The twentieth century and the professionalization of economics

The most prominent trends in political economy/economics have had their adherents within the Caribbean. Mercantilism exerted its effect throughout society, leaving long-term expectations of state intervention to ensure economic prosperity and promote social welfare.

The emergence of classical liberalism also had an influence but it must be recalled that while the main classical political economists were writing in Britain, the majority of the people of the Caribbean were slaves. In addition, the actual practice of liberalism in Europe was quite limited. The political, social and economic turbulence of the nineteenth century did not provide a fertile soil for economic liberalism, although the idea of being able to trade with nations beyond the mother country had its appeal. For the Caribbean, liberalism also received a blow in the latter part of the nineteenth century when European nations increasingly subsidized beet sugar production at the expense of Caribbean producers. Special trading relationships with colonial and neocolonial partners persisted throughout the twentieth century, and were only finally undermined in the aftermath of the formation of the World Trade Organization in 1995, which ruled against them.

Neoclassical economists would later have their influence as economics became increasingly professionalized in the twentieth century, and in as far as colonial/occupying governments sought to impose such policies. Despite this, it must be noted that even among professional economists, support for a laissez-faire approach was often constrained by the presence of Marxist, Keynesian, and developmentalist thinking. In addition, some of the regimes that emerged, while by no means socialist, did not promote a climate of business freedom. The most dramatic of these was that of Rafael Trujillo, who ruled the Dominican Republic from 1930 until 1961 when he was killed. Despite being credited by some with exercising a modernizing influence on the economy, his policies were directed at repressing all opposition and ensuring that he (and his associates) owned all new industries developed.

The twentieth century was a turbulent period with two major wars which impacted the region; depressions and recessions; commodity crises; tightening control on Puerto Rico, domination of Cuba, occupation of Haiti and the Dominican Republic, and other overt and covert interventions by the US; constitutional suspensions, coups and attempted coups; labor rebellions and general strikes; contestations with respect to the issue of race; transformations in gender relations; demands for constitutional reform leading ultimately to the emergence of many new independent nations; and the various developments relating to the Cuban revolution.

Economics students tended to stick (but not exclusively) with their former colonial power or language area, with a shift mainly towards the US as it became more important in economics and within the region. Given the training that Caribbean economists have received, it is not surprising that the majority outside of Cuba have remained within fairly orthodox lines, but extreme neo-liberalism never achieved unquestioned dominance within the Caribbean. It had its adherents especially among US-trained economists, with Chicago-trained former Haitian Minister of Finance Leslie Delatour being a good example. The Washington Consensus institutions impacted sections of the public sector, but their outlook did not take hold of the consciousness of the citizenry, more or less, regardless of their station in life. Many economists defended a developmentalist perspective and the shift from “get the prices right” back to “institutions matter” and “development is a multi-dimensional process” has generally been welcomed.

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Source: Barnett Vincent (ed.). Routledge Handbook of the History of Global Economic Thought. Routledge,2015. — 359 p. 2015

The twentieth century and the professionalization of economics

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