Economic history of Ireland

Last updated

Ireland's economic history starts at the end of the Ice Age when the first humans arrived there. Agriculture then came around 4500 BC. Iron technology came with the Celts around 350 BC. From the 12th century to the 1970s, most Irish exports went to England. During this period, Ireland's main exports were foodstuffs. In the 20th century, Ireland's economy diversified and grew. It is now one of the richest countries in the world by GDP per capita.

Contents

To 1700

Traditional land use in Ireland. Www.wesleyjohnston.com-users-ireland-maps-island agriculture.gif
Traditional land use in Ireland.

The first settlers in Ireland were seafarers who survived largely by fishing, hunting and gathering . This was the extent of the Irish economy for around 3500 years – until 4500BC when farming and pottery making became widespread. Sheep, goats, cattle and cereals were imported from Britain and Europe. Wheat and barley were the principal crops cultivated. There was an economic collapse around 2500BC and the population declined from its peak of around 100,000. Metalworking began in Ireland around 2500 BC, with bronze being the principal metal used. Swords, axes, daggers, hatchets, halberds, awls, drinking utensils and horn-shaped trumpets were produced in the period 2500BC – 700BC (the Bronze Age). Mining began also around this time. Mines in Cork and Kerry are believed to have produced as much as 370 tonnes of copper during the Bronze Age. The Celts brought iron technology to Ireland around 350 BC. They established kingdoms and a system of rule, which enabled the economy to be regulated for the first time.

In the 12th century, Ireland was invaded by the Normans. During these times, the economy was predominantly one based on subsistence farming, mainly oats and potatoes (after the 16th century) and other forms of tillage. An important industry developed on the south coast involving catching, processing and exporting pilchards (see Munster pilchard fishery 1570-1750).

18th century

The major change in the 18th century was the large amount of infrastructural development of Ireland; turnpike roads were established by the Parliament of Ireland from 1734. From 1756 the Grand Canal was built from Dublin towards the Shannon; the Ulster Canal (1783) and the Royal Canal (1790) followed. The "Money Bill dispute" of 1753 revealed a tax surplus that was maintained until the 1790s.

In the 18th century English trade with Ireland was the most important branch of English overseas trade 1 . Absentee landlords drew off some £800,000 p.a. in farm rents in the early part of the century, rising to £1 million, in an economy that amounted to about £4 million. Completely deforested for timber exports and a temporary iron industry in the course of the 17th century, Irish estates turned to the export of salt beef and pork and butter and hard cheese through the slaughterhouse and port city of Cork, which supplied England, the Royal Navy and the sugar colonies of the West Indies. The bishop of Cloyne wondered "how a foreigner could possibly conceive that half the inhabitants are dying of hunger in a country so abundant in foodstuffs?" 2 . The weather-related famine of 1740–41 caused the death of a third of the population in some areas. Despite this, the population increased from about 2.5 million in 1700 to 5 million in 1800. [1]

Irish trade was stifled by the Navigation Acts which limited Irish exports. These were repealed in 1779 due to pressure from the Irish Patriot Party, and fostered a brief boom in the 1780s. Under pressure from salted meat exported from the Baltic and from the United States, the Anglo-Irish landowners rapidly switched to growing grain for export, while most Irish ate potatoes and groats. The Royal Exchange was built in 1769, and in 1781 a new Custom House was started.

19th century

The 19th century quickly saw the merger of the Kingdom of Ireland into the Kingdom of Great Britain, to create the United Kingdom of Great Britain and Ireland with effect from 1 January 1801. This had wide-reaching consequences, especially when the expectation of Roman Catholic Emancipation took longer to emerge than had been foreseen, leaving Ireland chiefly represented by the Anglo-Irish and the Ulster Scots in the combined parliament sitting at Westminster.

For much of the 19th century, the only factories in Ireland were the textile mills of the north, the Guinness brewery, and the Jacob's biscuit factory in Dublin. For much of the period, the Irish economy provided cheap raw materials such as timber, beef, vegetables, and marble to the far more industrialised British economy. Ireland underwent major highs and lows economically during the 19th century: from economic booms during the Napoleonic Wars [ citation needed ] and in the late 20th century (when it experienced a surge in economic growth unmatched until the 'Celtic Tiger' boom of the 1990s), to severe economic downturns and a series of famines, the latest threatening in 1879. The worst of these was the Great Famine of 1845–1852, in which about 1,000,000 people died and another million had no option but to emigrate, with millions more leaving in the following decades.

