The Development of “Lands of Recent Settlement”
Summary and Keywords
Lands of recent settlement refers to countries settled predominantly by European migration during the nineteenth and twentieth centuries, such as the United States, Canada, Argentina, Uruguay, Australia, and New Zealand. Current scholarship on the lands of recent settlement reveals a very active agenda of comparative studies covering a broad range of areas and issues: culture, institutions, gender, ethnicity, labor, national identity, geography, ecology, environment, noneconomic factors of growth, and transnationalization and globalization. In explaining the different levels of development between lands of recent settlement and the rest of the world, traditional explanations pointed to propitious external factors and factor endowments. These explanations include the analysis of the history of the United States based on the notion of “frontier development” and the staple theory of growth. Meanwhile, recent works debate whether institutions, culture, or geography plays a crucial role. These works focus on the social, domestic, geographic, and biological elements of development, the cultural and institutional legacy of colonialism, as well as questions on gender, ethnic, and national identity. Although they do not reject the importance of foreign demand, capital, and labor in explaining the development of the lands of recent settlement, they question the adequacy of interpretations based solely on economic factors. Ultimately, the most important contribution of the study of development of lands of recent settlement is in the area of an analysis of transnational networks and globalization.
The term lands of recent settlement refers to those countries settled predominantly by European migration during the nineteenth and twentieth centuries such as the United States, Canada, Argentina, Uruguay, Australia, and New Zealand. They are located in the temperate latitudes of the world and were endowed with vast, fertile, and virtually empty areas readily available for farming, grazing, and mining. Between 1850 and 1914, they received large flows of capital and immigrants and grew in response to the demand for primary products resulting from the industrialization of Western Europe. The lands of recent settlement enjoyed remarkable developmental success, and this translated into the generation of wealth. Income levels measured in per capita terms and standards of living were among the highest in the world. Several other terms have been used to refer to these countries: “new lands,” “new countries,” “open spaces,” “dominion capitalist societies,” “frontier societies,” “settler societies,” and “regions of recent settlement” (Nurkse 1954; Baldwin 1956; Goodrich 1964; Hartz 1964; Ferns 1973; McCarty 1973; Fogarty 1981; Armstrong 1983; Denoon 1983; Wynn 1983). The lack of agreement on a common definition reflects the relatively recent nature of comparative studies on this topic. During the 1980s Platt and Di Tella called to coordinate the work of scholars from a broad range of disciplines and countries. Their efforts resulted in three prodigious volumes (Platt and Di Tella 1985; Di Tella and Platt 1986; Platt 1989) and influenced other works (Duncan and Fogarty 1984; Dingle and Merrett 1985; Korol 1991; Adelman 1994; Taylor 1994).
While there is a consensus that the United States, Canada, Argentina, Australia, New Zealand, and Uruguay constitute a coherent set, there is disagreement over whether additional countries qualify in this group. Nurkse (1954) includes South Africa and southern Brazil in this group, Di Tella (1985) favors including Russia’s Siberia, and Denoon (1983) adds Chile. The choice lies in identifying either nation-states or regions within countries as lands of recent settlement. This is of theoretical and analytical importance. At the nation-state level, the development of a particular region was often accompanied by the stagnation and even decline of other regions in the country. The south of the United States, the Canadian Maritime provinces, and the Argentine northwest actually declined between 1860 and 1914. The equilibrium between regions was severely upset when the poles of growth shifted in the nineteenth and twentieth centuries. It is evident that even in countries where the legacy of serfdom, slavery, and subsistence agriculture persisted such as Brazil, Chile, Russia, and South Africa, particular regions went through development experiences similar to the characteristics described here, and thus deserve consideration as lands of recent settlement.
From a historical perspective, the lands of recent settlement were not new and, although sparsely populated, not empty. With the exceptions of Australia and New Zealand, not explored by Europeans until the seventeenth century, European powers had explored and settled parts of them early on. Moreover, these countries had been inhabited by indigenous peoples long before that. Even though Spanish, Portuguese, French, Dutch, and British explorers had laid claim to these areas as early as the fifteenth century, European settlements were confined to a narrow strip of land along the seaboards, leaving vast extensions of the interiors largely unexplored and virtually unexploited. Given the available shipping technology of the day, no profitable trade could develop to justify the costs of sustaining continuous settlement in these remote lands. In 1966 Blainey argued that Australia needed to offer a profitable export opportunity before it would be attractive to European settlers. His thesis is particularly illustrative of the point that the lands of recent settlement needed a favorable external economic conjuncture to integrate into the world economy. Such an opportunity arose in the second half of the nineteenth century. As increased demand for foodstuffs and raw materials raised prices in European markets, alternative sources were sought in the periphery of the world economy. Technical improvements began to make overseas and continental transportation easier, faster, and cheaper. Moreover, land prices were comparatively lower in these countries and weighed lightly on the production costs. This all compounded to give them a competitive edge in underselling “old settlement” countries such as Prussia, India, or the United Kingdom in European grain and meat markets.
The lands of recent settlement would find a dynamic new role in the expansion of the second half of the nineteenth century. First, they became integrated into the world economy as the most efficient providers of primary products needed for the industrialization of Western Europe. Second, they in turn became consumers of European manufactured goods and capital. Their previous limited import capacity was expanded by rising export earnings and new investment opportunities in basic infrastructure developed everywhere (mainly but not exclusively in railroads). Third, they served as a magnet for surplus population predominantly from Europe. Immigrants not only provided the necessary labor to fuel the expansion but also created thriving internal markets, thus assuring that this dynamism was propagated throughout their new societies. Consistent with the principle of comparative advantage, they specialized in those products which intensively used the most abundant productive factor: land. Entering such a virtuous growth cycle promised to reap endless windfalls. For all these reasons, many authors viewed these lands with optimism and great promise. As Adelman (1994) noted, by the turn of the twentieth century, few doubted the advantages of integrating peripheral regions into a burgeoning world economy. After World War II, Hirschman (1958), Nurkse (1962), and Lewis (1978) pointed to the experience of the lands of recent settlement as the classic example of development based on integration into the world economy.
