This chapter explores the relationship between the core and the Caribbean from 1900 to 1960. This is roughly the period from the end of the Spanish-American War to the arrival of Fidel Castro on the international stage. Both the beginning and end of this period are therefore intimately associated with Cuba, but the island is also crucial to understanding so much that happened in the economic evolution of the Caribbean in the intervening years. Under US rather than Spanish tutelage, a nominally independent Cuba would remain a huge component of the Caribbean economy; thus what happened in the region as a whole was often determined by what happened in Cuba.

The period from 1900 to 1960 began and ended with a decade of world growth in output, employment and international trade. By contrast, the intervening four decades were marked by extreme volatility that included two world wars, a quasi-world conflict (the Korean War), a major slump (the Great Depression), several minor slumps (1920–1, 1937–8, 1948–9), a spectacular commodity price rise (1919–20), the collapse of the gold standard in the 1930s and the embedding of inflation from 1940 onwards into the global system. The impact of all this on the Caribbean is explored in section 1.