Foreword

Good habits give you insights for free. One habit I have is reading last year’s headlines, every day, using the wayback machine on archive.org. This is the news equivalent of a Facebook memory. The trends this habit reveals can be instructive. Another habit I have is subscribing to hundreds of daily feeds using RSS. By scanning through them very quickly each day, and only extracting data-based things to read,  I’m often reading reports and studies, rather than opinion pieces or leaders based on these studies. These two habits take me about fifteen minutes every day. They give me two free insights I feel others often miss. First, looking at the recent past allows me a way to see beyond the humdrum of today’s headlines. Second, looking at the data the world throws up first, before reading other people’s opinions of these data, gives me a chance to form an opinion other people might not.

Habits like this help form my opinion that we do not consider the future direction of the country enough. We covet the surface, not the structure. In the media, especially, we are absorbed in the minutiae of the minor story, often based around personality, or personal failings, or personal tragedies. As the days and weeks pass, the minutiae fade. Worse, because they are barely covered, the big stories, the structural issues, fade too. The media is deeply complicit in this, but so are you, because they respond to what you click on. Ask yourself, what was the big story this time last year? Or five years ago? If you’re like me, you probably don’t have a good sense of any story more than about three weeks old, unless you start putting in place systems to give yourself more ‘outboard’ memory.

The fact that you, the type of person to read something like this, probably don’t have a good sense of what the big story was three weeks ago, tells me you have the same problem I have, which is too much present-bias. What sits in front of you, on your phone, is what matters most. Because most of what you see is fleeting, its value is only in distraction from reality, and hence should just be classified as entertainment. Neil Postman’s Amusing Ourselves to Death is still the touch stone for me. Postman’s thesis is that the news, because it carries less and less information we can act upon, it is simply theatre. Postman analysed TV news in the 1980s. I’m not sure how he’d cope with Twitter, TikTok and Trump today. Today’s media are powerless to help us figure out the larger questions our society must answer. 

This series tries to frame an answer to the question of where are we going as a nation. It is the first series I have written for The Currency. The reason I’m passionate about The Currency is that uniquely, it gives me the space to answer these questions. It took me 12,000 words or so to do that, and I hope you engage with the arguments, and let me know your thoughts.

The series closes with a declaration from the heart about how policy can be used to lift us all up. Policy responds to the demands of the people. The more informed we are about the problems we will have to solve, the more likely we are to demand policies that ensure we see a better day.

PART ONE: LEGITIMATE EXPECTATIONS

Ireland is changing. How are we changing, and where are we going as a nation? This series of articles will attempt an answer. Let’s start with expectations people might have of a good life, for them, and for their children. Opportunities that were obvious and natural for the majority of the previous generation such as housing and pensions are dwindling.

As Minister for Finance Paschal Donohoe said in a recent interview with The Currency’s Ian Kehoe, “the big risk that’s always on my mind is what happens if in 20 or 30 years time we have a generation of Irish citizens who neither have a pension nor own a home.”

In 2006, 82 per cent of people in this country owned a home. In 2017 only 69 per cent of people do. This trend does not look like it will reverse. Only 35 per cent of Ireland’s private sector workforce has a pension, despite generous benefits and subsidies encouraging more saving. Ireland’s roadmap for pensions reform should terrify policymakers and the public alike.

This is because when this generation retires, it will have to live on the State pension, which is around 34 per cent of the average wage. We are now 4,857,000 people, and many of us on this island will live into our 90s. The lack of adequate pension cover is both a macroeconomic risk and if not addressed, a societal risk. This is why Minister Donohoe is right to be worried about these twin risks.

Moving beyond the risks, do the changes we are seeing in Irish society alter our expectations for our futures, and our children’s futures? Is that change legitimate? What are the set of legitimate expectations we can, and should have as a society?

Which group of people, what redistributive policy, might support our living standards into the future?

One source of support will be the new opportunities emerging from innovation and technological change, but only for those who are lucky enough to be born wealthy, or those who win the race between technology and education. We are more and more people of the city, rather than people of the country. The chart below shows the degree of urbanisation, in terms of the percentage of the population living in urban areas for Ireland relative to the Euro-Area.

In 2010, 34 per cent of us lived in cities, versus 47 per cent of Euro-area citizens. In 2017, the latest data we have for Ireland, 46.3 per cent of us live in cities, far ahead of the Euro-area. In fairness to the Euro-area, rather than assuming everyone has become a tent-dwelling hippy, we should note that Slovenia, Cyprus, Malta, Slovakia, Estonia, Latvia, and Lithuania joined between 2007 and 2015, and that altered the series. If the composition of the euro area stayed the same, we’d be roughly at par with the older euro-area countries. Cities are great things, when they are well designed and well governed.

Sarah Colenbrander has called cities “engines of economic growth”. Her research shows that this amazing engine only works when the people who live in cities can benefit from the dividends of urbanisation. The main benefits to an individual from increased urbanisation are increased proximity to jobs, and to networks of ideas. But there’s a dark side to living in a city.

As Colenbrander puts it, “one in seven of the world’s people live in poverty in urban areas. The urban poor often lack access to basic infrastructure and services, which substantially reduces their wellbeing, resilience and productivity. Yet urbanisation offers substantial opportunities to reduce poverty, not least because it is more cost-effective to meet many basic needs in urban areas than it is in rural ones.” Why? Higher population densities reduce the distribution costs of services and permit the production of these services at scale.

CAVEs, BANANAs and expectations

Colenbrander’s research focuses on the key element that makes some cities engines of economic growth, and others hellish places to live: infrastructure. Some governments struggle to generate the billions it requires to deliver excellent water treatment, roads, hospitals, and schools. Some governments, like ours, find it very difficult to get around CAVE (Citizens Against Virtually Everything) groups dedicated to versions of BANANAs policies: Build Absolutely Nothing Anywhere Near Anyone.

This restricts the availability of (and massively increases the costs of) infrastructural development, which makes life in urban environments far less enjoyable than it otherwise would be. Take Dublin’s M50. Traffic volumes in Dublin have expanded rapidly as the economy has expanded. The chart shows average annual daily traffic of cars that pass Junction 9 on the M50, from the Red Cow to Ballymount, from November 2013 to November 2019. In 2015, 123,000 vehicles transited through that space. In 2019, 134,000 vehicles used it. Citizens using the road (or any road in the capital) can look forward to longer, slower commutes, which saps a lot of the fun from life.

A very large literature exists on the effects of long commutes, but these are typically phrases as the benefits of short commutes. Shorter commutes mean more quality time each day; less stress; improved mental and physical health; better social and family interactions; reduced commuting costs;  reduced costs for absenteeism, hiring, training and healthcare; higher productivity; reduced traffic load and congestion; less pollution and decreased greenhouse gas emissions.

