Psychologist and Author Mark Henry joins Marian Tupy to discuss Ireland's incredible economic transformation.
Mark Henry: The Human Progress Podcast Ep. 21 Transcript
The full conversation between Marian Tupy and Mark Henry can be found here. The transcript is below.
Marian Tupy: Hello, viewers. This is Marian Tupy from HumanProgress.org, and this is our newest episode of Human Progress Podcast. Today, I will be talking to Mark Henry, who comes from Ireland, and who is the author of “In Fact: An Optimist’s Guide to Ireland at 100.” So with that, Mark, welcome to the podcast.
Mark Henry: Wonderful to be here. Thanks for the chance to talk about this great success story.
Marian Tupy: I can’t wait, but before we get into the weeds, let me first ask you to say a few things about yourself who you are, where you from? And most importantly, why did you decide to write this book?
Mark Henry: Yeah, yeah, I suppose I’ve spent a life in data and research and insights, mainly in the corporate world. And I studied psychology, originally, a psychologist by training, went into the tech sector, and then ended up working in tourism. So I suppose I spent two decades talking about Ireland’s success on the world stage. But it’s worth writing a book about because, in fact, Ireland’s progress is exceptional. The United Nations Development Program puts us up their number two now in terms of quality of life index. Why Ireland at 100? Well, because actually, it’s our 100th anniversary of independence this year. So I thought, “Hey, the data says that that’s worth celebrating.”
Mark Henry: But in this context, it’s worth understanding, how did Ireland achieve that? It’s worth sharing, actually, because there’s a lot of good reasons that I think have implications for other places around the world, and it’s worth, of course, for us, retaining these factors that have accounted for Ireland’s success. So, like any country, the news cycle isn’t optimistic all the time, this that 24-hour news, negativity, and, in the book, I explain some of the psychological biases that draw us towards that. But the facts, they felt a little bit differently. So I mean, this book, yes, it’s in the vein of the sort of work that Rosling did with “Factfulness,” that Steven Pinker does in terms of “Enlightenment Now,” looking at how we’ve achieved it, why you’ve achieved it, why we find it a bit hard to achieve, why we find it a bit hard to accept, but at the same time, putting context on the national debate as we approach an important anniversary.
Marian Tupy: Yeah, and I should mention that your book is filled with charts from third parties, from renowned institutions, from academics, and so on. And what I like about it is that, whenever you’re talking about a subject, there is a chart, showing exactly what happened, and that sort of thing. So we’ll talk about the success of the Irish economy in a moment, but before we get there, I think let’s try to position the Irish economy in the Irish society at Independence. Ireland has had the reputation as being one of the poorest countries in Western Europe. It is obviously associated with the great Potato Famine in the 19th century, massive outflow of Irish people into other parts of the Anglophone world. So if you were living in Ireland in the 1919s, or in 1921, of what sort of the country would you be living in compared to other nations in Western Europe?
Mark Henry: My favorite graph, as you say, there is 120 graphs in there. My favorite one is the GDP per capita, over the 100 years, because it tells a great story. Now, of course, it’s a story of misery, as you say, the beginning and for many decades, actually, our… The Irish GDP per capita is roughly half that of Britain, roughly 40% of that in the United States, and it kind of stays that from the 1920s, ’30s, ’40s, ’50s. So in fact, it’s quite some time before the Irish success story starts. So it is a century of two half, really. The first half is a century that really was a battle for self-reliance, as a new government that got independence, United Kingdom, they were like “We have to set ourselves up as our own nation.” But it was predominantly an agricultural economy. Its greatest exports were overwhelmingly going to the UK, more than 90%, so they were still very, very dependent, we were still dependent on them. They tried to throw up tariffs to try to say, “Oh, well, we’re trying to support local industry and independent industry.” It didn’t work. It didn’t work, and essentially, there was stagnant employment for those 50 years. For those 50 years, however, population, that would have been between 3 and 3 1/2 million people at that time, there was never more than 1.1 million in employment, so those basically stayed completely stagnant all the way up to the ’50s.
Marian Tupy: Let me interrupt you there. Forgive me, let me interrupt you there, just for a second. When you say it stayed the same way relative to the United Kingdom and the United States, are you saying as a share of the GDP at 40%, or are you actually saying that it just stagnated and never rose in the first half of the 20th century, which one of those two?
Mark Henry: Yeah, certainly as… It’s as a share, but as you’ll see, for most of that kind of up until after World War II, there wasn’t really any growth for anyone. That only kind of began to grow up. But you see it grew slowly. And that meant, to your point, you talked about immigration and immigration was a feature of Irish Life, as you say, from the 1800s, but right through, the 1950s, that were a terrible time, where more than a third of people in their 20s just stopped and left, because there was no employment prospects. If you had a job, you were gonna keep it, and there was no growth. So you had that first 50 years right up to the ’70s, which you would describe as relative stagnation. And then you have this period of openness that really triggers and is part of the key success factors for the following 50 years. Really, I’d say the crossover moment is 1973, because that’s when Ireland joined the European Union, and so much followed from what was the European Economic Community at that time. So we’ll get into that, but it was definitely a period where it wasn’t just 1920s, where there was a lot of relative poverty, up until the opening up of Ireland. We’ll come back to that.
