Kieran Allen


Is southern Ireland a neo-colony?


1. Why is southern Ireland underdeveloped?

SOUTHERN IRELAND remains one of the poorer countries in Western Europe. Its gross national product per head is 63 per cent of the average for the European Community; only Greece and Portugal are lower. [1] One third of its population live below the poverty line. It has experienced a catastrophic pattern of emigration for more than a hundred years. In the 1980s, for example, an average of 30,000 people left the country each year. It owes an enormous debt to local and foreign bankers. At one stage in the 1980s it had the fourth highest debt per head of population in the world. All of these signs hardly reflect a “normal” advanced economy.

Why, then, is southern Ireland underdeveloped? Nationalist historians have traditionally pointed to the role of Britain. Thus the influential nineteenth-century historian Froude claimed that “the mere rumour of a rise of industry in Ireland created a panic in commercial circles in England.” [2] The first major Irish economic historian, George O Brien, emphasised the political manoeuvres of the British government as the key factor. He argued that Ireland’s economic decline arose from the policy of the British government of “assimilating the institutions of Ireland and Great Britain as rapidly as possible”. [3]

The traditional nationalist interpretation of history is open to attack on many fronts. By stressing the purely political causes of Irish underdevelopment it implied that Irish self-government would be sufficient to break the pattern of underdevelopment. Moreover it painted a picture in which all Irish Catholics were equally oppressed. A whole generation of Irish schoolchildren were brought up on stories of the injustice of the Penal Laws, by which a jumped-up Protestant could force a noble Catholic lord to sell him his horse for 5. The vast majority of Catholics were too poor to own a horse in the first place – but that wasn’t the point.

James Connolly’s Labour and Irish History struck a major blow against this form of nationalist history. Later historians have also shown how the Irish Catholic rich amassed considerable fortunes under the British empire. Maureen Wall’s studies of the Catholic middle class have shown how the Catholic rich were driven out of landed property by the Penal Laws but still prospered through trade and moneylending. Catholic merchant families such as the Roches in Limerick and the Bellews in Galway were wealthy. In 1792, Edward Byrne of Dublin was contributing 80,000 annually in revenue to the state. [4]

A pamphlet produced by one Alexander the Coppersmith in 1737 complained of the Catholic merchants of Cork “whose diligence being more and luxury less than the Protestants will at last swallow up the whole of the trade and suck the marrow out of the city.” [5] During the period of revolutionary upheaval in the 1790s, the Catholic Committee, which organised the rising Catholic bourgeoisie, issued a statement to claim that “The Committee would suffer more by one week’s disturbances than all the members of the two houses of Parliament” – whose members were all landlords. [6]

Criticism of the nationalist accounts of Irish history has revealed the class character of those who came to lead the Irish national movement. There never was a fight between an undifferentiated mass of the Irish Catholic poor and the British empire. The Irish capitalist class used the cry of “national unity” against the British to disguise their own future rule. As Connolly put it:

every oppressor of the poor, every heartless sweater [employer of sweated labour], every enemy of progress and champion of reaction feels perfectly safe in Ireland as long as the cry of “national unity” paralyses the hand of the friend of progress and forbids open war against the Irish oppressor. [7]

But for socialists the mere recognition of a hypocritical Irish capitalist class does not negate the historical validity of the Irish nationalist struggle. The British empire was the largest and most powerful military machine of its day. On a world scale it represented a bulwark of reaction. And it was responsible for the systematic underdevelopment of Ireland, just as it played a major role in stunting and distorting the economies of India, Egypt and China. The particular mechanisms by which the empire contributed to the underdevelopment of Ireland may not be those that nationalist historians have described. Yet neither was the historians’ argument pure fantasy.

