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Legal and institutional reforms – redefining the role of the state in these economies, establishing the rule of law, and introducing appropriate competition policies.
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According to Oleh Havrylyshyn and Thomas Wolf of the International Monetary Fund, transition in a broad sense implies: liberalizing economic activity, prices, and market operations, along with reallocating resources to their most efficient use; developing indirect, market-oriented instruments for macroeconomic stabilization; achieving effective enterprise management and economic efficiency, usually through privatization; imposing hard budget constraints, which provide incentives to improve efficiency; and establishing an institutional and legal framework to secure property rights, the rule of law, and transparent market-entry regulations. Edgar Feige, cognizant of the trade-off between efficiency and equity, suggests that the social and political costs of transition adjustments can be reduced by adopting privatization methods that are egalitarian in nature, thereby providing a social safety net to cushion the disruptive effects of the transition process.
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The European Bank for Reconstruction and Development (EBRD) developed a set of indicators to measure the progress in transition. The classification system was originally created in the EBRD's 1994 Transition Report, but has been refined and amended in subsequent Reports. The EBRD's overall transition indicators are: Large-scale privatization Small-scale privatization Governance and enterprise restructuring Price liberalization Trade and foreign exchange system Competition policy Banking reform and interest rate liberalization Securities markets and non-bank financial institutions Infrastructure reform Context
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The economic malaise affecting the Comecon countries – low growth rates and diminishing returns on investment – led many domestic and Western economists to advocate market-based solutions and a sequenced programme of economic reform. It was recognized that micro-economic reform and macro-economic stabilization had to be combined carefully. Price liberalization without prior remedial measures to eliminate macro-economic imbalances, including an escalating fiscal deficit, a growing money supply due to a high level of borrowing by state-owned enterprises, and the accumulated savings of households ("monetary overhang") could result in macro-economic destabilization instead of micro-economic efficiency. Unless entrepreneurs enjoyed secure property rights and farmers owned their farms the process of Schumpeterian "creative destruction" would limit the reallocation of resources and prevent profitable enterprises from expanding to absorb the workers displaced from the liquidation of
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non-viable enterprises. A hardening of the budget constraints at state-owned enterprises would halt the drain on the state budget from subsidization but would require additional expenditure to counteract the resulting unemployment and drop in aggregate household spending. Monetary overhang meant that price liberalization might convert "repressed inflation" into open inflation, increase the price level still further and generate a price spiral. The transition to a market economy would require state intervention alongside market liberalization, privatization and deregulation. Rationing of essential consumer goods, trade quotas and tariffs and an active monetary policy to ensure that there was sufficient liquidity to maintain commerce might be needed. In addition to tariff protection, measures to control capital flight were also considered necessary in some instances.
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Transition in practice The most influential strategy for the transition to a market economy was that adopted by Poland launched in January 1990. The strategy was strongly influenced by IMF and World Bank analyses of successful and unsuccessful stabilization programmes which had been adopted in Latin America in the 1980s. The strategy incorporated a number of interdependent measures including macro-economic stabilization; the liberalization of wholesale and retail prices; the removal of constraints to the development of private enterprises and the privatization of state-owned enterprises; the elimination of subsidies and the imposition of hard budget constraints; and the creation of an export-oriented economy that was open to foreign trade and investment. The creation of a social safety net targeted at the individual to compensate for the removal of job security and the removal of price controls on staple goods was also part of the strategy.
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The choice of the transition strategy was influenced by the critical state of most post-socialist countries. Policy-makers were persuaded that political credibility took precedence over a sequenced reform plan and to introduce macro-economic stabilization measures ahead of structural measures that would by their nature take longer to implement. The "credibility" of the transition process was enhanced by the adoption of the Washington Consensus favoured by the IMF and the World Bank. Stabilization was deemed a necessity in Hungary and Poland where state budget deficits had grown and foreign debts had become larger than the country's capacity to service. Western advisers and domestic experts working with the national governments and the IMF introduced stabilization programmes aiming to achieve external and internal balance, which became known as shock therapy. It was argued that "one cannot jump over a chasm in two leaps".
