The Celtic Phoenix — The Need for Ireland to Establish a Ministry for Future Affairs

Published: 6/December/2016

With the way the world is currently economically operating, this globalised society we live and operate in is here to stay and won’t ever fully revert from this status unless we wish to live in a North Korean type of system. So on the back of that statement, we must understand that we can either adapt and thrive, or resist and be left behind to our detriment. Such detriments would include the following sort of regressions that will be discussed in the next paragraphs, which those in political opposition or the anti-establishment brigades will profess to be the way forward as it sounds refreshing and empowering to take back power and be the alleged makers of our own destinies.

The raison d’être of these anti-establishment types would see them resisting economic progress out of political stubbornness, unless they begin the transition into establishment figureheads thus foregoing, to their detriment, their political base for a grab at power. As those among us who fancy themselves as economic projectionists and political commentators, it would be safe to assume that the opposition and anti-establishment who take the reins of power on populist and weak promises, we will firstly see a drop in living standards. This will be conducted under isolationist and hard-line autarkic policy in a bid to get away from the globalised world which will more than likely be marketed by wrapping the flag of ultra-nationalism and faux patriotism around their hearts.

This will be instigated by imposing tariffs on imports, cutting out supply chains and the useful inputs to be processed into useable goods, negating and disregarding trade deals by going the Brexit route through an extreme nationalistic rhetoric at the cost of losing on decades of built up trust to carry out any future trade deals, focusing fully on national autonomy and home made goods to be sold internally or at a loss on the global marketplace, the inefficient allocation of jobs for people not suited to the production of certain goods/services, the limited global competition that will affect the price at which goods are sold internally, the creation of national oligopolies that will be ripe for collusion and price gouging, increased usage of the black market and piracy which in turn will increase crime, and not to mention the economic dependence on resources that could not be found in abundance within a region like oil.

Secondly a drop in wage power with the increase in internal market inflation will allow for a negative feedback loop that grows the cycle of cause and effect with wages chasing prices and prices factoring in new potential wage increases. The increased prices on goods and services will have a knock on effect for an increase in wages in an attempt to prevent a drop in standards of living and subsequently have an effect on the price of goods and services. The laws of supply and demand will then tell us that price equilibrium will move higher and higher (demand stays the same as supply decreases) and price out the poorest of society first before moving up the socio-economic ladder. On and on this will go which will cause a type of national hyper-inflation and the equilibrium effect to normalise growth will leave deep fissures of repercussions in the state for decades to come. This focus with possible price inflation due to problems undersupplying a constant demand will be weaponised by extreme nationalism (e.g. North Korea) and anti-establishment talking heads (e.g. Italian 5 Star Movement) will add to national inflation and all that comes with it (e.g. Zimbabwe) thus a drop in living standards and value of money is inevitable.

Knowing and understanding why there has been such a rise in populism like this is one thing, showing empathy to those who buy into it is another, and highlighting the issues to enact real positive change is the crux of why this article can be deemed important. A hypothetical ministry of future affairs is a long term government and opposition initiative to future proof a country without having to worry about the changing of the guard every time there is an election and the knock on new policy changes to undo the work laid by the ministerial predecessor.

Understanding Where We Stand on the Global Playing Field

We must first undertake a comprehensive analysis of the economy from whole industry to sector subsections to gauge the temperature of each gear in the national economic machine. This is basically a risk analysis for the industries within the country or region to uncover what businesses are safe and which are at risk. To prevent the same that has happened in 2008, we need to have policy in place to re-educate those in “at risk” industry, so that when the inevitable happens the transfer of labour can be seamless and easy, to prevent a decrease of productivity and increased strain on the welfare system, to ensure the country is not hammered by industrial loss, the value that is gained by the worker, and to make sure that the unemployment rate stays at its natural level of 4%. By outlining the trajectory in which the country will take through forward thinking economic policy, it will allow unhindered progress through the usual political intervention by allowing a country to play to its strengths in growth industries, and eventual minimisation of exposure and risk to weakened industries.