I reproduce the effects reported in peer-reviewed studies below. The more people we have doing longer commutes, the more we’ll see effects like these. The longer we see effects like these, the lower society’s expectations will fall. The solution to awful commutes is technological and behavioural, yes, but it is also infrastructural. You won’t take cars off Junction 9 of the M50 without an investment in better, more dense, housing, and better, more frequent, public transport.

Another way to see the change is to compare Ireland in 2003 in terms of its towns, villages, and rural areas to a country like Greece, and then compare the 2003 versions of each country to their 2017 versions. We’d want to do something like this to understand what role austerity played in driving this urbanisation. What do we see?

We see the change in both countries came from the loss of people from towns and rural areas to cities. I included the UK in 2017 to show where Ireland might go as a country in terms of our use of space: large urban areas, where most people (59 per cent in the UK in 2017) live, followed by fairly big towns, followed by a much smaller rural population. This may or may not be our fate, but it does mean that our focus on the built environment and the shapes of our cities (low and spread out vs high and densely packed) needs to be renewed. 

In 2008, as the world economy deflated like a child’s birthday balloon the day after the party, Eurobarometer commissioned an intriguing study. They asked European citizens what they thought the world would look like in 20 years. You should always ask people at the height of a crisis or the top of a bubbling economy what they think about the future. It teaches you more than you might learn asking the same question in the middle of the cycle.

In 2008, as it became clear we would need to bail out our banks to compensate international investors for being bad at their jobs, impose austerity on large parts of the Irish population, borrow to keep the public sector funded, and export a large part of our younger population, 67 per cent of the Irish people polled thought the future 20 years from now—ie 2028—would be a better place.

There’s a dark humour in this graph, if you read it in a certain way. In Greece, also experiencing a macroeconomic disaster, 78 per cent of respondents looked forward to better days. In Denmark, which largely escaped the crisis, less than half of respondents thought the world they would see in 20 years would be better. And in the UK, just 36 per cent of respondents thought the world would be better.  Respondents were shockingly prescient.

Across the EU, fewer than four Europeans in 10 (38 per cent) anticipated people’s lives would improve. Optimism about people’s lives in 20 years’ time decreased with the age of the respondent, but increased with educational attainment and degree of urbanisation. Interestingly for the data we’ve seen on commuting times and quality of life, eight out of 10 respondents agreed with the phrase “policies should put less emphasis on individual consumption, and more emphasis on other aspects of the quality of life”.

Respondents were the most likely to agree with the statements saying that in 20 years’ time the gap between the rich and the poor in their country would be wider (82 per cent) and that people’s working lives would be extended (80 per cent).

The picture the Euro-barometer figures paint is of a country that is decreasingly optimistic about the future, and yet grimly realistic about the prospects for their ability to work longer, and harder, than their parents. We are halfway through the period people were asked to think about. The economy has recovered, and with that recovery, the deficits in infrastructure caused by a decade of under-investment have appeared to plague citizens via backlogs in homes, schools, hospitals, and public transport. Home ownership and pension provision are changing, and the risks they expose the nation to have yet to be adequately addressed by policymakers.

*****

PART TWO: THE DEVIL IS IN THE DYNAMIC

We need to talk about where we are going. In the first part of this series, I looked at the changing fortunes of Ireland’s citizens. Vastly richer on paper than their parents, they nevertheless have a reduced set of expectations about the future for their children. The world they see coming to pass is one of reduced opportunity, lower levels of asset holding, especially homeownership and pension provision, with higher levels of income and wealth inequality. For all that, there’s a feeling that the future will be better than the past.

In 20 years the year will be 2039. If that sounds far away, just think back 20 years to 1999.

In 1999, Ireland was enjoying the first phase of her Celtic Tiger period. Emigrants were returning, bringing with them skills and capital acquired abroad. This injection of ideas and cash would fuel the growth of an economy sorely in need of convergence to the European average in terms of living standards. The Twin Towers still stood tall on the New York skyline. The West was led by Bill Clinton, Tony Blair, Jacques Chirac, and Gerhard Schröder. They believed in John Williamson’s Washington Consensus, which argued for free trade, financial liberalisation, and the reduction of state involvement in markets via privatisation.

Ireland participated fully in each part of the Washington Consensus, joining the EU and the Euro, removing both tariffs and national-level exchange rate risk, opened up to global financial flows via the IFSC, and privatising large enterprises like Eircom. The seeds for the crisis of 2007 were sown in 1999, and each seed was, in some sense, structural.

“We did not pursue a small state agenda like other countries. The Irish state expanded rapidly, in its size and scale, and in the scope of its activities.”

When I say ‘structural’, I mean an element of the institutional character of the economy was altered, either by adding something like the IFSC in 1988—or by deleting something—like the punt—or by weakening something—like prudential financial regulation of our banks. The IFSC brought us the vast financial flows that have defined the character of the economy since the 90’s. The single market and the euro gave us access to the world’s largest integrated trading area, changing the nature of what we buy and sell, and what we produce as a country, and flooding our banks with cheap capital they were incentivised to lend out.

The privatisation of parts of the state like Eircom was a disaster in both the short and long terms, as we can see from the National Broadband problems we are having now. We did not pursue a small state agenda like other countries. The Irish state expanded rapidly, in its size and scale, and in the scope of its activities. This expansion, combined with a weakening of the tax base for political purposes, left the state unable to cope when badly-regulated banks lent too much of the capital they had borrowed from the international financial markets. In a very specific sense, the 2007/8 crisis was the result of the structures put in place in the late 1990s.

Which brings me to 2019, and the prospects for our economy looking forward to 2039. The structural issues we have to deal with are all in some sense financial — in that we have a very large financial sector, as the chart above shows, and a very financialised economy, that often does not contribute what it should to the domestic economy, and which may well cost other economies more than it benefits them. We have an industrial sector dominated by large multinationals, as my discussion of Irish manufacturing recently showed. We have a stunning gap between rates of income inequality and post-transfer inequality, larger than some South American countries. And we have a growing, changing, population.

“What is less obvious is the ‘drag’ our increasing population puts on state resources. More people is not a bad thing, of course, but from the perspective of government spending, there is a cost to a larger population.”

The graph below shows net expenditure on goods and services by the government. I correct for changes in the price level because this is a 23 year-long series, so you’re looking at spending expressed in 2017 euros. The government buys all sorts of things in a year, from paying civil and public service employees to buying office chairs, software and equipment, and maintaining public buildings. Transfer payments like the state pension that don’t involve purchases are not counted in this statistic. In 1995, the state spent around €16 billion on goods and services for around 3.6 million people. In 2018, the state spent around €30 billion on goods and services for around 4.85 million people. The influence of the Celtic Tiger period, when the state expanded rapidly, is obvious in the graph, as is the 2008 to 2012 period of austerity, and the recovery.

