When Wall Street Colonised the Caribbean
A Tale of Financial Imperialism and Resistance
Credit: TheFinancialHorizons.com
Background
In the grand narrative of American imperialism, we often focus on military interventions and political machinations. But there's another story, equally compelling and perhaps more insidious: the systematic attempt by Wall Street to colonise the Caribbean through financial means. Peter James Hudson's Bankers and Empire: How Wall Street Colonised the Caribbean reveals this forgotten chapter of economic imperialism, one that offers deep lessons for our contemporary understanding of global finance and sovereignty.
The Great Banking Experiment
From the late 19th century through to the Great Depression, major American banks, including the institutions that would eventually become Citigroup and JPMorgan Chase, embarked on an ambitious project. Their goal was nothing short of financial domination across the Caribbean, targeting nations including Haiti, Cuba, Panama, and Puerto Rico. This wasn't merely about profit; it was about establishing control over entire monetary systems, trade networks, and economic governance structures.
The strategy was sophisticated and multi-layered. American banks sought to reorganise Caribbean monetary systems around the dollar, establish branch networks throughout the region, and gain control over commodity financing, effectively positioning themselves as the financial gatekeepers of Caribbean commerce.
The Intersection of Finance, Race, and Empire
What makes Hudson's analysis particularly compelling is his examination of how this financial expansion was deeply intertwined with racial capitalism. Banking practices weren't merely economic tools; they were shaped by racist ideologies that influenced everything from lending policies to governance structures. This intersection of finance, imperialism, and race created a system where economic control served broader imperial ambitions whilst reinforcing existing racial hierarchies.
The banks didn't operate in isolation. Their expansion was closely coordinated with American foreign policy, military interventions, and political influence. Finance became another weapon in the imperial arsenal, arguably more subtle but no less effective than gunboat diplomacy.
Resistance and Resilience
Yet this isn't simply a story of American triumph. What emerges from Hudson's research is a fascinating tale of resistance and resilience across the Caribbean. Local populations, business leaders, and political figures mounted sustained opposition to Wall Street's ambitions.
In Haiti, attempts by American banks to seize control of the financial system sparked protests and political instability as local leaders fought to maintain economic sovereignty. Cuban businesses and politicians actively resisted efforts to establish American branch banks and control commodity markets. In the Dominican Republic, attempts to dollarise the economy met with determined local opposition that significantly slowed implementation.
These weren't isolated incidents but part of broader anti-imperialist movements that swept across the region. Caribbean nations demonstrated a remarkable capacity for financial resistance, often frustrating Wall Street's best-laid plans through a combination of political opposition, civil disobedience, and economic nationalism.
The Failures of Financial Empire
Perhaps most surprisingly, Hudson's research reveals that Wall Street's Caribbean adventure was marked more by failure than success. Despite their considerable resources and political backing, American banks faced a litany of problems: corruption within their own ranks, costly military interventions, financial crises that exposed their vulnerability, and persistent local resistance that undermined their operations.
The grand vision of financial colonisation often collided with the messy realities of Caribbean politics, economics, and culture. What looked straightforward from Wall Street boardrooms proved enormously complex on the ground, where local knowledge, networks, and loyalties couldn't simply be bought or bulldozed.
Lessons for Today
The historical struggles documented in Bankers and Empire remain strikingly relevant to contemporary debates about financial sovereignty and economic independence. The resistance movements of the early 20th century Caribbean helped establish important precedents for protecting national economic autonomy. Many Caribbean nations in that period strengthened their financial institutions and regulatory frameworks specifically to prevent excessive foreign control over their economies.
Moreover, the Caribbean experience serves as a cautionary tale for emerging markets worldwide. The strategies of resistance developed in places like Haiti, Cuba, and the Dominican Republic offer insights for other regions grappling with financial imperialism in its contemporary forms.
A Unique Contribution
Bankers and Empire stands apart in the literature on financial imperialism precisely because it focuses on the Caribbean as Wall Street's testing ground for international expansion. Whilst other works examine European banking imperialism in Africa and Asia, Hudson's research highlights the specifically American, racialised, and ultimately flawed nature of financial colonisation in the Caribbean.
The book's emphasis on failure and resistance makes it particularly valuable. Too often, studies of imperialism focus exclusively on the imperial power's perspective, treating colonised peoples as passive recipients of external force. Hudson's work demonstrates that Caribbean resistance was not only real but often effective, fundamentally shaping the trajectory of American financial expansion.
When the IMF Succeeded Where Wall Street Failed
Yet the story doesn't end with Wall Street's Caribbean failures. In a cruel historical irony, what individual commercial banks couldn't accomplish in the early 20th century was largely achieved by the International Monetary Fund and the Washington Consensus from the 1980s onwards. The same goals, financial control, economic restructuring, and sovereignty erosion were pursued through more sophisticated and ultimately more effective means. The interventionist powers that we associate with the Washington Consensus didn't emerge from nowhere in the late 20th century. They trace back to semicolonial debt commissions set up in the 19th century by European and US investors to discipline borrowers across Latin America, the Caribbean, and beyond. What's remarkable is how structural adjustment is not just a distant relative of empire, but its direct descendant.
The IMF succeeded where individual banks had failed for several important reasons. Rather than appearing as obvious imperial actors, the IMF operated under the banner of international development and financial stability, providing essential ideological cover. The debt crisis of the early 1980s created perfect conditions where, by the mid-1980s, the neoliberal and capitalist doctrine was accepted by all independent states in the English-speaking Caribbean region. Most importantly, the IMF had learned from Wall Street's earlier failures. Where corruption, military interventions, and local resistance had derailed commercial banking expansion, the IMF presented itself as a neutral technocratic institution offering necessary economic medicine. Neo-colonialist states now leverage conditional loans, cultural hegemony, and economic superiority to sway foreign policy under the pretence of economic assistance.
In the Caribbean specifically, structural adjustment drastically intensified existing inequalities and removed governments' ability to alleviate these situations. Alongside Caribbean SAPs in the 1980s was also a successful wave of imperialist propaganda, resulting in many independent states seeing left governments replaced with reactionary conservative ones.
The genius of the Washington Consensus was that it reframed financial imperialism as modernisation theory. Countries weren't being colonised; they were being helped to "develop" according to universal economic principles. This ideological sophistication, combined with debt-induced vulnerability, allowed the IMF to achieve the systematic control over Caribbean economic policy that individual commercial banks had only dreamed of.
The Enduring Struggle
The story Hudson tells isn't merely historical, but part of a longer continuum of financial imperialism that continues today. Washington Consensus SAPs resemble modern financial colonisation, as private interests within liberal capitalist states continue to pursue the opening up of markets abroad through multilateral arrangements including the IMF. The tensions between financial sovereignty and international integration continue to shape Caribbean politics and economics, with the legacy of both early 20th-century resistance movements and later structural adjustment still visible in contemporary debates.
Understanding this history is critical for anyone seeking to comprehend contemporary global finance. The Caribbean's dual encounter, first with Wall Street's direct imperial ambitions, then with the IMF's more sophisticated approach, offers important insights into how financial power evolves, adapts, and ultimately achieves its objectives through institutional innovation.
Reference(s)
Hudson, P.J. (2017) Bankers and Empire: How Wall Street Colonized the Caribbean. Chicago, IL: University of Chicago Press.