The Saorstát is a Neo-colony
by Críostóir Fuilálainn
The term neo-colonialism is best regarded as existing in the same relation to imperialism that neoliberalism does to capitalism. No Marxist would argue that neoliberalism initiates a definitive break from capitalism, or that the same forms of industrial exploitation we see in nineteenth-century industry have disappeared, but rather that neoliberalism provides a useful means of speaking to economic and political trends in the west over the past number of decades, such as the increase in service jobs, cheap credit fuelling the over-valuation of speculative assets, increasing casualisation of labour and the opening up of welfare states to private competition. Along a similar time frame, more complex financial and political mechanisms have been incorporated into the arsenal of imperialist nations. Alongside annexations, inter-imperialist rivalry, plunder, invasions, blockades, and mass killings we also have seen use of sanctions, the appropriation of surplus product through vertically integrated and global supply chains, repatriation of profits, structural adjustment programmes, and strategic alignment with, re-direction and quashing of national liberation movements. When they are best deployed both terms attempt to speak to a world-historical conjuncture in which the United States is the hegemonic power par excellence, whose opportunistic bid for global supremacy came when the old European powers had been ravaged by the second world war.
Article originally published in Issue 8 of Rupture, Ireland’s eco-socialist quarterly, buy the print issue:
Historical works written on the subject of imperialism written by Marx, Engels, Lenin, Kautsky, and Luxemburg should be required reading for any socialist seeking to develop an understanding of the subject. However, they cannot hope to exhaust the myriad of distinct ways in which power is expressed through nation, class and culture, not least because they were written at a time when their authors were capturing a social configuration with an endless capacity to re-invent itself and evolve beyond its own limitations at a particular point in time. The obstacles to providing a totalising model in our own time are significant; statistics which do speak to this subject have been collated by transnational institutions based in the west who uphold the interests of the capitalist class, are underpinned by neoclassical economic assumptions and propagate spurious measurements of output. In interrogating the abstract model of capitalism in which workers of all nations live within autonomous territories exploited primarily by a ruling class whose powers are restrained by borders, we must make the attempt to penetrate into capitalism’s particularities. Such an exercise will make it impossible to deny that oppression along national, geographic as well as class lines are crucial to the ways in which the global economy is structured, that strict limits to decolonisation as political and economic projects remain in place and that, as Mike Davis wrote, ‘the brutal tectonics of neoliberal globalisation since 1978 are analogous to the catastrophic processes that shaped a ‘Third World’ in the first place’.
Crucial to the idea of neo-colonialism is that direct imperial control has been superseded by more sustainable forms of governance, via the construction of local political institutions that do not challenge free trade or foreign investment and that these limitations are partially enforced or upheld on a domestic level, by a native class who can expect to benefit from the arrangement. In his writings, the Algerian anti-imperialist Franz Fanon warned of a bourgeois nationalist class playing a reactionary role in the post-colonial context; ostensibly continuing the work of the authority that has been only formally ousted. In a similar vein the Ghanian revolutionary Kwame Nkrumah writes:
“Neocolonialism is a greater danger to independent countries than is colonialism. Colonialism is crude, essentially overt, and apt to be overcome by a purposeful concert of national effort. In neocolonialism, however, the people are divided from their leaders and, instead of providing true leadership and guidance which is informed at every point by the ideal of the general welfare, leaders come to neglect the very people who put them in power and incautiously become instruments of suppression on behalf of the neocolonialists.”
The key idea Nkrumah introduces here is that a ‘comprador’ bourgeoisie has more to gain by advancing the interests of a ruling class located within the metropole than articulating its own interests, whether territorial, political or economic, separate from them.
““Crucial to the idea of neo-colonialism is that direct imperial control has been superseded by more sustainable forms of governance.””
The parallels with the Irish revolution are obvious. Sinn Féin was an umbrella movement which, under very specific circumstances, brought together monarchists, socialists and Republican separatists within a single unified front for national liberation. Once serious discussions about the precise nature of the Irish state being struggled for began to be posed, as in the Treaty negotiations which followed May 1921 truce, these different factions within the organisation entered into open conflict. In this context and many others, we see how a national bourgeoisie might oppose a larger imperial formation and on that basis become a temporary ally of socialists or other revolutionary forces as their interests in taking on a foreign enemy coincide. However, political actors representing the interests of unionists, merchants and anyone else with a material interest in retaining access to British markets, acted on the orders of Winston Churchill and Lloyd George to withdraw Republican aspects of an Irish constitution, accede to partition and use British arms to barrage the Republican government in the Four Courts. Hence the reactionary statelet that emerged and in which we now live was constructed in order that the interests of British capitalists would be better served.