Marian Tupy: So the government initially… Obviously, Ireland had a massively negative attitude to the British Empire, you really struggled for independence for a very long time, and the key as far as the early Irish governments were seeing it, is autarky, self-reliance. And as we know, countries which cut themselves off from the rest of the world tend to grow at a lesser pace, if at all, than countries which embrace growth. Okay, so I get that. What about… Give me a sense of things like poverty levels, or give me a sense of what poverty was like in Ireland in the early 20th century, maybe life expectancy and that sort of thing, and after we are done with that, we’ll then compare it to today.
Mark Henry: Yeah, exactly. Life expectancy back in 1922 was averaging 57 years. As you say, we’ve made big progress. We’ll come back to that. Of course, the poverty statistics weren’t very reliable, if only because nearly everything, it was so endemic that the newspapers at the time were comparing the slums in Dublin to those in India, at the time in the newspaper. So in fact, this was a lot of… When the Irish independence movement, which kinda started with the Easter Rising in 1916 that ultimately led to independence, a lot of the people there were social activists and union workers who as much saw this as a battle for the worker to try to get jobs and to try to defeat poverty as much as anything to do with a nationalist ideal of self-governance. The view was, “Well, if we get self-governance, we can solve these issues.”
Mark Henry: So that was a fundamental driver of the change in the first place. As you say, we’ve come a long way. Now, as you say, we’ve added a whole generation to lifespan. So today, the average lifespan is 82 years in Ireland, and it’s just two years short of the Japanese. So we’re well up there. The amount of fruit and veg we’re eating is literally twice what it was 60 years ago. Alcohol consumption is down. It’s now down to a level, it has been the lowest in 30 years. And when asked in polls, your opinion in today, the Irish rate themselves the healthiest. So an easy 4%, I think I have in the book, of Irish people say that they are fairly or very healthy these days, and say more than any other country in Europe. I suppose that that’s… Yeah, go on, sorry.
Marian Tupy: This could be a bit of an unfair question because you don’t have that data in front of you, but one of the best proxies for standard of living and health is increase in height. Do we know how much taller the Irish are as opposed to 100 years ago, approximately?
Mark Henry: We do, we do. And it’s in the book, and I have a lovely picture of that. So men and women… Women are 11 centimeters taller than they were at that point of time, and they are now, on average in Ireland, as tall as men were back then. Men, however, have increased the gap. They’ve gained 12.5 centimeters over the 100 year. So as you say, health and longevity, which actually is that first basket that the UNDP look at in their quality of life indicators, have been monumental changes, obviously fundamental.
Marian Tupy: You mentioned veggies, and I always like to ask what was diet like in the early 20th century, because that tells you also a lot about the state of health and wealth?
Mark Henry: Exactly. I speak to a historian who specializes in nutrition in the book, and she talks about really what became quite a very vivid split between rural and urban because yes, the famine, as you say, that resulted in the mid-1800 threw lots of people off the land. A lot of them of course went to the cities and the move to the cities continued. Those who were still fortunate enough o be on the land could grow their own whatever, whether it was have their own cow, have their own pig. It was generally fresh produce. They could grow their potatoes, whatever. It was actually relatively protein-rich and relatively healthy or fresh. Those in urban, on the other hand, the diet was appalling, because of course, we began to be in the era of processed foods, so processed bread with the processed jams. Tinned food were all the rage, so it was spreads, literally spreads in the morning on toast, was what the urban people were eating. And again, the historian puts it that the diet of those in urban Ireland at that time, in the urban cities, were worse than they had been even during the famine. The nutrition, there was no improvement in nutrition whatsoever in that period of 70 years or so.
Marian Tupy: Fascinating. So, fast forward to 2020, how does Ireland compare? So now we have the picture of what it was like back in those days, and where do you stand now? Maybe let’s start with GDP and position Ireland with Western Europe and maybe the United States, and then take it down with diet and then longevity and so on.
Mark Henry: Well, exactly. So income, as you say, by some metrics, Ireland is the most productive country in the world, and this is when you rely on GDP, divided by numbers in employment per capita, in constant terms. Ireland is the most productive in the world. Now, in Ireland, we are actually all experts in GDP versus GNT, because multinational activity contributes a huge amount to our GDP. That makes anything per GDP a little bit of a distortion when you compare it to other countries. So we’re very aware of it here. So our GDP per capita now exceeds the United States. It is well ahead of the United Kingdom and continues to grow very strongly. We bounced back within a year from the COVID pandemic, but we take that with a big grain of salt here, because we know that GDP is not GNP, and even within that, even within GNP, there is a degree of multinational expenditure. So when you take that out, we’ve developed our own metric. The national statistics office here, the Central Statistics Office, has developed GNI Modified to actually take all of the multinational impact out and uses that to track incomes and to track the national income. But the point is, again, look at the book, in terms of real income, wages that are going to people, they are five times what they were in the 1940s, and continue to increase. Household wealth is at an all-time high and continuing to increase. Income inequality has declined over the last 20 years. It was at its lowest level in 2019.
