The Contribution of Canadian Economic Thought to Caribbean Political Economy
Summary
Chapter 1 seeks to investigate whether there are common theoretical threads between Canadian economic thought and Caribbean political economy. In doing so, the author briefly discusses the “staples theory,” the work of Arthur Lewis, the Plantation school literature, and contributions by Eric Williams and William Demas. The author then identifies key points of commonality and disagreement between the different approaches, and concludes with a discussion as to why the Canadian connection was dropped and the Lewis connection was downplayed.
Introduction
When I first stepped foot on the campus of The University of the West Indies, Mona as a newly appointed Lecturer of Economics back in 2003, I entered a storied place steeped in tradition. Here was a university that had produced not one, but two, Nobel laureates, including one in economics, Sir William Arthur Lewis, and I was about to join an illustrious company of scholars who had once roamed these fabled halls from the aforementioned Nobel laureate to such giants in Caribbean economic thought as William Demas, Norman Girvan, George Beckford, Kari Levitt, and Lloyd Best, these latter three thinkers forming the genesis of what had become known as the “plantation economy school” of political economy.
Yet, upon first reading the writings of the “plantation economy school” of political economy formulated at The University of the West Indies, Mona, I was struck that it did not appear to be an indigenous literature at all but bore striking resemblance to the work of Canadian staples theory scholars, such as Harold Innis, Mel Watkins, and, interesting enough, Kari Levitt, in her incarnation as a Canadian scholar who produced the classic work, Silent Surrender (1970). The more I looked, the more Canadian connections I saw. Not only was the economic theory similar to that of the staples theorists of Canada but they used similar terminology and each member of the plantation economy school had a notable connection to Canada, with four of them having studied or otherwise worked in the country prior to or contemporaneously with producing their seminal works and the fifth having worked extensively with Kari Levitt. Yet, importantly, no reference to the work of Canadian scholars was found in the plantation economy school literature. I discovered that this was not the only failure to acknowledge those who had come before because much of the time they either failed to acknowledge or openly denigrated Sir William Arthur Lewis contributions to their theory, despite many connections to that theory. For this latter insight, I am indebted to the work of Mark Figueroa (1998), a fellow economist at The University of the West Indies, who has outlined much of these issues in far more detail than I have attempted in the third section of this essay.
In this essay, I will demonstrate that the plantation economy literature is an outgrowth of Canadian “staples theory” with new packaging, which was married to the existing work of Sir Arthur Lewis, Nobel laureate in economics and the quintessential Caribbean economist of the pre-plantation economy school era. The decision, whether it was overt or unconscious, to fail to acknowledge the Canadian legacy has more to do with the politics of the region than anything else. This is not to articulate a position that the plantation economy research does not have unique, important, and fundamentally original contributions. Nothing could be further from the truth. Instead, it simply is an attempt to state that the intellectual founders owe a debt of gratitude to more than those whom they initially acknowledged. In the next section, I provide a brief discussion of staples theory as envisioned by Harold Innis and new staples theory, which has as its major proponents Mel Watkins and Kari Levitt, and which merges staples theory with other forms of dependency theory to support a non-Marxian foreign-ownership model of the economy. I then examine the work of Sir Arthur Lewis and his contributions to the political economy of the region, especially his groundbreaking works Theory of Economic Growth and Economic Development with Unlimited Supplies of Labour. This is followed by a discussion of the Plantation economy school literature of George Beckford, Lloyd Best, and Kari Levitt, as well as its supposed development from the work of Raul Prebisch, Eric Williams, and William Demas. During this discussion, I will identify key points of commonality and disagreement between the three approaches under examination. I conclude the paper with a discussion as to why the Canadian connection was dropped and the Lewis connection was downplayed.
