Ireland's uneven development

Shaun Harkin reviews three books on the impact of imperialism and colonialism on Ireland’s economic development

Ireland’s Economic History:

Crisis and Uneven Development in the North and South

Ireland in the World Order:

A History of Uneven Development

Towards A Second Republic:

Irish Politics After the Celtic Tiger

THE REPUBLIC of Ireland’s unprecedented economic expansion between 1995 and 2007 was widely viewed with wonder and celebrated by the advocates of neoliberalism as a model for other developing countries. According to McCann, during this period of unprecedented growth southern Ireland went “very quickly from being one of the least developed regions in the European Union, in constant need of structural funding, to being statistically on par with Japan and the United States in per capita GDP terms.”

All of this came to a halt beginning in 2007. As the shockwaves of Wall Street’s meltdown spread out from New York City harbor and east across the Atlantic, capital inflows to Ireland abruptly ended, American corporations vanished, and property prices collapsed. The Irish government bailed out Irish banks with taxpayer savings. In exchange for loans to cover massive debt, the Irish government invited the International Monetary Fund, the European Commission, and the European Central Bank to Dublin to determine austerity measures and future economic policy. Unemployment rocketed, migration reversed, and austerity policies cut social services to the bone.

What created the boom and the bust? McCann argues that the “neoliberal method of forcing a society into an artificial, eminently destructive economic process should be seen as not new to Irish history. Its patterns of development have been familiar, involving land deals, corrupt politicians, cronyism, monopolies, financial scandals that has placed profit for a few above the needs of the rest. The disastrous outcomes have been similar across a number of moments in Irish economic history.”

McCann aims “is to explore the contention that the political economy of the island of Ireland and its dominant ideological form—emanating from classical liberalism through to neoliberalism—has been a, if not the, cause of this turbulent history.”

Secondly, McCann contends, the Irish economy has to be analysed not as two distinct entities, as it has in the past by most commentators, but in a way that takes into account “the interactive nature of these border economies.”

The book covers an expansive historical period making it ambitious. Chapters are arranged to look at sequences in Ireland’s economic development beginning with “the colonial economy, famine” and leading on to “industrialization and militarization, partition, the war economies, the modernization process, the conflict economy, the role of the border, peace and reconciliation, neoliberal Ireland and the recession.”

By the time of the outbreak of the 1845 Famine there were more troops stationed in Ireland than imperial India; “one British soldier for every 80 Irish people.” The role of the military was “straightforward—controlling the population, repressing resistance and assisting in the extraction of whatever was commercially viable.”

English dominance, increasing commercialism, land marketization, landlordism, and tenant evictions generated growing dissent and led to increasingly bitter struggles over access to land.

While Irish society remained convulsed and traumatized by the Famine, market penetration, agricultural modernization, and industrialization continued apace but in a very uneven way, creating the future regional economic divergences that would shape Irish politics to the present.

The north industrialized at an unprecedented speed between 1850 and 1890, but southern Ireland struggled to maintain its manufacturing base. McCann writes, “The economy of the north-east had survived the worst years of the famine and, with its proximity to Glasgow, Liverpool, and Manchester had been able to create an industrial based around linen and rope production, tobacco packaging, and eventually shipbuilding.”

Home Rule was defeated in 1886, but Irish nationalism grew stronger and proliferated throughout every aspect of society on the back of emerging Catholic middle-class landownership. Irish Parliamentary Party leader John Redmond recruited Irish volunteers to fight for Britain during the war; ultimately some two hundred thousand Irishmen fought on the side of the Allied powers. Redmond believed Irish blood sacrificed for the British war effort would demonstrate loyalty to the empire and guarantee political support in Westminster for passage of and implementation of a new Home Rule bill. Redmond favored Home Rule over support for a republic because he calculated the link with Britain was crucial for Ireland’s economic development.

Aspirations that revolution would give birth to a new Ireland were dashed early on. A brutal civil war followed the signing of the treaty with Britain. The state’s governing regime would be procapitalist and allow Catholic conservatism to smother the country. The economy stumbled into the 1930s in such a weak position that the global depression had only a marginal impact on employment.

The new, and highly sectarian, Northern Ireland statelet, according to McCann, was “organically tied to the ebbs and flows of the British economy. Financial, fiscal, and monetary policies were shaped through the Treasury in London, yet the North was cut from a national economic hinterland in the Free State. It was to be the only region in the United Kingdom to have a border economy to deal with, and all the dislocation that this came to represent.”

In the “peace process” era the power-sharing northern administration “sought to mimic the neoliberal model in the south and to play off the perceived successes of the Celtic Tiger.” However, a number of factors meant the boom could make only limited inroads in the north. Firstly, the Republic had a corporate tax rate of 12 per cent, whereas it was 28 per cent for Britain including the North. Secondly, decades of war and political instability meant the North was viewed as a less than ideal location for multinational corporations.

