How
Ireland Became Victim of Private Rent Possession |
[Reprinted from Land
& Liberty, May-June 1986] |
IRELAND'S land tenure system was the supreme obstacle
preventing its participation in the Industrial Revolution. To this day
it continues to be allowed to stand in the way of economic progress.
The system implicated is not the landlord system of 19th century
infamy, which has long been jettisoned, but the general one by which
the possessors of land are also entitled to possession of the land's
rent. The unique natural conditions of Ireland have combined with it
to produce a particularly powerful deterrent to economic growth.
The mild, wet climate and lowland topography is ideally suited to
year-round grazing of livestock. Arable suffers from leaching, from
damp-induced pests and diseases, and from unreliable harvests.
Rotations with grass or, more productively but less sustainably,
fodder crops for manure, are essential for maintaining fertility and
breaking pest and disease cycles.
Coupled with an undeveloped external market, these conditions ensured
that until 400 years ago semi-nomadic pastoralism under the communal
Brehon land laws was able to survive.
The Elizabethan invasion of 1580, however, initiated a century of
traumatic change, to which a growing external market added impetus. By
1700 a totally new land tenure system was in place, vesting total
ownership of the soil in an alien class of landowners. The old Gaelic
aristocracy, elected and bound by prescriptive land rights, had been
swept aside. Catholics remained in ownership of just 1 million out of
20 million acres.
Colonial status also brought the island within the mercantile policy
of bleeding colonies of their natural products and stunting any
competitive economic growth for the benefit of the mother country.
Additionally, being a natural source of revenue and soldiers for the
sometime Catholic Crown, Protestant Parliament sought to impoverish
her. The Navigation Acts (1650s) barred direct trade with other
colonies, and the Cattle Acts (1660s), the Woollen Act (1699) and the
Penal Laws (1690s) were also passed.
Ironically, the outcome was that Ireland became a relatively
prosperous country during the eighteenth century. The growing external
market had naturally been tending towards the export of live cattle
and sheep. When these outlets were prohibited, more intensive forms of
farming became relatively profitable for the first (and only) time in
Irish history.
In terms of economic analysis the output of the country came to
exceed the optimum, or that output at which the income of each unit of
land, labour and capital employed could be maximised.
Under an Irish sky, and given certain constraints on the availability
of capital which shall be discussed later, the optimum output has
always been a combination of livestock products yielding a low total
output and supporting, at the highest available return net of costs, a
low population.
The new quest for high rents by landowners pushed the economy towards
the optimum but the Cattle Acts prevented it being achieved.
The store cattle were fattened and the sheep were sheared at home
instead. Then they were slaughtered, salted and barrelled for the
slaves in the West Indian sugar plantations and for the navy.
Dairying, the intensive side of the livestock sector, became more
competitive. So did tillage, the intensive side of farming in general.
Arable required grass or root crop breaks, and so potatoes became
important. Dairying, tillage and potatoes each required labour.
"During the century in which the Cattle Acts were in operation
Irish agricultural production appears to have expanded at a far faster
rate than it has done over any prolonged period subsequently,"
writes Raymond Crotty in his "pioneering"[1] Irish
Agricultural Production (Cork 1966, p.9).
This upwelling of primary activity provided resources and market
demand for secondary and tertiary activity, the cottage linen industry
being the most important.
Agriculture is notorious for the fluctuation of its daily and
seasonal demand for labour. Spinning and weaving were able to soak up
the pools of labour in off-peak hours, and linen also required the
growing of flax.
During the century, linen exports expanded to half the total value of
Irish exports of £4m in 1800, multiplying eighty times in volume
-- "perhaps the most remarkable instance in Europe of an
export-based advance in the eighteenth century".[2]
Perhaps those slowest to feel the benefit of this upsurge were the
landowners. The turbulence of the 17th century and the alternative
attraction of the New World had served to divert prospective English
immigrants, and so the native population enjoyed a "tenants'
market".
Also, the long leases granted by the new owners made rent levels slow
to respond to tenants' ability to pay. Real agricultural rent levels
perhaps doubled in the 50 years from 1680, whereas they almost tripled
in the next 50 years (see figure).