It is impossible to deny that the Free State remained subordinate to the British politically and economically well into the thirties. The Irish pound was tied to the sterling, Irish interest rates were determined by the Bank of England and its deposits were held in London. 90% of Irish exports went to the British market, the number of small farms fell precipitously and less labour-intensive forms of pasture farming predominated. If the Free State government was interested in its pursuit of an autonomous state and the extension of the project of national autonomy, it would not have exported livestock to Britain but would have rather kept the value-added parts of the production process by acquiring its own fixed capital to exploit its own agricultural resources. Instead, it remained wedded to a model which allowed recessions or wars in England to undermine Irish industry.
Dissatisfaction with the unemployment these policies brought about allowed for Fianna Fáil, the Free State’s natural party of government, to attempt a developmental project that would break definitively from Britain, through surplus generated from more labour-intensive forms of agricultural production and industrialisation via tariffs. In core capitalist nations in Europe, the mechanisms of the state played a crucial part in projects of this kind and took place alongside investments in education, extensions of credit and state planning. This is not seen to the same extent in the twenty-six counties. While attempting to create a state bank, Seán Lemass faced opposition from the civil service on the basis of this initiative’s supposedly communistic tendencies. Those elements within the Free State who favoured developmentalism and protection were therefore hindered, both by an overvalued sterling, but also a far more cohesive and powerful section of the capitalist class in the Free State, who benefitted from preserving the connection with England. Both Guinness and Players, which between them accounted for the majority of Irish share capital, were subsidiaries of British conglomerates. Those industries that were developed through tariffs were incapable of preventing the incorporation of the state into the US’ free trade zone into the early fifties. Though no one would deny that an indigenous Irish capitalist class has been powerful and remains so, it has never become a ruling class, due to this split between more outward-facing elements which had been empowered based by the economic dispensation inherited from the British, and those indigenous capitalists who, then as now, can only lobby for tax cuts and lower wages to protect themselves from international competition.
““A regime’s compliance or non-compliance with the Washington Consensus is a question worth billions of dollars.””
The term globalisation encourages us to regard social relations on the international level as having been flattened out and to see transnational institutions as moderating antagonisms between nation states such that no one nation enjoys any significant advantage over another. What this perspective would have us forget is just how central the US and the dollarisation of the world currency is to the global financial system and, as it is no longer constrained by deficits, the US can dictate international interest rates. The programme of monetary reform instituted by Richard Nixon to overturn the previously regnant Bretton-Woods agreement put the bulk of responsibility for international financial regulation into the hands of private operators. Using the dominance it had secured in the Gulf States the US pressured OPEC to raise oil prices, hobbling the European and Japanese economies, and developed the International Monetary Fund (IMF) whose structural adjustment programmes operate to pressure states to cut back on their expenditure, sell their deposits or open their state assets to foreign competition allowing US investors to come into their markets even stronger than before, as happened across Latin America in the 1980s. In this way all dependent nations are trapped in a debt-deflationary spiral effectively mandated by the US. It is important to emphasise that within this system former centres of global finance, as in London and other cities in Europe, have a subsidiary but still significant role as satellites of the Wall Street regime and in supporting the US’ export markets. None of these mechanisms makes the US less likely to intervene militarily, rather the opposite. The investment opportunities generated by weapons manufacturing and military logistics are crucial targets for surplus capital and also sets the stage for last instances of the kind we saw in Chile, Grenada or Burkina Faso. A regime’s compliance or non-compliance with the Washington Consensus is a question worth billions of dollars.
The significance of this in an Irish context can be seen in the Saorstát’s (Irish Free State’s) accession to the European Economic Community (EEC / EU), on the basis that it would stimulate Irish industry or raise living standards. In the nineties the Saorstát did achieve rapid growth, emerging from a decade in which unemployment was over 20%, due to firms such as Intel and Microsoft locating here in order to expand their operations into European markets and benefit from the reduction of transaction costs and flexible supply networks. The Industrial Development Authority (IDA) is the state body responsible for incentivising companies such as these to establish operations here by extending enormous sums of state money in the form of grants, special loan packages, and effective tax-free status. The Saorstát’s low-wage low-regulation regime rendered it such an attractive prospect for software and pharmaceutical companies that the foreign share of fixed capital ownership in the twenty-six counties rose to between 75 - 80% in the nineties; and the US share rose over the same period to 50%.
The Saorstát’s development into a global hub for FDI was concurrent with a global assault on both organised and unorganised labour, with an increase in flexibilisation of contracts in the west and super-exploitation in the south. The profits multinational corporations reaped by cutting wages below conditions necessary to reproduce their workforce are not re-invested in the southern nations in which these industries are located, but rather repatriated. This means that capitalists in the west are the primary beneficiaries, but also those of us who are accustomed to encountering clothing, electronics and foodstuffs such as coffee as cheap commodities; a form of compensatory consumerism which offsets our own real wage reductions. The Saorstát is obviously not subject to the same forms of crushing exploitation to which workers in Sri Lanka and Bangladesh are, rather it is a case of the same power dynamic applied to different degrees.
