Philipp Fink, Ireland in:

Philipp Fink

Late Development in Hungary and Ireland, page 51 - 55

From Rags to Riches?

1. Edition 2009, ISBN print: 978-3-8329-4173-4, ISBN online: 978-3-8452-1720-8

Series: Nomos Universitätsschriften - Politik, vol. 168

Bibliographic information
51 ment. Agricultural wages were correspondingly low and were kept low, due to the high levels of rural unemployment and the continuation of semi-feudal employment practices (János 1982: 129).21 Subsequent Hungarian industrialisation was mainly linked to the development of the railway network and thus was characterised by skill-intensive heavy industry. However, the introduction of modern transport technologies exceeded the general level of industrial and social modernisation present in the country. The resulting lack of skilled labour led to high pay differences according to skill levels and with the majority of skilled labour in Hungary being foreign immigrants.22 Skilled foremen und specialists originating mainly from Germany and the Hereditary Provinces were attracted by high wages to work in the manufacturing sector. The long duration of feudalism had impeded the evolution of rural indigenous proto-industrialisation in light industry and hence the development of corresponding skills in the rural population (Berend/Ránki 1974: 80-84). The structure of Hungarian industry and the workforce had therefore profound effects on the formation of the Hungarian labour movement. The evolving labour movement was small and elitist, as it was mainly based on the organisation of foreign skilled workers. Consequently, trade unions remained alienated due to their inability to organise the interests of the vast majority of unskilled labourers. Furthermore, the union movement was only based in the few industrial centres of the country, such as Budapest. The limitations of the labour movement also influenced the subsequent evolution of Social Democracy in Hungary, which failed to act as a social movement pursuing reforms (Berend/Ránki 1974: 87-89). Hence, the externally induced process of economic modernisation met upon a pre-modern Hungarian society, causing various overlapping social, ethnic and political conflicts. The multidimensionality of conflicts resulted in weak opposition to the political classes, thus affirming the status quo and upholding the socioeconomic ascendancy of the Hungarian nobility. 1.4.2 Ireland Process of de-industrialisation and continued emigration had implicit effects on the socioeconomic set-up of the country. Increased pastoralisation and depopulation prompted a process of social transformation in rural society. The concentration process of farmland led to the rise of an influential farming class, which had a piv- 21 Feudal employment practices still prevailed, for instance, in the Farm Servants Act (1898, 1907). Farm servants were forbidden to leave the estate and to strike. There were no restrictions on working hours. Remuneration was very low even for rural standards in Hungary and for the most part in-kind (Berend/Ránki 1974: 82). The Act was also commonly referred to as the slave law (János 1982: 130). 22 Accordingly, in 1875, 25% of skilled labour in Budapest was foreign. In the higher skilled iron industry and machinery branches, the rate of foreign skilled labour was 35% (Berend/Ránki 1974: 79). 52 otal role in the movement for national independence. Secondly, the process of deindustrialisation as well as the partition of the country resulted in a weak labour movement. Labour interest representation was further constrained through the dominance of sectarian cleavages. Finally, the split in the independence movement led to the creation of a three party system with two dominant catch-all parties. The political conflicts were essentially non-ideological with a high level of focus on local politics. Recurring mass emigration served to cement the socioeconomic structure and acted as valve to pacify Irish society. Agrarian Interests The described concentration process of farmland took place together with the growing bankruptcy of the traditional landowning classes. 23 The rise of legal encumbrances resulted from the growing wage pressures for agricultural labour, loss of rent payments due to rural depopulation and increased rate payments. These events strengthened the position of the middleclass tenant farmer. Due to the rise in bankruptcies, this class became landowners, constituting a new rural agro-elite based on the small farmer family (Foster 1989: 336). The socioeconomic status of the middleclass farmers was further supported by a change in traditions brought about by the demise of the agricultural proletariat. Families were on average smaller and marriages took place later than before the Great Famine. Furthermore, the introduction of impartible inheritance secured farming incomes and broke the cycle of marginalisation. However, the possessor principle, whereby the first born son inherited the farmland, also secured continued emigration. The stabilisation and growing importance of middleclass farmers also allowed open defiance against attempts by the landowning aristocracy to increase rent payments. This brought the issue of land reform to dominate the political agenda towards the end of the 19th Century through the rise of the Land League. The question of landownership had a pivotal role in the fight for independence after the Land League was connected to the Home Rule cause. Thus, the long lasting influence of agrarian interests was anchored in the political sphere (Mjøset 1992: 