Edmond Paul’s economic thought
Edmond Paul’s professor, Michel Chevalier, was an important statesman and Saint-Simonian intellectual who wrote about industry, monetary policy, and trade; his ideas clearly influenced Edmond Paul, who began writing when he was fresh out of school. However, Paul did not just repeat what Chevalier taught him. He read a wide range of authors, as his frequent citations show, and he knew how to adapt ideas he learned elsewhere to the particularities of the Haitian context.83 We can see Edmond Paul as an original thinker who is rooted in what Erik Reinert calls the Other Canon tradition of economics.84
In Edmond Paul’s view, Haiti’s main problem was that the country was exporting primary commodities in exchange for imported manufactured goods. The lack of industry was the root cause of many other problems, including political instability, corruption in government, unemployment in cities, the unprofitability of local commerce, the oppression of peasants, social unrest, inequality based on colorist politics, racist portrayals of Haiti by foreigners, and a dependence on foreign powers that weakened national sovereignty.85 The main solution was to do what every rich country had done to get rich: to create manufacturing industries in the cities, through industrial policy.86
Industrialization would create wealth and opportunity. With factories, the country would have less need to import products that it could produce itself. Value would be added to commodities before exporting them; for example, cacao would leave Haiti in the form of a finished chocolate product that sells for a higher price than the raw material.87 With good manufacturing jobs in every Haitian city and town,88 a growing population would become an advantage instead of a problem.89
A diversified urban economy would create alternatives to politics as a channel for social mobility, thereby contributing to a reduction in corruption and instability. Likewise, it would diminish dependency on the coffee tax as the main source of income for the state and the urban elite, thereby alleviating the economic pressure put on peasant producers.90 Industrialization would also lead to cultural flourishing, by creating a source of funding for education and the arts.91
Edmond Paul’s focus on industrialization did not lead him to neglect the role of agriculture.92 Indeed, his proposals with regard to agriculture were so detailed that even many years after his death, the government used them as a blueprint to renew agricultural policy.93 However, he insisted that Haiti needed to shift its comparative advantage away from being “essentially agricultural,” since agriculture could not truly flourish unless it was accompanied by industry.94 Moreover, he argued for a diversification of productive and service trades in rural villages, which was legally prohibited at the time.95
Edmond Paul was aware of the risks of industrialization, which was often criticized for causing social inequality and exploitation of the poor. In his view, misery in industrial contexts was the result of injustice, but it was not inherent to industry itself; once the country was industrialized, workers could fight for better wages.96 Because Haiti’s land was already well-distributed and in Haitian hands, he argued that industrialization would not cause the same type of problems in Haiti that it had caused in other countries.97
He was mindful of the practical challenges of shifting a country’s productive structure from an agricultural focus to an industrial one. He argued for a range of industrial policies, including temporary protections for import-substituting industries98 and direct subsidies for export-oriented ones.99 He called for a major effort to acquire new knowledge and skills by sending young Haitians to study abroad,100 recruiting foreign experts to teach in Haiti,101 training teachers and establishing schools all over the country,102 and changing the school curriculum to emphasize scientific and technical disciplines.103 He also advocated for investing in research for innovation.104
Of course, Edmond Paul was aware that the government and the urban elite were very comfortable living off of rentist tariffs on coffee exports, at the expense of the peasant producers, and that it would be hard to get them to accept a more demanding way of organizing the economy. He tried anyway, through detailed arguments that showed how the current system was hurting both the economy and society.105 To create a conducive environment for his vision of development, he fought against corruption in public institutions, and proposed that experts should be in charge of public administration.106
We should pause here to underline that Edmond Paul was not an “economic liberal” in the sense of promoting free trade and limited government without regard to context. He saw free trade as something to be desired only after the country’s productive structure had achieved maturity, at which point it could hold its own against foreign competition and engage in symmetrical exchanges.107 Getting there would require government intervention, including protecting infant industries from external competition for a time.108 In this sense, he emphasized that free trade should not be applied as an absolute principle, especially in Haiti’s current condition.109
Some contemporary scholars seem to have missed this point, perhaps because they have only had access to his book on eliminating the coffee tariff (but not to his books on industrial policy), and because of the ambiguity of the term “liberal.”110 For Edmond Paul, liberalism was about the rule of law, stable institutions, technocracy, and meritocracy, combined with public education and industrial policy.111 In his view, true freedom – in the sense of personal dignity, economic autonomy, and political sovereignty – would be the ultimate fruit of structural change in the productive sector of the economy.112
As for how to finance the upgrading of the productive structure, Edmond Paul proposed that industrial protections would incentivize both domestic and foreign capitalists to risk investing in the country.113 Foreigners from industrialized countries would not only bring their money, but also their technology and know-how, in order to enjoy the advantages given to industries based in Haiti.114 He also wrote a bill proposing that government funds from the coffee tax be used to create a bank that would provide credit, before phasing out the tax after four years.115 In another bill, he proposed that a state agency should be created to support imports of industrial machinery by offering financial guarantees.116
Meanwhile, Edmond Paul sought a way to accomplish this while protecting the sovereignty of Haiti as a nation founded on the principle of racial equality, which was not respected in other countries at the time. For that reason, while he was open to foreign investment and immigration to develop productive activities, Paul strongly supported the constitutional prohibition on foreign land ownership. He saw potential land grabs as a major risk, since they would turn self-sufficient farmers into a landless proletariat and put power in the hands of racist rent-seekers, whose interests were opposed to those of the Haitian people.117
From this perspective, we can understand why Edmond Paul, who himself had proposed a national bank,118 was against the national bank that Salomon created in 1880 using French capital, which effectively put government finances at the mercy of foreign interests.119 He was equally against other instances in which the Haitian government borrowed from foreign countries at unfavorable rates.120 As David Nicholls has noted, these foreign loans indeed led to a considerable loss of sovereignty, most dramatically with the U.S. Occupation of 1915-1934.121
Debates about monetary policy also took up much of Edmond Paul’s energy. When he first became a député, the government had been printing paper money with no backing in order to finance a war. He and his Liberal party colleagues saw this as a cause of inflation and a weakening of the Haitian currency,122 besides lending itself to financial speculation which created instability and hurt peasant coffee producers.123 Thus, they fought successfully to get rid of paper money and replace it with currencies made of precious metals,124 which were seen as having real value.125 Later, when Edmond Paul returned to government as a senator during Hyppolite’s presidency, after Salomon had reintroduced paper money, he again promoted the restoration of metallic currency.126
In sum, Edmond Paul had a holistic vision of what the country needed in order to improve its condition. While industrialization was the core element, he saw its connections to other factors, and addressed them as well. For example, his “Plan for Government” included many details about how to simultaneously achieve economic growth, decentralization, political stability, and social justice. Indeed, Edmond Paul was a rare policymaker who went beyond short-term issues to propose a coherent agenda for long-term development.127 This in itself, independently of the content of his proposals, is perhaps his greatest legacy.
Edmond Paul’s legacy, however, is not limited to his impact as a politician. He also deserves to be taken seriously as an intellectual who wrote prolifically. Frédéric G. Chéry has noted some of Edmond Paul’s seminal contributions to economics as an academic discipline in Haiti: his global vision of an interconnected economy, his concern for the impact of policy on people’s standard of living, his use of statistics, his understanding of the hazards of a rent-based economy based on a single commodity… and all of that is from just one of Paul’s books!128
