Famine and Finance: Credit and the Great Famine of Ireland

41YjUSWp3JL._SX351_BO1,204,203,200_I have recently finished reading Famine and Finance by Tyler Beck Goodspeed. While short, it should have a prominent place on the shelves of economic historians interested (obviously) in Irish history and (less obviously) in Malthusian theory.

Famine and Finance is a study of the response of Irish farmers to the potato blight. As it is known to many, many individuals simply left Ireland. However, where micro-credit was available, Goodspeed finds that farmers adapted by shifting to different types of activities – notably livestock. These areas experienced a smaller decline in population. Basically, where the institution of micro-credit was present, the demographic shock was much less severe. If only for this nuance, the book makes a sizeable contribution to the historiography of Ireland. The methods used are also elegantly simple and provide an interesting road map for anyone interested in studying the responses of local population to environmental shocks.

However, the deeper point comes from it tells us about institutions. In Goodspeed’s story, the amplitude of the collapse of the Irish population in the 19th century depends on the presence of the institution of micro-credit. Basically, the institution determined the amplitude of the shock. Since Ireland’s potato blight is often presented as the textbook case of Malthusian pressures, Goodspeed’s results are particularly interesting. In his chatper titled”Was Malthus Right?”, he shows that when controls for the institution of micro-credit is present, the typical Malthusian variables fail to explain population changes. In other words (i.e.  my words) , Malthusian pressures (the change in population) are in fact institutional failures.

This is a point I have often made elsewhere (see here, here and here and a blog post here). And because Goodspeed backs this point of mine, he has earned himself a place on my shelf of “go-to” books.

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2 thoughts on “Famine and Finance: Credit and the Great Famine of Ireland

  1. This sounds like a very interesting book and I should get around to reading it *but* there is a massive confounding factor here which I don’t see mentioned in the review. Namely, that size of holdings was correlated to distance from major economic institutions. The reasons why peasants had switched to potatoes in the first place was that it was only thing they could afford to grow on their holdings (both in an economic sense and also a sustenance sense). These holdings could be smaller than an acre. On such holdings, one could not possibly keep even a modest amount of animals and options for growing crops were similarly limited – even if one at relatively decent financial resources at one’s disposal. Areas of larger holdings, where farmers could and did (sometimes before the famine) switch to livestock, were in large part closer to urban and economic centres, and thus surely had better access to credit. After all, part of the famine legend here in Ireland is the widespread evictions (often exaggerated, but certainly actual events) of small tenants and their replacement by livestock. For this reason, Grazing farmers were often a hated political demographic in Ireland and would remain so until about the 1960s. Maybe this takes that into account, but without doing so its findings come up to noting that areas with larger land holdings and better access to credit coped with the famine less bad – which is not precisely a revelation. I hope I’m wrong though.

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