Tony O'Reilly's Last Game: A Case History of Irish Capitalism
Date:1979
Organisation:Sinn Féin The Workers' Party (see Workers' Party)
Edition:2nd
Contributor:Eamonn Smullen
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Commentary From The Cedar Lounge Revolution

7th September 2009

I’m indebted to the Workers’ Party (and in particular Padraig Mannion, Research Officer) for forwarding me this document, which has been mentioned in discussions on the Cedar Lounge Revolution during the past while. The accompanying explanatory note is of particular use.

Explanatory Note Tony O’Reilly’s Last Game was first published in 1976 and this revised and updated edition was published in 1979. This pamphlet is now thirty years old. However Tony O’Reilly is still in the news. In January he hit the headlines with the closure of Waterford Glass and presently he is in the news because of the major financial and boardroom problems in INN. It is therefore appropriate that this publication become available to a wider public. The original document has been scanned using OCR and reset on A5 pages. No alternations - either of spelling, syntax, grammer or politics - have been made to the text. It is planned to re-issue this pamphlet before the end of 2009 or early in 2010 with a comprehensive new introduction and a new epilogue. PM

And a short precis sums it up:

On the playing-field or in the boardroom. Tony O’Reilly always turned in a dazzling performance. Everything he touched - even butter - turned to gold. When he was approached by an American talent scout, O’Reilly seized the opportunity of professional coaching in Pittsburgh where he quickly learnt that Heinz means business. O’Reilly, the returned Yank, shot to the top of the Irish financial charts by applying the American code to Irish business. With the assistance of financial journalists, he cultivated a climate of success of which the greatest symbol was the FitzWilton empire. Tipped by Time magazine as a future Taoiseach, O’Reilly was dubbed ‘The Golden Boy’. But as 365 former Gouldings workers now know, all that glitters is not gold. They learned the hard way that free enterprise has to be paid for by someone. For them, the price was high indeed: O’Reilly’s enterprise, flair and dash cost them their jobs. This booklet reveals for the first time the full story of the rise of Tony O’Reilly and the fall of Gouldings.

The introduction by Eamonn Smullen is also very useful in contextualising the nature of the document. As Smullen notes:

This pamphlet, which traces the rise and collapse of the O’Reilly business- empire in the first half of the 70s, is a study in microcosm of the capitalist system as it operates in Ireland. It purposely picked as its subject the darling of the Irish bourgeoisie, for it shows the inevitability of any capitalist venture in Ireland - unemployment, inefficiency, waste of resources, double talk, and sordid corruption.

Some of the details are fascinating, for example:

In October 1972, as O’Reilly led out the team for the second half, there were a few complaining voices raised. The most distinguished was Dr. Ken Whitaker of the Central Bank. In October 1972 Dr. Whitaker told an investment conference what they all knew. “Within the last two years we have witnessed an astonishing wave of mergers and take-overs in these islands”. The crowd knew that and were quite happy about it, especially by O’Reilly’s neat trick of actually making money from the inflation that was hitting the workers’ wage packets. But Dr. Whitaker lamented: “If sections of the community come to have a vested interest in continued inflation, will this not tend to Feed inflation further?” The crowd agreed that it would and a good thing it was too for Irish business. Dr. Whitaker in desperation warned that it was paper money and that no goods were being produced by O’Reilly. “It surely cannot be desirable socially or economically” he said, “that financial transactions should yield bigger gains than production.” The crowd on the stands told him not to be an old fool. Noel Mulcahy, pioneer of the “stake-holder theory” and prominent Gaeilgoir who spoke figures in Irish, told Whitaker sharply “It seems a little untimely for Dr. Whitaker to dampen enthusiasm for enterprise”. The crowd agreed that O’Reilly should get on with the game.

One could quibble with the central conceit of the ‘game’, and some of the references which are perhaps a little too much of their time, but I think it’s a pretty effective way to get across the overall argument. And, as noted in the explanatory note, still as timely as it ever was.

I hope that we will have a number of other additions to the Archive of a similar nature in the near future. Again, thanks to the Workers’ Party for this contribution (it hardly needs saying, but by the way, as always the Archive is open to policy documents from all left and progressive parties, groups and formations on the island of Ireland or similar material from non-Irish sources relating to Ireland).

