The story of a North Sea bubble: the strange demise of the Anglo-liberal growth model in the United Kingdom and Ireland
Résumé
In the wake of the deepest and longest recession that the United Kingdom has experienced since the 1930s and the Irish Republic has experienced since the 1980s, this paper examines the origins, sustenance, and puncturing of the growth dynamic both economies have enjoyed since the early 1990s. It identifies, in both cases, elements of an ‘Anglo-liberal growth model’. For as long as it lasted, this took the form of a consumer boom fuelled by growing private indebtedness (typically secured against property in a rising housing market) and was itself dependent on the nurturing and sustenance of a low inflation–low interest rate equilibrium. Of the two cases, it is the United Kingdom that presents the purer form of Anglo-liberal growth; in Ireland, a hybrid growth model can be seen to have developed in which Anglo-liberal growth was allied to a more conventional (and ultimately more sustainable) export-oriented growth dynamic. The paper seeks to gauge the character, paradigmatic significance, and effectiveness of the interventions made in the attempt to shore up the Anglo-liberal growth model and the rather different prospects for the resumption of growth in the years ahead. It argues that the Anglo-liberal growth model is, indeed, fatally flawed. In such a context, it is difficult to see how sustained economic growth can be restored, in the UK case, in the absence of a completely new growth model and, in the Irish case, without the cleansing of the long-standing export-oriented growth model of the Anglo-liberal trappings it has acquired in recent years.