The Magazine

Crock of Gold

How the Emerald Isle became the Celtic Tiger.

Jun 9, 2008, Vol. 13, No. 37 • By EDWARD SHORT
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Luck and the Irish

A Brief History of Change from 1970

by R.F. Foster

Oxford, 227 pp., $30

When the Irish abandoned their parliament in 1800 and accepted the Act of Union with Great Britain, in return for bribes that were extravagant even by the generous standards of Georgian venality (each parliamentarian received £7,000, or what today would be £364,197.63), a turning point was reached in Irish history that would profoundly affect the future course of the country.

The Act of Union paved the way for systemic English misrule, famine, Fenianism, the unbridgeable divide between North and South, and the cult of sectarian violence that has only recently begun to recede. In Luck and the Irish, Roy Foster looks at another Irish turning point: the economic boom of the last quarter century, which has brought changes to Ireland's religious, political, and cultural life comparable to those wrought by the Union.

Professor of history at Hertford College, Oxford, and the author of Modern Ireland 1600-1972, Paddy and Mr. Punch, and a magisterial two-volume biography of William Butler Yeats, Foster comes to his analysis with impressive credentials. Despite the fact that academic historians do not as a rule shine when tackling contemporary history--consider Linda Colley on Hillary Clinton or Niall Ferguson on what he insists on calling the American empire--Foster treats his vexed subject with judiciousness and panache. Readers interested in Ireland or economic, political, and social history will find Luck and the Irish an entertaining, provocative study.

An English equities trader christened the "Celtic Tiger" in 1994 to liken the surging Irish economy to the "East Asian Tigers"--South Korea, Singapore, Hong Kong, Taiwan--during their period of rapid growth in the 1980s. The extent of the Irish boom has been impressive. In the decade after 1995, Foster points out, Ireland's output increased by 350 percent, personal disposable income doubled, exports increased fivefold, trade surpluses mounted into the billions, employment skyrocketed, and the number of immigrants soared.

At the beginning of the 1990s there were fewer than 50 immigrants applying for asylum in Ireland; by 2001 the number had reached 11,000. By 2001, immigrants from Latvia, Lithuania, Poland, the Philippines, and Romania were pouring into the country and 36,000 work permits were issued. The boom they helped to sustain made many Irishmen rich as Croesus. Terence Brown vividly substantiates this in his recent survey, Ireland: A Social and Cultural History 1922-2001: In 1995 Irish consumers spent £23 billion on goods and services, in 1999, £34 billion, and in 2000, £40 billion.

What caused this unprecedented prosperity?

Foster identifies two schools of thought regarding the Tiger's birth: One of "Boosters" and the other of "Begrudgers." The Irish historian Declan Kiberd, an outspoken Booster, claims that the Celtic Tiger sprang to life when the Irish rediscovered the ideals of the Gaelic revival of the late 19th and 20th centuries, and effectively combined "the sense of local pride with the idea of self help." For the Begrudgers, the boom was largely the result of American firms--among them Hewlett-Packard, Dell, and Intel--going into Cathleen Ni Houlihan's backyard and exploiting her talented labor for the gain of American stockholders.

There is more blather than reliable analysis in these readings. Yes, Irish initiative and American firms contributed, but the factors that most drove the boom were low taxation, pro-business regulatory policies, and a young, tech-savvy workforce. For many -multinationals the decision to do business in Ireland was made easier still by generous incentives from the Industrial Development Authority. EU membership was also helpful, giving the country lucrative access to markets that it had previously researched only through the United Kingdom, and pumping huge subsidies and investment capital into the Irish economy.

In recent years, as economic growth has slowed, the Celtic Tiger has lost much of its ferocity. Rising wages and inflation, poor infrastructure and the addition of new members to the EU since 2004 have all contributed to a blunting of Ireland's competitive edge. In addition, low fertility rates, which had initially buoyed the economy, may soon sink it as the population (a third of which is now aged 25-44) begins to grey. But this is a still-unfolding story; what Foster concentrates on is how the boom has changed the character of Irish society.