Ireland makes quite a bit of its money off US-developed IP transferred from US tech and pharma companies to Irish subsidiaries. These companies charge royalties on the IP (eg Apple and Google pay royalties on sales of their products in the US to European tax havens like Ireland). This gives them a tax deduction (for royalty payments) in the high tax US and very low taxed income in Ireland (also Lux, Switzerland, Netherlands).
It is the ultimate insanity of the US tax code that tech developed in the US by a US company generates all of its global royalty/trademark revenue in Ireland, which had nothing at all to do with it.
As for manufacturing, most of this is pharma where the cost of manufacturing inputs is very low relative to the price of the products. Just a way to keep the profits from EU sales in Ireland and keep the marketing and overhead expenses in high tax Germany, France etc.
Ireland is not like an Asian Tiger. Who is Ireland’s LG or Taiwan Semi? Ireland (outside of Ag) has essentially no homegrown powerhouses (except for the foreign companies who have moved their HQs to Ireland for tax purposes, and maybe Smurfit and CRH)
Don’t get me wrong - Ireland has done very well, I did business in Ireland for 30 years, I like the Irish and it is a fun place to visit (couldn’t pay me to live there).
Also, if you want to get a more complete picture of Ireland, stroll around Limerick as well as Kilkenny.
I just want to add that as an American who lived in Ireland for three years: Ireland isn’t actually a very rich-feeling place to live. Some things not mentioned in this essay:
1/ Ireland has a relatively low median wage for a wealthy country paired with *extremely* high median costs. When I lived there, the cost of living in Dublin *was (edit: this was true back in the mid-2010s, but now London is again ~20% more expensive) higher, even, than London, but salaries don’t match (for the same position they were often half, in my experience), even for highly-paid tech workers and professionals. Like most tech workers I knew there, my wife and I crammed into a tiny shared townhouse apartment, and we were among the lucky ones! People with more modest wages lived in unspeakable tenement-like conditions or were among the many homeless. The dream of getting on the property ladder seems impossible even for highly-educated professionals (something that Ireland does share in common with Silicon Valley!).
2/ This is worse when you add in the very high income taxes, VAT, and capital gains taxes which leave the median resident with a extremely high tax burden, in contrast to the zero-to-low tax paid by their employers. And what do you get for these taxes? Very little, actually! The public healthcare is far inferior even to the austerity-drained NHS across the Irish Sea. Maternal healthcare was extremely poor quality, especially since it was complicated until recently by Ireland’s abortion ban (which outlawed a lot of maternal healthcare, including lifesaving treatments for things like ectopic pregnancies!). You pay the same TV tax as your British neighbors but get the inferior RTE instead of the BBC. There is hardly any public transit in Ireland, with Dublin being one of the few large cities in Europe without a metro or even a train to the airport. Combined with the low density, this leaves the medieval streets *crammed* with traffic and some of Western Europe’s worst local air pollution. Outside of Dublin, there just isn’t anything, transit-wise. Intercity trains are extremely sparse and expensive, and no other cities outside of Dublin have any public transit more than buses. In contrast to most of Europe, there isn’t any subsidized childcare, either--and prices are even higher than the American average! Parental leave and child tax credits are miserly, especially for fathers. Then there’s the small, but noticeable stuff: trash everywhere, crumbling streets and sidewalks, tumble-down buildings, “crap towns,” and even a surprisingly unlovely cityscape through much of the city of Dublin, exempting a few of the more posh neighborhoods. It just doesn’t look rich most places in Ireland. You’ll find yourself thinking that much-poorer countries in Eastern Europe feel far richer. All-in-all, living in Ireland is like living in the US (with its notorious lack of public services), but paying a Nordic tax rate for the privilege!
