Christopher Caldwell on Ireland
In the latest Weekly Standard, Christopher Caldwell has written a dazzling masterpiece on the sudden collapse of Ireland’s globalized Ponzi economy. It makes for very depressing reading, particularly for those of us who found much to like in the Irish model. Early in the piece, Caldwell vividly sketches the old model, rooted in Catholic rectitude, that defined Ireland’s early republican period.
Irish identity has often been—explicitly and officially—a matter of protecting citizens from both the temptations of modernity and the vicissitudes of prosperity. In 1927 a Manchester Guardian journalist asked Eamon de Valera, the father of the modern Irish state, whether he understood that closing Ireland off from trade, the better to protect its culture, would mean a lower standard of living. De Valera replied,
You say “lower” when you ought to say a less costly standard of living. I think it quite possible that a less costly standard of living is desirable and that it would prove, in fact, to be a higher standard of living. I am not satisfied that the standard of living and the mode of living in Western Europe is a right or proper one.
De Valera’s Irish Republic was organized around the idea that money doesn’t matter that much. This may have been a noble aspiration, it may have been sanctimony and foolishness, but there was at the very least something bold and, as Yeats would say, indomitable about it. Next to De Valera’s uncompromising Christian renunciation, those two something-for-nothing ideologies, modern capitalism and modern socialism, are practically indistinguishable.
This is seriously the best thing I’ve read in a while. Check it out.
I’m very curious about Caldwell’s substantive views. This essay on Ireland seems to have a Larisonian nostalgia for Ireland’s “priest-ridden agricultural” past, yet I don’t think that’s his point, exactly.
Over the last 20 years, Ireland found riches a good substitute for its traditional culture. But now the country has been harder hit by the financial downturn than any country in Western Europe. We may be about to discover what happens when a traditionally poor country returns to poverty without its culture.
Somehow I suspect the fizz will return. Loss aversion is a very strong spur to creativity. A critique creeps in later in the essay:
The head of the Labour party, Eamon Gilmore, recently attacked the finance ministry on the grounds that its new, trimmed budget requires more austerity than the country at large can handle. Gilmore has called instead for an Obama-style stimulus package. This is far more difficult to pull off when you are dependent on foreign investors and don’t control the currency in which your debts are denominated—but at least it promises a continuation of something-for-nothing! Unsurprisingly, Gilmore is now the most popular politician in the country.
One gets the sense that Caldwell has his doubts about the Gilmore program.
I think the austerity vs. stimulus argument is the new axis of economic conflict among serious people, and unfortunately conservatives find themselves on the unpopular side of the divide. This is a big reversal from even the recent past, when Democrats embraced fiscal discipline and Republicans were stuck on tax cuts. Democrats have loosened their fiscal straitjacket as they’ve emerged from their thirty-year defensive crouch and Republicans are still stuck on tax cuts, but not Republicans who will ever be in a position to run the government. My guess is that Reagan-Volcker will be the form the conservative comeback takes — and by that I don’t mean the fizzy politics of tax cuts, but the politics of using leeches to bleed off the economic maladies that will accumulate over the next several years.
That or everything will be fine. Which would be good too!
P.S. My friend Alex Massie has a more critical take on Caldwell, which reflects some of my own thoughts.
What do you mean when you say, My guess is that Reagan-Volcker will be the form the conservative comeback takes — and by that I don’t mean the fizzy politics of tax cuts, but the politics of using leeches to bleed off the economic maladies that will accumulate over the next several years..
I’ve been thinking a lot about Paul Volcker lately, but I’m not sure why. And I’m not nearly smart enough nor well read enough to figure this out. What I do know is what I remember, the Fed under Volcker raising interest rates sky high during the recession in the early 80s when Reagan was president. And it worked, at least in the sense that it killed inflation.
And I kinda get the sense that interest rates were too low during the 2000s, maybe the 90s too. The spread between the rate at which the banks (and everyone else) could borrow and the rate at which they could lend really encouraged ridiculous risks. Leverage became way too cheap, and that’s why the banks (and everyone else) are all basket cases now.
So is that what you mean, when you say leeches? Raising interest rates? Certainly there’s nowhere left to lower them. If they’d been higher these last ten years or so, there’d be some room left to lower them. Or maybe we wouldn’t even be in this mess in the first place.
Or do the leeches imply just a lowered standard of living? That our own standard of living has been artificially high, based on borrowing, leveraging, and the austerity you mention is merely a painful correction?
— Edward Bohls · May 7, 12:32 PM · #