WE have gotten along remarkably well without a functioning banking system. The bank branches have been closed for more than six months this year, because of the bank officials' strike. Yet the economy has come through reasonably well.
Of course, things were not helped by the fact that, because of a different strike, the cement industry was closed for almost six months as well. At some point, the country is going to have to deal with its lamentable industrial relations record.
It should not be beyond the wit of man, in such a small country, to devise a less damaging way to deal with disputes over pay and conditions.
The intensely local nature of trade union organisation and bargaining is part of the problem. It leaves no mechanism for dealing with the needs of the national economy.
Of course, a more nationally organised system would require that the participants had a clear view of the national interest.
There would have to be sufficient common understanding between employers, unions and government to ensure that the new system did not become merely a swollen and more embracing version of the current damaging horse-trading.
The lesson to be drawn from the bank strike is the resilience of people when faced with unprecedented problems. Something akin to a parallel banking system grew up during those months. There were even reports of an informal credit system beginning to emerge.
It seems unlikely that such a situation will ever recur and that alternatives to conventional banking will ever again be required. One result of the bank officials' determined fight is that they seem assured of the best pay, conditions and job security for the foreseeable future.
The retail banks generally avoid mortgage lending, not liking to lend so long-term when they borrow so short, and the strike did not impact on the sharp increase in home loans from building societies.
These were up 60pc in the second quarter, and 30pc in the third, as compared with 1969. House-building seems to have recovered rapidly after the end of the cement strike, especially in the private sector.
There may be a danger that this is part of the general inflationary pressures seen elsewhere in the economy.
Consumer prices rose by more than 8pc in the first nine months of 1970, compared with the same period in the previous year. Some two percentage points of this was due to the doubling in turnover tax on the value of sales from 2.5pc to 5pc.
This is a damaging tax increase. It bears down most heavily on the poorer sections of society and encourages wage claims from organised labour.
It is to be hoped there will be no further increases beyond this punitive level; not even if we join the Common Market with its value-added tax (VAT) system.
There are signs of over-heating in the economy as well. Retail sales surged in the first quarter, as people bought goods and alcohol in anticipation of tax rise in the March Budget. But even after that subsided, consumer purchases remained 7pc higher than the previous year.
It is clear that rising prices have damaged the country's competitiveness. The rise in general prices, as distinct from consumer prices, is closer to 9pc. This compares with an average 5pc increase in the group of the seven largest OECD countries.
This is all the more disappointing because it has eroded much of the gain from the 1967 devaluation of sterling and the Irish pound.
There were early signs of the benefits of the devaluation, with exports to the US rising from 7pc of the total in 1966 to 12pc in 1970.
The loss of price competitiveness may see a reversal of that trend. There must be considerable doubt about the merits of devaluing the currency when wages respond as rapidly to inflation as they do in Ireland.
Perhaps there will come a time when workers, either willingly or from lack of bargaining power, will accept the reductions in real incomes which come from devaluations.
Until that day dawns, it may be just as useful -- perhaps even more so -- to deal with such problems directly through wage restraint and higher unemployment, so that the realities of sustainable income levels based on productivity can sink home.
Unemployment itself is on a rising trend. It hovered around 7pc for the first nine months of the year, which is well up on the 5pc recorded in 1966. There is little sign of any employment gain from the introduction of the Anglo-Irish Free Trade Agreement in that year.
One should not be too disappointed about that. Industrial employment continues to rise, and reached 194,600, an increase of 2.4pc, during the year.
There were healthy gains in the traditional food and drink industries, but the 11pc jump in jobs in general manufacturing points to the impact of the foreign-owned companies whose presence increased during the 1960s.
There will be losses as well as gains from the new free trade arrangements. The losses may even come first. Imports from Britain have grown from 55pc of the total to 59pc, while exports fell from 72pc to 66pc.
The switch from UK exports to US ones, which this figure partly represents, is to be welcomed, and must be sustained. There was, however, little improvement in the share going to the Common Market. This is a difficult market to penetrate but penetrate it we must if, as one hopes, Ireland eventually becomes a member.
The trade deficit of £200m, and the overall balance of payments deficit of £60m (3pc of GNP) show that the country continues to live beyond its means.
Stronger growth and a fall in unemployment will have to come from improved exports. The foreign companies will play a key role, but we must look to the native sector for a greater contribution, especially in what look like favourable international conditions in the coming decade of the 1970s.
With thanks to the Central Bank for archive material.