After decades of neglect, Ireland is finally debating national security. Unfortunately, we don’t just need to catch up with the rest of the world, but understand how our economic growth strategy involved national security choices that are coming back to bite us.
Market-based globalisation is being eaten alive as powerful countries contend for domination. That means that the economic advantages that Ireland strove to build for decades have hidden security vulnerabilities. Semiconductor manufacturing, the online economy, and global financial arrangements are among the most ferociously contested territories in the new landscape of global security.
None of this was expected. As Abraham Newman and I explain in our new book, Underground Empire, international policymakers let markets rip at the end of the cold war, lowering barriers to trade and the movement of money across borders. The internet rapidly expanded, seeming to allow ideas to spread freely too.
[ State papers: American do-gooders planned new town for the NorthOpens in new window ]
Politically influential commentators like Thomas Friedman believed this would create a more peaceful and prosperous world order. Information, financial and manufacturing networks would make war irrational, creating a globalised economy in which Boston, Berlin, Benin City and Ballina could compete fiercely on an equal footing. In an unfortunately titled 2005 column, “Follow the Leapin’ Leprechaun”, Friedman singled out Ireland as a country that would thrive in this new global marketplace, by “playing offense” on tax, regulations and business subsidies.
Róisín Ingle on Kathleen Watkins: She loved life, poetry and Gaybo. Conversation flowed from her like music
Sage Bertie Ahern, wry Joe Duffy and stoned-sounding Irish Maga fan: Radio reactions to Trump’s US election win
Beijing Letter: The blind date corner where parents keep an eye out for matches for their children
Matt Williams: How Ireland can secure victory over the All Blacks
Actually, Friedman’s networks magnified the power of the powerful, drawing the world economy further under US influence. In the early 2000s, most information on the internet travelled across US territory. The purportedly decentralised global financial system depended on the US dollar. As high-tech manufacturing spread across the globe, US businesses maintained quiet control over many of the commanding heights of intellectual property.
After September 11th, 2001, the US began to deploy this power. The documents leaked by Edward Snowden revealed how this enabled massive internet surveillance. But the US was able not just to monitor global financial networks but use them to massively increase the force of financial sanctions, leveraging the power of the US dollar to isolate people, businesses and eventually even entire countries such as Iran from the global financial system.
Policymakers didn’t consider national security risks when they transformed the Irish economy into a high-value node in semiconductor production, the platform economy and financial services
The Trump administration used these powers to bully Europe for trying to stick to a deal with Iran that the US itself had signed, and sanction officials of the International Criminal Court for investigating possible war crimes by US soldiers. Trump officials discovered that they could deploy manufacturing supply chains too, barring the Chinese telecommunications giant Huawei from buying the advanced semiconductors that it needed to build its global 5G ambitions. My and Newman’s research on how the US was weaponising the interdependent global economy accidentally helped inspire them. We warned of the dangers, but according to the historian Chris Miller, a senior Trump official described our work as a gameplan for undermining Huawei, rejoicing that our notion of weaponised interdependence was a “beautiful thing”.
The Biden administration has distanced itself from Trump’s bullying of allies, instead employing the Trump toolkit alongside Europe to mount an unprecedented economic counter-attack when Russia invaded Ukraine. More recently, the US imposed an effective global ban on exporting AI-enabling semiconductors, and equipment that could be used to make them, to China.
The US is uniquely powerful, but far from unique in its willingness to use economic power to get its way. China has been using economic pressure to bully other countries for decades: just ask Lithuania. After the US strangled Chinese access to AI semiconductors, China announced restrictions on the export of key metals used in semiconductor manufacturing.
[ Stephen Collins: In Biden’s US, it’s no longer ‘the economy, stupid’Opens in new window ]
Instead of bringing peace, globalised networks have often increased insecurity. This will worsen as great powers exploit each others’ vulnerabilities, and retaliate against each other for this exploitation. The global economy isn’t set to collapse, but it can’t be treated in isolation from national security any more. Ireland needs to start thinking through the consequences.
Policymakers didn’t consider national security risks when they transformed the Irish economy into a high-value node in semiconductor production, the platform economy and financial services. In fairness to them, nobody else was paying attention. Even so, you would now be hard put to identify three more vigorously disputed global economic battlefields than chips, data and financial flows. Like one of those ancient civilisations that built their cities and farms in a fertile flood plain, Ireland now has to figure out what to do as the waters begin rising.
