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.
Yea, I think the problem with this whole analysis is that it kind of brushes over the "Tax Haven" part way too quickly. If we look around the world at small nations that are also tax havens they tend to be very prosperous so I don't think this quite supports the point Noah thinks it does.
If I were to say "Will Fiji be a wealthy country in 2123?" and the answer was "Yes, because it will become a tax haven for the largest companies in the world" that isn't really an optimistic or stable path forward.
To be clear, some of Ireland's development is clearly real and will remain regardless of what happens with corporate taxes but I don't think using this point of time as representative of the wisdom of Irish development strategy makes a lot of sense.
Takes more than low tax rate. Takes an educated work force, low crime, decent education type society. Also "rule of law" maters. Venezuela has nearly free labor costs, but even if they had no corporate income tax, no way any company is going to invest a nickel in a place where the government will just steal it when they feel like it.
Lots of countries have those things though, the unique thing about Ireland is the tax rates. It's estimated that something like 80% of all corporate taxes paid in Ireland in 2021 are from foreign multinationals and a substantial portion of other taxes (such as income) come from employment opportunities that exist because of corporate headquarters based in Ireland.
Ireland has advantages, they are now the only natively english speaking country in the EU and have an educated workforce etc. But I'm not going to start applauding Irish economic performance and holding them up as an economic model to folliw while they are still acting as the world's largest tax haven for corporate profits earnt elsewhere.
You and I view things differently. Ireland's government has only one job: Do what's best for the people of Ireland. They made themselves a so-called tax haven and it worked. So, if other countries want to compete for those corporate profit taxes, then they need to lower their rates to compete. Instead, they feel entitled to take so much that the corporations fled to Ireland. This is a self-inflicted wound on the part of the US and elsewhere, which Ireland merely took advantage of.
One issue though is that only small countries (I'd say less than 10 million people) can be tax havens: because tax havens live off the taxes paid by the foreigners they attract, but need to levy the taxes at a low rate to attract said foreigners, they must perforce be parasitic on other much larger economies.
I see no reason why a "large "country cannot have a low (or no) corporate tax rate. If the US had as low or lower rate than Ireland, those corporations would not fled fled to Ireland to begin with.
Yes. Also it is a common mistake in journalism (though not particularly this article) to imply that policies that are successful in one country would be successful in another. This is to ignore the huge historical/cultural context which will either provide a drag effect or, in some cases, a booster effect. In Ireland (and in China under Deng) the historical/cultural gave a huge boost to the beneficial policy decisions. In Britain by contrast, they would meet with a huge drag effect.
Yep. The light manufacturing is to avoid subpart F of the U.S. tax code. There is a reason Ireland is the only EU country to oppose the 15% minimum global tax on corporate book income--goodbye foreign investment.
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?
As a Brazilian who has been living in Ireland for 5 years, having previously lived in the US (midwest), Canada (Quebec) and Prague, CZ, you couldn't be more wrong!
1. This is one is so egregious as a tech worker myself. Salaries are great in Ireland and not much different compared to the UK. I know that first-hand. There is absolutely no way you get paid 50% in Ireland for the same job/company. Of course, the market is smaller, but there are many good opportunities at FAANGs or private unicorns (Stripe, Intercom, etc).
2. Tax burden is slightly worse than the UK and you get slightly worse benefits. The difference is less stark than you imply. Anyone can easily calculate the tax burden for a 100k earner and see that for themselves. While the HSE sucks, you can avail of private healthcare for many things e.g. GPs, minor injury clinics, etc.
3. Ireland politics are absolutely so much better than the UK and US, wtf! How can you compare the likes of Trump or Boris Johnson with Leo Varadkar / Michael Martin? Sinn Fein is terrible but it's uncertain if they will ever have a majority.
4. This is one also is so deeply wrong, I can attest as an avid hiker myself. 30 min from Dublin city centre you can do the Howth Cliff loop or Bray-Greystones cliff walk. 60 min you can go to the Dublin mountains. 90 min you can go to the beautiful Wicklow mountains. There is no other capital in Western Europe with the same availability of greenery, sea, mountains, rivers, canals within a 60 min radius of the city centre. I agree there should be reforestation with Atlantic rainforests and too much space is used for farming (at least we have good food security and local produce).
1/ You can easily spot-compare FAANG salaries in Ireland to other countries, including the UK and US. This is the market that I was in when I lived there (article from 2016): https://www.theguardian.com/technology/2016/feb/07/google-ireland-staff-paid-less-than-half-their-london-colleagues Has it changed much since? Not fundamentally: Even on the average across all types of jobs, you also see the salaries remain far higher in London ($4300 vs. $3500 according to official stats, or 20% higher). London-based roles in all the tech companies I've ever worked for or with are in the top salary band and Dublin-based roles are in the second-tier. So, if Irish people are paid similar salaries to people in, for example, Sweden, but with a much higher cost of living (since the public services are far inferior and Dublin housing, especially, is unusually expensive), they have a worse deal. You're right in pointing out that my data on housing costs is outdated, since prices in London have now seemingly surpassed Dublin again (by 20%+) since I lived there (Dublin had notoriously surpassed its colonial older brother in the mid-2010s and it was splashed over all the Irish papers then). But even with that plus-fifth margin, Dublin is an unusually overpriced city for what you get. I lived in fancy Ballsbridge and very much enjoyed it, but it wasn't exactly like living in London's Soho or Mayfair, and I wouldn't have voluntarily paid 80% of the cost for the same center-city flat. Even so, perhaps Dublin and London are more at parity now than they were c. 2015 and my diatribe is a product of the time.
But I'm also not trying to make this a Ireland vs. UK thing. IMO, being based in *either* Dublin or London is just a bad deal for tech professionals who have other options, since the cost-of-living in both cities is such much higher than compensation, and for similar reasons: many essential services that in other Western countries are public are private and expensive in the British Isles (childcare being a clear example), public transit is poor (it's much better-quality in the UK, but vastly more expensive than the European norm), and housing is unusually expensive. In this way, both cities are very much like San Fransisco/Silicon Valley (but at least they have public healthcare in Ireland and the UK), suffering the same cost-of-living crisis ills. And that's a real indictment of all three countries, when even the most privileged workers in the tech industry with their often six-figure salaries can't afford the basics of normie life! I would submit that living in the Netherlands, Luxembourg, Denmark, Sweden, Norway, Switzerland, France, Spain, or Italy is going to be a better deal for highly mobile tech professionals who don't otherwise have strong ties or preferences and are willing to go beyond the Anglophone.
3/ If you re-read my statement, I didn't at all say the politics were "better" than the US or UK, especially not now in the Trump or Brexit Eras. I said, "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." So Ireland's politics aren't as bombastic and extreme, but they are something similarly threatening to a thriving democracy: lifeless. The recent rise of Sinn Fein is a result of these "boring" and disengaged politics, and shows the cost of a lack of real alternatives from the two very complacent center-right parties. In this way, Ireland in 2020 rhymed with the UK the same year and the US in 2016: disaffection with a two-party system that had run out of legitimacy leads to a wild protest vote that doesn't promise any better. If the Irish Social Democratic Party, for example, was polling more than single digits or if one of the two dominant parties served as a genuine alternative to each other, then there would have been a much more constructive way to signal to the polity that the current path of development was leaving too many average Irish people behind.
4/ Howth isn't nature. The Howth Cliff Walk is a reclaimed light-gauge railroad line. You can find those all over even the most suburban American communities in the Eastern half of the country. There's one almost identical in my native Washington, DC, tracing the C&O Canal. So, perhaps I should be more specific in what I mean by saying "Nature." I mean wilderness or at least minimally-spoiled habitats. I don't mean urban parks, walking paths, suburban lawns, or farms. In DC, for example, you can enjoy the many parklands within the city or the Howth-like walking/biking/horseriding trails that lead outside it, but you can also find, within accessible distance, more than half a dozen state parks. DC proper is a smaller city than Dublin and right in the middle of the most developed Atlantic strip in the whole United States, but it still has some nature. But nothing in the Eastern half of the United States matches the western half of the country, where there are vast, unspoiled expanses of nature. Ireland has nothing like this, despite having only 4.5 million people in the Republic. Donegal is as wild as it gets on the island and even there you're stuck in caravan parks to experience the great outdoors. The "Wild Atlantic Way" too the south is hardly wild, but mostly a (beautiful) drive through farmland by the sea. Nor is there any "Right to Roam" on all this mostly-private land or much of any areas set aside for camping or true wilderness, as I mentioned. And is is just untrue that "There is no other capital in Western Europe with the same availability of greenery, sea, mountains, rivers, canals within a 60 min radius of the city centre." Switzerland? Finland? Sweden? Norway? Slovenia? In these and many other countries, you find capital or large cities with close proximity to Nature without and lots of greenery within.
it is easy to criticise the Irish health service, but for all its failings life expectancy is higher than in the UK or much of Europe and the "poor quality" maternal care has a lower infant mortality than in the UK. According to the OECD PISA study Irish schools are in the top decile, not "middling" and the IEA PIRLS score is similar.
There is a subsidy for childcare, although you may think that it is not enough. Wilderness is easy to find in Norway, not so easy in the Netherlands.
As the article states, Ireland became rich, not everything can be done immediately to make it like countries that have long been rich.
You are very harsh but also raise a lot of good points that many would agree with. Ireland has a “poor” vibe that takes many Eastern Europeans by surprise who are wondering why this rich place feels poorer than their place of low wages and hard work.
1. Although the costs of living are not low, they are not *extremely* high. I laughed out loud when you said that the cost of living in Dublin exceeds London. Come on! Leaving aside the fact that London is 10x the size, making a like-for-like comparison difficult, that is not supported by any kind of data and does not pass the smell test. "Salaries don't match." I take your anecdote, unsupported by evidence and give you one back: two friends of mine worked at Citadel, same level of seniority (one in London, one in Dublin). All in their comp was about the same, the guy in Dublin had a nicer apartment, and was able to save enough to buy a place in the mountains in France.
2. Extremely high tax burden? You mean completely in line with the developed world? Welcome to planet earth! In exchange, you get to live in Ireland, one of the most peaceful, culturally vibrant, prosperous places in human history.
3/4. I am having a hard time deciding if point number 3 or point number 4 is the single stupidest, most wrong thing I have read on the internet today. Bravo!
5. Traces of the preceding thousand years of history can be observed in the country's institutions, even today. Imagine that!
In response to your epilogue, I really don't know what to tell you. Ireland is a small country (maybe you should have googled it before moving there). If you want to live in a megalopolis (NYC, London, Tokyo) there isn't one in Ireland.
