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The Nature of Political and Economic Development in the British Dominions

Published online by Cambridge University Press:  07 November 2014

A. F. W. Plumptre
A. F. W. Plumptre*
Affiliation:
The University of Toronto
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Extract

Canada, Australia, New Zealand, and South Africa have two attributes which, taken together, distinguish them from all other countries: they are new countries and they are British Dominions. Economically, their outstanding feature is the relative abundance of their resources in relation to their population and supplies of capital. Politically, it is the fairly recent emergence of self-government under institutions modelled upon those of Great Britain and erected within the loose and conveniently ambiguous constitution of the British Empire. Culturally, too, they are predominantly British; although special reservations must be made in the cases of Canada and South Africa. As a result of their similarities it is possible to draw a number of general conclusions regarding the nature and direction of their growth.

The nature of development in new countries should be a matter of interest to all students of economics and political science because (as Professor Mackintosh has recently pointed out in this Journal) it is in such countries that the impact of development may be most clearly seen and the problems of open, internationally exposed economies most effectively studied. Moreover, the subject is one of great practical importance. It should be familiar to “the Legislators of the Empire, and all who are set in authority over us; that all things may be … ordered and settled by their endeavours upon the best and surest foundations”. Indeed, this paper has been prepared as the background for a larger work on the administrative problems of central banking in the Dominions. This may account for special emphasis on some points, and relatively little on others (such as immigration) which might have been treated rather differently had a more general object been in view.

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Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 3 , Issue 4 , November 1937 , pp. 489 - 507
Copyright
Copyright © Canadian Political Science Association 1937

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References

1 Mackintosh, W. A., “Some Aspects of a Pioneer Economy” (Canadian Journal of Economics and Political Science, vol. II, 11, 1936, p. 457).CrossRefGoogle Scholar

2 Heaton, Herbert, “The Development of New Countries: Some Comparisons” (Minnesota History, vol. X, no. 1, 1929, pp. 6 and 13).Google Scholar He writes of these countries that “their history has been predominantly economic…. Their politics have been concerned with … economic issues chiefly.” This statement may belittle a number of profound struggles concerning race, religion, and constitution.

3 Lovell, R. I., The Struggle for South Africa (New York, 1934), p. 285.Google Scholar

4 Condliffe, J. B., New Zealand in the Making (London, 1930), pp. 142–6.Google Scholar

5 Innis, H. A, Problems of Staple Production in Canada (Toronto, 1933).Google Scholar Also, by the same author, “Unused Capacity as a Factor in Canadian Economic History” (Canadian Journal of Economics and Political Science, vol. II, 02, 1936, p. 1).Google Scholar Also Fay, C. R., Imperial Economy (Oxford, 1934).Google Scholar Also the nine volumes of the Canadian Frontiers of Settlement Series (Toronto, Macmillan, 1934-7).

6 Williams, J. H. in Quarterly Journal of Economics, 1929, pp. 195 ff.Google Scholar

7 It is sometimes considered convenient to regard a rise in the prices of exports as a favourable movement in the “barter terms of trade”; but there are objections to this. Most of the normal results of a rise in the prices of staple exports would probably ensue even if the prices of imports happened to rise pari passu or faster and there was no change or an unfavourable one in the (net) terms of trade. Moreover, the barter terms of trade is a ratio composed of two quantities (imports and exports) which vary, sometimes as a result of independent forces and sometimes residually to permit equilibrium in the balance of international payments (see the next footnote); and therefore the explanation of its movements is complex. If we attempt to explain other matters in terms of its fluctuations, we do not get very far, and are in danger of ambiguity if not of error. It seems preferable to stick to concepts, such as price movements or (better) value movements, which, while not always clear, are at least less dangerous than the terms of trade.

8 This may appear to controvert the opinion put forward by Professor Viner, viz., that the commodity balance of trade conforms to capital movements, implying that the latter is often, in some sense, the “independent variable” ( Viner, J., Canada's Balance of International Indebtedness, 1900-1913, Cambridge, Mass., 1924, ch. xi).Google Scholar It is doubtful, however, whether there is any fundamental conflict. The value of exports may be one independent, the import of capital another, and balance of trade the resultant. Nevertheless, it seems difficult to accept entirely his explanation of the adjustment of commodity trade to capital movement. He makes it appear that, during the period under consideration, the increasing value of the exports of Canada's staples (wheat, copper, nickel, silver, etc.) was something needing special explanation (pp. 261 ff., “Restrictive Effect of Capital Borrowings on Exports”). But surely this movement of export values, together with new discoveries and innovations, was the root of the whole matter. Capital imports came in to take advantage of the new opportunities associated, directly or indirectly, with the expansion of exports—in the expectation that exports would continue to grow. Had the value of exports decreased, the import of capital would have disappeared.