3/ Irish politics are a downer. Ireland avoids a lot of the populism or ethno-nationalism that has plagued the rest of the West in the last few years, but it’s replaced by a tyranny of low expectations. The same two center-right parties traded government for the entirety of Ireland’s independent statehood. One was vaguely more rurally-oriented than the other, but otherwise, they’re identical. There was no viable center-left alternative, even. Which seems very odd in Western Europe. And extremely odd when even the neighboring UK has at least had Labour governments. It’s not just the monoculture of meh neoliberal ideology that sucks up the oxygen of political optimism--it’s also a very uncompetitive two-party political dynamic wherein the two parties are so undifferentiated and the voters don’t expect much from either of them. When corruption scandals broke, as they often did, it was greeted with a shrug. Everyone I met when I lived there just kind of expected that the government couldn’t do things like fix the housing crisis, finally build a rail line to the airport, not waste the tax windfall, etc. This was frustrating to me, coming before the post-2016 moment in the United States where Americans also gave into a fatalistic shrug as the “Do-Nothing” country. But at least in the US, there’s a kind of libertarian excuse where at least you don’t pay high taxes and therefore expect better state capacity. In Ireland, you pay for premium and get budget.
4/ Ireland has no nature to speak of. Yes, the tourist brochures are all sheer cliffsides and emerald fields and bracing sea air and all that, but when you live there you realize that those cliffs are owned by some landlord who charges you entry to snap photos and directly in the other direction are a bunch of fenced-in allotments with ugly 1970s cottages on them built as an investment. Camping? Forget about it! Want to take a hike? There are a few fenced off areas that everyone crowds into on the weekends. Wilderness? Where!? There is not a scrap of land on this entire (very underpopulated!) island that isn’t owned by somebody, seemingly. And, long ago, any intact Nature was stripped for parts: There is hardly a forest in the entire country. It has one of the lowest biodiversity measures in the world. National parks are few and paltry. Even when you compare with the UK across the water--with all its population and extremely unequal legacy of land ownership and intensive cultivation and development--Ireland feels like a sprawling exurb. If rich countries can afford to again restore a rich nature, Ireland is far from rich.
5/ Rich countries have good schools and Irish people are among the world’s most educated. So why is it there Ireland has no top-quality (secular) education system!? Because it doesn’t. *Most* of the public schools are actually Catholic schools! Read that again and be amazed. More than 95% of all schools in Ireland are explicitly Catholic or Christian! This is a weird holdover from the (not too distant) era where the Catholic Church was basically the state in Ireland. Nor do these theologically-oriented public schools impress: Ireland is middling on international ranking of educational outcomes for schoolchildren. Like in the US, there’s a big gap in quality between K-12 and elite university, with Ireland really punching above its weight in the latter and seriously disappointing in the former.
Among many other reasons, these factors make living in Ireland very discordant. You know that, on paper, you are in a rich country. So why doesn’t it feel that way?
Most immigrants/expats, like me, hit their limit after 2-3 years of living there. Especially when it came time to plant roots and settle down, the practicalities and appeal just weren’t there. And it seemed like every younger native Irish person felt the same, dreaming of life in London, New York, or Dubai. So, a city like Dublin, more so even than other large cities, felt transient and very young. Which just seems like the kind of thing that isn’t sustainable. You can’t build an economy on young people from elsewhere coming into study or work in early-career jobs before leaving, can you?
If I were to guess which countries would be rich in a 100 years, I would look at countries who have high economic complexity relatively to their income levels:
Assuming no wars, I would basically bet on all of the developing Southeast Asian countries (Thailand, Indonesia, The Philippines, Vietnam, Malaysia... and EVEN Laos & Cambodia and dare I say Burma.... if it can get over itself) and India. Same with Mexico. I also think Zeihan is wrong about an "economic collapse" in China and think China will still get richer (although agree China needs reforms).
I think some Westerners would feel confident in Thailand, China, Vietnam, Malaysia, India, or Indonesia becoming rich in 100 years (and even before then).
I think I would be laughed at by some Westerners if I thought Philippines, Laos, Cambodia and especially Burma would be rich.
Huge swaths of Africa needs to do some soul searching, most African economies are unfortunately non-complex economies that depend on cash crops/mining ores/crude oil & gas that grow in commodity booms (2000-2014 - "Africa rising era") and stagnate/decline in commodity busts (2014-2021). "Africa's 3rd lost decade era".