These countries did not have to overcome major obstacles presented by preexisting institutions or strongly embedded traditions of rural labor; free labor was the dominant form of production. Where subsistence agriculture persisted, it was absorbed into the market. Of further importance, these countries did not have to deal with a large peasant element. The absence of inhibiting traditions meant that the spread of capitalist relationships could continue unimpeded and these countries could make efficient or optimal use of their resources. They were what McCarty (1973) called the purest examples that history offers of capitalistic societies.
Immigrants settled in large numbers, attracted by the promise of high per capita incomes and upward social mobility. Aided by large volumes of immigrants, the countries’ populations expanded and settled on vast, resource-rich territories. Where native aborigines were encountered, they were rounded up and eventually suppressed. This process of displacement was facilitated by the fact that in contrast to other experiences (China, India, Mexico, or Peru), native peoples were not established in centralized empires. Although the majority of immigrants came from Europe, significant numbers came from East Asia (China and Japan), the Middle East (Syria, Lebanon, and Palestine), and Africa. As will be discussed later, recent studies reveal the depth of the immigrant experience of the lands of recent settlement. Between 1850 and 1914, they received more immigrants than did any other countries in the world.
Population densities did not rise sharply under the impact of migration because of the vast size of these countries. The new inhabitants (newcomers and newborns alike) were diluted in vast territories. This characteristic is even more startling given the magnitude of population growth in this period. Large net migration balances coupled with exceptionally high birth rates increased populations rapidly. The impact of migration was also revealed in labor force participation rates, urban growth, and population distribution. The share of adult males in the labor force was much higher in these countries due to migration. There was also a strong correlation between high rates of economically active population and high economic growth. Some regions in these countries noted the presence of immigrants more than others because immigrants tended to follow distinct settlement patterns. Many of them decided to stay in their ports of entry. As a result, urbanization increased rapidly. Urban population surpassed rural population earlier relative to most industrialized economies in Europe.
This entry is organized as follows: first, it reviews important works in a long tradition from Adam Smith to the staple theory of growth which highlight the characteristics that make the development of lands of recent settlement distinct. More recent interpretations and debates are reviewed next. These works help to identify issues that may have an impact on the key question of why their development experiences differed so greatly. More importantly, they help to identify future areas of research. Finally, this entry concludes with a critical assessment of the wider implications of the study of development of lands of recent settlement and suggests new lines of inquiry.
Early Explanations in Classical Works: Smith, de Tocqueville, and the Marxist Tradition
Many authors from the classic tradition paid particular attention to the study of lands of recent settlement. Arguments were started by the realization of differences in economic and political performance within Europe and between Europe and other parts of the world which became evident in the eighteenth and nineteenth centuries. The lands of recent settlement did not fit the established notions of non-European development. The common theoretical conclusion was that the lands of recent settlement will develop along a path of efficient capitalism and democracy. This proposition evolved from several contributions which attempted to explain the differences in the economic and political development of countries on the basis of their resource endowment, political institutions, and culture.
In The Wealth of Nations (1776/2000), Adam Smith used the now famous expression “waste countries” to refer to the new world colonies. He concluded that “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.” Simply put, new settlements in open spaces were more prosperous than colonies in which a more advanced population exploited labor of a preexisting society or even their places of origin. Smith believed that the United States’ original colonies were the typical case, but he also found other historical support for his proposition. He stated that the first settlement by European colonists in North America was not an altogether new development since Greece and Rome had followed this policy before. To illustrate this point, Smith compared Greek colonies to Roman conquests. Greek colonies not only were more advanced than the conquered provinces which had been fully inhabited before the Roman invasion, but also in many cases had grown to surpass their mother cities in Greece. This situation, he believed, characterized the European colonies in North America. The progress of the settlement colonies had been very rapid, and they had great potential for continued growth. New settlers carried with them some notion of law and government (regular administration of justice, regular government, and a system of laws), and thus laid out the basic foundations for progress and civilization. Land was so cheap and so readily available in relation to labor that salaries would be high and laborers would have easier access to the land. Compared to Europe, laborers could get more land than they could possibly work, and they did not have to pay rent or work for a landlord. They had every incentive to work as hard as they could for themselves. However, given that land was so abundant, its exploitation required more labor in order to make the most of it. Labor was scarce and expensive, but producers were willing to pay high wages to get more land into production. This encouraged laborers to become “landlords themselves, and to reward, with equal liberality, other laborers” (Smith 1776/2000). Moreover, it created the conditions for amicable relations between landlords and capitalists on the one hand and workers on the other. “The high wages of labour encourage population. The cheapness and plenty of good land encourage improvement, and enable the proprietor to pay those high wages” (Smith 1776/2000). Smith (1776/2000) found in this the reason for the prosperity of the new settlement colonies and concluded with an optimistic note about their future: “what encourages the progress of population and improvement, encourages that of real wealth and greatness.”
Alexis de Tocqueville drew similar conclusions, although he was more interested in the political outcomes of the new European settlement colonies. Furthermore, he emphasized the role that culture played in the process, which further differentiates him from other authors reviewed here. In Democracy in America (1835–40/2004), he argued that the United States enjoyed a democratic republic not only because of the wisdom of its Constitution and its laws but also because of its natural endowment. Of this, de Tocqueville wrote that “in the United States, not legislation alone is democratic, for Nature itself seems to work for the people.” Not just luck played a part, for, as de Tocqueville pointed out, historical circumstances had a significant bearing as well. Almost from the very beginning, aristocratic classes or privileges did not inhibit the growth of economy or democracy in the United States. A high land-labor ratio favored the formation of an extensive middle class of farmers which constituted the basis of both an egalitarian democracy and a vigorous internal market. Land was broken up into small plots which the owner himself cultivated. In this setting, a new political situation developed “not the aristocratic freedom of their [i.e., the immigrants’] motherland, but a middle-class and democratic freedom” (1835–40/2004).
