Friday, 29 April 2011

THE 12 BILLION EURO GAP

The former Minister for Finance, Brian Lenihan, feels he was forced to take the loan from the EU/IMF, so that the Irish taxpayer would put capital into the Irish banks. This was done so that these banks could repay money they had borrowed from the European Central Bank. In other words, it is argued that the Irish taxpayer is now rescuing the ECB, as much as the other way around.
There is also the point I made myself in a letter last January to President Barroso. The European banks, who lent foolishly to the Irish banks and thus helped inflate the Irish bubble while hoping to profit from it, were part of the problem too. They were not adequately supervised, either by their own national central banks, or by the European Central Bank.
The ECB has had, from the day it was founded, a clear legal responsibility for supervision of credit institutions, and for the financial stability in the euro zone. Events show that it did not exercise these responsibilities adequately between 2000 and 2008.
Irish taxpayers are paying for the errors of the Irish central bank, when it allowed Irish banks to borrow too much from other European banks to fuel a property bubble. But the taxpayers of those European countries should take a proportionate responsibility for the errors of THEIR central banks, when they allowed their banks to lend this money in the first place.
It is frustrating that none of these points are even being acknowledged by the central bankers, Governments or politicians of other EU countries. They pretend that the problem is purely an Irish one, and that the lending, and bond buying, decisions of their own banks have nothing to do with it.
They act as if Ireland must first be “punished“ for its sins, by being forced to increase its corporation tax rate, before it gets any reduction in the interest rate on the loan .
All this is fine. All these are valid points. But where do they really get us?
Irish history shows that one can nurse a grievance for a long time, and feel morally superior to those who wilfully fail to understand it. But grievances do not pay the bills at the end of the week. Indeed, in all areas of human life, un assuaged grievances often distract attention from things we can actually do something about, and that are our own sole responsibility.
There is one very important thing that is the responsibility of the Irish people themselves. That is the fact that the cost of government services in Ireland, before rescuing any banks or paying any interest on debt, will be 53 billion euros this year while tax revenues will be only 41 billion euros!
So even if all our debts were wiped out by some miraculous act of generosity by the EU, the IMF, and the private banks, Ireland is still 12 billion euros short on its day to day spending on salaries, wages, social welfare etc.
Those who talk about “restructuring” existing debts, should keep that 12 billion gap in the forefront of their minds.
A country that has to borrow 12 billion euros of new money, every year, just to keep going, is not in a great negotiating position to demand concessions on its existing debt. This is because it will be demanding those concessions from the same people from whom it also wants to borrow more new money, on top of its old debts, every year.

Ireland needs to get into a position that it can borrow on the commercial sovereign bond markets on reasonable terms as quickly as possible, if its economic independence is not to be permanently compromised. Delay will not make things easier. Conditions on sovereign bond markets are likely to get harder and harder, year after year. Interest rates are likely to go up, not down. If “restructuring” by any sovereign borrowers take place, interest rates on all new sovereign bond issues will tend to rise even further. There is a lot to be said for accelerating the 2012 budget process, and taking decisions earlier than the financial markets and our EU partners expect them to be taken. Waiting will not make things easier.
The United States, which is 20% of the world economy, is having difficulty maintaining its credit rating. Japan, which is 8% of the world economy, has a debt/GDP ratio of 200%. It may run out of domestic savings as its baby boomers retire, and may enter the international bond markets. Even Germany will have to borrow more to cater for an ageing population.
Competing for funds with these voracious borrowers will not be easy for Ireland, especially if the supply of funds is reduced because the lenders, China and the oil producing nations, have to keep more of their money at home to meet the needs of their own restive populations.
So I believe that it is now time for our economic commentators and pundits to come home, to turn their forensic and investigative skills away from the deficiencies of the ECB, the EU, the foreign banks, our banking exiles, and all those worthy foreign targets, and focus their analytic skills instead on that huge 12 billion euro gap between revenue and spending here at home.
When Ireland has bridged that 12 billion euro gap, it will be in a much better position to talk to the ECB, the EU, and the bondholders.
Ireland urgently needs to surprise the markets with some good news.
Imagine the effect of bringing the 2011 deficit in substantially below market expectations.
Imagine the effect of a 2012 budget that involves less borrowing than the market expects.
Imagine the effect of some speedy sales of distressed assets, and some ghost estates actually being sold.
That is what is needed now, not more finger pointing.