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The many foreign advisers from, principally, the United States, the United Kingdom and Sweden were often under contract to the international financial institutions and bilateral or multilateral technical assistance programmes. They favoured free trade and exchange rate convertibility rather than trade protection and capital controls, which might have checked capital flight. They tended to support privatization without prior industrial restructuring; an exception was to be found in Eastern Germany where the Treuhand (Trust Agency) prepared state-owned enterprises for the market at considerable cost to the government. Western technical assistance programmes were established by European Union – through the Phare and TACIS programmes – and other donors (including the US AID, the UK Know-how Fund and UNDP) and by the IMF, the World Bank, EBRD and KfW, which also advanced loans for stabilization, structural adjustment, industrial restructuring and social protection. Technical assistance was
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delivered through the exchange of civil servants and by management consultants, including Agriconsulting, Atos, COWI, Ernst & Young, GOPA, GTZ, Human Dynamics, Idom, IMC Consulting, Louis Berger, NIRAS, PA Consulting, PE International, Pohl Consulting, PwC, and SOFRECO.
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It had been expected that the introduction of current account convertibility and foreign trade liberalization would force a currency devaluation that would support export-led growth. However, when prices were de-controlled enterprises and retailers raised their prices to match those prevailing in the black market or towards world price levels, earning them windfall profits initially. Consumers reacted by reducing their purchases and by substituting better quality imported goods in place of domestically produced goods. Falling sales led to the collapse of many domestic enterprises, with personnel lay-offs or reduced hours of work and pay. This further reduced effective demand. As imports grew and exporters failed to respond to opportunities in world markets due to the poor quality of their products and lack of resources for investment, the trade deficit expanded, putting downward pressure on the exchange rate. Many wholesalers and retailers marked prices according to their dollar
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values and the falling exchange rate fed inflation. The central banks in several countries raised interest rates and tightened credit conditions, depriving state agencies and enterprises of working capital. These in turn found it impossible to pay wages on time, dampening effective demand further.
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The impacts of the conventional transition strategies proved to be de-stabilizing in the short-term and left the population impoverished in the long-term. Economic output declined much more than expected. The decline in output lasted until 1992-96 for all transition economies. By 1994, economic output had declined across all transition economies by 41 percent compared to its 1989 level. The Central and Eastern European economies began growing again around 1993, with Poland, which had begun its transition programme earliest emerging from recession in 1992. The Baltic States came out of recession in 1994 and the rest of the former Soviet Union around 1996. Inflation remained above 20 percent a year (except in the Czech Republic and Hungary) until the mid-1990s. Across all transition economies the peak annual inflation rate was 2632 percent (4645 percent in the CIS). Unemployment increased and wages fell in real terms, although in Russia and other CIS economies the rate of unemployment
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recorded at employment exchanges remained low. Labour force surveys undertaken by the International Labour Organization showed significantly higher rates of joblessness and there was considerable internal migration. High interest rates induced a "credit crunch" and fuelled inter-enterprise indebtedness and hampered the expansion of small and medium-sized enterprises, which often lacked the connections to obtain finance legitimately.
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In time domestic producers were able to upgrade their production capacity and foreign direct investment was attracted to the transition economies. Local-manufactured higher quality consumer goods became available and won market share back from imports. Stabilization of the exchange rate was made more difficult by large-scale capital flight, with domestic agents sending part of their earning abroad to destinations where they believed their capital was more secure. The promise of European Union membership and the adoption of the EU's legislation and regulations (the Community acquis or acquis communautaire) helped secure trust in property rights and economic and governmental institutions in much of Central and Eastern Europe.
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Some economists have argued that the growth performance of the transition economies stemmed from the low level of development, decades of trade isolation and distortions in the socialist planned economies. They have emphasized that the transition strategies adopted reflected the need to resolve the economic crisis besetting the socialist planned economies and the overriding objective was the transformation to capitalist market economies rather than the fostering of economic growth and welfare.
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But by 2000, the EBRD was reporting that the effects of the initial starting point in each transition economy on the reform process had faded. Although the foundations had been laid for a functioning market economy through sustained liberalization, comprehensive privatization, openness to international trade and investment, and the establishment of democratic political systems there remained institutional challenges. Liberalized markets were not necessarily competitive and political freedom had not prevented powerful private interests from exercising undue influence.
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Ten years on, in the Transition Report for 2010, the EBRD was still finding that the quality of market-enabling institutions continued to fall short of what was necessary for well-functioning market economies. Growth in the transition economies had been driven by trade integration into the world economy with "impressive" export performance, and by "rapid capital inflows and a credit boom". But such growth had proved volatile and the EBRD considered that governments in the transition economies should foster the development of domestic capital markets and improve the business environment, including financial institutions, real estate markets and the energy, transport and communications infrastructure. The EBRD expressed concerns about regulatory independence and enforcement, price setting, and the market power of incumbent infrastructure operators.
