A return to the past?

From miracle to hard border?

In the 1990s Ireland was a great success story. Then came the financial crash and now there is the danger of Brexit unleashing economic mayhem. In the first of two articles, James Harvey discusses the changing fortunes of Irish capitalism

Throughout all the twists and turns of the interminable Brexit saga, one issue has remained a major stumbling block for the Tory government, as it seeks a majority for the withdrawal agreement: the so-called Irish backstop, dealing with the status and nature of the border between the United Kingdom and the Republic of Ireland.

The backstop emerged because the Dublin government, with the support of the European Union, refused to accept a hard economic border on the island of Ireland. Thus during the negotiations of the withdrawal agreement Britain was faced with a choice: either accept a de facto customs and regulatory border between Northern Ireland and Great Britain (unacceptable to the Tories’ Democratic Unionist Party allies and their uber-unionist backbench Tory friends); or agree that the whole of the United Kingdom would remain inside the single market and customs union (completely ruled out by the hard-line Brexiteers of the European Research Group). The result was a compromise between Theresa May’s promise to deliver Brexit and her assurances that there would be no hard border. But taking Britain out of the EU, whilst keeping it aligned to its regulatory framework, customs union and single market, pleased nobody and finally resulted, after months of desperate parliamentary manoeuvres, in Theresa May’s resignation as Tory leader.

Thus something which had hardly featured in the referendum campaign increasingly became the central issue of British politics. This much was evident as the Jeremy Hunt/Boris Johnson Tory leadership circus rolled into town this week to address the handful of Conservative Party members in Northern Ireland. Both played the unionist card to perfection: Johnson accused the EU of “moral blackmail” over the backstop and insisted that he would never allow the return of a hard border, whilst Hunt assured Northern Ireland’s Tories that he would not “allow the EU or anyone else to create any kind of division down the Irish Sea or attenuate our union”.1

These defences of the integrity of the United Kingdom were guaranteed to go down well with unionists, who identified Brexit with preserving British sovereignty against ‘enemies’ - whether in Brussels or closer to home in Dublin. As the DUP’s Sammy Wilson commented before the visit of the Tory leadership hopefuls, “What we’ve heard so far, we’re very pleased about. They have said that the current agreement is not going to work. They have both said they are committed to the union.” Significantly he went on to urge Hunt and Johnson to stand up to the Irish over a hard border: “We know the Irish. If you vacillate they’ll push you around. If you stand up to them, they will start to take you seriously.”2

This rhetoric, although primarily aimed at Wilson’s electoral base in the Six Counties, also reflected growing tensions in relations between London and Dublin. In Conservative circles it is widely argued that Irish taoiseach Leo Varadkar had overplayed his hand during the negotiations and that his alignment of Ireland with the EU against the UK was motivated by ‘traditional’ Irish anti-British feeling. To these Tories and the headline writers in The Sun, Daily Mail, The Daily Telegraph and the Daily Express Brexit was clearly a case of Ireland seizing an opportunity during the current difficulty to join with ‘Brussels’ and stab Britain in the back.3

The traffic was not all one way, however. Irish politicians and commentators gave as good as they got in this war of words by attacking British arrogance and delusions of faded imperialist grandeur.4 Fintan O’Toole, one of Ireland’s most celebrated public intellectuals, was a familiar critic on both sides of the Irish Sea, laying into the “sado-populism” and English nationalism of the Brexiteers. In particular he contrasts their reactionary nostalgia with a modern, confident Ireland that has come to terms with its past and is now embracing a progressive European future.5 Although O’Toole’s critique of Brexit was framed largely in cultural terms, his arguments reflected the dominant consensus amongst the Irish ruling class.

In less elevated language, Leo Varadkar, whilst acknowledging the very negative effects Brexit would have on the Irish economy, argued that the Irish state’s future political and economic interests now lay with the European Union rather than in bilateral relations with the UK.6 Indeed, whilst much of this verbal sparring from Dublin turned on the impact of a hard border or the supposed threat that Brexit posed to the ‘peace process’ and the Good Friday agreement, the Irish ruling class had other equally pressing concerns about British withdrawal from the EU.7

New partners?

To explain these recent developments it is perhaps helpful here to look briefly at the development of the Irish state and the relationship of the Irish ruling class to the British bourgeoisie and British imperialism. This relationship always had a very contradictory character, although it was always one of economic dependence and ultimate political alignment.