Alexis de Tocqueville also compared the settlement colonies in North America with the Spanish and Portuguese colonies in South America, where different forms of forced labor systems were created. Both the Spanish and the Portuguese had encountered vast centralized empires in control of the land and then proceeded to destroy them and subjugate the numerous populations. In North America, the French and the British had found mostly nomadic tribes who did not engage in any systematic exploitation of the land. In this respect, de Tocqueville echoes later analyses of the lands of recent settlement, as in his words “one could still properly call North America an empty continent, a deserted land waiting for inhabitants” (1835–40/2004). However, he believed that the difference between the economic and political development paths of the North and South American colonies was to be found not in nature or in the laws but in what he called the “mores,” a factor that current authors would identify as culture.
There is not a specific hypothesis on the relationship between factor endowment and economic and political developments in the Marxist tradition. The most enduring work on colonialism by Karl Marx and Frederick Engels, and later V.I. Lenin, Leon Trotsky, and Rosa Luxemburg, focused on the dynamics of imperialism. It is important to note that Marxism did not ignore the particular relationship between labor, land, and development. However, the study of the lands of recent settlement generated a limited number of references.
In Capital, Marx (1867–94/n.d.) discussed the modern theory of colonization. He distinguished between colonies of European settlers and colonies inhabited by a native population and subjugated by European powers. Marx defined “real colonies” as those possessing “virgin soils, colonised by free immigrants.” He included Canada, the United States, and Australia in this category. Thus, he defined settlement colonies on the basis of two characteristics: free land and free labor. “The essence of the free colony, consists in this – that the bulk of the soil is still public property, and every settler on it therefore can turn part of it into his private property and individual means of production, without hindering the later settlers in the same operation.”
In the settlement colonies, a new condition develops: capital faces the resistance of independent producers. It is a condition characterized by the lack of precapitalist residues and the emergence of a large number of independent laborers who are property owners and work for their own advancement. This creates the absence of a “class of wage-labourers.” In fact, Marx (1867–94/n.d.) claims that as long as “the labourer can accumulate for himself – and this he can do so long as he remains possessor of his means of production – capitalist accumulation and the capitalist mode of production are impossible.” Having recognized this threat, colonial rule moved in to regulate colonization in order to reproduce the social conditions of the mother country.
For Marx, it is the abundance of ample, cheap land that makes these new colonies so different. Land is public and easily available. Settlement is undertaken by free men, not slaves, and each individual is able to employ his own labor to his own advantage. Labor is dear because men are scarce. Marx notes that agriculture and industry are not two totally separate activities in the colonies, unlike in Europe, where the destruction of the household industry had taken place. Laborers divide their time between farming and many other occupations; they are carpenters, shoemakers, weavers, and spinners as well.
Historically, the impact of the lands of recent settlement in the world economy was so profound that it moved Engels to predict the demise of the landed classes in Europe. He said that technological improvements such as steamships and railroads had combined to incorporate vast new lands into exploitation to compete in European markets. The new lands he was referring to were the North American prairies and the Argentine pampas. These were “plains cleared for the plough by Nature itself, and virgin soil which offered rich harvests for years to come even with primitive cultivation and without fertilisers.” Engels was confident that these new competitors would drive European landlords out of existence.
Population in the settlement colonies increased more quickly than in the mother country because of immigration. Immigrants came in search of free land and high wages. Then, as Marx (1867–94/n.d.) noted, a paradoxical situation arises: immigrants enter the labor market as “ready-made adults, and yet the labour-market is always understocked.” Two separate factors explain this: social mobility and a seemingly endless supply of land. Wage workers are in a constant state of social mobility, and the high salaries they are afforded allow them to move into the role of independent producers (farmers, artisans, and the like). For Marx, this situation entails a low degree of social exploitation. Labor remains scarce, salaries are high, and mobility is the norm. As labor scarcity is perpetuated, there is a dispersion of producers and wealth. For example, in the United States wave after wave of immigrants moved west in pursuit of a never-ending frontier. The other side of this process was that labor always remained scarce. Marx regarded this development as a crucial difference between the United States and Europe, where a large pool of unemployed labor was always available. In the words of Baran (quoted in Denoon 1983),
One cannot distinguish sharply enough between the impact of Western Europe’s entrance into North America (and Australia and New Zealand) on one side, and the “opening up” by Western Capitalism of Asia, Africa and Eastern Europe. In the former case Western Europeans entered more or less complete societal vacua, and settled in those areas […] They came to the new land with “capitalism in their bones” […] From the outset capitalist in its structure, unencumbered by the fetters and barriers of feudalism, that society could single-mindedly devote itself to the development of its productive resources.
Mandel (1970) stresses that European capital sought an outlet in the “empty” countries of the British Empire (Canada, South Africa, Australia, and New Zealand) and North and South America. In contrast with the disruption of existing modes of production brought about by the worldwide division of labor in the colonial and semicolonial countries of Asia, Africa, and Latin America, capitalist development in the United States and the “white” dominions of the British Empire was balanced. “The manufacturing transformation industries were developed parallel with or even prior to the basic industries; light industry was directed primarily toward the internal market, which in its turn expanded because agriculture provided raw materials for industry; a proportionate development of all branches of the economy.”
Waisman (1987) sums it up by saying that “the purest form of capitalism and, hence the form most prone to economic dynamism and liberal democracy[,] is the one created ex nihilo, as in the American northern colonies.” This in turn reflects a point of convergence not just between Marxist and Neo-Marxist currents but with non-Marxist thinking as well. A common proposition at the core of the literature on lands of recent settlement is that these countries reproduce the ideal conditions for the creation of democracy and capitalism.
