Thought for the Day

3 08 2011

“The trouble with quotes on the internet is that it’s hard to verify their authenticity” – Abraham Lincoln





Journal of Historical Research in Marketing: New Feature

2 08 2011

I was asked to post this by Stanley J. Shapiro, who Professor Emeritus of Marketing at Simon Fraser University, regular reader of this blog, and an editor of  the Journal of Historical Research in Marketing. Launched in 2009, Journal of Historical Research in Marketing is the only quarterly, peer-reviewed journal publishing high quality, original, academic research that focuses entirely on marketing history and the history of marketing thought.

Prof. Shapiro would like to bring your attention to a new feature in the Journal. That journal now wishes to introduce a Teaching & Learning feature which will highlight how others are teaching courses, whatever the home discipline, that devote considerable attention to the history of public markets,  marketing practice, advertising, retailing, cultures of consumption, distribution systems and related topics.

These are subjects on which economic historians, social historians,urban studies, and those working in women’s studies among others have published. However, JHRM has only a very limited knowledge either of how many courses are being taught that cover this area, in whole or in part,  or, evn more importantly, how those courses are structured. Put very simply, we want first to compile an ongoing and continually updated collection of this sort. Contributions to our list will both be announced in the new Teaching & Learning section of JHRM and the course outlines, bibliographies of interest and the like will also appear on the Resources page of JHRM’s sponsoring organization, the Conference on the History of Advertising, Retailing and Marketing.

Stan had this to say about the new feature:

 

Let me begin by briefly reviewing the relevant pedagogical content that has already appeared in JHRM. What’s been published to date provides readers with a most impressive mix of course outlines, edited collections of readings, and observations on teaching the history of both marketing thought and, to a lesser degree, marketing practice. In Volume I, Issue 1, Jones and Keep discussed in some detail Stan Hollander’s seminar taught at Michigan State University on the History of Marketing Thought and provided the 1994-95 syllabus for that course. The full table of contents of the associated Hollander and Rassuli readings volume is also provided. This remains a classic collection with numerous sources that would still merit consideration for inclusion in a more contemporary reading list. 

 

Two items of obvious pedagogical interest appear in Volume 1, Issue 2. The first is a discussion by Mark Tadajewski of the process he and Brian Jones used in assembling the mix of previously published articles included the in three volume set, The History of Marketing Thought, they edited for Sage. The full table of contents of that set is also provided so readers can compare Tadajewski and Jones’s selections, made fifteen or so years later, with those of Hollander and Rassuli. That E&I contribution by Tadajewski is accompanied by three others, authored by Eric Shaw, Robert Tamilia, and Goran Svensson, who provide commentaries on the three volume set of readings. The same issue of JHRM also includes Ron Savitt’s observations on both teaching and studying marketing history. There is much to be learned from that article and Ron’s comments on “the course that never was” would be of particular value to all those who today wish to introduce a course on marketing history.

 

There are no course outlines or discussions of pedagogy in Volume 2, Number 1, though Tracey Deutsch’s discussion of emerging areas of interest in retail history has obvious reading list implications. In Volume 2, Issue 2, Jones et al briefly reveal the scope of Danny Monieson’s doctoral level course at Queen’s University on the development of marketing thought. The full course syllabus with its reading list and assignment sequence is available on the CHARM web site at www.charmassociation.org.

 

The E&I found in Volume 2, Issue 3, also highlights new developments, neglected areas of interest, and emerging trends in the study of retail history. The direct pedagogical relevance of the three contributions there again relates to the design of reading lists on the history of retailing. Volume 2, Issue 4, on the other hand, contains three very detailed discussions, along with course outlines and reading lists, on how marketing theory and the history of thought is currently being taught. That material was provided by Shelby Hunt (teaching in the United States), Christine Domegan (in Ireland) and Ben Wooliscroft (in New Zealand). That E&I is, simply put, currently the “mother lode” source for any and all interested in introducing such a course be it at the BBA, MBA or PhD level.

 

Volume 3, Issue 1, contains two contributions of pedagogical importance. The first is Eric Shaw’s E&I commentary in which he reflects on the two offerings of Dixon’s doctoral seminar, 1975-76 and 1978-79, on the development of marketing thought and theory in which Shaw participated. The tone and tenor of that two semester offering is made clear as are Dixon’s views both on certain concepts of the time and on those who were then promoting these concepts. The thirty page reading list for the 1986 seminar is posted on the CHARM web site www.charmassociation.org under “Resources”.  In that same issue of JHRM one also finds a previously unpublished Dixon paper which discusses the changes in the reading list for Reavis Cox’s Marketing Theory Course at Wharton before and after Alderson’s Marketing Behavior and Executive Action was incorporated therein. Though the sources discussed are now somewhat dated, the insights provided more than justify a careful reading of that article.

