What was Sally Rooney’s crime? The more she writes, the more her books sell, the more incoming fire she seems to take from reviewers, opinion-makers and various salon arbiters of literary standards.
Could it be that she is the author of choice for many, writing novels with characters and experiences that readers bond with, and that annoy critics? Could it be that she’s simply a better writer than some of the reviewers who have decided she needs to be taken down a peg or two?
Jealousy is the most likely answer. There is just not enough room at the top for all those who fancied themselves as the great millennial novelist, so knocking feels like justice.
Don’t worry: the column isn’t about to veer off into the sticky swamp of literary criticism. We’ll stick to economics, but will link four big stories this week: Sally Rooney, Leaving Cert points race inflation, the dysfunctional housing market and the faltering popularity of the Government.
The connection is “elite overproduction”, a theory conceived by Peter Turchin, the Russian/American historian. Turchin argues that historical data shows societies, through the ages, become politically and socially unstable when countries produce far too many graduates with aspirations of becoming part of the elite.
Expectations are heightened. If the economy isn’t sufficiently robust to generate the opportunities these people believe they merit, they will become angry, frustrated, crestfallen and politically volatile. Having been promised a lifestyle and career reflecting their abilities, the comedown associated with mediocrity and spurned ambition can lead to radicalism.
Indeed, the alliance of a cohort of spurned, educated underachievers and a large, faltering left-behind class explains much of 21st-century populism. This is the problem with a meritocracy. The elite and the would-be elite believe they are heading to the top based on merit. They think they deserve it because they are worth it. Hell hath no fury like a meritocrat spurned.
Ireland is not immune from this global trend.
Lawyers in America
Turchin focuses on the over-production of lawyers in the US over the past generation as evidence of endemic elite over-production. Let’s take a more appropriate metric for Ireland: the Irish grind and its inevitable offspring, grade inflation.
There can be few better examples of middle-class parents pushing children towards the elite than the grind, which promises their children will steal a march on the child sitting beside little Johnny in class, who depends solely on the basic education system and its teachers.
Conservative estimates have put the value of the second-level grinds market in Ireland at €60 million. According to the latest Growing Up in Ireland longitudinal study, just under half (49 per cent) of all Leaving Cert students are receiving grinds of one kind or another, with a further 20 per cent indicating they intend to take grinds ahead of their exams.
As expected, grinds are more commonplace for the children of the well-off in society, with 63 per cent of Leaving Cert students in the top 20 per cent income bracket receiving private tuition – a stark contrast to the 33 per cent from the bottom 20 per cent.
Dedicated grind schools are expensive, but if they ease access to the elite, many parents deem it a price worth paying. Part of the frustration when the students realise that there are not enough opportunities later is the expense incurred.
Final year in the Institute will set you back €7,650; Ashfield College costs a similar €7,495; and it’s the same across the country, from Bruce College Cork (€7,650) to Yeats College Galway (€7,400).
Even choosing grinds for a few subjects is expensive. Let’s say you send your child to a non-fee-paying school but want to give them that extra edge with grinds in just three subjects. At €35 per hour for each subject (which is probably at the lower end of the range), that’s more than €100 per week and around €3,200 for a full academic year.
As more students get grinds, each grind cancels out the advantage of the last one. A grind for your child is only worthwhile if no one else is doing grinds. We end up with grade inflation, which triggered this week’s complaints. In Ireland, the elite is being over-produced even before they get to university.
Now look what happens to those who graduate from the top university courses. They leave college, maybe with a master’s degree, with high expectations of what life should deliver. However, the economy can only produce so many high-status jobs, and even if they get one of these, their aspirations slam into the dysfunctional housing market. They have the job but not the lifestyle.
When we express a graduate salary in terms of rents, we see the problem. According to a 2020 GradIreland.ie survey, the top graduate salary is around €35,000, which means a take-home pay of around €29,000 after tax. Glancing at the latest Daft report, average monthly rental prices for a one-bed apartment in Dublin range from a low of €1,359 in north Co Dublin to a high of €1,817 in Dublin 4.
o, if a well-qualified graduate wants to live in a one-bed apartment of their own in the nation’s capital, it means handing over anywhere from 56 per cent to 75 per cent of their post-tax earnings. In other words, this is an unattainable luxury. Who said a one-bed flat isn’t a home? Is it any wonder they get frustrated?
