The economist David McWilliams has always been quick to spot societal and economic shifts. In this interview with Sam Smyth, he explains why Covid-19 offers an opportunity for the government to reimagine the Irish economy and the interaction between business and the state. McWilliams also talks about wealth, the future of the media, the Irish housing crisis, the importance of accessible economics and why Dickens was ahead of his time.

In this candid interview with Sam Smyth, McWilliams talks about:

Sam Smyth (SS): Hello, I’m Sam Smith and welcome to my podcast with The Currency. I’m joined by economist and commentator David McWilliams, who has a pulpit at Electric Picnic, sometimes, and an important political and media influence. They all genuflect to him.

David, would your role as a populist, I suppose, economist and prophet be better served if you grew a beard and wore a white kaftan?

David McWilliams (DM): Who has a beard and a white kaftan?

SS: Well, all the Old Testament.

DM: Well look, I think making economics accessible is a great thing to do. It’s something that not enough people do, I actually think. It’s funny you talk about the Old Testament, sometimes I feel that economists were a little bit like Renaissance or medieval priests who only spoke Latin to the congregation and, in doing so, said to the congregation, ‘Look, I have a relationship with God. Don’t you worry about the intricacies of the economy. I’ll explain that to you. You just go to mass, say the creed and all will be grand.’ So sometimes that’s the case.

“What is important is rarely complicated, and what is complicated is rarely important.”

David McWilliams

SS: As a consequence of that, do you think that some of the academics and so on would sort of look down their nose at you because you were more accessible to more people? Have you been victim of snobbery?

DM: I always think that getting it right is actually the key thing. I wouldn’t say victim snobbery. I’m not sure, because I find most of the academics are really quite nice people. I would think that some of those in academia should be a little bit more forthcoming with their knowledge. I teach in Trinity and there’s a huge amount of knowledge down there. I was talking to Luke O’Neill, the immunologist, and I was warning him, I was saying, ‘People going to get sick of you and immunologists and all that sort of stuff.’ That type of person who takes what is a difficult subject and makes it accessible, that, I believe, is what most teachers try to do. And I think what I do is a form of teaching and that you take something that people find inaccessible, something that’s made maybe explicitly a little bit too difficult…

SS: Well it’s abstract thought isn’t it?

DM: It’s abstract thought, but I’ve always felt, and Sam you’ve known me for years that, what is important is rarely complicated, and what is complicated is rarely important. And I think that’s really the nub of the thing. So, in economics, I find it difficult to accept that something that seems so straightforward to me can be made so complicated by others.

SS: But there’s also in there, I suspect, that envy can be there. And of course, economic gurus sit beside the host at dinner parties very often.

If you can earn €10,000 for speaking at a corporate gig for half an hour, do you not imagine people…

DM: I don’t know where you’ll get these figures from.

Look, I think that usually in terms of teaching, normally there’s never really bad students. There’s only bad teachers. And I think one great way to road test your ability to communicate is in the public arena. And if you shy away from the public arena, my sense is that the signal you’re saying is that, in fact, either the public arena is too difficult to communicate to or that it’s not worthy of communication.

So, I think that if you’re lucky enough, and you and I know we’re lucky enough to be in a position that we were journalists and we were reasonably well-known, but if you’re lucky enough in my case to go to university and get the state to pay for your education, that education gives you an understanding of the society, which is slightly more nuanced than the average. Then communicating that is quite a good thing. I think that’s the whole point. I think it’d be a much more democratic society if we all explained a little bit more what we know, particularly given that what we know is actually quite important to people’s lives.

SS: If you’re a teacher, then, as you say, you’re among the highest paid teachers in the country, if not in the EU at the moment.

DM: I presume that’s the objective, to do well?

SS: Oh absolutely. Do you measure that by your income?

“The richer they got, the more neurotic they became and the more worried they got about somebody else who was even richer.”

David McWilliams

DM: No, I have really never thought of that. It doesn’t strike me as being… It’s a funny thing, I was talking to somebody recently about people who define themselves by incomes, it seems to me very, very narrow gauge way of defining what you do. It seems to me it’s almost the unintended consequence of what you do.

SS: Or scale by which you can measure something.

DM: Years ago I worked in investment banking, and because I worked in an investment bank, I became aware of, or was put in front of, people who were very, very wealthy because they all wanted to invest, and I can tell you Sam, of all those very rich people I met when I was much younger, very few were happy. And this really struck me that very, very few wealthy people were actually happy. And I think the richer they got, the more neurotic they became and the more worried they got about somebody else who was even richer.

I think that if you worry about things like income as a barometer of your worth or whatever, what’s really interesting about humans is that our position is not what makes us happy or sad. How you value these things is the contrast between what you have and somebody else. So, I’ve never felt that income is a particularly good barometer. But on the other hand, I think working for nothing is a stupid thing. And I would actually say that to my kids. Don’t I ever work for nothing, value yourself.