The role of Britain in Ireland’s underdevelopment has come under sustained attack from the “revisionist” school of Irish historians. The most popular historian of this school, Roy Foster, simply portrays a benign empire that is constantly tripped up by Irish romantics and fanatics. Foster claims that the “institutionalised Anglophobia” that arose after the Famine of 1847 was not justified. Irish underdevelopment, he argues, occurred because “Ireland’s reputation dissuaded potential investors”. It was the “insecurity of property” that prevented capitalist manufacturers from investing in Ireland. [8]

Joseph Lee, the author of The Modernisation of Irish Society, argues that Ireland was underdeveloped because “Irish manufacturers were not psychologically prepared for expansion.” [9] In this school of thought the role of Britain is constantly played down. The economic historian L.M. Cullen argues, for example, that “the Act of Union” of 1800 was “in no way responsible” for the collapse of Irish industry in the 1820s. [10]

These revisionist attacks have been given a pseudo-Marxist gloss in Ireland by the Workers Party. In The Irish Industrial Revolution, the Workers Party argues that Irish underdevelopment was caused by a “lazy bourgeoisie”. It claims that “the Irish national bourgeoisie were, and are, by any standards the most avaricious and lazy ruling class ever seen in the European polity.” [11] The Irish rich, it says, refused to put their capital to work productively and invested in banking and property speculation instead. Echoing Lee’s notion of their psychological unwillingness to advance manufacturing, the Workers Party claims that the wealthy Irish valued the professions more than industry. They thus produced “speeches instead of steel and oratory instead of ore”. [12]

The Workers Party’s attack on the Irish bourgeoisie is entirely a moral one. It provides no explanation as to why the Irish bourgeoisie might be so lazy nor why they “refused” to build a manufacturing base like every other capitalist class in Europe. We are left with the idea that they were lazy because they were Catholic. This explanation leaves Britain out of the history of Irish underdevelopment and is patently one-sided.

In fact the relationship with the British empire is one of the central factors explaining the underdevelopment of Ireland. Ireland was Britain’s oldest colony and experienced many of the shifts and changes that went to build up the British mainland as the “workshop of the world”. Control over colonial trade played a major role in establishing Britain as the world’s first industrial power. In 1775, on the eve of the industrial revolution, colonial trade amounted to a third of British commerce. [13] This was rigorously defended against all-corners by the mercantilist policies of the British state – and Ireland was one of the first countries to suffer.

In 1696 the Navigation Acts prohibited Ireland from direct trade with the colonies. Trade in foodstuffs or cotton between Ireland and, for example, Jamaica had first to pass through English ports such as Bristol. In 1699 Ireland was prohibited from exporting woollen goods – in order to minimise competition with this mainstay of English industry. In 1735 and 1746 orders were passed prohibiting the export of Irish glass.

When these restrictions were removed as the empire was weakened during the American War of Independence, Irish industry did grow. New techniques of organisation and new forms of technology also contributed to this. Between 1785 and 1799 exports from Ireland to England rose from 1 million to 5.6 million. [14]

By the time of the industrial revolution therefore, Ireland had made some steps towards industrialisation, albeit at a far slower pace than Britain because of the previous restrictions on trade. When Marx was preparing an outline report on the Irish question for the First International he noted that in Kilkenny, for example, there were 56 blanket manufacturers employing 3,000 workers; that there were 2,500 calico looms at work in Balbriggan, County Dublin; that there were 6,000 weavers, combers and hosiers in Cork. [15] Lord Castlereagh estimated that there were between 30,000 and 40,000 workers in the cotton industry. [16] The vast bulk of these were engaged in domestic outworking or in the most rudimentary stages of manufacture. So, as L.M. Cullen has stated, far from the country being left to rot in rural backwardness by a “lazy bourgeoisie”, “it was not because Ireland was a non-industrial country but because she was an industrial country” that she had more to lose from the coming industrial revolution. [17]

By the 1820s however this first flicker of industrial development had been quashed. Ireland was reduced to an impoverished state with a vast peasantry whose staple diet was potatoes. Many factors were involved. The introduction of the power loom in Britain wiped out competition from domestic weavers. Ireland’s lack of natural resources in coal and iron was a handicap. But none of these issues can be separated from the fact that Ireland’s relationship to the empire inevitably forced it to specialise in agricultural produce.

Countries made the transition to capitalism in the nineteenth century under the aegis of a nation-state. It was the state that passed laws to drive surplus labour from the countryside into industry; opened colonies that provided sources for the primitive accumulation of capital; guaranteed protection against commercial rivals. At no point did an Irish state play such a role in forcing the pace of capitalist development – since Ireland’s involvement with the empire meant that it was British capital that was stimulated and protected.

