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A Swift lesson in Irish economics

Today is Dean Jonathan Swift’s birthday. He was born on November 30th, 1667, in the parish of St Werburgh’s in Dublin. Last weekend, I was asked to speak at his cathedral, St Patrick’s, as part of the Swift Festival.

It’s not every day you share an altar with the Archbishop of Canterbury, Justin Welby (or indeed, with a former president of this country, Mary McAleese). The subject was identity and, specifically, Irish and British identity after Brexit.

Given the enormous constitutional upheavals that could be triggered by Brexit, not just in Britain between England and Scotland but obviously on our island too, “conflicted identity” may become a political buzzword of the third decade of the 21st century.

Swift was not only a satirist, but also a keen observer of economics, and his insights are still relevant today.

Swift’s own identity was initially conflicted. He referred to himself as an Englishman stolen and brought to Ireland, even though the facts appear to have been a bit different. Swift was born in Dublin. His father died before he was born.

He was brought to England as an infant and returned to Ireland at the age of one. Although at Kilkenny College he regarded himself as a bit of an outsider, and even referred to himself as a “large fish out of water”, ultimately it was as an Irishman that he became famous.

At the height of his satirical powers in England he was unambiguously seen as Irish. By his death, Swift’s reputation as the wicked Irish wit who poked fun at the English was unassailable. And in later years, the man who aimed to Anglicize Catholic Ireland to Anglicanism was adopted by both Wolfe Tone and the Young Irelanders as a symbol of Irish nationalism.

Economic upheavals

His experiences show that identity is fluid and that great economic upheavals change outlooks and allegiances. The early 17th century was a period of enormous economic and political upheaval in Ireland. Swift’s later writings on finance and industry attest to his keen awareness of the economic forces around him.

The early 18th century was the beginning of what could be termed the British project. In 1707, English nationalism led to the incorporation of Scotland and a union of the Scottish and English parliaments in London. After Ireland was subjugated and colonised completely following the Battle of the Boyne, this union began to project its power far beyond these islands.

Despite a system of apartheid in this country during the Penal Laws of the 18th century, the empire expanded under the banner of democracy, enlightenment and fair play!

Thus began the global colonial project, about which some of today’s more excitable Brexiteers reminisce, referring to their imagined post-Brexit world as a buccaneering global adventure – all high seas and free trade. This image of Britannia ruling the waves is at odds with today’s Britannia which tends to waive the rules, but I suppose every movement needs an image and maybe an invented past.

A more sober assessment might be that Brexit marks the end of this British project of 300-or-so years. It expanded in Swift’s time, peaked in Wilde’s era and was in decline by the time Beckett choose Paris over London for exile. The project got a shot in the arm with the second World War, but went into decline quickly thereafter.

Diminished state

Like the Roman Empire, the British one frayed at the edges, and then gradually its stitching unravelled until it came apart at the seams. The rump is the diminished state called the United Kingdom.

Looking forward, the next Scottish independence referendum might well untangle the 1707 Act of Union, leaving England back where it started in the mid-17th century.

As in Swift’s time, the economic symphony playing away in the background is crucial. Back then, two huge forces were at play. The first was a massive shift in European economic power from the Mediterranean to northwest Europe. (Today we see another economic power shift, this time to Asia).

From the Renaissance to the late 17th century, Spain and Italy were the fulcrum of European economics. The Spanish were buoyed by untold riches from the colonies in South America, while the Italian, bolstered by the city states of Venice, Genoa and Florence, excelled in banking, manufacturing and textiles.

However, this was to be challenged by growth in Holland and then England because the Italians never traded the oceans like the Dutch and the English, who brought back the finest materials from the Orient and then traded them with the rich Spaniards, who were happy to spend the gold taken from the Americas.

The second and related shift was from land to trade. Wealth had been tied up in land for centuries, but once the world started trading on a large scale, real money was made in buying and selling, manufacturing goods and flogging all around the world.

And of course slaves were also a significant commodity of this traded economy.

Globalised risks

This was the first age of globalisation and the expanding Dublin of Swift’s time was a Dublin of coffee houses and sweetened sugars from Barbados, silks and spices, teas from China, manufacturing tools from Amsterdam, books and pamphlets from Boston. With the globalised world came globalised risks.

Swift also lived through and lost money on the world’s first global financial boom and bust, the South Sea Bubble of 1720. No more than in the Celtic Tiger, the South Sea boom created in Dublin appetites for all classes of showy luxuries, most notably in women’s fashion.

Indeed Swift was something of the puritan and took against the craze for women wearing foreign clothes. He advised the House of Commons in Dublin to “exclude all silks, velvets and calicoes, and the whole lexicon of female fripperies” and went on to describe opponents of these measures as “enemies of the nation”.

The times sparked Swift’s interest in economics, and he wrote extensively on money and exchange rates, agitating for Ireland to have its own currency. In particular, he argued for Irish economic development.

Swift understood that the world was changing and that the interests of the land-owning class being elevated over the interests of a craft class (and ultimately a manufacturing class) would condemn Ireland economically. In short, he understood globalisation. He believed that the Anglo-Irish aristocracy, particularly the absentee landlords, were not only greedy, but stupid. They wanted to keep Ireland agrarian so that they could extract as much rent as possible from the land and thus had no interest in manufacturing.

Without manufacturing, in a world of flourishing global trade, the economy became mired in low-value-added agriculture. For 200 years, the interests of the landed aristocracy, many of them absentee, destroyed economic potential.

How the world works

Swift appreciated that for a small country it is critical to understand how the world works and your place in it, so as to maximise opportunities. Small countries have always profited from trade – the more sophisticated the better. We use all the tools at our disposal to achieve this.