SS: Likeminded people like yourself end up with people who are equally or even more successful. I’m saying, for instance, you’re quite pally with Bono and other very successful people. Not necessarily in your business. Are successful people more fun?

DM: I think the funniest people I know, the greatest craic people I know are people you’ve never have heard of. But I’m not too sure if there’s any correlation between objective success and people being good craic. In fact, what I can’t wait for now is for the local pub, McKenna’s, in Dun Laoghaire to reopen because the people in there are great fun. Nobody has a clue what anyone does. It’s not something that’s ever struck me as a defining characteristic. I think maybe one of the problems in society is there’s too much credence given to objective success. At the end of the day, it’s not important. What’s actually important, like you just got married now, so what’s actually important is your family, your mates, people you’re close too and those very deep relationships that you have those deep relationships that you have are never mediated by others. They’re mediated by you.

SS: We’re being so philosophical here. But here’s one for you…

DM: Economist can be philosophically. We can.

Politics and economics in a world of crisis

SS: That’s why I thought of a beard and a white kaftan.

Tell me, our new three party coalition government will inherit a €30 billion deficit and a global killer pandemic. Do you have a quick fix or a snappy solution?

DM: Not a quick fix, not  sloppy solution.

But it must be the most fantastic time to be in government because the European Central Bank has just announced Austria borrowed money last week for 100 years. It issued a 100 year bond, and it borrowed at less than point three per cent. So think about this. you are in government, in a eurozone country where there is no financial constraint, where a government like Austria just issued an IOU for 100 years and it said to the borrower, ‘We’ll pay you back in 100 years-time. You just give us the money now.’ Think about the carte blanche that is. It would be so exciting to think what you can do when there’s no budget constraint. So, I would say to the three party government, this is the time to be incredibly visionary about what you can do. And they can do lots. The Green Party wants this Green New Deal. Go and do it and borrow huge amounts.

SS: I think that the Covid-19 pandemic will not just be limited to health and economics. Tell me, what can be worse than being penniless with a life threatening illness?

DM: What was for me very encouraging was the way in which the state decided to create a wage for everybody at €350 wage subsidy. And now we realise that’s doable. You can do that. And in fact, the financial markets will support you. Let’s think about the vista that opens up, that opens up vistas like universal basic income, where everybody can have a basic stake in society.

SS: Or some might think that you get paid a wage for doing nothing.

DM: Let’s talk about the philosophy of this, that if we continue to frame the discussion on economics, on us and them, scroungers and earners, the deserving and the undeserving, which is exactly how you framed it.

SS: The undeserving poor.

DM: And the undeserving not so poor right now. Then you begin the politics of diversion. The United States has been gripped by this, and hatred and vilification.

I would think of much more uplifting ways of looking at all this is regarding what’s just happened as a potential road map to the future. But in actual fact, the state can provide a universal basic income for everybody. And that universal basic income, once people pay tax on that, which they will, will actually cost the state not a huge amount of money as long as the economy grows.

“The difference is not between the left and right and urban and rural and conservative and liberal. It’s actually between people who have a stake in society and people who don’t have a stake.”

David McWilliams

So, the whole key to this is not to look at the difference between accountancy and economics. So, economics at its core is counterintuitive. So, what appears wrong is right. And what appears right can be wrong. So, for example, you’d say, well, ‘It doesn’t feel right. You can’t give people money for nothing.’ Then you see, actually, what are we trying to do is maintain income. And when you think about how the economy works, your income Sam, when you spend it you’re spending is my income. And my spending is your income. And if we’re both spending together, we’re both generation income. And then that income multiplies around and you can choose to save a bit or to spend a bit. But ultimately, we’re all totally interdependent. The problem with accountancy is it always looks at one balance sheet. Economics looks at a million balance sheets together. Accountancy looks at one balance sheet. When you look at one balance sheet, you think, ‘You better balance your books.’ Because you’re not acknowledging the fact that demand comes from other people.

SS: Yeah, but going back to the voting thing, you did say, I think, that Sinn Fein won the youth vote and Fianna Fáil and Fine Gael won the older vote. Now, you’ve got a coalition with Fianna Fáil, Fine Gael and the Green Party.

DM: I think this is the last government before a Sinn Fein government. That’s what I think. Unless, of course, voting behaviours change dramatically. And the reason is the following, is that Sinn Fein have been the main beneficiaries of the generation gap between the old and the young or the middle-aged and the young. And that’s what you see in many societies, is that I remember interviewing Tony Benn many years ago and he said to me, and I probably looked younger than I was when I interviewed him, and he said that the young and the old have one thing in common: They’re bullied by the middle-aged. Which I thought was quite a good quote.