1/ You're right. My case is overstated. As per my reply above, I see now that Dublin is no longer a higher cost-of-living than London, but I was when I lived there in the 2010s: https://www.thejournal.ie/dublin-cost-of-living-index-4926640-Dec2019/ It seems that in the 2020s London has crept up to be about 20% more expensive than Dublin. But, even so, that's also the spread in the average salary in 2023 in the two cities. So, perhaps workers in Dublin and London are both equally strapped, given the high cost-of-living in both cities. With the difference being that people in Dublin aren't living in a premier global city like London, so their heavy cost-burden isn't as justified.
2/ Yes, extremely high tax burden. Completely in line with the developed world? Yes. I'm perhaps unusual for an American in not minding taxes at all and very much enjoying living in high-tax countries with high state capacity, but in Ireland, there just isn't the value-for-money, compared to those other developed countries. If you pay French- or Swedish-level taxes in Ireland, you definitely don't get as much back for it. My life in Sweden is easily much cheaper than in Ireland (or the US) because my taxes are relatively high, yes, but so is the value I get for the social services that I get back for them. And I also get a lot back in the form of direct transfers for families that I wouldn't have gotten in Ireland. For example, childcare, which nets out to be free here in Sweden, but costs more in Ireland than it does even in the US. That, alone, is a five-figure cost per child. Another example, public transit. In Sweden, like most of Europe, it is excellent and affordable. In Dublin, you pay more for less, getting two pathetic light-rail lines that weren't even connected to each other when I lived there and still cover only a fraction of the city of two million residents. Stockholm has the same population as Dublin and has a premier metro system, plus trams, light-rail, passenger rail, and even ferries out to the Archipelago islands! Sweden isn't that unusual in having such high-quality transit in Europe, either. If anything, you have superior intercity transit in countries like Switzerland, France, Spain, Italy, Germany, et al. So, while it's pretty hard to avoid having a car in Ireland eventually (especially if you want to buy property), it's easy in a Stockholm. Also, not all public healthcare is created equal: We ended up paying out-of-pocket for much than we don't in Sweden and actually using our employer-provided private health insurance very often (while having it is basically pointless in Sweden).
4/ If you disagree with me that Ireland is lacking Nature, see my above comment. Or, don't take my word for it: This is a frequent topic of handwringing within Ireland (https://www.irishtimes.com/opinion/2023/06/10/emerald-isle-no-more-why-is-nature-eroding-so-fast/) and also in the neighborhood (https://www.bbc.com/future/article/20210211-rewilding-can-ireland-regrow-its-wilderness). Some facts: "The Republic of Ireland has the lowest forest cover of any country in Europe. It wasn't always that way. Once, 80% of the land here was covered by native trees – the figure now just 1%. Farmland dominates, covering 72% of land in the Republic and 75% of land in Northern Ireland. For an island so often referred to as "green", there's a striking lack of wilderness. Ireland's dearth of biodiversity has long been noted, and it is getting worse. A 2019 report found that 85% of Ireland's habitats had "unfavourable" conservation status, and nearly half of habitats were in decline." So where is my objectively true statement the "stupidest, most wrong thing... on the internet today?" Or perhaps you think of farmland as "Nature?"
2. "I'm perhaps unusual for an American in not minding taxes at all and very much enjoying living in high-tax countries with high state capacity." This is not unusual for an American at all.
4. On the narrow point of whether significant rewilding of farmland is in order, we are certainly in agreement. There is broad support for this idea on the island as well.
I read your initial comment as a complaint about a lack of opportunities for outdoor recreation, or lack of opportunities to enjoy natural splendor. I do think that when you take the coastline and Ocean into account, Ireland still compares favorably to most (not all!) similar-sized swaths of land in North American or continental Europe in terms of beauty and variety of the terrain, but I think we should agree that this is largely a matter of taste.
Broadly, I find that the sporting and recreation culture in Ireland is phenomenal (cold water swimming and surfing, the gaelic games for all ages, and so on), but I understand now that this is not what you were talking about.
And, on Point #5, I'd argue that you're downplaying the problem in Irish education. It's not just that Ireland is almost unique in the Western world for not having a secular public school system (though, for the plurality of parents now who aren't practicing Catholic or Christian, this is itself justifiably a concern). Ireland, for better or for worse, is now fully globalized, and the city of Dublin is extremely diverse and heavy with immigrants. So presenting immigrant families with Catholic schools as their only available option for primary education is a bizarre situation.
And I'm not saying that Catholic schools are automatically bad. I myself went to a Jesuit one for university, despite not being Catholic, and got an excellent education. But, in Ireland, the problem in education is not just the lack of secularism, but also a matter of underinvestment: Ireland has below-average expenditure on education in the OECD, especially at the primary school level. Even if you discard Ireland's grossly distorted GDP as a baseline measure and use GNI, instead, Ireland's per-student expenditure is middling.
Of course, money isn't everything in education (though it is very strongly correlated to outcomes). Ireland's PISA scores are certainly very good (especially on reading). And, as I said, Ireland has en excellent higher education sector and a very educated adult population. But given the importance of its human capital to its economic model, it could (and should) do more. Because the tap of educated immigrants coming in to feed Dublin's human capital appetite won't be enough, eventually (especially as Europe ages), and also threatens to cause a similar xenophobic backlash, as in other developed countries.
To be clear, if I could wave a magic wand and disentangle the Catholic church from every institution in Ireland, I would. I certainly grant that it is weird to make non-Catholic immigrants bite-the-bullet and send their kids to Catholic school in 2023-- it seems like there is some room for improvement here.
In terms of outcomes, Ireland appears to get more for less-- isn't that what we should be aspiring for?
I should add that I am not really trying to change your mind about any of the points that you make-- after all, you lived in Ireland and decided it wasn't a good fit for you.
The subject of this post was how Ireland went from being a poor country to a rich one. To me, the essence of your initial comment read something like: "Ireland doesn't have some of the things that I personally associate with "rich" countries, so it doesn't appeal as much to someone working at an internet advertising company as some others, so when picking my country of residence off a menu, I pick somewhere else."
I just want to point out that there is a difference between a country not being poor anymore, and a country being desirable for FAANG employees in some broad sense. I also want to add that many of the things that Ireland is lacking (in your view) are largely consequences of scale and geography. I will cut myself off though.
Let me correct a little for the tone of my original comment: I don't think Ireland is a terrible place to live. It's easily one of the best in the world. But I was just trying to temper Noah's trademark sunny techno-optimism, as if Ireland was now developed and everything is great.
As you said, history matters: Ireland is a post-colonialist society. Ireland was, up until about a generation ago, one of the poorest in Europe. Ireland was, until about two generations ago, one of the most isolated countries on the edge of Europe. Upon its independence, Catholicism got tied up with Irish Republican Nationalism in a way that I think has been harmful. So, given its original baseline, Ireland's emergence as one of the wealthiest, most globalized countries in the world is remarkable. So, it is a little unfair for me to nitpick so.
My discontent is largely a function of my optimism for Ireland. It *could* be so much more. Despite the burden of history and path dependency of a lot of regrettable original conditions, Ireland has some other strengths that other advanced democracies don't:
It's small. So society and politics can be nimble. I saw that with the abortion and gay marriage referenda when I lived there. What a breakneck speed of social change! And without so much angst and blowback.
Its people aren't burdened by the arrogance and insecurity of the declining superpower (e.g. the UK right across the Sea or the US across the Ocean). That national humility makes it easier to course-correct.
The population is educated and literate. Few places have a better culture of ideas than Ireland. Dublin has more independent bookshops than most major American cities and "The Irish Times" is healthier than such a small potential readership would normally afford. So, this gives a lot of the foundation for informed democracy that the US, in particular, increasingly lacks. (That's why it's doubly disappointing to me that this doesn't translate to a really thriving democratic participation and more inspiring politics).
On the environmental questions, I hold Ireland to a high standard because it's got the capacity for rewilding and the restoration of nature that a overpopulated Netherlands, for example, could never have. With only five million people on the island and one of the lowest population-densities in Europe, why should it be that Ireland lacks forest and wilderness? The culprit is this fetish for enclosure and private land ownership inherited from British colonialism. Arguably, this is the root of Ireland's housing crisis, too. Landlords just have too much power in the Republic, and guard their rent-seeking zealously. But, despite the lack of what I would define as Nature, you're right that the Irish have an enviable outdoor living culture, with wide participation in sport and an embrace of the (not-always-ideal) weather.
So, yes, it does come off as petty and entitled to stand on a perch as a highly-mobile tech worker judging Ireland for all its shortcomings. I get that. But I also deeply feel that these flaws are felt much more by the median Irish person than somebody working at an internet advertising company. At least the latter can afford the rent, if not to buy a home. At least the latter enjoys the (still insufficient) higher salaries of the professional class, while others struggle mightily paycheck-to-paycheck. And, most importantly, the latter are able to decamp Ireland for other greener pastures if they want. The median Irish person can't or won't.
I think we are largely in accordance with each other-- enjoyed the back and forth. I hope that they know how to pour a Guiness properly in Stockholm, at least.
I’ve been to the west of Ireland for work a couple of times in the last 12 months, and the one part of the public transport system that people told me worked was the inter-city/long-distance bus network (I used it, and it seemed to be true).
But the main issue here, which you touch on, is that Ireland’s conception of the level of public services it can afford hasn’t caught up with its income, partly because when Ireland was a poor country—as you say—the Catholic Church acted as the social safety net. But the Church isn’t very good at infrastructure, of course. It seems quite likely to me that it will start to increase spending on things like housing and transit systems because it will have to.
The other deep legacy of the Irish independence struggle is two political parties who were divided not by policy but by a tribal position on the 1920s Irish Free State. The Church was locked into this as a kind of triangle that meant that nothing changed. But now that the Church has been disgraced by scandal, and Ireland is visibly more like a European country, you can see the space for new political parties to emerge. Whatever your view of Sinn Fein, its political programme is a sign of that.
As an American, I'm very sensitive to the (largely negative) influence of history on both present conditions and also contemporary conceptions of the possible. One could argue that a lot of the "Original Sins" of the United States really constrained things like the development of a modern, Social Democratic welfare state. For example, the four-century legacy of African slavery and the resulting racism and festering existence of a racialized underclass. This was something that FDR's New Deal had to contend with in a way that the emergence of the British or Nordic welfare states didn't. Add to that settler-colonialism, late industrialization, and the mixed blessings of being a hegemon largely safe from direct threat and you start to get to why the US is so exceptional among Western developed countries in many ways that aren't flattering.
That's an explanation, but not an excuse. Because, as strong as the historical determinist effects of such things are, there's still possibility for societies to overcome them. Spain, for example, was a dictatorship up until 1975. Like Ireland, it was also considered a backwater of Europe, and many foreign commentators wrote it off as a culture eternally blinkered by its Catholicism and other essentialist (and implicitly bigoted) explanations for "backwardness." But look at Spain today! It's certainly not perfect, but it's got some of the most advanced infrastructure on the planet, the single longest-lived population, and a thriving (very contested and active) democracy with a range of ideologies.
