Staple Thesis

What Is the Staple Thesis?

The staple thesis is a theory of economic growth that stresses the job of traditional commodities, or staple products, and the impact they have on molding an asset rich economy. It contends that national economies are linked to the production and export of staple goods.

Figuring out Staple Thesis

The staple thesis, made by Canadian economic history specialist Harold Innis and macroeconomic W.A Mackintosh in 1923, takes a gander at how societies develop corresponding to economic production. The thesis was introduced as a clarification for how the pattern of settlement and economic development of Canada was influenced by the abuse and export of natural resources. Despite the fact that its original purpose was to model Canada's historical economic development, the staple thesis can be applied to any country with an export-weighty economy.

Innis and Watkins contended that various regions in Canada developed diversely founded on their primary exports. For instance, they related Atlantic Canada to the fishing industry, especially the harvest of cod. Central and northern parts of the country relied intensely on the fur trade, while Western Canada's primary export was wheat. The theory expands on these linkages to make sense of the unique "characters" of every region, for instance, with respect to their perspectives toward government authority.

The fundamental system of the staple thesis is possibly applicable to any economy whose development is dependent on the export of raw materials. The theory contends that the degree to which economies depend upon the export of staples for their development influences their economic, social, and political development.

Staple Thesis Example: Brazil

One more contemporary application of the staple thesis could include the influence of the petroleum industry on economic growth in a country that exports unrefined petroleum, like Brazil. An increase in demand for oil exports returns profits for large oil producers.

In Brazil, the government holds over half the voting shares of Petrobras, the country's largest oil producer. Hence, the income from oil influences the development of infrastructure, mechanical innovation, and human capital both inside and outside the petroleum industry as it assists with driving the country's economy.

Critique: The Staple Thesis Trap

The creators of the staple thesis held fairly restricting perspectives in regards to the impact of reliance on staple commodities on economic development. In Mackintosh's view, mature economies could effectively keep on depending upon staple production. Innis took a more skeptical view, accepting that as countries create, their economies ordinarily need to progress from an over-reliance on the production of staples for export. Innis set a center outskirts structure in which metropolitan areas with manufacturing capacities exercise a certain amount of control over fringe areas that give raw materials.

The center fringe structure recommends that the relative progress of economies dependent on staples is contingent upon the development of economic activity linked to staple products themselves. Subsequently, economies equipped for creating related industries become more prosperous, as indicated by the theory.

Features

• The staple thesis contends that the degree to which economies depend on the export of staples for their development emphatically influences their economic, social, and political development.
• The staple thesis was made by Canadian economic antiquarian Harold Innis and financial analyst W.A Mackintosh in 1923 to model Canada's economic history.
• The staple thesis is a theory of economic growth that stresses the job of traditional commodities, or staple products, and their impact on the molding of an asset rich economy.