OK, that’s not quite true. What happened was that at a summit at Camp Rapidan in October 1929, President Herbert Hoover told Prime Minister Ramsay MacDonald that the U.S. would cancel Britain’s war debt in exchange for Trinidad, Bermuda, and British Honduras. Hoover only wanted Belize in order to split it up between Guatemala and Mexico, and nobody expected London to part with Bermuda. (Strangely, MacDonald drew the opposite line at the summit, insisting on retaining Belize but showing no objection to giving up Bermuda.)
The real prize was, of course, Trinidad. Hoover had worked there, the place had oil, and its location was perfect. Between Trinidad and Puerto Rico U.S. planes could overfly the entire Lesser Antilles (and Venezuela), pretty much turning the Caribbean into an American lake.
How much did Hoover offer, you ask? Well, in nominal terms, a little less than £1.0 billion. In 2006 terms, £44 billion. And as a percentage of Britain’s GDP, the equivalent of £254 billion today. Not a bad deal for the U.K.
MacDonald, of course, eventually said no. Hoover later wrote that MacDonald knew that Hoover had previously suggested a moratorium on war debts, and therefore the perfidious British saw no reason to pay off what they owed.
But what if MacDonald had said yes?
Trinidadians probably would not have gotten citizenship right away, but considering as Congress granted it to the Virgin Islanders in 1927, it’s hard to imagine them lacking it for long; certainly not past the Second World War. (All those draftable soldiers!)
As for political status, well, Eric Williams and Luis Muñoz Marín had a lot in common in terms of temperament, experience, ideology, and biography. It isn’t hard to imagine both men jointly agitating for the status of an Associated Free State (hence the blog title) and both territories getting it in 1952.
The most obvious change would be that the citizens of the Commonwealth of Trinidad and Tobago would drive on the right. Now, I am aware that the U.S. Virgin Islands still drives on the left ... but the USVI is small, and does not qualify for federal highway funds. I don’t know for sure, of course, but I suspect that the Federal Highway Administration would have forced Trinidad to make the switch.
The roads would be much better, more like Puerto Rico. The intersection below, for example, would be a concrete spaghetti bowl.
Trinidad would also (probably) have fewer people. Half of all Puerto Ricans live on the mainland; to match that, you’re talking about the emigration of somewhere between 300,000 and 600,000 additional Trinidadians.
Would an American Trinidad subsidize the rest of the United States with its oil and gas production? The answer is no. Under the U.S. Constitution, all federal tax and tariff revenue collected in an unincorporated territory must be remitted to the government of that territory. No taxation without representation, after all, unless you live in Washington, D.C. The only exceptions are FICA payroll taxes (which are attached, of course, to Medicare and Social Security benefits) and corporate income taxes.
A Commonwealth of Trinidad and Tobago, therefore, would not pay any direct federal taxes on its oil and gas production. (Well, it would ... but the receipts would be turned over to Port-of-Spain.) American oil companies operating in a hypothetical U.S. Trinidad might have to pay taxes on their profits earned on the island ... unless they managed to wrangle a special tax exemption. Companies investing in Puerto Rico did, in fact, enjoy such an exemption until very recently. I have little doubt that Governor Eric Williams would have been more than savvy enough to get Trinidad the same treatment.
So, no new taxes, except for those tied to Social Security and Medicare.
But would a Commonwealth of Trinidad and Tobago be richer than the Republic we know? I have my doubts. The average nominal hourly wage in Trinidad (not including the petroleum industry) was US$4.54 in 2006. That compares with US$8.08 in Puerto Rico, and seems to imply that Trinidadian wages would be higher were it part of the U.S. of A.
The catch is that a Trinidad tied to the U.S. dollar would certainly have caught a fairly severe case of Dutch disease, and the general price level would also be a lot higher. (In fact, average hourly wages in Trinidad rise to US$6.43 if purchasing power is taken into account.)
The intuition behind the Dutch disease is pretty simple. Consider California. (Yes, I know, most examples of this phenomenon are drawn from commodities.) It exports movies and software, a boatload of movies and software. That brings a s—tstorm of money into the state, and drives up the cost of real estate, dry cleaning, legal services, medical treatment, and all the other non-tradable services that a modern economy consumes. Californians earn more than other Americans, but a good chunk of that difference is eaten up in a higher cost-of-living.
For movies-and-software, read oil. In fact, the Dutch disease was named for the Netherlands’ experience after the North Sea oil and gas discoveries of the 1960s. As you can imagine from the name of the phenomenon, the Dutch disease isn’t necessarily a bad thing. Sure, oil means that nobody in Alberta is going to build an auto plant, but does that mean that Alberta would really be better off without the oil?
