Irish history proves the power of market access
The shift towards more extreme political views, and strife within the employer-employee nexus, could be linked to a long-term trend showing the widening disparity between those with relative wealth and those without.
The wealth management company Pictet provides interesting data underlining this point: between 1980 and 2014 the top 1% of income group earners in America saw their average real (adjusted for inflation) after-tax pay rise almost threefold.
In the same period, those in the lowest quintile saw barely any improvement in pay.
This may be due to technology changes which have made work previously undertaken by human beings becoming mechanised.
The existence of equipment that can do work done before by people may also depress the wage available to those doing the labour.
It is also connected, presumably, to the evolution of a global marketplace which brought very low priced labour in developing countries to effectively compete with those in the western world.
The data showing a large widening of the gap between those on very high incomes and those on low wages is probably most pronounced in the US but it is likely that similar patterns are evident across Europe.
That helps partly explain the disillusion among so many people in the UK and their decision to support a Brexit policy that may provide an alternative future.
Finding a way of correcting these huge shifts in the shape of any economy is akin to twisting a gigantic Rubik’s Cube.
A simple knee-jerk reaction could be to shut down international borders and revert to a localised economy where less expensive labour can be kept out.
This is part of the Brexit narrative but it blows up under scrutiny.
The key reason why the single market has helped shape greater wealth across Europe is precisely because it allows labour to move to those regions where greatest opportunity exists.
Being able to sell products and services anywhere in Europe unfettered helps explain why so many companies in the UK have done so well over recent decades.
In Ireland, we have our own experience of what closing market access can do. Between 1932 and 1938, a trade war was waged between Ireland and Britain over land annuities.
The Government of the time adopted a protectionist policy which included tariffs on imports from Britain. The UK retaliated by imposing 20% tariffs on Irish food and drink imports.
At its peak, the crisis caused Irish farmers to slaughter cattle because they could find no market for them.
The net effect was to seriously damage economic growth in Ireland given its dependence then — and ever since — on access to international markets.
Any development related to Brexit or any other protectionist impulses around the world are only bad news for Ireland.
We do not have the luxury of a major domestic economy that can be self-sufficient if our trade links begin to crumble.
Exports equate to 110% of GDP in Ireland, far more than most developed countries, so we need to be strong advocates of liberal market access.
Whatever about the strong views among political parties about how incomes should be taxed and paid for in Ireland, there needs to be a cross-party lobby that fights for the retention and further development of trade deals which expand — rather than constrict — the openness that has defined Ireland since the 1970s.
Brexit threatens that potential and associated growth.
