The Staple Theory @ 50: Gerry Helleiner

One remarkable and gratifying aspect of our special series of commentaries marking the 50th Anniversary of Mel Watkins’ classic 1963 article on staple theory, is the interest and input it has generated from researchers and scholars who have applied Mel’s work in various capacities, in Canada and internationally.  One such contributor is Gerry Helleiner, a globally-recognized development economist and professor emeritus in Economics at the University of Toronto.  He has been in touch as a result of our series, and contributes the following commentary on the significance of the staple theory in international development theory and practice.  The global importance of this theory, he notes, constitutes a kind of Canadian “staple export” — but of a better kind than we usually supply to the world!

Staples Theory on the International Stage

By Gerry Helleiner

Staple theory is a Canadian invention. The original writings of Harold Innis were sparked by Canadian economic history. Mel Watkins’ classic article, while making a more general case, appeared in the Canadian Journal of Economics and Political Science. Indeed, most subsequent discussion and debate of staple theory seem, at least to most Canadian analysts, to have taken place in Canada. Yet there is a much broader and more international story to be told about the development and influence of staple theory.

The developmental significance of the “choice” of different kinds of export activities has long itself been a “staple” of development debate in Latin America, the Caribbean, Africa and even parts of Asia. Sometimes Watkins was footnoted in the relevant writings, sometimes not. (To my knowledge, Innis never was.) How strands of knowledge or analytical approaches are transmitted is complex and often unclear; I leave this to the historians of economic thought and sociologists of knowledge. But what is indisputable is that Watkins’ way of thinking about these issues clearly had impact, whether direct or indirect, in the developing world over the past 50 years.

There is a rich tradition, for instance, among Caribbean economists (not least our own Kari Polanyi-Levitt) emphasizing the peculiar, and developmentally detrimental, legacy of plantation-based export economies. It features the influences of such matters as distorted infrastructure, limited backward or forward linkages and, of course, the distribution of income from these export activities. There are parallel concerns and a parallel literature concerning plantation, estate or large-scale export-oriented agriculture and forestry (such as bananas, pineapples, palm oil, timber, etc.) in many other parts of the developing world. Not infrequently these issues are accompanied by debates about the accompanying role of foreign direct investment, a matter on which Watkins also, of course, had a great deal to say. Most recently it is foreign (Chinese, Arab, and other)“land grabbing” in ostensibly “independent” SubSaharan African countries that has captured the popular spotlight. The concerns raised by this trend are thoroughly Watkinsian.

Comparable Watkins-style analyses have long surrounded the issue of (usually foreign-owned) mining and petroleum export activity in poor countries. What kind of infrastructure do such activities require, and do they assist further development? Are there any significant domestic linkages? Where does the income go? Some of these critical questions have at times been drowned out by popular discussions of the “resource curse” – overvalued currencies (Dutch disease), corruption, and overblown governmental spending of the (often lavish) revenues. After the recent boom in international mineral and other commodity prices, with its resulting rapid growth rates in poor commodity-dependent economies, there has been renewed attention to the longer-term development question of what, if anything, these “successes” leave behind after the boom has abated. In many current policy discussions in poor countries, the staple theory’s principles are therefore very much in the limelight once again.

In many parts of the developing world, a version of staple theory has also been deployed to analyse the relatively positive developmental implications of smallholder (peasant) agriculture geared at least partially for export: for example, with Tanzanian coffee or Ghanaian cocoa. I know this with particular certainty because I have written extensively on these topics myself…and I know where I got these ideas.

In later years these same analytical tools have been employed to acquire a better understanding of the benefits and possible costs of labour-intensive manufacturing for export, as in Bangladesh, and export processing zones in a wide range of other poor countries. Significant labour income (largely to female workers) accrues from these activities; but often, quite apart from the lax fire, safety and other labour standards, precious little else is done to further sustainable longer-term development.

These staple theory approaches not only describe the likely developmental accompaniments, positive or negative, of alternative export “choices” (where choices exist); but they also provide guidance as to policies that might begin to overcome the deficiencies inherent in some of them. Staple theory is not and never should have been seen simply as an approach to economic history. By now it should be evident, too, that its applications go far beyond the cases of Canadian cod fisheries, fur trade and wheat. The insights of staple theory, both historical and policy-oriented, belong to the world. That is why, during my more than thirty years teaching a graduate course on “International Aspects of Development” at the University of Toronto, Mel’s article on the staple theory was always compulsory reading.

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