Inevitable fallacies and false assumptions about Ireland fail to persuade

Inevitable fallacies and false assumptions about Ireland fail to persuade

by ThinkScotland
article from Monday 31, July, 2017

BOOK REVIEW: Kevin Meagher, A United Ireland: why unification is inevitable and how it will come about  (Biteback, London, 2016)

While Kevin Meagher has produced a thought provoking, well-written book it is ultimately flawed; the only thing ‘inevitable’ about this book is its failure to persuade

The failure of ‘A united Ireland’ to persuade stems from a selective use of evidence and an overreliance on implicit assumptions and counterfactuals (that often don’t hold up to even the most cursory scrutiny).

The book’s title rests on the notion of historical inevitability. Of course as philosophers since Karl Popper have argued, the assumption that history follows a predictable and inevitable course to a clearly defined destination (in the manner of the Belfast to Dublin railway line) is not one that serious scholars of economics or history follow.

The fact that Meagher selectively draws on a discredited philosophical idea (historical inevitability) should not surprise the discerning reader. Meagher in the introduction to A United Ireland claims that the book is not a historical survey: yet he simultaneously devotes an entire chapter of A United Ireland to such a survey! Consistency is thus not Meagher’s rhetorical forte.

Nor it appears is visiting the history section of his local library one of his strengths.

An unwary reader of Meagher’s book would have no reason to believe that a large ‘revisionist’ (for that read ‘objective’) mainstream within universities on both sides of the Irish border reject the nationalistic account of history that he peddles. There is alas no bibliography in the book, but his claims on the motivations and consequences of the Penal laws reflect a literature that predates Maureen Wall’s work in the 1960s. Likewise his glib claims about the original Ulster Volunteer Force (UVF) suggest he has not read Tim Bowman’s more recent work on the topic.

Meagher acknowledges that politics is the art of the possible rather than the perfect (p.35); yet he nowhere provides a feasible historical alternative to the Government of Ireland Act, 1920. The historical foundations of Meagher’s analysis look a whole lot shallower than Meagher assumes.

In terms of the economic component of Meagher’s argument, it was gratifying to this reviewer that (unlike some nationalistic inclined political commentators) he accepts the validity of the £9bn annual figure for the Northern Irish subvention. Such fiscal transfers are necessary within any multi region state; in the simplest (Kaldor) model of fiscal co-insurance, such a transfer represents the transfer of taxation revenue from the most to least prosperous regions. This rationale after all is why within the Republic of Ireland, Greater Dublin can be said to ‘subsidise’ the Irish west. However, in reality fiscal coinsurance is again more complex than Meagher presents.

So, for example, in 2007-8 London actually got more public expenditure (minus social protection and agriculture) per head than Northern Ireland, while Wales did rather poorly compared to richer Scotland. In short, the need for public infrastructure in London explains why it needed ‘subsidised’; of course without such a ‘subsidy’ the income of the UK as a whole would be lower.

UK regional (labour, product, capital) markets and public finances are interdependent. Hence for example a Malone Road resident will pay tax revenue into a pot that is spent in North Kensington. That Northern Ireland has since 1938 been a net recipient of such fiscal transfers reflects its lower productivity (and hence weaker tax revenue base) than Great Britain.

The academic consensus is that this persistent problem has very little to do with the constitutional issue (as such a gap long predated partition) and that until the 1990s Northern Irish output per head exceeded the Republic of Ireland. Meagher appears to be either unaware of this academic consensus or happy enough to ignore it.

Meagher’s treatment of the possible economic implications of Irish reunification rests on a number of implicit assumptions and, again, highly selective use of evidence. Meagher draws on the assumption-laden Hübner study as the bedrock of his argument that unification would boost output over an eight-year period. There is not enough space to cover all the modelling problems in the Hübner report (problems that explain why, in this editor’s view, it will not appear in any major academic journal!).

It is sufficient to note, firstly, that the same methodology Hübner used would show a boost to Irish output if it re-joined the UK!  Secondly, high tech inward investment has clustered disproportionately in Dublin and Wicklow, so assuming that unification would inevitably lead to a northward drift rests on assumptions not borne out in reality.

The three relevant academic literatures on addressing the potential economic consequences of Irish reunification are not referred to by Meagher. The earliest theoretical literature on the economics of market integration and disintegration, associated with such luminaries as Hayek and Meade, rejects the idea that economies operate as Meagher assumes. The literature on constitutional economics and optimal country size that has developed since the 1990s provides a second branch. The even more recent literature on long-run economic development on the island of Ireland and the lessons of German unification provides a third. Just to draw on the third literature, work based on the East German experience (and modelling of the two Koreas) suggests that total factor productivity gaps do not close after unifications.

Even after a quarter-century, former East Germany continues to receive a fiscal transfer on the order of 15 per cent of GDP. In other words, contra the rhetoric within A United Ireland changing borders by itself does not tend to close the productivity gaps which explain why fiscal coinsurance is necessary regardless of the constitutional issue. Moreover, the empirical evidence on partition suggests that it cannot explain Ireland’s economic past, present or future in the way that Meagher assumes.

Kevin O’Rourke, Professor of Economic History at Oxford, has in a recent (2016) paper observed that the economic performance of independent Ireland since the 1920s was driven by similar processes to other independent states. Indeed O’Rourke suggests that relative growth performance can be explained by comparing initial per capita income levels in 1926 with the outcomes determined over the next 75 years. There was a very clear negative relationship. Initially poor countries, such as Portugal, grew much more rapidly than initially rich countries such as Switzerland. Independent Ireland was not unusual.

In other words, O’Rourke’s analysis by implication does not suggest that historical factors unique to Ireland, including partition, were a binding constraint on its growth performance. Instead, poorer economies (circa 1920s) have tended to converge on richer ones, mostly as the result of importing best practice technological and organisational forms already adopted by richer states. It was this ability to ‘leapfrog’ the path of economic development, rather than the loss of any fourth green field, which is crucial in explaining Ireland’s economic development. Furthermore, Garrett FitzGerald, who prior to a political career was an economist, stated that the institutional advantages of Ireland at independence was such that the inheritance of British courts and civil service would have tended to boost (rather than diminish) Ireland’s economic potential since the 1920s.

If partition was an economic scar, it was a barely visible one.

Meagher stated that he wants the book to be judged as a piece of ‘extended political argument’ judged then rhetorically we’re easily able to conclude that A United Ireland fails to persuade. Classical rhetoric has three parts: invention, arrangement and style. Invention is the framing of arguments worth listening to; it is concerned with the content of argument. Arrangement is concerned with the order and/or logic of the argument within a piece of writing. Style is easier to teach as this third component involves the fluency and tone of the argument. Meagher’s journalistic style is much the strongest part of his rhetoric. His arrangement, despite his selectivity and inconsistency, undoubtedly keeps the reader engaged; but it is the invention within the book that is inadequate. Meagher needed to spend more time in the library before engaging in this rhetorical work.

This article first appeared in the blog thisunion.co.uk and was written by its editor.

References in this piece include:

• Burda, Michael and Weder, Mark, “The Economics of German Unification after Twenty-Five years: Lessons for Korea”, Economic Risk Berlin, SFB 649 Discussion Paper (2017).

• O’Rourke Kevin Hjortshøj, “Independent Ireland in Comparative Perspective”, University of Oxford, Discussion Papers in Economic & Social History, Number 150, December (2016).

• McLean, I., Lodge, G., and K. Schmuecker, “Fair Shares? Barnett and the Politics of Public Expenditure”, IPPR, London (2008).

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