Luckily there are bright spots and some African economies are more complex than others Kenya has an ECI of -0.46 and Senegal has an ECI of -.59 which is miraculous compared to DRC's -1.81 or Guinea's -1.84.
Unmentioned by Noah is the 23% VAT that Ireland imposes on a variety of goods and services. This in part allows them to keep corporate taxes low and points to a direction that the US should follow. It's far better to put in place a self-implementing VAT than have a Swiss cheese tax code full of loopholes that astute corporate tax attorneys can take advantage of. Were the US to do this, a lot of the off shored things would come back here as there would not be any real advantage to booking profits overseas and only worry about the once in every decade repatriation of funds when it happens.
I visited Ireland in 1991, the prevailing mood seemed to be stagnation. I remember the billboards opposing privatization of telecoms which showed cartoons of fat felines in suits, smoking cigars, with the caption: "Who gains? The fat cats!"
Then when in 1996 I briefly worked out of Shannon, the mood had become more positive and dynamic.
Since then I've wondered if the change in mood was a result of the privatizations.
It's been interesting to live through it, having lived in other places that were wealthier, and now, maybe not so much. I guess some other things are low levels of comparative corruption as measured by Transparency International; a very effective tax collection system (nobody messes with the Revenue Commissioners); and the ability to turn policy into action quickly at least in certain respects (no one knows how to fix housing quickly, unfortunately); high levels of social trust and cohesion. I'm sure there are others too. I'm not certain how to weight them comparatively. Oh, and no politics of nostalgia (our past was kinda crappy).
It may be petty, but I love to see this comeuppance. lf you read English authors from the 18th and 19th Centuries, their racism towards the Irish is shocking, as bad as anything you will ever encounter today in the bowels of Twitter. Imagine their looking into a crystal ball and seeing this reversal. Now, if the Irish succeed in reviving the struggling Irish language the way they have their fortunes, that would be an even bigger accomplishment.
So, while this is a magnificent macroeconomic overview of Ireland, you miss the whole point that Ireland's housing crisis is indeed just that and while the Silicon Valley connection of tax benefits do put Ireland way up there as one of the wealthiest countries in the EU, the issues of poverty, homelessness and cost of living for a majority of the Irish who are NOT college educated or working in tech, (which is still a massive part of the population), struggle on a daily if not weekly basis. I think you spend too much time in your bourgie bubble and hang out with Ireland's gilded class.
Excellent quick overview of an incredibly complicated story. I would quibble with some details, but in general, well done. (Once you mentioned the importance T. K. Whitaker, I knew I was in safe hands.) I would guess you've had a couple of long conversations with David McWilliams while you've been in Kilkenny!
I would second all of Shane O'Mara's points, by the way: part of the success is down to things like the relatively low level of corruption, and the relatively high level of personal tax compliance, etc. (Ironic, I know, given that we help so many major international corporations avoid paying their fair share – I'm not in love with that side of our economy.)
Now, Ireland USED to be far more politically corrupt, in the era when Charlie Haughey was Taoiseach (prime minister), and on through to the era of Bertie Ahern (so, 1960s to 1990s), though it was relatively modest corruption when compared to that in many other nations – possibly because we weren't rich enough for corruption to be all that lucrative. (Good thing we didn't strike oil.) And, again in that era, we used to have a problem with the rich not paying their fair share of taxes (there were a number of tax-dodging schemes that were tacitly allowed for many years, because the professional and ruling classes used them.) But we've cleaned up politics considerably since then, and improved the fairness of the (domestic) tax system, and compliance with it. We've also dealt with the very different form of corruption in the Catholic Church, which had allowed for a tremendous amount of sexual abuse, which was covered up at all levels. That era, too, is over. The increased wealth of the country maps pretty closely onto the decrease in corruption at all levels, so there's that factor too. (Ireland's success is definitely multi-factorial.)
If you read that, you will see that the introduction of "the highly restrictive Planning Act" led to an era of corruption (as politicians now had control of the planning process for all commercial and housing development), and also laid the foundations for the current housing catastrophe – the Planning Act has hugely slowed necessary construction, and makes it hard for the market to correct. A possible case-study for a future YIMBY post, Noah!
