John O’Hagan
- HISTORY OF THE BOOK
The beginnings
I was asked by my head of department at Trinity College Dublin, Louden Ryan, in July 1970 to deliver the SF (second year) Economy of Ireland course (to around 220 students). Having come from an engineering background, I had no real interest in economic policy and current affairs at that time, so I was maybe a good choice! The challenge as I saw it was to make the course appealing by concentrating on longer-term issues rather than on short-term and often tedious information.
But for the first five years there was no suitable textbook, so we used bits and pieces from various reports and books. In 1974 I approached the Irish Management Institute (IMI) about putting all these readings into a single book. The seeds for the first edition were thereby sown. The first edition was published by the IMI in 1975. Most of the material had been published before, but there were some new contributions, to fill gaps: by, for example, a young Dermot McAleese, later Whateley Professor at Trinity, and two young undergraduate students, Donagh McDonald (who later got a PhD at MIT and worked in the IMF) and Philip Kelly, and myself. One of the reprinted readings, on the historical background, was by Garrett FitzGerald.
The book got a favourable review by Paul Tansey in the Irish Times of 19 November 1975. One feature, retained to this day, he particularly lauded was the structure of the book, divided as it is into logically developed parts or building blocks. The preface was written by T. K. Whitaker. He kindly stated in relation to the book that ‘it will both inform and provoke argument and is sure of the wider appeal it is intended to have. This “democratisation” of economics, without any injury to content, is in itself a major contribution.’ That has been the objective of all editions ever since.
Consolidation: second to sixth editions
The only significant change in the second edition, 1978, was the addition of a new chapter on agriculture by a former ‘militant’ president of the Trinity students’ union, Alan Matthews! He is today one of Europe’s leading commentators on agri-food sector policy. One of the biggest changes in the third edition, 1981, was a new chapter on economic growth by Seán Nolan, a first-year PhD student at Yale, who later worked in the IMF. His chapter led me for the first time to think of Ireland in economic policy terms as a Connecticut or Bavaria, not a US or Germany.
All chapters were written specifically for the fourth edition, 1984, except for the Garrett FitzGerald piece, which was still retained. There were new chapters by JS (third year) student Andrew John (on policy objectives, later PhD at Yale), and Kieran Kennedy (on employment) and Frances Ruane (on manufacturing), both at different times directors of the Economic and Social Research Institute (ESRI), and some others. The fifth edition, 1987, saw a new history chapter by Jonathan Haughton, also a former president of the Trinity students’ union and by then with a Harvard PhD. A new chapter in the sixth edition, 1991, ‘Government Intervention’, was written by a precocious third-year student at the time at Trinity, later a PhD student at Harvard, named Philip Lane, now chief economist in the ECB.
New publishers: seventh and eighth editions
We switched from the IMI to Macmillan publishers for what was in effect the seventh edition, 1995. There were new chapters by John Fingleton, who in 2022 received a CBE for his services to the UK economy and innovation, and Mary O’Sullivan, a UCD graduate and PhD student then at Harvard, and currently a professor of economic history in the University of Geneva. This edition was the first and only one to be sent for international review and got favourable coverage in, for example, the Economic Journal, and the Journal of Economic Literature:
Too often this sort of volume, the product of many specialist hands, lacks coherence and readability. The Economy of Ireland has both … Any economist, or inquisitive lay person, wishing to understand the current economic situation in Ireland should begin with this book.
– David Johnson, Journal of Economic Literature, March 1997
An economics book that reaches its seventh edition over a period of twenty years is clearly a success in having established a core readership market. In the case of O’Hagan’s book, it is easy to see why.
– Douglas Hamilton, Economic Journal, July 1997
There were more changes for the eighth edition, 2000, including a new publisher, Gill & Macmillan, and a few new authors.
New co-editor and many new contributors: ninth to twelfth editions. The ninth edition, 2005, witnessed a major change: the book was co-edited with Carol Newman. Carol had delivered the Economy of Ireland course in my absence as college bursar since the previous edition in 2000. She not only shared the editing burden but contributed a new chapter on education (two chapters in later editions). Tara McIndoe, a JS student at the time, helped with copy-editing and co-authored a chapter with me on employment. Anne Nolan wrote her first chapter on the health sector, as did Sara Cantillon, first on distribution and later editions on the care economy. Francis O’Toole had co-authored a chapter with Frances Ruane in earlier editions but contributed a new chapter, on competition and regulation, for the tenth edition, 2008.
The eleventh edition, 2011, saw significant change. In particular, three contributors to subsequent editions were introduced at this stage, namely Micheál Collins (UCD) on taxation, Eleanor Denny (current bursar at Trinity) on energy, and Michael King on social justice and equity. There was little dramatic change for the twelfth edition, 2014, apart from updating and substantial rewriting of some chapters. However, at this juncture Gill & Macmillan informed us in 2014 that they were ending all publication for the third-level education sector. This came as something of a blow as we had found Gill & Macmillan wonderful to work with, over five editions.
