Let’s begin with the most expensive cabbages in the world. They tell us something about the way in which the debate on the public finances after the coronavirus is being framed.
In April 2005, the then minister for justice used the phrase “good value for money”. He was defending his purchase, on behalf of the State, of 150 acres of land on the border between Dublin and Meath, for €30 million or €200,000 an acre. A farm four miles away had recently been sold for €26,000 an acre.
Is there a statute of limitations on the need to feel any embarrassment at such a shocking waste of public resources? Apparently there is – and it has run out
With additional purchases of access routes, legal fees (€1.4 million for our learned friends), banking fees, technical fees, security, the laying of 4.8km of water mains and connections, culverting of streams, fencing work, drainage and landscaping, this piece of earth had, by 2015, cost Irish taxpayers €50.63 million. In that same year, the Valuation Office reckoned it was actually worth €2.4 million.
If you look for the site now on Google Maps, it is marked rather spookily as a non-place: "Thornton Hall Prison (never built)". We might rename them the WC Fields, given that so much public money was flushed away there. The minister who pulled the chain was, of course, Michael McDowell.
Last I heard, a small part of this blessed plot was being used for a horticultural project for prisoners. This, no doubt, is a very good thing. But it is surely the most lavish exercise of horticulture in the history of mankind, manured as it is with €48.2 million of public money.
Is there a statute of limitations on the need to feel any embarrassment at such a shocking waste of public resources? Apparently there is – and it has run out. McDowell is now a fiscal hawk, warning in The Irish Times that "The enormous hole in the public finances cannot simply be wished away by borrowing many billions." His prudence extends to protective equipment for health workers: "We can't afford to spend €1 billion a year on single-use PPE."
Fiscal prudence is a virtue and rigorous control of public spending is a moral as well as a financial imperative. Every cent of public money wasted deprives some citizen of a necessary benefit. But right-wing politicians in Ireland have long played a double game. In office, they waste vast amounts of public money: on pet projects, on reckless tax cuts, on bailing out the bondholders of dead banks. Out of office, they use this very waste as a way to discredit public spending itself. It is a neatly circular argument and its chutzpah is admirable. But what “we can’t afford” right now is to play this game.
Ireland, like every other country, will and must borrow a lot of money to sustain businesses, to stop unemployed workers falling into poverty, to shore up a health system in which we have under-invested for far too long, and to pay for the large-scale adjustments that must be made to physical spaces and working practices if we are to be safe. This is not “wishing away” a “hole in the public finances”. It is the hard realism of survival. Without it, there will be an economic depression whose fiscal consequences will be far worse.
The task ahead – a remaking of society and the economy – is daunting enough as it is, without false narratives based on amnesia about the last great economic crisis
What we do not need is a rhetoric of “losing the run of ourselves”, especially from people who were in government when we actually managed to do just that. This is not the madness of Celtic Tiger, founded on massive private debt. It is, if anything, the opposite – a response to very high levels of private savings.
As John FitzGerald pointed out in The Irish Times, we will be essentially making use of money collectively accumulated by Irish households who cut spending during the crisis: "Much of the new debt being issued by the Government will end up being bought by the European Central Bank. The household sector, who are the beneficiaries of the debt-financed income support, will leave a lot of this income on deposit in banks and they, in turn, will lodge it back in the ECB. This circular transaction means that, after the crisis is over, the State's net indebtedness will not have changed much. Indirectly, with the help of the ECB, the Government is borrowing from the people of Ireland."
The task ahead – a remaking of society and the economy – is daunting enough as it is, without false narratives based on amnesia about the last great economic crisis. Scare stories about necessary borrowing are based on two fallacies. One is that we can’t afford it. In fact governments, including Ireland’s, can borrow at extremely low rates of interest. The other is this vague but powerful notion that the money will merely be wasted. It could be, of course. We could stick it in the ground to fertilise cabbages or throw it away on subsidies to socially and economically harmful businesses. The big issue is not the money – it’s what we do with it.
That in turn depends on both values and systems. The values determine the choices we make: what are the things that matter most to us as we seek to rebuild society? The systems are about accountability for meeting these objectives – and even, shockingly, for those who waste public resources.