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The Theory of the Plantation

Plantation Economy Theory
Lewis dual economy model and policy prescriptions were

All governments of English-speaking Caribbean adopted Lewis

strategy and related policies and institutional arrangements

Debate started over the effectiveness of Lewis strategy for

development New World Economists

New World Economists include: George Beckford, Norman

Girvan, Kari Polanyi, Lloyd Best, James Millette
Plantation Economy Theory Genesis
Lewis strategy came under critique as:

Unemployment continued to increase

Increasing inequality and poverty
Persistent domination of the economies by foreign firms
As industrialization by Invitation was not seen as genuine

The Plantation Economy emerged after the way they

characterized Caribbean Economies
o Best, Lloyd. 1968. A Model of Pure Plantation Economy. Social
and Economic Studies.
Plantation Economy
Best and Levitt (1969)
The central concern of Caribbean economic thought has been
how to get the economy to grow fast enough

Major argument is that the study of the character of the

plantation sector and its relations to the domestic economy and
the external world is necessary in understanding how the
Caribbean economy actually functions
A Plantation:
an economic unit producing only agricultural products for sale

Employs relatively large number of unskilled labourers who are under

close supervision

Plantation economy was called such due to the dominance of

the institution called the plantation
Plantation Economy Theory
The classification of Caribbean economies as Plantation Economies
emerged from the relationship between the Caribbean countries
and their colonizers.

Colonial period:
Caribbean economies were described as Hinterlands (came from the
Germans means country side)

Their colonizers were called the Metropole in Europe

Hinterland economies were considered depended on the metropoles

located at the centre of international economic system
Plantation Economy Theory
Typology of Hinterlands (Best)

Hinterlands of Conquest
Plundered for existing wealth by the Europeans

Hinterlands of Settlement
Colonies in which Europeans settled and built new societies

Hinterlands of Exploitation typified Caribbean economies

and gave rise to the Plantation Economy
Colonies established primarily to produce raw materials for new
industries in Europe
Plantation Economy Models
Three models of the Plantation economy was put forward:

Model 1 The Pure Plantation Economy (the economy of the slavery


Model 2 Plantation Economy Modified (economy of the first century

after emancipation)

Model 3 Plantation Economy further modified (economy in the current


Central theme in the models is continuity with change Girvan

The Plantation Economy
Plantation economy was called such due to the dominance of the institution
called the plantation

The plantation was regarded as:

A total institution

The principal institution of production

More relevant to the Caribbean than the competitive firm of neoclassical economics

Largely self-sufficient (little trade or links with other entities in the hinterland)

Tied closely to the merchant house that owned it

Produced a staple crop for export

The Plantation Economy
The plantation dominated the resources of the hinterland
(land, labour, capital)

Resources are monopolized, thereby denying access to any rival


Characteristics of the Plantation Economy:

Export-propelled growth
Property incomes accrue to metroploe
The Plantation Economy
Staple cycle:


o Low costs of establishment cheap labour and land; highly fertile and productive
land virgin land

Golden age
o Strong market demand for the staple
Maturity and decline
o Rising costs (declining land fertility, increasing labour costs, increasing security
costs (slaves), increasing managerial costs, competition,
o Release of land and labour resources from production (formation of the
residentiary sector)
Economy expanded and contracted with the price of the staple
Legacies of the Plantation Economy
Limited skill and technology and all oriented to the export

Limited land available outside of the plantation led to

overcrowding and subsequent migration (focus of the thesis for
Lewis unlimited supplies of labour)

Limited incomes limited surplus for saving and investment in

the residentiary sector

Foreign oriented tastes

State oriented to enforce law and order and not economic

Comparing Lewis Dual Economy Model
and the Plantation Economy
Opposing views about the role of foreign investment

Source of dynamic growth

Lewis lies in the modern sector

Plantation economists lies outside the plantation sector

Best and Levitt:
o First with the settlers prior to Model 1
o In Model 1 the activities of the maroons
o Model 11 peasant agriculture, artisan activity and other activities
located in the local market and utilizing locally available supplies -
represents a potential for economic diversification never before

Beckford peasantry agriculture engages in both subsistence production

and own account production
Policy Proposals

Reduce openness

Secure inter-sectoral linkages from plantation activity

Land reform

Income re-distribution