During the international Post-Napoleonic depression (1815–1821) following the conclusion of the Coalition Wars (1792–1815), wheat and other grain prices fell by half in Ireland, and alongside continued population growth, landlords converted cropland into rangeland by securing the passage of tenant farmer eviction legislation in 1816, which led, because of the Irish workforce's historic concentration in agriculture, to a greater subdivision of remaining land plots and increasingly less efficient and less profitable subsistence farms. [2] [3]

Ireland's economic problems were in part the result of the small size of Irish landholdings. In particular, both the law and social tradition provided for subdivision of land, with all sons inheriting equal shares in a farm, meaning that farms became so small that only one crop, potatoes, could be grown in sufficient amounts to feed a family. Furthermore, many estates, from whom the small farmers rented, were poorly run by absentee landlords and in many cases heavily mortgaged.

When potato blight hit the island in 1845, much of the rural population was unable to access the remaining food – wheat, livestock etc. which was due to export to Britain. At this time British politicians such as the Prime Minister Robert Peel were wedded to a strict laissez-faire economic policy, which argued against state intervention of any sort. While some money was raised by private individuals and charities (Native Americans sent supplies, while Queen Victoria personally donated £1,000) British government inaction (or at least inadequate action) led to a problem becoming a catastrophe; the class of cottiers or farm labourers was virtually wiped out. [4]

The famine spawned the second mass wave of Irish immigration to the United States, the first having been the migrations of the 18th century. There was also a large amount of emigration to England, Scotland, Canada, and Australia. This had the long term consequence of creating a large and influential Irish diaspora, particularly in the United States, who supported and financed different Irish independence movements, beginning with the Irish Republican Brotherhood. From 1879 a "Land War" developed, and by 1903 many farmers were able to buy their land, but usually chose small and uneconomic lots.

In east Ulster the industrial revolution led to rapid urbanization. Belfast grew from a population of 7,000 in 1800 to 400,000 in 1900, having outgrown Dublin, the former capital.

In the 1890s, the Irish agricultural cooperative movement flourished, with bodies such as the Irish Agricultural Organisation Society becoming important elements of the economy. [5] Cooperatives greatly increased the productivity of Irish agriculture, especially in the dairy sector, while also playing a part in the growth of Irish nationalism. [6]

A 2022 study, using a newly constructed dataset on Irish industrial output, found, "Irish industrial output grew by an average of 1.3 per cent per annum between 1800 and the outbreak of the First World War... While Ireland did not experience absolute deindustrialisation either before the Famine or afterwards, its industrial growth was disappointing when considered in a comparative perspective." [7]

History since partition

After the War of Independence, most of Ireland gained independence from the United Kingdom. Twenty-six counties of Ireland became the Irish Free State, later described as the Republic of Ireland, while the other six remained in the Union as Northern Ireland. There had already been a significant economic divide between these two parts of Ireland, but following partition both regions further diverged, with Belfast, as the North's economic centre, and Dublin becoming the capital of the Free State. Partition had a devastating effect on what became Ireland's border area. County Donegal for example was economically separated from its natural regional economic centre of Derry. The rail network struggled to operate across two economic areas, finally closing across a vast swath of Ireland's border area (the only cross-border route left being that between Belfast and Dublin). The last remaining cross-border line (Belfast-Dublin) could not have operated after 1953 without government support.

Both parts of Ireland in effect used pound sterling (to which the Irish pound was pegged) until 1979 (when the peg was removed). As a result, both parts also shared in any inflation or deflation in the value of sterling, with interests rates being determined in London. The continuing link to sterling from 1922 to 1979 underlines how much the economy of the south depended upon exports to (and remittances from) Britain, even though it was politically independent.

In general the economy of the Republic was much weaker than that of the North throughout the 20th century, being based on agriculture; and much of that also being based on uneconomically small farms. Protectionism was introduced by Seán Lemass in 1932 and the economy became isolated. From 1945 to 1960 Ireland missed out on the European economic boom across Europe, and 500,000 people emigrated. A major policy change followed the issue of TK Whitaker's economic model in 1958, and the Republic slowly embraced the industrial world. Most Irish exports continued to go to Britain until 1969. Lemass reversed his policies in 1959 and the economy started to grow.