Mark Henry: So, the income statistics, and we take the big GDP ones with a grain of salt, but no matter how you cut it, the improvements have been significant. Why have incomes increased? Well, because of course, employment increased hugely. So that stagnation I talked about in terms of employment numbers began to turn, particularly in the 1980s and into the ’90s, when in a 15-year period, we doubled the number of people in employment. It went from 1.1 to 2.2 million by the ’90s.
Marian Tupy: Driven by government employment or private sector employment?
Mark Henry: Primarily private sector employment. We had that famous Celtic Tiger period, which you might come back to, of extraordinary economic growth, driven by a lot of multinational investment in particular that resulted in real jobs. So as I say, we’ve doubled up to 2.2 million. We had the economic crash then that lost a few hundred thousand of those jobs into the 2010s, but by 2019, again we are back to record levels of 2.3 million jobs. And the nature of those jobs has changed. So again, you go back to pre-Celtic Tiger, back in the ’80s, the minority were categorized as high skill jobs. Today, it’s the biggest sector. Four in ten jobs now are categorized as high skill jobs. So a huge boom in employment and a huge growth in the high-end type of employment. So obviously incomes are going to increase, if you think about it, and household wealth of course is increasing.
Marian Tupy: Well, the increase in employment would obviously increase the size of the economy, but what accounts for the increase in per capita incomes, adjusted for inflation, would be the fact that you have switched from a primarily agricultural economy into a bid economy, or whatever, much more education. I understand that. So you obviously now…
Mark Henry: Yeah, and actually… Just you mentioned education, sorry to interrupt you, but I think to me, as you say, A, definitely and obviously a huge contributory factor to it, but that has been, again, one of the transformations. We’ve doubled the number of people who have a third-level qualification in just 20 years, so now 51% of working age adults have a higher education qualification, so 51%, again it’s the highest or second highest in Europe at the moment. So again, that obviously creates a wonderful virtuous circle to your point where you are able to convert those extra jobs into those higher skill ones, and that in turn feeds into the personal income.
Marian Tupy: Has the massive expansion of the tertiary sector lowered standards in the tertiary sector, or are you still performing well relative to other countries when it comes to the quality of the tertiary education? We know that in some countries, governments decide, “Let’s take everybody to university,” and then education declines in quality. So what was the situation in Ireland and how did you accomplish to add so many people to the tertiary sector without undermining the quality?
Mark Henry: Yeah, it’s a good question because how do you assess quality? Perhaps international rankings? I talk about that in terms of international rankings of the universities, for example, and third-level institutions. I have a chapter at the end of the book where I talk about our challenges for the century ahead as we enter into our second century, and educational investment is one of the ones that I call out as a challenge or a risk, because I talked about the economic crash. We had, and obviously continued to have, growth in student numbers and growth in intake as a percentage into third-level institutions. It currently stands at 69% last year, so 69% of people have finished second-level education, as you say. Going into tertiary, it’s huge, but government investment was cut back in the great recession and hasn’t kept pace. So the average spend, government investment in terms of dollars or Euros per student is now 50% of what it was back in 2008, 2009.
Mark Henry: So that’s a risk factor, because to your point, how do you retain quality if you’re not investing? You need to increase the investment going forward. So that definitely is one of those warning factors for Ireland. No, but I think overall, the sense is when you looked at the rankings up until recently, up until the last couple of years when the investment cutback has begun to bite, Irish institutions did particularly well, and generally speaking gained in rankings, but that has been undone a little bit in the last decade, I’d say.
Marian Tupy: What is, or what was the response of the Irish readers to this book? When they are hit over the head with what is, after all, a big book, is it incredulity? Is it pride? What is it?
Mark Henry: It’s a great question, and actually the book has been hugely well received, and actually attracted a huge amount of media interest for I think a variety of different reasons. I think one is because it speaks to a bit of optimism at a time when people have been feeling a bit challenged over the last couple of years. So people have been looking for positivity. I had lots of journalists reach out to me to say, “We want positive stories. Tell us the story.” Secondly, I think, yes, there is a bit of a pride as we come up to a big anniversary, but I think more fundamentally, there’s a lot of people who feel positive about their personal circumstances and find it a little bit difficult to relate to a negative news cycle.
Mark Henry: And I don’t blame media for that. It is what human beings want to consume. They were on the look out for negative news. If we have time, we can cover that chapter, but the point is that most people in Ireland are happy. 97% the last UN poll in 2017, 97% agreed or strongly agreed they were generally happy with their lives. Only 1% weren’t. That was the highest in in Europe at the time. But of course, that’s not what people have necessarily been seeing around them. So I think a lot of people have been like, “Yes, I recognize this degree of change in my own lifetime. Yes, I can see how much I am better off, how my kids are better off than the generation that came before me.” And a lot of people have been saying, “There’s a lot of truth to this, and we actually need to recognize this and stand up and talk positively about our progress.”