Staples Theory
Staples theory is both a theory of regional equilibrium and regional disequilibrium. In the former context, as discussed by the Economic Council of Canada (1977), the theory reduces down to a form of neoclassical trade theory, wherein spatial distribution of resources leads to comparative advantages such that certain regions end up providing raw materials (the hinterland) while the metropoles (the heartland) end up acting as processors of these raw materials not because they lacked the processing power but rather because they possessed the ability to package and get production to market through access to seaways and other transportation networks. According to this theory, the various boom-bust periods of the Canadian hinterlands correspond roughly to changes in economic demand for those goods and the ability of these regions to extract these resources in a competitive fashion. The collapse of the Atlantic fisheries market due to overfishing and inadequate property rights led directly to the dependency of that region on the rest of Canada. The solution is to allow markets to play themselves out properly, having individuals shift their place of employment and residence to areas of more suitable financial suitability. In other words, it is a theory that stresses people prosperity over place prosperity. Its greatest defender is Courchene (1986) who argues that regional disparities persist because of an inability to separate out these two concepts. Essentially, regional adjustment assistance acts as a form of interprovincial “welfare” that anchors individuals into a particular location, making them less likely to move. While textbooks discuss wage and price flexibility, the real world is one of wage rigidity due to minimum wage legislation, unemployment insurance, and federal policies that provide aid to specifically targeted groups (such as fishermen) to encourage them not to migrate. This is precisely the wrong strategy according to the viewpoint. Courchene (1986: 49) goes out of his way to state, “It would be absurd to argue that the provinces deliberates chose this option. Likewise it would be inappropriate to asset that it was a conscious policy decision on Ottawa’s part to generate the current status quo with respect to the economic viability of various provinces.” However, if this is the case, one wonders why it is that supposedly rational governments could not foresee the consequences of their actions. To argue that a province that is in a position of dependency will not attempt to maximize its own gains from that condition rather than make a (futile) attempt to break free of the chains appears to be an attempt to derive a politically correct stamp on the logical (but undesirable) natural conclusion.
This form of staples theory coincides with the perspective of the Rowell-Sirois Commission (1940) that sees the extraction of natural resources as one of several stages in economic growth that would eventually result in an economy that no longer is tied to the land. Essentially, the argument is that resource extraction provides the necessary income for capital accumulation that will allow the nation to move up the chain of industrialization to the next stage. This is a lovely sentiment but wholly unsupported by facts, which indicate that Canada is still in many ways more like the resource extraction economy of its past than an advanced industrialized economy of Europe’s present. Although Canada has moved up the resource base from fur trade, fisheries, and timber to oil sands, uranium, and potash, it still has a long way to go to become the processing giant that the United States, Europe, or Asia is. In some ways, having resources provides one with the “resource curse”, even if it is a relatively benign affliction of it.
In contrast to the equilibrium model depicted above, Harold Innis, in The Fur Trade in Canada, provides a decidedly disequilibrium model of the economy and is, in fact, the precursor to modern dependency theory, of which the Plantation School play a part. Innis was an economic historian trained in the American Institutionalist school tradition to look at how economic structures determine our destiny. In his book, A History of the Canadian Pacific Railway (Innis 1923, 294), he alleged that the exporting for the Canadian prairie provinces of wheat, a staple crop, grown under conditions of pure competition but that were transported by a veritable monopoly in the Canadian Pacific Railroad created the basis for exploitation of the region: “The question as to whether the prairie provinces shall control their own natural resources has become increasingly difficult . . . the dominance of eastern Canada over western Canada seems likely to persist.” Similarly, in his books, The Cod Fisheries (1940) and The Fur Trade in Canada (1930) the locus of control that exists was always in the hands of the dominant powers that could wield monopoly power over the staple producers. This dichotomy would play a central role for Innis in the development of the new Canadian economy:
The economic history of Canada has been dominated by the discrepancy between the center and margin of western civilization. Energy has been directed towards the exploitation of staple products and the tendency has been cumulative. The raw material supplied to the mother country stimulated manufacturers [in the mother country] of the finished product and also of the products that were in demand in the economy. (Innis 1956c: 385)
In other words, Canada, being a staples producer for the main country, found itself in a peculiar position. As its comparative advantage lay in its ability to produce natural resources in a competitive environment, there would not be a surplus gained to allow it to develop the same level of industry as was found in Europe. This could lead to one of three different possible scenarios. The first was an outgrowing of the original staples economy. It was this view that was undertaken by W. A. Macintosh (1964) who would argue, similar to Rostow’s (1960) Stages Theory of Industrialization, that staples production was but a necessary first step in a transition to a full-fledged manufacturing power. However, this could only occur if diversification around the economic staple could be sufficient to catapult the economy to the next level. For example, Ontario began as a producer of wheat and barley. To get these commodities to the market, it developed transportation linkages and the servicing of these linkages allowed the economy to develop an infrastructure necessary to move industrial goods. At the same time, due to its control over transportation linkages and the reduced costs associated with generating small industrial production in the area due to the proximity of this infrastructure allowed the creation of a nascent industrial economy, which later grew into the powerhouse that it is today. However, much of this can also be attributed to import substitution that was carried out under the nationalization policies of various Canadian governments. Thus Canada, through import substitution was able to grow industrially. However, this did not alleviate the natural geographic issues initially found with staples production. Instead, it merely transferred to the industrial heartland of the country the same role that had previously been occupied by the mother country of England, while the staples-producing hinterlands continued to act as economic dependencies. Innis argued that we could not simply take for granted what had transpired in Europe because one could not “fit the phenomena of new countries into the economic theories of old countries” (Innis 1956a: 10).
