A Post-Christian Ireland? || Economics and Christian Values

Economics and Christian ValuesAuthor(s): John FitzgeraldSource: The Irish Review (1986-), No. 27, A Post-Christian Ireland? (Summer, 2001), pp. 77-85Published by: Cork University PressStable URL: http://www.jstor.org/stable/29736021 .

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Economies apd^t?tian Values

JOHN FITZGERALD

Finding our Values

Identifying

the values that individuals believe in can often be difficult to

infer from individuals' own behaviour. It is all the more difficult to estab?

lish the values that society in some way collectively believes in by

examining the many economic policy choices that it makes. However, some

key policy choices may occasionally pose moral issues directly in a way that

the noise of everyday life frequently obscures.

In the 1980s the public pension scheme in the United Kingdom was

effectively privatized. This change in government policy was in no way sur?

prising, given the prevailing political views in the UK at the time. However,

after a number of years it became clear that the private companies that were

to provide replacement pension cover had seriously misled many contribu?

tors and, as a result, they were likely to find themselves without cover in

their old age. Faced with this prospect, the Conservative government forced

the errant companies to repay billions of pounds. In forcing restitution the

government recognized that ultimately in Britain, as in other European Union countries, society could not walk away from its responsibility to

ensure a reasonable standard of living for all of its citizens in old age. If the

private schemes had defrauded many individual contributors, the state

would ultimately have had to make good the loss.

The fact that pension provision in the UK seems mean by the standards

of much of the rest of the EU is not my point. For me what was important was that even a fairly conservative European government explicitly recog? nized the continuing role of the state in providing a social safety net. This

acceptance of the role of the state in providing a social safety net is a

FITZGERALD, 'Economics and Christian Values', Irish Review 27 (2001) 77



characteristic of all EU governments, even if they interpret it in very different ways.

While sharing many basic values, broadly derived from Christianity, the

EU member states also show great diversity in how they apply these values.

Scandinavia has much greater provision of public goods and services than

does Ireland, or the southern European members of the EU This clearly reflects a preference on the part of their citizens but it is not clear that it

reflects a completely different set of values. It was interesting that in the

debate on joining EMU last year in Denmark, a major argument against EMU was that it might require Denmark to reduce its standard of provision of public goods and welfare services. The fact that that argument was totally

spurious is irrelevant. What was important was that it was widely accepted

by Danes that, if such were the case, it would have been an important reason

for not joining EMU. This reflects the importance that Danish society attached to adequate provision of public services.

Ireland is clearly situated within the broader European culture in terms of

the values that have in the past played a role in the development of social

and economic policy. As in all EU states there is a tension between the

rights of the individual and the role of the state. However, there is clearly

widespread acceptance of the key role of the state in economic and social

policy. In contrast to the US, government is not always a bad word. In the

end people look to the state, not just to protect them, but also to protect the

rights and interests of those who are too poor, or for some reason unable to

vindicate their rights themselves.

The Role of Economics

While one frequently hears statements that some policy is 'not sensible' or is

even 'undesirable' from an economic point of view, this is generally a short?

hand way of saying something more complex. Economics as a discipline can

be used to implement Christian values, just as it can be used to frustrate

them. Very often a misleading view of economics is perpetrated where

advocates of a particular point of view argue that it is 'economically neces?

sary' to follow their advice. In seeming to co-opt economics as part of their

argument they do economics a disservice.

Economics is a methodology for analyzing certain aspects of human

behaviour. As a methodology, rather than an ideology, it does not allow for

normative statements of what is 'good' or 'bad'. However, in considering the

effects of economic policy on individuals and society as a whole, where cer?

tain welfare criteria are introduced, it is possible to assess outcomes against

78 FITZGERALD, 'Economics and Christian Values', Irish Review 11 (2001)



those criteria. For example, when asked the question,'How do you raise the

incomes of the poorest 10 per cent of the population at minimum cost?'

economists can beaver way with their models and come up with, albeit

uncertain, conclusions.

Of course, while economics may in the abstract may be considered 'value

neutral', this can not be the case for economists, as with any other profes?

sional workers. In their private lives they have a duty and a right to express their values. However, many will shy away from expressing views in public for fear of mixing values with methodology Similar choices face doctors in

trying to separate emotional involvement from clinical judgement when

looking at individual patients. It does not betoken indifference.

