Protectionist Economics is Irish Economics
Today, it is popularly said that Ireland’s economy rests on the bedrock of free trade globalization. Ireland opened up to the liberal free market of the world and grew because of it. There is no other way to do so. This economic thinking, it is alleged, is what most defines Ireland. To be Irish is to be a liberal free trade globalist.
This perspective is an aberration. The long history of Ireland reveals the economic doctrine of the Irish was protectionism. Moving from century to century, Irish people embraced and argued for protectionism against free trade. Free trade was seen as an insidious ideology leveraged by British imperialists to control and plunder Ireland. Protectionism was defined by its focus on securing national sovereignty, fostering industrialization and development, and improving the general welfare of the people.
During the time of the Irish Revolution, Arthur Griffith became the greatest articulator of this doctrine. From the early 1900s through the 1910s, Griffith consistently laid out the case for his defense of protectionism. Griffith explained, “I am in Economics largely a follower of the man who thwarted England’s dream of the commercial conquest of the world…His name is a famous one in the outside world. His works are the text-books of economic science in other countries…I refer to Friedrich List…the man whom England…hated and feared more than any man since Napoleon…the economic teacher of the nations…whose work on the National System of Political Economy I would wish to see in the hands of every Irishman.”
List is a major figure in the field of economics. His contributions, best advanced in his “National System of Political Economy” published in 1841, emphasized industrialization and national protectionism. He advocated for the nation-state to create subsidies and tariffs to incentivize infant industries’ growth. His ideas are very important to the canon of protectionism. List’s system is best labeled as nationalist in contrast to the other two prominent economic traditions of liberal free trade globalism and Marxist socialist internationalism.
As a rebuttal to free trade Griffith wrote, “protection does not mean the exclusion of foreign competition – it means rendering the native manufacturer equal to meeting foreign competition” and that “we must offer our producers protection where protection is necessary.” As a rebuttal to socialism, Griffith wrote, “I deny that Socialism is a remedy for the existent evils or any remedy at all.”
Griffith declared, “I am a Protectionist. I believe in the protection of the capital of my country against the power of English or any other foreign capital. I believe that as it is the first duty of a nation to use all its resources to repel a military invasion of its territory, equally it is the duty of a nation to draw on and use all its strength to repel
an industrial invasion which threatens its people with loss of their means of livelihood. It is the business of the organized nation to protect the employment of its people. It is the duty of the organised nation to protect Labour, and secure for it from the profits of production, not a mere competitive wage, but an adequate recompense proportioned to its services…I know it is unjust to pay a man less than the value of the services he renders.”
In his era, Griffith was not alone. According to Joseph Connolly, “D.P. Moran founded The Leader, a weekly newspaper…concentrated on the language and industrial revival movements and it probably did more than any other single clement to awaken our people to the responsibility they owed to the country by buying Irish-made products in preference to the imported goods. Michael Collins argued similar themes in his 1922 The Path to Freedom. Later, Sean Milroy, T.D., criticized the Free State in for its free trade policy and explicitly cited its departure from the doctrines of Griffith and List.
These contemporaries of the Irish revolutionary period were part of a long chain of Irishmen that thought similarly. In Griffith’s main text, apart from List, he also cited the Irish-American economists Mathew (father) and Henry Carey (son) as major inspirations. Their careers spanned from the late 18th century to the late 19th century. Together, they pioneered and promoted protectionism. The older Carey actually mentored a young List during his exile from Germany in the U.S. Mathew was part of the same network that influenced Alexander Hamilton’s Report on Manufacturers. Henry was President Abraham Lincoln’s chief economist. The older Carey, being born and raised in Ireland, participated in nationalist groups that advocated for protectionist economics before leaving for the U.S.
The swirl of Irish radicalness in the 1770s to the 1790s, that produced Mathew Carey, made protectionism a central issue. The Provost of Trinity College Dublin John Hely-Hutchinson controversially wrote The Commercial Restraints Of Ireland in 1779. It argued that the failures of Ireland’s economy were due to artificial restrictions placed on Ireland. Later that year, protestors paraded around Ireland with placards and a symbolic cannon arguing for the removal of British prohibitions on the Irish parliament’s ability to enact protectionist policy. Politicians followed the grassroots sentiment.
Scholars Anna Devlin and Frank Barry wrote, “the roots of nationalist advocacy for protection lay…when ‘Grattan’s Parliament’ had made extensive use of grants, bounties and tariffs.” Wolfe Tone was in consensus with this view and later wrote that British policy against Irish protectionism was responsible “for the destruction of [Ireland’s] trade and manufactures.”
Decades before them, other Irish intellects argued the case for protectionism. While famous for his fiction, Jonathan Swift also took interest in economics. He advocated for tariffs and the preference for Irish manufactured goods at the exclusion of foreign ones. Bishop George Berkeley advocated for domestic self-sufficiency, an Irish Mint, and National Bank. Henry Maxwell also favorably wrote on the formation of a national bank to increase the circulation of money to stimulate domestic industry. Arthur Dobbs in An Essay on the Trade and Improvement of Ireland examined the problems of British interference and advocated for encouragement of manufacturers in Ireland.