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19 Wood, , Borrowing and Business in Australia, p. 7.Google Scholar

20 Larson, H., Jay Cooke, Private Banker (Cambridge, Mass., 1936).CrossRefGoogle Scholar Cooke's banking house fell in the attempt to finance the Northern Pacific Railroad across the United States.

21 Cf. Marshall, Alfred, Principles of Economics (ed. 8, London, 1927), p. 429.Google Scholar

22 Op. cit.

23 Chicago, 1914.

24 Cf. Schumpeter's description of the attributes of an “entrepreneur” who undertakes “innovations” (The Theory of Economic Development, ch, ii, sec. 3, and passim).

25 Innis, , Problems of Staple Production in Canada, p. 56.Google Scholar

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27 Viner, Canada's Balance of International Indebtedness, 1900-1913. See also Shortt, Adam, “The Financial Development of British North America, 1840-1867” (Cambridge History of the British Empire, vol. VI, Canada and Newfoundland).Google Scholar

28 Wood, , Borrowing and Business in Australia, p. 5.Google Scholar See also Walker, Eric A., A History of South Africa (London, 1928), p. 209.Google Scholar

29 Condliffe, , New Zealand in the Making, p. 282 and ch. ix passim.Google Scholar

30 Emden, , Randlords, p. 227.Google Scholar

31 Royal Institute of International Affairs, The Problem of International Investment (Oxford, 1937).Google Scholar

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33 Reeves, W. P., The Long White Cloud (ed. 3, London, 1924), pp. 243–4.Google Scholar Condliffe, J. B. (New Zealand in the Making, p. 33)Google Scholar has taken issue with these statements of Reeves; but his own views of the importance, and in many cases of the benefits, of public works are not so very dissimilar (ibid., pp. 270-1 and passim).

34 Report of the Monetary Committee, 1934 (Wellington, Government Printer), para. 296.Google Scholar

35 Shortt, , “The Financial Development of British North America”, p. 376.Google Scholar

36 Innis, , Problems of Staple Production in Canada, p. 80 Google Scholar; also “Problems of Adjustment in Canada” (Journal of Political Economy, vol. XLIII, 12, 1935, p. 802).Google Scholar

37 Smith, Skene, Economic Control (London, 1929).Google Scholar Also mimeographed bulletin on The Orderly Marketing of Australia's Surplus Products through Export Control Boards (Commonwealth Department of Commerce, 1933).Google Scholar This summarizes the experiments of the other Dominions in addition to those of Australia. Also Research Committee of the League for Social Reconstruction, Social Planning for Canada (Toronto, 1935), ch. vi.Google Scholar

38 Hammell, J. E., in a letter to Toronto Saturday Night, 08 21, 1937, p. 22.Google Scholar

39 Jackman, W. T., The Development of Transportation in Modern England (Cambridge, 1916), ch. ix.Google Scholar Also Clapham, J. H., An Economic History of Modern Britain: The Early Railway Age, 1820-1850 (Cambridge, 1926), pp. 396–9.Google Scholar

40 Frankel, S. Herbert, The Railway Policy of South Africa (Johannesburg, 1928), pp. 36–7 and 46.Google Scholar

41 Cf. List, Freidrich, The National System of Political Economy (London, 1885).Google Scholar

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49 See Windeyer, W. J. V., “The Creation of New States” (Studies in the Australian Constitution ed. Portus, G. V., Sydney, 1933, pp. 131–227).Google Scholar

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57 In emergency this reliance may go to extraordinary lengths. An instance is to be found in Newfoundland's voluntary surrender of Dominion status in 1933. As a writer in the Round Table (vol. XXIV, p. 256)Google Scholar put it, “Self government did not die by a murderer's hand; the verdict must be suicide while temporarily insolvent”. See Plumptre, A. F. W., Fraser, A. M., and Innis, H. A., “Newfoundland, Economic and Political” (Canadian Journal of Economics and Political Science, vol. III, 02, 1937, pp. 58–85).CrossRefGoogle Scholar

58 Taylor, K. W., “The Effect of the Ottawa Agreements on Canadian Trade” (Canadian Papers for the Yosemite Conference of the Institute of Pacific Relations, 1936, vol. I, Toronto, 1936, mimeo.).Google Scholar

59 Marshall, Herbert, Southard, F. A., and Taylor, K. W., Canadian-American Industry (Canadian-American Relations Series, Toronto and New Haven, 1936).Google Scholar