David McNally
Staple Theory as
Commodity Fetishism:
Marx, Innis and Canadian
Political Economy
By Innis out of Marx?
Over the course of the past decade the writings of Harold Adams Innis
have served as a source of intellectual inspiration to scholars attempting
to develop a critical political economy of Canada. During this decade of
analysis and investigation, it has been suggested continually that Innis'
work forms the indispensable basis for a Marxian analysis of the Canadian economy. Frequently,
contemporary
neo-Marxian
theories of
economic dependency have been considered to provide the framework for
this fusion of Innisian and Marxian analysis. On Canadian soil, it was
hinted, Marxist political economy would find a powerful ally in Harold
Innis. This article constitutes a challenge to this prevailing orthodoxy in
radical Canadian political economy. It advances a Marxian critique of the
economic thought of Harold Innis and, thereby, of modern efforts to use
the writings of Innis as the basis of a Marxian political economy of
Canada. In so doing, it issues a call for the rejection of the theoretical
perspective of Innis in favour of building on the more fruitful foundation
of Marx's critique of political economy.
The first work to attempt a radical appropriation of Innis was Kari
Levitt's Silent Surrender: The Multinational Corporation in Canada.'
Studies in Political Economy, No.6,
Autumn,
1981
35
Studies in Political Economy
While explicit references to Marx are entirely absent from Levitt's work
(the major influences acknowledged being Schumpeter and Galbraith),
the central thesis of modern dependency theory - that the focus of
radical economic analysis should be on the hierarchic relationship of
exploitation between metropolitan and satellite nations - is formulated
clearly in Chapter 6, "Metropolis and Hinterland".
Furthermore, Levitt
takes over a now-famous passage from Innis' The Fur Trade in Canada
and inserts it into the general framework of dependency theory. This
passage from Innis reads in part:
The economic history of Canada has been dominated by the discrepancy between the centre and the margin of western civilization . '.' agriculture,
industry,
transportation,
trade,
finance and governmental
activities tend to become subordinate to the production of the staple for a
more highly specialized manufacturing
communtty.?
In the influential series of essays edited by Gary Teeple and published
under the title Capitalism and the National Question in Canada' a further
step was taken in the effort to combine Innis and Marx. The influence of
Marx is made explicit in these essays, while that of Innis is largely implicit
in the analytic categories used by several of the contributors. The Innisian
influence is most apparent in the book's seminal essay, R.T. Naylor's
"The Rise and Fall of the Third Commercial Empire of the St.
Lawrence." Naylor's central argument is that the dominant section of
Canada's capitalist class is a commercial or mercantile bourgeoisie which
eschews long-term fixed investment in manufacturing
in favour of
investment in the transportation and sale of staple or primary products
that are sold to a metropolitan economy. The result is industrial underdevelopment, reliance on imports of manufactured goods and chronic
dependence on foreign exports markets. In his response to critics, published in Canadian Dimension, Naylor pointed out his reliance on the
Innisian staple theory and on the historiography
of the Laurentian
school. Naylor claimed that his distinction between mercantile and industrial capital "is the critical, if only implicit, basis of the whole Laurentian
school of Canadian historiography."
And taking a bow in the direction
of Innis, he characterized Canada as "a staple extracting backwater
colony.Y"
Naylor's adherence to a modified staple thesis of Canadian economic
history was developed further in The History of Canadian Business. In
that work, Naylor defined the Canadian economy as "a staple-extracting
hinterland" and argued that "Industrial capital formation was retarded
relative to investment in staple development ... "5 Naylor's implicit debt
to Innis has been brought out forcefully by Mel Watkins, one of the foremost proponents of the fusion of Innis and Marx and perhaps the most
enthusiastic commentator on Naylor's work. Describing The History of
36
David McNally/STAPLE
Canadian
since the
Naylor's
historical
Business as
early Innis
"ties to the
model "is a
THEORY
"the most important historical writing on Canada
and the early Creighton," Watkins argues that
staple approach are obvious" and that Naylor's
Marxist version of the Innisian version."6
Watkins has advanced this "Marxist version" of Innis in his own
work. His essay in the collection (Canada) Ltd. entitled "Resources and
Underdevelopment"
linked Innis' staple theory with the work of the
Latin American dependency school." And in a telling review, Watkins
heralded John Hutcheson's Dominance and Dependency' as part of "the
Canadian wedding of the Innisian and Marxian traditions."9 While
Watkins has argued the case for the theoretical compatibility of Innis and
Marx, Daniel Drache has attempted to use Innis' staple theory as the basis
of an analysis of the contemporary problems of "underdevelopment"
and "economic dependency" in Canada. In this vein, Drache entitled a
1975 article "Canadian Capitalism: Sticking With Staples" and called a
revision of this piece published in Imperialism, Nationalism and Canada
"Staple-ization: A Theory of Canadian Capitalist Development." 10 In
both versions of this article Drache included a central section entitled
"Building on Innis" in which he argued that Innis' staple theory is
indispensable to an understanding of the historical development of the
Canadian economy. In his comprehensive survey of literature on the
Canadian economy, Drache called for a rediscovery of the indigenous
tradition of Canadian political economy pioneered by Innis - an
approach which, Drache contended, is distinguished by Innis' "model of
centre-margin relations." II
The argument that the historical and economic theories of Marx and
Innis are fundamentally compatible has stimulated attempts recently to
show that Innis was moving towards a more or less conscious embrace of
Marxism before his death. In a review article entitled "By Innis Out of
Marx: The Revival of Canadian Political Economy," C.B. Macpherson
portrayed Innis as moving towards an unconscious rapprochement with
Marxism. He wrote of Innis that "The further he went on his own the
closer (unconsciously, or certainly not explicitly) he moved towards a
Marxian analysis." 12 The most extreme version of this view was
developed in a truly astonishing essay - astonishing, that is, for its
elementary conceptual confusions - by Ian Parker entitled "Harold
Innis, Karl Marx and Canadian Political Economy" in which the claim is
made that" ... Innis' work, taken as a whole in its historical trajectory
from 1920 to 1952, can best be understood as that of a historical
materialist, and a developing dialectical materialist . . ." 13 Parker,
however, was forced to concede that "aspects of political-economic
development" such as class struggle, exploitation, the production of
surplus value, the notion of capital as self-expanding value, the inherence
37
Studies in Political Economy
of capitalism in the social relationship based upon wage labour and the
laws of motion of capitalism "were not fully dealt with by Innis." Despite
these "omissions,"
Parker concluded that Innis' theoretical perspective
tends to converge with that of Marx. 14
Over the past decade, then, an interest in employing Innis' work as the
foundation for a radical analysis of Canadian economic history has
engendered conscious attempts to synthesize the Marxian and Innisian
traditions. In the following pages I shall argue that this project - "the
Canadian wedding of the Innisian and Marxian traditions" - is a fundamentally misguided effort. I shall attempt to show that Innis' staple
theory is rooted squarely in the tradition of classical political economy
inaugurated by Adam Smith - the very political economy at which Marx
aimed his celebrated critique. In so doing, I shall demonstrate that Innis'
work contains the fetish of market relations and the "technicist" concept
of production which, according to Marx, characterize classical political
economy. I shall attempt to show that Innis' work, replete with historical
insights though it may be, embodied a crude materialism inherited in large
part from Veblen which led to a systematic neglect of the role of social
relations of production in economic life. The result was a rigidly
deterministic interpretation
of economic history whose central feature
was commodity fetishism - the attribution of creative powers in the
historical process to the staple commodity as a natural and technical
object.
Commerce Civilization and Dependency:
Adam Smith and Harold Innis
That Adam Smith exercised a decisive influence on Innis is hardly a
point of contention. As W.T. Easterbrook
has written, " ...
Innis
remained throughout a disciple of Adam Smith and no name appears
more frequently in his observations on economics past and present." 15
Adam Smith's essential contribution to social and economic theory may
be reduced to two major ideas. First, Smith argued that commercial or
civil society represented a new stage of social organization in which the
disparate activities of self-seeking individuals were integrated and
harmonized via the market mechanism, the mechanism of economic
exchange. Furthermore, this commercial society - in which every man
lives by exchanging "or becomes in some measure a merchant" - leads
to material prosperity, social order and good government;"
Secondly,
Smith contended that capitalist or commercial society was characterized
by a dynamic impulse towards geographic expansion and economic
development. The engine of expansion and development was the extension of exchange relations. Thus, the development of "the wealth of
nations" was a function of the social division of labour. The degree of
division of labour was determined by the extent of the market.
