Ireland after NAMA

In order to help politicians formulate evidence-based policy and to more fully understand the socio-economic geography of the 43 constituencies, and to be able to compare areas within and between constituencies, the All-Island Research Observatory (AIRO – http://www.airo.ie), a NIRSA project based at NUI Maynooth, is providing free access to its mapping modules for candidates and parties contesting the forthcoming election.  The modules are also free to use for anyone working in the public sector for non-commercial purposes.

Each constituency mapping module has data at the electoral division scale relating to potential voters; population demographics; marital status; religion; economic status; industry; housing; households; social class; socio-economic group; education; transport; deprivation indexes.

Associated mapping modules map the Live Register at office level, unfinished housing estates, planning permissions and housing development, and voting in the last election.

AIRO Election Module Interface

Elsewhere on the AIRO site there is access to data on 12 different themes and hundreds of pre-prepared maps for the whole island. A point and click interface means no mapping expertise is required.

To access the mapping modules
1. Visit http://www.airo.ie
2. Register as a user (top right of screen) or log-on
3. Click on the ‘mapping module’ tab
4. Select ‘Election Constituency Module’
5. In the ‘Choose theme’ box select the constituency you are interested in, then click ‘View’
6. The mapping module will now open
7. To zoom in and out of the map use the scale bar in the top left of the map panel
8. To change the data being mapped click on the ‘Indicators’ button and select the information you wish to view
9. All the panels are interlinked, so if you click in the tables it will highlight on the map and as you hover over the map the area is highlighted in the table
10. The buttons in the bottom right of the panel will open other relevant modules

Justin Gleeson and Rob Kitchin

Frank McDonald writing in today’s Irish Times reports that the local area plan for Bandon has zoned land for an additional 1,700 houses.  And yet he notes that land is already zoned for 1,500 houses, much of it it seems within the NAMA portfolio.  There are 6,119 houses in the Bandon Electoral Area Local Plan as of 2010.  The DEHLG survey of unfinished estates show that there are 9 such estates in the town of Bandon itself with a total of 370 planned units, of which 229 have been commenced (84 are occupied; 105 are completed and vacant, 40 still under-construction).  4 of the 9 estates have yet to be fully completed.  There are 305 unfinished estates in County Cork.

The local area plan then begs the usual questions. Why does Bandon need land zoned sufficient to increase the number of residential units in the area by 50%?  As it presently stands, the area already has an oversupply of units that it is finding it difficult to source residents for. Does the area really expect to double in size in the next 2-10 years (in other words are the population projections realistic)?  And why does the area want to zone land above and beyond that in the NAMA portfolio, on which the taxpayer has staked it’s financial future, at this point?  Surely additional zoned land is going to undermine the potential value of existing zoned lands, thus undermining the ability of NAMA to fulfil its mandate, and thus run counter to the national good?

It may well be that Bandon forms part of the Cork commuter belt, and it is projected to grow in the future, but surely land should be zoned on a needs be basis?  Or is there some other agenda at work in the local area plan?  Or perhaps the plan is still caught in a different era?  Whatever the rationale, it seems extremely unlikely that Bandon is going to need land for 3,200 additional houses in the immediate future.

Rob Kitchin

Back in February 2008 Brendan Gleeson, then based at Griffith University in Australia, was a visiting professor at NUI Maynooth.  Based on his observations he penned an opinion piece for European Voice entitled Lessons from Down Under.   At the time he was criticised for being too negative and pessimistic.  Three years later, it seems his prognosis was prescient.  Now back in Ireland on a permanent basis, it’ll be interesting to see what he makes of the place.  He’ll be joining IAN as contributor.  Here’s the EV piece.

For years, Ireland was the boom baby of Europe, the golden child of economic liberalism. It grew fat on low taxes, generous friends and good fortune. Up close, the Celtic Tiger looks more ragged these days. Are these first hints of trouble also an augury that Europe is not, as the optimists suppose, going to escape scot-free from global recession? Are faultlines in the liberal model now – belatedly – being exposed?

EU expansion has always brought fresh tribute to the growth feast. But the migrant worker-ants are now moving on to new fields of opportunity. The Irish Independent recently reported that immigrant workers are being wooed on to Estonia, Hungary, the Czech Republic – even back to Poland.