What is less obvious is the ‘drag’ our increasing population puts on state resources. More people is not a bad thing, of course, but from the perspective of government spending, there is a cost to a larger population. An Ireland with 3.6 million people but with 2018’s economy would enjoy spending per person of around €8,500 per person, instead of around €6,300 per person. Increasing the size of the population, particularly the young and the old usually requires more spending from the state in terms of health and education. One of the things we know for sure is that the proportion of older people will increase in the coming 20 years.

The young dependency ratio is the number of young people aged 0-14 as a percentage of the population of working age. The old dependency ratio is the number of older people aged 65 and over as a percentage of the population of working-age people. The CSO projects the ‘young’ ratio will fall from 32.4 to 23.8 in 2036. The old dependency ratio will rise from 20.3 to 31.7, and with it, government spending will either have to rise, or we will have to redefine what ‘old’ means.

I hope to be a spry 61-year-old in 2039 and will be looking forward to another ten years of work, at least, by then. Regardless, the state will need to spend more into the future, as our population will continue to rise at a fairly predictable pace. What should the state be spending on, and how should it think about that spending?

What should the state be spending on, and how should it think about that spending?

Ireland is deeply financialised, and open to the rest of the world. This brings lots of benefits as long as we go along with the modern version of the Washington Consensus, but if that consensus breaks, as it looks like doing, we are not at all positioned to take advantage of the breaks. The quality of our strategic thinking—to understand the devil is in the dynamic, not the detail—will be what sets us apart from other nations. There is little evidence we are seriously gearing up for a conversation about where we might go as a nation, though recent speeches by Ministers Donohoe and Humphreys are encouraging. There are hints of a new strategy in FutureJobs and in Donohoe’s discussions of what our post-tax industrial policy might look like.

At a conference organised by President Michael D. Higgins on rethinking the role of the state in the economy, the UCL economist Mariana Mazzucato argued the state needs to become bolder, and more risk-taking, to solve the problems of financialisation, climate change and inequality.

How would the state become bolder? First, by finding ways to measure the value created by the public sector and transferred to the private sector. Think about the value created by someone producing burgers. They make X burgers per hour for a given wage, and those burgers sell for a given price. We know the value of the person making the burger gives to society, not to mention their productivity. We have no idea what value a secondary school teacher provides society, and find it very difficult to measure their productivity, so we see them as a cost, only, to be minimised. A better measurement of the value the public sector generates would let us do two things. First, we’d know whether hiring more teachers was a good idea, or not. Second, we’d know where to allocate the scarce resources generated by citizens and their enterprises.

“Our missions from now until 2039 are not moon landings, but championing radical policies around carbon neutrality and growing our own unicorn companies.”

The second way the state can become bolder is by adopting what Mazzucato calls ‘missions’ to change our country. These are multi-annual or multi-decadal projects with an overall target, but without the intermediate specified. So, ‘get a man to the moon, and return him safely’ is the canonical mission. Our missions from now until 2039 are not moon landings, but championing radical policies around carbon neutrality and growing our own unicorn companies. Mazzucato thinks we can move beyond a vision of the state as market failure-fixer to market success-creator. The dream Mazzucato has is of a state that is confident in its ability to take risks, to invest in new technologies, and keep the returns from many of those technologies.

Where we are going as a country depends on our choice of the structural features of our economy, on the dynamic path we choose to walk. We need to remember that many of these structural choices are still within our gift to make. If we can make choices around the type of society we want, and the type of economy we’d like to see created, then we can create missions that put people, policies, and financial resources around making them a reality. The next question becomes: how do we generate agreement about which missions to choose from? Achieving that societal cohesion is the subject of next week’s column.

*****

PART THREE: IDEAS, INTERESTS AND INSTITUTIONS

We are ruled by the interaction of ideas, interests, and institutions.

Ideas are mental models providing a coherent set of beliefs about cause-and-effect relationships. Ideas often lead to ideologies—guiding sets of beliefs. For example, if I have an idea that the government can spend when the economy turns down, and save when the economy turns up, I’m probably a Keynesian in my beliefs. If I have an ideal that the only way the economy can evolve is via the liquidation of unproductive sectors of the economy, I’m probably a Libertarian in my beliefs.

Interests are the goals or policy objectives that the central actors in the political system and in the economy follow. The interests of the governing class, for example, or the asset-owning class, may be quite different from the interests of those without assets. Similarly, as I argued earlier, the interests of the young and the old may be very different, and these are not unrelated to the inability of the young to acquire assets like housing and pensions.

Institutions, and here I mean political institutions, both national and international, establish the rules governing the processes everyone else follows. Those institutions can be extractive, or they can be inclusive, to use the terminology of Acemoglu and Robinson in their books Why Nations Fail, and The Narrow Corridor. Extractive institutions are controlled by small groups to remove resources from the rest of the population. Inclusive institutions bring larger groups into the governance process, and so it is commensurately harder for the smaller would-be extractive groups to exploit those powerful institutions for their own ends.

We need to talk about where we are going

In part 3 of this series asking where are we going as a nation, I want to look at the institutional design of our society, analyse our ruling ideas, and ask which sets of interests will continue to dominate. Last week, in part two of the series, I argued that where we are go as a country depends on our choice of the structural features of our economy, on the dynamic path we choose to walk. That dynamic path will determine the hopes and expectations of our citizens in the context of the changing, as I argued in the first part of the series.

The diagram above puts a question mark at its centre, because where ideas, interests, and institutions go, so Ireland goes. At any given moment, one of these features dominates our discourse. I’ll give you four examples of their interaction. You can generate many more, and you might disagree with my characterisations, but you’ll get the gist of the framework.

The dominant institutions were the new political parties that had won the war of independence. The dominant interests were those of the nascent state and the Catholic church against the landed class.

Take the period right after the formation of the state, from say 1918 to 1924. The dominant idea was republicanism and separation from our former masters. The dominant institutions were the new political parties that had won the war of independence. The dominant interests were those of the nascent state and the Catholic church against the landed class.

Take another example, the movement from a relatively closed, autarkic society to an open one, in the late 1950s and early 1960. The dominant idea was openness to trade, to ideas, to export-led growth. The dominant institutions were the Catholic church and the government, and the dominant interests were Ireland’s new manufacturing and service-based merchant classes, winning authority over the agricultural power bases of the past.

Take another example, the period of austerity from 2008 to 2013. The dominant idea was cutting the states’ spending and increasing taxes to win the support of the international bond market. You can think of that idea as either fiscal consolidation or austerity. The dominant institutions were the ECB, IMF, and the European Commission. The dominant interests were those of the state.