Consequently, economic and industrial development were products of
38
David McNally 1ST APLE THEORY
commercial expansion, of the extension of trade relations. The Smithian
conception of capitalism, then, is based on the notion that it is commerce
which revolutionizes industry. 17 These two themes became central pillars
of classical political economy. Capitalism was conceived as a society
based upon liberty and individuality whose advancement depended upon
free trade and the unfettered expansion of the market. In its most
optimistic version, capitalism was viewed as an advancing system of
"natural liberty" sweeping away all petty, parochial and antiquated
restrictions in the course of its onward march.
The central defining feature of capitalism for Smith is exchange.
Capitalism is the trading or commercial society. It is for this reason that
Marx criticized Smith for failing to penetrate the sphere of the circulation
of goods in order to decipher the social relations of production that
underpin commodity exchange. For Smith, relations between social
classes appear in the form of rent, profit and wages only at the level of
distribution of the total social product. Production is viewed entirely in
material terms, not as a process in which fundamental social relations are
continually reproduced.
There is little doubt that Innis accepted the classical perspective which
identifies capitalism with trade and exchange and that he saw the
expansion of capitalism simply in terms of the spread of trade relations.
Following Veblen, Innis often described capitalism as a "price system" a system in which economic activity was regulated by the market determination of the prices of all factors of production. In his famous essay
"The Penetrative Powers of the Price System," Innis signalled his
adherence to the view that the dynamic expansion of trade inevitably
swept away all previous forms of social and economic organization. "The
price system," he wrote, "had gradually but persistently eaten out the
rotting timbers of European colonial structures and as it destroyed the
feudalism so it destroyed the defences of commercialism. "18 In The Cod
Fisheries, Innis connected this view explicitly with the outlook of Adam
Smith: An expanding commercial system broke the bonds of a rigid
political structure defended by vested interests. The genius of Adam
Smith foresaw and hastened the trend of expanding trade beyond the
bounds of empire. 19
In this view, the growth of world capitalism is conceived in terms of
the geographic spread of trade relations. As John Hutcheson has written,
"Innis saw economic development as occurring as a price system or
market organization extended itself geographically ... ' '20 This essentially
Smith ian conception of the nature of capitalist development underpins
the staple theory of economic growth. In the optimistic-liberal version of
the staple theory produced by some post-Innisians, economic develop-
39
Studies in Political Economy
ment via the production of a staple product for the world market is put in
classic Smithian terms. The optimistic-liberal version of the staple theory
emphasizes the export of staple products as the mainspring of growth,
diversification
and development.
This interpretation
was expressed
forcefully in Mel Watkins' 1963 essay on the staple theory in which he
wrote that "Economic development will be a process of diversification
around an export base." As with Adam Smith, growth is a function of
increased market demand: "Growth is initiated by an increase in demand
for a staple export. "21
While this view is entirely consistent with the outlook of classical
political economy, Innis dissented from the optimistic-liberal perspective
on one critical point. He rejected the proposition that the spread of the
capitalist world market inevitably led to integrated development for all
nations pulled into the international division of labour. The classical
theory in its optimistic guise maintained that every nation brought into
the world market would begin to specialize in the production and
exchange of those commodities with which it was favourably endowed, be
it for natural or social reasons. This doctrine of comparative advantage
asserted that the engine of economic development would be driven by the
export of those commodities in which a nation enjoyed such an advantage. Integration into the world market would generate specialization and
development. Innis recognized that this argument ignored the crucial
differences between the economic development of a self-sufficient nation
and that of a new economy largely dependent upon trade with an older,
already-industrialized
metropolitan power. "Canada,"
he wrote, "has
never been self-sufficient, and her existence has depended primarily upon
trade with other countries."
As a result, ". . . Canadian economic
history must be approached from the standpoint of trade with other
countries. "22 This argument led directly into the central thesis of The Fur
Trade in Canada: that Canadian economic history has been "dominated
by the discrepancy between the centre and the margin of western
civilization.' ,
According to Innis, the trade relation with a metropolitan centre
structures the pattern of economic development in a country like Canada.
Moreover, the pattern of economic development and the accompanying
form of social organization are determined uniquely by the character of
the specific staple commodity that is being exported to the metropole.
Indeed, the history of Canada could be written as the history of its
successive staple trades." After all, each new staple commodity has
refashioned and reorganized the social and economic order in its own
image:
Concentration on the production of staples for export to more highly
industrialized areas in Europe and later in the United States had broad
40
David McNally/STAPLE
THEORY
implications for the Canadian economic, political and social structure.
Each staple in its turn left its stamp, and the shift to new staples invariably
produced periods of crises in which adjustments in the old structure were
painfully made and a new pattern created in relation to a new staple.e'
Innis thus accepted the classical proposition that commerical capitalist
civilization was transmitted to the new world via trade and market
relations. Indeed, staple products were precisely the instruments of this
transmission. However, Innis rejected the view that the spread of trade
relations to the new world engendered an automatic replication of the
metropolitan pattern of economic development. Instead, he insisted that
the reliance on staple exports created a distinct course of development
and a novel set of problems, among them industrial dependence and a
lop-sided industrial structure;"
This outlook has been incorporated into the second - or "Marxian"
- version of the staple theory which informs much contemporary Canadian political economy. This version sees staple production and export as
dominated by a market-centred
process of surplus expropriation that
results in chronic dependency and underdevelopment.
The "mechanism
of exploitation"
which underdevelops Canada is the capitalist world
market. 26
The methodological foundation of both the optimistic-liberal and the
"Marxian"
variants of the staple theory remains the same as that of
Smithian economics: market abstractionism. Theories of development or
underdevelopment
via the market, despite their empirical differences,
both accept that it is through the process of exchange, within the sphere
of market circulation, that economic development is either fostered or
blocked. For versions of the staple theory, as for modern dependency
theory, ". . . capitalism is very broadly conceptualized
in terms of
exchange based on trade and investment. "27 It is this methodological bias
that places Innis and the staple theorists squarely in the Smithian
tradition. By identifying capitalism with trade and exchange, these
theorists fetishize the sphere of commodity circulation and fail, as Marx
pointed out of Smith, to understand capitalism as a mode of production
characterized by its fundamental social relations of production. As a
result, they abstract the market, the sphere of circulation, from the total
circuit of capital and treat it as the general determinant of economic and
social phenomena. 28
While Innis adopted the market abstractionism of Smith, he tended to
treat the staple commodity as decidely more than a mere primary product
for the market. Each staple product, according to Innis, embodies a
complex of geographic and technical factors which uniquely shapes the
social organization of the new society. This focus On the geographic and
41
Studies in Political Economy
technical character of staple products was part of Innis' intellectual
inheritance from Veblen. And, as I will show below, that Veblenian
inheritance compounded the commodity fetishism that Innis took over
from Adam Smith.
Geography,
Technology
and Staples: Thorstein Veblen and Harold Innis
No intellectual figure so dominates commentaries on Adam Smith as
does Thorstein Veblen. Innis came under Veblen's indirect influence
while at the University of Chicago and was soon converted to the latter's
wide-ranging critique of neo-classical economics. Indeed, so great was
Innis' admiration for Veblen that he compared him to Adam Smith.P It is
no overstatement,
therefore,
when Robin Neill writes that "Innis
accepted Veblen's critique of neo-classical economics, so much so that his
work presupposes Veblen and cannot be understood outside of that
context. "30
Veblen's attack on neo-classical economics focused on two main
points: first, opposition to the hedonistic presuppositions of marginal
utility theory - the conception of man as a utilitarian pursuer of physical
desires; and, secondly, rejection of the static vision of economic life
inherent in general equilibrium theory. The very basis of modern
economics, Veblen argued, is the notion of an unchanging human nature
which objectifies itself in the economic system. In this respect, he pointed
out, neo-classical economics had not truly advanced beyond the concept
of the "natural order" of the Physiocrats or that of "natural liberty" to
be found in Adam Smith.!' Veblen argued that neo-classical economics
uncritically treats society as little more than an "algebraic sum" of individuals; that it takes the "human nature" produced by market relations as
an ahistorical and unchanging datum; and that it presupposes the
"institutional facts" of the society that it claims to explain. 32
These criticisms reveal a certain affinity with aspects of Marx's critique
of the ahistoric and reified categories of classical political economy.
Moreover, like Marx, Veblen insisted that economics should become an
evolutionary
science. When it came to the task of substantive
construction,
however, Veblen consciously parted ways with Marx.