Spain's not the richest country in Europe, of course, and has many problems that Ireland doesn't have: double-digit youth unemployment, separatism, a not-so-quiet fascist movement, angst over immigration, etc. But, even so, its trajectory within my own lifetime has been extraordinary.
Ireland emerged from darkness around the same time as Spain, and is, today, far richer, yet, in many ways, less developed. Why? Both countries had an extremely strong Catholic Church. Both countries suffered a devastating civil war around the same time. Spain wasn't colonized by a foreign power, but a lot of Spain's regions would certainly say that they were. And Spain suffered much of the blowback and corrosive effects of being a colonizer itself, in the way that Ireland didn't.
There are other small countries in Europe that have made rapid societal transformations within the last generation or two. Finland and Iceland were poor and "backward" in the middle of the 20th Century. Now they're among the most developed in the world. They decided to develop themselves and did. You can see Baltic states like Estonia doing this today, under conditions that are arguably even more challenging.
So I just don't buy the forever excuse that Ireland couldn't do better or that it's "unfair" to criticize it for its shortcomings. The fact is that the winners in Irish society don't want anything to change and that the median voter isn't pressed enough yet to push for better. So, you get a lot of bellyaching about the state of things, and no real efforts to do anything about it. Maybe it's because Ireland settled on a "good-enough" level?
In UK most of the country was "left-behind" by London and South East. It seems Ireland is somewhat similar. I do wonder about the recent success of Sinn Fein too (in the elections, it did not translate to government, I think).
In Ireland under English rule, there was "The Pale" (around Dublin) and "Beyond the Pale." That uneven pattern of development does remain today, over a century after independence. You're right that the regional inequality was reflected in election results in 2020, when Sinn Féin threatened Ireland's century-old two-party system for the first time. Their strongest showings were in the Border counties and the Midlands, areas that are significantly less developed than everywhere else in the Republic. But, interestingly, they also did quite well across districts in Dublin itself, as well as neighboring Wicklow (both very much "in the Pale"). In Dublin, they only underperformed in the wealthier Southeast of the city and its fancy suburbs spreading down the coast in the same direction. They also underperformed in the largely rural Southwest of Ireland, perhaps because the area is the second most-prosperous in the Republic. So, Sinn Féin can be seen as a protest votes from "left-behind" rural areas and also discontented parts of the metropole itself, with less appeal to the rural and urban parts of the country that have done well.
This reflects how there's no quite as stark a regional inequality as you see in England, since the cities of Cork and Galway have an affluence that rivals Dublin from the South and West, respectively. Cork, especially, has a very thriving tech sector. And the Southwest EU statistical region (including Cork and County Kerry) has an HDI just a hair below Dublin's. If there's an Irish equivalent of the UK's declining North, it's the Midlands and Border territories in Ireland's heart, where there's much less wealth, but also hardly any population density. Most everywhere that people actually live in Ireland is pretty equally wealthy.
Ireland is not as unbalanced as England, there is significant economic activity in Cork, Limerick and Galway. The sparsely populated centre shows a poorer area, but few enouh live there. Donegal is poor because of partition.
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.
I agree with you with the countries that could get rich but there is one glaring issue: demographics. Vietnam, Thailand and Malaysia are rapidly aging, and the other countries are not far behind. India and Indonesia still seem capable (demographic dividends, huge diaspora), but are in sore need of reforms around country.
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.
Is a desire by US Republican politicians to fuel anti-tax sentiment a factor in why European sticker prices include VAT but US sticker prices do not include sales tax?
Ireland can have a tax structure that works for Ireland and is not beholden to other countries. If those countries do not like the Irish tax structure, they are welcome to emulate it. The worst thing we can do is have a single universal corporate tax structure because we will kill examples of other ways tax corporate profits (and with that we will never evolve).
This will be important because even if we adopted the idea structure for today...the world changes. With a single, universal structure we would risk having a 20th century corporate tax structure going into the 22nd or 23rd centuries.
Honestly, just reducing the corporate tax (and the entire idea of a wealth tax) for higher inheritance and capital gains taxes (including the step-up basis) would probably address the vast majority of these issues. Few people will relocate their entire lives (although some still will) than a company HQ. You would keep most of the taxes, have a more equitable system, and maybe attract some of the companies back from Ireland.
Just because the US has an idiotic tax structure (and other countries have even worse structures) doesn't mean that everyone else in the world has to.
Actually we SHOULD have a universal corporate tax structure: zero tax on corporate income. Impute them (consolidated world wide income) to the shareholders and tax the shareholders.
I could get behind that....it would work better than what we have now, and I do think it is kind of silly to treat corporations in this way.
Personally though, I don't like writing off future options. There may eventually be a work/tax structure were corporate taxes makes sense. (I don't know what that would look like but since we are talking about the future, I doubt anyone can). Any universal option would still create a situation where the world was probably locked into zero corporate taxes. I suspect corporate taxes currently exist as a second-best type political arrangement (i.e., it is difficult to change things). A universal structure might prevent second-best type solutions.
Again, I think the idea is better than what we have but I am still reluctant to set global standards that would be near impossible to undue if the world changed in an unpredictable way or if political incentives make it an "ideal" solution impossible.
Imputing tax to the shareholders and taxing the shareholders sounds insane to me. Inter alia you're implementing a de facto wealth tax for non-dividend paying stocks. This seems indisintguishable from taxing unrealized capital gains.
From a simple global view, Ireland's "liberalization" illustrates that if one reduces government interference, excessive regulations and restrictions, and a modern tax approach, the economy and the country thrives. We see the opposite in the current US federal government and blue states where over and excessive regulations and taxes have stifled wealth generation and preservation. One more example that dictated socialism does not work.
Maybe...maybe not...have you read the rules on the global tax agreement? I tried to and all I came away with was that they seem ripe for similar gamesmanship (i.e., spinning off small companies or doing the fiscal equivalent of gerrymandering to get revenue/profit margins/sales in specific countries/headquarters in specific countries, etc.). I am not sure how that will work out but suspect it will just add red tape and a bunch of oddly arrange corporate restructures but who knows....maybe it will be great.
Not to mention that last I saw the had just released the text in early October. Maybe the global world works much faster than individual governments.
Since stealing is bad and taxation is theft, I don’t see the harm. Let all countries compete to see which one can have the lowest taxes and we all win.
Well let’s take our nearest neighbour Britain which had an empire that stole and even in Ireland was responsible for a famine that halved the population. Are we meant to feel bad about presenting a UK tax arb. Your position is that we should be poor forever because of bad luck historically.
Let me turn around your question, what country do we arb tax from who isn’t rich and powerful due to having done far worse ills in their history?
You’re assuming Ireland can be Denmark which there’s no evidence to back up. Denmark has way better geographical positioning for example.
And yes, I would infinitely prefer to listen to people complaining about our economic model than have the country be as poor as it was when my parents were my age.
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.
I still have my shares from that Varado, now owned by Vodafone. After an initial spike, the shares fell sharply and a lot of first time share buyers got burned and the government got blamed. So no to your last sentence: in fact there was no large privatisation to the public again.
So why did the mood improve? Because the 1980s here were miserable, 18.5% unemployment and the rest, and we were damn grateful to finally have jobs at home and not feeling like a failed country.
I think a big part of it was UK’s $5 trillion Global War on Terror that eradicated the IRA with hundreds of thousands of ground troops while killing hundreds of thousands of innocent civilians…oh wait, America did that in the Middle East. ;)
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).
I live in Vietnam where is also no politics of nostalgia, somewhat understandably. I often wonder how much that single thing -- nostalgia -- is holding back the developed countries of the world.
Everybody know how to fix housing quickly: let builder build what is profitable where it is profitable (with a few safety related building codes which probably just codify best practice and don't really oblige anyone to do anything they would not do anyway).
I'm generally a YIMBY, as I've written in my substack on many occasions - but the problems we have here are that PLUS a building sector that is at absolutely at capacity in terms of materials and labour, and which needs to increase annual output by probably a third to keep up with demand. We need to important workers to build houses, as we've run out of them ourselves, and we have nowhere to house them while they're building houses! To this I have no solutions...
1,000 pre-fab structures could be imported to house immigrant construction workers, who can then build more homes for everyone.
Furthermore, the existing population, which other commenters are saying include lots of poor folks who are not enjoying Noah’s description of Ireland’s gilded age, can be trained to build. In a population of 5 million, one technical trade school graduating 100 people a year would make a big impact by 2030.
Sounds like the real issue is permitting, and that simply requires the Irish to change their minds and inform their representatives.
I get the pre-fab solution: it's not like these solutions haven't been thought of. And in principle I agree. But we also need serviced land (electricity, water, etc.), and we need to source construction materials as well. Our internal market is small.
'The National Apprenticeship Office currently oversees 72 national apprenticeship programmes, catering for more than 26,000 apprentices in training with 9,000 employers. There is a broad range of industry areas to choose from, from financial services to engineering, from farming to hospitality, biopharma and tech' (https://www.irishtimes.com/ireland/education/2023/09/19/earning-and-learning-for-a-brighter-future/)
However, we just housed c.90k Ukrainian refugees, and just ran out out of places - some have even been housed in tents, such has been the shortage of housing.
Regarding permitting: that is certainly a problem - we have managed to create a system that is too complex. Is it the sole cause? I'm not so certain.
Great points, Shane. I agree with everything Noah said, but I'm curious to hear what you both think about why Ireland might not "feel" like a wealthy country to those of us who live here?
The economy has grown at a faster level than the infrastructure and the state generally could cope with. Its a good problem to have and with continuing sensible public policies it should be solved i the medium term, if the country continues on the right bpath.
100% - I'm far from advocating the other direction. But is infrastructural deficit the only challenge? And if so are we addressing it at enough pace to steer off more populist politics as the UK and UK have seen?
I think the answer to your question requires a deep consideration of human cognitive biases, to be honest, and is probably worthy of a blog in it's own right. We need to think about time horizons and geographical horizons. If you remember the 1980s, as I do, your memory is dominated by unemployment, inflation, and interest rates in the high teens, coupled with staggering levels of emigration (of which I became one at the very tail end of the 80s). Moreover health outcomes and longevity were both poor, and our cities were shrouded in coal-fire smog. You might even remember lettuce sandwiches (I jest, although those were a thing). Across that time, Ireland has become very rich indeed: longevity, full employment, etc., Comparatively speaking: travel around Europe and other places. Ireland does feel well off. You don't have to go far in other countries to encounter tatty town centres and transport infrastructure that is not in good condition.