Tuesday, 19 April 2011

THREE BOOKS THAT LOOK AT WHAT WE FACE TODAY


I read three books recently , which  throw some light on how  the  developed world got itself into its present mess, and how it might get out of it.
It is important to remember that it is developed countries that have  debt problems, not the entire world. There is actually a slight surplus of saving over debt in the world, but the saving is in one part of the world and the debt is somewhere else!
Capitalism 4.0 , by Anatole Kaletsky, has  the subtitle “ The birth of a new economy in the aftermath of crisis “. As the title indicates, Kaletsky is optimistic.  He believes that most of the forces, that gave us prosperity since 1990, still exist.
The mistake we made was putting too much faith is markets, on their own.  Markets need effective Governments if they are to work.
The problem was that Governments, including Central Banks, abdicated their responsibilities after 1980, and believed that markets would naturally correct themselves. He condemns the Efficient Market Hypothesis, that underlay the mathematical trading models of many in the financial world.  By definition, models based on this hypothesis failed to predict what happened, because all the data used in the models had been collected in benign conditions.
Economics became dominated by mathematics and forgot its roots in philosophy.
 There would have been a better chance in 2006 of a philosopher, an anthropologist, or a sociologist predicting the crash of 2007/8,  that there would of a mathematical economist doing so. Indeed the IMF produced one of its most optimistic ever  forecasts for the world economy in 2006! 
Kaletsky has some pretty startling things to say about banking. We need banks, and banking is a very important activity.  Allocating savings and investment in a complex economy is a socially valuable activity and that is what banks do, and sometimes do very well. Over emphasis on “greedy bankers” and their role, while not  unjust a lot of the time, can blind us to a much more complex reality. States need banks, and banks need states. As Kaletsky puts it,
 “the taxpayer is the silent partner in every  banking business , whether in it is nationalised like  RBS, or private, like Goldman Sachs.”
And he goes on
“the idea that a purely private financial system can exist without Government backing of some kind is a market fundamentalist illusion”
He says that 
“Situations are bound to arise, perhaps once in a  generation, when  Government simply  cannot allow any bank to fail”
That said, he is highly critical of how bankers, or more precisely bank employees, are paid.
He compares the behaviour of banks in recent times, and in particular the way they awarded employees big bonuses for short term  gains, to Workers Cooperatives, run for the benefit of  employees, to the detriment of shareholders. For years,he says, banks were systematically  undercapitalised in relation to the risks that they were taking. The big losers in all of this were the bank shareholders, many of whom lost everything, and the taxpayers.
Another book, that comes to similar conclusions about the modern world, is “Obliquity, Why our goals are best achieved indirectly” by John Kay.
His basic thesis is that straight line thinking often leads us to the wrong conclusions about what to do, because it focuses almost exclusively on things we can quantify, or express in a precise way, and thus leaves out things that we sense,  in less exact ways.
If we make happiness an explicit goal of our lives, we may end up unsatisfied. But if we work for a goal outside ourselves, we may become happy as well.
Companies that remunerate employees on the basis of a few narrow measures, like enhancing shareholder value, may not even achieve high shareholder  value,  because the devalue all the other unquantifiable things that  make a company successful, like  enjoyment of working towards a goal that is socially worthwhile.
A rather more pessimistic view is taken in “Endgame, the end of the debt super cycle and how it changes everything”  by John Mauldin and Jonathan Tepper.
They believe we are heading into a second economic crisis, caused this time not by the debts of the banks, but by the debts of Governments. They fear a period of deflation, which will makes debts unsustainable, followed possibly by a period of hyper inflation,  as Governments then try to get out of their debt  difficulties by printing money.
Some of the evidence they produce is quite convincing.  Countries, like Ireland, who are borrowing on international markets, may soon find increased competition for limited funds.
The United States political system is having huge difficulty facing up to its burgeoning deficits. Already “healthcare” in the United States costs an average of 8100 dollars for every American, including the healthy ones who never get sick. Yet politicians on both sides of the divide can agree neither to raise taxes, to cut entitlements, nor take on vested medical interests.
 Japan has a Government debt of 200% of its GDP, and is able to sustain this, because it is borrowing at only 1% interest from its own people. But when more Japanese retire, and then start drawing down their savings,  Japan may no longer be able to borrow all it needs at home and will be forced to borrow on world  markets, where the  rates of interest will be much higher. That could make its debts unsustainable.
There are also property bubbles developing in China, and in Australia, where house prices are too high.
Finally there is such a thing as Austerity Fatigue.  Electorates can agree to cut back for a while, if they see a clear goal in view. But if the process is dragged on for too long, with no goal except meeting interest payments, electorates lose patience, and may make irrational decisions, as the German electorate did in 1933.
That said, we are all much more prosperous than we were in the 1930s. We are also better educated, although the German electorate of 1933 was one of the best educated of its time.
I think people need a goal that appeals to their self interest and their altruism, at the same time.  Giving a positive meaning to austerity, appealing to peoples imagination, and constantly experimenting with new low cost employment intensive  ways of  solving long standing social problems  like   energy inefficiency, the  isolation of the elderly, and  lack of locally produced food, could help  us make sense of austerity and  get us through with our sense of self worth intact.
One thing alone  is clear, the future is unpredictable, and looking for complete certainty is a waste of time! 

