In July 1957, Harold Macmillan famously remarked that: "Most of our people have never had it so good."
While this phrase has entered the collective memory, the complete passage from that speech will resonate with many in Ireland today: "Go around the country, go to the industrial towns, go to the farms, and you'll see a state of prosperity such as we have never had in my lifetime - nor indeed ever in the history of this country. What is beginning to worry some of us is the question, "Is it too good to be true?" or perhaps I should say, "Is it too good to last?"
In our case these concerns are accentuated by nostalgia for lost values - a feeling that our sense of wellbeing is not commensurate with our economic status, perhaps. Last week RTÉ screened a documentary about a wedding in which a young couple paid €32,000 to recreate a Tuscany-type ambience in Tipperary. For many, such an ostentatious display of wealth sits uncomfortably alongside what we know about nursing homes for the elderly, to mention but one example.
Over the last 20 years we have done the economic thing. We now have twice the growth rates and half the unemployment of any country in Europe. Our GDP per capita is 128 per cent of the European Union average. Our public debt levels are the envy of all. All this was achieved using a very liberal free market model.
But it would be a mistake to think we can continue in the same vein, expecting pure market solutions to solve the problems which confront society today.
Our dilemma is how to make up for years of under-investment in physical infrastructure and public services, whilst simultaneously catering for massive population expansion and changing demographics and to accomplish all of this relatively quickly, without overheating the economy.
The starting point, I suggest, is to question our attitude to maximising economic growth. What is it for? We have full employment, to all intents and purposes. The objective now should be to maintain economic growth at a level that preserves this, but without generating the high population growth that means physical and social infrastructure will always be inadequate.
It is a case of optimising growth as opposed to maximising. To continue as we are means the population will reach 5.5 million by 2026, according to the CSO.
The second point is to consider the limitations of market-based solutions to our needs. For example, will childcare needs be met in circumstances where the number of women at work is increasing, demand for childcare is also increasing and the number of people capable of delivering that care is decreasing? The "market" cannot deliver in such a scenario.
The Minister for Health's proposal on care of the elderly is a big improvement, but is it sustainable in the long run as people wise up to the options for minimising their property exposure? Is the moral hazard inherent in the proposal not likely to undermine it ultimately? Would it not be better to start thinking about care for young and old alike as a public good - as we treat education - and so finance it through social insurance or taxation?
We can already see evidence of market failure in occupational pensions provision in a range of high-profile cases in the UK and Ireland lately. In circumstances of an increasingly ageing population that is living longer, we will have to provide centrally for mandatory "second pillar" pensions or callously accept increasing poverty amongst the elderly.
In the field of energy we have been operating a theoretical competition model which has succeeded in transforming Ireland from being one of the cheapest to one of the most expensive countries in Europe. This is not entirely our fault. We have been following EU directives that are foolishly based on the original UK regulatory model. It makes no sense at all in the small market which is Ireland.
The recently published ESRI report on electricity reveals that supply and demand are delicately balanced. Security of supply must be the principal driver of energy policy and the Government would be well advised to allow the ESB to get on with ensuring that it will be achieved. If our position is so precarious at present, how much more so will it be if we don't make the right strategic decisions in the face of the rapidly expanding population I described earlier?
Nor can energy policy be divorced from environmental policy. The Budget committed Government to spending €270 million on emissions trading to buy 18,000 tonnes of carbon permits. This is absolutely unsustainable. We cannot continue indefinitely to buy our way out of our responsibilities under the Kyoto Protocol.
In respect of healthcare, the Government has retained tax shelters to encourage investors to build private hospitals on public hospital grounds. Irish healthcare is a hybrid of public and private provisions and if the balance of this model is pushed towards the private sector it may undermine public hospitals, as in the US. The tax shelter method of financing the shift is outrageously inefficient as clearly demonstrated by Maev-Ann Wren and Dale Tussing in How Ireland Cares: the case for healthcare reform (New Island, 2005). Moreover, this shift towards private medicine is happening against the background of a medical insurance market in which apparently no one wants to compete unless they can be guaranteed profits four times what they might expect in other countries.
In terms of industrial policy, we are depending on up to 100,000 migrants from eastern Europe to meet our labour market needs. Ireland has surely got "first mover" advantage from this pool of high-quality, well-educated people. But how long will they stay? What will happen when economic convergence of the 10 new EU countries begins to occur, or when the rest of Europe opens its markets to the highly skilled? We should be making the right investments now in childcare and upskilling of the existing workforce, to facilitate increased labour market participation and higher productivity.
It seems to me that Ireland faces many complex decisions. We have a window of opportunity of seven to eight years, when we have a good demographic profile and a low dependency ratio, to get things right. We will never again be as well placed or as well off. If we miss the opportunity to make the right strategic decisions we will spend a long time regretting it.
In January the new National Development Plan will be published. It will be a crucially important document for the reasons I have mentioned. Let us hope that it is driven by a broader vision than the constricted neo-liberal orthodoxy of the market. The next stage of our development requires social development to be valued on a par with economic development.
David Begg is general secretary of Ictu, the Irish Congress of Trade Unions, and a governor of the Irish Times Trust