Turner’s Frontier Thesis: American Exceptionalism in Comparative Perspective
Frederick Jackson Turner made a now famous analysis of the history of the United States based on the notion of “frontier development.” The essence of The Frontier in American History (Turner 1920) is that there is a relationship between the settlement of uninhabited lands and economic and political development: “The existence of an area of free land, its continuous recession, and the advance of American settlement westward, explain American Development.” For Turner, frontier meant more than a high land-labor ratio; it was also a wild environment whose settlement transformed the settlers and shaped US culture and institutions. The existence of open spaces was for him the determining factor of the economic development of the United States. It prompted the Homestead Act, market expansion, immigration, railroad construction, and other progressive trends. Immigrants were attracted by the cheap lands of the frontier, and even farmers felt this influence strongly. In places where exhausted soils yielded diminishing returns, farmers soon grasped the opportunity to acquire a plot of virgin soil in the frontier. “The competition of the unexhausted, cheap, and easily tilled prairie lands compelled the farmer to go west and continue the exhaustion of the soil on a new frontier, or to adopt intensive culture” (Turner 1920). Farmers were equally hard-pressed to find more lands by the need to support their growing families. There was a continuous demand for cheap land by people who wanted to farm it. In addition, extraordinary factors such as land fertility (allowing farmers to produce larger and cheaper crops) and rising agricultural prices (due to demand for food in Europe) maintained the overall momentum. For Turner, the frontier also worked as a homogenizing force in politics by instilling a sense of nationality among the immigrants.
However, European demand for food was not “insatiable,” nor was the frontier “limitless.” In his book, Turner (1920) recalled the 1890 official announcement of the closure of the frontier. For him, the United States “has been another name for opportunity,” and when the end to “free land for all willing to toil” came, he lamented it as the end of an era.
While US scholars generally avoid comparative studies of the United States, especially with non-European cases, the development experience of the United States has been analyzed by non-US scholars. Even though Turner’s thesis has been accused of economic determinism and of narrowness since by itself no single cause can explain the development of the United States, he provides a valuable insight into the development experiences of other nineteenth-century frontier societies. Di Tella (1982) applies Turner’s thesis to Argentina, Australia, and Canada; Guy and Sheridan (1998) compile comparative analyses of the frontier experiences of North and South America under the Spanish Empire; and Adas (2001) challenges prevailing notions of American exceptionalism by comparing the US experience with that of other lands of recent settlement. The ragged rugged individualism of the frontier experience à la Turner had similar parallels elsewhere: the bush ranger in Australia, the gaucho in Argentina, and the Métis in Canada. As Adas argues, while the US experience was different, it was not exceptional when put in a comparative and global perspective. The lesson is that US claims to originality are less convincing. US scholars must integrate other global experiences into their analyses. They may start by looking at the mirror which other lands of recent settlement provide them.
The Staple Theory of Growth
That production for exports generated significant changes in the polity has been noted by several authors. Baldwin’s “Patterns of Development in Newly Settled Regions” (1956) is of particular interest. Baldwin hypothesized that the economic development of certain regions and their pattern of social stratification were determined by the way in which capital, land, and labor are used and by the technology of the dominant economic activity. To illustrate his point, he compared the economic and social consequences of specialization in the production of two different types of export commodities: a plantation crop and an extensive crop. His hypothesis was that the second commodity, ceteris paribus, was more likely to produce a faster and more balanced type of development as well as a more equitable income distribution. A plantation crop generates a society with a large pool of cheap, unskilled labor at the bottom and low potential for industrialization. On the other hand, extensive agriculture, such as wheat, is more likely to lead to a society of middle-class farmers and has more forward and backward linkages, resulting in greater economic differentiation and greater potential for manufacturing growth. At the same time, it introduces another element of differentiation as it creates a more egalitarian income distribution with the consequent benefits to the economy and social structure. Baldwin’s theory received further support from the so-called staple theory of growth, eventually collapsing into one. The resultant model was widely applied in a number of works studying the development of the lands of recent settlement (Buckley 1958; Blainey 1964; Butlin 1964; McCarty 1964; Abbott 1965; Fogarty 1966; Lougheed 1968; Díaz Alejandro 1970; Geller 1970; Di Tella and Zymelman 1973; Gallo 1976; Pomfret 1981; Armstrong 1983; Schedvin 1990).
The staple theory of growth evolved from the works of Canadian historians Mackintosh (1923) and Innis (1930). The staple theory of growth focuses on the economic and political development of countries with open spaces based on the exploitation of their natural resources for export demand within a Heckscher-Ohlin framework of international trade. Innis, without doubt the single most important exponent of this theory, argues that development depended on the exploitation of a succession of key primary resources for export. Innis identified the following staples in Canadian development: fish (especially cod), followed by fur (especially beaver); with the disappearance of beaver, lumber replaced it; lumber was later supplemented by pulp, paper, and agricultural products (especially wheat but also beef); and finally minerals (gold, nickel, and oil). Settlers of new lands were drawn into the production of goods which were in high demand in Europe and which could be carried across the ocean to yield the largest profit. They concentrated in the production of goods necessary for the manufacture of luxury items, goods unique to their part of the world, or those produced in large quantities at low cost and delivered satisfactorily to Europe under prevailing transport conditions. These goods were staples. Staples are defined as products destined primarily for export which have a high natural-resource content. The staple theory insists that the characteristics of such staples, from the technology of their production to the social infrastructures needed to support them, set the pattern for overall economic and political development. For this reason, the staple theory is often referred to as the export-led model of economic growth which applies specifically to lands of recent settlement (Hirschman 1981; Fogarty 1985).