Tuesday, 12 April 2011

EGYPT, LIBYA, TUNISIA, PALESTINE, ISRAEL, YEMEN, AFGHANISTAN......A NEW REALITY


I attended a conference in Washington this week where some of the major  security problems of the worlds were discussed.  A few things stuck in my mind which may be of interest to visitors to this website

 A NEW ARAB WORLD
 The most important thing to happen this decade is the wind of change in the Arab world.
 The Arab world has a huge youth population, educated but  with poor economic prospects. Authoritarian methods could not control them when they had independent access to communication through the social media and Al Jazeera.
The peaceful character of the demonstrators was remarkable. Even in Yemen, where guns abound, they   have been peaceful.
Egypt will soon have free elections, as will Tunisia. This means that everybody, including Europe, the US and Israel, will have to pay attention to Arab public opinion in those two countries. It will no longer be possible to do deals with leaders over the heads of the public.

 BUT NOT EVERYWHERE
In other countries the development will not be so benign.  There will be no peaceful transition to democracy in Syria or Bahrein. Libya seems headed for a stalemate.  In the past, Al Qaeda recruited many suicide bombers from the Benghazi area, and one cannot be sure how well “liberated” Libya  will develop. The Western intervention does not have a clear end point. I wonder did people really  believe that Khaddafi would  go quietly, like Mubarak and Ben Ali, once the  West intervened.
There was a general view that the democratic revolutions have restored Arab pride.   But the economic problems the new governments will face will be severe, especially in Egypt, where the decline in tourism and the increase in food and fuel prices will hit the poor hard.  Freedom on its own does not put bread on the table.
 Iran will lose some ground because it will have fewer grievances to exploit. Turkey, as a democracy with Islam inspired Government, may become a role model, and see its influence increase.

THE PALESTINIAN PROBLEM IS STILL THERE
The Palestine question was not a central issue in the demonstrations, but a democratic Egypt may make tougher demands on Israel, in regard to Israeli settlements on Palestinian land, than the military regime was prepared to  do. President Obama started to do something to create a resolution of the Israel/ Palestine conflict at the beginning of his Administration, but now has given up, having failed to get Israel to stop building settlements that preempt the possibility of a viable Palestinian state.
Meanwhile, it looks as if Saudi Arabia, by supporting the regime in Bahrein, is opposing democratic change. Saudi oil is critical to western prosperity, now that supplies from Libya are interrupted.

