A Model of Plantation Economy for Explaining AU-CARICOM Relations

Posited by some of the Caribbean’s most eminent scholars, “A Model of Plantation Economy ” was first promulgated as an analytical lens through which to examine the pillars of a perpetuated underdevelopment within Caribbean economy; often with emphasis on exploring interactions between Northern and Southern states. Notwithstanding, further analysis of its architecture will find that it provides superior explanatory powers for the nature of the interactions – or lack thereof – between and amongst post-colonial states [largely peripheral in nature] as well as the linkages between these interactions between postcolonial states and the world’s more developed states. It therefore provides superior explanatory powers for the barren manifestation of AU-CARICOM intercourse.

In the construction of its framework, A Model of Plantation Economy borrows from the fundamentals of dependency and world systems theories, and panders to international relations’ seeming obsession with understanding and theorizing power dynamics between and amongst state actors. This is evidenced in the distinctions it makes between two groups of states or economies within the architecture that is the international system – Hinterland Economies, a derivative of peripheral states, and Metropolitan Economies, a derivative of core states (Levitt, 2005). This is also evident by the manner in which it interprets interactions between these two groups. 

Plantation economy theorists carry explorators of their promulgations through the various historical cordons of Caribbean economy and development – the slave plantation, post emancipation and modernization and development – and conclude that years after Caribbean states attained emancipation from their colonial parentage, their economies continue to maintain a disadvantageous, development-repugnant economic structure patterned after the plantation system of colonial days (Beckford, 1976; Best, 1968; Best & Levitt, 1968; Levitt, 2005). According to its theorists, a more powerful satellite state(s), Metropolitan Economy, dictates all of the functions of economic development in Hinterland Economy to its favor. Theorists further proffer an observation that serves as the anchor for many of the framework’s conclusions: Plantation or Hinterland economies had been erected for the wealth and benefit of their colonial masters and were therefore not designed or organized in a manner that would favor non-umbilical approaches or efforts toward development. Ultimately, A Model of Pure Plantation Economy convincingly identifies the root of underdevelopment in Hinterland Economy as a function of the uneven distributions of power that mark its interactions with Metropolitan Economy. Best more pellucidly deconstructs this plantation-inspired dynamic via the use of a five-point institutional framework called, “The Rules of the Game”.

Balenbouche Estate, Saint Lucia

A Model of Plantation Economy: The Rules of the Game

The first rule, Inter Caetara, borrows inspiration from Pope Alexander VI’s 1493 historical Papal bull for its coinage, and seeks to explain the reality of spheres of influence exercised by Metropolitan Economy over Hinterland Economy. 

On May 4th, 1493, in a bid to settle territorial disputes between Portugal and Spain, Pope Alexander VI issued Inter Caetera, according to Spaniard monarchs King Ferdinand II of Aragon and Queen Isabella I of Castille the exclusive right to conquer, occupy, and evangelize the newly discovered territories in the Americas, with the exception of certain regions already under Portuguese control. This papal bull would later be legally formalized via the Treaty of Tordesillas, leaving a monumental and perpetual impact on colonial enterprise: it helped establish the political and legal foundations of the modern Western Hemisphere and inadvertently set the stage for an international system organized and governed via spheres of influence. This dynamic, Best & Levitt (1968) argue, has both hindered and frustrated independent, decolonized efforts toward development by Caribbean hinterland economies.

The second rule, Muscovado Bias, recognizes distinctions in the division of labor between Metropolitan Economy and Caribbean Hinterland Economy, as well as the restrictions placed on diversification of plantation-based economies (Best 1968; Best & Levitt, 1995). Muscovado, as part of its coinage, stands eponymously, literally and metaphorically in its capture of the productive capacity and productive foci of plantation economies.

