Skip to content

We could have been a contender

I had a question I wanted to ask philosopher Adam Smith. Smith spent a lot of time thinking about why some countries are rich and others, with the same resources, are poor.
David-RobinsonWEB
David Robinson, Economist, Laurentian University, drobinson@laurentian.ca.

I had a question I wanted to ask philosopher Adam Smith. Smith spent a lot of time thinking about why some countries are rich and others, with the same resources, are poor. I wanted to know how he would explain the terrible economic performance of Northern Ontario.

Unfortunately, Smith is dead. Fortunately, he wrote a book called An Inquiry into the Nature and Causes of the Wealth of Nations. Unfortunately, he never mentioned Northern Ontario. (That might be because there was no Northern Ontario at the time. And no Ontario. And no country called Canada.) Fortunately, Smith has a theory for places like Northern Ontario. According to Smith, Northern Ontario should be getting richer and greater than any other human society!

You probably don’t believe this, so here is the exact quotation from Book IV, Chapter VII, Part II: "The colony of a civilized nation which takes possession either of a waste country, or of one so thinly inhabited that the natives easily give place to the new settlers, advances more rapidly to wealth and greatness than any other human society.”

That is an obvious description of Northern Ontario. It was a waste country and it was so thinly inhabited that the natives easily gave place to the new settlers. According to Smith we should be advancing more rapidly than any other human society.

So what went wrong, Adam, I ask?

Read on, young Davie, and you’ll find the explanation in the next few pages, he replies. So I do.

Smith claims the ancient Greek colonies that had “established themselves in countries inhabited by savage and barbarous nations progressed rapidly.” Why? According to Smith “they were at liberty to manage their own affairs.”

Smith also claims that the English colonies in North America have been more successful than any others. Why? “Plenty of good land, and liberty to manage their own affairs their own way.”

So Smith offers two possible reasons for the poor performance of Northern Ontario. Either the land is no good, or we have not been free to manage our own affairs our own way. Take your pick.

Actually, Smith goes on to say that it is not the land. The Spanish, French and Portuguese colonies had better land than the English colonies. The English colonies had better political institutions. So Smith’s answer to my question is that Northern Ontario has the wrong political system. Northern Ontario is not self-governing.

Adam Smith would probably join the Northern Heritage Party if he were alive today! The man was a bloody radical!

But Smith wrote this stuff more than 238 years ago. Let’s look at a more recent work. Lange, Mahoney, Matthias and vom Hau, for example, talk about how colonialism reversed the development pattern in much of the non-European world. Prosperous areas were dragged down, but the sparsely populated, underdeveloped areas often became relatively successful countries. This is not too different from what Adam Smith saw happening more than 200 years ago.

In the prosperous areas the colonial powers simply took over — they set up their own governmental structures and started pumping resources out. The regions where Europeans settled were generally thinly populated like Northern Ontario. As the settler populations grew they expected to have a say in running their new lands (often newly stolen) and they expected to keep most of the wealth they produced. This is not like Northern Ontario. Northern Ontario became a settler economy without self-government, where the goal of the European colonial power (which turned out to be Toronto) was to extract as much wealth as possible.

In successful settler states, land policies reinforced small land owners and prevented the formation of powerful elites. Monopolistic control of resources was blocked.

Northern Ontario’s forest tenure system is exactly the opposite of what worked for the successful states. Big companies control the land base. Economically it resembles the plantation system of the southern U.S. or the giant estates of Latin South America. Those systems retarded development.

So, Adam, are you happy to know that recent research on colonialism supports your theory about what makes some nations do well?

And one more thing, Adam: could we get you to do a speaking tour in Northern Ontario?