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Income inequality as measured by the Gini coefficient rose significantly in the transition economies between 1987 and 1988 and the mid-1990s. Poverty re-emerged with between 20 and 50 percent of people living below the national poverty line in the transition economies. The UN Development Programme calculated that overall poverty in Eastern Europe and the CIS increased from 4 percent of the population in 1988 to 32 percent by 1994, or from 14 million people to 119 million. Unemployment and rates of economic inactivity were still high in the late 1990s according to survey data.
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By 2007, the year before the global financial crisis hit, the index for GDP had reached 112 compared to 100 in 1989 for the transition economies. In other words, it took nearly 20 years to restore the level of output that had existed prior to the transition. The index of economic output (GDP) in the countries of Central and Eastern Europe was 151 in 2007; for the Balkans/ South-eastern Europe the index was 111, and for the Commonwealth of Independent States and Mongolia it was 102. Several CIS countries in the Caucasus and Central Asia as well as Moldova and Ukraine had economies that were substantially smaller than in 1989. The global recession of 2008-09 and the Eurozone crisis of 2011-13 destabilized the transition economies, reduced growth rates and increased unemployment. The slowdown hit government revenues and widened fiscal deficits but almost all transition economies had experienced a partial recovery and had maintained low and stable inflation since 2012.
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Process
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Transition trajectories have varied considerably in practice. Some nations have been experimenting with market reform for several decades, while others are relatively recent adopters (e.g., North Macedonia, Serbia, Montenegro), and Albania. In some cases reforms have been accompanied with political upheaval, such as the overthrow of a dictator (Romania), the collapse of a government (the Soviet Union), a declaration of independence (Croatia), or integration with another country (East Germany). In other cases economic reforms have been adopted by incumbent governments with little interest in political change (China, Laos, Vietnam). Transition trajectories also differ in terms of the extent of central planning being relinquished (e.g., high centralized coordination among the CIS states) as well as the scope of liberalization efforts being undertaken (e.g., relatively limited in Romania). Some countries, such as Vietnam, have experienced macro-economic upheavals over different periods of
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transition, even transition turmoil.
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According to the World Bank's 10 Years of Transition report "... the wide dispersion in the productivity of labour and capital across types of enterprises at the onset of transition and the erosion of those differences between old and new sectors during the reform provide a natural definition of the end of transition." Mr. Vito Tanzi, Director of the IMF's Fiscal Affairs Department, gave definition that the transformation to a market economy is not complete until functioning fiscal institutions and reasonable and affordable expenditure programs, including basic social safety nets for the unemployed, the sick, and the elderly, are in place. Mr Tanzi stated that these spending programs must be financed from public revenues generated—through taxation—without imposing excessive burdens on the private sector.
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According to the EBRD a well-functioning market economy should enjoy a diverse range of economic activities, equality of opportunity and convergence of incomes. These outcomes had not yet been achieved by 2013 and progress in establishing well-functioning market economies had stalled since the 1990s. On the EBRD's measure of transition indicators the transition economies had become "stuck in transition". Price liberalization, small-scale privatization and the opening-up of trade and foreign exchange markets were mostly complete by the end of the 1990s. However economic reform had slowed in areas such governance, enterprise restructuring and competition policy, which remained substantially below the standard of other developed market economies.
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Inequality of opportunity was higher in the transition economies of Central and Eastern Europe and Central Asia than in some other developed economies in Western Europe (except France, where inequality of opportunity was relatively high). The highest inequality of opportunity was found in the Balkans and Central Asia. In terms of legal regulations and access to education and health services, inequality of opportunity related to gender was low in Europe and Central Asia but medium to high in respect of labour practices, employment and entrepreneurship and in access to finance. In Central Asia women also experienced significant lack of access to health services, as was the case in Arab countries. While many transition economies performed well with respect to primary and secondary education, and matched that available in many other developed economies, they were weaker when it came to training and tertiary education.
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Over the decade 1994 to 2004, the transition economies had closed some of the gap in income per person with the average for the European Union in purchasing power parity terms. These gains had been driven by sustained growth in productivity as obsolete capital stock was scrapped and production shifted to take advantage of the opening-up of foreign trade, price liberalization and foreign direct investment. However the rapid growth rates of that period of catch-up had stalled since the late 2000s and the prospects for income convergence have receded according to the EBRD's prognosis, unless there are additional productivity-enhancing structural reforms.