From its genesis, European colonization of the Caribbean was propelled by desire to improve European wealth, but this was not achieved without difficulty. Colonialists shifted from one cash crop to another, until the colonial machinery eventually landed on what would become their most profitable crop; Muscovado, a form of unrefined sugar, would emerge as king of Caribbean plantations, fostering a persistent move away from the commercial production of other crops. In theorizing on the makings of the Sugar Revolution in the British West Indies, B.W. Higman (2000) captures this singular productive focus well when he identifies, “a shift from diversified agriculture to sugar monoculture” as part of the concatenation of events responsible for the Caribbean region’s Sugar Revolution. This shift, fostered by European demand and dictates, also mimicked a colonial productive subjugation that had since the beginning of European occupation  of Caribbean lands marked colonizer–colonized relations: a singular focus on the production, extraction and processing of raw materials  for export.

Navigation Provision, constituting the third rule, refers to a series of navigation acts enforced by European powers, particularly Britain, upon their colonies. Best (1968) posits that the Navigation Acts, bolstered by the British empire’s spheres of influence and control over trading vessels, effectively prescribed the trade routes adopted by the British Caribbean colonies. Consequently, these stringent regulations culminated in the isolation of the British Caribbean colonies from the global trade network, compelling them to exclusively engage in commerce with their colonial masters. By curbing their opportunities to partake in international trade, these colonies were left with little choice but to remain firmly tethered to the economic interests of their British rulers.

In 1650, the British government, with the objective of advancing the economic interests of Britain and undermining the commerce of their adversaries, primarily the Dutch, enacted a series of legislation known as The Trade and Navigation Acts of 1650 and 1651. The 1650 Act, formally titled the “Act for Prohibiting Trade with the Barbadoes, Virginia, Bermuda and Antego,” Act sought to hammer home, to these colonies, the authority of the Commonwealth government under Oliver Cromwell. It prohibited all commerce between England and the aforementioned colonies, effectively severing them from their primary source of imported goods and export markets, thereby debilitating their economies. The 1651 Act, referred to as the “Navigation Act,” built upon the stipulations of the 1650 Act and exerted a direct influence on Caribbean economies. Notable components of the 1651 Act encompassed trade restrictions, whereby all goods imported into English colonies (including the Caribbean) were mandated to be transported on English vessels or those of the colony producing the goods, thereby excluding foreign ships, particularly the Dutch, from engaging in direct trade with English colonies; regulation of colonial commerce, whereby all goods manufactured within English colonies, including the Caribbean, were obligated to be shipped directly to England, thus establishing a captive market for imports from the colonies; and safeguarding English shipping, whereby foreign vessels were prohibited from conveying goods from one English port to another, and from fishing in designated waters, in order to defend against rivalry from foreign merchants and shipping lines. These Acts played a pivotal role in molding the Caribbean economy, particularly in the realm of trade, during the colonial period, and their repercussions persist even today. 

The rule of penultimate measure, Monetary Exchange Standard, is concerned with the governance and analysis of financial flows in the externally propelled Plantation Economy. In accordance with the Metropolitan Exchange Standard, monetary exchange in hinterland economy occurs via financial intermediaries owned by Metropolitan Economy. This, according to Best, eliminates “exchange risk [of investors] and to ensure that hinterland  assets are fully realizable in terms of metropolitan goods and services” (Best, 1968).

Imperial Preference is the paramount metric. It assists in discerning the complex interplay of structures and policies that shape the international trading preferences of Hinterland Economy. As posited by Best (1968), Hinterland Economies are conferred a distinct advantage in terms of securing markets for their goods, due to deliberate orchestration by Metropolitan Economies. These key players in the global economic landscape have engineered a system wherein metropolitan markets become the favored destinations for hinterland producers. Consequently, this arrangement fosters a symbiotic relationship in which Hinterland Economies benefit from expansive market opportunities, while Metropolitan Economies capitalize on the steady inflow of goods and resources at cheap prices. This intricate economic dynamic, entrenched in the concept of Imperial Preference, underscores the significance of comprehending and navigating the nuances of international trade and interdependence among various economies.

