Tuesday, September 30, 2008

What Has Christianity Ever Done For Us?

This is the text of a response I was asked to give to a talk by Dr. Greg Clarke at the 2008 C. S. Lewis Lecture last night. Greg's talk will be available online at a future date - I'll post a link when I get it.

What Has Christianity Ever Done for Us?

Let me begin first by congratulating Greg on his excellent lecture and his thoughtful contribution to the crucially important debate about the role of Christianity in contemporary society. As I have been asked to respond to Greg’s lecture, I have taken my cue from his ‘third call to maturity’: namely for a mature, Irish contribution to the debate. Nevertheless, it will only be a modest response to his ‘modest proposal’.

I have given my response the title: What Has Christianity Ever Done for Us? A play, of course, on that wonderful scene in Monty Python’s Life of Brian when John Cleese and the rest of the cast debate ‘what have the Romans ever done for us’. A scene, I suspect, that has done more for the cause of historical revisionism than any academic treatise!

And so it is when reading the works of the new atheists like Richard Dawkins or Christopher Hitchens that I often feel like the characters in the movie who reply to John Cleese’s question about the Romans with a long litany of things that the Romans did. Only, instead of sanitation and aquaducts, I think of things like democracy, science, capitalism and Western Civilisation as benefits of Christianity which – it seems to me – far outweigh the costs.

But rather than address the issue of the West and its Christian roots – a subject well covered by Greg in his lecture – I want instead to talk about Ireland in the context of Greg’s analysis and the wider debate he refers to. My subject then is: what has Christianity ever done for Ireland, and what of Christianity’s future in Ireland?

How Christian is Ireland?

But first let me explain where I’m coming from in this debate. I am an economist by training and a market researcher by occupation so I can’t help but bring the insights and practices of those two disciplines to bear on the subject we are discussing this evening. That means lots of statistics – just to forewarn you!

In terms of my own personal values and beliefs I am wary of labels but if I had to put it in a sentence I would describe myself as a pro-Christian, post-Christian. What do I mean by that? By post-Christian I mean that I share a Christian heritage with other Christians in that I grew up a Catholic in Northern Ireland. On the other side of the North’s religious divide, as it happens, from that into which C. S. Lewis was born in Belfast in 1898. However, I don’t share the core metaphysical precepts of mainstream Christianity, being more aligned to the perspectives of radical Christian theologians like Don Cupitt. That’s the post-Christian bit.

As for the pro-Christian label: that is more straightforward to explain. I share the philosophical outlook of conservative thinkers such as Edmund Burke and F. A. Hayek who had a deep respect for the nature of human society as an organic, spontaneous order with which you medelled at your peril. I see Christianity as a deeply embedded, evolving stream of ideas and beliefs that have fundamentally shaped the world we live in today. As such, any attempt by those who subscribe to world-improving ideologies to simply abandon the teachings and practices of Christianity in order to start a new chapter in human history are doomed to failure. Indeed, such attempts will leave us considerably worse off than if we leave things to evolve organically. The history of the 20th century has taught us this if nothing else surely?

Still I don’t want to go too far into a discussion about the relationship between Western Civilisation and Christianity: Greg has done that for us. As I said, I want to bring the focus back to Ireland.

So first things first: is Ireland Christian? I did say I am an economist by training so naturally I have to answer the question with an ‘on the one hand, and on the other’ response! On the one hand, according to the 2006 Census we are an overwhelmingly Christian country. More specifically we are an overwhelmingly Catholic country: of the total population of 4.2 million men, women and children living here some 3.7 million ticked the ‘Roman Catholic’ box in response to the question ‘What is your religion?’ That’s 88% of the population; or nearly 9 people in every 10 living in Ireland. Indeed, the number of Catholics rose by 6.3% from the 2002 census, just as it rose in every inter-censal period since the 1960s. While we’re at, the numbers belonging to practically every religious faith have grown in recent years – from C. S. Lewis’ Church of Ireland (up by 8.6%), to Muslims (up by 69.9%), to Pentecostals (up by 157.5%).

So you might wonder, given these trends, at the widespread perception that Ireland is becoming a secular society; one witnessing the demise of Christian faith in general and Catholicism in particular. I guess this is where I give you the ‘on the other hand’ answer to the question about Ireland’s Christianity: because the second largest group in Ireland in terms of relgious affiliation after Roman Catholic is those who tick the box for ‘no religion’ – their numbers were up 34.8% to 186,000 in the last census. Mind you, that’s still only 4% of the population – or less than one in twenty people.

Like Everyone Else

But the Census only tells us so much. It is the attitudes and practices behind the labels that are more revealing. For example, in a survey my own company did in 2006, the same year as the Census, only a slim majority of adults (53%) agreed with the statement ‘I would describe myself as a religious person’. Even though almost 95% described themselves as belonging to one Christian denomination or another in the Census. The percentage of those in our survey describing themselves as ‘a religious person’ fell to just 31% of 15-24 year olds.

In most respects this isn’t that surprising. When it comes to religious beliefs, the reality in the 21st century is that Ireland shares most of the characteristics of other developed countries. In other words, those more likely to consider themselves to be religious in any given population tend to be women more than men, older people rather than younger people, and those whose formal education ended at primary or secondary levels.

A chart in a recent international report by the US-based Pew Research Center plotted GDP per capita against the percentage of the population in each country who agreed that ‘religion is very important or somewhat important’ in their lives. It showed a strong negative correlation of -0.8, in effect a straight line relationship between economics and religiosity. The higher GDP per capita, the lower the reported level of belief. Ireland was not included in the survey, but I know from asking the same question of Irish respondents in other surveys that our country is firmly in the same place on the chart as Britain, Australia and most of Western Europe. The exception to this apparent economic determinism, it goes without saying, is the United States.

Nevertheless, what seems to be happening in Ireland is that we are becoming what I believe they call in Britain ‘four-wheel Christians’. We come to be baptised in a pram, to be married in a limo, and to be buried in a hearse. In the meantime, fewer and fewer darken the doorsteps of our churches – less than 50% of Irish Catholics attending mass once a month or more often. That’s still high, mind you, relative to other, nominally Catholic countries.

Irish Exceptionalism

But just as we have American exceptionalism in matters religious, so also have we Irish exceptionalism. Indeed it would be wrong to simply pigeon-hole Ireland as ‘just like everywhere else’ when it comes to our experiences of Christianity and secularism. And as an economist I know better than to base analyses on naive economic determinism. It’s rarely that simple. There are in fact several aspects of our society’s history and development that add a unique perspective to the debate. Two in particular strike me:

1. The role of the Catholic Church in Ireland and its relatively recent, if meteoric demise as a religious force.
2. The sectarian conflict in Northern Ireland and its continuation right up to the dawn of the 21st century.