We got a very small taste a few years ago, when sanctions against the aluminium giant Rusal and its Russian oligarch owner Oleg Deripaska hit Rusal’s aluminium refinery at Aughinish, Co Limerick. For a short period, workers and executives panicked as Rusal became a pariah. Ireland got lucky. Our book describes how then Irish ambassador to the US Dan Mulhall got a call on a Friday “from the people at the plant saying that the gas supply would be cut off on Monday” for fear of sanctions, but was able quickly to get US assurances to avert a shutdown. Soon thereafter, US officials rowed back on the sanctions. They hadn’t understood that, without Aughinish, the entire European aluminium sector and the manufacturers that relied on it might have gone into meltdown.
There are other potential Aughinishes on Ireland’s territory – chokepoints in the global economy that might be exploited, and businesses and business sectors that might become accidental casualties in the greater economic and technological conflicts that are beginning to get going. What happens to semiconductor production when great powers are fighting over the techniques, minerals and machinery used to make them? How might sanctions and economic countermeasures disrupt Ireland’s financial sector? How will data centres work in a world where the US and China are individually trying to grab as much information as they can for themselves, while denying as much as they can to each other?
The US hadn’t understood that, without Aughinish, the entire European aluminium sector and the manufacturers that relied on it might have gone into meltdown
As others have warned in these pages, such thorny questions risk being lost as politicians and commentators revert to dimly remembered student debates about Nato in the 1970s and 1980s. Those ancient spats are mostly beside the point. Ireland is enormously unlikely to face physical invasion, and Washington DC policy experts smile kindly when they’re asked about whether Ireland should join Nato or not. As far as they’re concerned, Ireland’s military decisions simply don’t matter very much.
Ireland needs to focus more on economic security, where its main vulnerabilities lie. That doesn’t mean abandoning the debate on military security but instead considering Ireland’s growth strategy and its national security together. Other countries, including the US, are going through the same painful changes. But Ireland faces some particular challenges.
Most obviously, the Irish Government is poorly fitted to gather the information to make the necessary trade-offs that it needs to make. The Taoiseach has suggested that Ireland should learn from other countries with more formal cross-government institutions for security. He’s right – but Ireland should also consider the weaknesses as well as the strengths of existing models. Senior US national security officials worry that their government’s institutions focus too heavily on traditional security, and are trying to retrofit their institutions for economic security. Ireland has the opportunity to custom-build institutions for this new world.
This will require investment in the collective intelligence of government across and within departments. The Department of Foreign Affairs and Department of the Taoiseach have done extraordinary things despite chronic underfunding, but they are stretched to their limits and beyond. The resources of the National Cyber Security Centre are derisory when compared to its responsibilities.
That can’t be the pattern going forward. Getting economic security right is essential, not just for the wellbeing of Irish citizens but for their continued prosperity too. How should Ireland respond to US pressure, which is only going to increase, and might get far worse if Trump or someone like him is elected in the future? How should it manage its relations with China? What should its approach be to France’s plans for increased “strategic autonomy” for the European Union? Does its desire to cling onto lax privacy oversight and low corporate tax arrangements have consequences for national security as well as the economy? Irish politicians and officials are most certainly thinking about these problems, but they don’t have the resources or the institutions that they need to fit them into a coherent long-term strategy for economic security.
[ Germany drops legal commitment on Nato defence spendingOpens in new window ]
If Ireland starts to build such a strategy, it might start to find opportunities as well as challenges. Its integration into the US technology complex, its relationship with the UK (which may improve after the next British election) and its role within the EU may make it an important node in a very different kind of network. It could exercise influence in the interstices between and among great powers and their allies, where more decisions are getting made. But getting there will require Ireland not just to pay attention to national security, but to pay attention to how dramatically it has changed.
Henry Farrell is the SNF Agora professor at Johns Hopkins School of Advanced International Studies, 2019 winner of the Friedrich Schiedel Prize for Politics and Technology, and former editor-in-chief of the Monkey Cage at the Washington Post
Underground Empire: How America Weaponized the World Economy by Henry Farrell and Abraham Newman is published by Allen Lane and available in shops and online from September 7th
