Opinion: Irish unity debate must catch up to economics of 21st century – Sean Fearon

What the economic debate on reunification needs most is a healthy dose of scientific reality, and an acknowledgement of ecological limits

Predictions are risky but it does seem likely that a united Ireland will be voted on at some stage in the next five to 10 years
What the economic debate on reunification needs most is a healthy dose of scientific reality

This week economists John Fitzgerald and Edgar Morgenroth published some updated work on the ‘cost’ of Irish unity. Unfortunately, the paper is undone by the same issues that existed when a similar version was published in 2020.

Firstly, it comes with the same fear that Irish unity would, as a matter of fact, be unavoidably marked by an ‘immediate’ and ‘major’ reduction in living standards.

It might be playfully said that Irish unity, by the authors’ estimation, will dawn upon our island as a great hallucination. Without warning, Ireland will be united, and the subvention, which is overstated in any case, will envelope the living standards of the south of Ireland in a great abyss.

For the authors’ analysis to hold, no borrowing can take place to cover the cost of subvention. No significant policy changes can take place to accommodate changed macro-economic conditions. We can confidently reject any forecasts of plummeting living standards predicated upon assumptions such as these.

All of this raises an issue of much greater importance, however: the economic debate on Irish reunification is unmoored from social and ecological reality.

Fitzgerald and Morgenroth argue again that the north is not productive enough, and that this productivity gap must narrow to reduce the subvention. Mainstream supporters of reunification claim, not without merit, that a united Ireland could unlock greater productivity in the north.

Questions of production, consumption and the allocation of income in a united Ireland are of vital importance to us all. But we must dismiss assumptions that more production, producing more efficiently, and more consumption of anything at all to grow our economy, improves living standards.

What production are we lacking, and who will benefit from producing more efficiently? If we welcome a glut of international investment, will we as citizens see our share of national income rise, or will profits and dividends rise? Will productivity be achieved by suppressing our wages or shedding jobs? Will the expected rise in income find its way west of the Bann and to border counties, or remain in the glassy towers of south Belfast?

These questions remain unanswered in the narrow confines of mainstream debate, which go little beyond ‘my growth is bigger than yours’.

Economic growth in overdeveloped economies creates problems for which growth is the only solution: unemployment, pollution and biodiversity extinction, damage to our mental and physical health, inequality, and damage to the stability of our democracies.

Consider that, in real terms, the northern economy produced £16 billion more in 2019 than it did at the signing of the Good Friday Agreement in 1998. The financial services and professional services sectors have doubled in size in this time.

The Household Support Fund is used to support food banks and provide energy support to struggling households
Despite rising prosperity, food banks are a daily reality for many families (Jonathan Brady/PA)

Meanwhile our society is marked by the obscenity of child poverty. Our heath service does not serve hundreds of thousands of people on waiting lists. A severe housing crisis has scarred the lives of a generation of young people on both sides of the border. Rural communities have no access to the most basic public transport infrastructure.

Simply put, our economy produces more than it ever has, yet we see shortage of the essentials of a dignified life at every turn, as the natural world dies around us.

Modelling from the University of Leeds names the Republic of Ireland as among the most unsustainable economies on earth. If the rest of the world operated as the Irish economy does, it would need three planets to sustain it.

Data is harder to come by in the north, but where it exists, a similar level of ecological overshoot is clear.

What the economic debate on Irish reunification needs most is a healthy dose of scientific reality, and an acknowledgement of ecological limits. It must catch up to the economics of the 21st century.

What the economic debate on Irish reunification needs most is a healthy dose of scientific reality, and an acknowledgement of ecological limits

Ireland, united or otherwise, does not face a problem of scarcity. It faces a problem of allocation, and distribution of the vast quantities of income and wealth which exist here.

How can we design a re-unified Ireland where our wellbeing, our natural heritage, and the health of our communities are the first and only ends of economic activity?

These are difficult questions, but no re-unified Ireland can endure in the 21st century without answers to them.

:: Dr Seán Fearon, Centre for the Understanding of Sustainable Prosperity (CUSP), University of Surrey