Pushing the thought further: we humans tend to look up, not down. I'm sure your average millionaire feels poor compared to Jeff Bezos, who probably feels poor in relation to, idk, that twitter guy, or whoever. This is the 'hedonic treadmill', or eaten bread is soon forgotten. Fundamentally, feeling wealthy needs a comparison: if you look to countries with half or a third of our GNI* per capita we will feel wealthy. If you look at others further up, maybe not so much. But who spends their life making such comparisons?
I also have the sense that when we travel to continental Europe, we lack the grand buildings of empire - wander about Paris a bit, and this really comes home. But go outside the Peripherique and see what you think - there are clearly disparities. We had no money to invest in our infrastructure for more than half a century - and we're still catching up.
There is an ironic upside to that: a motorway through the centre of Dublin demolishing the Georgian core all the way to Irishtown was seriously mooted - hence the long-standing problems of Pearse St. We would have made terrible mistakes - and we did make some for sure (Woodquay?).
(I hate to be that guy, but I have written quite a bit about cognitive biases, NIMBYism and all that good stuff on my substack..).
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.
While Irish poverty is the lowest in the EU, it's offset by many social welfare programs, and while this is great, it's only 13% of the population, it doesn't mean, based on your comment, that this is "OK". The issue is that while the poorest have trouble renting homes or even rooms, the same can be said for those who would be considered living above the poverty line or even "middle class". Ireland's housing shortage, while it disproportionately impacts the poor, has driven many younger men and women to emigrate or stay in their family homes longer, even if they have good jobs, or are attending university or technical colleges, because they can't afford to live near their work or schools. Young married couples can't afford starter homes, let alone rent larger apartments in the country's larger cities.
I live in a third world country and I never feel a risk of being mugged or killed.
Maybe you need to update your priors about what life is like in a third world country.
Also, Ireland had 44 murders across the whole country last year and 52% of them were from domestic violence. I doubt the risk of murder in northern central Dublin is especially high while walking around.
This is not entirely correct. I regularly visit the north inner city of Dublin. Yes, it is a deprived area, such as there are in most cities in the world, but it is not especially dangerous. Anyone who has visited a third world city will not be confused as to which is the most deprived.
They are all in social housing and pay peanuts - some don’t pay at all. They tried moving them out (Tallaght, Ballymun) and that wasn’t great so now people who live in wealthy southside neighbourhoods (or anywhere in Dublin) are happy for them to stay there and not get moved out into their neighbourhoods
While I don’t want to deny there are some challenges in Ireland, you’re response seems entirely anecdotal which makes it hard to measure. Most data we have shows Ireland doing quite well (tho there is work to be done on housing). And every city has its dodgy parts? That is not a uniquely Ireland issue
Dublin isn't NYC, or London (a filthy dive full of useless Brits pre- and post-Brexit), but the surge in homelessness due to the housing crisis and increased drug use has led to increase violence, with one U.S. tourist actually being murdered last summer, something incredibly rare in the country overall.
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.
Re your point that you weren’t rich enough for corruption to be lucrative, that doesn’t seem to stop people in many countries poorer than Ireland was. Think Haiti, Nicaragua, Myanmar- none of them have a lot of mineral wealth, but they rank near the bottom of the world in perceived corruption.
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 US however, abandoned 'capacity building' , one of the 3 areas mentioned to strengthen a country. The US is good at liberalization- giving every gain to Richy Rich and the Corporations and all costs to 'we, the people' over the past 50 years. Which doubles down on bad effects when so abandoned. Industrial policy is currently being challenged, as the corporate giveaways have gone so far out of balance - thank goodness for union building.
The deficit is the responsibility of the Republicans, but they don't take responsibility or accountability. They live in fantasies and attacks. Every Republican President digs tge hole & the dems work to climb out while being criticized with lies. Last balanced US budget was Clinton.
The US has the best universities in the world: perhaps a hundred of them. That’s capacity building.
The Inflation Reduction Act and the CHiPS Act are both widespread, capacity-building efforts.
In a sense NIMBY zoning reduces capacity. Minneapolis has shown that rezoning solves that problem. And the California legislature keeps pecking away at this constraint. Eventually we will get through it.
I have heard that high-tech and skilled immigration is still stalled, post Trump and post-pandemic. I don’t know if that needs to be changed by congress, or if Biden can do it. Seems like it should be a bipartisan issue for everyone but isolationist Trumpies.
Not capacity building in the sense Noah wrote of- care for the total citizen population. Further, the best University options are open to the wealthy worldwide who can pay, while the vast majority of US institutions have been starved of funding as have tech centers, other than the god worshipped computer. Ask any professors who are paid by the class , work 3-4 jobs to barely survive.
Immigrants are economic primarily and not screened for skill , education in the vastly overwhelmed US immigration evaluation centers. Child & cheap labor taking resources for months from US citizens when unable to get the lousy job that is not sustainable for US citizens. How will they not become a burden? I know of Afghans living in Vermont, the mother pregnant watching tv, more kids, unlimited kids, no sense of US contribute but feeling ‘owed’ , the father ‘injured’ at work after 6 months refugee lappers paying the rent, again they can’t pay their own rent. Afghans who played both sides against the middle for 20 years.
The excess of professors for every university job = excess capacity in education.
California subsidizes in-state tuition at UCs for residents whose families make less than $88K per year. Other states can potentially do this as well with higher taxation on the wealthy.
What US institutions and tech centers are you referring to that have been starved? And are you including the trillion dollar support the IRA & CHIPS Act are now funding?
According to Noah’s definition, the IRA and Chips Act are industrial policy & liberalization. You don’t seem to acknowledge the third leg of the stool, capacity building of the people’s lives. Current republicans want to throw out SS, Medicare, Medicaid, women’s bodily autonomy, even further.
Vermont is defunding aspects of its public universities, and the ‘glut’ of professors has much to do with the corporatization of universities, as with healthcare. Less and less for the sick and students. More & more for the powerful few . The Oligarchal capitalization of all resources- all formerly public good. Westerners using federal public lands & paying nothing, even denigrating local resources.
Certainly. Blue states have lots of regulations restricting permitting. Red states are getting most of the immediate benefits of these capacity-building projects.
But with the lowered costs and benefits to health and civilization, renewable energy, semiconductors and EVs will ultimately benefit everyone.
"The Inflation Reduction Act is building future capacity, so we don’t want to reduce that." We HOPE that is the case. Let's see what the return on that capacity is.
Is it ever possible to “build capacity” and know the outcome? Uncertainty about the future seems like it’s inherent in the action.
Nonetheless, we saw how dependent our economy was on semiconductors a few years ago. And if China constrains Taiwan’s supply to the rest of the world, it will be very painful. So CHIPS was a smart investment — what remains now is largely how well it gets implemented.
And renewable energy has proven itself to be the cheapest source of energy in history, partly because it can be deployed so quickly.
So increasing those should lower energy costs for every sector of the economy, which again is a smart investment.
And EVs are far more energy efficient than combustion vehicles, so we will make good use of the renewable electricity we will generate — not only reducing pollution, which could preserve our civilization from imminent ruin and will certainly reduce health care costs; but also decoupling our economy from the oil market and undemocratic governments.
If we let our allies like Israel and Taiwan get attacked with impunity, the rest of our allies will think our agreements with them are meaningless -- as will their enemies.
Russia’s struggle in Ukraine demonstrates how hard it is to take over another country now by force, particularly when it has Western allies. Hence Sweden and Finland have now joined NATO.
Noah has written about his concerns with China’s threats to Taiwan and the US military capacity:
This is not correct. A brief visit to any of the pharmaceutical clusters would easily demonstrate how much physical activity there is in this sector in Ireland. Likewise in IT, with Intel's huge chip manufacturing facility, etc.
The physical activity is also due to Ireland being a tax haven. To avoid US subpart F income (which would tax the income shifted to Ireland in the US if there were not substantial activities in Ireland), these companies put some minor manufacturing in Ireland (it also helps persuade the Irish tax authorities to write letters approving of the tax treatment). Consequently, while Ireland does benefit from the manufacturing fig leaf for tax, it is not a replicable model--unless everywhere is going to be a tax haven.
But somehow the wages remain low. Obviously Ireland's economy has improved, and not all industry is profit centre only, but it's population is merely as wealthy as that of the UK.
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.
That's kind of the trouble. Average what vs median what? As Noah points out, Ireland doesn't use GDP since it is so distorted by the tax haven income which makes GDP per capita useless.
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.
Yea, I think the problem with this whole analysis is that it kind of brushes over the "Tax Haven" part way too quickly. If we look around the world at small nations that are also tax havens they tend to be very prosperous so I don't think this quite supports the point Noah thinks it does.
If I were to say "Will Fiji be a wealthy country in 2123?" and the answer was "Yes, because it will become a tax haven for the largest companies in the world" that isn't really an optimistic or stable path forward.
To be clear, some of Ireland's development is clearly real and will remain regardless of what happens with corporate taxes but I don't think using this point of time as representative of the wisdom of Irish development strategy makes a lot of sense.
Takes more than low tax rate. Takes an educated work force, low crime, decent education type society. Also "rule of law" maters. Venezuela has nearly free labor costs, but even if they had no corporate income tax, no way any company is going to invest a nickel in a place where the government will just steal it when they feel like it.
Lots of countries have those things though, the unique thing about Ireland is the tax rates. It's estimated that something like 80% of all corporate taxes paid in Ireland in 2021 are from foreign multinationals and a substantial portion of other taxes (such as income) come from employment opportunities that exist because of corporate headquarters based in Ireland.
Ireland has advantages, they are now the only natively english speaking country in the EU and have an educated workforce etc. But I'm not going to start applauding Irish economic performance and holding them up as an economic model to folliw while they are still acting as the world's largest tax haven for corporate profits earnt elsewhere.
You and I view things differently. Ireland's government has only one job: Do what's best for the people of Ireland. They made themselves a so-called tax haven and it worked. So, if other countries want to compete for those corporate profit taxes, then they need to lower their rates to compete. Instead, they feel entitled to take so much that the corporations fled to Ireland. This is a self-inflicted wound on the part of the US and elsewhere, which Ireland merely took advantage of.
One issue though is that only small countries (I'd say less than 10 million people) can be tax havens: because tax havens live off the taxes paid by the foreigners they attract, but need to levy the taxes at a low rate to attract said foreigners, they must perforce be parasitic on other much larger economies.
I see no reason why a "large "country cannot have a low (or no) corporate tax rate. If the US had as low or lower rate than Ireland, those corporations would not fled fled to Ireland to begin with.
Yes. Also it is a common mistake in journalism (though not particularly this article) to imply that policies that are successful in one country would be successful in another. This is to ignore the huge historical/cultural context which will either provide a drag effect or, in some cases, a booster effect. In Ireland (and in China under Deng) the historical/cultural gave a huge boost to the beneficial policy decisions. In Britain by contrast, they would meet with a huge drag effect.
