Cuban Economy

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					  Cuban Economy

Monoculture Sugar economy
               Sugar Industry
• Creation of Large Latifundia
  – Consolidation of smaller plantations into huge
    corporate plantations
  – Have clout to influence policy decisions
• Concentration of Sugar mills
  – Need larger more efficient mills
  – To expensive for smaller producer
     • Forced to rely on large producers for processing
• Cheap labor reduces wages
  – Mainly from Caribbean
  – Seasonal unemployment excessive
  – As much as 50% of labor force at any
    given time

• Consumer demand in US creates
  increased production and
  investment by Companies such as
  Hires and Hersheys
     Dance of the Millions
• WWI disrupts European Sugar
  production
• Reduced supply accompanied by
  reduced demand as Europe not
  buying
• When war ends European demand
  comes before increased supply
• Prices reach excessive pinnacle in
  Feb of 1920
• Many in Cuba and US borrow
  tremendous amounts of Money to
  put more land into production and
  build more mills
• Banks in Cuba, Spain and US give
  loans liberally
• By Dec. of 1920 Prices come
  crashing down as overproduction
  in Cuba and European producers
  hit market at same time
• 100’s of investors and growers lose
  everything
• Smaller banks collapse and further
  aggrevate the economic disaster in
  Cuba
• Larger US Banks are able to
  absorb the loses and foreclose on
  over 50 large plantations leading to
  even further concentration of
  Cuban land and sugar industry into
  US ownership
• Most extreme but not only example
  of Boom-Bust Cycle in a
  monoculture economy
    Effects on Cuban Economy
• Lack of confidence in Cuban economy
  leads wealthy Cubans to invest in US.
  – Real estate and stockmarket
• Cuban government more interested in
  redistributing existing wealth than creating
  it
• Proximity to US leads to no development of
  native industry
• Reliance on US products makes cubans
  have US cost of living with a Latin
  American income
• Us dominance of local industries led to
  inflated wages for skilled industrial labor
• Agricultural workers form unions and
  oppose modernization and mechinazation
• By the 1950’s US Cost of living skyrockets
  while Cuban income stagnates

				
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posted:5/23/2013
language:English
pages:9