Economics

Ireland’s Astonishing Economic Growth Holds an Important Lesson

Image Credit: iStock

St. Patrick’s Day makes this week a perfect opportunity for an update on Ireland and the Irish. Recent developments in the Emerald Isle teach a lesson Americans will find instructive.

At the start of the decade that produced the tragic potato famine,

about 8.2 million people called Ireland home. That was 1841. So many people starved or emigrated in the years to follow that the population of the island never fully recovered. Today, the combined population of the Republic and the northern counties that remain part of the UK is barely 7 million.

Though fewer people today live in Ireland than did almost two centuries ago, they’re busy teaching the world that economic freedom works.

The Heritage Foundation’s Index of Economic Freedom ranks the Irish economy as the third freest in the world, behind Singapore and Switzerland. The United States, once consistently in the top ten, has fallen to #25.

The Fraser Institute’s broader Human Freedom Index considers each nation’s freedoms of speech and press, the integrity and fairness of the justice system and the vibrancy of private, civil society institutions. There too, Ireland is near the top—#5 in the world, no less—while the US stands at #23.

In 2022, the Irish economy grew at the astonishing rate of 12.2 percent, the fastest on the European continent. (By comparison, the US economy grew by 2.1 percent in 2022.) If you think there’s no connection between Irish freedom and Irish prosperity, contact your economics teachers and demand a refund.

“Countries are well cultivated, not as they are fertile, but as they are free,” wrote the 18th Century French historian and philosopher Montesquieu. It’s no coincidence that the least free and most socialist nations of the world, such as Cuba, North Korea and Venezuela, are also among the poorest.

Ireland ranks high because property rights and contracts are well protected. The business climate is friendly because regulations aren’t nutty and intrusive, while tax rates are competitive. (In fact, the Biden administration is pressuring Ireland to raise its low 12 percent corporate income tax rate so America’s 21 percent doesn’t look so bad.)

It’s freedom, not the “luck of the Irish,” that explains Ireland’s remarkable economic success.

Ireland is blessed by freedom, which in turn reminds me of the famous Irish blessing: “May the road rise to meet you and the wind be always at your back. May the sun shine warm upon your face and the rains fall soft upon your fields. And until we meet again, may God hold you in the palm of his hand.”

Happy St. Patrick’s Day!

(A version of this essay, adapted for the state of Montana, appears on the website of the Frontier Institute).

For Additional Information, See:

The Irish Miracle by Karl Sigfrid

The Irish Potato Famine by Teresa R. Johnson

Free Trade and Irish Famine by John P. Finneran

Why Ireland May Soon Have to Say Goodbye to the Low Tax Rates that Made the Nation Rich by John Phelan

Why Bono Thinks Ireland’s Low Corporate Tax Rate is Great for the Economy by Fred Lucas

Ireland Stands Its Ground Against 132 Countries by Saul Zimet and Dan Sanchez

What Makes Biden and Yellen’s Global Minimum Tax Push so Hypocritical by Lawrence W. Reed

The post Ireland’s Astonishing Economic Growth Holds an Important Lesson was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.

Related Posts