Yep. The light manufacturing is to avoid subpart F of the U.S. tax code. There is a reason Ireland is the only EU country to oppose the 15% minimum global tax on corporate book income--goodbye foreign investment.
Ireland accepted the 15% tax rate 2 years ago, do a little research before commenting.
So Lucky Charms isn’t a unicorn??
😊
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?
As a Brazilian who has been living in Ireland for 5 years, having previously lived in the US (midwest), Canada (Quebec) and Prague, CZ, you couldn't be more wrong!
1. This is one is so egregious as a tech worker myself. Salaries are great in Ireland and not much different compared to the UK. I know that first-hand. There is absolutely no way you get paid 50% in Ireland for the same job/company. Of course, the market is smaller, but there are many good opportunities at FAANGs or private unicorns (Stripe, Intercom, etc).
2. Tax burden is slightly worse than the UK and you get slightly worse benefits. The difference is less stark than you imply. Anyone can easily calculate the tax burden for a 100k earner and see that for themselves. While the HSE sucks, you can avail of private healthcare for many things e.g. GPs, minor injury clinics, etc.
3. Ireland politics are absolutely so much better than the UK and US, wtf! How can you compare the likes of Trump or Boris Johnson with Leo Varadkar / Michael Martin? Sinn Fein is terrible but it's uncertain if they will ever have a majority.
4. This is one also is so deeply wrong, I can attest as an avid hiker myself. 30 min from Dublin city centre you can do the Howth Cliff loop or Bray-Greystones cliff walk. 60 min you can go to the Dublin mountains. 90 min you can go to the beautiful Wicklow mountains. There is no other capital in Western Europe with the same availability of greenery, sea, mountains, rivers, canals within a 60 min radius of the city centre. I agree there should be reforestation with Atlantic rainforests and too much space is used for farming (at least we have good food security and local produce).
5. Only point I agree with.
1/ You can easily spot-compare FAANG salaries in Ireland to other countries, including the UK and US. This is the market that I was in when I lived there (article from 2016): https://www.theguardian.com/technology/2016/feb/07/google-ireland-staff-paid-less-than-half-their-london-colleagues Has it changed much since? Not fundamentally: Even on the average across all types of jobs, you also see the salaries remain far higher in London ($4300 vs. $3500 according to official stats, or 20% higher). London-based roles in all the tech companies I've ever worked for or with are in the top salary band and Dublin-based roles are in the second-tier. So, if Irish people are paid similar salaries to people in, for example, Sweden, but with a much higher cost of living (since the public services are far inferior and Dublin housing, especially, is unusually expensive), they have a worse deal. You're right in pointing out that my data on housing costs is outdated, since prices in London have now seemingly surpassed Dublin again (by 20%+) since I lived there (Dublin had notoriously surpassed its colonial older brother in the mid-2010s and it was splashed over all the Irish papers then). But even with that plus-fifth margin, Dublin is an unusually overpriced city for what you get. I lived in fancy Ballsbridge and very much enjoyed it, but it wasn't exactly like living in London's Soho or Mayfair, and I wouldn't have voluntarily paid 80% of the cost for the same center-city flat. Even so, perhaps Dublin and London are more at parity now than they were c. 2015 and my diatribe is a product of the time.
But I'm also not trying to make this a Ireland vs. UK thing. IMO, being based in *either* Dublin or London is just a bad deal for tech professionals who have other options, since the cost-of-living in both cities is such much higher than compensation, and for similar reasons: many essential services that in other Western countries are public are private and expensive in the British Isles (childcare being a clear example), public transit is poor (it's much better-quality in the UK, but vastly more expensive than the European norm), and housing is unusually expensive. In this way, both cities are very much like San Fransisco/Silicon Valley (but at least they have public healthcare in Ireland and the UK), suffering the same cost-of-living crisis ills. And that's a real indictment of all three countries, when even the most privileged workers in the tech industry with their often six-figure salaries can't afford the basics of normie life! I would submit that living in the Netherlands, Luxembourg, Denmark, Sweden, Norway, Switzerland, France, Spain, or Italy is going to be a better deal for highly mobile tech professionals who don't otherwise have strong ties or preferences and are willing to go beyond the Anglophone.
3/ If you re-read my statement, I didn't at all say the politics were "better" than the US or UK, especially not now in the Trump or Brexit Eras. I said, "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." So Ireland's politics aren't as bombastic and extreme, but they are something similarly threatening to a thriving democracy: lifeless. The recent rise of Sinn Fein is a result of these "boring" and disengaged politics, and shows the cost of a lack of real alternatives from the two very complacent center-right parties. In this way, Ireland in 2020 rhymed with the UK the same year and the US in 2016: disaffection with a two-party system that had run out of legitimacy leads to a wild protest vote that doesn't promise any better. If the Irish Social Democratic Party, for example, was polling more than single digits or if one of the two dominant parties served as a genuine alternative to each other, then there would have been a much more constructive way to signal to the polity that the current path of development was leaving too many average Irish people behind.
4/ Howth isn't nature. The Howth Cliff Walk is a reclaimed light-gauge railroad line. You can find those all over even the most suburban American communities in the Eastern half of the country. There's one almost identical in my native Washington, DC, tracing the C&O Canal. So, perhaps I should be more specific in what I mean by saying "Nature." I mean wilderness or at least minimally-spoiled habitats. I don't mean urban parks, walking paths, suburban lawns, or farms. In DC, for example, you can enjoy the many parklands within the city or the Howth-like walking/biking/horseriding trails that lead outside it, but you can also find, within accessible distance, more than half a dozen state parks. DC proper is a smaller city than Dublin and right in the middle of the most developed Atlantic strip in the whole United States, but it still has some nature. But nothing in the Eastern half of the United States matches the western half of the country, where there are vast, unspoiled expanses of nature. Ireland has nothing like this, despite having only 4.5 million people in the Republic. Donegal is as wild as it gets on the island and even there you're stuck in caravan parks to experience the great outdoors. The "Wild Atlantic Way" too the south is hardly wild, but mostly a (beautiful) drive through farmland by the sea. Nor is there any "Right to Roam" on all this mostly-private land or much of any areas set aside for camping or true wilderness, as I mentioned. And is is just untrue that "There is no other capital in Western Europe with the same availability of greenery, sea, mountains, rivers, canals within a 60 min radius of the city centre." Switzerland? Finland? Sweden? Norway? Slovenia? In these and many other countries, you find capital or large cities with close proximity to Nature without and lots of greenery within.
it is easy to criticise the Irish health service, but for all its failings life expectancy is higher than in the UK or much of Europe and the "poor quality" maternal care has a lower infant mortality than in the UK. According to the OECD PISA study Irish schools are in the top decile, not "middling" and the IEA PIRLS score is similar.
There is a subsidy for childcare, although you may think that it is not enough. Wilderness is easy to find in Norway, not so easy in the Netherlands.
As the article states, Ireland became rich, not everything can be done immediately to make it like countries that have long been rich.
You are very harsh but also raise a lot of good points that many would agree with. Ireland has a “poor” vibe that takes many Eastern Europeans by surprise who are wondering why this rich place feels poorer than their place of low wages and hard work.
1. Although the costs of living are not low, they are not *extremely* high. I laughed out loud when you said that the cost of living in Dublin exceeds London. Come on! Leaving aside the fact that London is 10x the size, making a like-for-like comparison difficult, that is not supported by any kind of data and does not pass the smell test. "Salaries don't match." I take your anecdote, unsupported by evidence and give you one back: two friends of mine worked at Citadel, same level of seniority (one in London, one in Dublin). All in their comp was about the same, the guy in Dublin had a nicer apartment, and was able to save enough to buy a place in the mountains in France.
2. Extremely high tax burden? You mean completely in line with the developed world? Welcome to planet earth! In exchange, you get to live in Ireland, one of the most peaceful, culturally vibrant, prosperous places in human history.
3/4. I am having a hard time deciding if point number 3 or point number 4 is the single stupidest, most wrong thing I have read on the internet today. Bravo!
5. Traces of the preceding thousand years of history can be observed in the country's institutions, even today. Imagine that!
In response to your epilogue, I really don't know what to tell you. Ireland is a small country (maybe you should have googled it before moving there). If you want to live in a megalopolis (NYC, London, Tokyo) there isn't one in Ireland.
1/ You're right. My case is overstated. As per my reply above, I see now that Dublin is no longer a higher cost-of-living than London, but I was when I lived there in the 2010s: https://www.thejournal.ie/dublin-cost-of-living-index-4926640-Dec2019/ It seems that in the 2020s London has crept up to be about 20% more expensive than Dublin. But, even so, that's also the spread in the average salary in 2023 in the two cities. So, perhaps workers in Dublin and London are both equally strapped, given the high cost-of-living in both cities. With the difference being that people in Dublin aren't living in a premier global city like London, so their heavy cost-burden isn't as justified.
2/ Yes, extremely high tax burden. Completely in line with the developed world? Yes. I'm perhaps unusual for an American in not minding taxes at all and very much enjoying living in high-tax countries with high state capacity, but in Ireland, there just isn't the value-for-money, compared to those other developed countries. If you pay French- or Swedish-level taxes in Ireland, you definitely don't get as much back for it. My life in Sweden is easily much cheaper than in Ireland (or the US) because my taxes are relatively high, yes, but so is the value I get for the social services that I get back for them. And I also get a lot back in the form of direct transfers for families that I wouldn't have gotten in Ireland. For example, childcare, which nets out to be free here in Sweden, but costs more in Ireland than it does even in the US. That, alone, is a five-figure cost per child. Another example, public transit. In Sweden, like most of Europe, it is excellent and affordable. In Dublin, you pay more for less, getting two pathetic light-rail lines that weren't even connected to each other when I lived there and still cover only a fraction of the city of two million residents. Stockholm has the same population as Dublin and has a premier metro system, plus trams, light-rail, passenger rail, and even ferries out to the Archipelago islands! Sweden isn't that unusual in having such high-quality transit in Europe, either. If anything, you have superior intercity transit in countries like Switzerland, France, Spain, Italy, Germany, et al. So, while it's pretty hard to avoid having a car in Ireland eventually (especially if you want to buy property), it's easy in a Stockholm. Also, not all public healthcare is created equal: We ended up paying out-of-pocket for much than we don't in Sweden and actually using our employer-provided private health insurance very often (while having it is basically pointless in Sweden).
