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Falling over the Competitive Edge

O Riain, Sean (2004) Falling over the Competitive Edge. In: Place and Non-Place: The Reconfiguration of Ireland. Irish Sociological Chronicles (4). Institute of Public Administration, Dublin, pp. 19-29. ISBN 9781904541066

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Abstract

In the Celtic Tiger years of the 1990s, Ireland apparently rode the roller coaster of freewheeling capitalism towards the information society. A boom in high technology industry was said to be fbelled by a new entrepreneurial class competing in free markets, and driven forward by private investors motivated by low tax rates. Ireland was unusual too in that it turned to international investors as the source of economic change. Foreign investment in high technology was intensely promoted, stressing Ireland's attractions: a skilled English-speaking labour force, access to the EU market and, above all, low corporate tax rates. The untrammelled market remained the road to a coveted place in the brave new information economy. This belief would have been all too familiar to Karl Polanyi, who wrote in the 1940s of the dangers of the 'liberal creed' that elevates markets above all other social relationships. While markets can be important and useful institutions, creating a 'market society' that prioritises markets over relationships of community and social solidarity will ultimately lead to social fragmentation and even economic decline. Sustainable economic growth must remain embedded in social relationships - as markets themselves tend to undermine the relationships of cooperation that are essential to social life and economic development. After World War 11, many advanced capitalist countries, in Polanyian fashion, embedded market relationships firmly within national welfare state institutions and international controls on trade and capital flows. Since the 1970s, however, these social and political institutions have been under attack from a new, virulent form of the 'liberal creed', which advocates widespread deregulation, privatisation and reduced public spending. A blind faith in the global market had come early to Ireland, with the turn to foreign investment and free trade in the 1950s. After the economic disasters of the 1980s, globalisation appeared kinder to Ireland in the 1990s with the Celtic Tiger boom. In 2002, however, the economy slowed, inflation rose, foreign investment rates declined and unemployment began to increase. Nonetheless, faith in the market society persisted. The widespread solution offered to these dilemmas was the restoration of cost competitiveness by reining in public spending and controlling wages. The barriers posed to market action by the public sector, social welfare and the demands of community and solidarity were to be stripped away.

Item Type: Book Section
Keywords: Ireland; economic development; market; society; welfare state; capitalism;
Subjects: Social Sciences > Sociology
Social Sciences > NIRSA-National Institute for Regional and Spatial Analysis
Item ID: 3509
Depositing User: Prof. Sean O Riain
Date Deposited: 29 Feb 2012 16:18
Publisher: Institute of Public Administration
Refereed: Yes
URI:

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