Veblen's model for the reconstruction
of economics was Darwinian
biology. Veblen sought to analyze the causal relations between the
habituations and mutations in human culture which condition economic
life. As he saw it,
The growth of culture is a cumulative sequence of habituations, and the
ways and means of it are the habitual responses of human nature to
exigencies that vary incontinently, cumulatively, but with something of a
consistent sequence in the cumulative variations that go forward .. )3
42
David McNally 1ST APLE THEORY
With this theoretical paradigm in place, Veblen proceeded to an
analysis of capitalist society. Capitalism, he asserted, has two essential
features: I) the price system which encourages capitalists to pursue
personal gain through the purchase and sale of goods; and 2) machine
industry which trains those who work directly with machines - the
engineers - in the enlightened habits of scientific and mechanistic
thought. Against the self-seeking ethos of the price system, machine
industry inculcates a wholly different set of values and an entirely different world-view. This world-view is based on the scientific application
of the principle of causality:
The machine technology takes no cognizance of conventially established
rules of precedence; it knows neither manners nor breeding and can make
no use of any of the attributes of worth. Its scheme of knowledge and of
inference is based on the laws of material causation, not on those of
immemorial custom, authenticity, or authoritative enactrnent.w
Veblen saw the conflict between the ethos of the market and the ethos
of machine technology as the central contradiction of industrial capitalism. As an unrelenting critic of the price system and market society,
Veblen banked his hopes for social change on "the machine-made point
of view." As one recent commentator has put it, in Veblen's writings,
"The machine emerges as the historical agency of redemption, fulfilling
much the same role as Marx's proletariat. The machine is the antithesis of
business enterprise. "35
While Innis appears never to have accepted Veblen's perspective on
revolutionary changer" he did accept the latter's critique of neo-classical
economics. Innis concurred with Veblen's contention that economics
should become an evolutionary science and he inherited his technological
determinism. The technological determinism, however, did not consist of
a narrow concentration on machine technology. Rather, it involved an
analytic preoccupation with a multi-faceted "technological situation."
As Veblen wrote in a passage suggestive of Innis, "The emphasis on the
technological situation, as one might say, may fall now on one line of
material items, now on another, according as the exigencies of climate,
topography, flora and fauna, density of population, and the like, may
decide." 37
For this reason it is mistaken to ascribe to Innis a simple geographic
determinism. True, Innis often identified geography as the determinant
factor in a complex "technological situation." Thus, we read in his essay
"On the Economic Significance of Cultural Factors" that "Geography
provides the grooves which determine the course and to a large extent the
character of economic life. Population in terms of numbers and quality,
and technology are largely determined by the geographic background
43
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Studies in Political Economy
38 A variant of this approach
is developed in the initial chapters of
The Fur Trade in Canada and The Cod Fisheries which are concerned
with the life habits of the beaver and the cod respectively. At other points,
Innis writes in a classically Veblenian vein of the determinant role of
industrial technique. It is to technology, to the introduction of machine
industry in particular, that he often attributes the decisive developments
in Canadian economic history. Thus, we read in The Fur Trade in Canada
that "The sudden growth occasioned by the production of wheat and the
subsequent development of the Canadian shield have been the result of
machine industry.v' " In his essay on "Transportation
as a Factor in
Canadian Economic History,"
Innis asserts that the most important
political developments in Canada between 1840 and 1878 were a product
of "the introduction of steam on the St. Lawrence waterways" and we
are informed that "The arrival of the first steamboat down the Red River
to Winnipeg is surely the most dramatic event in Canadian economic
history. "40
•••
At no time did Innis address seriously questions of methodology with
respect to economic history. All his major works exhibit this vacillation
between geographic and technological determinism. It seems clear, in
fact, that Innis felt justified in treating geography and technology as
reciprocally conditioning elements of a nexus of determination. Whereas
Veblen absorbed geography into his concept of the "technological situation,"
Innis appears often to have done the opposite - to have
subsumed technology under the general rubic of the "geographic
background." Thus, he writes in The Cod Fisheries that "The geographic
background, represented by climate, the salt available, the technique of
the industry, and the size and abundance of the fish, was a stabilizing
factor of supply. "41 Here, industrial techniques are absorbed into the
"geographic background"
which determines the pattern of economic
events.
What Innis inherited from Veblen, then, was a two-pronged critique
of neo-classical economics. First, Innis accepted the Veblenian view that
economics should eschew its preoccupation
with static conditions of
market equilibrium in order to become a genuinely evolutionary science.
Secondly, Innis concurred with Veblen's insistence that economics must
sketch its vision of the economic cosmos on a broader canvas - that its
panorama must extend beyond the market and include the cultural fabric
of society. In this vein, Innis adopted Veblen's view that the key to
unlocking the mysteries of the evolution of economic culture lay in a
detailed analysis of the "technological
situation"
or "geographic
background" that determined economic life as a whole.
Veblen's technological determinism rendered explicit in Innis what is
often merely implicit in classical political economy - its tendency to view
44
David McNally 1ST APLE THEORY
production in entirely material or technical terms. As Marx argued, the
classical economists - most notably Ricardo - treat production as an
eternal natural and material process which produces things known as
commodities. For Marx, as I shall indicate below, capitalist production is
fundamentally the production and reproduction of the capitalist social
relationship - the dialectical relation between wage-labour and capital.
Once production is viewed simply as a technico-material process - as in
Smith, Ricardo, Veblen, Innis, etc. - then the dynamics of social
production are reduced to those of technological change. The result is a
conception of capitalist production as constituted by relations between
things and culminating in the production of things. This, as Marx argued,
is the vulgar side of all political economy and it is why all political
economy can be criticized for commodity fetishism - since the commodity is treated as a thing produced by things and not as the form of
appearance of a fundamental social relation. Veblen's technological
determinism elevates this technicist conception of production into an
explicit theoretical construct by making the "technological situation" the
determinant element of economic life. As a result, commodity fetishism
becomes the open foundation of Veblen's system.
Staple Theory: Commodities and History
Innis' staple theory is in large measure a product of his inheritances
from Adam Smith and Thorstein Veblen.V His staple theory, as several
commentators have pointed out, was neither intended nor utilized by
Innis as a theory of economic growth. Rather, the staple theory was
intended as an "historical thesis'v" or, better yet, "an economic interpretation of Canadian history.Y'"
What did this "economic interpretation of Canadian history" assert?
First, that the civilization of North America is fundamentally the
civilization of Burope." Secondly, that the mechanism of cultural transference, of the transmission of European civilization to the New World, is
trade. And, therefore, that it is the effective demand of the metropole
which is the stimulus to development. 46 Thirdly, that the new outposts of
European civilization cannot replicate the original, metropolitan pattern
of development. Rather, new patterns are created when cultural outposts
of a dominant civilization attach themselves to their metropolitan centres
via trade relations. Fourthly, that these patterns of development and
accompanying forms of social and political organization are determined
fundamentally by the character of the staple product - especially its
geographic and technological constitution - that is being produced for
export. Thus, it is the set of imperatives created by the nature of the staple
commodity itself that fashions the character of the new society, its form
of social organization and its political institutions. According to Innis,
"Each staple in its turn left its stamp, and the shift to new staples
45
Studies in Political Economy
invariably produced periods of crises in which adjustments in the old
structure were painfully made and a new pattern created in relation to a
new staple."
This is commodity fetishism writ large. For Marx, commodity
fetishism consisted in that inversion, rooted in alienated conditions of
social life, by which the social relations between people appear as
objective - indeed, natural - properties of the commodities themselves:
... the relationships between the producers, within which the social
characteristics of their labours are manifested, take on the form of a social
relation between the products of labour.
The mysterious character of the commodity-form
consists therefore
simply in the fact that the commodity reflects the social characteristics of
men's own labour as objective characteristics of the products of labour
themselves, as the socio-natural properties of these things.s?
In other words, commodity fetishism consists in the social activity of
human beings taking the form of relations between things. While it is true
that under capitalism things dominate people, this is so only because
(alienated) human activity takes on a reified forrn.:" Classical political
economy uncritically reproduces this commodity fetishism in theoretical
terms since it presents the value of commodities as a thing constituted by
things, for example, land, labour and capital. Innis pushes this sort of
fetishistic outlook beyond the bounds of classical political economy. Not
only are commodities
taken as the foundation
of all economic
phenomena (rather than human, social relations), but commodities are
made the subjects of historical action as well. Indeed, it is no
overstatement
to change Marx's dictum and to state that for Innis
commodities make their own history - although not, perhaps, in
conditions of their own choosing. In Innis' staple theory of Canadian
history it is the staple commodities themselves that dictate the patterns of
historical development and social organization. As C.R. Fay wrote in a
review of the work of Innis and his Toronto School:
The Toronto School is writing the economic history of Canada by
commodities ....
the emphasis is on the commodity itself: its significance
for policy; the tying in of one activity with another; the way in which a
basic commodity sets the general pace, creates new activities and is itself
strengthened, or perhaps dethroned, by its own creation.s?