Even the tenants' ability to pay was not what it might have been.
Over-optimum output meant that increased costs -- in the form of
capital and labour supplied within the economy -- left a smaller
surplus as potential rent.
The ideal situation from the landowners' point of view had been
outlined by Sir William Petty. His plan was to turn Ireland into a
vast sheep and cattle ranch housing 6m cattle and 300,000 people, the
other 1.7 million moving to higher wage areas.
Crotty noted almost 300 years later that the landowners had
eventually had their way and that the land had indeed come to be
dominated by 6 million cattle, though the population had managed to
rise by half.
Nevertheless, in the early 18th century the landowners could only
cash in on the general prosperity by multiplying their tenants,
allowing subdivision of farms among children, and encouraging new
tenants to enclose waste land in return for potato plots and yarn
put-out for weaving.
"Landlords were well-rewarded for a minimum of capital outlay,"
observes W. H. Crawford. But "the landlords did not supply the
dynamics of the economy: that role belonged to the linen drapers and
the merchants".[3]
He added: "The domestic linen industry provided labour for all
the family and therefore a premium for larger families." This
aided and abetted the landlords' quest for higher rents, and did so to
the poorest reaches of the island. In County Mayo in 1790 a newspaper
proclaimed that linen had become "the principle source of the
wealth and independence of the country".
Access to land was available merely through paying the rent, and work
was available so that labourers could do so. The need to acquire
capital (in the form of livestock) no longer delayed marriage and
reduced family size.
"A particular combination of institutional and economic
conditions made it possible for the Irish proletariat to acquire land
and build cabins on it and to reproduce itself at a rate for which
there is scarcely any parallel in rural societies," concludes
Crotty (p.56).
This population explosion was to convert a tenant's market in
lettings into a landlord's market. By mid-century all land of value
had been enclosed and the landowners' position was beginning to
strengthen.
The story of the eighteenth century was foreshadowed in the final
decade of the previous century. The internal logic of the tenure
system and external interference in the pattern of trade combined
first to raise and then to depress the vigour of the economy.
Irish currency was artificially cheap during that decade, giving
Irish woollen goods an advantage in the English market, and creating a
threat of inflation at home. L. M. Cullen writes:
"Expecting a fall in the nominal value of coins in
their possession, people became anxious to convert coin as quickly
as it came into their possession into goods or land. The price of
lands and rent, both low in the first half of the 1690s, was now
rising very sharply ... Rising prices and rents meant a reduction in
the large margin of competitive advantage that Irish exports enjoyed
in 1696."
Exports peaked at £ 1 million in 1698 but fell back by one-third
in the next three years. The Woollen Act of 1699; revaluation of the
currency in 1701; and a decade of European war from 1702 merely
hammered nails in trade's coffin. "Tenants who had rented land at
high rates in the 1690s suffered especially," notes Cullen. A
currency-induced economic boom had produced a land cycle which served
to undermine the boom.
The 18th century as a whole witnessed a land cycle (see figure)
triggered by government policy. It was to follow the same inexorable
course.
Normal market relations with the rest of the world were restored in
the 1730s. Live cattle exports rose for the first time in fifty years,
and wool and butter exports rose in the 1740s.
By the 1760s the incipient long-term shift of the better lands of the
south and east to pasture was inspiring the first "agrarian
outrages" by Whiteboys.
By 1780 all the acts prohibiting Irish trade had been repealed.
England was no longer seeking markets for its farmers but food for its
towns. At first this meant corn, and Ireland became a corn exporter
from 1760 to 1815. But in the long term it meant meat, which was to
seal the change over to pasture.
By the 1790s the Whiteboy resistance was becoming more organised.
Radical changes, however, were to be delayed until after 1815 by the
American war. the French wars, and the doubling of world prices from
1760.
The wars maintained the victualling trade and the demand for arable
products. The secular price rise. Grotty has argued, "was
particularly conducive to an expansion of tillage". Cereals "gave
the highest gross output per acre: the windfall profits which rising
prices would bring I inputs bought at today's prices; outputs sold at
tomorrow's! would, therefore, be greatest on land under tillage".
