Who sank the Celtic Tiger? Fintan O'Toole gives us his take in 'Ship of Fools'

The rise in access to education also had an enormous impact, opening up Irish society and making it more attractive for inward investment.

“The strange thing was the way in which you had all this remarkable change -- Ireland became the most globalized economy -- attracting high tech industry and the leading multinationals in the world,” O’Toole says.

“You’d all that stuff happening, but underneath that you had all of the underlying Irish cultural responses remaining almost unchanged. The failure to change our basic cultural assumptions had really serious economic effects over time.”

The political culture of Ireland, O’Toole argues, is still the political culture of 19th century Irish America.

“It’s the machine, it’s Tammany Hall politics, it’s a brilliant Irish invention, but we’re stuck with it still and its out of date. We never got our Kennedys or Obamas. We’re still stuck with Boss Tweed,” O’Toole argues.

Another factor that retarded Ireland’s economic stability and growth was what O’Toole calls the 19th century obsession with property.

“If you think of Ireland as not just part of the economy but really on the leading edge, when it starts getting wealth how does it value that wealth? Well, it was not in terms of investing in new products, new inventions, infrastructure, and all that stuff. Instead it was in property, land,” he says.

“We developed a psychotic property boom. One of the reasons why house prices became so inflated in Ireland was the cost of the actual land itself that houses were built on.

“They were a vastly disproportionate part of what people were paying – up to 50% of the cost of the houses were in the land. A relatively small number of people were able to control the development land and were able to use that control to pump up the price to incredible levels.”

Part of the reason why negative equity on so many people’s houses is so dramatic is because they paid huge amounts to land owners. “It’s almost as if we were in the 19 century, it’s as though we were stuck in a feudal situation where land was what gave you wealth and control over society. It’s rooted in fairly obvious things. We have a history of deep insecurity about land, which is one of the reasons why Irish people in Europe disproportionately as soon as they get a job want to buy a house. We don’t rent. In Ireland buying a house is seen as an absolute necessity. We need the security of owning the thing.”

A lot of the big developers in Ireland came from rural Ireland and held similar ideas about land ownership, O’Toole says. Their conception of what wealth was was completely tied up with land. They were still thinking like small farmers, even though they were often dealing in billions.

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Nster.com