 

Course design of a sort, but at a very different level, is discussed in Volume 3, Issue 2, when Bill Lazer and Pete Bennett reflect on the initial mid-to-late 1960s offerings of the American Marketing Association’s Doctoral Consortium. An interesting comparison is made between how the Consortium, a gathering for some of the very best and brightest, functioned then and how, forty plus years later, it now is structured. Finally, the E&I in Volume 3, Issue 3, was devoted in its entirety to publication of Shapiro and Tamilia’s  annotated bibliography (some 200 items) on the history of Canadian marketing from earliest exploration until the beginning of World War II. This was intended, among other things, to serve as a source document from which modules or even entire courses might be fashioned. A more complete bibliography on the history of Canadian marketing is also to be found on the CHARM web site.

 

Looking backward (something I do with increasing frequency these days) it appears that a significant degree of progress has been made, especially in the marketing thought area, as regards the compilation of teaching material. That said, what has been highlighted above is only a down payment on what is needed. JHRM, in association with CHARM, must take the lead in assembling in one place all of  the course outlines, reading lists, and reflective essays on how marketing history is or could be taught either by marketing academics, business historians, or economic and social historians. Future “Teaching & Learning” sections will be devoted to briefly informing JHRM readers of our latest discoveries in this crucial area. Associated source documents will appear on the CHARM web site. In its own way this will be a major effort and we need JHRM readers to help identify any and all relevant pedagogical material.

If you have sources to suggest or ideas to share, please contact him at sshapiro@sfu.ca.

 

 

 

 







History of Bond Rating Agencies

30 07 2011

“I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.”

James Carville, Wall Street Journal (February 25, 1993, p. A1)

There has been a lot of discussion recently about the possibility that the United States might lose its triple-A bond rating as a result of the standoff between President Obama and House Republicans. For press coverage see here, here, here, and here. For blogosophere reaction, see here, here, and here.

Speculation about the results of a rating downgrade was fueled when Mohamed El-Erian, chief executive of bond trading giant Pimco, said that the debt-ceiling political crisis in the United States has hurt that nation’s reputation in the financial markets and that the loss of the triple-A credit rating would have dire consequences.

El-Erian wrote:

America’s already-fragile economic psyche and its global standing have taken a material hit. Forget about “animal spirits” for now. Instead, worry even more about an economy that is already having tremendous difficulty sustaining an acceptable growth momentum, and that already suffers from an unemployment crisis that is increasingly protracted in nature. Analysts will now scramble to again revise down their projections for growth, and up those for unemployment… America’s friends and allies are bewildered at what is going on here (and its enemies rejoicing).

Read more here.

El-Erian’s piece in the Huffington Post generated lots of discussion. There has, however, been relatively little discussion of the history of the agencies that issue these ratings.

An excellent paper by Richard Sylla on this subject is available online. Sylla is the Henry Kaufman Professor of the History  of Financial Institutions and Markets and Professor of Economics at the Stern School of Business in New York. Anway, here is the first paragraph of his paper.

When the business of bond credit ratings by independent rating agencies began in
the United States early in the twentieth century, bond markets—and capital markets
generally—had already existed for at least three centuries. Moreover, for at least two
centuries, these old capital markets were to an extent even ‘global.’ That in itself
indicates that agency credit ratings are hardly an integral part of capital market history. It
also raises several questions. Why did credit rating agencies first appear when (1909)
and where (the United States) they did in history? What has been the experience of
capital market participants with agency credit ratings since they did appear? And what
roles do agency ratings now play in those markets, which in recent decades have again
become global, to an even greater extent than previously in history.

As Sylla shows, it is entirely possible to have a lively bond market without rating agencies. Like many people, I am skeptical of the predictive value of bond ratings because they come from for-profit companies that have conflicts of interest that undermine their credibility. The 2008 Global Financial Crisis destroyed much of the reputational capital of these agencies. As we all know, the credit rating agencies granted very high ratings to dodgy subprime mortgage securities. As one observer pointed out, “a primary cause of the recent credit market turmoil was overdependence on credit ratings and credit rating agencies.”   Read more about the role of the rating agencies in the subprime crisis  here.

