This is the second of a lecture delivered by Professor Norman Girvan on February 20 at the UWI St Augustine campus to launch the year of Sir Arthur Lewis in commencement of the Caribbean’s first Nobel Laurette.
Professor Girvan’s presentation is reprinted from the Trinidad and Tobago Review of March 3, 2008. The third part will appear in our next issue.
By Norman Girvan
This brings me to the controversies surrounding the differences between Lewis and the New World Economists; a group in which, of course, I count myself. The differences were mainly over the role of foreign capital in industrialisation strategies; which Lewis advocated and the New World economists critiqued; and over what is the appropriate model for understanding West Indian economies; with Lewis using his dual economy model and the New World economists opposing this with the plantation economy model.
However, the New World critiques were often advanced as polemic in which the Lewis model of Industrialisation—which ascribed a leading role to foreign investors—was ridiculed as ‘Industrialisa-tion by Invitation.’
This term was invented by Lloyd Best, and it became associated, in the late 1960s, with unemployment, foreign control, over the economy, dependency, and lack of transformation—all the main problems of the time. This diagnosis was embraced by the new generation of young radicals as part of a political project. And there is no doubt that the attacks on Lewis could become personal. To many of my generation Arthur Lewis, with his English accent and bearing similar to that of an English academic, was the epitome of the black Englishman. This perception that was also fuelled by his critique of the American Black Power movement—Lewis argued that it should focus on acquiring mainstream educational skills rather than on Black cultural studies—and his view that the steel band was not an appropriate representation of West Indian national culture. As recently as 2002 instance we find Lloyd Best making the following statement.
That generation did not understand the problem. They had a lot of very good ideas which were expressed in the Lewis proposal for economic development, but Lewis was an Englishman. When I say that, people think I am trying to denounce him or pull him down. Quite the opposite. He was epistemologically an Englishman; he was brought up by Ricardian and Smithian theories and he was Stanley Jevons professor in the University of Man-chester. He had to be an Englishman. And his great acheivement was that he was an English economist who understood what economic transformation had been in England, and he developed a model that was suitable to most countries in the world. The country it was not suitable for was the West Indies, the Caribbean (Best 2003: 426).
Now when you read that statement in its entirety it is clear that when Lloyd called Lewis an Englishman he was speaking epistemologically, although he also threw in personal culture for good measure! But attacks of this kind evidently hurt Lewis, the staunch anti-imperialist who had taken on English economists over the West Indies’s ‘right to industrialise’, and beaten them. I am told by Kari Polanyi Levitt that Sir Arthur admitted as much to the late Willy Demas. I recall attending the CSA Conference in Barbados in 1989 when Lewis was the honouree, and after listening to three hours of tributes, including some from his erstwhile critics, Sir Arthur came on the stage and told a couple of funny stories, all of which were about people who had once been pilloried and were now being praised. In one of them, a famous Senator meets a journalist who had attacked him in print for many years.
The Senator asks the journalist what he really had against him, with the journalist replying “You were so famous and people said that so many good things about you, I figured you would be a good target.”
Even more revealing, perhaps, is a story told by Lloyd Best of having once sharing a public panel discussion with Arthur Lewis, in which several members of the audience attacked what Lloyd had said, often misrepresenting his position. Lloyd says that Lewis passed him a note which went something like this: “They will not only attack you for what you have said, but also for what you have not said; and for things that you never even dreamed of saying”. Lloyd would have appreciated the subtle irony, for in expressing his sympathy, Lewis was also suggesting that Lloyd had become the victim of what he himself had done to Lewis. Best later confessed, in one of his Lewis memorial lectures, that every generation has to commit, as he called ‘intellectual patricide’ in order to distinguish itself from its predecessors—a comment not only on his critique of Lewis but also of the later critiques that were levelled at the New World Economists by a succeeding generation.
While on this subject I should say something about the allegation that I have heard in some quarters, that Arthur Lewis fired Lloyd Best from the University in 1961, when Lewis was principal and Best was a young Research Fellow at the ISER. It is indeed the case that Best’s contract as a Research Fellow was not renewed, and that Lewis was instrumental in this decision, and that it happened in spite of frantic efforts by Lloyd Braithwaite, then ISER Director, to have Lloyd’s contract renewed. However, in an interview given in January 2005, at which I was present, Lloyd made it clear that he believed that Lewis had every right not to renew his contract because, as he put it, “I was not doing the work that the university was paying me to do” which was to help Dr. Carleen O’Loughlin prepare national income statistics.
As I have said, the substantive differences between Lewis and the New World Economists were over the role of foreign capital in industrialisation, and behind this lay different models of development. In the Lewis model, foreign capital in industry is part of the solution while in the Plantation model it is part of the problem. However, both Lewis and the Plantation School believed in the necessity of an agricultural revolution in order to support sustained economic growth and industrialisation and in this remains an issue today.
