Could North America have been settled more peacefully, with fewer property rights violations against Native Americans? To answer this question, we utilize the case of French colonists of Atlantic Canada (the Acadians) and a Native American tribe (the Mi’kmaq) between the seventeenth and eighteenth centuries in the areas around the Bay of Fundy in the modern provinces of Nova Scotia and New Brunswick. Under a relative state of anarchy, both the Acadians and the Mi’kmaq were able to minimize the relative returns to using violence by adopting rules of collective decision-making that favored consensus-building. By prioritizing consensus, distributional coalitions were faced with higher decision-making costs, making it difficult for concentrated interest groups within each society to capture the gains from fighting and spilling them over as external costs over the rest of the population. As a result, both the Acadians and the Mi’kmaq were able to reap the benefits of productive specialization and social cooperation under the division of labor.
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Similar to the United States, relations between Native Americans and settlers in Canada, which had worsened gradually and mildly between 1776 and 1867 (Surtess 1988), deteriorated rapidly after independence in 1867. Akin to the American colonial era, Native American policy for colonial Canada was mostly managed from the British capital, as it was the British who would shoulder the burden of conflict through sending troops. After American independence in 1776, the British were even keener on avoiding conflicts between Native Americans and Canadian settlers as they needed the Native Americans to supplement their own troops on the Canadian frontier (see Allen 1996). In terms of violence, the Handbook of North American Indians (Vol.4 on relations between settlers and natives, and Vol. 13 on Plains tribes) makes it clear that conflicts in Canada prior to 1867 were fewer and less intense than in the United States during the same period. Only after Canada became a country did violence increase. These differences between Canada and the United States from 1776 to 1867 suggest the possibility that in the presence of an involved and capable state, management by a colonial power imposes some restraints on the ability to raid. However, we leave this topic for future research.
The plural of Mi’kmaw is Mi’kmaq. Most of the literature uses these terms, although older historians and anthropologists used the Micmac/Micmacs convention for writing.
This is similar to the case of Medieval Iceland studied by Friedman (1979) and Solvason (1993). While the label of pure statelessness did not strictly apply, the state was weak enough that one could argue it was a close approximation. Acadia seems to have been a similar close approximation of statelessness.
Few papers in that literature have attempted to measure the outcomes from anarchy. They tend to concentrate on the conditions that made statelessness an equilibrium. There are exceptions however. For example, Friedman (1979) uses a limited quantity of information to document living standards. Geloso and expand. Another exception concerns the case of Somalia (Leeson 2007a; Powell et al. 2008). We add to these exceptions.
For a version of this argument that is better embedded in economic history, one should consult Ogilvie and Carus (2014). It can also be framed in terms of the recent contribution of Acemoglu and Robinson (2019) where societies that want to achieve growth and development must remain narrow corridor between lawlessness and authoritarianism. In that corridor, rulers provide security but they are constrained (either de jure or de facto) from abusing the tools that allow them to provide security. Related to this point, see also Piano (2019), Boettke and Candela (2020), Geloso and Salter (2020), and Piano and Salter (2020).
One may conjecture that if such a situation is inefficient, then as Leeson (2020) would suggest, this raises another question: why will this situation prevail as the status quo? As Holcombe (2018, p. 253) argues, the point of the Coase Theorem applied to government (or the PCT) is not to conclude that transaction costs are low and that resources are allocated to their highest valued uses, but rather that when resources are not allocated to their highest-valued uses, the reason is that transaction costs stand in the way. In politics, special interest groups face low transaction costs of bargaining with each other and therefore can make public policy for their benefit. Because the masses face high transaction costs in organizing as an interest group, this excludes them from the political bargaining process. As a result, the “efficient” outcome in this case will be for resources to be allocated to the highest valued uses among individuals in the low-transaction-cost group, but costs are dispersed among those in the high-transaction-cost group, who cannot bargain to mitigate them. None of this necessarily implies that there is not the possibility for the high-transaction-cost group to bargain with the low-transaction-cost group to allocate resources more efficiently. As Coase (1960, p. 34) states, “Pigovian analysis shows us that it is possible to conceive of better worlds than the one in which we live. But the problem is to devise practical arrangements which will correct defects in one part of the system without causing more serious harm.” For example, it has historically been the case that authoritarian political elites have ceded power to a parliament as form of political exchange and unintendedly created a path toward the rule of law, which has reduced the transaction costs of devising more inclusive political institutions as well as greater security of the property rights among the masses of the population (see Kiser and Barzel 1991; Barzel 2000, 2002; Congleton 2011; Candela 2020).
