I’m not an economist, but…

by Maria on February 21, 2006

You know when you look at a word, and suddenly it appears to be spelt wrongly? ‘Vendor’ is a classic. Somehow you’ve stepped outside the frame, and the obvious no longer appears right.

I just cast my eyes over a press release from an Irish political party that shall remain nameless, and realised, ‘either this is a poor translation from the Manchurian or I have been abroad for way too long…”

“More than 20,000 Meath residents are already forced to commute for hours every day because they cannot get jobs closer to home. Yet the Government has done nothing to counter the misery of commuters by providing better transport infrastructure, or by trying to bring jobs into the county.”

For the first time, that sounds really odd to me; the idea that it’s the government’s job to bring jobs into the county. Not the country, the county. Of course the government should have done (but didn’t) sensible urban planning, developed and then actually implemented a proper national transport plan, should create tax incentives, reward or perhaps mitigate entrepreneural risk-taking, provide a decent level of eduation, health and other ‘soft’ infrastructure etc. etc. But should its job be to ‘bring jobs into the county’? Specifically to Meath? (On a side point, I imagine many in Leitrim or Donegal envy Meath’s position as a commuter belt, but anyway.)

It seems a bizaarely passive expectation that says ‘we voted for you, now get the jobs in’. It’s not simply the value; pork= a human right, that slapped me sideways. It was the whining passivity that thinks of job-creation as something that happens in Dublin and is then passed around. Now I’m not so naive as to think people don’t vote at least in part for better or more economic opportunities. And I live in a city that devotes endless resources to the unstatesmanlike activity of divvying up moderately important agencies between mid-level European cities.

But I was surprised at the fatalism that still passes for political rhetoric in Ireland. Or maybe I just never noticed it before. Have I been exposed to too much hardball Anglo-Saxon market capitalism? Is the MBA finally shifting my politics to the right? Or does this sound equally weird to others?

Here’s some more:

“Yet the job creation record in Meath is appalling, and the county has been losing up to 50 IDA-supported jobs every year.”

The IDA is the state agency whose job is to use subsidies to attract FDI. It deserves some credit for Ireland’s economic boom, having focused early on attracting pharma, IT and financial services to the country. The idea that a county would have something like a quota of IDA-supported jobs is just plain odd. It seems to take something positively and intelligently provided for the good of the economy, and turn it into a mealy-mouthed entitlement.

There are sensible points, too. The press release asks what should be done for commuter-belt counties that can’t compete with Dublin on providing jobs, and instead are turning into vast dormitory suburbs storing up social trouble. But I just can’t get over the presumption and entitlement in it, and the underlying idea that economic growth within a country is a zero sum game.

The kicker is that this sudden concern for Meath is triggered by the closure of an NEC factory in the area, and the direct loss of about 350 jobs. The factory’s moving to Malaysia. Nothing strange there, and probably little or nothing the government could have done to stop it, short of imposing Soviet style price controls to try and keep down the cost of labour in Ireland. But as high consumer prices have been a political football in Ireland for the past year or so, the blame for the closure is laid at the government’s door:

“The fact that NEC plans to move production to Malaysia demonstrates again how the Government is losing the competitiveness challenge by driving up costs and pricing Ireland out of the market.”

Eh, no. We were a middle income country, now we’re a high income one. So prices went up to meet demand, and we pretty much caught up with the rest of Europe on labour costs. There’s no mystery here. We’re simply victims of our own success. Now we have to figure out what our economic strategy is for life in a world of low transport and labour costs that’s teaming with people who speak English just as good as we do. You really don’t have to be a Nobel prize nominee to see that.

Sure, there are lots of things that could and should be done differently. (That’s why I’ll be supporting the opposition in the election we expect this year.) But we are not going to figure out how to respond as nimbly and successfully to deepening globalisation if we let ourselves be hoodwinked into thinking economic reality is something the government cooked up. Simply surviving the ‘competitiveness challenge’ of the next 20 years will require straight thinking and plain talking, and not the pious buck-passing that currently passes for political thought.

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02.21.06 at 12:14 pm

{ 21 comments }

1

Kieran Healy 02.21.06 at 11:41 am

Obviously the government just needs to build a job creation factory in Kells.

2

Raw Data 02.21.06 at 12:22 pm

Sounds to me, Maria, that you have just had an epiphany.

The large irony, of course, is that people are asking governments to do something — “job creation” — that they are wildly incapable of doing. Government can create a context — honest courts, for example — but not a whole lot more.

3

A Nonnie Mouse 02.21.06 at 12:24 pm

I’m not an English teacher but …

Of course the government should have (but didn’t) done sensible urban planning …

still made me laugh. :)

4

Belle Waring 02.21.06 at 12:44 pm

I had a hell of a time with my ‘impostor’ post the other night. I wanted to spell it ‘imposter’.

5

Maria 02.21.06 at 1:02 pm

Tks nonnie mouse. I’ve fixed it, sort of. But the longer I looked at it, the less right it seemed…

6

Marcus Stanley 02.21.06 at 1:24 pm

“The large irony, of course, is that people are asking governments to do something—“job creation”—that they are wildly incapable of doing.”

Governments are extremely capable of creating jobs. They are an employer just like anybody else. They also give contracts to other employers. It is pure mysticism to say that government cannot “create jobs”.

There is another debate about the macroeconomic effects of the taxes or borrowing that funds government. But if you pretend to certainty that those macroeconomic effects will create a greater negative impact of aggregate job growth than government-funded hiring does, then you are also being mystical. There is no such certainty outside of ideological assertions.

7

Luc 02.21.06 at 1:41 pm

Is the MBA finally shifting my politics to the right?

Looks like it.

