Ireland's Economic History: Crisis and Development in the North and South

Ireland's Economic History: Crisis and Development in the North and South

by Gerard McCann

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This book explores the complex developments that have shaped Ireland's economic development, north and south, and led to recurring crises and instability.

The Irish economy has been traditionally portrayed as a product of its political divisions and the colonial legacy, divided and analysed in terms of the hegemonic tensions that exist on the island. Influenced by these divisions, academics have tended to look at a two-region approach to economic development, without adequately acknowledging the interactive nature of the island economy as a source of the crises or as a solution to systemic divergence.

McCann's definitive and dynamic history of the Irish economy circumvents conventional analyses and investigates the economic development of the island economy as a whole, highlighting where aggressive differentiation has been divisive and destabilising. He concludes by considering an alternative integrated and cohesive process of economic development.

Product Details

ISBN-13: 9781783714896
Publisher: Pluto Press
Publication date: 09/12/2011
Sold by: Barnes & Noble
Format: NOOK Book
Pages: 256
File size: 2 MB

About the Author

Gerard McCann is a Senior Lecturer in International Studies at St Mary's University College (Queen's University, Belfast). He is Director of the Global Dimension in Education project and co-ordinates partnership initiatives with universities in Sub-Saharan Africa and the Middle East. He has written extensively on the European Union's development and education policies. He is the author of Ireland's Economic History (Pluto, 2011) and editor of From the Local to the Global (Pluto, 2015).

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The Act of Union between England and Ireland came into effect on 1 January 1801. From that point onward economic activity in Ireland was to change radically, with the ubiquitous and indigenous economic system – as it had evolved on the island until that period – being forced into a larger, more centralized laissez-faire trading system dominated by London. The shock that this brought to the island's economic base could be sourced to article six of the Act, which introduced a mechanism to abolish tariff protection for Irish produce, abolish the Irish exchequer and merge the currencies:

That, from the first day of january one thousand eight hundred and one, all prohibitions and bounties on the exports of articles, the growth, produce, or manufacture of either country, to the other, shall cease. ... That all articles, the growth, produce, or manufacture of either country ... shall from thenceforth be imported into each country from the other, free from duty. (Act of Union, 1 August 1800; available at

Not only did the Act introduce the Union Jack as a symbol of political intent, with the dissolution of the Irish Parliament it removed Irish stewardship over indigenous economic destiny. The relative autonomy of the Irish Parliament in Dublin and its economy was subsumed by London's commercial weight under the auspices of a compliant Anglo-Irish landed ascendancy. From their perspective, free trade between the two countries would assist in opening up the Irish market to commercial activity within the context of a larger system. One hundred Irish members of the Westminster Parliament would be able to platform Irish affairs and ensure that the adjustment to free trade would permit access for the Irish commercial and landed classes to the growing imperial and industrial market. The pay-off to the ascendancy for supporting the Union was obvious – 28 new Irish peerages were created and a further 20 peers were elevated within the ranks of the Lords (Kee 1976a: 158).

From another perspective, the Act was to usurp the commercial potential of the island in a colonial relationship that would change the Irish economic base in a manner that would destabilize the society for generations to come. The first act of resistance came as early as 23 July 1803 when the United Irishmen, inspired by the French revolution, staged a failed rebellion. Led by Robert Emmet, Thomas Emmet and Thomas Russell, their Proclamation of the Provisional Government introduced the first statement of independence for the island and a call to arms: 'You are now called upon to show the world that you are competent to take your place among the nations; that you have a right to claim their cognizance of you as an independent country' (Kee 1976a: 166). In its list of decrees it proposed a republic that would revoke the Union, abolish tithes, transfer all Church land to the new nation, introduce universal suffrage, and suspend all transfers of land and financial securities. The rebellion was suppressed within weeks and Robert Emmet was hung, drawn and quartered as a lesson to would-be resistants to the Union. R. R. Madden, in his homage to the 1798–1803 radicals and their attempts to decolonize Ireland (in The United Irishmen), considered the Anglo-Irish union prophetically:

Whether we contemplate past or present rule in Ireland every thing offers a warning against dangers, and woe betide the people, in such circumstances as ours, by whom it would be despised . ... God made the land, and all his works are good, Man made the laws, and all they breath'd was blood; Unhallowed annals of six hundred years, A code of blood – a history of tears! (Madden 1846: xi)

The economic changes that the Union brought were caught in the maelstrom of the times. Overshadowing the Act was an ongoing war with republican France and London's urgent priority to defend England against invasion. Westminster continued to fear a Jacobin rebellion in Ireland and believed that it needed to subdue an Irish population which was increasingly politicized, conscious of economic exploitation and resistant to military repression. This suspicion of the Irish by the English establishment and the ascendancy affected all 32 counties of the island. Edmund Curtis, in his History of Ireland, noted that an estimated 100,000 troops were stationed in Ireland going into the Act of Union to fortify it against external and internal subversion (Curtis 1952: 349). The Napoleonic wars had projected Ireland to a new level of threat for the Tory establishment under William Pitt, with the Act being seen as a means of controlling a volatile and exposed region. In the aftermath of the republican uprisings and the 30,000 deaths that their suppression cost, Ireland was constantly and vigorously monitored.

