Asset Value in Canada, 1800-2000

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While most of the advanced national economies around the world use the United States as a benchmark for commercial development, this commitment carries ideological baggage and methodological limitations that must be addressed. Asset value analysis reveals the social and geographic costs of macroeconomic theory, especially in the case of the United States. The contradictions of using enslaved Africans as both currency and infrastructure simultaneously is only one of the fundamental problems. Over time, this specific error was replicated during the process of industrialization in terms of immigrant labor populations as well as the manipulation of consumer networks over the last seventy years. An examination of the Canadian processes of commercialization reveals that there are other ways to approach market growth.

Canada (really the remainder of British North America) in 1800 covered the eastern Mississippi river valley, the Great Lakes region, with core settlements stretching north and east from Lake Erie to Nova Scotia. Over 95% of the physical infrastructure for the nation laid within two miles of a lake, river, or ocean. In 2010 dollars, the asset value of the country was just over $2 billion – barely 2 per cent of the United States at the same time. The core of early American commercial growth was Montreal (though a dozen smaller towns also contributed). In this pre-industrial setting, the importance of converting natural resources into physical infrastructure was everything. Canadian towns were little more than military installations to protect limited commercial activities in timber and furs.  This pattern persisted through the nineteenth century, limiting any fundamental movement towards industrialization and minimizing larger-scale patterns of urbanization.

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By 1900, Toronto had emerged to emulate its American neighbor to the south – New York City. Canada’s political independence gave it a nominal claim to the western territories and introduced the possibilities of expansion across the Pacific Ocean. Its national asset value exceeded $152 billion. While this measure shows evidence of growth, the market expansion is anemic compared to the major world powers of the time (United Kingdom, United States, Germany, Japan, and Russia). Canada remained a small, stagnant, rural economy on a national scale with little physical or financial infrastructure to reward industrial investment. Toronto grew largely as an extension of the Buffalo metropolitan area, creating a “twin cities” effect similar to Philadelphia and Camden (or San Francisco and Oakland) at the end of the nineteenth century. At $36 billion in asset value, Toronto surged past Montreal as the economic center for the country. It became the first densely urbanized center in Canadian history and became the model for its commercial growth over the next century.

 

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The main story of Canadian market expansion comes in the second half of the twentieth century. The emergence of the United States as a global superpower during the Cold War against the Soviet Union required the consolidation and protection of North America. Canada reaped the benefits of increased American military and financial investments in projecting its political authority around the world. In the early twenty-first century, 90 per cent of all Canadians live within 100 miles of the United States border. Further, 70 per cent of Canadians live in major metropolitan areas. The process of rapid industrialization and digitalization of the Canadian economy is a direct result of $1.7 trillion of direct private investment from the United States since 1946. Toronto, and later Vancouver, were the most direct local beneficiaries of this investment in terms of asset value. By 2000, Toronto’s asset value reached more than $1 trillion, while the Canadian national economy became a leading global partner worth $7.27 trillion. The massive economic growth of the twentieth century may foreshadow the kind of commercial expansion that the United States experienced between 1880 and 1920. If Canada can create better transportation and communication networks while attracting increasing numbers of skilled immigrants, it will be the key to geopolitical stability in both Asia and Europe in the twenty-first century.

 

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Author: waltergreason1

Public Figure.

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