AFGHANISTAN................A BELGIAN PRECEDENT?
There was pessimism about the achievability of the goal of NATO handing over security to the Afghan Government by 2014.  While progress is being made, the problem will not be resolved by 2014.
The cost of present security comes to 8 times Afghanistan’s GDP!  100000 NATO troops are in Afghanistan, but only 100 Al Qaeda operatives, and none of the Al Qaeda leadership. The leadership, and most of the operatives, are now in Pakistan.  The Pakistani army has an ambiguous relationship with some of the terrorist groups.
If NATO troops are not to remain in Afghanistan indefinitely, a new approach must be found.   One  solution suggested was  a treaty between all its neighbours guaranteeing Afghanistan’s military neutrality, was suggested.  This is worthwhile and original thought. It was the approach that led to the creation of the state of Belgium in 1830. Previous to 1830, the territory that is now Belgium had been fought over for hundreds of years.
 For this approach to work in Afghanistan, there would have to be an agreement between Pakistan, India, Iran and China, with the support of the US and Russia. It might be something that all Afghanistan neighbours might accept. An unstable failed state in Afghanistan is bad for all the  neighbours.
 But talking to Iran might be difficult for the United States, in light of Iran’s nuclear programme, which has the potential to change the balance of power in the region.  Israel is convinced that a nuclear Iran would constitute a mortal threat. But an endless NATO war in Afghanistan is unthinkable, and  financially unaffordable.

Thursday, 7 April 2011

THE MINISTER FOR EDUCATION’S INITIATIVE


Earlier this week, the new  Minister for Education, Ruairi Quinn TD, is reported in the “ Irish Independent “ of  3 April, to have said  he  would  “prefer schools spent time improving reading and maths skills rather than preparing pupils for  sacraments such as  First  Communion and Confirmation”.
He reportedly said that faith formation carried out during the day took up time that could be used in other ways, and referred in this context to the severe decline in performance by Irish pupils in the  international OECD/PISA league table on  literacy, dropping from  5th  to 17th place, and he  remarked that performance in Maths had also disimproved.
Primary school students spend 30 minutes per day on religion, which, in the case of Catholic schools, includes preparation for the  sacraments.
He  said that while  no person should enter the  world  without clear knowledge and understanding of the history of  religion, faith formation  was a different thing,  He said that  faith formation ”takes up a lot of time” and that “some people might suggest it might be  done by parents or parish  but outside school teaching hours.” He remarked that “quite frankly, we have overloaded the curriculum”.
I believe it would be impossible for anyone to talk about religion and politics in Ireland in the  week that  remarks of this significance  were made without addressing them in a serious and studied way.  I would like to contribute to the debate that the Minister, to his credit, has launched.
 It is an important debate, and one that should be characterised by reasoned dialogue not name calling. It is a debate about the proper content of education, of the content of preparation for citizenship. In that sense it is a debate about who we think we are, or should be, as Irish people in the twenty first century and beyond.
 That is why, in many ways,  the Education portfolio is the  most important one in any Government, in the  sense that the decisions its holder makes have  effects over  a longer time frame  that those of the  holder of any  other  office of Government.
 Seventy years on, the impacts, for good or ill , of  citizens’  experiences in  education will still be being   felt in society.   The impacts of the  work of a Minister for  Finance, a Minister for Health,  or a Minister for  Social Protection may have greater immediate  effect, and attract greater public notice for that reason, but these effects  are  both more transient, and more reversible,  than  educational decisions, because  people usually  go through the educational system  once in their lives.
 It is thus, I suggest, even more important that we get educational policy decisions right than almost any other category of political decision. 

