“Buy Irish” sounds sensible, but is it really such a good idea?

8 September, 2011

You may have read about a report prepared by Amárach Research which said that if consumers were to spend as little as €4 extra a week on Irish-produced goods then over 6,000 new jobs could be created. Minister for Enterprise and Jobs Richard Bruton formally launched the research in Dublin last Monday.

This prompted an Irish Times editorial urging us to Buy Irish, and the editorial was in turn criticised by a letter to the editor of 8th September .

The letter-writer was 100% correct in his scepticism about these developments, for such campaigns constitute a form of “soft” protectionism: if we are consistently willing to favour Irish products which are either more expensive or of lesser quality than the equivalent import, then we allow Irish producers to be less efficient than foreign competitors, and thereby almost ensure that they will not be able to compete with them in overseas markets.  This condemns Irish firms to being small-scale domestic producers.

Any campaign to Buy Irish is against the spirit (if not the letter) of the law governing the Single Market, and we have more to lose than to gain if other EU countries follow suit.

The Irish Times editorial did admit that “long-term prosperity depends on winning in world markets” but asserted that “a shot in the arm for the domestic economy is desperately needed in the short term”.  But what constitutes the short term?  Irish firms cannot postpone the achievement of greater efficiencies for even a short period, and I have no doubt that firms (under pressure from their workforce and the trade unions) will see any indulgence by the Irish consumer as an opportunity to postpone hard decisions.

More importantly, many of the inefficiencies and cost burdens under which Irish businesses toil are directly as a result of Government policy or inaction.  Whether it’s electricity costs, local government charges, unrealistic pay rates, gold-plating of EU directives or monopolistic legal fees, it is the government that is to blame for imposing high costs on Irish businesses, or allowing others to do so.

The “Buy Irish” campaign is a potential distraction from the meaningful reform that is needed to make Ireland competitive once again in the world marketplace; it should be regarded with suspicion, and treated as a red herring.

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