Involutionary Growth in a Labour-Scarce Economy. A dialectic interpretation of the boom and bust of cocoa production in Ghana, c. 1890-1970

The use of the analytical tools of classic and neo-classic economics has played a significant role in the study of Africa’s economic history since the 1970s. In this paper, we summon this body of work under the paradigm of Smithian growth models. Although different in techniques and approaches, this work shares a use of markets as the organising principle of the study. The aim of this paper is to critically reflect on the validity of Smithian models. We use the boom and bust of cocoa production in Ghana as an example, and conclude that while Smithian approaches provide valid explanations for the initial expansion, but are less suitable for explaining economic decline. The latter is explained by factors that are found outside of the realm of economics and thereby detached from the economic forces that account for the initial boom. We present a different analytical framework – based on the concepts of involutionary growth and forest rents – and argue that the decline in cocoa production was endogenously driven by the specific structural conditions created by cocoa production. We argue that our tentative dialectic interpretation is theoretically more consistent and empirically more plausible than previous Smithian analyses.