Straight thinking and talking makes a good living for an MBA, but does the straight thinking deliver jobs to the people in Meath? If so, you’re creating an artificial divide between you and them, if not, you’re becoming a cynic.

We’re simply victims of our own success.

Who’s we? The solidarity with the victim here is what determines left or right.

If the county looses jobs because of the success of the rest of the country, they’d be justified counting on the county getting support from the country.

8

Andrew Edwards 02.21.06 at 2:05 pm

Straight thinking and talking makes a good living for an MBA, but does the straight thinking deliver jobs to the people in Meath? If so, you’re creating an artificial divide between you and them, if not, you’re becoming a cynic.

I have no idea what this means.

I also, by the way, don’t see why leftism necessarily corresponds to valuing Meathian jobs especially highly. The real acid test for an MBA changing your politics is what happens when you go get a high-paying post-MBA job and start paying taxes at the top marginal rate.

And “not an economist” is a qualification, Belle, not a disclaimer.

9

jim 02.21.06 at 2:13 pm

Yes, the language is odd, but one sees what they mean. The Government (both this one and preceding ones) has claimed credit for increased employment (which they’ve called job-creation) when it’s happened in the past. So when it doesn’t happen, or doesn’t happen here, the Government is going to get blamed. Seems fair to me.

10

aaron 02.21.06 at 2:26 pm

Careful Maria, you might get kicked off the blog.

11

john m. 02.21.06 at 2:56 pm

Maria, I think perhaps you should have headed the article “I’m not a politician, but…” The ruling government (of any stripe) rushes to take the praise for the creation of all and any jobs (as you know an issue of great recent historical political importance) and in marginal constituencies they rush in an unseemly fashion to establish regional job creation task forces etc. – hence the opposition take advantage of negative news to put attempt to put the boot in. It is, as you rightly point out, nothing to do with the notional role of government and certainly nothing to do with economics but it is most certainly core Irish politics.

12

Colin Danby 02.21.06 at 4:57 pm

Jim’s point is good — even governments that claim to be conservative can’t resist claiming credit for good things, so this kind of rhetoric continues. I agree with the post — I’d rather define a small set of things gov’t should do well rather than look to it as capable of solving all things.

I would relax, too, about the “competitiveness challenge.” See Paul Krugman’s debunking of “national competitiveness” (the key articles are collected in _Pop Internationalism_).

13

DC 02.21.06 at 5:48 pm

“Of course the government should have done…”

All the things you agree the government ought to have done is presumably what is meant by “the govt ought to have created jobs in Meath”. Those things would presumably (and sensibly) have effected more regionally balanced growth and therefore more jobs (proportionately anyway) in Meath and less in Dublin.

By the way, the election is supposed to be 2007 not 2006. Though who knows what Bertie thinks about anything…

14

Daniel 02.21.06 at 6:39 pm

I had an attack of the same phenomenon this morning when, due to an early start, I believed that the Telegraph was reporting that “43% of children are born out of weblogs”. They’re good for something at least, I thought.

15

Helen 02.21.06 at 8:51 pm

we are not going to figure out how to respond as nimbly and successfully to deepening globalisation if we let ourselves be hoodwinked into thinking economic reality is something the government cooked up.

Wot, you mean the recent decade of relative prosperity in Oz wasn’t all John Howard’s doing after all??

16

vivian 02.21.06 at 11:11 pm

Daniel: They’re good for something at least, I thought.

children or weblogs?

17

Quo Vadis 02.22.06 at 1:52 am

I’m one of those MBA types too, but I believe that there is a great deal governments at all levels can do to promote economic growth. In fact, I would say that doing so is an essential part of community planning.

A nation or community that wants to promote industrial expansion has many ways of using policy and public funds to support economic development. For instance, any investment in physical and educational infrastructure could support industrial development. Governments can also make direct and indirect investments in R&D to increase their competitiveness in key markets.

The quality and availability of basic public services is important as well. Crime and corruption can affect the environment for economic development and I have heard that Toyota located a new manufacturing facility in Canada rather than in the US in part because they didn’t have to worry about health care issues there.

Governments can and do offer tax incentives to companies to locate within their community. If you check the 10K filings for any large US corporation and calculate their corporate tax rate you will probably discover that it is significantly less than the sum of the federal and state rates because states will offer corporations lower rates to locate there.

Of course there are things governments do to encourage economic growth that can have a negative impact on quality of life like lax environmental regualtions, but a government that has the community’s best interests in mind will has to balance those priorities.

18

P O'Neill 02.22.06 at 11:32 am

The issue of the NEC closing will be raised at the next meeting of the Ballivor Fianna Fail cumann. Hence it is something to which the party/government will feel requires a reponse. It’s just the chronic localism of Irish politics — pothole candidates, people with famous surnames, and time-servers, dominating the pool of politicians.

19

Pit 02.22.06 at 1:18 pm

Yes, the language is odd, but one sees what they mean. The Government (both this one and preceding ones) has claimed credit for increased employment (which they’ve called job-creation) when it’s happened in the past

20

Darren 02.23.06 at 4:29 pm

Luc,

So “solidarity with the victim” defines whether someone is left or right? I always thought it might have something to do with principles, ideas or policy positions. Good to know that it’s really just a matter of defining who the victim is and looking to see who is on which side.

Actually, that would be horrible to know. My bad. Good thing it isn’t true.

21

Luc 02.25.06 at 3:38 am

Darren, what isn’t true?

Isn’t there any solidarity required with the unemployed (whom I called “the victim”), specifically when labour costs are rising because of economic growth?

I know there’s no single left dogma about this. But over here it is not uncommon to refer to solidarity when adressing this issue.

And ofcourse it doesn’t define, but as I said the policy determines left or right, if only in the practical sense that left and right political parties have different policies for this.

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