A Very Political Project: Charles Haughey, Social Partnership and the Pursuit of an “Irish Economic Miracle”, 1969-92
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Dublin City University School of Law and Government A Very Political Project: Charles Haughey, Social Partnership and the pursuit of an “Irish economic miracle”, 1969-92 By Philip O’Connor Thesis completed under the supervision of Prof. Gary Murphy in fulfilment of the requirements for the degree of Doctor of Philosophy Dublin City University, School of Law and Government January 2020 Declaration I hereby certify that this material, which I now submit for assessment on the programme of study leading to the award of Doctor of Philosophy is entirely my own work, and that I have exercised reasonable care to ensure that the work is original, does not to the best of my knowledge breach any law of copyright, and has not been taken from the work of others save and to the extent that such work has been cited and acknowledged within the text of my work. Signed: ________________ (Candidate) DCU ID: 54160707 Date: 6th Jan. 2020 Table of Contents Table of Contents 3 Acknowledgements 6 Abstract 7 Introduction 8 Chapter 1: Theoretical contentions and competing literatures Contentions 14 The political economy of policy change 15 Policy and partnership in the economic transformation 19 Ireland’s social partnership in comparative analyses 22 Other literature 24 Part 1: Leaps, Bounds and Reversals, 1945-86 29 Chapter 2: The quest for socio-economic organisation, 1945-70 Irish politics and economic interests before 1945 30 Fits and starts: Irish “tripartitism” 1945-56 36 Lemass’s economic institutionalism 1957-63 40 System stresses: from expansion to dissolution 1963-69 45 Spirit of the ‘60s: social change and industrial crisis 1967-69 49 “Order plucked from threatening chaos”: Haughey’s 1969-70 initiative 53 Lynch’s retreat to minimalism: the 1970 Wage Agreement (NWA) 56 Haughey, the ITGWU and the suspension of tripartitism 59 Chapter 3: The politics of retreat and revival 1970-81 Asymmetric impact: tripartitism in the 1970 Northern crisis 64 Corporatist minimalism: the NWA system, 1971-76 66 From tripartite revival to “National Understanding”, 1976-79 72 New Deal: Haughey recasts the “Understanding”, 1980 81 From implementation to crisis 1980-81 88 Chapter 4: Partnership and autonomous government 1981-86 Breakdown under the Fine Gael-Labour coalition, 1981-82 92 Revival in another Haughey interlude, 1982 97 Policy consensus, ideology and party conflict in the 1980s 105 Autonomous government: economic crisis and policy choice 108 Unbridgeable divide? – Employers, unions and the state in the 1980s 114 3 Part 2: Genesis and construction of the “PNR”, 1984-87 121 Chapter 5: Policy revolution: the politics of the NESC plan Inception: Ó hUIginn, Flynn and the genesis of an idea 122 Parting of the ways: the Labour/union policy split 126 Strategy revolution at the NESC 128 “Palace coup”: the ICTU secures a mandate 134 The “Haughey Factor” again decisive 136 Partnership on principle: Fianna Fáil in the 1987 election 141 Chapter 6: Long haul: the dramatic road to the “PNR”, 1987 Government choice and policy positioning 143 First step: Haughey engages the social partners 144 Blunt talk: Haughey’s three-stage strategy 149 Broad base: mobilising social partner input 153 Pay and planning agendas: crafting the agreement 157 “To the strains of ‘Mise Eire’”: the political symbolism of a plan 162 The PNR: a plan for socio-economic transformation 163 Political high stakes: the rocky road to ratification 166 Part 3: Implementation, 1987-89 177 Chapter 7: The strategy and dynamics of partnership, 1987-89 Kick-starting the partnership “system”, December 1987 178 Institutional drivers: CRC, NESC and the State: CRC: a “mechanism unique in the European Community” 181 NESC: the “appropriate body” for national strategy 186 Political dynamic: partnership at the “political level” 190 Partnership as mobilisation of Total Factor Productivity 194 Leveraging Europe: the “National Development Plan” 200 Partnership and the Haughey-Delors “alliance” 204 Chapter 8: Green Shoots: recovery and policy innovation, 1987-89 “Turnaround”: a pattern emerges 211 Policy tested: “indigenous” industry’s uneven performance 212 Growth drivers: new sectors and EC leverage 218 Innovation: IFSC “pipe-dream” and the FDI “surge” 221 A mixed economy model: Haughey, the unions and the semi-states 226 Chapter 9: The politics of pay and social compensation 1987-89 Deferring reward: partnership and the politics of pay 236 New paradigms: “Rural Development”, “Long-term unemployment” 242 The politics of “unemployment black-spots” 248 Managing despair: government policy and “anti-poverty” politics 251 Social compensations and state modernisation 253 Irish model: a state-dirigiste globally active mixed-economy 255 4 Part 4: Consolidation, 1989-92 257 Chapter 10: Institutionalising Social Partnership, 1989-91 Haughey’s commitment to partnership as a “permanent system” 258 ICTU and programme delivery: the leveraging of discontent 260 Who’s “Left”? ICTU and its rebels 266 System consolidated: local pay, apprentices and industrial relations 270 Strategic shift: the Haughey/ICTU deal on the “semi-states” 273 Planning the transition: towards a new agreement 281 Completing the blueprint: NESC and the 10-year “PESP” 284 Chapter 11: Metamorphosis: Economic and political consequences of the PNR/PESP Prototype Tiger: towards an “economic miracle” 292 Template for a Social and Developmental State 299 Thus far … : setting limits to partnership institutions 301 Party politics: the (partial) demise of anti-corporatism 306 Social partnership and equality politics: a case study 310 Unruly offspring: partnership and the politics of poverty 315 Conclusions 321 Addenda 331 Appendix A: Membership of the “Central Review Committee”, 1990 332 Appendix B: CRC attendance under the PNR, 1987-90 333 Appendix C: Pay rounds and party preferences, 1945-91 337 Acronyms and abbreviations 338 References: Archival sources and private papers 344 Interviews with and information from witnesses 346 Press 347 Bibliography 348 5 Acknowledgements This thesis would not have been possible without the encouragement and support of Professor Gary Murphy, who supervised it. It was he who convinced me, after I completed an MA in 2014, to pursue the historical study of social partnership I wished to undertake through the route of a PhD, focusing on it as an essentially political project central to the historic Irish economic turnaround achieved in the 1990s. DCU provided generous support through a 4-year scholarship and study grant. My work benefitted from many conversations with Gary, who is currently completing what will be a definitive biography of Charles Haughey. I am also grateful to Dr. Eileen Connolly of DCU, and to the internal and external examiners, Dr. Eoin O’Malley of DCU and Professor Seán Ó Riain of NUI Maynooth, for their thoughtful comments, suggestions and encouragement. My thanks are also due to Martin Fraser, secretary general of the Department of the Taoiseach, who, at the request of Shay Cody, gave me generous access to the extensive records of the Central Review Committee of social partnership in that Department, and to archivist Joseph Goude for his unfailing assistance as I worked through them. I would also thank David Begg for similar access to the records of the ICTU, Dr. Rory O’Donnell to those of NESC and Shay Cody those of Fórsa. Thanks also to Seán Haughey TD, Vincent McBrierty, Manus O’Riordan, David Connolly and many others who assisted with ideas, accessing sources and convincing key witnesses to talk with me, as well as the interviewees themselves for their time and candidness. I also thank Jean Kennedy at SIPTU College, Pádraig Mannion at ILHS, and the staffs of all other archives consulted, including UCD, Sligo IT, NLI and NAI. A special thanks also to Pádraig Yeates for providing his own research and interview papers, and to Phil Flynn, Des Geraghty, Kieran Rose and others who made private papers available. Finally I would like to thank by wife and lifelong partner, Helen Lahert, for not alone enduring but encouraging me in this project, and to family and friends for their support and on-going, often amusing, accompanying comments throughout. Needless to say, none of those who assisted me bear any responsibility for views or judgements expressed in the study, which are entirely my own. 6 Abstract A Very Political Project: Charles Haughey, Social Partnership and the pursuit of an “Irish economic miracle”, 1969-92 By Philip O’Connor The social partnership model initiated in Ireland in 1987 was a key factor enabling the transformation of the Irish economy and society from one of West Europe’s poorest to one of its top performers in little over a decade. This policy paradigm shift, as profound as that of 1959-63, recast the economy within a few years to a new model, its future defining characteristics established by 1991. The strategy involved exploiting emerging opportunities, particularly global finance, to drive a transformation, but also encompassed comprehensive social and institutional reform, employment growth, state industries, and a radical remodelling of social and educational provision. The combined approach was consciously conceived as an alternative route to economic modernity to solely “monetarist” or social state dismantling approaches adopted elsewhere. Social state innovations under partnership, however, rapidly became its central concern as job creation failed to keep pace with the attrition in declining industries. But the dual social/economic strategy of partnership made it a model of international significance, not least in being instituted just as most states were retreating from “corporatism” or abandoning it altogether. Central to the Irish transformation was a circle led by Charles Haughey, who engineered it through tight control over government and a working alliance with key forces among the social partners. In this Haughey, a modernising nationalist, realised a long-conceived policy approach he had previously attempted. Social partnership was neither primarily an emergency response to the immediate debt crisis nor a conforming to a supposed European “norm”.