Role of Sir John A. Macdonald in the Creation of the Canadian Banking System

18 04 2014
John A. Macdonald, 1875. Image from Library and Archives Canada

John A. Macdonald, 1875. Image from Library and Archives Canada

A reader of this blog has asked for information about the role of Sir John A. Macdonald in the development of Canada’s banking system. I suggest that they start with:

Smith, Andrew. “Continental Divide: The Canadian Banking and Currency Laws of 1871 in the Mirror of the United States.” Enterprise and Society 13, no. 3 (2012): 455-503. They should also look at this new working paper by Joe Martin and Donald Brean.

A reader of this blog has noticed that this link no longer works.  Here is an abstract of the paper:


Joe Martin, Rotman School of Management, University of Toronto

Donald S. Brean, Rotman School of Management, University of Toronto

Recent tensions in the Eurozone have elicited relatively little public discussions of how large  federal systems grappled over time with forging a common financial and monetary system.  This paper draws on the disparate experiences of two North American countries from similar  traditions – Canada and the United States, with a view to putting that process in historical  context. Despite advantages which Europe does not enjoy, these countries’ efforts to build  their national banking systems and common currency as well as unify their national debt  followed a long and varied path. The paper argues that Europeans would profit from the  lesson that the process required many difficult political steps in order to build the necessary  consensus for these systems to function, with all their flaws, as a binding rather than divisive force. We contend that those who supported and implemented the introduction of the Euro  ignored much of the institutional and organizational infrastructure required to successfully run  an “optimal currency area.”

Impact of CEO Knighthoods on Firm Profitability

18 04 2014

That’s the subject of a new paper that looks at data from New Zealand.


This paper studies theoretically and empirically whether and how governments can affect the behaviour of CEOs through the use of awards and honours. Our model predicts that government awards have a negative effect on firm performance. This effect is stronger in non-competitive industries. The empirical analysis uses two legal reforms in New Zealand: knighthoods and damehoods were abolished in April 2000 but reinstated in August 2009. The findings are consistent with the predictions of the model. Overall, our results indicate that governments can redirect firms towards a “stakeholder view”; through the use of government awards to the detriment of shareholders.


It would be interesting if someone did some similar analysis for Canadian corporations before the Second World War.

The Enhanced Supplementary Leverage Ratio and the Stereotype of US Laissez-Faire

17 04 2014

Matt Yglesias has published a great summary of the debate over the debate over the proposed regulations for bank capital adequacy in the United States. Yglesias’s piece is interesting because it deals with an intrinsically important issue (how to regulate banks so as to reduce the chances of future financial crises) and because it undermines that widespread view that the net burden of regulation is always greater in social-democratic Europe than in the United States. Ygelsias shows that the plans to impose a 5 percent equity ratio on the biggest banks are being fought tooth and nail by the said banks and their spokesman, Tim Pawlenty, the former Minnesota governor who now runs the Financial Services Roundtable.  Pawlenty has argued that the proposed 5% rule would disadvantage US banks relative to their competitors in Europe, where a requirement of just 3% is currently under discussion. 

Yglesias makes this apt comparison with environmental regulation:

Since both American and European banks are supported by their respective governments when they get into trouble, if European regulators let European banks take bigger risks than American regulators allow the European banks will be at an advantage.

The question citizens have to ask is whether this is a good reason for lax regulation. A country with stricter air pollution rules puts its manufacturers at a disadvantage. On the upside, it gets cleaner air. By the same token, a country with a stricter leverage ratio will have a smaller and less lucrative banking system than a country with a laxer one. On the upside, it gets fewer financial crises. To the extent that you think a big problem in America is that our banking sector isn’t sufficiently large or profitable, Pawlenty’s concerns should weigh heavily on your mind. To the extent that you’re more worried that our banking sector is excessively crisis-prone and bailout-dependent, Pawlenty’s concerns seem less compelling.


Historic Turns in Organization and Management Theory: Critical, Cultural, and Qualitative

11 04 2014

AS: I’ve very interested in this panel, which will take place at the Academy of Management Conference in Philadelphia, 2 August 2014. 

Coordinator: Michael Rowlinson; Queen Mary U. of London; 
Coordinator: Gabrielle Durepos; St. Francis Xavier U.; 
Coordinator: Kyle Bruce; Macquarie U.; 
Panelist: Shawn M. Carraher; Oxford Journal Distinguished Research Professor; 
Panelist: Diego Maganhotto Coraiola; U. of Alberta; 
Panelist: Stephanie Decker; Aston Business School; 
Panelist: William M Foster; U. of Alberta; 
Panelist: John Hassard; The U. of Manchester; 
Panelist: Albert J. Mills; Saint Mary’s U.; 
Panelist: R. Daniel Wadhwani; U. of the Pacific; 