According to economic historian Kevin O’Rourke, the Irish economy remained underdeveloped for extended periods of time due to its excessive dependence on an underperforming British economy. He argues that European integration, which reduced dependence on the UK, substantially improved the Irish economy. [8]

Meanwhile, the main northern industries based on shipbuilding, ropes, shirts and textiles declined from 1960, and then more so due to the 1970s 'Troubles' in Northern Ireland, despite government investment in projects such as the Belfast DeLorean plant. In 2005 the northern economy was supported by a net annual "subvention" from London of £5 billion, an amount that has risen over time. [9]

Conversely, after a bleak period in the 1970s and 1980s, the Celtic Tiger era in the Republic was spurred on by the high technology industries that took root in the country in the mid-1990s. The southern economy also benefited relatively more after 1973 up to 2002 from the European Structural Funds system. It grew markedly until 2007, but no corrective measures were taken to control the process, leading to the 2008 crisis.

However, since 2014, the Republic of Ireland has seen large economic growth, referred to as the "Celtic Phoenix".

See also

Footnotes

  1. See: Braudel, F, 1979. (Page Number Needed)
  2. See: Plumb, J.H., 1973. (Page Number Needed)

Further reading

Related Research Articles

<span class="mw-page-title-main">Great Famine (Ireland)</span> Famine in Ireland from 1845 to 1852

The Great Famine, also known within Ireland as the Great Hunger or simply the Famine and outside Ireland as the Irish Potato Famine, was a period of starvation and disease in Ireland from 1845 to 1852 that constituted a historical social crisis which subsequently had a major impact on Irish society and history as a whole. With the most severely affected areas in the west and south of Ireland, where the Irish language was dominant, the period was contemporaneously known in Irish as an Drochshaol, literally translated as "the bad life". The worst year of the period was 1847, which became known as "Black '47". During the Great Hunger, roughly 1 million people died and more than 1 million fled the country, causing the country's population to fall by 20–25% between 1841 and 1871. Between 1845 and 1855, at least 2.1 million people left Ireland, primarily on packet ships but also on steamboats and barques—one of the greatest exoduses from a single island in history.

<span class="mw-page-title-main">Ireland</span> Island in the North Atlantic Ocean

Ireland is an island in the North Atlantic Ocean, in north-western Europe. It is separated from Great Britain to its east by the North Channel, the Irish Sea, and St George's Channel. Ireland is the second-largest island of the British Isles, the third-largest in Europe, and the twentieth-largest in the world.

The Popery Act of 1704 required land held by Roman Catholics to be divided equally between all a landholder's sons, both legitimate and illegitimate, on his death. This had formerly been normal under the law of gavelkind, a law abolished by the Dublin administration in 1604. Known as sub-division, this inheritance practice continued by tradition until the middle of the 19th century.

<span class="mw-page-title-main">Irish Famine (1740–1741)</span> Famine in the Kingdom of Ireland

The Irish Famine of 1740–1741 in the Kingdom of Ireland, is estimated to have killed between 13% and 20% of the 1740 population of 2.4 million people, which was a proportionately greater loss than during the Great Famine of 1845–1852.

<span class="mw-page-title-main">British Agricultural Revolution</span> Mid-17th to 19th century revolution centred around agriculture

The British Agricultural Revolution, or Second Agricultural Revolution, was an unprecedented increase in agricultural production in Britain arising from increases in labour and land productivity between the mid-17th and late 19th centuries. Agricultural output grew faster than the population over the hundred-year period ending in 1770, and thereafter productivity remained among the highest in the world. This increase in the food supply contributed to the rapid growth of population in England and Wales, from 5.5 million in 1700 to over 9 million by 1801, though domestic production gave way increasingly to food imports in the 19th century as the population more than tripled to over 35 million.

<span class="mw-page-title-main">History of Ireland (1801–1923)</span> Irish history between the Acts of Union of 1800 and the formation of the Irish Free State in 1922

Ireland was part of the United Kingdom from 1801 to 1922. For almost all of this period, the island was governed by the UK Parliament in London through its Dublin Castle administration in Ireland. Ireland underwent considerable difficulties in the 19th century, especially the Great Famine of the 1840s which started a population decline that continued for almost a century. The late 19th and early 20th centuries saw a vigorous campaign for Irish Home Rule. While legislation enabling Irish Home Rule was eventually passed, militant and armed opposition from Irish unionists, particularly in Ulster, opposed it. Proclamation was shelved for the duration following the outbreak of World War I. By 1918, however, moderate Irish nationalism had been eclipsed by militant republican separatism. In 1919, war broke out between republican separatists and British Government forces. Subsequent negotiations between Sinn Féin, the major Irish party, and the UK government led to the signing of the Anglo-Irish Treaty, which resulted in five-sixths of the island seceding from the United Kingdom, becoming the Irish Free State, with only the six northeastern counties remaining within the United Kingdom.

