Quiz 2

Question 1

“Ancient” / Primitive Economies

Answer 1

Ancient economies were organized around agriculture, as agricultural productivity was insufficient to sustain a non-farming population. Peasants, who formed the vast majority of the population, consumed most of their product in these subsistence economies, rarely selling their goods in the marketplace. The market economies of the cities were ruled by tradition and command, and economic participants that were able to trade in the market were dependent on the subservience of peasants and slaves.

Question 2

Social Surplus

Answer 2

In any society, the existence of wealth implies that a surplus has been extracted from nature, and the economic production problem has been solved some margin above whatever effort is required for its subsistence. In premarket societies, wealth accumulated to those with political, military, or religious power, and not to its most productive elements.

Question 3

Colonial Origins

Answer 3

17th century European settlements in North America expanded into nation states. European colonization spread and colonial populations expanded. An abundance of land and resources facilitated this colonial expansion, along with the devastation of indigenous populations by disease and war. After 1800 populations doubled approximately every twenty years, while simultaneously sustaining increased growth in GDP per capita signalling the beginnings of modern economic growth. The technologies of the Industrial Revolution were successfully transferred across the Atlantic Ocean and adapted to North American conditions.

Question 4

Migration

Answer 4

Economically, the abundance of resources and lack of labour increased the value of labour in the Americas; however, the cost of migration proved a significant barrier to entry for many Europeans. People indentured themselves as servants for a fixed period to gain passage, often settling in the arable lands of New England. Still, a lack of migration led the colonies to a reliance on slave labour, which formed a significant proportion of the population of New England, especially in the south.

Question 5

Fur Trade

Answer 5

Trade in furs began as an adjunct of the cod fisheries, until the demand for furs in Europe made the trade viable in its own right. The profits from furs enabled the French to establish permanent settlements in the St Lawrence Valley and Acadia, and the British to establish forts in the Hudson’s Bay. Profits from furs also resulted in the French and English exploring and expanding their presence westward into the Canadian interior. The lucrative and competitive fur trade opened the interior of the continent of North America to exploration and settlement. The English and French travelled deep inland trading European goods to satisfy the demand for furs at home, which were in fashion at the time. The trade established social, economic, and political relationships between Europeans and Indigenous people, and these would play a formative role in the creation of the Canadian state. While competition could create conflict, the fur trade helped foster peaceful indigenous-settler relations, and social ties led to a new demographic of mixed-race peoples known as Metis. The economic importance of the fur trade dwindled in the 1700s, but it remained an important aspect of geopolitics and First Nations alliance.

Question 6

Beaver Wars

Answer 6

The fur trade was a staple in the economy of the French settlement of New France, while the British established their trading presence on the Hudson’s Bay. Competition for control of the fur trade led to military conflict between, on one side, the French, the Huron, and the Algonquin, and on the other side, the British and the Haudenosaunee Confederacy. Known as the Beaver Wars, these conflicts lasted throughout the 17th century.

Question 7

Rupert’s Land

Answer 7

A vast area of northern wilderness that constitutes one third of the geography of present-day Canada. Named after Prince Rupert, the first governor of the HBC, the company maintained its claim to Rupert’s land until 1870, when it sold that title to the Canadian government.

Question 8

Early Fisheries

Answer 8

Fisheries drew the first Europeans to present-day Canada, and remain intrinsic to certain regional economies to the present day. Europeans began fishing off the coast of Newfoundland in the 15th century, where cod was plentiful and easy to catch, and these fisheries became important to European economies, spurring developments in shipbuilding, shipping, and trading. At first, English fisheries were concentrated in semi-permanent fishing stations where cod would be dry cured to make it suitable for long-distance trade. The French did not establish permanent bases for fishing, but instead used the green-cure technique, which was not tied to any geographical area. Having more access to salt, the French were able to process their fish quickly using the green-cure method aboard their ships, which involved heavily salting and then resalting the fish. This style of fishing enabled the French to get their fish to market faster than the British and return to the banks more than once per season, although their fish was less suitable for long-distance trading. The contact that the British made with the land had important future implications, as it eventually led to permanent fishing settlements. After the Treaty of Paris in 1763, the position of Newfoundland in the British colonial and mercantile system was affirmed. The regional economy remained highly specialized, although specialization within the fishing industry and some diversification did occur as the population grew in the 18th century.

Question 9

Fisheries After 1800

Answer 9

The French did maintain some fishing rights in the Maritimes under the treaties of Utrecht and Paris, but politically the area came under British control. In the 1800s the Maritime fishing industry diversified to include shellfish as well as the groundfish such as cod that were the staple of the industry. After confederation, the industry began to be controlled by government regulations aimed at preventing overfishing. The Canadian government also had to protect its Maritime fisheries from foreign competition during this period, including incursions of American fishers into Canadian waters. This period also saw a large fishing industry develop in British Columbia, with salmon dominating the Pacific fishing industry. The 1900s saw technological improvements that increased productivity, but fisheries were still a precarious trade. The industry faced heavy regulation as heavy fishing put strain on the resource, and at many moments the industry was also rescued by federal aid. The depletion of the resource has meant that the importance of fishing to coastal economies has declined; however, the sector has become more stable, providing better and more consistent wages to its labour force.

Question 10

Truck System

Answer 10

Fishing families traded on credit with merchants in their stores – an economic arrangement called the truck system. Merchants gave the fishers gear and supplies, and the fishers would pay them back with cod. Many outport families fell into debt, and merchants also found it difficult to make a profit due to uncertain fishing conditions and unstable market prices.