If the rating agencies turn on the United States government and downgrade its credit rating at this critical moment in the history of the American empire, it would be a rather ironic turn of events, since the global political clout of the bond rating industry is largely a creation of regulations put in place by American officials during the New Deal era. These regulations were strengthened in the 1970s, after which an increasing number of financial professionals were forced to use the ratings produced by a small group of government-approved ratings agencies. These agencies are known as “National Recognized Statistical Rating Organizations”. Read more here.

The NRSRO business is rather uncompetitive with considerable barriers to entry. As of 2011, American companies are allowed to use the ratings produced by just ten such agencies. See here. To the credit of the US SEC, which licences the NSRSOs, not all of these agencies are American. There is one Japanese firm and one Canadian company on the list, which shows that the Americans aren’t being protectionist here. In other ways, however, these agencies are remarkably homogenous in terms of their corporate structure and underlying business model. All are in the private sector. All of them are for-profit businesses. In all ten cases, the agencies make their money from payments from bond issuers rather than from the people who make decisions based on their ratings. (Holy conflict of interest Batman!)  None of these agencies is a non-profit organization and it is unlikely the US SEC would designate a non-profit agency staffed by disinterested volunteers as a NRSRO. For one thing, such an agency wouldn’t have the money for the required campaign contributions to members of Congress.

I have nothing against homogeneity in an industry if the industry is functioning properly. But it seems to me that in the NRSRO business, it would be beneficial to have some heterogeneity. Why not have a mixture of non-profits, profitable companies, and government departments issuing bond ratings?

Very few people actually believe that the rating agencies have much predictive power, so by themselves their ratings wouldn’t have much impact on investor behaviour. What makes the ratings produced by these agencies so damn important are US laws that require financial institutions to take the bond ratings produced by these agencies into account.

Here is an analogy. Suppose there was a notoriously unreliable weather forecaster who worked for a particular TV station. In the normal course of events, nobody would trust his forecasts. They make decisions about travel plans, clothing choices, bringing umbrellas, etc based on the weather forecasts on competing TV stations or some other method. But if the government passed a law saying that only the predictions of this one forecaster could be used to make decisions about, say, when it was unsafe for a scheduled flight to go ahead,  then this forecaster would have a captive market in the country’s airport and airlines. Moreover, if the weather forecaster had a financial stake in say, a particular airport, he or she might be inclined to say “Yeah, it’s ok to fly today” than would otherwise be the case. At the very least, there would be an obvious conflict of interest, since an airport loses money every day it is closed.

Image of a weather forecaster randomly selected from the Wikimedia Commons

At this point in the crisis, it would be worthwhile for all players and commentators to pay more attention to the history of the rating agencies and to financial history more generally. We should also think long and hard about why the ratings issued by these NRSROs matter so much.

Further Reading

Flandreau, Marc, N. Gaillard and F. Packer, (2009), “Ratings Performance, Regulation and the Great Depression: Lessons from Foreign Government Securities”, CEPR Discussion Paper 7328.

Goodhart, Charles A.E. (2008), “The Financial Economists Roundtable’s statement on reforming the role of SROs in the securitisation process”, VoxEU.org, 5 December 2008.

Partnoy, Frank (2001), “The Paradox of Credit Ratings”, UCSD Law and Economics Working Paper.

Partnoy, Frank (2006), “How and Why Credit Rating Agencies Are Not Like Other Gatekeepers”, in Yasuyuki Fuchita, and Robert E. Litan (eds.), Financial Gatekeepers: Can They Protect Investors?, Brookings Institution Press and the Nomura Institute of Capital Markets Research.

Portes, Richard (2008), “Ratings agency reform”, VoxEU.org, 22 January 2008.





Campus in Summer

30 07 2011

A university campus is a strangely empty and quiet place in the summer. There are few people around aside from academics and support staff. The students are all gone.

Coventry University Campus, Summer 2011

Coventry University Campus, Summer 2011

I recently took this photo at Coventry University. It is a bit unfortunate that the students are missing out on the beautiful flowers that are in bloom this time of year.

I’m looking forward to the upcoming academic year and the arrival of the students.





Bloggingheads on Norway’s Terrorist Attacks

27 07 2011

Oslo

I’m sharing a very interesting discussion about the Norway shootings that recent took place on Bloggingheads. See here.