Take yet another example, the period we are in today. Employment has reached more than 2.3 million people for the first time in our history as a state. Our unemployment rate is 4.9% on a seasonal basis, and falling. The Irish economy is growing very strongly, recent tax data supporting the notion that our economy is at, or near, the top of its economic cycle. Despite the good economic news, the dominant idea is fundamentally negative: Protecting the gains of the last few years from the threat of Brexit generates a least-worst set of policies at best (no pun intended). The dominant institutions are the Departments of Finance and Foreign Affairs. The dominant interests are of those with assets of all kinds, including housing and financial assets. Whether these interests will continue to dominate is another matter, entirely.  

When the flow of ideas are poisoned by nationalism, when interests of one group dominate all others, when institutions fail to mediate between different interest groups and privilege one group above all, the nation itself may fail. How might Ireland avoid this fate?

Ruling ideas?

An ideology is a set of guiding beliefs. We often think about people or groups as following one dominant ideology. I think this view is mistaken. The first thing we should understand is that ideologies are not anywhere near as important as we think. In fact, I think we may well be capable of multiple ideologies, depending on the context. I would conjecture the average Irish citizen is maximally libertarian around their own home, wanting to be mostly left alone save for their property rights being respected. They are socialist at the community level, wanting an average level of engagement for everyone. At the national level the average Irish citizen is somewhere between centre-left and centre-right, depending on the issue in question, with social issues in particular skewing left/liberal for people under about 50. If there are multiple, context-dependent ideologies, then it matters that they can be in conflict with one another quite often.

The question becomes how we resolve the tension between these ideologies within ourselves. I find it striking to see the same people decrying the homelessness problem in Dublin and championing objections to the only policy remedy that would alleviate this problem — an increase in housing supply

Let’s think about housing, as an example. Take the NIMBY or BANANA (build absolutely nothing anywhere near anyone) crowd who very quietly dominate our polity, and whose interests our political system responds to. At the national/centrist level, they would like there to be more housing. At the community/socialist level, they would like homelessness and insecure tenancies to end. So far, so lined up. But at the individual/libertarian level, they recognise their interests (as measured by the negative impact of a large increase in local housing on the value of their major asset) are not aligned with the other ideological levels I’ve described. As that household-level concern dominates, so the other ideologies are left behind, the objections are put in, and off we go.

The question becomes how we resolve the tension between these ideologies within ourselves. I find it striking to see the same people decrying the homelessness problem in Dublin and championing objections to the only policy remedy that would alleviate this problem — an increase in housing supply. I often wonder how the tectonic plates of ideology roll on top of or around each other, and to be honest, I don’t have a good sense of exactly how this works, except that I think there’s a convenient fall guy (fall-person?) one can always blame: the government.

Where does the government gets its ideas and ideologies from? Ideologies are not ideas, of course. Ideologies are more operative, more usable than ideas. They tell you want to do in a given moment, like a kind of social operating system. Copenhagen Business School’s Cornel Ban’s recent book Ruling Ideas gives a wonderful overview of how ideas become entrenched, and dominant, because they are held by the technocratic class, who learn those ideas in prestigious schools as generalisable laws derived from past date that they can apply to their own countries.

They find Ireland is fairly poor at stakeholder engagement in developing regulations, and dreadful at figuring out whether new regulations actually work via a process called ex post evaluation.

This is why technocratic rule is a mistake. Technocrats run on certain types of data from the past, threaded through frameworks from the past. They often forecast from the past to the future, and feel free to pronounce upon the future.  (As someone who once wrote a book called Ireland in 2050, I can attest to this fact). Technocrats are hardly ever exposed to the present. Only democratically-elected leaders are forced to come face to face with the people they serve, and deal in the present on the present’s terms. This is why democracy is so important.

Our institutions are precious.

Every few years the World Governance Indicator report spews out a bunch of reports on the quality of our institutions. The figure below reproduces the values of the past few years. The WGI includes a measure of confidence in their findings, and also ranks Ireland in terms of other countries. Unsurprisingly, we do well as a country, consistently ranking in the 90th percentile and above on many measures. That said, there has been a deterioration in our scores for many measures. Mouse over the various measures to see each in turn. Elements like regulatory quality have fallen from 1.91 in 2008 to 1.6 in 2018. Government effectiveness was 1.5 in 2008, it is 1.42 in 2018. Quantitative measures are not the be-all and end-all of the universe, but if every measure is going in the wrong direction, you might have a problem of institutional deterioration. The OECD monitor the development of Ireland’s regulatory environment, and find similar results using a different measure in their unputdownable page-turner, the OECD Regulatory Policy Outlook. They find Ireland is fairly poor at stakeholder engagement in developing regulations, and dreadful at figuring out whether new regulations actually work via a process called ex post evaluation.

That said, while our institutions may have deteriorated somewhat over the last decade, when people are asked about their experience of the public services they generally give good or very good marks. The chart shows a the percentage of respondents who express confidence in various elements of the public service last year, for both Ireland and the OECD. The national government does well, with 62 per cent of respondents voicing satisfaction, relative to 45 per cent for the OECD. The judicial and educational systems come across very well too, at 68 per cent and 83 per cent respectively. The health system, unsurprisingly fares worse than the OECD average, but still attains a 64 per cent score.

Ideas, interests, institutions: What does it all mean?

The ruling idea of our time is presented as a question in two parts, and each citizen may draw his or her own meaning from their own answer to each question. The first question is: what form of economy and society will best protect our citizens in a post-Brexit world? The second is: what form of political settlement will best knit the island together over the coming 50 years, both North and South? The answer to the first question entails thinking about how open we are, how our economy and society is structured institutionally, and what kinds of elements might replace those that aren’t working well for us. The second answer is about peace and security. Without a good answer to the ‘national question’ most people can get behind, we risk sliding back towards a grim past the last generation thought it had freed us from.

Democracy is how we take ourselves forward as a nation. Our democracy is being challenged at the moment, because of a change in our ideas about ourselves—our identity. In the next part of this series, I’m going to ask: Who are we now?

The ruling ideas of most times in history are not economic, or political, really, but fundamentally are about dignity. In an economy, most things have prices, because most things can be valued. (As we saw last week, assigning value is a little difficult for the public sector, but even there, there is hope). Without blowing your mind all together, dear reader, let me bring in philosopher Emmanuel Kant, who contrasted things that have prices with things that have a dignity. In his Groundwork of the Metaphysics of Morals, page 33, Kant wrote:

“In the realm of ends everything has either a price or an intrinsic value. Anything with a price can be replaced by something else as its equivalent, whereas anything that is above all price and therefore admits of no equivalent has intrinsic value.”

