The Power and the Money

How Canada stopped being British

Montreal is a fascinating place. And so, in honor of being here, a few random Canadian posts.

You may be aware of the recent Australian citizenship kerfuffle. Basically, the Australian constitution prevents anyone with double-citizenship from holding public office. The exact phrase is, “Is under any acknowledgement of allegiance, obedience, or adherence to a foreign power, or is a subject or a citizen or entitled to the rights or privileges of a subject or citizen of a foreign power.”

That is a little weird. As is the fact that the Australian high court held that it was enough to be eligible for foreign citizenship. Weirder still is that people appear to have only recently realized that this clause exists, and so a number of politicians have had to resign.

But what really struck me was the identity of three of the four “foreign powers” causing the trouble: New Zealand, Canada, and Britain. (Plus Italy.) None of these were foreign in 1901, when the Australian constitution was written. Anyone born in Canada, Australia, New Zealand, South Africa, or Newfoundland was a natural-born British subject. (The link goes to the British Nationality Act of 1914, versions of which also passed in all the Dominions.)

Today, though, Australian law treats all the former dominions (including Ireland, which was grandfathered in at independence) as completely foreign countries. Since 1984, Commonwealth citizens have had no benefits in Australia, although they are still allowed to vote if they arrived before that year. In Canada, Commonwealth citizenship also confers no benefits of which I am aware. In the U.K. itself, there are a few.

So, in honor of the fact that I am in Montreal, when did Canadians stop being British? Well, the short answer is 1946, when Canada passed the Citizenship Act. Except that is not quite right! The separation started earlier and took longer to complete.

The Canadian government first limited the right of Britons to settle in Canada in 1910, under the Canadian Immigration Act of 1910. The act allowed the government to deport immigrants who were “unsuited to the climate or requirements of Canada” or who had traveled courtesy of a charitable organization. The first requirement was laser-aimed at black Americans; the second at poor Britons. The act introduced the phrase  “Canadian citizen” which included “a British subject who has Canadian domicile” but which also made it clear that such domicile was not automatic. 

Ironically, the Canadian attempt to discourage Britons from emigrating flipped to encouragement after WW1, when the Empire Settlement Act of 1922 authorized Parliament to spend up to £3 million per year, the equivalent of roughly C$167 million today. Canada wanted Britons, you see, but only the right sort of Briton. 

In 1921, the Canadian Nationals Act defined Canadian nationals as British subjects who were born in Canada or who legally resided in Canada for more than five years. Weirdly, anyone naturalized in Canada would become British subject able to freely move to Britain, but being a British subject did not mean that you automatically had the right to move to Canada. 

So there was a de facto Canadian citizenship in place well before 1946.

Moreover, the special place of British subjects did not disappear after 1946. British subjects could still vote in Canadian elections after only one year of legal residency. In fact, British subjects Commonwealth citizens didn’t lose the right to vote in federal elections until the Canada Elections Act of 1970; even then, they could vote in provincial elections in B.C. and Ontario until 1985, New Brunswick until 1999, and Nova Scotia until 2006. (See pages 12-13.*) 

The slow distancing of Canada from the United Kingdom seems to have been an entirely unplanned thing. I would have thought that Québécois opinion had a lot to do with that, but I would be wrong. London just kept handing off autonomy to its North American colonies bit by bit. Each bit of devolution became harder to reverse. Moreover, London refused to graft any institutional meat onto the rotting bones of its Empire, forestalling any chance that the Commonwealth might turn itself into something like NATO or the E.U. or even a glorified free trade zone.

My current hypothesis is that the key decision was to grant the Dominions the right to set trade policy. Once they had that, they had interest groups that would refuse to reverse integration in that key sector. Add to that a very understandable reluctance to get the colonies to contribute towards their own defense and you had nothing but straight decline into irrelevance. In other words, socialist beer destroyed the British Empire.

Still, it is sort of amazing just how weak the links have become between the U.K. and its settler colonies, the ones that didn’t fight a war of independence.