Innis begins his tale by noting that many of the staples that were produced, all of which were unprocessed at least at first in the country of extraction, were not subject to free competition. The Hudson Bay Company was created for the explicit purpose of supplying fur to England. It was granted a monopoly trading permit to engage in this activity and demand for the product was a derived demand based upon the manufacturing of fur clothes in England. Since the furriers had already set up extensive manufacturing facilities and the new found colony had neither a transportation network nor a large population of Europeans at the time, the tendency would be to ship these products back to England for eventual manufacturing. Canada grew in population predominantly by immigration and, therefore, it would not have the industrial capabilities of the mother country. The reason for this was two-fold. Industrialization required a large population to be moved from off the land into factories and this was simply not available in Canada. Second, industrialization was quite advanced relative to another that could be undertaken in Canada during this time so there was little incentive to develop industrial capabilities given that the major market for these goods was the mother country. It made little difference whether one was to produce in the colony or in the home country, since very little of the output of the colony would go to service the colonial population. Therefore, there would be little incentive to create manufacturing plants. It was only when the population became large enough to support its own manufacturing that such endeavors became reasonable and the tendency was then to locate such plants in what would be the industrial heartland due to transportation linkages.
Thus, staple production created the impetus for more immigration and whether industry would be set up tended to depend on the nature of the staple itself. The gathering of cod, for example, caused the development of secondary industries supporting the development of fisheries, such as shipbuilding. Production of wheat led to railroads, barges, and production of grains and cereals. Staples also defined the characteristics of the society with fishery-based economies having less centralization than agricultural-based economies since the latter’s products had to be moved to rail lines that were permanently positioned:
Concentration on the production of staples for export to more highly industrial areas in Europe and later in the U.S. had broad implications for the Canadian economic, political, and social structure. Each stable, in turn left its stamp, and the shift to a new staple invariably produced periods of crises. (Innis 1956b: 8)
This transformation from one staple to another was a second possible avenue of adjustment. As technology and tastes changed, so too would the staple production. Lobster production, for example, which is now a major source of fisheries income in the North Atlantic had no major basis until the start of this century as the delicacy was regarded more as suitable for the likes of orphans and prisoners. Lobster meat was used as fertilizer in the Maritimes up until the turn of the last century. This ended with the development of modern transportation that allowed the lobster to be sold live in faraway ports. The denigration of taste that occurred in the canning process was alleviated and the commodity became much more valuable. This is one way that staples producing economies can survive, by adapting and changing with the times.
The third possibility is what is known as the staples trap (Watkins 1963). This is the most pessimistic outlook for the staples economy and occurs when “staples exploitation limited the options and opportunities for a more equitable and controlled distribution of economic development, leading the country invariably deeper and deeper into a ‘staples trap’ of dependency and stagnation” (Brodie 1990: 42). As prices fall for the staple over time due to competition from other entities or because quantities fall due to over extraction of the staple or because of increases in population that production of the staple can no longer support or because the staple is no longer in such great demand for whatever reason, the country becomes mired in poverty and its dependency on the staple becomes an albatross around its proverbial neck. This tends to occur when backward, forward, and final demand linkages are insufficiently broad to support a higher standard of living or the progression to a new type of economy is no longer dependent on the now outdated staple.
