Why the Spanish Caribbean Was Unable to Maintain Control Over Its Own Industries

César Ayalain his book, American Sugar Kingdom: The Plantation Economy of the Spanish Caribbean 1898-1934,explains the cause of underdevelopment in the Spanish Caribbean and focuses on the hurdles in the development of plantation economies of Puerto Rico, Cuba and the Dominican Republic in the beginning of the twentieth century. Ayala compares and analyzes the kind of growth of sugar industry in these nations on the backdrop of the 1898 Spanish – American War during which the US  acquired Puerto Rico and Cuba. In this analysis, Alaya aims to show how the development of modern economic systems and social class is closely linked to the history of the sugar industry in the of the US during the period when its expansion and consolidation peaked.

He examines the investment patterns and the interactions between native planters and US capitalists. He contrasts old and new regions of sugar monopoly and the patterns of migration of labor as well as the historical grouping of workers on the sugar plantations. This account places in comparative perspective the history of the US, plantation of sugar and colonialism across the region. It is from this explanation and analysis that the argument to explain why the Spanish Caribbean was unable to maintain control over its own industries is based.

The United States became an imperial power after the Spanish-American War of 1898 and it subsequently structured the economy of the Caribbean society to benefit their own course. Ayala argues that it was the desired result of the American expansion in the Spanish Caribbean to create a new form of underdevelopment. This was based on the capitalist relations of production and not the anti –capitalist relations that persisted.

This book explains that production areas were concentrated on in the hands of foreign capitalists and that the foreigners were themselves very present and not absentee owners. The problem is that they never reinvested their profits locally. This means they were never intent on developing the area and only wanted to exploit it to the maximum.

What hindered Spanish Caribbean industries from fully taking off in terms of development was their overreliance on foreign assistance. This they did so as to share the investment risks and the administrative responsibilities in the rapidly expanding business. This is how they let in United States investor to take control of their industries. This happened so that by 1900, a process of concentration in the sugar industry had already faced out the smaller mills in the competition while larger ones flourished in the hands of foreign owners. It was as a result of Us investments that these companies in the Spanish Caribbean nations achieved their modern morphologies meaning that nothing could go on without the interests of the foreign investor being served first. Slowly therefore, these Spanish Caribbean countries lost control of their industries.

Another factor that exacerbated this scenario was the rural proletarianization process which by then was already spreading in the highlands and which took a great leap upon the introduction of forced colonial tax. They transformed local class and proletarianzed the workforce by putting up large scale investments in sugar centers. These developments benefited the US as they increased the number of those who fed the ranks of workers needed for their corporations in local cane growing. This was the case mainly in Puerto Rico where colonial government expropriated taxes to enable them create the agricultural working class. This containment of the sugar industries within the US sugar customs areas tied them to that particular economy. Also, the introduction of direct rule made it possible for the US colonial administration to enforce taxation. This virtually shifted control of the industries from the natives to the Us foreigners. Ayala focuses engagingly and broadly on these issues in chapters three and four where he looks at the role of the customs and the vertical kind of ownership of sugar industries. In chapter eight, he extends and elaborates that the increased US sugar tariffs, the great depression and the subsequent adoption of Us sugar program added more stress. In responding to these excesses, these countries responded differently in their own different ways thus denying them the unity of one voice.

Vertical ownership that allowed foreigners to control most sugar companies in the region is another factor for the failure of the Spanish Caribbeans to maintain control of their own industries. This has an  economic impact on the industrial ownership of the firms. This structure was developed to boost the organizational innovations of the foreigners and help them underpin relational contracts and reduce costs of transactions. This move disempowered the industries of these nations.

Imperialism also played a major role in ensuring control of the Spanish Caribbean industries was solely kept in the hands of foreigners. Ayala’s judgement of how things are likely to develop in the future projects that vertical relationships with their headquarters in the US were clear signs of imperial power. This vertical ownership, he says, slowly reduced local interests and ensured they never resurfaced.

Ayala also makes a very strong case for the heterogeneity of the make-up of the institutions and economic developments of each of the countries covered by the phrase Spanish Caribbean. The influence of the US was very strong and differentiated which meant that they held key sectors of the industries and thus pushed the locals to the periphery in terms of controlling the economic activities of the industries. He seems to suggest that there were never any better alternatives for the native sugar planters leaving them only to do business with these near monopolies. It would be massively wrong to assume that they did not know what they were entering. Rather it was a situation that escaped them under their very eyes because they lacked the technological advancement and the financial muscles to drive away the intruder which in this case is the US. They were virtually powerless or one can just say , made incapable of pursuing their own best interests.

Looking at all these factors therefore and the extent of the damage they inflicted on the economies of these countries, it becomes apparent that the Spanish Caribbean was hindered by a myriad of deterrents that ensured it failed to control its industries. First it was the invasion of 1898 that totally frustrated attempts by Cuba to reorganize their society in order to fit their national needs. It was from there that they became second fiddle players. And with virtually all the engines of the economy in the hands of foreigners, the Spanish Caribbean could not manage to maintain control of its industries.