Anderson and McChesney (1994) use “negotiating” in their work, but we use the term “trade,” hence our modification of the terminology.
Under the constraint that α and β must be between 0 and 1, that α > (1 − α) and β > (1 − β).
The narrower (wider) the distribution of the gains (costs) from violence, the greater the chances of violence being used. The wider (narrower) the distribution of the gains (costs) from violence, the greater the chances of using trade.
Bouchard (1999, p. 81) priced muskets in New France (modern day Quebec) at somewhere between 10 and 30 livres between 1720 and 1740 while Geloso finds that incomes per person during the era fluctuated between 93 and 136 livres (2016, p. 131). This fails to include the cost of maintaining a working firearm.
One such example is the deportation of the Acadians in 1755. This was pushed for by the Massachusetts colony, and though London had explicitly disapproved, they ended up paying for it nonetheless (Geloso 2015). See more in Sect. 4.3.
Gregg and Wishart (2012) considered the social cost of the removal of the Cherokees from the areas they occupied in Alabama, Tennessee, North Carolina and Georgia during the 1830s. This is an important example, as popular imagination concentrates largely on the postbellum era as the era of violence towards Native Americans. However, as Gregg and Wishart show, the budgetary cost alone represented 3% of the US GDP in 1830. For Cherokees, direct costs represented 17.13% of their GDP. For comparative purposes, another costly war in American history, World War Two, constituted a burden equal to 1.88% of GDP. The social costs for Cherokees were even higher.
Such conflicts between settlers and natives occurred in regions such as Quebec, New England and New York in spite of a much larger fur trade than in Acadia (Delâge 1970; Leach 1988). This suggests that comparative advantage was in itself not sufficient.
The reduction in population is largely attributable to the introduction of diseases to which First Nations had never been exposed. However, the magnitude of their population decline places the Mi’kmaq among the groups that suffered least from this problem.
See Leeson (2014, pp. 155–169) for other examples.
Historians recognize that Acadia was a much less hierarchical society than Quebec was Heaman (2015). Historians also extend this judgment to the American colonies even though the comparative body of literature is smaller on this front (Griffiths 1992; Hodson 2012). In addition, attempts to impose formal rules were impeded by the lack of “administrative stability” and the inability to erect an “efficient bureaucracy” (Harris 2008, p. 56).
Which earned the Acadians the nickname of the “neutrals.” The British also were aware that they held no grip on the Acadian countryside (Harris 2008, p. 56).
The seigneur could impose the frontage tax of the cens, the conceded land area tax of the rente, the land sale tax of the lods et ventes, as well as a wide array of ancillary taxes that depended on the features of his estate. The seigneur also imposed the mandatory minimum labor provision of two to three days of work per year (known as the corvée) which could be avoided by paying a fee amounting to twice the daily wage rate for unskilled workers.
In 1720, after the cession of the region to the British, governor Richard Philipps claimed that trade between Acadia and New England stood at 10,000 £—a large part of which consisted of fur pelts. There is uncertainty as to which type of monetary units Philipps was referring to (New England currency, Halifax currency, Sterling currency or French currency. Simultaneously, the Acadians also traded with the French colony of Cape Breton, situated in the northern part of Nova Scotia. In 1740, it is believed that they traded for 26,939 livres (roughly 3.87 livres per person in Acadia) of which 20.1% was from skins, hides or furs (Clark 1968, pp. 207, 255–259).
We use the British spelling of dyke because it is the one used in the Canadian economic history literature on the topic (Saunders 1935; Clark 1968; Upton 1979; Wynn 1979; Griffiths 1992; Gwyn 1998; Faragher 2006, 2014; Kennedy 2008, 2013, 2014; Harris 2008; Hodson 2012; Caron 2015) and in the wider literature on farming in the area of New Brunswick and Nova Scotia (Longley 1936). We prefer to respect established conventions on the topic by using the British spelling.
They hunted seal in January. In February and March, they hunted otter, beaver, moose, bear and caribou. As of April, they fished (smelt, herring, shad, sturgeon and cod later in the summer). During the summer, they also hunted pigeon, partridge, hare and rabbit. Foraging and gathering yielded such edibles as roots, blueberries, beechnuts, wild pears and cranberries.
The sources are not always precise as to which grain is being discussed, but wheat tended to be the main crop in both Quebec and Acadia.
