RESHORE #2 – National Economics and Industrial Autonomy, an Interview with Peter Ryan

In this newsletter I wanted to highlight the work of Peter Ryan, who recently completed a Masters thesis on the economic thought of key Irish nationalists in the early 20th century anti-imperialist independence movement. I grew up during the Celtic Tiger, and started university right when the housing bubble burst, so Peter’s project of envisioning a different economic path for Ireland is something quite close to my heart.

In collaboration with Angela Nagle, he has produced a ’10 Point National Development Plan’ deviating from current policy which sees Irish sovereignty given up to serve the interests of international capital. While we may differ on specifics, most importantly, for me, this is an imaginative starting point for rethinking what is possible when we discard flawed assumptions around ‘development’ and economic possibility.

In the following extract from a longer conversation, we discussed Peter’s interest in Friedrich List and national economics, and the relevance this might hold for an open economy like Ireland.

TS: So, before getting to the 10-point-plan specifically, I’d like to start by exploring your interest in national economics. What is ‘nationalist economics’ and what drives your interest in it?

PR: There is a blind spot when we talk about economics, in that it often starts from these scientific theories that exist in this Platonic-ideal realm. From those, we’re supposedly just extracting this impartial knowledge and inferring things from it. But as I started to go back in history and explore the intellectual history of economic ideas, I realised you can’t really separate the people, the places, and the relationships between geopolitics and the economic theories that come forth from that. So when we look at classical economics, let’s say, we have Adam Smith’s Wealth of Nations as an avatar. But the actual work becomes synonymous with English imperial ways of setting up the economy, of the empire, and what that means is you have England as the manufacturing workshop of the world and then every other colony or peripheral country becomes both a consumer market for those manufactured goods, but also an extraction market for raw materials like cotton or something else. So on the peripheries you’re extracting stuff out of the ground, and that is your comparative advantage – moving onto David Ricardo here, of course. These theories start to gel with a lot of contemporary English policymakers and so this becomes the early 19th century way of doing economics. That comes with its agitations and backlashes, of course: people feel there’s something not quite right about how this is set up, and the main alternative that we’re presented is Marx, who comes along in the 1840s and 50s. So now we’re presented with this sort of dialectic between the free trade economic gospel and Marxism, which is talking about the problems of capitalism.

But I have a different tradition I look to – this thing called ‘nationalist economics’. This is actually in some ways an older tradition. Key here is the work of Friedrich List, a German-American economist who writes about the ‘national system’ of political economy. This becomes the standard in discussing ideas away from individualism and free trade liberalism, where there’s often this global landscape identification but no discussion of the national entity. For List, it’s not that the individual or the global don’t exist, but you’re just missing this crucial piece in the hierarchy of how the system gets organized. So he goes on to say that the nation is the real primary unit of analysis and so you need to have national policies and protectionism, you need to have industry domesticated and have reliable supply chains, rather than the sort of elusive comparative advantage which really is more of an extractive setup.

And here is where we can fast forward a little bit with contemporary economists like Ha-Joon Chang, who wrote a book called Kicking Away the Ladder that sort of resurrected Friedrich List around 2003. His title paraphrases List and the book explores how advanced countries like England got to the top of the supply chain first with manufacturing, and then created sort of a doctrine of economics that was kicking away the ladder of other less developed countries from getting there. Because that would create competition for manufactured goods, but also it would destabilize the hegemony of the English empire. So now you put this all together and you start to see that really ‘national economics’ is also anti-imperialist economics because it prioritizes the nation and getting out of that empire dynamic.

TS: So let’s link that back to contemporary Ireland. What do you think national economics can bring to the Irish case?

PR: So let’s compare Ireland with South Korea, which has developed through industrialisation and the sort of policies I have been advocating. There’s this thing that gets thrown around about Ireland that we’re too small and don’t have natural resources, which I think is nonsense. Anyway, the moniker ‘the Celtic Tiger’ implies Ireland grew miraculously in a very short period of time, like all the East Asian Tiger economies. But Ireland’s nothing like them, because those economies were built on manufacturing and industrialization and some other key nationalist economic policies. Since independence, Ireland experimented a little bit with some of those policies, even up to the 80s, but ever since then it’s really been hollowed out to the point that Ireland is basically like the Bahamas or Bermuda. It’s a tax haven for corporations to launder money, and maybe there’s some externalities in terms of the creation of administration jobs. Pharma has become a huge industry too but again how much employment is that creating and how much actual value is getting put back into the Irish economy? If you look at the verticalization of the supply chain of pharma, what is going on is that they basically get the recipes from another country, it’s being produced in Ireland, and then if they really wanted to those companies could basically set up another factory and leave in a year, especially with the idea that now the global minimum tax has been changed.

