It’s the long weekend, which allows us time to kick back and maybe entertain some thoughts on where this economy of ours is going. Largely on the back of the strength of our two major trading partners, the US and Britain, our economy is growing.
As long as the euro remains weak and interest rates in the eurozone are at depressed crisis levels, the natural tendency of an economy to recover and grow should remain intact.
Most economists call this propensity for an economy to ebb and flow, the business cycle – I prefer to term it “human nature”.
We humans are not the rational creatures depicted in economics textbooks. On the contrary, we are highly irrational animals, susceptible to swings from optimism to pessimism. We are unbelievably influenced by our neighbours and prone to excitability as well as depression.
As a result when we become giddy, we become giddy together; and when we become pessimistic, this pessimism is infectious and we all become gloomy together.
This very human cycle between collective optimism and pessimism is the business cycle.
However, there are moments in an economy’s lifetime when big strategic decisions are taken which are influenced – but not determined – by the business cycle. These are big decisions which have enormous economic consequences. We are about to celebrate the anniversary of one next year, 1916.
The funny thing about these big events is the fact that most of them were unexpected. It is the job of historians to give them context, give them a plausible cause and give us a narrative, which makes sense of historical events.
The underlying reason for this is that we always want to feel that we are somewhat in control and we are in some way bounded by probability rather than improbability.
That’s also human nature. We humans, though irrational, like to equip ourselves with stories that have beginnings, middles and ends. These stories deem that big events are the “inevitable consequences” of something else.
But that’s actually not how the world works. For example, if this column was being written in August 1915 and it suggested that Russia – the least industrial big powerful country in Europe – was going to be overthrown and replaced by the thoroughly urban communists, you’d think this mad.
Had I said that the Austrian and Turkish Empires would disappear, you’d think me extreme. Or if I had suggested that an ultimately victorious Britain would, by 1921, lose more of its land mass than a defeated Germany, you’d have laughed at me.
Had I told you in 1915, when the Home Rule party was the only real mainstream nationalist party in Ireland, that by 1918 they’d only have one MP in the whole country, you’d have me committed.
But all this happened. And now we think it was all inevitable, but it wasn’t.
Strange things do happen.
Armed with that idea, let’s look out now from the vantage point of 2016 and ask whether we might have a united Ireland before any of us thought possible or (maybe even) desirable. Might we stumble into a united Ireland in the same way we stumbled, quite unexpectedly, out of the United Kingdom?
Before we head up the M1 to Belfast, consider first our relations with Brussels.
Over the past few months, in fact since the onset of the eurozone crisis, it appears incontrovertible that the EU has changed.
What has been dressed up as an economic conflict between debtors and creditors could also easily be seen as a cultural battle between the north and the south.
Certainly, that’s the way the popular press paints it and, in truth, most European citizens see it this way too.
Vastly different economic realities have pitted the north against the south, with France not too sure which way to go. Germany has indicated that it has had enough and intends to lead Europe in a more Germanic direction – which is fine for Germany.
However, one of the implicit promises of the European Union was an economic promise that if countries joined, they’d get rich.
Remember all the slogans in Ireland during referendums about the Holy Trinity of “growth, jobs and Europe”. The same promises were made all over Europe to electorates that bought that line. The understanding for poor countries was that the EU stood for prosperity and by definition therefore, national sovereignty stood for poverty.
Once you make these types of promises, even implicitly, you have to deliver. In recent years, the EU hasn’t and that’s one reason for today’s problems.
My hunch is that we will have recurring debt crises in the eurozone and we will see the core countries around Germany pulling away on their own. Simply put: not everyone can keep up with Germany. Those that can will stay with Berlin, and those that can’t will go elsewhere.
The EU could well split between a core zone around Germany, Austria, Poland, Slovakia, the Benelux and France, with a second Mediterranean group headed up by Italy and the Iberian countries.
We also have the small problem of Europe’s south-eastern corner from Athens to Ljubljana, including Greece, Bulgaria, Romania and the former Yugoslavian countries. What is going to happen there?
These economies are faltering; economic inequality is terrible and the EU promise remains as distant as ever. Can Germany carry these countries if it can’t carry Greece? What do you think?
This brings me to the semi-detached arc of these islands and Scandinavia. By not joining the euro, Britain, Sweden and Denmark have all signalled that they are happy to be semi-detached.
These are all rich trading countries and, with Norway, they constitute an independent bloc of sovereigns that seem less than enamoured with giving more to Europe. Could they form a looser free-trading bloc that actually doesn’t need German hegemony to give them hope?