Mounting population pressure diverted these windfall profits into
land rents and maintained the share of rent in total income despite
the increase in arable which would tend to lower it.
Long leases at fixed rents, however, meant that it did not all go to
the official land-owning class. Tenants were able to sub-let at
profitable rents.
Long leases, therefore, began to be converted to short leases as they
fell in. which facilitated the conversion 10 pasture when prices
dictated.
Later, nationalists argued that this reduced the security necessary
for tenant investment and explained the low level of investment in
agriculture.
But the timing was not right. Joel Mokyr has shown that even by 1845
two-thirds of the land was still held under long leases, whilst low
investment had long been endemic.[4]
Mokyr has quantitatively analysed the available historical data to
test various hypotheses on the causes of the poverty that made the
Great Famine possible.
He concludes that the problem with the Irish economy was "reduced
capital formation", and that the paucity of capital was one basic
fact:
Landlords, the only element in Irish society with some
access to capital markets, were rarely interested in agricultural
progress, and as a class probably invested little.
The incentive to invest lay with the tenants because of the long
leases. The potential funds -- the agricultural surplus represented by
rents, and whatever loans were available -- were in the hands of the
landowners. But the landowners had a notoriously low "marginal
propensity to save":
Irish landlords, whether they lived in Ireland or not.
adopted the lifestyles and English consumption pattern; of English
gentlemen ... Contemporaries tended to think that the source of
Irish troubles was that the absentee landlords spent income abroad.
The real problem was that they spent their income at all, and that
even those who saved some portion of it did not invest it in their
(or anybody else's) estates. Nol only did Irish landlords save
little and invest even less: many of them actually saved negative
amounts for decades prior to the Famine
The colonial legacy exacerbated their behaviour:
Far more than their English counter parts ... they were
alienated from their tenants, from the land, and from agriculture in
all its technical and economic aspects. The root of the failure of
the Irish landlords was a failure of entrepreneurship as well as one
of savings behaviour.
The middlemen who sub-letted plots probably accounted for much of the
entrepreneurial activity of the eighteenth century. But the rents they
were able to siphon off from the increasingly competitive land market
ensured that the tenants in general had little left over for land
improvement after bare subsistence.
A Royal Commission (1835) reported that the impediments to drainage
projects were "in some cases the absence of leases and in many
more cases the want of capital in the tenant and of assistance and
encouragement from the landlord". (Quoted by Mokyr, p.171).
Contemporaries blamed the poor state of agriculture on the lack of
fertiliser. Whatever manure the poor could get went on the potato crop
and no potatoes were left over for livestock to provide manure.
William Blacker, a respected author on agriculture, in his Prize
Essay on the Management of Landed Property in Ireland (Dublin.
1834), proposed that tenants receive loans to permit them to survive a
year while they grew crops lo feed cattle -- and that the obvious
person to advance them was the landlord. He admitted, however, that
the landlord may reasonably ask, "how can I be secured in the
repayment of the sum...?"
Mixed farming based on rotations that included fodder crops was the
basis of the Agricultural Revolution in Britain. It was particularly
essential if pasture, arable and farm labour were to expand and
co-exist in the Emerald Isle.
Such a system required, however, considerable expenditure
in deep field draining, and marling and liming to reduce soil
acidity. In addition some funds would be needed for the purchase of
fertiliser, until the farm started to produce sufficient quantities
itself... Ireland's inability to generate enough capital formation
to make the transition to the new husbandry helped lo perpetuate the
rural conflicts; the latter fed back into the inhibition of the
process of capital accumulation.
Cullen and Smout have observed that "No country has ever been
transformed into a modern economy without a successful agricultural
revolution preceding or coinciding with industrialisation: Ireland
could not be an exception to that rule".[5]
In 1767, the first major industrial building in Ireland was erected
at Slane. It was a five-storey, water-driven flour mill costing £20,000,
and it outshone even English mills. Two of its three partners were
landed gentry.
In the 1770s, however, milling felt the pinch of competition from
largescale plant in England. With breweries and glass houses, it began
to concentrate in Dublin and the main towns.