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The recent history of transition suggested that weak political institutions and entrenched interest groups had hindered economic reform. The EBRD's Transition Report 2013 looked at the relationship between transition and democratization. The report acknowledged that the academic literature was divided on whether economic development fostered democracy but argued that there was nonetheless strong empirical support for the hypothesis. It suggested that countries with high inequality were less inclined to support a limited and accountable state. In general, the proportion of the population with an income of between US$10–50 a day (the so-called "middle class") correlated with the level of democracy; however this correlation disappeared in transition countries with high income inequality. Those countries with large natural resource endowments, for example oil and gas producers like Russia and Kazakhstan, had less accountable governments and faced less electoral pressure to tackle
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powerful vested interests because the government could rely on resource rents and did not have to tax the population heavily. Countries with a strong institutional environment – that is, effective rule of law, secure property rights and uncorrupted public administration and corporate governance – were better placed to attract investment and undertake restructuring and regulatory change.
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To spur further economic reform and break out of a vicious circle, the EBRD Transition Report 2013 proposed that the transition economies should: Open up trade and finance, which made reform more resilient to popular pressure ("market aversion") and meant that countries could access the EU single market either as member states or through association agreements (such as those being negotiated with Ukraine, Moldova and Georgia); Encourage transparent and accountable government, with media and civil society scrutiny, and political competition at elections; Invest in human capital, especially by improving the quality of tertiary education.
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Countries in transition Although the term "transition economies" usually covers the countries of Central and Eastern Europe and the former Soviet Union, this term may have a wider context. Outside of Europe, there are countries emerging from a socialist-type command economy towards a market-based economy (e.g., China). Despite such movements, some countries have chosen to remain non-free states with regard to political freedoms and human rights. In a wider sense, the definition of transition economy refers to all countries which attempt to change their basic constitutional elements towards market-style fundamentals. Their origin could be also in a post-colonial situation, in a heavily regulated Asian-style economy, in a Latin American post-dictatorship, or even in a somehow economically underdeveloped country in Africa. In 2000, the IMF listed the following countries with transition economies: 1 — World Bank assessment
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In addition, in 2002, the World Bank defined Bosnia and Herzegovina, and the Federal Republic of Yugoslavia (later Serbia and Montenegro) as transition economies. In 2009, the World Bank included Kosovo in the list of transition economies. Some World Bank studies also include Mongolia. According to the IMF, Iran is in transition to a market economy, demonstrating early stages of a transition economy. The eight first-wave accession countries, which joined the European Union on 1 May 2004 (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia) and the two second-wave accession countries that joined on 1 January 2007 (Romania and Bulgaria), have completed the transition process. According to the World Bank, "the transition is over" for the 10 countries that joined the EU in 2004 and 2007. It can be also understood as all countries of the Eastern Bloc.
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Branch of economics Transition economics is a special branch of economics dealing with the transformation of a planned economy to a market economy. It has become especially important after the collapse of Communism in Central and Eastern Europe. Transition economics investigates how an economy should reform itself to endorse capitalism and democracy. There are usually two sides: one which argues for a rapid transformation and one which argues for a gradual approach. Gérard Roland's book Transition and Economics. Politics, Markets and Firms (MIT Press 2000) gives a good overview of the field. A more recent overview is provided in Transition Economies: Political Economy in Russia, Eastern Europe, and Central Asia by Martin Myant and Jan Drahokoupil. See also Soviet-type economy Planned economy Mixed economy Marketization Privatization Corporatization Real socialism References
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External links Policy Research Working Papers from the World Bank Health in transition economies – a dossier Quarterly Newsletter issued by UNDP and LSE on Development and Transition issues in Europe and CIS IMF: Nsouli, S. M. "A Decade of Transition – An Overview of the Achievements and Challenges" GDP and Industrial Output during transition 1990–present – statistics Economic liberalization Economic systems Former communist economies Decommunization
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A New Kind of Science is a book by Stephen Wolfram, published by his company Wolfram Research under the imprint Wolfram Media in 2002. It contains an empirical and systematic study of computational systems such as cellular automata. Wolfram calls these systems simple programs and argues that the scientific philosophy and methods appropriate for the study of simple programs are relevant to other fields of science. Contents
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Computation and its implications The thesis of A New Kind of Science (NKS) is twofold: that the nature of computation must be explored experimentally, and that the results of these experiments have great relevance to understanding the physical world. Since its nascent beginnings in the 1930s, computation has been primarily approached from two traditions: engineering, which seeks to build practical systems using computations; and mathematics, which seeks to prove theorems about computation. However, as recently as the 1970s, computing has been described as being at the crossroads of mathematical, engineering, and empirical traditions. Wolfram introduces a third tradition that seeks to empirically investigate computation for its own sake: he argues that an entirely new method is needed to do so because traditional mathematics fails to meaningfully describe complex systems, and that there is an upper limit to complexity in all systems.