Mark Henry: So we’ll been focusing a lot on commemorating things that happened 100 years ago as we come up to our moment of independence. Really, this book has started a bit of a debate about how we’ve got on since, how we’ve actually… Not just joined the nations of the world, but actually joined one of the… The class of leading nations of the world, and that is something to be proud of. So it started a good debate. Of course, some people disagree. And of course, there are lots of challenges around today that people might have, particularly when it comes to housing in Ireland. We’ve had such population growth, that’s a challenge, and we had the economic crash, that meant there weren’t enough houses built for quite a period of time. So there are challenges out there, absolutely people feel the book does reflect. But their experience may not be as uniquely positive or as optimistic as Mark Henry may think.
Marian Tupy: Well, as Steven Pinker from Harvard says, “Progress doesn’t mean that everything is working out for everyone everywhere at all times. That wouldn’t be progress, that would be a miracle.”
Mark Henry: Exactly. Exactly.
Marian Tupy: Now, as you resolve certain problems in Ireland, as you have successfully, then new problems will arise that you need to tackle and that’s just going to be until the end of days, [chuckle] because human desires are infinite, and… So you said it opened up a conversation about how you got there. So let’s talk a little bit about that. As you mentioned before, the first half of Irish independence… Of the 100 years of Irish independence, autarky, closed off from the rest of the world, that sort of thing. The last 40 to 50 years, much more openness, so… Obviously from… I put to you as sort of a leading questions, because I do think that openness and globalization has something to do with it. But why don’t I let you make those points rather than me myself doing it.
Mark Henry: Yeah. So I suppose, “Why was Ireland successful? Why has it outperformed other countries, all other developed nations on the UN Human Development Index?” So when they first started that tracking in 1990, we were 23rd place, which I’m sure it was pretty good increase if they’d started testing in the 1970s. But the point is, we’ve gone from 23rd to second, and that’s more of a gain than any other developed nation in that period. So why, what has Ireland done or what are the factors that account for that? And as you say, pulled together all the data across some 100 different data points that are in the book. I spoke to 50 different experts in each of the different areas to say, “Well, how… What was it that led to Ireland’s success?” And boil that, to me, there are four factors that have accounted for Ireland’s success that to me have implications for other countries or other policy areas as well.
Marian Tupy: The first of them was stability. So we’re fortunate to have been a democratic country for that full 100 years. We managed to avoid the implications of World War II in Europe. And that has led to solid, well-established, good well-functioning institutions of state. There have been no extreme swings in Irish politics, to the extreme left or to the extreme right, and that has led to a very consistent policy direction. That’s in terms of investing in education, for example, that’s in terms of attracting FDI, we’ll come to some of these. But the point is that led to good building of institutional capital. So the first one is to build really good institutional capital. The second one, I suppose is…
Marian Tupy: Before we get into the second, there is of course, a problem there, in the sense that you can have a consensus, you can center right and center left around a bad policy. So if we agree that autarky was the wrong way to go for the first 50 years, it seems to me that the institutions agreed that’s the way we should go until the consensus collapse for everyone and then they together opted… Both left and right opted to go in a different direction. So I totally get the essential need for political stability. I just think that the consensual nature of politics can also mean that everybody’s heading off the cliff. Where am I wrong on that?
Mark Henry: Yeah. No, and… I mean, you’re not wrong in the Irish example, because there was political agreement for the first 30, 40 years that we needed to stand alone, and as you say, follow those policies. Let me come back to what changed, if you don’t mind.
Marian Tupy: Sure, sure.
Mark Henry: Just to finish the four points. But then very much touch on the what changed. The second thing that has accounted for our success, I think, particularly in these decades, of course, is the strength of community. So there are… There’s good degree of community bonds for a small country. There is far less them versus us in this country than there are practised in bigger places. There’s very high levels of interpersonal trust, and that has given… Meant there are good reservoirs of social capital. The second point there. So we’ve got good institution capitals, we’ve got social capital. Education. Education is the third factor, as you say. More again, from the 1960s, ’70s, we began to invest enough, we were laggards before that. But again, that developed the human capital that enabled us then to have that virtuous circle going as investments sort of came in.
Mark Henry: And you see, that fourth point for me is that openness, is that you supercharged all of that human capital, social capital, institutional capital by opening up to the world. And I’ll come back to that in a minute. But this is the point, Ireland opened up to the world, allowed Irish people to go out to the world stage, Irish businesses to go out into the world stage, Irish pubs to be everywhere around the world. But to attract foreign direct investment in, to attract talent in, to attract learning… And that competitiveness was good for us. So those four factors, for me, are the magic formula that have implications for any country. But specifically to your point, what was the turning point policy-wise? Well, it was really the 1950s with the huge outflow, I mentioned earlier, of the youth emigrants.
Mark Henry: There was a sense that actually after… At that point, after 30 years of being an independent nation, we were failing a generation. A third of people in their 20s or so having to leave, there was a sense of, “Oh my goodness, we’ve created no jobs. We’re not offering our kids a future.” And there was a famous Dublin Opinion News Journal that had an illustration on the front page at the time in the late ’50s, saying, “Would the last person out, can you please switch off the lights?” And it was clear to the political system that this just wasn’t working, that it just wasn’t delivering wealth, it wasn’t delivering prospects. And so there was a 180-degree turn, a 180 degrees driven by the civil servant in charge of the Department of Finance at the time who convinced his minister who then shortly thereafter became prime minister, Taoiseach, as we call him in Ireland, and Seán Lemass, and they just, completely in the late, ’50s switched the policy and said, “Right, we’re going to attract in foreign investment, stop trying to do it ourselves and try to create… Get other people in to create jobs.”