Complexity

While public discussion may often partition policy choices to be made into

different areas ? the economy, welfare, foreign policy etc. ? the reality is

rather different. Decisions made by governments and other groups in soci?

ety about their behaviour have varied consequences, consequences that may be deemed to fall into both the economic and the social sphere. Some of

the consequences may be desirable and some may be undesirable, when

assessed against a

particular welfare or moral criterion.

The role of economics is: ? To help understand the implications of human behaviour in a particular

field. ? To help individuals and society to realize their own 'economic goals'. ? To help understand the possibilities and limitations of public policy and

to help implement public policy in the economic sphere.

Where do values come in? It is not economics that should set the agenda ?

that is the role of individuals, acting as individuals, and together as society, to

define their economic and social goals. Economics does not say that increas?

es in GNP are good (or bad). It does not ascribe a particular weight to

maximizing economic growth, reducing unemployment or modifying the

distribution of income. However, when society, in a complex and opaque

way determines these priorities, the discipline of economics can help imple? ment these choices. The complexity of economic relationships means that

most economic policy decisions do not pose clear-cut moral choices. They

bring with them a mixture of desirable and undesirable effects.

For example, while it may not have been fully realized at the time, subse?

quent research has shown that the emigration of the second half of the




nineteenth century played an important role in raising living standards for

those that remained in Ireland (O'Rourke and Williamson, 1996). For the

bulk of the emigrants their expectation was that migration would improve their economic circumstances. Measured by the standards of real disposable

income, both those who emigrated and those who did not generally had

higher living standards, as a result of migration. However, this quantification takes no account of the human misery that was involved for emigrants in

leaving their family in Ireland for ever. The emotional impact of that pain is

still apparent in any perusal of the literature of the time or of the letters that

passed between emigrants and their families at home. The cost of raising dis?

posable incomes in this way was high and few would claim that emigration was a good thing. However, many families decided for themselves that it was

the least bad of the alternatives available to them.

Similarly today, simple policy decisions may have complex consequences,

consequences that are neither foreseen nor desired. For example, in the early

1980s, with the mounting problems of recession and growing concern

about the impact of the downturn on the poor, there was a major increase

in the real value of welfare benefits. The way the increase was delivered

meant that, for significant numbers of individuals, they were better off not

working and unemployment rose. This was a decision by society that, out of

a concern for the impact of poverty on individuals and families, no one

should have to work for less than the specified level of welfare benefits.

However, the consequence of this measure was higher unemployment

which, in a time of fiscal crisis, required further increases in taxation and

cutbacks in state services, aggravating the unemployment problem. The role of economic research under these circumstances was to identify

the consequences of the policy measures and to examine how the objective of sustaining the incomes of the poor could best be achieved. Unfortunate?

ly, the necessary research had not been done when decisions had to be

made. However, subsequent economic research indicates that, if the increase

in benefits had been delivered in a way that did not interfere with the

labour market, the objective of reducing poverty could have been met at

lower cost. This was a case where the complexity of the network of eco?

nomic behaviour made the policy choices difficult, even in the face of a

clear statement of values.

In attempting to formulate economic and social policies economists,

unlike physicists, are faced with the problem that the behaviour that they are

studying keeps on changing. Whereas physicists can expect electrons to

behave themselves consistently in experiments, economists have the

unnerving experience of having the society they are studying looking over

their shoulders. For example, when economists think they have understood




how consumers will behave under certain circumstances, the consumers

themselves have also learnt what is expected of them and they frequently react by changing their behaviour. This makes economics both difficult and

exciting ?

the answers are never the same.

Changing Priorities

Over the last fifty years the changing problems facing Irish society have been

reflected in developments in the priorities of public policy These priorities themselves are set by the political system, reflecting the values of the wider

society, not by economists acting in their professional capacity However, these

changes in policy have not necessarily reflected a change in basic values. From

the end of the Second World War until the 1960s the clear economic priority for successive Irish governments was the need to stem the tide of emigration.

As discussed earlier, this imperative was not

purely, or even

mainly, an 'eco?

nomic' objective, but it arose from a much broader concern for the future of

the family, for poverty, and for the wider good of Irish society. This was

reflected in the debate contained in the Conirnission on Emigration (1954). This priority reflected the collective experience of more than a century of

emigration, as distilled in literature and art, as well as in statistics.

