In 2008 Ireland experienced one of the most dramatic economic crises of any economy in the world. It remains at the heart of the international crisis, sitting uneasily between the US and European economies. Not long ago, however, Ireland was celebrated as an example of successful market-led globalization and economic growth. How can we explain the Irish crisis? What does it tell us about the causes of the international crisis? How should we rethink our understanding of contemporary economies and the workings of economic liberalism based on the Irish experience?
The Rise and Fall of Ireland’s Celtic Tiger: Liberalism, Boom and Bust, by Seán Ó Riain (National University of Ireland) masterly combines economic sociology and comparative political economy to analyse the causes, dynamics and implications of Ireland’s economic ‘boom to bust’. This interesting and insightful book examines the interplay between the financial system, European integration and Irish national politics to show how financial speculation overwhelmed the economic and social development of the 1990s ‘Celtic Tiger’. Arguing that developmental and corporatist institutions were critical in promoting growth in the 1990s, they were derailed by the property bubble of the 2000s fuelled by market liberalism and state boosterism.
This excellent book (free access to the 1st chapter) places Ireland’s rise and subsequent fall in exactly the kind of socio-economic and political-historical perspective that is desperately required, presenting new insights into the politics of financialization within and across Europe.
Although Ó’Riain’s holistic and nuanced analysis focuses on the Irish national crisis, that story is itself woven with a number of broader and recurring threads: the increasing tension between financial and productive capital; processes of economic globalisation and regional integration; and the perennial tense embrace of capitalism and democracy. These three threads are linked by a deeper theme that runs through the entire analysis – the question of the economic liberalism that has dominated the global political economy since the 1970s. This book tackles also some profound conceptual issues. How should economic liberalism itself be understood? What kind of social structure and political programme is ‘economic liberalism’ and what are its key features?
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A simpler explanation is the causes of business downturns but what intensifies in terms of a deeper recession or depression is the reactions of government.
The case of Ireland, it was the foolish decision of the government to guarantee payment of the bondholders of several banks. They then reissued that guarantee despite finding out that it was initially obtained under the fraud about the extent of liabilities.
Bail out the bankers and let the people starve. It’s as old as Marie Antoinette.