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Simple programs The basic subject of Wolfram's "new kind of science" is the study of simple abstract rules—essentially, elementary computer programs. In almost any class of a computational system, one very quickly finds instances of great complexity among its simplest cases (after a time series of multiple iterative loops, applying the same simple set of rules on itself, similar to a self-reinforcing cycle using a set of rules). This seems to be true regardless of the components of the system and the details of its setup. Systems explored in the book include, amongst others, cellular automata in one, two, and three dimensions; mobile automata; Turing machines in 1 and 2 dimensions; several varieties of substitution and network systems; recursive functions; nested recursive functions; combinators; tag systems; register machines; reversal-addition. For a program to qualify as simple, there are several requirements:
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Its operation can be completely explained by a simple graphical illustration. It can be completely explained in a few sentences of human language. It can be implemented in a computer language using just a few lines of code. The number of its possible variations is small enough so that all of them can be computed.
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Generally, simple programs tend to have a very simple abstract framework. Simple cellular automata, Turing machines, and combinators are examples of such frameworks, while more complex cellular automata do not necessarily qualify as simple programs. It is also possible to invent new frameworks, particularly to capture the operation of natural systems. The remarkable feature of simple programs is that a significant percentage of them are capable of producing great complexity. Simply enumerating all possible variations of almost any class of programs quickly leads one to examples that do unexpected and interesting things. This leads to the question: if the program is so simple, where does the complexity come from? In a sense, there is not enough room in the program's definition to directly encode all the things the program can do. Therefore, simple programs can be seen as a minimal example of emergence. A logical deduction from this phenomenon is that if the details of the program's
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rules have little direct relationship to its behavior, then it is very difficult to directly engineer a simple program to perform a specific behavior. An alternative approach is to try to engineer a simple overall computational framework, and then do a brute-force search through all of the possible components for the best match.
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Simple programs are capable of a remarkable range of behavior. Some have been proven to be universal computers. Others exhibit properties familiar from traditional science, such as thermodynamic behavior, continuum behavior, conserved quantities, percolation, sensitive dependence on initial conditions, and others. They have been used as models of traffic, material fracture, crystal growth, biological growth, and various sociological, geological, and ecological phenomena. Another feature of simple programs is that, according to the book, making them more complicated seems to have little effect on their overall complexity. A New Kind of Science argues that this is evidence that simple programs are enough to capture the essence of almost any complex system.
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Mapping and mining the computational universe In order to study simple rules and their often-complex behaviour, Wolfram argues that it is necessary to systematically explore all of these computational systems and document what they do. He further argues that this study should become a new branch of science, like physics or chemistry. The basic goal of this field is to understand and characterize the computational universe using experimental methods. The proposed new branch of scientific exploration admits many different forms of scientific production. For instance, qualitative classifications are often the results of initial forays into the computational jungle. On the other hand, explicit proofs that certain systems compute this or that function are also admissible. There are also some forms of production that are in some ways unique to this field of study. For example, the discovery of computational mechanisms that emerge in different systems but in bizarrely different forms.
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Another type of production involves the creation of programs for the analysis of computational systems. In the NKS framework, these themselves should be simple programs, and subject to the same goals and methodology. An extension of this idea is that the human mind is itself a computational system, and hence providing it with raw data in as effective a way as possible is crucial to research. Wolfram believes that programs and their analysis should be visualized as directly as possible, and exhaustively examined by the thousands or more. Since this new field concerns abstract rules, it can in principle address issues relevant to other fields of science. However, in general Wolfram's idea is that novel ideas and mechanisms can be discovered in the computational universe, where they can be represented in their simplest forms, and then other fields can choose among these discoveries for those they find relevant.
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Systematic abstract science While Wolfram advocates simple programs as a scientific discipline, he also argues that its methodology will revolutionize other fields of science. The basis of his argument is that the study of simple programs is the minimal possible form of science, grounded equally in both abstraction and empirical experimentation. Every aspect of the methodology advocated in NKS is optimized to make experimentation as direct, easy, and meaningful as possible while maximizing the chances that the experiment will do something unexpected. Just as this methodology allows computational mechanisms to be studied in their simplest forms, Wolfram argues that the process of doing so engages with the mathematical basis of the physical world, and therefore has much to offer the sciences.
