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Alberto Vierira’s “The Sugar Economy of the Madeira and the Canary Islands” serves as a guide to the development of the island based sugar production system, which was employed by the Spanish and the Portuguese. The system was slow to develop and only succeeded through the use of royal backed monetary investments. Even with monetary backing from the royals the plantation owners needed labor to run their businesses and with most of the native populations decimated by smallpox the newly established plantations relied heavily on slave labor.
Thanks to the warm weather of the islands the growing of sugar cane proved very lucrative for the plantation owners as well as the Spanish/Portuguese crowns. The production of sugar cane also increased the availability of sugar for the European continent which in turn increased the demand for sugar as more people became accustomed to having it around. As Erin pointed out the sugar merchants generated more open commerce for sugar products to meet the demands of the European market, creating a more open European trade infrastructure.
Island based sugar economies dominated for some time but as the infrastructure of Brazil developed island based systems could not compete with the shear amount of workable land Brazil had to offer. That being said island based sugar economies still exist today such as the one present in the state of Hawaii so the legacy of these original systems can be observed in a modern context.