The new 26-county state that emerged in 1922 after partition failed to fully complete the national project of political and economic independence. Despite the republican rhetoric of political leaders such as De Valera and constitutional claims to sovereignty over the whole island, in practice successive Dublin governments revised the ‘national project’ to one of developing their own distinctive ‘southern’ state and society. Given the power of British imperialism until World War II, this pragmatic acceptance of the partitionist status quo could be easily justified. Even after that period the relative weakness of the Irish state in comparison with Britain remained a determining factor in Anglo-Irish relations.8 Although after 1948 the southern state was formally a republic outside the Commonwealth, politically it continued to be closely aligned to the interests of the UK.

Nowhere was this close political relationship seen better than in the Irish state’s cooperation with British imperialism in containing the republican insurgency in the Six Counties from the late 1960s. Suppressing this insurrectionary movement was in the direct interests of the southern bourgeoisie, which feared that a revolutionary movement could threaten its state too.9 From the early 1970s the Irish and British governments worked closely together to defeat the Provisional movement and to develop a new political dispensation that would draw sections of the nationalist population into supporting a modified form of the status quo in the Six Counties.10 From the Sunningdale agreement (1973), the Anglo-Irish agreement (1985), through to the Good Friday agreement (1998), the Dublin and London partnership attempted to stabilise both the Six Counties and the southern state. The peace process and the close cooperation of political leaders such as Tony Blair and Bertie Ahern showed that, when it came to the north of Ireland, the interests of the Irish and British states were inextricably linked.11 Although this Anglo-Irish partnership reached its apogee under Blair and Ahern, it remains an essential state strategy of paramount political interest for the southern bourgeoisie in managing conflict in the Six Counties.

For much of the 20th century these political relationships reflected long-established economic realities. Fianna Fáil had attempted to develop an independent manufacturing base and an internal Irish market through forms of protectionism and state intervention in the 1930s and 1940s, but by the 1950s these had failed to create a strong ‘native’ industrial base. Ireland remained part of the sterling area and continued its historic economic dependence on Britain. Its economy was an underdeveloped exporter of livestock, food products and people to its wealthier neighbour, whilst in return it imported British consumer and manufactured goods.12 Levels of emigration, especially to Britain, remained high, underlining the economic failure of the 26 counties: by the mid-1950s many critics openly doubted the viability of the Irish state to provide any kind of modern, decent life for its population.13

The southern state responded to this crisis by reversing its semi-autarkic attempts to build an industrial economy and home market by looking instead to foreign capitalists to generate economic growth. Using fashionable Keynesian models of modernisation and economic efficiency, combined with a degree of state intervention and investment incentives, taoiseach Seán Lemass promised an economic transformation of Irish society, in which a “rising tide lifts all boats”.14 His 1958 ‘Economic Development’ programme and 1963 ‘Second Programme for Economic Expansion’ were framed as reinvigorating the (southern) national project and strengthening “economic independence”.15 Lemass established the basic policy framework for the southern state for the rest of the 20th century which reshaped the underlying structures of the Irish economy in this period.


From the early 1960s the EU - and its forerunners, the European Community and the Common Market/European Economic Community (EEC) - played a key role in the political and economic strategy of the 26-county state. Although Ireland’s application to join the Common Market in 1961 was in conjunction with that of Britain, and reflected British capitalism’s continued domination of the southern state, many sections of the Irish bourgeoisie argued that membership held out the promise of increased economic independence and the development of new industrial sectors and markets away from British influence. The political implications of closer relations with Europe were clearly evident to Irish politicians and policymakers in this early period. As one diplomat noted positively, membership of the EEC could result in “some diminution of our present sovereignty”, but this should be balanced against the Irish state’s “long-term political aim of reduced dependence on the British market”, combined with a “worldwide political influence, which could not be ours in isolation”.16

