Summary
In this new and expanded edition, more recently written Chapters take up the themes of the earlier ones, but put more emphasis on innovation and history. One of them, «Understanding Britain’s «Brexit» Parliament,» provides an essential clue to the problems with the Irish voting system identified earlier. «The History group» contains an account of the scarcely known but crucial part Ireland played in two scientific revolutions. It also reveals how the law of Limited Liability on which every Corporation in the world depends, had its origin in Dublin’s eighteenth-century independent Parliament.
Much of the time intervening between the two editions was devoted to the research and writing of the book, How Capitalism Destroyed Itself: Technology Displaced by Financial Innovation. These Irish articles are in fact a running commentary on the evolution of this global process in one country.
Excerpt
Table Of Contents
- Cover
- Title
- Copyright
- About the author
- About the book
- This eBook can be cited
- Contents
- Preface to the New Edition
- Acknowledgements
- Democracy and Governance
- Chapter 1 Understanding Democracy Through Britain’s ‘Brexit’ Parliament
- Chapter 2 ‘Interrogating Irish Policies’ Revisited
- Chapter 3 The Lemmings of Democracy
- Chapter 4 Belief in the Superior Wisdom of the State
- Chapter 5 The Electoral System Is Still Crucial
- Business and the Economy
- Chapter 6 Why Ireland Failed to Keep Up
- Chapter 7 Need the Irish Economic Experiment Fail?
- Chapter 8 Nice Rents If You Can Get Them
- Chapter 9 Entrepreneurship or Rent-Seeking?
- Bureaucracy
- Chapter 10 What Can We Do about the Civil Service?
- Chapter 11 ‘Systemic Corporate Failure of Public Administration’: Reflections on the Travers Report
- Chapter 12 ‘Marking the Card’ of an Overseas Applicant for the Post of Garda Commissioner
- Chapter 13 Why Did Ireland Spend $1 Million Preventing Research into Lusitania?
- Chapter 14 Why Was There No Whistleblower in the HSE?
- Chapter 15 The Importance of Laws for Whistleblowing
- Reform Proposals
- Chapter 16 Industrial Policy: Responding to Covid 19
- Chapter 17 An Alternative Agenda for Public Service Reform
- Chapter 18 Innovation: New Property Rights Are Better than State Involvement
- Chapter 19 Transforming the Conditions for Indigenous Innovation
- Chapter 20 A Patent System to Suit Ireland?
- Chapter 21 The Financing of New Businesses
- History
- Chapter 22 The Evolution of Limited Liability from Its Dublin Origin
- Chapter 23 Gladstone’s Irish Lesson for the EU
- Chapter 24 Chance, Genes and Antibiotics: Irish Involvement in Two Scientific Revolutions
- Bibliography
- Index
Preface to the New Edition
More than a decade ago, Dublin University Press published a collection of my writings on Irish topics. This was intended only for a local readership, but surprisingly found its way to many foreign countries. For this reason, this new edition, also containing articles published since then, is being co-published with Peter Lang, a firm whose focus is specifically international.
There are several reasons for incorporating material from the earlier edition in this one. Firstly, all of its copies were sold, leaving some unsatisfied demand. Secondly, the earlier articles assembled elements of contemporary Irish history that are otherwise not readily available. Thirdly, a principle behind all the writing has been that the only test of sound theory, in the social as well as the hard sciences, is the power to predict. Readers of this new edition will be able to evaluate the newer articles in terms of the extent to which the predictions in the earlier ones have or have not been fulfilled.
Ireland in the context of capitalist decline
Much of the time intervening between the two editions was devoted to the research and writing of my book, How Capitalism Destroyed Itself. That this destruction would happen was forecast by the Austrian economist Joseph Schumpeter as long ago as 1942 in his well-known Capitalism, Socialism and Democracy. The objective of my own book is to explain why and how this happened, summed up in its sub-title, Technology Displaced by Financial Innovation.
Covid vindication
Unhappily, Covid 19 is worldwide proof of the accuracy of that summing up. From his unique experience in combatting diseases in Africa, Bill Gates forecast as early as 2015 that something like it was inevitable, but no preparations were made anywhere. For reasons which the book explains, creative energy and brainpower that could have contributed to this had been increasingly attracted away from technologies (including pharmaceutical) into finance and software. Ireland’s vaunted strength in multinational pharmaceutical firms is at least as much to do with their tax planning as to the claimed availability of a skilled workforce.