Bloggingheads.tv is a political, world events, philosophy, and science video blog discussion site in which informed participants engage in a conversation that is recorded with webcam and then podcasted to viewers. Essentially, the dialogues work much like a Skype conversation except that they are recorded. Typically, the conversations are about an hour long. Each week, several blogging heads conversations are released. The regular weekly segments on Bloggingheads include “Values Added”, which is about the intersection between religion and politics (in the United States) and “Science Saturday”.

The political conversations deal with fairly topical matters. Not surprisingly, the terrorist incident in Norway is high on the agenda this week. You can expect to hear about Anders Behring Breivik and the Islamophobic discourse that inspired him to go on his killing spree.

Normally I don’t like discussions of international affairs on Bloggingheads because they are so damn America-centric: 99% of the participants are American academics and journalists. Typically, the producers at Bloggingheads arrange for the two participants in a conversation to be from the two different political parties in the US: one of the speakers is a Democrat, the other is a Republican. I suppose that this seems to very fair and balanced to an American producer, but to my mind it is actually really parochial.

The apparent assumption is that there aren’t non-Americans who are informed about world events and capable of speaking intelligently and in English about them. The reductio ad absurdum of the bloggingheads approach to non-US news was when two Americans (a journalist and an academic philosopher) discussed a Canadian federal election in a dialogue in which a great deal of ignorance about the Canadian political system and its terminology was demonstrated.

The operating assumption at Blogginghead is that events outside of the United States are suitable for American academics to study and discuss but that the subjects of the discussion aren’t allowed or aren’t capable of participating. Granted there probably are cases where it wouldn’t be feasible to get someone from the country or region under discussion to participate: it might be hard to find an English-speaking academic in South Sudan capable of conversing for an hour with an American political scientist about developments in their country. At the very least, such a conversation might dilute the brand of Bloggingheads: people listen to their dialogues because you get to hear smart, educated, and quick-witted people chat in fluent English about important events. Moreover, there would be problems with broadband access and time zones conflicting. But surely none of these considerations apply to events in developed countries!

What you get in a typical Bloggingheads dialogue is unilingual Americans talking to other unilingual Americans about Japanese tsunami or European immigration patterns or some other topics of which they have little direct knowledge. At the very least, this is a sign of a producer too lazy to search for non-American commentators. At worse, it is the product of a mindset that reduces non-Americans to the level of the tribal peoples studied by patronizing old-school anthropologists.

This sort of parochialism might have been acceptable before the internet, but it seems out of place today. The wonderful thing about the internet is its ability to overcome physical distance. It is sad to see old-school American parochialism being translated into the new medium of Bloggingheads.

In the case of the Norwegian shooting, however, the producers at Bloggingheads arranged for a Norwegian political scientist (Hans-Inge Langø) and an American journalist (Eli Lake) to share their perspectives.

I hope that this is the start of a trend and that Bloggingheads continues to be less parochial in its selection of guests. Perhaps future Bloggingheads weekly dialogues on world affairs could be between one American and one non-American participant.

The world affairs dialogues on Bloggingheads are funded, in part, by the Carnegie Endowment for International Peace. Ensuring that these dialogues include people of more than one nationality would, in my opinion, be appropiate in view of Andrew Carnegie’s belief that communication between peoples of different nationalities would foster world peace.





North America’s Early Lead Over Latin America

22 07 2011

North Americans have been wealthier than Latin Americans for many centuries, at least since the 17th century. At least, this is the argument of a new paper by Robert C. Allen, Tommy E. Murphy and Eric B. Schneider.

 

Summary: We begin by measuring real wages in North and South America between colonization and independence, and comparing them to Europe and Asia. We find that for much of the seventeenth and eighteenth centuries, North America was the most prosperous region of the world, offering living standards at least as high as those in the booming parts of North-Western Europe. Latin America, on the other hand, was much poorer and offered a standard of living like that in Spain and less prosperous parts of the world in general.

My thoughts: Latin America and North America were and are big places with huge disparities of culture, natural resources, and per capita income. Is any category that includes both the Amazonian jungle and downtown Buenos Aires really useful? 

 This study is based on just six locations: “Boston, Philadelphia, and the Chesapeake Bay region in North America and Bogotá, Mexico, and Potosí in Latin America”. Well the three locales in North America studied were all on the coast and relatively close to each other. Wouldn’t it be fair to include, say, Newfoundland, New France, Rupert’s Land, and Detroit as well? I know that there are always problems with getting sources, but a sample size of three is just too small, IMHO. 

So my verdict is that this paper is an interesting starting point for research, but the authors need to increase their sample size.

