Yes, they did – but not by bombs and bullets, those were just pin-pricks in comparison to the real destruction.
Yesterday's Northern Ireland 'Leaders Debate' on UTV confirmed that all the main parties agree that the economy is in a poor state, and all four agree that it is too highly dependent on the public sector – which provides around 50% of all jobs, according to Ritchie.
Why is this the case? Surely Northern Ireland had a tradition of ship-building, linen, engineering, agriculture, and so on – all 'serious' businesses that should have provided skills and infrastructure for growth. And yet, when these old sunset industries died out, nothing replaced them. Why not?
The unionist argument is that the IRA destroyed the economy by its bombs – but the IRA almost never touched the industrial sector. Harland and Wolff, Mackies, and all the rest – the linen mills, the animal feed mills, etc – were killed by simple technical progress and globalisation. The IRA never bombed an industry out of existence. When a town centre was destroyed by a bomb it was shops that were destroyed, but they bounced back. There is no shortage whatsoever of retail space in the north now. What is missing is creative industry – software, innovative technology, pharmaceuticals, leading R+D, and so on. Of course much of this can be 'bought' off-the-shelf if you have a low corporate tax like the south, but there is wealth creation in the south of England even with the same high rate of corporate tax as in Northern Ireland.
So why does the north lack a real private sector? Is it geographic isolation? No, because it shares the island with the successful southern economy (still a major exporter, despite budgetary problems), and is geographically privileged compared with Israel, one of the world's high-tech hotspots despite its isolation.
The real reason why the north lacks a private sector – and this was also alluded to in yesterday's Leaders Debate – is that the public sector crowds it out. The public sector – all those thousands of nice well-paid 9-to-5 jobs, often with inflated titles (and salaries), are simply too tempting. Why take risks, why spend years working 80-hour weeks with only a chance of making it, when for half the effort you can get a guaranteed regular income courtesy of the tax-payer?
So did the IRA's bombs really kill the private sector? The answer is a categorical no – Germany, completely flattened by the Second World War, with ruined cities, a lost generation of men, and its infrastructure destroyed, rebounded in less than 15 years to become a Wirtschaftswunder.
However, the IRA's campaign drew a whole generation of young Protestants into the public sector – often via the RUC and UDR, and led the British, in an attempt to smother discontent, to throw money at the problem, spawning what is probably Western Europe's most public-sector dependent economy. Jobs in the civil service, in quangos, and in all sorts of community organisations multiplied. For those who couldn't (or wouldn't) work, there was social welfare and public housing. And thus a whole generation found that it was possible to live relatively well without actually needing to create anything.
In its two-pronged approach to the IRA's war – military and welfare – the British government successfully killed entrepreneurship in Northern Ireland. There was no need to try, because London would always subsidise the place. Even 'loyal' unionists feel that the block grant is their 'right' – regardless of whether there are cuts in Britain. Disloyal nationalists have nothing concrete whatsoever to say about entrepreneurship beyond a hope that somehow they could persuade the British to grant the north a lower corporate tax rate.
The relationship between Northern Ireland and London is increasingly becoming like that between a junkie and his pusher – what matters most is the next hit, either through the block grant, or through the £800 million for devolving policing and justice, or through compensation for the PMS savers. Almost all of the parties, thought paying lip service to the need to 'grow the economy', are still more fixated on how much they can get out of London to pay for more and more public sector goodies – building a multi-sports stadium, building more social housing, investing in hospital construction, building new schools, and on, and on, and on.
But politicians – and certainly not those without fiscal powers – are not those who drive entrepreneurship. Entrepreneurship comes from individual greed, and the desire to become rich. And in economic terms greed is good – if it leads to people setting up businesses and working hard to make them successful. These businesses employ people and buy things, leading to a virtuous circle of wealth creation.
But in the north it remains so much easier to enrich yourself – in real terms – by getting a nice comfortable public sector job. When private enterprise either pays less than the public sector, or when public sector jobs are easier to get, or simply more comfortable, many people will be tempted into the public sector.
So the IRA did destroy the north's economy, but not directly. Its campaign encouraged the British government to increase the medication, in the hope of sedating the patient. And it worked, except that now Northern Ireland is a junkie-economy addicted to public money.
The only solution for Northern Ireland, as for all junkies, is cold turkey. In good times the cure could be put off – indeed it was put off for half a generation – but the good times are over. Regardless of who wins on May 6 the flow of money from London to Northern Ireland is going to slow down. Peter Robinson last night admitted that around £200 million a year was going to be cut – but it could be more. But until there is a systematic reduction in the public sector in Northern Ireland, and not just a short-term response to the budget deficit, Northern Ireland will remain addicted. Until the rewards of private sector enterprise, hard work and self-reliance become visibly better than the 'rewards' of public dependency, the north's economy will remain poor.
Let the cuts begin. It's for our own good.