4/ If you disagree with me that Ireland is lacking Nature, see my above comment. Or, don't take my word for it: This is a frequent topic of handwringing within Ireland (https://www.irishtimes.com/opinion/2023/06/10/emerald-isle-no-more-why-is-nature-eroding-so-fast/) and also in the neighborhood (https://www.bbc.com/future/article/20210211-rewilding-can-ireland-regrow-its-wilderness). Some facts: "The Republic of Ireland has the lowest forest cover of any country in Europe. It wasn't always that way. Once, 80% of the land here was covered by native trees – the figure now just 1%. Farmland dominates, covering 72% of land in the Republic and 75% of land in Northern Ireland. For an island so often referred to as "green", there's a striking lack of wilderness. Ireland's dearth of biodiversity has long been noted, and it is getting worse. A 2019 report found that 85% of Ireland's habitats had "unfavourable" conservation status, and nearly half of habitats were in decline." So where is my objectively true statement the "stupidest, most wrong thing... on the internet today?" Or perhaps you think of farmland as "Nature?"
2. "I'm perhaps unusual for an American in not minding taxes at all and very much enjoying living in high-tax countries with high state capacity." This is not unusual for an American at all.
4. On the narrow point of whether significant rewilding of farmland is in order, we are certainly in agreement. There is broad support for this idea on the island as well.
I read your initial comment as a complaint about a lack of opportunities for outdoor recreation, or lack of opportunities to enjoy natural splendor. I do think that when you take the coastline and Ocean into account, Ireland still compares favorably to most (not all!) similar-sized swaths of land in North American or continental Europe in terms of beauty and variety of the terrain, but I think we should agree that this is largely a matter of taste.
Broadly, I find that the sporting and recreation culture in Ireland is phenomenal (cold water swimming and surfing, the gaelic games for all ages, and so on), but I understand now that this is not what you were talking about.
And, on Point #5, I'd argue that you're downplaying the problem in Irish education. It's not just that Ireland is almost unique in the Western world for not having a secular public school system (though, for the plurality of parents now who aren't practicing Catholic or Christian, this is itself justifiably a concern). Ireland, for better or for worse, is now fully globalized, and the city of Dublin is extremely diverse and heavy with immigrants. So presenting immigrant families with Catholic schools as their only available option for primary education is a bizarre situation.
And I'm not saying that Catholic schools are automatically bad. I myself went to a Jesuit one for university, despite not being Catholic, and got an excellent education. But, in Ireland, the problem in education is not just the lack of secularism, but also a matter of underinvestment: Ireland has below-average expenditure on education in the OECD, especially at the primary school level. Even if you discard Ireland's grossly distorted GDP as a baseline measure and use GNI, instead, Ireland's per-student expenditure is middling.
Of course, money isn't everything in education (though it is very strongly correlated to outcomes). Ireland's PISA scores are certainly very good (especially on reading). And, as I said, Ireland has en excellent higher education sector and a very educated adult population. But given the importance of its human capital to its economic model, it could (and should) do more. Because the tap of educated immigrants coming in to feed Dublin's human capital appetite won't be enough, eventually (especially as Europe ages), and also threatens to cause a similar xenophobic backlash, as in other developed countries.
To be clear, if I could wave a magic wand and disentangle the Catholic church from every institution in Ireland, I would. I certainly grant that it is weird to make non-Catholic immigrants bite-the-bullet and send their kids to Catholic school in 2023-- it seems like there is some room for improvement here.
In terms of outcomes, Ireland appears to get more for less-- isn't that what we should be aspiring for?
I should add that I am not really trying to change your mind about any of the points that you make-- after all, you lived in Ireland and decided it wasn't a good fit for you.
The subject of this post was how Ireland went from being a poor country to a rich one. To me, the essence of your initial comment read something like: "Ireland doesn't have some of the things that I personally associate with "rich" countries, so it doesn't appeal as much to someone working at an internet advertising company as some others, so when picking my country of residence off a menu, I pick somewhere else."
I just want to point out that there is a difference between a country not being poor anymore, and a country being desirable for FAANG employees in some broad sense. I also want to add that many of the things that Ireland is lacking (in your view) are largely consequences of scale and geography. I will cut myself off though.
Let me correct a little for the tone of my original comment: I don't think Ireland is a terrible place to live. It's easily one of the best in the world. But I was just trying to temper Noah's trademark sunny techno-optimism, as if Ireland was now developed and everything is great.
As you said, history matters: Ireland is a post-colonialist society. Ireland was, up until about a generation ago, one of the poorest in Europe. Ireland was, until about two generations ago, one of the most isolated countries on the edge of Europe. Upon its independence, Catholicism got tied up with Irish Republican Nationalism in a way that I think has been harmful. So, given its original baseline, Ireland's emergence as one of the wealthiest, most globalized countries in the world is remarkable. So, it is a little unfair for me to nitpick so.
My discontent is largely a function of my optimism for Ireland. It *could* be so much more. Despite the burden of history and path dependency of a lot of regrettable original conditions, Ireland has some other strengths that other advanced democracies don't:
It's small. So society and politics can be nimble. I saw that with the abortion and gay marriage referenda when I lived there. What a breakneck speed of social change! And without so much angst and blowback.
Its people aren't burdened by the arrogance and insecurity of the declining superpower (e.g. the UK right across the Sea or the US across the Ocean). That national humility makes it easier to course-correct.
The population is educated and literate. Few places have a better culture of ideas than Ireland. Dublin has more independent bookshops than most major American cities and "The Irish Times" is healthier than such a small potential readership would normally afford. So, this gives a lot of the foundation for informed democracy that the US, in particular, increasingly lacks. (That's why it's doubly disappointing to me that this doesn't translate to a really thriving democratic participation and more inspiring politics).
On the environmental questions, I hold Ireland to a high standard because it's got the capacity for rewilding and the restoration of nature that a overpopulated Netherlands, for example, could never have. With only five million people on the island and one of the lowest population-densities in Europe, why should it be that Ireland lacks forest and wilderness? The culprit is this fetish for enclosure and private land ownership inherited from British colonialism. Arguably, this is the root of Ireland's housing crisis, too. Landlords just have too much power in the Republic, and guard their rent-seeking zealously. But, despite the lack of what I would define as Nature, you're right that the Irish have an enviable outdoor living culture, with wide participation in sport and an embrace of the (not-always-ideal) weather.
So, yes, it does come off as petty and entitled to stand on a perch as a highly-mobile tech worker judging Ireland for all its shortcomings. I get that. But I also deeply feel that these flaws are felt much more by the median Irish person than somebody working at an internet advertising company. At least the latter can afford the rent, if not to buy a home. At least the latter enjoys the (still insufficient) higher salaries of the professional class, while others struggle mightily paycheck-to-paycheck. And, most importantly, the latter are able to decamp Ireland for other greener pastures if they want. The median Irish person can't or won't.
I think we are largely in accordance with each other-- enjoyed the back and forth. I hope that they know how to pour a Guiness properly in Stockholm, at least.
I’ve been to the west of Ireland for work a couple of times in the last 12 months, and the one part of the public transport system that people told me worked was the inter-city/long-distance bus network (I used it, and it seemed to be true).
But the main issue here, which you touch on, is that Ireland’s conception of the level of public services it can afford hasn’t caught up with its income, partly because when Ireland was a poor country—as you say—the Catholic Church acted as the social safety net. But the Church isn’t very good at infrastructure, of course. It seems quite likely to me that it will start to increase spending on things like housing and transit systems because it will have to.
The other deep legacy of the Irish independence struggle is two political parties who were divided not by policy but by a tribal position on the 1920s Irish Free State. The Church was locked into this as a kind of triangle that meant that nothing changed. But now that the Church has been disgraced by scandal, and Ireland is visibly more like a European country, you can see the space for new political parties to emerge. Whatever your view of Sinn Fein, its political programme is a sign of that.
As an American, I'm very sensitive to the (largely negative) influence of history on both present conditions and also contemporary conceptions of the possible. One could argue that a lot of the "Original Sins" of the United States really constrained things like the development of a modern, Social Democratic welfare state. For example, the four-century legacy of African slavery and the resulting racism and festering existence of a racialized underclass. This was something that FDR's New Deal had to contend with in a way that the emergence of the British or Nordic welfare states didn't. Add to that settler-colonialism, late industrialization, and the mixed blessings of being a hegemon largely safe from direct threat and you start to get to why the US is so exceptional among Western developed countries in many ways that aren't flattering.
That's an explanation, but not an excuse. Because, as strong as the historical determinist effects of such things are, there's still possibility for societies to overcome them. Spain, for example, was a dictatorship up until 1975. Like Ireland, it was also considered a backwater of Europe, and many foreign commentators wrote it off as a culture eternally blinkered by its Catholicism and other essentialist (and implicitly bigoted) explanations for "backwardness." But look at Spain today! It's certainly not perfect, but it's got some of the most advanced infrastructure on the planet, the single longest-lived population, and a thriving (very contested and active) democracy with a range of ideologies.
Spain's not the richest country in Europe, of course, and has many problems that Ireland doesn't have: double-digit youth unemployment, separatism, a not-so-quiet fascist movement, angst over immigration, etc. But, even so, its trajectory within my own lifetime has been extraordinary.
Ireland emerged from darkness around the same time as Spain, and is, today, far richer, yet, in many ways, less developed. Why? Both countries had an extremely strong Catholic Church. Both countries suffered a devastating civil war around the same time. Spain wasn't colonized by a foreign power, but a lot of Spain's regions would certainly say that they were. And Spain suffered much of the blowback and corrosive effects of being a colonizer itself, in the way that Ireland didn't.
There are other small countries in Europe that have made rapid societal transformations within the last generation or two. Finland and Iceland were poor and "backward" in the middle of the 20th Century. Now they're among the most developed in the world. They decided to develop themselves and did. You can see Baltic states like Estonia doing this today, under conditions that are arguably even more challenging.
So I just don't buy the forever excuse that Ireland couldn't do better or that it's "unfair" to criticize it for its shortcomings. The fact is that the winners in Irish society don't want anything to change and that the median voter isn't pressed enough yet to push for better. So, you get a lot of bellyaching about the state of things, and no real efforts to do anything about it. Maybe it's because Ireland settled on a "good-enough" level?
In UK most of the country was "left-behind" by London and South East. It seems Ireland is somewhat similar. I do wonder about the recent success of Sinn Fein too (in the elections, it did not translate to government, I think).
In Ireland under English rule, there was "The Pale" (around Dublin) and "Beyond the Pale." That uneven pattern of development does remain today, over a century after independence. You're right that the regional inequality was reflected in election results in 2020, when Sinn Féin threatened Ireland's century-old two-party system for the first time. Their strongest showings were in the Border counties and the Midlands, areas that are significantly less developed than everywhere else in the Republic. But, interestingly, they also did quite well across districts in Dublin itself, as well as neighboring Wicklow (both very much "in the Pale"). In Dublin, they only underperformed in the wealthier Southeast of the city and its fancy suburbs spreading down the coast in the same direction. They also underperformed in the largely rural Southwest of Ireland, perhaps because the area is the second most-prosperous in the Republic. So, Sinn Féin can be seen as a protest votes from "left-behind" rural areas and also discontented parts of the metropole itself, with less appeal to the rural and urban parts of the country that have done well.
