
Adiós!
An Irishman’s perspective on Ireland, the future, and other things from time-to-time …
Institutions will try to preserve the problem to which they are the solution. Clay ShirkyThat's one of those insights that increasingly seems to be confirmed everywhere I look. NAMA, Anglo Irish Bank... the Irish Government. Even Social Partnership, as the wheels threaten to come off the latest, negotiated settlement between the Government and the representatives of (most of) its employees. Kevin Kelly applies the Shirky Principle to trade unions thus:
Unions were a brilliant solution to the problem of capital management which tended to exploit uncapitalized workers. But over time as capital increased in complexity, unions complexified as well, until unions needed management. The two became one system -- union/management. So now the problem with unions is that they are locked into the old framework, the old system. They inadvertently perpetuate the continuation of the problem (management) they are the solution to because as long as unions exists, companies feel they need management to offset them, and so the two became co-dependent. In effect problems and solutions tend become a single system.But I think there's a logical corollary of the Shirky Principle, namely that preserving the problem ultimately destroys the institution. Take sovereign debt: the IMF is warning us that:
...the biggest threats have moved from the private to the public sectors in advanced economies. Governments not only took on many of the bad assets from private institutions but due to the recession face continuing heavy borrowing needs for the next few years. Slow growth in the real economy and high unemployment will retard tax revenues and require higher government spending—such as on unemployment benefits and job creation activities.So governments - including Ireland's - are on the hook for the debts arising from their efforts to solve the problem of an imploding banking system. But David Goldman sees a bigger problem down the track in the United States:
The spat over Richie Boucher's pension is but a mere foretaste of what is to come: imagine the media reaction when the Irish banks start reporting large and growing profits? Now I've nothing against banks making profits (by being banks, not property-addicted pawnbrokers), but I suspect that that'll be a hard one for Irish taxpayers (and borrowers and mortgagees) to swallow. So the government's solution to the problem will have created another problem...In the new corporatism, where governments bail out banks and banks bail out the government, the question continuously arises: who’s the senior partner in the merger?
The government bailed out the banks, of course. The banks are now financing the deficits of governments... Now, let me see–do I have enough fingers and toes to work this one out?–the governments are issuing gigantic amounts of debt to bail out the banks. The banks are making money levering up this debt, so it looks like there’s no more problem in the financial system. So to reduce the debt of governments, we should tax the banks’ balance sheet, which have ballooned as the banks bought government debt with zero-interest financing from the government, and made lots of profits…
We are much more vulnerable now than we were during the Second World War. When I grew up we had the skills to be self-sufficient; we made our own clothes and fished, we never felt poor. Now you don’t need a nuclear bomb to finish off a country; you just cut the power off for a week. Harry EyresWill the internet save us from the next global disaster? That's the fascinating thesis put forward by David Eagleman. He has featured once or twice in previous posts - he's always guaranteed to challenge your thinking. David's talk at the Long Now Seminar series identifies six easy steps to avert the collapse of civilisation. A noble ambition. They range from 'trying not to cough on one another' to 'mitigating tyranny'. All his steps have one thing in common: the ubiquity of the internet and its capacity for distributed productivity, learning and knowledge storage.
Violence, naked force, has settled more issues in history than has any other factor, and the contrary opinion is wishful thinking at its worst. Nations and peoples who forget this basic truth have always paid for it with their lives and freedoms. Robert A. Heinlein
In matters of free speech about religion in Denmark, the government monopoly on violence has been broken. There is another player in the market, declaring that cartoons perceived as anti-Islamic are punishable by death. A pattern of political violence against ordinary citizens is something western Europe has not experienced in more than half a century. Some people describe radical Islam as a kind of totalitarianism, or “Islamofascism”. That is an oversimplification. Even if he had contact with al-Qaeda, Mr Westergaard’s would-be assassin was probably working as an individual.Here in Ireland we have our own 'competing source of predictable violence'. This week's attack by the Real IRA on MI5's headquarters in Northern Ireland was a powerful reminder of that fact (that's if you can call holding a taxi driver's family hostage, threatening to kill them and forcing him to drive the bomb to the target an 'attack'). Of course, republican violence in Ireland has had a very long history - and was instrumental in the foundation of the Free State. The Real IRA and their supporters would therefore claim to be the latest in a long line of those who have used violence for political ends.But this power to intimidate, though informal, is potentially decisive. It is the same power exercised by those who threaten journalists in Russia, those who kill policemen in Mexico, or the Ku Klux Klan in the US south of a century ago. Such acts make law. It is remarkable how few people they have to harm to do so. Lars Løkke Rasmussen, the Danish prime minister, was not just mouthing a cliché when he described the attack on Mr Westergaard as “an attack on our open society”. Once a competing source of predictable violence emerges in an open society, government must do something to stop it.