As more and more expectations are spurned, an increasing proportion of the population becomes deeply frustrated, jealous and indignant. After all, what is much of Twitter other than the angry echo chamber of unhappy Arts graduates?
On a more serious note, the under-appreciated and unfulfilled meritocrat with a sense of victimhood can easily team up with real victims, the left behind, to create new political movements, which don’t make sense from a traditional right/left, conservative/liberal, middle/working class perspective. We see this happening here, as Sinn Féin picks up voters from every stratum of society.
For a country experiencing the shattered aspirations of elite over-production, the question is, who are the “Normal People”?
Having originally scoffed at it as an empty “woke” gesture, the UK’s Tory government then scrambled to back the English football team “taking the knee”. This is a fine example of a brand trying to get back on the right side of public opinion. It turns out that the majority of English people – and particularly the young – agree with Marcus Rashford, who is a far more potent adversary to Boris Johnson than Keir Starmer.
Like all brands, the Tories live and die in the court of public opinion, and public opinion shifts. Just ask Fianna Fáil. Being on the right side of these cultural swings is essential for any brand.read more
In January 1988, the Economist magazine carried a special report on Ireland entitled “The poorest of the rich”. Our economy was in a tailspin. Emigration was skyrocketing, we had just devalued the currency for the fourth time in a decade and the country was flirting with a debt crisis.
Capital and talent continued to flow out of the country, leaving a fragile shell of vulnerable local companies and a bloated public service, undermined by a current account deficit. In short, a basket case.read more
One of the great mysteries in economic history is why large parts of Africa and Latin America do not speak Chinese but rather English, Spanish, Portuguese or French.
In 1492, when three rudimentary Spanish vessels alighted in what is now the Dominican Republic, the Chinese navy dwarfed the combined sailing infrastructure of competing European kingdoms. Technologically, China was miles ahead of Europe, with gunpowder, watches, paper money and a whole host of other innovations, created and honed over centuries. These innovations beguiled Marco Polo.read more
When it comes to foreign politics, we tend to get hot under the collar about events in the UK and the US. Yet in terms of the impact on Ireland and Irish policy, events in Germany are more material. We are on the path to closer EU integration, and Germany is the dominant country, so Germany counts now more than ever.
The Merkel era is over – a new Germany is recalibrating. What sort of Germany will we get?read more
Economics is counterintuitive – and maybe this is the most important lesson in macroeconomics. Here’s a good example. A responsible household will try to save but the economy is not a household. When everyone in the economy saves at the same time, it may look good and responsible from an individual perspective but, if everyone is saving, who is spending? Since your spending is my income, if you are not spending, where is my income going to come from? And as savings flow from income, if my income is falling so too are my savings, thus everyone saving at the same time leads to a fall rather than an increase in savings.
When so-called “serious” people call for general belt-tightening, urging people to save and not spend, it sounds parsimonious – and in modern economics we’ve fetishised parsimoniousness – but it’s actually silly. What seems like common sense isn’t sensible at all.read more
The difficulty lies not so much in developing new ideas as in escaping from old ones — John Maynard Keynes.
This week, the Irish Fiscal Advisory Council has shown it is wedded to old ideas by trying to bully the State into cutting spending and raising taxes. Meanwhile, the world is moving into an era of greater government spending, backed to the hilt by new central bank financing, in order to fix infrastructure.read more
Our world is terrorised by short-term thinking. We are living longer but thinking shorter. So many aspects of our lives are now governed by instant gratification from Insta likes to Twitter notification on our mobile devices. TikTok thinks YouTube isn’t short enough.
In our working world, people expect emails will be answered immediately. WhatsApp groups bark for attention. Amazon urges us to “Buy now”. Netflix tracks our habits, reminding us of the next “must watch” mini-series. We are increasingly out of breath. In business, chief executives are obsessed by quarterly results. Shareholder value demands immediate profit. In the financial markets, Bitcoin surges and then collapses, driven in part by the oppressiveness of nanosecond algorithm trading.read more
The other night I was watching an episode of Parts Unknown in which Debbie Harry is chatting to Anthony Bourdain. Although they didn’t address it directly, they alluded to the long term cultural consequences of the unaffordability of housing in New York.
It reminded me of Bourdain’s descriptions in his memoir Kitchen Confidential of the people who work in the heat, sweat and electrifying atmosphere of a busy kitchen:read more
David has been writing for almost 20 years and there are plenty of articles covering some of the most turbulent times in the world economy.
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