The intrinsic value Kant was talking about was dignity. The ruling idea of our time has to, somehow, find a way to express the dignity of the nation in a way that most people can agree with. The answer to those two questions—on a form for our society, and on a form for peace-have to include a way for us to talk about dignity. What is homelessness, but a drastic diminution of a family’s dignity? What is the health crisis, if not a loss of basic dignity for the sickest?

I think a conversation based around those question will find our ruling idea for the 21st Century. I think the groups in whose interests our society functions would participate in such a conversation, and with sufficient support, we might see some of the means by which their powers are deployed reduced. Our institutions clearly need to be strengthened, but there is hope. The hope comes from who we are, now, and not just where we have been. The hope comes from our democracy. Democracy is how we take ourselves forward as a nation. Our democracy is being challenged at the moment, because of a change in our ideas about ourselves—our identity. I know want to ask: Who are we now?

*****

PART FOUR: EARNING POWER

Institutions help us see the future, and more importantly, they help us get there. In their individual existences, humans can be overly present-focused. This present-focus tends to blind us to the upside and downside risks the future holds. Present-focus also allows us to escape from changing our behaviour today, even if we know that tomorrow will be hurt by that behaviour. Spreading the damage of our actions out over a long horizon, we are like a person in a large group who orders a triple whiskey when he knows the eventual bill is going to be divided by fifteen. This is an example of the kind of thinking David Hume criticised when he first pointed out what he called the ‘incurable narrowness of soul that makes people prefer the immediate to the remote.’ (Hume was aping St Augustine of Hippo at the time, but in fairness, if you’re going to steal cool phrases, you may as well aim high).

The obvious victim of this narrowness of thinking identified by Hume is the environment. One could argue that the current movement of young people agitating for change only makes sense in the context of their growing realisation that they, more than any other generation, are going to have to pay the bill past generations have run up for them.

There are other bills to pay, other elements of the good life that seem out of reach for the latest generation. Part one of this series looked at two: Asset ownership, in particular housing, and pensions. A startling statistic from the USA physically stopped me in my tracks when I read it this week. When baby boomers, the children of the men and women who fought the Second World War, were 35, they owned 21 per cent of all the assets. When the average member of Generation X was 35, in 2008, they owned 8 per cent of all the assets. When the average millennial turns 35 in 2023, they will own around 4 per cent of all the assets. Even correcting for the different sizes of the generations, that is a huge change. The charts below shows the build up of wealth in the USA from the late 1980s to today.

Our millennial cousins will have to wait quite a while to inherit. And this makes a lot of other computations, around pensions especially, difficult to make. All is opaque.

Three trends are clear. First, the seemingly inexorable rise of wealth over the Clinton and Bush eras is halted by the shock of the Global Financial Crisis, only to resume its rise after 2011. Second, the rates of build up in asset values for each generation — the Silent generation, those now aged over 70, the Boomers, Gen X, and the Millennials — are all markedly different. In terms of rates of change, the Silent generation is far closer to Gen X than the Boomers. Millennials are far, far behind in terms of asset ownership and asset growth. Third, the Boomers are out there on their own when it comes to asset buildup and asset holding. By the middle of 2019, the Boomers have $48 Trillion in assets. The Silent generation have $29 Trillion. Gen X has $22 Trillion, and the Millennials have $7 Trillion.

You can really see this in terms of shares of wealth: At any one time, the total percentage of wealth is 100 per cent. In this next chart I show the wealth of the USA by quarter in proportionate terms. It is even clearer this time that the Boomers are OK, to misuse a catchphrase, while the Millennials are most definitely not OK. Their ability to acquire and hold assets has been retarded by the financial crisis, by the nature of the system they work within, and of course by the failure of their Boomer and Silent generation relatives to do the decent thing (from the Millennials’ perspectives) and shuffle off this mortal coil. The best way to amass assets is of course to have a relative with them die, and pass the title of those assets onto you. This mass shuffling will happen, but it probably cascades from the Silent to the Boomers and to the Gen X cohort. Our millennial cousins will have to wait quite a while to inherit. And this makes a lot of other computations, around pensions especially, difficult to make. All is opaque.

I want to turn now from a view of the future of the US economy to a data-based view of the Irish economy.

Earnings in Ireland: What do they tell us?

CSO Statisticians Morgan O’Donnell and Gerard Brett have produced a brilliant piece of analysis looking at earnings in Ireland. They used administrative data—which is very different to the usual survey data we see in most studies like this. Administrative data usually comes straight from tax records or from other large data sets. The key difference between administrative and survey data is that administrative data records what you actually do, surveys record what you say you do. There are other advantages: a more complete coverage of a population, which makes regional statistics far better, very low data collection costs, reduced respondent burdens, and far better data quality. The data cover seven years, and look at almost every worker in the country in that period, so you are looking at the ‘real’ Irish labour market, for all intents and purposes.

What do we see? The first chart shows you where you’re more likely to earn more. I’ve made a chart by county to make it easier. Mouse over the counties to see who earns what where, in terms of median weekly earnings. Unsurprisingly, the Dubs earn the most, at €847 per week, with surrounding counties benefitting from sprawl as poor planning pushes economic activity out, and not up.

The difference in earnings by sex and by age shows us that the large disparities in the labour market are both a function of age, and a function of the structure of our labour market.

The detail here is fascinating—click on counties to see it. On the basis of weekly earnings, Cork (€740) and Limerick (€708) do slightly better than Galway (€702). Kerry (€609) does worse than Roscommon (€654). The regional disparity is most acute in Donegal, at (€565) per week. Overall the map shows us the economic centre of the country is, and will likely remain, Dublin, unless there is a large policy change to move lots of economic activity out of the capital. The IDA’s recent policy of trying to locate new business outside of Dublin has had some success, but ultimately the flow of workers from the villages to the towns, and from the towns to the cities, has not been stemmed.

The difference in earnings by sex and by age shows us that the large disparities in the labour market are both a function of age, and a function of the structure of our labour market. Older men are more likely to be in higher paid jobs, and even when older women are in those jobs, they are paid correspondingly less. Male workers aged 50 to 59 earn on average €367 more than female workers. The difference is far less pronounced at lower ages, certainly before the ‘motherhood penalty’ kicks in for a large swathe of the female population, and the data reflect this inequality.

