Enda Kenny - Exclusive Interview

0:02You're listening to A Book With Legs, a podcast presented by Smeed Capital Management. At Smead Capital Management, we advise investors who play the long game. You can learn more at SmeadCap.com or by calling your financial advisor.

0:20Welcome to A Book With Legs podcast. I'm Cole Smead, CEO and Portfolio Manager here at Smead Capital Management. At our firm, we are readers and we believe in the power of books to help shaped informed investors. In this podcast, we speak to great authors about their writings. The late, great Charlie Munger prescribed using multiple mental models and analysis. We analyze their work through the lens of business, markets, and people. This is bonus content to go deeper on our discussion from Padraig Scanlon's book, Rot. Hosting this episode with me is our, again, resident Irish citizen, our chief operating officer, Conor O 'Callaghan.

0:56Conor, thanks for joining me. Glad to be here. This is going to be a really exciting one. This will be really fun. This is a person that I got to know through you and is a very warm person. And I would also say I've never had someone treat me so grandfatherly, and you love the person as soon as you meet him, which makes him just an incredible person to be around. In this episode, we are going to discuss the history of the Irish potato famine with a gentleman who was the Taoiseach from 2011 to 2017. Joining us today is Enda Kenny. Mr. Kenny, so glad you're here with us. Well, very glad to join you on a subject that is imprinted on the DNA of all people.

1:39Enda, it's well known that you are a proud Mayo man. Canacht is the hardest hit area of Ireland during the potato famine. Did this affect those places like Mayo even more than the rest of the country? And what are the lessons or horrors that we take away from this in the effects of Irish culture? Yeah, well, this was one of the great humanitarian catastrophes in Europe of its day. And the legacy of the Great Famine, which was due to the failure of the potato crop, affected the demography, the culture, the tradition, the language, the relationships between Ireland and Britain, which was a colonizing country at the time.

2:22And the impact is self-evident today in the fact that 35 million Americans signed their birth certificates as being descended directly from the Irish. When Australia celebrated its bicentennial a number of years ago, 50 % of the population in Australia at that time was directly Irish. and the population dropped from 8 million to less than 4 million died on the roadsides another million emigrated to america as the uh as the as john f kennedy quoted the port saying they they're they're going going going and we cannot bid them stay across the bowl of bitter tears. So that legacy is left to the Irish.

3:12And I think in one sense, it has impacted in many different ways. Because 60 years ago, an organization was founded here in Ireland called Gorta, G-O-R-T-A. That's a Gaelic word, an Irish word for famine. And the great famine due to the potato failure in 1845, 47 and beyond was called in the Irish language, Un Gortha Moor, the Great Hunger. And that charitable organization has demonstrated that proportionately the Irish contribution to humanitarian aid around the world has been second to none, in fact, in the top three at all times for a small population because of that very fact. You understood what was a humanitarian, cultural, social, political community disaster.

4:10And at a time in those periods, for instance, when workhouses were built and provided to bring people there to try to endure when the main crop failed. For instance, in Ballina town, 20 miles from here, the workhouse had over 3 ,000 destitute individuals. And I mean destitute. The disease like typhoid spread rapidly, dysentery, all of these things were endemic in the population. And that legacy, believe you me, is emotional and raw and very easy to recover when you talk about humanitarian disasters today. In fact, it's the reverse of what you have now in Gaza, where you have trucks piled up waiting to get in to deliver food aid to people.

5:10in Westport, 12 miles from here, which was then a port on the West Coast. You had ships actually leaving the port laden with food for Britain when you had hundreds and thousands of individuals on the roadside starving. Yeah, that was something Padraic highlighted, that it wasn't the question of the amount of food available, it was the allocation of resources. Yes, the distribution. Yes, and that was the political inability and inefficiency of the British government of the time to actually cater for what was the single great failure, because the potato crop was the stable diet of the Irish people.

