In 1977, J.K. Galbraith claimed that ‘all races produced notable economists except the Irish'.

Was Galbraith, with his Scottish ancestry, trying to copper fasten the claims of Adam Smith to be the true founder of political economy against the equally strong claims of the Irish-born Richard Cantillon, or did he have some inkling that the Irish relationship with political economy is disrespectful of its claims to be a universal science?

The present chapter argues that the peculiar feature of Irish involvement with political economy is that it contributed both to the construction of the edifice and to the undermining of its claims to universality.

As a result of the plantation of settlers, a tenure system superficially similar to that in England was imposed on Ireland. At the top were the Anglo-Protestant landlords many of whom were absentees residing in England, the middle tier were tenant farmers: in the North-East, these were mainly Scots Presbyterians but elsewhere largely Catholic. At the bottom of the pile were the catholic cottiers and agricultural labourers. This was the group most affected by the Great Irish Famine of 1845—9, as a consequence of which their numbers were greatly reduced through death and emigration.

Agriculture was the dominant industry in Ireland until well into the twentieth century. Given the soil and climate, its natural advantages lay in the production of pastoral rather than arable crops, and pastoral products have tended to dominate. Potatoes were originally grown as a dietary supplement, but by the early nineteenth century they had become the main food of the poor. Although this provided a nutritious diet, the dependence on a single source of nutrition left the poor vulnerable to malnutrition and starvation when the potato crop failed.

In the late seventeenth century, there was significant growth of output and exports in the linen and woollen trades. However, the Woollen Act of 1699 ended the export of woollen goods and finer woollen production began to be subject to competition from imports. Following a period of economic crises, recovery in the second half of the eighteenth century created demand for a broad range of manufactured goods. The 1780s saw the development of a partly mechanized cotton/calico printing industry, but this succumbed to competition from the Lancashire industry in the decades following the Union with Britain in 1801.

During the remainder of the nineteenth century, most industry outside Dublin and Belfast was geared towards the domestic market. Belfast became the main location for export-oriented industry with shipbuilding, textile machinery, tobacco and rope production joining linen as important industries. These differences in industrial structure carried into the twentieth century and were an important factor in Irish partition. After independence, attempts were made to nurture domestic industry using protective tariffs. However, the restricted domestic market meant that the policy met with only limited success. Following a period of economic crisis and high levels of emigration in the 1950s, there was a re-orientation of industrial policy towards attracting international investment. Partly because of the opportunities Ireland could provide through access to the single European market, this policy met with considerable success and contributed to the Celtic Tiger phenomenon of the 1990s. Meanwhile, in Northern Ireland, the ‘troubles' and the inability to pursue independent industrial policy meant that there was insufficient new industry to compensate for the decay of traditional activities.