Most policies are driven towards preserving the status quo and the status quo becomes much more of a generational thing. And Sinn Fein have understood this, and they are being rewarded in the polls. And I think they will be rewarded in the polls unless this government is able to build 75,000 houses. Which it can do, but it needs to start today and take away that pressure. Because what happens is, I look at Ireland and the difference is not between the left and right and urban and rural and conservative and liberal. It’s actually between people who have a stake in society and people who don’t have a stake. So, the way I look at politics, it’s not between left and right, it’s between insiders and outsiders.

Monopoly board economics

SS: Are the old too rich or are the young too poor?

DM: Self, evidently. That’s self-evident now. And the vector that amplifies those inequalities is the housing market. So, in order to, in some way redistribute the income and the opportunity to give the young a stake in society you have to address the fundamental inequality, which is that if you create a society where land is rewarded by virtue of existence, which is what we have done, you will consistently skew the returns to society to land. Now you think about land, think about what we’re doing here, right? You’re in a studio. There’s microphones. There’s a product. Hopefully the product creates some money for The Currency, right. That money comes in. You’re generating maybe innovative ideas, talk whatever. Land does nothing of this. Land doesn’t generate a wage, doesn’t generate any innovation, doesn’t generate energy. It’s a dead asset.

SS: It can generate income for some.

DM: But it shouldn’t. It shouldn’t. That’s the thing. Brains should, and brawn and innovation should generate income. The idea that land is anything other than a cost to the majority of people is a fabrication, and a manipulation of the economy. So, what we have to do in Ireland is basically tax land to the hilt in order to reduce the tax on everything else. And that’s the only way we can do this. When I look at the present government, what I see is no inclination to redress the opportunities away from landowners back to workers and innovators and entrepreneurs and the people who actually employ people.

Those house prices have been made expensive by a public investment. So the taxes of everybody goes to pay the Dart, but the rewards only go to the individuals who buy the houses there.”

David McWilliams

We’re sitting here in Dublin 2, so Dublin 4 is just down the road. Why are houses in Dublin 4 worth more than houses and Darndale? Think about it.

SS: More people want to live.

DM: Why do they want to live there?

SS: Because to be surrounded by people that they admire and want to live beside and the status.

DM: And because there’s a University in Dublin 4. There’s a large hospital in Dublin 4. There’s a Dart line in Dublin 4. There’s good services. The land value of Dublin is not created by the people who buy the land. It’s created by the community.

For example, on the Dart, house prices on the Dart are much, much more expensive than house prices, not on the Dart. So those house prices have been made expensive by a public investment. So the taxes of everybody goes to pay the Dart, but the rewards only go to the individuals who buy the houses there. So, what you should do is you should tax the site value because the house in Darndale and the house in Sandymount are probably worth the same. The bricks and mortar. But what’s the site is the problem?

“Think about what Monopoly does when you play Monopoly. You go around and you try to accumulate the wealth of places and you try to hoard land. We can see it around Dublin, we were hoarding land. That creates vandalism, the vandalism of the lack of occupancy.”

David McWilliams

And if you do this, this is a very old idea, what you do is number one is you redistribute the gains from public investment back to the public, which makes sense.And number two is you actually price the gains from public investment. So, the people who benefit from that pay the people in Dublin 4. And this seems to me to be a very obvious way of redressing, reimagining, reengineering the society away from land.

SS: It’s a very high, gilded thought.

DM: It’s not it’s very, very easy to do.

SS: It’s also an abstract thought.

I’m thinking about my very good friend, Eamonn McCann who is very much convinced by Trotsky…

DM: But I believe in the free market.

SS: And I would often say to him, and I like Eamonn very much, I’d say even, ‘Great, show me a working example.’ Is there a working example of what you’re saying?

DM: Well, the problem wilt site value taxes is that landowners, it was actually the basis of Monopoly, the actual boardgame. Think about what Monopoly does when you play Monopoly. You go around and you try to accumulate the wealth of places and you try to hoard land. We can see it around Dublin, we were hoarding land. That creates vandalism, the vandalism of the lack of occupancy. So, people who buy buildings in Dublin and hoard them should be penalised. Land has to be used to be valuable to the community.

SS: Which country or our society does that?

DM: Singapore’s a great example.

SS: That’s a city state.

DM: It’s a city state that’s got double the population of us. So it’s a big city state.

SS: I’ve been there.

DM: Singapore must be, by definition, some freewheeling country where land is free. No, the government owns all land. You know that? The government owns all land.

SS: Oh, I do. And I do know that chewing gum is not encouraged, spitting is discouraged.

DM: Sam, you asked for an example and I’m giving you the first one.

SS: And you think that is desirable.

DM: Absolutely.

What’s the easiest way to own land here? To inherit it. So as long as we genuflect to inheritance of a fundamentally redundant asset, which has been given the option to generate income from it, from a tax system that supports it, what you’re going to do is more and more of the income of the average worker is going to go to the drone class.

So, there’s two types of class. There’s drones who live off the income of land, and there’s workers. I happen to believe that in the nest, the worker bees are more valuable than the drones. You might not believe that, but I do.