Sir William Arthur Lewis
The only Nobel laureate in economics to have worked in the Caribbean, his work is significantly denigrated by the Caribbean Plantation School theorists. He was born in St. Lucia and was a prominent figure in the development of the West Indies, taking a position at the University College of the West Indies campus in Mona, Kingston, Jamaica as its first Principal from 1958 to 1960 and as the first Vice-Chancellor of the newly formed University of the West Indies, Mona in Kingston, Jamaica from 1960 to 1963. Yet despite his West Indian pedigree, Lloyd Best (1966: 29) argues that Demas deserves credit as having formulated “the first serious contribution of a West Indian economist to the general theory of development,” a slighting of the great intellectual thinker that was rampant at the University of the West Indies during the 1960s and 1970s, which “came, not in the form of a critique, but of shifting focus from the work to the personality of the man and attacks on him as an ‘Afro-Saxon’, etc.” (Pantin 1998: 137). Best himself likens this to the notion that “all intellectual generations tend to commit patricide” (Pantin 1998: 138).
The confrontation with Lewis has as much to do with the internal strife at the University of the West Indies, Mona economics department as with anything else. It was Lewis who had placed in the position of Head of Department, the economist Charles M. Kennedy and while a number of West Indian economists were to find their homes at the department in the coming years, a clash of civilizations that occurred in 1964–65 sparked a nerve that was not easily redressed. Although Lewis was no longer with the university, his appointed successor as the Head of Department of Economics was not a man given to identifying with nationalistic jingoism. As George Beckford, one of the Young Turks in the Department would put it, in that year a course on “Caribbean Economic Problems” was proposed. The proposal was put forth by the West Indian economists but their majority opinion was overruled by Professor Kennedy who argued “there were no economic problems specific to the Caribbean and that this proposal, if accepted, would lead eventually to an undesirable state of ‘parochialism’” (Beckford as quoted in Levitt 2000: 440).
This antagonism is unfortunate because Lewis forms the first cogent articulation of the plantation economy problem. Essentially, according to Lewis’ magnum opus, The Theory of Economic Growth (1955), the problem for tropical agricultural producers was the greater productivity in that sector translated into declining terms of trade such that the benefits of increased productivity were granted to the consumer to the detriment of the producer. The major issue that Caribbean economists had with Lewis was his standing as the chief architect of what they believed to be a failed policy of recolonization via foreign ownership and control. Much of these arguments would find articulation in another form in Kari Levitt’s influential Innis-inspired text Silent Surrender: The Multinational Corporation in Canada (1970). It is a misreading of Lewis to suggest that he supported the introduction of foreign capital over domestic capital when the two were presented as equal choices. The problem is that the individuals needed to lead the problem-solving exercise needed to be developed within the society and that proved difficult in an area where few had been given the opportunity to blossom as managers. He argued that it was better to utilize the resources at home prior to going abroad for assistance (Lewis 1958) but was not averse to going abroad for assistance if such resources were not forthcoming at home.