Commodity production is organised within supply chains spatially dispersed through a vast global network in which core regions keep the most technologically advanced and profitable nodes for themselves, while the economies of other nations are re-shaped to these nations’ interests. The Saorstát has been fashioned as an international tax-haven, in which there are no restrictions on repatriation of profits, corporations may operate tax-free with access to a low-wage workforce, and are provided with industrial estates and full access to electricity grids or water supply. Unions, where they exist, are compliant rather than combative. In this way the Saorstát’s peripheral status is contained in its being an intermediary. The broader network of indigenous Irish firms do not benefit from any form of technological transfer or pool of fixed capital as multinationals will tend to locate the more routine segments of their operations here, such as assembly of components, services or call-centres, while retaining the research and development operations domestically. As multinationals export more than 90% of their products, and import from other places, only a small minority of indigenous firms work as sub-suppliers and do not produce technically sophisticated goods. Rather they create outsized low-wage and low-profit sectors such as print or packaging. Enterprise Ireland occasionally puts forward linkage programmes to create a more mutually beneficial relationship between international and domestic capital. However, any significant scaling up would introduce some form of regulation which would work against the free hand corporate entities prefer. Though it is important not to understate the highly remunerated roles which are available in tech, legal, or professional service sectors, any account of Irish capitalism should reckon with the number of large Irish employers which are in the hands of North American multinationals. Cement Roadstone Holdings has sold its European operation to a US investment firm. The Ardagh Group is now based in Luxemburg. Beamish, Murphys and Ballygowan have been sold to Heineken, Carling and Budweiser respectively, Guinness has been merged into the Spanish company Diageo, Paddy Power merged with British Betfair, Total Produce has been bought out by the Standard Fruit Company and Kerry Groups’ consumer foods operations was bought by the American multinational Pilgrim’s Pride.
The relative treatment of indigenous firms in this regard is also illustrative. Between 2015 and 2020 the Department of Enterprise, Trade and Employment paid out €1.6bn in grants, an average of €240,651 to non-Irish firms, and an average of 35k to Irish firms. 71% of IDA grants handed out in the seventies to facilitate re-tooling went to British firms employing an average of 190 people, versus the remainder indigenous firms employing an average of 39 people. The work of Éirígí in mapping the locations of vulture landlords has highlighted the extent to which housing in the Saorstát has been increasingly monopolised by British and North American property companies. Irish natural resources are similarly monopolised from overseas, as we see in Shell’s ownership of Corrib gas.
In this sense, a global bourgeoisie in the US organised Irish capitalism as an intermediary in its interests, keeping Irish capitalism in a subordinate position in much the same way as the British did. Though there are local differences and local struggles to be contested and won, just as there was under British occupation, the substance of this subordinate relationship remains the same; the Irish bourgeoisie has no capacity to significantly adjust its economic policies in the face of global capitalism. Their authority and the continuing presence of multinational investment cannot be separated as state capacity is directed towards the provision of markets and an array of support services, infrastructure and labour training for these companies. In this way Irish capitalism is highly vulnerable to external economic shocks and will tend to follow the US into economic boom and contraction. The Two Celtic Tigers model that Denis O’Hearn has put forward in his scholarship bears this out, with a dot com bubble and burst in the nineties, followed by the meltdown of speculative real-estate assets in 2008.
““In this sense, a global bourgeoisie in the US organised Irish capitalism as an intermediary in its interests.””
During the election of 1918, Republican Frank Healy noted that partition had the aim of removing counties in which Irish industry had been concentrated and would render the resulting Saorstát an economic non-entity. The six-county statelet has also proved economically non-viable in the long-term as native industrialists, disproportionately represented in the Herrenvolk Stormont parliament, failed to recover after the global slump of the thirties. These industries were bought out by foreign capital and in the six counties too an intermediary ruling class reigned. During the thirty-year struggle against British occupation, the state survived on a subvention from Britain and the creation of a wartime security sector which provided 24,000 additional jobs, overwhelmingly in the Protestant community. It is here that the value of the concept of neo-colonialism in an Irish context today is at its highest. The partition of Ireland was accomplished by the 1920 Government of Ireland Act, passed by a British government, against the wishes of the Irish people. The institutions of the Republic were crushed in the six counties by a paramilitary colonial police force. The passing of a century has not made this border any less imperialist, nor has it made either state anything more than synthetic clientelist constructions. The notion that the invocation of the Republic has become an irrelevance originates in the idea that capitalist development has taken place in both jurisdictions independently so they might as well be separate entities. This is at best, a concession to a notional post-Belfast Agreement situation in which national liberation struggles are regarded as a distraction and at worst an acceptance of partition, which set out to inculcate a competitive dynamic between the two statelets.
