Geoscience Reference
In-Depth Information
statistical scrutiny of the LIS income surveys (
Chapter 8
) confirms that this
link is in fact an empirical regularity: a heterogeneous geography of income
drives preferences for fiscal structures apart and tilts politics towards a conflict
between regions; a homogenous geography of income implies that the nature
of redistributive conflicts is similar across regions and renders politics a conflict
between nationwide social groups.
The extent to which the geography of income shapes politics as a conflict
between regions or country-wide income classes is, in turn, mediated by two
other factors: the degree of regional economic specialization, and the level of
mobility of workers and dependents. By fostering a disperse geography of labor
market risks, the former reinforces the decentralizing impact of a heterogeneous
geography of income. By bridging risk profiles across regions, the latter mutes
such an impact. The contrast between the American and Canadian experiences
after the Great Depression captured clearly the workings of this tension and
its direct political implications.
I have shown that the shape of the American response to the Great Depres-
sion is largely the result of efforts of a particular set of units, the Southern states,
to protect the peculiarities of their labor market structure (
) from external
influences. The potential demise of the political economy of paternalism was,
for the Southern political elites, a much higher price to pay than revenues com-
ing fromWashington, regardless of their magnitude, could offset. Obviously, as
argued above, they managed to protect their specificities because they enjoyed
the institutional capacity to do so by controlling the relevant Committees in
the House and the Senate. Yet Canadian provinces enjoyed a similar capacity
in that the centralization of redistribution required their consent to amend the
British North America Act. Likewise, Canadian provinces also differed largely
in their regional labor market structures and, furthermore, the Depression hit
the more agrarian economies in the West of the country harder. And even so
they renounced their institutional capacity to block centralized unemployment
insurance.
The origin of these differences lies in the differing patterns of interregional
mobility between units in the two North American federations. While the
estimated 100,000 transients in Canada operated as a sort of multiplier effect
across provinces, expanding the unskilled workers' unrest through the nation,
the whole logic of Southern paternalism was to create a system of mutual
dependencies able to prevent tenants and croppers from moving toward the
Western and Northeastern industrialized states. As a result Canadian provinces
became closer in terms of both the profile of their dependent population and
the way in which the Depression affected them. The structure of Ontario and
Quebec's incentives changed towards a position less reluctant to embrace a
centralized solution. Meanwhile, American states maintained the large distance
between them in both respects. In addition, the beginning of World War II
operated in Canada as a second shock at the time of designing their response
to the Depression, disabling the few remaining pockets of provincial resistance
to pooling resources in a centralized solution. To conclude, in Canada the
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