Author(s): | Dye, Alan B. |
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Reviewer(s): | Salvucci, Richard |
Published by EH.NET (September 1999)
Alan B. Dye, Cuban Sugar in the Age of Mass Production: Technology and the
Economics of the Sugar Central, 1899-1929. Palo Alto, CA: Stanford
University Press, 1998. xi ii + 343, $55 (cloth), ISBN: 0-8047-2819-4
Reviewed for EH.NET by Richard Salvucci, Department of Economics, Trinity
University, San Antonio, Texas.
The history of Cuba is the history of sugar or so it might seem to a reasonable
observer. Indeed, so much has been written about sugar, about Cuba, and about
sugar in Cuba that you might wonder what remains to be said. The answer, after
reading Alan Dye’s study of Cuban sugar in the age of mass production, is
“plenty.” The period of Dye’s focus, 1899 through 1929, is commonly called
Cuba’s “second” sugar revolution as opposed to the
“first” revolution that occurred between about 1825 and 1845 or so. Dye brings
the elegant simplicity of mainstream economic analysis to bear on a subject
that has rarely been treated so dispassionately. If you do not know much about
Cuban history, you may find it odd to learn that simply thinking about Cuba (or
much of the rest of Latin America) in neoclassical terms is in itself a big
deal. But that it is. There was a time, not so long ago, I might add, that to
question whether all Cuba’s ills were really the result of capitalism,
imperialism and racism was to question the basis and legitimacy of the
Revolution itself. Dye knows this and picks his way
carefully through the minefield (and politics) of Cuban historiography. The
result is an impressive economic history, with as much stress on history as on
economics.
The first three chapters of the book give an accurate and informed account of
the Cuban
sugar industry between 1763 and 1898, when the lines of Cuba’s subsequent
economic development were set. This was the age of the sugar plantation, of
African slavery, of the rapid spread of sugar into the island’s fertile central
plains, and of the ingenio, which Dye defines as
“a self-contained plantation/mill complex, vertically integrated and centrally
managed.” The production of sugar grew by leaps and bounds,
coming to dominate the island’s economy, or at least it did in the west, if not
in the back ward, peasant-dominated east. Anyone unfamiliar with the history of
Cuban sugar before 1898 can read these chapters with profit. My only criticism
is that the discussion seems heavily in the thrall of Manuel Moreno Fraginals,
Ramiro Guerra y Sanchez, Fe Iglesias, and Leland Jenks. There has subsequently
been more than a little empirical work on Cuba (and quite relevantly, on
Puerto Rico as well) that would nicely buttress Dye’s conclusions but which
escapes his attention. Still, this is not a major failing. Dye’s principal
contribution begins with Chapter Four and it is on this basis that his work
should be judged.
The first thing to recognize is that Cuba faced a problem that had bedeviled
the sugar industry everywhere, namely, a long term decline in the price of
sugar. In an effort to remain competitive, producers in Cuba discarded the
model of the plantation complex that had been the bulwark of the industry
everywhere since the sixteenth century. They turned, instead,
to the continuous-process technology that yielded important economies of
scale, namely, the large, modernized, heavily mechanized central with its
attendant corps of cane farmers or colonos. The technology came to Cuba after
the conclusion of the Spanish-American-Cuban War and was disproportionately
deployed by investors from the United States who had taken over the Cuban
protectorate from Spain. Logically, the new centrales embodied the best
technology available and in so doing gained a reputation for imposing
efficiency on Cuban rivals
who would not or simply could not compete. Dye argues that this reflected not
so much capital market imperfections or credit rationing as it did the desire
of the Cubans to continue producing sugar from plants that may have been
obsolescent, but which, in view of the high price of sugar down to 1920, were
not yet obsolete. When prices suffered their inevitable fall, the Cubans found
themselves squeezed out by the Yanquis, whose success the Cubans attributed to
political clout and economic endogamy. This
makes for a good story and Dye tells it very well.
