It was long believed that the backwardness of the Irish economy in the first half of the nineteenth century was a result of the abolition of protective tariffs in the decades after the Union. By the terms of the Union, Ireland and Britain were to be a single free-trade area. However, it was agreed that some Irish industries needed time to adjust. Accordingly, it was arranged that there should be a 10% duty on some eighteen products entering Ireland until 1821. These included leather, glass, and furniture. Woollen and cotton goods got even more favourable terms. In 1820, these duties were reviewed and the Government first suggested that the 10% rate should remain until 1825, then be phased out, and finally abolished in 1840. However, the free traders in the Government had all duties abolished in 1824. Unprotected Irish industries then faced large-scale English competition.
In the decades before the Famine Irish cottage industries decayed. From the 1820s there was widespread distress and unemployment in much of the country as industries based on small-scale handcraft gradually gave way to cheaper imported mass-produced goods. However, one must take into account Ireland’s ‘economic situation’ in the age of industrial revolution. Ireland’s problems were, in many ways, like those in some parts of Britain and throughout much of Western Europe as the industrial revolution had its effects. Regions previously prosperous began to decay and new centres of industry, wealth, and population arose. This dramatic change in the balance of economic activity depended on the location of the sources of energy and raw materials. Ireland had little coal and no iron. Consequently, in the age of steam, it was handicapped from the start in any competition with the rest of the United Kingdom. Raw materials could be imported but this raised costs. Ports close to Britain enjoyed more favourable conditions. English factory production, particularly textiles, became increasingly mechanised. The combination of increased output and reduced unit costs allowed English manufacturers to meet and beat any manufacturers sharing the same market.
Britain’s increasing dominance of the Irish market owed much to quicker and cheaper transport. From the 1820s, packet steamers plying between the two countries greatly lowered transport time and costs. However, deeper penetration of the Irish market had to await the coming of the railways. This change in transport and costs was gradual and so, too, was the penetration of the Irish market by English goods. Difficulty of access gave some industries a temporary respite in their local markets. However, the railways finally made Britain and Ireland a single integrated market economy.
During the eighteenth century, Ulster with its regional capital Belfast had become the main centre of linen production. Apart from its natural resources—a good harbour, fast-flowing streams, a plentiful supply of flax—the region had a ready supply of able entrepreneurs and a distinctive rural economy in which agricultural cultivation was attuned to the work habits of the domestic linen workers. In the 1770s cotton was introduced. It centred on the North-East where many of the techniques already learnt in the production and sale of linen could be applied to cotton. Capital was available and in 1810 there were over 20,000 employed in cotton spinning alone. However, the cotton era in the North-East was short-lived. Protected by tariffs and based almost entirely on the home market, the industry faced a succession of crises in the early 1820s. It never recovered. The agricultural price slump after Waterloo (1815) led to a great fall off in consumer demand for cotton goods on the home market. Then, in the early 1820s, the abolition of protective tariffs left the industry open to competition from Lancashire.
Luckily, the collapse of the cotton industry coincided with the recovery of linen. However, an abundant supply of cheap labour seriously held back the mechanisation of the linen industry. When the new wet-spinning process, invented in the 1820s, made it possible to spin fine linen yarn by machine, the manufacturers of the North-East invested in the new machines. Soon the industry was confined to Belfast and its surrounding areas. As late as 1817 as much as one-fifth of the total value of Irish linen production came from outside Ulster—Louth, Meath, Longford, Sligo, Mayo, and parts of Munster. By the mid century, these pockets of linen production had almost disappeared.
The state of the Irish economy turned on the efficient use of the country’s greatest natural resource, the land. The massive increase in population was a condition and a consequence of the expansion of agricultural output. By 1841, the population was more than eight million. The expansion of tillage required many labourers. Besides, increased yields in cereals were best achieved by crop rotation which meant extended cultivation of potatoes and root crops, and these were also labour intensive. However, accelerated growth caused intense competition for land. This led to inflated rents and a rapid reduction in the rewards for labour. This explains why the profits of higher output did not reach the labourer, the cottier, or many smaller farmers.
Because agriculture was the basis of the Irish economy, the slump in food prices after Waterloo (1815) seriously altered the prospects for Irish agriculture. The slump was general, but prices dropped more for tillage than for grassland products. And this was despite the efforts of the Government which passed the Corn Laws to ensure a minimum price for Irish and British corn growers by protecting them from foreign competition. Immediately, it became very difficult for many farmers to keep up the payment of high rents. A small number of landlords lowered rents to meet the changed circumstances, but this was not general. As rents became harder to pay, some farmers found themselves falling heavily into arrears. Leases were renewed with difficulty and tenancies-at-will became increasingly widespread.
The rising economic hardship led to rising rural disorder. Land hunger and the struggle to survive were what drove the cottiers and labourers into the secret societies such as the Rockites, Whitefeet, and Terryalts. Threatening notices, cattle maiming, hay burning, ploughing up grassland, and personal assault were some of the means used by cottiers, labourers, and subsistence tenants to prevent evictions and to discourage tenants from taking holdings from which others had been evicted. These means were also used to keep down rents, to deter the tithe proctor, and above all to ensure that landlords and farmers did not convert conacre tillage lots into grass for bullocks. Rural disorder was checked by coercion: the Government passed Insurrection and Whiteboy Acts to intimidate secret societies. These agrarian disorders were symptoms of the serious difficulties that faced the agricultural economy before the Famine. Production continued to rise, but so did poverty because the profits of increased output were unequally shared—the rich got richer, the poor got poorer.
The role that the money supply played in the post-war economic recession is more difficult to measure. During the Napoleonic wars there was serious inflation in Britain and Ireland. With the return of peace the Government pursued a ‘sound money’ policy and there followed a period of severe deflation during which the Irish pound was gradually devalued. The Bank of Ireland kept tight control on note issue and a shortage of credit contributed to the collapse of several banks and industries. The gold standard resumed in 1821 and the exchange rate remained steady until the merging of the Irish and English currencies in 1826.
Many evils began to be evident in the 1830s—minor potato failures bringing famine, fever and death in their train and chronic unemployment in town and country because of surplus labour and industrial decline. Population growth slowed and emigration rose. The performance of the pre-Famine economy was conditioned by population pressure, natural resources, social structures, the transformation of the market by price movements, and revolutionary changes in the means of production and distribution of consumer goods.
At the same time, State intervention remained significant especially in currency and customs reforms and the removal of tariffs and bounties. It is clear that the Irish social system, or certain aspects of it, was the crucial obstacle to Irish economic health. It was argued that there was a shortage of capital due to the outflow of rents to absentee landowners, and investors were reluctant to sink capital in an unstable society. However, there was no shortage of capital in pre-Famine Ireland: the extent of Irish investment in Government stock and joint-stock banks later proves this. Irish investors, unwilling for the most part to put their money at risk, were tempted by greater security and higher profits to invest in Britain. It is unlikely that the chronic poverty, economic imbalance, and social disorder of the pre-Famine decades would have been solved simply by land reform and a better deal for the tenant farmer. Any real reform plan would have involved a fundamental redistribution of resources—a gigantic piece of social and economic engineering—and no Government was willing to underake that.
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