Lecture

Summer talks series: Connected histories of capitalism

Political Economy and Sugar Business in the British Empire: Mauritius Miracle Postponed?

Add to calendar 2021-07-21 16:00 2021-07-21 17:30 Europe/Paris Summer talks series: Connected histories of capitalism Via Zoom YYYY-MM-DD
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When

21 July 2021

16:00 - 17:30 CEST

Where

Via Zoom

A conversation with Professor Karolina Hutkova, London School of Economics.

The development of the nineteenth-century Mauritius sugar industry illustrates the ways in which business activity in British colonies was shaped by trade and industrial policies. British policies, although not calculated to ruin colonial producers, often gave preference to consumers and/or producers at home and this had unintended effects on colonial economies. From the first quarter of the nineteenth century, British policies became increasingly more laisser-faire. The proliferation of such laisser-faire trade policies was gradual and was initially embodied by a shift towards the equalisation of customs duties within the Empire. In the next stage, the policies of Imperial Preference, defined by lower duties, leveraged on imports from the Empire, were phased out. These policies were intended to bring revenue to the Exchequer through the expansion in the volume of imports, to expand access to consumer goods at cheaper prices, and to create an incentive for more efficient production in colonies. However, these policy changes were largely unanticipated by entrepreneurs in the colonies, who had very limited time to adapt to the new trading environment. The aim of the British policies was to put imports from both within and outside the Empire on equal footing. Yet, producers outside the Empire were often beneficiaries of various forms of support from their own governments which British producers did not enjoy. The sugar industry is a case which illustrates the effects of changes in British trade policy on entrepreneurs in the colonies. Nineteenth-century sugar industry in the British Empire did not enjoy technological leadership and the competitiveness of sugar plantations and refining was starting to lag behind the major competitors – Brazil, Cuba, Java, and Continental Europe. Moreover, in the case of sugar industry, the equalisation of duties can hardly be seen as putting importers from outside the Empire on equal footing with British producers. The sugar industry in Brazil and Cuba continued to rely on slave labour beyond the end of the Imperial Preference regime in 1846. Moreover, the second part of nineteenth century saw the rise of the sugar industry in Continental Europe fostered by export bounties and tax exemptions. Sugar producers within the British Empire, on the other hand, continued to face challenges that were often exacerbated by the Empire’s political economy system. The Mauritius sugar industry offers an ideal illustration of the challenges that British sugar entrepreneurs faced since Mauritius possessed ideal environmental conditions for sugar production and the development of the industry was shaped mostly by access to markets, access to credit, and entrepreneurship on the part of the sugar businesses and organisations such as the Mauritius Chamber of Agriculture.

This chapter reflects on the theories of entrepreneurial leadership and on the arguments made by Bishnuprya Gupta and Tirthankar Roy pointing towards the inadequate investment into agricultural technologies on the part of British colonial government and to the limitations in access to financial capital as leading factors in sustaining underdevelopment. The chapter complements such arguments by showing the role inadequate Mauritius financial infrastructure had on the prospects of business survival in times of crises and opportunities for technological upgrading. It further adds to the debate on the role of colonial government in development by pointing towards the negative effects of sudden unexpected changes in trade policies on businesses.

The chapter shows that the Mauritius sugar industry had a great capacity for adaptation when it first shifted from reliance on slave labour to indentured Indian immigrant labour. Secondly, when it withstand the 1847 crisis that resulted from the end of the Imperial Preference regime and adapted to the new British tariff policies by exporting to new markets. For this the entrepreneurial leadership of the Mauritius Chamber of Agriculture was of central importance. Yet, the chapter also emphasises that despite being able to overcome the main challenges the development of the sugar industry in the second half of the nineteenth century remained constrained due to inadequate access to credit necessary for technological upgrading. Moreover, the access to the British market – the main European consumer market for ‘refined’ i.e. ‘finished’ sugar – continued to be hindered due to the system of levelling tariff duties on different types of sugar effectively stopping the imports of the most processed types of sugar.

To consider the industry in long-run framework the chapter first focuses on the performance of the Mauritius sugar industry in the nineteenth century. Second, it explores the shift from slave labour to indentured labour. Third, the chapter focuses on the effects of the end of the Imperial Preference regime on Mauritius sugar entrepreneurs presenting a micro-study of the effects on one of the sugar estates. Lastly, the chapter studies the development of the Mauritius sugar industry in the second part of the nineteenth century. 

Links:

Speaker:

Karolina Hutkova (London School of Economics)

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