* Willem Maas, “Access to Electoral Rights Canada,” Access to Electoral Rights Report RSCAS/EUDO-CIT-ER 2015/9 (July 2015). 

Uruguay and New Zealand: Never alike?

So here I am in Uruguay! Getting here was a bit more involved than I had hoped. My Copa flight gave me 45 minutes to change planes in Panama City, but thunderstorms delayed our departure from Dulles for about that long, and that was that. Overnight in Panama.

In a previous post, I showed evidence that Uruguay and New Zealand were very similar in terms of their geographic endowment (meaning lots of great grazing lands) but Uruguayan farners failed to adopt technological innovations that their New Zealander cousins took up with abandon. I asked why and got two good hypothesis: Shah8 suggested that New Zealanders were more integrated with Australia and had access to cheaper capital, while Sam pointed out that Uruguayans were far less educated than New Zealanders in 1900.

Well, there is another possibility. In the late 19th and early 20th centuries there were two ways to generate large-scale energy: burn a fossil fuel or dam a river. But Uruguay is flat, with no natural lakes, and it receives only 75% as much rainfall. Moreover, that rainfall is more erratic. Reto Bertoni and Henry Willeband (Universidad de la República) noticed that difference, and gathered hydro cost data for the two countries. And they found this circa 1920 (page 25):

Capital costs for hydropower in Uruguay were triple their level in New Zealand; operating costs (for all electric power plants) were double. And if you consider Shah8’s conjecture that capital was scarcer in Uruguay, then the levelized capital cost relative to N.Z. will be even higher than these figures imply.

New Zealand and Uruguay were very much unalike in one key respect — hydropower resources. But two quibbles. First, hydro was not the only source of power. The Uruguayans could have burned coal. Second, did energy matter that much? Sure, it cost more than in New Zealand, but that does not mean that those higher costs mattered in countries dependent on agriculture. 

Thoughts?

Escapism: A 19th-Century science fiction novel and a 21st-Century science fiction TV series

 First, this is the weirdest thing that I have ever read. It’s a science fiction novel from 1889. It’s badly-written. (I mean, it’s badly-written for 1889. For comparison, A Connecticut Yankee in King Arthur’s Court was published around the same time.) The technological extrapolations are weird and wrong and barely affect the plot, which concerns bizarre machinations around the succession to the British Empire and some weird-ass scheme where the President of the United States is trying to marry off her daughter to the Emperor. It ends with Canada beating the U.S. in a war.

Anyway. Why did I read it? Well, besides insomnia most of the major characters are women, and women who were not trying to impress a man. That is pathetically rare, even today, let alone 1889. Plus the author went out of his way to point out all the awesome people in the book who just also happened to be Jewish. For something so old-fashioned, it was also strikingly modern.

Second, I finished watching Occupied on Netflix. I recommend it! The main scenario is improbable, but slightly significantly less so than before November 8th. An energy-independent U.S. has pulled out of NATO and established a valued relationship with the Russian Federation. In the midst of a massive surge in energy prices prompted by wars in the Middle East, a Green government in Norway decides to shut down the country’s oil and gas production in order to combat climate change. Panicky Europeans green-light a Russian seizure of the Norwegian fields to restart production. The Norwegian prime minister reluctantly allows this in order to avoid a war, but his county finds itself entrapped in a slow-motion conquest as the Russians slowly assume more-and-more authority. 

It is quite well done. My only quibble? Well, whoever plays the American ambassador to Norway has a Canadian accent. You know, with that weird caught=cot sound you can hear from Justin Trudeau. Given that a pretty massive plurality of Canadians don’t have a recognizable Canadian accent, it’s an impressive bit of miscasting. (If somebody finds out that the actor who plays the ambassador is actually from Massachusetts, I will be embarrassed.)

The accent screw-up is all the more inexplicable considering how good British and Australian actors have gotten at mimicking spot-on American accents, even American regional accents.