Mark Henry: And at first, we talk about tax rates, at first that was zero percent tax. They said, “No, there’ll be no tax to anyone who can come in and create a job in Ireland.” And from the late ’50s into the ’60s. Over time though that became a 10% tax rate for manufacturing, and as it was the 1970s and the ’80s. And then as we came into the ’90s… And of course, that was all manufacturing, so that was all goods, but of course then services began to play a bigger thing, and it was like, “Well, shouldn’t we extend that tax rate to services, but then if we do, how do we protect as well the domestic economy and companies who work in the services sector?” So in 1997, there was the adoption of a 12.5% tax rate for all companies, for all activity. So that tax policy, I suppose. So it took a while to work, of course, that transformation in the late ’50s, of thinking, took a while. And I talked about how it was really in the ’80s and into the ’90s that that began to translate into job increases then that began to translate in terms of incomes and so on and the step change.
Mark Henry: But I think to relate that point though to the four factors, that tax policy was born of that switch to openness, that embracing of openness. It was consistently applied in terms of that stability. Once it was adopted, people had stuck religiously, irrespective of a change of government, to those tax rates. That whole policy was supported by education, which of course then over time, the importance of the tax rate diminished and the importance of the education, of having a highly skilled workforce began to increase and increase, and of course, it was delivering benefits, if you will, to the community, to the general public, so it actually has retained great public support as well as government support.
Marian Tupy: So, taxes, we’ve discussed that, and it is important to say that relative to corporate tax rates elsewhere in the world, including the United States, Ireland was an outlier, and in a good way, positive way. I genuinely believe that when you are a poor country, you cannot put a 30% tax on a corporate income, especially if you lack political stability, but if you have political stability and you are trying to attract foreign direct investment, which may be spooked by very high rates, then these two together can have a very beneficial effect on the economy. But there’s another aspect to the Irish economic success that when I was reading a book, I looked at Economic Freedom of the World Report, which is published by the Fraser Institute in Canada and the Cato Institute in Washington, my employer, and of course, your regulation is also pretty light. You have a very high level of rule of law, which is very important.
Marian Tupy: That goes with the institutional set up. Now that’s very difficult to export to the rest of the world, but regulations, very light compared to other countries. I’m not saying that you are a sort of free-market paradise, but compared to other countries, you’re doing very well, and that’s something that other countries can import. And then of course, monetary stability, which you have, thanks to ECB and so forth. But yeah, would you agree with me that also the Irish governments in the second half of the 20th century took a very light touch to regulation of the economy?
Mark Henry: We did. It’s great to see Ireland is fifth in economic freedom in the most recent index, which is very positive. We’ve been in the top 10 since you started the analysis, which is great, and again ties to that openness in terms of thinking, which these days is not just about openness in terms of letting people in, it’s openness to freedom and social as well as political as well as economic areas. Obviously, there’s been a lot of progress in social areas in Ireland in the last few decades as well. I think that the key factor here in all of this is the European Union for Ireland.
Marian Tupy: Let’s talk about the EU a little bit, yeah.
Mark Henry: Exactly, ’cause I said earlier, that change of mindset moment really, in terms of Ireland beginning to see economic benefit, that point where you switch off in the first 50 years of closed door to really beginning to see a benefit was joining the EU in 1973. So we might have had the policy shift in the late ’50s, but that was when all of a sudden it made sense, of course, for multinationals to begin to invest in Ireland to a greater extent because we were part of the EU. And I think that there was a lot of investment in terms of infrastructural development funds from the EU, throughout the ’70s, throughout the ’80s, and well recognized by the Irish public who could see signs going up on roads and sewage plants all over the place going EU-funded, which was great. But then 1993, when the Single Market came in for Europe, all of a sudden there was a… It’s when Irish exports really, massively took off in value as of course, Ireland became a hub for international companies’ exports. And that’s when the Irish public began to see the benefits in terms of employment and wealth.
Mark Henry: And in fact, right even to today, in the most recent polls, Ireland is the number one. The Irish population are the most supportive of the EU and most optimistic about the EU’s future because it really has been so instrumental in terms of how you’ve taken the step change. So there were a lot of regulations, of course, is coming from Europe, and we… They do a lot of the thinking, and we contribute to that, of course, as a member of the European Union, But we’re pretty good and faithful in terms of implementing new laws because of course, that’s partly the reason is so much investment is coming our way.
Marian Tupy: Yeah, in the past, obviously, when I was working much more in Europe than I currently do, I was skeptical about certain aspects of the EU very much, but I’ve never denied that EU made much more sense for certain countries than others, and some countries have benefited much more from EU membership than others. In fact, Ireland was always at the back of my mind when thinking about infrastructure, because of course what you managed to do in Ireland is to take the EU development funds, the structure and cohesion fund, I think that’s what they’re called, you manage to build highways and ports and whatever, in other words, you have put it to good use, whereas the region where I come from, which is Eastern Europe, the structure and cohesion funds have been, very often, either stolen by corrupt politicians or heavily… Or mis-allocated or very often went unused because these governments didn’t know how to plug into the European dispersement system, and I guess that goes to your point about the institutions, is that when all this “Free money” started flowing from Brussels to Ireland, it didn’t get stolen. Right?