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Wolfram argues that the computational realities of the universe make science hard for fundamental reasons. But he also argues that by understanding the importance of these realities, we can learn to use them in our favor. For instance, instead of reverse engineering our theories from observation, we can enumerate systems and then try to match them to the behaviors we observe. A major theme of NKS is investigating the structure of the possibility space. Wolfram argues that science is far too ad hoc, in part because the models used are too complicated and unnecessarily organized around the limited primitives of traditional mathematics. Wolfram advocates using models whose variations are enumerable and whose consequences are straightforward to compute and analyze. Philosophical underpinnings
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Computational irreducibility Wolfram argues that one of his achievements is in providing a coherent system of ideas that justifies computation as an organizing principle of science. For instance, he argues that the concept of computational irreducibility (that some complex computations are not amenable to short-cuts and cannot be "reduced"), is ultimately the reason why computational models of nature must be considered in addition to traditional mathematical models. Likewise, his idea of intrinsic randomness generation—that natural systems can generate their own randomness, rather than using chaos theory or stochastic perturbations—implies that computational models do not need to include explicit randomness.
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Principle of computational equivalence Based on his experimental results, Wolfram developed the principle of computational equivalence (PCE): the principle states that systems found in the natural world can perform computations up to a maximal ("universal") level of computational power. Most systems can attain this level. Systems, in principle, compute the same things as a computer. Computation is therefore simply a question of translating input and outputs from one system to another. Consequently, most systems are computationally equivalent. Proposed examples of such systems are the workings of the human brain and the evolution of weather systems.
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The principle can be restated as follows: almost all processes that are not obviously simple are of equivalent sophistication. From this principle, Wolfram draws an array of concrete deductions which he argues reinforce his theory. Possibly the most important among these is an explanation as to why we experience randomness and complexity: often, the systems we analyze are just as sophisticated as we are. Thus, complexity is not a special quality of systems, like for instance the concept of "heat," but simply a label for all systems whose computations are sophisticated. Wolfram argues that understanding this makes possible the "normal science" of the NKS paradigm.
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At the deepest level, Wolfram argues that—like many of the most important scientific ideas—the principle of computational equivalence allows science to be more general by pointing out new ways in which humans are not "special"; that is, it has been claimed that the complexity of human intelligence makes us special, but the Principle asserts otherwise. In a sense, many of Wolfram's ideas are based on understanding the scientific process—including the human mind—as operating within the same universe it studies, rather than being outside it. Applications and results There are a number of specific results and ideas in the NKS book, and they can be organized into several themes. One common theme of examples and applications is demonstrating how little complexity it takes to achieve interesting behavior, and how the proper methodology can discover this behavior.
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First, there are several cases where the NKS book introduces what was, during the book's composition, the simplest known system in some class that has a particular characteristic. Some examples include the first primitive recursive function that results in complexity, the smallest universal Turing Machine, and the shortest axiom for propositional calculus. In a similar vein, Wolfram also demonstrates many simple programs that exhibit phenomena like phase transitions, conserved quantities, continuum behavior, and thermodynamics that are familiar from traditional science. Simple computational models of natural systems like shell growth, fluid turbulence, and phyllotaxis are a final category of applications that fall in this theme.
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Another common theme is taking facts about the computational universe as a whole and using them to reason about fields in a holistic way. For instance, Wolfram discusses how facts about the computational universe inform evolutionary theory, SETI, free will, computational complexity theory, and philosophical fields like ontology, epistemology, and even postmodernism. Wolfram suggests that the theory of computational irreducibility may provide a resolution to the existence of free will in a nominally deterministic universe. He posits that the computational process in the brain of the being with free will is actually complex enough so that it cannot be captured in a simpler computation, due to the principle of computational irreducibility. Thus, while the process is indeed deterministic, there is no better way to determine the being's will than, in essence, to run the experiment and let the being exercise it.
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The book also contains a number of individual results—both experimental and analytic—about what a particular automaton computes, or what its characteristics are, using some methods of analysis. The book contains a new technical result in describing the Turing completeness of the Rule 110 cellular automaton. Very small Turing machines can simulate Rule 110, which Wolfram demonstrates using a 2-state 5-symbol universal Turing machine. Wolfram conjectures that a particular 2-state 3-symbol Turing machine is universal. In 2007, as part of commemorating the book's fifth anniversary, Wolfram's company offered a $25,000 prize for proof that this Turing machine is universal. Alex Smith, a computer science student from Birmingham, UK, won the prize later that year by proving Wolfram's conjecture. Reception
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Periodicals gave A New Kind of Science coverage, including articles in The New York Times, Newsweek, Wired, and The Economist. Some scientists criticized the book as abrasive and arrogant, and perceived a fatal flaw—that simple systems such as cellular automata are not complex enough to describe the degree of complexity present in evolved systems, and observed that Wolfram ignored the research categorizing the complexity of systems. Although critics accept Wolfram's result showing universal computation, they view it as minor and dispute Wolfram's claim of a paradigm shift. Others found that the work contained valuable insights and refreshing ideas. Wolfram addressed his critics in a series of blog posts.