Growth and Fluctuations
The third seminal publication I want to refer to is Growth and Fluctuations (Lewis 1978). An interesting innovation in this book is his characterisation of the world economy as consisting of ‘core’ and ‘periphery’ regions, which he borrowed from the Latin American economist Raul Prebisch. The period of study is the era of great expansion of world trade in the latter part of the 19th century. Lewis’s question is why did this trade become a mechanism by which the core transmitted its growth to some parts of the periphery, and not to others?
The answer, he concludes, lies in government policy. The peripheries that developed had governments that invested in raising agricultural productivity and promoting manufacturing industry through industrial protection. Those that remained underdeveloped followed policies that promoted the use of cheap labour in agriculture and favoured cheap imports of industrial goods through low tariffs. In this lay the current division of the world economy into rich and poor countries, for the peripheries that developed were mainly those of the European settlement in the temperate zone whole those that remained poor were those in the tropical zone where colonial policies promoted mass immigration from Asia.
On the relationship between trade and economic growth, therefore, Lewis is very clear on his position. In the concluding chapter of his book, which represents virtually a lifetime of research and reflection, he states, that “…the long run engine of growth is technological change, and that trade cannot substitute for this except in the initial period of laying development foundations” (Lewis 1978a:245).
His analysis provides a much-needed antidote to the assumptions that underlie the current pressures towards global trade liberalization under the WTO and the current debate, for example, of the benefits to be expected from the Economic Partnership Agreement EPA with the Europe.
The questionable assumptions are that trade liberalization and trade expansion are always—and necessarily—good for development. These assumptions have become the subject of a considerable critical literature by authors such as the United Nations Deve-lopment Programme, the Nobel Prize winner Joseph Stiglitz, and the Harvard Economist Dani Rodrik, to name only some.
The UNDP’s path breaking report, Making Global Trade Work for People (2003) has shown convincingly that the presumed links between trade liberalization, economic growth and human development do not necessarily hold, and may even be perverse.
The thrust of Lewis’s conclusions, which have been amplified in the UNDP Report, is that trade expansion is not an end in itself, but must be made to serve the ends of development, and that to do so there must be strategic and targeted policy interventions; to raise productivity in the case of one, to promote human development in the case of the other.
This of course runs against the current orthodoxy. As Professor Ha-Joon Chang showed in his book Kicking Away the Ladder (Chang 2002) many of the interventionist practices that the advanced industrial countries adopted at an earlier stage of their development, aimed at ensuring that trade served the ends of Industrialisation, these very countries now seek to prevent developing countries from adopting through the WTO agreement and regional trade agreements like the EPA (Economic Partnership Agreements between ACP countries and Europe.) This is why the last UNCTAD Conference asserted the necessity for developing countries to preserve ‘policy space’ in the design of trade agreements.
Arthur Lewis and regionalism
Finally I want to talk about Arthur Lewis and regionalism. Lewis was of course a regionalist; his regionalism was a natural consequence of anti-imperialism; his sense of history in the growth of the West Indian peasantry after Emancipation; the subject of one his first research papers while still an undergraduate; and the leading role of the regional labour movement in initiating political change in the 1930s; the market limitations of small size, which led to his call for a West Indian Customs Union as early in 1950; and his tireless efforts to preserve the West Indian Federation and, after its beak-up due to the Jamaican Referendum, to broker a new Federation, first involving Trinidad and then a Federation of the Eight by personal diplomacy with the political leaders and the preparation of numerous technical papers on how its fiscal budget could be constructed.
Lewis’s analysis of the failure of several Federal efforts from 1960-65 is the subject of his article, the Agony of the Eight (1998). His reasons for the failure boil down to a combination of Colonial Office incompetence and unwillingness to commit assured funding, and distrust among West Indian leaders due to an accumulation of bad experiences in the West Indies Federation and the subsequent negotiations. Amazingly, one of the man sticking points of reaching agreement was Antigua’s insistence on keeping its own postal services as a unitary responsibility and the outrage this provoked from the Colonial Office! Lewis’s concluding remarks betray his profound frustration and disappointment:
Ultimately West Indians will come together again in political association, but only after the present generation of leaders is dead.
Jamaica is out forever; should never have been in, since sentiment for Federation was never strong in that island. But it is the inescapable destiny of Trinidad, British Guiana and the other British islands to link their fortunes together (Lewis 1998: 24).
And later, he almost seems to contradict himself:
Trinidad offers a unitary state, but when the offer is accepted by Grenada, stalls indefinitely. Common decency suggests that this poor deluded island should now be released if Trinidad is not prepared to go ahead.
