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The Progressive Economics Forum

The Staple Theory @ 50: Introduction to a Special Blog Series

In my job as economist for Unifor (and before that the CAW), I have had a long-time interest in more sustainable and sensible policies for managing Canada’s resource wealth. The challenge, given the lucrative but fleeting nature of resource booms, is to leverage Canada’s resource wealth in a manner that stimulates a more diversified, inclusive, and sustainable economy. Market-driven approaches, reinforced by the rules of free trade deals (including, in particular, the still-unprecedented energy-sharing provisions of the NAFTA) will leave us with a skewed, polarized, fragile, and environmentally doomed resource-addicted economy.

A few weeks ago, I was giving a presentation about the bitumen boom and the economic and social dangers it poses to Canada. At the end of the slide show I provided a list of key references for further readings – including Mel Watkins’ classic 1963 article: “A Staple Theory of Economic Growth.” That article applied and updated Innis’ original analysis of the role of successive waves of staples in Canada’s economic development. It laid the intellectual foundation for so many subsequent theoretical and policy interventions during the tempestuous late 1960s and 1970s. Chief among these was Mel’s own work on the subsequent Task Force on Foreign Ownership and the Structure of Canadian Investment, which reported in 1968.

Right there in front of the audience, I realized out loud (with surprise) that this year marks the 50th anniversary of the publication of Mel’s classic article. In recognition of both its stand-alone importance, Mel’s many broader contributions to progressive political-economy in Canada, and the renewed importance of a critical understanding of Canada’s staples problem (given the resource-dominated regression of our economy over the last decade), it is important that the heterodox economics community in Canada collectively mark the occasion.

To that end, the Progressive Economics Forum will host a series of special guest blog commentaries on RPE this fall, recognizing the lasting significance of the 1963 article, and exploring its relevance to modern-day development and industrial policy debates in Canada and internationally. The blogs will run at regular intervals (roughly one per week) through the fall, starting now. Mel himself will write a concluding wrap-up and retrospective, engaging with the blog commentaries and providing his own thoughts on the staples issue 50 years after his article.

Later in the year, the whole collection will be published as a stand-alone report (available on-line and in hard-copy) by the Canadian Centre for Policy Alternatives.

Our goal with this series is not just to reflect on the importance of the 1963 article (and Mel’s other work).  It is also to add concretely to the current debate over staples, including a frank consideration of the strengths and weaknesses of staples analysis in the context of our current economic, geopolitical, and environmental conjuncture.  Many of the commentaries will be applying staples analysis to new topics: such as B.C.’s proposal to base future growth around exports of LNG, the gender stratifcation of Canada’s economy, and the obvious challenge of developing new development strategies that recognize and respect the environmental constraints facing our country and our world.

Authors who have accepted our invitation to contribute to the series include: Gord Laxer, Marjorie Cohen, Dan Ciuriak, David Wolfe, Alberto Gago, Tom Gunton, Marc Lee, Diana Gibson, Daniel Poon, Brendan Haley, Daniel Drache, and Hugh Grant.  Fittingly, our first contribution, posted concurrently today to RPE, is from Abe Rotstein: Professor Emeritus of Economics at the U of T, Mel’s colleague during the heady days of political-economy research in that program, and one of the founders of the Committe for an Independent Canada.  Abe provides a personal retrospective on the vibrant theoretical community that spawned this great work of Canadian economic analysis.

We welcome comments and responses to this special series, posted either in the Comments area below each post, or through e-mail to me at jim.stanford [AT] unifor.org.  And collectively, as we launch this series, we say a special thank you to Mel Watkins for his important theoretical and personal contributions (in economics and in many other areas of life) to building a better Canada!

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Comments

Comment from Dennis Howlett
Time: September 25, 2013, 10:36 pm

What a great idea. I was a student of both Mel and Abe at U of T and was greatly influenced by their analysis. I agree that the staples theory is still relevant today and needs to be updated again and applied to the current challenges we face.

Comment from Herb Wiseman
Time: September 26, 2013, 12:33 am

Is the article itself available?

Comment from Jim Stanford
Time: September 26, 2013, 4:59 pm

Here’s a full reference to the original article. You can download it from Scholar’s Portal or other e-journal services (if you have access to that), or consult the hard copy at a research library. Let me know if you have a hard time finding it; contact me at jim.stanford@unifor.org.

Mel Watkins, “A Staple Theory of Economic Development,” Canadian Journal of Economics
and Political Science 29/2 (1963), pp. 49–73.

Comment from Ben Klass
Time: September 27, 2013, 12:51 pm

Is anyone here aware of work that connects radio spectrum to the staples theory? If you could point me in the direction of some I would be very grateful.

Comment from Paul Tulloch
Time: September 27, 2013, 3:59 pm

I am so happy to read this post celebrating and reflecting on Mel’s work. I am a student of Canadian political economy and grateful for the work and ideas that have been uniquely forged on the anvil of the Canada’s unique political economic makeup. Into the problems and ideas that Mel, Innis and those that followed the most important, I believe, is the holistic approach, that is the intersection of the political and the economic needed to comprehend the depths and machinations of how Canada’s economy sits within our social communities.

I recall my early career days in the Sault working at the Economic development Corporation on my lunch break sitting on the St. Mary’s river reading Mel’s work on the staples theory, and watching the idled smoke stacks from Algoma Steel as the powers that be tried to shutter one of the last value adding manufacturers in Northern Ontario- I recall thinking how the health of Algoma Steel was always on the edge of the knife of staples theory- but Mel’s theory was never far from my mind in understanding why economic development in anything but resource extraction was so difficult in the North.

Comment from Gerry Helleiner
Time: December 15, 2013, 9:07 pm

I’ve enjoyed your series on the 50th anniversary of Mel Watkins’ staple theory article.

As I recently told Mel, his article was compulsory reading in my grad course on international aspects of economic development at U of T for over 30 years, something he evidently never knew. In my first book – on economic development in Nigeria (1966) – I drew on the staples approach in contrasting its then reliance on peasant agricultural exports with others’ mines and plantations. Later I did the same in an early analysis in the EJ (1972) of export processing zones and in other pieces thereafter. I’m sure these approaches stemmed from my early exposure to Innis/Watkins. Many, many others have since used elements of this approach in the international development literature.

Your excellent series has understandably had a predominantly Canadian orientation. I think it important to recognise its more global significance. It has been influential.

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