‘She saved the country’. This was just some of the hyperbole evoked by David Cameron following the passing of Margaret Thatcher last month. Well I’m sorry, Mr Cameron, I must have missed that!

Mrs Thatcher is largely remembered in Northern Ireland for her misjudged response to the hunger strike and for the much reviled Anglo Irish Agreement, which some now say paved the way for the eventual success of the Good Friday Agreement. But her economic legacy in Northern Ireland has been largely overlooked. Unfortunately, it was even less successful than her political interventions.

I spent the first half of Mrs T’s tenure as Prime Minister working in Northern Ireland as an economist in the public sector before moving to the private sector in the mid eighties. I watched therefore as unemployment in Northern Ireland rose to a peak of 18.1% in 1986 (compare this to a rate of 8.5% today), with over 120,000 people claiming unemployment benefit. The Thatcher government also preached the message to our businesses that they had to face up to the ‘cold hard winds of competition’, resulting in the collapse of our manufacturing sector where employment fell by around 40,000 in the first half of the eighties to less than 100,000 jobs.

In many ways, the Northern Ireland economy suffered more under Thatcher than in the present recession. While she did push through important structural reforms in the UK, her economic policies were little short of disastrous for Northern Ireland, even given the context of the Troubles which curtailed inward investment. The drive for home ownership was widely welcomed but also laid the seeds of the property boom of the first decade of this century. Ironically, where the Northern Ireland economy did benefit in the 1980’s was the huge growth in public spending which led to our current overdependence on the public sector.

In the so-called ‘Sermon on the Mound’ to the General Assembly of the Church of Scotland in 1988, Mrs Thatcher linked her economic and political policies to her Christian faith. ‘Christianity is about spiritual redemption not social reform’, she pronounced. This led her to conclude that our social and economic arrangements must be founded on the acceptance of individual responsibility which ‘comes with freedom and the supreme sacrifice of Christ’.

While I accept the basis of her belief, the implications for social and economic policy and the role of the state do not follow for me. Unfettered wealth creation was considered to be entirely acceptable as long as it was accompanied by a degree of altruism. The role of the state was not to ‘intervene’ in the market but to promote the market so that individuals could exercise their choice freely.

Michael Sandel has attributed to Thatcher and her American buddy, Ronald Reagan, the responsibility for turning our ‘market economy’ into a ‘market society’, a trend which was picked up enthusiastically by their successors Blair and Clinton, a society in which we have lost our moral values in pursuit of the market. The capitalist market economy is the best system available for allocation of resources but capitalism must be accompanied by compassion and concern for those who lose out. I look to government to support and promote these principles, not to ignore them.

Philip McDonagh

Philip McDonagh is an economist and a member of the Society of Friends.

On 16 October 2012, Philip McDonagh facilitated a lively discussion on this book by Michael Sandel, who is political philosopher and a professor at Harvard University.

In What Money Can’t Buy, Sandel examines one of the biggest ethical questions of our time and provokes a debate that’s been missing in our market-driven age: What is the proper role of markets in a democratic society, and how can we protect the moral and civic goods that markets do not honour and money cannot buy?

Philip McDonagh is an economist. He formerly worked for Price Waterhouse Coopers; he has over 30 years experience in dealing with local economic matters. He is a Charity Commissioner with the new Charity Commission for Northern Ireland. He is also a member of the Society of Friends.

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Esmond Birnie and Allen Sleith both seek to apply their faith to all areas of life, including economics. However, on this issue they come to different conclusions.

This evening was not a debate, to see ‘who wins’, but a conversation to explore and learn. Allen and Esmond talked about how their faith, and their reading of scripture, influenced how they approached this question. The audience then joined in what proved to be a lively discussion!

Esmond Birnie is Chief Economist for PWC in Northern Ireland.
Allen Sleith is minister of Regent Street Presbyterian Church.

Unfortunately, due to technical problems, we were not able to record the first few minutes of the discussion, so a small part of Allen’s introduction is missing.

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Just before Christmas, a leading evangelical minister wrote on his blog about a Tesco executive who had reportedly backed gay marriage, also commenting on the supermarket chain’s sponsorship of the London gay pride festival. (more…)

Money, Magic, Greed and the Power of Illusions:

A Christian Critique of our time

The 2011 Catherwood Lecture was given by Bob Goudzwaard on 1 December 2011. Economics is a major issue of our time. The economic system operates at an international level. Each one of us is also part of the system as consumers or investors. As Christians we should be actively considering one of the most pervasive aspects of our world. Bob Goudzwaard brought a Christian critique of our current economic situation.

Philip McDonagh, a local economist with over 30 years experience and currently a Charity Commissioner, gave a response to Bob’s lecture from the local perspective.

Click below to hear the lecture and the response:

The text of the lecture can be downloaded by clicking here: Catherwood_2011_text

Bob Goudzwaard is professor emeritus at the Free University in Amsterdam. He was elected to the Dutch Parliament in the 1970s and served for a time in a Christian policy research institute in The Hague. He is the author of numerous books including ‘Idols of Our Time’, ‘Capitalism and Progress’ and ‘Hope in Troubled Times’.

It has been noted that economics is an ‘imperialist beast, claiming the relevance of its general approach … to a very wide range of human activities’.¹ Thus economic models and language have come to predominate in institutions previously organised in different ways. The current policy of introducing market forces into the health service is an example of this. Changing the ethos of an organisation like the health service by the imposition of economic models raises concerns that something will be lost. Yet economics often wins out, simply because it has been seen to be effective in so many different contexts. (more…)

‘How much more is enough?’ was one of the many perceptive questions asked by Marva Dawn during the weekend she spent with CCCI in November 2006.

The Bible gives us God’s perspective on life, the universe and everything. It begins and ends with big pictures about origins and endings. Genesis chapters 1 – 3 tell us about who we are, what our role is as image bearers of the Three-in-one, how we began to mess it up and the consequences. (more…)