<span class="mw-page-title-main">Economic history of the Republic of Ireland</span>

The economic history of the Republic of Ireland effectively began in 1922, when the then Irish Free State won independence from the United Kingdom. The state was plagued by poverty and emigration until the 1960s when an upturn led to the reversal of long term population decline. However, global and domestic factors combined in the 70s and 80s to return the country to poor economic performance and emigration. The 1990s, however saw the beginning of unprecedented economic success, in a phenomenon known as the "Celtic Tiger", which continued until the 2008 global financial crisis, specifically the post-2008 Irish economic downturn. It also led to Ireland becoming the most indebted state in the European Union. As of 2015, the Republic has returned to growth, and was the fastest growing economy for that year. Since August 2017, Irish unemployment has been at a 9-year low of 6.1%. [outdated]

<span class="mw-page-title-main">Economic history of India</span> History of economy in India

India was one of the largest economies in the world, for about two and a half millennia starting around the end of 1st millennium BC and ending around the beginning of British rule in India.

<span class="mw-page-title-main">History of agriculture</span>

Agriculture began independently in different parts of the globe, and included a diverse range of taxa. At least eleven separate regions of the Old and New World were involved as independent centers of origin. The development of agriculture about 12,000 years ago changed the way humans lived. They switched from nomadic hunter-gatherer lifestyles to permanent settlements and farming.

<span class="mw-page-title-main">History of Ireland (1691–1800)</span>

The history of Ireland from 1691–1800 was marked by the dominance of the Protestant Ascendancy. These were Anglo-Irish families of the Anglican Church of Ireland, whose English ancestors had settled Ireland in the wake of its conquest by England and colonisation in the Plantations of Ireland, and had taken control of most of the land. Many were absentee landlords based in England, but others lived full-time in Ireland and increasingly identified as Irish.. During this time, Ireland was nominally an autonomous Kingdom with its own Parliament; in actuality it was a client state controlled by the King of Great Britain and supervised by his cabinet in London. The great majority of its population, Roman Catholics, were excluded from power and land ownership under the penal laws. The second-largest group, the Presbyterians in Ulster, owned land and businesses but could not vote and had no political power. The period begins with the defeat of the Catholic Jacobites in the Williamite War in Ireland in 1691 and ends with the Acts of Union 1800, which formally annexed Ireland in a United Kingdom from 1 January 1801 and dissolved the Irish Parliament.

<span class="mw-page-title-main">Economy of Northern Ireland</span> National economy

The economy of Northern Ireland is the smallest of the four constituents of the United Kingdom and the smaller of the two jurisdictions on the island of Ireland. At the time of the Partition of Ireland in 1922, and for a period afterwards, Northern Ireland had a predominantly industrial economy, most notably in shipbuilding, rope manufacture and textiles, but most heavy industry has since been replaced by services. Northern Ireland's economy has strong links to the economies of the Republic of Ireland and Great Britain.

The economy of Belfast, Northern Ireland was initially built on trade through Belfast Harbour. Later, industry contributed to its growth, particularly shipbuilding and linen. At the beginning of the 20th century Belfast was both the largest producer of linen in the world and also boasted the world's largest shipyard. Civil unrest impacted the city's industry for many years, but with the republican and loyalist ceasefires of the mid-1990s, Good Friday Agreement and the St Andrews Agreement in 2006, the city's economy has seen some resurgence once again.

<span class="mw-page-title-main">Economic history of Scotland</span> Aspect of Scottish history

The economic history of Scotland charts economic development in the history of Scotland from earliest times, through seven centuries as an independent state and following Union with England, three centuries as a country of the United Kingdom. Before 1700 Scotland was a poor rural area, with few natural resources or advantages, remotely located on the periphery of the European world. Outward migration to England, and to North America, was heavy from 1700 well into the 20th century. After 1800 the economy took off, and industrialized rapidly, with textile, coal, iron, railroads, and most famously shipbuilding and banking. Glasgow was the centre of the Scottish economy. After the end of the First World War in 1918, Scotland went into a steady economic decline, shedding thousands of high-paying engineering jobs, and having very high rates of unemployment especially in the 1930s. Wartime demand in the Second World War temporarily reversed the decline, but conditions were difficult in the 1950s and 1960s. The discovery of North Sea oil in the 1970s brought new wealth, and a new cycle of boom and bust, even as the old industrial base had decayed.