But not Russell Crowe. See minute 1:12 in this clip from an otherwise great movie. Points to the person who guesses the word he screws up in the context of getting everything else right. The mess-up is all the more pronounced considering as he is in a scene with Denzel Washington, who has a perfect New York accent considering as that is how he naturally talks.

Actually, a television show about a Russian occupation of Norway might not be all that escapist these days, considering. 

The U.S. would not have had a better constitution without the Revolution

Dylan Matthews’ third point in his screed about why the American Revolution was a mistake is that without the Revolution, we would have had a Westminster-style parliamentary government, and parliamentary governments are better.

I grant the point about parliamentary government. The U.S. constitution is a mess, at least as a governing document. It sets up multiple veto points and is quite unsuited to disciplined, ideological parties. The Canadian constitution, as it currently stands, works quite a lot better.

But the United States would not get the current Canadian constitution if we had not fought the Revolution.

Consider the Canadian constitution as it stood in 1867. It possessed this giant monstrosity called the Senate: an appointed chamber deliberately set up to represent the regions and throw sand into the legislative gears. And the Senate did just that! Occasionally, it rejected major reforms: in 1926, for example, the Senate axed Canada’s first attempt at a social security system. 

The Canadian senate, however, soon became remarkably deferential to the lower house. (For example, the failed 1926 social security bill sailed through unchanged the next year.) That is in part because the Prime Minister can appoint more senators, but mostly it is because the institution does not have the legitimacy to use its de jure powers to the fullest. It is not quite the House of Lords, but it’s close.

Now imagine designing a constitution for a British North America that includes a bunch of slaveholding states provinces. One might imagine that you would get an institution rather like the Canadian senate. But does anyone believe that politicians from the slave states provinces would hesitate to use every power at their disposal to protect their control? The end result would be an upper house that would be even more of a dog’s breakfast than our own.

And that assumes that you even get a united British North America without the Revolution! I will admit, it seems likely that the British colonies would eventually federate. But I mostly think that because Canada, Australia and South Africa eventually did federate, even if New Zealand and Rhodesia kept out of the latter two. Blind analogy is probably not a good reason to assume that British North America would go the same way.

Having North America divided into ... uh .... somewhere between 13 and 16 different autonomous entities under the British crown is not a recipe for good government. Give me the Senate instead of balkanization! Hell, give me the even messier constitutional wreck that is the European Union. 

In other words, claiming that North America would have had a better constitution absent the Revolution is ahistorical smoke blowing. Wasn’t gonna happen. 

Uruguay and New Zealand: no copying allowed?

 I am currently starting a project that will (well, may) end with a comparison of Argentina and Canada. Along with Argentina and Australia, that is a comparison that many scholars have noted, even if the literature so far has shed less light on the mystery of Argentine failure than one might have expected. 

A recent paper by Jorge Álvarez Scanniello, however, notes an even better comparison: Uruguay and New Zealand. (Apologies to all for also putting this post under the “Argentina” tag. I did it for future reference, at least until Typepad develops a widget for nested topic searches. In my defense, many Argentines are still unclear on the fact that Uruguay is a country.) Moreover, the paper focusses in on livestock. So it is a one-industry comparison between two like countries. 

How similar were they? Well, here is chart of livestock exports as a % of all exports:

OK, so far, so similar. But maybe they exported to different markets or had different trade preferences, and therefore maybe experienced different economic shocks? Well, here are their terms of trade:

Pretty correlated until the 1990s, by which point Uruguay had already fallen from 80% of New Zealand’s income per capita circa 1925 to only 50%.

Well, maybe New Zealand was just a better place for cows and sheep?

 

Line 1 is the ratio of New Zealand’s “meat equivalent” per hectare to Uruguay’s. It is about the same until 1930, which is when (not coincidentally) N.Z. starts to pull away in the income tables. The other three measures do not go back as far (for details, page 6) but show the same post-1930 trend. Basically, the two places look about as good for cows until 1930, when New Zealand becomes a lot better.