The state's reaction was to reinforce the garrisons and its military networks across the island, to create a rearguard defence – and to keep the economy of the island linked as closely as possible to the English supply chain. In the restructuring, Irish produce was put to new ends: wool, rope, uniforms, armaments, ceramics and agricultural production were adapted to support military demands. Consequently, in the aftermath of war with republican France the Irish economy suffered a major depression and the diversifying markets that had created prominent hubs of activity around Galway, Westport and Belfast contracted. Beyond its role as an island fortress, where significant aspects of economic life were integrated into the defensive complex, Ireland retained its primary role as a colonial supply route. Indeed, by the time of the famine in 1845 it was the barracks for more troops than were stationed in imperial India, with one British soldier for every 80 Irish people. Their role was straightforward – controlling the population, repressing resistance and assisting in the extraction of whatever was commercially viable.

The implications of article six of the Act were pervasive. The free trade 'partnership' that was mooted at the outset of Union dissolved rapidly into a colonial relationship, with Ireland as a dependent economy. Cecil Woodham-Smith reflected on the effects in The Great Hunger:

The hope of investment proved a delusion. Free Trade between the two countries enabled England to use Ireland as a market for surplus English goods; Irish industry collapsed, unemployment was widespread, and Dublin, now that an Irish Parliament sat no longer in College Green became a half-dead city. (Woodham-Smith 1991: 16)

The imposition of the Union forced change in commercial activity across the island – with the north-east acting to strengthen its cotton and linen manufacture, while the south and west underwent a coerced diversification process to become a supplier of agricultural products such as barley, livestock, wheat and potatoes. While profit gravitated towards the financial hubs of London and Dublin, prosperity was increasingly being distributed on the basis of location, family heritage, faith and loyalty. For the vast majority of the population of the island, however, the new order meant socio-cultural subjugation matched with grinding poverty. It brought reaction and comment. The Select Committee into the Disturbances in Ireland in 1824 cited a resident magistrate in Cork who stated: 'I have seen several countries and I never saw any peasantry so badly off' (House of Commons, Hansard, 1824: 300). On a visit to Ireland in 1825, Sir Walter Scott commented on the lives of the rural Irish: 'Their poverty has not been exaggerated: it is on the extreme verge of human misery' (quoted in Pomfret 1930: 8).

Contemporary observations on the extent of economic degradation in the early 1800s give some indication of the intensity of the adjustment process that took place post-union. The warping of production and market forces, and the elevation of the export side to make it more compliant to the demands of the larger neighbour, left a large proportion of the population vulnerable to change. Woodham-Smith pointed out that between 1801 and 1845 warnings about the volatile state of the Irish economy were noted by no fewer than 114 commissions and 61 special committees, each referring to impending crises (Woodham-Smith 1964: 31). Beyond Hansard and newsprint, there were also a number of key governmental reports, each cataloguing economic activity and poverty in Ireland in the years preceding the 1845 famine: the 'Poor Inquiry' of 1835–6, the Census of 1841 and the report of the 'Devon Commission' in February 1845. There were also a series of period observations which, together with the state's evidence, provided an intimate portrait of conditions on the colony. In sequence, they were Edward Wakefield's An Account of Ireland, Statistical and Political (1812), James Ebenezer Bicheno's Ireland and its Economy (1830), Henry Inglis's A Journey Through Ireland (1834), Alexis de Tocqueville's Journeys to England and Ireland (1837), Gustave de Beaumont's L'Ireland: sociale, politique et religieuse (1839), William Makepeace Thackeray's The Irish Sketchbook (1843) and J.G. Kohl's Travels in Ireland (1844). Collectively, they presented a distressing view of a society and an economy on the verge of collapse. Thackeray presented a penpicture of life in the Irish townlands at this juncture:

The houses have a battered rakish look, and seem going to ruin before their time. As seamen of all nations come hither who have made no vow of temperance, there are plenty of liquor-shops still, and shabby cigar-shops, and shabby milliners' and tailors' with fly-blown prints of old fashions. The bakers and apothecaries make a great brag of their calling, and you see MEDICAL HALL, or PUBLIC BAKERY, BALLYRAGGET FOUR-STORE (or whatever the name may be) pompously inscribed over very humble tenements. Some comfortable grocers' and butchers' shops, and numbers of shabby sauntering people, the younger part of whom are barelegged and bareheaded, make up the rest of the picture which the stranger sees as his car goes jingling through the street. (Thackeray 1843: 12; also see the repository)

The psychological imposition of colonial Ireland proved to be as pervasive as the economic. 'A Child of the Dust Must Not Be Proud', written repeatedly on slates by children in pre-famine Ireland, was one of the most common National School punishments for minor misdemeanours. It is quite a complex statement, but it says more about the system that formed a population into the colonial mindset of the period than about the impoverished children late for school. The Copy Book punishments mirrored the political economy of the day – structured, hierarchical and repressive (Scally 1995: 158). Social positions were asserted clearly in a popular Irish hymn of the time: 'The rich man in his castle, the poor man at his gate, God made them high and lowly and ordered their estate. All things bright and beautiful, all creatures great and small....' The structure and composition of Irish society resembled a jigsaw of economic and cultural activity dominated by agricultural production for export, emigration and shipping between the island and the neighbouring industrializing cities of Liverpool, Manchester and Bristol. The island's east–west divide was also cemented at this period, as Dublin's powerful economic interests recoiled from the hinterland of the west.