In his marvelous book Preventing the Future – Why Was Ireland So Poor for So Long?, Tom Garvin reminds us of the extraordinary power the Catholic Church wielded in Ireland as recently as the 1990s. Referring to the findings of various attitudinal surveys in the 1950s and 1960s, Garvin observes that:
It must be remembered that Irish religious culture was one of literal belief in God, Christ, the Virgin birth, miracles, saints, heaven, hell, purgatory, limbo and all the rest of it – a belief system partly pre-Christian in origin and certainly non-Christian in psychological texture.
Garvin then describes the onset of secularisation in Ireland through the 1960s and 1970s right up to the present day, going on to note that:
… the counterexample of the United States, a very religious country, indicates that the death of faith has nothing in particular to do with modernisation or economic development, but everything to do with politics. In particular, faith in the modern world seems to be liable to be poisoned by an overly intimate relationship between church and state, and, more generally, by an intimate relationship between ecclesiastical organisations and political power. ... In other words, Ireland is not so much becoming secularised … Rather, it is that Ireland is becoming declericalised.
Ireland’s exceptionally intimate relationship with the Catholic Church from cultural to social through to political levels is now rapidly giving way to something else. Something that does not fit neatly into two dimensional models of economic development and secularisation.

But before exploring what that ‘something else’ might be lets look at the second aspect of Irish exceptionalism – Northern Ireland. The North is by far the most religiously observant region of the UK – with 81% of the population describing themselves as Christian (versus a UK average of 53%), and 45% saying they attend church at least once a month (versus a UK average of 15%).

I suspect that Northern Ireland is going through its own rapid secularisation at present, brought on by the cessation of armed conflict between Republican, Loyalist and state forces. That cessation means that the traditional badges of religious identity and ‘tribal affiliation’ no longer need to be worn so explicitly as they were until quite recently. It probably also means a more reflective approach to religious faith and practice, driven more by personal than by political imperatives.

The question, of course, is whether the normalisation of religious practices in Northern Ireland will impact on Southern Ireland. I suspect it will: if only because the traditional schism between Catholics and Protestants will lose its resonance with the younger generation now growing up on both sides of the border - leading to a more open and perhaps more experimental approach to religious insight and faith. Perhaps.

Propelling the Future

Where next then for Christianity in Ireland? Its future course will undoubtedly be shaped by global trends now underway. Both by trends at the level of ideas – for example, the challenge of the New Atheism addressed by Greg – and by those at the level of institutions: in particular the European Union from Ireland’s perspective.

Anticipating the possible future direction of Christianity in Ireland does demand that we have a clear understanding of the role and impact of Christianity at a societal as well as at a personal level. In their book Suicide of the West, authors Richard Koch and Chris Smith note the pivotal role played by Christianity in shaping Western Civilisation – from Europe to America to Australasia. All that we hold dear as Westerners – democracy, freedom and equality between all human beings regardless of class, colour or gender – have their origins in Christianity’s fusion of ancient Greek and Judaic teachings with its unique emphasis on individual integrity, agency and responsibility.

Moreover, the free market economy is a uniquely Western invention which only became possible because of innovations such as those of Pope Gregory VII in the 11th century which created private property rights that could not be violated by monarchs or by the state. As Indian-born economist Deepak Lal has pointed out, only Christianity ended the despotism and poverty that typically prevailed under almost all other religious traditions. The result: some 10 centuries later we have globalisation and a standard of living enjoyed by billions of people only available to kings throughout most of human history.

But back to Ireland. We still enjoy the social capital built up through centuries of Christian faith and practices. The special emphasis on family life in Irish society is a crucially important legacy of our Christian past, and one reason for the relatively low incidence of divorce and family breakdown – so far. Christian tolerance and compassion has undoubtedly played a part in our country’s remarkably trouble-free adjustment to immigration and with it the arrival of nearly half a million people of many different faiths and from many different countries in the past 12 years. Even some of our institutions – such as Social Partnership and the Seanad – have their origins in earlier Catholic social teachings such as Vocationalism and Corporatism.

Like all capital, our Christian social capital in Ireland can quickly be depleted unless preserved and reinvested. That in turn requires a far more public debate about our values than heretofore: not just in terms of what American’s call ‘culture war’ issues such as abortion and gay marriage, but also about that quintessentially Christian question, i.e.: what sort of life should we lead? And what sort of society is best suited to support the choice of such a way of life?

We can see some hints of a debate about this question, for example, in relation to the emerging area of happiness research and the role of social, economic and psychological factors in enhancing or diminishing happiness. I suspect that the rich seam of Christian teachings on the good life, that build in turn on pre-Christian philosophies, has much to contribute here.

Likewise, Christians should see the popular distinction between ‘spirituality’ and ‘religion’ as an invitation to contribute to a more reflective, personal evaluation of how best to live in this world. After all, the distinction has a powerful heritage in Christianity’s history – all the way back to Spinoza, one of the Enlightenment’s greatest philosophers.

But the preservation of our Christian social capital also demands a political response too. The current Irish angst post the failed Lisbon referendum is in part about a lost sense of direction. Someone once said that religion is spread through stories – not through theology or dogma or philosophy. It is the stories we tell one another; that we tell our children; and that we tell the world about ourselves that provide the narrative for our individual and collective lives.

So what stories will we tell about Ireland – about where we have come from and where we are going? I believe that the stories that will resonate most, and be the most effective, will be those that weave Christianity into the narrative.

And if there’s one thing we do well in Ireland it is telling stories!

Thank you.

Black Tuesday

Mark the day folks: yesterday's bloodbath on the ISEQ and the world's stock markets was but an adult-rated movie trailer for the gruesome main feature about to play today.

The rejection of the $700 billion rescue package by the US House of Representatives last night means that Tuesday, 30th September 2008 will go down as one of those days when the course of history changed.

Willem Buiter, as usual, gets it exactly right:
What is likely to happen next? With a bit of luck, the House will be frightened by its own audacity and will reverse itself. If a substantively similar bill (or a better bill that addresses not just the problem of valuing toxic assets and getting them off the banks’ books, but also the problem of recapitalising the US banking sector) is passed in the next day or so, the damage can remain limited. If the markets fear that the nays have thrown their toys out of the pram for the long term, the following scenario is quite likely:
  • The US stock market tanks. Bank shares collapse, as do the valuations of all highly leveraged financial institutions. Weaker versions of this occur in Europe, in Japan and in the emerging markets.
  • CDS spreads for banks explode, as will those of all highly leveraged financial institutions. Credits spreads generally take on loan-shark proportions, even for reputable borrowers. Again the rest of the world will experience a slightly milder version of this.
  • No US bank will lend to any other US bank or any other highly leveraged institution. The same will happen elsewhere. Remaining sources of external finance for banks, other than the facilities created by the central banks and the Treasuries, will dry up.
  • Banks and other highly leveraged institutions will try to unload assets at fire-sale prices in illiquid markets. Even assets not viewed as toxic before will become unsaleable at any price.
  • The interaction of a growing lack of funding liquidity and increasing market illiquidity will destroy the banks’ business models.
  • Banks will stop providing credit to households and to non-financial enterprises.
  • Banks will collapse, both through balance sheet insolvency and through liquidity insolvency. No bank will be safe, not even the household names for whom the crisis has thus far brought more opportunities than disasters.
  • Other highly leveraged financial institutions collapse on a large scale.
  • Households and non-financial businesses revert to financial autarky, among wide-spread defaults and insolvencies.
  • Consumer demand and investment demand collapse. Unemployment shoots up.
  • The government suspends all trading in financial stocks until further notice.
  • The government nationalises all US banks and other highly leveraged financial institutions. The shareholders get nothing up front and have to wait for an eventual re-privatisation or liquididation to find out whether they are left with anything at all. Holders of bank debt get a sizeable haircut ‘up front’ on the face value of the debt and have part of the remainder converted into equity that shares the fate of the old equity.
  • We have the Great Depression of the 2010s.

