>In response to Michael K.'s mention of Huntington, Brad's journal
>recently published a counter example. It noted that the sugar colonies
>in the Americas had the highest per capita income regardless of whether
>the British, French or Spanish ruled them. It suggests that the factor
>endowments determined the institutions.
I'm sorry, but that example is pretty bogus. Given the nature of the crop
(with inelastic demand and the spread of sugar to new lands and the
development of new forms of sugar harvesting, e.g., beet sugar) the high
per capita incomes were bound to fall. That is, the high incomes were
mostly the result of the _high price of sugar_ at the time.
I suspect that the issue of "whether the British, French or Spanish ruled
them" is more important to the issue of the distribution of income within
the total of each colony.
The authors write that "The production of these commodities called for
relatively low levels human capital, making slavery a more profitable
proposition. The institution of slavery required certain types of
institutional arrangements."
Given the international market for these commodities, it was hard for
non-slave production to prevail at the time. The market encourages
"downward harmonization" of working conditions. Also, the "man/land" ratio
was very low at the time, so that workers could flee to the hills or other
islands or the frontier to escape bad working conditions. As Domar points
out, this meant that the bosses had to use forced labor relations in order
to make a profit. (It's also suggested by the last chapter of volume I of
CAPITAL, though that's not Marx's emphasis.) Of course, low-skill work
("low levels of human capital" in econ-jargon) is part of the picture,
since skilled workers can leverage their skill to resist slavery.
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