By the 1780s, the spinning of worsted in rural areas was also
suffering competition. New cotton-spinning mills, however, were
springing up, like the new sugar refineries, large-scale from the
start.
In 1785, Pitt's Commercial Propositions for free trade with Ireland
alarmed British industrialists who envisaged an influx of cheap Irish
goods and an outflow of British capital and artisans.
"Mechanisation and more effective management might well make it
possible for Ireland to capitalize the advantage it enjoyed in terms
of the wage rates of unskilled labour." explains Cullen.
However, fifteen years later when the Act of Union put Pitt's aim
into practice, those same industrialists were no longer worried.
Capitalisation was reducing the role of wages, writes Cullen.
During the 1790s annual imports of cotton wool for the new
cotton-spinning industry barely doubled, whereas in Scotland they
increased sixteen-fold. The industry did not survive the next 25
years. Nor did wool-weaving. "There appears to have been one
exception to the general slowness with which capital accumulated in
Ireland: social overhead capital". That is, roads, canals, public
buildings.
Thus Mokyr explains the paradox whereby Cullen is able to state that "Investment
had been heavy in the late 18th century ... There was no shortage of
the capital necessary to finance development ... Landowners provided
much of the capital of turnpike trusts, canal companies, and other
large-scale ventures."
Mokyr sets this achievement in context: "The main beneficiaries
of the expensive road system were graziers and landlords ... and it
seems likely that from the point of view of the entire economy ...
some of the capital which was used to build these roads would have
been more productive had it been applied elsewhere in the economy."
Another serious diversion of savings may also be traced to the land
tenure system. The digest of the Devon Commission on land occupancy in
Ireland in 1844 noted that "the tenant willingly expends any
capital he may possess in obtaining possession of the land and thus
leaves himself without the means of tilling it effectively afterwards."
Robert Kane, in an influential book The Industrial Resources of
Ireland (Dublin. 1845), wrote that "If some money (profits)
be made in trade in Ireland it is not so treated (reinvested), it is
withdrawn from trade and stock is bought, or land is bought, yielding
only a small return, but one with the advantage of not requiring
intense exertion or intelligence, and free from serious risk."
Mokyr relates that, apart from government securities "The
Guinnesses also owned large estates in Wexford and Wicklow, and there
can hardly be any doubt that these and similar transactions reduced
the rate of expansion of the entire industrial sector."
A further twist was that "in so far as they [savings] were used
to buy out bankrupt landlords who had lived beyond their means in the
past ... the negative savings of some landlords offset the positive
savings of the bourgeoisie."
Mokyr's conclusion is that "The wealth of rentiers did not find
its way into investment projects that could have helped the economy to
modernise. As far as economic development is concerned this capital is
then irrelevant, it might as well not have existed."
As with the cycle of the 1690s, the land cycle of the 18th century
had done its work before the post-1815 price collapse administered the
coup de grace.
Having triggered the exponential growth of the farm population and
asphyxiated alternative employments, the land system now shifted into
reverse gear and, by consolidating holdings for pasture, made much of
the workforce redundant.
The inevitable Great Famine of 1845-51 literally killed off
resistance to this change. Over a million died, and a million
emigrated, and serious discontent with the arrangements for land was
postponed for thirty years until the next economic crisis.
REFERENCES
[1] Both Michael Winstanley's and Joel Mokyr's
adjective. Mokyr adds "but controversial". L.M. Cullen calls
it "highly controversial", but "useful".
[2] Cullen, L.M. An Economic Hisotyr of Ireland Since 1660,
Batsford, 1972, p.53.
[3] Crawford, W. H., The Influence of the Landlord in Ulster,
in Cullen and Smout, op cit., p.200.
[4] Mokyr, J., Why Ireland Starved: 1800-1850, Allen &
Unwin, 1983, p.100.
[5] Cullen, L.M. & Smouth, T.C., Comparative Aspects of
Scottish and Irish Economic and Social History 1600-1900, John
Donald, 1977, p.10.
[6] Starcke, Viggo., Centuries of Experience with Land Taxation
in Denmark, in 1966 International Seminar, ed. Woodruff,
Brown and Lin, John C. Lincoln Inst., 1967.
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