None of this is unavoidable, provided the US Congress grows up and adopts forthwith something close to the Emergency Economic Stabilization Act as a first, modest but necessary step towards re-establishing functioning securitisation markets and restoring financial health to the banking sector. Cutting off your nose to spite your face is not a sensible alternative.

PS My remaining financial wealth is now kept in a (small) old sock in an undisclosed location.

PPS The conduct of both US Presidential candidates in this matter makes them unfit for purpose.

Today will not be pretty. Anyone with a pension, savings or investments has got a ringside seat, and is going to get splattered. Bring a towel.


The markets are up - all of them. I hang my head in shame, sackcloth and ashes have been donned. I fell victim to my own Narrative Fallacy: as if billions of decisions by millions of people to buy or not buy stocks could be reduced to a story about a vote by a handful of politicians in the USA. When will I ever learn? Mind you, the Irish Government's decision to guarantee all deposits did lead to a rally in the ISEQ, and maybe all the other stock markets - oops, there I go again: slap-wrist! Man, it's hard to lose that god-damn Narrative Fallacy habit: think I'll stick to weather forecasting and the 3.15 at Chepstow - way better odds of getting it right ...

Sunday, September 28, 2008

Our Nuclear Destiny

The most important decision about Ireland's energy future took place this week. And no, I don't mean the announcement that we might be getting a new grid for electric cars. I mean of course the decision by France's EdF to buy out the UK Government's remaining stake in British Energy.

This is important because it means that the skills, capital and ambition is now in place to build up to four new nuclear power stations in Britain by 2020. Why should that matter to us? Fundamentally because our future energy security will be contingent on our neighbour's energy security. The UK has left it perilously late to sort its energy investment plans, and there is still the chance that things could go horribly wrong. But if they go horribly wrong for Britain it will be catastrophic for Ireland.

Already we are falling behind with vital decisions in relation to new power generation capacity and integration into the European electricity grid. Instead of getting on with building a state-of-the-art coal powered electricity station - and planning for a nuclear power station - we are dancing on the heads of pins with discussions about carbon taxes and carbon footprints. Let's be clear about this: if we don't have sufficient electricity we won't have an economy to create the jobs and wealth to pay any taxes let alone carbon taxes. Though we will undoubtedly have a lower carbon footprint - Amish style in fact.

Yes let's plug in the renewables and the electric cars: but let's not delude ourselves that we can be wealthy and 'eco-pure' at the same time. Trade offs have to be made: as usual the UK will go ahead and make the tough decisions, and with luck we'll get to piggy back on the outcomes without having to compromise our precious principles. Make that a lot of luck.

Friday, September 26, 2008

Trickle-Down Communism

I love the story in today's Guardian about venture capitalist Bill Perkin's advertising campaign against 'trickle-down communism'. For a more considered critique of Bush's socialism for the rich see this.

Though, as usual, Jessica Hagy gets it spot on ...

Wednesday, September 24, 2008

Surfing the Tsunami

The recent draft agreement between the Social Partners was an exercise in buying time. Buying time for what I'm not quite sure. Time is not on our side, not least because of the financial tsunami now threatening the global economy. In most regards the draft agreement is a short term agreement dealing with short term issues: leaving all the hard stuff - like pensions and public sector reform - to another day.

This is a pity because the single largest source of inequality in Irish society now emerging is that between those with public-sector pensions and those without. Even among those with private pensions, the prospects for their future material wellbeing are not looking good right now. As reported in today's Irish Independent, the recent stock market turmoil has wiped billions off the value of the pension funds that private sector workers are dependent on. Sure, fund values can recover - but the value of the ISEQ yesterday (€51.4 billion) is just 40% of its value at its historic peak in February 2007 (€127.3 billion). It will be a decade (and, more likely, much, much longer) before we see a return to even this nominal value. Pity anyone retiring in the next ten years.

But not our public sector employees. As the Minister for Trade and Commerce John McGuinness TD put it recently - in an extraordinary speech:
The public service is the back office of this country. It spends money hard earned by others. At its higher levels it should be advising ministers, bringing forward initiatives and indeed restraining short term political impulses. It is honest, impartial and full of good people. But it is now so protected by its unions that it has largely become a reactionary, inert mass at the centre of our economy. Its culture destroys ambition, resists change and is now so insulated from reality that information can be withheld from a Minister, unfavourable reports are doctored and answers to parliamentary questions that come too close to the bone are masterclasses in dissemination and obfuscation, which can deny our T.D.’s the information they need to get to the heart of a matter.

... As a consequence, there are far too many well paid but unhappy square pegs in round holes throughout the public service. Furthermore, most State institutions are not subject to many of the controls and regulations which are hung around the necks of private individuals and commercial enterprises.

... I am particularly concerned by the fact that the public service continues to employ, adding more and more people who are almost impossible to let go and who will in due course be getting inflation proof salaries and pensions. In today’s world this is madness, if it was ever sensible, and I believe the government should tell the unions that the pay and conditions of new employees will be substantially different, thereby drawing a line under an arrangement that I consider an abuse of the taxes paid by the owners and workers in the private sector.

The State and its employees should broadly be subject to the same rules and regulations as everyone else. If this is not done we are running a two tier Ireland. We are reinforcing the belief that there is something exceptional, something a cut above the rest, about being an employee of the State.

That attitude, the lack of accountability, the lack of professionalism and the virtual impossibility of being sacked is destructive. It steals individuality, encourages arrogance, forces compliance to a culture, drains enthusiasm and denies the people, politicians and wealth creators of this country the benefits of a modern, high powered, creative arm of the state that is vital to our continued success. The Public Service has to be immediately, radically overhauled because we cannot afford it in its present form.
Sorry for the lengthy quote - but you have to admit it's a refreshing change from the bland platitudes that accompany most discussions about public sector reform. Curiously, the Minister's speech is not available on the Department's web site - an oversight I'm sure ...

At a time when the public finances are increasingly fragile, little is being done to mitigate the huge burden of public sector pensions on present and future tax payers. Ireland is not alone in this regard, of course. A similar divide between private have nots and public have lots is emerging in the UK. And if you think the current financial turmoil in the United States, with $1 trillion of imploding bad debts, is bad then consider the consequences of that country's $99.2 trillion in unfunded liabilities for social security and medicare.

Maybe we should all get a nice job in the civil service until the storm has passed.

Tuesday, September 23, 2008

Too Little Financial Innovation

The current financial crisis is one of too little innovation, not too much. At the heart of the sub-prime catastrophe that started it all is the plain old domestic mortgage. We forget how recent an innovation such loans are. In a recent Econtalk interview Robert Shiller explained that up until the Great Depression, most loans for the purchase of houses were 5-year rolling balloon payment mortgages. The Depression forced the innovation of the 15-30 year long-term mortgage that we know today.

The problem with the typical mortgage we are all now familiar with is that the repayments are effectively fixed to the rate of interest on the loan - not to the trend in house prices nor the payee's income. If the innovation behind sub-prime loans had been focused on delivering this sort of flexibility (rather than the obscene fee-generating Ponzi scheme we're all now paying for) then we might have had a better outcome. Shiller elaborates on his ideas in a recent article in the New York Times.