Here the Act of Union of 1800 did play a central role. Firstly and most obviously, under the Act Ireland had to contribute two-seventeenths of the cost of maintaining the empire. The impoverished colony was supposed to pay tax on a basis equal with the metropolis. Throughout the nineteenth century, therefore, tax per head in Ireland increased by 140 per cent while it decreased by 25 per cent per head in Britain. [18]

Secondly, the Act of Union reduced tariffs on imports into Ireland to 10 per cent (with a number of exceptions allowed up to 1820). The result was that the massively expanding British economy was able to destroy Irish industry, which lacked the protection of its own state. In the economic crisis of the 1820s, Irish industry was literally wiped out by the unfettered competition from English manufacturers. In 1825 three million yards of woollen cloth were imported; by 1835 this had risen to eight million. By 1838 the Irish woollen industry was supplying only 14 per cent of its own domestic market. [19]

In addition to this intense competition from British manufacturers there was the continual drain of rent from the Irish countryside. Marx estimated that in 1836 7 million was sent abroad to absentee landlords. [20] Far from this class being a fantasy, as some revisionist historians claim, it was a powerful force right up to the 1870s. As late as 1872 774 landlords owned 10 million acres in Ireland – half the total surface of the country. [21] The effect of this financial drain was to reduce the domestic market and the available capital for investment.

By the mid-nineteenth century Ireland was completely reduced to an agricultural supplier for the empire. For the landed interests that dominated the Irish parliament this was relatively satisfactory. In 1803 Ireland had exported 146,000 barrels of wheat and 439,000 barrels of other corn. By 1822 this had risen to 776,000 and 1,948,000 barrels respectively. [22] The Corn Laws created a virtual monopoly for Irish corn and encouraged the specialisation of the economy. When these laws were repealed in 1847 they helped to begin a major shift in Irish agriculture towards pasture. People were replaced by livestock as the countrywas turned into a vast cattle ranch. In 1903 81 per cent of the country was under pasture. [23]

This pattern occurred throughout the empire. Nations such as Ireland and India were driven into an economic relationship with Britain by which they supplied raw materials in exchange for manufactured goods. The fact that these developments occurred through the imperceptible economic laws of free trade led many to claim that fair competition was involved rather than imperialism. The apostles of free trade at the time were a good deal less sanguine. One of their number argued that with free trade “foreign nations would become valuable Colonies to us [Britain], without imposing on us the responsibility of governing them.” [24]

When a belated concern with industrial development arose again in Ireland at the end of the nineteenth century, it was already too late. As a result of the consolidation of land holdings after the famine of 1846 and the switch to pasture, small surpluses became available to petty capitalists. Much of this surplus, however, was channelled towards the banks. Joseph Lee has taken this as evidence of the refusal of the “rural bourgeoisie” to behave like proper capitalists. Ireland, he claims, was never short of capital.

This is however a complete distortion. Deposits in the Irish banking network never rose above 6.4 per cent of the UK figure. [25] There is every indication that these were often small deposits, as no interest was paid on large amounts of the total deposited. The banking network itself also creamed off a huge dividend on these deposits. Vast sums were also invested on the London stock exchange, partly because the banks were often British-owned and also because industry in Britain could provide more profits than would be generated from an impoverished Irish market.

“Morally”, Irish capitalists performed neither better nor worse than their counterparts elsewhere. Emerging mainly from the countryside after the destruction of industry in the early part of the nineteenth century, they invested cautiously in projects that demanded limited capital. To blame them for not engaging in manufacture of mass-produced goods, when competition in this area was at its most vigorous, is to hold a misconception of the nature of capitalism. This exists not to provide jobs or even an industrial base – its primary concern is profit.

Ireland’s underdevelopment was, thus, neither a natural state of affairs nor was it produced by the peculiar psychological weakness of its capitalist class. The problem arose from the relationship between Ireland and the British empire. The colonisation of Ireland by Britain led to the breaking down of many pre-capitalist tribal structures. The cash nexus, the market and petty commodity production were established quicker than they would have been had colonisation not occurred. But the strength of the British economy and the intervention of the British state on its behalf ensured that the Irish economy was shaped in British interests.

