Few countries have been as dramatically transformed in recent years as Ireland. Once a culturally repressed land shadowed by terrorism and on the brink of economic collapse, Ireland finally emerged in the late 1990s as the fastest-growing country in Europe, with the typical citizen enjoying a higher standard of living than the average Brit. Just a few years after celebrating their newly-won status among the world's richest societies, the Irish are now saddled with a wounded, shrinking economy, soaring unemployment, and ruined public finances. After so many centuries of impoverishment, how did the Irish finally get rich, and how did they then fritter away so much so quickly? Veteran journalist David J. Lynch offers an insightful, character-driven narrative of how the Irish boom came to be and how it went bust. He opens our eyes to a nation's downfall through the lived experience of individual citizens: the people responsible for the current crisis as well as the ordinary men and women enduring it.
|Publisher:||St. Martin's Press|
|Product dimensions:||9.82(w) x 11.80(h) x 0.91(d)|
About the Author
David J. Lynch is a senior writer with Bloomberg News in Washington, D.C., focusing on the intersection of politics and economics. Previously, he covered global business issues for USA Today, first writing for the Money section, then becoming the founding bureau chief in both London and Beijing. In 2001, he became the first journalist from USA Today to be selected for the prestigious Nieman fellowship at Harvard University. He has made numerous television appearances on BBC and Sky News in London and C-SPAN and PBS in the United States. His writing has also appeared in The New Republic, Time, and The New York Times. He lives in Washington, D.C.
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When the Luck of the Irish Ran Out
The World's Most Resilient Country and its Struggle to Rise Again
By David J. Lynch
Palgrave MacmillanCopyright © 2010 David J. Lynch
All rights reserved.
The Irish, over many miserable centuries, had endured famine, deprivation, and the British. But by 1984, few contemporary irritations compared to the simple act of completing a telephone call. In Whitegate, a small town in the west, the telephones stopped working on weeknights at 10 p.m. On Sundays, the lines were silent save for a 90-minute window in the morning and two hours at night. A local man named Hugh Weir recalled the time a neighbor had died and two of the dead man's relatives, including a young woman clad only in her nightdress, were forced to run a mile into the night to get help at the local pub.
Making a phone call in Ireland required time, patience, and a bit of luck. Fully one-quarter of the country's telephone exchanges were creaky manual museum pieces; one dated to the nineteenth century. Calls routinely failed to connect or endlessly rang busy. And tens of thousands of Irish men and women could only dream of such frustrations. In Greater Dublin alone, the waiting list for a telephone held forty thousand names. Some residents had already been stewing for two or three years or, in rural areas, even longer.
The state's new telecommunications agency, Telecom Éireann, opened the new year with a splashy ad campaign vowing to clear the waiting list. But the agency's initial achievements seemed unexceptional; it boasted of filling new phone orders in "just eight weeks." When Telecom Éireann's marketers promised that by 1988 Ireland would have the most modern telephone system of its kind anywhere in the world, the claim seemed to the Irish Times "rather beyond belief."
Still, the telephone network was positively futuristic compared to the roads. Highways in modern Ireland were all but unknown. The lack of bypass roads skirting town centers meant that motorists journeying between any two major cities—say, Dublin and Cork or Waterford and Galway—had to pick their way through interminable local traffic in dozens of small villages. To travel from a town in the midlands to the capital—a distance of perhaps 75 miles as the crow flies—consumed a soul-crushing four hours, puttering along narrow roads shared by passenger cars, intercity buses, farm tractors, and the occasional horse or sheep. An association of engineers called for a national "rescue program" after finding that more than one-third of the nation's crumbling roads were in a state of structural collapse. Yet even when officials tried to improve matters, they often stumbled. One proposed road designed to slice through the heart of Dublin was known as "the road to God knows where."
During a parliamentary debate over road financing, lawmaker T. J. Fitzpatrick complained that he had traveled to the capital along the Kingscourt–Navan road, which was in "a bad state of repair with potholes and so on over an extensive length of it." Before leaving home, he'd tried to obtain some information from the transport ministry but had been stymied by an all-too-familiar problem. "Due to the breakdown in the telephone system, I was unable to contact the department," Fitzpatrick told the Dáil.