And what of Ireland’s heartlands? For this is an increasingly modern European nation – that is, suburban. The drums of discontent are beating for the Tiger. Unplanned growth has pushed people into car-dependent suburban sprawl.

Dublin’s congestion is awful and dispiriting. Schools are over-full, hospital waiting-lists long and lethal, and, outside central Dublin, much of the public realm looks neglected.

What will outer suburban workers do when petrol prices go through the roof? Ireland might start to lose its grasp on the knowledge workers who have brought it success.

Australia, another precocious boom child, is newly aware of the limits of the ‘hands-free’ growth model. The ancient proverb quos Deus vult perdere prius dementat, (roughly ‘those whom God wishes to destroy, He first sends mad’) aptly describes conservative opinion in Australia in the last years of the recently departed John Howard government.

The folly of the commentariat that supported the Howard government took many forms: climate scepticism, a ‘no poverty’ mythology and faith in the infallibility of the market.

Mounting contradictory evidence included a biblical drought, surely driven by climate change, sporadic outbreaks of unrest in urban poor communities, and an economy bursting with ‘capacity constraints’, after years of under-investment in key public infrastructure. Conservative opinion-makers reassured the public that these maladies were not real, just spectres raised by a hand-wringing Left.

The edifice of denial collapsed when Australians rewrote their own history and for the first time threw out a national government at the height of an economic boom. Howard’s “Go for growth!” election mantra was spurned by an electorate tired of freewheeling boosterism.

In Australia global warming is a ‘clear and present danger’, to use the language of Hollywood. The extraordinary dryness and heat of recent years have disturbed the national mindset. Surveys confirm public belief that the strange weather of the past decade arises from climate change not natural cycles.

Australians looked with increasing alarm at a national economic growth model that cheerfully inflated greenhouse gas emissions and failed to consider or provide for the costs of adapting to a warmed climate. They also accepted as real the threat of peak oil prices. “Pain at the pump” was the media’s catch cry in recent years as petrol prices rose relentlessly. Again, denial in the commentariat: “We’ll find more oil, it’s just a temporary problem.” “No it isn’t,” said the car-dependent, mortgage-strapped voters of Australia’s heartlands, the suburbs of its great cities.

A river of interest-rate rises carried neo-liberal hopes out to sea. The dedicated inattentiveness that defines economic liberalism explains the failure of the federal government to address the many mounting stresses, especially in infrastructure capacity, which drove up inflation and thus interest rates.

The electors were not interested in the technical issues, but knew whom to blame for failing to provide sound technocratic oversight of the economy during the boom. Australia’s suburban heartlands ached with laments as the cost of money, petrol, food (the drought) and services rose relentlessly. What was the point of “near to full employment” when a wage could not cover the basics? Howard’s attempt to liberalise employment conditions infuriated voters further. Metropolitan suburbia threw the government out on its head.

What might Ireland learn from the Australian adventure? Both nations have enjoyed an economic boom conjured by the miraculous power of an unleashed market. Both had wonderful offerings for the growth feast: a well-educated citizenry, strong social capital and lots of unexploited nature. Much of this stock has been run down. In Australia, civic realisation of blight and waste ended the reign of a politics committed to hands-free growth. It surely has the capacity to do the same in Europe, especially in Ireland.

Clearly the dying business of the government is to enact the Finance Bill.  The draft bill has rolled back on provisions relating to the termination of property incentives such as Section 23 tax reliefs.  Instead, an economic impact assessment will now be undertaken to examine the effect of any changes to present provision, meaning that any tax relief changes will be deferred for several months or longer.  I’m not going to deny that there are financial implications for investors in rolling back on Section 23 tax reliefs and other property tax incentives.  It will undoubtedly push some investors into difficulties and some over the edge into bankruptcy.  However, they and their wealth, is being sheltered and protected on the pretext of saving the banks from further losses – and make no mistake this is protecting long term assets of investors from the perils of what happens when a free market goes sour; and other parts of the economy are subsidizing this tax relief to the tune of €60m a year through further cuts or increased tax elsewhere in the bill and earlier budgetary changes.