Another consequence of the ongoing British occupation of Ireland, with its competing currencies and corporate tax regimes can be seen along the border counties of Cavan, Donegal, Monaghan, Leitrim and Sligo. In these counties rates of long-term unemployment and regional trade deficits consistently exceed the national average, while educational attainment, density of public services, and investment fall below. Not coincidentally, these are also the regions in Europe most exposed to the economic effects of Brexit and a potential hard border. That these are areas in which Gaeltacht regions are located should not escape our attention either.
The notion that the EU functions as an imperial power in Ireland is often presented against Ireland’s neo-colonial status, as though the suggestion is so absurd that we can dismiss it out of hand. Such an approach has the disadvantage of regarding the EU’s allocations for northern border regimes, involvement in the Belfast Agreement, or peace funding as altruistic gestures from a capitalist trading bloc rather than a partnership with politicians in the Saorstát and the US to broker a new partitionist consensus against the wishes of the majority of the Irish people. Significant portions of this funding, supposedly put forward for initiatives such as community development, have in fact tended to fall along political party lines - disappeared into the statelet bureaucracy or into the hands of loyalist paramilitaries. In this sense, the clientelist structure of the six-county statelet has not been broken with, but rather reformed, integrating the Catholic community and a broader set of political parties north and south of the border in order to prolong the existence of a failed economic and political entity.
Without Conor McCabe’s analysis of Irish capitalist entrepreneurs serving as intermediaries for American, British and European investors, it is in many ways impossible to make sense of such concessions to partition. The response of the Irish bourgeoisie to British soldiers massacring civilians in the six counties was not to finish the revolution and agitate internationally for British withdrawal, but to insulate the state from the conflict. This necessitated the brutal crack down on anti-partitionists and socialists operating across the border and a refusal to investigate further the involvement of British intelligence in the Dublin-Monaghan bombings and shed territorial claims. The prospect of Sinn Féin becoming a party of government in both statelets has not led to unity around the political vehicle most likely to bring a United Ireland about. Instead, it has provoked Fianna Fáil and Fine Gael to cleave to deeply unpopular unionist positions, call for commemoration of colonial police who terrorised the Irish population, and, against the basic tenets of democracy, guarantee loyalist supremacy within a United Ireland. And, lest we forget, this has all taken place at a time when the ruling class of the twenty-six county state have been reduced to appealing to larger imperial formations to prevent Britain from undercutting it with inferior deregulated goods. The examples are endless; this is not the activity of a national bourgeoisie interested in securing its own position independent of imperial powers.
The fact that Ireland in comparison to Britain, Germany, France, the United States, or other countries which share in the spoils of Empire, has not seen a popular turn towards fascist politics in the aftermath of the 2008 financial crisis, should not be regarded as a quirk or a mere accident of history, but rather indicative of how imperialism is not hegemonic here in the same way it is elsewhere. It is well known that Ireland is unique in the depth of its opposition to Zionism and it is precisely within this instinctive solidarity with the oppressed of the earth that the Irish working class are best appealed to. Only through an authentic process of decolonisation can we overturn the systems formed by imperialist barbarism.
Notes
Deaglán de Bréadún, ‘Ní methusaleh amháin a fheicfidh Éire Aontaithe’. Comhar, imleabhar 82, uimhir 05, 2022, pp. 7 - 8.
Maurice Coakley, Ireland in the World Order: A History of Uneven Development. Pluto Press, 2012.
Raymond Crotty, Ireland in Crisis: A Study in Capitalist Colonial Undevelopment. Brandon Book Publishers, 1986.
Peter Gowan, The Global Gamble: Washington’s Faustian Bid for World Dominance. Verso, 1999.
Feargal MacIonnrachtaigh, Language, Resistance and Revival: Republican Prisoners and the Irish Language in the North of Ireland. Pluto Press, 2013.
Conor McCabe, Sins of the Father: The Decisions That Shaped the Irish Economy. The History Press Ireland, 2013.
Gerard McCann, Ireland’s Economic History. Pluto Press, 2011.
Ronaldo Munck & Denis O’Hearn, Critical Development Theory: Contributions to a New Paradigm. Zed Books, 1999.
Denis O’Hearn, The Atlantic Economy: Britain, the US and Ireland. Manchester University Press, 2001.
Denis O’Hearn, Inside the Celtic Tiger. Pluto Press, 1998.
John Smith, Imperialism in the Twenty-First Century: Globalisation, Super-Exploitation and Capitalism’s Final Crisis. Monthly Review Press, 2016.