This tradition held through the 19th century as well. For instance, James Fintan Lalor advocated “to create a complete and efficient industrial economy.” As further explained by Devlin and Barry, “in 1846, Isaac Butt, Charles Stewart Parnell’s predecessor as leader of the Home Rule Party, published a series of lectures entitled Protection to Home Industry: Some Cases of its Advantages Considered…Daniel O’Connell and the Repeal Association alluded to the ‘premature withdrawal of the protecting duties’ in the textile industries as a ‘disastrous effect’ of the Union. In the Nation newspaper, Young Irelander Thomas Davis asserted that an Irish parliament would be able ‘to create vast manufactures here by protecting duties in the first instance and to maintain them by our general prosperity’.”
Griffith admired Davis and edited a collection of his works. This brings us full circle. From the earliest years of the modern era when economics as a discipline was just getting started, writers in Ireland had consistently advocated for protectionism and against free trade. This common thread spanned Swift, Tone, Carey, Davis, and Griffith. Today, if one feels indebted to the legacy of Irish independence movements and the desire to carry the torch of their ideas, one must also acknowledge protectionist economics is part of that torch. Irish patriotism is inherently tied to protectionism.
As a final note, a reader may reply that protectionism was tried in Ireland. Eamon de Valera spearheaded it in the 1930s and much of Ireland’s slow progress thereafter was due to this. Thus, protectionism was tried and failed so Ireland should stick with liberal free trade globalism.
While Dev’s protectionism can certainly be labelled protectionism in a nominal sense, in practice it was revealed to be out of line with much of protectionist orthodoxy. Scholars Ronan Fanning, Mary E. Daly, Cormac O’Grada, and Conor McCabe are all in consensus that after Griffith died in 1922, his core economic ideas were abandon by the new state. There was persistency to the status quo free trade ideology because elite institutions like banks and universities weren’t revolutionaries but were allowed to continue elite leadership post-revolution. This immovable lobby group also coopted Dev’s administration.
The most glaring omissions from Dev’s protectionism was a focus on export-led growth and sovereign monetary policy. Dev was content with Ireland focused on trade within itself, while Griffith and others wanted increased trade with the outside world like Japan and Argentina. Dev conceded monetary policy to the elite bankers. This enabled them to keep the Irish currency pegged to the British pound and investing Irish savings in Britain. This prevented a devalued currency which would have stimulated development as well as increased credit expansion into business formation, especially in manufacturing.
Dev’s application of tariffs was haphazard and done as a reaction to an issue totally unrelated to protectionism. The tariffs weren’t necessarily focused on fostering the correct infant industries but on punishing Britain. In another area, the Dev’s rule that mandated majority Irish ownership of Irish companies was often circumvented by shell companies which were ultimately controlled by obfuscated British owners.
After a stressful period of haphazard unorthodox protectionism and free trade status quo inertia, Daly wrote, 1938 “marked the end of Fianna Fail economic radicalism…There is little doubt that the unduly ambitious aims of Fianna Fail and of earlier generations of nationalists were not met.” Ultimately, Dev’s protectionism was a problem, not of protectionism, but of the poor application of it and the entrenched free trade lobby.
The current cohort of free trade globalists in Ireland neglect to acknowledge that liberal free trade globalism started in the 1960s in Ireland. The introduction of foreign direct investment, multinational corporations, and foreign debt somehow didn’t create productive economic growth for decades. Instead, Ireland found itself in a massive debt crisis walking into the 1980s.
The real magic of the Celtic Tiger period was caused by 1.) manufacturing 2.) manufacturing in the right industrial sectors and 3.) manufacturing done by indigenous Irish firms. Starting in the 1980s, there was a deliberate government policy to encourage manufacturing activities in the emerging information technology sectors. Much of this policy approach was more emulative of orthodox protectionism than Dev’s.
However, the early 2000s represented a change of course. The directed policies towards productive manufacturing and domestic firm formation were eschewed for financialization and transient services. Construction speculation and tax evasion dominated the new economy. Increased foreign financial flows were supposed to go to industry but instead were diverted to unproductive property building. The original intention of the tax policy of the 1980s was to encourage specific outcomes in the economy, however, those intentions were lost as the tax evasion sector was later justified on its own myopic terms rather than general economic development.
Liberal free trade globalism was really the demise of the Celtic Tiger and responsible for all the negative consequences of the crash and austerity thereafter. Liberal free trade globalism was also the constant handicap of Irish economic development throughout the 20th century. Modern economists like South Korean Ha-Joon Chang concluded, after a tremendous examination of studies from multiple countries, that protectionism was the key ingredient to the economic development for almost all advanced countries. In the end, generations of Irish economic protectionists were vindicated. Not only is Irish economics protectionist, but it’s also correct economics.