But it could go a lot further: Shiller speculates about a New Financial Order in which people will be able to take out livelihood insurance to protect against economic uncertainty and redundancy in an age of technological change. Furthermore, he advocates radical changes to taxation to reduce not just the lifetime consequences of inequality but also inter-generational inequalities in which a younger generation pay for the burden of the older generation once retired.

These are financial innovations that have the potential to transform the lives of billions around the world for the better. The sooner we sort out the mess of Ponzi Capitalism and return to a free market in which financial innovation delivers real benefits to the 'have nots' and not just to the 'have mores' then the sooner the world's poor can get on the ladder of economic progress. And it can only come about if the regulators abide by the maxim 'first do no harm'.

Sunday, September 21, 2008

The Worm Turns

I was interviewed by Susan Mitchell last week for a piece in the Sunday Business Post, published today. Her thesis is that the Irish middle class have discovered thrift. I think she's on to something: I certainly see it in surveys and focus groups around the country. In the past, shopping around for value was a sign you were stingy - now it is a sign you are shrewd.

Consumer attitudes certainly seem to be changing fast: as witness the findings in our recent survey for the National Consumer Agency which show 'price' replacing 'convenience' as the no. 1 driver of supermarket choice. Convenience has always been no. 1, even in the late 1980s when I first started doing market research in Ireland. Things really have changed.

I suspect consumers are going to become yet more price aware (and responsive) in the coming months. The wholesale price index for August (pdf) continues to show Irish manufacturers raising the price of goods manufactured for the home market (by +7.2%) and reducing those for export markets (by -1.3%). Ireland's increasingly shrewd shoppers might go global in their quest for value before too long.

Saturday, September 20, 2008

The End of the Beginning

Summarising the day's developments on the RTE News last night, Anne Doyle explained that the ISEQ had experienced its largest ever daily increase due to the Minister of Finance Brian Lenihan's reassurances about the security of bank deposits. This is possibly the most stupid thing I have ever heard uttered on RTE (I'm not calling Anne stupid, btw, she was just reading the nonsense written on her teleprompter.)

What kind of delusional narrative fallacy grips the news team at RTE anyway? To seriously suggest that the less than convincing utterances of an arriviste finance minister should be the primary, if not exclusive driver of multi-million euro transactions on the Irish stock market is a sign of just how little the folks reporting the news actually understand about what's going on. But it does serve one purpose: it panders to the re-assuring fantasy that the Government is in control and knows what is doing (and is even doing it successfully). Re-assuring but, regretably, completely divorced from reality.

Probably the biggest driver of yesterday's extraordinary bounce in the ISEQ (and the FTSE and the Dow Jones) was the collective decision by regulatory authorities in the US, UK and Ireland to ban short-selling of financial stocks - forcing those holding such positions to buy financial stocks to avoid regulatory punishment. Probably: but I'm no expert on the nuances of financial markets though I reckon the simulataneous surge in the US, UK and Irish stock markets had rather more to do with this than anything else. Unless the RTE news team think yesterday's largest ever daily increase in the FTSE 100 was also due to Minister Lenihan's utterances? Quite possibly they do, God help us.

Nevertheless, stepping back from the turbulence of the past week there is a sense that a period of extraordinary change is coming to an end (starting way back in August last year).Though I feel it is the end of the beginning rather than the beginning of the end. Not only does more financial turbulence lie ahead, so also does the full impact of the economic downturns in the developed world now under way that have yet to reach their nadir. The 'bottom' is some way ahead, probably towards the middle of next year (being as optimistic as I can whilst reading the economic tea leaves).

I think Edmund Conway calls it right in today's Daily Telegraph when he forecasts a leftward lunge in politics in general, and economic policies in particular. A pity because, despite the excesses and consequences of capitalism, a free market is still the only way to deliver wealth and well-being to the world's poor. This week Ireland was ranked 10th in the world for Economic Freedom according to a Cato Institute's report (a different measurement of economic freedom ranks us 3rd in the world). Whatever the precise measure, Ireland's economic success in recent years has been due to free markets and entrepreneurship. Our current problems are more the result of politicians meddling in the housing market (on behalf of the construction industry lobby) than with the workings of free markets. RTE will no doubt continue to attribute our economic and financial fortunes to politicians, but I'll be betting on the private actions of business owners and their staff to see us through the difficult times ahead.

Friday, September 19, 2008

Equal Opportunity Bigots

One of the most interesting topics I have worked on in recent years has been that of attitudes towards immigration. It is obviously hugely important to Ireland given the unprecedented speed and scale of our own immigration experience.

But we do have the advantage of learning from the experiences of others, if only to avoid the worst mistakes. And God knows Europe has made plenty of mistakes that we can learn from - if we want to. so far, Ireland has been spared the worst of anti-Muslim and anti-Jewish bigotry, mainly - I suspect - because we don't have large populations of either group.

It is different in other countries of course, and a recent study by the Pew Research Center paints an extraordinary, even alarming picture of the scale of anti-Muslim and anti-Jewish prejudice in parts of Europe. The chart shows the percentages of populations in different countries who are intolerant towards Jews, mapped against the percentage intolerant towards Muslims. In fairness, prejudiced people appear to be equal opportunity bigots: being intolerant towards both Jews and Muslims at the same time (the correlation is 0.8!). The exceptions are Germany (more prejudiced against Muslims than Jews), and Russia (more prejudiced against Jews than Muslims).

We have prejudiced people in Ireland too of course. The recent ESRI report on experiences of discrimination among ethnic minorities in Ireland points to particular problems for Africans in particular and black people in general. Though much of the information is woefully dated (from 2004 for some statistics), the findings are not surprising. Racism is a cultural virus (or meme as Richard Dawkins calls it) is probably impossible to eradicate. But challenging naked prejudice and discrimination is one way of at least minimising the extent to which it can spread.

That said, I don't think worthy calls from The Equality Authority and the likes will make much difference. An extraordinary article in The Irish Times by Gerard McMahon from DIT recently captured for me the Kafkaesque futility of so much activity by that organisation. The article describes various cases before the Labour Court and the Equality Tribunal, one of which ruled that an employee could not be fired for theft if that person happened not to speak English as a first language and was not told in writing in their own language that stealing from your employer was not permissible.

McMahon concludes by suggesting that:
... it looks like employers will have to change all of their documentation into however many languages are necessary to facilitate foreign nationals in their workforce. And that's assuming people can read. Alternately, they might be well advised to shell out on English language classes.

Do you think? Well, speaking on behalf of those of us living on Planet Reality with payrolls to meet at the end of each month, somehow I don't think this so. In fact, the reverse is going to happen - by making it more expensive to employ people from different ethnic backgrounds, employers will simply not hire them. You can call that discrimination, but I call it: SELF-FULFILLING PROPHECY. So let's learn what we can to avoid the legacy of past prejudice still evident in Europe, but let's also avoid spectacular home grown mistakes that serve more to confirm the anti-business prejudices of unelected quangos than any underlying prejudice on the part of the Irish people.

Mapping Education's Future

You can imagine my excitement when I came across the Map of Future Forces Affecting Education from KnowledgeWorks Foundation and the Institute for the Future. Three of my favourite topics - maps, education and the future - in one location!

Seriously though, this is a brilliant example of clear thinking about a hugely important topic communicated using the best of the web's tools. Unlike the increasingly embarrassing effort at a debate about third level fees in our own country ...

