If I were an Irishman, I should find much to attract me in the economic outlook of your present government towards greater self-sufficiency. (J.M. Keynes)The 1930s were years of political turmoil and economic crisis and change in Ireland. Economic activity had peaked in 1929, and the last years of the Cumann na nGaedheal government (in power since the establishment of the Irish Free State in 1922) saw substantial drops in output, trade and employment. The policies pursued after Fianna Fáil’s victory in the election of February 1932 were therefore influenced both by immediate economic pressures and by the party’s ideological commitments. The highly protectionist measures associated with de Valera and Lemass — key men of the new régime — sought both to create jobs quickly and to build more gradually a large indigenous industrial sector, producing primarily for the home market.Political controversy complicated matters. De Valera was regarded as a headstrong fanatic by the British establishment. His government’s refusal to hand over to Britain the so-called ‘land annuities’ — a disputed item in the Anglo-Irish settlement of 1921 — led to an ‘economic war’, in which the British Treasury sought payment instead through penal ‘emergency’ tariffs on Irish imports. The Irish imposed their own duties, bounties and licensing restrictions in turn. The economic war hurt Irish agriculture badly; the prices of fat and store cattle dropped by almost half between 1932 and mid-1935. Farmers got some relief through export bounties and the coal-cattle pacts (quota exchanges of Irish cattle for British coal) of 1935-7, but Anglo-Irish relations were not normalised again until the finance and trade agreements of the spring of 1938, and the resolution of the annuities dispute did not mean an end to protection. The questions ‘Who won the economic war?’ and ‘What was the impact of protection on the Irish economy?’ are analytically distinct, but they are not that easy to keep apart in practice.
Protection, economic war and structural change: the 1930s in Ireland