This workshop is located at the intersection between critical management studies (CMS), management history (MH), and organization and management theory (OMT), and will consider the prospects for more critical, cultural, and qualitative historical research in organization theory. There can be no doubt now that an historic turn is underway in OMT. However, for many advocates of an historic turn there was an expectation that it would be more closely aligned with the rise of CMS. From this perspective, there is a perception that CMS is less historical than expected and also less reflexive in the treatment of history; that Management History (MH) is not noticeably much more critical in its orientation; and for the most part, history in OMT is equated with quantitative longitudinal studies. Accordingly, the workshop will provide a forum for discussing these perceptions, with a specific focus on the role of generalist journals in OMT and CMS and the specialist historical journals in MH and the neighboring field of business history. The aim is to consider how historical research should be crafted and how historical papers should be developed for submission to the most appropriate journals. The workshop will also consider whether a case needs to be made for generalist journals in OMT to reconsider their standard article format in order to facilitate a wider range of historical research, for example, by relaxing the requirement for a generalizable contribution to theory to allow for a theorization of singular of historical events within a historical context.

Search Terms:


Ignorance is Strength

8 04 2014

As long-term readers of this blog know, one of my interests is the use of knowledge in society and the theories of knowledge that underpin competing normative views of public policy. I was therefore fascinated to read of some research on the MonkeyCage blog that showed that support among Americans for US military intervention in the affairs of Ukraine is negatively correlated with the ability to successfully locate Ukraine on a map of the world.  In other words, Americans who have a rough idea of where Ukraine is located are more likely to oppose military involvement that those who have absurd ideas about Ukraine’s actual location.


On March 28-31, 2014, we asked a national sample of 2,066 Americans (fielded via Survey Sampling International Inc. (SSI), what action they wanted the U.S. to take in Ukraine, but with a twist: In addition to measuring standard demographic characteristics and general foreign policy attitudes, we also asked our survey respondents to locate Ukraine on a map as part of a larger, ongoing project to study foreign policy knowledge. We wanted to see where Americans think Ukraine is and to learn if this knowledge (or lack thereof) is related to their foreign policy views. We found that only one out of six Americans can find Ukraine on a map, and that this lack of knowledge is related to preferences: The farther their guesses were from Ukraine’s actual location, the more they wanted the U.S.  to intervene with military force.





Some of the guesses about where Ukraine is located are hilarious (see map).


This research is connected to Ezra Klein’s recent blog post about how politics makes people stupid (i.e., how strong political views reduce their ability to perform basic math).



Empire, Trees, and Climate: Re-Assembling Climatic Pasts in the North Atlantic

7 04 2014

My research collaborator Kirsten Greer will be presenting a paper at the Association of American Geographers Conference in Tampa on 9 April.  Her paper is called Empire, Trees, and Climate: Re-Assembling Climatic Pasts in the North Atlantic


Kirsten Greer, Dr.* – Nipissing University
Adam Csank, Dr. – Nipissing University
Kirby Calvert, Dr. – Pennsylvania State University
Margot Maddison-MacFadyen – Memorial University

How can historical geographies of British imperial expansion, trade networks, and commodity frontiers inform climate histories?  This paper contributes to mixed methods in climate change research by combining theoretical and methodological approaches in historical geography, dendrochronology, and GIS to understand how the Atlantic triangle trade in timber can inform studies on climate.  In the early to mid-nineteenth century, British North America was an integral site in Britain’s triangular trade of timber, fish, sugar, rum, and molasses with the West Indies.  Known today as eastern Canada, the region’s forests and watersheds were transformed into the “modern” world system as the Crown secured lands and timber rights during the Napoleonic Wars.  Considering that British North American timber was integral to ship-building, imperial infrastructure (dockyards, fortifications, government buildings), and maritime supremacy in the age of sail, we provide a speculative piece on how archival and museum research, dendro-provenancing (e.g. analysis of tree ring widths of historic buildings and shipwrecks), and visualizing techniques using GIS can provide important insights into climatic conditions of the past.  We also discuss the theoretical challenges of using mixed methods in climate change research, especially when bringing together different approaches from the humanities and environmental sciences, and in thinking about the role of non-human agency in climate change.


Alex Tabarrok on the Ukrainian Crisis

1 04 2014

Alex Tabarrok makes some important observations about the nature of knowledge in society and prediction in a blog post about the West’s policies towards Ukraine.  His key insight is that Western politicians and pundits have strong views about what is to be done about Ukraine despite knowing little about the country or even being able to speak its language. 

Foreign policy experts love making bold predictions.  The clearer their conclusions, the wiser they sound.  Unfortunately, as Philip Tetlock documents, their predictions about controversial topics are scarcely better than chance.  They’re all style, no substance.  

I’m reminded of F.A. Hayek’s words: 

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account. The Fatal Conceit : The Errors of Socialism (1988), p. 76

Hayek was talking about the impossibility of successful central planning: the economy is so complex that central planners wouldn’t be able to manage it even with supercomputers. However, his basic point can be applied to the making of foreign policy as well. 


Get every new post delivered to your Inbox.

Join 46 other followers