Closer to home, if Britain has a referendum on the EU and the No side wins, it will trigger a series of events, leading to a federal Britain, not least because the SNP-driven Scots will not want to be in the present British structure outside the EU.
They will have two options: either go for a federal Britain or full independence rather than be dominated by England without Europe. However, if Europe is changing dramatically, riven by fractures and crises, joining a putative Atlantic/North Sea trading alliance with the Scandis might make sense.
Now what about us in this scenario?
As I write, I am looking at demographics in Northern Ireland from the 2011 census. The most interesting statistic shows the proportion of Catholic vs Protestant in various age groups. Of the over-90 population in the North, 64 per cent are Protestant and 25 per cent Catholic. A total of 9 per cent had no declared religion.
This reflects the religious status quo when these people were born in the 1920s and more or less reflects the realities of the Treaty.
Now look at the same figure for the under-4s, those children and babies born since 2008. This corresponding figure is 44 per cent Catholic and 31 per cent Protestant. In one (admittedly long) lifetime, the Catholic population in the youngest cohort has almost doubled, while the Protestant one has more than halved.
Even given the fact that 23 per cent of parents of infants declared themselves as having no religion, we seem to be en route to a united Ireland.
It may happen much quicker than you think in the context of a wider EU and UK realignment. If the UK, as we know it, were to break up, the willingness of England without Scotland to prop up the North may well change. And according to the Belfast Agreement, if they want a United Ireland, we can’t stop them.
Now wouldn’t that be something for the 1916 heroes to digest? A Northern Ireland that wanted reunification and a Republic that is petrified by the prospect?
The first question I’d ask is why would you want a united Ireland.
The attitude of the NI politicians to governmental budgeting, particularly the SFs is to tell the British government to sod off with their nonsense of living within their means.
They’d expect us to pay for all their unearned goodies.
The 1916 heroes are welcome to them.
With hindsight that partition deal is looking better as each day passes.
You’re not going to have a united anything. Much less a united Europe. What you will see, I think, over the next several decades is fragmentation into currency areas, and people pulling out of large blocs and rejoining the biggest bloc of all – the rest of the world. The young have a much more international outlook and simply don’t want to be limited to a silly geriatric geographically restricted project that sells them all down the river. Ireland would be better joining the constituent parts of the UK in a trade commonwealth with our old international partners and all… Read more »
I’ve lived in the North for 5 years now and still can’t get my head round the complexities of the religion/politics. Our protestant friends vote SDLP – to prevent SF getting in – and while many Catholics are open to the idea of a ‘united’ Irland, they balk at the idea of it being led by the likes of Kenny/Noonan. And don’t forget; at the last Census 21% declared their nationality to be “Northern Irish” rather than Irish of British. I just can’t see it happening in my time. But perhaps that is what David is getting at. Like the… Read more »
A North Atlantic trading zone sounds like a winner to me David. That’s where our cultural and economic identities converge. The present EU political and democratic deficits don’t serve our interests. Why not adapt to changing realities and prepare for those realities? We have to make ourselves attractive to other members of such a trading zone. The north also has to make itself attractive to potential suitors. Let me set out my stall. I wouldn’t want unification with the North as it operates today. It’s an economic basket case and elements of both communities are absolutely delusional about their “attractiveness”… Read more »
Of, the elephant in the room is what to do with the loyalist community in the united Ireland should they wish to draw inspiration from the Donetsk People’s Republic. But perhaps they will behave or it will more be like the Velvet Revolution. It would be interesting though if Sinn Féin and the loyalists groups switched the roles and the loyalists started to play the role of the oppressed minority refused the right to self-determination. I only hope that the Irish Army is prepared for that and it won’t be surprised by potential separatists movement like Dublin City Council is… Read more »
Not all Catholics in the North want unity with the Dublin centred state. And not all Protestants are happy with their standing in the UK. In addition, NI will be a different place, if they learn to spend less time fighting with each other. And then there is the rest of Ireland perspective. The strange thing is that in Munster, most people think a united Ireland is the best possible outcome. But in the middle stretch of the country, south of a line between Drogheda and Sligo, there is a woeful antipathy towards Northerners – as a psychological construct. This… Read more »
To be honest as things stand, we have not run the RoI properly in decades. There is a serious malaise in the state system here.
Compare the current Irish Water mess, to the manner in which the ESB and Bord na Mona was set up in the 1940s.
There is a serious rot in Irish society at it’s core. And no amount of spin, and patting ourselves on the back over nothing, will change that.