HOW ARE SCHOOLS TO BE RUN?                                   A 200 YEAR OLD DEBATE

The Minister has set up a Forum to examine the patronage, or ownership, of schools by religious bodies.  The Forum is going to hear from a long list of established organisations, with established  views and historic positions and interests to defend.  Educational policy making in Ireland  in the past 150 years has been  dominated  by the interplay between these same  interests. There was very limited democratic political involvement in these debates in the past.  As  Seamus O Buachalla said in  his book  “Education Policy in the  Twentieth  Century” in  1988 
      “Parents, political parties and representatives of the socio economic system have not figured  as                                  active  participants in the policy process, the low level of involvement of the major parties is self imposed”
   That was true in 1988. It is still true today. Dail debates on education  consisted, and still consist,  of demands for more money for schooling, rather than discussions of what the schooling should be about, or for that matter of discussion of where the extra resources sought might be found.
Well, it is good that that is all changed now, by Ruairi Quinn’s intervention last week.  Before joining the welcome debate the Minister has started, it is no harm to set it all in its historic context.
The present structure of control of patronage or ownership of schools long predates the state itself. It has roots in  the movement that had led to Catholic Emancipation in 1829 and the  reaction against the century long  religious settlement that had followed the end of the Williamite  wars. 
 The present system of National Schools was launched in 1831, based on a  proposal by a parliamentary Committee  chaired by  Thomas Wyse  MP, one of the first Catholics elected to the House of  Commons, a  Waterford man who was elected to represent Tipperary.  The first Board of Education was chaired by the Duke of Leinster, with clerical and lay representatives of different  denominations.
 The idea put forward by Thomas Wyse was to provide combined literary, but separate religious, education.  In other words, Protestant and Catholic children would go to the same schools, attend most classes together, but separate for religious instruction.
 But the National  schools  system did not remain multi denominational for long.
 According to Seamus O Buachalla, the first objections came from the Church of Ireland. In 1832 a petition was lodged in Parliament by seventeen of the Church of Ireland bishops protesting that the system deprived their clergy of their legal trust of superintending schools.  This is not all that surprising in that, at that time, the Church of Ireland was still the state church.
Initially the Irish Catholic bishops supported the National school system as proposed . Archbishop Murray of Dublin actually became a member of the Board of Education, but his stance was opposed by the  Archbishop of Tuam, Dr McHale, who has enjoyed perhaps unjustifiably, a much better   press from subsequent nationalist historians than has  Dr Murray.  But Archbishop Murrays stand was also opposed by the Vatican .
  By 1841, Pope Gregory recognised that the operation of National Schools on a multidenominational basis in the preceding ten years in Ireland  had not, in fact,  injured the Catholic  religion but  ruled that  participation by Catholics in multidenominational National schools should in future be decided  without controversy by each  local Catholic bishop.
 In practice this meant that the argument among Catholics went against multi denominationalism. By 1852, only 175 out of 4795 National schools were managed on a joint basis. Separating religious education from other aspects of the curriculum proved to be difficult in practice, especially as many of the teachers were themselves members of religious orders. Nationalist opinion did not give much support to multidenominational education either. In fact separate educations seems to have been  what the people wanted at the time, and  for  more than a century thereafter. With the benefit of hindsight, perhaps if Thomas Wyse’s  original idea had been adhered to, there might be fewer so called peace walls  keeping neighbours apart in Belfast today.

 SHOULD RELIGIOUS FORMATION BE REMOVED FROM THE SCHOOL DAY?

