Irish Free State Capitalism Enters Fourth Year of Economic War
Charles Donnelly, International Press Correspondence, 11 January 1936

The third year of the Economic War between the Irish Free State and Britain, the third year of the high-speed, state manipulated development of capitalism in southern Ireland, closes with a question mark. That the Free State has actually stood the strain without breaking for three years, has been a source of the greatest surprise to the imperialists in Ireland, and the question for them is, having stood the strain for this time, is the Free State going to prove capable of carrying through the programme of industrial development along capitalist lines, in face of the British economic attack and the political attack of the active pro-imperialist exporting and commercial interests.

In 1929 Irish Free State exports were valued at approximately £44 millions, or about two-fifths of the national production, in 1932 they had fallen to approximately £26 millions, in 1933 £19 millions, in 1934 £18 millions. The decline in imports lagged far behind. Imports, valued at £42 1⁄2 millions in 1932, were £34 millions in the following year, and rose again to £39 millions in 1934. This year the adverse balance has been decreased by £3 millions. Against the adverse balance must be set the Free State's invisible exports, approximately £14 millions entering the country annually in interest on foreign investments, pensions, remittances from relatives abroad.

It is, of course, completely unfair to attribute the entire decline as the imperialists do, to the Economic War. Nor is the position merely that there would have been a decline in Free State agricultural exports in any case, but that it has been intensified by the economic conflict with Britain. The truth of the matter is that the growth of the crisis left the Free State in the position in 1932 that she could retain the British market for agricultural produce only at the cost of what would practically have amounted to a Customs Union with Britain, only at the price of a guarantee of raising no further tariffs against British exports or even of modifying what tariffs she then had. This, in act, was the recognised position at the beginning of 1932, before Cosgrove's government, representing the agricultural exporters and commercial and financial interests and the bigger capitalists with established positions, [a small part of this is missing – editor], extended unemployment relief. But the signs point out, that heavily burdened as the Exchequer is with the cost of its concession to the capitalists, these experiments, inadequate as they are, will have to be modified in the future. Already unemployment relief has been withdrawn from certain classes of farm labourers.

Against the relief schemes of the government must also be set its budgetary juggling to throw a heavy portion of the burden of building capitalism on the working class consumer. In the Free State indirect taxation, which in 1934 accounted for £11 1⁄2 millions out of the £19 millions total revenue, last year accounted for approximately £12 1⁄2 millions out of £20 millions. Due to the burden of inordinate taxation, as well as to the rise consequent on protection and other causes, the cost of living has risen enormously on the Free State over the last few years.

The trend of the Irish Free State under capitalism may be summed up, therefore, as increasing production, decreasing purchasing power – not a very original direction despite all the talk from De Valera's mouthpiece of the 'New Industrial System.'

The conclusion of such a line of development is obvious- search for external markers, completely contradicting the propaganda of 'national self-sufficiency.' Already, indeed, the Free State manufacturers have cast their eyes abroad for markers which don't exist, and which not even Mr De Valera's faith can conjure into existence.

Politically, there can be no longer any doubt that De Valera has accommodated himself to the Empire. The opportunity at Geneva of exposing British Imperialism's 'Peace' plan was one which a De Valera who wanted to fight would certainly not have missed. The fact that the Free State has fallen into line in the pro-war scheme of imperial air consolidation proves this also.

The prestige which De Valera has gained over the last year in the eyes of even bigger industrial interests, and the softened attitude on his part to the exporting and pro-imperialist interests which we may expect as a result of the failure of hide-bound economic nationalism, point toward De Valera replacing Cosgrave as the champion of British imperialism in southern Ireland.


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