<span class="mw-page-title-main">Economic history of Europe (1000 AD–present)</span>

This article covers the Economic history of Europe from about 1000 AD to the present. For the context, see History of Europe.

<span class="mw-page-title-main">History of Ireland</span> Historical Development of Irelands Culture, Environment & People

The first evidence of human presence in Ireland dates to around 33,000 years ago, with further findings dating the presence of homo sapiens to around 10,500 to 7,000 BC. The receding of the ice after the Younger Dryas cold phase of the Quaternary around 9700 BC, heralds the beginning of Prehistoric Ireland, which includes the archaeological periods known as the Mesolithic, the Neolithic from about 4000 BC and the Copper Age beginning around 2500 BC with the arrival of the Beaker Culture. The Irish Bronze Age proper begins around 2000 BC and ends with the arrival of the Iron Age of the Celtic Hallstatt culture, beginning about 600 BC. The subsequent La Tène culture brought new styles and practices by 300 BC.

The post-Napoleonic Depression was an economic depression in Europe and the United States after the end of the Napoleonic Wars in 1815.

<span class="mw-page-title-main">Economic history of the United Kingdom</span> Aspect of history

The economic history of the United Kingdom relates the economic development in the British state from the absorption of Wales into the Kingdom of England after 1535 to the modern United Kingdom of Great Britain and Northern Ireland of the early 21st century.

<span class="mw-page-title-main">History of the potato</span> Domestication, spread, and popular usage of the potato in history

The potato was the first domesticated vegetable in the region of modern-day southern Peru and extreme northwestern Bolivia between 8000 and 5000 BCE. Cultivation of potatoes in South America may go back 10,000 years, but tubers do not preserve well in the archaeological record, making identification difficult. The earliest archaeologically verified potato tuber remains have been found at the coastal site of Ancón, dating to 2500 BC. Aside from actual remains, the potato is also found in the Peruvian archaeological record as a design influence of ceramic pottery, often in the shape of vessels. The potato has since spread around the world and has become a staple crop in most countries.

<span class="mw-page-title-main">Economy of Scotland in the early modern period</span> Overview of the economy of Scotland during the early modern era

The economy of Scotland in the early modern era encompasses all economic activity in Scotland between the early sixteenth century and the mid-eighteenth. The period roughly corresponds to the early modern era in Europe, beginning with the Renaissance and Reformation and ending with the last Jacobite risings and the beginnings of the Industrial Revolution.

<span class="mw-page-title-main">Agriculture in Ireland</span> History of agriculture in Ireland

Agriculture in Ireland began during the neolithic era, when inhabitants of the isle began to practice animal husbandry and farming grains. Principal crops grown during the neolithic era included barley and wheat.

References

  1. "Ireland's population in the mid 1800's". Archived from the original on 25 September 2004.
  2. Blessing, Patrick J. (1980). "Irish". In Thernstrom, Stephan; Orlov, Ann; Handlin, Oscar (eds.). Harvard Encyclopedia of American Ethnic Groups. Cambridge, MA: Harvard University Press. p.  529. ISBN   978-0674375123. OCLC   1038430174.
  3. Jones, Maldwyn A. (1980). "Scotch-Irish". In Thernstrom, Stephan; Orlov, Ann; Handlin, Oscar (eds.). Harvard Encyclopedia of American Ethnic Groups. Cambridge, MA: Harvard University Press. p.  904. ISBN   978-0674375123. OCLC   1038430174.
  4. "C. O Grada essay on the Famine" (PDF). Archived from the original (PDF) on 21 July 2011. Retrieved 19 February 2010.
  5. Harold Barbour, The Work of the IOAS, 'Why agricultural organisation was necessary in Ireland' (Cornell University Library, 1910), 2-3.
  6. Timothy G. McMahon, Grand Opportunity: The Gaelic Revival and Irish Society, 1893-1910 (Syracuse University Press, 2008), 152.
  7. Kenny, Seán; Lennard, Jason; O'Rourke, Kevin Hjortshøj (2022). "An annual index of Irish industrial production, 1800–1913". The Economic History Review. 76: 283–304. doi:10.1111/ehr.13189. ISSN   0013-0117. S2CID   229197092.
  8. O’Rourke, Kevin Hjortshøj (2017). "Independent Ireland in Comparative Perspective". Irish Economic and Social History. 44 (1): 19–45. doi:10.1177/0332489317735410. hdl: 10197/8246 . ISSN   0332-4893. S2CID   157635780.
  9. Times Online accessed 15 January 2009

Sources