Shane's also right about the benefits of having "no politics of nostalgia (our past was kinda crappy)." Ireland is a remarkably forward-looking country. No one in their right mind would want to go back.
This is very interesting, but you skipped two important comparisons: Denmark and the US.
You mentioned Denmark had more foreign direct investment, but it is renowned for having very high taxes. Can’t ignore that.
And in the US there’s a sentiment among Democrats that “we can’t have nice things” like Europe, because people don’t want to raise taxes, even on the rich. Mostly I’m thinking of public child care. But public health care gets mentioned a lot, too.
We also have a crazy deficit at the moment with lots of debt servicing. The Inflation Reduction Act is building future capacity, so we don’t want to reduce that. I expect that inflation on interest rates is part of the debt. The money spent during Covid seems to have kept our economy humming better than the rest of the world, although lots of folks say that’s what caused the high inflation and therefore the high interest rates. And I agree with your concern that the US needs to build up its military arsenal ASAP, which will come from more spending (and hopefully better procurement processes).
But all of this makes the Bush and Trump tax cuts on the rich seem like mistakes. Now I get that the US is a much bigger country than Ireland. But without this comparison, a casual reader can think “the US should lower its taxes, too. Then everything but housing would be fine.”
Within the last few months, I was reading an on-line discussion about Ireland's amazing economic performance. Having visited several times during the early 90s, it has made a lot of amazing changes. But, during the discussion one Irish guy popped in to point out that the statistics are very skewed in that a relatively small number of mostly foreign ex-pats make huge amounts of money that pushes the averages way beyond what most Irish make. He expressed dismay that the rest of the world sees a rich country when the majority of Irish have a hard time getting by since the cost of housing has gone through the roof (so to speak).
Just another data point that I can't personally validate.
Ireland makes quite a bit of its money off US-developed IP transferred from US tech and pharma companies to Irish subsidiaries. These companies charge royalties on the IP (eg Apple and Google pay royalties on sales of their products in the US to European tax havens like Ireland). This gives them a tax deduction (for royalty payments) in the high tax US and very low taxed income in Ireland (also Lux, Switzerland, Netherlands).
It is the ultimate insanity of the US tax code that tech developed in the US by a US company generates all of its global royalty/trademark revenue in Ireland, which had nothing at all to do with it.
As for manufacturing, most of this is pharma where the cost of manufacturing inputs is very low relative to the price of the products. Just a way to keep the profits from EU sales in Ireland and keep the marketing and overhead expenses in high tax Germany, France etc.
Ireland is not like an Asian Tiger. Who is Ireland’s LG or Taiwan Semi? Ireland (outside of Ag) has essentially no homegrown powerhouses (except for the foreign companies who have moved their HQs to Ireland for tax purposes, and maybe Smurfit and CRH)
Don’t get me wrong - Ireland has done very well, I did business in Ireland for 30 years, I like the Irish and it is a fun place to visit (couldn’t pay me to live there).
Also, if you want to get a more complete picture of Ireland, stroll around Limerick as well as Kilkenny.
I just want to add that as an American who lived in Ireland for three years: Ireland isn’t actually a very rich-feeling place to live. Some things not mentioned in this essay:
1/ Ireland has a relatively low median wage for a wealthy country paired with *extremely* high median costs. When I lived there, the cost of living in Dublin *was (edit: this was true back in the mid-2010s, but now London is again ~20% more expensive) higher, even, than London, but salaries don’t match (for the same position they were often half, in my experience), even for highly-paid tech workers and professionals. Like most tech workers I knew there, my wife and I crammed into a tiny shared townhouse apartment, and we were among the lucky ones! People with more modest wages lived in unspeakable tenement-like conditions or were among the many homeless. The dream of getting on the property ladder seems impossible even for highly-educated professionals (something that Ireland does share in common with Silicon Valley!).