SS: Surely you need a queen bee, if you’re going to stick with that analogy?

DM: But we do. we have to have a parliamentary structure and that parliamentary structure thankfully has a finite life, like the queen bee. And every now and then it disappears.

So, what I’m saying is that the beauty of economics is it’s so easy to fix. Ireland is about three or four big decisions away from being a really cool state. When I say cool state, I mean one that runs for people and that we can create anything here. We’ve done all the hard stuff. This is the easy stuff.

The present coalition parties, I’d say in their DNA, the Green Party probably feels like doing this, but they didn’t feel that they had enough suasion. I’m not sure if Fina Gael gets this at all. I don’t think it’s electorate would particularly want this, and Fianna Fail – who knows? Is Fianna Fail what it used to be, is it a different party? I’ve no idea anymore.

But I think, take great countries and copy them. And we’ve done a huge amount of good already.

SS: Well, you did say, for instance, that if you look at previous natural disasters, the Renaissance followed the Black Death. The roaring 20s followed the Spanish flu. Liberal society as we know it followed the Second World War.

DM: The human reaction to adversity, tends to be quite counterintuitive in the sense you imagine the Black Death kills 30 per cent, maybe more, of the European population, certainly 50 or 60 per cent of the urban European population.

SS: And the poor people first.

DM: And the interesting thing is the people who survived the Black Death got very rich. This is the fascinating thing. So, what happened is when the population collapses to such an extent, the survivors actually end up, per capita, being much better off.

So actually, what you saw was a massive shift of income to working people in the late 14th century. And what happened then was that people in the late 14th century said, ‘I’ve got a little bit more income. Maybe I should send my kid to education.’ The one kid surviving gets the get to education. So, what you have is this extraordinary flourishing of education in a class that never had it before. And the second thing is you get much more scientific inquiry after something like a Black Death. People ask how did that happen?

If you look at the Decameron, Boccaccio wrote in 1349 or 1350, it’s like the Covid-19 committee of people who escaped Florence to try and think about the world. They’re kids and their all exchanging stories. And the stories they exchange are these very cosmopolitan stories about how life could be. Very soon after this, you get the incipient emergence of humanism and then you get the Renaissance and then you get Michelangelo. Then, within a generation or two, you have Gutenberg and the printing press. All this happened because of the shift in income to workers who decided, you know what, I think this education malarky could be a good idea. Not maybe for me, but for my kids and my grandkids. And why can I do this? Because I have a little bit more income now than I ever had before.

SS: Also after the Spanish flu, eventually in the late thirties and so on, you then had the rise of fascism and an apocalypse, more or less across Europe.

DM: You did. And the great thing is that happened, so we know how to stop it. If you look at what happened, in the Roaring Twenties, probably the most exciting decade for many, many people, certainly in their lifetimes, and electricity emerges, radios emerge, cars emerge. These are all amazing innovations. And of course, what happens with innovation is you tend to get deflation because innovation is deflationary. So, interest rates go quite low. When interest rates go quite low, people get a little bit too speculative and a little bit too enthusiastic. And they start borrowing money that isn’t theirs and putting it on something else. And you get a stock market.

SS: Although most people think of the roaring 20s as people dancing and jazz music.

DM: Exactly. And The Great Gatsby.

So, economics is part of culture. You can never divorce culture from economics, because economics is only an expression of culture. It’s only an expression of a different way of looking at the world.

The politics of Paschal Donohoe

SS: It is. But you know what? We are so far down the road of philosophy here we better speak about something practical. Is Paschal Donohoe a shrewd operator who disguises himself as the teacher’s pet?

DM: Yesterday, my wife and I, you know Sian?

SS: From Portadown.

DM: From Dundonald. Equally loyal, but a different part of NI.

But the Dalkey Book Festival that we put on and we were delighted we were able to replace this year’s festival with book awards. And our partner in this is Zurich, and they very generously put forward €30,000, which is a big cheque for two writers. And we launched that last Saturday.

But what was interesting is Paschal Donohoe was very much active on Twitter talking about books.

SS: He eats books.

DM: He knows a huge amount of literature and really reads. I don’t know where he gets the time.

SS: And he reads good books.

DM: He reads lots of good books and he seems to have a very profound interest in all sorts of areas. I think there is an opportunity for him now to be a totally transformational minister, availing of what Philip Lane, who is the head of the chief economist to the European Central Bank, has basically said to governments – do what you want. We’re going to back you.

SS: You were speaking to him last week.

DM: I was listening to him. I listened to him on a webinar. It was quite radical.

SS: While he was here, he would have been seen very much as some sort of technocrat of the Central Bank. About two people in every 20 would half understand what he was saying. So you’re telling us now there was actually a prophet in our midst and we didn’t recognise it.