230; Foster 1989: 343-344, 373) Moreover, the agrarian sector was also defined by the underlying basic conflict between extensive graziers and intensive farming landowning peasantry. This conflict surfaced not only during the Land War, but also was a predominant cleavage 23 Rate payments increased especially during the Great Famine as a result of financing the measures aimed at the alleviation of rural poverty. These included payment obligations for the provision of Public Work Schemes and the financing of Poor Law Unions, which were established following the introduction of the Poor Laws, was introduced in Ireland in 1847. The high level of high indebtedness led to the initiation of the Encumbered States Act (1849), freeing property for legal encumbrances. As a result, Irish estates worth £ 20 million changed hands in the following decade (Foster 1989: 328). 53 shaping modern Irish politics of the later Irish Republic. The fall in agricultural prices in the 1870s exerted additional pressure on tillage small-holders. The slump in prices again prompted the further replacement of tillage farming by pastoral farming, which gained from the stable demand for live cattle from British markets. Thus dependency increased not only on a particular export product, live stock, but also on a particular market, the UK (Breen et al. 1990: 185, 193; Foster 1989: 410, 414). Labour Interests The labour movement was comparatively underdeveloped. This was in part due to the marginalisation of the working class in the course of de-industrialisation and emigration and in part due to the Protestant-Catholic antagonisms of the Irish independence movement. The only viable industrial centre was situated in the Protestantdominated Northeast of Ireland, where the working class organisations were also Protestant-dominated. In the south of the country, industry and hence the labour movement was connected to agriculture. The only viable sector was food processing (brewing, distilling, canning). The non-industrialised nature of southern Ireland explained the low level of labour organisation and hence the lack of political labour representation (Foster 1989: 437-438). The surfacing of a reform agenda was further undermined as the classic capitallabour cleavage was subordinated by the nationalist struggle for independence (Foster 1989: 443; Coakley 2005: 24). Marginalisation of Irish labour interests was propelled by the loss of Ireland’s only industrial region in the Northeast in Belfast due to partition in 1922. In 1926, only eight percent of the labour force of the newly independent Irish Free State (later Irish Republic) was employed in industry and just over four percent in manufacturing (Mjøset 1992: 260). Party Political Structure These conflict lines greatly influenced the political sphere and formation of the current political party landscape. The split in the nationalist movement (Sinn Féin) over the issue of the recognition of the Anglo-Irish Treaty, granting Irish self-rule at the cost of partition and dominion status, led to the Civil War of 1922-1923. Essentially a three party system with two catch-all parties developed out of this conflict. The pro-Treaty party (Cumann na nGadheal later Fine Gael) supported the centre right interests of graziers, commercial and professional classes. The centre party, initially anti-Treaty, drew its support from small farmers (tillage) and the lower classes (Sinn Féin later Fianna Fáil). The marginalisation of labour interests reduced the Labour Party to a third party role (Jacobsen 1994: 50; Coakley 2005: 24). This party political constellation led to fundamental differences in Irish politics compared to its European neighbours. The political conflicts were and are essentially non-ideological with a high level of focus on local politics. The high degree of 54 localism in Irish politics is seen to be the result of the electoral system (proportional representation paired with the system of single transferable vote), which leads to a high degree of electoral personalisation. Furthermore, decision making is strongly centralised in Dublin. Closely related to this is also a traditional rural-urban divide (Gallagher/Komito 2005: 255-259). The combination of the strong influence of the Catholic Church, supported by the religious homogeneity of Catholic southern Ireland as well as its dominant role in social institutions, and the economic importance of agriculture led to the development of an ideologically homogenous and conservative agrarian society (Mjøset 1992: 248-250; Breen et al. 1990: 42). Consecutive waves of emigration reinforced this social structure, leading to its persistence well into the second half of the 20th Century. The combination of a lack in employment and a rigid agrarian conservative society based upon the possessor principle fuelled by the impartibility of inheritance, led to the high mobility of the Irish population. Hence, emigration acted as a safety valve in Irish society, relieving the socioeconomic institutions and actors from the pressure to reform. The failure of ideological cleavages to surface in the political realm and the dominance of two catch-all parties resulted in the non-surfacing of the issue of emigration on the political agenda (Mjøset 1992: 7). The political parties represented, in the words of Lee (1989: 644), “the survivors” and “winners”. Their comfort depended to a certain degree on the continuation of mass emigration and population decline. Hence, Ireland at the turn of the twentieth Century resembled a Malthusian state, as the degree