A set of characteristics helps to explain how exports shaped overall economic and political development: (1) autonomous demand for exports; (2) forward and backward linkages from the export sector to the rest of the economy; (3) technological advancement, particularly in transportation, which facilitated exploitation of natural resources; and (4) natural resource endowment. The staple theory of growth assumes that external demand and changes in external demand were unrelated to changes in the staple-producing country and thus are said to be autonomous. Since demand was determined abroad, staple production and export faced critical shifts in demand which revealed the countries’ dependency on external markets. Boom-bust cycles were crucial in determining the pace of development and its geographical spread, and in this process, trade and not production had been the cutting edge of change in the world economy.
The staple theory attempts to provide a broad framework for explaining economic and political development. Development is determined externally by the pattern of demand and the level of technology in the core countries and internally by the country’s geography and resource endowment. The basic impetus comes from the core countries in the form of increased demand and supply of new technology and capital. The risks implicit in this development strategy are well known. When countries joined the world economy, a whole set of factors blocked their development into fully mature industrial countries. Cardoso and Faletto’s Dependency and Development in Latin America (1978) illustrates that in the periphery, the process of accumulation is largely dependent on external forces. The linkages generated by export-led growth remained weak, import penetration was significant, foreign ownership was substantial, and an indigenous class of entrepreneurs was lacking. A country dependent on natural resources had to rely on its social and political institutions to address the many contradictory changes resulting from its integration into the world economy.
These explanations were designed to explain a specific historical experience that classical economic writings were unable to, and thus in their day these works constituted an innovative approach. The stated purpose was to explain growth in the lands of recent settlement. They were original in that they assumed that the cases were part of a world economy; in fact, they claim these countries were “open economies,” and in doing so they rejected the classical notion that these countries can be analyzed in isolation. The cases had to be studied in their global context. In attempting to address this question, they adopted an interdisciplinary approach combining history, economics, sociology, and politics. This approach emphasized the external determination of growth, and for that Ricardian assumptions of international trade were inadequate because Ricardo assumed that economies were self-contained units where factor mobility (capital and labor) remained confined within political boundaries.
In attempting to determine the timing of expansion in a land of recent settlement, Caves (1965) devised the vent-for-surplus model, which improves on previous contributions to the staple theory of growth. Caves hypothesized that the timing of accelerated expansion depended on the discovery of an exportable resource. The pace of total output growth that followed such a discovery was set by the rate of factor migration and absorption. Caves saw this process as superimposed on an underlying pattern of neoclassical growth. In a neoclassical model, growth occurs as a result of the growth in population and capital stock (domestic savings), and the general advance in labor efficiency that accompanies improvement in technology. However, as the historical experiences of these countries show, significant deviations from the long-term trend in the growth of total real output predicted by the neoclassical model took place. Population and capital grew at rates that the neoclassical model was unable to explain. Export-led growth explains these “variations” in aggregate expansion. When the extraordinary circumstances that gave way to the export-led phase cease to exist, the neoclassical model of growth determines the underlying long-term rate of growth and reveals increases in efficiency in the absence of new natural resource discoveries (Caves et al. 1980).
In A Staple Theory of Economic Growth (1963), Watkins argues that the staple theory applies to a country which is characterized by “a favorable man/land ratio and an absence of inhibiting traditions.” Countries with such characteristics are expected to have great potential for economic growth and for the development of an egalitarian social structure. A high land–labor ratio assures the workers relatively high incomes, which in turn encourage the growth of a domestic market and substantial factor mobility. The lack of tradition supports a society with a culture more likely to embrace change and thus more functional to development. Institutions and values are created anew with little or no significant legacy from old traditions.
The staple theory maintains that development was a response to external demand. However, as Fogarty (1985) argues, the most significant aspect of development in the case of Argentina, Australia, and Canada is not only that production for export grew to satisfy external demand, but also the high degree of specialization it achieved. For this reason, he identifies what he calls “super staples” as being the basis for the development of Argentina, Australia, and Canada. They became “world leaders in the production of these staple products, improvising and adapting imported technologies, but above all standing in the fore as contributors of technological advances” (Fogarty 1985). He goes on to argue that by producing a “superior product they were not only able to respond to demand conditions but in fact created demand in much the same way as did the staple manufactures of the British Industrial Revolution” (Fogarty 1985).
The majority of existing studies have concentrated on the demand side of the economic equation. This is understandably so, because changes in demand are easier to collect and identify (prices and exports), and they are treated as “exogenous variables.” However, this approach may neglect several important factors and thus fail to explain significant differences among countries. Fogarty (1985) urges us to “look more closely at the supply side of the export-led equation.” Factors affecting the supply side are specific to each country and thus provide more insight into their differing experiences. He calls for the analysis of “both the demand and supply side conditions,” and even suggests that “shifts in supply function were probably more important” in their development trajectories during the nineteenth century (Fogarty 1985). Fogarty identifies this as a basic problem of neoclassical theories of economic growth: “It is one of the limitations of theories of economic growth, including staple theory, that they cannot cope adequately with the proximate, or non-economic factors in development.” He argues that too little stress has been paid to features such as entrepreneurship, innovation, creativity, and institutional framework.
It is important to reiterate that the staple growth theory aims to explain the process of development for a specific set of countries and is not applicable in all cases and at all times. More specifically, the staple theory focuses on the long-term effects of different characteristics of the supply of land and labor in the specialization of production for export markets compared with alternative forms of agrarian production. The development experience of the lands of recent settlement consisted of a process of extensive exploitation of natural resources in which their ever-expanding agricultural frontier was matched with increased labor and capital inputs. The process was not inexhaustible. In fact, Nurkse (1962) claimed that this type of development was no longer relevant after World War II.