The government has been little prepared to listen to and hold back policy changes in relation to the financial penalties being imposed on lower and middle class citizens through tax hikes and cuts in benefits, and those parts of the bill remain.  It would appear though that they have listened to their allied lobby groups in the construction, taxation and financial sectors such as the Construction Industry Federation, Irish Property Owners’ Association, Irish Taxation Institute, and Irish Auctioneers and Valuers Institute (see IT article) and to align that with protecting the investor class that has traditionally voted for them.  A cynical election ploy of a party fighting for survival?  An attempt to push an unpopular decision onto the next government?  Or a sensible strategy to help Ireland out of the financial mess it finds itself in?  If the latter, why did it even find its way onto the agenda in the first place?

For a party that has been arguing that There Is No Alternative to most things financial for the past couple of years, it seems after all that there is an alternative to investors feeling a slightly larger pinch or facing the realities of the free market in action.  If only they were bond holders – they would have been completely indemnified.

Rob Kitchin

Here is the NIRSA submission on the Public Consultation Draft of the Guidance Manual for Managing and Resolving Unfinished Housing Developments published by the Department of Environment, Heritage and Local Government.  It was submitted last Thursday 13th January.

NIRSA welcomes the publication of the draft Guidance Manual for Managing and Resolving Unfinished Housing Developments by the Department of Environment, Heritage and Local Government.  Given the nature and scale of the unfinished estate phenomenon in Ireland, and their various associated problems, it is vital that a strategy, including appropriate policy and statutory instruments, is developed and implemented to address and resolve the issues these estates face.

General comments and recommendations

Whilst we welcome the Department’s public consultation draft, and feel it is a step in the right direction, we are of the opinion that the guidance manual needs significantly more work if it is to be effective in tackling the various issues that unfinished housing developments face.  Indeed, without significant changes to the proposed way forward we would envisage many estates progressing very little from their present circumstances over several years.  In particular, there are nine general concerns that need further attention.

a)  The lack of compulsive mechanisms to ensure that issues are resolved.  The proposals in the draft manual are highly voluntaristic in nature and seek to encourage, rather than compel, various stakeholders to address specific issues.  It is proposed that all elements of Site Resolution Plans (SRPs) are negotiated between stakeholders, with discretion left to Local Authorities as to whether to pursue stakeholders with available legislative instruments.  This voluntary nature makes it likely that some stakeholders will seek to avoid addressing the problems developments face. There is thus a real risk that the guidance will not achieve its stated aim of finalising the development of incomplete estates.  In addition, given the centrality of SRPs as the prime mechanism to address issues related to unfinished estates, this instrument should be detailed very early in the document.

SRPs should be composed of compulsory elements which are rigorously enforced to ensure compliance.

b)  The lack of time frames. The present proposals are not accompanied by any proposed time frames for development and implementation.  This is a significant oversight that will potentially lead to enormous drift and the potential for very little to happen over lengthy periods of time to rectify the problems of unfinished estates.  Issues of health and safety, for example, need immediate attention.  Some estates have been in their present state for a number of years.  The delay in recognising the seriousness of the unfinished estates phenomenon, the time taken to undertake and analyze the DEHLG Survey, and the time taken to formulate this consultation document has meant resolutions to existing problems have already considerably delayed corrective action.  The absence of time frames will extend the delay to action even further as stakeholders drag their feet to suit their own agendas.

Time frames should be added to the various steps involved in SRPs and this timetable should be rigorously enforced.

c)  The lack of conflict resolution mechanisms.  Whilst the manual sets out the idea of SRPs, it does little to spell out how such SRPs would work in practice or how to resolve conflict between stakeholders within SRPs.  Given the varying vested interests of stakeholders there is significant potential for conflict, especially around issues of finance and liabilities.  This is especially the case whilst SRPs are voluntaristic in nature as stakeholders seek to minimize their risk and costs and maximize their benefits.  Without a well defined conflict resolution mechanism for managing SRPs the danger is that many SRPs will stall and little progress will be made to address the problems facing estates.