This reflects how there's no quite as stark a regional inequality as you see in England, since the cities of Cork and Galway have an affluence that rivals Dublin from the South and West, respectively. Cork, especially, has a very thriving tech sector. And the Southwest EU statistical region (including Cork and County Kerry) has an HDI just a hair below Dublin's. If there's an Irish equivalent of the UK's declining North, it's the Midlands and Border territories in Ireland's heart, where there's much less wealth, but also hardly any population density. Most everywhere that people actually live in Ireland is pretty equally wealthy.
Ireland is not as unbalanced as England, there is significant economic activity in Cork, Limerick and Galway. The sparsely populated centre shows a poorer area, but few enouh live there. Donegal is poor because of partition.
https://twitter.com/peterdonaghy/status/1702408601799639369
What do you get for your taxes in America? You have to pay at every turn
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
I agree with you with the countries that could get rich but there is one glaring issue: demographics. Vietnam, Thailand and Malaysia are rapidly aging, and the other countries are not far behind. India and Indonesia still seem capable (demographic dividends, huge diaspora), but are in sore need of reforms around country.
Not sure if it would be good necessarily. Vietnamese ETF over 10 years was quite bad.
https://www.vaneck.com/us/en/investments/vietnam-etf-vnm/performance/.
Same with Indonesia ETF: https://www.ishares.com/us/products/239661/ishares-msci-indonesia-etf#chartDialog
Capital markets would need a lot more development.
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.
Is a VAT even constitutional? I think this politically dead on arrival, though and interesting idea
Is a desire by US Republican politicians to fuel anti-tax sentiment a factor in why European sticker prices include VAT but US sticker prices do not include sales tax?
Simple. By stealing other people’s taxes.
Ireland can have a tax structure that works for Ireland and is not beholden to other countries. If those countries do not like the Irish tax structure, they are welcome to emulate it. The worst thing we can do is have a single universal corporate tax structure because we will kill examples of other ways tax corporate profits (and with that we will never evolve).
This will be important because even if we adopted the idea structure for today...the world changes. With a single, universal structure we would risk having a 20th century corporate tax structure going into the 22nd or 23rd centuries.
Honestly, just reducing the corporate tax (and the entire idea of a wealth tax) for higher inheritance and capital gains taxes (including the step-up basis) would probably address the vast majority of these issues. Few people will relocate their entire lives (although some still will) than a company HQ. You would keep most of the taxes, have a more equitable system, and maybe attract some of the companies back from Ireland.
Just because the US has an idiotic tax structure (and other countries have even worse structures) doesn't mean that everyone else in the world has to.
Actually we SHOULD have a universal corporate tax structure: zero tax on corporate income. Impute them (consolidated world wide income) to the shareholders and tax the shareholders.
I could get behind that....it would work better than what we have now, and I do think it is kind of silly to treat corporations in this way.
Personally though, I don't like writing off future options. There may eventually be a work/tax structure were corporate taxes makes sense. (I don't know what that would look like but since we are talking about the future, I doubt anyone can). Any universal option would still create a situation where the world was probably locked into zero corporate taxes. I suspect corporate taxes currently exist as a second-best type political arrangement (i.e., it is difficult to change things). A universal structure might prevent second-best type solutions.
Again, I think the idea is better than what we have but I am still reluctant to set global standards that would be near impossible to undue if the world changed in an unpredictable way or if political incentives make it an "ideal" solution impossible.
Imputing tax to the shareholders and taxing the shareholders sounds insane to me. Inter alia you're implementing a de facto wealth tax for non-dividend paying stocks. This seems indisintguishable from taxing unrealized capital gains.
From a simple global view, Ireland's "liberalization" illustrates that if one reduces government interference, excessive regulations and restrictions, and a modern tax approach, the economy and the country thrives. We see the opposite in the current US federal government and blue states where over and excessive regulations and taxes have stifled wealth generation and preservation. One more example that dictated socialism does not work.
No they can't, it's a global world.
This is why they had to agree to the new global tax levels taking effect from January 2024.
Maybe...maybe not...have you read the rules on the global tax agreement? I tried to and all I came away with was that they seem ripe for similar gamesmanship (i.e., spinning off small companies or doing the fiscal equivalent of gerrymandering to get revenue/profit margins/sales in specific countries/headquarters in specific countries, etc.). I am not sure how that will work out but suspect it will just add red tape and a bunch of oddly arrange corporate restructures but who knows....maybe it will be great.
Not to mention that last I saw the had just released the text in early October. Maybe the global world works much faster than individual governments.
Here is an article https://www.euractiv.com/section/economy-jobs/news/global-minimum-tax-to-fall-short-of-expectations-researchers-warn/
I'm sure there are loop holes and I think the tax level at 15% is way too low.
https://maples.com/en/knowledge-centre/2023/4/eu-global-minimum-tax-directive-and-investment-fund-structures
Why should we feel bad about that? The countries we arb tax from are rich because of far worse crimes.
Why you should feel bad? Because you're are stealing other people's taxes. Stealing is bad, remember?
Not everyone in those countries are rich and certainly could have use for those taxes.
How about you compete on a level playing field?
I'm also truly curious what crimes all other European countries have committed that somehow justify this?
Since stealing is bad and taxation is theft, I don’t see the harm. Let all countries compete to see which one can have the lowest taxes and we all win.
But, but, but Ireland stole our stolen property!
If taxation is theft, is theft taxation?
Well let’s take our nearest neighbour Britain which had an empire that stole and even in Ireland was responsible for a famine that halved the population. Are we meant to feel bad about presenting a UK tax arb. Your position is that we should be poor forever because of bad luck historically.
Let me turn around your question, what country do we arb tax from who isn’t rich and powerful due to having done far worse ills in their history?
Take Denmark. They out-compete Ireland, have much higher tax rates and actually produce something themselves.
Ireland will never earn respect this way but it doesn't seem you care. The end justify the means kind of people?
You’re assuming Ireland can be Denmark which there’s no evidence to back up. Denmark has way better geographical positioning for example.
And yes, I would infinitely prefer to listen to people complaining about our economic model than have the country be as poor as it was when my parents were my age.
What's the geographical advantage of Denmark? Closer to Europe but further from the US?
Taxes are of course set to change in January so it will be more of a level playing field then.
How about other countries lower their tax rates to compete? If you suck, why should Ireland have to suck so you can compete better?
Ireland got rich because its capital is always Doublin'.
You're canceled
Guinness gracious, what a horrendous pub🙃I mean pun.
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.
I still have my shares from that Varado, now owned by Vodafone. After an initial spike, the shares fell sharply and a lot of first time share buyers got burned and the government got blamed. So no to your last sentence: in fact there was no large privatisation to the public again.
So why did the mood improve? Because the 1980s here were miserable, 18.5% unemployment and the rest, and we were damn grateful to finally have jobs at home and not feeling like a failed country.
Thanks for your comment!
I think a big part of it was UK’s $5 trillion Global War on Terror that eradicated the IRA with hundreds of thousands of ground troops while killing hundreds of thousands of innocent civilians…oh wait, America did that in the Middle East. ;)
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).
I live in Vietnam where is also no politics of nostalgia, somewhat understandably. I often wonder how much that single thing -- nostalgia -- is holding back the developed countries of the world.
With Russia perhaps being the most extreme example, with the regime building its legitimacy almost entirely on the victory of 1945.
Everybody know how to fix housing quickly: let builder build what is profitable where it is profitable (with a few safety related building codes which probably just codify best practice and don't really oblige anyone to do anything they would not do anyway).
I'm generally a YIMBY, as I've written in my substack on many occasions - but the problems we have here are that PLUS a building sector that is at absolutely at capacity in terms of materials and labour, and which needs to increase annual output by probably a third to keep up with demand. We need to important workers to build houses, as we've run out of them ourselves, and we have nowhere to house them while they're building houses! To this I have no solutions...
Really? No solutions?
1,000 pre-fab structures could be imported to house immigrant construction workers, who can then build more homes for everyone.
Furthermore, the existing population, which other commenters are saying include lots of poor folks who are not enjoying Noah’s description of Ireland’s gilded age, can be trained to build. In a population of 5 million, one technical trade school graduating 100 people a year would make a big impact by 2030.
Sounds like the real issue is permitting, and that simply requires the Irish to change their minds and inform their representatives.
I get the pre-fab solution: it's not like these solutions haven't been thought of. And in principle I agree. But we also need serviced land (electricity, water, etc.), and we need to source construction materials as well. Our internal market is small.
There are plenty of apprenticeships etc with associated training schemes (e.g.: https://www.solas.ie/construction-lp/). Or a recent piece:
'The National Apprenticeship Office currently oversees 72 national apprenticeship programmes, catering for more than 26,000 apprentices in training with 9,000 employers. There is a broad range of industry areas to choose from, from financial services to engineering, from farming to hospitality, biopharma and tech' (https://www.irishtimes.com/ireland/education/2023/09/19/earning-and-learning-for-a-brighter-future/)
However, we just housed c.90k Ukrainian refugees, and just ran out out of places - some have even been housed in tents, such has been the shortage of housing.
Regarding permitting: that is certainly a problem - we have managed to create a system that is too complex. Is it the sole cause? I'm not so certain.
Regarding poverty: make of this what you will https://www.statista.com/chart/30411/share-of-people-at-risk-of-poverty-or-social-exclusion/ and this https://www.oecd-ilibrary.org/sites/8483c82f-en/index.html?itemId=/content/component/8483c82f-en which places our poverty rates at about those of Belgium and Switzerland.
Sounds like the problem seems bad at the moment, because Ireland is at capacity with its generosity with refugees.
You’re totally on top of training. 🤘🏼
Why is it hard for such a wealthy country to source construction materials? Just import them, right?
Rezoning works for housing: https://fortune.com/2023/08/09/minneapolis-housing-zoning-real-estate-inflation-yimby-nimby-minnesota/
Does Ireland actually have zoning, or is it a country where (like in the UK) every new development must be individually approved?
I made a comment here relevant to this: https://www.noahpinion.blog/p/how-ireland-got-so-rich/comment/43165715
Great points, Shane. I agree with everything Noah said, but I'm curious to hear what you both think about why Ireland might not "feel" like a wealthy country to those of us who live here?
The economy has grown at a faster level than the infrastructure and the state generally could cope with. Its a good problem to have and with continuing sensible public policies it should be solved i the medium term, if the country continues on the right bpath.
100% - I'm far from advocating the other direction. But is infrastructural deficit the only challenge? And if so are we addressing it at enough pace to steer off more populist politics as the UK and UK have seen?
