Models for Caribbean Economic Development: The Impact of Arthur Lewis and Lloyd Best on Development Strategy in Trinidad & Tobago

• Author: Bhoendradatt Tewari/Roger Hosein
• Pages: 37-65

Chapter 2

Models for Caribbean Economic

Development: The Impact of Arthur Lewis

and Lloyd Best on Development Strategy

in Trinidad & Tobago1

Chapter two details two models for economic development in the

Caribbean, which competed during the 1950s, 1960s and 1970s. The first

of these was outlined in the 1950s by Arthur Lewis and expresses the

urgent need for Caribbean countries to adopt what has been described as

an “Industrialization by Invitation” Strategy. The second, outlined by

Lloyd Best, includes as one of its policy directives the taking over of the

commanding heights of the economy. On the surface, the two positions

seem diametrically opposed. However, when the influence on policy is

taken into account, in the case of Trinidad and Tobago what emerges on

close examination, is that elements of both strategies were found to have

been implemented, sometimes sequentially and at other times

concurrently.

This article was first published in S. Ryan (ed.) Independent Thought and

Caribbean Freedom: Essays in Honour of Lloyd Best, SALISES (2003),

The University of the West Indies, pp. 309–352.

1 This paper focuses on the time period after the Second World War up to the current

time period, and therefore coincides with what Best referred to as Plantation economy

further modified.

Trade, Investment & Development

38

2.1 LEWIS AND INDUSTRIALIZATION BY

INVITATION

The decade of the 1930s in the English speaking Caribbean was

characterized by a state of political colonialism, labour unrest, high

levels of poverty and unemployment and a productive structure

dominated by sugar and dependent on the metropole. Sugar, however,

had seen better days and clearly was a productive sector on its way out.

The islands were characterized by high levels of malnutrition and a

paucity of educational opportunities and social services for the

population. In the main, the political, cultural and economic ties

established with the metropole over centuries remained substantially

intact whilst such links as existed between countries of the Caribbean

archipelago tended to be sporadic and relatively insubstantial.

In this era, two main intellectual influences predominated in terms of

attempts at creating a new political, economic and social order in the

Caribbean sphere. The first of these was that of the Moyne Commission.

Lord Moyne was sent into the British West Indies in 1938 to assess the

socio-economic state of the islands in the aftermath of the emancipation

of slavery in 1838 in general and in the context of a spate of labour riots

ripping through the islands at that time in particular. The second major

intellectual influence emerged in the 1940s partly in response to the

report of Lord Moyne and was based substantially on the industrial

experience of Puerto Rico: a Spanish speaking Caribbean island in which

foreign investment had begun to play an important role (Demas 1976).

That economic development strategy outlined by Lewis in 1949 and

inspired primarily by the experience of Puerto Rico, recognized that

agriculture had reached its boundaries of internal and externally

profitable cultivation. He also acknowledged that the growth rate of the

population was faster than the growth rate of agriculture and so a

manufacturing base had to be established to absorb agricultural output, to

create employment opportunities and to remove the surplus labour.2

The Lewis formula identified the foreign market as recipients of a

Caribbean manufacturing sector output. Dependence on the foreign

market was necessary from the Lewis point of view since the size of the

2 Let us define MPL and TPL as the marginal and total product of the Lth and L workers

respectively. If MPL+n = 0, then surplus labor is representable by these n remaining

workers. Alternatively said, if TPL = a and TPL+n = a, then the total output of the n ((L +

n) -L) workers is zero and represents the surplus labor force. Lewis’s surplus labor force

existed in the agricultural sector of the Caribbean economies and such workers argued

Lewis, and should be siphoned off to facilitate the growth and development of the

fledgling manufacturing sector (and by extension, the overall macroeconomy).