A conflict resolution mechanism should be devised that will ensure that SRPs do not stall and fail.

d) The lack of clearly defined SRPs suitable for different kinds of estates. The manual talks of a spectrum of unfinished estates, but only provides a broad description of a SRP.  It would be much more useful to present a typology of unfinished estates accompanied by model SRPs, with defined policy instruments and pathways mapped out to resolve the issues facing each kind of estate.  These should be also summarized in tabular form.  This would provide much clearer guidance on the expected routes of resolution and outcomes in relation to different kinds of unfinished estate.  It is acknowledged in the document (p. 33) that some sites might be assessed as not having a viable future, and one model SRP should outline what happens in these cases (which is not done at present).  The case example provided in Appendix 3 is far too thin on detail and substance to fulfil the role of a model example SRP.

A typology of unfinished estates should be devised and ideal type SRPs set out for each category, including well defined policy instruments and pathways to resolution.  This should include cases where a SRP has designated an estate as being unviable.

e) The absence of embedding within wider housing, planning and public policy strategy. The manual discusses a range of potential statutory instruments that might be used by Local Authorities when negotiating with stakeholders.  However, there is little attempt to embed the approach taken to resolving unfinished developments within wider housing, planning and public policy strategy, including the National Spatial Strategy, National Development Plan and four year economy recovery plan.  There is a single page (p. 29) that discusses unfinished estates with respect to core planning strategies (development and local plans, regional planning guidelines) and wider housing policy concerning public housing and sustainable communities.  This isolates SRPs from the wider context of, and initiatives in, planning and housing policy that should be providing vital framing for SRP formulation.

The approach to resolving the problems facing unfinished estates needs to be embedded within and framed by wider housing, planning and public policies.

f) The lack of a single agency tasked with ensuring that SRPs are properly formulated and implemented.  Without sufficient oversight, it is likely that the process of developing SRPs will drift significantly meaning:

• they will vary in form enormously across the country;
• there will be variances in their delivery and execution (leading to a ‘postcode lottery’ with respect to resolutions reached depending on the competencies and efficiencies of local authorities);
• conflict in the resolution process will be ineffectively and inefficiently dealt with.

A single agency charged with oversight will ensure that SRPs are pursued as envisaged, that they are consistently applied across the country, that there is a skilled hub of expertise and experience for mediating conflict in SRPs, and that SRPs are aligned with other strategic policies relating to local core strategies (development and local plans, regional planning guidelines) the National Spatial Strategy, National Development Plan, and so on.

A single agency should be appointed to oversee and be responsible for the successful delivery and implementation of SRPs.  In our view that should be the Housing and Sustainable Communities Agency.  This agency should be sufficiently resourced to undertake the task.

g) The need for greater clarity on the parameters of estates needing SRPs

The manual uses the DEHLG’s national housing development survey to initially define those estates that SRPs will be applied to.  Further narrowing of the remit is undertaken by excluding “developments that are substantially complete and might only have minor outstanding issues that are normally addressed by the taking-in-charge or maintenance processes”. Neither does the document focus on dwellings that are being occupied or dwellings that have not commenced and will not therefore be causing problems in relation to safety or visual impacts.  There are a number of problems with these parameters.  First, the DEHLGs survey is limited to post-2007 estates and there are estates completed prior to 2007 that have issues that need redress.  Second, just because an estate is considered ‘complete’ does not mean it does not have issues that need redress.  For example, a completed estate might have low level of occupancy that makes an estate management company unviable and therefore is missing adequate services such as street lighting or bin collection or communal electricity to power sewage treatment plants.  Third, because houses are occupied does not mean an estate does not suffer from problems relating to road surfaces, lighting, sewage, and amenity areas.  Fourth, SRPs do need to consider dwellings not yet commenced to assess whether such dwellings are desirable and viable

There is a need to revisit the parameters defining what unfinished developments will be tackled through SRPs; this will be aided by the taxonomy recommended in point d above which should identify the problems faced by different kinds of estates.

h)  The issues of finance, resourcing and NAMA.  The draft manual is very thin on the issues of finance (a single page, p. 28), a crucial element in the ability to be able to tackle most issues facing estates.  The manual has little to say about what happens when a developer is insolvent and therefore little or no credit is available. The manual also offers little on the possible mechanisms and risks associated with different financial approaches.  A second gap in the discussion is the resourcing of the SRP process in a time of declining municipal capacity; how will resources be made available to stakeholders to facilitate SRP creation and implementation. Finally, the manual is relatively silent about the role of NAMA in the process of resolving issues on estates within their portfolio.

