The quest for sovereignty in Ireland
The quest for sovereignty in Ireland
A weak and dependent economy blocked from economic development
As I reviewed in my commentary on “The creation of the Irish Free State” of November 10, the Anglo-Irish Treaty of 2022 created the Irish Free State as a dominion in the British Empire. And it partitioned the island, permitting six counties in the northeast to form a separate state of Northen Island. The 2022 Treaty provoked division in Sinn Féin, the principal political party which had emerged with great force as a revolutionary, republican, and anti-imperialist party in the period 1916 to 1921. The pro-Treaty Sinn Féin were able to prevail over the anti-Treaty Sinn Féin in the debates in the Dáil of Ireland in January 2022; in the Free State general elections of June 18, 2022; and in the civil war from April to October of 2022 between the Free State government and anti-Treaty militants of the Irish Republican Army.
Like my two previous commentaries on Ireland, today’s commentary draws upon Ireland, Colonialism, and the Unfinished Revolution by Robbie McVeigh and Bill Rolston, published by Haymarket Books in 2023 and by Beyond the Pale Books, Belfast, Northern Ireland, in 2021.
At a meeting in Dublin on April 27, 1923, pro-Treaty Dáil deputies and other Treaty supporters formed a new party, Cumann na nGaedheal, which would proceed to govern the Free State for nine years. According to McVeigh and Rolston, most of the people of Ireland and the governments of the world viewed the Irish Free State as a legitimate government.
Cumann na nGaedheal took the Irish Free State of the 1920s through an ideological turn away from the fundamental principles formulated in the 1916 Proclamation of the Irish Republic and the 1919 Irish Declaration of Independence; and toward the joining of the imperial family, identifying with majority-white dominions in the British Empire. This was most clearly indicated by the participation of Irish Free State representatives in imperial conferences in London in 1923, 1926, and 1930. This ideological turn was nuanced, in that it did not involve denunciation of republican principles. All was framed as pragmatism.
During the period, pro-Treaty Sinn Féin elected to the Díal of Ireland refused to take their seats, inasmuch as this would imply accepting the legitimacy of the Irish Free State and the partition. This policy was consistent with the earlier Sinn Féin policy of parliamentary abstentionism with respect to the Westminster Parliament of the Union of Great Britain and Ireland.
In March 1926, Éamon de Valera, President of Sinn Féin, proposed that elected party members be permitted to take their seats in the Irish parliament, if and when the Oath of Allegiance to the King of England was removed. When his proposal was defeated, Valera resigned from the Party and founded a new party, Fianna Fáil, which was dedicated to deepening from within the republican structures and characteristics of the Free State. Most of the elected delegates of the Party followed him.
Fianna Fáil took political power in the elections of 1932. They proceeded to implement their vision of reform, seeking to distance the Irish Free State from the UK, the Crown, and the British Empire. The Fianna Fáil government approved constitutional amendments and enacted laws that eliminated the Oath of Allegiance and reduced the role of the Crown. It developed and obtained approval for a new Constitution in 1937. And it disengaged from participation in the structures of the British Commonwealth, such as the imperial conferences. In these steps toward Irish autonomy, the government of the Irish Free State was provided statutory support by the 1931 Statute of Westminster, which granted parliamentary autonomy to the six British “Dominions,” defined as “Commonwealth Realms” with a British “Commonwealth of Nations.”
The 1937 Constitution
The 1937 Constitution reflects the orientation of Fianna Fáil to reconnect to the nationalist and anti-imperialist orientation of the Irish republican revolution of 1916 to 1921, albeit in the context of practical acceptance of the political reality of the partition of the island and the creation of the Irish Free State. The new orientation was symbolized by the fact that the 1937 Constitution of Ireland changed the name of the state from “Irish Free State” to “Éire,” the Irish word for Ireland.
In addition, the Constitution of 1937 affirms that the ultimate mission is to attain the reunification of Ireland and the incorporation of the entire island in the nation. It accepts that the Parliament has jurisdiction only over the area governed by the Irish Free State. But such acceptance is “pending the re-integration of the national territory, and without prejudice to the right of the Parliament and Government established by this Constitution to exercise jurisdiction of the whole of that territory.”