The problem for Lewis was that foreign investors saw the Caribbean as no different than any other area. As such, unless advances in productivity were translated into a reduction in the base wage per unit produced, capital flight to other areas would occur. Essentially, the reliance on agricultural production and, in later years to other natural resources such as bauxite and petroleum, were such that product differentiation could not occur. Thus the sugar produced in one country was equivalent to that produced anywhere else. Therefore, the lowest cost producer would gain the lion’s share of production. There was little incentive to make marked investments in the locality since production costs determined whether one would stay or go. Lewis’ (1954) seminal breakthrough was the essay “Economic Development with Unlimited Supplies of Labour” in which he suggests that so long as the commodity being offered is relatively plentiful when compared with demand for it and the commodity can reasonably be produced using only a fraction of the labor available in the area while, at the same time, there are no alternative sources of employment, the limiting factor of scarcity of labor does not apply. As such, increases in productivity are completely offset by declines in the terms of trade. If we wanted to raise cost of sugar, for example, we would have to make it scarce relative to demand. Since this is impossible to accomplish, the burden shifts to the producer to provide the lowest possible cost. Since there are, for the sake of argument, unlimited quantities of labor, wages fall to subsistence levels. The Ricardian “Iron Law of Wages” applies in full force. There is no desire among the capitalist class to invest more heavily in the sector because all such investments will simply result in a lowering of prices and thus capital has no incentive to make the improvements necessary to assist the lot of the peasantry. Indeed, since capital is, in the neo-Ricardian sense, granted a fixed return based on the economy-wide return to capital, additional investments would simply lower that rate of return below that available to other investment opportunities. Therefore, such a policy is not followed:
“Cane sugar production is an industry in which productivity is extremely high by any biological standard. It is also an industry in which output per acre has trebled over the past 70 years—a rate of growth unparalleled by any other major agricultural industry in the world—certainly not by the wheat industry. Nevertheless, workers in the cane sugar industry continue to walk barefooted and to live in shacks, while workers in wheat enjoy among the highest living standards in the world. However vastly productive the sugar industry may become, the benefit accrues chiefly to consumers.” (Lewis 1955: 281)
Lewis saw foreign capital as concentrating its efforts on expanding exports in part because the capital was foreign. That it would have a home country bias was noted as far back as Adam Smith. But he also saw that the problem lay in not having sufficient jobs available for the masses. So long as subsistence production was in place alongside export-based production, there would be no rising standard of living. The reasoning was that a capitalist would never have to offer a higher wage because there was always another subsistence farmer willing to work at the subsistence wage. Therefore
. . . so long as productivity is constant in subsistence production, practically all the benefit of increases in productivity in the commercial crops accrues to the consumer and not to the producer. The individual country can benefit by keeping ahead of the average for the tropical world, and will lose if it falls behind; but tropical producers, taken as a whole, do not benefit from higher productivity in commercial crops, so long as productivity remains constant in subsistence food production. Greater productivity is offset by adverse terms of trade. (Lewis 1961, p. xix)
The solution for Lewis was an industrial policy based not on laissez-faire but on state-initiated capitalism designed to provide sufficient employment for the region so as to eliminate the subsistence sector. When such a policy could not be undertaken using domestic capital, one should seek out foreign capital and have that capital harnessed with the explicit requirement that training in such areas as managerial competence and entrepreneurial skill could be manifest in the domestic population rather than allowing the foreign entity to control production processes from abroad.
The Plantation Economy school is generally thought to have sprouted out of the work of Lloyd Best, George Beckford, Kari Levitt and is generally considered to be a form of dependency theory. Dependency theory is thought to have originated with Raul Prebisch’s work in the 1950s but a reading of Prebisch indicates that his goals were far different from those of the dependency theorists. Indeed, his central argument mirrors Lewis in that he argued that the terms of trade would decline as technology improves, resulting in the center receiving the bulk of any benefits from advances in technology and trade. Essentially, his was an empirical argument while Lewis made the theoretical connection between this decline and the economic structure that existed in the Caribbean and most of the third world. Prebisch saw the Infant Industry argument made by Frederich List as the savior for the third world and argued for Import Substitution Industrialization (ISI), such that high tariff barriers would be enacted to protect local industry and allow it to fill its home market with goods. By protecting it initially, it would be able to increase its efficiency to such a level that it would eventually be able to thrive. What Prebisch did not account for was the rampant corruption that would find itself throughout the Third World in the form of rent-seeking and the resultant inability of infant industries to ever outgrow their diapers.
