Introduction to Economics                                             Lesson of 26 September 2006


IRELAND:-  Starvation in the 1840’s, Boom in the 1990’s

In 1840 Ireland was, as now, a green and fertile land.  A part of the British Empire, it was virtually only a ferry ride away from Britain itself, the richest and most economically developed nation of the day.  Yet, commencing in 1845, Ireland experienced one of the most devastating famines in history, in which it is estimated between 500,000 and I million people literally starved to death.  By the end of the 1840’s, death and emigration had reduced the population by at least 20%.

The immediate cause of the Famine was an outbreak of ‘potato blight’, a fungus that destroyed, for several years, almost the entire potato crop, the staple food of the majority of the population.  But why did the people starve?  One could go one step further and say the country was poor, but again one asks why?  Many explanations of various causes have been suggested; cultural, ethnic, religious, political, legal and economic.

Conversely, at the end of the 1980’s, Ireland entered into a period of economic boom, which to a large extent continues today and that has caused it to be dubbed the Celtic Tiger.  This is an analogous reference to the East Asian boom economies of South Korea, Taiwan, Singapore and Hong Kong, dubbed the Asian [or Confucian] Tigers.

Between 1990 and 2005, employment almost doubled, from 1.1 million to 1.9.  Population, which had been declining for decades through emigration, has reversed itself and through immigration and natural increase begun to climb.  Ireland’s GDP per head is now the second highest in Europe with the highest economic growth rate.  Again, many reasons are suggested.



Some of the suggested reasons for the Famine are as follows;


Ireland is sometimes said to have demonstrated the correctness of the Malthusian principle.  Malthus himself saw Ireland as overpopulated.  Like that of Britain, the population of Ireland had increased dramatically in the first four decades of the C19.  [It was 4.4 million in 1800, probably 6.6 million in 1845 and 4.4 million again in 2000].  In the meantime Britain had industrialised and Ireland had not.

As economist Tom Bethell notes in his book, “The Noblest Triumph”, [which deals primarily with the fundamental importance of security of property], at the relevant time Ireland had more cultivated acres per head than the Netherlands, Britain or Sweden and there was a greater population density in Britain.  Yet the peoples of these countries did not starve. 

It is estimated that as a result of the Famine 1.5 to 2 million people eventually left Ireland

Ethnic & Cultural

The charge is sometimes levelled that the Irish were naturally lazy and incompetent as a result of cultural and ethnic factors.  Yet this allegation is contradicted by innumerable examples of hardworking Irish success stories in the Irish diaspora.

Colonial Oppression

The law in Ireland and its application to the indigenous people was particularly harsh and oppressive.  The indigenous Irish stubbornly and continuously resisted Anglo Saxon attempts to absorb them into the dominant culture.  They were, [and were perceived as], ever ready to rebel and join in alliance with the enemies of England.  Attachment to the Roman Catholic faith were seem by many as symbolic of this. 

Despite being nominally, after the union of 1801, an integral part of Great Britain, the indigenous Irish, particularly outside Ulster, were subject to many discriminatory laws.  They were effectively treated in many ways as second class citizens. This was particularly significant with respect to land tenure laws.  Laws in Britain, which promoted security of tenure and discouraged forfeiture, were effectively reversed in Ireland. 

Absence of Security of Tenure

It is estimated that at the time of the Famine perhaps half of the tenant farmers of Ireland were tenants at will.  Tenant farmers were subject to rack renting and the continual threat of eviction without compensation or payment by their landlords for any improvements.  There was thus no incentive to develop or improve their land.  Yet why did the landlords of Ireland behave in such a manner, which seems clearly contrary to their own long term interest ?

Bethell, whose book focuses on this aspect, rejects the suggestion that Irish landlords, as a group, were naturally, particularly rapacious or stupid.  Rather they too lacked security of tenure.  Largely so-called Anglo-Irish and often absentee landlords, they had, in many instances received their large landholdings over the centuries as grants from the English conquerors.  Such grants were always seen as subject to revocation, depending on the political winds from Whitehall.  The indigenous Irish were also perceived as ever ready to seize back the lands that had been taken from them. 

The landlords, often possessing no other wealth than their land holdings, thus had little, if any, incentive to develop their properties as long term investments and every incentive rather to exploit them to the maximum possible in the short term.



On achieving independence in 1922, Ireland adopted a policy of Economic Nationalism; protectionist, self-sufficient and welfarist.  It was a policy that resulted in a stagnant standard of living, inflation, rising taxes, high unemployment, a continually declining population caused by a tradition of emigration, and an image of being a poor country.

By the late 1980’s, Ireland was in deep economic crisis.  In an economic revolution, similar to the Lange/Douglas one in New Zealand and for similar reasons, Ireland changed course.  In particular, it set out to attract foreign investors and to open itself to global trade.  To foreign investors, particularly American, it offered minimal corporate taxes, a geographic location within Europe and close to major markets, a young, well educated, cheap workforce, common law, and an English speaking population with many foreign links, particularly to America.

Following the change in course, many new industries, particularly high-tech ones such as computers, pharmaceuticals and medical products have opened, employment has nearly doubled and the population decline has reversed itself.  The Irish economy has become the fastest growing in Europe.

The changes have not been without criticism.  Irish workers are working cheaply and for longer hours.  Given the need to compete there has been a decline in control by Dublin.  There is a growing resentment against the increasing number of foreigners.  As part of the global economy, Ireland is subject to the uncertainties and consequences of competition.  Industries can, and do, close as fast as they open and there are doubts, given the competition from some of the former Soviet bloc countries of Eastern Europe as to how long the good times can last.

Ireland however is no longer seen as the poor man of Western Europe.


                                                    David Sharp

                                                       26 September 2006  







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