Ireland is an unequal place. When you look at market income inequality alone — before you adjust for the intervention of the State via taxes and transfers — Ireland is one of the most unequal in the Eurozone. It is a quirk of our history that we can be so unequal before the state does its thing, and so equal after the state gets involved. This next chart breaks income inequality down a bit. I look at three decile of income. To make a decile, you break a distribution up into ten classes, making sure each class has the same number of people in it. Again, the detail is really fascinating. You can see that only three per cent of employees working in industry are in the first decile, with median earnings of less than €202 per week, while 28 per cent of those working in accommodation and food services are, and 24 per cent of those working in the arts and entertainment industries are. The fifth decile is, not unsurprisingly, in the middle, with a bit of every industry. Now look at the top decile, those earning over €1373 per week. What do we see? We see 31 per cent of ICT workers in there, 23 per cent of finance jobs, 17 per cent of professional activities, and 15 per cent of public administration in the higher pay jobs. We have recovered not just the earnings and industry structure, but in part a proxy of the class structure of Irish society.

Now look at this chart. It shows the distribution of employees by their earnings and by their activity. Again, use the wonderful animations inside the graph to gain some insight. Imagine you were a parent choosing a course for your child based entirely on the likelihood of them making a large wage. The child will go along with whatever you suggest, somewhat unusually for a teenager. What sector would you pick? You would pick courses teaching your child information and communication first, and second, before any other course, because 23 per cent of all employees in ICT earn over €1600 a week. The next highest is finance, at 17 per cent earning over €1600 per week, and only then the professions. The points system does not yet reflect this difference in salaries, with demand for courses in medicine far in excess of those in computer science.

Now look at the other end of the chart. 56 per cent of artists earn less than €400, with the next 33 per cent earning between €400 and €800. This statistic is why the true Minister for the Arts is Regina Doherty. In a culture that says it values creativity, in a country that celebrates its artistic history to the world, this statistic is nothing short of damning.

Where should you work? The next chart shows the evolution of median annual earnings over the seven year period, but shows it by size of company, from tiny (zero– nine) employees, all the way up to 1000+. You can see salaries rise with company size. In 2011 the difference between working in a tiny company and a huge one was about 23 grand. In 2018 the difference is about the same. The crisis hit small and mid-size companies a lot harder than larger ones, and this is reflected in the lack of growth in earnings in those smaller companies. That said, all told the salary increases for all company sizes have not been stellar — on the order of about 1 or 2 per cent a year, over this period. Based on this data, you should think about working for a larger company, with 500-999 employees, as they have seen the largest, fastest, and most consistent salary growth.

Where are we going?

The data show the future of good, high quality work is in creating indigenous services Irish people can sell to the world. High value-added service jobs require lots of education and on the job training, as well as an ability to work in teams at a high level. Our higher education system does some of this well, but our larger, more productive firms are really brilliant at training their staff to be very productive. Spreading that productivity is a key part of the FutureJobs strategy. Using data like this, we can identify exactly what sectors those highly productive jobs are in and come up with ways to spread that productivity around.

I believe in the ability of good policy to make people’s lives better. I think if we make our artists’ lives better, we will all benefit.

We can also see the sectors that are not doing well, and yet should be. In this piece I’ve highlighted the arts, because we rely on the arts to generate many of the components of a good life. There are other sectors, like accommodation, which also feature low wages, and these should be looked at. It remains true we use our artists, somewhat shamelessly, to sell ourselves abroad. We usually do this when they are quite dead, and thus quite cheap.

The fact that an artist, or someone working in entertainment, who might be able to use their creativity to help make something really special, can’t live even a lower middle class life, is a huge problem. One that we can solve with policy measures, the same way we solve market inequality with policy measures. I believe in the ability of good policy to make people’s lives better. I think if we make our artists’ lives better, we will all benefit. In a larger sense, though, these data must make us question who we are when we are working, and who we are working for, when we are working. The crucial issue of ownership is the subject of the next section.

*****

PART FIVE: IS IT TIME FOR A NEW POLITICAL MODEL?

Let’s perform a thought experiment. I give you the island of Ireland. It’s yours, congratulations. I wipe everyone’s memories. They are suggestible. You can decide how power is apportioned in the country from now until the end of time. You can choose to stop it being a country if you like, we could re-join the UK or join Russia. Assuming you’d like to keep Ireland independent, you can choose communism over capitalism and private property, or at a more granular level, you can choose a list-based system of representative democracy over the proportional representative system we have now, or whatever. You can apportion power by ladies in lakes lobbing swords at random passers-by. Totally up to you.

What model of the distribution of power would you choose? In choosing, your ideas of what constitutes a just settlement between rulers and ruled matter. Your understanding of which sets of interests should be set against other sets matter, too. And the institutions you choose to uphold the rules everyone lives by will matter more, again.

You might choose to have a very small state, with lots of private agencies doing most of the work of the state. You might choose a large state, paid for with taxes. Whatever you choose, it will have consequences. Whatever you choose will have centuries-long consequences and ultimately, will tell us more about you than the country.

Ireland’s political model evolved from our colonial history. We aren’t a colony anymore. What should our political model be now, in an era of weaponized interdependence?

The thought experiment teaches us three things. First, the choice of key distributional variables like political model matters. Seconds, the choices are never value-free, and third, when we think about the real world, we see what our thought experiment mostly lacks: the influence of history.

Ireland’s political model evolved from our colonial history. We aren’t a colony anymore. What should our political model be now, in an era of weaponized interdependence? We can’t ignore history, but we must realise we are at a moment when we can create a path to change large parts of our economy and society, if we want to.

Everything is a reaction to something. For example, the Nordic political model emerged in reaction to the threat fascism posed for democracy in the 1930s. The core idea of the Nordic model is the belief that everyone in their community is equal at all levels. Its social democratic foundation was a reaction against the conservative Christian democratic tradition in Germany and across Europe that emphasised hierarchy above all else. The political culture generated using the Nordic model was largely collectivist, and perhaps even consensual. The results of the political culture are very high living standards. In 2019, the top four countries on the World Happiness Report are Nordic. Nordic countries typically feature low levels of inequality, low levels of market-limiting regulation, and generally progressive approaches to climate-related issues, not to mention efficient, high quality, free (or nearly free) education, childcare, healthcare, pensions, and low levels of corruption. These are all features most people say they desire when asked. The chart shows the difference in the average of tax revenues as a proportion of national economic output in a basket of five Nordic countries and Ireland. Even using this crude metric—the availability of tax revenue for the state to use–the difference in economic model is clear.

This reading of Nordic countries as Valhalla with an ability to tax lots and spend lots is too pat, too simple, to be real. There are similarities between the Nordic countries, yes, but there are also major differences. For example, although social democratic parties were utterly dominant in Norway and Sweden during the post-war decades, they never had an outright majority in Denmark, and were much less dominant in Finland and Iceland. The story of the clear win for social democracy, now very much in decline in the Trump era as a centring political ideology, is far muddier than many narratives will tell you. In fact an examination of the history of the Nordic model reveals one key difference between them. Some of the Nordic states–Denmark and Sweden–were themselves imperial powers. The others were colonies. Finland, for example, had a violent civil war at almost the same time Ireland did. The historical process of how their individual states were brought into being determined as much about each state as their eventual choice of political model. As discussed in part 3, it all comes down to the interaction of ideas, interests, and institutions.