In its first six articles, the Constitution declares that “the Irish nation hereby affirms its inalienable, indefeasible, and sovereign right to choose its own form of Government, to determine its relations with other nations, and to develop its life, political, economic and cultural, in accordance with its own genius and traditions.” It declares the state to be “sovereign, independent, and democratic,” and that the government derives its power, “under God, from the people, whose right it is to designate the rulers of the State.” With this declaration of principles, it should be noted, the government of Ireland in 1937 makes evident its common ground with the American Revolution of 1763 to 1789 as well as the Third World anti-colonial revolutions of 1945 to the present.
Moreover, like the most radical manifestations of people’s revolutions in the USA (especially in 1774-1775) and the Third World (especially the nations constructing socialism), the 1937 Constitution of Ireland sought to develop structures that politically empower the people. It did so, first, by creating a House of Representatives that was formed through universal voting, without restriction with respect to religion or sex, in an electoral system of proportional representation using the single transferable vote. And secondly, it did so by concentrating power in this democratically formed House of Representatives, vesting it with authority to elect and recall the Prime Minister and the other ministers of the Government; and also to designate permanent members of the judiciary.
Written by Prime Minister Éamon de Valera and a team of advisors in the social context of the Great Depression of the 1930s, the initial drafts of the constitution included the redistribution of land, the regulation of the credit system, and welfare rights. However, these socioeconomic measures were ultimately included as non-binding “directive principles,” in deference to the desire of the Department of Finance to keep state spending to a minimum, and in deference to the interests of cattle and sheep ranchers. Here precaution was decided as the best course of action, such that the final text conserved the existing cattle-trading relations with the United Kingdom.
However, the Constitution expressed seven progressive guiding principles that are oriented to the protection of the socioeconomic rights of the people as well as defining the role of the state in promoting economic development. (1) All citizens have the right to an adequate means of livelihood and to earn through their occupations the means to make reasonable provision of their domestic needs. (2) Ownership and control of material resources must be distributed among individuals and social classes in a form that serves the common good. (3) The operation of free competition must not be permitted to have the result of the concentration of ownership or control of essential commodities in the hands of a few individuals. (4) The control of credit must seek the welfare of the people as a whole. (5) Families should be established in economic security to the maximum extent that circumstances allow. (6) The State shall supplement private initiative in industry and commerce when necessary. (7) The state shall ensure that private enterprises are conducted in a form that ensures reasonable efficiency in the production and distribution of goods and protects the public against unjust exploitation. (8) The State pledges to safeguard with special care the economic interests of the weaker sectors, and when necessary, to contribute to the support of the infirm, the widow, the orphaned, and the aged. (9) The State shall endeavor to ensure the health of workers and to prevent the exploitation of child labor.
It ought to be noted that these directives are in harmony with the principles that have been formulated by the nations of the Third World plus China that are constructing socialism today.
The Constitution affirms that the State recognizes private property and the private ownership of goods as a natural right. The State, therefore, can enact no law that abolishes the natural right of private property. However, the right of private property “ought to be regulated by the principles of social justice,” and in addition, the State may restrict the exercising of the right of private property in accordance with the requirements of the common good. By implication, this prevents the State from regulating private property in accordance with the interests of large property owners. It is similar to declarations of countries constructing socialism today, in which the right of private property is recognized, but the exercise of the right is restricted by the national economic plan for development formulated by the people’s state, by socialist values, and by the demands of social justice.
With respect to religion, the Constitution declares that “the State acknowledges that the homage of public worship is due to Almighty God. It shall hold His Name in reverence, and shall respect and honour religion.” However, the State cannot “endow any religion,” and it guarantees freedom of conscience and freedom of religion. Discrimination on the basis of religion cannot be imposed. In the aftermath of a colonial history of religious discrimination and anti-Catholic laws, this is a fundamentally progressive declaration, pointing to the construction of a new social reality. Those who criticize the reference to “Almighty God” are missing the point.
The Constitution affirms three principles of foreign policy that place the Irish nation in harmony with the anti-imperialist governments today of the Third World plus China.
“(1) Ireland affirms its devotion to the ideal of peace and friendly co-operation amongst nations founded on international justice and morality.