Here's a guide to using the Map of the Future - I urge you to have a look and to play with the tools they make available:

Tuesday, September 16, 2008

Our Methadone Housing Policy

Having overdosed on the pure heroin of leveraged financial excess, the banks, the builders and the Government want to ease the pain of financial cold turkey by taking the policy equivalent of methadone. Hence absurd calls for the Government to introduce schemes to make it easier for people to 'get on the housing ladder' through subsidies to local authorities, builders, banks and anyone else wailing loud enough.

My, how short some people's memories are! Was it not the provision of 'sub-prime' loans to people who shouldn't have been buying houses in the first place that led to the mess we're in? The much touted ninja loans (no income, no job or assets) made a lot of fees for the lenders, it just didn't do the borrowers any good.

Alan Ahearne is advising the Government to ignore the self-serving lobbies - as he puts it:
The use of public funds would be appropriate to help lower earners in danger of losing their homes and to prevent a collapse in a systemically important institution. Large banks are systemically important. Developers and property investors are not.
It was Government intervention and meddling that got us into the current housing crisis in the first place (aided and abetted by the banks and developers to be sure). Maybe it's time to just go through the cold turkey and come out the other side wiser and determined not to do it again.

Banking's LHC Moment

Last week we worried about a black hole being created under the Alps at the Large Hadron Collider: this week we're worried about a financial black hole being created in the world's economy. So far we seem to have survived both 'experiments'.

The odd thing is how limited the consequences of the financial black hole created by the demise of Lehman Brothers (and Merrill Lynch and Fannie and Freddie and Bear Stearns ...) for the real world. I think Anatole Kaletsky calls it right when he points out that most of the financial leveraging over the past 10 years was between financial institutions rather than between banks and, say, borrowers. Here's his explanation for the current mess:
To understand the underlying reason why the enormous deleveraging triggered by the still-expanding financial crisis is doing much less damage than generally expected to the real economy, consider the following example: before the arrival of “hyper-finance”, if a family wanted a £100,000 mortgage they would go to the Halifax and simply borrow £100,000. Now consider what would have happened in the new financial world. The family would have borrowed £100,000 from Northern Rock, which would sell £100,000 of bonds to hedge funds, which would buy these bonds with £100,000 borrowed from Bear Stearns, their prime broker, which would raise this money by selling £100,000 of commercial paper to Citibank, which would then borrow £100,000 through the inter-bank market from Halifax. The original borrower is still the same household and the ultimate lender is still Haliax, but now a £100,000 mortgage has created £500,000 of new debt.
So we're sort of back to where we started: banks make profits by charging interest on loans to borrowers who either earn the money or create the income stream (if they're a business) to repay the loan. Boring but probably better for the economy in the long run: even though we've still a lot of toxic waste to clean up.

Sunday, September 14, 2008

Satire Will Set You Free

The one thing I really enjoyed on holiday in the United States was the quality of satire on television. The Daily Show and The Colbert Report are bitingly funny programmes - there is nothing on Irish or UK television that compares.

Which is a pity really: it seems that people who watch satirical news reports are better informed about the 'real' news that those who don't. Maybe that's what we need for Lisbon II: a show that royally takes the piss out of both the Yes and the No campaigns and happens to reduce the "don't knows" vote along the way. Best way to spend tv licence money that I can think of right now.

And for an example of how good it gets check this out (ht to Richard Delevan for the link):

The Limits to Immigration

It is uncanny the parallels between political developments in the UK and in Ireland in recent months. Gordon Brown and Alistair Darling have a summer from hell, the 'Two Brians' have something similar. The other parallel that struck me this week is the emerging debate about immigration. Though as always the UK is a little ahead of us when it comes to the hard issues that actually need debating.

This week saw the release in the UK of a well-researched report called Balanced Migration. The initiative behind the report came from Frank Field MP, a man with impeccable Labour Party credentials in social policy innovation and implementation. His imprimatur on the report meant that it couldn't be dismissed as a 'right wing/neo-fascist' piece of populism by the opposition: as seems to be our own Government's default setting whenever any new idea on immigration is floated. The report also includes a fascinating history of immigration in the UK, in which the Irish feature prominently it should be added.

The authors are at pain to point out that they are not anti-immigration, as they observe:
... the benefits of migration are not in doubt. Our country – just like any other – would be much the poorer but for the contribution that immigrants have made here, and that Britons have made overseas. Our concern is not the principle of immigration, but its scale. In recent years we have seen an entirely new phenomenon: very large scale immigration, the impact of which has become a matter of increasing public concern.
The same applies to Ireland of course. To coincide with the launch of the UK report the publishers published survey findings (spreadsheet) which showed that 6 out of 10 British voters think the level of immigration to the UK is too high and that there should be less in the future. Another uncanny parallel: my own company published research this week showing that 66% of Irish citizens want immigration policy to be more restrictive in the future.

The UK is worried about its ability as a nation to cope with further immigration. As the Balanced Migration report notes, the current rate of immigration (one immigrant per minute) is 25 times higher proportionately than any previous experience of immigration since the Norman Conquests in 1066. Looking ahead, the report anticipates that 35% of immigrants from Eastern Europe to the UK will stay (see Appendix B). Recent population forecasts for Ireland show a similarly large contribution to future population levels from immigration (36% of the total increase to 2060: equal to another Dublin).

As acknowledged at the National Immigration Debate I participated in last week, when it comes to immigration to Ireland, nobody wants an open door policy any more than anybody wants a closed door policy. So where do you draw the line? The UK's socialists are losing their naive idealism and beginning to grasp - to quote David Goodhart - "that a belief in universal moral equality does not mean that we have the same obligations to all humans". As Goodhart further explains:
Until a few decades ago, the basis of national 'specialness' would have been ethnicity - shared ancestry, history, sacrifice. In multi-ethnic and multiracial societies, the basis of specialness is citizenship itself. The justification for giving priority to the interests of fellow citizens boils down to a pragmatic claim about the value of the nation-state. Without fellow-citizen favouritism, the nation-state ceases to have much meaning. And most of the things that liberals desire - democracy, redistribution, welfare states, human rights - only work when one can assume the shared norms and solidarities of national communities.
We have to negotiate difficult times ahead. Economic uncertainty is adding to the challenge. Writers like Robert Putnam are suggesting that countries like Ireland need to find their own version of E Pluribus Unum. In other words we need a definition of Irishness for the 21st century that goes beyond 'united colours of Benetton' platitudes and that makes the case for what makes us different, as well as what makes us the same. Same goes for Britishness I guess. So we'll be paying a lot more attention to developments on the 'other' mainland over the coming months.

Saturday, September 13, 2008

On the Internet Everybody Knows You're a Dog

I've been playing with Twitter these past few weeks and experiencing (though I didn't know it at the time) 'ambient awareness'. That's how American social scientists describe the experience of using Facebook, Bebo, Twitter etc and the emergence of a sense of presence and 'intimacy' that previously only resided offline (aka 'the real world').

There is now a generation of Bebo users and of other social networks growing up with an entirely different grasp of what privacy means - let alone intimacy. A report by my company earlier this year showed that 87% of Irish 18-24 year olds use sites like Bebo on an almost daily basis. I remember the good old days when the joke went 'on the internet nobody knows you're a dog'. It's quite the reverse now - in an age of Google and 'bebo stalking' (as my daughter and her friends call it) everybody knows you're a 'dog' and there's no point in pretending otherwise. Or as I like to put it: on the internet everybody can hear you scream ...