Now I would like to come to the present  Minister for Educations views. He is not just going back to Thomas Wyse’s original model, of common teaching of all subjects except religion.  He is going further and is questioning whether religious formation should take place during the school day at all.  I would like to respond to what he said on that  point.
First the poor results in OECD/PISA tests.  I agree with him that disimprovements in Ireland’s performance in these tests is profoundly discouraging.
  But where is the evidence that the 30 minutes per day spent on religion is responsible for this?
 As far as I know that 30 minutes per day has not increased  over the period since the earlier   tests in which Ireland  obtained a creditable  5th place. So why single out religious formation?  Why  does the Minister not , for example, refer to the teaching of  second language, Irish in most cases , on which I believe 120 minutes per day is spent? Perhaps because that has not increased either in the period since we got the good result in an earlier test.
 Another possibility could be that the school year is too short.  Irish  second level(but not primary) school children spend  slightly   fewer hours per year in school than do  their  equivalents in the OECD as a whole.  But that was also so when we got the earlier good result in the international comparison
Of course, reducing the time spent on Irish would be very unpopular with some people. Increasing the length of the school year would be unpopular with others.  So why single out the 30 minutes per day spent on religious formation, when there are so many other ways to find time to improve out scores in reading and mathematics?
It is also important not to enthrone results in OECD/PISA comparisons as the be all and end all of educational policy. Education seeks to prepare children not just for working life, but for life as a whole. Education that focussed narrowly on work available today would soon be obsolescent.  The purpose of education is to develop the whole person, aesthetic, artistic, physical, moral, and spiritual.
How about the Ministers suggestion that religious formation take place outside school hours?
There are two possibilities here, that this be done in the evening, or at the weekend.
 First how about doing it during the school week but  outside school hours? At home? Or in the  school building but  outside the normal school day?
 While it is true that,  in theory under the Irish constitution, the primary educator of the child is the  family, as the Minister knows only too well, in most households today both parents are also  working in paid employment outside the home.
  Their working day usually ends later than does that of their children. To expect parents to make up at home , for the 30 minutes that might be lost to religious education during the school day, would be quite demanding.  A  tired parent arrives home, prepares an evening meal, supervises homework  for all non  religious subjects, and is then expected to  give  30 minutes religious instruction after all that is  done.   How realistic is that? How well qualified are most parents do this? They may be observant in their own religious practice, but how prepared are they to become teachers?
Another possibility is to provide religious education in school but not as part of the school day.  Those who want religious education would  either have  to arrive at school half an hour early, or leave half an hour late.   That would severely disrupt the school transport system, and   would involve making significant demands on young children.
The other possibility would be that religious education be provided at the weekend, on a Saturday for example.  To make up for the 30 minutes per day now provided would require two and a half hours work.  That would essentially mean that the children whose parents wanted them to have  a religious education would have a five and half day week , while other children would have a  five day week.  That would be a good way to kill off religious education altogether, which I am confident is not the Ministers intention.
It is important to say that many other matters, as well as  reading mathematics and religion  are dealt with during the school  day.  Education in road safety, sport, positive health, nature study, and   civics are all part of the school week. Nobody argues against that.  Indeed there are frequent calls for a new topic to be added whenever a new social problem is identified that parents have no time to  adequately cover.
If one  argues that  religion should  be  dealt with “outside school hours” , but that all these other non core matters should continue to be dealt with at school., one is  saying that  religion is less important than  road safety, sport, positive health etc.  Given that , for most people,  religion concerns itself with eternal life, that would be  a pretty  radical claim to make.



SHOULD WE FOLLOW THE AMERICAN MODEL?

The argument may be made, although it is not made by Ruairi Quinn to date, that, in the United States, religious education does not take place in  public schools.  And, despite that, there is a religiosity about American public life that is missing here.  Could such a system work here?
 I do not believe it would. The United States is an immigrant society, and one where people move  house far more often than they do in Europe. Churches provide a way of meeting people and integrating into a community, a role for churches that is less salient in European society.
There is  also much more lively competition between churches in the United States. Half of all Americans change their religious affiliation, during their lives.
 The exclusion of religion from public schools has not helped the US get good grades in the OECD/PISA comparisons to which the Minister referred.  US performance is much worse than Irelands’ and many American parents are prepared to pay very high  fees to put their  children into religiously run, or other private,  schools in order to get them a  decent  education. As a result, the United States, originally a more egalitarian and meritocratic society than Europe, is rapidly becoming more socially stratified  than Ireland is.
 I would also add that the absence of religious education in schools in the United States  may have contributed to  an “anything goes “ approach to  religious belief there, which  focusses on what feels good, rather than on what is true, and which  allows people, who call themselves pastors,  to  think it is a religious thing to do burn the sacred books of other faiths.
 An  absence of religious formation in US public schools may also  have contributed to a form of relativism which  says “ believe what you like, it is of no interest to me”, rather than a  true pluralism which would  say “ I respect you and  your convictions, because , like me, you too are seeking to find truth, to find out the meaning of our lives”.