The Continuing Search for an Explanation of Different Paths of Development
This section identifies and discusses new directions in the study of lands of recent settlement. The works grouped here reflect a continuing interest to explain their diverging development experiences. The differences among the cases are clearly apparent. Nevertheless the similarities of their development experience continue to attract scholarly interest. This area of study is no longer the exclusive domain of economics; other disciplines have broken into it as well. They have reinvigorated debate, forced reinterpretations to old questions, and raised new ones. The literature about lands of recent settlement has incorporated new issues and themes such as social and domestic factors, institutions, the environment, and gender, class, and ethnic identity. These studies do not reject the importance of foreign demand, capital, and labor in explaining the development of the lands of recent settlement, but they question the adequacy of interpretations based solely on economic factors. They provide new insights about the interaction between global and domestic forces. The works discussed in this section should not be interpreted as an exhaustive review but as a representative sample of new directions in the field. This section is organized to indicate current and future areas of research on the lands of recent settlement.
Social and Domestic Elements of Development
Several works have focused on the noneconomic factors of the development experience of these countries. First, quite deservingly, the role of the state is seen as a crucial element of the process. For example, Lewis (1983), Platt (1986), and Escudé (1989) argue that the role of the state and domestic capital had been greatly underestimated in the development of Argentina. Rocchi (2006) shows that manufacturing industries in Argentina were more modern, large, and significant than previously believed. Hora (2001) challenges established historiography and asserts that Argentine landowners were not an established dominant group until late in the nineteenth century and that their economic, social, and political power is greatly exaggerated. Other authors have paid attention to the social context, the balance of social domestic forces and relationships, and class coalitions in determining the direction of state policy action. In each country, there arose a political coalition reflecting persistent political alignments shaped by international trade (Rogowski 1989; Hiscox 2002).
In his provocative work on the reversal of economic and political development in Argentina, Waisman (1987) draws from several disciplines to build a typology of noncore agrarian societies. His proposition is that Argentina is not an underdeveloped country likely to be lumped together with other Latin American countries but, more properly, an impoverished land of recent settlement. Argentina’s failure to become an industrialized, liberal democracy, which has puzzled so many authors in the past, gains more theoretical importance when reviewed against this model.
Increased attention to the role that domestic and noneconomic factors played in the development of settler societies has helped to provide a more balanced view of the period and a better understanding of the experiences of these societies.
The discussion of the cultural and institutional legacy of colonialism has generated a great deal of recent scholarship. The proposition that political and economic institutions and culture affected the development experiences of these countries is not a new idea. Classical works and authors in the staple theory tradition identified such factors as religion, land ownership, innovation, education, the role of the church, and political regimes as key conditioning variables of growth. However, all these factors came to be reconciled in a single explanation: institutions matter. The most important representative of work in this area is North (1989). North’s thesis is that there is a fundamental institutional difference between North America and Latin America. Moreover, it is this institutional difference that explains the development gap between the United States and former Spanish colonies in the Western Hemisphere.
Several contributions based on the Northian thesis of institutionalism argue that the development gap between North American (United States and Canada) colonial experiences on the one hand and Latin American, Asian, and African experiences on the other originates in different institutional settings (Engerman and Sokoloff 1997; Haber 1997; Coatsworth 1998; Sokoloff and Engerman 2000; Acemoglu et al. 2001, 2002; Fukuyama 2008). More importantly, they argue that neither geographical nor cultural explanations can convincingly account for the failure to catch up with the former colonies of British North America and Oceania.
Geography, Biology, and the Environment
A different and sometimes opposite perspective to the institutional view is provided by studies emphasizing geography and biology. Why did European settlers successfully adapt to these lands so distant from Europe? What made these lands so appealing to European immigrants, capital, and technology? Why did these countries become the primary focus of European expansion during the nineteenth century? Crosby (2004), Diamond (1999), and Gallup, Gaviria, and Lora (2003) find the answer to these questions in geographical and biological factors. They point out that the lands of recent settlement, in either the Northern or the Southern hemisphere, share similar latitudes with Europe. In other words, they share similar climates. What Crosby calls the “Neo-Europes” composed of European descendants consistently produce large food surpluses for which they find outlets in world markets. From an ecological perspective, the lands of recent settlement today export products of European origin as a result of violent processes of transformation in which foreign species devastated native ones. Rather than claim an innate European superiority, both authors claim that “germs” and “diseases” brought to the Americas and Oceania assisted the European “invaders” in conquering native peoples and environments.
Questions on Gender, Ethnic, and National Identity
Over the last decades the study of ethnicity in the lands of recent settlement has expanded markedly, with research moving from the traditional European settler model into the study of “non-white/non-European” immigrant groups. The compilation of works in Klich and Lesser (1998) demonstrates the impact of Middle Eastern immigration into Latin America, especially Argentina and Brazil. Immigrants from the former Ottoman Empire (Arabs, Muslims, and Jews from present-day Syria, Lebanon, and Palestine) left distinctive marks in the societies of Argentina and Brazil and raised important questions about national identity.
As this new scholarship demonstrates, the presence of non-European immigration (East Asian, Middle Eastern, and Melanesian) subverted the official attempts to achieve homogeneous societies or to “whiten” the indigenous population to approximate an ideal yet unrealizable European settler model. The experience of the more than 60,000 indentured Melanesians who worked in the sugar plantations of Queensland, Australia, is illustrative of the complex dimensions of class, ethnic, and national identity. After the practice of using indentured labor from the South Pacific Islands ended in the 1890s, government efforts were redirected toward repatriating them (Moore 2000).
