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if you were to take a look at the wealthiest citizens in the world in the 1980s you would have seen that the tax havens like Monaco Switzerland and Luxembourg are at the top of the list while some economic powers like the United States and Germany would be at around the 13th to 14th richest and all the way down at number 28 past countries like Greenland New Caledonia and Andorra would be the country of Ireland but today that list looks a little bit different as Ireland now has the fourth largest GDP per capita in the world and of the countries with over 3 million people Ireland is second behind only Singapore but it wasn't always like this you see Ireland just a hundred years ago was considered by some to be a third world country I mean in the 1920s greater than 90% of Ireland's economy came from agriculture and most of its working population was composed of poor farmers and after Ireland gained its independence in 1922 it only had one trading partner which was the UK and virtually all of Ireland's exports were beef and dairy now during this time Ireland was falling behind the rest of the world in regards to its economy and technology so it decided to try some new economic policies you see the Irish saw that during the Great Depression the countries that were being hit the hardest were the ones with a free market meanwhile countries under communism such as China and the Soviet Union were actually experiencing some economic and industrial growth during that time so The Statesman Eamon de Valera decided to take some ideas from the Western world and some ideas from the communist regimes that's why Ireland soon nationalized and monopolized a large portion of its economy it banned most foreign trade and investment and put high tariffs on virtually all goods from other countries now these policies were supposed to help make the country self-sufficient and rapidly industrialized the nation but that is not what happened you see the first thing that occurred after these economic policies were put into place was that the Irish began leaving the country at faster rates than they were before in fact from 1840 to 1950 the population of Ireland went from 8 million people all the way down to four million people although I should mention that the potato famine of 1845 played a major role in this as well now the second thing that happened was that the Irish policymakers ran into a problem you see in order for a country to become industrialized they need all of the resources required to build things like factories ports and modern buildings now for large countries with tons of resources like Russia and China that was not much of a problem but for a country like Ireland which is 0.49 percent the size of Russia and 0.88 percent the size of China this would prove to be troublesome for the small European nation and even if Ireland were to be abundant in all of the required resources it would have been very difficult to build an industry around each one of those resources because Ireland's population was small and it was actually less than some cities like New York and London now one interesting note is that because the Irish were going through some tough times the country was actually one of the very few nations in the world to stay neutral during World War two anyways over the next several decades the nationalistic economic policies would prove to be disastrous for the Irish economy as there was very little economic or industrial growth during that time compared to the rest of the European world so as virtually all communist countries have done they decided to change their economic policy in 1957 Ireland began accepting foreign investment they slowly began opening up to more international trade they started investing heavily into education and they began selling off many of their state-owned companies and soon after in 1973 Ireland joined what would become the European Union which is viewed by many as Ireland becoming a modern nation however things took a little bit of a turn you see a combination of an oil crisis uncontrolled government spending bank strikes and extremely high taxes upwards of 50 percent for the average person led to one of Ireland's worst economic down Falls in its history unemployment in the 1980s hit 17% that similar levels to a country's are going through today during the lockdowns their infrastructure was also faltering as many parts of Ireland experienced power outages and soon the country once again became an impoverished nation when it was nicknamed the sick man of Europe in fact the economy in the 1980s became so bad that the Irish government decided to do something that would seem extremely radical to today's politicians they came up with an idea called to the talat strategy where all of the political parties came together to make quick and sweeping economic reforms that would provide immediate and long-term benefits for the country and their reforms during this time would change the country's trajectory forever the government cut down its borrowing of money it cut taxes tied wages to economic growth it actively started seeking out foreign investment and expanded its private sector to levels that were seen throughout the rest of the European Union these changes throughout the late 1980s and into the 90s became known as the Celtic Tiger a period that is known as one of the greatest economic expansions in the history of the world so you might know how in the 1990s China had the fastest-growing modern economy in the world right well actually from 1995 to the year 2000 Ireland's economy outpaced virtually every other nation in the world including China where the Irish saw consistent 9 to 10 percent growth rates and let's put that into perspective in the year 1987 the average Irish adult had an income that was 66 