Proposal preview

Tropical economies in the making of the modern world

William Arthur Lewis (1915-1991) is a pioneering economic historian who discussed the trade and development of the world’s tropical regions including South Asia, Southeast Asia, Sub-Saharan Africa and Latin America. Although he was writing during the age of dependency theory, his work on tropical economies, represented by Aspects of Tropical Trade 1883-1965 (1969) and Tropical Development 1880-1913 (1970), advanced an argument that the export of raw materials was the engine of economic growth in the tropical regions from the 1880s to the eve of the First World War. In this argument, he offered an insightful view that highlighted the initiatives among peasants who effectively responded to the factor endowments and the natural environment in their respective regions, and to economic opportunities brought from outside their regions. More importantly, however, he also pointed to factoral (income) terms of trade as the determinant of the divergence in economic development between the temperate and tropical zones.

The aim of this session is to revisit Lewis’s argument to extend the scope of his work into the late pre-colonial period of the nineteenth century, which had already witnessed the early growth of the global export of raw materials from the tropical regions to industrializing countries in Western Europe and North America. It will provide a platform to discuss the agency, rather than the dependency, of the tropical economies in the making of the modern world during the first wave of globalization. Also, it will shed fresh light on multiple paths of economic development from tropical perspectives.

The session is comprised of seven papers on tropical economies in the early to mid-nineteenth century and includes comments from two renowned economic historians of Asia and Africa. In Southeast Asia, especially in Java and Philippines, the unlimited supply of low-wage labor to the subsistence sector made possible the rapid growth of exports in primary products such as coffee and sugar. Kohei Wakimura reveals that this labor supply to the Southeast Asian economies consisted of two phases: the rise of fertility in the first half of the nineteenth century and migrant labor from China and India in the second half of the century. Atsushi Kobayashi explores the linkage between changing consumer preferences and the development of Southeast Asian trade. Ryuto Shimada takes up the case of tea production in tropical Asia by arguing that the growth of tea production had already begun for domestic consumption before Europeans organized tea plantations to boost exports. In Sub-Saharan Africa, both East and West, the rapid growth of exports of raw materials and food offered new income-earning opportunities to coastal producers and enabled them to consume imported cloth from Britain, India and the United States. Katharine Frederick reveals that increasing global demand for gum copal and other goods produced on the East African coast led to different income-earning opportunities between coastal and interior producers. Similarly, Kazuo Kobayashi argues how the export of palm oil from West Africa made it easier for coastal producers to gain access to cheap British calicoes. In Brazil, cane sugar and coffee were the two most important export commodities during the nineteenth century. Christopher Absell demonstrates that European trade policy influenced the imperfect competition that led to the divergence in growth performance of these commodities. Juan-Santiago Correa discusses how railways gave an impact on commodity production in Columbia.

Organizer(s)

  • Kazuo Kobayashi Osaka Sangyo University k.kobayashi2030@gmail.com
  • Ryuto Shimada University of Tokyo shimada@l.u-tokyo.ac.jp

Session members

  • Kohei Wakimura, Osaka City University
  • Katharine Frederick, Utrecht University
  • Christopher Absell, Universidad Carlos III de Madrid
  • Atsushi Kobayashi, Osaka Sangyo University
  • Juan-Santiago Correa, Colegio de Estudios Superiores de Administración

Discussant(s)

  • Gareth Austin University of Cambridge gma31@cam.ac.uk
  • Kaoru Sugihara Research Institute for Humanity and Nature sugihara@chikyu.ac.jp

Papers

Panel abstract

William Arthur Lewis argued that the export of raw materials was the engine of economic growth in the tropical regions from the 1880s to 1913. In this argument, he highlighted the initiatives among peasants who effectively responded to the factor endowments and the natural environment in their respective regions, and to economic opportunities brought from outside their regions. He also stressed factoral terms of trade as the determinant of the divergence in economic development between the temperate and tropical zones. This session is aimed to extend the scope of his work into the late pre-colonial period of the nineteenth century, which had already witnessed the early growth of the export of raw materials from the tropical regions to the industrializing West. It explores not only the agency of the tropical economies in the making of the modern world, but also multiple paths of economic development from tropical perspectives.

1st half

Palm oil exports in nineteenth-century West Africa: Lewis reconsidered

Kazuo Kobayashi

The export growth of cash crops in nineteenth-century West Africa has been discussed in revised frameworks of the Myint’s ‘vent-for-surplus’ theory. Yet, in the West African context the literature has not yet fully explored Lewis’s alternative explanation of tropical development. While Lewis highlighted the export of raw materials as the engine of economic growth in tropical regions from the 1880s to 1913, it is shown that already in the early nineteenth century the growth of palm oil export provided an income-earning opportunity that small-scale producers in West Africa to purchase more imported goods ever. This paper argues that the palm oil trade expanded more rapidly in the first half of the nineteenth century rather than in the period covered by Lewis. This is attributed to the increasing difficulties caused by intensive competition in British markets with products from other regions of the world in the second half of the century.