It was to be in this context that dependency theory emerged. Unsatisfied with the progress of ISI, dependency theory suggested that non-capitalist forms of production would better suit the progress of nations and many of the scholars came under the allure of Marxian analysis. Certainly, Eric Williams whose seminal work Capitalism and Slavery published in the 1940s, was also amenable to the notion that economic dependency had at least partly to do with the capitalist form of production. This does not mean that there was an embracing of the Soviet Union but rather a socialization of activity along nationalistic lines was in order and the calling for change was found throughout Latin America during the late 1960s and early 1970s. The irony was that the Canadian staples theorists were moving in a similar direction with Levitt’s (1970) Silent Surrender, the Task Force on Foreign Ownership and the Structure of Canadian Investment, which was also known as the Watkins (1968) Report, and Lumsden’s (1970) Close the 49th Parallel etc.: The Americanization of Canada, all of which argue that Canada was increasingly becoming a dependency of the United States. Canada also found itself with a militant advocacy group for socialism in the form of the Waffle, which was founded in 1969 by leading staples theorists Mel Watkins and James Laxer.
The immediate acknowledged forerunner of the Plantation Economy literature was a book by William G. Demas (1965), then head of the Economic Planning Division of the government of Trinidad and Tobago entitled The Economics of Development in Small Countries with Special Reference to the Caribbean. Demas had come to McGill University in 1964 to perform research and deliver a series of lectures that would form the basis of this book. His arrival at the instigation of Kari Levitt is the first clear bridge between Canadian academics and their Caribbean counterparts. Demas’ work echoes sentiments of Innis in that he makes special reference to the inability of small countries to pursue large-scale industrialization because of a lack of ability to finance economies of scale. As such, they become dependent on outside forces and, as such, he argues that engaging in customs unions with more advanced countries will only lead them to being marginalized as they will be unable to develop industry on a sufficient scale to generate such economies. He notes, as does Innis, that the conditions found in the Caribbean are different from those found in the small states of Europe when they went through their industrialization phases. He further argues that economic dependence on external sourcing of necessities makes development in the Caribbean particularly difficult. His one major contribution over that found in Canadian staples theory is the notion that small states could integrate themselves and pursue scale economies. As such, he championed the formation of CARICOM and served as its Secretary-General.
About the same time, the New World Group was formed by a group of Caribbean intellectuals and a corresponding similar group was headed in Montreal by Kari Levitt. Levitt (1998: 3) notes that neither she nor Best were well equipped with the Latin American Structuralist/Dependency School theorists at the time:
I was attracted to the idea of modelling Caribbean economic reality on its own terms, to reveal how such highly open and dependent economies adjust to the changing fortunes of their commodity export sector; how incomes generated are distributed between foreign and national capital; wage earners and the government; and how employment is generated. The approach was recognizably “structuralist” in the Latin American sense of the term. But we had read little of the literature [emphasis added], with the notable exception of Celso Furtado’s Economic History of Brazil.
She goes on to credit Dudley Seers (1964) for having shone a light on that literature for them. Levitt (1998: 3) notes that while they used the term ‘the plantation’ for their principal unit of analysis, the plantation really represented all manner of industries that were essentially staples-producing, such as “sugar, bauxite, . . . or petroleum industries” as well as the tourism industry. Like Canada, the Caribbean was in terms of “the leading export sectors and import substitution manufacturing . . . predominantly owned and controlled by foreign capital” (Levitt 1998: 3). Levitt (1998: 8) further notes that the New World Group’s principal publication outlet, the New World Quarterly, was being published in Montreal and that journal served as the first outlet for what would later become Silent Surrender.