Mel Watkins recognized this form of commodity-determination
of
history and society in Innis in his 1963 essay on the staple theory when he
wrote that the "staple may create a social structure" and proceeded to
criticize Innis for downplaying the influence of geographic factors as a
result of his "exaggerated emphasis on the character of the staple."so
Furthermore, in the work which Watkins heralded as a leading example
46
David McNally 1ST APLE THEORY
of "the Canadian wedding of the Innisian and Marxian traditions," John
Hutcheson pointed out that for Innis "staples could make a country," as
well as unmake it. 51
By ascribing the creative role in the historical process to the primary
commodity itself, Innis' staple theory systematically ignored the role of
social relations of production in shaping and reproducing society. At
times Innis opened up his nexus of determination to include forms of
business organization and inherited political institutions, but at no time
did the system of social production
and exploitation
receive such
privileged status. 52 For Innis it was staples that make history. As Carl
Berger has pointed out, Innis' history of Canada was history "dehumanized" 53 - the making of history by human beings, albeit in conditions
not of their own choosing, plays no role in his works.
Innis, Marx and the Critique of Political Economy
The contemporary view that the theoretical systems of Marx and Innis
can in any meaningful sense be synthesized or "wedded" betrays serious
misunderstanding of Marx's critique of political economy and his concept
of the capitalist mode of production. To be sure, most of the new political
economists who are endeavouring to wed Marx and Innis recognize that
some theoretical mediations are indispensable to a successful marriage.
Generally, this theoretical mediation is considered to consist of an
addition of "class analysis" to the otherwise sound corpus of Innis' staple
theory. At times, however, the methodological eclecticism is extended to
embrace several distinct - and often conflicting - theoretical perspectives, as in Daniel Drache's praise of "the new political economy" for
"effectively applying dependency theory, class analysis, elite studies and
contemporary models of capitalist development." At another point in the
same essay, Drache lauds R.T. Naylor's attempt to "deepen"
the
Innisian analysis of dependency by substituting capital for Innis' concept
of the staple. 54 Such a substitution is presumed to make the staple theory
more "Marxist" in character. In a similar vein, Mel Watkins has called
for "fleshing out a Marxist version of the staple theory." Such a project,
he suggests, "would require the recasting of the staple theory as a theory
of class formation ... "55
A careful examination of Marx's critique of political economy shows,
however, that such an enterprise is misguided in the extreme. While
empirical material derived from Innis may be useful to a Marxist
understanding
of Canadian
history, it remains the case that the
theoretical perspectives of Innis and Marx are fundamentally incompatible. Marx's theory points us in an entirely different direction from
that taken by Innis and the "new political economists." Marx's critique
of political economy, his attempt to decipher the hidden anatomy of
capitalist society, does indeed begin with the commodity, "(t)he first
47
Studies in Political Economy
category in which bourgeois wealth presents itself." 56 But Marx's analysis
is designed to show that the commodity is an expression of value which, in
turn, expresses a definite social relation. In order to be exchangeable, all
commodities must consist of some common element. This, Marx argues,
is human labour. But in exchange different individual labours are
equated. This is possible only insofar as commodities are products of a
common or average labour or what Marx calls "human labour in the
abstract. "57 Seen in material terms, commodities are merely embodiments
of specific acts of individual labour. Comprehended as socially created
objects, however, they are seen to be embodiments of a real, historical
abstraction - human labour in the abstract. The value of commodities
can only be analyzed in terms of the "form of value," the form of social
organization of the labour process through which the homogenization of
concrete acts of labour takes place. The value of commodities thus presupposes an historical process of alienation through which concrete
labour is homogenized and reduced to abstract human labour.
Abstract human labour is not an intellectual abstraction or analytic
convenience for Marx; it is something real. It is the actual form that
objectifications of human labour take in a society in which workers are
separated from the means of production and forced to sell their labour
power in order to live; it is the result of the fact that under capitalism
human beings do not control their labour. Capitalist exploitation can
occur precisely because workers experience an historic form of alienation
- their separation from means of production which deprives them of
control over the conditions of their labour. If labour power is to be
purchased as a commodity on the market - in order that it may be
exploited - it is necessary that the direct producers be separated from
any direct access to or ownership of means of production. It is only
"free" workers - those without direct ties to land or other means of
production - who will sell their power to work for a wage. Capitalism,
therefore, according to Marx, "arises only when the owner of means of
production and subsistence finds the free worker available on the market
as the seller of his own labour power. "58
An essential historical precondition of capitalism, therefore, is that
process by which direct producers are separated from their means of production. This is what Marx calls "the secret of primitive accumulation."
Primitive accumulation, the original historical process of the formation
of capital, "is nothing else than the historical process of divorcing the
producer from the means of production."
In the classical case of
England, this divorce of the producers from the means of production
could only mean one thing - the separation of peasants from their land:
"The expropriation of the agricultural producer, of the peasant, from the
soil is the basis of the whole process.">?
The "secret of ·primitive accumulation"
is actually the secret of the
capitalist mode of production itself. It is not trade, money or the market
48
David McNally 1ST APLE THEORY
which decisively distinguish capitalism; it is only on the basis of the social
relations of capitalism that trade, money and the market take on a
specifically capitalist character. As Marx writes:
In themselves, money and commodities are no more capital than the
means of production and subsistence are. They need to be transformed into
capital. But this transformation
can itself only take place under particular
circumstances, which meet together at this point: the confrontation
of, and
the contact between, two very different kinds of commodity owners; on the
one hand, the owners of money, means of production,
means of
subsistence,
who are eager to valorize the sum of values they have
appropriated by buying the labour-power of others; on the other hand, free
workers, the sellers of their own labour-power, and therefore the sellers of
labour.w
Thus, capitalism is distinguished by a set of "laws of motion"
determined by a distinct social relation of production - the exploitation
of "free" wage-labourers by capital. 61 The capitalist mode of production,
according to Marx, involves the extended production and reproduction of
a specific social relation by way of the production of material things
known as commodities. Production, in other words, is fundamentally a
social process. Capitalist production is characterized by the reproduction
of the exploitative class relation between wage-labour and capital. Marx
writes that "The capitalist process of production, therefore, seen as a
total, connected process, i.e, a process of reproduction,
produces not
only commodities, not only surplus value, but it also produces and
reproduces the capital-relation itself; on the one hand the capitalist, on
the other the wage-labourer. "62
What Marx describes as the "distinctly capitalist mode of production"
comes fully into being only in conditions of industrial capitalism. The
"real subsumption of labour under capital" exists when alienated labour
reappears as capital in the form of machinery - when, in other words,
the domination of living by dead labour assumes a developed form. The
distinctly capitalist
mode of production,
therefore,
involves the
continuous transformation
of surplus value into material means of
production which dominate the direct producers. This is the essence of
industrial capitalism. Furthermore,
capitalist production requires that
dead labour - capital - be produced on an ever-extending scale.
Capitalist accumulation is precisely the production and -reproduction of
wage-labour and capital on an expanding scale.P Extended reproduction
of capital is possible because the distinctly capitalist mode of production
develops by way of increasing relative surplus value - by revolutionizing
the means of production so as to increase labour productivity and total
surplus value. It is this feature which gives capitalism its dynamic
character; it is the production of relative surplus value that requires and
makes possible a continual revolutionizing of the means of production
and a continual extension of the capitalist world market.
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Studies in Political Economy
Classical political economy fails to grasp these fundamental features
of the capitalist mode of production. By defining capitalism in terms of
exchange and by constituting classes at the level "of distribution - and not
of social production - it conceives of production in purely technical and
material terms. Because classical political economy does not understand
capitalism in terms of the systematic reproduction of the capital-relation
it fails to understand the system as a whole. Bourgeois economists, Marx
writes, "do indeed realize how production takes place within capitalist
relations. But they do not understand how these relations are themselves
produced ... "64 These relations are in fact produced in the course of the
production of commodities. For the commodity, as Marx incessantly
argued, is not simply a material thing. The commodity is the expression of
a social relation of production.
All of bourgeois political economy is vitiated by commodity fetishism
since it fails to see the commodity as more than a material thing; since it
fails to see that the commodity can only be understood as the general
form of appearance of capitalist social relations. It is for this reason that
the concept of commodity fetishism can be said to be the central category
of Marx's critique of political economy - since the fetishistic view of the
commodity as a mere thing prevents political economy from penetrating
the reality of the capitalist mode of production.
The production of commodities in the fully capitalist sense presupposes the production and reproduction of the capital-relation. And the
basis of the capital-relation is the separation of the labourer from the
means of production.
