Has Canada been Poorer than the US for so long?

A standard stylized fact in Canada is that we are poorer, on average, than the average American. This has been presented as a fact that is as steady as the northern star. But our evidence on Canadian incomes is pretty shoddy prior to 1870 (here I praise M.C. Urquhart for having designed a GNP series that covers from 1870 to 1926 and links up with the official national accounts even if I think there are some improvements that can be brought to measuring output from some key industries and get the deflator right). But what about anything before 1870? There are some estimates for Ontario from 1826 to 1851 by Lewis and Urquhart (great stuff), but Ontario was pretty much the high-income of Canada.

So, can we go further back? This is what my work is about (partially), and I just made available my results on Canadian living standards (proxied by Quebec where the vast majority of the population was) from 1688 to 1775 as captured by welfare ratios. So that’s pretty much the closest we can get to the “founding”. Below are my results derived from this paper. They show that the colonists in Canada were not very much richer than their counterparts in France with the basket meant to capture the meanest of subsistence and roughly equal to their counterparts in France with a basket that includes more manufactured goods like clothing and more alcohol. This explains why most migrants from France to Canada were “volunteered” (in the sense that they were pretty much reluctant migrants) for migration. But the key interesting result is that relative to New England – the poorest of the American colonies – it is poorer regardless of the basket used. Thus, there seems to be truth to the common logic about Canadians being always poorer than the Americans.

comparingcanadane

However, I am not fully convinced of my own results. This may surprise some. The reason is not that I do not trust my data (in fact, I think it is superior to most of what exists for the time given that I will be able to proceed to tons of other data). The reason is simple (and rarely discussed): natives.

Natives are always omitted from the stories of living standards. But they existed nonetheless. In terms of national accounts, if the British and French settlers dispossessed and killed natives, their welfare losses are just not computed. But the welfare losses of a musket shot to the head are real. I have always been convinced that if we could correct estimates of living standards to account for the living standards of natives, the picture would change terribly. The reason is two-fold. The first reason is that the historiography is pretty clear that while they were obviously not nice, the French were nicer than the British towards the Natives (at least until 1763 when the British shifted strategy). In fact, trade between French and Natives was very frequent and so it might be that for the whole population (natives + settlers), the French-area peoples enjoyed more growth and higher average levels. In the British colony, if the settlers killed and dispossessed natives, this is basically the British turning native capital stocks into their own capital stock or into consumption (which would enter settlers GDP but not change total GDP). In essence, this is basically a variation on the arguments of Robert Higgs with regards to measuring the American GDP in World War Two and Albrecht Ritschl on the German interwar growth. I am pretty sure that adjusting for the lives of natives would show a greater level for Canada leading to rough equality between the two colonies. However, I am not sure if the argument would cut that way (my guts say yes) since in their conjectural growth estimates, Mancall and Weiss show that with the natives included, their zero rate of income per capita growth turns into a positive rate.

Nonetheless, I still think that knowing that the settlers were better off in the US as an improvement over the current state of knowledge. Until ways to impute the value of native output and production are found, my current estimates are only a step forward, not the whole nine yards.

Should UNM replace its seal?

The University of New Mexico is under fire to change its seal. The current seal depicts two Spanish conquistadors. This is part of a wider movement asking for universities to remove controversial symbols. This includes calls to rename Calhoun College at Yale, remove Wilson imagery at Princeton, or change the Harvard Law School Crest. This movement is not exclusive to the US. Similar calls are being made to remove perceived symbols of colonialism in South Africa and elsewhere. Nor are these calls exclusive to the political left. Conservatives at my alma mater want to get rid of a Che Guevara mural.

I for one am against these calls.

I am against these calls on the basis that I do not feel college campuses should be safe spaces. Students should be exposed to ideas they may found troubling in college. Students need not embrace these ideas. I am not making the case that we should re-institute slavery or attack the nearest Indian reservation. Students are free to, and I hope, reject these ideas but they should be exposed to them if only so they know their weaknesses.

More importantly though I feel that it whitewashes history. I am against these calls for the same reason I dislike seeing whites celebrate Native American Day. Removing symbols of colonialism or observing an indigenous people’s day are good symbols that efforts are underway to correct historical injustices. However in practice they are a way for people to pat themselves on the back for being socially progressive and little else.

There are many things that could be done to improve the welfare of Indians, but few have the drive to carry them out. Why should they? Instead of changing bad public policy they can get rid of a seal or statue and think they’ve done their part. If they’re particularly lazy they can change their facebook display image to include a rainbow or French flag. Symbols of colonialism should be kept and used to remind people that historical injustices continue to be propagated.