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  • By: Hugh Green Mon, 07 Sep 2009 10:51:37

    Very interesting. I agree that the Rugby conceit wears a little thin rather quick. What also chafes is this idea of the ‘Irish national bourgeoisie’ ‘bluffing and fouling’, ‘greedy and stupid’ as though there is a universal standard of behaviour to which a bourgeoisie ought to be held.

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  • By: t g macamhloaibh Mon, 07 Sep 2009 11:26:39

    I remember a sitting in a bar in NY in the early 80’s and a Dublin mate telling me about this fella, o’reilly, who had made a fortune in the early 70’s. My mate couldn’t tell me how o’reilly made the money except that involved selling some sort of paper (maybe like the Irish lotttery at the time was my mate’s theory) and it was some sort of ponzi scheme. Here, nearly 30 years later, I finally read the whole story! In a way, my mate was right in his description.

    It might add some perspective to that time period and indeed our present situation to let you know that o’reilly’s actions were based on solid Wall Street theories regarding risk. While the SEC may have temporarily halted the game, Wall Street had quietly latched onto ‘efficient market theory’ and turned it into ‘efficient portfolio theory’. The main idea, simply put, is that you hold various assets so that your overall portfolio is not concentrated on one asset. You spread the risk through diversification.

    They applied the theory to the macro-economy and why companies should diversify their activities by acquiring a broad range of industries. We all know about leveraged buy-outs, job losses and massive wealth concentration. A Wall street veteran, who was at the coal face of this activity, only had one comment to make regarding the debacle – his firm (one of the current golden circle) made quite a profit by unwinding the conglomerate – so it all worked out in the end!

    However, the means or theories weren’t as important as the methods of conveying the seeminly logical message. The ‘efficiency’ theory gave credibility to the same shell game played out in the 60’s. While the SEC and corporate America had some misgivings about playing the shell game again, they had lost the argument on a ‘mathematical and scientific’ basis. In fact, one could say that o’reilly was ahead of the curve given the time frame outlined in the pamphlet.

    Modern caitalism works upon its message at all time. It has a clear goal (capital accumulation by any means) and is highly adaptable. Many think capitalism, and especially financial capitalism, doesn’t work on a long term agenda. Well, the MBS (mortgage backed securities) and subprime debacle of 2008 was a work-in-progress going back to the early 80’s. I was there when the computerisation of credit scoring; working out of legal vehicles to move assets outside US jurisdication; deregulation; attack on semi-public mortgage origination [Fannie and Freddie Mac]; poaching of staff from semi-public companies; the ability to securitize any asset; and the creation of a market theory to make the entire story plausible were just beginning.

    Modern capitalism relies on the MSM to deliver the latest theories and tailored messages to meet its goals. The consolidation of Irish media was just an important ingredient in the Irish property ponzi scheme as were the financing techniques and govt policy. Strangely enough, even though I had some insight, I too had thought capitalism had come up with some magic formula as home prices in Ireland just went beyond any ‘normal’ measurement of supply & demand and risk & reward. All I could do was sit on the sideline, keep debt to zero, save and wonder just how the hell these feckers were working. We now know. The same shell games delivered in shiny new packages.

    |’ve just read that Wall Street’s newest ‘product’ is the securitisation of life insurance policies. Get’em while they’re hot.

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  • By: Colm B Mon, 07 Sep 2009 12:15:20

    Ironically it was written by Eoghan Harris. Whatever about the substance it has all the hallmarks of his writing/speaking style.

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  • By: Garibaldy Mon, 07 Sep 2009 12:20:42

    Thanks for that TG.

    I agree with Hugh that the rugby metaphor may wear thin, but I also think that a lot of this is familiar when you look at the history of the Celtic Tiger, right down to celebrating Irish capitalists taking over British firms. This is exactly the sort of stuff the left needs to be doing today.

    As for Harris, I think this bears out my point he did a lot of good as well as the bad when his talents were properly directed.

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  • By: Garmin in-car GPS ridealong | Garmin GPS Tue, 08 Sep 2009 06:43:47

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  • By: Starkadder Wed, 09 Sep 2009 17:47:58

    Interesting pamphlet. Shouldn’t the modern Irish left be producing
    similar works on the likes of Denis O’Brien and Declan Ganley?

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  • By: WorldbyStorm Wed, 09 Sep 2009 19:02:22

    WP is working on such material AFAIK…

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