Mark Henry: Yeah, absolutely. And as you say, in later years, and in fact as the European Union expanded to these, a whole lot of the new member accession states were sent to Ireland to look and to see how we had spent the investment because it was considered best in class by the European Commission. So yeah, exactly, maybe because we’re a small country, hey, and you couldn’t get away that much, once you’re taking the money, people would know where it went. It wasn’t that much for the long list of things we wanted to do in terms of infrastructure. And being so close to United Kingdom has pros and cons. Part of the pro perhaps is that that set a standard, they’re saying “Oh, well, they’ve got that. Why haven’t we got that? Let’s look to get that sort of standard of infrastructure that’s almost available in the neighboring country.
Mark Henry: I would also say you have a negative, for many years because we couldn’t get passports, literally our exports couldn’t get passports, and until we joined the EU, so only then we got to look over the hill, and go, “Oh, wait a minute, there’s a lot of things happening over there we can learn from and adapt. That was part of the openness that we did and we did with the funding, that is equally with policy and equally with new ideas and with social norms and all sorts that changed… And again, speaker after speaker that I spoke to for each area of Irish life, everything from education to culture, flagged memberships of the EU as transformative, in their sense.
Marian Tupy: Did the openness of the Irish mind proceed membership of the EU, or did it follow the membership of the EU?
Mark Henry: I think this is a very interesting one because of course, the book only covers the last 100 years, but of course, we were by the British empire before that. And of course, we were part the British administration and many Irish people went to play their part. Now, of course, the English had the plum roles, but we played our parts in the Army, or the administrations of the British empire around the world. So there was that openness, but there also was this point about immigration, as we say, from the mid-1800s, particularly on, but all the way, I talk about it. The point is that kind of meant that there wasn’t a Irish family who didn’t have a relative maybe in America and then later years in Britain or in Australia or Canada. So there was a lot of connectivity there around the world, and I do think people, again, I talked to people in the book about this, how just around Christmas every year, there will be queues at the Irish post offices waiting for the cheques to come in from the relatives, so they could get the Christmas dinner and the new set of Christmas clothes and all that. For again, that first 50 years, we were relying on businesses coming in and used to come in.
Mark Henry: So we weren’t disconnected to the world. And again, you mentioned the Catholicism, again, it was a strong tradition there in terms of the Irish missionary priests going to Africa in particular, but also other places as well, where Irish immigrants went again. We were up for every fundraising. Every Irish child for that generation that went to Irish… Went to Catholic schools nearly extensively, so they were always fundraising or looking for money for helping the poor of Africa or where ever it was, support the missions. And so actually, I do think, as a relatively small nation, we actually had lots of connectivity with the other places of the world.
Mark Henry: You know, as I say, because of the Africans, the missions, whatever it was, we had a lot of connectivity, a lot of awareness. I do you think there was an openness to what was happening about it, but again, people I speak to say, “Yes, but what really triggered, for example, the women’s movement in Ireland would have been, well, in the ’60s and so on, when again, immigration in the ’50s, ’60s, forced a lot of Irish women to go, for example, to London, to work, and they all of a sudden saw a different standards of living and a greater degree of freedom, and then when they came back to Ireland in the ’60s and ’70s, they sort of began to demand that at home, why can’t I have that?
Marian Tupy: So I think we had that exposure, understanding of what’s happening elsewhere, but I think really, again, it was the ’60s and the ’70s, and again, tying it to the EU and all that, when the change actually began to be demanded at home. If you wanted the freedom before that, you went to somewhere else to get it. From the ’70 on, they began to come back, and… And it was our first period, in the ’70s, when we began to have returning immigrants because the economy began to perform well, all of a sudden people began to come back, ’cause they could come back and get a job and all, and that was when those kind of different perspectives and social mores began to be ingested and demand for change began to grow from there.
Marian Tupy: Right. In your book, and also in this interview, you talked about the high levels of trust and national cohesion, and even when you had elections, it’s really center-right center-left, but not really huge deviations and that sort of thing. What is the future of Irish national cohesion and interpersonal trust in a world where obviously, A, religion is going to play much less of a role? You expand on that in the book at length, about how much less religious society Ireland is. So religion goes by the wayside. You have also… Ireland’s going to become a much more multi-national and much more multi-ethnic country, as immigrants from all over Europe and other parts of the world are going to come in. So the national cohesion… Sorry, the ethnic-cultural cohesion, if you will, is going to go by the wayside. So what’s the future for national cohesion, around which idea or what set of values do you think that Ireland is going to coalesce, to maintain very high levels of trust and openness to the rest of the world?