Well, the prophet was only when he goes abroad, and he’s gone abroad. And I think now he has the job that he probably always wanted. Because Philip’s personality, he wouldn’t be very ebullient person. But what he is, is a very brilliant economist. And I think now he is the brains behind the ECB and therefore we have to listen to what he says. When he was here, he was hamstrung by the Irish Central Bank, not really having a huge amount of power. Now he’s at the epicentre of a powerful organisation in a crisis. His boss, Christine Legarde, is a lawyer. So, she’s slightly out of her depth anyway. Intellectually she’s not following this because she doesn’t have the training.

SS: Has she any good instinct?

DM: I don’t know. I don’t think so.

SS: Is she more a politician?

DM: I saw that she greenlighted the single biggest loan to any country ever, which was to Argentina, and they defaulted eleven months later.

SS: I remember you cheering for Argentina.

DM: I think the amazing thing about Argentina is between 2002, when they changed their currency and 2010 it grew the fastest of any country almost in the world.

SS: And in 1912 it was the seventh richest country in the world, if I remember right.

DM: What I’m saying is Christine Lagarde, I don’t know. I don’t anything about her, I’ve never obviously never met her or anything, but seems to me that once you get that ‘above the clouds’ position, the positions are very political.

SS: She’s very stylish.

DM: I’m not so sure about that, but she’s….

SS: She dresses well.

DM: She’s French and she is part of the French nomenclature who believe that, every second European job should go to them. You know, this anarchist French elite.

SS: But that school, they all went to the equivalent of Gonzaga or something?

DM: I sincerely hope it’s slightly more rigorous than Gonzaga.

SS: Ok, like yourself, Blackrock?

DM: Maybe, maybe, maybe, Blackrock is a very strange place, produce all sorts of eejits, you know? But I think that, but the point about Lane is what he’s saying is, quite fascinating in terms of implications. And that’s, I would think could make, the next few years economically very exciting.

SS: So you think that Pascal and Phillip Lane could be a great item together for lifting this country?

DM: Definitely, without a shadow of a doubt, without a shadow of a doubt.

SS: Well, what would you say to Catherine Martin now, who among her many tasks is to try and reverse the meltdown of the media in this country?

DM: The meltdown….

The future of the media

SS: Oh there is I mean to say, the newspapers are in terrible trouble.

DM: Yeah, No they are.

SS: And a lot of broadcast media is….

DM: Well it seems that RTÉ is in a terrible state. I did an interview, I interviewed for an event last week. Lenny Abramson and Ed Guiney. The producer and director of Normal People, the producer and director of Room, the producer of The Favorite. I mean, these are serious, serious movers and shakers, very talented people.

And I was making the point that when I was in college with them years ago, the two of them set up the Trinity Film Society, and they’d be walking through the arts block in Trinity in the late 80s right? Very miserable, dismal time, with their little tripods and their cameras and They’d be making movies and the wags and cynics would be saying “There’s the Abramson and Guiney the pair of them” next they’d be telling us they’re going be nominated for Oscars, and they were. And so it’s interesting, you can do things, but they both made the point that the broadcast, they were talking about Normal People and why it wasn’t made because it was, Irish writer, Irish director, Irish production company, almost all…

SS: Derry Girls, Father Ted, all that history

DM: All the history, and why was that not made or at least part-financed in Ireland? It was financed by the BBC and they just had the very explicit idea that maybe, RTÉ is in a very precarious position and that is..

SS: Everybody says it’s lack of money, but presumably there’s also a lack of ideas? To generate maybe…

DM: Yeah I think there’s no doubt there’s a lack of ideas, but I think there’s an anxiety, if you’re worried about money, I think you second guess your own competence in other areas because it, there’s an anxiety in that. And if, for example, you’re an executive in a public organisation that every single month is losing advertising revenue or what have you, I think that must seep into your self-confidence and your ability to back yourself and your ability to see the world beyond the balance sheet…

SS: Well then it needs the political masters who are ultimately responsible for these things to bring about changes.

DM: Look it won’t happen. Look, TV has changed. Places like RTÉ will be current affairs and news production outfits within five years. I mean, there’s no future. Look at… Everything is on demand. Like The Currency, okay? Like my podcast. You pay for what you want.

And this idea that you have a model, an anachronistic model, which is that we’re going to penalize you with a tax, right, called the license fee

SS: Well we’re a half an hour flight from the UK, which has a model.

DM: Yeah, But it’s the US. So I mean that’s the world. And look, technology changes the world and the world doesn’t come back. So, for example, we talked about the 1920’s Sam, there may have been people when they saw the Model T Ford who were hoping for the horse to come back, but it never did. And it’s exactly the same thing, so if your business model is based on a, like a 20th century, 1976 world view where you are the only broadcaster, you extract a license fee and you extract advertising and you’re the only TV advertiser, and you stick to that model in the face of Netflix and Hulu and HBO, it’s gone.