Thus, the secret of the capitalist mode of
production - based on the secret of primitive accumulation - is that the
separation of the direct producer from the means of production is continually reproduced. "As soon as capitalist production stands on its own
feet," Marx writes, "it not only maintains this separation, but reproduces
it on a continually extending scale."65 The reproduction of the capitalrelation takes place largely in the form of the extended reproduction of
modern industry. In Marx's theory of the capitalist mode of production,
therefore, out attention is directed towards the inter-related processes of
the formation of a working class and the emergence of capitalist industry.
Innis' staple theory can accomodate none of these Marxian principles.
Its focus on trade forces it to try to establish the fundamental laws of
capitalism at the level of circulation - that is, within the movements of
money and commodities in exchange. This fetishistic preoccupation with
market phenomena obscures the fact that "In themselves, money and
commodities are no more capital than the means of production and subsistence are. They need to be transformed into capital." And the conditions of such a transformation - "the confrontation of, and the contact
50
David McNally 1ST APLE THEORY
between, two very different kinds of commodity owners," capitalists and
wage-labourers - cannot be established adequately by a theory that
accepts the commodity (and its physical-technical characteristics) as the
primary datum of historical experience. Furthermore, Innis' exaggerated
technological determinism compels him to conceptualize production in
strictly technical terms. Not only is production seen as nothing more than
the production of material things (as in all bourgeois political economy)
but the techniques, technologies and physical traits of production are
made determinants of all other aspects of social life. In Innis' work, then,
the commodity fetishism common to all bourgeois political economy its treatment of the commodity as a simple thing rather than as the form
of appearance of a relation between people - is compounded by his
elevation of the commodity to the status of primary historical agent. For
this reason, Innis' system can be said to be constructed on the very sort of
theoretical premises that Marx's Capital set out to destroy.
Towards a History of Canadian Capitalist Development
Adherence to some form of staple theory ~ however modified'" has hindered the construction of a Marxist history of capitalist development in Canada. While many studies inspired at least in part by Innis have
focused on trade relations and trade patterns in Canadian history, there
has been little by way of an attempt to grasp the total process of capitalist
industrialization and the formation of a working class in Canada." The
elaboration of such a history is, to say the least, beyond the bounds of
this paper. I propose, however, to sketch out some of the most important
lines of inquiry that should follow from Marx's theory of the capitalist
mode of production and to indicate some of the historical writing upon
which such an approach could build.
i) Primitive Accumulation
in Canada
The question of primitive accumulation
- of the creation of a
proletariat and the historical genesis of the capital-relation
- is the
central issue in the study of capitalist development. This question has yet
to be made the focus of an historical study of Canada. The absence of
such a study is curious given that the creation of an indigenous proletariat
from the ranks of the settler population became a major issue of
discussion with respect to British colonial policy and Canada in the 1830's
and 1840's. The proponent
of policies designed to encourage
proletarianization
was Edward Gibbon Wakefield who argued that
cheap, available land in the New World created a tendency towards
equality of land distribution. This situation produced obstacles to the
formation of a propertyless working class and thus denied capitalists
profitable outlets for the employment of their savings. The result,
Wakefield argued, was economic stagnation. Economic development in
the New World, he claimed, required that land be made more expensive
51
Studies in Political Economy
so that new immigrants would be forced to labour for employers if they
were to have any hope later of becoming landholders. Marx took note of
Wakefield's argument in the first volume of Capital where he argued that
Wakefield presented
... the secret discovered in the New World by the political economy of
the Old World, and loudly proclaimed by it: that the capitalist mode of
production and accumulation, and therefore capitalist private property as
well, have for their fundamental condition the annihilation of that private
property which rests on the labour of the individual himself; in other
words, the expropriation of the worker. 68
Wakefield's writings have a direct relevance to the study of capitalist
development in Canada. After all, Wakefield wrote the important sections
on land policy and immigration in Lord Durham's Report on the Affairs
of British North America (1839), probably the most important political
document prior to Confederation.
In that section Wakefield combined
his standard views about land policy with the suggestion that emigration
of those inclined towards wage-labour should be encouraged. 69 The application of Wakefield's land policies proved problematic in Canada - as
he himself acknowledged - since higher land prices encouraged new
immigrants to pursue the cheaper land available in the United States.
Nonetheless, as many studies have argued, the decades immediately following the Report did in fact witness the emergence of a Canadian
working class and important strides towards industrial capitalism. The
development of a surplus-producing
agriculture, the emergence of a
domestic market for manufactures, and the formation of an indigenous
working class all signalled the transition towards industrial capitalism. 70
The most important
index of such a transition
is the degree to which
the real subsumption of labour under capital, expressed in the growth of
industrial capitalist enterprises, has taken hold. While there are many
studies that deal with aspects of this process, Marx's theory of capitalism
would suggest that the systematic investigation of the total process of
primitive accumulation in Canada - including the extent to which dispossession of peasants in Europe, for example, in Ireland, was a
precondition of the formation of a Canadian working class - is the key
to understanding Canadian capitalist development.
ii) Agricultural
Development
and Industrialization
The basis of any economy is food production. Even during the heyday of the "staple trades," agriculture was establishing itself as the
foundation of the economies of Upper and Lower Canada. But it is the
social relations of agricultural production and their dynamics which
determine whether or not agricultural production
will generate the
impetus to industrial development. Quite different structures of "agricultural economy" produced markedly different results in Upper and Lower
52
David McNally 1ST APLE THEORY
Canada. Whereas the production of growing agricultural surpluses for
domestic and foreign markets stimulated a "classic pattern of industrial
growth" in Ontario characterized by "industrial development based on
the internal market, internal sources of capital, internally generated transportation facilities and locally produced raw materials" recurrent crises
in Quebec agriculture hindered accumulation from surplus production
and blocked the expansion of local markets for agricultural goods." Too
often, however, these differences are ascribed to mental habits" or to
geographic and climatic conditions." Marx's approach would suggest
that these different trajectories of development must be rooted in the
differing social relations of production and economic laws of motion that
characterized the two local economies. On this approach, the roots of
agricultural crisis in Quebec and consequent failure of integrated industrial development would be located in the dynamics of the relations of
surplus extraction and production. The seigneurial system in Lower
Canada would then have to be studied in terms of its tendency to raise
rents and obligation in order to increase absolute surplus production and
thereby to impoverish the habitant. The impoverishment of the habitant
resulted in a lack of agricultural investment, depletion of the soil and a
recurrent pattern of agricultural crises. In this context, Ouellet's
statement that Quebec's agricultural crisis was the product of "the very
structures of agricultural exploitation" would have to be understood to
imply that the social relations of exploitation - not the technical structures of soil exploitation-generated stagnation and crisis in the Quebec
economy of the late 18th and 19th centuries.?" The very different social
relations of farming in Upper Canada based on independent
commodity production and infusions of savings in the form of
agricultural investment - would then have to be studied in terms of the
genesis of capitalist farming as the precondition of Ontario's industrial
revolutiorr." The features of this process would be production of
agricultural surpluses in the form of cash crops, an ongoing process of
agricultural investment to boost productivity and profits, consequent
expansion of the home market (especially for agricultural implements)
and the use of wage-labour on the land. The industrial expression of this
process would be found in the evidence of the growth of foundries,
agricultural implements shops and factories, paper mills, saw mills, iron
mills, textile mills and the general growth of establishments manufacturing consumer goods." At all times the features of this process must be
conceptualized not in primarily technical terms but as expressions of the
social dynamics of capitalist production.
iii) Confederation, the National Policy and the Expansion of the Home
Market
Capitalism presupposes the continuous reproduction of the capitalrelation on an extended scale. Contrary to those views which see the
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Studies in Political Economy
expansion of markets as stimulating industrial development, Marx saw
the self-expansion of capitalist industry as necessitating the growth of the
market: " ...
the immanent necessity of this mode of production to
produce on an ever-extended scale tends to extend the world market
continually, so that it is not commerce in this case which revolutionizes
industry but industry which constantly revolutionizes commerce."?"
Every national capitalist class is concerned, therefore, to protect and
expand that section of the world market which it is privileged to treat as
its national market. As a result, the consolidation of capitalist nation
states is bound up intimately with the extension of the home market. As
Marx points out in his discussion of primitive accumulation, the use of
state power is a central feature of the transition to the capitalist mode of
production.
State power, "the concentrated and organized force of
society," is the "midwife" of the birth of the new society. Political force,
expressed in the form of state power, "is itself an economic power. "78
This is especially clear in the case of Canadian Confederation.