The export growth of cash crops in nineteenth-century West Africa has been discussed in revised frameworks of the Myint’s ‘vent-for-surplus’ theory. Yet, in the West African context the literature has not yet fully explored Lewis’s alternative explanation of tropical development. While Lewis highlighted the export of raw materials as the engine of economic growth in tropical regions from the 1880s to 1913, it is shown that already in the early nineteenth century the growth of palm oil export provided an income-earning opportunity that small-scale producers in West Africa to purchase more imported goods ever. This paper argues that the palm oil trade expanded more rapidly in the first half of the nineteenth century rather than in the period covered by Lewis. This is attributed to the increasing difficulties caused by intensive competition in British markets with products from other regions of the world in the second half of the century.

What drove East Africa’s cotton cloth imports in the nineteenth century?

Katharine Frederick

How did a rapid nineteenth-century increase in East African export-oriented production and global trade affect import levels of foreign cloth in distinct geographic regions? This paper reveals that the scale and composition of nineteenth-century cloth imports heavily depended on production changes among East African coastal groups – relative to interior-situated people – which consequently consumed the majority of nineteenth-century imported cloth. Increasing coastal production augmented coastal incomes, stimulating greater consumption of imported manufactures. Exports of ivory from the interior also grew from the mid-nineteenth century. However, heavy transportation costs and a high interior exchange value of imported goods relative to ivory dampened the growth of cloth imports into interior regions. Trade data reveal that imports of American-made cloth – popular in the interior – were rapidly surpassed by Indian- and British-made cloth, which was largely consumed near the coast.

How did a rapid nineteenth-century increase in East African export-oriented production and global trade affect import levels of foreign cloth in distinct geographic regions? This paper reveals that the scale and composition of nineteenth-century cloth imports heavily depended on production changes among East African coastal groups – relative to interior-situated people – which consequently consumed the majority of nineteenth-century imported cloth. Increasing coastal production augmented coastal incomes, stimulating greater consumption of imported manufactures. Exports of ivory from the interior also grew from the mid-nineteenth century. However, heavy transportation costs and a high interior exchange value of imported goods relative to ivory dampened the growth of cloth imports into interior regions. Trade data reveal that imports of American-made cloth – popular in the interior – were rapidly surpassed by Indian- and British-made cloth, which was largely consumed near the coast.

Market potential, relative prices and agricultural specialisation: the rise of coffee in the Brazilian South-east, 1825-1840

Christopher David Absell

During the period spanning independence to mid-century, Brazil’s south-east shifted from specialising in the export of cane sugar to coffee. This paper explores the mechanism underlying this shift by exploiting a new monthly database of international prices and exports from Rio de Janeiro. I argue that a change in relative prices incentivised Brazilian producers to shift to coffee cultivation. This argument is supported by the finding that coffee exports were positively related to the increase in the ratio of coffee to sugar prices during the period 1825 to 1840. Prices in Brazil followed international trends, indicating that the shift in relative prices was exogenous. The expansion of foreign market potential, in the form of an import demand shock driven by the removal of tariffs on coffee in the United States, led to increased market integration and a shift of relative prices in the south-east in favour of coffee exports.

During the period spanning independence to mid-century, Brazil’s south-east shifted from specialising in the export of cane sugar to coffee. This paper explores the mechanism underlying this shift by exploiting a new monthly database of international prices and exports from Rio de Janeiro. I argue that a change in relative prices incentivised Brazilian producers to shift to coffee cultivation. This argument is supported by the finding that coffee exports were positively related to the increase in the ratio of coffee to sugar prices during the period 1825 to 1840. Prices in Brazil followed international trends, indicating that the shift in relative prices was exogenous. The expansion of foreign market potential, in the form of an import demand shock driven by the removal of tariffs on coffee in the United States, led to increased market integration and a shift of relative prices in the south-east in favour of coffee exports.

Colombia railway structure: the early experiences in the XIXth century

Juan-Santiago Correa

During the second half of the 19th century, Colombia started building fourteen railways for several purposes. Most of them sought to build a connection between local production and the international market amidst a consensus that identified international trade and economic growth. Its possible observe an increase in commodities exported by Colombian to world markets in the second decade of the 19th century. This is particularly clear in the case of coffee, which will become the most important product of Colombian exports. By the end of the 19th century, almost 90% of the rail network was dedicated to the export of coffee. In this way, it is possible to prove the hypothesis that these railways were built primarily for foreign trade and generated a positive impact on their production.

During the second half of the 19th century, Colombia started building fourteen railways for several purposes. Most of them sought to build a connection between local production and the international market amidst a consensus that identified international trade and economic growth. Its possible observe an increase in commodities exported by Colombian to world markets in the second decade of the 19th century. This is particularly clear in the case of coffee, which will become the most important product of Colombian exports. By the end of the 19th century, almost 90% of the rail network was dedicated to the export of coffee. In this way, it is possible to prove the hypothesis that these railways were built primarily for foreign trade and generated a positive impact on their production.