SS: Just to move on to something else. The banks there are friends of mine, some of whom say banks are S.H.1.T’s. others say banks is S.H.1.T’s. Now there’s a grammatical difference there, but they both agree with the one conclusion. Do banks serve this country well?

DM: Banks could be the solution to our dilemma. That’s the thing that I…

SS: So could I. But it’s more unlikely I suppose.

DM: No, I mean, banks could be because, the role of the bank in a modern society is to pass on rates of interest that are made available to those banks for the central bank. That’s its job right now. And how they do that is they lend money, ok?

SS: Now they only get for percent at the minute, the banks are borrowing money or the states are borrowing money

DM: At zero, more or less zero. Point two eight of a per cent

SS: But if people get their money at point five, what would the banks be then other than an administration?

DM: Well, I think that FinTech will destroy the banking system, not destroy it but in the same way as RTÉ, like AIB and Bank of Ireland are the OT of finance, right? I mean, my children use Revolut. Revolut is a banking system on their card, they have no relationship with it. It basically does a job which is it finances, well actually I finance them.

So you ask my children about AIB and Bank of Ireland and they look as if, they don’t know what they are. They’ve no idea what you’re talking about. In the same ways you ask my children about RTÉ, they’ve no idea what you’re talking about. The same way as you ask them about terrestrial television, BBC. They might have, I’ve never seen my kids watch TV. Ever

SS: How old are your children?

DM: Late teenagers, so they watch YouTube, they watch pay per view. But I’ve never seen them watch terrestrial television.

SS: Do they watch dramas?

DM: Oh yeah, and there watch great dramas, you know, the watch older, all the great ones.

SS: Are they not better watched on a bigger screen? And as a shared experience?

DM: I’m not so sure but what strikes me as critical is if your business model is located squarely in the 20th century with the genuflection to the 19th century, your chances of surviving in the 21st century are very slim, in any business.

SS: So you don’t see the TV any longer, as being a shared experienced in the house?

DM: No, and maybe sociologically, that’s a good thing. The idea of the whole family sitting around watching Glen Row, which is something I remember, was a product of our community.

SS: Or the family prayer.

DM: Or the family prayer, indeed, we could go back to Dundonald and we could observe the Sabbath. But do you see what I mean? There’s something really exciting about what’s going on the world, which is this collision of the old and the new, the opportunities afforded by technology and obviously there’s threats to lots of things.

But these are fascinating events that, if we can all figure them out, could lead to a much more….

The philosophy of Dickens

SS: Going back just to something here now because I know you’ve something else to do today. You seem to share sympathy in the less belief in the state borrowing big to you know, to promote prosperity in the country. Tell me, Charles Dickens was probably the most accomplished writer and sociologist of the 19th century. Was Mr. Micawber an eejit?

DM: He was definitely wrong in economics. Again, that goes back to the difference between accountancy and economics, right? Some Micawber was a bean counter. But Dickens was a very interesting social commentator. And without inequality, Dickens would have had no material. Right? So Dickins and Dick was quite a moral sort of person in terms of the characters he portrayed. But he maybe he portrayed the idea, but I’m more sympathetic than that epidemic.

DM: Dickens was quite a revolutionary character. But what is amazing about Dickens is that the invention of a writer with a social conscience, whose interpretation of the basis of household accounting was Micawber has in some way been catapulted to being an economic sage is a reflection of how little economics is understood. Which brings us back to where we started

SS: Or how sharp his writing is that it’s neon lit in people’s imagination.

DM: No, it’s neon lit because of a lack of comprehension.

So we started with this idea of teaching and the noble pursuit of communicating. And something like economics, and Micawber is the reason we do it, because this is like somebody from the Flat Earth Society invading people’s heads and suggesting to them that the world is not round, but it’s flat.

SS: No, it is. Or it’s your mother saying to you, if you borrow money off somebody, you have a duty to pay them back

DM: So we’re back to this idea of the difference between one balance sheet, and a million balance sheets. So what I was saying about economics is macroeconomics is counterintuitive. There’s a thing called the paradox of aggregation. When you aggregate things up, they become paradoxical, okay?

So, for example, I’ll give you a good example.

The way in which the economy works is very, very much like, the part of fabrication says what is good for the individual is not always good for the collective. So what the individual says is it’s good for me to balance my books and pay off my debts. That’s good for the individual. But if the entire collective is balancing books and paying off its debts who’s spending?

SS: It’d be a very dull country

DM: and who’s spending? Nobody. And if you’re not spending, you’re not earning. If you’re not earning, you’re not spending. You generate no income and you collapse. So what I would say to the armchair accountants in the Dickensian tradition is. Follow me on Patreon in my podcast, where I teach economics and an economics course, and for a small sum, the world will become clear. But all these things…

SS: How much do you charge for your podcast?

DM: Well, it’s free, free to air. And then we have various tiers.

SS: Is there advertising?

DM: So it’s free to air. And then the model is A-cast for advertising. And that has now, in the beginning, basically, the podcast is now, I think a hundred and ten thousand downloads a week. So it’s really doing well.

