On Models of the Wheat Boom in Canadian Economic History

Mention of Canadian economic history almost always elicits the knowing response of ‘Ah, yes, the Innis staple theory’, or its variant, ‘the Toronto staple theory’. More than a decade ago Hugh Aitken pointed out that this ‘theory’ had nothing to do with any testable proposition in economics, and the point bears repeating. Innis’s magnificent works on the cod fishery and the fur trade stand with Eileen Power’s lectures on The Wool Trade in English Medieval History and L. C. Gray’s History of Agriculture in the Southern United States to 1860 as classics in the histories of staple economies. These authors’ interest was not only, nor even mainly, in economic growth, but rather in the relationship between the economics of the staple product and the development of institutional structures, especially political, legal, and financial institutions. The hallmark of Innis’s work in particular was his fascination with the unintended by-products of economic life. To the extent that there is any ‘theory’ embedded in these classic studies of staple products it is a theory of institutional development, not of economic growth. Yet today, the hackneyed ‘staple theory’, as used in the Canadian context, seems to imply, if it means anything at all, a theory of Canadian economic growth, or, even worse, a Canadian theory of economic growth. I wish for it only oblivion.