The famous American writer was also interested in economic issues and the development of the North. Jack London proposed an idea that contradicted popular beliefs of the time. In many practical cases his hypothesis has come true.
Many of Jack London’s works feature the tales of the North, namely, the Yukon and Alaska. We can easily recall such famous novels as The Call of the Wild and White Fang which are set up in the North.
But there is more to it - Jack London participated in the famous Klondike Gold Rush himself and, based on that experience, wrote an essay concerning the economic development of the region. The detail that he described is now known as a Jack London Hypothesis or a Jack London Effect.
The essay The Economics of the Klondike Gold Rush outlines a curious economic process in the development of frontier regions. By those we mean the unexplored territories that still require a lot of force for development and don’t yet have a distinct border and/or permanent population. Some would say that it’s a wide border between complete wilderness and civilization.
The term is usually used in a broad sense and can be applied to many Northern regions up until the point when the frontier ‘closes’ - when there’s enough population to call the area ‘civilised’.
The traditional description of frontier regions’ economies is called a boom-bust cycle or a boom-bust story. At first, the economy of a newfound region booms due to the vast resources available in the region. A new town experiences rapid growth.
However, when the resources end (or when some other misfortune occurs), comes the dreaded bust which halts the development of the region. In Russian history such resources in the boom-bust cycle have usually been oil, gas, gold, fish and timber.
When the frontier town is being settled, the supporting economy senses that huge money is being dealt in the region and comes to provide different services. This one can be represented by many professions. Teachers, medics, researchers, hairdressers, bakers etc. In other words, every person who is not working in the local resource enterprise.
The problem, however, lies in the fact that when the majority of resources is removed from the ground the need in a town slowly vanishes. The resource enterprises venture out along with a huge part of workers. But the supporting economy stays in place!
Basically, a boom-bust cycle leaves a town which is bound to a slow economic death, since there’s no core enterprise that could provide sustainable development.
This, obviously, was and still is the most popular opinion on the matter.
At the time of Jack London, one of classic boom-bust cases could be found in the Klondike. There was a lot of critique saying that the famous Gold Rush was completely pointless. Jack London held an opposing view and in his essay argued that, even though the gold-mining operation in Klondike led to significant expenses, it wasn’t all in vain:
"The figures stand for themselves: $220,000,000 have been spent in extracting $22,000,000 from the ground."
The writer thought that even a 10 to 1 expense could account for the future development of the region.
"While this sudden and immense application of energy has proved disastrous to those involved, it has been of inestimable benefit to the Yukon country, to those who will remain in it, and to those yet to come."
The hypothesis, then, sounds like this:
When the core resource economy leaves the region, the supporting economy remains and continues to stimulate the development on its own.
All the expense, even on such an economically meaningless operation as the Gold Rush, proves itself in the future because cheaper and faster transportation as well as some new methods of craft will come in the future.
A Canadian researcher Lee Huskey effectively coined the term a Jack London Hypothesis and extracted three key arguments in London’s writing.
Thus, the hypothesis addresses the boom-bust cycle, but from a different perspective. In London’s views, it actually concludes in a slightly less ‘busted’ economy with a positive aftermath for future generations, as it becomes cheaper and more profitable to work in the region.
The logic is the following: if there weren’t a temporal operation in a frontier region, there wouldn’t be a settlement, and numerous towns across merely explored territories would soon lie in ruin or remain undiscovered. Not only the development doesn’t stop when resource economy leaves, but it may actually be the only key to continue.
The original hypothesis can be applied to different situations in the Arctic.
Lee Huskey has applied it to the Yukon situation in a time period between World Wars. He found out that the supporting economy only grew, while staples (resource) companies had been slowly decreasing their presence after the First World War. The Jack London effect in the Yukon can be deducted from the rates shown on the diagram below.
As one of the most vivid examples, the war led to a significant increase in fishing operations and the subsequent decrease of fish in the Alaskan seas. When there was no more need ‘to feed Europe’, Alaskan settlements obviously couldn’t hold the same tempo of development as before. The resource sector effectively went bust, while the supporting sector remained. However, the Jack London effect played out, and the resilient economy of the region sustained, continuing to develop mainly through the supporting sector.
While Huskey has applied the hypothesis to check whether the effect itself is true, in Russian discourse it materialised as a peculiar ‘pathway’ which provides certain aims for the development of the Northern regions.
Nadezhda Zamyatina wrote about a case which, in time, hadn’t managed to ‘use’ the effect and couldn’t demonstrate a resilient supporting economy. This is the case of the Soviet city Igarka in the Krasnoyarsk region.
Being a pioneer of the regional timber industry and a key point in the Northern Sea Route, Igarka hadn’t managed to completely save the infrastructure after the ‘golden age’, which occurred in the 70s and the 80s.
The city lost most of the industries during the 90s crisis. The timber transshipment ceased in 2005.
According to the researcher, this could have been partly resolved if Igarka managed to either become an administrative district centre (like neighbouring Dudinka and Norilsk) or a research centre (like Apatity with its Kolsky Science Centre).
In order for a Jack London effect to play out, there should be a resilient foundation that would provide the supporting economy with enough means for it to continue the development.
The Jack London hypothesis should be taken into account in the context of Arctic development. Of course, it is not an axiom that works like a charm. It would mean that any plan for the development should sound like that - “We remove all the resources, the economy will do everything by itself later.” The hypothesis should rather serve as a roadmap for the development. So that any plan in the North runs smoothly, one should consider that aside from attractive resource-extracting opportunities there are also possibilities to build a resilient supporting economy.
The aim of any serious enterprise in the North shouldn’t limit itself to resource capabilities of the region, but also to create spheres for future lives: healthcare, education, research, tourism, so that when resources end (and they are always finite) the city could function on its own and wouldn’t slowly turn into ruin.
Dmitry Tarasov
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