Schumpeter’s forecast had been that
a socialist form of society will inevitably emerge from an equally inevitable decomposition of capitalist society … there is inherent in the capitalist system a tendency towards self-destruction … it not only destroys its own institutional framework but it also creates the conditions for another. (Capitalism, Socialism and Democracy 1997 [1942]: 152).
In retrospect, I now see that what I have had to say about Irish matters has been a running commentary on the development of this process in one country. The British Empire was a capitalist phenomenon, and its disintegration from World War I onwards was started by Irish independence. In fact, one of the reasons for resisting that independence was the belief that ‘if Ireland goes, India will follow’, as did indeed happen.
Ireland actually reflects the whole process of capitalist growth and decline. An essential element in its growth was the concept of Limited Liability, which is the basis of the modern corporation. The very first time this can be found in law, anywhere in the world, is in the 1782 Anonymous Investors Act of the old Irish Parliament, and its evolution is discussed in Chapter 22 below. Capitalism’s decline phase is well illustrated by the progressive replacement of individual initiatives by State action in Ireland.
Revolutions and property rights
It is probably inevitable that violent revolution results in States which are inherently biased towards intervention, or socialism. This is because the revolutions which bring them into being are reacting to the established property rights system.
This bias was strongly tempered in independent Ireland by Church influence for which private property was an article of dogma, as discussed below. Unfortunately, that dogma did not include any possibility that the laws of property could come under the control of those who would benefit from them, and cease to reflect the public good.
As this happened in Ireland, direct intervention in the economy increased, limited mainly only by the need for such property rights as would encourage foreign direct investment. And it hardly needs to be stressed, for Ireland as for other countries, that the Covid 19 pandemic has given a major opportunity to those who want to boost the growth of the State.
Plan of the book
The chapters which follow are grouped into five sections. The first of these deals with how the country is governed, and the second focuses on economic aspects of this. Movement from capitalism to socialism inevitably increases the importance of a country’s bureaucracy, so the third section includes articles dealing with Irish public services.
On the principle that a writer ought not complain without, at the same time, being able to offer a suggestion for making things better, the fourth group is made up of proposals for reform. The final section, ‘History’, includes articles on aspects of Ireland that are otherwise little known, including how both the antibiotic and the DNA revolutions had important origins here.
The time-span over which the chapters in this collection were published inevitably means that some of their contemporary references have ←xiii | xiv→been overtaken by events. However, since the broad trajectory of Irish policy has remained consistent throughout the period of their publication, these evaluations of it are still relevant. Equally inevitably, there is a good deal of repetition in the articles, since they were written for different readerships. Neither has anything been done about this, on the ground that what is repeated is generally the most important point that was sought to be made.
And all these points support the main argument, which is:
If we don’t get the laws of property right, intervention will not work; to the extent that we can get them right, intervention is unnecessary.
Acknowledgements
Most of these chapters originally appeared in Studies, three were in books, two in History Ireland and one each in The Economic and Social Review, Administration, The Irish Banking Review and the Irish Times. I am grateful to their editors, not only for giving me a platform, but also for suggestions which invariably improved what I submitted to them.
Chapter 1
Understanding Democracy Through Britain’s ‘Brexit’ Parliament
English Parliaments have been known by many names, including ‘Reformation’, ‘Cavalier’, ‘Long’ and1 ‘Rump’. The one which has recently been replaced will surely have the title ‘Brexit’, because it was so dominated by the issue of leaving the European Union. Its failure to settle this reflects a mismatch between direct democracy and representative democracy, which can be understood through a concept developed by Garret Hardin, ‘The Tragedy of the Commons’.
This must surely be the most influential social science article ever written by a biologist. In it, he used the analogy of a pasture open to all to describe the effect of self-interest in any situation where there is free access to a resource. Such access becomes disastrous as soon as the limits of the resource are reached, because
The rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another; and another … But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.2 (Emphasis added.)
Contemporary and vivid confirmation of Hardin’s ‘herdsman’ observation can be found in what happened to the Newfoundland cod fishery. This was once the most prolific fishery in the world, but it was a ‘commons’, as there was free access to it. Consequently, it paid every fishing ←3 | 4→firm, in its own interest, to invest in the biggest boats and the most advanced gear until it was completely fished out.
Universal Suffrage makes government a ‘commons’
The relevance of Hardin’s insight to economics is immediately evident, but its application to politics has been overlooked. We have not noticed that the resource of government becomes a commons once universal suffrage gives everyone access to it. This puts it in danger of being ruined by voters’ self-interest, when the law of the jungle must prevail. Such a result can in fact be seen in many ex-colonial countries which were established on the basis of one-person-one-vote. These moved quickly to some form of autocracy as parliamentary democracy failed them. Their experience illustrates why a political commons cannot work when the number of voters is large.