Amid such constraints, it was a wonder the Irish accomplished anything at all. In truth, the woeful physical infrastructure was a visible symbol of a moribund society. Six decades of independence had left Ireland one of the poorest countries in Europe. An embryonic boom in the 1960s had fizzled after the politicians responded to the twin oil shocks of the following decade with an orgy of spending. In just one year, 1979, the government had increased the number of public sector workers by 5 percent and total government salaries by 29 percent. "It was a disaster," the then-taoiseach Garrett Fitzgerald later recalled. In the most recent year alone, the national debt had increased by a staggering 23 percent. Nearly one of every six workers was jobless, and almost one-third of the population was receiving some form of monthly welfare payment. Inflation, which had topped 20 percent earlier in the decade, remained stubbornly in double digits.
As 1984 dawned, a pervasive gloom and lack of opportunity hung over Dublin like a wet blanket. "1983 will be seen to have been perhaps the worst year," Fitzgerald said hopefully, one day before news that the national jobless figure hit an all-time high. It was more than just an inert economy that was responsible for the dreary atmosphere. Ireland was also hamstrung by a cultural stasis, caught between the traditional conservative influence of the Catholic Church and a long-gestating impulse toward modernization. And though it had been several years since terrorist bombers last struck Dublin, the specter of sectarian violence in the North cast a pall over the Republic. Two policemen had been killed before the new year in the rescue of Don Tidey, a supermarket executive who had been kidnapped and held for three weeks by ransom-seeking gunmen of the Irish Republican Army.
The torpor was especially profound in the stagnant rural communities that dotted the countryside. Banagher, a sleepy crossroads village on the banks of the river Shannon, had changed little in the years since independence. The local economy revolved around farming, as it ever had. Children were raised with modest ambitions, advised by their parents to seek out a "good pensionable job" in the traditional anchors of the flat-lining economy: teaching, government, or banking. Many young men survived by harvesting turf from local peat bogs during the summer before going on the dole for the remainder of the year.
Eamon de Valera, the first taoiseach and the father of modern Ireland, had famously recommended for his people a life of "frugal comfort." Four decades later, beneath the tacit endorsement of such minimalism, members of a new generation were agitating for the nation to raise its sights. An urban politician was quietly making himself indispensable to his party's leadership while a schoolteacher nursed dreams of a writing career. A young woman who had recently earned a law degree bristled at the limits society imposed upon her gender. And an aggressive financier laid plans to invigorate a failing bank with a culture of drive and entrepreneurship. None would realize instant success, but all were sowing the seeds of a new Ireland.
FAMILY, FAITH, AND FARM
A farmer's son named Jack Byrne aimed to be among the relative handful to exceed the limits of the possible. In an age when many in rural Ireland took jobs in mills or factories rather than complete secondary school, Byrne had become one of the first from his parish of Lusmagh in 50 years to make it to university. He had studied agricultural science at University College Dublin since farming was all he knew. But it bored him and seemed to offer only the backbreaking life that had so worn down his mother and father. Almost on a lark, he switched to the still-young field of computer science.
Byrne found that he thrived on the detail and iron logic of computer programming. In 1983, he graduated with an honors degree and, at a time when good jobs were as scarce as snowflakes in July, landed a position working for an American software company in Cork. It was a good job, well paid and offering interesting work. And it promised a more varied life than what he'd known as a boy. One of 13 children, Byrne had experienced a typical upbringing for the era. Life revolved around family, church, and helping on the farm three miles outside Banagher in County Offaly, smack in the middle of Ireland. At 150 acres, the Byrne farm was one of the larger operations in the area, raising beef and dairy cattle and growing cereal grains. Life was comfortable, if unadorned. "As a kid, I never went to Banagher. There was no such thing as going to the sweet shop. There was no such thing as buying candy or Cokes or Fanta or any of that stuff. It just wasn't done," he recalled.