There is a need to set out all the possible mechanisms to overcome financial shortfalls, including a cost benefit and risk analysis of different approaches.  The resourcing of the SRP process should be clarified. In addition, how NAMA will operate with respect to SRPs, including the office within NAMA who will be responsible for negotiation, needs to be agreed and set out.

i)  The issue of estate management.  Many unfinished estates, especially apartment complexes but also some housing developments, were conceived as being run as private developments that would be serviced by estate management companies, rather than being taken in by Local Authorities.  Many such estate management companies have become insolvent or are unable to discharge their duties because there are not enough residents to provide sufficient fees.  In these cases, existing residences are suffering from a number of issues such as a lack of proper services with respect to bin collection, lighting, sewage treatment, security.  The issue of estate management is not dealt with in the manual.

There is a need to include estate management companies as a stakeholder group for SRPs and for the issues faced by residents when an estate management company goes bust or cannot operate effectively to be covered by SRPs.

Brendan Gleeson and Rob Kitchin

A recent post on this blog asks whether local authorities should be temporarily relieved of their decision-making powers. In response a number of critical questions can and should be asked:

1. Would centralised decision-making be any less subject to the influences of misplaced political judgement?

2. How would centralisation deal with the apparent legal issues arising in relation to dezoning?

The question of overzoning and overdevelopment does need to be dealt with but centralised control may not be the best answer. Indeed effective strategic planning at the local and regional levels is currently impeded by the neccessity to follow a common set of population porojections, produced at national level and sanctioned by the DoEHLG which are recognised by regional planners to be wildly out of line with realistic expectations of future growth given current levels of unemployment and emmigration.

Experience in Northern Ireland would suggest that a centralised system of planning can lead to beuracratic decision-making where planning decisions are made according to a tightly prescribed policy that is blind to questions of spatial context. It is also possible that centralised decision-making would open the door for a system based on tradable development rights and permits,  favoured by some infleuential environmental policy experts both in Ireland and elsewhere. Relieving local authorities of their planning powers would serve to seriously undermine the authority and legitimacy of local government at a time when a renewal of democratic principles of accountablity and civic responsibility is required.

Cormac Walsh

On Monday the Irish Independent reported that local authorities approved 43,000 apartments and homes in housing estates in 2009 and 2010 (not including one-off houses), despite the well known problems of oversupply and overhang in the housing market (see our key housing statistics).  A few months ago, the Indo also reported (also see here) on the land zoning bonanza that has occurred over the past couple years, deep into the recession, as local authorities sought to zone land ahead of the introduction of the Planning and Development (Amendment) Act 2010.  It seems that local authorities have been facilitating developers and banks who wanted to protect or inflate the value of their property and land assets ahead of valuations by NAMA or to sneak it under the guillotine of the new Act.  The Act and the quotas in the Regional Planning Guidelines will help rein back future zonings and permissions, but there is a question mark over existing permissions and zonings.  It could be a case that any attempt to rescind permissions and dezone may lead to cases around injurious affection (compensation for the loss of value by actions of the state).  The new windfall/betterment tax of 80% on trading profits and capital gains arising from disposals of land, where it has increased in value due to a status in its zoning status post October 2009, may head some of these off, though its not clear to me about pre-Oct 2009 cases.

One really has to wonder what is going on here?  Why are local authorities/councillors helping landowners, property developers and speculators to zone unneeded land and give unneeded permissions at the expense of the state, state agencies and tax payers?  The only interests it serves is that of landowners, property developers and speculators.   The new Act is going to help, but no doubt vested interests will be at work trying to find ways around it and the local authorities/councillors seem primed to help them.  What is needed seems to be a fundamental change in planning culture away from a laissez faire presumption for development to a more measured, regulated system free of cronyism and clientelism.  The question is – can local authorities transform and deliver that?  Or are local authorities incapable of getting their houses in order to act in the public good, in which case is there now a case for all planning decisions (and not just plans) to be taken from them?  Perhaps we’re now at the stage where we need to consider this as a serious proposition, if only on a temporary basis until we have a system fit for purpose.

