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.’
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.