Ideas, Interests, Institutions

History matters. The choice of political model is a function of the interaction of ideas around the distribution of power which are prevalent when the state becomes independent. This is further shaped by the confluence of powerful interests operating at the time, and by the availability of good institutional templates. The Irish example of painting the pillar boxes green in the 1920s but keeping everything else about the postal system the same is the easiest one to mention, but let me make a deeper point using African budgeting systems.

Institutions (and their templates) are very important in shaping the outcomes of any large system. We are often unaware of just how deeply institutions’ features run. An individual policy maker can often find themselves using institutional levers put in place decades, or even centuries, ago. We often forget this. Rent a car in the UK and drive from London to Canterbury. You think you are driving on the M2 motorway, and you are. But you are also driving a route set down by the Romans, in 150AD, called Stone Street. Some roads really do still lead to Rome. History, to repeat, matters.

The Minister of Finance in francophone countries has unique powers in their management of state’s expenditure management, and these powers are without parallel in the Anglophone system.

Sometimes it matters in fairly weird ways. The OECD’s Ian Llienert analysed the budgeting systems of African countries which were former British colonies, and compared the systems to former French colonies. It turns out they also painted their pillar boxes, to stretch the metaphor. The former colonies still use budgetary systems given to them in generations past. In former British colonies, the line ministries are very important, as they are in the UK. In former French colonies, the ministry for finance controls almost everything. The Minister of Finance in francophone countries has unique powers in their management of state’s expenditure management, and these powers are without parallel in the Anglophone system. This is all despite the fact that most of the countries Llienert studies in his work have been formally independent since the 1960s. History matters, both in the application of ideas, and in the long lives enjoyed by institutional configurations.

Easter, 1916?

We all remember Yeats’ immortal line ‘A terrible beauty is born’. Easter, 1916 is scathingly critical of the founding fathers and mothers of the state for their use of violence. Two more important lines in that poem, for me at least are ‘Too long a sacrifice // Can make a stone of the heart’. The question Yeats is posing to those who took part in the events of 1916, or who celebrated them afterwards, is when will the quantum of personal pain be enough to get things to change, to produce an actual element. Like the thought experiment above, when you actually think about changing things, you realise there is some pain involved in the transition. Too much pain, and the transition will not have been worth it.

Despite that worry, change is what is coming. Political scientists Henry Farrell and Abraham Newman have come up with a new idea to talk about how states how states might leverage network structures they are a part of as a coercive tool and under what circumstances those coercive tools might work. They call this a theory of weaponised interdependence, which, to quote them directly, emphasizes “the topography of the economic networks of interdependence intersects with domestic institutions and norms to shape coercive authority”. Their account places networks like financial communications, supply chains, and the internet at the heart of what states should do. It is a thoroughly modern idea of states and their actions through networks.

When the rules make no sense, when ideas and technology change so the rules become irrelevant you don’t get rid of the ideas, or the technology, or the people, you get rid of the rules

For a small, very open economy, Farrell and Newman’s ideas should become mandatory reading. They teach us how to be strategic in our use of new types of networks. Take, for example, the European system of government and governance of which Ireland is a small part. Ireland can influence that network well, and it has done so during both the Brexit debates and the creation of the New Hanseatic League, which is an effort to plot a post-Brexit course, issue by issue, through the creation of a new diplomatic ‘hub’ of connections.

Take the issue of our political networks, from grassroots up to national level. Here there’s an argument the system is too networked. A network with too many connections becomes completely useless, as some of our TDs certainly are, especially when it comes to land use policy. The chart below shows median weekly rents for 2 bed and 3 bed dwellings by county as a proportion of wages. No surprise that in Dublin, where NIMBYISM is less a practical reality than a religion, affordability is seriously concerning. In Laois and Offaly, the problem is a combination of low wages, and low supply.

Everywhere else, affordability is at reasonable levels. This is a map of policy failure at the political level, which is entirely fixable because these institutional configurations are not laws of nature, they are not given to us from physics. They are fallible rules invented by fallible people at a point in time, and iterated slowly over time. When the rules make no sense, when ideas and technology change so the rules become irrelevant you don’t get rid of the ideas, or the technology, or the people, you get rid of the rules. It’s time to think of a new political dispensation for Ireland for the 21st Century.

*****

PART SIX: WE ARE GOING WHERE THE CHILDREN TAKE US

‘Juxtaposition’ is one of those words it is easy to hate. When you juxtapose, you achieve a contrast by placing two things near each other. Often you’ll juxtapose to have some effect, so there’s a third layer to its use: the reader learns about your values, or your editorial priorities, or sometimes your political view. This is especially good if you can’t say any of those things directly. Sometimes a juxtaposition is random, but for that, all the more telling.

Consider a recent front page of the Irish Times. Two headlines juxtaposed modern Ireland exactly. The first was ‘Ireland has third highest quality of life in world, says UN report’. The headline immediately afterward was ‘Poverty in Ireland: Over 140,000 children in cold, damp homes’.

Juxtaposition.

How can the world’s third-best country to live in let 140,000 of its children sleep in cold, damp homes? That’s 12 per cent of the child population. Only three explanations make sense in explaining the stark difference between these two headlines. Let’s look at each in detail, because each tells us a lot about where we are going as a nation.

Explanation for juxtaposition 1: We’re just one-eyed kings

The simplest explanation for Ireland’s success on the human development index ranking is that it is just a ranking. It says nothing about what is being ranked. It might be that the rest of the world lets a greater proportion of its children live in awful conditions, so in a strict ranking sense we are doing better. This ranking-thinking is the logic behind Erasmus’ famous line ‘in the land of the blind, the one-eyed man is king’. It says nothing about the experience of those living in poverty, or not. It just says fewer children live in poverty relative to other countries. Is that true?

The chart shows the proportion of children in 2018 living in cold, damp, or rotting homes across Europe. I have highlighted two countries. First, Ireland’s 12.3 per cent, putting us in the middle of the distribution. Second, the UK’s 21.7 per cent, a staggering figure for the sixth largest economy in the world. Germany has 17.5 per cent of its children living in cold or damp homes, Denmark has 19.4 per cent. The ‘winner’ of the Human Development Index report referenced in the first headline, and subsequently trumpeted by the Taoiseach, is Norway. (The lowest ranked country is Niger). 8.8 per cent of Norway’s children live in damp, cold homes. The average across all EU countries is 15.4 per cent in 2018. So we are not one-eyed kings. Child poverty in Ireland is middling relative to our neighbours, and too high relative to our expectations for ourselves as a society. The men and women who founded our nation said we should be judged on how we treat our children. I agree. We will discuss policies to alleviate poverty in a moment.

