ECON 321

1
ECON 321

• Tariff Induced Growth The Corn Laws and Economic
  Development

2
The Corn Laws

• Background
• Corn in this context is actually wheat. What we
  would call corn is either maize (if used as
  animal food) or sweet corn if people eat it
• The currency system has changed significantly.
  The Sterling system had pounds, shillings and
  pence as its basis.

3
The Corn Laws

• There were 20s to the pound and 12d to the
  shilling.
• Once the gold standard was in place, one Pound
  cost 4.86 to buy.
• The system of weights and measures was also
  different tariffs on wheat/corn were calculated
  per bushel (bu), quarter and hundredweight (cwt).
  

4
The Corn Laws

• In Lower Canada, the units were different
  againminots not bushels but the total size is
  pretty similar
• A bushel is about 36 litres in volume a quarter
  is 8 bushels a hundredweight about 50.8 litres

5
The Corn Laws

• The Corn Laws were in effect from 1689 to 1846
• Designed to protect English landowners, the goal
  was to keep prices high enough to maintain
  incomes while still providing sufficient food to
  avoid civil unrest.

6
The Corn Laws

• Wheat was a major dietary component
• Other grains or potatoes were viewed as inferior,
  or even Giffen goods
• Unlike the timber tariffs, the Corn Laws were
  designed to balance British domestic objectives
  and protect British industry rather than foster
  colonial development

7
The Corn Laws

• In normal times, wheat could be imported from
  continental Europe with northern France and
  Prussia being two key sources
• North and South America, and Australia were also
  emerging as important sources of supply
• The amount of armed conflict on European soil,
  and the use of naval blockades meant that
  economically efficient sources were not always
  available

8
The Corn Laws

• As the British turned to emerging markets, some
  areas of BNA benefitted from increased demand
• In particular, both Upper and Lower Canada were
  in a position to benefit from increased demand.
• Agriculture formed a strong base for the
  subsequent expansion in one region but not the
  other.

9
The Corn Laws

• These unequal outcomes have led to an ongoing
  debate regarding the efficiency of agriculture in
  Upper and Lower Canada
• Key factors are endowments, farming methods, and
  institutions
• Note that wheat fits the profile of a staple with
  the difference that it needs to be grown rather
  than extracted.