The “Mississippi Bubble” and the complex history of Haiti

(Press-News.org) Cambridge, MA – Many things account for Haiti’s modern troubles. A good perspective on them comes from going back in time to 1715 or so — and grappling with a far-flung narrative involving the French monarchy, a financial speculator named John Law, and a stock-market crash called the “Mississippi Bubble.”

To condense: After the death of Louis XIV in 1715, France was mired in debt following decades of war. The country briefly turned over its economic policy to Law, a Scotsman who implemented a system in which, among other things, French debt was retired while private monopoly companies expanded overseas commerce.

This project did not go entirely as planned. Stock-market speculation created the “Mississippi Bubble” and crash of 1719-20. Amid the chaos, Law lost a short-lived fortune and left France.

Yet Law’s system had lasting effects. French expansionism helped spur Haiti’s “sugar revolution” of the early 1700s, in which the country’s economy first became oriented around labor-intensive sugar plantations. Using enslaved workers and deploying violence against political enemies, plantation owners helped define Haiti’s current-day geography and place within the global economy, creating an extractive system benefitting a select few.

While there has been extensive debate about how the Haitian Revolution of 1789-1804 (and the 1825 “indemnity” Haiti agreed to pay France) has influenced the country’s subsequent path, the events of the early 1700s help illuminate the whole picture.

“This is a moment of transformation for Haiti’s history that most people don’t know much about,” says MIT historian Malick Ghachem. “And it happened well before independence. It goes back to the 18th century when Haiti began to be enmeshed in the debtor-creditor relationships from which it has never really escaped. The 1720s was the period when those relationships crystallized.”

Ghachem examines the economic transformations and multi-sided power struggles of that time in a new book, “The Colony and the Company: Haiti after the Mississippi Bubble,” published this summer by Princeton University Press.

“How did Haiti come to be the way it is today? This is the question everybody asks about it,” says Ghachem. “This book is an intervention in that debate.”

 

Enmeshed in the crisis

Ghachem is both a professor and head of MIT’s program in history. A trained lawyer, his work ranges across France’s global history and American legal history. His 2012 book “The Old Regime and the Haitian Revolution,” also situated in pre-revolutionary Haiti, examines the legal backdrop of the drive for emancipation.

“The Colony and the Company” draws on original archival research while arriving at two related conclusions: Haiti was a big part of the global bubble of the 1710s, and that bubble and its aftermath is a big part of Haiti’s history.

After all, until the late 1600s, Haiti, then known as Saint Domingue, was “a fragile, mostly ungoverned, and sparsely settled place of uncertain direction,” as Ghachem writes in the book. The establishment of Haiti’s economy is not just the background of later events, but a formative event on its own.

And while the “sugar revolution” may have reached Haiti sooner or later, it was amplified by France’s quest for new sources of revenue. Louis XIV’s military agenda had been a fiscal disaster for the French. Law — a convicted murderer, and evidently a persuasive salesman — proposed a restructuring scheme that concentrated revenue-raising and other fiscal powers in a monopoly overseas trading company and bank overseen by Law himself.

As France sought economic growth beyond its borders, that led the company to Haiti, to tap its agricultural potential. For that matter, as Ghachem details, multiple countries were expanding their overseas activities — and France, Britain, and Spain also increased slave-trading activities markedly. Within a few decades, Haiti was a center of global sugar production, based on slave labor.

“When the company is seen as the answer to France’s own woes, Haiti becomes enmeshed in the crisis,” Ghachem says. “The Mississippi Bubble of 1719-20 was really a global event. And one of the theaters where it played out most dramatically was Haiti.”

As it happens, in Haiti, the dynamics of this were complex. Local planters did not want to be answerable to Law’s company, and fended it off, but, as Ghachem writes,  they “internalized and privatized the financial and economic logic of the System against which they had re­belled, making of it a script for the management of plantation society.”

That society was complex. One of the main elements of “The Colony and the Company” is the exploration of its nuances. Haiti was home to a variety of people, including Jesuit missionaries, European women who had been re-settled there, and maroons (freed or escaped slaves living apart from plantations), among others. Plantation life came with violence, civic instability, and a lack of economic alternatives.

“What’s called the ‘success’ of the colony as a French economic force is really inseparable from the conditions that make it hard for Haiti to survive as an independent nation after the revolution,” Ghachem observes.

 

Stories in a new light

In public discourse, questions about Haiti’s past are often considered highly relevant to its present, as a near-failed state whose capital city is now substantially controlled by gangs, with no end to violence in sight. Some people draw a through line between the present and Haiti’s revolutionary-era condition. But to Ghachem, the revolution changed some political dynamics, but not the underlying conditions of life in the country.

“One [view] is that it’s the Haitian Revolution that leads to Haiti’s immiseration and violence and political dysfunction and its economic underdevelopment,” Ghachem says. “I think that argument is wrong. It’s an older problem that goes back to Haiti’s relationship with France in the late 17th and early 18th centuries. The revolution compounds that problem, and does so significantly, because of how France responds. But the terms of Haiti’s subordination are already set.”

Other scholars have praised “The Colony and the Company.” Pernille Røge of the University of Pittsburgh has called it “a multilayered and deeply compelling history rooted in a careful analysis of both familiar and unfamiliar primary sources.”

For his part, Ghachem hopes to persuade anyone interested in Haiti’s past and present to look more expansively at the subject, and consider how the deep roots of Haiti’s economy have helped structure its society.

“I’m trying to keep up with the day job of a historian,” Ghachem says. “Which includes finding stories that aren’t well-known, or are well-known and have aspects that are underappreciated, and telling them in a new light.”

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