While over the previous 150 years emigration had been viewed as a

painful feature of Irish society, it was also accepted as inevitable. However, in

the context of the economic recovery of Europe in the 1950s, emigration came to be seen as unnecessary and as a wrong that could be righted, even if

solutions had not seemed feasible before. Over the subsequent decades the

concern about the outflow of emigrants changed. While emigration contin?

ued throughout the 1960s and the 1970s, it was at a much lower level than

in the 1950s, and it faded from view as a major preoccupation of public pol?

icy. The fact that many young unskilled Irish people were still emigrating in

the 1970s, and that they faced many problems in the world they were mov?

ing to, did not continue to attract attention. With the exception of some

church bodies, responsibility for after-care for emigrants was never felt to be

a public priority. From the late 1970s onwards there was increasing concern about the

growth of unemployment. It replaced emigration as a key focus of econom?

ic policy debate. Rising unemployment was seen to bring poverty to the

families affected and it also brought exclusion from much of the daily life of

a normal citizen, daily life that was increasingly urban and focused round

the world of work. The same concerns that drove policy on emigration motivated the priority given to tackling unemployment in the 1980s and

the 1990s.




Migration

Looking to the future the changed circumstances of the economy raise new

moral choices, choices unforeseen a decade ago. For two centuries young

Irish people sought and obtained access to the best labour markets in the

world. Now Ireland is one of the most attractive labour markets and we are

faced with the choice of how we handle the issue of immigration. In the 1930s Ireland refused immigration visas to every Jewish family that

applied for asylum (Keogh, 1998). Many of those refused entry no doubt

subsequently died in the holocaust. While Irish immigration policy of the

time was similar to that of the UK Home Office and the US State Depart? ment, Ireland as a society has never acknowledged its, albeit minor, role in

the moral outrage of the holocaust. Atonement for this past sin should

inform our attitude to the question of immigration today While the need for a generous response to the issue of immigration is

obvious on moral grounds, the appropriate policy to follow is not so clear.

Unregulated immigration would probably place an intolerable burden on

the housing infrastructure and those seeking housing and on the social wel?

fare system. However, the mean-minded approach, that sees even legitimate

visitors ending up in Mountjoy, is totally unacceptable. As a society we have

to work out a generous response to this issue.

Related to the issue of immigration is the question of'whose welfare are

we trying to maximize' through economic policy. Is it the welfare of those

currently living in Ireland or does it include Irish emigrants living abroad?

What weight do we put on the welfare of new immigrants? This question affects a range of policy choices to be made on infrastructure and economic

and social policy. From a moral point of view, there is no clear'right' answer

to this question.

Income Distribution

Income redistribution poses a major challenge for society. There is wide?

spread acceptance within the Christian community that the distribution of

income is unacceptable. There is also acceptance that the distribution of

income between countries ? especially between the developed world and

the Third World is also morally unjust. However, there is much less accep? tance of what would constitute a 'fair' distribution of resources. It is

probably much easier to gain acceptance for marginal changes, albeit of a

substantial magnitude, than it is to get acceptance of what is the ideal. This is

reflected in the nature of the debate on poverty in Ireland.

82 FITZGERALD, 'Economics and Christian Values', Irish Review 27 (2001) 82



Where economics has a role is not in determining what is the objective of income redistribution, but rather to explain how best particular objec? tives can be achieved with minimum cost in terms of lost income or output. It may seem mean to be concerned that those who are better off do not pay

more than is necessary to lift the poorest in society above a certain floor.

However, it is both important from the point of view of gaining acceptance of the redistribution measures, and also in terms of maximizing the

resources available for distribution, that that cost be minimized.