“(2) Ireland affirms its adherence to the principle of the pacific settlement of international disputes by international arbitration or judicial determination.
“(3) Ireland accepts the generally recognised principles of international law as its rule of conduct in its relations with other States.”
The constitution draft was approved by the Díal of Ireland on June 14, 1937. And it was approved in a popular referendum on July 1, 1937, with 56.52% of voters answering “Yes” to the question, “Do you approve the Draft Constitution?” Registered voter turnout was 74.84%. The Constitution went into effect on December 29, 1937.
On December 30, 1937, the government of the United Kingdom issued a communique noting that the new Constitution of Ireland refers to “Éire” or “Ireland,” and that His Majesty’s Government does not recognize any claims to territory that forms part of the United Kingdom of Great Britain and Northern Ireland. It therefore regards “the use of the name “Éire” or “Ireland” in this connection as relating only to that area which has hitherto been known as the Irish Free State.
Accordingly, it can be seen that twenty years after the Irish Declaration of Independence in 1916, the elected representatives of the Irish people continue to declare their right to sovereignty over the entire thirty-two counties of the island, even though they recognize that their authority is de facto limited to twenty-six counties, excluding the six counties of “Northern Island.” Thus, in the 1930s, Fianna Fáil led the nation toward coming to terms with the reality of the partition and the twenty-six county state, but defining it as the new terrain of political struggle.
During the period 1937 to 1949, it was unclear if the Irish head of state was the President of Ireland or the King of England. The 1937 Constitution made no mention of the King, and it established a President of the Republic with primarily ceremonial functions, but it does not assert that the President of Ireland is the head of state. In practice, the King of England accredited ambassadors to Ireland, and the King was viewed as the head of state of Ireland by foreign governments.
This ambiguity was rectified by the Republic of Ireland Act of 1948, which eliminated all remaining functions of the British monarch in relation to Ireland, and it provided that these functions would henceforward be carried out by the President of Ireland. It further declared that the State shall be called the Republic of Ireland. The Act went into effect on April 18, 1949.
The failure of the Irish nationalist economic struggle
The reassertion of the Irish nationalist and republican revolution under the leadership of the Fianna Fáil government was also expressed in the economic terrain. Upon assuming power in 1932, the Fianna Fáil government led by Éamon de Valera launched a protectionist policy, imposing tariffs on a wide range of imported goods, mostly from Great Britain, which was by far Ireland’s largest trading partner. The protectionist policy was intended to promote the development of Irish industry and to eliminate economic dependency on Britain.
In addition, the government sought to attain control by Irish citizens of manufacturing in Ireland. The Control of Manufactures Act of 1932 mandated majority ownership of companies by Irish citizens.
Moreover, the Fianna Fáil government discontinued forwarding to Britain the payments of land annuities by Irish small farmers to the government of Ireland. The payments were a consequence of previous land reform acts, which enabled tenant farmers to purchase their land, using sums advanced to them, which were repayable over a period of years. The land annuities had been forwarded to Britain by the previous government of the Irish Free State. Such annuities, of course, were a first-class rip off, because in essence Irish tenant farmers turned small landholders were paying Britain for land that had been stolen from Irish farmers and landholders by British settlers, with the support of the British government. As McVeigh and Rolston expressed it, it was a matter of “debt incurred against land which had been expropriated from the Irish people by the colonial state – put simply it was Irish people compensating British landlords for land which had been stolen from them through colonial land grabbing in the first place.”
Accordingly, the Irish Free State passed the Land Act of 1933, which reduced the annuities being paid by small farmers, and used continuing payments for local government projects in the twenty-six counties, rather than forwarding the payment to Great Britain. In addition, the de Valera government demanded that Britain pay back £30 million already paid in land annuities, and that it compensate the Irish Free State in the amount of £400 million for Britain’s over-taxation of Ireland between 1801 and 1922.
The protective tariffs, the suspension of payment of small landholder annuities, and the demand for financial compensation for colonial practices was too much for the largest colonial power in human history. Britain responded with a 20% import duty on Free State agricultural products, which constituted 90% of all Free State exports, a figure that is an indication of the complete economic dependency of Ireland on Great Britain. In response to the British duties, the Free State placed a duty on British imports, including coal.
