Economic history from below the tropics.

France v. Australia, Matchday 1, Kazan, 15 June at 7pm (BST)

June 14, 2018 by Tom Westland

Australia and France share both a well-recognised maritime border as well as a substantial if somewhat less recognised land border (in Antarctica, but who’s counting). And yet despite this proximity, merchandise trade between France and Australia, at least in the important products, defies economic gravity: Belgium received $438 million of French cheese in 2016, while Australia, despite having an economy almost three times as large as Belgium’s, only got $24 million of the stuff. The trade in French wine is only slightly less skewed. What gives?

Things didn’t have to be this way, of course. Now and then in the course of Australian history, the French have—timidly, to be sure—expressed interest in a much closer relationship. Napoleon sent an expedition to the Land Down Under, and at least one of its members was impressed enough to lay out a detailed plan for French colonial rule, once perfidious—but vigorous—Albion had been dislodged from the New South Wales coast. What would the economic history of the colonie d’Australie, and, later the République australienne have looked like? And what would France have looked like had the ‘mustachioed sons of Gaul’’ taken possession of the ghost acreage of la Grande Jave?

First of all, the good news. The abolition of the feudal order in France in 1789 would mean that Australie française imported the French Civil Code and not the feudal system that was France’s imperial gift to Québec. As a result, Australie would have inequality that was much lower than in Québec, institutions that were less exploitative, and bread that tasted much better.

Presumably, the wine would be more plentiful than it was in British Australia, too. The French would have been even quicker than the British to realise the excellent potential for this particular export industry to make the colony pay for itself. However, the question would be: would this have drawn the factors of production away from Australia’s other primary export, wool—or would the pull of wool have strangled the early growth of viticulture? Due to more ardent French attempts at viticulture prior to the outbreak of the phylloxera, la colonie d’Australie would have taken over the French domestic market for wine, at least, during the period of the disease when France’s wine trade balance turned negative. Australie française would therefore serve the function that Algeria would in fact do (presumably, with Australie preserved as an outlet for settler energy, there would be no need for the costly invasion of Algiers in 1830, although no one ever went broke overestimating Bourbon stupidity). 1

The bad news, though, would be in land policy, and, consequently, on the growth of the wool industry. In British Australia, the question of what to do with the boundless plains that stretched out west from the Blue Mountains was one of the fiercest political quarrels of the young colony. The imperial administration was as wary of expansion outside the Nineteen Counties as it had been on the American frontier; the dynamic was, as W.K. Hancock wrote of South Africa, one in which the prospect of huge domains was “pushing a restless pastoral people into the hinterland and pulling the reluctant State after it”. Eventually, the ‘squatters’, who illegally ran their sheep on Crown land, were allowed to purchase annual licenses, with land reverting to the Crown at expiry. (Some respect for property rights this was, Acemoğlu and friends.) You would think this would discourage investment in the wool industry, but since there wasn’t much need for long-lasting capital anyway—fences were inefficient—the industry boomed even without the certainty of land tenure. Squatters, of course, lobbied for their occupation to be formalised so they could extract land rents; the New South Wales government, eager for cash, wanted them to pay for the privilege. The end result was a compromise: somewhat more secure tenure, but not freehold, and later, the process of ‘selection’ would democratise land ownership further, even if large pastoral runs remained the dominant form of land use in the drier inland regions. 2

In Australie française, however, the political context would be much different. Briefly in 1848—and, after the collapse of the Second Empire, from 1871—France allowed colonial representatives to sit in the French Parliament. Representatives from Australia française were elected on a wide—at least, for males—franchise, a concession won honestly in revolution and not, as in British Australia, through London’s ignorance of the extent of Sydney house-price inflation. This was obviously a fairly significant concession, but it would mean that most legislative power would remain in Paris, and therefore when the question of land reform came up, it would be decided there and not in a democratically elected Assemblée australienne. And while France itself was a nation of peasant smallholders in the nineteenth century, there was the possibility for a powerful lobby group that would have allied itself with the sheep barons rather than frustrated Sydney artisans dreaming of a homestead in the Riverina: the woolen industry of northern France. In Australie française, the balance would be tipped towards the ‘squattocracy’, with the long-term development of the economy veering closer to the Argentinean path. 3

And what about effect of the acquisition of Australie française on France? Not very high, for the same reason that McCloskey and Thomas advance for the (non) effect of British colonial trade on British growth: substitutes are easily found for most goods. Even if late 19th century French protectionism had spread to Australie and made wool imports for the woolen manufacturers of Roubaix and Tourcoing relatively cheaper, Britain still would have had access to Argentine and South African and Uruguayan wool; and it still would have had the cost advantage of its specialisation in shoddy. 4 And once la République australienne gained its independence from France (with the territorial addition of France’s Pacific island possessions), the logic of retailing coal and iron to Japan would have been every bit as obvious as it was to Australia. But would Australie française at least have imported more French wine and cheese, stimulating growth in these sectors? Again, I think probably, and disappointingly, no. After all, no matter how much you try to tempt us, we come from a land of plenty.

  1. La colonie d’Australie, therefore, presumably would have experienced the reverse of the phyloxera crime pattern documented by Bignon, Caroli and Galbiati. In an ingenious use of disease as an instrument for income shocks, they found that exposure to phylloxera lead to an increase in property crime from increased poverty and a decrease in violent crime due to less drunkenness. [return]
  2. There was a large amount of fraud involved in selection—’dummies’ would take up leases of farming land and then lease it or sell it back to the squatters, but for our purposes this just means that there was a redistribution of income rather than land. [return]
  3. In one of the few nearly natural experiments that allow us to compare French and English institutions in a colonial setting—the New Hebrides (now Vanuatu) condominium—the French were much more willing to officially authorise and validate massive land alienation, but then again this may have been more due to the French desire to outlast the British on the island [return]
  4. Another possibility, perhaps more plausible, is that France would have got the Australian cotton industry going earlier to feed the cotton industries of Alsace, as it tried to do in Mali. But again, here we’re just talking about France specialising in some industry over another, presumably. [return]

Tom Westland and Emiliano Travieso are PhD students in economic history at the University of Cambridge.