What is a Staple Thesis?

The staple thesis was developed because of the noticeable economic development in Canada, but the thesis can also be applied in different countries. The thesis follows that traditional commodities or staple products contribute immensely to the actualization of a wealthy economy. In other words, the thesis is a theory that aids substantial economic growth.

Back to:ECONOMIC ANALYSIS & MONETARY POLICY

How did the Staple Thesis Originate?

The thesis observed how societies have developed over time and concluded that the exploitation and exportation of natural resources contribute to the pattern of settlement and the economic development that Canada has experienced in recent years. Its two progenitors strongly affirm individual regions in Canada have experienced growth as a result of their primary exports. For example, Atlantic Canada is associated with the fishing industry, specifically the harvest of cod. Central and northern parts of the country, the fur trade, while Western Canadas primary export was wheat. These primary exports have aided the economic increase in these regions. The theory as developed by Canadian economic historian Harold Innis andeconomistW.A Mackintosh in 1923 emphasize the distinctive trades these different regions engage in as a vital tool to economic development.

Brazil as an Example of Staple Thesis

The theory emphasizes on economies that have strategically developed as a result of trading in their raw materials. For example, in recent times, the theory can also be visualized in the petroleum industry. Countries that export oil has experienced economic development, Brazil as a case study. The Brazil government controls large percentage shares of Petrobras, the nations largest oil producer. The income from oil is used in the development of infrastructure, technological innovation, and human capital. This primary export, petroleum has contributed significantly to the nation's development. This is also the case for all other petroleum exporting countries.

The Staple Thesis Trap

The progenitors of this theory hold a contrasting view on the degree to which economies should rely on the export of staples for their development. But, the core principles of the theory still remain the same, this is the fact that the success of an economy is primarily dependent on staples. The point of the authors controversy is dependent on these staples. Ma Mackintosh holds the view that a developed economy could successfully continue to rely on staple production since that is its means of attaining high economic growth while Innis affirms that as countries develop, their economies should move from being overdependent on the production of staples for export. He offers that manufacturing countries can typically control resources-giving countries.

Related Topics

• Rule of Law relate to Economic Growth
• Labor Productivity
• Productivity and Learning Curve
• Experience Curve
• Acceleration Principle
• Aggregate Production Function
• How to Measure Productivity
• What is the Effect of Sustained Economic Growth?
• How are compound growth rates and compound interest rates related?
• Compound Growth Rate
• Solow Growth Model
• What are the Components of Economic Growth?
• Porter's Diamond
• Physical Capital
• Human Capital
• Infrastructure
• Staple Thesis
• Resource Curse
• Capital Deepening
• What are Growth Accounting Studies?
• What is a Healthy Climate for Economic Growth?
• Economic Convergence
• Emerging Market Economy
• BRIC Countries 
• Growth Consensus
• Economic Conditions
• Leading Economic Indicators
• KOF Economic Barometer
• CEO Confidence Survey
• NAB Business Confidence Index