5:49You still had to grow corn, raise cattle and export to pay taxes, which were a ferocious burden on people at that time. So, I mean, the books and the poems and the songs that were written of the disaster of the Great Famine are still in the people. And, you know, I suppose if you look at it in a different way, with all of those who emigrated on what were known as the coffin ships to Groce Hill in Canada and to Philadelphia and later on to Ellis Island in New York. These were Irish people who went out there, in the case of women, mostly as servants in houses or working in factories. And for men, those who joined the gangs building the docks and the piers and the ports and the railway lines and the coal mines.

6:40And that spread out over the United States. And today, in a peculiar way, with the digital connection, you now have a diaspora that is of the order of over 70 million people connected right across the globe. So their travels, because of that economic factor, has resulted in, if you like, a 250-year-old legacy, which is there today. Well, you know, like any good head of state, and you're touching on a lot of our questions in our first question, but that's great. So I understand you're in Castle Bar right now. I've actually been to Taconic finals several times, Gaelic football, with Martin and Regina McGarrigal's kids.

7:22So it's a very small world. We've been struggling to win the national championship, which is called after a great nationalist, Sam McGuire, since 1951. And we've been in the final on many occasions over those years, and yet have failed to, as I would say, consummate that particular marriage. Yeah, get it done. So when President Biden was here, visiting the hometown of Ballinam, where his ancestors on one side came from, he did give the great Mayo battle cry of Mayo for Sam. Now, Sam in Ireland does not mean surface-to-air missiles. It means Sam Maguire, which is the major championship trophy called after Sam Maguire, who was involved in the foundation of the Gaelic Athletic Association and his nationalist tendencies throughout the early part of the 20th century.

8:19That's very cool. So you touched on this a little bit already, but I want to kind of break it down for our listeners. So the population of Ireland was 8.2 million people in 1841, which is about a million more people than Ireland has today. So that's pretty amazing. And again, you threw out these figures, but by 1931, it had dropped to about 4.2 million. So you're talking about about a 50 percent decline over 50 years. And then even though the population was net growing, you had tremendous emigration through the 1980s. And so wondering kind of what drove this prolonged emigration and then also what changed, because if you look at Ireland over the last 35, 40 years, the population has grown tremendously, about 40 percent.

9:01So, you know, we know the horrors of the famine. Let's talk about the positives coming out of it. The population of the country was 8 million in the early 1840s. By the 1870s, that was down to less than 4 million. And the gross figures would be that a million died on the roadsides, a million went emigrated to the United States and hundreds of thousands of others to Britain and to Australia, to where some were deported to Van Diemen's land, which is Tasmania, or to mainland Australia. So the thing was that if you look, Ireland was a quite Catholic country because of the plantation of the country with landlords after the Great Wars in Europe.

9:55Populations were driven west and poorer land, very small holdings. there wasn't any economic opportunity for people or very little in the west of Ireland in particular and so emigration or the sea were the inherent opportunities that people had to put up with and so the coffin ships that left from the west coast heading for Rose Hill or places in America brought with them a population that carried songs and stories of the tradition of hardship that was there. So yes, we did have real difficulties economically. There were huge political problems in the 1850s, 60s, 70s, 80s, agitation for land ownership, evictions from houses or people who were unable to pay taxes or whatever.

10:53And therefore, immigration was the only opportunity. And that continued right through until you had the famous political personalities in the House of Commons who were representing Ireland, Charles Stuart Parnell and many others. Daniel O 'Connell before that, who fought for Catholic emancipation. and you know the Irish joined up in World War I to fight for the British army and in British uniforms on the basis that they would be given home rule if the Allies won that war which they did however in the middle of the Great War between 1914 and 1918 another rising took place in Dublin in 1916. And that lasted for a week.

11:45It was one of those frequent risings of the day. But the difference was that all the leaders of that were executed. And that turned the population against the British government. Then you had a war of independence. You had truce talks with Gladstone. You had a treaty arrangement made in the early 20s. And the state was founded after a civil war in 22. So you had to rebuild or build a new state from scratch with no opportunity to have resources like countries have now. So Ireland faced difficulties in the 30s, 40s, and 50s. And then at the end of the 1950s, you had the first sort of economic program written for a country, a small country that was one of the first of the 20th century to achieve its independence.