The only qualification I might add is that, while economically enticing,
Cuba offered investors from the United States other advantages. Before 1910,
most direct investment from the United States in Latin America went to Mexico
but that investment rested on the political stability imposed by the
gerontocracy of the regime of Porfirio Diaz. When the lid blew off Mexico in
1910 and Diaz decamped to Paris, the gringos jumped ship as well,
but they got off in Cuba. I believe Cleona Lewis’s work on “American”
investment overseas substantiates this. Cuba, with its complaisant political
system (the United States was given the right to intervene in the island’s
affairs in 1901 by the infamous Platt amendment to
the Cuban constitution), was a lot better than revolutionary Mexico and even
better than, say, the Philippines, which were as willing to fight the United
States as they were to fight Spain. Cuba offered diversions and the quiet life
that Mexico no longer
did. Dye’s book is also interesting on other grounds. Observing, as did Leland
Jenks, that sugar mills in Cuba continued to expand in the 1920s even as the
war-induced spike in prices (known in Cuba as the “dance of the millions”)
collapsed thereafter, Dye proposes, in Chapter Five, that adjustment costs
rather than “irrational exuberance” are the explanation. Many of the newer
mills that entered the market when prices were high were unable to expand
rapidly enough to avail themselves of economies of scale before prices fell.
Skilled supervision, social overhead capital, even well-organized domestic cane
supplies were not readily available to new entrants into the industry at
anything less than prohibitive cost. So, as is sometimes said in Latin America,
the new mills
“made haste slowly,” expanding production to optimal levels even after the
initial stimulus to entry would seem to have dissipated. Rational exuberance,
in other words. Dye cautions his readers that they might wish to skip over his
estimation of adjustment costs. I can see where my colleagues in Latin
American history might not want to go where Dye leads,
but I was repeatedly struck by the clarity and cleverness of his exposition.
In Chapter Six, Dye tackles the issue of regional specialization.
Historically, the sugar industry had spread from west to east and for most of
the nineteenth century; the western half of the island was the most
“modern.” The pattern changed dramatically in the twentieth century when the
bulk of new investment flowed to eastern provinces like Camaguey and Oriente.
Dye’s explanation for this phenomenon makes sense. Western Cuba was least
malleable in institutional terms, since prospective investors faced independent
cane farmers and a railway network adapted to pat terns of production dating
back to the 1830s. The east was relatively virgin territory. There the new
industry could have railways shaped to its own requirements and could control
cane farming by reserving large tracts of land for its own use. Eastern Cub a
thus offered advantages to the latecomer that were unavailable in the west. For
the modern-minded, this analysis is formally specified and tested using a
fixed-effects regression model in Chapter Seven, wherein Dye draws the
inevitable conclusion that history matters: “The difference of the relative
costs of cane in the east and the west was truly a consequence of the different
histories of the two parts of the island” (p. 238). Chapter Eight reflects on
the importance of factor endowments for choice of
technique.
It would be difficult for me to overstate the value of this book but even so,
there are some blemishes. The text repeats itself in more than a few places and
the repetition sometimes occurs within the compass of a couple of pages. This
is just poor copy-editing. There are also places where I thought Dye was
making things unnecessarily difficult, particularly for non-specialist readers.
Why does degree of difficulty matter? Well, here is a book that should be
required reading for all Latin American historians and not just for economic
historians or the Methodologically and Theoretically Correct. It may well be
that the Revolution in 1959 was not the result of some Big Dialectic working
its way through Cuban history, but Dye explains, in measured tones, how one
historical option after another was foreclosed to Cuba and why its problems
have consequently seemed so intractable. This may be an enlightening example of
“path dependence” but to Latin American historians of a certain age, it
recalls
the discussions of “colonial heritage” that generated so much excitement
thirty years ago.
The fact that Dye ends up where he does strongly suggests that there is no
right or wrong way to do history, just more or less fruitful and relevant ways
of doing it.
Good history is good history, and Alan Dye’s book is good history indeed.
Richard Salvucci teaches at Trinity University in San Antonio, Texas. He is
writing a book on Mexico’s “London Debt” in the nineteenth century and recently
has written a paper with his wife Linda Salvucci on the Latin American terms
of trade in the nineteenth century.
Subject(s): | Agriculture, Natural Resources, and Extractive Industries |
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Geographic Area(s): | Latin America, incl. Mexico and the Caribbean |
Time Period(s): | 20th Century: Pre WWII |