Cyclonic Booms, Inevitable Busts, Staples to the Rescue…and Cities Where the Action Is

The American scholar Alfred Crosby writes of the neo-Europes, the offshoots of Europe, the products of the settling of the New World while unsettling those whose world it already was. James Belich, an historian – who writes like an economic historian – of New Zealand now teaching in Australia, has written a massive and splendid book, Replenishing the Earth: The Settler Revolution and the Rise of the Anglo-World, 1783-1939, about the neo-Britains, Canada included, albeit with its internal neo-France.

The main object of the exercise is to explain why so much of the world speaks English. Putting aside the subject empire, English speakers grew sixteen times from 1790 to 1930. And considerable numbers speak Spanish, and Portuguese. Belich thinks this is the big story about the European empires. He writes provocatively: “With all due respect to the rich scholarship of European imperialism, in the very long views most of these European empires in Asia and Africa were a flash in the pan.” The real legacy is the neo-Europes.

In the process Belich casts some light on the venerable staple thesis and suggests for this reader an alternative “city thesis” to complement it.

A literal reading of the staple theory of economic growth is that an increase in exports creates economic growth through spread or linkage effects and can do so strongly by pulling in labour and capital from abroad. By examining the sequence of things for the neo-Britains (defined as the United States, and specifically the American West, Canada, Australia, New Zealand and South Africa) throughout the long nineteenth century of his title, Belich instead finds a recurring pattern. It begins with an explosive, exuberant boom, as people rush into newlands and settlements emerge and capital flows in for infrastructure and imports boom rather than exports. Growth feeds on itself.

It’s too much too fast, and the bubble bursts – Belich refers to “the pyramid-selling character of booms” – and the economy goes into a sharp slump. It is only then that an export base is created around a staple or staples. As time passes and the sequence recurs, new staples are found or old staples made freshly viable. Writes Belich: “The false half of staples theory – that staple exports powered boom – should never blind us to its true half, namely that staple exports rescued most settler economies after their booms had busted.”

With that comes what Belich calls “recolonization” as the settlement is truly integrated economiclly with Britain or, in the case of the American West, with the eastern U.S. Not only has staples become the story but so too has “dependency.” We’re back in the known world of the staple of Canadian fame, but that does not deny the importance of what Belich exposes as to the nature of growth. It is all much more “messy” and “irrational” and “hysterical” then the simple, simplistic, staple model of growth implies.

Belich is aware of the key role of Harold Innis in originating the staple approach before it was reduced to a theory, and what Belich finds in fact fits comfortably into an Innisian world. Innis was aware that economic growth took place with explosive bursts which he called “cyclonic.”

Belich is at his best in putting a primary focus on migration itself as an autonomous force. What had been more like a pattern of exile before the nineteenth century – “Before 1800, most Britons saw emigration as social excretion” – became with the heavy hand of promotion – “The Canadian winter was presented as one long holiday” – more like settlers as pioneers seeking opportunity and finding happiness in the newlands – though there is still the terrible push of the Irish famine. The neo-Britains came to be seem at the centre as part of a Greater Britain and the margins returned the favour – even sending their sons off to be slaughtered in World War I.

Settlements in due course became cities, and Belich reminds us of the extraordinary speed with which that happened. At the beginning of the book, Belich describes the phenomenal growth of Chicago in the nineteenth century as “one of the most amazing things in the history of modern civilization.” And a bit later the U.S. has its Los Angelos, and Australia its Melbourne and Canada its Toronto, and many more “boom-time settler cities” that came out of nowhere, doubling populations in single decades. Toronto (then York), having quadrupled in the quarter century from 1800-25, then grew twentyfold over the next quarter century. As incremental growth that had characterized the colonies up to then morphed into gargantuan growth, the quantum leap in the scale of the “adjustment” imposed on aborkiginal people was their final marginalization.

It occurred to me as I read Belich that when I used to teach North American economic history, the narrative for Canada was around staples from beginning to end, while the narrative for the U.S. was much more around cities, beginning with the intense competition among eastern seaboard cities, building canals and railway, for control of the west.

The telling of American economic history has always had room for staples, notably cotton in the South. Canadian economic history, it now strikes me, would benefit significantly from a city focus, where cities, whlle having a symbiotic relation with their hinterlands and themselves linked to the megacities of London and New York, breed the busines classes and urban masses that become a dialectic of history.

Today we have a staples narrative and an abstracted neo-classical economics narrative that, whatever its merits – and they are real but limited – is mostly just boring even to economics students. We could use a city theory of economic growth where, as Belich shows us, the New World is, in its own distinct way, explosive. Put a city narrative together with a staple narrative, which is at heart of what Belich is doing, and there’s a good chance of telling a very good story.

Belich devotes much of his space to the American West and Australia. (This encyclopedic volume also includes Siberia, Argentina and Brazil.) For Canada we could usefully pick up from where he leaves us. And we could take advangtage of Jane Jacobs’s insight – not noted by Belich though it would fit well into his theory – that cities and their surrounding economies, can be seen as growing from replacing imports with domestic production. Jacobs thought that was more important to growth than exports though that may make insufficient allowance for the distinctive character of New World cities because the New World is dintinct in its staples bias.

One comment

  • Hi Mel,

    That is a very useful insight and a pathway I have been trying to piece together.

    I wonder how that would model with export processing zones within developing countries. Assuming some labour market inefficiencies can be overcome, like allowing trade unionism to find its pathway forward without the threat violence.

    I would like to follow up more on this. I would love to try and use this approach within a couple of case studies.

    Jane Jacobs rules!

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