The gaelic areas of the island had changed little since the Huguenots arrived in the early 1700s, while the east of the island – increasingly concentrating around Dublin and Belfast – had bustling trading links shipping wheat, barley, tobacco, cotton cloth, whiskey and labour to and from competing English and Scottish ports. Liverpool in particular saw a trade flow from Ireland that gave it a unique position in the development of the island. Built on the profits of the African slave trade and its proximity to the expanse of agricultural land and to the Atlantic Ocean, Liverpool was elevated to become a trading hub in the way that London had become the financial and political powerbase of the two islands. A feature that was to become significant for the evolution of the Irish economy was the role of shipping labour to and from Liverpool docks throughout the 1800s. Liverpool's century began with 'cargoes' of slaves from Africa to the Caribbean and ended with the freighted Irish peasantry in all its desperation at the height of the mill system.

The era just prior to the famine saw a society on the verge of catastrophe, with an agricultural economy strained and exploited, residing uncomfortably with a nascent modernity, yet seeking dependence on British commercial and imperial power. The economic culture that was prevalent in English society – dominated by an utilitarian mix of capital appreciation, surplus value, labour and its division, manufacturing and ultimately profit – brought an alien economic culture to the Irish. For the English commercial managers Irish economic culture was antiquated, backward and unprofitable. Their target was the informal economy and means of exchange that would have been commonplace in Irish communities, notably in the rural west, and seemed incompatible with the regulated monetary system that accompanied free trade. Indeed, as Robert Scally pointed out in The End of Hidden Ireland, two distinct economic cultures were present in Ireland in the 1830s, one looking eastward to the commercial 'sophistication' of London and the other to a communitarian and indigenous form. The social and economic differences were profound:

emigration from the townlands before the famine was restrained by a culture and worldview consonant with this seclusion, deeply suspicious of outsiders, secretive in its dealings with them, and scornful of those who strove to become like them, whether in regard to property, social station, or personal ambition. (Scally 1995: 7)

While the management of the state's economy was bureaucratic, with dealings often documented in an assiduously methodical manner, the social economy of Ireland retained many of the mores pertinent to more flexible methods of commercial activity. This indigenous culture would repeatedly frustrate the establishment of what was ostensibly a London-focused market system. By holding on to the obstinate economic culture of rural Ireland the Irish showed themselves to have more akin with other colonial economic cultures than the disciplining laissez-faire culture of the south-east of England.

For most of Ireland in the pre-famine economy, activity was not geographically centralized or monetarily fixed. The dominant commercial centres outside the ports were the village markets which served tenant cottages and small farming communities. The centres of Irish society were the bailia (ballys), clusters of smallholdings dotted throughout the landscape where families and immediate communities would have resided for centuries. Its patchwork form remained its strength, giving a sense of collectivity and local identity, self-sustaining when permitted to harvest its own resources. The jigsaw-like pattern of this gaelic model of settlement can be seen in the Ordnance Survey records of the 1830s, with communities often described as baile fearann (home towns) representing the link between townland communities and extended families. One of the most insightful pre-famine investigations of the nature and form of the bailia (and the clachan, Irish village) came from the federalist philosopher Alexis de Tocqueville. Tocqueville's observations were taken in the summer of 1835 and referred to various aspects of Irish life and economic activity at this crucial juncture (Tocqueville 1968: 154–5). The picture he painted of rural Ireland in Journey's to England and Ireland was of a pre-industrial world of lime-whited thatched cottages, grouped occasionally into small communities and focusing on local and often isolated market towns. This was the environment where most Irish lived, with barefooted poverty, sociological complexes respectful of gaelic heritage and folklore, resistant to the recently repealed penal laws, with historical patterns of worship, knowledgeable of a European diaspora, and of the French and American revolutions.


Excerpted from "Ireland's Economic History"
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Copyright © 2011 Gerard McCann.
Excerpted by permission of Pluto Press.
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Table of Contents

1 The colonial economy (1831–1860),
Land and laissez-faire,
The famine economy,
2 Post-famine adjustment and industrialization (1861–1921),
The new reality,
War as stimulus,
3 Partition and depression (1921–1939),
The northern 'dominion',
Economic war,
4 The impact of war (1939–1957),
War economy in the north,
Post-war reconstruction,
5 Modernization and the conflict economy (1958–1987),
Opening the north,
Into the European Economic Community,
The conflict economy in the north,
The bleak 1980s,
6 The peace dividend (1988–2001),
Integrating the border as an answer,
Regionalization as development,
The Agreement,
7 Neoliberal Ireland,
From model to miracle,
The collapse,

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