There are multiple enacted colonial policies that contribute to understanding the rule of Imperial Preference. However, two stand most pertinent to its explication: The 1902 Preferential Tariffs and The 1932 Imperial Conference. Under the leadership of British Prime Minister Joseph Chamberlain, the British government introduced preferential tariffs, which offered reduced rates for imports from British colonies and dominions. These preferential trade policies were aimed at strengthening economic ties within the Empire and making the colonies economically dependent on Britain. During the Ottawa Conference in 1932, the British government and representatives from the dominions and colonies agreed to implement measures that would promote trade within the Empire. This was to be achieved by granting preferential tariff rates, import quotas, and other measures that favored trade exclusively among the imperial territories. These policies were enacted throughout the British Empire, including the Caribbean colonies, reinforcing economic dependence on Britain. Imperial Preference policies, such as these, not only aimed to strengthen the British economy and safeguard domestic industries but also sought to instill economic interdependence among the imperial territories. While these policies succeeded to some extent in boosting trade within the Empire, they also limited the ability of the colonies to diversify their trade relationships and strengthen their economies independently. In the long term, these preferential policies contributed to the economic struggles faced by many former colonies in the post-colonial era.

The Rules of the Game in the Age of Globalization: Kari Levitt’s Reapplication of The Rules of the Game

“A Model of Plantation Economy” was theorized at a time where globalization had not yet taken root as one of the foremost design influences on the architecture of the international system, and for a time – after the emergence of globalization as the leading design influence on the international system – the theoretical framework had been critiqued for its antiquity, and declining relevance. Noting this deficiency, in 2005, Professor Emeritus, Kari Levitt, sought to make a case for the continued validity of the rules in the age of globalization. The proceeding paragraphs explore Levitt’s (2005) reapplications of the theory, and where possible provides valid evidential addendums to Levitt’s visualizations of the Rules in the age of globalization.Noting this deficiency, in 2005, Professor Emeritus, Kari Levitt, sought to make a case for the continued validity of the rules in the age of globalization. The proceeding paragraphs explore Levitt’s (2005) reapplications of the theory, and where possible provide valid evidential addendums to Levitt’s visualizations of the Rules in the age of globalization.

In her reapplication of Inter Caetera, Levitt (2005) notes that the Caribbean is situated in the “sphere of influence” of a major metropolitan power, as instanced by a history of US military interventions in Cuba, Haiti, the Dominican Republic and Grenada, and the extraordinary hostile pressures which the United States continues to apply to Cuba, notwithstanding the end of the Cold War.

Levitt’s (2005) revisualizations of Rule Two, Muscovado Bias, point out that the conventional demarcation of labor that defines commerce between metropolitan and hinterland economies remains steadfast. Hinterland economies remain restricted to the utmost extremities of the value chain, focusing on the extraction and processing of raw materials, and the final stages of assembly manufacturing, Hinterland Economies persistently rely on the exportation of a limited number of primary commodities (such as petroleum, natural gas, bauxite/alumina, and bananas) or services (namely tourism) to propel their growth  dynamics. Manufacturing activities, whether intended for domestic or international markets, consistently occupy a lower position within the value chain, as exemplified by the garment industry in Jamaica. 

Levitt (2005) further revisualizes the third rule, known as Navigation Provision. In her reinterpretations, she extends Best’s (1968) exploration of ownership and control of channels of movement for goods to encompass ownership and control of channels of movements for services, communication, ideas, people, technology or culture. According to Levitt, Metropolitan control over channels of transportation, distribution and communication between Hinterland Economy and Metropolitan Economy persists and continues to reinforce the ‘Muscovado Bias’. Hinterlands assume the role of “price-takers” in relation to monopolistic metropolitan buyers and, to a lesser extent, monopolistic metropolitan suppliers. Information disseminated through electronic media is predominantly influenced by emissions from the United States, with the primary source of international television news being CNN. As it concerns Metropolitan Exchange, Levitt notes that although all Caribbean Hinterland currency is no longer fully backed by metropolitan (hard) currency, full convertibility has (recently) been reintroduced to ‘eliminate exchange risk [of investors] and to ensure that hinterland  assets are fully realizable in terms of metropolitan goods and services’. The reinstatement of full convertibility is a crucial aspect enabling the seamless exchange of Hinterland currency for its metropolitan counterpart. The primary motivation behind this development, according to Levitt (2005), is to mitigate the potential exchange rate risks faced by investors while simultaneously providing assurance that Hinterland assets retain their value and can be readily liquidated in terms of metropolitan goods and services. This strategic move aims to bolster the Caribbean Hinterland’s financial stability and foster an environment conducive to economic growth and investor confidence.

