I left this comment on ‘Blinkered thinking at the heart of Ireland’s economic crash’ by Donal Donovan and Antoin Murphy, published yesterday in the Irish Times. Donal Donovan is a former deputy director of the International Monetary Fund and a member of the Fiscal Advisory Council; Antoin Murphy is a fellow emeritus of Trinity College Dublin.
The question of blame is important because beyond the academic considerations of regulatory architecture and processes of policy-making, there are people paying the price for the banking guarantee. This payment takes various forms: in worsened health due to cutbacks in health; in impoverishment due to unemployment and cuts to wages and benefits; in the destruction of family and community life due to the compulsion to emigrate, to name a few things. The price is not being paid by bankers or policy-making elites and associated advisers. Nor for that matter is it being paid by those owners of capital whose profits are being restored through the imposition of austerity policies.
What Donovan and Murphy suggest in this article is that such payments are a logical and justifiable consequence of ‘most of Irish society’s’ ‘acquiescence’ in the ‘artificial riches of the boom’. They do not say what forms such acquiescence took, or what non-artificial riches look like. In fact, that is the only time ‘most of Irish society’ comes into their argument. The rest of the article focuses on ‘the policy-making apparatus’, ‘the key decision-makers’, and the absence of ‘contrarian views’ in ‘the Central Bank/Financial Regulator, the Department of Finance or the media’.
Thus whilst they counsel ‘a wide-ranging and systematic reflection’, it doesn’t sound like the kind of process that ought to involve the general public much. Their own reflection is neither wide-ranging nor systematic, but operates within narrow parameters: it’s fine to blame the public for causing Ireland’s property, banking, fiscal and financial crises, and make them pay the according price in order to preserve the integrity of the financial system, but there is no need to explain why they are to blame, let alone worry about how the public might protect itself against such calamities in future.
Which is fine. By so doing, they are helpfully showing that economic orthodoxy –even when it espouses a critical, contrarian viewpoint- sees no role for democratic participation in economic decision-making, whilst treating the needs of the owners of capital as paramount. Thus an article denouncing ‘blinkered thinking’ is merely peddling a better set of blinkers in the interests of the rich.