With so many children in the house, birthdays passed without notice. But each child's First Communion and Confirmation were occasions for a family feast of goose or duck and plenty of apple pie. It was a simple life. "I'd knock on the door and say, 'Is my friend coming out?' And we'd go off skipping through the fields," he remembered years later. "Who'd know what we'd wind up doing and nobody would ever say, 'Where are you going?' or, 'What time will you be back?'"
Banagher was a great place to live, but a great place to leave, too. For anyone with intelligence, drive, and ambition, there was little opportunity. Somehow, without ever directly saying so, Byrne's mother imbued her children with the notion that it was necessary to leave to thrive. Eight of the 13 Byrnes would eventually go abroad. "We just grew up knowing we weren't going to stay there," said Byrne.
Among University College Dublin's two dozen computer science graduates in 1983, all but two had to leave Ireland to find work, a slight improvement over the previous year when the entire graduating class had been forced into occupational exile. During the spring recruitment season that year, no Irish companies even bothered to appear at the college. Byrne was one of the two graduates lucky enough to find good jobs at home, in his case writing software for an early forerunner of e-mail called "teletext." His employer, CPT Corporation of Minneapolis–St. Paul, was part of a burgeoning American high-tech colony in Ireland, which included better-known companies such as Apple Computer and Digital Equipment Corporation.
In October 1983, Byrne moved to Cork. After a bone-jarring six-hour journey in the family's Hillman Hunter sedan, he arrived in time to witness the fallout from the closure of an iconic Ford Motor Company assembly plant that had operated since 1917. Romantics believed Henry Ford had chosen Cork for the plant in honor of his maternal grandfather, who had emigrated to the United States from West Cork. But the factory, which opened with the Model T and was once the world's largest tractor plant, owed its existence to the protectionist policies Ireland followed from the 1930s until it joined the European Economic Community in 1973. Ireland's decision to embrace open trade ultimately doomed the Ford plant and its eight hundred workers.
Cork was Ireland's second city. But the economy there was no better than anywhere else, and the city's diversions were few. "When I moved to Cork, there was something like 17 percent unemployment.... And even when people were employed, you had nothing," Byrne says. "Nobody had a new car. Nobody had clothes like what we have now. Nobody went to restaurants." Stores closed at 5 p.m., except on Thursdays when they remained open until 8 p.m. Traditional pubs were the beginning and the end of the city's nightlife.
CPT was solidly profitable, but its revenues were slipping. In May 1986, after five years in Ireland, the company announced it was shuttering its 44,000-square-foot Cork plant and consolidating production at a facility outside Minneapolis. The decision would boost future profits, but at the cost of pink slips for 89 Irish employees. Suddenly, Jack Byrne, like so many other Irish men of his generation, was unemployed.
FROG-MARCHED TO THE FRONT PEW
The Ireland of the 1980s was smack in the middle of its own great depression. Fewer people were working than in 1926 while the output of goods and services was running more than 15 percent below the economy's long-run potential. Almost everywhere but Ireland, it seemed, prosperity reigned. The United States had recovered from the deep recession of the early 1980s and was enjoying a full-throated boom. Presiding over the resurgent superpower, Ronald Reagan would campaign for re-election in November on a slogan of "Morning Again in America." In the United Kingdom, Prime Minister Margaret Thatcher had breathed life into the remnants of empire with her uncompromising brand of capitalism. Europe, too, was growing. Among developed countries, Ireland seemed uniquely hobbled. In truth, the country had been an economic disappointment since the 1922 founding of the state. Where once the nation's problems could be blamed on colonial oppression, they now were squarely Ireland's own. Something fundamental seemed lacking in the Irish, hamstrung by what the cultural critic Declan Kiberd labeled a "psychology of self-doubt and dependency."
Ireland's political class was proving itself singularly ill-suited to the challenge of righting the economic ship. Neither of the two main parties—Fianna Fáil and Fine Gael—could muster a popular consensus. Unlike a typical European state, Ireland's modern political lineup reflected the legacy of its civil war rather than traditional left-right differences. Fine Gael had accepted partition and the establishment of the Irish Free State while Fianna Fáil struck a more aggressively nationalist stance. The competing political camps were thus more like tribes than ideologically oriented political groupings. As governments rose and fell, beleaguered Irish voters endured three general elections in the space of 18 months. Amid such political turmoil, it was impossible to enact the reforms needed to get the country's runaway borrowing under control. By 1986, government debt had exploded to the banana republic level of 130 percent of GDP. High debt and a reluctance to cut social spending locked Ireland into a tax trap—the top income tax rate hit 65 percent and the standard corporate levy was 50 percent. A toxic brew of taxes and debt was poisoning the economy.