Mark Henry: Yeah, I think it’s a great question. To your point, we now have nearly one in five people living in Ireland today who aren’t born here, because we’ve had dramatic increase… I talked about employment and people coming from all over the world to take up those opportunities, which has been good for everybody. And we haven’t had any significant opposition to that in any political or public sense at all, because it has patently benefited people. And I think the social cohesion, it’s there, still strongly, as you say, despite, for example, decline in religion as a force there. Again, you look at the EU polls, [0:40:34.3] ____ 10. Irish people, again, I talk about in the book, say they have equality of opportunity these days. Again, just short of that number say that equality of opportunity is dramatically more than it was 20 or 30 years ago, and again, number one in Europe saying that.
Mark Henry: So people still recognize… We’re at a time where people recognize that transformation, and they recognize that… Generally speaking, all the people I’ve met say there has been a transformation for the better in the lane, and therefore, people have been giving support to the politician and support to each other, those levels of generosity, for example. Again, talk about it in the book, the World Charities Institute, says the Irish are the most generous in EU, and have been for the last 10 years, based on donations of time, donations of money, assistance to strangers, for example. So, so far so good, the ethnic change has not posed any significant challenge. But I do, write in the book, poses a particular challenge, I think as we go into the second century.
Mark Henry: Yeah, I referred to it earlier that the lack of housing is… And the inability of people who are in their 20s and even into the 30s today to buy a home has become a significant issue that is beginning to threaten some of that social cohesiveness. It is beginning to introduce a bit of [0:41:53.8] ____. That generation were older and they were living a different time and they could afford a home, but we can’t, and we are being ignored. And that is certainly the political issue of the last few years, and that is driving people to reach for more extreme solutions to that because it’s not quick fix, of course. And I mentioned how it came about. There was a huge growth in housing to accomodate all that inbound immigration in the ’90s into the early 2000s, but then that crash came 2008, ‘9, ’10 and basically for 10 years, it was basically nothing. But I don’t say there’s nothing, but there’s next to nothing built.
Mark Henry: Yet of course, you have a population growth and more people coming into their 20s and 30s, but with no increase in supply of homes. We’ve got back to a point now where there’s roughly 20,000 housing units built in each of the last two years, despite the COVID challenge, but the estimates are that you need anything between 35 and 60,000 per year, so the gaps still remains, and that is causing a lot of consternation and social angst, and a lot of people saying, “Yeah, yeah, I’m not optimistic for the future because of that. So I think these kind of domestic issues are in fact the ones that we need to fix in order to ensure that the fairness is there and that people have a lot reasonable expectations, that they’ve got reasonable jobs, but they should be able to afford homes for themselves to live in.
Marian Tupy: Why didn’t the financial crash of 2008-2009, why didn’t it undermine the Irish economic model? Why did it survive? Why did that openness survive? We didn’t have… Nobody got up and said, and let’s now do 180 degrees in the opposite direction. Was it perceived by people as a temporary blip that was somehow external to Ireland, and that is why the economic model persists?
Mark Henry: I think the short answer is yes, people did feel, who the hell were Lehman Brothers, anyways? Did you know that it really had nothing… Most of it had nothing to do… What is a subprime mortgage? We don’t get those in Ireland. So people didn’t feel a lot of it was external. In Ireland, we had invested an awful lot in property, and there was a property collapsed then, in domestic respect. There was a lot… There had to be a lot of austerity, but people, I think, appreciated, in the main, there had been a transformation in the ’90s and into the ’90 in terms of employment, in terms of wealth, and people could feel it. They Absolutely could see it, and that, okay, we had to go through a bit of pain, a lot of pain for a huge amount of people. Obviously, there were thousands of jobs lost. But the economic model was working. By which I mean that within… And [0:44:38.1] ____ in the book, is it two to three years, exports growth continued.
Mark Henry: So there was a bit of a trip in GDP, but again, within a couple of years, it was back to matching US levels in terms of GDP per capita. So, people felt, well, wait a minute, we had the foreign direct investment agency, IDA Ireland, very quickly attracted in new projects, we had food exports and drink exports reaching record highs from our food agency, tourism continued to grow. So people thought it was export industries were actually what was going to save us, they hadn’t been the cause of anything negative, they have been the source of a lot of our… Contributed significantly to the wealth of the country before then. So when that began to return quickly, the faith wasn’t lost, that this was going to be what we needed to put us back on track, and it has proved to be the case. I mean, by 2019, there were record levels on all of those sectors.
Marian Tupy: Right, so the key was that when the crash happened, there was a generation of voters, maybe two generations of voters, who… Voting concurrently, who saw the massive improvement in Irish fortunes. And as a consequence, they were like, “Oh, well, okay, let’s take this on the chin, but let’s not throw out the baby with the bath water.” I’m mixing my metaphors.
Mark Henry: Yeah, absolutely.
Marian Tupy: The point is that they were saying, “Okay, let’s try to get back on that trajectory as soon as we can.” Whereas, what worries me about some other countries, United States, France, is that we, of course, haven’t seen a real growth in wages over long periods of time for some time. And so when you do have an economic crash, it’s like people are saying. Well, whatever we had before then wasn’t really working particularly well, so we might as well go for something more extreme and that’s when you can get into trouble.
