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The Progressive Economics Forum

A Critical Take on Staples

Almost a century ago W.A. Mackintosh and Harold Innis created the staple approach to Canadian studies which came to be the core of “Canadian political economy.” Post World War II the staple approach was revised and rejuvenated, and became the core of what was now called “the New Canadian Political Economy.”

There have always been doubters about the efficacy of the staples approach. One of the most persistent is Paul Kellogg and he has now published a book (U of T Press) cleverly titled Escape from the Staple Trap – by which he means that proponents like myself should “escape” the staple approach – and subtitled Canadian Political Economy after Left Nationalism to signal that he is not only taking on the staple approach but also the nature of nationalism which is notoriously contentious on the left.

The essence of the staples approach is that it sees the export of relatively unprocessed resources as central to economic growth. A staples trap is when the very importance of resource exports creates barriers to the maturation of the economy. In Innis’s words: “Energy has been directed toward the exploitation of staple products and the tendency has been cumulative…[E]nergy in the colony was drawn into the production of the staple economy both directly and indirectly…Agriculture, industry, transportation, trade, finance, for a more highly specialized manufacturing community. These general tendencies may be strengthened by government policy…”

While Innis is mostly referring here to colonial history, the final sentence has a contemporary ring when we think of how first the Harper government and now the Trudeau government, and the Alberta government throughout bias Canadian policy – to building pipelines and thwarting effective policy on climate change – toward pushing bitumen export. We are prepared to go to bed with the despicable President Trump on these matters rather than think responsibly. The staple trap lives on.

See Brendan Haley on the staple trap and the carbon trap, a major essay in the New Canadian Political Economy. See also W. T. Easterbrook’s North American Patterns on Growth and Development:the Continental Context – a much neglected and very relevant book – on which more later.

Kellogg endlessly analyzes data on Canada’s level of industrialization showing that there is slight evidence of a Canadian deficiency. This is good so far as it goes but Kellogg gets carried away. In the 1950s and 1960s mainstream economists like Harry Eastman, Stefan Stykolt and Ted English wrote about the miniature replica effect where all the American firms came to Canada and split up a much smaller market and there were serious barriers to entry for indigenous Canadian firms. R&D was neglected and head office jobs were elsewhere. Kellogg’s statistics – quantitative rather than qualitative – don’t seem to capture this.

There is likewise the matter of the auto industry and the autopact. This is a very large industry quantitatively, but there are serious problems qualitatively. Canada is the only G7 country that never produced a car of its own – certainly a serious deficiency. In order to get its “fair share” of auto production Canada had to insist on the AutoPact – hardly a sign of strength and efficiency. Kellogg doesn’t explain why the Pact was necessary in the first place. There is no satisfactory quantitative resolution to this problem, a point that Kellogg does not properly grasp.

Easterbrook provides fascinating historical background. His book looks at U.S., Canada and Mexico. Put Mexico aside for present purposes and contrast the US North, the US South and Canada. Distinguish between “patterns of persistence” and “patterns of transformation.” The US North is “transformed” by an American Industrial Revolution. Canada “persists,” caught in a staple trap, and falls prey to American corporate control. Let it be noted that Easterbrook was a much respected economic historian and definitely not on the left and not a nationalist.

Kellogg’s apparent political agenda is to discredit left nationalism, such as the Waffle variant. There is a Global North and a Global South, Canada is part of the imperialist Global North, and therefore cannot practice left nationalism. The first two parts of this statement are true but in so far as Canada is beneath the U.S. in the pecking order it can take an “anti-American” progressive political position. Politics is riddled with contradiction to an extent not always appreciated. Canadian nationalism was alive and well under Lyndon Johnson, and is likely to be again under Donald Trump.

The auto industry is neglected again. No mention is made of what was arguably the biggest event with respect to left nationalism, the creation of an independent autoworkers union – and of other such unions. This made a big difference on the ground at the time of the free trade debate – which Kellogg recognizes as what he calls a nationalist “moment.”

Kellogg deserves the last word. In the final paragraph of the book, he generously pays tribute to the Waffle: “we all owe it a tremendous debt.” Agreed.

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Comments

Comment from Brendan Haley
Time: February 5, 2017, 2:05 pm

Thank-you for this review of Kellogg’s book Mel.

My addition is that whether Canadian capitalism is strong or weak, imperialist or not is beside the point. In my article on the carbon trap, I discuss how resource extraction can create dependence on a fossil-based economic paradigm and not another country in particular. If Canada has a greater amount of international economic and political power, then the implications of the staple trap/carbon trap are more severe.

A focus on the qualitative aspects of our economic structure and the nation’s capacity for “transformation” is needed, as you discuss in this post.

With the current US leadership, Canadian independence rather than a colonial mindset is more important than ever. See http://www.progressive-economics.ca/2016/11/17/canada-after-trump-harold-innis-and-what-to-do-when-empires-go-crazy/

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