Fast forward to today; multinational companies have transformed our capital base, created entire new industries and plugged us into extraordinary global networks. You have only look at the announcement this week of Intel’s new €3.6 billion manufacturing facility.

And yet we listen to the lunacy of people suggesting that multinationals are a source of commercial instability and worse. What would Swift have made of this line of argument? Not much, is my guess.

If Cork can’t succeed economically, Ireland will regress

If you happen to be a Jackeen relation of a large Cork family, we might get together and form a self-help group. Given the amount of inter-cousin abuse I’ve had to endure over the years, it’s tempting.

Being a semi-detached, arms-length Corkonian comes with its burdens but they are but nothing compared with those carried by the Leesiders themselves, who combine fragile victimhood with muscular self-regard. But putting the inter-city rivalry aside, one thing is clear to me: if Cork doesn’t succeed economically in the years ahead, Ireland will also go backwards.

Cork is the litmus test when it comes to Ireland’s ambition to lift the burden of development from Dublin’s shoulders. If Cork can’t do it, nowhere can. The development of Cork won’t come at the expense of other cities such as Limerick or Galway, but will be complementary, and is vital for spatially balanced growth in the country.

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Wealth tax for Irish ultra-rich makes sense

Have you ever wondered why the windows of the Bank of Ireland on College Green in Dublin are bricked up? It is because of the imposition of a wealth tax, called the “window tax”.

Ireland, the UK, Holland, parts of northern France – unlike the Mediterranean – are starved of natural light at certain times of year. In the pre-electricity era, light was a luxury in these countries.

The urban poor lived in a dark world of gloomy, window-less hovels, while the rich who wanted to live in the brightest rooms possible, built magnificent ceiling to floor windows to let in the light . Georgian sash windows attest to class difference; the poor lived in the shadows and the rich lived luminously.

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If I were Paschal Donohoe, here is what I would do

On Wednesday evening at rush hour, with rain falling steadily and traffic bumper to bumper, I hopped on the Dart from Dún Laoghaire to Dublin city centre. Plugging in my headphones, I thanked my lucky stars that I live in one of the few areas of Ireland that has a reliable train service.

Relaxed ahead of a meeting, safe in the knowledge that the train would be on time, I considered how good public transport infrastructure enhances our lives. It’s not just a means of getting from A to B , it’s a mark of a civilised, democratic country. But why should citizens who live along the Dart line enjoy a luxury that is denied to others?

Providing public infrastructure is a basic function of any state – and we are failing. The track my Dart runs on was laid before the Famine. I’m not joking. Transport infrastructure is an ongoing project, and a country with a growing population and ambitions to compete internationally needs to constantly upgrade.

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What the world’s megacities can teach Dublin

Dubai is not for everyone. The glittering metropolis, which erupts out of the desert, captures much that is good and bad about humanity in a few square miles.

On the good side, this extraordinary trading hub, reveals what human ambition can achieve. As it waves its two diamond-encrusted, air-conditioned fingers to Mother Nature, a city where none should be, Dubai stands testament to what can be done through sheer force of will and extraordinary urban vision.

On the other hand, Dubai’s legions of mostly Asian labourers, who toil away under the searing heat, remind us again of the world’s unacceptable inequalities and how – irrespective of the huge strides made in recent years – the lottery of location or the accident of birth, dictate our time on this Earth. The city’s success is partly a product of deeply problematic bonded labour.

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Why Irish apartment rents are like the Cuban car market

Two years ago, my son spent half his transition year in the Vedado area of Havana, a few miles west of Havana’s extraordinary old city. Havana is a vibrant city. There might not be a more exciting place to learn Spanish – and the competition is stiff. The Spanish-speaking world hosts some of the most pulsating cities on Earth.

He stayed with a Cuban family, immersed in the fascinating psychodrama that is everyday life on that island.

When I went to visit, I was delighted to encounter himself and his mate haggling with the local cab drivers over fares, gesticulating wildly, half theatre/half commerce, in an accent that the locals told me was pure Havana.

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Dún Laoghaire typifies Ireland’s poor use of land

Ireland’s population is surging, the fastest-growing in Europe, on target to hit five million citizens next year. Such burgeoning dynamism implies that our approach to planning and urbanisation needs to be revised.

The new reality promises all sorts of opportunities. For example, a rapidly rising population and, more significantly, large-scale increases in employment signal lower income taxes.

When your population rises, so does your tax base, and therefore income tax levels should fall, if we manage it properly. Conversely, as taxes fall and demand for housing rises, house prices are liable to increase unless we manage the economy better than we do at the moment.

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Why your boss earns so much more than you

One of the most difficult questions for any parent is: “What should I do in the future?” When your child asks you what is a good job, can we honestly say we have any idea?

Many jobs that pay well now, such as the highly sought-after data analyst, didn’t exist 10 years ago. What hope have we, mere parents, of predicting the future jobs market? Things are changing so quickly, driven by technology. Consequently, even making a stab at what might be vogue in five years is highly speculative.

The best we can do is look at big trends that are emerging all over the world.

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Brexit is an opportunity. Let’s use it

There is something deeply elemental about being woken up by streaks of forked lightning illuminating the darkness in electric blue followed almost immediately by booming claps of thunder as a violent Adriatic storm passes just over the roof.

The Romans understood the power of the elements and observed that, in mid-August, the searing heat and soaring temperatures of the previous weeks tended to clash with colder weather coming in from the north or west, leading to dramatic electric storms. They took this to be a sign from the gods that one season was over and another starting.

Emperor Augustus named the 15th of August Feriae Augusti or the festival of Augustus, falling in the middle of the most significant month in the year, which naturally took the Emperor’s name. Today all Italia still closes on August 15th or Ferragosto, the modern Italian version of the Latin name.

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David has been writing for almost 20 years and there are plenty of articles covering some of the most turbulent times in the world economy.

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