Clearly there is a generation gap: I'm a digital immigrant, just like Rupert Murdoch. But as this fascinating article by Clive Thompson in the New York Times explains, the digital natives are on to something quite profound - a redefinition of our evolved, human sense of belonging:
You could also regard the growing popularity of online awareness as a reaction to social isolation, the modern American disconnectedness that Robert Putnam explored in his book “Bowling Alone.” The mobile workforce requires people to travel more frequently for work, leaving friends and family behind, and members of the growing army of the self-employed often spend their days in solitude. Ambient intimacy becomes a way to “feel less alone,” as more than one Facebook and Twitter user told me.
Thompson refers to the work of anthropologist Robin Dunbar who hypothesised back in the 1990s that humans had evolved to live in communities of about 150 people. He suggests that 'digital prosthetics', such as Twitter, may enable us to extend the Dunbar number to many hundreds more if not thousands (as in the case of some of the people he interviews for his article).

I do think something really profound is going on here in terms of our experience of being human. If class consciousness is going to be replaced by ambient awareness - and three degrees of separation from everybody else online - then what are the implications for politics, for nation states, and, indeed, for social class? I expect it will be a mix of good and bad consequences.

On the bad side, more and more studies in the United States of the first generation of digital natives points to some worrying conclusions - here's one college professor of English's description of his students:
  • Primarily focused on their own emotions — on the primacy of their "feelings" — rather than on analysis supported by evidence.

  • Uncertain what constitutes reliable evidence, thus tending to use the most easily found sources uncritically.

  • Convinced that no opinion is worth more than another: All views are equal.

  • Uncertain about academic honesty and what constitutes plagiarism. (I recently had a student defend herself by claiming that her paper was more than 50 percent original, so she should receive that much credit, at least.)

  • Unable to follow or make a sustained argument.

  • Uncertain about spelling and punctuation (and skeptical that such skills matter).

  • Hostile to anything that is not directly relevant to their career goals, which are vaguely understood.

  • Increasingly interested in the social and athletic above the academic, while "needing" to receive very high grades.

  • Not really embarrassed at their lack of knowledge and skills.

  • Certain that any academic failure is the fault of the professor rather than the student.

I've no idea if this is the case in Ireland: but I have a strong suspicion it is happening here too. Still, it is too early to tell: Clay Shirky is right to suggest it will take 50 years or more for us to really understand the full impact of the changes now underway. I'm looking forward to being along for at least some of the journey.

Friday, September 12, 2008

Spooked by the Economy

The folks at Eurobarometer continue to shed light on what ails the people of Ireland. Their latest report on attitudes towards climate change (pdf) is more interesting for what it has to say about other matters. One of the introductory questions they asked in their survey, conducted between March and May 2008, was 'what do you consider to be the most serious problem currently facing the world as a whole?'. People could choose up to three problems from a pre-defined list. Climate change was the number 2 issue in the EU27 (62% saying it was the most serious problem - after poverty, lack of food and drinking water at 68%), and was actually number 1 in Ireland (at 63%).

However, more interesting was the percentage citing 'a major global economic downturn' as the most serious problem. Ireland had the highest percentage of respondents choosing this issue of all the 27 EU nations in the survey: with 43% of Irish people identifying it as one of the most serious problem facing the world versus just 24% of all Europeans. The Irish part of the survey was conducted in April 2008 by the way, a full two months before the ESRI made it official that we had entered a recession - and over a month before the Lisbon Treaty was rejected at the Referendum on 12th June.

So perhaps it really was the economy after all that scuppered Lisbon, despite all the nonsense about conscription (pdf)? As I've noted before, fears about globalisation are at the heart of a lot of Irish angst right now.

Interestingly, specifically in relation to climate change, the detailed Irish results (pdf) show young Irish people to be less alarmed about climate change than either their elders or other young Europeans. Again, the negativity of younger voters towards the Lisbon Treaty might well have been motivated by economic concerns.

Something tells me that, following De Valera's example and looking into my heart, the Irish people - and lot more of our fellow Europeans - might well have revised their priorities in relation to the most serious problems facing the world since the Eurobarometer survey was done. And the nice thing is that they'll update it in due course and we'll be able to see for ourselves.

Thursday, September 11, 2008

Whinge Energy

We're going to hear a lot of complaints about energy over the next twelve months. The Irish Times tells us this morning that businesses are facing a 75% hike in electricity prices next year, following a similar increase in gas prices over the past year. Yet, despite a trend increase in global energy prices (even allowing for the recent weakening in oil prices), future demand for energy is expected to increase by 50% between 2005 and 2030, according to the latest forecasts from the Energy Information Administration.

Where will the energy come from? An essay by Sterling Smith over at The Oil Drum faces some inconvenient truths about energy: efficiency and renewables won't fill the gap if we are to extend modern civilisation to the world's developing nations (though some Greens don't want to do that of course). The answer, as best he can call it looking out to 2050, is nuclear power - the only source potentially capable of filling the demand-supply gap illustrated in the above chart from his essay. I'm not so sure myself, though I do think nuclear will play an important part in the energy transition we are now facing.

Meanwhile here in Ireland we seemed to be more consumed with micro-managing an all-Ireland electricity grid than actually putting in place the infrastructure to protect and sustain our economic wellbeing into the future. So expect a growing cacophony of complaints about energy prices and energy insecurity in the months and years ahead - now if only we could plug that into the grid ...

Wednesday, September 10, 2008

A Tolerant People

The Irish are a tolerant people by and large. We tend to beat ourselves up a lot about our health service, our litter and our weather - often ignoring the good things about our country (except the weather, that's really getting to me now). Among the positives is our extraordinary degree of tolerance. Take the findings about Ireland in the recent report on Discrimination in the European Union 2008 (pdf). On measure after measure we are more tolerant than the EU27 as a whole on indicators such as:
  • actual experience of discrimination on grounds of ethnic origin, sexual orientation, age, gender, religious belief and disability
  • level of comfort with neighbours from different ethnic groups etc (with the notable exception of Roma)
  • support for positive discrimination measures in the workplace
  • having friends or acquaintances from different backgrounds (especially religious in Ireland)
I think by far the most powerful measure of our tolerance is the way in which we have responded to the extraordinary speed and scale of immigration to our country over the past 10 years or so. As noted in new research by my own company, the majority of Irish people consider immigration to have been a good thing on balance for Ireland. Almost no other country has experienced such a surge in the share of foreign nationals in its total population (to 10% in just 10 years) with so little real social, economic or political strife as Ireland. There is no greater testimony to our tolerance as a people in my opinion.

None of this is to say that things will continue on as they have until now. Hardly; given the sea change in our economic fortunes and prospects. Whether it's about the wearing of hijabs or tighter immigration controls, we are now facing the hard decisions about the future course of immigration - and the integration of immigrants - in our country. Ultimately, debates about immigration and integration are about values - not economics, or politics or rights. Our tolerance is founded on the values that have made Ireland what it is today - a Western mixture of Christianity, Ancient Greek Philosophy (much of it via Muslim and Jewish thinkers) and our own Celtic heritage of course.

