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Burn Everything British but their Coal: the Anglo-Irish Economic War of the 1930s

Published online by Cambridge University Press:  03 March 2009

Kevin O'Rourke
Kevin O'Rourke
Affiliation:
The author is Assistant Professor, Graduate School of Business, Columbia University, New York, NY 10027
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Abstract

The Anglo-Irish Economic War of 1932 to 1938 was eventually settled on terms highly favorable to the Irish. This article uses a computational general equilibrium model of the interwar Irish economy to argue that the welfare costs of the war were not so great as has been thought, and that the dispute helped de Valera electorally. These considerations help explain the eventual Irish “victory” in the Economic War.

Type
Papers Presented at the Fiftieth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 51 , Issue 2 , June 1991 , pp. 357 - 366
Copyright
Copyright © The Economic History Association 1991

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References

I am grateful to Nigel Buttimore, Mary Daly, Michael Gavin, Dermot McAleese, Joel Mokyr, Cormac Ó Gráda, John O'Hagan, Jean-Laurent Rosenthal, Frances Ruane, Tom Rutherford, Jeffrey Williamson, and seminar participants at Harvard, UCLA, and Berkeley.Google Scholar

1 The following paragraphs draw on Lee, Joseph, Ireland 1912–1985: Politics and Society (Cambridge, 1989);Google Scholarand Johnson, David, The Iterwar Economy in Ireland (Dublin, 1985).Google Scholar

2 Johnson, The Intenvar Economy, p. 16.Google Scholar

3 McMahon, Deirdre, Republicans and Imperialists: Anglo-Irish Relations in the 1930s (New Haven, CT, 1984).Google Scholar

4 Johnson, The Intenvar Economy, p. 28.Google Scholar

5 Fanning, Ronan, The Irish Department of Finance 1922–58 (Dublin, 1978), p. 292.Google Scholar

6 Ibid.

7 O'Rourke, Kevin, “The Costs of International Economic Disintegration: Ireland in the 1930's” (Mimeo, Columbia University, 05 1990).Google Scholar

8 This paragraph draws on Richardson, J. H., “Tariffs, Preferences and Other Forms of Protection”, in British Association, Britain in Recovery (London, 1938);Google ScholarAshby, A. W. and Jones, W. H., “Agriculture (C): The Livestock and Meat Trade”, in Britain in Recovery;Google Scholarand Hancock, W. K., Survey of British Commonwealth Affairs, Volume II, Part 1 (Oxford, 1942).Google Scholar

9 See Rooth, T. J. T., “Limits of Leverage: The Anglo-Danish Trade Agreement of 1933,” Economic History Review, 37 (05 1984), pp. 211–28, for an account of the Anglo-Danish agreement.CrossRefGoogle Scholar

10 British prices for Irish cattle are not readily available; I used the data sources given in Neary, J. Peter and Gráda, Cormac Ó, “Protection, Economic War and Structural Change: The 1930's in Ireland”, Irish Historical Studies (forthcoming).Google Scholar

11 O'Rourke, “Costs”, shows that the model tracks reality well when the shocks that actually occurred are imposed on it.Google Scholar

12 All Irish tariff calculations are from Ryan (see source note to Table 3). In Ireland: A New Economic History (in progress), Cormac Ó Gráda argues that Ryan may have overestimated Irish tariff increases during the period. If that is true, it clearly strengthens the arguments of this paper.Google Scholar

13 Neary and Ó Gráda, “Protection.” Neary and Ó Gráda used back-of-the-envelope methods to calculate the costs of the war. For a full description of the model used in this paper, see O'Rourke, “Costs.”Google Scholar

14 In O'Rourke, “Costs,” it is shown that the precise form of the utility function matters little for the welfare results of exercises such as these.Google Scholar

15 Neary and Ó Gráda, in “Protection,” derived welfare costs on the order of 1.3 to 1.9 percent of the GNP.Google Scholar

16 O'Rourke, “Costs”, p. 3.Google Scholar

17 To this day, small farmers support Fianna Fáil and large ones Fine Gael. The farmer's dole is a rare example of a “first best” solution being applied to the problem of maintaing agricultural employment. Current European Community Commission proposals to reform the CAP envision buying small farmer support in a similar manner.Google Scholar