Undertaking the transition to industrial capitalism at a time when the
more advanced centres of world capitalism, the United States in
particular, were in the early period of monopoly capitalism, Canadian
capitalists needed state-backing if they were to rapidly extend their
market and expand their scale of production. As Pentland and Ryerson
have argued persuasively, the drive towards Confederation included as a
central element the desire of manufacturers for a larger and protected
home market. This material pressure is central also to understanding the
protective tariff of the National Policy. Despite claims that the purpose of
the tariff was to encourage industrial dependency via the construction of
American branch plants, the evidence that the tariff did in fact stimulate
industrialization is compelling."? Furthermore, the purpose of the tariff
and the role of industrial capitalist pressures cannot be addressed
adequately unless they are looked at in the context of the opening up of
the Canadian West. No lesser spokesman for the National Policy than
Laurier explained in 1905 that the objective of the tariff was to provide an
expanded home market for Canadian manufactures by insuring that new
settlers in the West would buy goods produced in Canada, not in the
United States. The settlers, he argued,
...
will require clothes, they will require implements, they will require
shoes ....
this scientific tariff of ours will make it possible that every shoe
that has to be worn in those prairies will be a Canadian shoe; that every
yard of cloth that can be marketed there shall be a yard of cloth produced
in Canada; and so on and so on ....
80
That the National Policy tariff failed to live up to these expectations is
another question. What seems irrefutable is that the expansion of a home
54
David McNally/STAPLE
THEORY
market for capitalist industry was central to its basic objective that of Confederation.
iv) Canadian "Dependency"
as to
and the Rise of Monopoly Capitalism
Capitalist accumulation, by continually reproducing the capitalrelation on an extending scale, creates ever larger units of capital.
Accumulation therefore brings about what Marx calls concentration of
capital. But the more dramatic process is the centralization of capital.
Centralization is the result of the inherent competition between units of
capital. For competition "always ends in the ruin of many small
capitalists, whose capitals pass into the hands of their conquerors, and
partly vanish completely." The result is the "transformation
of many
small into few large capitals. "81 Several modern commentators have
shown that the underdevelopment of the Maritimes was the result of just
such an historic process of centralization of capital. 82 But such an
explanation has not been developed to account for Canada's general
economic "dependency" - manifest particularly in the high degree of
foreign ownership of Canadian industry. Yet, the most significant
historical origins of American domination of Canadian industry appear
to lie precisely in the period 1890-1921 when a wide-ranging process of
monopolization - an extreme form of centralization of capital reshaped international capitalism.
As centralization of capital proceeded at a feverish rate, wholly new
technologies of production were introduced since, as Marx noted,
centralization creates "the technical means" necessary for "immense
industrial undertakings. "83 As late as 1914, American branch plants
accounted for only 10 per cent of capital formation in Canada. American
ownership, however, was concentrated overwhelmingly in the new growth
industries - electrical goods, chemicals, petroleum, rubber and autos which were to dominate the world economy of the twentieth century. 84
Canada's industrial "dependency,"
then, may best be understood as a
product of attempting to complete the transition to industrial capitalism
at a time when the strongest sections of world capitalism were undergoing
intensive concentration and centralization. The younger and smaller units
of Canadian capital appear to have been the victims of an historic phase
of capitalist competition which culminated - as must all such phases "in the ruin of many small capitalists, whose capitals pass into the hands
of their conquerors, and partly vanish completely." Such an hypothesis
would certainly seem to offer the prospect of a richer understanding of
economic dependency in Canada than do those which focus on the
characteristics of staple commodities or the psychological aptitudes of
Canadian businessmen. 85
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Studies in Political Economy
To suggest that a Marxist history of capitalist development in Canada
could best develop along these four lines of inquiry by building upon
much of the relevant literature is not to suggest that there is a ready-made,
mechanical pattern according to which the rich and distinct texture of
Canadian history should be stretched and cut. Rather, it is to suggest that
all useful historical inquiry is based upon theoretical propositions that are
brought into a "dialogue" with historical evidence and that if our object
is the creative elaboration of a history of capitalist development and
working class formation in Canada, then these principles derived from
Marx may best inform our investigation."
To be relevant to socialist
theory and practice, Marxism must remain what it was for its founders a critical and creative science.
Conclusion:
Vulgar Materialism
or Historical Materialism?
The central principle of Marx's materialist conception of history is
that human beings "make their own history" but that "they do not make
it under circumstances chosen by themselves ... "87 In capitalist society,
those circumstances not chosen by themselves are in large measure the
products of their own alienated labour. Human beings are dominated by
the results of their own practical activity. Indeed, that alienated activity
takes on a life of its own and develops "laws of motion" of its own. But
human emancipation
- whose basis is the self-emancipation
of the
working class - is possible because the social laws which govern people's
lives are ultimately the products of human beings themselves. For this
reason, it remains possible for human beings to assume control over their
lives and their society.
Marx's Capital is theory devoted to this practical task. Capital is a fundamental attempt to de-fetishize the forms of appearance of human social
relations in capitalist society; it is designed to show the essentially human,
social and historical character of the "things" which seem to govern
social life. The most immediate and most universal of these forms of
appearance is the commodity - the "elementary form" of the capitalist
mode of production. By demonstrating that commodities and commodity
relations are nothing else but forms of appearance of human social relations - by showing, that is, that these relations are humanly and
historically constituted - Marx shows that they may also be humanly and
historically abolished.
Innis' staple theory has no common ground with Marx's historical
materialism. His staple theory is built upon precisely the kind of theoretical commodity fetishism that Marx attacked. Indeed, Innis compounds
the fetishism characteristic of classical political economy. To begin with,
Innis follows Adam Smith in defining capitalism in terms of circulation
and the market - in terms of the exchange of goods. As a result, the
commodity is treated naively as a thing. Implicit in such a view is the
56
David McNally/STAPLE
THEORY
technicist concept of production criticized by Marx - the view which sees
production as the creation of material things but not as the reproduction
of social relations. Inspired by Veblen's notion of the determining role of
technology, Innis compounded this error by constructing an historical
thesis which explained the major patterns of Canadian history in terms of
the physical characteristics
of staple products.
In this commodity
fetishism writ large, "the emphasis is on the commodity itself," as
C.R. Fay wrote. While such a view is indeed materialist, it can best be
described as a form of vulgar materialism. It makes the crudely material
features of human history - for example, geography and technology determinant of social life. It ignores the fact that for Marx all material
things are socially mediated;
that material reality is historically
constituted. Thus, it liquidates the dimension of human practical activity
which was the crucial feature of Marx's materialist conception of history.
It is indeed, as Carl Berger puts it, history "dehumanized."
Those radical political economists who have tried to build upon Innis'
staple theory have inherited - often unwittingly - the market fetisism
and technicist concept of production
which vitiate Innis' work.
Consequently, nowhere do we find in their work the concentration on the
development and transformation of social relations of production which
allows us to comprehend history as a process made by human beings,
albeit in circumstances not chosen by themselves." And it is for this
reason that they have failed to develop any meaningful analysis of the
formation of the Canadian working class.
It will not do to say that we can build upon Innis the way Marx "built
upon" Smith and Ricardo. For Marx's dialectical critique of classical
political economy was precisely an attempt to undermine - not to build
upon - the theoretical premises of Smith and Ricardo.j? A similar
dialectical critique of Innis, as I have tried to show, would have to
explode the fetishistic premises of his staple theory. And that would
involve a return to Marx, showing how staple commodities were nothing
more than the forms of appearance of social relations of production.
There is an immense job to be done by way of developing a Marxist
understanding of Canadian history, notwithstanding the valuable work
being done in many quarters. Reliance upon the staple thesis of Harold
Innis has directed attention away from the kind of questions that should
occupy centre stage in such a process of inquiry and analysis. It is high
time that the fetishistic preoccupation with staples was abandoned in
favour of a concentration on class formation and capitalist development
in Canada. And it is high time that vulgar materialism was supplanted by
historical materialism. If they hope to contribute to the construction of a
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Studies in Political Economy
creative Marxist view of Canadian history, those who have undertaken to
"wed" the traditions of Innis and Marx must be urged to file for divorce.
NOTES
An earlier version of this paper was presented to the Annual Meetings of the
Canadian Sociology and Anthropology Association in Montreal, June 1980. I
would like to thank Norman Penner for many useful suggestions concerning the
research for this paper and Brian McDougall for criticisms of an earlier draft.
Thanks also to Mike Lebowitz, reviewer for SPE, for critical comments and
suggestions.
I Kari Levitt, Silent Surrender: The Multinational Corporation in Canada
(Toronto 1970).
2 From Harold Innis, The Fur Trade in Canada, revised edition, (Toronto 1956),
385, as quoted by Levitt, Ibid. 47.
3 Gary Teeple, ed., Capitalism and the National Question in Canada, (Toronto
1972).
.
4 Tom Naylor, "Setting Naylor's Critics Straight" Canadian Dimension, X/5,
1974.