I think the answer to your question requires a deep consideration of human cognitive biases, to be honest, and is probably worthy of a blog in it's own right. We need to think about time horizons and geographical horizons. If you remember the 1980s, as I do, your memory is dominated by unemployment, inflation, and interest rates in the high teens, coupled with staggering levels of emigration (of which I became one at the very tail end of the 80s). Moreover health outcomes and longevity were both poor, and our cities were shrouded in coal-fire smog. You might even remember lettuce sandwiches (I jest, although those were a thing). Across that time, Ireland has become very rich indeed: longevity, full employment, etc., Comparatively speaking: travel around Europe and other places. Ireland does feel well off. You don't have to go far in other countries to encounter tatty town centres and transport infrastructure that is not in good condition.
Pushing the thought further: we humans tend to look up, not down. I'm sure your average millionaire feels poor compared to Jeff Bezos, who probably feels poor in relation to, idk, that twitter guy, or whoever. This is the 'hedonic treadmill', or eaten bread is soon forgotten. Fundamentally, feeling wealthy needs a comparison: if you look to countries with half or a third of our GNI* per capita we will feel wealthy. If you look at others further up, maybe not so much. But who spends their life making such comparisons?
I also have the sense that when we travel to continental Europe, we lack the grand buildings of empire - wander about Paris a bit, and this really comes home. But go outside the Peripherique and see what you think - there are clearly disparities. We had no money to invest in our infrastructure for more than half a century - and we're still catching up.
There is an ironic upside to that: a motorway through the centre of Dublin demolishing the Georgian core all the way to Irishtown was seriously mooted - hence the long-standing problems of Pearse St. We would have made terrible mistakes - and we did make some for sure (Woodquay?).
(I hate to be that guy, but I have written quite a bit about cognitive biases, NIMBYism and all that good stuff on my substack..).
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.
Poverty in Ireland has consistently declined.
While Irish poverty is the lowest in the EU, it's offset by many social welfare programs, and while this is great, it's only 13% of the population, it doesn't mean, based on your comment, that this is "OK". The issue is that while the poorest have trouble renting homes or even rooms, the same can be said for those who would be considered living above the poverty line or even "middle class". Ireland's housing shortage, while it disproportionately impacts the poor, has driven many younger men and women to emigrate or stay in their family homes longer, even if they have good jobs, or are attending university or technical colleges, because they can't afford to live near their work or schools. Young married couples can't afford starter homes, let alone rent larger apartments in the country's larger cities.
I live in a third world country and I never feel a risk of being mugged or killed.
Maybe you need to update your priors about what life is like in a third world country.
Also, Ireland had 44 murders across the whole country last year and 52% of them were from domestic violence. I doubt the risk of murder in northern central Dublin is especially high while walking around.
This is not entirely correct. I regularly visit the north inner city of Dublin. Yes, it is a deprived area, such as there are in most cities in the world, but it is not especially dangerous. Anyone who has visited a third world city will not be confused as to which is the most deprived.
They are all in social housing and pay peanuts - some don’t pay at all. They tried moving them out (Tallaght, Ballymun) and that wasn’t great so now people who live in wealthy southside neighbourhoods (or anywhere in Dublin) are happy for them to stay there and not get moved out into their neighbourhoods
While I don’t want to deny there are some challenges in Ireland, you’re response seems entirely anecdotal which makes it hard to measure. Most data we have shows Ireland doing quite well (tho there is work to be done on housing). And every city has its dodgy parts? That is not a uniquely Ireland issue
Dublin isn't NYC, or London (a filthy dive full of useless Brits pre- and post-Brexit), but the surge in homelessness due to the housing crisis and increased drug use has led to increase violence, with one U.S. tourist actually being murdered last summer, something incredibly rare in the country overall.
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.
Re your point that you weren’t rich enough for corruption to be lucrative, that doesn’t seem to stop people in many countries poorer than Ireland was. Think Haiti, Nicaragua, Myanmar- none of them have a lot of mineral wealth, but they rank near the bottom of the world in perceived corruption.
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 US however, abandoned 'capacity building' , one of the 3 areas mentioned to strengthen a country. The US is good at liberalization- giving every gain to Richy Rich and the Corporations and all costs to 'we, the people' over the past 50 years. Which doubles down on bad effects when so abandoned. Industrial policy is currently being challenged, as the corporate giveaways have gone so far out of balance - thank goodness for union building.
The deficit is the responsibility of the Republicans, but they don't take responsibility or accountability. They live in fantasies and attacks. Every Republican President digs tge hole & the dems work to climb out while being criticized with lies. Last balanced US budget was Clinton.
The US has the best universities in the world: perhaps a hundred of them. That’s capacity building.
The Inflation Reduction Act and the CHiPS Act are both widespread, capacity-building efforts.
In a sense NIMBY zoning reduces capacity. Minneapolis has shown that rezoning solves that problem. And the California legislature keeps pecking away at this constraint. Eventually we will get through it.
I have heard that high-tech and skilled immigration is still stalled, post Trump and post-pandemic. I don’t know if that needs to be changed by congress, or if Biden can do it. Seems like it should be a bipartisan issue for everyone but isolationist Trumpies.
Not capacity building in the sense Noah wrote of- care for the total citizen population. Further, the best University options are open to the wealthy worldwide who can pay, while the vast majority of US institutions have been starved of funding as have tech centers, other than the god worshipped computer. Ask any professors who are paid by the class , work 3-4 jobs to barely survive.
Immigrants are economic primarily and not screened for skill , education in the vastly overwhelmed US immigration evaluation centers. Child & cheap labor taking resources for months from US citizens when unable to get the lousy job that is not sustainable for US citizens. How will they not become a burden? I know of Afghans living in Vermont, the mother pregnant watching tv, more kids, unlimited kids, no sense of US contribute but feeling ‘owed’ , the father ‘injured’ at work after 6 months refugee lappers paying the rent, again they can’t pay their own rent. Afghans who played both sides against the middle for 20 years.
The excess of professors for every university job = excess capacity in education.
California subsidizes in-state tuition at UCs for residents whose families make less than $88K per year. Other states can potentially do this as well with higher taxation on the wealthy.
What US institutions and tech centers are you referring to that have been starved? And are you including the trillion dollar support the IRA & CHIPS Act are now funding?
According to Noah’s definition, the IRA and Chips Act are industrial policy & liberalization. You don’t seem to acknowledge the third leg of the stool, capacity building of the people’s lives. Current republicans want to throw out SS, Medicare, Medicaid, women’s bodily autonomy, even further.
Vermont is defunding aspects of its public universities, and the ‘glut’ of professors has much to do with the corporatization of universities, as with healthcare. Less and less for the sick and students. More & more for the powerful few . The Oligarchal capitalization of all resources- all formerly public good. Westerners using federal public lands & paying nothing, even denigrating local resources.
One wrinkle in the capacity building for the US is that it varies by state, which have a whole set of their own policies
Certainly. Blue states have lots of regulations restricting permitting. Red states are getting most of the immediate benefits of these capacity-building projects.
But with the lowered costs and benefits to health and civilization, renewable energy, semiconductors and EVs will ultimately benefit everyone.
https://www.bloomberg.com/graphics/2023-red-states-will-reap-the-biggest-rewards-from-biden-s-climate-package/
Although Republicans suck, Democrats spending has increased the deficit significantly.
According to the U.S. Treasury Fiscal Data1, the budget deficits for the last five fiscal years are:
Fiscal Year Deficit (in trillions)
2023 $1.70
2022 $3.13
2021 $3.13
2020 $0.98
2019 $0.78
These are from Trumpty. Citizens United has poisoned all US political wells now, thanks to the supreme jesters.
"The Inflation Reduction Act is building future capacity, so we don’t want to reduce that." We HOPE that is the case. Let's see what the return on that capacity is.
Is it ever possible to “build capacity” and know the outcome? Uncertainty about the future seems like it’s inherent in the action.
Nonetheless, we saw how dependent our economy was on semiconductors a few years ago. And if China constrains Taiwan’s supply to the rest of the world, it will be very painful. So CHIPS was a smart investment — what remains now is largely how well it gets implemented.
And renewable energy has proven itself to be the cheapest source of energy in history, partly because it can be deployed so quickly.
https://www.bbc.com/news/science-environment-62892013
https://www.nytimes.com/2023/01/31/climate/renewable-energy-transition.html
So increasing those should lower energy costs for every sector of the economy, which again is a smart investment.
And EVs are far more energy efficient than combustion vehicles, so we will make good use of the renewable electricity we will generate — not only reducing pollution, which could preserve our civilization from imminent ruin and will certainly reduce health care costs; but also decoupling our economy from the oil market and undemocratic governments.
https://www.motortrend.com/news/evs-more-efficient-than-internal-combustion-engines/
The US and other countries that want to increase GDP should lower their corporate income tax rates, since they are inversely correlated.
https://taxfoundation.org/research/all/state/income-taxes-affect-economy/
Corporate tax or income tax?
Also, of course the “Tax Foundation” will say taxes need to be lower. Please find a less-biased source.
To prevent World War Three.
If we let our allies like Israel and Taiwan get attacked with impunity, the rest of our allies will think our agreements with them are meaningless -- as will their enemies.
Russia’s struggle in Ukraine demonstrates how hard it is to take over another country now by force, particularly when it has Western allies. Hence Sweden and Finland have now joined NATO.
Noah has written about his concerns with China’s threats to Taiwan and the US military capacity:
https://open.substack.com/pub/noahpinion/p/were-not-ready-for-the-big-one?r=pskf5&utm_medium=ios&utm_campaign=post
International trade and peace have been the result of “Pax Americana”:
https://www.noahpinion.blog/p/youre-not-going-to-like-what-comes
Just get rid of Israel as an ally. Easy
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.
This is not correct. A brief visit to any of the pharmaceutical clusters would easily demonstrate how much physical activity there is in this sector in Ireland. Likewise in IT, with Intel's huge chip manufacturing facility, etc.
The physical activity is also due to Ireland being a tax haven. To avoid US subpart F income (which would tax the income shifted to Ireland in the US if there were not substantial activities in Ireland), these companies put some minor manufacturing in Ireland (it also helps persuade the Irish tax authorities to write letters approving of the tax treatment). Consequently, while Ireland does benefit from the manufacturing fig leaf for tax, it is not a replicable model--unless everywhere is going to be a tax haven.
But somehow the wages remain low. Obviously Ireland's economy has improved, and not all industry is profit centre only, but it's population is merely as wealthy as that of the UK.
Eire. I think you mean Éire. The former word means 'rise'.
How lost this comment section would be without you.
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.
I live in Ireland and that guy is not correct.
Then average should be very different from median compared to such difference in other countries. Should be relatively easy to check.
That's kind of the trouble. Average what vs median what? As Noah points out, Ireland doesn't use GDP since it is so distorted by the tax haven income which makes GDP per capita useless.
Average/median wages? Average/median household earnings per capita? Either should be virtually undistorted by the tax haven thing.