The unexpected: thirteenth, fourteenth and fifteenth editions
As I was to retire in 2016, one year before another edition was due, I thought the fates had determined that this was the end! Which it was until a Palgrave representative approached me early in 2016 about writing a book on cultural economics. The answer was no, but I asked, ‘Do you by any chance have an interest in continuing on with the Gill & Macmillan book?’ Thus was born the thirteenth edition, 2017, the first to be published by Palgrave/Macmillan. Sweeping changes were brought about for this edition, with a new title, new co-editor, Francis O’Toole, and many new contributors, including a new chapter on housing, by Ronan Lyons. There were constants though throughout: Dermot McAleese since the very first edition, Alan Matthews since the second edition, Jonathan Haughton since the fifth edition, Philip Lane since the sixth edition, Francis O’Toole since the seventh edition, and Frances Ruane, Sara Cantillon, Anne Nolan, Eleanor Denny, Micheál Collins, and Michael King over several editions.
The fourteenth and fifteenth editions had new publishers, Red Globe Press/ Macmillan for the fourteenth and Bloomsbury Publishing for the fifteenth. I was not to be involved in the fourteenth edition, 2021, until Francis O’Toole and our new co-editor, Ciara Whelan, insisted very kindly on putting my name on the cover, despite minimal input from me. I tried to make up for this with the fifteenth edition, 2025. Ciara is also the author/co-author of two chapters, on the traded sector and education, in both recent editions of the book.
Over the fifty years the basic structure of the book remained the same: Part 1, Historical Context and Policy Objectives; Part 2, The Role of the State/Policy Implementation; Part 3, Policy Issues at a National Level; Part 4, Policy Issues at a Sectoral Level. The biggest change over time related to the last mentioned, as the initial two chapters on agriculture and manufacturing were over time joined by chapters on energy, housing, education and health. New chapters on the care economy and gender, and sustainability were added to Part 3 in the fourteenth edition (Part 1 in the fifteenth edition) and behavioural economics in the policy implementation section (Part 2 in fifteenth edition).
As a reflection of the above, John FitzGerald, who also contributed a chapter in recent editions, concludes his prologue to the fifteenth edition as follows:
Given the ability of this book to evolve over fifty years, encompassing the latest insights from economics and discussing the latest policy challenges, it may well be around in some form fifty years hence. However, the cast of authors of course will be very different, no doubt including some of the first-time readers of this latest edition.
2. LANDMARK POLICY CHALLENGES
So, what were the policy challenges over the period of the fifteen editions? What has remained unchanged is that all policy must consider historical experience and lessons. As pointed out by Haughton in chapter 1 of various editions of the book, quoting Santayana’s famous words that ‘those who ignore history are condemned to repeat it.’ To understand the present one must learn from the experiences of the past, understanding that many policy issues are transitory, not least the fluctuations, for example, of stock markets and GDP forecasts, and that others are much longer term in nature, for example, housing, security, and sustainability. This emphasis on the past has been one focus of all fifteen editions.
1970s and 1980s
There was a housing crisis in the 1970s, with specially appointed committees asked to come up with solutions. In fact, housing crises are cyclical, like the economy. This is not to lessen in any way the dire housing shortage today for the least advantaged, except to state that the problems are not new. Another major development in the 1970s, with clear parallels today, and covered in the first edition of the book, albeit briefly, was the prediction by a group of eminent scientists, called the Club of Rome, that the world was running out of essential raw materials and that pollution levels, including carbon dioxide emissions, were unsustainable within maybe two decades. That some of their most alarming predictions did not materialise may have set back the campaign for a cleaner and safer environment, at least until the last decade or so. Another huge shock to the world economy was the oil price crisis of 1973 and 1974. It was not just that the price of oil, almost overnight, had been quadrupled, without any notice, but the realisation that oil supply could be completely turned off by the oil-producing Middle East countries, thereby bringing the industrialised world to its knees. I remember well, on an educational trip to the EU institutions with students, learning that transport had been banned in some continental cities on Sundays to conserve energy supplies.
The parallels with today again are striking: first in relation to the War in Ukraine, where the previous huge dependence by some European countries on Russian gas caused alarm. Second was the shock to the world economy by the aggressive demands made by the US in early 2025, exposing the overdependence on one country, especially for security. As such, the issues of security and overdependence on other potentially non-friendly counties is dominating world headlines again.
The other major development affecting Ireland in 1973 was the decision to join the EU, crucially with the UK. As such, unlike much later, there was no economic break with the UK resulting from EU membership. At that stage lectures referred very little to this aspect of the economy. It made me realise though that in some respects economic policy in Ireland was largely determined in London, with no Irish representative at the ‘table’. In many ways, we were economically no different from Scotland in the UK, or Bavaria in Germany, simply a reality that needed to be recognised.
Ireland made a dramatic recovery in the years following the oil crisis, but it created a state of hubris that came to haunt us in the 1980s. Articles in the Economist and other media outlets lauded the Irish success, with one headline reading ‘the little people who found the crock of gold’! So great was the hubris that one government minister predicted zero unemployment by the early 1980s.
