Dr. Tom McDonnell:

It is important for a number of reasons. Ireland has developed in a very different way. Education spending was originally through the church and the same applied to health. In the northern European countries, however, a pact was reached between what might be called social democratic or even socialist parties and Christian democratic parties on the other side. To offset revolution, as had been seen in the Soviet Union, for example, a welfare state was built up. They had built up a welfare state decades before we did. Part of that was an insurance model like the National Health Service in the UK, for example, but it also included pension benefits and so on.

There are drawbacks with the social insurance model, of course. For example, the original social insurance model was very much based upon the male breadwinner, and often the benefits did not necessarily go to the spouse, or to women or whoever it might have been. Broadly speaking, the way it works is that all the money is collected, it is put into a pot, and then workers gain benefits in terms of health care, pensions, unemployment benefits and so on, which insulate them. It is effectively an insurance mechanism for when things go wrong.