2/ This is worse when you add in the very high income taxes, VAT, and capital gains taxes which leave the median resident with a extremely high tax burden, in contrast to the zero-to-low tax paid by their employers. And what do you get for these taxes? Very little, actually! The public healthcare is far inferior even to the austerity-drained NHS across the Irish Sea. Maternal healthcare was extremely poor quality, especially since it was complicated until recently by Ireland’s abortion ban (which outlawed a lot of maternal healthcare, including lifesaving treatments for things like ectopic pregnancies!). You pay the same TV tax as your British neighbors but get the inferior RTE instead of the BBC. There is hardly any public transit in Ireland, with Dublin being one of the few large cities in Europe without a metro or even a train to the airport. Combined with the low density, this leaves the medieval streets *crammed* with traffic and some of Western Europe’s worst local air pollution. Outside of Dublin, there just isn’t anything, transit-wise. Intercity trains are extremely sparse and expensive, and no other cities outside of Dublin have any public transit more than buses. In contrast to most of Europe, there isn’t any subsidized childcare, either--and prices are even higher than the American average! Parental leave and child tax credits are miserly, especially for fathers. Then there’s the small, but noticeable stuff: trash everywhere, crumbling streets and sidewalks, tumble-down buildings, “crap towns,” and even a surprisingly unlovely cityscape through much of the city of Dublin, exempting a few of the more posh neighborhoods. It just doesn’t look rich most places in Ireland. You’ll find yourself thinking that much-poorer countries in Eastern Europe feel far richer. All-in-all, living in Ireland is like living in the US (with its notorious lack of public services), but paying a Nordic tax rate for the privilege!
3/ Irish politics are a downer. Ireland avoids a lot of the populism or ethno-nationalism that has plagued the rest of the West in the last few years, but it’s replaced by a tyranny of low expectations. The same two center-right parties traded government for the entirety of Ireland’s independent statehood. One was vaguely more rurally-oriented than the other, but otherwise, they’re identical. There was no viable center-left alternative, even. Which seems very odd in Western Europe. And extremely odd when even the neighboring UK has at least had Labour governments. It’s not just the monoculture of meh neoliberal ideology that sucks up the oxygen of political optimism--it’s also a very uncompetitive two-party political dynamic wherein the two parties are so undifferentiated and the voters don’t expect much from either of them. When corruption scandals broke, as they often did, it was greeted with a shrug. Everyone I met when I lived there just kind of expected that the government couldn’t do things like fix the housing crisis, finally build a rail line to the airport, not waste the tax windfall, etc. This was frustrating to me, coming before the post-2016 moment in the United States where Americans also gave into a fatalistic shrug as the “Do-Nothing” country. But at least in the US, there’s a kind of libertarian excuse where at least you don’t pay high taxes and therefore expect better state capacity. In Ireland, you pay for premium and get budget.
4/ Ireland has no nature to speak of. Yes, the tourist brochures are all sheer cliffsides and emerald fields and bracing sea air and all that, but when you live there you realize that those cliffs are owned by some landlord who charges you entry to snap photos and directly in the other direction are a bunch of fenced-in allotments with ugly 1970s cottages on them built as an investment. Camping? Forget about it! Want to take a hike? There are a few fenced off areas that everyone crowds into on the weekends. Wilderness? Where!? There is not a scrap of land on this entire (very underpopulated!) island that isn’t owned by somebody, seemingly. And, long ago, any intact Nature was stripped for parts: There is hardly a forest in the entire country. It has one of the lowest biodiversity measures in the world. National parks are few and paltry. Even when you compare with the UK across the water--with all its population and extremely unequal legacy of land ownership and intensive cultivation and development--Ireland feels like a sprawling exurb. If rich countries can afford to again restore a rich nature, Ireland is far from rich.
5/ Rich countries have good schools and Irish people are among the world’s most educated. So why is it there Ireland has no top-quality (secular) education system!? Because it doesn’t. *Most* of the public schools are actually Catholic schools! Read that again and be amazed. More than 95% of all schools in Ireland are explicitly Catholic or Christian! This is a weird holdover from the (not too distant) era where the Catholic Church was basically the state in Ireland. Nor do these theologically-oriented public schools impress: Ireland is middling on international ranking of educational outcomes for schoolchildren. Like in the US, there’s a big gap in quality between K-12 and elite university, with Ireland really punching above its weight in the latter and seriously disappointing in the former.