So the key task in anticipating the future course of immigration and integration in Ireland is one of gauging the course of our values in the coming years and, indeed, generations. Adding to the challenge is the cultural interaction between immigrants and the host population and the inevitable negotiation of values that that interaction gives rise to. But not only is Ireland being changed by immigration, it was (and is) changing itself as a country by becoming a post-Christian, secular society - regardless of trends in immigration.

That makes for a much more comlex debate - one comprising intrinsic and extrinsic sources of change in fundamental values. The task then is to equip ourselves with the tools to accommodate this change even as the change is already under way. I find inspiration for this task in the writings of philosophers like Austin Dacey whose book - The Secular Conscience: Why Belief Belongs in Public Life - should be required reading for all our politicians and others engaged in the ongoing debate.

I believe that the intrinsic tolerance, compassion and wisdom of the Irish people will enable us to successfully negotiate the turbulent times ahead. Regardless of the weather ...

Tuesday, September 9, 2008

Working Class Zero

Whatever happened to the working class in Ireland? Did 'missing the industrial revolution' mean that we missed the formation of a 'true' working class? Even Marxists are worried about the demise of the working class, as evident in this recent essay from the Fourth International entitled 'Has Working Class Consciousness Collapsed?'. The author defines class consciousness thus:
The awareness of individuals in a particular social class that they share common interests and a common social situation. Class consciousness is associated with the development of a ‘class-for-itself’ where individuals within the class unite to pursue their shared interests.
The joke used to be that class consciousness was never strong in Ireland because everyone was convinced they were descended from High Kings and chieftains anyway! A more modern take on it might be that the world has become smaller and more intimate. The Irish have embraced social networking tools like Bebo and Facebook with passion, such that there are no longer seven degrees of separation between people but three degrees of separation. If the 'common interests' and 'common social situation' you share with others are mediated by the web and mobiles then is it class consciousness?

That said, social class is a concept used all the time in market and social research. Essentially it is based on the occupation of the head of household or chief income earner: so if, say, you are interviewing an 18 year old student living at home with little or no income they are deemed to be middle class if his or her father is in, say, a managerial job. Crudely, social class is deemed to be strongly correlated with household income or spending power (which could be more easily gauged by simply asking people their income if we didn't have one of the highest refusal rates to that question in Europe!)

But on its own social class usually has limited, separate explanatory power when we allow for the influence of other key variables on attitudes, behaviours and circumstances including: age, gender, educational attainment and marital status. This is not to say that income levels don't have a powerful effect - indeed they do. But as in the case of the student living at home, personal income is a very blunt guide to economic status and wellbeing. A fact deliberately ignored by many in the poverty lobby when they lament the scale of 'working poverty' - in fact a lot of the people on low incomes are young people (often 2nd/3rd level students) working part time to have some spare cash for themselves.

But family poverty is a real and pressing problem. As evidence from the United States shows, the growing polarisation of US society costs a high price in terms of children effectively denied the opportunity to participate in the economic benefits of living in the richest country in the world. Nor is it just about educational attainment - the attainment of non-cognitive skills (such as motivation, sociability and self-regulation) are even more important as this study shows:
Fifty percent of the variance in inequality in lifetime earnings is determined by age 18 (Cunha and Heckman, 2007). The family plays a powerful role in shaping adult outcomes that is not fully recognised by current American policies. As programs are currently configured, interventions early in the lives of disadvantaged children have substantially higher economic returns than later interventions such as reduced pupil-teacher ratios, public job training programs, convict rehabilitation programs, adult literacy programs, tuition subsidies, or expenditure on police. This is because life-cycle skill formation is dynamic in nature. Skill begets skill; motivation begets motivation. Motivation cross-fosters skill, and skill cross-fosters motivation. If a child is not motivated to learn and engage early on in life, the more likely it is that when the child becomes an adult, he or she will fail in social and economic life. The longer society waits to intervene in the life cycle of a disadvantaged child, the more costly it is to remediate disadvantage.
That is the great virtue of the Middle Class: its transmission of non-cognitive skills to the next generation at no cost to the state. No wonder the future belongs to the Middle Class. Though they may not be conscious of it of course.

Sunday, September 7, 2008

Privatising the Recession

Over the past two weeks I've had the same conversation three times with directors of different advertising agencies in Dublin. They all report grim discussions with the financial controllers of various Government Departments that also happen to be clients. The message from their clients: "we have to cut our advertising and marketing spending by 50% so we're changing our contracted expenditure with you for next year". 'Like it or lump it' being the sub-text.

The Government has decided to privatise the pain it must face in terms of its rising budget deficit. The private sector - businesses and their employees providing goods and services to the public sector - will bear the brunt of a retraction in government spending. The same goes for capital spending: it is private sector contractors who deliver the roads, hospital buildings and IT systems purchased by the public sector - so a cut in capital spending means reduced incomes for private sector suppliers. The Government seems intent to outsource its pain, and those of us not in sheltered employment will feel it.

It surprises me how little this is commented on in the acres of coverage about the forthcoming Budget and the Government's options. In the private sector if your revenues fall and costs don't then you usually have no choice but to reduce the numbers and hours of your employees. In the public sector, on the other hand, IT WOULD TAKE AN ACT OF THE OIREACHTAS to make a single, tenured civil servant redundant. That's what I call job security.

So the ONLY option the Government has (by way of cost reductions) is to reduce its spending with the private sector. Sure they can huff and puff about 'pay restraint' and 'low single digit pay rises' but we all understand the fundamental realities: there are no consequences for public sector workers who refuse to play along with calls for restraint. That isn't to say there are no consequences at all - rather the private sector bears most of them through reduced demand and rising redundancies.

Also in contrast to the private sector, the Government can put up its 'prices' when revenues fall - i.e.: raise taxes. So we're in for a double hit for businesses, their employees and consumers. As I see it, nothing short of an unemployment rate closer to 15% than 5% will induce the public sector to do what the private sector are already doing: letting go those staff for whom there's no work. But in the short term the prospect is for even less work for those businesses reliant on public sector clients like my ad agency friends.

Saturday, September 6, 2008

The Pulse of the Nation

I wonder will the boundaries between art and science disappear in years to come? Might seem like a silly question, but when you look at what artists like Jonathan Harris are doing using state-of-the-art data manipulation technologies to create stunning works of art then I think the answer might be 'yes'.

We've been using a combination of different techniques to measure the 'mood of the nation' at my company (Amárach Research) these past few months. It's in the space I call (for want of something better) 'real time research' or RTR. Instead of the clunky process of going out and finding people willing to participate in research and then process their answers, RTR uses the explosion of user-created content to find out what's going on right now. Ultimately the 'old' and the 'new' ways will be complementary of course, and I realise we're still at very, very early stages.

Which is why Harris' We Feel Fine project blew me away when I came across it (sorry for the hyperbole, but that's how I felt!) Just click on 'Open We Feel Fine', select Ireland from the Country list and then watch the nation's feeling pour out through the beautiful interface designed by the people behind the project. It's as stunning a combination of art and science I've come across in some time.

Listen also to Harris' talks at TED to get a feel for what motivates him as an artist and computer scientist. I know it's hackneyed, but the guy is a genius. I realise we're in the foothills with our RTR work at Amárach, but Harris has shown us the peak.

