Does the Conquest Explain Quebec’s Historical Poverty? The Economic Consequences of 1760

This new working paper is probably the one that will get me most in trouble. However, as I am gradually assembling the pieces of a book on the economic history of French-Canadians (tentatively titled The Seeds of Distinctiveness: Economic Growth and Institutions in French Canada to 1913), I felt there was no way around it. How could one assess the historical origins of Quebec’s relative poverty (and how it speaks to wider questions in economic history) without discussing the extent to which the British Conquest of 1760 matters. Historians have been going back and forth on this for decades (at least since François-Xavier Garneau) and no one is convinced. However, I noticed that all arguments boil down to a simple mechanism: the extent of French-Canadian engagements with markets.

More nationalist historians argued that there was a retreat from the market into a form of subsistence agrarianism. Others argue that there was no retreat to be had. Others argued that the British unleashed some form of market revolution (not in those terms). As such, the validity of the mechanism advanced by all sides can be tied to whether markets grew more integrated (which would mean greater responsiveness to market signals) over time and space. I test exactly that and find that there was market integration — very strong signs of market integration in fact after signs of disintegration under French rule.

My findings provide a strong development in the literature as it leaves only two questions to consider. Indeed, we now know which mechanism was correct (i.e., that which claimed that British rule was associated with greater market development) and which are incorrect (that there was either zero effects of the conquest or negative effects). All we need to know is how beneficial was the Conquest and whether the market integration trends observed were due specifically to British rule. The link to the paper is here and the abstract is below:

The British Conquest of Quebec in 1760 was a key moment in Canadian history as it marked the beginning of a tense coexistence between French and English Canadians. Many argue that the Conquest had strong economic consequences in the form of the relative poverty of the French settlers. The mechanisms proposed are manifold, but they all rely on a key feature: a retreat from the market by French farmers. Using 171 years of wheat price data for Quebec City and Montreal, I test whether there are any signs of this retreat from the market and instead find the opposite: over time, markets grew more integrated across regions. In fact, there are more signs of disintegration during the era of French rule. Additionally, over time, regional prices became better predicted by current prices elsewhere than by the lagged prices in the same region. By the 1830s, markets in Quebec were as well integrated as those in economies such as the United States, France, Britain and Germany. The evidence in this paper is consistent with recent empirical findings about Quebec’s economic history, and so I argue that the case for the Conquest’s initiation of the relative poverty of Quebec (also dubbed “economic inferiority” in the historiography) is non-existent. This does not exclude long-run consequences of the Conquest, but the correct answer must lie elsewhere than in conventional explanations.

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