5 Tom Naylor, The History of Canadian Business, I (Toronto, 1975) 3, 15.
6 Mel Watkins, "The Staple Theory Revisited" Journal of Canadian Studies,
XII/5, 1977,88.
7 Mel Watkins, "Resources and Underdevelopment"
in Robert Laxer, ed.,
Canada Ltd: The Political Economy of Dependency, (Toronto 1973), III,
115-116.
8 John Hutcheson, Dominance and Dependency: Liberalism and National
Policies in the North Atlantic Triangle (Toronto, 1978). Hutcheson describes
the central chapters of his work as "an extension of the staple approach," 24.
He also identifies three "basic contradictions"
in Canadian society: the
contradiction between Quebec and English Canada; the contradiction between
the regions; and the contradiction between Canada and the United States, 7.
What is for Marxist theory the central "contradiction"
- that between wagelabour and capital - is conspicuous by its absence.
9 Mel Watkins,
"Canada's
Contradictions,"
Canadian Forum LIX/695,
1979-80, 38.
10 Daniel Drache, "Canadian Capitalism: Sticking with Staples," This Magazine
IX/3,
1975 and "Staple-ization: A Theory of Canadian Capitalist Development" in Craig Heron, ed., Imperialism, Nationalism and Canada (Toronto,
1978).
II Daniel Drache, "Rediscovering Canadian Political Economy," Journal of
Canadian Studies IX/3,
1976; reprinted in Wallace Clement and Daniel
Drache, A Practical Guide to Canadian Political Economy, Toronto, 1978.
12 C.B. Macpherson, "By Innis Out of Marx: The Revival of Canadian Political
Economy," Canadian Journal of Political and Social Theory III 12, 1979, 135.
13 Ian Parker, "Harold Innis, Karl Marx and Canadian Political Economy,"
Queen's Quarterly LXXXIV 14, 1977, 547. This essay has now been reprinted
in J. Paul Grayson, ed., Class, State, Ideology and Change: Marxist Perspectives on Canada (Toronto, 1980).
14 If Parker concedes that these Marxian themes are absent in Innis, wherein does
he see a similarity between these two thinkers? Both. Marx and Innis share a
"materialist epistemological perspective" in which "human experience ultimately determines human consciousness," 548. But even on the (questionable)
basis of that criterion, does that make Innis any closer to Marx than it does to
other materialist thinkers like Bacon or Pavlov? Parker tells us that one link
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David McNally/STAPLE
15
16
17
18
19
20
21
THEORY
between Marx and Innis "lies in their mutual strong anti-dogmatic biases,"
552. Does this essentially vacuous statement refer to the strongly historical
orientation of both thinkers (hardly enough on its own to establish such a
link)? Or is it meant to suggest that both had few theoretical premises and
adopted an essentially positivist approach to "facts"? Both thinkers we are
told (553) undertook a "materialist reformulation of Hegel's understanding of
the dialectic of history." Innis' comprehension of Hegel's philosophy is
dubious in the extreme. Nonetheless, if we accept that he knew the Hegelian
system, how can a "materialist reformulation" 'that focuses on the material
character of commodities be considered to have much in common with Marx's
reformulation in which human beings make their own history in material-social
conditions inherited from the past? Parker tries to get additional mileage out
of the fact that both Innis and Marx seriously read Adam Smith, 553. Yet, in
Innis' case this involved a basic acceptance of the Smithian paradigm; in
Marx's case a critical dissection of Smith's system. Parker tries to suggest that
Innis derived his notion of the metropolis-hinterland
relation from Hegel's
"Master-Slave dialectic," 553. But nowhere in Innis' work is there any
suggestion of such an inspiration. Indeed, all the indications are that he read
Hegel long after he wrote his major works in Canadian economic history.
Parker only compounds the confusion by suggesting that Hegel's Master-Slave
dialectic has something to do with Marx's notion of the dialectic between the
money-form of the commodity and the commodity in the circuit of capital. As
most commentators are aware, the connection here is between Hegel's Logic
and Marx's Capital not between Capital and the Phenomenology. (On this
connection see Jairus Banaji, "From the Commodity to Capital: Hegel's
Dialectic in Marx's 'Capital' " in Diane Elson, ed., Value: The Representation
of Labour in Capitalism, London, 1979.) It is difficult to take seriously the
suggestion that we can understand much of Canadian history by studying an
18-word epigram from Innis just as "the Zen Buddhist suggests that we can
recreate or reconstruct the universe by fully understanding a single leaf," 557.
How one could "compare many of Innis' writings with Marx's Eighteenth
Brumaire or his writings on the US Civil War," 561, remains obscure in the
extreme. After all, Marx dwelt in his writings in both areas on the decisive role
of class struggles in historical events - a theme which Parker by his own
admission finds largely absent in Innis. At the end we are left with such a range
of misguided assertions and suggestions that it is hard to see what part of
Parker's argument can be sustained.
W.T. Easterbrook, "Innis and Economics," Canadian Journal of Economics
and Political Science 19, 1953, 291. The influence of Adam Smith was
transmitted to Innis also via C.R. Fay, a colleague of Innis at Toronto and a
recognized authority on Smith. For Fay's influence on Innis see Robin Neill, A
New Theory of Value: The Canadian Economics of H.A. Innis, (Toronto
1972), 12, 39-40, 43 and W.A. Mackintosh, "Innis on Canadian Economic
Development," Journal of Political Economy LXI/3,
1953, 186.
Adam Smith, The Wealth of Nations, Cannan ed (New York, 1937),22, 385.
Smith, Book I. For Marx, the reality is precisely the opposite - it is capitalist
industry which revolutionizes commerce. See Capital, III (Moscow, 1971),333.
Harold Innis, "The Penetrative Power of the Price System," Essays in
Canadian Economic History, Mary Q. Innis, ed. (Toronto, 1956),257; see also
271.
Harold Innis, The Cod Fisheries, revised edition (Toronto, 1954), 502.
Hutcheson, Dominance and Dependency, 23.
M.H. Watkins, "A Staple Theory of Economic Growth" in W.T. Easterbrook
and M.H. Watkins, ed., Approaches to Canadian Economic History, 53-54,
60.
S9
Studies in Political Economy
22 Harold Innis, "The Teaching of Economic History in Canada," Essays, 11-12.
23 Watkins, "Resources and Underdevelopment,"
116; Drache makes the claim
that all of Canada's political and social history can be written as a history of
staples, "Staple-ization,"
31.
24 Harold Innis, Empire and Communications,
revised by Mary Q. Innis,
Toronto, 1972, 5-6.
25 Harold Innis, "Transportation
as a Factor in Canadian Economic History,"
Essays, 66.
26 Drache, "Rediscovering,"
in Clement and Drache, 36.
27 Henry Veltrneyer, "A Central Issue in Dependency Theory,"
Canadian
Review of Sociology and Anthropology
XVII/3, 1980,204.
28 Robert Brenner, "The Origins of Capitalist Development: A Critique of NeoSmithian Marxism," New Left Review, 104, 1977 has exposed accurately the
Smithian bias of modern dependency theory. See also the useful discussion by
Henry Veltmeyer, "Dependency and Underdevelopment: Some Questions and
Problems", in Grayson, ed.
29 Harold Innis, "The Work of Thorstein Veblen," Essays, 25.
30 Neill, New Theory of Value, 109; see also 35, 27, 40 and Easterbrook, "Innis
and Economics," 293.
31 Thorstein Veblen, "The Preconceptions of Economics, " I and II, in The Place
of Science in Modern Civilization and Other Essays (New York 1961). See also
his biting criticism of neo-classical economics in "Why is Economics not an
Evolutionary Science," Place of Science, 74.
32 Veblen, Place of Science, 139, 141, 193,233.
33 Veblen, "The Limitations of Marginal Utility" in Place of Science, 241; see
also 36, 43, 75. While Veblen had serious respect for Marx, his understanding
of Marx was quite limited, causing him to repeat common misinterpretations
of Marx's thought. See "The Socialist Economics of Karl Marx and his
Followers" in Place of Science.
34 Thorstein Veblen, The Theory of the Business Enterprise, (New York 1932),
311.
35 John P. Diggins, The Bard of Savagery: Thorstein Veblen and Modern Social
Theory (New York 1978),23. See Veblen, Place of Science, 55.
36 In fact, Veblen supported the Bolshevik revolution and called for a' "soviet of
engineers" to be established; see Diggins, Bard of Savagery, 137.
37 Veblen, Place of Science, 332-3.
38 Harold Innis, Political Economy in the Modern State, Toronto, 1946, 83.
39 Innis, Fur Trade, 402.
40 Innis, Essays, 76, 75.
41 Innis, Cod Fisheries, 485, my emphasis.
42 There were of course other influences such as Duncan McIntosh and N.S.B.
Gras, but these figures were of secondary importance compared to Smith and
Veblen.
