Luck and the Irish, By RF Foster

Why Irish eyes are smiling

The transformation of Ireland in the past 20 years is one of the miracles of the modern economic age and already a subject for theses the world over. How did Europe's basket-case economy become, almost overnight, the most successful? Those who, like me, grew up in the Ireland of the Fifties, remember barefoot children, an all-powerful Catholic Church, endless poverty and mass emigration. We also remember happier aspects too: poetry, song and a respect and knowledge of age-old culture and mythology.

It has changed, not quite utterly, but certainly beyond easy recognition. The Ireland of today is bursting with prosperity and success, with the highest income per capita in Europe, and richer even than the US. A few years ago The Economist, somewhat dubiously, ranked it number one in the world for "quality of life". Foreign investment pours in and exports of high-value-added microelectronics and pharmaceuticals pour out. Emigration has reversed, although Ireland is probably the only country in the world whose population is less today than it was a century ago.

So how did the Irish pull it off? Roy Foster's answer is simple: they "got lucky". The boom was set off, and accompanied, by a series of what he calls "interconnected crises": scandal and corruption in government, a succession of political crises, planning blight, incompetent (and worse) leaders, and violence in the North. But it was also accompanied by the hugely successful creation of Brand Ireland, much copied by emerging countries from India to South Africa, by a low tax structure, EU money and, of course, enormous piles of foreign cash.

The cash won. But it was almost by accident. No one planned it, presided over it, chided it along or took responsibility for it. It just sort of happened – despite, rather than because of, everything those in power did to try to stop it.

Foster, professor of Irish history at Oxford, previously wrote a widely praised history of modern Ireland which stopped in 1972, the year of Bloody Sunday and the burning of the British embassy in Dublin. Luck and The Irish (note: not the hackneyed "Luck of the Irish") takes it up to the end of the millennium.

Except it doesn't. This book is more a collection of finely-drawn essays, loosely connected by the theme of modern Ireland, than it is a history. It doesn't seriously try to tackle the why, although the book is focused on the preconditions and the circumstances. The overwhelming evidence actually points to tax – hence Northern Ireland's attempts to persuade Gordon Brown to level the playing field and give them a corporate rate of 12.5 per cent. But no one understood the impact a 10 (now 12.5) per cent corporation tax rate would have when it was first introduced in the Republic. So luck will do just as well.

Charles Haughey gets an essay all to himself, and he thoroughly deserves it. Foster doesn't think much of him or his legacy and has a great deal of fun (there is a lot of fun in Foster's elegant writings) at his expense. Charlie is his big villain, his malign influence hanging over the whole period of modern Irish history.

Haughey's story is a truly amazing one: IRA gun-runner turned millionaire taoiseach (three times), collecting cash from friends and supporters and spending it on extravagant luxuries, including his own private island and an impressive collection of vintage wine. Thanks to the endless official inquiries and ongoing tribunals, we now know more than we want to know of Haughey's long, long trail of corruption, including the fact that he took payments equivalent to £30m between 1979 and 1996 and "granted favours in return".

Despite the volumes of evidence, we still don't know exactly what those favours were, and Haughey has taken his secrets to the grave. But we do know that they included approval for some of the most awful property developments ever seen in Ireland and the creation of a great deal of wealth for former bricklayers who became billionaires. Property developers have been the biggest beneficiary of the Irish boom.

That's the bad bit. There are good bits too – lots of them. Foster is much taken with the unexpected blossoming of the new Irish culture, which has gone global and which was born of this period of dislocation, crisis and change: the popular music of Bono, Geldof, Van Morrison and Enya (at one stage the most played musician in the world), inspiring an even larger number of second-generation Irish such as Shane MacGowan, Johnny Rotten (actually John Lydon), Liam and Noel Gallagher, and Elvis Costello. There was dance, too, with Riverdance; and the arrival of a new genre of novelist, notably John Banville, Colm Toibin, Anne Enright and Roddy Doyle, who have won more than their share of literary prizes.

Above them all, of course, is the towering figure of Seamus Heaney, with firm roots in the old Ireland but not to be left out of the new. All of these strut the world stage as the cultural output of no other European country does.

At the end of the day, Foster is not entirely certain whether the Celtic Tiger is a good or bad thing, and concludes, rather tentatively for such a self-assured historian, that it is probably a bit of both. It is a story, he says, citing the history of Haughey, of shade as well as light. And he is clearly tempted to conclude that the breakneck speed of change experienced by Ireland could mirror previous eras in Irish history, which "often ended in some great and traumatic upheaval".

Whenever he toys with that thought, however, he quickly draws back in the face of the sheer force of the change on every front in this period. The Catholic Church has been broken by a combination of women's emancipation and revelation after revelation of long-buried child abuse; there is peace in Northern Ireland, now the Mexico to the Republic's US; there are world-class businesses and economic numbers the rest of the developed world can only envy. So why not enjoy it? For centuries, Ireland had it so bad. Now, for the first time in centuries, it has never had it so good.

Allen Lane £20 (228pp) £18 (free p&p) from 0870 079 8897