Among many other reasons, these factors make living in Ireland very discordant. You know that, on paper, you are in a rich country. So why doesn’t it feel that way?
Most immigrants/expats, like me, hit their limit after 2-3 years of living there. Especially when it came time to plant roots and settle down, the practicalities and appeal just weren’t there. And it seemed like every younger native Irish person felt the same, dreaming of life in London, New York, or Dubai. So, a city like Dublin, more so even than other large cities, felt transient and very young. Which just seems like the kind of thing that isn’t sustainable. You can’t build an economy on young people from elsewhere coming into study or work in early-career jobs before leaving, can you?
If I were to guess which countries would be rich in a 100 years, I would look at countries who have high economic complexity relatively to their income levels:
Assuming no wars, I would basically bet on all of the developing Southeast Asian countries (Thailand, Indonesia, The Philippines, Vietnam, Malaysia... and EVEN Laos & Cambodia and dare I say Burma.... if it can get over itself) and India. Same with Mexico. I also think Zeihan is wrong about an "economic collapse" in China and think China will still get richer (although agree China needs reforms).
I think some Westerners would feel confident in Thailand, China, Vietnam, Malaysia, India, or Indonesia becoming rich in 100 years (and even before then).
I think I would be laughed at by some Westerners if I thought Philippines, Laos, Cambodia and especially Burma would be rich.
Huge swaths of Africa needs to do some soul searching, most African economies are unfortunately non-complex economies that depend on cash crops/mining ores/crude oil & gas that grow in commodity booms (2000-2014 - "Africa rising era") and stagnate/decline in commodity busts (2014-2021). "Africa's 3rd lost decade era".
Luckily there are bright spots and some African economies are more complex than others Kenya has an ECI of -0.46 and Senegal has an ECI of -.59 which is miraculous compared to DRC's -1.81 or Guinea's -1.84.
https://yawboadu.substack.com/p/5-questions-you-may-have-asked-what
Unmentioned by Noah is the 23% VAT that Ireland imposes on a variety of goods and services. This in part allows them to keep corporate taxes low and points to a direction that the US should follow. It's far better to put in place a self-implementing VAT than have a Swiss cheese tax code full of loopholes that astute corporate tax attorneys can take advantage of. Were the US to do this, a lot of the off shored things would come back here as there would not be any real advantage to booking profits overseas and only worry about the once in every decade repatriation of funds when it happens.
Simple. By stealing other people’s taxes.
Ireland got rich because its capital is always Doublin'.
I visited Ireland in 1991, the prevailing mood seemed to be stagnation. I remember the billboards opposing privatization of telecoms which showed cartoons of fat felines in suits, smoking cigars, with the caption: "Who gains? The fat cats!"
Then when in 1996 I briefly worked out of Shannon, the mood had become more positive and dynamic.
Since then I've wondered if the change in mood was a result of the privatizations.
It's been interesting to live through it, having lived in other places that were wealthier, and now, maybe not so much. I guess some other things are low levels of comparative corruption as measured by Transparency International; a very effective tax collection system (nobody messes with the Revenue Commissioners); and the ability to turn policy into action quickly at least in certain respects (no one knows how to fix housing quickly, unfortunately); high levels of social trust and cohesion. I'm sure there are others too. I'm not certain how to weight them comparatively. Oh, and no politics of nostalgia (our past was kinda crappy).
It may be petty, but I love to see this comeuppance. lf you read English authors from the 18th and 19th Centuries, their racism towards the Irish is shocking, as bad as anything you will ever encounter today in the bowels of Twitter. Imagine their looking into a crystal ball and seeing this reversal. Now, if the Irish succeed in reviving the struggling Irish language the way they have their fortunes, that would be an even bigger accomplishment.
So, while this is a magnificent macroeconomic overview of Ireland, you miss the whole point that Ireland's housing crisis is indeed just that and while the Silicon Valley connection of tax benefits do put Ireland way up there as one of the wealthiest countries in the EU, the issues of poverty, homelessness and cost of living for a majority of the Irish who are NOT college educated or working in tech, (which is still a massive part of the population), struggle on a daily if not weekly basis. I think you spend too much time in your bourgie bubble and hang out with Ireland's gilded class.
