Presentation Paper: Economic Growth, Preference Falsification and Religious Fervour in Quebec – 1920 to 1970

The deadlines have passed and I have submitted the following paper (co-authored with Hubert Villeneuve of McGill University) to the Cliometric Society that will hold a conference in Seattle in the beginning of this summer. Here is the abstract:

Before the Cascade – Economic Growth, Preference Falsification and Religious Fervour: Quebec 1920 to 1970

Abstract: It is generally asserted that religious practices “backslided” in the province of Quebec rapidly from 1960 onwards, a development that is often associated with the rise of the welfare state, which stripped the Catholic Church from its various social responsibilities in areas such as education or healthcare. However, using insights developed by Rodney Stark, Laurence Iannaconne and Roger Finke, this paper proposes an alternate narrative which highlights the importance of various pre-1960s developments indicating that the erosion of religious influence might have preceded and evolved to a certain extent independently from the massive overhaul of the Quebec provincial state. This implies an important level of preference falsification. Finally, we contend that the use of the “economics of religion” yields more much potent and complete explanations than the existing literature conveys.

19th century Quebec farmers were not “idiots”

If I had to point to one problem that economists get frustrated with when they jump in the field of economic history, I would point to the idea of the “peasant mentality”. In many history books either for backwater societies or pre-modern economies, generations of historians have labelled peasants as “incapable” of showing economic rationality. Hence, the use of economic theories to explain individual behaviour is – although increasingly used – a novelty in most historiographies. Many economic historians like Sheilagh Ogilvie, Tracy Dennison, Winifred Rothenberg, Robert Gallman and Philip Hoffman have used the approach of stating the capacity of peasants to maximize utility albeit imperfectly in the case of central Europe, Russia, America and France.

Since I started working on Quebec’s economic history (and by extension on North American economic history as a whole), I had to deal with the same claim of peasant mentality. In the case of Quebec in the early 19th century, which is one of the topics I treat in my doctoral work, it is claimed that peasants were somewhat unable to shift from wheat to other crops after the first decades of the 1800s. Although there was a partial shift to oats, it is claimed that peasants were incapable of responding to relative prices, which led to a deterioration in living standards.

I respectfully disagree..

Using data collected by Fernand Ouellet (the main proponent of the “peasant mentality” approach in Quebec) for the prices of agricultural commodities, I decided to observe how peasants responded to relative price changes and how this affected the values of these commodities exports. Since I don’t want to divulge all my work in a blog post, I only took the exports of flour and wheat from Quebec and attributed to them the prices given by Ouellet. Then I looked at how these exports responded to relative prices changes to oats. Normally, economic theory would dictate that all things being equal, a decline in the relative value of wheat to other products (namely oats) would lead to a reduction in the supply of wheat since factors of production would end up being reallocated to other forms of output (again, oats as historians point out happened). Do the observations match the theory? Between 1800 and 1822, with the exception of the anomalous three years of the Anglo-American War (1812-1815), as the relative price of wheat falls so does the real value of exports of wheat and flour per capita (wheat by itself falls also, but in a more “see-sawed” way).

Exports

Between 1825 and 1839 (I don’t have data for 1823 and 1824 regarding prices of oats, but I could extrapolate from other series, but that is for another post), the relative price of wheat increases and so does the real value of  exports of wheat and flour (as well as wheat alone).

Exports2

This indicates that peasants, in spite of being limited by poor communication and dual languages in Quebec, did respond to price changes. Peasants in Quebec were not “idiots”. If there was a decline in living standards from 1800 to 1840 (something I intend to dispute in a future post), then it was not because peasants were “idiots” – a study of institutions and how they shaped incentives is even more warranted.

Productivity growth in Quebec, 1946 to 1960

In playing with my data from my book, I found that I could have done a measure of productivity growth in Quebec relative to Ontario by using man-hours. In short, I have estimates of Gross National Product, Personal Income, Personal Disposable Income and hours worked, total employment on average by workers in manufacturing. Sadly, I don’t have data for hours in all sectors, but its a start for approximation. I divided all the figures for output by the sum of employment and average hours (total man-hours) to get a figure of productivity. What are the results? See the graph below:

ProductivityQc

What do I see in this graph? The following three points:

  1. Quebec was more productive in 1960 relative to Ontario than it was in 1946
  2. Quebec had very fast productivity growth in the 1950s
  3. The relative drop from 1947 to 1950 is I believe the result of wartime adjustments. Quebec obtained a smaller share of military production and employment than other provinces, the costs it had of adapting its economy back to peacetime production was smaller than in Ontario. That is my hypothesis and the topic of maybe another research paper.

Such a fast pace of productivity growth meant that the economic progression of Quebec relative to Ontario is not a statistical fluke but rather a genuine statistical reality that cannot be refuted. Especially since this period “convergence” upon Ontario’s level is the first period in Quebec’s history where Quebec has caught up rather than slipped back.

Quebec’s economic performance in the early days of Canada

In my most recent book, I document how economic growth (on a per capita basis) was slightly slower (or at best, it was on par) in Quebec than it was in Ontario from 1900 to 1940. I showed that living standards remained roughly 25% to 30% inferior in Quebec. I also argued that productivity growth was also considerably slower in Quebec which contributed to this disappointing performance.

But what about Quebec’s first days in the Canadian confederation? I have had the chance to stumble on an article by Kris Inwood and Jim Irwin (2002) in Acadiensis which estimates, roughly, provincial incomes from 1871 to 1891 which I can combine to the existing estimates by Alan Green (1971) and Morris Altman (1988). Sadly, price indexes are not available for each province for such a long period. However, as one can see below, the trends all point in the same direction: Quebec suffers from an economic decline relative to Ontario regardless of the statistical series used from 1870 to 1910.

EconomicGrowthQcOnt

This table is heavy in implications. First of all, it means that economically, Quebec initially declined relative to the rest of Canada up to the First World War. Secondly, it means that at best, Quebec stagnated relative to Ontario during the interwar period. At worst, it continued to decline in relative terms but at a slightly slower pace than before. Third, this means that the rapid economic growth of Quebec from 1945 to 1960 that I document (faster than elsewhere in Canada, including Ontario) is a complete break from past trends. Had I known of the existence of the Inwood-Irwin dataset, I believe I would have added this table to my book. But now, it is said and it will be added to the “book section” of this blog in order to provide readers with “follow-ups”.

Economic History between Two Swimsuits

My recent book, Du Grand Rattrapage au Déclin Tranquille, is the subject of an article in the French-Canadian magazine Summum. For those who are not from Quebec, Summum is a “boys’ magazine” with tons of girls in swimsuits (or less). So I dare say I gave an interview to end up between two girls in their swimtrunks. Here is the cover and the article itself for which there are two addendas that I am adding at the end of this blog post:
photo (4) lyVQTKR photo (3)

Addenda 1: On the second page, it says “85 Quebecers had university degrees for every 100 Ontarians” – that is not the exact statistic. The proportion of Quebecers above 15 years of age who possessed university degrees in 1961 was equivalent to 85% of the same proportion in Ontario.

Addenda 2: A few lines below, it says that it high school participation declined while in fact it increased. The reporter merely inverted the terms, nothing bad.