In conclusion, Levitt (2005) astutely reconceptualizes the notion of Imperial Preference by shedding light on the significance of preferential access for essential export commodities within metropolitan markets in Europe and the United States. Through the lens of the LOMÉ Convention (an agreement between the European Community and African, Caribbean, and Pacific countries) and the Caribbean Basin Initiative (CBI) preferences granted by the United States, Levitt delineates the enduring reliance of Caribbean export commodities on the privileged entry to such markets. This insightful analysis not only underscores the contemporary relevance of Imperial Preference in the global economic landscape but also highlights the intricate dynamics between developed nations and their trading partners, fostering a deeper understanding of the interdependencies that underpin the modern world economy.

A Model of Plantation Economy: The Rules of the Game in African Hinterland

Thus far, there emerges a conspicuous lacuna that the explications of “A Model of Plantation Economy” herein possess, even more so when examined within the context of this research project. According to Levitt (2005), the theory, geographically situated in the Caribbean, renders its promulgations relevant to analyses and explanations of Caribbean political economy solum. Consequently, in line with Levitt’s delineation of the theoretical framework, this research project, with parameters extending to both African and Caribbean states, would be found depleted in its sufficiency without a demonstration of  how the core underpinnings of this theory apply to AU member states. 

Despite the assertions of Levitt (2005) on the exclusivity of the geographical situation of the theoretical framework, it is the remaining part of her characterization of the same that leaves room for possible extensions of the framework.  Levitt (2005) astutely observes that the “Model of Plantation Economy” is germane to and befitting of the elucidation of “colonies of exploitation,” a fitting portrayal of the colonial experiences of erstwhile African colonies. The following paragraphs will therefore seek to demonstrate how the Rules of the Game stand in equal, and in some instances, more significant applicability in their elucidation of the realities of colonial and post-colonial African political economy, akin to their effectiveness in elucidating the complexities of colonial and post-colonial Caribbean political economy. The 1884-1885 Berlin Conference serves as the point of departure for this demonstration, as the far-reaching implications of this historical event leave little room for doubt that African colonies indeed align with Levitt’s (2001) characterization of “colonies of exploitation.”

During the period November 1884 to February 1885 European rulers convened in Berlin, Germany to, in simplistic terms, decide upon the division of the vastness of the African continent amongst themselves (Appiah & Gates, 2010). This conference, among other things, inextricably, and in longevity, tied African resources to the fulfillment of European interests, leaving in its wake consequences of epic proportions that persist in African development even today. The consequences of the Berlin Conference are strongly analogous to those of the territorial divisions imposed by Inter Caetera, thus extending the similarities between Caribbean states and African states beyond ethnic composition to include similarities in colonial experience and the subsequent structure of their political economy. More pointedly, the Berlin Conference subsumed African states within European and, to a lesser degree, American spheres of influence. By 1914, Britain had gained control over a considerable portion of the continent. Its collection of colonies included Egypt, Sudan (Anglo-Egyptian Sudan), Uganda, Kenya (British East Africa), South Africa, and Zambia, Zimbabwe, Botswana (Rhodesia), Nigeria and Ghana (Gold Coast). Portugal took Mozambique in the east and Angola in the west. Italy’s holdings were Somalia (Italian Somaliland) and a portion of Ethiopia. Germany took Namibia (German Southwest Africa) and Tanzania (German East Africa). Spain claimed the smallest territory – Equatorial Guinea (Rio Muni). Consequently, as per the defining principles delineated by Plantation Economy theorists, it can be posited that the Berlin Conference signified the inception of the African Hinterland, just as Inter Caetera marked the genesis of the Caribbean Hinterland.

There also exist parallels between the Muscovado Bias and the divisions of  labor evident in colonized African territories, hereinafter referred to as African Hinterland Economy. Throughout its colonial epoch, African hinterland shared similarities with the Caribbean, predominantly confining its economic activities to the cultivation and extraction of raw materials. Prime examples of this economic pattern can be found in Ghana and Ivory Coast’s cocoa production, Congo’s rubber industry, and the extraction of bountiful minerals such as diamonds and gold in South Africa. This overreliance on a singular resource gave rise to an absence of economic diversification, fostering an enduring dependence on external markets akin to the plantation economies of the Caribbean. Regrettably, these constraints continue to wield influence in the present day. 

