Question

The pattern of growth, and eventual stagnation in the plantation economy has been ruled by the external conditions in the metropolitan market. To what extent do you think the structure of the plantation systemis still evident today? [7 marks]

Answer 1

Plantation economy may be known as a consequence or reflection of capitalism where the planters organized slave laborers in a centralized manner to allow the planters maximum profits in producing staple crops for the competitive global market. According to the planters’ capitalism concept, the plantation economy was productive, profitable and efficient. It allowed rapid economic growth in regions of dominance. In southern USA and Caribbean, the absence of industrial and urban development was the consequence of comparative advantages in agricultural production. However the New World plantation areas failed to develop an agricultural revolution. The home market for industrially produced capital and consumer goods providing mass market for industrialization of the North did not really develop. The model was inefficient as per the class structure model because it limited economic activity of the planters (due to unfree status of the slaves) and also barred the slaves from developing economic motivation. The planters did not have option to withdraw from the world market even if prices fell. They had to adjust through cost reduction. This led to inefficiencies in the model itself.