Thus much of the work on income redistribution by economists has

concerned itself with issues of efficiency. How can the cost of raising tax

revenue be minimized and how can the labour market effects of redistribu?

tional measures also be minimized? Economics tells us that the higher the

levels of marginal tax rates the larger the cost in terms of lost output from

raising any given level of tax. This does not mean that low taxes are an

imperative but it does mean that, with rising taxes, as marginal tax rates nec?

essarily rise, the cost to society of the income redistribution also rises. While

high costs might be bearable if they were carried exclusively by the rich, in

practice they are likely to be felt by many in the population. In particular,

part of the cost may be felt in terms of increased unemployment. This con?

straint on action is difficult to measure, even more difficult to explain, but

nonetheless a serious issue for all policy-makers. Even if society as a whole believes that social change may be worth pay?

ing for, there may be problems in implementing that resolve. It is taken for

granted that individuals may move from job to job if it in some way

improves their economic circumstances.This is not normally

seen as a moral

choice. However, in exercising this option it may reduce the ability of gov? ernments to raise revenue to pay for social policy measures considered to be

important. For example, in the 1980s many of those who emigrated did not

emigrate because they could not get some kind of a job in Ireland. They rather left because their after tax standard of living would be substantially

higher elsewhere. This legitimate response constrained governments in their

ability to fund desirable social policy initiatives.

Time

The increasing pressures of work in a modern society may leave less time to

actually enjoy the fruits of rising living standards. Some of the benefits of

rising living standards should be taken in the form of more 'leisure' ? time

outside the paid labour force. Ireland is not a very family-friendly society.

Engagement in paid employment is part of the aspiration and need of the




bulk of the adult population, but the way we organize that work makes the

decision to have children increasingly difficult and costly This is reflected in

the results of a recent study on equality in the Irish labour market (Barrett et

ah, 2000). This shows that the pattern of earnings today manifests little dis?

crimination against women qua women. However, it shows that time out of

the labour market is very heavily penalized, nearly always time out of the

labour market by women. This reflects the fact that to have a career in the

paid labour market and to have children is not seen as a 'normal' activity in

Ireland, posing unnecessary and unwelcome choices for most couples.

Rising living standards can and should be partly taken in shorter flexible

working hours in the paid labour force, if parents are to have the time to

bring up families and enjoy some 'leisure'. In Europe over the last thirty

years a significant proportion of the rise in living standards has been taken in

the form of shorter hours at work ? both a shorter working week and much

longer holidays. If Germany had instead followed the US route, where

working time has fallen much more slowly, Germans would today be 'as

well off' as the US, measured in terms of GDP per head ? German GDP per hour worked is similar to that in the US. Instead Germans have chosen to

take some of the rise in living standards in terms of shorter working hours.

This choice is mirrored across Europe. While we in Ireland, along with the

UK, are at the end of the European spectrum closest to the US, we have still

chosen to take some of our increase in living standards as greater leisure.

Maybe it would also be appropriate to take some of the increase in living standards as time to allow couples to have children and to raise them. This

option has been recognized in Scandinavia and is embodied in public poli?

cy Such a choice will, of necessity, reduce measured output and incomes,

but it might well increase overall welfare. However, if it is to happen, the

increased time out of the paid labour market will have to be shared more

equally between men and women if it is to become an accepted feature of

Irish life. If it becomes normal for fathers as well as mothers to take parental leave all employers will come to recognize that, whether you employ a man

or a woman in their twenties or thirties, the likelihood is that they will

spend some time out of the labour market on family duties.

Conclusion

The values informing our decisions on economic and social policy have not

necessarily changed over the last half-century However, the social and eco?

nomic problems that face us have altered dramatically Finding the right way of tackling these problems is never easy. The difficulty stems not just from




the need to make painful choices, but also from the complexity of modern

society. While society as a whole may be able to establish certain priorities for social action, that action must take account of the fact that individual

citizens, acting morally, will often make implementation difficult. In this

article I have discussed a number of new problems or issues facing us in Ire?

land today. Establishing what is the morally correct response to these

problems is not easy. Even having established the appropriate policy objec? tives, finding the best way of implementing the necessary actions will be , as

ever, difficult.

Notes and References

Barrett, A., T. Callan, A. Doris, D. O'Neill, H. Russell, O. Sweetman and J. McBride,

How Unequal? Men and Women in the Irish Labour Market, Dublin: Oaktree Press 2000.

Commission on Emigration, 1954, Dublin, The Stationery Office.

Dermot Keogh, Ireland and the Jews, 1998.

K. O'Rourke and J. Williamson. 'Around the European Periphery 1870?1913: Globaliza?

tion, Schooling and Growth', University College Dublin Working Paper WP95/17

1995.




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A Post-Christian Ireland? || Economics and Christian Values