The 1980s was a depressing time to be teaching the Economy of Ireland course, as the economy came almost to a standstill, with out-of-control public expenditure, very high unemployment and political turmoil. The most depressing thing for me was the emigration of so many of our students, not only because they had no job offers, but much more worrying in that they did not want to live in the Ireland of the 1980s. This reinforced my strong belief that economic policy had to be formulated in the context of political realities. To have sought election on the basis of addressing the public-finances problem at that time was guaranteed to lead to electoral loses.
1990 to 2020
By the end of the 1980s the political will to address the alarming public- finance deficits was garnered, which set in motion a remarkable turnaround in Irish economic performance. And, in 1979, Ireland broke the link with sterling, for the first time since 1826. This was an extraordinary statement of economic independence from the UK, fraught though with tensions and uncertainty. This led to Ireland in time being accepted for membership of the euro zone, and by 2000, euro notes and coins were the currency of the country, with the major complication of Northern Ireland continuing with the use of sterling.
In 1992 the Single European Act came into effect, leading to a very significant boost to EU economic integration, of which Ireland was an enthusiastic participant. By 2000 Ireland had caught up economically with its peers in the EU, and this trend continued well into the 2000s. The population started to grow significantly for the first time in the history of the state, largely due to huge net immigration from 1998 to 2008. The transformation in the economic and social fabric of Irish society in a very short time was startling. The admission of ten new, poorer members states to the EU in 2004 and the resulting migration west, including to Ireland, was underway, altering the social landscape of the country to an extraordinary extent.
We had some ‘fun’ in lectures at that time trying to explain the dramatic turnaround in Ireland’s fortunes. Explaining why an economy grows or stagnates is a favourite ‘pastime’ of some commentators, with a few at the time thinking that Ireland’s success in sports or the Eurovision song contests were factors! Who knows, except that one essential, but not sufficient, requirement for economic success is the rule of law and political stability.
A lot of the boom though had been fuelled by surging household debt, pushing up house prices to unsustainable levels. At the same time a serious banking collapse in the US had set in motion a world recession, and in Ireland there was the collapse of Anglo-Irish Bank, and a huge government bailout of Irish banks ensued. This was the worst such crisis since the 1930s, and for the first time I realised how fragile are the financial structures that underpin economies. Psychology as much as economics, I then realised, matters. House prices plummeted, granted from unsustainable highs, and empty housing estates became top news items.
The ‘drama’ continued. Between 2012 and 2020 there was another extraordinary turnaround, when the economy rebounded very strongly, with net in-migration resuming and population and employment growth at unprecedented levels. A major hiccup, but which did not significantly affect growth and employment, was the decision by the UK in 2016 to exit the EU, an event which led to torturous negotiations between the UK and the EU, with unstinting support provided by the EU for dealing with the consequences for Ireland, North and South. The Irish economy though has weathered the storm well so far, with living standards today well above those in the UK, including Northern Ireland, having been well below them up to 1990, from the foundation of the state. The existence of two economies on the island, with only one of them a member of the EU, does though pose continuing challenges.
2020s
By 2021 there were new concerns, when the Covid-19 pandemic caused a major crisis around the world, Ireland included. Predictions of mass deaths and the arrival of a possible new, even more deadly virus for human health circulated. The change to Irish lifestyles was extraordinary but predictions of economic decline did not materialise, and the economy has recovered strongly since. Until 2025, when the world economic system was put in disarray by unprecedented US policy in relation to trade and security, bringing another bout of huge uncertainty and possible doomsday scenarios. But such swings as seen above have been part of the story of the economy over the fifty years of the Economy of Ireland book. At a sectoral level there have also been recurring crises in housing, education, energy, agri-food, health, and internationally traded services and goods, the last listed being particularly vulnerable in the event of a world trade tariff war.
In the last twenty years, there has been greatly increased concern with the environment and global warming, something which as noted above was also highlighted in the 1970s but largely ignored. The emphasis in many chapters in the fifteenth edition reflects such deep concerns. Ever since the Cuban Crisis in 1962 though, my main worry has been and still is the prospect of a nuclear war, heightened again by the war in Ukraine, the consequences of which would be apocalyptic for Ireland and the world. Not just for the economy but for human existence.
3. POSTSCRIPT
Delivering lectures (for forty-five years) on The Economy of Ireland to such motivated and intelligent young students has been a source of great enjoyment and has brought a real sense of achievement. The issues certainly sparked their interest and engagement; many of them went on to very important roles in government/state bodies, academia, international organisations, and the private sector. That first lecture in 1970, and the first edition of the book in 1975, seem like only yesterday, as the body of students you see in lectures has not changed in terms of age and socioeconomic mix, except for the greatly increased and very welcome numbers of visiting and full degree non-Irish students. The lecture halls are the same, and the format of lectures remains the same. Even assessment methods have not changed so significantly, apart from during the Covid years. But the person giving the lectures has changed, even if the students are not aware of it!
John O’Hagan is Professor Emeritus of Economics at Trinity College Dublin. His book The Economy of Ireland: Policy Making in a Global Context (London: Bloomsbury, 2025) has been the standard textbook on the subject for the past fifty years. The date of publication of the fifteenth edition, which he has co-edited with Francis O’Toole and Ciara Whelan, is 1 September 2025.