In the 40 years following Ireland’s entry into the EEC in 1973, the state and the bourgeoisie threw themselves into ‘the European project’. Key symbolic turning points marking a lessening of British influence over the southern economy were the ending of the punt’s parity with sterling in 1979 and joining the European Monetary Union in 1999. The two parties of Irish capitalism, Fianna Fáil and Fine Gael, were both firmly committed to membership of the EU as an important element in their project of capitalist modernisation of the Irish economy.17 EU structural and cohesion funding was lauded as essential for the development of the transport and public infrastructure that underpinned growth and foreign investment.18 The Common Agricultural Policy was also held to have helped the modernisation of Irish agriculture by raising the incomes of larger famers and agri-businesses, whilst at the same time encouraging smaller, inefficient farmers to leave the land.19 Likewise the growth of new industries, such as electronics, computers and chemical production, was largely a product of multinationals from outside the EU establishing branch enterprises that could gain access to European markets.20

This pattern of ‘economic transformation’, combined with an increasing financialisation of the economy and a credit-fuelled property boom, culminated in the ‘Celtic Tiger’ period of the 1990s and 2000s.21 This period saw growth rates and GDP figures outstrip those of other EU states - not only making the Irish economy nominally one of the fastest-growing and richest in the world, but also one of the most unequal.22 For Irish capitalism this heady period proved that at last they had made it into the big time on the world stage and were getting noticed as an economic success - a ‘miracle’ born of unshackled Irish entrepreneurialism within the nurturing framework and single market of the EU23.

  1. www.irishtimes.com/news/world/brexit/brexit-withdrawal-agreement-a-dead-letter-says-boris-johnson-1.3944127.

  2. www.theguardian.com/politics/2019/jul/02/dup-welcomes-tory-leadership-contenders-vow-to-ditch-backstop.

  3. www.independent.ie/irish-news/politics/leading-tory-brexiteer-attacks-leo-varadkars-border-stance-as-irresponsible-votechasing-immaturity-36665280.html. For further examples of the tone of some of the tabloid exchanges, see also www.politico.eu/article/how-brexit-burned-uk-irish-friendship-theresa-may-leo-varadkar.

  4. www.irishtimes.com/news/ireland/irish-news/irish-ambassador-to-uk-accuses-british-magazine-of-anti-irish-bias-over-brexit-1.3858298.

  5. www.theguardian.com/books/2018/dec/29/fintan-otoole-the-books-interview-brexit-english-nationalism.

  6. www.ft.com/content/1ea92d34-fee3-11e8-aebf-99e208d3e521.

  7. www.irishnews.com/news/brexit/2019/01/10/news/implications-of-brexit-on-peace-process-are-likely-to-prove-far-reaching--1525065.

  8. C O’ Halloran Partition and the limits of Irish nationalism Dublin 1987; K Allen Fianna Fáil and Irish Labour: 1926 to present day London 1997.

  9. B Hanley The impact of the troubles on the Republic Of Ireland 1968-79: boiling volcano? Manchester 2018.

  10. T McKearney The Provisional IRA: from insurrection to parliament London 2011.

  11. E O’Kane Britain, Ireland and Northern Ireland since 1980: the totality of relationships Abingdon 2007.

  12. T Garvin Preventing the future: why was Ireland so poor for so long? London 2014.

  13. T Brown Ireland: a social and cultural history 1922-2000 New York 2004, pp199-226.

  14. https://web.archive.org/web/20090404160150/http://www.oireachtas-debates.gov.ie/D/0208/D.0208.196404150045.html.

  15. J Horgan Seán Lemass, the enigmatic patriot: the definitive biography of Ireland’s great modernising Taoiseach Dublin 1997.

  16. www.dfa.ie/media/dfa/alldfawebsitemedia/ourrolesandpolicies/irelandintheeu/ireland-in-the-eu-history.pdf. For other aspects of the Irish state’s political strategy about EEC membership, and its fears about British intentions in the early 1960s, see: www.irishtimes.com/news/politics/ireland-s-1961-application-to-join-eec-fraught-with-fear-of-rejection-1.3695449.

  17. R Foster Luck and the Irish: a brief history of change from 1970 Oxford 2008.

  18. http://aei.pitt.edu/27/1/Odonnell.pdf.

  19. www.cso.ie/en/media/csoie/releasespublications/documents/statisticalyearbook/2004/ireland&theeu.pdf.

  20. K Allen The Celtic Tiger: the myth of social partnership in Ireland Manchester 2000.

  21. D O’Hearn Inside the Celtic Tiger: Irish economy and Asian model London 1998; P Kirby The Celtic Tiger in distress: growth with inequality in Ireland London 2002.

  22. P Kirby op cit.

  23. G Kerrigan The big lie: who profits from Ireland’s austerity? Dublin 2012.