Included in the Northern Ireland peace framework are multiple areas where there can be economic cooperation across the border. McCann appears optimistic that this “development process” can lead to economic revitalization of the country as a whole and especially border areas affected disproportionately because of partition. There’s no doubt this could be a positive development, but in an era of neoliberal austerity this isn’t an automatic outcome; cross border cooperation can become a tool for rationalization, privatization, lay-offs, and wage-cuts.

McCann argues that an alternative to “market fundamentalism” is needed, one that includes “social justice.” The content of this alternative and how to create it is left incredibly vague, however. McCann rejects “neoliberal” globalization but not necessarily capitalism in its entirety.

Oddly, he makes the case that the state visit by Queen Elizabeth II to the Republic of Ireland in 2011 “offered an insight into the potential peace building between the islands and within Ireland itself.” It goes without saying that the British monarchy is an antiquated institution, but it continues to play an important role in maintaining the status quo for the ruling class. The British Empire, for the most part, is long gone, but Britain is still a neoliberal imperial power and the Queen its titular head. Rather than the potential for peace this visit represents neoliberal normalization.

This is an extremely useful book and a very important contribution. McCann effectively demonstrates how economic frameworks and political decisions pursued by elites over the past two hundred years, be they in Brussels, London, Dublin or Belfast, have had an adverse impact on the vast majority of people on either side of the Irish border. Within the study of Irish economic history, and Irish history more generally, Ireland’s Economic History can help to challenge an orthodoxy that attempts to reduce the impact of colonialism, naturalize for-profit economics, and continues to promote policies benefiting the rich and powerful.

In his fascinating study of Irish economic, social and political history Coakley aims to explore Ireland’s position in the formation of the modern world order and why it developed unevenly, and differently from neighboring England, Scotland, and Wales. He argues that the “dominant currents within Irish historical studies avoided any exploration of the structural relationship between Ireland and Britain as a matter of methodological principle. Notions of colonialism were considered redundant.” In this framework, British governance in Ireland is viewed as a civilizing force and Irish resistance “narrow, primitive and atavistic.”

The industrial revolution motored Britain into the position of the preeminent global power in the nineteenth century. Ireland’s failure to industrialize was viewed as evidence of innate backwardness and the hold of mystical Catholicism. The northeast of Ireland, particularly around Belfast, industrialized, but the region had a Protestant majority so reinforced the notion of Catholic inferiority.

Coakley argues, to the contrary of these arguments, that colonialism is key to understanding Ireland’s economic development. “It was Marx’s study of Ireland,” he writes, “which led him to doubt earlier optimism of the impact of capitalist expansion.” For Coakley, underdevelopment is the “collateral damage” of capitalist expansion.

Utilizing the insights of Denis O’Hearn, Coakley contends trade and manufacturing restrictions imposed by England on Ireland in the context of an Atlantic economy are a critical factor in shaping its economic development. He also also attempts to integrate Robert Brenner’s theoretical framework of agrarian capitalist development, but in reverse.

The dynamic of England’s industrialization led to increasingly commercialized and market-oriented agriculture in Ireland and Scotland. In the 1760s agrarian resistance movements spread across the most commercially developed areas of Ireland. Colonial rule blocked the development of a social layer of tenant farmers who could collaborate with landlords in advancing production. Anglo-Irish landlords faced intense loathing from the Irish Catholic countryside, except in the northeast of the island, where the “Ulster Custom” between Protestant tenants and landowners had an impact on the region’s industrialization.

Trade restrictions, followed by “free trade” imposed by the English Parliament caused “de-industrialisation” in the nineteenth century of Ireland’s already weak industrial base. “It was not so much that Ireland developed more ‘slowly’ than England in the early modern era,” writes Coakley. “Actually, Ireland developed very rapidly in the early modern era as evidenced by the growth of markets, exports, and population. It was that this growth was of a hugely destructive character, resulting in extreme degrees of poverty, misery and ultimately famine, a phenomenon that would become known as ‘underdevelopment.’”

Britain’s global dominance was fundamentally challenged in the Great War. Death in the trenches destroyed the authority of British rule, and rebellion swept across Ireland. Coakley argues that the “crucial significance of Irish independence, for all its limitations and hesitations, is that it began the breakup of the British Empire.”

At the same time, the social and economic policies of the new Irish Free State differed little from the era of British rule. Ireland continued to be dominated by the British market, where 90 per cent of Irish goods were exported.

Today, in the ongoing aftermath of the 2008 crisis, both the Northern Irish and the Republic of Ireland states are imposing austerity largely at the dictate of external powers. Coakley calls this a new “neo-imperial” phase of Irish history that Irish elites are fully complicit in.