TS: So the economy is especially vulnerable right now…

PR: You take away the low corporation tax and the multinationals just get sucked into the orbit of the centres of Europe, France and Germany, for example. I don’t really understand what the incentive is here. After the 2008 crises, there were the bailouts, there was austerity, and I know there were conversations then about all this but that’s now become muted. I think attaching Ireland into this global economy and monetary union in a way that is not suitable for its development level or for its national well-being, that’s never been really reconciled. So crucially, for example, we need a different monetary approach. The Eurozone crisis hasn’t gone away, it kind of got muted but it’s still a ticking time bomb. And Covid obviously exposed the neoliberal paradigm, showing that global supply chains have a downside. There has been this realisation that we should reshore some stuff, think differently, but I don’t think that conversation really penetrated anywhere in Irish policy making circles. Most Irish people are employed in sectors of the economy that were radically hit by the Covid lockdowns, but on paper the Irish economy is one of the best performing economies in the world over Covid. In part, that’s because Pfizer is located there and recorded all their profits there. So there’s this huge disconnect with the real economy.

TS: So given those vulnerabilities, what pull does the ‘nation’ hold for you, as opposed to say internationalism or more localist responses? Especially at a time when the word ‘nationalism’ seems to have taken on pejorative connotations for some.

PR: My research has focused around the 1916 cadre of Irish nationalists and the economic ideas that inspired them. But I arrive at that, not just from this myopia focusing on Ireland, but as a globally relevant case study of understanding what authentic and healthy nationalism is. Obviously, the British empire unjustly controlled Ireland and there wasn’t any proper democracy in place to enable sovereignty and the actual welfare of the Irish people. So when I think of a nation and of nationalism, I think about an intense form of democracy that allows people to make decisions about our economy in a different way. Ultimately in 1918 the Irish people overwhelmingly voted in favour of Sinn Fein and the Irish revolutionaries. That sort of nationalism is what we should be aspiring to and when then you start to look into the actual economic writings of those men like Arthur Griffith, which not a lot of people have done, it is very much this tradition of nationalist economics which he references. Friedrich List is his avatar, not Karl Marx, not Adam Smith. It is this alternative third way and when you start again looking at specific policies it becomes about this idea of protecting industry, of having your own money, especially your own monetary policy, your own central bank. Now, as we fast-forward to modern Ireland, I would think at least instinctually a lot of Irish people are sort of on board with justifying and validating what those men died and fought for, and the ideals that they held. We’ve already established the political morality of having a nation state, so now let’s move on to their adjacent doctrine in economics and let’s try to see how those things gel together. If you start to do that, then we validate the idea of having a nation state over being in an imperial structure.

TS: So before laying out the 10 Point Plan, perhaps you could talk about what you hope to achieve with this.

PR: You ultimately need some sort of government policy that is directing the economy in this productive way. If you do not have that then you’re leaving yourself vulnerable to foreign and neoliberal influences, and a lot of local people get dependent on that. The economy gets distorted and you need a national level policy to create a guardrail system to start moving the economy that way. I’m advocating information giving, and public discussion so that, for instance Irish people can vote in this way and create a democratic feedback loop.

10 Point Plan to Industrially Develop Ireland:

  1. Leave the Eurozone but stay in the European Union. Emulate the relationships of the 8 other European countries currently in the European Union but outside the Eurozone.
  2. Nationalise Irish central banking and institute a sovereign Irish currency with a free-floating exchange rate. Taxes will be paid in this new currency. The government will spend on goods and services with this new currency. Pre-existing contracts will be paid in the previous currency. Bank deposits will stay Euro-denominated and there will be no forced conversions. Convert all foreign debts to this new currency or otherwise, they will be repudiated. Any future debts will be denominated in the new currency.
  3. Establish a variety of investment funds, supervised by the national central bank, with unique missions to properly finance different aspects of the domestic economy (like high tech startups or long-term development projects) in order to generate tangible societal and individual returns for each Irish citizen.  
  4. Organise quantity of credit quotas for private banks to invest in specific sectors that support industrialization, with special consideration given to SMEs, to encourage domestic finance over foreign finance. Areas of focus will be machinery, electronics, and medicine. Continuous and dynamic research will be conducted to evaluate the optimal allocation and thus these sectors could be subject to change. Priority will be given to maximising the verticalization of Irish industry. Credit should be deployed for productive activities and not speculative ones.
  5. Set tariffs on certain imports to foster domestic production and begin the process of import substitution. Manage tariffs to accord to the quality and maturation of industries and remove unproductive ones.
  6. Invest directly from the fiscal budget into critical infrastructure and industry using central bank stimulus with special importance on the wide distribution of industry and full employment.  
  7. Emphasise domestic energy generation through nuclear and hydro in the long term while enabling necessary fossil fuel consumption in the short term with a specific focus on facilitating Ireland’s offshore oil and gas fields. Any solar or wind infrastructure used must be manufactured in Ireland with Irish labour.
  8. Encourage the global Irish diaspora to return, invest, and do business in and with Ireland. Incentives will be given to the Irish diaspora to employ their talents in domestic development.
  9. Revitalise the Irish social service system to reorient towards a vocational education model, which will create a more optimal skills base for Irish nationals coupled with high unemployment insurance, state-subsidised skills retraining to adapt to technological change, and state-provided guaranteed employment for anyone willing and able to work.
  10. Generate gains for labour derived from the above in the form of increased wages, employment, and quality of life improvements. The government will maintain a neutral role in negotiating the trade-offs for both labour and capital with the main objective of national wellbeing.

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