Rob Kitchin

In a recent column in the Financial Times (“Debt: Another Word for Guilt”, January 14, 2011) Simon Kuper questions the validity of the rational actor model so beloved of economists. He suggests that treating the individual as an isolated figure acting in a void provides little insight into why people behave the way they do.  Behavioural economics which cleaves to the notion of the individual actor –  albeit an irrational one – is also limited as an explanatory perspective. What’s missing, Kuper suggests is the wider social context within which these actors – rational or otherwise – live their lives.  Kuper should try reading some sociology.  Sociologists strive to understand not just the individual in relation to his or her social context, but the dialectical process by which the individual shapes but in turn is also shaped by the wider contexts.   That is axiomatic to our discipline.

It may be helpful to reiterate here what sociology does, that economics, generally speaking, does not do.  Sociologists offer a robust alternative to the kind of reductive rational choice models frequently proffered by economists.   According to Therborn (1991)  the key difference resides in the conceptualization of the relationship between the individual and his or her context.  Rational choice models (favoured by economists) treat actors as given and situations as discriminating: “people act they way they do because their situation is such and such, and they act differently when their situation changes”.    In contrast, Therborn observes sociology treats the cultural belonging and structural location of actors as the principal explanatory variables:  “people act the way they do because they belong to a particular culture and and/or because they have certain resources to draw upon” , (1991: 188).   When sociologists come to interpret social processes (like why people save rather than spend during economic crises)  we are therefore, attuned to the particular cultural and social locations of people, the structural context of their action, and the kinds of resources that they can draw upon and that help to shape their courses of action.  This of course requires a measured rather than a knee jerk approach to the analysis of human action.

In recent times in Ireland,  the sociological perspective has been effectively sidelined in the headlong rush to re-cast the nation and the society as an economy initially on speed, and now junked up and strung out.  Privileging an exclusively economic perspective rules out others and has implications not only for our notions of collective identity but how we might conceive of and re-shape our core institutions.  Moreover, an economistic perspective that favours the rational actor model promotes the economic self over the social or reflexive self, and privileges the attainment of private economic interest at the expense of the collective good. That’s what happened at the high point of the Celtic Tiger and continues to happen almost unabated in its aftermath. Its time to rein in the rational actor model. We need to begin the process of re-imagining  through a more sociologically attuned lens-  our economy and our society as well as the political system which underpins them.

Ref: Therborn, G. 1991. “Cultural belonging, structural location and human action: explanation in sociology and in Social Science”  in Acta Sociologica 34, pp. 177-191, 1991

Mary Corcoran

I have previously commented on this site about the impact of unsustainably high rents on businesses in Dublin city centre, and particularly in the Grafton Street Area. Almost a year on, things are beginning to look a little different on Grafton Street. At the Southern end of the street, for example, Dunnes Stores has reopened in recent months and a Disney Store is due to occupy the unit next door, with work currently underway.  Meanwhile, across the street a 3D Games shop has opened in what was then a vacant unit.  Further down the street, the former West Jewellers  has recently been bought by Brereton Jewellers and is therefore likely to be reoccupied in the near future. Furthermore, the two units on South Anne Street, which appeared in the image with West Jewellers last February, are now occupied (Opticks Eyewear and Madison furnishing and interiors store).

West Jewellers and Surroundings, corner of Grafton Street and South Anne Street, February 2010. Photo by Philip Lawton

West Jewellers and Surroundings, corner of Grafton Street and South Anne Street, December 2010. Photo by Philip Lawton

Still, however, the issue of rent is high on the agenda. One graphic illustration of this is the ‘High Rents Are Killing Our Jobs’ sign which hangs above Korky’s shoe shop on Grafton Street. Spreading the net a little wider, but staying in roughly the same area, the current crisis has claimed a number of high-profile eateries.  Although the closure of some ‘Celtic Tiger’ establishments, such as Nude on Suffolk Street, may be an indication of shifting consumer habits, a letter to the Irish Times, last Friday, 14th January from the owners of  Mermaid and Gruel on Dame Street cites what they refer to as the “…intransigence of landords who still demand boom-time rents…” as the predominant factor in the closure of their restaurants. While the ban on upward only rent reviews and the fall in values offers potential for new-comers, it seems high rents are still placing a serious burden on existing businesses. Furthermore, this is not in any way confined to the area that I have focused on here, but, as highlighted by various media sources (eg; Galway and Athlone), is a national issue.

