GENERATIONS of Irish people have had to accept much lower living standards and a poorer infrastructure than their neighbours in northern Europe. This depressing reality has become embedded in our national psyche.
We are consequently ill equipped to adjust to the sudden dramatic change in our fortunes. This change could propel us within a single generation from being by far the poorest country in northern Europe to being, in terms of our annual income - although not for a long time to come in respect of our infrastructure - one of the wealthiest.
A distinguished economist has recently said that our capacity for economic growth has been raised to about 6 per cent a year.
But perhaps a 6 per cent growth rate would be too much to hope for even if we have developed a capacity for such a rate of economic growth, there are bound to be periods of less dramatic performance. We might, therefore, do better to look at the implications of a lower average growth rate of 5 per cent, sustained over most of the next 15 years.
That this is a possibility may be seen from the fact that except for the early 1980s when a sharp deflation of our economy was required to bring order into public finances - our economy grew at an average rate of 4.2 per cent per annum from 1958 to 1988. And since 1988 our growth rate has averaged almost 5.5 per cent - so a long term growth of 5 per cent implies a slowing down of our economy.
Now, few people realise that even a reduced 5 per cent growth rate, if sustained over 15 years, would more than double our national output. And, even assuming the impact of economic growth on employment during the past four years has been exceptional, a doubling of national output must increase employment by over one third. That would mean at least 450,000 jobs.
Such a rise in employment would reduce substantially the numbers out of work: even allowing for a substantial inflow of returned emigrants taking up jobs; women returning to work after a period of child caring, and for school leavers and college leavers seeking employment. (Because of the post 1980 fall in the birth rate this post education flow will, of course, diminish steadily after the turn of the century).
As employment rises and unemployment falls, our population will be growing. Given our low birth rate, it will grow more slowly than the rise in employment. Within 15 years the population might increase by 250,000 to 300,000 depending on the scale of net immigration.
With employment rising much faster than population, the ratio of dependants to workers - which in 10 years has already fallen by one fifth - will drop by about a further one third. This would mean that the increase of about one half in each worker's output and purchasing power in this period would have to be shared whether within his or her family or through taxation, among far fewer dependants. Consequently average material living standards, would almost double.
And as current projections of living standards in Britain and continental Europe during the next 15 years suggest improvements of less than one hall, (only one third in the case of Britain, if that country's economic forecasters are right), this would mean that average material living standards here would likely outstrip those in Britain very early in the next decade. Within this 15 year time horizon, our standard of living could in fact pass out those of almost all other European countries.
WHAT of the public finances? In such circumstances many different scenarios would be possible, depending on the priorities of the government in office at the time.
However, an example of one such scenario would involve a reduction of the burden of income taxation by one quarter. This would be combined with an annual increase of 3 per cent in the resources available for current public spending on services like health and social welfare. And at the same time there would be a doubling of the volume of public investment, to be financed out of a current budget surplus rather than by further borrowing. (Instead of borrowing we would be repaying debt by that stage).
Let me emphasise once again, the scenario that would make all this possible is not a particularly optimistic one. It reflects what would be possible if during the next 15 years our economic performance were on average to be worse than in the past eight years. The danger we now face is one failing to take seriously this prospect of dynamic economic growth. For of course this encouraging prospect could all too easily be messed up if we failed to prepare adequately for it.
Thus if our education system were to respond in the wrong way to future needs, for example by succumbing to half baked pressure to allow vocational training to displace genuine education in our schools, we could all too easily choke off this remarkable opportunity.
We would have a similar outcome if we failed to reorient our training provisions towards the rapidly changing needs of the economy. For our economic success to date stems above all from the quality of our non specialised and liberal education system.
Moreover, if we failed to make the huge investments needed to catch up on our infrastructural backlog, in roads and public transport, we could weaken our chance of a major economic breakthrough. And if we made the wrong investments building in Dublin a grossly inadequate on street LRT system that could dog our streets, the effect would be the same.
Again, failure to allocate to our deprived urban areas the current and capital resources needed to remove the principal causes of crime in our cities could eventually precipitate conditions of disorder that would discourage the large scale industrial investment that is a precondition of continued rapid economic growth.
ANOTHER error that would wreck our prospects would be a failure to plan on an adequate scale the availability of serviced land with adequate drainage and other services to meet our housing requirements. For housing could easily prove a real bottleneck, partly because many of the new jobs would be filled by emigrant workers returning here with their families and they would have to housed.
For Dublin, this will mean abandoning the ludicrous idea: that housing and the servicing of land can be adequately planned by seven independent county councils rather than on the basis of a comprehensive and unified metropolitan organisation of the region's housing, drainage and transportation needs.
Again, failure to put our water resources to best use could blocks economic progress. As Sadbh O'Neill pointed out on this page, last Wednesday, it would be a disaster if populist pressure for free water were to dissipate this valuable resource.
Like other similar scarce resources such as electricity and gas, it will be put to best use only if it is metered and, to the extent that consumption exceeds a normal household's needs, paid for ash it is used.
The prime task of the government that emerges from the forthcoming election will be to turn our whole society around to face the unfamiliar problem of coping with a rate of economic growth unknown in Europe during the past 40 years. Might our political parties, perhaps, raise their sights to make this most crucial issue the principal focus of their campaigns? It's a thought. {CORRECTION} 970107000152