Excellent analysis. There is much that can be applied to the United States. Thank you.
Next post better be about how awesome Scotland is
Excellent quick overview of an incredibly complicated story. I would quibble with some details, but in general, well done. (Once you mentioned the importance T. K. Whitaker, I knew I was in safe hands.) I would guess you've had a couple of long conversations with David McWilliams while you've been in Kilkenny!
I would second all of Shane O'Mara's points, by the way: part of the success is down to things like the relatively low level of corruption, and the relatively high level of personal tax compliance, etc. (Ironic, I know, given that we help so many major international corporations avoid paying their fair share – I'm not in love with that side of our economy.)
Now, Ireland USED to be far more politically corrupt, in the era when Charlie Haughey was Taoiseach (prime minister), and on through to the era of Bertie Ahern (so, 1960s to 1990s), though it was relatively modest corruption when compared to that in many other nations – possibly because we weren't rich enough for corruption to be all that lucrative. (Good thing we didn't strike oil.) And, again in that era, we used to have a problem with the rich not paying their fair share of taxes (there were a number of tax-dodging schemes that were tacitly allowed for many years, because the professional and ruling classes used them.) But we've cleaned up politics considerably since then, and improved the fairness of the (domestic) tax system, and compliance with it. We've also dealt with the very different form of corruption in the Catholic Church, which had allowed for a tremendous amount of sexual abuse, which was covered up at all levels. That era, too, is over. The increased wealth of the country maps pretty closely onto the decrease in corruption at all levels, so there's that factor too. (Ireland's success is definitely multi-factorial.)
An overview of that era of relative corruption:
https://en.wikipedia.org/wiki/Corruption_in_the_Republic_of_Ireland#1960%E2%80%931980
If you read that, you will see that the introduction of "the highly restrictive Planning Act" led to an era of corruption (as politicians now had control of the planning process for all commercial and housing development), and also laid the foundations for the current housing catastrophe – the Planning Act has hugely slowed necessary construction, and makes it hard for the market to correct. A possible case-study for a future YIMBY post, Noah!
Shane's also right about the benefits of having "no politics of nostalgia (our past was kinda crappy)." Ireland is a remarkably forward-looking country. No one in their right mind would want to go back.
This is very interesting, but you skipped two important comparisons: Denmark and the US.
You mentioned Denmark had more foreign direct investment, but it is renowned for having very high taxes. Can’t ignore that.
And in the US there’s a sentiment among Democrats that “we can’t have nice things” like Europe, because people don’t want to raise taxes, even on the rich. Mostly I’m thinking of public child care. But public health care gets mentioned a lot, too.
We also have a crazy deficit at the moment with lots of debt servicing. The Inflation Reduction Act is building future capacity, so we don’t want to reduce that. I expect that inflation on interest rates is part of the debt. The money spent during Covid seems to have kept our economy humming better than the rest of the world, although lots of folks say that’s what caused the high inflation and therefore the high interest rates. And I agree with your concern that the US needs to build up its military arsenal ASAP, which will come from more spending (and hopefully better procurement processes).
But all of this makes the Bush and Trump tax cuts on the rich seem like mistakes. Now I get that the US is a much bigger country than Ireland. But without this comparison, a casual reader can think “the US should lower its taxes, too. Then everything but housing would be fine.”
The median income in Eire is the same as the UK. All that biotech is head office only profit booking for the low corp tax.
Within the last few months, I was reading an on-line discussion about Ireland's amazing economic performance. Having visited several times during the early 90s, it has made a lot of amazing changes. But, during the discussion one Irish guy popped in to point out that the statistics are very skewed in that a relatively small number of mostly foreign ex-pats make huge amounts of money that pushes the averages way beyond what most Irish make. He expressed dismay that the rest of the world sees a rich country when the majority of Irish have a hard time getting by since the cost of housing has gone through the roof (so to speak).
Just another data point that I can't personally validate.