43 Robin Neill, "The Passing of Canadian Economic History," Journal of
Canadian Studies XII/5, 1977.
44 Easterbrook, "Innis and Economics," 442.
45 Innis, Fur Trade, 383.
46 Innis, Fur Trade, 15, 42.
47 Karl Marx, Capital, I, trans. Ben Fowkes, Harmondsworth,
1976, 164-5.
48 See Lucio Colletti, Rousseau to Lenin, trans. John Merrington and Judith
White (London, 1972), esp. 84 for a discussion of the reality of commodity
fetishism. This "reality" does not, however, eliminate the need for dialectical
critique.
49 C.R. Fay, "The Toronto School of Economic History," Economic History,
1934, 171. For Fay's influence on Innis see Note 15 and Craufurd D.W.
60
David McNally/STAPLE
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
THEORY
Goodwin,
Canadian Economic
Thought:
The Political Economy
of a
Developing Nation 1814-1914 (Durham 1961), 175.
Watkins, "Staple Theory", 58, 68.
Hutcheson, Dominance and Dependency, 22.
Harold Innis, "The Penetrative Powers of the Price System," Essays 258 lists
geographic factors, cultural considerations, technology, business organization
and political institutions as determining factors. Social relations of production,
or any concept approximating
it, remain absent.
Carl Berger, The Writing of Canadian History, Toronto, 1976, 98.
Drache, "Rediscovering,"
32,33. The notion that one can merely place capital
in the position occupied by the staple in Innis' theory is misguided in the
extreme. For it involves seeing capital as a thing. Capital, at least in the Marxist
view, immediately implies the social relation of wage-labour. To introduce
such a social relation, however, is to leave Innis and the immediate sphere of
market relations far behind.
Watkins, "Staple Theory Revisited," 89. Watkins never indicates how this
"recasting"
is to occur, nor could he in my view given the framework he
adopts. It is instructive that Watkins warns us to "be on our guard," 89, when
dealing with the work of H.C. Pentland - work that is indispensable for
anyone concerned with class formation in Canada.
Marx, Grundrisse, trans. Martin Nicolaus (Harmondsworth
1973), 881; see
also Capital, I, 125.
Marx, Capital, I, 128.
Marx, Capital, I, 274.
Marx, Capital, I, 876.
Marx, Capital, I, 874.
The notion that capitalism is defined fundamentally
by "laws of motion"
based on a determinate social relation of production has been developed by
Jairus Banaji, "Modes of Production in a Materialist Conception of History,"
Capital and Class, 3, 1977.
Marx, Capital, I, 724.
Marx, "Results of the Immediate Process of Production,"
appendix to
Capital, I, 1007, 1018, 1054, 1061-2.
Marx, "Results,"
1065.
Marx, Capital, I, 874.
John McCallum, Unequal Beginnings: Agriculture and Economic Development in Quebec and Ontario until 1870 (Toronto
1980) advocates
a
"modified"
staple approach noting "the inadequacy of explanations based
only on the properties of a particular commodity,"
120. However, he calls for
adding elements like political power to the staple approach, the result of which
can only be, as I have argued above, methodological eclecticism. Despite its
theoretical
deficiences, McCallum's
study is one of the most important
examinations of the relationship between agriculture and industry in Canada.
There are, however, many excellent partial or local studies. The most
important
remains H.C. Pentland,
"Labour
and the Development
of
Industrial Capitalism in Canada", PhD. Thesis, Toronto, 1960. This has just
been published as Labour and Capital in Canada. 1650-1860 (Toronto 1981).
Stanley Ryerson's Unequal Union (Toronto 1973) while quite schematic is of
value. Recent studies addressing industrialization
and class formation include
Greg Kealey, Toronto Workers Respond to Industrial Capitalism, 1867-1892
(Toronto 1980) and Bryan Palmer, A Culture in Conflict: Skilled Workers and
Industrial Capitalism in Hamilton, Ontario 1860-1914 (Montreal 1979). We
still lack any general study comparable
to Lenin's The Development
of
Capitalism in Russia (Moscow 1967).
Marx, Capital, I, 940.
61
Studies in Political Economy
69 For a discussion of Wakefield and his influence in Canada see Craufurd D.W.
Goodwin, 25-30 and Gerald M. Craig's "Introduction"
to his edition of Lord
Durham's Report (Toronto 1973).
70 See especially, H.C. Pentland, "The Role of Capital in Canadian Economic
Development Before 1875," Canadian Journal of Economics and Political
Science XVI/4, 1950, 457 along with McCallum, Kealey, and Jacob Spelt,
Urban Development in South-Central Ontario, Toronto, 1972.
71 McCallum, Unequal Beginnings, 91. On the crisis of Quebec agriculture see
McCallum and Fernand Ouellet, Economic and Social History of Quebec,
1760-1850 (Ottawa 1980).
72 See Ouellet, Economic and Social.
73 McCallum, Unequal Beginnings, esp, 34.
74 Ouellet, Economic and Social, 230; see also 134-7,283-5,362,471-5.
Robert
Brenner, "Agrarian Class Structure and Economic Development in PreIndustrial Europe," Past and Present 70, has developed the argument that the
surplus-extractive relation of classic European feudalism led inevitably to soil
depletion and agricultural crisis.
75 Such a process is now widely considered to have been crucial to England's
industrial revolution. See A.H. Johns, "Aspects of English Economic Growth
in the First Half of the Eighteenth Century," Economica 28, 1961 and
"Agricultural Productivity and Economic Growth in England, 1700-1760,"
Journal of Economic History 25, 1, 1965. See also E.L. Jones, "Agricultural
Origins of Industry," Past and Present, 40, 1968.
76 See Spelt, McCallum, Ryerson, Pentland and Donald Creighton, British North
America at Confederation, Ottawa, 1963.
77 Marx, Capital, III, 333.
78 Marx, Capital, I, 915-916.
79 For such evidence see Spelt, Urban Development, 166-7. Naylor's view that the
tariff was commercially inspired to lure American industry to Canada has
come under severe attack. For a useful summary of this debate - and one
which ultimately rejects Naylor's view see Paul Phillips, "Unequal
Exchange, Surplus Value and the Commercial-Industrial
Question: A Paper in
Honour of Stanley Ryerson," presented to the 1981 Meetings of the Canadian
Political Science Association.
80 As quoted by Vernon Fowke, The National Policy and the Wheat Economy
(Toronto 1957), 66.
81 Marx, Capital, I, 777.
82 See especially Henry Veltmeyer, "The Capitalist Underdevelopment
of
Atlantic Canada"
in Robert J. Brym and R. James Sacouman, eds.,
Underdevelopment and Social Movements in Atlantic Canada (Toronto 1979).
See also T. W. Acheson, "The National Policy and the Industrialization of the
Maritimes, 1880-1910," Acadiensis 1/2,1972.
.
83 Marx, Capital, I, 779 and "Results," 1024, 1054-5.
84 These points are made by Glen Williams, "Political Change, Economic
Growth, and the Politics of Industrialization in Canada," unpublished paper,
24-26.
85 The two positions are, of course, those of Innis and Naylor respectively. It is
interesting that Paul Phillips has recently developed an argument along the
lines of my hypothesis. The rise of economic dependency in Canada, he writes,
"fits very well the Marxian model of progressive concentration."
He should,
however, also have added the role of "centralization"
of capital. See his
"Unequal Exchange," 9.
86 E.P. Thompson has presented a powerful defence - despite some terribly onesided formulations - of "historical logic" based upon a dialogue between
concepts and evidence in his "The Poverty of Theory" in The Poverty of
62
David McNally 1ST APLE THEORY
Theory and Other Essays (London 1978).
87 Karl Marx, The Eighteenth Brumaire of Louis Bonaparte (New York 1963),
15.
88 Pentland showed a grasp of this outlook when he wrote of industrialization in
Canada that "Human transformation was bound to be partial, and mostly
unplanned,
because men were remaking
themselves without
much
comprehension or consciousness of it, because deliberate changes sent out
other ripples of subtle, unrecognized adjustments to preserve the tension and
balance of existence ... ", "Labour and Industrial Capitalism", 385.
89 Andre Gunder Frank sees Marx as "deepening" and "extending" the analysis
of Smith and Ricardo, Dependent Accumulation and Underdevelopment (New
York 1979), 38. For works which go beyond such a naive view and pose the
relation more correctly see I.I. Rubin, Essays on Marx's Theory of Value
(Montreal 1973) and Roman Rosdolsky, The Making of Marx's 'Capital',
trans. Pete Burgess (London 1977).
63