Colonial Economic Development with Unlimited Supply of Land: A Ricardian Case

Abstract

The reader may notice the similarity between the title of this paper and that of Arthur Lewis's classic paper.l It is intentional. Like Lewis, I shall discuss development under conditions of perfectly elastic factor supply. But land has been substituted in the title for labor because ours is a land surplus rather than a labor surplus economy. However, a land surplus economy is only interesting if there are several qualities of land, and this takes us to Ricardo's theory of differential rent.2 Moreover, the scope of this paper is narrowed down to colonial economic development and that means agricultural development; under old-style imperialism, development in the colonies was concentrated to agriculture with infrastructure, trading facilities, and administrative institutions. I stop short of dealing fully with industrialization but do discuss its preconditions in our particular setting, and I shall briefly touch upon the possible application to a neocolonial setting with multinationals operating in independent less developed countries (LDCs) with surplus land. A Ricardian model with several qualities of land is, of course, more differentiated than standard models assuming homogeneous land (or simply including land in capital K). Our aim, however, is not just to set up a model with n qualities of land rather than one. In associating particular qualities of land with particular social classes, we shall go a step further in differentiation. Thus we shall take it that subsistence agriculture by illiterate and uneducated native farmers takes place exclusively