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Scientific philosophy A tenet of NKS is that the simpler the system, the more likely a version of it will recur in a wide variety of more complicated contexts. Therefore, NKS argues that systematically exploring the space of simple programs will lead to a base of reusable knowledge. However, many scientists believe that of all possible parameters, only some actually occur in the universe. For instance, of all possible permutations of the symbols making up an equation, most will be essentially meaningless. NKS has also been criticized for asserting that the behavior of simple systems is somehow representative of all systems.
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Methodology A common criticism of NKS is that it does not follow established scientific methodology. For instance, NKS does not establish rigorous mathematical definitions, nor does it attempt to prove theorems; and most formulas and equations are written in Mathematica rather than standard notation. Along these lines, NKS has also been criticized for being heavily visual, with much information conveyed by pictures that do not have formal meaning. It has also been criticized for not using modern research in the field of complexity, particularly the works that have studied complexity from a rigorous mathematical perspective. And it has been criticized for misrepresenting chaos theory.
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Utility NKS has been criticized for not providing specific results that would be immediately applicable to ongoing scientific research. There has also been criticism, implicit and explicit, that the study of simple programs has little connection to the physical universe, and hence is of limited value. Steven Weinberg has pointed out that no real world system has been explained using Wolfram's methods in a satisfactory fashion.
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Principle of computational equivalence (PCE) The principle of computational equivalence (PCE) has been criticized for being vague, unmathematical, and for not making directly verifiable predictions. It has also been criticized for being contrary to the spirit of research in mathematical logic and computational complexity theory, which seek to make fine-grained distinctions between levels of computational sophistication, and for wrongly conflating different kinds of universality property. Moreover, critics such as Ray Kurzweil have argued that it ignores the distinction between hardware and software; while two computers may be equivalent in power, it does not follow that any two programs they might run are also equivalent. Others suggest it is little more than a rechristening of the Church–Turing thesis.
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The fundamental theory (NKS Chapter 9) Wolfram's speculations of a direction towards a fundamental theory of physics have been criticized as vague and obsolete. Scott Aaronson, Professor of Computer Science at University of Texas Austin, also claims that Wolfram's methods cannot be compatible with both special relativity and Bell's theorem violations, and hence cannot explain the observed results of Bell tests.
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Edward Fredkin and Konrad Zuse pioneered the idea of a computable universe, the former by writing a line in his book on how the world might be like a cellular automaton, and later further developed by Fredkin using a toy model called Salt. It has been claimed that NKS tries to take these ideas as its own, but Wolfram's model of the universe is a rewriting network, and not a cellular automaton, as Wolfram himself has suggested a cellular automaton cannot account for relativistic features such as no absolute time frame. Jürgen Schmidhuber has also charged that his work on Turing machine-computable physics was stolen without attribution, namely his idea on enumerating possible Turing-computable universes.
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In a 2002 review of NKS, the Nobel laureate and elementary particle physicist Steven Weinberg wrote, "Wolfram himself is a lapsed elementary particle physicist, and I suppose he can't resist trying to apply his experience with digital computer programs to the laws of nature. This has led him to the view (also considered in a 1981 paper by Richard Feynman) that nature is discrete rather than continuous. He suggests that space consists of a set of isolated points, like cells in a cellular automaton, and that even time flows in discrete steps. Following an idea of Edward Fredkin, he concludes that the universe itself would then be an automaton, like a giant computer. It's possible, but I can't see any motivation for these speculations, except that this is the sort of system that Wolfram and others have become used to in their work on computers. So might a carpenter, looking at the moon, suppose that it is made of wood."
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Natural selection Wolfram's claim that natural selection is not the fundamental cause of complexity in biology has led journalist Chris Lavers to state that Wolfram does not understand the theory of evolution. Originality NKS has been heavily criticized as not being original or important enough to justify its title and claims.
