| Cuba's sugar industry grew rapidly in the first two and a half decades of the twentieth century, transforming the island into a magnet for foreign capital and investment. Contrary to many accounts, Cuban entrepreneurs, not U.S. investors, spearheaded the island's economic recovery in the early twentieth century. Access to U.S. markets was crucial to the island's economic success but that access began to shrink with the rise of U.S. tariffs during the 1920s, culminating in the notorious Hawley-Smoot Act of 1930. Far from seeking control of Cuba's economy, U.S. politicians, acting on behalf of domestic interests, set up barriers that bankrupted U.S. and Cuban sugar companies alike.;This dissertation examines the international and domestic politics behind Cuba's transformation from a dynamic export-oriented economy into one that was highly-regulated to protect the interests of Cuban producers. From the 1920s on, the Cuban government enacted regulations that would eventually give it control over production, credit, and wages in the all-important sugar industry. By the end of the 1930s, hundreds of laws, decrees, and rules regulated every phase of the industrial process. In order to assure the survival of small, nationally owned mills and sugar cane plantations, the government virtually eliminated all competition within the sugar sector through a complex system of internal quotas and economic regulations. The result was an economy geared toward what economists call "rent-seeking" behavior and a political system mired in corruption. |