Best (1966), who worked with Levitt in Canada from 1966 to 1969, would critique Demas’ (1965) conclusions that smallness lead to dependency and argued that societal factors played a role in dependency and, ultimately, a role in eliminating that dependency. The Plantation economy critique is predominantly based on the notion that foreign capital dominates over the society. As such it is little different from the arguments played out by the staples theorists in Canada and the argument that capital seeks cheap labor as opposed to upgrading its productivity is stated thus:
What is the point of incurring the costs of a creative and expensive structural adjustment in the old place when it is so much easier and cheaper to start fresh in an entirely new location? What this means is that there is a built-in process of running down a plantation to the point of decline and collapse (Best 1998: 31)
This is eerily reminiscent of the “staples trap” (Watkins 1963) wherein, to compete, some entities may choose to forgo investment in the hopes of lowering costs but this leads inevitably to a pathway to its destruction:
The theory of plantation economy therefore not only describes domination and dependence; it exposes the mechanism of maldistribution of the gains from trade and of persistent poverty or underdevelopment, so misnamed. (Best 1998: 31)
The unique features of the plantation economy literature lie, therefore, not in their prescriptive basis, which tends to mirror their contemporary staples theorists’ arguments for nationalization of various industries to escape from foreign ownership issues, but rather their description of the structural characteristics of the Caribbean economies. However, in doing so, the theorists destroy all possibility of generalization in favor of examining the “special case” of the Caribbean. They note that the individuals who run the plantations are tied to the metropole, just as those who ran the staples industries were tied to the industrial heartland or the mother country. With production financed out of other countries, costs were not transparent so “transfer pricing favoring the transfer of surplus to the metropole continues to be a problem whenever a large private enterprise is simultaneously engaged in the production and the overseas marketing of an export commodity” (Levitt 1998: 13–14). This problem harkens back to Innis’ objection that staples production was dependent upon the desires of the overseas market and potentially would lead to an underdevelopment of a domestic market.
At the same time, we see the dependency theory school’s discussion that this “export bias” would follow from an “implicit assumption . . . that ‘world prices’ are the ‘right prices’ which should determine resource allocation in all countries [and this leads inevitably to] the grossly unequal distribution of purchasing power on a world scale” (Levitt 1998: 14, emphasis as in original).
Finally, we turn to George Beckford, whose 1972 study Persistent Poverty: Under-development in Plantation Economies of the Third World, picks up on these themes. Beckford (1972), notes in the introduction to his book, that his “whole view of plantation economy and society has been profoundly influenced by Lloyd Best.” Once again, not a single citation to Innis is found nor to any other Canadian staples theorist, with the citing of Levitt’s contributions confined to her collaborations with Best. Beckford traces the plantation economy through its interweavings of history and society but his manner differs from that of Innis. Rather than concentrating on geography as the defining characteristic, Beckford chooses race, on which he goes into considerable detail including the profound problems of once being an enslaved peoples. His work does not contain the same words that are found in the Canadian staples literature. Noticeably absent are the words “staples” and “hinterland” that are sprinkled throughout the Best and Levitt work. Beckford also does not have any obvious direct Canadian connection, having spent his sabbatical time at Stanford University. However, by cutting Beckford off from this rich and vast literature, the development of the school changed from one focusing on the monocrop to the actual form of production, the plantation. As such, the development of the plantation school may be considered as having gone in a different direction than if the original Canadian legacies had been openly acknowledged.
Conclusion
The history of economic thought is replete with examples of how non-Western concepts are usurped by the West. Examining the Nobel Prize in Economics, this Western domination of economic thought appears to be true even in the modern era. At the time of this writing (in 2014), since the founding of the Nobel Memorial Prize in Economics, there have been 75 winners with only two (Sir Arthur Lewis and Amartya Sen) having been born or served much of their time in the developing world.
This would not be a problem if it were not based on Eurocentrism. Blaut (1993) offers up an interesting analysis of the expansion of European domination through the myth that progress emanates from the Western Greco-Roman heritage. Madjd-Sadjadi (2014) notes that the history of economic thought has an extreme Western bias and points to achievements in economic theory by the Chinese that predate their recognized Western equivalent concepts by hundreds of years.
Therefore, the development of a truly unique indigenous theory of development growing out of research in the third world should be one that is celebrated, not questioned. However, the problem is that this wonderful fairy tale of overcoming vast limitations in terms of resources to develop a unique and important new theory is exactly that: a fairy tale. Part of the problem can be related by Mamdani (1995: 24) who relates that “Without research, education turns into a consumer product, neither original nor creative, nor inspiring independence of thought.” Furthermore, without that independence of thought, without that breaking free of the intellectual chains of the colonial powers, can the formerly colonized ever be truly free?
