Ask not what the economy can do for you, but what you can do for the economy

Philip Lane, Professor of International Macroeconomics at TCD, had a letter in Monday's Financial Times arguing that there was no connection between Irelands economic collapse and its membership of the EMU. He concludes "While Emu membership does provide a safe haven, the policy framework in Ireland requires a major overhaul in order to live more comfortably with the constraints imposed by participation in a currency union. In particular, success under Emu requires national governments to maintain discipline over budgets, the banks and the labour market.

On all three fronts, the Irish government is now actively engaged in active reforms."

This brought to mind the following comments by Polayni made, in The Great Transformation, when discussing the gold standard and the last great depression.

" The 1920’s saw the prestige of economic liberalism at its height. Hundreds of millions of people had been affected by the scourge of inflation: whole social classes, whole nations had been expropriated. Stabilization of currencies became the focal point in the political thought of peoples and governments; the restoration of the gold standard became the supreme aim of all organized effort in the economic field.  The repayment of foreign loans and the return to stable currencies were recognized as the touchstones of rationality in politics; and no private suffering, no infringement of sovereignty, was deemed too great a sacrifice for the recovery of monetary integrity. The privations of the unemployed made jobless by deflation; the destitution of public's servants dismissed without a pittance, the relinquishment of national rights and the lost of constitutional liberties were judged a fair price to pay for the fulfillment of the requirement of sound budgets and sound currencies, these a priori of economic liberalism. (p142)

“Civilization was being disrupted by the blind action of soulless institutions the only purpose of which was the automatic increase of material welfare (p. 219)”

Plus ca change eh?