DAVE MANSELL of his economic policies, De Valera had been free to combine opposition to Griffith's politics with support for his economics, so that once in power he could combine hi~ aim of separation from Britain with protectionist economic policies. As early as 1928 one of De Valera's colleagues, Sean Lemass had made a speech in the Dail which epitomized the traditional separatist view of the possibilities of the lrish economy: "We believe that Ireland can be made a self-contained unit, providing all the necessities of living in adequate quantities for the people residing in the Island at the moment and probably for a much larger number". De Valera opened the period of autarchy by precipitating an "economic war" with Britain by withholding the Land Annuities. The British reacted by erecting a tariff barrier to which the Irish replied in kind - from 9% in 1931 the leve! of duties rose to about 45%. At the time emigration to America had virtually stopped because of the recession there, and by 1935 unemployment was twice the 1926 leve!. To combat this trend De Valera's policy had been the deliberate fostering of light industry. To facilitate this it was necessary to set up scmi-autonomous state bodies starting with the Industrial Credit Company in 1933 to provide long term loans to prívate capitalists, and to act as an underwriter for lrish capitalists on the British stock exchange. In the same year the Irish Sugar Company Ltd. was established to provide Irish farmers with an outlet for their crop. In 1936 the state set up Aer Lingus because no private capitalists showed any sign of developing air transport. Aer Lingus played a central role in introducing new technologies and technical skills into the Irish economy, but any profitmaking diversifications it established were usually turned over to prívate entrepreneurs. The main effort to reduce unemployment, however, lay in the government's development of small agricultura! cooperatives and industrial units of less than fifty workers, and this had the active support of the Roman Catholic clergy. There was a rise in employment in industry from 110,588 in 1931 to 166,513 in 1938, and industrial output rose by 40% between 1931 and 1936, but this policy of import substitution had definite limits of expansion due to the small size of the domestic market. The benefi.ts that the rise in industrial and rural co-operative employment brought to wage earners were so miserable that the Church really did become the opium of the people in 60
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