Some situations where access to a commons does not result in Hardin’s tragedy show why numbers are important. In the Swiss Alps, farmers move their flocks in summer to common pastures, and in the Yukon, miners worked out ways of peaceful sharing of access to veins of gold before any system of legally registering claims was established. In each case the numbers were small enough for mutual knowledge and trust to act as a counterbalance to individual self-interest.
Monastic influence
Some form of counterbalance is found in every case where any form of democracy has worked. In Greece’s cities, the numbers were small (there was of course no question of giving the vote to slaves) and the counterbalance to self-interest was the distribution of public offices by lot. In many forms of assembly democracy, the counterweight was the power of ←4 | 5→monarchs, whose support from religion helped their wishes to be seen as the public good. This is illustrated in Europe by the transition from barbarian leader to anointed king. In fact, assemblies or ‘parlements’ came into being there through nobles asserting their power against the absolute power of a king, as in Magna Carta.
This is the first time that a basic principle of democracy, that Government depends upon the consent of the governed, can be seen in the secular world, but monasticism had prepared the ground for it. Everyone in medieval Europe could see all around them places where people were living under an elected Abbot. The explicit provision in their Rule for this made it clear that his authority comes from his monks.3 In practice, of course, many Abbeys were controlled by powerful people who appointed the Abbot instead, but the ideal proved to be enduring.4
Representative democracy
This understanding of the nature of democracy eventually contributed to the most effective of all counterweights to self-interest when voting numbers are large. This is representative democracy, and it was one of the great achievements of Western culture. In this, voters choose individuals who are intended to articulate the public good in governing assemblies, to balance a multitude of individual and often conflicting interests. The classic expression of how this is meant to work can be found in Edmund Burke’s famous warning to those who had elected him in Bristol on 3 November 1774:
←5 | 6→Your representative owes you, not his industry only, but his judgement; and he betrays, instead of serving you, if he sacrifices it to your opinion (1774).5
This system was always imperfect to the extent that Members of Parliament were unable to escape the influence of interests. Burke himself learned this from his failure to prevent England from trying to keep the American colonies by force. A century later, Gladstone was clearly acting in the public interest of the United Kingdom by advocating Home Rule for Ireland, but private interests with a majority in Parliament defeated him. Nonetheless, in spite of these and many other failures, representative democracy deserved Winston Churchill’s observation that ‘it is the worst form of government except all those other forms that have been tried from time to time’.
Electoral systems
Since for democracy to work, there has to be a counterbalance to aspirations, another point which has to be considered is the weighting to be given to each vote. Switzerland can operate a system of direct democracy, including settling issues such as the length of the runways at Geneva airport, by referenda, because it has so much individual property, which provides this function. The franchise is attached to this, and like slaves in ancient Greece, foreigners are denied the right to vote.
Where everyone has this right, then whoever gets to govern depends upon the electoral system. The ‘first past the post’ arrangement is widely criticised for being unfair, but it has the great advantage of distancing the government from the aspirations of the electorate, and so could enable it (if it was not under the control of interests) to legislate for these aspirations as far as it is realistic to do so. The Electoral College provision in the United States Constitution was intended by the Founding Fathers to perform much the same role.
Systems of proportional representation, on the other hand, are manifestly ‘fairer,’ but correspondingly put the governments which emerge from them under more pressure to legislate in ways that reflect the electorate’s aspirations, however hard or even impossible it may be to achieve these dreams in the real world. A government which combined efficiency with ←6 | 7→fairer representation is therefore only possible to the extent that there are factors other than votes to counterbalance pressures from voters. Needless to say, we cannot expect such other factors to be provided by interests concerned to obtain laws to suit themselves.
Britain provides a useful illustration of this. The UK Independence Party (UKIP) articulated the aspirations of that section of the British electorate which most blamed the EU for the disabilities it experienced. Consequently, it wins significantly more seats in the European Parliament under list-type proportional representation which applies to European Union elections, than it does in the House of Commons under the ‘first past the post’ system.
Details
- Pages
- XVI, 350
- Year
- 2021
- ISBN (PDF)
- 9781800793507
- ISBN (ePUB)
- 9781800793514
- ISBN (MOBI)
- 9781800793521
- ISBN (Softcover)
- 9781800793491
- DOI
- 10.3726/b18132
- DOI
- 10.3726/b18204
- Language
- English
- Publication date
- 2021 (August)
- Published
- Oxford, Bern, Berlin, Bruxelles, New York, Wien, 2021. XVI, 350 pp.
