Edward Lotterman

Haiti, the Caribbean country with a tragic history that shares the island of Hispaniola with the Dominican Republic, between Cuba and Puerto Rico, has become a failed state in the truest sense of the word.

Government has all but collapsed. Feuding criminal gangs vie for control. The value of output, already low, is falling and health and nutrition, already bad, are worsening.

With the eyes of the world focused on acute geopolitical dangers in Ukraine and the Middle East, there has been passing attention paid to an island country with a population of 11 million, who are overwhelmingly Black. Understandable but tragic.

Haiti’s travails eventually may affect our nation slightly, but with the closest sea distance to Florida six times greater than that from Cuba, there is little chance of a small-craft armada like the 1980 Mariel boatlift that brought 125,000 Cubans to our country. The Biden administration, already tarred as having failed on immigration, studiously avoids the issue.

But going beyond the immediate foreign policy challenge, it might be good to start paying attention. Why? Because Haiti’s situation forces us to think about age-old economic questions to which we still have no clear answers: Why are some nations almost inherently more productive and prosperous than others? Why do some have more successful governments? Why do some have societies that are more cohesive and just than others?

Why, for example, is Uruguay both more prosperous, more stable politically and with better social indicators of health, nutrition and education than its otherwise similar neighbor Argentina just across an estuary? Why did 19th century Japan take off economically when no other Asian country did? Why did the republics of the Netherlands and the city-state of Geneva have such dynamic economies and intellectual ferment in the 1700s, while France, Spain and other monarchies stagnated?

And at a different level, why do Oregon and Minnesota, for example, consistently best Alabama and Mississippi in every economic and social indicator?

Sometimes we can get “new ideas from dead economists,” in a phrase Todd Buchholz used as a title for his excellent introduction to economic thought.

Eighteenth-century Scottish philosopher Adam Smith knew a little about Haiti, but his ideas sift through factors that explain its situation — vis-à-vis even its more prosperous neighbor, the Dominican Republic. A man-made line geographically divides the island. But a world divides their economies.

One may not always agree with Smith’s conclusions, but his questions and insights remain invaluable to both curious and influential minds.

In his best-known 1776 book, “An Inquiry into the Nature and the Causes of the Wealth of Nations,” Smith argued that prevailing beliefs in his day in having government take large roles in economic activity were not just wrong, but strongly counter-productive. And he railed against remaining elements of the medieval guild system that sharply limited who could do what in professions and skilled trades.

However, perhaps more importantly but less well known, Smith had written an earlier relevant book. In “The Theory of Moral Sentiments,” Smith examined how and why people, motivated in great part by self-interest, still develop empathy, a concern for others, a willingness to cooperate with others, and how this trait contributes to effective and just societies.

So one might ask what sorts of policies Haiti has followed? What sort of social ethos has developed there? And how would Smith explain this?

Generally through history, regardless of laws that remain nominally in effect, Haiti has been a kleptocracy, a political and economic system based on theft by controlling individuals or groups.

While Christopher Columbus never actually got to any of our 50 states, he landed on Hispaniola on his very first voyage. Within a few decades, virtually all of the native population died of violence, disease and brutal slavery.

Spain retained a colonial government on most of the island, with the French eventually gaining the western section, what is now Haiti. Both were repopulated by slaves violently brought from Africa by English merchants, who financed the slave ships that handled the largest part of the trade. This brought enormous wealth to Britain during Smith’s life, something he notes, but does not really examine.

Slave labor for sugar cane production in Haiti was probably the most brutal and deadly in any slave nation. There were numerous slave revolts in the 1700s, all put down with extreme cruelty and savagery. One in the 1790s eventually led to the nation’s independence in 1804.

However, France still had clout to force the Haitians pay reparations to France for property taken — including themselves as former chattel. The initial payment was five times the country’s annual budget, so interest accrued. In the 1920s, what is now Citibank took over the Haitian promissory note from France and collected payments until 1947.

Adding yet another factor of U.S. involvement, in addition to our commercial interests always having influence in Haiti’s economy and government, we sent Marines to occupy the whole country in 1914. They stayed until 1931. So Haiti was a de facto U.S. colony for nearly two decades. Moreover, after leaving, we manipulated who had power and oversaw the ascension of Francois Duvalier, who ran a brutal dictatorship for 31 years.

So U.S. hands are covered with Haitian blood. We were part of the process by which that country became dominated by a French-speaking economic and political elite that extracted wealth at the expense of the Creole-speaking masses.

De facto economic institutions and policies in Haiti have left little to market forces. Outright corruption and a bureaucratic system of licenses and permits dominate resource allocation — similar to the merchant guild system that Smith denounced. The judicial system is corrupt. Government fails to deliver even basic services.

All this tragic history means that Smith’s “moral sentiments” never had an opportunity to prosper in Haiti as they had in 1700s Amsterdam and Geneva. Nor have the “mediating structures” that sociologist Peter Berger and theologian Richard Neuhaus saw as vital to society gained a footing. All of these traits, when generally adopted by a population, become “values,” in that they bring value to a society and an economy.

Will they ever in Haiti? The U.S. occupation a century ago gave Haiti roads, water and sewer systems along with schools and clinic buildings. But it also cemented the power of the elites and established a brutal dictatorship. U.S. peacekeepers sent in 2004 restored order and made room for some political reform, but a massive earthquake in 2010 and hurricane in 2016 were harsh blows.

So Smith gave us some reference points into the knotty issues of failing governments and economies as do many more recent scholars including not only Berger but Robert Putnam on “social capital.” Robert Axelrod’s insights on “the evolution of cooperation” deals with issues parallel to Smith’s moral sentiments.

And what does this say about us? With rampant road rage, random shootings, customers throwing hot coffee back in the faces of food servers, obstreperous passengers in airplanes, brawling melees at amusement parks, malls and on cruise ships, one may wonder whether our own moral sentiments are dying, our mediating structures collapsing and our social capital melting away. Perhaps they are. We are more bitterly divided now than we have been for more than a century. Haiti offers us a lesson both about the underlying reasons, and the consequences.

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St. Paul economist and writer Edward Lotterman can be reached at stpaul@edlotterman.com.