And then you’ve got to figure out, OK, how do I pay myself and the guys who make it? And then you think, OK, there’s one model, which is the advertising model. Or what you can say to somebody is you can subscribe on Patreon, and you don’t get any advertising, and then it struck me that what people really needed in the downturn was education, and the Trinity course I give, which is a course I devised for the MBAs and Trinity.

I took that and I sort of reengineered it into an online education course. And the response has been huge, so people really want to learn and now what I’ve done is taken that and made tutorials out of it. So I do a shout out every week and ask people what they want to learn about. And they’d say, oh, we want to learn about the bond market or the currency market or whatever. And then I devised a tutorial and we put that up. So what I’m trying to do, what we’re doing is create a parallel economic infrastructure here, which helps people understand economics in a way that they don’t get when they study economics in university, which brings us back to our original idea of being the teacher, that there is a massive yearning to understand this thing, the economy, and people are looking at, it seems very, very clear to us that there’s a huge overlap between the people who are studying with me, lots of them are actually doing economics in college.

SS: Tell me when the pandemic is over, do you think you’ll have a big Christmas party somewhere?

DM: Always have Christmas parties. But I think, you know, what you do is your podcast and you’re creating a tribe. This is the first, you talk to me about the end of media, like I did documentaries.

You’ve done them too, right? There was never any sense that we were creating a tribe of people who were interested because it’d be mediated by producers and editors and all these people who sat in offices thinking they knew how to communicate and they didn’t. And then those messages go out, and that would be it. Whereas now the technology and this is why I’m not worried at all about media.

The technology is providing the ability to create, all tribes of people who have similar interests and those people come for information, for social ammunition, for education,

SS: God forbid a cult.

DM: No, but this is a fascinating thing and this is the way the world is moving. And I think that..

SS: There was a Joseph Smith who did it with the Mormons. There was a lot of people who did it, and I’m not meaning in any way to undermine your…

DM: But it’s not undermining, it’s more reflective the way you think than undermine me. Now basically, you can spend your life complaining about trends and events and mock and besmirch and belittle, which is really something that Ireland unfortunately has a little bit too much of.

SS: Well now most Countries do.

DM: Yeah but I’m saying or you can take the changes as being an exciting permission for you to act differently in your life. Right? So I always, that maybe the difference between me and people who undermine for a living, if you try to enlighten for a living and you try to shed light on things, you’re kind of, you’re quite naive in a way.

SS: Well the worry is Larry David, for instance,

DM: The great Larry David.

SS: Would probably be cast as an underminer. There are those of us who thinks that if he shows us the way through because…

DM: No, I think, you know, what I’m saying is, the world is changing almost by the day and we as fathers, as whatever you’d like to describe yourself, us, have two choices, either you can be bamboozled by the change and complain about it, sit on the sidelines and point your finger.

Or you can say. I’m going to try and do something with this change. I’m going to try and understand it, comprehend where it’s going. And that’s the joy of life.

SS: I think you do give it your best shot. You’re trying to contribute as much as you can. But while we’re there, I’m going to have to ask you this now, because I remember one of the things when I told some people that I was speaking to you today, they said, well, there was one thing that a lot of people, particularly those who are involved in economics and so on were concerned about, was that incident, was it back in 2008 when the then Minister for Finance, Brian Lenihan, arrived at your kitchen door late at night?

And coming to speak to you because the country was in crisis, facing into its worst time. And he had a chat. He was seeking your ideas on what could be done, and you were later accused then of breaking a confidence in that.

DM: Well as I said to him, I said that when he came, well you’re about eight years too late, when he came through the door. What really annoyed me about that period from 2000 to 2008 is that every single time I went on TV to say “this is going to blow. House prices are far too expensive. The banks are extending too much credit.” The very people who got upset with me subsequently revealing how the economy works and how society works here, were talking about the soft landing. So the crime, I’ve always thought was. If there was a crime, was not using your education to inform the people.

SS: Which you had done.

DM: All the time.

SS: But this was a private meeting.

DM: Yeah. And then about a year later I said that I’d listen to all this stuff and a lot of the nonsense being talked about by ministers as if they understood. And I said, listen man, this is what happened.

They understood nothing. That’s it.

SS: Any more confidence in government and those guys now than you did then?

DM: But come back to the point. You revealing, that they didn’t understand anything, because they didn’t.

SS: I think he admitted that.

DM: And they were trying to spoof the people, And they had already impoverished the people by encouraging them to buy houses that were expensive.

SS: Although they were also going to other people that knew who were advising them. These were the people who advised them, presumably, to make all the wrong decisions.

DM: But this is my point, you know. You can involve yourself in the niceties of the parlour game. Or you can actually tell the truth. What do you wanna do?

SS: Or would you feel ethically that this is someone who came to me quietly at night in my home?