12:39and two big events occurred in my lifetime, which were, if you like, opportunities that Ireland has built on. The first of these was the announcement of free education in the late 1960s, where hundreds of thousands of young people, young boys and young girls, did not go to anything beyond the very basic primary school system. And so they started to go to secondary school and then eventually on to third level education and colleges. The second major event was the joining of Ireland, along with Great Britain, to the European Union in the mid-1970s. And that opened up a whole new series of opportunities for trade, for business, for education, for understanding.

13:24Brought in, for instance, the Erasmus programmes for education that young people could attend in universities all over Europe and indeed beyond for a sabbatical year. learn their traditions culture study their degree and so on like that the inter-railing mechanism which allowed hundreds of thousands of young people to travel see other countries meet other people understand their culture tradition dress music food all of these things and the opportunity then in the evolution of the of the common market into the european union allowed for trading systems to a population of over 500 million. In the middle of all that, clearly the United States had a very big bearing on Ireland's past and present and indeed future.

14:15Because over the years, beyond the scale of just working as the construction workers or the road builders or whatever, the Irish and their descendants got into business, into politics, local, state and federal, and represented in the White House on many occasions. And that leverage was very important. And when the United States in the late 60s and 70s began to look out from its own borders and recognize that there was a serious opportunity in the European Union, they came to Ireland, they spoke English with the decline of the language because of the famine, but that the education system was nimble, flexible, future thinking.

15:00So you produced a generation of coders, of people who were really, really up for the wave of change that was coming with the start of the computer age and the digital systems and all of that. And that's been a great alliance between Ireland, Europe and the United States. On somewhat rocky grounds at the moment, these things will even themselves out in due course. all of that legacy of hardship and pain and penury from the famine was imprinted on the minds of the people. And education and their future through education was of critical importance and still is for Irish and the young Irish. So I want to ask a follow on because in the book, one of the things Padraig really talked about was the Irish view of their family.

15:52And really what he argues in the book is that their family was their wealth. Connor has three boys. I have three girls and a boy. Call me Irish, but I like that view. Small families by Irish. Small family. But in today's context, it's like three or four kids seems to outpunch the average. And so I guess, can you teach us what about the Irish people continues? Because again, I think part of the diaspora conversation is really the context of family. I know when we met first time here in Arizona, you and Connor were talking about people that we know in common. Our colleague, Richard O 'Connell, who's in London, you were talking about people that you know in common.

16:31But it's that aspect of family, closeness, cousins, et cetera, that seems to continue to show through with the Irish people. Can you kind of teach us how that's maybe changed, but also what do you think the core of that is? I think the Irish people generally are inquisitive and they're curious and they are some of the best connectors in the world. So those who went to New York, in through Ellis Island or down to Philadelphia or wherever, they would say they would be brought over there by money sent back from the United States by relatives who went out first. Bring over the next batch. When the Titanic sailed and went down, it contained many Irish people who were emigrating to the States for whom money had been sent over to Ireland to pay their fare to America and go and work and live there.

17:23And so no more than any other nationalities, the Poles or the Germans or whatever else, the Italians, you had sort of Irish ghettos, if you like to call them that, which were built up in cities where Irish congregated together. Irish knew other Irish people. That was a way of creating employment, of knowing who had a job to offer. where work might be available and all of that. And that still applies in a very modern sense. And in relation to the, let's say, they talked about the Connick final, the Gaelic Athletic Association, either football or hurling, young people in New Zealand or Australia or China or wherever, Africa, will wear the county colors of their team.

18:05So an Irish person would recognize immediately that this person is from Ireland because they're wearing the jersey of their county and their team. It's a brand image. It's a recognition. I am from there. And we can associate together very quickly and very easily. Do you know this person? Do you know where there might be work available? I've got this problem. Do you know somebody who can solve it for me? So in that sense, that connection has always been there. And to bring that forward again now, where young people have gone out to gain experience in American industry at whatever level, be it pharma, be it digital, be it technical or whatever, they gain experience, come back at work here, use that experience, send out others.