percent lower than that of the average person in the UK but just 13 years later the average Irish person had an income that was higher than the average person in the UK and arguably the biggest reason why Ireland became such a wealthy nation during that time was because of the growth of both domestic and international corporations you see one of the earliest economic reforms that Ireland passed was a reduction in corporate taxes in the 1980s Ireland had a 50% corporate tax rate which was one of the highest in the world but by the early 2000s the corporate tax rate was 12.5% which was one of the lowest in the world this reduction in corporate taxes and expansion of private businesses in the country led to an increase in homegrown corporations as of right now there are a few dozen Irish companies with revenues of over 1 billion dollars and for a country with only about 5 million people it has one of the most billion-dollar homegrown companies per capita in the world and with these companies expansion throughout Europe and the rest of the world Ireland's economy kept growing at higher rates for most of the 2000s and the 2010s except for the years of the financial crisis but then something weird happened you see Ireland in 2015 was already one of the 15 richest countries in the world and then this happened they went through a year where they initially reported a 26 point 3 percent rise in GDP which was later revised upwards to a higher number of thirty four point four percent that year in 2015 single-handedly catapulted Ireland to amongst the top five richest countries in the world they essentially experienced five to seven years worth of good economic growth within one year so that brings up the question what happened well remember how in the 1980s Island began cutting its corporate tax rate well as it turns out this caught the attention of many multinational corporations outside of Ireland so companies with thousands to hundreds of thousands of employees opened up their international headquarters in Ireland over the next several decades and the list of giant companies with headquarters in Ireland are too long to mention in this video but the general rule is if they are a tech company and are worth more than a hundred billion dollars then they probably have their international headquarters in Ireland the best examples of big names are Apple Facebook and Google and it's worth mentioning that the tax incentives are only one part of the reason why companies place their headquarters in Ireland because countries like Hungary Macedonia Bulgaria Moldova and Bosnia are all European countries with lower tax rates than Ireland but because Ireland has a better infrastructure better trade relations and an educated workforce Ireland has a leg up on a few key differentiators for multinational corporations but anyways the biggest in hacked from these corporations was Apple by 2012 after years of gradual increases Apple was funneling thirty five billion dollars in profits per year into Ireland which represented twenty percent of the country's GDP but then virtually overnight in 2015 Apple shifted 300 billion dollars worth of IP assets and tens of billions of dollars worth of profits over to their Ireland headquarters so by Apple shifting most of their money over to Ireland it's single-handedly made Ireland's growth rate go from a number that would be likely around the six to ten percent range all the way to the twenty five to thirty four percent range in one of the troubles with this is that that money does not end up in the hands of the Irish worker or the Irish government as most of this money is not taxed or reinvested I mean right now Apple has roughly two hundred billion dollars in the bank just sitting there and doing nothing although I should mention that this money is then used as essentially collateral for the Irish banks but that's a story for another time so in a sense Apple artificially pumped up the entire GDP per capita of Ireland by itself and that event became known as leprechaun economics and this is the aftermath Ireland actually was forced to come up with a new standard of reporting its economic data and began using a new metric called modified gni instead of using GDP when these new metrics are used Ireland is still a wealthy country being somewhere in the top ten richest in the world right behind countries like the USA but it no longer gives us the perception of Ireland being way wealthier than the rest of the world also if you were to use the modified gni metric you would find that Ireland is actually one of the most indebted countries in Europe in relation to the size of its actual economy yet despite all of this Ireland still has a governmental budget surplus thanks to the sheer amounts of corporate money being funneled into the country so all in all what Ireland has done over the past hundred years has been quite remarkable going from a poor farming nation to a fairly well-off country that is home to the world's largest corporations but it's very strange to think that Apple in some years as composing about 20 to 25% of Ireland's economic growth so in reality Ireland's economy is relatively solid but it's definitely artificially inflated and makes it seem like Ireland is a much wealthier country than it actually is but who knows if companies keep funneling more and more money into their Irish headquarters we might see Ireland on top of the world's richest countries list even if Ireland isn't really that rich now if you're interested in watching more videos like this please check out my documentaries playlist as I have a ton of other videos just like this on there and please hit that like and subscribe button that would mean the world to me I appreciate all of you but anyways make sure to click on my next video and I will see you guys there in just a few seconds [Music]