An Irishman's Diary

Columnists generally tend not to take issue with one another; but on this occasion, Kevin Myers cannot forbear.

Columnists generally tend not to take issue with one another; but on this occasion, Kevin Myers cannot forbear.

Fintan O'Toole's column last week, which essentially declared that the rich in Ireland behave in pretty much the same way as the rich in Hailie Selassie's Ethiopia, was at one level highly enjoyable. He could have gone further, and announced that the Irish rich regularly ate peasant children, or that the Kildare Hunt habitually cornered and killed asylum-seekers; but the comparison between contemporary Ireland and Hailie Selassie's stone-age regime, with an elite of fabulously rich and the masses living in grinding poverty, why, that will do.

Visit Tallaght shopping centre, or any other working class mall, and see how long that comparison survives. I'm not too sure how many immigrants flocked into the Lion of Judah's empire, but if you don't count Mussolini's armoured divisions, not too many. In the last few years, 200,000 foreigners - Brazilians, Chinese, Germans, Americans, Nigerians, and why, probably a good few Ethiopians too - have poured into Ireland: they clearly don't feel this country's economic policies have much in common with good old sunny, sandy Abyssinia's.

Earlier this week, Fintan O'Toole complained about the amounts of Irish money being invested abroad. This, he said, was "obviously a bad thing", especially in 2001 and 2002, when the economy was in "decline".

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No. Far from being an obviously bad thing, it's an obviously good thing. To be sure, I don't understand much about economics: however, I don't understand much about nuclear reactors either, but at least I know that if you see a reactor on fire, or plutonium leaking into a river, or children playing with radioactive piles, something's probably amiss. I know nothing about brain surgery either; however, if I see a doctor hitting a patient abaft the ears with a claw-hammer, I'll gather that all's not well on the medical front.

So, I know when people start talking about "money" as if it's a national asset which should be cycled within a notionally discrete economy, I get the same edgy feeling I'd get if I saw flames rising from Sellafield main tower. Our wealth has been created by opting for an open economy, with low taxes and a flexible, intelligent workforce - 100,000 of whom will change jobs this year. We have the most open economy in the world, and we have in Charlie McCreevy the most successful Minister for Finance in the history of the state; indeed, the most successful in all of Europe.

We've been generating vast capital surpluses, year after year, and they have to be invested, and under EU law the Government can't create impediments to the movement of what anyway is not even an Irish currency, but an international one. Moreover, we are no longer just a producing economy, but an investing one, to the benefit of all concerned: Irish pension funds which invest in an office block in Manchester mean that people in Lancashire are working to create profits for pensioners in Ireland.

Is this not sensible? Is this not prudent? Is spreading your capital around in different areas, in different industries, in different parts of the single European Union of which we're an integral part not a wise way of managing your future? Investment in Ireland is of course splendid: but only if it makes sense. Patriotic investment for patriotic purposes only is idiocy, and if it is done by a publicly quoted company, such as a bank, it is actually immoral. Not merely is it very possibly feather-bedding a badly managed company, but it is depriving the shareholders of their right to a maximum dividend on their investment. Worst of all, too much investment into a confined market causes catastrophic inflation.

A successful economy is characterised by a movement of money and people. This is what has distinguished the Irish economy since 1989. Contrary to what Fintan O'Toole declared, the Irish economy was not "in decline" in 2001 and 2002: it simply was no longer growing at the extraordinary rates which had been achieved in the 1990s. How could it? Not even 1950s Germany in the days of Erhard's economic miracle had achieved such growth. Yet even in these recent, more sluggardly days, we outshone the rest of Europe, and indeed the world, and put the dismal dirigistists of France and Germany to shame. Which is why foreigners are desperate to come and live here.

The best a government can do for an economy is create a favourable economic and educational environment for it, then police its rules and protect its currency.

We never had any power over our currency; but we did have over our economic environment, and fifteen years ago, for the first time since independence, we consciously made the historic shift away from statism to laissez-faire. Perhaps even more than joining the EEC, this was the most important decision to be made since independence, liberating people, enterprise and capital.

Let money wander where it will. Its instincts are to forage wherever it can find profits. And this is good. I rather like the idea of Hungarians and Poles and Geordies generating wealth which will mind me in my old age: and I like the idea of Poles and Hungarians being liberated from poverty by capital from Ireland - which had originally been generated here through inward investment.

It's called globalism: this has created a benign cycle of economic activity all over the world, and has been the greatest dividend of the defeat of communism. It's certainly not Hailie Selassie's Ethiopia.