18:50it's a different kind of transient person now because when they went to the states previously they stayed for life and very few came back but now it's a much more mobile situation might go for three three months three years or whatever it might be in australia it might be in africa you might wherever else it's a it's a knowledgeable and transient movement now um And that connection, you know, is so strong. In 2013, I think it was, we had a gathering in Ireland where we said, come home. Come home and see where your ancestors came from. Come home and see where they lived. Come home, in some cases, and see from where their great, great, great grandparents were evicted from.

19:34Understand who you are. Understand where your background is, what your background was, and why you are the person that you are and what you carry inside you and be proud of that heritage and that capacity to be resilient, to compete, to learn, to change and live a life. Well, the come home thing is pretty funny that you say that. So I had the privilege about 20 years ago of meeting Bono when he was the commencement speaker at my alma mater, at the University of Pennsylvania. And so, you know, I told him I was from Ireland. He said, where are you from? I said, you know, I lived there for a short time in Clonsilla.

20:12And he said, my God. And he's like, well, you know, the potato famine's over. It's okay for you to come home. And so I thought that that was a really funny thing. I've met Don on many of you. I'm sure. He's been around the world doing great work, not just with his music, but also on humanitarian issues. And it's true what he said. And everybody knows that it's over. so it's a very different country obviously than applied in those times poverty penury you know no living conditions none of the facilities of modern living and yet now you've got young Irish people who are at the forefront of many of the businesses and businesses of change that are impacting globally these days so so what he said was correct and clearly you know so many American people come over here every year.

21:04When we had the Notre Dame and the Navy play here a few times, it was the biggest exodus of Americans since World War II. 35 ,000 Americans traveled over here, not just to see the game, but to sample the Irish hospitality, understand just how much this country has changed, and yet kind of make connections in some cases with their ancestral family locations and people. we digitized all of the birth certificates and the baptismal certs. So while some were destroyed when the four courts were born in 1920, the baptismal records go back 300 years, the church records. And you have people arriving, this is all on the public site anyway, but many, many American people come back from Oregon or from places around the States.

21:56On my own late mother's side, We have a lot of relations out in Montana who spread through Billings, Anaconda, way down into the Black Hills and down as far as Boulder, Colorado, Eugene, Oregon. And they look the same as we look ourselves until they open their mouths and they've got the Midwestern drawl of the American accents. So that connection is live and vibrant, as it is with other nationalities as well. Hi, I'm Cole Smead, CEO and Portfolio Manager here at Smead Capital Management and host of this podcast. If you enjoy this podcast, I'd like to invite you to check out SmeetCap.com. At our firm, we are stock market investors.

22:35We advise investors who play the long game with a discipline that has proven success over long periods of time. Learn more about our funds at SmeetCap.com. Past performance is not indicative of future results. Investing involves risks, including loss of principle. Please refer to the prospectus for important information about the investment company, including objectives, risks, charges, and expenses. Read and consider it carefully before investing. Smead Funds Distributed by Smead Funds Distributors, LLC, not affiliated. Well, so you talked about change and positive change. So in the book, there was obviously a lot of discussion about Ireland's relationship with Britain, which needless to say during the potato famine, to say it was horrific would be a gross understatement.

23:20Clearly, a lot of things have changed. Good Friday Agreement in 1998. The temperature has been turned down a lot. But I'm curious if you could talk about the current state of affairs because there's an ever-growing sort of whisper of, you know what, we might see a united Ireland here at some point in the coming decades. And there's a little bit of an irony to it because now, to my understanding, Northern Ireland would actually be an economic drag on the republic as opposed to the other way around. So just high level, I'm curious if you could speak on that and the likelihood of us seeing a united Ireland, say, in our lifetimes.

23:52Okay, well, your history lesson in 30 seconds. Ireland was colonized for 700 years, and you had revolution after revolution after revolution. and 1916 and the rising was a catalyst in its own way to a kind of a real rejection of the way the country was being run, their lust for independence and that came about clearly. You had the country divided on the treaty negotiations with the British government and that continued right on through a period of 30 years of war with the terrorist organization, the IRA and so on like that. So the important thing now is that you have a peace process in operation for the last 30 years plus and that's been holding very steady.