Navigation Provision highlights the external control over trade routes and markets, and this is seen in Africa with European colonizers limiting the trade opportunities for their colonies. This rule is exemplified by the imperial policies of European powers, which established exclusive trade relationships and often forced African colonies to import only from their colonizing country. These trade restrictions limited the opportunity for African countries to develop independent, diversified trading relationships and perpetuated economic dependence on their former colonial powers.

The fourth parallel is perhaps even more evident in the post-colonial machinations of African hinterland than it is in Caribbean hinterland. This is the rule of Monetary Exchange Standard. The Monetary Exchange Standard refers to the practice of colonial governments pegging their currencies to that of the colonizing country. In Africa, many former colonies continued to use currencies tied to those of their former colonizers even after independence. This practice often resulted in unstable monetary policies, foreign exchange challenges, and hindered attempts to manage inflation, interest rates, and overall financial stability in the region. But perhaps, the most striking example of this is the case of the CFA Franc Zone. Under the CFA Franc system, the African countries using the currency must deposit a percentage of their foreign exchange reserves with the French Treasury. This requirement grants France significant control over the fiscal policy and monetary reserves of these countries, limiting their ability to independently manage their resources and influence their own economic outcomes. In the context of the rule of Monetary Exchange Standard, the existence of the CFA Franc has enabled French corporate and financial interests to maintain a strong presence in the region. The currency’s convertibility and close ties to the European market facilitate the mobility of capital, allowing France to benefit from investment opportunities and access to resources in the CFA Franc zone countries.

The Relevance of a Model of Plantation Economy for Analyzing AU-CARICOM Relations

The Model of Plantation Economy serves as an instrumental analytical tool in examining the dynamics of cooperation between the Southern regions of Africa (the AU) and the Caribbean (CARICOM). This model emphasizes the historical context shared by both regions, wherein their externally-driven economies were initially established as colonies intended for exploitation. Additionally, the bearings of this historical context situates them unmistakably within the category of Southern states. Furthermore, the Model of Plantation Economy astutely recognizes the existence of an alternative group of states, distinguished by their prominent role as epicenters of decision-making. This clear delineation perceptively accounts for the influential position of Northern or More Developed States within the international system, thereby offering invaluable insights into the complex interplay of various geopolitical entities.

Building upon Lloyd Best’s (1968) comprehensive institutional framework, The Rules of the Game, it becomes evident that the intricate systems and structures governing the international sphere significantly impact the manner in which externally-driven economies navigate their relationships with both Northern counterparts and fellow Southern states. Best’s seminal posits on  The Rules of the Game – Inter Caetera, Muscovado Bias, The Metropolitan Exchange Standard, Navigation Provision, and Imperial Preference – in conjunction with Levitt’s (2001) insightful amendments, astutely encapsulate the economic and social dynamics that transpire between Hinterland Economy and Metropolitan Economy. According to this analysis, these rules meticulously delineate the parameters of trade, labor, and monetary policy, as well as the social and cultural conditioning that characterizes the plantation economy. Consequently, this intricate framework engenders a milieu in which the Metropolitan Economy manipulates the terms of trade and currency regulations to its advantage, and restricts Hinterland economies to terminal activities, such as primary production and crude processing thereby reaping the majority of profits from all activities executed by the Hinterland Economy.

A thorough understanding of these mechanisms is indispensable for delving into the underlying reasons as to why the African Union (AU) and the Caribbean Community (CARICOM) –   two regional groups that umbrella Southern States – despite their ostensibly complementary nature, might prioritize their relationships with Northern states over fostering cooperation with one another. In essence, the Model of the Plantation Economy creates room to present the compelling argument that an international system governed by spheres of influence inevitably leaves Southern States subjugated, pandering to the dictates of Northern states for their survival, and consequently with minimal incentive to collaborate with their Southern counterparts.

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