IS FAITH FORMATION A VALID  PART OF EDUCATION?

But now I would like to turn to the wider question, underlying what the Minister is saying, should there be faith formation at all? Is faith formation important for a society?  Is it just a private matter?
I believe a religious sense is inherent in every human being. As GK Chesterton supposedly remarked, once men stop believing in God, they do not believe in nothing. They start to believe in anything.  Secular religions take the place of transcendental ones.
 Communism, with its belief in iron laws of history and the ultimate utopia of a classless society, was a secular religion.  Nazism, with its enthronement of race and its elaborate ritual, was another secular religion. Once people ceased to believe, as Christians do, that each human person was individually created by God, and thus had an inherent value that no other person had a right to take away, it became all too easy to accept concentration camps, gulags, ethnic cleansing and the elimination of class enemies.  Other human lives just become objects, to be disposed of for the greater good, or the greater convenience of chosen life styles
If there is no God, is there any basis for saying that there are any absolute values laid down by any agency greater that the consensus of the   human beings who happen to be around at a given  time?  In the absence of  a sense of the  Absolute, what is a “human right” in one generation, could be  quite properly deemed to be a  luxury in another generation, and vice versa.
If we replace religion , what criterion will we  use to determining  what is “good” and what is  “evil”?  What will guide our educational system in making value judgements?
If society is not to descend into chaos it needs to develop a common sense of  right and wrong. That is not something that  will happen spontaneously. It has to be created through education, and through reasoning together. Rabbi Jonathan Sachs described our  modern dilemma thus
“The idea of reasoning together was dealt a fateful blow in the twentieth century by  the  collapse of moral language, the disappearance of “I ought” and its replacement  by “I want”, “I choose”, ” I feel”.  Obligations can be debated. Wants, choices , and feelings can only be satisfied or frustrated” he said.
He went on to  identify  the importance of religion in providing a basis for the development of a shared civic  sense of obligation,  for each of our countries, and for  our world.
He said
“Reverence, restraint, humility, a sense of limits, the  ability  to listen  and  respond to human distress- these  are not virtues produced by the market, yet they are attributes we will need if our global civilization is to survive and they are an  essential part of the  religious imagination”
Those who would banish religious formation from our schools should reflect on those words  of the former Chief  Rabbi of Great Britain.

ARE THERE ADEQUATE ALTERNATIVES TO RELIGION AS A SOURCE FOR A SOCIAL ETHIC?

