Labour and Land in Ghana, 1874–1939: A Shifting Ratio and an Institutional Revolution

Abstract

The Second Industrial Revolution created markets for new products for Ghana, rubber and then cocoa beans. Mechanised transport spurred the spread of cocoa planting. The paper estimates the resultant shift in factor ratios, and synthesises the data for prices of landuse rights and wages as the economy moved from land abundance to localised land scarcity. The consequences for factor markets were institutional rather than simply quantitative. For the first time markets in land use rights became widespread, while hired labour and farm pledging replaced slavery and debt bondage, as cocoa income made it possible for farmers to offer labourers sufficient inducement to enter the labour market.JEL categories: N37, N57, N77, J43, F54

The ‘reversal of fortune’ thesis and the compression of history: Perspectives from African and comparative economic history

“…In any case, those systems themselves tended to adjust fairly efficiently (in economic terms) where overseas demand made land rights valuable. Such rights acquired a market value in the cocoa belt of early colonial Ghana (Austin, 2007). Whether this was expressed in the sale or just renting of land varied with the power and policy of local chiefs.…”

“…Colonial officials were nervous about this force of change from within the economy, implemented by African agency. Their policies generally sought to slow, but ultimately accommodated it (Austin, 2005(Austin, , 2007. Rather than economic institutions being simply determined by the preferences of colonial administrations, and preferences for extraction at that, British West Africa fits an alternative interpretation that can be summarised in two propositions.…”

Comments on Factor Prices and Income Distribution in Less Industrialised Economies, 1870–1939: Refocusing on the Frontier

“…The arrival of opportunities to exploit abundant land within a global market will change value of enslaved labour from command over its direct services to command over tradable commodities. Austin's (2007) and Roy's (2007) articles suggest that, in both Ghana and India, globalisation imparted value to land and elites shifted from direct exploitation of labour to a system of landownership and wage labour -presumably because they found it advantageous on a selfish basis (although distaste for slavery on the part of British officials also played a role). Other literature suggests a similar shift in labour institutions occurred also in parts of South-East Asia.…”

“…Gareth Austin's (2007) discussion of Ghana's incorporation into the Atlantic economy that emphasises expansion of the cocoa frontier and the centrality of slavery, and the Nieboer-Domar hypothesis is particularly interesting in this context. Slavery was, of course, inexorably part of the mobilisation of labour for the exploitation of American staples and had widespread and long-lasting ramifications for growth potential.…”

Review of periodical literature published in 2007

“…JeffreyWilliamson's work on globalization inspires a special issue of the Australian Economic History Review but the resulting case study evidence gives only partial support to his theories on trade expansion leading to relative factor price convergence. Austin, in a piece on pre‐1940 British Ghana, is typical of most contributors in also highlighting institutional changes (affecting land, labour, and technology patterns) that reshaped agriculture. In Ghana's case, this facilitated the growth of cash crops like cocoa and sugar.…”