The Staples Thesis

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The Staples Thesis
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The Staples Thesis

• Thesis first developed by Innis et al
• A means of characterising early economic
  development in the area that becomes Canada
• Will look at cod, fur (both beaver and sea
  otter), timber and (pre-Confederation) wheat

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The Staples Thesis

• Thesis is driven by the strength of linkages
  which will, according to the theory, determine
  the nature of economic development
• Three classic linkages, all characterised in
  terms of their effects on investment in the
  domestic economy

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The Staples Thesis

• The three linkages are
• Backward inducement to invest in industries
  necessary to obtain the resource (e.g., a series
  of forts)
• Forward inducement to invest in industries that
  use the staple as an input (e.g., mills for both
  wheat and timber)
• Final demand linkages inducement to invest in
  industries that serve the demands of those
  receiving factor payments (e.g., service sector
  in resource townswhere do loggers and farmers
  spend their wages)

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The Staples Thesis

• In general, few linkages mean less economic
  development more (and stronger) linkages mean
  more development
• The staples examined fall into two groups, those
  that are also natural resources (cod, fur,
  timber) and those that are not (wheat).

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The Staples Thesis

• Lateral linkages, described by Norrie, are the
  amount of investment/growth triggered by the
  provision of goods or services such as railways
  for 20th C wheat, which have sufficient capacity
  to allow for other growth

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The Staples Thesis

• The order in which these staples were exploited,
  and the period for which their development was
  the major force in economic development, is
  roughly as follows
• Cod 1500-1575
• Fur 1575-1820 (earlier in Upper and Lower Canada
  and the Maritimes)
• Timber 1795-1860
• Wheat 1795-1850

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The Staples Thesis

• Key factors that in part determine the nature of
  economic development are
• the nature of the resource in terms of its
  biological characteristics
• the property rights and political or industrial
  structure associated with the good
• the value to weight ratio.