The economic war between the UK and the Free State had much more impact on the economy of the Free State, due to the difference in the size of the two economies, and the great dependency of Ireland on the UK. There was sharp fall in the demand for Irish goods, with disastrous consequences for many farmers, especially large cattle breeders.
The de Valera government took steps. It called upon the people to support the Irish government in the confrontation with Britain in a spirit of national sacrifice. It urged farmers to turn toward production of food for the domestic market. And it purchased most of the surplus beef for a newly created “free beef for the poor” program.
But the negative impact of the economic war was much greater than the benefits derived from the import tariffs. Suffering from reduced demand for their products, many farmers refused to pay property taxes or land annuities, and the government reacted by impounding livestock for auction. Seeking to stop the auctions, farmers blocked roads and railways. The government mobilized security forces to protect the buyers of impounded goods, resulting in people being killed or injured.
In addition, the turn to economic nationalism and the subsequent economic war had negative consequences for manufacturing. Although the protective tariffs enabled some Irish industries to expand, the Control of Manufactures Act had the consequence of stimulating large Irish companies with foreign investors, such as Guinness, to relocate their headquarters abroad, which meant that their corporate taxes were being paid abroad. Moreover, the decline in the farming economy led to a decline in the demand for manufactured goods.
The negative consequences of the economic war compelled the Fianna Fáil government to seek peace. The Coal-Cattle pact of 1935 removed tariffs from these essential commodities. The Anglo-Irish Trade Agreement of 1938 ended all duties imposed during the previous five years. In addition, it allowed Ireland to impose tariffs to protect new Irish industries. And it settled the land annuities issue, which potentially could have cost Ireland £3 million per year, with a one-time payment to Britain of £10 million. The Agreement also returned to Ireland the three Treaty Ports that had been retained by Britain when the Irish Free State was established.
The Fianna Fáil government, emphasizing the concessions that had been made to Ireland and the advantage of ending the economic war, presented the Anglo-Irish Free Trade Agreement as a victory for Ireland. But it also was an implicit recognition by the government of Ireland that it was not in a position to take action designed to promote the economic development of the nation.
The protection of industry through tariffs can be effective in determined circumstances, especially if it is part of a comprehensive plan to strengthen the productive capacity of the national economy, particularly in the industrial and agricultural sectors. The most reliable way to increase productivity is to increase investments in the modernizing of existing national economic enterprises and in the creation of new enterprises in industry or agriculture. These new investments can be attained through the mobilization of domestic financial resources and through the attraction of foreign investments. The state has a critical role to play in the mobilization of national resources and the attraction of foreign investment, and in ensuring that the new investments serve the priorities of the national development plan, and not exclusively the interests of the foreign and domestic investors.
Taking the above into account, one can see that the economic policy of the government of Ireland during the 1930s was not well conceived. Protection through tariffs in and of itself is not likely to promote economic development, and it can provoke an undesirable economic war with a stronger economy. Furthermore, although the regulation of privately-owned industry is necessary, it must be managed with strategic intelligence, in order to avoid making the nation unattractive for investors.
One of the sources of Ireland’s half-baked economic policy of the 1930s was ideological. The idea of economic development through protection and tariffs was an idea floating around the world during the twentieth century. Many Latin American countries were trying it, without much success.
A more comprehensive and effective approach would emerge later, step by step, in the period 1974 to 2015. There were many contributors to its formulation, including the Asian Tigers, China, Vietnam, the leading nations of the Non-Aligned Movement, leading nations in the Latin American process of union and integration, and the nations of BRICS Plus. But this necessary road to economic development for developing nations was not yet a part of human understanding in the 1930s.
An additional problem, however, was the partition of Ireland. When the six counties of Northern Ireland, possessing industrial activities in shipbuilding and engineering, separated themselves from Ireland, they rendered their economic and financial assets unavailable to any plan of the Irish Free State/Ireland to mobilize financial resources for economic development. Moreover, Northern Island itself, which scandalously discriminated against the Catholic population, and which was forging a politically unstable project lacking in domestic legitimacy and international credibility, was scarcely an environment capable of attracting foreign investors. Weak and divided, the Irish nation of the 1930s lacked the capacity to mobilize for investment in productivity, even if it had known what needed to be done.