British Guiana fishes for Barbados and Antigua, in a Free Trade Area, thus promoting confusion, jealousy and disunion with other islands. Must The Eight also wait until the present generation of leaders is dead before they can take an obvious step?” (Lewis 1998:25).
The agony of the eight, therefore, was the also the agony of Sir Arthur.
It needs to be said that by the early 1960s Lewis’s reasons for Federation were not primarily economic, or even about the exercise of collective sovereignty because of the limitations of insular sovereignty. They were in fact related to what is now called good governance.
…the maintenance of good government requires a federal structure. In a small island of 50,000 or 100,000 people, dominated by a single political party, it is very difficult to prevent political abuse. Everybody depends on the government for something, however small, so most are reluctant to offend it.
The civil servants live in fear; the police avoid unpleasantness; the trade unions are tied to the party; the newspaper depends on government advertisements and so on.
This is true even if the political leaders are absolutely honest. In cases where they are also corrupt, and playing with the public funds, the situation becomes intolerable.
The only safeguard against this is Federation. If the government in island C misbehaves, it will be criticised openly by the citizens of island E. The Federal Government must be responsible for law and order, and for redress of financial or other abuses.
Thus the Colonial Office could not in good conscience make each little island independent on its own. To do so would be to betray the liberties of the West Indian people (Lewis 1998: 12)
He also gives as reasons the staffing of the public service, which is easier when there is federal career path available; and the willingness of international financial agencies to assist a Federal grouping rather than several very small states. But the fundamental reason he gives is the necessity for what he calls ‘good government’.
I note for example that my colleague Hamid Ghany has classified as Lewis as a conservative because of his book Politics in West Africa, which critiqued the authoritarian tendencies evident in many newly independent West African states, and is consistent on Lewis stand on good governance.
But if Sir Arthur may have been viewed as a conservative in the 1960s, today he would be seen as a reformer, for many the experience of insular independence in the West Indies has confirmed many of the fears that he expressed back then; and reforms of governance are very much on the agenda.
With regard to regionalism, the leaders of the 1960s are all dead, but are we any nearer to realising Sir Arthur’s dream? What view would he take about the failure of the attempt at an OECS political union in the 1980s and the current project of creating an OECS Economic Union and the Caricom Single Market and Economy? Would he be optimistic or pessimistic, say that the glass of regionalism is half full, or half empty?
This of course is a matter of speculation, but my guess is that he would argue that the legacy of the 1960s continues to dog the regional project.
The primary rationale given for the CSME is economic, the need to cope with globalisation. Reform of domestic governance is nowhere being advanced as a reason, although it seems to me that Sir Arthur’s rationale for this has been strengthened by the passage of time.
Reform of Community governance however is on the agenda, in order to address the ‘implementation deficit’ of Caricom which continues to prevent the full realisation of the CSME nearly 20 years after it was first launched.
As we all know, the root of the problem is the desire to retain insular sovereignty, which was ultimately the problem with the Federal project of half a century ago. In the Rose Hall Declaration of 2003, the Heads of Government agreed to a system of governance that would give automatic application of Caricom decisions in certain defined areas as having the force of law in member states, as happens in the EU. But they have consistently shrunk from taking the necessary steps to give effect to this.
The most recent event was the Report of the Technical Working Group on Governance, chaired, ironically, by Professor Vaughan Lewis, nephew of Sir Arthur; and a distinguished political scientist in his own right. (Sir Allen Lewis, Vaughan’s father and Arthur’s brother, was also a distinguished Caribbean jurist who became the first Governor General of independent St Lucia and was also Chancellor of the UW1). One must hope that Lewis 111 will succeed where Lewis I did not! The TWG came up with an ingenious, if rather complicated formula, by which a Single Caricom Act would be passed in each member state that will give effect to Community decisions. 1 believe that this recommendation has been accepted ‘in principle’ last July, but since then there have been several changes of government in the Community, and other pressing matters have intervened, including the escalating cost of living, soaring crime, and the EPA.
The problem of course is that the rest of the world is not waiting patiently while we engage in the usual dilly-dallying and prevarication on integration.
‘Soon come’ and ‘just now’ may sound cute in the Caribbean, but they cut no ice in multilateral fora. It is clear, for instance, that the proposed Economic Partnership Agreement with the Europeans could make the CSME a largely irrelevant exercise. The EPA is essentially a scheme of economic integration with Europe and coincidentally with the Dominican Republic. It will eliminate all customs duties on the majority of imports from these countries, free most service industries to entry by their service providers, partially liberalise investment flows, and commit Caricom states to adopt standards for competition, heightened intellectual property protection, transparency in public procurement, and e-commerce which they have as yet to agree among themselves.