2nd half

Exports of Primary Products and Labour Supply in Tropical Asia during the 19th Century: From the Perspective of ‘Factorial Terms of Trade’ Thesis

Kohei Wakimura

This paper examines causes of low wage in the sectors producing primary commodities in the maritime Southeast Asia from the perspective of ‘factorial terms of trade’ thesis. This thesis was proposed by W.A. Lewis to clarify the great divergence between the temperate zone and the tropical zone during the 19th century. In the first half of paper, we highlight two sources of labor supply during the 19th century: high population growth in the maritime Southeast Asia and large labor migration from South Asia. Particularly, we argue about the importance of high population growth. In the second half of paper, we analyze the low food productivity in the subsistence sectors of Southeast Asia, which was the opportunity cost for laborers in the primary commodities sector. Also, we touch on the issue of low food productivity in South Asia. Finally, we draw some implications for exploring the great divergence in the 19th...

This paper examines causes of low wage in the sectors producing primary commodities in the maritime Southeast Asia from the perspective of ‘factorial terms of trade’ thesis. This thesis was proposed by W.A. Lewis to clarify the great divergence between the temperate zone and the tropical zone during the 19th century. In the first half of paper, we highlight two sources of labor supply during the 19th century: high population growth in the maritime Southeast Asia and large labor migration from South Asia. Particularly, we argue about the importance of high population growth. In the second half of paper, we analyze the low food productivity in the subsistence sectors of Southeast Asia, which was the opportunity cost for laborers in the primary commodities sector. Also, we touch on the issue of low food productivity in South Asia. Finally, we draw some implications for exploring the great divergence in the 19th century.

Changing Consumption and Trade Growth in Southeast Asia, c. 1800-1870

Atsushi Kobayashi

The paper explores the development of Southeast Asian trade during 1800-70 with special attention to the change of consumer goods’ imports. Since the early-modern period, Southeast Asian trade had been growing as a part of intra-Asian trade through importing luxurious goods from India and exporting native produces to China. After the 1820s, while British industrial cotton products began to be imported into Southeast Asia, the region sustained imports of Indian cotton textile owing to the local consumers’ preference to durable and traditional-patterned clothing. Consequently, the circulation of Indian cotton goods persisted until the early 1840s, and in the meantime, the regional market adjusted to the influx of British industrial products. Thus, the progressive shift of Southeast Asian imports from luxury to mass consumption goods took place, and it induced the expansion of commercial production in local livelihoods, which led to the remarkable growth of primary goods’ exports after 1870.

The paper explores the development of Southeast Asian trade during 1800-70 with special attention to the change of consumer goods’ imports. Since the early-modern period, Southeast Asian trade had been growing as a part of intra-Asian trade through importing luxurious goods from India and exporting native produces to China. After the 1820s, while British industrial cotton products began to be imported into Southeast Asia, the region sustained imports of Indian cotton textile owing to the local consumers’ preference to durable and traditional-patterned clothing. Consequently, the circulation of Indian cotton goods persisted until the early 1840s, and in the meantime, the regional market adjusted to the influx of British industrial products. Thus, the progressive shift of Southeast Asian imports from luxury to mass consumption goods took place, and it induced the expansion of commercial production in local livelihoods, which led to the remarkable growth of primary goods’ exports after 1870.

Maritime Traders and Trade Pattern in Transition in South Asia and Southeast Asia in 1780-1870

Ryuto Shimada

The maritime trade in the Indian Ocean and the Southern China Sea changed on a large scale from the late eighteenth century to the mid-nineteenth century. The Dutch East India Company was losing its power to control the maritime trading order in Asian waters, Western private traders as well as Asian indigenous traders rose their presence in Asian maritime trade in the course of time. In reflection to these changes in traders, the trading pattern also changed during this crucial period. While the British cotton textile inflows and the Asian primary products for the European market increased, intra-Asian trade and local trade grew up mostly due to the high demand of the Chinese economy for Southeast Asia products. All these changes prepared for the dynamic modern trade and economy in maritime Asia after 1870.

The maritime trade in the Indian Ocean and the Southern China Sea changed on a large scale from the late eighteenth century to the mid-nineteenth century. The Dutch East India Company was losing its power to control the maritime trading order in Asian waters, Western private traders as well as Asian indigenous traders rose their presence in Asian maritime trade in the course of time. In reflection to these changes in traders, the trading pattern also changed during this crucial period. While the British cotton textile inflows and the Asian primary products for the European market increased, intra-Asian trade and local trade grew up mostly due to the high demand of the Chinese economy for Southeast Asia products. All these changes prepared for the dynamic modern trade and economy in maritime Asia after 1870.