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Hawai’i: Eight Hundred Years of Political and Economic Change

Author(s):La Croix, Sumner
Reviewer(s):Alston, Lee J.

Published by EH.Net (October 2019)

Sumner La Croix, Hawai’i: Eight Hundred Years of Political and Economic Change. Chicago: University of Chicago Press, 2019. ix + 309 pp. $60 (hardcover), ISBN: 978-0-226-59212-1.

Reviewed for EH.Net by Lee J. Alston, Department of Economics, Indiana University.

Economic and political development is a longitudinal process. Sumner La Croix (emeritus University of Hawaii) gives us 800 years of the development of Hawaii from its settlement by immigrants from the Society Islands in the mid-thirteenth century to the present. The settlement of Hawaii was unique because it was uninhabited when the Polynesians arrived, which means they did not face resistance. This does not mean that the settlers started with a tabula rasa. They brought with them the culture and institutions that they left in the Society Island. In Chapter 1, La Croix gives us a short history of Hawaii, a Cliff’s Notes to the book. I encourage the reader not to stop there because the book is too rich in the details of institutional change. Indeed, it is the best case study that I have read on long run development.

In Chapter 2, La Croix takes up the issue of voyaging and settling Hawaii. He relies on recent work by archeologists who have established that Polynesians traveled to Hawaii sometime in the mid-thirteenth century. The Polynesians migrated strategically, i.e., they did not discover Hawaii by chance but rather by taking longer and longer voyages until they discovered Hawaii. They found an uninhabited fertile land and they thrived economically and demographically. The population growth rate in the first century was perhaps the highest recorded anywhere. It slowed from the mid-fourteenth century to the mid-fifteenth century and slowed further to reach an estimated population of 400,000 by 1778, at the arrival of Captain James Cook. To support such a high population growth, land must have been fertile and initially abundant. La Croix maintains that the social structure was relatively egalitarian. The crop of choice was taro.

From Chapter 3 on La Croix adopts the framework of North, Wallis and Weingast (NWW) in Violence and Social Orders. The Polynesians brought their home institutions of chiefdoms to the Hawaiian Islands. They competed with one another and violence erupted frequently. In the language of NWW, the chiefdoms were fragile states. Over time, archaic states emerged that were more stable and became natural states with systems of taxation and a hierarchy. Relying on work of archaeologists, La Croix documents that the agricultural surplus allowed for recreation as well as a more hierarchical structure with the elite taxing those below to allow for investments in stone monuments. Taxation consisted of labor dues, and consumption by chiefs and their retinue as they moved across their states. Ritualistic human sacrifices helped established legitimacy. The archaic states encompassed entire smaller islands with the larger islands splitting into several states generally delineated by volcanic slopes. Despite rebellion and wars, the population continue to grow. Over time, agriculture expanded from ponded taro production to include large rain fed fields on volcanic slopes.

The arrival of Captain Cook in 1778 upset the relatively stable natural order in the Hawaiian states (Chapter 4). The interactions with the whites from the west meant a dramatic decline in population from disease, as much as an 80% drop in population between 1778 and 1831. This exceeds by far the decline in Europe from the Black Death. Amid the population decline, Hawaii experienced a resource boom in the extraction of sandalwood, mostly for the Chinese market. The decline in population and the rush for sandalwood meant a decline in agricultural production, yet somewhat perversely, wages did not increase because of consolidation of political power. In 1795, Kamehameha, one of the ruling chiefs on the island of Hawaii conquered all of the islands except for two minor islands. He did so by amassing an arsenal of weapons before other chiefs. Kamehameha established himself as King and cleverly solidified his power by cutting in the other chiefs on the rents from land and sandalwood. The new dominant network was powerful enough to extract more labor at lower wages in agriculture and sandalwood extraction. Kamehameha died in 1819 and was succeeded by his son, who, though he managed to stay in power, was less successful in managing the overharvest of sandalwood that was more or less depleted by 1830.

Two other booms followed the sandalwood boom (Chapter 5): supplying whaling ships and sugar cane cultivation by British, German and U.S. corporations. Both sugar and supplying whaling ships were labor intensive so wages rose considerably. Population continued to decline from new epidemics. La Croix maintains that in the face of increased power of foreign corporations, the King privatized most of the land including his own holdings. The rationale was that land held in private would be harder to usurp should a foreign power take over Hawaii. The King also adopted other western institutions, including more rule of law in general along with a written Constitution. In the language of NWW, Hawaii by mid-nineteenth century had become a mature natural state.

The monarchy by the mid-nineteenth century seemed relatively stable and accommodated the nascent sugar industry. What upturned the apple cart such that Hawaii became a U.S. territory in 1898? In Chapter 6 La Croix argues convincingly that two factors led to the increased power of the sugar industry, which in turn led to the U.S. toppling the monarchy: population growth in the U.S. West where Hawaii sold most of its sugar; and a reciprocal trade agreement with the U.S. in 1876 that eliminated any tariff on Hawaiian sugar.

After territorial status, native Hawaiians lost power and three forces dominated Hawaii: the sugar industry, the territorial government and the U.S. military. Native Hawaiians increasingly lost power. There was a positive side in that increasingly U.S. institutions became implanted but with fewer checks and balances because power resided in the territorial governor and not the legislature (Chapter 7). For most native Hawaiians, territorial rule was extractive and arbitrary. Chapter 9 “Statehood and the Transition to an Open-Access Order” follows more cleanly after Chapter 7. The details are fascinating on the forces that led to statehood, which Hawaiians overwhelmingly supported. Hawaiians viewed statehood as clearly superior to the colonial style rule of territorial status. With statehood came representation in the U.S. Congress and less arbitrary policies. Importantly, neither the territorial nor the state government ever properly redressed the former confiscation of crown lands and lack of secure property rights to land for the majority of Native Hawaiians. In Chapters 8, 10 and 11, La Croix chronicles the failed policies of territorial and state policies concerning homes, leases and land reform intended to benefit those left behind. The policies consistently never met their stated goals. Despite the failures, Hawaii boomed from the 1960s to today, largely through tourism from the U.S. In his concluding chapter, La Croix discusses the broad sweep of Hawaiian history including the importance of self-rule for 600 years that set the stage for the successful transition to statehood. Problems still exist concerning the recognition of the rich cultural Native heritage but there is strong advocacy for recognition. Overall, La Croix pulls together an amazing amount of interdisciplinary scholarship to shed light not just on Hawaiian economic and political development but on the larger process of institutional change.

I highly recommend this book.


North, Douglass C., John Joseph Wallis and Barry Weingast. 2009. Violence and Social Orders: A Conceptual Framework for Recorded Human History. Cambridge: Cambridge University Press.

Lee J. Alston (Professor of Economics, Indiana University and Research Associate, NBER) is co-author of Institutional and Organizational Analysis: Concepts and Applications, Cambridge University Press (2018) and Brazil in Transition: Beliefs, Leadership, and Institutional Change, Princeton University Press, (2016).

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Subject(s):Economywide Country Studies and Comparative History
Geographic Area(s):Australia/New Zealand, incl. Pacific Islands
Time Period(s):General or Comparative