 

Hat tip to Tyler Cowen.





Reviews in History

21 07 2011

The Reviews in History website just published a review essay I wrote about two recent works in Canadian political biography.





CETA: Why Isn’t Anybody Talking About It?

21 07 2011

When Canada’s premiers gather in Vancouver next week, it’s hard to imagine that the subject of trade talks with the European Union won’t come up. The potential ramifications of any deal for the provinces are enormous. And yet there has been little discussion in Canada about the proposed Comprehensive Economic and Trade Agreement (CETA), which is perplexing given the far-reaching implications for this country of any pact with the EU.

That’s from a recent article in the Globe and Mail. I’m shocked and somewhat appalled by how little attention has been paid to the CETA agreement. It’s not that I dislike the agreement (far from it!), but I do think that the media has done the publics of Canada and Europe a disservice by not covering what could be an important turning point in Canadian history.

My frustration at the lack of attention to CETA is one of the reasons why I decided to organize a one-day conference on CETA. It’s going to take place on 18 November 2011 in London and is called “CETA and Canada-EU Economic Linkages in the 21st Century”.  The conference is designed to bring together academics, journalists, and others interested in this proposed agreement.

Our confirmed speakers are: Robert Hage, DFAIT (retired); Patrick Leblond (University of Ottawa); John M. Curtis  (now at CIGI, formerly Chief Economist of the Canadian Dept of Foreign Affairs and International Trade) ; Kurt Hübner (UBC).

The lead organizer of this conference is Michael Kandiah at King’s College within the University of London.  Michael’s research specialty is modern British political and diplomatic history. His prefered research methodology is oral history. He has done work on such topics as the history of the British Conservative party under Thatcher and the 1976 IMF bailout of the UK.

P.S. Check out this interesting article, which argues that one of the possible results of this agreement would be the elimination of interprovincial trade barriers within Canada.





UKIP on the Canada-EU trade agreement

21 07 2011

UKIP is a right-wing party opposed to Britain’s membership in the European Union. Although it certainly isn’t a racist party like the BNP, it does engage in the politics of the nostalgia and frequently pines for the days when Britain’s ties to the Dominions were much stronger. Despite its hatred of the EU, UKIP members sit in the EU Parliament. One of them gave this speech on the proposed Canada-EU trade agreement. He professes to be concerned about the possibility that the agreement would limit Canadian sovereignty.





Why the British government discouraged paper currency in the colonies in the early 19th century

21 07 2011
 A few days ago, I got the following email from a scholar in Canada.
“Do you know why the British government discouraged paper currency in the colonies in the early 19th century?”
Here is my reply to his question about the motives of the British government in wanting to limit the issue of paper money in British North America.

In the period between the Conquest and the War of 1812, the British government took little interest in Canadian currency matters. Its policy was one of benign neglect. That began to change in 1821, when the British returned to the gold standard, which had been suspended during the Napoleonic Wars. In 1825, Sir James Stephen, an official at the Colonial Office in London, wrote a long memorandum on the need to standardize the currency used throughout the British Empire. Thereafter, the Colonial Office began to take a more active interest in Canadian currency.

 This interest was most intense in the 1840s and 1850s. In the early 1840s, there was a heated debate in Britain about currency and banking that pitted advocates of an expansionist money supply against hard money people. The debate continued until Robert Peel’s 1844 Bank Charter Act, which quickly came to be regarded by the British as an appropriate role model for the entire Empire.

http://www.bankofengland.co.uk/about/legislation/legis.htm

In 1846, the Colonial Office issued a circular to governors throughout the empire that set forth certain principles for banking law that were incorporated into regulations all over the world. The underlying motive here appears to have been to prevent raw frontier colonies from going crazy and issuing lots of paper money.  In the early 1850s, the Canadian Minister of Finance fought a long battle with the British government over the name and denomination of Canada’s currency—should it be called the pound and be subdivided into 20 shillings or should it be decimalized and called the dollar. I suspect that the Colonial Office’s opposition to calling Canada’s currency was basically about symbolism rather than any practical economic consideration. Eventually, the British government gave in and in the late 1850s the BNA colonies adopted dollars and cents as their accounting units.

