Ireland Remains a Neoliberal State

The signage is removed from the old Anglo Irish Bank building, April 20, 2011

A certain sector of the Irish population seems to strongly dislike David McWilliams. He is often the butt of jokes where something mean appears to have replaced something witty in the punchline. He’s like our answer to Malcolm Gladwell, someone with a prominent platform that seeks to make complicated things simple, even if that runs the risk of everything becoming simplistic.

Harsh judgements come easy. There is something perilous to being an opinion columnist. Every week you have to come up with an angle for your Editor. Increasingly, that angle has to be incendiary enough to generate a flurry of activity on social media sites. However, the depth of the truth never gets plumbed because of the churn of words. What often strikes us when reading McWilliams is how ethically sensitive he can be. He is trained and made his name in the Dismal Science, but he demonstrates the interest and the attention of a humanist.

In spite of this, in his column on Saturday, McWilliams made an argument so misleading that we have to satisfy the Editors of the world by engaging the ragebait. As Europe largely stumbled further Right in its elections, McWilliams argued that “nothing could be further from the truth” than that Ireland is a neoliberal state. In the article (beyond paywall) he rolls out another of his “Breakfast Roll Man” catchphrases by suggesting that Ireland is presented as the “Florida of the North Atlantic”.

It is striking that McWilliams does not offer a definition of neoliberalism. He introduces the idea by reference to the economists Friedrich Hayek and Ludwig von Mises and then jumps into debunking the idea that Ireland fits the bill. Ireland has a redistributive tax system where the wealthy pay proportionately more. He argues that Ireland can’t be neoliberal because there is still a social security net. It is true that 3.3 million citizens are beneficiaries of social protection payments, but since every disabled person, child, pregnant woman, and pensioner are definitionally included in that group, the stats are not as dramatic as they might appear.

Had McWilliams offered a description of what he means by neoliberalism and how it came to be, this argument would hit the rocks pretty quickly. Maggie Thatcher was presumably a neoliberal. She also did not oppose the pension or maternity pay – indeed one of her first acts was to extend maternity leave. “Neoliberal” is not a synonym for “psychopath with an interest in economics”. Social transfers have almost always been part of the neoliberal agenda– indeed the great neoliberal theorist Milton Friedman almost got a form of universal basic income on the agenda of Nixon. (There have been psychopaths who happened to be neoliberal leaders but it should go without saying that Pinochet is an outlier.)

McWilliams claims that the “area where the neoliberal label is most aggressively thrown about is the multinational sector” and goes on to cite Ireland’s incrementally increasing corporate tax rate as evidence that we are not neoliberal. At the peak of his powers, Reagan – presumably people will agree he was neoliberal – proposed a corporation tax rate of 33%.

The whole argument takes the form of a sleight of hand. Operating without definition or rigor, he pivots at the end to discuss the housing crisis. He is right that a robust and rigorous tax on land speculation should be widely supported by anyone interested in ending our housing crisis – indeed JCFJ will be publishing research on this in the autumn – but the entire argument proceeds without reference to the causes of the housing crisis.

Right through the long period when Ireland was relatively poor, homelessness was not a massive issue. As McWilliams’ colleague, Fintan O’Toole reminded us just last week: “In 1990, local authorities in Ireland spent the equivalent of €600 on emergency bed and breakfast accommodation for homeless people.” In the decades since, Ireland’s GDP and GNI has grown massively and homelessness and housing precarity rose with it.

The most accurate explanation for what happened is the academic term “neoliberalism”. It is not a slur. It does not mean “politics I don’t like”. It is not a shorthand for economics. It has a clear intellectual history, with identifiable leaders and centres of power, and a cogent definition. McWilliams seems to think it is some form of crude libertarianism. In reality, it is the disenchantment of politics by the rhetoric of market competiveness.

Another, less academic way to put it, is that neoliberalism is a political movement that argues that before we get around to discussing what kind of society we want, we have to attend to the truths that are generated by the markets. Pricing and profit and competition are prior to principles and ethics.

The thing about neoliberalism that should not be forgotten is that it does generate economic growth. It is not an insult to describe Pascal Donohoe or Ray McSharry as committed to neoliberalism. It is a description of how they understand that letting competition drive efficiency is a better approach than a centralised response, which will be unruly and wasteful.

Most people – even folk who bandy the term around carelessly – agree that markets can bring efficiency. Irish mobile phone bills are cheap. No one wants to return to the days of Telecom Eireann’s monopoly. But as British people are realising, making everything a market might be a mistake, as their train system collapses, sewage infiltrates their water supply, and their previously world-class university sector faces catastrophe.

Similarly, the move to neoliberalism (which occurred in Ireland in 1987) replaced a house-building system that was largely driven by local authorities who built houses on land they owned with a marketised system where private developers built houses for sale, while various Approved Housing Bodies tried to fill the gap. The end of the Celtic Tiger cannot be understood apart from this – as McWilliams once understood. And the solution to the present crisis cannot be achieved without a return to the old ways.

That would be a rejection of neoliberalism. And McWilliams does not even deign to allude to that history or that response in his piece. Shadow-boxing in lieu of argument.

There is an important conversation to be had about neoliberalism. In the aftermath of the Pandemic and with the rise of various threats to the liberal consensus, the era when political vision took a back-seat to cost/benefit analyses may be coming to an end. What replaces it is a much bigger question than how much of a carer’s allowance we give a parent in relation to OECD averages. We need figures like McWilliams to engage much more seriously in that conversation.