Philipp Fink, Constrained Industrialisation in:

Philipp Fink

Late Development in Hungary and Ireland, page 55 - 56

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
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 56 the status quo due to the lack of sufficient opposition. In Hungary, this was guarantied by the acceptance of Austrian hegemony and the suppression of opposing interests of either ethnical or social nature. In Ireland, emigration repeatedly played the role of relieving the socioeconomic system of sufficient pressure to reform.

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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.