From the agrarian societies of the eighteenth century came the general habituation to the use of force and conspiracy, and the concepts of alternative law and rule. From Tone derived the clear expression of the dogmas that the British connection was the unfailing source of Ireland's ills, and that 'Protestant, Catholic and Dissenter' was a false distinction, employed by the imperial power to divide Irishmen, for their better subjugation. Tone also contributed the notion of the Republic (especially epitomised by its Army, the repository of civic virtue and authority), and in general fathered the movement's totalitarian strain. From the Young Irelanders came the first the definitive association of cultural separation, mass education and popular literature with the cause of violence. To them too we must attribute the first clear linkage of political virility and the use of arms. From Fenianism came the assertion that Ireland was in a constant state of war with Britain, as well as the assumption of governmental rights by the Irish military arm which was committed to the struggle. It was Fenianism moreover which developed the strategy of manipulating Irish opinion by evocative demonstrations and the tactic of infiltrating and deploying exterior organisations. From Pearse came the 'religion' of violent nationalism, the cults of blood, youth and sacrifice, and the concepts of generation witness, historic roles and supremacy of the gesture.Each of these stages was in turn shaped by forces as diverse as political philosophy, imperial power struggles, and even rising affluence and literacy - in Ireland and abroad. Especially the 'supreme gesture' of the 1916 Rising. But these historical forces have long since given way to other, more contemporaneous ones. And the most fundamental one is that on 23rd May 1998 the majority of Irish people in the Republic of Ireland and in Northern Ireland approved the Belfast Agreement and its core principle of democratic consent to future changes to the political structures on this island. Today the factors that McDonagh described as shaping the ideology of violence in Ireland no longer pertain. All we are left with are the Real IRA and the 'supremacy of the gesture'. Like last Monday's car bomb. Gestures that certainly demonstrate the existence of the perpetrators but which have no prospect of achieving any political change simply because the conditions are no longer those that can be shaped by violence as in the past.
(1) attack civilians, a policy that has a lousy track record of convincing those civilians to give the terrorists what they want; (2) treat terrorism as a first resort, not a last resort, failing to embrace nonviolent alternatives like elections; (3) don't compromise with their target country, even when those compromises are in their best interest politically; (4) have protean political platforms, which regularly, and sometimes radically, change; (5) often engage in anonymous attacks, which precludes the target countries making political concessions to them; (6) regularly attack other terrorist groups with the same political platform; and (7) resist disbanding, even when they consistently fail to achieve their political objectives or when their stated political objectives have been achieved.Sounds familiar. So why persist? Abrahms thinks people turn to terrorism for social solidarity - like joining a street gang. It might seem a somewhat fatuous explanation, but a recent study by Demos - The Edge of Violence - was based on interviews with convicted Muslim terrorists and non-violent radicals and observed that:
Terrorists, radicals and young Muslims had all experienced some degree of societal exclusion, had a distrust of government, a hatred for foreign policy, many felt a disconnection from their local community, and many have had an identity crisis of sorts. Of particular note was a high level of distrust among young Muslims towards policing and intelligence agencies, with obvious implications for counter-radicalisation efforts.Thus much of the momentum behind persistent problems of terrorism (when objective factors such as repression and occupation do not pertain) is the problem of disaffected young men who feel increasingly alienated from the society they live in. As the drug gang related violence in our cities shows, once you create the conditions for 'competing sources of violence' to emerge, then it's very hard to win the competition in a democracy.
...The spread and acceptance of radical or violent ideas can be helpfully conceived as a social epidemic, because whether an individual comes to accept such ideas depends on how far their peers do and the extent to which they are seen as worthy of imitation. An increasingly important part of al-Qaeda’s appeal in the West is its dangerous, romantic and counter-cultural characteristics.
It would be unfortunate if a politically correct progressivism were to deny the reality of the challenge to social solidarity posed by diversity. It would be equally unfortunate if an ahistorical and ethnocentric conservatism were to deny that addressing that challenge is both feasible and desirable. Max Weber instructed would-be political leaders nearly a century ago that ‘Politics is a slow boring of hard boards.’ The task of becoming comfortable with diversity will not be easy or quick, but it will be speeded by our collective efforts and in the end well worth the effort.It is worth repeating Conor Cruise O'Brien's observation that 'there are no Irish aborigines': we are all of us descended from immigrants via one lineage or another. I suspect that being an immigrant in Ireland has never been easy, but the best - such as Phil Lynott - overcame multiple disadvantages to the inspiration of many others. As I see it, assimilation is best accomplished by enhancing the native culture and society with the energies and complementary values of each new wave of immigrants - creating a better Ireland in the process (in the eyes of both the indigenous population and the newly assimilated one). The trick, of course, is to have an immigration policy that enables this to happen.
The actions I have announced today will put the banks in a much stronger position than before. I am imposing specific lending targets on AIB and Bank of Ireland. They will make available for targeted lending not less than €3 billion each for new or increased credit facilities to SMEs in both 2010 and 2011. This in particular must include funds for working capital for businesses. This will be a significant increase on the figures reported by the banks for 2009 and will help to sustain the economy and foster growth. This figure will be reviewed as the needs of the economy change.Yesterday saw the launch of the Credit Review Office, a kind of 'Banking Appeals Tribunal' equivalent to the Employment Appeals Tribunal - for disgruntled SMEs. Its purpose is to 'provide a process to review decisions by the participating banks to refuse, reduce or withdraw credit facilities.' I find all this very disturbing, and not because I don't think the banks have reduced their lending to businesses - plainly they have (or more to the point have had to because of the consequences of their previous behaviour for their liquidity ratios etc).
Bank of Ireland and AIB must also make available €20 million each for Seed Capital to be provided to supported ventures, building on the very successful programme launched in 2009.They will each set up a fund of up to €100 million for Environmental, Clean Energy and Innovation projects. This is in addition to the €100 million provided under the recapitalisation last year.
I am requiring the banks to:In other words, he is demanding the banks do the things they should do anyway (and used to do before becoming property pawnbrokers). We'll see how that works.
- commit resources to work with Enterprise Ireland and the IBF to develop sectoral expertise in the modern growth sectors of the Irish economy;
- explore with Enterprise Ireland and the IBF how best to develop the range of banking services that Irish SMEs trading internationally will need; and
- develop expertise and bring forward new credit products in areas where cashflow, rather than property or assets, is the basis for business lending
Anglo Irish Bank is the Celtic ChernobylEasily the best (and scariest) analogy we have come across in a long, long time.