I was in pharmacy once along the border. I went to get non-prescription medicine, which happens to be cheaper in the North, thanks to market rigging here. So of course, I asked how much is that. And then I asked if there was a reduction on a large quantity. So anyway, I indicated that I would buy it. It was about 50% cheaper. And the assistant in the counter asked me if I was entitled to it for free. Now I don’t have a northern accent, so this left me baffled. So I stated that I was not entitled to… Read more »
Changing into a totally different field, is any of the readers a geneticist by profession or education and can give me an opinion and on that article which has caught my eye today:
https://www.newscientist.com/article/mg22730313-500-semen-has-controlling-power-over-female-genes-and-behaviour/
When I won the All Ireland Heavyweight title (amateur) in 1964 it was just that. The All Ireland Title. That year I recall that 7 of the ten weight classes were taken by Ulster men. Everyone got along fine in those days and the border between North and South was wide open and only staffed during “office hours”. I drove through several times with nobody in attendance in the small hours of the morning. If unification is desired or desirable then just open the borders and let the people mix and meet!!!! There is the anecdote of the First World… Read more »
The tsar and the Japanese – could well be true since they were in the same side. After all her maj gave overweight bad driver ted Kennedy a knighthood for all the love and affection he’d bestowed on us over the years.
Mike Lucey
Abso-fu**king-lutely. Game of Thrones which has very violent content has done more for Northern Ireland and ROI tourism than the real violence and mayhem which screwed up the place. It took them a long time to realise that people generally don’t like to visit war zones unless they’re news media living on expense accounts out of the Europa hotel.
As one ponders ones own personal problems the world economy is contracting all around. http://campaign.r20.constantcontact.com/render?ca=be8bfdf3-7c79-4413-9eb3-cdc4d6244069&c=877a32b0-427b-11e3-ad08-d4ae52a45a09&ch=8905dbc0-427b-11e3-ad3c-d4ae52a45a09#hoffman “With each passing day, the evidence pointing to an imminent, comprehensive collapse in not only global economic activity, but the aforementioned, worthless fiat currencies underlying it, becomes increasingly obvious – to the point that there’s no way of pretending otherwise, which is why it’s so obvious that guys like Barry Rithholtz have an agenda, in publishing nonsensical statements like “the U.S. economy is improving, as are those of many other countries.” I mean geez, we are unquestionably at the singular low point of global economic… Read more »
Grzegorz Kolodziej,
So was Walesa a good man, or a bad man?
Or is it not as simple at that? What’s your opinion on him?
Thanks,
Adam.
A suggestion for Greece may suit All Ireland Alan Leishman Greece should join the Swiss Confederation 04.08.2015 Greece should join the Swiss Confederation? This week Canton Valais in SW Switzerland celebrates its Bicentenary of joining Switzerland as a new Canton in 1815. http://www.valais.ch/en/information/landingpage/valais-2015 Prior to this happy and stabilising event, the Valais had been for several centuries an unstable geo political battle ground in a power struggle that ebbed and flowed between the Duchy of Savoy, the Dukes of Burgundy, and the Bishops of Sion, (capital of the Valais). In the wake of the French Revolution, Napoleon invaded the Valais,… Read more »
Such a heavy question with Walesa and it is sooooo late… If I were to say it in one sentence, I’d say it’s not as simple as that, but the more we find out about Lech Walesa, the more iffy we become on him… And I am sorry I am unable to explain more without outlining the whole historical context and the latest historical research on Walesa… We know for sure that he was cooperating with the communist regime in the early 70s; he claims that he signed some papers or words to that effect, but his meteoric rise in… Read more »
The test I have devised for working out whether a country is laid back or not is to get €50.01 (or similar round number) of petrol in a petrol station and to offer a €50 note in payment. In the England I grew up in the cashier might think about it and decide to let you off the penny, or not. In Ireland they would think it strange that you even considered it and further proof that it takes all kinds to make a world. On the continent they would, I think, ask for the full amount. I have to… Read more »
McCawber My measure of a laid back Country is road manners: 1.People will let you out from a side road in most situations if they can. 2.People thank you by flashing hazard lights if they’ve just overtaken you. 3.People flash you with full beams if there’s a speed trap ahead. I’d love the whole Country to withhold tax and see exactly how failed politicians cope with no pensions when the ATM doesn’t spit out 50’s in Marbella or welfare wasters have no money for Dutch Gold. They’re both examples of long term unemployed just at different benefit rates. In relation… Read more »
Questions being asked.
http://investmentresearchdynamics.com/sot-47-market-update-collectivist-uprising-total-collapse/
http://thedailycoin.org/?p=38981
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