Philip Lawton

Korky's Shoe Shop Grafton Street, December, 2010. Photo by Philip Lawton

Ireland is the world’s seventh most economically free country according to the Heritage Foundation, a US think tank, that has ranked 183 countries.  Ireland has a score of 78.7 (a fall of 2.6 pts on last year).  Here’s how the country fares on the ten measures used to assess ‘economic freedom’.

92.0    Business Freedom    (Avg 64.3)
87.6    Trade Freedom    (Avg. 74.8)
72.1    Fiscal Freedom    (Avg. 76.3)
47.1    Government Spending    (Avg. 63.9)
80.7    Monetary Freedom    (Avg. 73.4)
90.0    Investment Freedom    (Avg 50.2)
70.0    Financial Freedom    (Avg 48.5)
90.0    Property Rights    (Avg 43.6)
80.0    Freedom from Corruption    (Avg 40.5)
77.5    Labour Freedom    (Avg 61.5)

If it wasn’t for government spending we’d probably be in the top three.  The Heritage Foundation are profoundly anti-state and are opposed to government in general, public services in particular, and public administration beyond aiding the free market.  Here’s how the Heritage Foundation describes economic freedom:

“Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please, with that freedom both protected by the state and unconstrained by the state. In economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.”

This is very clearly ideologically driven, underpinned by the tenets of neoliberalism (even if its proponents do not know what neoliberalism is or argue that they are non-ideologues).  Here’s how David Harvey describes neoliberalism in A Brief History of Neoliberalism (2007):

‘Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterised by strong property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practice. The state has to guarantee, for example, the quality and integrity of money. It must also set up those military, defence, police, and legal structures required to secure private property rights and to guarantee, by force if necessary, the proper functioning of markets. Furthermore, if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary. But beyond these tasks the state should not venture.’

SNAP!

Neoliberalism prioritises the rights of individuals and corporations – it’s survival of the economic fittest.  There is no collective good of society.  The free market is inherently just and supports individual (not social) freedoms. Whereas in Keynesianism the priority of the state was full employment, economic growth and the welfare of its citizens, under neoliberalism the state’s priority is to support free economic enterprise and to police social (but not economic) relations.  All services should ideally be administered and delivered by the private sector – education, health, energy, transport, water and so on.  Everything should be open to exploitation for capital accumulation.   Deregulation and privatization are the order of the day – governance and regulation are unnecessary burdens and restrictions; the market should be allowed to regulate itself.  Taxes should be the absolute minimum.  Welfare – forget that; people should look after themselves.  Individuals make their own way in the world, pulling themselves up by their bootstraps, with limited or no aid by the state – individuals are free to work, produce, consume and to be exploited, ridden over roughshod and live impoverished lives.  Capital and power is thus disembedded from the state and society and put into the hands of a relatively small elite and corporations.

During the Celtic Tiger years, Ireland was the poster child for neoliberal, open, free economies – the model to emulate and copy.  And now?  We’re the poster child for what happens when neoliberalism goes awry.  Interestingly, most of our solutions involves a deepening and strengthening of neoliberal practices and the IMF, one of the prime global instigators of neoliberal reforms through structural adjustment, is pushing us further in that direction – publicization of private debt through nationalization, bailouts, NAMA, etc. with the bondholders taking no pain and the explicit aim of transferring assets back to the private sector as soon as possible and at bottom of the market rates; talk of privatization of public utilities; the commitment to keep direct taxes low, especially for the wealthy and corporations; the scaling back of government and public services; further private contributions to education, health, etc.   In other words, citizens take on the risk and costs, then transfer assets to the private sector, along with, what has to date been the work of the state, being outsourced to companies.

There has been precious little debate as to what this deepening and reinforcing of neoliberal doctrine and policies will mean for the country in the future.  The ‘state is bad, the market is good’ mantra dominates public discourse.  And yet it was neoliberal policies that got us into this mess and they are now being employed to try and get us out of it.  Personally, I’d be much more comfortable if we were down the list in the mid-twenties with countries such as Sweden, Germany and Norway, with stable economies, decent public services and a good standard of living; that we started to move back to forms of Keynesianism.   ‘Economic freedom’ as defined by the Heritage Foundation is not all it’s cracked up to be – it’s great for the rich and corporations, it’s not so great for everyone else.

Rob Kitchin