Another area of recent scholarship focuses on the comparative experiences of female labor and indigenous labor in the lands of recent settlement. These works highlight the significance of political, economic, cultural, and historical processes in shaping women’s and indigenous experiences, identities, and practices. For example, Alford (1984), Dawn (1994), and Oxley (1996) bring attention to the role of female and aboriginal labor in the development of Australia. Gabaccia and Iacovetta (2002) and Sharpe (2001) examine the gendered nature of transnational migration to Argentina, Australia, and Canada, among other countries. These works caution us against stereotypical representations of female immigrants and workers which depict women as passive victims of patriarchal and capitalist relations. They urge us to move away from relying too much on the US experience as a model for understanding the differences, nuances, and subtleties of the experiences and identities of female immigrants and workers.
Another issue raised by the literature is that the efforts behind the construction of a nation-state and a wage labor market during the nineteenth century were reflected in a new moralizing discourse which condemned women to a private role. I have argued that in the context of Argentina, while there is evidence to support this argument, there is also evidence of a shift of female employment toward modern urban activities where women found new niches (Harris 2007). The essays in Gabaccia and Iacovetta (2002) clearly show very public roles for women in labor and political militancy far distant from stereotypical notions of passivity and domesticity. These lines of inquiry point to a complex reality intersected by different dimensions. Further exploring and conceptualizing the gender, ethnic, and national identities of labor in the lands of recent settlement will help us better understand their collective experience.
The Nineteenth-Century Era of Globalization
The preceding discussion reveals the complexity and depth of transnational networks of migrant workers and their families during the nineteenth century. An important contribution of the literature on the lands of recent settlement lies in how it can help us explain current debates on transnationalization and globalization. Although the impact of workers’ remittances in the country’s finances of the lands of recent settlement and in the countries of origin of the migrant workers may be an unexplored area, significant work has been done on the nature of the migration, transportation, trade, and financial networks that developed during the nineteenth century (O’Rourke and Williamson 1999; Hatton and Williamson 2005; Gills and Thompson 2006).
More recently comparative studies of the impact of global financial crises on the lands of recent settlement during the nineteenth-century era of globalization have revealed the wider implications for the contemporary era of globalization. McLean (2006), Davis and Gallman (2001), and Della Paolera and Taylor (2004) review the institutional and financial structures of the United States, Argentina, Australia, and Canada between 1860 and 1930. These works show that many clues to the current financial crises can be found in the past.
Continuing Quantitative Agenda
This last section identifies an issue which underlies the inconclusive nature of some of the debates. Recent works aim to account for variations in the long-term performances of these countries. One such work is Sanz-Villarroya (2005). She focuses on the long-term trajectories of lands of recent settlement and seeks to identify the precise timing when the Argentine economy diverged paths with Australia and Canada. She argues that structural changes which took place before World War I had profound implications for subsequent economic development. Yet what her work illustrates best is that the quantitative sources on which scholarship is built are still incomplete. Based on new data, her work revisits a question that many students of Argentina have periodically asked since the 1950s and that her work, not by her fault, will not put to rest. The series of works on the global economy by Maddison (1995, 2007) and country-specific works by others (Green and Urquhart 1994; Greasley and Oxley 1997; Cortés Conde 1997; Véganzonès and Winograd 1997) indicate the vitality of historical statistics research. Continuing the quantitative research agenda on the long-term performance of the lands of recent settlement holds considerable relevance.
As discussed in previous sections, current scholarship on the lands of recent settlement reveals a very active agenda of comparative studies covering a broad range of areas and issues: culture, institutions, gender, ethnicity, labor, national identity, geography, ecology, environment, noneconomic factors of growth, and transnationalization and globalization. It is my belief that future work will continue to expand our understanding of these cases. It is my hope, in particular, that future empirical research will provide us with better tools with which to evaluate their experiences.
Traditional explanations of the development of lands of recent settlement have generally focused on the different economic and political patterns that emerged among these countries and between these countries and the rest of the world, with particular emphasis on their subsequent evolution toward democracy and industrialization. One of the first puzzles is why these countries were so successful. Lands of recent settlement became relatively rich, while other noncore areas in Latin America, Africa, and Asia remained relatively poor. Of equal importance is the question of why some settler societies were more successful than others. Traditional explanation pointed to propitious external factors and factor endowments; recent works debate whether institutions, culture, or geography plays a crucial role.
Let me start by suggesting that these explanations are not necessarily contradictory. The answer to different levels of development between lands of recent settlement and the rest of the world may be in geography. European settlers intentionally and unintentionally replicated different dimensions of their homelands (food, society, institutions, and culture) in the new lands and succeeded in generating large surpluses with which to sustain themselves and grow wealthy. Looking at the combined 2007 average per capita (PPP) GDP of Argentina, Chile, and Uruguay, we find that it is 40 percent larger than that of their Andean counterparts (Bolivia, Colombia, Ecuador, Peru, and Venezuela). The same basic difference holds true for the gap between South Africa and her southern Africa neighbors. However, the answer to the puzzle of why differences exist within the lands of recent settlement may be in institutions. When we compare the United States, Canada, Australia, and New Zealand, the gap between them and the Latin American cases is 60 percent, and with South Africa 70 percent. Why, even after experiencing remarkable growth, did they fail to catch up with their counterparts in North America and Oceania?
These countries were born potentially rich; their factors endowments and growth prospects were highly promising at the start of the nineteenth century. As they took full advantage of external demand for foodstuffs and raw materials for the industrialization of Western Europe, their development experiences converged after the 1870s. Until the 1910s (and even 1920s), Argentina and Canada’s income levels matched. Despite relatively similar productive bases and population levels, Uruguay could not duplicate the level of development of New Zealand. During the 1970s and 1980s, self-doubt gripped Australia as it began to be explicitly compared with stagnant and crisis-prone Argentina. Moreover, Australia and New Zealand did not rank among the richest countries in the world (measured in per capita terms) during the 1980s and 1990s. What accounts for these variations? Institutions? Political regimes? Resource endowment? Policy responses?