24:46And it's an example, if you like, in places around the world where there are serious political problems now ranging from war to uprisings of one sort or another, that Ireland in its own way was able to put together a process that brought about peace on the streets and that is still holding. Now, you should know that all governments, the Irish Republic, the British governments by and large, but particularly with President Clinton, who sent over Senator George Mitchell here as the mediator and moderator of discussions between all the parties in Northern Ireland to bring about the peace process. And that took, believe me, a long and difficult period over five years to put that together.

25:35The Good Friday Agreement stands. And when you mention about a united Ireland, the Good Friday Agreement also contains the reference to the possibility of sometime in the future that on the same day, the people of Northern Ireland might vote to from Great Britain and that the people of the Republic of Ireland might vote on the same day to say we are happy to accept this, the last thing I did at the European Council meeting myself was to get a unanimous verdict and support for that situation in that if that were to happen that Northern Ireland would then be allowed to rejoin the European Union without having to reapply in the same way as Scotland would have to do if it were to achieve its independence by referendum, which was turned down previously.

26:32So all of that is there. And I have to say that the relationship between the British government and the Irish governments over the last number of years have been very steady and very clear. And there are lots of mutual things that do happen in terms of we maintain the central features of what happened in the 1920s, in that Irish people have the right to travel to England, to live in England, to vote in England, and that applies vice versa, but wasn't a reality because of the economics of Ireland for so many years. Those central issues are still there. And one that has happened since the Good Friday Agreement, is that there is now no border between the Republic and Northern Ireland.

27:18So the British people then decided by referendum that they would leave the European Union. And that caused quite a lot of difficulties for the administration of the way the European Union works with its standards in terms of manufacturing and food and the free movement of people, capital, goods and services. so you know if you're if you're traveling or where for the last number of years back to back from the continent to britain or from britain to the continent you took a different lane than what the irish would because as a member of the union you went straight through with your passport others had to line up and be checked now the latest the latest negotiations that have taken place will kind of deal with that situation.

28:05So for people in Northern Ireland, which you say could be a drag on the economy here, the position is that Northern Ireland actually has an advantage that nobody else in the European Union has now. Because from a business perspective, they have free and open access to the United Kingdom. That means Scotland, England, and Wales. And they also have free and open access to the market of 500 million in the European Union, provided that the standards, particularly in relation to the importation or the distribution and manufacture of food and food processing and so on, are complied with. So despite all of the difficulties, you have a situation now where Ireland moved from being practically junk status in 2011 because of an economic collapse following Lehman Brothers and the catastrophic situation with the Irish banks here to a position where as a small country now, you're in the top 20 wealthiest countries in the world.

29:07So the challenges for this government and future governments are for first world country challenges, housing, construction, infrastructure, continued employment in all of these things. So it's a very vibrant situation. And as I say, Ireland from 1845 is an entirely different place now. Well, you mentioned first world problems. We talk a lot about those are the kinds you want to have. And it's the first world problems that we like to solve and figure out. It's the other problems that are far worse. You know, you were a very popular Taoiseach, which just so for our audience, that's that's the Gaelic equivalence of prime minister.

29:46I believe you met three presidents, which would have been obviously first Obama, then Trump, then Biden. Those are different people. Those are different politics. Can you tell us what that was like, maybe about their style or things that you remember about each of those interactions that were unique to you? Yeah, well, I had the privilege and the honor of being elected as Taoiseach. Taoiseach is an old Gaelic word for chieftain or leader. so if you like if you like to say from an american perspective you might say theodore roosevelt thee thee catch the live wire you get a shock so the shock there is only one the shock on the planet and he or sometime in the future to be she uh i call that the shock and that's the word means leader or chieftain so so when i had that privilege of being elected as a teacher in the beginning the country was on the edge of an economic precipice.

30:41Actually, you had about 28 days left to pay the public service. You had to make some really difficult decisions, which the people accepted and moved it forward. So from that point of view, we maintained the tradition of having access to the American president in the White House on St. Patrick's Day or St. Patrick's Week. Clearly, you have massive parades down in Savannah, and New York and Chicago, Boston, San Francisco, Seattle, all these places. And a great celebration of Ireland, not just for Patrick's Day, but for Patrick's Week. It can go on for longer, either end of that. So the opportunity to go and visit the White House and talk to the president.