A presidential invitation to wake up

Irish society is facing serious chalelenges, and on April 28 this year President Higgins delivered a speech that addressed them head on. The occasion was a reception in Áras an Uachtaráin to honour the think-tank TASC.
Targets of the speech included the manner in which policy is made in this country, the ideas that have come to dominate policy thinking and, most specifically, the role played by economics and economists in influencing policymakers. Some of the negative reactions to his speech, particularly by economists, revealed the same damaging mindsets that the President tried to highlight.
What did the President say? First, he asserted that policymaking in Ireland “can be characterised as largely reactive, technocratic, ‘top-down’, not strongly influenced by the institution of social partnership but rather by powerful vested interests”. This surely resonates strongly with people in the Northern and Western Region and Mayo in particular. The centralisation and bureaucratisation of power in Ireland may not yet have produced the divisiveness and conflicts that currently engulf the UK, but there are signs that we are heading in that direction.
Next, the President singled out ‘neoliberalism’ as the driving idea that creates and sustains inequalities in our society. What did he mean by ‘neoliberalism’? At its most crude, it is a political approach that favours free-market capitalism, deregulation and reduction in government spending. The UK is the prime European example of neoliberalism in action. This contrasts with social-market capitalism, careful regulation of abuse in markets, and maintenance of government spending at a level that protects weaker elements of society through progressive taxation, as in northern European states.
Domination of our news agendas by what happens in the UK, rather than more widely in egalitarian, social-democratic Europe, prevents us from realising just how badly we are doing. Think of our apparently insoluble housing crisis. Think of patients lying on trollies in hospital corridors. Think of the state of repair of some of our schools. Think of the poor infrastructure in the North-West.
Turning to the economists, the President pointed to obvious contradictions between their obsessive focus on ‘an inexorable growth narrative’ based on GDP and the ecological catastrophe that we now face. In a damning verdict on the economics profession and the way that economics is taught in our universities, he singled it out as a discipline that had ‘lost touch with everything meaningful, a social science which no longer is connected, or even attempts to be connected, with the social issues and objectives for which it was developed over centuries. It is incapable of offering solutions to glaring inadequacies of provision as to public needs, devoid of vision’.
When our President articulates ideas and criticism like this, he is constitutionally prevented from pointing the finger at any specific policy, any individual minister or any political party. So he is obliged to speak in general terms or in code. The faults that he highlighted were described in terms of the very narrow political economy thinking that underpins our politics. He invoked some of the deep societal thinkers of the ages that have little place in the education of most of today’s economists. He invited us to wake up.
The public reaction of some economists was revealing. A Professor of Economics at UL said the President ‘is critiquing an economics that existed in the 1970s before I was born’. A UCC economist said, ‘as President Higgins has shown no interest in engaging with how economics is actually taught, I see no point in engaging with what he has to say on the matter’.
The most dismissive comment was by a former banking economist, Jim Power, who said: “Give us a decade of zero growth and see how that works out”. A UL economic historian, who really should have known better, said “I can’t understand half of what was in the speech and I am a political economist. If you are going to make criticism, make it comprehensible to people.”
It is unfortunate that a debate that is urgently needed in Ireland could be so quickly extinguished by a complete lack of comprehension by the people being criticised. Why is it that many economists are so narrow in their views, so dogmatic, so unyielding?
I came to economics late in life following a mainly scientific education. Finding myself working alongside economists, I needed to learn the strange language that they spoke. So I read many of the classics of economic literature, from Adam Smith’s ‘Wealth of Nations’, Keynes’ ‘General Theory’ to JK Galbraith’s ‘The Affluent Society’, and many others. Of course, I also had to master the mathematical models that economists use to do their thinking for them. Today, it is mainly the mathematical models that are taught in universities. The deep and nuanced thinking of the great classic writers of economics is ignored as out-of-date verbiage.
President Higgins, a sociologist by profession, is absolutely correct. The way in which economics and business studies are taught in our universities produces graduates who are often ignorant of the serious limitations of their models and tone deaf to their possible negative consequences for society. Their narrow form of technical economics dominates political thinking. The President is not saying that all economics is bad. Rather that both sides need not be enemies, but friends. Resolution of this debate will only come about when we are touched by the better angels of our nature.

John Bradley was a professor at the ESRI and has published on the island economy of Ireland, EU development policy, industrial strategy and economic modelling.