Fragile Ireland, Our reliance on Foreign Direct investment
This report is a few months old but is worth remarking on
The biggest payers are not mentioned, but it’s fair to say it’s some combination of Google, Facebook, Intel, Microsoft and Apple. Our reliance on Foreign Direct investment has long been the panacea for a government that struggled to create jobs. And since Irish government loves to expand, constantly generating quangos and bodies to fix the parts of the economy that the government helped break in the first place, – attracting FDI has always been a way to gain more revenue without unpopular taxes, and despite the cries of low corporation tax rate, do pay quite a bit
This strategy has worked well, but it has fragilised our economy. An economy that is prone to shocks to which it cannot recover, often with wide reaching and catastrophic failure. Complex and opaque interdependencies, combined with “too big to fail” result in wholesale fractures in the fabric of the economy. Such an entity can no more whether a shock than a fragile crystal sculpture can withstand a hammer.
As the mathematician Nassim Taleb often talks about, unpredictable and unforeseeable events (Black Swans as he calls them) come when they will , and shatter everything . An economy based on thousands of indigenous business, meeting genuine demand in the free market would be far more antifragile and able to withstand these events.
The Irish state has been storing up fragilty for decades, not just on the economy. We have a third level education system , vastly expanded past usefulness and devoting more and more of its energies to gender equality and social justice , and a banking sector which purportedly “fixed” still offers no chance for saving. This especially affects the millennials, who are coming of the age they wish to start families and finding themselves with no accumulated capital after years of underemployment, debt and tax.
On top of this we have , from the highest levels, been directing the ethnic and cultural make-up of this Island into a diversitopia experiment, with no heed paid to the historical implications of multicultural utopias, or the decay in social trust that engenders. Whether you think multiculturalism is good , bad or come combination of the two, the fact is that it’s endpoint and outcome has had vanishingly small airtime and discussion ,
Our black swans, the events that will shatter our illusions, can come from any direction. From the collapse in the share price of the tech companies based here, to the reshoring to the USA of the Multi-nationals, Brexit, or another financial crisis (perhaps deeply tied into the Euro and ECB) , who knows. and with a national debt north of 200 billion, it seems that even a small crack could be a prelude to the entire edifice coming down around our ears.