Instead of austerity, Coakley calls for the repudiation of bankers’ debt as an alternative to structural adjustment and the destruction of public services. If resistance for different social priorities and a reorganized Europe does not emerge, Coakley is correct to argue that a dystopian future awaits Ireland.

In their detailed study of Irish political institutions, how the boom was managed, and a comparative analysis of Ireland’s role in the world economy, Kirby and Murphy argue the Celtic Tiger, despite the hype, failed to solve Ireland’s long-standing development problems. The crisis and what it has exposed demonstrates the “Malaise at the heart of the Irish project of Independence.”

Ireland’s political system is deeply dysfunctional, with golden circles of political, economic, and social elites enmeshed in a culture of corruption. According to a 2007 Bank of Ireland wealth report “5 per cent of the population owned two-thirds of Irish wealth.”

Kirby and Murphy argue that while the international banking crisis triggered the Irish economic crisis, the deeper causes were very much home grown. An indigenous Irish elite overlaps with an international elite. For the boom to occur, Ireland had to contort itself into an extension of the US economy and adapt itself to the needs of global corporations. US corporations such as Google and Microsoft were notorious for using Ireland to evade paying taxes and US pharmaceutical companies used transfer-pricing to increase profits from 5 percent to up to 50 percent. The state-led pursuit of multinationals from the 1960s on weakened the trade union movement. Dissent was coopted and managed through a “social partnership” agreement that became embedded in the late 1980s along with austerity.

To understand modern Ireland, Kirby and Murphy contend, the phenomenon of Fianna Fáil (Soldiers of Destiny), the Republican Party must be understood. Fianna Fáil formed as a political party in 1926 after refusing to accept the treaty with Britain that partitioned Ireland and denied full republic status. After first coming to power in 1932, Fianna Fáil then went on to dominate Irish politics for the next seventy years. Fianna Fáil viewed itself not simply as a political party but as a “national movement.” The failure of labor to present itself as a viable alternative in the early years of the new Irish state allowed populist nationalist parties to win the allegiance of working-class voters. The authors argue Fianna Fáil can be viewed as similar “to the Congress party in India, the PRI in Mexico, the Christian Democrats in Italy and the LDP in Japan, all of which have in common centrist policies and patron-client relations.”

The permanence of Fianna Fáil in power allowed a conservative Irish state bureaucracy and civil service to develop as a “permanent government” with immunity for high-level civil servants. In Ireland’s transition from British rule during 1921–22 to the Irish Free State, over 98 percent of the over twenty thousand members of the Irish civil servants retained their posts.

Gender inequality, Kirby and Murphy argue, is deeply embedded in Irish society and political institutions, reflected in the fact that Ireland was ranked by the UN as seventy-eighth in the world for female representation in parliament. In 2006 women’s average hourly wage was 86 percent of men’s.  In assessing the losers in the aftermath of the Celtic Tiger, they write: “Lone-parent households are the most at risk of poverty, with a rate of 36.4 percent. It is the cross-cutting nature of disadvantage that really impacts on women’s inequality. The intersection of gender inequality with other areas of discrimination renders a double disadvantage for women Travellers, women migrant, women with disabilities, and women who are homeless.” Meanwhile the winners are “drowning in champagne.”

The Celtic Tiger and the globalization of the Irish economy also had a tremendously detrimental ecological impact: “Ireland’s greenhouse emissions had increased steadily from 55.5 million tons to 70.7 million between 1999 and 2001.”

The authors describe in detail the various aspects of the Northern Ireland peace agreement that was overwhelming supported in a referendum held on either side of the border in 1998. The economic peace dividend, however, did not occur, and though they acknowledge further integration between North and South is possible, they contend that the “sectarian logic of the consociational institutions” has the potential to institutionalize divisions.

In the 2011 national elections Fianna Fáil suffered a devastating and humiliating political defeat. However, the coalition government made up of Fine Gael and the minority Labour Party has continued with austerity and in pursuing a neoliberal development strategy.

To point a way forward towards a new republic, Kirby and Murphy document the role and potential of left-wing parties and of social movements. They appear surprisingly confident in the notion that if the government coalition of 1994–1997 had been reelected in 1997, market regulation, social investment, and social equality would have been pursued. Furthermore, they argue, the 2007 collapse could have been avoided.

They don’t grapple with the impact decades of “social partnership” have had on the capacity of trade unions and the broader working class to struggle effectively. In determining the content of a new republic, the authors favor the development of an “ecological or ethical socialist model,” but argue that unfortunately this model is not likely to win majority support.

This is an extremely useful contribution to the wide discussion about the future of Ireland and the need for root and branch transformation. However, the academic character of the book leads to a lack of precision when discussing alternatives and how they can be achieved. 

Issue #103

Winter 2016-17

"A sense of hope and the possibility for solidarity"

Interview with Roxanne Dunbar-Ortiz
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