of comfort can be expressed by the relatively high level of living standards of those remaining in the country.24 This can be explained by the high level of world prices for agricultural goods and the fact that the Irish population had vastly decreased through emigration. Hence, according to short-term competitive electoral logic, the dominant political parties were inclined to accept emigration as an element to sustain and strengthen their political power (Mjøset 1992: 11, 65-67; Breen et al. 1990: 25). The determinants of Irish underdevelopment can be seen in cumulative processes comprising emigration and industrial decline. Emigration weakened the possibilities for further socioeconomic modernisation by reaping the Irish economy of potential consumers, workers and entrepreneurs. The ensuing contraction of internal demand and the home market further weakened the industrial base. Ensuing unemployment was further exacerbated by the dependency on labour-extensive agricultural pastoral exports predominantly to British markets leading to further emigration. Social rigidities were cemented, as the impetus for socioeconomic change was counteracted by the predominance of emigration. 24 In 1913, Irish GDP per capita was 50% of British, 73% of French and 80% of German GDP (O’Hearn 2001: 113). 55 1.5 Constrained Industrialisation Subsequent Irish and Hungarian development strategies had to tackle specific modernisation blockages. These were the result of the culmination of internal social structures, restricting the evolution of capitalist modes of production, and the countries’ imperial incorporation as agricultural hinterlands. Imperial incorporation effectively affirmed the internal structures. It gave the process of deindustrialisation in Ireland and the Hungarian system of aristocratic semi-feudal great estates a capitalist logic. The countries’ prime role as agricultural suppliers to the imperial centre complemented agrarian interests and secured their socioeconomic predominance. Furthermore, imperial incorporation also continued to constrain the development of industrial capacities. Owing to the internal structures, low incomes had created low demand, impeding the development of sufficient markets and hence profits for entrepreneurial activities in both countries. On the one hand, Ireland never left the pre-industrial stage of cottage industries, as wages due to the pre-famine population growth were sufficiently low to inhibit an increased concentration of production. On the other hand, re-feudalisation and its legacies in Hungary effectively blocked the development of sufficient rural markets to induce wide-spread protoindustrialisation. In the midst of this, imperial incorporation, which entailed the free movement of goods, opened both economies to goods from the imperial centres. This further hampered industrial development under imperial direct rule, as both economies were subjected to competition with superior goods from the imperial core. In the case of Ireland, this accelerated the process of deindustrialisation. In Hungary, it impeded the general development of industrial capabilities. Within the context of agricultural export dependency, reinvested agricultural export earnings resulted in increased unemployment and marginalisation. Technological innovations in grain production displaced farm labour in Hungary, which due to the underdeveloped state and hence lower productivity of the remaining economic sectors was left unabsorbed. An agricultural proletariat arose. Similarly, capital investments in dry cattle pastoralisation in Ireland entailed land-extensive investments, leading to rural unemployment and resulting in emigration. However, rising Irish wages due to labour scarcity were unable to unleash demand effects, as a result of the underdeveloped nature of the productive structure owing to the small internal market. Both results essentially inhibited sufficient profit possibilities for entrepreneurial investment. Consequently, agricultural export earnings were invested outside of the country or were spent on consumer imports and luxury consumption. The socioeconomic set-up in both countries reflected the economic structures, further inhibiting industrial development. Economic backwardness had decisive results for the social and political fabric. In both countries, conservative agrarian interests were complemented by the economic structure. This entailed for Hungary the predominance of anti-capitalist noble elites, who were vigorously interested in upholding their traditional social and political status. In contrast, in Ireland, conservative agrarian interests dominated the political sphere. Society and the state were in both cases directly or indirectly moulded by the dominant interest groups to affirm

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Irland und Ungarn verfolgen eine Entwicklungsstrategie, die in bewusster Abhängigkeit von Globalisierungsprozessen in Form von ausländischen Direktinvestitionen steht und sich als Paradigma in der Peripherie durchgesetzt hat. Doch dieser Entwicklungspfad hat zu einer ungleichen und abhängigen Entwicklung geführt. Dies ist laut dem Autor das Resultat des mangelnden Gestaltungswillens beider Staaten, für einen gleichgewichtigen Wachstumsprozess zu sorgen. Die historische Analyse zeigt, dass eine auf ausländische Firmen fußende Entwicklungsstrategie nicht ausreicht, um traditionelle Peripheralität zu überwinden. Der Autor fordert eine Reform des Entwicklungsparadigmas, um eine gleichgewichtige Entwicklung zu ermöglichen.