The conclusion to be drawn is not uplifting. Although reaffirming the historic aspirations of the Irish nationalist and republican revolution, Ireland under the leadership of Fianna Fáil following 1932 was unable to advance in the necessary struggle for the economic development of the Irish nation.
In the 1960s, with the demise of historic hopes of the state leading a viable project of economic development, the Fianna Fáil government turned to free trade as the basis of its economic policy. The new approach redirected public investment from social objectives, such as the construction of houses and hospitals, to productive ones, such as new industry, tourism, and agricultural research. And it sought to attract foreign investment in private industry through tax concessions and the promotion of exports. The program is widely viewed as a success, in that industrial manufacturing nearly doubled and unemployment fell during the 1960s.
Such gains in productivity are important, but if they are attained at the cost of less social expenditures, this means that the people will have less resources to purchase goods, which is necessary for the sustained expansion of the economy.
In January 1973, Ireland, the UK, and Denmark joined the European Community, later called the European Union. This enabled Ireland to become less economically dependent on the UK. The authors list several benefits to Irish membership in the EU:
“Irish businesses have unhindered access to a market of over 510 million people.
“An estimated 978,000 jobs have been created in Ireland during the years of membership, and trade has increased 150-fold.
“Foreign Direct Investment into Ireland has increased dramatically from just €16 million in 1972 to more than €30 billion.
“Irish citizens have the right to move, work and reside freely within the territory of other member states.
“Between 1973 and 2015, Ireland received over €74.3 billion from the EU. During the same time, it contributed approximately €32 billion to the EU budget.
“Between 1973 and 2014 Irish farmers received €54 billion from the Common Agricultural Policy.”
As a result, Ireland emerged as a shining example, a “Celtic Tiger,” and an “economic miracle” that surprised Ireland and the rest of the world. However, the economic miracle turned out to be not long-lasting. In the context of the world financial crisis, the government of Ireland announced in September 2008 that it was agreeing to an adjustment plan with the European Union, European Central Bank, and the International Monetary Fund, which would put Ireland in debt to the international finance agencies for two generations.
As McVeigh and Rolston point out, Ireland’s economic policy has been “premised on the commitment not to tax, not to interfere, not to monitor, and not to criticize.” New investments that are attracted by this policy are going to have certain spillover benefits. But it is an approach that lacks quality control. It lacks an identification of the specific areas in which investment ought to prioritize in a national development plan, taking into account the characteristics of the national economy and the long-term needs of the nation. The approach lacks creativity with respect to the terms of trade, in that it has not developed agreements that respond to the long-term interests of the national economy, while at the same time ensuring some level of profitability for the investor. The needed approach is slower and more painstaking than giving away the resources of the nation, but it is the necessary path to sustainable advances in productivity.
Some of the economic advances in Ireland were based on the attractiveness of Ireland as a tax haven, because of its non-taxing of big business. Indeed, McVeigh and Rolston report that by 2018, Ireland was listed as one of the world’s top tax havens, euphemistically called “offshore financial centers.” Such an activity provides some level of low- and medium-income employment, but the enormous floating funds cannot be used by the nation to promote its long-term economic productivity, and it certainly does not contribute to the dignity of the nation as a place where investments lead not only to profit but to the development of a productive and prosperous national economy, with widespread benefits and wellbeing for all.
But all is not lost. Ireland has a high level of education, as a result of a long-term commitment to education rooted in Catholic social policy. In addition, the two fundamentally different approaches that the government of the Irish Free State/Ireland has taken since 1932 have had some enduring positive results. Because of these factors, Ireland routinely is found in the top ten of the Human Development Index of the United Nations. This implies that Ireland has things to offer in the quest for mutually beneficial investment projects.
As I have maintained above, the future development of Ireland requires the reunification of Ireland and Northern Island. This is indispensable for expanding the availability of existing resources and increasing the attractiveness for foreign investment in both regions. Moreover, a reunified Ireland, while maintaining historic relations with the United Kingdom and the European Union, should seek to develop mutually beneficial trade relations and cooperation with the developing economies of the Global South, which are accumulating experience in the mechanics of South-South cooperation.
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