Guest Post by Gerry O'Hanlon S.J.: Asking the Right Question

Gerry O’Hanlon: We are understandably concerned about economic recovery in Ireland these days. But given that ‘recovery’ might be taken to imply a return to a previously desirable state, perhaps we need to reframe the question that we ask. If we ask ‘how do we recover’, we are in danger, in our public discourse, of letting conventional indicators like a pick-up in retail sales, an increase in property values, a rise in consumer sentiment, even – the Holy Grail! – growth in GDP and GNP, become the sole normative criteria for what might too easily become a return to ‘business as usual’. That would be a pity. Given what we have learned about the serious flaws in our ‘business as usual’ model, it might be better to ask a different sort of question that might push us in a more radical direction – so, for example, ‘how do we create a new economic model that is sustainable’?

The predominantly neo-liberal, infinite-growth model of the recent past has let us down. It was shot through with an economism which meant that an obsession with economic growth trumped so many other human values. It was riddled with inequalities both within and between nations, in ways which made solidarity unsustainable. And its focus on consumption did serious damage to our planet, as well as failing to make us happier.

In this context the reflections of the former Chief Rabbi of Ireland, David Rosen, are apt. Rosen quotes an old Jewish commentary on those who, according to chapter 11 of the Book of Genesis, showed hubris in attempting to build The Tower of Babel up to the heavens – ‘if in the course of building, a human being fell and was even killed, no one batted an eyelid: but if a brick fell and shattered, they all sat down and cried’. In other words, in this story of an ancient industrial collapse, work and growth were more important than human beings, and the enterprise went to the heads of its developers, showing ‘a profoundly distorted sense of values in which human life and dignity are subordinated to material achievements’.

Of course ‘material achievements’ are important: we want a future where people can work, where basic needs are satisfied, where human dignity is respected. But can that perhaps be done within a vision of the future articulated in terms of ‘prosperity without growth’ (Professor Tim Jackson), a ‘steady-state economy’ (Hermann Daly), ‘the richness of sufficiency’ (Bangkok letter of ecumenical group of Asian Churches in 1999)? And within that vision perhaps we need to create a culture which values society as well as the individual, a culture of the common good that respects solidarity and fairness and that commits itself to responsibility for inter-generational care of the earth?

That kind of new vision, those kinds of values, would have concrete implications. Banks would need to recognise that they have obligations to all stake-holders, not just to share-holders, that they have a social function in serving the ‘real economy’. Financial traders would need to be regulated in such a way that short-termism is eschewed – the introduction of a Tobin or Robin Hood tax on international currency and financial transactions might be a relatively simple and effective first step in this respect. Our economic priority should be to favour labour rather than capital, to put work and jobs as a prime target, and to consider salary caps or more progressive redistributive tax policies in order to bring about greater equality. It is estimated that CEOs in the USA were paid 344 times the average worker’s wage in 2007, as against 42 times in 1989. Why shouldn't we take up the suggestion of Paula Clancy of TASC and consider what it would be like if a policy objective was inserted in the Constitution that limited the top 20 per cent in Ireland to an income of 10 times, or even 5 times, that of the bottom 20 per cent?

The New Economics Foundation (The Great Transition, 2009) has tried to spell out concretely what such an economic model, with those kinds of values, might mean for Britain. They speak in terms of a fall of GDP by a third (to 2001 levels); of a four-day working week, to allow for full employment with less economic activity and to give a better work-life balance; market prices reflecting social and environmental costs; a redistribution of income to Danish levels of equality; capital markets functioning in such a way that company profitability would be linked to social and environmental value, so that share prices for listed companies would reflect this – and so on. All this would be premised on a democratic national determination of what the UK as a society deemed to be of social and environmental value, with government retaining the right to make determinations between competing interests. The net result, they estimate, would be a growth in ‘real value’, despite a reduction in consumption and economic growth.

Are we doing enough to raise these kinds of questions and research these kinds of solutions in Ireland? What is involved is a change of culture; a political class which is capable of the kind of leadership given at the height of the Northern Ireland crisis when a more radical approach was taken; a religious input that transcends the evil evidenced in Murphy and Ryan, not to mention the mediocrity of the kind of social conservatism so common in post-independence Ireland but which – as Habermas, Putnam, Rawls and Sandal all acknowledge – can draw on inspirational sources of self-transcendence which encourage believers to engage in a critique of the status quo and to join with fellow-citizens in the search for a better way forward.

Gerry O’Hanlon, S.J., Jesuit Centre for Faith and Justice, author of recently published Theology in the Irish Public Square, Dublin: Columba Press, 2010.

The value of public service

Slí Eile: In the midst of the shrill debates on public sector workers, their pay, their pensions, their tenure and a host of other matters such as social welfare, health and education it is good to step back and ask ourselves what sort of society do we want.

Every society decides its own mix of public, private, community effort, responsibility and obligation. Underlying all this is a set of civic values and objectives. In terms of international comparisons Ireland tends towards the lower end of public provision with a mix and pick of universalism, means-testing, meritocracy and a very patchy provision of public health (think of the quality and extent of dental care for all children) low corporate taxes, low capital taxes, low local taxes and a narrow tax base.

Currently, proposals are emerging for a huge and sustained attack on our public services by means of an 'adjustment' of some 3-4 billion in 2010 and the same again next year (but for every €1bn adjustment only part of it will reduce borrowing due to higher unemployment, lower taxes etc). The stage is being set for across-the-board pay cuts, social welfare cuts and service deterioration. We will hear a lot about wasteful public spending, things we can no longer afford, FAS trips, rich people getting child benefit and medical cards as well as quangos, overpaid public servants. That there is scope and need to reduce spending in some areas and redirect these to more urgent priorities and defence of frontline services is not disputed. That the overall level of public spending must be cut and that there is no alternative to this is disputed.

Before any recession we had an inadequate public service. Our society was and continues to be an unjust one with unjust distribution of income, wealth and opportunities for social participation. The recession is greatly exacerbating these problems. The slash and burn and amputate policy will erode our services, damage the health of the nation and lead to higher levels of social inequality. In the coming weeks we will hear and more and more of the following:

better to cut public sector pay than social welfare
better to cut social welfare than vital health services
better to cut all public spending than be taken to the cleaners by IMF or ECB

Like a desperate patient in the trenches - we will be told 'we can amputate just this leg otherwise we can take your arms'. Sensible people with social consciences will be driven to despairing, boxed-in, tunnel-vision, Liveline type 'if you don't go for X then you are effectively bringing abougt Y.

The economic analysis and political values behind this rush to amputate our public services is wrong-headed, badly thought through and potentially ruinous for our future. It must be opposed and positive alternatives argued for.

Above all, we need Hope, we need Vision, we need an Economic Strategy to get Ireland back to work and not condemn us to a lost generation and a lost opportunity to address inequality.