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The Evolution of Private Property in Nineteenth-Century Hawaii

Published online by Cambridge University Press:  03 March 2009

Sumner J. La Croix  and
James Roumasset
James Roumasset
Affiliation:
The authors are Professors of Economics. University of Hawaii, Honolulu, HI 96822.
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Abstract

Population pressure has been identified as a major force behind the transition from traditional property rights in land to exclusive, transferable property rights. This article examines the case of Hawaii where the transition to private property in land occurred while its population was rapidly declining. That transition was driven by new market opportunities and considerations of public finance.The shift in comparative advantage to sugar production increased the rents associated with private land rights, while declining tax revenues prompted the king and his government to pursue property rights reform to gain additional revenues.

Type
Articles
Information
The Journal of Economic History , Volume 50 , Issue 4 , December 1990 , pp. 829 - 852
Copyright
Copyright © The Economic History Association 1990

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References

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6 There was also a third very small class of slaves (kauwa).Google Scholar

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22 The 150,000 figure is the “official” missionary estimate. Other estimates are as low as 130,000. James Jackson Jarves’s estimate of 142,050 has been widely cited. See Schmitt, Robert C., Demographic Statistics of Hawaii: 1778–1965 (Honolulu, 1968), pp. 22–25.Google Scholar

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30 See Kamakau, Samuel M., Ruling Chiefs of Hawaii (Honolulu. 1961), p. 175;Google Scholar and li, John Papa, Fragments of Hawaiian History, edited by Barrere, Dorothy B. (Honolulu, 1959), pp. 13–14, 20, 26, 69–70.Google Scholar

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37 Ibid.. p. 291.

38 Ibid.. p. 294. This allocation is consistent with John Umbeck’s prediction about property rights allocation. See Umbeck, John. “Might Makes Rights: A Theory of the Foundation and Initial Distribution of Property Rights.” Economic Inquiry. 19 (01 1981). pp. 38–59. On p. 46 he showed that when property is being allocated among a group of individuals, those people receiving “more productive land will get less land than others whose holdings are not so productive.”CrossRefGoogle Scholar See also Roumasset, James and James, William. “Explaining Variations in Share Contracts: Land Quality, Population Pressure and Technological Change.’ Australian Journal of Agricultural Economics. 23 (08 1979). pp. 116–27.Google Scholar

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40 Kuykendall. The Hawaiian Kingdom. vol. I. pp. 153–69.Google Scholar

41 See the discussion in Ibid.. pp. 153–59.

42 Earlier disputes between the Hawaiian government and foreign governments had resulted in foreign warships visiting the Islands to “influence’ the course of negotiations. Two American warships arrived in 1826 to press for the repayment of debts incurred by the chiefs in the course of sandalwood trading. Ships returned later in the year and in 1829 to remind the chiefs of their unpaid obligations. Questions about the treatment of native Catholics. French priests, and foreign consuls produced a succession of visits by American. French. and British ships during the 1830s.Google Scholar

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45 Croix, La and Roumasset. “An Economic Theory of Political Change.” pp. 161–64.Google Scholar

46 Morgan, Hawaii. p. 76. In addition, he noted: “By 1838. with diminishing returns from the Japan and Yellow Seas, the rich Kodiak or Northwest Coast ground off the Russian possessions had been discovered. 30 days sail from Hawaii.” With the exhaustion of the Northwest Coast grounds in the late 1840s. ship visits declined until news of the 1848 opening of the Arctic Ocean north of the Bering Strait brought forth a renewed round of visits in 1852. Whaling ship visits began to permanently decline in 1859 and, with the exception of a brief revival in the late 1860s, continuously declined thereafter.Google Scholar

47 Growth in whaling ship visits varied (see Table 2). From 1824 to 1833 ship visits increased from 104 to 189. but then declined steadily over the next seven years. bottoming out at 86 in 1840. From 1843 to 1854 an average of 419 ships visited Honolulu and Lahaina annually. While the decline during the 1830s is substantial, it is important to remember that whaling ships did not visit the Islands prior to 1820. The period 1820–1842 might be characterized as the “establishment” period of the industry in the Islands. while the decade after 1843 might be identified as the industry’s “mature” period.Google Scholar

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55 The term “wage rate” refers to the shadow price of a commoner’s time, not to the actual method of compensation for agricultural work. Since a worker on the land owed labor dues (which are not fixed in value) to the chief and to the king. workers could be characterized as sharecroppers. “Rents” refer to a combination of taxes and rents prior to the constitution of 1840, as the finances of the chiefs, king. and the government were not separated until 1842. After 1842 rents refer to the shadow price of the land’s services.

56 North and Thomas. The Rise of the Western World. Pp. 39–40.Google Scholar argued that part of the shift from in-kind to other forms of taxation is explained by the growth of commodity and factor markets. Rulers could more efficiently collect money taxes and then use the proceeds to purchase the goods and services they needed as markets became better developed relative to the earlier period in which taxes in kind may have been used to minimize the transaction costs of revenue collection. While North has recently acknowledged (Structure and Change, pp. 129–31) timing problems with the application of his analysis to Europe. the criticisms do not apply to the Hawaiian case.Google Scholar

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66 The figures from 1853–1857 should be interpreted cautiously. In 1856 the government halted the sale of large tracts of land. It adopted a policy of leasing the remaining lands in response to the lower land prices prevailing during this period. The land sales reported for 1855 and 1857 were actually made in 1854 and 1855 but were reported in later years due to a delay in the issuance of royal patent grants.Google Scholar

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68 Ibid., p. 28.

69 Ibid., p. 139.

70 Ibid., pp. 138–42.

71 The “new political economy” is an umbrella term for public choice, economics of property rights, law and economics, political economy of regulation. the new institutional economics. and the new economic history. See Buchanan, James M.. Explorations into Constitutional Economics (College Station. 1989). p. 61:Google Scholar and Inman, Robert P.. “Markets. Governments, and the ‘New’ Political Economy.” in Auerbach, Alan J. and Feldstein, Martin. eds., Handbook of Public Economics (New York. 1987). vol. 2.Google Scholar

72 This perspective suggests due caution in generalizing about the minimal efficient degree of central control independent of an economy’s state of development. See Roumasset, James and La Croix, Sumner J.. “The Coevolution of Property Rights and Political Order: An Illustration from Nineteenth-Century Hawaii,” in Ostrom, Vincent, Feeny, David, and Picht, Hartmut, eds., Rethinking Instiiuonal, Analysis and Development (San Francisco, 1988), pp. 315–36.Google Scholar