The Labour Party will be supporting this motion because, while we have many reservations about the limited role of Fóir Teoranta in the past, we still believe the State should retain for itself some mechanism for intervention in the economy in a positive way. In the aftermath of the Communist collapse in eastern Europe there are questions we must ask ourselves concerning the dividing line between ourselves as a socialist party and member of the European Socialist Group of parties and other parties. We must ask what is the role of the State in a mixed and open economy, which is the reality that confronts all of us in the immediate future pending the successful completion of the GATT negotiations. It seems that on the right there are those who believe that the role of the State should be confined exclusively to getting the climate right, creating a not too clearly defined set of circumstances which will promote, among other things, a sense of confidence in the marketplace that would induce investment and risk taking — in other words, a hands off approach by the State to the economic affairs of the country.
There is a second view that goes a little further. It is that the State has a positive role to play in promoting, investing and providing the infrastructure of transportation, telecommunications, education, social security, peace and so on that would enable business activities to take place and eliminate risks that have nothing to do with commerce and everything to do with the society in which people live. There is a third view that the State should intervene in enterprise itself, above and beyond infrastructure and way beyond providing the climate, both of which are necessary in themselves. There is a further view of intervention, which is controlling certain key elements and owning or taking control of sections of industry. Finally, there is the now discarded command economy, which has been seen to have failed miserably right across the whole of central and eastern Europe and through the Soviet Union itself.
This is not meant to be an economic lecture; I certainly do not have the time for that. However, the Labour Party believe that the State must have a positive role in the economy and must be prepared and equipped to intervene in the economy. In the words of someone else recently, the State must be prepared to be a marriage broker and not a pawnbroker and must be able to intervene in those enterprises that get themselves into trouble and which need a helping hand above and beyond what can be obtained from a commercial bank.
We argued strenuously for that kind of role for NADCORP, but NADCORP was — since we are in the climate of pro life discussion — strangled at birth by the mandarins of the IDA and was never allowed to flourish fully in the way intended. There is no institution, other than the IDA itself, that can take direct equity in companies. We have always argued against that schizophrenic role for the IDA; it is a bit like asking the referee to periodically play on one side or the other in a football match. Notwithstanding the recommendations of Culliton, we do not see the IDA, whose primary task is one of promotion and encouragement of investment in this country, also taking equity, because having to carry out the two functions would confuse the decision makers. We are all human in that respect and it would not be reasonable to ask people to make such decisions.
While we would prefer a body like NADCORP to be in existence that could take equity shares and participate from the very beginning in promoting through venture capital those enterprises that could maximise employment through use of natural resources within our economy, in the context of this debate we are faced with a proposal by Fine Gael to restablish Fóir Teoranta and we will support that motion. Tragically, I suspect that the Government will say there is no real need for it because of the experience of Fóir Teoranta in the past. I think that would be a mistaken response, because Fóir Teoranta had to cope with a period of adjustment from the late seventies to the early eighties after the oil crisis. There was a massive shake out at a time when many industrial jobs were lost.
With the completion of the internal market and the full rigours of the European economic space, as it will initially be, and then full European union, with the accession of the five EFTA members, there will be a different kind of shakeout. If we want to have a level of economic activity which participates fully, openly and vigorously in that free and open market, but which at the same time contributes back to the Irish economy, we must promote the creation of large enterprises that above and beyond the normal criteria of investment have a loyalty to this place. To that extent the historic role of the State intervening in the economy, which was an integral part of socialist philosophy and ideology, must be retained, but utterly transformed in the context of a multi-state or inter-state economic union, which is what the European Community will be. This is an issue that is currently exercising the minds of socialists, economists and politicians in all of the other member parties of the confederation to which I belong to determine at what level the political economic institution can intervene — at the level of the nation state, the provincial Department, the German Lander and at the European level — in a manner that has been so successful in parts of Korea, albeit a totally different level of economic development, or indeed in Japan.
One thing is sure. The era of Reaganomics, the era of Thatcherism, as a philosophy that produces sound economic growth leading to buoyancy in the economy and overall net increases in employment is over. Hopefully, it will be buried formally tomorrow in the elections in Great Britain, because the damage that Reaganism did to the United States economy and that Thatcherism did to the British economy — now that we have had a chance to look at it — is clearly a lesson that anyone who has a genuine, open intellectual interest in economics and politics should look at with a degree of objectivity. The other achievements of Thatcherism — and there were many — are ones that will have to be left for another time. In the economic field Mrs. Thatcher's admonition that the state should get out of the market place is altogether one that is unacceptable to us.
I know the UMP debacle is the progenitor of this motion here tonight. There are enterprises which at an earlier stage than insolvency desperately need equity capital and ultimately they can only depend on the State to invest in them.