Mark Henry: Yeah, yeah, no, no, absolutely. And I think if we’ve now reached a point where we have GDP levels per capita equivalent with the US, there’s not a huge amount of room for growth left, if you like. Who else can you catch up with? If we’re number two in the United Nations development index, will you beat Norway? To simply hold number two would be very well. It would be a great outcome for the next few years. So, we are in a time, of course, as you look out into the next century, where we’re not gonna see that degree of growth again. So to your point, retaining faith, in that we need to nurture and support and continue to support the policies.
Mark Henry: But the factors that have got us here. Continue to invest in education, continue to support that openness, continue to build that social cohesion, to support that degree of community, continue to support institutional capital development. Those things, I think, are going to be important to do [0:47:46.0] ____ flag, as we head into the second century. And in all of those, I think there was one thing that we didn’t think about, a type of capital we didn’t think about that we now need to, which of course is natural capital. Because again, when you look at pollution, at least in terms of CO2 emissions, Ireland is one of the worst offenders in Europe per capita. Why? Because we are still a very agricultural nation in the sense that we are… For example, the Northern Hemisphere are the number one exporters of beef, as I talk about. Not per capita, in actual terms, in the Northern Hemisphere. We export more beef than anywhere else in the Northern Hemisphere.
Marian Tupy: That’s extraordinary. That’s extraordinary statistic.
Mark Henry: It is. The problem is, it’s all the methane it’s giving off and all of that. So that’s a harder one to fix in terms of our CO2 emission. So there are, yeah, that natural capital biodiversity. There are things, of course, that we now need to factor in that, frankly, we didn’t for the last 50 years.
Marian Tupy: So, I wanted to end with a question about what are the lessons for the rest of the world, and I’ll let you take it away. But let me be controversial for a moment here and say the following. Of the four main aspects of Irish success that you have identified, institutions, community education, openness, it’s easy to say, well, it’s… I would argue that it’s easy for countries which have those to prosper, but of course, openness, economic openness is something that you can do through policy. You can pass a law, saying we are going to be open from tomorrow. We are going to stop protecting our markets. We are going to trade with the rest of the world. We are going to export, we are going to cut our taxes. It’s much more difficult to build institutions, which it almost seems to me like what you’re saying is that you have inherited pretty good institutions from the Brits and you kept them and maybe improved upon them. But that’s hard to build from scratch, if you are a struggling Asian or African country. High level of trust. Yep. There are some in developing world that perhaps could apply. And then of course, education. Yeah, if you don’t have a corrupt government, then you can invest a lot in education, but institutions matter. And so I’m simply wondering to what extent is this model exportable to the rest of the world. But you’ve given it much more thought than I did. So why don’t you take it away?
Mark Henry: Well, exactly. I think none of this happens quickly. I talked about the fact that the first 50 years for Ireland weren’t great success story, that the policy began to change in the late ’50s, that it took really until the early ’70s and joined the EU in particular that that really began to bear fruits, began to bear fruit. But it wasn’t really until the ’80s and then into the ’90 that we saw the step change in employment and in incomes. So, that’s a long journey, but again, if you consistently identify and nurture and support investment to these things, there are clear programs that can be undertaken over a period of time to deliver those benefits. So look, it’s not a quick fix, but as you say, investing in all of these areas and putting in place the policies to support developing these areas will enable people and countries to begin to follow the same path that Ireland has. Well, I talked in the book, as you know, about population wellbeing as well, and about how a lot of research is now been done about how what brings wellbeing for nation states. And that has a lot of implications, I think for policy makers as well.
Mark Henry: And I’ve… In the book, I’ve looked at how Maslow’s hierarchy of needs can be merged and/or applied, if you like, to a population level and how you can begin to think, as policy makers, about how to tackle the basic needs and a range of different needs, which if you do it successfully, again, the evidence is building all the time, but will lead to high levels of population wellbeing, if you do that. And that is going to connect with your… Kickoff your virtuous circle, which will build your community, build your social cohesion, and in fact education is part of that infrastructure. So again, it puts in place a lot of the good building blocks around that. And there’s an article on HumanProgress.org that I’ve written, that will talk to that model. So I think, no, I think we are becoming more and more clear in terms of what the blueprint is for national wellbeing and for national success. So, part of it, as you say, is in here and part of it is in your good work and HumanProgress.org. And obviously I encourage anyone who’s watching this to buy the book and make it onto the website and follow everything that you’re doing, ’cause it’s a really important conversation we’re having. And hopefully, Ireland’s case study can give a bit of light and a bit of food for thought and help inform the debates that are happening elsewhere around the world.
Marian Tupy: Well, that’s a great place to finish, Mark. I do want to urge our viewers to buy this book Ireland at 80… [chuckle] Ireland at 100, for a variety of reasons. One is the… One, it’s a beautiful book, full of facts, and facts is what we are all about. But also I think that it’s a great way to infuse people with optimism, people who don’t live in Europe and the United States and advanced countries, but people who may be living somewhere in Asia or Latin America or Africa, where life is still difficult. And it’s a book that shows you that things can improve, that within two or three generations, you can go from one of the poorest places in Western Europe, perhaps in the world, to one of the richest. And it is with that in mind that I really want to recommend anyone interested in facts and success stories to buy this book. Thank you, Mark, for writing it, and thank you very much for your time today.
Mark Henry: Thanks for the opportunity.
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