There are two basic ways of viewing the making of British government policy towards colonial currency. One is to assume that policymakers (e.g., the successive Colonial Secretaries and the civil servants at the Colonial Office who advised them) were motivated by some conception of the public interest and desire to promote the welfare of Britain and/or Canada.  The other starting assumption is that the Colonial Office’s efforts to influence the banking laws of the colony to pressure from special interest groups, such as London headquartered banks with branches in the colonies. (Keep in mind that in those days there were no conflict of interest regulations preventing civil servants from investing in banks or taking money from cronies).  The truth probably involves a mixture of these two approaches.

Adam Shortt (1859-1931), who wrote about this topic in the early 20th century, leaned toward the view that the actions of the Colonial Office are best understood with reference to conceptions of the public interest and the teachings of the economists of the day. Shortt doesn’t say that the Colonial Office was always right, but he suggests that its actions were motivated by a desire to advance the public interest.   At the very least, he discusses the British government’s actions on this file without once mentioning the possibility that there could have been lobbying from British bankers or other interest groups.

“Currency and Banking” by Adam Shortt, in Canada and Its Provinces 5, United Canada, 1840 – 1867 (Toronto: Edinburgh Univ. Press, 1914) vol. 5, 261-294.

Here are the relevant sections of Shortt’s essay. I have put the sentences that deal with motives in bold.

 

p.269

THOUGH, as we have seen, the recommendations of the British government, in dealing with the charters  of the Canadian banks, had been very largely adopted,  there was one feature to which the British authorities attached  great importance which the Canadian government, at the  instance of the Canadian banks and business interests, could  not be induced to accept, namely, the abolition of bank  notes under £1 currency. The object of this limitation was,  of course, as in Britain, to increase the volume of metallic  currency in circulation and in the vaults of the banks, with  a view to steadying the exchanges of the country and rendering the colonial bank issues more secure. Pressure had been put upon the Canadian government through the disallowance  of several amended bank charters, notably those of the Commercial Bank and of the Bank of Upper Canada. While  the principle contended for by the British Treasury was sound  enough in the case of countries conducting a large financial business, yet the situation in Canada differed greatly from  that in Britain. Here as yet there were very few purely  financial operations of a domestic nature. Practically all  the local and the greater part of the foreign exchange was  directly connected with trade and commerce, calling only  for the most convenient medium of domestic exchange. This  was undoubtedly furnished by the bank notes. To have  forced the substitution of an extensive metallic currency,  which must have been obtained from abroad in exchange for a corresponding amount of Canadian exports, would have  involved quite unnecessary expense. The special interest in  Canadian currency which was manifested by the home government in the forties was chiefly due to the fact that a very  vigorous and prolonged discussion of the whole currency and  banking question had been absorbing the attention of the  British authorities for some years, and had culminated in  Peel’s Bank Act of 1844. The principles of this act, it was

p.270

felt, were of universal application and must be enforced in all parts of the British Empire, regardless of their special  local conditions. This proposition was frankly declared in  the dispatch of 1846 instructing Lord Cathcart to have the  principles of the British measure introduced into all future  Canadian bank charters. Most of the essential features of  the new British act, with the exception of the high minimum  denomination for notes, had been accepted by the Canadian  legislation of 1841. The practical question was discussed  over the charters of two new banks in Eastern Canada, La Banq ue des Marchands, of Montreal, and the Quebec District  Bank. The Canadian government insisted upon the retention  of the privilege to issue one-dol1ar notes, and in the end the  home government gave way.”

 

End quote.

 

A very different theory of how the British government made colonial policy is provided in  Peter J. Cain and Anthony G. Hopkins. British Imperialism: 1688 – 2000. Harlow [u.a.]: Longman, 2009. They basically argue that British colonial policy was made largely with the interests of the City of London in mind.  Cain and Hopkins shows that the policymakers were frequently friends of prominent city financiers and linked to them by marriage, schooling, and, in some cases, investments.  Their theory of British imperialism emphasizes both the supremacy of London-based financial and mercantile interests in the formation of British policy towards the empire, and the separateness of City-based gentlemanly capitalists from mercantile and industrial interests based outside of central London.

 

My book on Confederation argued that the British policy of supporting Canadian Confederation (and of pressuring reluctant colonies such as Nova Scotia to join it) was influenced mainly by London bankers with substantial Canadian investments.  So I’m more sympathetic to the interest group approach, at least in principle. However, I haven’t done an archival investigation to try to see the extent to whether the London based bankers attempted to influence the 1846 banking circular or other British government actions re Canadian banking law in this period. I suspect that the Bank of British North America (founded 1836) would have been the company most interested in the Canadian banking laws, but this is speculative.

Anyone with more information on this topic is welcome to post here or to message me.