A good illustration of this relative wealth is exemplified in the work of Griffiths (1984) where the period from 1713 to 1748 is labelled as a golden age. The Acadian data provided by (Leblanc 1979) suggest a compounded growth rate for Acadia of 4.73% per year between 1710 and 1755. The data for Massachusetts and the whole of the thirteen colonies provided by Rabushka (2008) suggest slower growth rates of 2.57% and 3.25%, respectively.
Geloso (2015) observes that the reaction in London to the deportation generated a backlash that pushed colonial officials, when they took over the larger French colony of Quebec in 1760, to tolerate the French-Canadians (their faith, their institutions, and their customs) and to eschew any talk of deportation.
There was a notable incident in 1779, when a group of Mi’kmaq attacked local British settlers in Miramichi, raised a French flag and asserted support for the American revolutionaries. The uprising was subdued by British troops and the British forced the Mi’kmaq tribe of the area to change chiefs (Patterson 2009, p. 50).
There was a fear in 1793 that there would be a French invasion (Upton 1793, p. 83), and fears of an American invasion in the early 1800s (Upton 1979, p. 86).
Andrew Nurse (2004, p. 128) describes the post-1760 decisions of the Mi’kmaq in the following terms: “By 1760 the Mi'kmaq leadership had little option but to accept whatever deal was offered (…) the British Crown, in the form of the colonial administration (…) held sole legal authority over Nova Scotia with the legitimate right to make law unilaterally, including the regulation of the Mi'kmaq economy.” From there, the British established Mi’kmaq reservations which they gradually reduced in size at the behest of local settlers (notably after the migration of Empire loyalists to Canada) and granted themselves the right to confirm the selection of chiefs (Bock 1978, pp. 117–119).
There are other pieces of supporting evidence as well. Using import per capita figures, which are frequently used as a proxy for income growth, Gwyn suggests that the region stagnated economically until the mid-nineteenth century (1998, p. 168), while available evidence for Quebec suggests that the region experienced mild growth up until the 1850s (Paquet and Wallot 2007; Geloso and Bédard 2018; Geloso and Lindert 2020).
The 1701 census is available in the 1871 census of Canada, fourth volume, which compiles summaries for most censuses prior to that point (Public Archives of Canada 1874). The census of 1707 is detailed in the work of Clark (1968, pp. 234–235) but does contains some errors in calculation. Readers should consult the compilations available here (https://22.214.171.124/cea/livres/doc.cfm?ident=R0231&cform=T), which are drawn directly from Library and Archives Canada (Series G1, Vol. 466–1).
This approach is known as the welfare ratio approach. One should consult Allen (2001) for details about this approach, which is meant to create purchasing power parities that are superior to using exchange rates.
Geary-Khamis dollars estimates do not exist for the American colonies. For Britain, estimates of income exist in both forms.
See notably Gerschenkron (1947) for a detailed methodological discussion of this approach.
French cords are smaller: 48 cubic feet as opposed to 128 cubic feet.
The plural of a quintal which weighs 48.95 kg.
Lunn (1942, p. 118) suggests 70 to 80 lb, but it is important to note that she is referring to the French pound (489.5 g) as opposed to the British pound (453.6 g).
To arrive at this estimate, we took the population figure of 8,600 from the middle of the eighteenth century for this region as given by Carlos and Lewis (s2011, p. 72).
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We wish to thank Peter Boettke, Adam Martin, Ennio Piano, Ben Powell, Louis Rouanet, Alex Salter, Henry Thompson, and Andrew Young for their comments and feedback on earlier drafts of this paper. We are very grateful to three anonymous referees, whose suggestions for revision were invaluable for improving our argument. We are also grateful to William Shughart and Peter Leeson for the editorial suggestions as we revised this paper. Any remaining errors are entirely our own.
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Appendix A: calculation of GDP
Appendix A: calculation of GDP
Censuses of 1701 and 1707
The method undertaken to compute GDP herein expands on the model developed by Morris Altman (1988) and refined by Vincent Geloso (2018). The approach is relatively straightforward, as it simply adds up different outputs weighed by a fixed vector of prices (Crafts and Harley 1992; Broadberry et al. 2015). However, this requires a broad range of macroeconomic information. In the case of Quebec, Altman and Geloso utilized data and research culled from censuses and tithe surveys conducted under both French and British rule, allowing them to create multiple estimates over time when combined with trade data and assumptions from secondary sources.