This is the great conundrum that must be explored when dealing with these issues. It is not so much that there is considerable overlap between the theories of Innis and those of the Caribbean plantation economy writers a generation and a half removed, for Innis sets the tone for the entire dependency school literature. Rather it is that there is no acknowledgment of this linkage by the later writers. This also was true about the linkages to Lewis. Their attitudes towards Lewis, who could not normally be overlooked, serve to help frame the disengagement that they would also find with Innis. The fact that at least one of the formulators of the school was intimately familiar with the Canadian staples thesis should not go unnoticed. For the sole non-West Indian member of the “plantation school” not only was familiar with Innis but Levitt (1970: 46) actually took the time to write in a book that was written contemporaneously with her plantation economy work:
It seems to have escaped the attention of most of our economists that the insights contained in the writings of the late Harold Innis are highly relevant to an understanding of our contemporary relationship to the United States. The misconception that Innis’s staples of fish and fur are an unpalatable diet compared with the elegant apparatus of modern economic theory has deprived recent generations of Canadian economists of the building blocks of a theory of Canadian development.
Even more telling of this linkage, providing the “smoking gun” as it were, that solidifies this connection is the following:
Innis was the chronological antecedent of the Latin American economists in developing a “metropolis-periphery” approach to American staple economies, and shared with them the attempt to widen the parameters of analysis to comprehend categories which are conventionally assumed to lie beyond the strictly economic. (Levitt 1970: 46)
Yet despite this and the recurrent use by plantation economy theorists of the terms hinterland, heartland/metropoles, and staples that abound in the Canadian context, but not very often used in the dependency literature, which usually uses the terms periphery, center, and a variety of terms to describe the resource-based or primary goods production of the Third World, there appears not one single reference to Innis or Watkins or any other Canadian staples theorist with the exception of Levitt, whose contributions are only noted in her work that dwells on the Caribbean or in a peripheral note regarding her contemporaneous work on Canada that would become Silent Surrender. The implication was for Caribbean scholars who had not read her Canadian work that Silent Surrender may, in fact, have emanated out of the work done on the Caribbean and not the other way around.
So it appears that the basis of this was to attempt to establish for the Plantation School its own footing as a uniquely “Third World” approach to the problem. If it acknowledged its debt of gratitude to its Canadian antecedents in the great body of its own work, it would have held its claims of having been an indigenous solution up for attack. By refusing to acknowledge that much of it came from elsewhere, it would be more palatable. Best refused to acknowledge the contributions of Lewis for a similar reason: Lewis had been instrumental in the postcolonial industrialization process of inviting foreign capital to set up in the Caribbean. Yet, Best attempted to downplay this by arguing “I know from experience that the generations inevitably have to murder their fathers to confirm their adulthood” (Best as quoted by Figueroa 1998: 101).
Figueroa (1998: 102) tends to dismiss as self-serving Best’s argument that his differences with Lewis were methodological and not political:
[Best’s] explanation of the school’s attitude to Lewis is of little merit. It is true that in the process of “product differentiation” new thinkers often tend to focus on their differences with their predecessors. There are definite imperatives towards excessive negation, but a central point of this article is that we need to be wary of the tendency to annihilate our forbearers, leaving ourselves the poorer for the neglect of their insights.
A similar statement could be made for including Canadian political economic insight in the history of the development of the plantation economy literature.
Notes
1. The “resource curse”, first identified by Auty (1993) although discussed in the literature in other ways well before that, is the observation that countries that have plenty of natural resources end up growing at a slower rate than those endowed with nothing. Essentially, the theory behind it is two-fold: first, countries with resources lack the incentive to invest in higher productivity enterprises simply because they have a natural opulence and second, even when they do end up investing, they do so in a miscalculated manner because their revenues appear plentiful during good times and dry up during bad times. In essence fiscal mismanagement leads to their slow growth. Reasons for this problem can be found in intrastate conflict (Nigeria), high levels of government corruption (Russia) due to a rent-seeking society (Krueger 1974), and exchange rate appreciation due to Dutch disease (Corden 1984; Van Wijnbergen 1984), which occurs because high resource endowments provide pressures on the exchange rate, raising it to levels whereby the manufacturing sectors of a country are no longer competitive. The current “petro-dollarification” of the Canadian dollar is an example of this latter problem.
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