October 2014        

“Portrait of a patriot”

Alan Hanlon

A biography of T. K. Whitaker by Anne Chambers, entitled Dr T. K. Whitaker: A Portrait of a Patriot, has just been launched. Whitaker was born in 1916, and in the 1950s and 60s (May 1956 to February 1969) he was secretary of the Department of Finance.
      It is unusual for civil servants to be well known, let alone to have their biographies written. The Taoiseach, Enda Kenny, launched the book and described Whitaker as “a brilliant man, a man who made a singular and peerless contribution to life on the island of Ireland, a national treasure.” He had “steered Ireland from a stunting and suffocating protectionism to embrace instead the idea of international free trade.” In 2002 Whitaker was voted Irishman of the Century.
      It might well be asked why the bourgeoisie are now trying to maintain that one individual was responsible for the reform of the economy from the 1950s to the present. Whitaker’s main claim to fame was the “Programme for Economic Development,” published in 1958 while he was secretary of the Department of Finance. It is worth looking at the background to this document and how its origins were other than the current portrayal.
      The similarities between Ireland in 2008 and in 1956 are remarkable. Gerard Sweetman (Fine Gael) was minister for finance, a barrister from a privileged background (like Brian Lenihan). In 2008 the same factors were used to introduce a series of austerity budgets. The European Union had replaced Britain as the main imperial power involved.
      In the 1950s and after 2008 the succeeding Governments followed the same austerity programmes as their predecessors. The International Monetary Fund and the European Central Bank (instead of the World Bank) endorsed the austerity programme, which essentially involved reducing labour costs, privatising as much as possible, and reducing the role of unions.
      In 1956 Whitaker produced “Capital Formation, Saving and Economic Progress.” In essence this paper advocated a move away from “social capital formation” towards “economic investment,” focused on the need of the consumer. Building social housing was out, and the market was in.
      Ireland was still part of the sterling area in the 1950s, so Britain was able to “advise” the Government in relation to imports and exports that could affect the value of the pound. In effect the budget had to be approved in advance by Britain, as it is today by Berlin. The Suez Canal Crisis in 1956 had brought about a decline in exports. The 1956 census showed a drop in population and emigration of about 196,000. There was a constant trade deficit.
      Britain wanted Ireland to join the IMF as a counterweight to the United States. Ireland would be expected to take the view of Britain as part of the sterling area. Capital was being invested abroad through the banks rather than in Ireland.
      Housing was the main issue after the ending of the Second World War. The Department of Local Government reckoned that 110,000 new houses were needed in 1948, but only 1,602 were built with state aid. By 1951 the number had increased to 12,305, under pressure from the unions and the Labour Party.
      It was against this background that Sweetman sought to refocus the economy towards a more liberal market economy. This meant austerity budgets on the home front. Investing in social housing was seen as of no benefit to the bourgeoisie.
      Housing was one-third of the state’s capital programme. On 4 November 1957 the Capital Investments Advisory Committee recommended that new building be reduced, the repeal of the Rent Restrictions Act, and the introduction of differential rents by local authorities.
      James Ryan (Fianna Fáil), who had succeeded Sweetman, advocated a reduction or removal of non-productive capital expenditure. Everything had to pay for itself. Improved living conditions for the citizens were never a consideration. The idea of looking at an alternative to capitalism was never entertained.
      It was in this environment that the Economic Development Plan was developed. To obtain foreign capital from the World Bank, an economic plan was required. Whitaker put the plan together, using data from various Government departments, constantly liaising with the British Treasury, the IMF, and the members of the World Bank.
      The idea was that in order to raise finance from the World Bank there needed to be a plan for how the money would be spent and how it would improve Ireland’s financial situation. Another aspect was that it should be available to the public so that it had “popular” support. There would be no alternative.

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