Notes on the Front

You may not be familiar with the think-tank Heritage Foundation. Its mission statement should give you a clue:

‘ . . . to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.’

Those ‘traditional American values’, so loved by conservatives, so distorted and unrepresentative of the American experience; to say that the Heritage Foundation is one of the most right-wing think-tanks in existence is not to fully grasp their ideological compass. To say they are one of the most right-wing groups in the Milky Way is yet to be determined, but I know where I’m putting my money. When I left my good country I hoped to be rid of these crowds, at least here. How misguided. For Davy Stockbrokers is upbeat about the Irish economy. And part of the reason is that the Heritage Foundation says really nice things about the Irish economy.

And on its way, the recent Davy report contradicts just about everything that employers’ organizations and the right wing allies say is wrong with the economy.

Of late, Davy reports have tended to be downbeat. So up pops ‘Beyond the Housing Shock’ and boy are they bullish. They’re projecting an upswing in economic growth starting in 2009 – heading up to 4%, well ahead of Eurozone. Capital investment, demographics, productivity, debt ratio, educational achievement – okay, so 2008 will be a bit rough but come December 31st we can look forward to rainbows and sunshine in the medium term.

And there’s one more reason for their rosy prognosis: the Heritage Foundation thinks Ireland is an economic Mecca. They produce an annual Index of Economic Freedom. Ireland ranks 3rd. Ireland ranks ahead of the US. Ireland has been at the top of this index for as long as anyone can remember. Compared to us, the rest of Europe are a bunch of slaves, labouring away in boot-camp economies. Ireland, on the other hand, is ‘free’.

Freedom should be put in bold quotation marks. While the Heritage Foundation uses ten categories to rate countries’ ‘freedom’ (business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom), the game is given away when they rank Singapore 2nd the in freedom stakes.

Singapore is hardly what you would call a ‘free’ country. According to Human Rights Watch:

‘Singapore remains an authoritarian state with strict curbs on freedom of expression, assembly and association.  All political activities are tightly controlled . . . trade unions are under the same restrictions.’

Of course, that fits right in with neo-liberals’ minds-set – when you don’t believe in society, the only thing left to rate is the economy.  And club football (after three matches played in the Singapore League, the Super Reds are tied with Singapore Armed Forces FC on maximum points – go Super Reds!).

Obviously this good news hasn’t reached the employers’ organisations and their apologists in the media. They still think we live and work in some kind of economic gulag – over-taxed, over-regulated and over-paid (the worker drones anyway, not the queen bees). Thankfully, the Davy report puts some of these complaints in perspective:

Complaint 1: Regulation is killing entrepreneurship. Davy’s Response:

‘Ireland ranks very well in tables that rank the ease of doing businesses across countries. Excessive bureaucracy and red-tape are not an issue.’

Complaint 2: Our swollen public sector is an economic burden. Davy’s Response:

‘A bloated public sector can spawn increased red tape and regulation that limit productivity gains in the private sector. Ireland’s share of employment in the public sector is low in an EU context. It is particularly low when compared with the larger "core" European economies such as France and Germany. Ireland’s GNP per capita at purchasing power parity is now the fifth highest in the EU-27 but has not led to a huge public sector share of the economy in a European context.’

Complaint 3: High taxes are preventing greater economic growth. Davy’s Response:

‘Ireland’s overall low implicit tax on labour ranks favourably in an EU context. In 2005, Ireland’s implicit tax rate was 30.0% of GNP. That compared with an EU-27 average of 35.2% and a euro-area average of 36.8%. Moreover, Ireland’s implicit tax rate fell 4.1 percentage points in 1995-2005.

Complaint 4: Labour protection legislation is preventing employment growth. Davy’s Response:

‘Ireland’s labour market stands out as one of the most flexible in the OECD. It ranks well both in terms of permanent and temporary Contracts. With regard to regular employment protection legislation, Ireland consistently ranked in the top-ten most flexible and least-protected labour markets. Ireland ranked seventh from bottom for overall strictness of protection against dismissal (i.e. it is relatively easy to dismiss workers in Ireland), fourth-best for notice (i.e. not much required) and severance pay (low).’

And, of course, there is the Heritage Foundation. We do better, in terms of business-friendly economic and state practices, than even the US.

Now Davy is not some left-wing think tank, a fifth column of subversives determined to sabotage vested corporate interests (if they were, sign me up). It is a stockbroking firm. Enough said.

And, though Davy is right about the Anglo-American character of our economy (a suburb of Boston, light-years from Berlin), when they suggest these realities form the basis for future prosperity, they are talking a load of twaddle.

It is interesting to note that, in their charts and arguments, they refer to all those countries that rated ‘worse’ than Ireland – public sector bloated Germany and France, over-regulated Netherlands and Austria, high-tax Sweden and Denmark; all those countries that are streets ahead of us in the Global Competitiveness Index, in wage levels, in social protection, in poverty (i.e. they have a lot less). Yes, it’s great we’re not like them – we might end up being European. And a bit more wealthy.

But if that’s where the Davy analysis falls down, then they are no different from most other cheer-leaders of the neo-liberal state. Still, we should be grateful for their analysis in this respect – it totally undermines the arguments of employers and the Right.

And we can now bask in the warm glow of the Heritage Foundation’s nice words about the Irish economy and wrap ourselves up in the comforting flag of ‘traditional American values’.

Yes, every day will be Independence Day.