There are things that an country with its own currency can do to combat the Dutch disease, but a Commonwealth of Trinidad and Tobago would not have its own currency. Therefore, even if nominal wages in our hypothetical dollarized Trinidad were a little less than twice as high — around the level of Puerto Rico — the price level in our hypothetical Trinidad would probably also be around twice as high. (From personal experience, I would say that everyday services are at least twice as expensive in San Juan as in Port-of-Spain, and Port-of-Spain is right smack in the middle of an oil boom.)
That said, the income distribution would be much more equal. U.S. minimum wage laws, Medicaid, and food stamps would see to that.
I don’t think the place would feel much more dramatically prosperous on the ground, though, even if much of Trinidad’s deep poverty disappeared in a hail of minimum wage jobs and WIC offices. The opening picture on this entry is of Amma pointing at her childhood church. The above picture is in the same neighborhood. The area is a poor part of Port-of-Spain, one that Amma’s parents inveighed me not to go into. Other than the relative lack of cars (and graffiti, roller-blading children, or horse-riding teenagers) it doesn’t look any worse than the poorer parts of Ponce or San Juan.
While Trinidad does have a few shantytowns left — well, at least one, called, ah, Shantytown — most of the island looks, feels, and is no poorer than many existing insular possessions of the United States.
Would U.S. defense spending have provided a path to greater prosperity? A Caribbean version of Guam? Probably not. First, Guam isn’t all that rich, although it is very well off compared to those other Pacific islands tragically abandoned by their former colonizers after they’d squeezed out everything they could. (Viz, Nauru.) Second, Chaguaramas wouldn’t have made it through BRAC, and you can google both terms if you’re confused.
Wouldn’t Trinidadians be better educated, though? Again, probably not. Both Puerto Ricans and Trinidadians average about 12 years of schooling, with Puerto Rico having both more drop-outs and more college graduates. So I’ve got some doubts that a Trinidad linked to the U.S. would do much better than it has in that respect.
What about tourism? Hard to say. Piarco airport would have been improved earlier, of course, but I can’t see any reason why American Trinidad would have attracted more tourists than Trinidadian Trinidad. Quite the reverse, in fact — Eric Williams would still have been in charge for several decades, national pride would have been even more prickly, and most importantly, something like the Black Power movement would still have happened and would have attracted a lot more attention on the mainland. A nicer airport just doesn’t quite seem like enough to compensate.
So what would be different, besides the quality of the roads? (And I’m not knocking the importance of road quality here.) Well, three things, I think. First, the U.S. relationship with Venezuela would be even more troubled than it is. That would make life on the island interesting, to say the least.
Second, as I mentioned, the income distribution in Trinidad would be a lot more equal. In all fairness, that’s not a small change, even if average incomes would probably not be all that different.
Third, less crime. But not for the reason you think.
Before 1999, Trinidad averaged around 10 homicides per 100,000 per year, half the Puerto Rican rate and rather less than the typical Southern state. In fact, the rate slowly declined throughout the late 1990s, bottoming out in 1999 at 8.2. There is absolutely no reason to think that being part of the United States would have made any difference in these levels or these trends.
But in the year 2000, suddenly, inexorably, crime began to rise.
Kidnapping for ransom soon joined homicide. From 10 in 2001, they leaped to 29 in 2002, 51 in 2003, 28 in 2004, and 58 in 2005. The government recently — with the active help of the FBI — busted a major ring that included (but was not limited to) four Trinidad Regiment officers who left the barracks at night to kidnap unsuspecting victims. That (and other enforcement efforts) have dragged the number back to 17 in 2006 and only 7 as of August 2007, but the explosion was both unprecedented and unnerved a lot of people.
So what happened to make 1999 the last year of falling crime in Trinidad? Trinidad was never a major drug transshipment point — where would you ship it to? The oil boom did expand the local cocaine market, and fueled violence, but the crime rise started before oil prices started to skyrocket. In addition, other places have experienced similar booms (with similar increases in the demand for drugs) without seeing an explosion in crime. And even more strangely, the crime explosion occurred all across Caricom, even in countries that haven’t seen petroleum-fueled booms.
What happened was that the U.S. started deporting non-citizen felons at the end of their sentences, even if they were legal residents. The number of criminals dumped on Trinidad rose from 6 in 1998 to 214 in 1999. In 2005, it was 305. The total came to 1,599. That’s a lot of violent criminals to drop on an island with only 1.1 million people.
If Trinidad had been a Commonwealth, then there would have been no way for criminals hardened in New York and trained in that state’s prisons to be dumped back on island. They’d be American citizens, and they’d go back to Brooklyn upon release, into a community and a police force ready to deal with them.
So there you have it. The second biggest benefit that being a territory of the United States would have brought Trinidad is ... protection against the policies of the United States.