In the case of Acadia, there are not as many censuses to draw from, which is to be expected given the limited reach of the state in the region. However, this does not and should not imply the absence of useful census data. In fact, there are two very reliable censuses that can help estimate output: 1701 and 1707.Footnote 31 The 1701 census is notably nominal – the names of all the individuals within a household are included rather than simply those of the household heads (like we see in the 1707 census). They also offer the considerable advantage of containing important insights into the extent of improved land holdings as well as the size of the cattle, sheep and swine herds. Subsequent to this, there is no census that reports this type of information until the dispersion of the Acadians by the British in 1755.
Finally, it must be pointed out that the estimates offered here are biased downwards for two important reasons: first, the quantitative evidence for the extent of the fur trade is limited. As such, a conservative approach was adopted in estimating fur output and more than likely underestimates its true scope, as suggested by the qualitative evidence—especially that relayed by Andrew Clark (1968). Secondly, minor sectors of agricultural production are excluded (notably horse breeding and poultry), as well as the important value of capital goods investments in the form of dykes. Consequently, the resulting estimates are downwardly biased.
Geloso (2016, 2018) used both qualitative and quantitative evidence on Quebec to create a wide-ranging array of income measures that can be compared in order to use it as a pivot point between non-comparable measures for other countries. There are three methods to evaluate living standards that exist. Geloso calculated nominal incomes which he then deflated by the commonly-used bare-bones bundles to compare with New England and Britain.Footnote 32 However, in comparing Quebec with France, Peru, Mexico and another measure for Britain, he was obliged to shift to the Geary-Khamis dollar approach developed by Angus Maddison (2007).Footnote 33 As such, comparisons are in different units. These two approaches cannot be used for Acadia because of the absence of price vectors for the colony, meaning that the third approach used by Geloso must be adopted. This is possible since Acadia and Quebec used the same monetary system and were more or less similar colonies. This method proves to be the more conventional tack of computing GDP as a volume index where quantities are converted by a fixed vector of prices.Footnote 34 However, since Quebec's living standards are expressed in all available measurements, it can thus serve as a pivot point where all other areas are expressed as a percentage of Quebec. This allows a cardinal ranking of living standards which can be observed in Table 1 above.
As there is no wide vector of prices for Acadia when comparing with other regions, we had no choice but to use price vectors from 1739 for Quebec—the same used by Geloso (2016, 2018) to estimate the colony's GDP.
We preserved the core assumptions made by Geloso and Altman to measure net output for wheat. This method is predicated on assuming that 75 per cent of cultivated land was allocated to the growing of wheat. Seed requirements are retrenched by assuming that two minots were sown per arpent which produces the estimate of net wheat output (1 minot = 1.107 bushels and 1 arpent = 0.845 acres). We also assumed that all other grain output was allocated as inputs into pastoral output, from which we retracted an additional 20% of net wheat output to reflect feed for animals. Censuses, however, did not report actual output of grain, meaning we must import an approach to help calculate yields per unit of land must be imported. In this case, we opted to create a low and high bound. The low bound uses Garneau’s estimate of 6.66 minots per arpent which applies to Quebec (Garneau 1859, p. 104). The high bound uses the figure of 11 minots per arpent provided by Dechêne (Dechêne 1992, p. 186) for the region of Montreal. This high estimate is roughly the same as that of Acadia, suggesting the possibility that the reality is closer to the upper bound (Clark 1968, p. 163, fn.132).
The estimation of output is based on the method developed by Geloso (2016) and influenced by the work of Winifred Rothenberg for the farmers of Massachussetts circa 1800 (1979, p. 995). In terms of dressed meat (which accounts for losses in transformation), a cow weighed 221.3 lb, an ox weighed 402.4 lb, and a steer weighed 189.9 lb. Rothenberg also observed how the percentage of oxen, cows, and steers that were slaughtered differed significantly (the rates of slaughter stood respectively at 20%, 12%, and 50%). Thanks to Rothenberg’s assumptions, we can isolate the total quantity of meat produced from cattle. To divide cattle into finer categories, we use herd composition data from Dépatie (1988). To estimate the meat produced from pigs and sheep, we use the price for lard and beef as there are no prices for pork and mutton. The dressed weight and slaughter rate for pigs are also drawn from Rothenberg. For sheep, we imported the method of Geloso et al. (2017) where one-third of sheep were slaughtered and each one weighed 60% of its life weight (75 lb).