DM: No, this is the soft piece, soppy, little way. Life is tough, right? Life is tough, and we all are big boys. This idea of poor little… The point is, The government from 2000 to 2008 bullshitted the people, they bullshitted the people with their mates. I called it out, OK?

SS: When you say they bullshitted the people, they might have been sincerely wrong, but presumably they weren’t cynically wrong.

DM: They were stupid. Stupidity is a crime if you run the place. Don’t you think so?

Competence is a basic..

SS: Well there’s a difference between incompetence and malevolence.

DM: Well, that is a great, great technical defense. But I believe if you take a job, you should understand what you’re doing. And if you don’t understand what you’re doing, you shouldn’t take the job. And if you decide that you’re going to talk about economics to the nation and spoof them and impoverish them and create a recession, then, It’s incumbent on those of us who argued the opposite to try and protect the people. To say “look guys, this is the way the world works” and all that pomp and ceremony and all that stuff..

SS: All of that, that was then, when it was 12 years ago now, tell me, are the people you see going into government now, a new lot of shiny faces and bright eyes.

Are they going to be any better?

DM: I have no idea. I have no, I don’t know anything from, but what I’m saying is that, what is intriguing to me, is the fact that this economy between 2000, 2008, if you had designed it, to implode better, you couldn’t have done so. Many people who were employed at the highest level to analyze the economy, got that wrong.

SS: Surely Pascal had got everything right, the place was cruising along. Up until that except there was a housing crisis, there was a healthcare…

DM: But again, you’ve spent too much time in Leinster House. You’ve too much respect for this institution. You should be on the side of the citizen. Don’t be on the side of the elite. Don’t be on the side of the ministers. Don’t be on the side of the advisers. Think about the citizen, the average Joe who doesn’t have access like you and I have to these people, the average Joe who’s sitting around thinking “what the hell’s going on?”

Our job is to be on their side. Our job is not to genuflect to power.

SS: And there’s some people in Leinster House who are even worse….

DM: what is our job to do? To tell the truth, to power.

SS: As best we can.

DM: Right. So revealing the shambles of power is an important thing to do because we are on the side of the citizen. And once we lose that, and once we become encumbered with and in some way flattered by and infatuated by power, we lose our job

SS: Except everybody claims to be on the side of the citizen, including the government of the day, oh yes they do, I’m not sure that what they say is best for the citizen, but is their intention not good in most cases?

DM: My understanding of the way this country works is that there is as much evidence of elite collusion in economics, in rent seeking, in supporting the status quo, in, for example, austerity, you basically you tax the poor, that’s what you do.

SS: Is that lack of imagination, or just laziness?

DM: Whatever it is, it retards the progress of the country. That’s the key.

So when I’m asked whose side I’m on, it’s never Leinster House.

SS: It’s for the neighbour. Has anyone ever, you know, has anyone in business or in banking ever tried to influence or persuade you to for instance, support the banks at any time or to go for any particular policy that would support the status quo?

DM: No. The status quo. I mean, the status quo….

SS: Did Dermot Desmond and Michael Walsh of IIU, did they ever discuss what to do about the banking crisis, you know, when it was going on.

DM: No.

SS: So, you know, people, these things went around for a while but… Tell me, the EU, are you more for United States of Europe as an EU or do you see it as, you know, lose election?

DM: I think it’s probably going to be looser.

SS: That’s the way it’s going now, do you think that’s a good thing?

DM: Yeah, I think it’s hard to glue so many countries together. I think and I think the looser works.

SS: And you think that the national state is a natural way for people to arrange their affairs?

DM: Yeah, I think, I haven’t seen that being replaced. Just yet.

SS: Tell me, you’re currently writing a book and writing a screenplay and doing a podcast and doing the garden of your new house and so on I suppose. Tell me, what’s the book about and what’s the screenplay about?

DM: We’re trying to do a book about the history of money, so going right back to…

SS: Barter?

DM: Even before that. Going right back.

SS: So what was before barter.

DM: In actual fact the evidence is there was no barter. That’s the interesting thing. The evidence is archeologically that there was, there’s no evidence that we came and you said….

SS: I swapped you green beans for potatoes?

DM: Yeah, no there’s no evidence of that.

SS: Well, that’s is interesting. I would have thought that.

You’re very active on Twitter. I don’t know if that’s a compliment or not. But you were named as Ireland’s most influential Twitter user in 2016. A hundred years after the 1916 rising. You must be terribly proud of that….

Listen, that’s it, is there anything else that you want to tell the people of Ireland before you go?

DM: No, not, I was meant to have a conversation with you.

SS: Yeah, well, there are other people listening in, I suppose. Yeah, well, I suppose as far as we can go now is and that is to thank you very much for turning up today, David.

DM: Not at all.

SS: And to thank the people out there who are listening. And I look forward in these postcrisis days to having a big feed and a drink with you.

DM: It is a pleasure. Cheers, Sam.

*****

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