Although no single factor can explain the puzzle of divergent development, I will argue that we need to take another look at external factors. As the recent experiences of Australia and Chile show, in a relatively short period of time, commodity-exporting countries can grow and improve their standards of living impressively. Their national and colonial elites eagerly embraced integration into the world economy and opened their borders to capital and people during the nineteenth century. Based on their natural endowments, they gave raw materials to fuel the industrialization of Western Europe. At the turn of the twentieth century, they could boast having the world’s highest per capita incomes. The Great Depression is the turning point in their development trajectories. Immigration, capital, and access to foreign markets for their products suddenly stopped. From then on, their existing (institutional and noninstitutional) differences concealed by decades of success had deleterious long-term consequences.
Another question of importance explores the necessary conditions for establishing a liberal, plural democracy. What lessons can these cases provide to the understanding of societies less divided by national, racial, gender, and cultural prejudices? Lands of recent settlement were expected to develop a family-based society of independent farmers. These smallholders would be the basis for a strong, liberal democracy. An alliance of urban middle classes and working classes were expected to oppose landowning interests during the nineteenth-century world trade expansion and demand democratic reforms while at the same time laying the foundations for manufacturing growth by introducing tariff protection for industries. However, liberal democracy eluded Argentina and South Africa (and, to a degree, Chile and Uruguay) during the second half of the twentieth century. Moreover, since the 1970s protective industrialization and state interventionism were rolled back in New Zealand, Australia, Chile, Argentina, Canada, and Uruguay. These market reforms have profoundly affected the labor movement, one of the key actors in guaranteeing the success of liberal capitalism and democracy in these countries.
Finally, the most important contribution is in the area of an analysis of transnational networks and globalization. The literature on the lands of recent settlement examines how the integration of these cases into the global economy shaped national and local realities and in turn how domestic responses affected transnational processes. As comparative studies on labor, migration, finance, and trade processes indicate, the nation-state loses primacy as a level of analysis, and a very complex global and transnational reality emerges. Public policy responses to immigration, labor activism, gender, and capital in these cases had to incorporate a global context. If, as McLean (2006) argues, the lands of recent settlement were the emerging markets of the nineteenth century, the wider implications of the study of their development experiences are significant. I may even suggest that they are bellwethers of changes in the world economy. Ignoring the lessons of their past and current experiences may prove quite dangerous!
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Links to Digital Materials
ACSANZ. At http://www.acsanz.org.au/about.html, accessed Oct. 15, 2009. The Association for Canadian Studies in Australia and New Zealand (ACSANZ) promotes comparative studies of Canada, Australia, and New Zealand. It publishes the journal Australasian and Canadian Studies (formerly Australia Canadian Studies) and an online newsletter.
ANZSANA. At http://www.anzsana.net, accessed Oct. 15, 2009. The Australian, New Zealand Studies Association of North America (ANZSANA) promotes interdisciplinary research on comparative studies of Australia, New Zealand, Canada, and the United States. It organizes an annual academic conference.
Desarrollo Económico. At http://www.ides.org.ar/revista, accessed Oct. 15, 2009. Desarollo Económico is published by the Instituto de Desarrollo Económico y Social (IDES) of Argentina. This journal regularly features articles comparing Argentina, Canada, and Australia. Although the print issues are not available online, the site provides a comprehensive index and author list and abstracts in Spanish and English.
Developing Country Export Statistics. At http://eh.net/databases/developing, accessed Oct. 15, 2009. This particular database is available at EH.net, which is supported by the Economic History Association (EHA). It includes export data on Argentina, Brazil, Chile, Uruguay, and the Cape of Good Hope Colony for the years 1840, 1860, 1880, and 1900.
Handbook of Latin American Studies (HLAS). At http://lcweb.loc.gov/hlas, accessed Oct. 15, 2009. This is an excellent bibliographical source of scholarly research on Latin America produced by the Hispanic Division of the Library of Congress. It provides abstracts and bibliographic information for materials from and about Latin America. It has links in English, Spanish, and Portuguese.
Institute for the Study of the Americas. At http://americas.sas.ac.uk, accessed Oct. 15, 2009. Part of the University of London’s School of Advanced Study, the Institute promotes research and postgraduate teaching on the Americas including Argentina, Brazil, Chile, Uruguay, Canada, and the United States. It publishes books, papers, and the Journal of Latin American Studies. The list of publications can be searched by country, topic, and author.
Institute of Commonwealth Studies. At http://commonwealth.sas.ac.uk/index.htm, accessed Oct. 15, 2009. Part of the University of London’s School of Advanced Study, the Institute promotes interdisciplinary studies of former British colonies, including Australia, New Zealand, Canada, and South Africa. It publishes Commonwealth and Comparative Politics (formerly The Journal of Commonwealth and Comparative Politics).
Latin American Studies Association (LASA). At http://lasa.international.pitt.edu, accessed Oct. 15, 2009. LASA is the world’s largest association of professionals from all disciplines and diverse occupational endeavors engaged in the study of Latin America. It publishes the journal Latin American Research Review.
League of Nations. At http://www.library.northwestern.edu/govinfo/collections/league/stat.html, accessed Oct. 15, 2009. Northwestern University has digitized and made accessible online the print editions of the Statistical Yearbook of the League of Nations from 1926 to 1944. Each Yearbook provides data on population, migration, production, transportation, communication, public finances, prices, and trade.
The World Economy. At http://www.theworldeconomy.org/publications/worldeconomy, accessed Oct. 15, 2009. This site, maintained by the OECD, showcases two works by Angus Maddison: The World Economy: A Millenial Perspective (2001) and The World Economy: Historical Statistics (2003). It provides historical statistics of the world economy.
I want to thank the anonymous reviewers for their helpful criticism on earlier drafts. I also want to thank Salvatore Babones and Andrea Gerlak for their patience and assistance in making this project possible. On a more personal note, I especially owe a great debt of gratitude to Bob Denemark for his constant guidance and support throughout my academic career.