For more than a century, those with ambition had relied upon a straightforward solution to Ireland's lack of opportunity: They left. By 1911, one-third of all people born in Ireland lived outside the country. In the nineteenth century, impoverished farmers fleeing famine and rapacious landlords had made up the bulk of the exodus. But now, the country's best-educated sons and daughters were leaving, steadily hollowing out Ireland's future. In Boston alone, there were more than 70,000 Irish men and women under the age of 25.
Among the exiles was Linda O'Shea, one of eight children raised by a pair of civil servants in Limerick. Linda's mother, Kathleen, was born in New York, the same month as the stock market crash of 1929. Kathleen was three years old when her parents moved the family back to Carrick-on-Suir in southeastern Tipperary, where Kathleen grew up. She married Gerard O'Shea in 1950, and both found good jobs with the Post and Telegraph Office in Limerick, a gritty unsentimental city. It was an era when the most mundane civil service position carried a patriotic gloss; working for the government was synonymous with building independent Ireland. But that all ended for Kathleen when she was still in her twenties: as a matter of law, she was required to quit the civil service upon marriage. It was not something the smart, outspoken woman ever forgot, nor let her five daughters forget.
Linda O'Shea grew up in an unusual household. At a time when most people in Ireland were orthodox Catholics and staunchly Fianna Fáil, her parents were neither. The O'Sheas encouraged their children to think for themselves and to question received wisdom, whether it originated with a priest or a politician. Gerard was a student of history and an enthusiastic reader, especially of the Bible. He would end each day on his knees in prayer, yet he enjoyed arguing with visiting priests about history and religion. In other homes, priests would be received as visiting royalty. At the O'Sheas', they were just another pugilist in an intellectual slugfest.
O'Shea's mother was a bit of a dreamer, entertaining vague notions in her youth of being a war correspondent. Fiercely independent, she was a religious believer, but was utterly unimpressed by the intricate, man-made rituals of the institutional church. Even the nuns' legendary knuckle-rapping power failed to intimidate her. Believing one sister had been too harsh on a classmate, she once hurled her Latin book at the nun, dislodging her veil and blackening an eye. As a grown woman, Kathleen saw contradictions in the catechism everywhere she looked. Catholic women were taught they had to accept all the children God gave them, for example, and that procreation was the purpose of sexual relations. Yet the act of giving birth somehow made them unclean. "Woman had to be 'churched' after they had children.... Once you gave birth you had to be cleansed. Of what sin, we're not sure. This is as a married woman, now!" said her daughter. "You had to be cleansed before you could receive communion again. This kind of stuff didn't really go down well with my mother."
Others saw the liberalizing reforms of Vatican II (1962–1965) as a welcome step toward drawing the church closer to the laity. But to Linda's mother, it seemed hypocritical for Rome to have amended strictures that it had always described as immutable divine laws. In her view, the church couldn't have it both ways. Either the priests were taking it upon themselves to rewrite God's rule book or it had all been a fraud from the beginning. Linda's father was less troubled. "He wasn't as affected; he was a man. The church usually messed around with women's rights more than anything to do with men," O'Shea said.
Excerpted from When the Luck of the Irish Ran Out by David J. Lynch. Copyright © 2010 David J. Lynch. Excerpted by permission of Palgrave Macmillan.
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Table of Contents
Introduction: "The Boom Times Are Getting More Boomer"
• Chapter 1: Frugal Comfort
• Chapter 2: The Most Important Pub In Ireland
• Chapter 3: Liftoff
• Chapter 4: A Different Country
• Chapter 5: Famine To Feast
• Chapter 6: Having It All
• Chapter 7: People Lost The Run Of Themselves
• Chapter 8: Money Is Just Evidence
• Epilogue: The Ireland That We Dreamed Of