When Marx claimed that “every time Ireland was about to develop industrially, she was crushed and re-converted into a purely agricultural land”, he was not referring to the purely political ambitions of British politicians, although this was undoubtedly a factor. [26] Across the globe the British empire forced countries into a limited specialisation that served the needs of Britain’s industry. In that sense it became responsible for their backwardness and underdevelopment.

The revisionist history which excuses the British empire is pure ideology. It reflects the fear of a section of the southern ruling class today that parallels might be drawn between their own fight to establish an independent state and the struggle of northern Catholics during the past 20 years. The Workers Party, which supports this revisionism from a pseudo-Marxist standpoint, is equally terrified by this revolt. They have consistently come to the support of the British army and the RUC. Not surprisingly, therefore, they will read a benign role for these forces back into Irish history.

Revolutionary socialists oppose the continued presence of the British army in northern Ireland. As a result they have no reason to distort or excuse the role that Britain plays in Ireland. Ireland is still dominated by the imperialist structures that extend across the world today. But the principal mechanism by which Ireland slots into the world capitalist orbit is no longer the British empire but a nation-state dominated by its own capitalist class. The idea that southern Ireland remains a neo-colony of Britain today obscures this reality. It leads its holders to a gross underestimation of the strengths of the native capitalist class in southern Ireland today. It thus needs to be challenged.




1. Eurostat Review 1977-86, p.53.

2. J.A. Froude, The English in Ireland (no place and date of publication) p.443.

3. G. O Brien, The Economic History of Ireland from the Union to the Famine (A. Kelley: Clifton, New Jersey 1972), p.58.

4. M. Wall, The Rise of the Catholic Middle Class in 18th Century Ireland, in Irish Historic Studies, vol.11, no.42, p.104.

5. Wall, in Irish Historic Studies, vol.11, no.42, p.100.

6. Wall, in Irish Historic Studies, vol.11, no.42, pp.103-4.

7. Forward, paper of the Glasgow Independent Labour Party, 14 January 1911.

8. R. Foster, Modern Ireland (Allen Lane/Penguin Books: Harmondsworth 1988), pp.318 and 322.

9. J. Lee, Capital in the Irish Economy, in L.M. Cullen (editor) The Formation of the Irish Economy (Mercier: Cork 1969), p.57.

10. L.M. CuIlen, The Economic History of Ireland since 1600 (Batsford: London 1972), p.104.

11. The Workers Party, The Irish Industrial Revolution (Repsol: Dublin 1978), p.15.

12. The Irish Industrial Revolution, p.18.

13. E.J. Hobsbawm, Industry and Empire (Penguin Books: Harmondsworth 1979), p.53.

14. P. Dubois, Contemporary Ireland (Maunsell: Dublin 1908), p.323.

15. K. Marx, Outline of a Report on the Irish Question, in K. Marx and F. Engels, Ireland and the Irish Question (Progress Publishers: Moscow 1971) pp.131-2.

16. E. Strauss, Irish Nationalism and British Democracy (Methuen: London 1951), p.75.

17. L.M. Cullen, The Irish Economy in the 18th Century, in Cullen (editor), Formation, p.21.

18. Dubois, p.341.

19. Cullen, Economic History, p.106.

20. K. Marx, Speech on the Irish Question to the German Workers Educational Association, in Marx and Engels, p.141.

21. Dubois, p.239.

22. D.A. Chart, An Economic History of Ireland (Talbot Press: Dublin 1920), p.90.

23. Dubois, p.231.

24. B. Semmel, The Rise of Free Trade Imperialism (Cambridge University Press 1970), p.8.

25. K. Ollershaw, Aspects of Bank Lending in post-Famine Ireland, in Economy and Society In Ireland and Scotland (John Donald: Edinburgh 1988), p.223.

26. Marx, Outline of a Report, in Marx and Engels, p.132.


Last updated on 6.3.2002