Praying for a Carbon Tax

St Augustine of Hippo famously asked God to 'make me chaste Lord, but not just yet'. The same might be said about a carbon tax. In all the recent coverage about the forthcoming, fast-tracked budget it is the tax that dares not speak its name. With good reason: it would be hugely economically and politically risky in the present climate (pardon the pun).

This will be tough on the Greens in government: without a carbon tax they will have little to show for their time at the cabinet table come the next election. But the reality in an Irish context is that a carbon tax demands a major re-structuring of income taxes, business taxes and social welfare payments: as set out in considerable detail in a recent paper by the ESRI. With the Government worried about how much they are going to raise from already existing taxes, now is probably not the time to take a massive gamble with the entirety of the tax system by introducing a tax that does not exist anywhere else in the world.

And looking beyond our parochial concerns, there is even less political will for a global carbon tax. Not least because the task of conjointly forecasting climate and economic variables is something we are only beginning to grapple with. As noted in this excellent essay from The New Atlantis:
Long-term climate prediction is in its infancy. Estimating the cost impact of various potential warming scenarios requires us to concatenate predictions made by non-validated climate models with those made by economic models that purport to understand the economy of the twenty-first, twenty-second, and twenty-third centuries. It is hubris to imagine that these can guarantee accuracy, and impossible to validate such claims. Epistemological humility requires us to admit that we can predict reliably neither what impact human activities will have on the climate nor the resulting impact of these climate changes on the economy over multiple decades and centuries.
Which is not an argument for doing nothing - quite the contrary. A focus on energy efficiency and non-emitting energy generation technologies will be crucial to our response to the risk of long-term climate change, and to the (in my opinion) far more imminent and deadly threat of peak oil. Indeed, rising oil and gas prices have done more already to curb our CO2 emitting habits then any hypothetical carbon tax. Be careful what you pray for.

Friday, September 5, 2008

The Future Will Be Evenly Distributed

There was me thinking we should replace books with Kindles (or better still - Netbooks), when a piece in Wired pointed out the obvious: why do we need books in an age of Wikipedia?

I love the idea of open source textbooks - a forthcoming initiative from Flatworld Knowledge. Ironically, I've already come across such an initiative here in Ireland through the work of the third world charity Camara. They recycle and ship second hand computers from Ireland to various countries in Africa, loaded with Edubuntu software.

Africa will probably leapfrog the developed world (eventually) using mobile and open source technologies to equip their children with 21st century tools to acquire 21st century skills. And why not? A director of a major Far Eastern airline once put it to me that most of the 'third world' airports are now in the 'first world'. He'd just come through Dublin airport, but I didn't press him on it. So perhaps we'll see first world technologies helping third world children secure their place in our increasingly flat world.

Meanwhile our children will make do with the Shakespearean experience:
Then, the whining schoolboy with his satchel
And shining morning face, creeping like snail
Unwillingly to school.
With nothing more sophisticated than a calculator in the satchel.

Thursday, September 4, 2008

A Hawthorne Budget

Not drowning but waving: that's the upbeat message from Finance Minister Lenihan announcing a change of schedule for the budget. I wish him well - his budget will have implications for me, my family and my business. Probably.

But the funny thing is - having bought into the pre-budget hype regarding budgets under various UK Chancellors and Irish Finance Ministers - I just don't buy it any more. I.e.: the idea that one Minister, tweaking various tax and spending 'controls', can really affect much significant change.

I'm reminded of Hayek's famous observation:

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
F.A. Hayek, The Fatal Conceit
I don't doubt there will be some unexpected initiatives by the Minister in his Budget. Stephen Kinsella has set out the broad options and I think he's right. But I think the Budget, like most Budgets, will be closer in nature to the Hawthorne Effect than to anything more real or impactful. The effect is named after the famous 1930s experiment in a factory in Hawthorne, Chicago. Researchers set out to test the impact on productivity of various initiatives and found, to their surprise, that any initiative had a positive effect. In the short term. But almost all initiatives lead to a rise in productivity and output followed by a reversion to the status quo ante.

It seemed the factory workers just liked the attention and wanted to please the experimenters. So I'm expecting lots of positive assessments when the budgetary details are announced ... and a reversion to our more gloomy state shortly afterwards. But I'll enjoy it while it lasts - so should Minister Lenihan.

Education 2.0

The ink is barely dry on my post proposing the Department of Education gives every school child in the country an Amazon Kindle when I learn that something similar is already happening. Today's Irish Times carries a story that students at Caritas College in Ballyfermot have been given Iliad e-ink pads from iRex in the Netherlands.

It isn't clear if this is a Department initiative or a private initiative by Caritas College, Gill & Macmillan and iRex (and more power to them if it's the latter). If it is the former: why just one college, and why just one technology platform - ideally we need to trial multiple schools, platforms and age groups: quickly. Forget third level fees (nobody will decide anything on that until safely after the next general election), here's a chance to do something for our children and our future economic well-being in one fell swoop.

Wednesday, September 3, 2008

Quench Your Thirst

Sticking with the water theme for another post (via FutureLab):

View SlideShare presentation or Upload your own. (tags: design crisis)

Prices, Property Rights & Water

Last night's Future Shock: The Last Drop was better than some of the previous broadcasts in the series, though only just. The programme was certainly very informative and I learned a lot from it. But while it was strong on diagnosing the problem, it was desperately weak in setting out solutions. For a less dramatic but equally sobering primer on our water situation read the excellent report from Forfás published yesterday.

Nevertheless, both the RTE and Forfás analyses skirt around the two fundamental issues at the heart of any national water debate:

- who pays for the water, and
- who owns the water.

Taking the first one, the issue of domestic water rates and metering got very little attention in either analysis: which is a huge mistake. If the price of water is effectively set at zero for consumers then the consequences are inevitable: waste, under-investment and neglect (cryptosporidium anyone?). The solution is simple though politically difficult: make consumers pay for water just as they pay for waste - either directly to local authorities or to licenced private suppliers. The only people who never seem to understand that people respond to prices and incentives (i.e.: taxes) are politicians - and too many in the media suffer from the same myopia.

The second issue is even more important: who owns the streams, rivers and lakes being polluted by household septic tanks and slurry from farms? I suspect that if Lough Corrib and the many others now endangered were privately owned by those with land adjoining them then the disgusting legacy of neglect and polution would not have occurred. Quite simply those whose part of the lake was poluted by their neighbours would be entitled to sue and demand compensation sufficient to stop the polution or mitigate its impact. But again, rather than empower property owners to protect their property from polution we are faced with recommendations for local authorities to clean up everyone else's mess.

And maybe if we can sort our own water pricing and property problems out we can help those with far more pressing water problems.

Happy Blogday

Forgive the self-indulgence (or is it all self-indulgence?) but today is Turbulence Ahead's first birthday. I've written 298 posts in 365 days and I've enjoyed it way more than I expected. As I say to my friends, blogging's cheaper than therapy ...

I have especially appreciated all the comments from readers - online and offline - as it challenges me to hone my thoughts and communication skills. Not to mention IT skills as I've learned more about the tools available to wannabee communicators in the past year than in the previous five years.

So what now? I'm with Kafka:
If I were another person observing myself and the course of my life, I should be compelled to say that it must all end unavailingly, be consumed in incessant doubt, creative only in its self torment. But, an interested party, I go on hoping.
And so I will.
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