In the specific case of the UNM seal I am concerned that it is too easy for attacks against Spanish conquistadors to be turned into general attacks against the Columbian exchange. The enslavement and massacre of Indians was awful. However it is difficult, especially since I am a mestizo, to believe that the interaction between the two worlds was ultimately for the worse. To the contrary the exchange made the world richer.

Pizza is a prime example of this. Pizza could not exist prior to the Columbian exchange. Europeans lacked tomatoes and native Americans lacked wheat. The first pizza was made in Italy, but even then what most of us think of pizza has its roots in New York City. Pizza is a mestizo, half European half American. If UNM does change its seal it should consider having a native and conquistador sharing a slice.

Columbus Day needs to go, but…

I deplore Columbus Day. It it a state-sponsored celebration of state-sponsored genocide. I argue that it needs to be abolished because Columbus was a bad man with bad motives.

However, there are a number of talking points, put forth by the Left, that are simply wrong and need to be debunked before we can have an honest discussion about why Columbus was such a bad guy.

The conquests of New Spain and Brazil undertaken by Spain and Portugal were state-sponsored, while the slow, eventual westward push by other European peoples were only indirectly sponsored by states (through corporate charters and the like) until the mid-nineteenth century (a time frame of over four centuries). This state sponsorship can largely explain why Latin America is the red-headed stepchild of the West today.

I don’t buy the argument, put forth by Politically Correct Leftists, that the genocide of Native Americans was perpetrated solely by white men and their cunning and guile. This counter-narrative is just as dishonest as the traditional narrative proclaiming Columbus to be a great discoverer. It takes away the agency and the complexity of Native societies with one fell, condescending swoop.

As an example, consider yesterday’s (American) football game between the Cardinals and the Redskins in Phoenix. The owner of the Redskins, under fire for keeping the name ‘Redskins’, invited the current, democratically-elected President of the Navajo nation to watch the game with him and his family. The President and his wife obliged, and wore Redskins gear to accentuate their support for the Redskins owner.

The couple did this while hundreds of anti-Redskins protesters stood outside the stadium with signs and slogans. Native fans brandished signs inside the stadium declaring their support for the Redskins name.

Many appointed Native leaders simply sold their people out to Europeans. Many more thought assimilation between their culture and the Europeans’ would be the better option going forward. Many Native factions actively slaughtered other factions for money, land, or other goods and services.

I often wonder if traditionalists don’t see what Leftists are doing when they deliberately display such a proud ignorance of historical facts. It’s as if traditionalists relish the role of bad guy in society when they play into the dishonest hands of Leftist so-called reformers.

At any rate, here is economist Bryan Caplan on Columbus Day, and here is philosopher Irfan Khawaja. Both are worth reading. Both are libertarian, to one degree or another, and both pieces move well beyond the usual garbage that passes for debate in this country.

What’s Up with New Zealand?

Economist Scott Sumner’s 2010 piece on the unacknowledged success of neoliberalism (which I linked to yesterday and you should definitely read or reread) poses an interesting question:

There are two obvious outliers [to aggressive neoliberal reforms]. Norway, the highest-income country, is much richer than other countries with similar levels of economic freedom, and New Zealand, at 80 on the economic freedom scale and only $27,260 in per capita income (US PPP dollars), is somewhat poorer than expected […] Perhaps New Zealand’s disappointing performance is due to its remote location and its comparative advantage in agriculture holding it back in an increasingly globalized economy in which many governments subsidize farming.

Rather than challenge Sumner’s thoughts as to why New Zealand is much poorer (I think his guess explains a lot), I think I can add to it: The Maori.

The Maori are the indigenous inhabitants of New Zealand, and can be compared – socially – to the Native Americans of the New World or the aborigines of Australia. Unfortunately I know next to nothing about the Maori (or other South Pacific cultures), but I do know how to draw rough inferences about things by using data!

The Maori comprise about 15% of New Zealand’s population, whereas in other states settled by Anglo colonies the population of the natives relative to the overall population of the country is minute (aborigines in Australia comprise 3% of the population, for example, and in Canada and the US the indigenous make up about 2%).

The relatively large percentage of indigenous citizens in New Zealand can better explain why New Zealand is an outlier among rich countries, but I also think it’s important to ask why the Maori (and other indigenous populations in Anglo-settled colonies) have failed to match the demographic trends of their European and Asian counterparts.

Institutions are, to me, the obvious answer, but I’m curious as to what the rest of you think. I’d also like to add that I don’t think enough of us think about the issue of land (as in ‘land, labor and capital’ when we discuss the huge demographic gaps found between – for lack of better terms – settlers and natives in Anglo-American countries).