By allocating the resources of the country to the appropriate avenues that we will eventually be pushed down into the future, we can help with innovation at home by embracing these strength industries. We can increase competition through local businesses that operate in these sectors to allow prices competition to decrease prices, and therefore give value to consumers at home and indeed abroad via our deep trade connections. From an Irish viewpoint, let’s do what the Irish do best and adapt to the ever changing economic environment and thrive to be the country that we can be.

Perceived Lack of Guidance and Trajectory

There is a lack of guidance as to where the country seems to be going. All that is heard is about the obligations for repayment through fiscal responsibility, prudence, and perhaps the occasional plan about making this the best little country to do business in, which only details short term practices, which doesn’t give a future to aim for that inspires hope in the people to believe that the future is brighter. Having this lack of detailed guidance or trajectory seems to be better than having none at all, but there is no in depth of detail about how it will be done that articulates this process to the average person. Political and economic jargon is used, either intentionally or not, to confuse the people and disengage their interest with intent to prevent questions.

By having a clear plan not cemented in the short term, information needs to be relayed to the general public as to why decisions are made, how far into the future they are thinking, and were Ireland will be in the next 20, 50, and 100 years. More transparency in this decision making and construction of the state blueprint for future endeavours, the public, households, and firm can plan far into the future and be safe in the stability of the country for long periods of time allowing for stable growth.

Need to Set Objectives for Balance in National Autonomy and Globalisation

To refocus our efforts into the industrial strengths of the country, to maximise our resource allocation and keep employment high, massively educated, and specialised in various strength industries that improve the welfare of the Country and the world. This specialisation into strength industries that are science and technology can allow for innovation in these industries by having incentives for FDI and national industry to set up and compete with one another.

Animal Spirits and Black Swans

The severe lack of confidence in the political system is evident in the way political events have played out this year. Protest voting for a change of direction is leading the charge. Perceived corruption in Government, like what was showcased in Brazil earlier this year, and the information being given to the public through the medium of outlets such as Wikileaks is playing havoc with the animal spirits of the population.

A Ministry for Future Affairs can do some sort of job to correct these issues that the people have with their current political grievances by giving the people information on where their country is aiming to be directed down and how everyone will have a prosperous future, but the scale of an individual’s prosperity will come down to their willingness to work with the tools of education and opportunity given to them by Government.

The Ministry of Future Affairs can also undertake potential risk management situations by encompassing Black Swan situations such as recessions, by bringing back the ability to understand the future spending power that our money will have on our economy such as rises in inflation, and future living standards.

Problems with the Establishment of a New Ministry

Understandably the people will initially get annoyed with the creation of a new ministry as history would suggest that it will be a waste of taxpayer money. Not only will they see it as being a new way for taxes to be squandered, the historical deadweight waste of public funds will give rise to the pertinent questioning of the efficiency and usage of a nation’s tax, political zest to accomplish tasks, and politician and civil/public servant wages. It can be said with accuracy that this lack of confidence stems from a total distrust of the political system and how confidence needs to be restored in the governance of a nation. The need for taxes to be seen to work for what these taxes are intended for is of paramount importance as that is money from the people to be used by the people and for the people.

We must then look to actually reform, through top down political means, the trinity of the political houses (Dáil, Seanad, and Uachtaráin) and the need for this reform to be filtered down into the various departments within each of these houses to allow the running of the nation be done in a manner to maximise the benefits for its citizens.

The Need to Think of the Future

By streamlining the process of which route the country should take in the future into a Ministry of Future Affairs, it will take that burden off of the other ministries to concentrate on the present to optimise the day to day running of the country in resource allocation. We have led the way in the world with social economic outcomes like the Gay Marriage Referendum with the knock on effect that had on the country for social inclusion and attractiveness to firms due to this end goal of social inclusion, so by taking our future into our own hands, at some stage we can benefit the people of Ireland, the people of Europe, and the people of the world through increases in output, productivity, and social liberty. This is why a Ministry of Future Affairs will at some stage be a rock solid foundation for this country and many other nations around the world if they develop and utilise one. It’s up to the current actions taken by current Government to plant these seeds of stability and future growth to be sown, and allow future citizens reap the awards.