Question 11

Stationers

Answer 11

Fishing families that moved their work from Newfoundland to Labrador for the summer. From land they went out fishing each day in small open boats. The fish was brought back to shore and processed on land.

Question 12

Floaters

Answer 12

Floaters lived on schooners and sailed up and down the Newfoundland coast in search of cod. They packed their fish in salt and brought it back to Newfoundland to be dried there. Floaters did not rely on family labour but instead used hired crews of men and women.

Question 13

Bank Fishery

Answer 13

By the 1860s the stocks of fish in key areas in Newfoundland were becoming depleted leading to a third branch of the fishing industry developed off the shore of the grand banks. The bank fishery ran from March to October, but was more accessible to those living on the south shore due to a shorter winter freeze. Fishers traveled to the banks aboard schooners and ocean-going vessels where they anchored, and launched small open boats from which to fish, returning their catch to the schooners. They would remain anchored for weeks at a time.

Question 14

Wheat Boom

Answer 14

One of the main objectives of the Canadian government following confederation in 1867 was to open the west to settlement. The completion of the CPR in 1885 did not achieve this goal, and large-scale settlement did not begin until about 1900. Farmers in the region had been struggling to overcome the short agricultural season, the scarcity of labour, and rudimentary equipment. By the time wheat prices rose in the 1890s farmers had developed the necessary techniques to take advantage of favourable economic conditions - the advent of seed drills, large turbine binders, and labour-saving devices on threshers. It was the greater profits of wheat farming that encouraged further production of railway branches and provided the incentives for labour to move into the region. These changes meant that after 1900 Canada was able to capture an increasing share of the rising world wheat trade. Only improvements in technology and economic conditions enabled the wheat boom, and, despite the government’s efforts, there was little that policy could have done to expedite this process prior to 1900. Adjuncts of the wheat economy included speculative land sale, forestry and land-clearing, and transportation and shipping, because wheat is a high-bulk, low-value product, and therefore requires specialized infrastructure to support bulk shipments of wheat.

Question 15

Railways

Answer 15

Railways are one of the most important inventions in history. Railways transformed the nature of business in the colonies, the structure of cities and villages, and the life of the average citizen. In North America, railways helped solve the problem of moving people and goods along its immense geographical expanse. In Canada railways connected the nation from coast to coast as a vital part of the economic and social landscape. The development of railways in the 19th century revolutionized transportation in Canada and was integral to nation-building. Large industrial centers such as Toronto boomed due to their location on important railway lines. Central to industrialization, railways opened new markets and tied regions together economically. The introduction of railways into western Canada opened the area to large-scale settlement, and railways were thereby an important factor in the expansion of confederation.

Question 16

Government Subsidies of Railroads

Answer 16

Initial railways such as the Grand Trunk Railway were rather large and risky investments that required significant backing in the form of cash grants, guaranteed interest, land grants, rebates, and rights-of-way from the government. The lure of the railway was its potential for significant returns in the form of economic development, business expansion, and employment. Railways also pressed into new territory, pushing the agricultural frontier west and north. Railways in Canada thus government involvement and large capital inflows from Britain to get off the ground. The Canadian government eagerly involved itself in promoting railraods, and although its venture in railroad building brought Canada to the brink of bankruptcy, but the loans came in and the railways were built.

Question 17

Canadian Pacific Railroad

Answer 17

As part of his vision of confederation, sir John A Macdonald was determined to connect Canada from east to west with a transcontinental railway. In spite of political scandal in Ottawa involving bribery and campaign donations, the need for mass importation of Chinese labour in British Columbia, and substantial government subsidies to spur the project to completion, in 1885 Macdonald achieved his vision with the completion of the Canadian Pacific Railroad. This connected the economies of all Canadian provinces through trade, and facilitated the settlement of its western provinces, while helping to cement Canadian sovereignty and prevent American encroachment northward.

Question 18

Slavery

Answer 18

Throughout the 17th century, European settlers in North America turned to enslaved Africans as a cheaper, more plentiful labor source than indentured servants from Europe. Until 1800 Africans worked mainly on the tobacco, rice and indigo plantations of America’s southern coast. At the turn of the century, the development of the cotton gin made cotton a lucrative agricultural product, and the south transitioned to the large-scale production of cotton, reinforcing the region’s dependence on slave labour. Slaves constituted a third of the antebellum southern population, but masters ensured their dependency by prohibiting them from learning to read or write and restricting their movements. Hierarchical positions for slaves in plantations promoted internal divisions amongst slaves and prevented them from organizing. The African slave trade was outlawed by the United States in 1808, but the domestic trade flourished, and the enslaved population continued to grow. Slavery continued to be a significant part of the southern economy until the emancipation proclamation and the 13th amendment following the American Civil War.

Question 19

Economic Differences Between Free and Slave States

Answer 19

At the time of the American revolution, non-human wealth per capita was roughly equal in the north and south, with the south having higher total wealth per capita. Slaves became the dominant form of investment in the south, with land being the dominant form in the north, leading to differences in regional development. Northern landowners encouraged town development, business and infrastructure, while in the south crops and people were more mobile and moved into the most fertile lands. Slave-owning was a barrier to economic entry in the south, and so most migration from Europe settled in the north, leading to higher population growth in that region. By 1860 non-slave states had a total population that doubled that of slave states. The free population of the south thrived economically until emancipation, when regional incomes fell sharply relative to the north, even as southern urbanization and industrial investment increased.