  Of course, people who believe religious formation does not belong in schools  may argue that there are other sources available  to draw upon in   shaping the ethics of children. 
Could not   science, material progress, freedom, a secular ethic, or human rights perform that  role? 
Could a  combination of  these provide us with a sufficient sense of what is good and what is evil, so that we could safely banish religious belief to the private sphere,  as something unnecessary to the formation of future citizens? 
Science?
 Science, as we know, is a search for truth but, on its own, it has no inherent ethical boundaries. The application of science has given us marvellous medical advances, improved sanitation, and wonderful new means of communication.  But it has also given us the atom bomb, the depletion of scarce water resources, and climate change.
Material progress and rising living standards?  Should they be our goal and our guide?
Material progress has not been cost free. Beyond a certain point, which we in Ireland passed about 30 years ago, there seems to no correlation between improvement in average material  living  standards and  improved wellbeing.  This is a finding of economists who have been studying the “economics of happiness”.   
The same economic studies suggest that, when it comes to links between material wealth and a sense of wellbeing, everything is relative. If we can afford a better car than our brother in law, we feel well off. If we can only afford a cheaper one, we feel badly off.  Thus it becomes an endless and unsatisfying struggle.  A religious sense, if it is allowed to develop, would  put all these things back into proportion.
Freedom?
Should that be the goal? Should we just leave it to people to decide for themselves how to use their freedom, without any collective communal guidance?
 The trouble with “freedom” as a goal for society is that it is a purely individualistic concept. It says nothing about how we should treat other people. It would, for example, validate the pursuit of private profit regardless of the effect that has on other people, or on the environment.
 Freedom can only exist in the framework of law, otherwise it becomes chaos.  And law making involves value judgements, and the values underlying law have to come from a source above and beyond the law itself.   Otherwise law is just a malleable thing based on popular consensus and majority opinion, which as we know is highly fickle and contingent on emotional  waves. Majorities can be both  blind and unjust, at times.
Ethics, separate from religion? Is that a possibility?
 I think it is difficult to come up with a complete set of ethical principles, without  having a view about the purpose of human life, why we are here, and  thus who we are as humans. Some would argue that we can have a concept of human rights that is entirely separate from our concept of how each human being came in to existence and  from our sense of the value of that human life, and whether that life exists in any continuing form after  death.  I am not sure that this is possible.   I believe Christians could reach a wide level of agreement on a lot of human rights topics who believed this, but not complete agreement, I suggest. Why do I say that?
 Genomics, the science of genes, brings us up against the limits of such an approach.  Is it okay to “create” a new, better, man, with fewer diseases, in a test tube, to experiment with human beings, to discard some and retain  others?
I believe these are questions that go beyond any possibility of absolute determination by some system of secular, religion free, ethics
When do we become sufficiently “human” to have “human rights”? Are human right inherent from the beginning of life, or are they contingent on whether we can live independently, as some might argue? These issues cannot be decided for us by science on its own.  And in the absence of a scientific answer  he  question is left to politics . And, as we know from the debate about  abortion in other countries,  the best politics can come up with is some arbitrary rule, determined by a temporary political compromise of some kind.  That shows the limits  of the human rights model on its own, if it is separated from a deeper consensus on the nature and meaning of human life.
A similar problem of agreeing on common assumptions arises in a dialogue on human rights with countries like China, whose Marxist materialist ideology and Confucian ethic give it a different view on the value of individual lives. Islamic societies would also have different priorities than western societies, whose “secular” notions of human rights have roots in, often unremembered and unacknowledged, diluted Christian assumptions.
I believe the cultivation of a religious sense, through religious education is  a vital part of  education. Education is  about more that  a lot of facts.  It is about learning how to live, and how to make judgements. Anyone who sets out to educate children and prepare them for life, and  for making judgements,  has to start with their own belief of what constitutes a good life and good judgement. I think that is self evident.  So I think it follows that teachers need to believe what they are teaching and  schools do need to  have a shared  belief system

FAITH AND REASON ARE COMPATIBLE

Of course this does not mean that religion should have free rein, without critical rational challenge.  Without a constant questioning, faith can become a form of oppression, fanaticism that distorts our humanity.    As Pope Benedict said in his famous Regensburg address there is a proper dialogue that must always go on between faith and reason. They should influence one another constantly. Religion must check the hubris of faith, and faith that of reason.
As he said ,before  he became Pope, in a speech in Saint Etienne  in June  2004
“I would say that there can be no peace in the world without genuine peace between reason and faith, because without peace between reason  and religion, the sources of morality and law dry up”
So I would suggest respectfully to Ruairi Quinn that faith formation does have a place in our schools, a place that it should share peacefully with science, literacy,  mathematics and all  those other good  things.

Speech by John Bruton, former Taoiseach, in the series of “Lenten Lectures” on faith and public, policy organised jointly by the Catholic, Church of Ireland and Presbyterian parishes, in the Radisson Hotel, Dublin , at 8pm on the 7 April 2011