Some poverty measures are really measures of how well the economy is doing in a given moment. The greatest anti-poverty device in the world is a job, and so when labour markets deteriorate, and people lose their jobs, it is always the case that poverty and child poverty rise. The chart shows three measures of poverty from 2007 to 2018. The first is the evolution of the leaking roof/damp home proportion I showed in the previous chart. The second is the proportion of households unable to keep warm. The third is child poverty itself.

Explanation for Juxtaposition 2: It’s an accidental comparison, we are just measuring different things

The other simple explanation is that the two measures—one of living conditions, the other of health, education, and living standards—are simply measuring different things. The deprivation measures come from the EU’s survey of income and living conditions, which is exactly what it sounds like, a survey. The Human Development Index measures come from a combination of measures of life expectancy, years of education, and gross national income per person. The HDI has the advantage of being far more general than the survey of income and living conditions, but has the deep disadvantage in that, for Ireland, the presence of multinationals (yes them, again) distorts one of the key measurements, the gross national income measure. Using a measure which strips out the influence of multinational activity here, Ireland falls from third place in the HDI rank to 12th.

This is a nine place fall, obviously, but it puts Ireland in the same territory as Finland and other very high income, highly developed countries. There is an inequality sub-ranking to the HDI score, which loses us six more places on the ranking, putting us in 18th place, around Japan and Austria. Austria has roughly the same proportion of children living in sub-standard accommodation, and is roughly equivalent to Ireland across a host of measures, so it is unlikely the UN and Eurostat are measuring different things, which makes any comparison a chalk versus cheese comparison. It is more likely that, taken in their entirety, with all the caveats that apply to data gathering exercises like this, they are measuring the same things differently—measuring chalk in centimetres, and then in inches.

Another reason to believe Ireland should be in the top 20 rather than the top five of countries is another index, the Social progress Index, which puts us 14th. We meet the basic needs of human existence well, but fall down in giving everyone equal opportunity, and in providing adequately for the weakest members of our society. Starting to sound familiar?

Where does this leave us?

If the HDI is a pretty accurate measure of where Ireland is, then many of its rankings are fairly solid guides to where we can do better. Buried in the data tables provided by the UN (I sweat these details so you don’t have to, dear reader), you can find a series of indicators like pupil teacher ratios, doctors and hospital beds per 10,000 people, and so forth. The division of measures is by UN Sustainable Development Goal. The individual indicators are colour-coded, with green placing the country in the top third for this statistic, yellow for the middlle third of countries, and orange for the bottom third. Across most of the measures, as you would expect, Ireland is green. Whatever our problems, our citizens enjoy a very high quality of life relative to much of the rest of the world, and this has been improving over the last ten years, in particular.

Where are we ‘yellow’, or ‘orange’ on this national report card? We’ve work to do in reducing years of lost health expectancy, increasing hospital beds, decreasing youth unemployment, increasing the proportion of female pension recipients and female share of senior management roles, reducing fossil fuel consumption and carbon dioxide emissions, and in ending child poverty.

The ‘report card’ stage of the HDI report for Ireland could provide the template for the next programme for government. It is automatically measured, already aligned to the UN’s Sustainable Development Goals, and shows us exactly where we need to go as a nation.

This series has been about asking questions of where we are going.

We can think about the answers coming at three different levels. Each level is connected.

At the household level, when it comes to people under 40 today, the two key questions are: when will they be able to acquire assets at something like the rate their parents and grandparents could get homes and pensions? Without a decent social safety net, and none of the fall backs these assets provide, people under 40 are quite rational in reducing their expectations about the future. That change in expectations will impact their behaviour today. State-supported savings policies make sense, but only when the state can generate sufficient investment to pay for the needs to people when they eventually retire.

What is clear is that the next 50 years will be about altering the production and consumption arms of the world’s economies to cope with the climate crisis. I hope it will be enough.

You have just been reading about the children growing up in substandard accommodation, whose prospects in life might be forever damaged by their childhoods. A policy of deep retrofit would not only reduce the conditions these children, and their children, live in, it would also be beneficial for the environment. This would be horrendously expensive, and it would require a totally different spatial policy, which I will talk about in a new column, but it would generate the employment and the return on investment many people will need, as well as altering how Ireland looks and feels.

Our children know how to start a conversation about the future. Those who belong to Generation T (for Thunberg) are aware of the burden they will bear into the future from climate change. Whether that changes how they treat the generations who have come before them when they are in positions of power is a question yet to be posed, let alone understood. What is clear is that the next 50 years will be about altering the production and consumption arms of the world’s economies to cope with the climate crisis. I hope it will be enough.

At the firm and sectoral level, the key changes we will need to make is producing workers and employers for high value services not just headquartered here, but started here. The resources required to do this have simply never been made available. FutureJobs is an ambitious attempt to address this problem, but it will need several years’ constant investment to earn a return. As for the higher and further education sectors, they are still becalmed. Like RTÉ, they clearly need more funding, but with health and housing being larger problems, they cannot argue for the larger funding envelopes needed, and it is not clear the public support paying more for them in any case. A new conversation is required, and no one has yet grasped how to start that conversation.

Across dozens of measures, life is getting better for billions of people in the 21st Century. It will continue to improve, if we get the policies right. I believe this with all my heart.

At the institutional level, we have to learn to live in a world where the old orders are breaking down, where a small open economy allying itself to global supply chains using low taxes and a pliant industrial policy cannot prosper simply by repeating the word ‘open’ for the next fifty years.

The government is usually the fall guy (person?) when it comes to finding solutions to large problems. It often succeeds, but, because of the nature of our debate, successes are quickly forgotten, while failures stay ever-present. Governing is a hard job, not always done well. The government is the only agent in the system that can change our behaviour on a multi-decadal scale. We need a new cadre of risk-taking governors who can make decisions about the future, and defend those decisions. Right now we are too often met with time servers and double-speakers. This erodes public confidence, and it is not clear how much further public confidence can fall before all legitimacy is lost. The evidence we have says, in general, more equal societies are more prosperous and harmonious, and in a market-based economy, equality has to be fought for by institutions. Exploitative institutions tend to deepen inequality and produce exploitative classes of people. The public often assumes the access to capital or prestige buys power, and that power gives a small elite license to make policy. We can take the license from those people when there are personal and private consequences for public malfeasance.

Finally, there is hope. Plotting every country in the world at the same time, the Human Development Index slopes ever-upwards. Across dozens of measures, life is getting better for billions of people in the 21st Century. It will continue to improve, if we get the policies right. I believe this with all my heart.