Distributive patterns in settler economies : agrarian income inequality during the first globalization

Abstract

The aim of this paper is to identify different distributive patterns in the settler economies (Argentina, Australia, Canada, Chile, New Zealand and Uruguay) during the First Globalization (1870-1913). I present the methodological decisions, discuss my results and propose some conjectures about the long-run evolution of inequality. As agriculture was the most important productive activity in the settler economies and one of the main sectors in leading the land frontier expansion, a study of the generation of income and the evolution of the distribution in this sector is of main interest. First, I estimate the income (or product) per worker in the agriculture and concern for relative performance within the club focusing on (total and sectoral) growth and convergence. After that, I present the notion of functional income distribution and discuss the existence of two distributive patterns. In one of these, the territories that were British colonies and where the capitalist relationships predominated, and in the other, in former colonies of Spain, economic relationships were based on agrarian rental incomes. During the period, income distribution worsened in the Australasian economies and Canada, but it worsened even more in the South American Southern Cone countries. These differences among settler economies are consistent with dissimilar dynamics of expansion onto new land and the conformation of institutional arrangements that promoted unlike patterns of distribution.