So what happened?

Well, the paper has only hypotheses, but they are interesting. In New Zealand, university botanists in 1920-40 developed better strains of ryegrass combined with clover that could fix nitrogen and reduce fertilizer use. So, better pasture. Then, in 1940-66 the country started using aerial topdressing (dropping fertilizer from airplanes) combined with a great deal of government investment in things like rural roads and electrification. 

In Uruguay, well, they saw what was happening in New Zealand. In 1951, Uruguay sent a team of experts to New Zealand to copy their technology for improving grasslands, but it never really went anywhere, with improved lands stalled out at 12% if the total around 1975. (Graph 10.) Why? Well, results on improved lands seemed to fall behind those in New Zealand. Since farmers were not really making more money, they stopped bothering.

In other words, something stopped Uruguay both from developing its own indigenous technology and from successfully adopting techniques from New Zealand.

What could that block have been?

How socialist beer destroyed the British Empire

 A long time ago, an internet forum that I was involved with considered how the world would have been different had the settler colonies of the British Empire been able to hold themselves together into some sort of federation. Imagine a 125 million-strong country consisting of Canada, the British Isles and Australasia. A federated Commonwealth might not quite have gotten out of World War 2 as a superpower but it would have been much more of an equal to the United States. 

To a casual observer, in fact, it seems a bit mysterious that the U.K. allowed colonies whose initial settlement came overwhelmingly from Britain (save Canada) to just drift away. Why not give them seats in Parliament and keep the new territories in the fold? 

Well, one thing that surprised me is just how early Britain began allowing the settler colonies to impose their own tariffs. Even before responsible self-government, for example, New South Wales began taxing imports from Great Britain. Up until 1843 imports from the U.K. received preferential access ... but they still paid tariffs. And after 1843, tariffs had to apply equally to imports from everywhere in the Empire. That had the effect of ratcheting up tariffs on British goods, rather than (as London seemed to hope) lowering rates on imports from India. 

One of the things that made Imperial Federation a nonstarter was that the Dominions, by the late-19th-century generally democratic and self-governing (I am going to ignore the abominable Union of South Africa) had little desire to fight the political battles necessary to create a common Imperial economic space. Moreover, the U.K. had pledged to defend them and was seen as unlikely to renege on that commitment. So why pay more for Imperial defense when the U.K. taxpayer was going to pay for most of your defense for you? Even in retrospect that proved to be a pretty good deal: sure, the U.K. failed to defend Australia in any serious way in WW2, but it seems unlikely that an Imperial Federation would have been able to devote more resources to the south Pacific than our far-less-organized British Empire actually managed. 

But how did those Dominions come to have their own trade policies? Well, here it gets strange: London seems to have actively encouraged them to tax imports and set up local industries.

Consider Australia. New South Wales (NSW) started taxing alcohol imports in 1800; alcohol was the obvious thing to tax and most booze was imported, so the tariffs were also, in fact, the first taxes in the country. (Raised to pay for a pair of jails, which seems somehow ironic.) The import taxes rapidly gave rise to import substitution ... directly financed by the government in London. “The introduction of beer into general use among the inhabitants would certainly lessen consumption of spiritous liquors,” wrote the colonial secretary in 1802 (page 7). “I have therefore in conformity with your suggestion taken measures for furnishing the colony with a supply of ten tons of Porter, six bags of hops and two complete sets of brewing materials.”

Sadly, the subsidized importation of brewing equipment by the authorities back in London failed, so the colonial government set up its own brewery in 1804. In 1821, the British Parliament cut the alcohol tax on alcohol distilled in NSW from £0.50 to £0.13 while leaving the tax unchanged on imported spirits. 

You got that right: parliamentarians in London kick-started import substitution in New South Wales. In 1827 they added insult to injury by taking a 5% duty on manufactured imports from places other than Britain and extending it to Britain. 

Er?

