Canadian Staples Thesis

Canadian Staples Thesis-12
Innis can hardly be blamed for trying to figure out a solution.

Innis can hardly be blamed for trying to figure out a solution.

In effect, this forces Canada to respond to a downturn by contracting the money supply, amplifying the effects of the original negative shock.

Many of the problems that Innis identified can be put down to bad choice for an exchange rate policy.

This collection brings together Watkins' most important scholarly articles.

In Staples and Beyond Watkins addresses the "staple thesis" of Canadian economic and political development and, in particular, the effort to extend Harold Innis' work by giving more explicit consideration to class relations and the role of the state.

Harold Innis may not be a household name today, but he was one of Canada’s most influential economists in the 1930s and 1940s, and he’s still honoured for his role in establishing many of the institutions supporting economic research in Canada.

Perhaps more to the point, Innis is credited with developing the “staples thesis” of economic development, a class of arguments warning of the dangers of relying on natural resource wealth — “staples” — as a driver of economic growth.

To give some idea of the scale of the crisis, Saskatchewan was the third most populous province in 1931, but lost 10 per cent of its population over the next decades.

It didn’t recover its lost population until the 1960s, a period in which the population of Canada as a whole increased by 70 per cent.

To be sure, the income generated by (say) Alberta’s oil wealth during the last boom was not uniformly distributed across Canada, but it did show up as increased tax revenues for the federal government, and all households benefited from the increased purchasing power of the Canadian dollar.

Olewiler concludes — as do many of the studies she cites — that Harold Innis did get it wrong: resource wealth has contributed to Canada’s long-term economic growth.

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