Yes, we are currently indebted to Europe with repayments and currently have very limited independence with decision making, but once repaid the seeds that should have been sown years before can begin to be nurtured and grow. The need for the Future Affairs Ministry to also talk with Europe about a reform needed to decentralise decision making away from a one size fits all policy will need to be discussed for the E.U to not fail as a trading block, but to thrive as decisions that are taken to counter the current state of the business cycle in one part of Europe will have a bleeding effect on other countries and add to their current business cycle status pushing them to have an even greater economic contraction in the future for when their economy eventually tanks.

By combating the economic business cycles across nations through the understanding that they are independent economic entities, a potential buffering of the boom/bust system can happen. This will allow the Celtic Phoenix rise from the ashes of the near decade dead Celtic Tiger and soar on the winds of prosperity, but how long can the Phoenix survive if the future isn’t accounted for?

On a global scale, a super national agency such as the World Trade Organisation should establish a wing to promote improved fluidity of employment and education or re-education for workers in industries deemed to be nearing the end of their lifecycle and to be replaced with a newer industry i.e. drivers being replaced with autonomous vehicles.

Extra Thoughts about this Hypothetical Ministry

The following points are just some pillars of ethos or items of importance in its modus operandi that this hypothetical Ministry could base itself upon;

To reinstate confidence in the political system within a country by ensuring future proofing of a nation could help a government, and whoever occupies power at the time, to not be distracted or play political games and putting the future of the people in jeopardy.

There will need to be a reform on a regional level in Europe to stop the one size fits all policy in the EU that will overheat or supercool an economy is its business cycle does not match the countries with bigger and more robust representation.

To rectify the information asymmetry between policy makers and citizens to allow a more transparent free flow of info that can be used in policy making but also to give citizens a heads up on potential policy coming down the road that may affect the citizenry bottom line which simple put is living standards.

As we live in a representative democracy, we elect someone to represent us and our needs at the tables of power and decision making. That is why a high level of transparency between policy makers and the citizens they have been elected to represent must be crystal clear, as if something is coming down the road that will affect living standards of the people, they need time to prepare or revert a policy that is theoretically sound, but practically redundant.

The simplification and reform of the tax system would be of most importance in an attempt to limit deadweight loss of tax takes or market participants, while also being effective and efficient in the spending of tax take with tangible economic and social outcomes to be benefited for the people.

Committing to a long term cross governmental strategic plan for economic and social policy can see a trajectory of action plans be carried out for a country into the distant future. Accountability and responsibility must be held for competition or failure to meet timeframes.

Reformation of the trinity that is the Irish political system is needed, firstly by keeping the power base dispersed across these houses, but by determining how to make it more efficient in operation and election process such as open Seanad elections and you can only run in one election without being co-opted into another house if an election attempt failed.

The promotion that a citizen should be judged on their character and merit is paramount. The ability to be unbiased in a citizen’s race, sexual orientation, ideology (as long as that does not cause harm to themselves or those around them), and the promotion of the use of ethical and moral scientific and technological improvement in a positive manner to the benefit of citizens without impeaching an individual’s rights, liberties, or freedoms, should be a cornerstone of the agenda that the Ministry would operate under.

Finally to streamline the size of the government and the workforce to be reflective, in a sense, of the free market so interventionist policy is used to rebalance the economy with a public to private ratio, or enact justice in the social arena where needed. This can be funded through the enactment of optimal and progressive taxation policy thus allowing government to construct and continue the upkeep of infrastructure but not use taxation for the sake of taxation to try and balance books or kick the debt down the road. A taxation Laffer curve of sorts could be researched and implemented to limit unnecessary deadweight loss.

About Author

Jonathan McEvoy is an Irish based border control post inspector for the Irish Government and Europe Union who took up his role in 2019 in response to British withdrawal of trade agreements, which was a position taken up after time spent working within the financial services sector in Dubai. He is an economics and finance postgraduate from Waterford Institute of Technology and a community stalwart in his home city of Waterford having been elected to serve on many boards of directors around the city in a voluntary capacity. His love of writing has a deep theme of economics in every published article which talk about history, philosophy, finance, politics, and society. His writings are grounded in practical observations away from the theoretical hypothesis of hypothetical potentials. If you are looking for a modern digestible viewpoint on modern economic ideas with a focus practicality and no holding back, he is a writer for you.

Find Jonathan on the social platforms @jonathanmcev0y

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