Eventually the Australian colonies gained self-government, but by the then the urge to protect was well-established. South Australia separated from NSW in 1836; by 1846 it had ad valorem tariffs on even more goods than NSW. Victoria separated from NSW in 1851; by 1859 it had an organized “Tariff League” and in 1866 there came an openly protectionist Customs Act designed to promote the local manufacture of textiles, hats, leather goods, woodenware, furniture, toys, woollen blankets and rugs, glass and glassware, earthenware and porcelain. (Page 9.) Cigarettes soon followed. 

By this point, Australia was clearly on its own economic policy path. Even had London been able to get its act together about inviting Dominion representatives into the Parliament, the negotiations would have been difficult. It is more surprising that the Australian colonies managed to knit themselves together into the Commonwealth of Australia than that they failed to build lasting economic links to Britain.

One has to wonder if things would have been different had British bureaucrats been more proactive about keep Oz and Albion in the same economic space. More concretely, I have to wonder why those self-same bureaucrats put Australia on the road to economic independence, to the point of passing an Act of Parliament. It seems strange and goes beyond simply wanting to make the Dominions self-financing. (Which they never were, if you count the cost of imperial defense.) 

I understand why once you had local booze, independence was near inevitable. What I don’t understand is why London wanted them to have their own booze. But either way, the first sign of the inevitable end of the British Commonwealth came when that first Ozzie cracked open that first locally-brewed government beer. 

A lesson for China from Australian history?

 If ever there was a country less likely to provide useful lessons for China, it is Australia. Australia has always been underpopulated. It is practically the platonic ideal of a settler colony, having wiped out the locals far more thoroughly than its American counterparts. The settlers brought British institutions with them and then improved them: in humanity’s slow move towards democracy and the rule-of-law, Oz has always been on the forefront.

But there is one thing that past Australia shared with future China: a huge imbalance of men over women!

There has been a lot of blather about China’s sex-imbalance, most recently in the Washington Post. In the words of our co-blogger, Doug Muir: 

I’ve been reading variants of that article since well back in the Clinton administration. Is anyone aware of any hard evidence linking skewed sex ratios to a more aggressive foreign policy? Because AFAIK there is none, which makes these articles Just So stories justifying another round of yellow peril pearl-clutching.

I note that China’s oldest sex-skewed cohorts are in their thirties now. So far, the major effects seem to be a rise in prostitution and a lot more time spent on the internet. Both negative social consequences to be sure, but a long way from the Tong Wars and “virile” foreign policy these two dopes are going on about.

So what did an unbalanced sex ratio do in Australia? Well, Pauline Grosjean and Rose Khattar of the University of New South Wales decided to take a look! Their findings:

We document the implications of missing women in the short and long run. We exploit a natural historical experiment, which sent large numbers of male convicts and far fewer female convicts to Australia in the 18th and 19th century. In areas with higher gender imbalance, women historically married more, worked less, and were less likely to occupy high-rank occupations. Today, people living in those areas have more conservative attitudes towards women working and women are still less likely to have high-ranking occupations. We document the role of vertical cultural transmission and of homogamy in the marriage market in sustaining cultural persistence. Conservative gender norms may have been beneficial historically, but are no longer necessarily so. Historical gender imbalance is associated with an aggregate income loss estimated at $800 per year, per person. Our results are robust to a wide array of geographic, historical and present-day controls, including migration and state fixed effects, and to instrumenting the overall sex ratio by the sex ratio among convicts.

In other words, the historical evidence does not point to a future of gang warfare and foreign adventurism. Rather, China will be more traditional, more married, and slightly poorer than it would have been otherwise. And if the lessons from the West and Latin America hold, the result of that will also counterintuitively be a much lower birthrate than in more gender-equal countries.

China in 2050? A big giant Queensland! But with robots. 

This is not as sexy as a Venezuelan-style crime wave combined with an invasion of Siberia, or whatever. But it has the advantage of being grounded in this thing we historians call evidence.