In 1916, They Weren't Fighting to Build a Tax Haven

Andy Storey

Andy Storey is a lecturer in political economy at University College Dublin and a board member of human rights group Action from Ireland (Afri).


Much of the discussion around the 100th anniversary of the Easter Rising focuses, reasonably enough, on political and military issues. But there was a long-standing and powerful economic argument fueling the drive for Irish independence.

British imperialism typically had a disastrous impact on the economies of its colonies, as documented by Maurice Coakley: “what manufacturing industries these societies possessed were first curtailed by mercantilist restrictions imposed by the colonial power, and then subjected to the blitzkrieg of free trade by the newly mechanised industries of Britain and the other imperial powers.”

For example, a 1699 law banned the export of Irish woollen products abroad while high trade taxes impeded their sale to Britain itself. The 1801 Act of Union allowed the by then hyper-competitive British products more or less free access to the Irish market and contributed to deindustrialisation in all but the north-east of Ireland.

Some writers have queried what they term this “traditional nationalist” narrative but, politically, it was hugely influential, leading prominent Sinn Fein figures like Arthur Griffith to argue that Ireland’s industrial development could only be achieved through an independent government implementing measures such as trade protectionism.

The independent.ie/opinion/columnists/david-mcwilliams/the-heroes-of-1916-were-economically-clueless-and-the-nation-paid-for-it-34189127.html">argument was not that Irish people were getting poorer, necessarily, but that, absent independence, the country as a whole was condemned to largely remain an agricultural province of Britain. Other, more immediate economic factors that played a part in the run-up to the Rising were tax increases to fund World War I and the British government’s refusal to fund a resolution to a housing crisis impacting working-class Dublin in particular.

The types of policies Griffith recommended were not implemented until Fianna Fail took power in 1932, and what followed was indeed a growth in industrial employment, though the project ran out of steam with the stagnation of the 1950s, at which point the now dominant policies of free trade and openness to foreign investment began to be adopted.

Coakley has described that shift as follows: “Where earlier developmental strategies were premised on asserting greater national independence, further development was now to be achieved through subordinating Irish sovereignty to the requirements of North American and European capital.”

Specifically, Ireland would adopt a strategy of “industrialisation by invitation”, serving as a low-tax location for US capital, in particular, to access the European market.

Many of the issues I have dealt with previously in this column – including Ireland’s role in facilitating corporate tax avoidance, its dependence on potentially volatile inward investment, and the recent hospitality extended to vulture funds – stem in one way or another from this decisive historical shift.

The decision to repay in full, at the price of austerity for the general public, the debts owed to European and US bondholders similarly reflects the subordination of sovereignty to the diktats of external capital. That subordination means that Ireland ends up paying 42 percent of the total cost of the European banking crisis.

The desire of the 1916 leaders to create a sovereign, economically independent state has mutated into an aspiration to be “the best small country in the world in which to do business”, the leader of which is happy to have his head (literally as well as metaphorically) patted by the powers that be.

There is also a certain irony in the fact that 100 years after the Rising, a housing crisis is again generating political controversy. Dublin City Council admits that the 22 modular homes that were supposed to have been built by December last will not be ready before May.

And this drop in the ocean will do almost nothing to address the fact that there are 769 homeless families (including 1,600 children) in Dublin living in emergency accommodation at the end of January. In Cork a terminally ill child had to live with his family in a car for three weeks after being made homeless.

According to the 1916 Proclamation, “The Republic guarantees . . . equal rights and equal responsibilities to all its citizens and declares its resolve to pursue the happiness and prosperity of the whole nation and of all its parts, cherishing all the children of the nation equally.”

In reality, in 2016, the rights of corporate tax cheats and property-finance interests well outweigh the rights of homeless children.

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Andy Storey: Andy Storey is a lecturer in political economy at University College Dublin and a board member of human rights group Action from Ireland (Afri).

Reader responses

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John Flynn
at 30 March 2016 at 10:20

‘British imperialism typically had a disastrous impact on the economies of its colonies’.

That’s quite a sweeping statement – the impact of British colonialism varied greatly from country to country. Hong Kong, for example, was a British colony that benefited greatly from colonialism, becoming a sophisticated and successful modern economy. Moreover, the British introduced democracy to India, giving them English as a common language to unite the various ethnic groups.

The post-colonial legacy had more to do with the decisions post-colonial leaders made than with the iniquity of the British.

‘The 1801 Act of Union contributed to deindustrialisation in all but the north-east of Ireland.’ What industrialization had there been in Ireland before then?

Ed
at 30 March 2016 at 11:50

“Moreover, the British introduced democracy to India, giving them English as a common language to unite the various ethnic groups.”

That will come as news to the Indians. They did nothing of the sort: democracy was established in India after a long anti-colonial struggle which had to overcome brutal state repression by the British authorities. You might as well say democracy was established in Poland by the Soviet Union.

Declan
at 30 March 2016 at 17:52

I don’t doubt British economic policy in Ireland delayed economic development but to say that we can tie back our current policy to them is too easy.

Ireland is a small country with a small market. To think we can prosper and pay for our services and capital infrastructure without trade is a joke. I’d rather live a day in the European Ireland then a year in Dev’s insular Ireland.

Similarly, to say we facilitate tax fraud is overly simplistic. Yes, we have one of the lowest rates in the world of CT but we can’t use other mechanisms (state subventions + other inducements) without reducing the welfare state and other supports. Instead, we have that plus a flexible work force sourced at home and abroad, access to the EU market and a number of other advantages.

Finally, I agree that housing is a complete mess in Ireland but it’s time that we need to ask ourselves why won’t our “socialists” parties support property taxes and quick build development. There are too many me feiner’s and nimby’s out there

juniorjb
at 31 March 2016 at 20:05

@Declan: Who said anything about doing without trade? That’s a pretty simplistic way to set up an argument – either you support or accept all of our current policies, including the disastrous bank guarantee and general kowtowing to investment capital or you are against trade, Europe, the Future, mobile phones, the new fad for washing with soap, I don’t know what, dancing with Dev at the crossroads. The fact that you may hear this kind of stuff from many soi-disant “educated” Irish clerical technicians (sorry, “professionals”) doesn’t make it any more meaningful.

John Flynn
at 20 April 2016 at 17:56

@Ed: Soviet Union enforced communism on Poland so I don’t see why you’re bringing that up.

Brits were harsh and repressive towards Indians but the long-term effect of stable democracy in an ethnically divided society has served the country well.

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