Wool and dairy output
With regard to production of wool, Altman multiplies the quantity of sheep reported by 1.3 lb while Geloso relies on the 1851/52 census figure of 2.2 lb per sheep (Public Archives of Canada 1874, pp. 219–221). Both figures are used to derive the lower and upper bounds of wool output. As for dairy output, Altman estimates 44 lb of butter equivalents per cow; different versions of this calculation appear in other papers. However, in a later article Altman (1998) places the proportion at twice that amount. By comparison, authors like Lewis and McInnis (1984) put it at 92 lb per cow (as per their work on the 1851 census of Canada East). Evidence assembled by Geloso et al. (2017) points to findings that are much closer to this higher bound. Nonetheless, in his output on Acadia, Clark (1968, pp. 168, 243–244) highlights qualitative evidence of contemporary observers who argued for the low productivity of cows. As such, we will use both bounds to create a range estimate.
Altman's (1988) research places firewood output at 13 livres per capita while Geloso (2016, 2018) assumes that, given environmental constraints, it would have been impossible to survive with any less than 20 (French) cords of firewood; he therefore set this as the bare minimum required to be produced.Footnote 35 Given the small size of the Acadian population and the availability of land, firewood was a relatively cheap commodity.
The output of fisheries was not measured often for the Acadian region. What is more, the issue of estimating output is rendered more complicated by the fact that the Acadian fishing fleet was complemented by transient ships from France. In his work, Andrew Clark references a report by Lieutenant-Governor Thomas Caulfield of Nova Scotia who, in 1715, estimated that the inhabitants of the Minas region (where 38% of the Acadian population reported in the 1707 census resided) had between 30 and 40 vessels which they built themselves (Clark 1968, p. 247). Cautiously, we will assume that these ships represent the entirety of the fleet.
To arrive at the value of output, we rely heavily on the work of Balcom (1984). For 1718, in the French colony of Cape Breton (northern Nova Scotia), he calculated that fisheries yielded 156,500 quintauxFootnote 36 when there were 626 ships engaged in the region—this means that each one produced 250 quintaux (Balcom 1984, pp. 35, 47). The price in 1739 for a quintal is obtained by dividing the value of cod exports by the quantity of cod quintaux exported (20 livres per quintal) (Balcom 1984, pp. 17, 35). The average output of a ship in 1718 is multiplied by the 1739 price (which allows us to maintain comparability with the Geloso price dataset) and then deflated by 40.9% to account for the value of inputs needed to produce cod (Balcom 1984, p. 58). The low bound and high bound of the values of cod output is based on the ranges provided by Caulfield.
The ability to estimate fur as a commodity proved highly problematic as there are few estimates of actual output, a large part of which was exported illegally (Murray 1938). Several methods were attempted and produced important differences which could not be properly evaluated in terms of plausibility.
As a result, we had to adopt a conservative approach based on the potential Mi'kmaw labor force involved trapping furs. Julian Gwyn estimated there to be “perhaps less than three hundred potential trappers” throughout the eighteenth century (2003, p. 76) for a total population hovering between 2200 and 2500 (between 12% and 13.6% of the population were trappers). When furs were shipped, they were measured by pack (a compact bale of furs weighing 80 to 90 lb) (Gélinas 2000, p. 414).Footnote 37 In the Hudson Bay region, the York Factory, operated by the Hudson Bay Company, received an average of between 23.48 and 26.68 skins per trapper.Footnote 38 If we use the proportions suggested by Gwyn (2003, p. 76), we arrive at a labor force of between 1,032 and 1,173 trappers. The number of skins traded at the York Factory (Carlos and Lewis 2011, pp. 189–191) are then divided by the number of trappers. While this is a shortcut, we presume that all skins are beaver skins. Given a weight of 1.3 lb per skin (Wien 1990, p. 305, fn.55), this shows us how each trapper in the region was providing between 30.5 and 34.7 lb of skins. Nothing in the sources for Acadia lends support to such high proportions, so we have chosen to scale these proportions by half. This is an arbitrary decision, but it does line up better with our understanding of the fur trade in the mid-eighteenth century (Gwyn 2003, pp. 71–72). The total value was deflated by 13% (an assumption used by both Altman and Geloso in their estimates of Quebec's GDP) to avoid double counting. We also excluded the 25% tax which Altman and Geloso argue are already embedded in the price of furs.
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Candela, R.A., Geloso, V.J. Trade or raid: Acadian settlers and native Americans before 1755. Public Choice 188, 549–575 (2021). https://doi.org/10.1007/s11127-020-00853-y
- Collective decision making
- Property rights