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The authoritative manner in which NKS presents a vast number of examples and arguments has been criticized as leading the reader to believe that each of these ideas was original to Wolfram; in particular, one of the most substantial new technical results presented in the book, that the rule 110 cellular automaton is Turing complete, was not proven by Wolfram. Wolfram credits the proof to his research assistant, Matthew Cook. However, the notes section at the end of his book acknowledges many of the discoveries made by these other scientists citing their names together with historical facts, although not in the form of a traditional bibliography section. Additionally, the idea that very simple rules often generate great complexity is already an established idea in science, particularly in chaos theory and complex systems. See also Digital physics Scientific reductionism Calculating Space Marcus Hutter's "Universal Artificial Intelligence" algorithm References
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External links A New Kind of Science free E-Book Chua, Leon O, A Nonlinear Dynamics Perspective of Wolfram's New Kind of Science (Volume V). World Scientific Publishing, March, 2012. WolframTones: An Experiment in a New Kind of Music The NKS Blog InformationSpace. Causal set exploration tool which supports 1-dimensional causal sets such as those found in the book. 2002 non-fiction books Algorithmic art Cellular automata Computer science books Complex systems theory Mathematics and art Metatheory of science Science books Self-organization Systems theory books Wolfram Research Computational science
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The Nonintercourse Act (also known as the Indian Intercourse Act or the Indian Nonintercourse Act) is the collective name given to six statutes passed by the Congress in 1790, 1793, 1796, 1799, 1802, and 1834 to set Amerindian boundaries of reservations. The various Acts were also intended to regulate commerce between settlers and the natives. The most notable provisions of the Act regulate the inalienability of aboriginal title in the United States, a continuing source of litigation for almost 200 years. The prohibition on purchases of Indian lands without the approval of the federal government has its origins in the Royal Proclamation of 1763 and the Confederation Congress Proclamation of 1783.
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Text of the land provision The first four Acts expired after 4 years; the 1802 and 1834 Acts had no expiration. The version of the Act in force at the time of the illicit conveyance determines the law that applies. The courts have found few legal differences between the five versions of the Act. For example, three dissenting justices in South Carolina v. Catawba Indian Tribe (1986) noted that the 1793 Act expanded the scope of the 1790 Act by applying the prohibition not only to lands but "claims." The original Act, passed on July 22, 1790 provides: No sale of lands made by any Indians, or any nation or tribe of Indians within the United States, shall be valid to any person or persons, or to any state, whether having the right of pre-emption to such lands or not, unless the same shall be made and duly executed at some public treaty, held under the authority of the United States.
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The 1793 Act provides: [N]o purchase or grant of lands, or of any title or claim thereto, from any Indians or nation or tribe of Indians, within the bounds of the United States, shall be of any validity in law or equity, unless the same be made by a treaty or a convention entered into pursuant to the constitution ... The 1796 Act provides: [N]o purchase, grant, lease, or other conveyance of lands, or of any title or claim thereto, from any Indian, or nation or tribe of Indians, within the bounds of the United States, shall be of any validity, in law or equity, unless the same be made by treaty, or convention, entered into pursuant to the constitution ...
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The 1799 Act provides: No purchase, grant, lease, or other conveyance of lands, or of any title or claim thereto, from any Indian, or nation or tribe of Indians, within the bounds of the United States, shall be of any validity, in law or equity, unless the same be made by treaty or convention, entered into pursuant to the constitution ... The 1802 Act provides No purchase, grant, lease, or other conveyance of lands, or of any title or claim thereto, from any Indian, or nation, or tribe of Indians, within the bounds of the United States, shall be of any validity, in law or equity, unless the same be made by treaty or convention, entered into pursuant to the constitution ...
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The 1834 Act, currently codified at 25 U.S.C. § 177, provides: No purchase, grant, lease, or other conveyance of land, or of any title or claim thereto, from any Indian nation or tribe of Indians, shall be of any validity in law or equity, unless the same be made by treaty or convention entered into pursuant the constitution.
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Legislative history One of the earliest interpretations of the Nonintercourse Act comes from a speech by President George Washington to the Seneca Nation of New York in 1790, after the passage of the Act:
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I am not uninformed that the six Nations have been led into some difficulties with respect to the sale of their lands since the peace. But I must inform you that these evils arose before the present government of the United States was established, when the separate States and individuals under their authority, undertook to treat with the Indian tribes respecting the sale of their lands. But the case is now entirely altered. The general Government only has the power, to treat with the Indian Nations, and any treaty formed and held without its authority will not be binding. Here then is the security for the remainder of your lands. No State nor person can purchase your lands, unless at some public treaty held under the authority of the United States. The general government will never consent to your being defrauded. But it will protect you in all your just rights.
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Land claims litigation
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History
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The first litigation of the Nonintercourse Act by an indigenous party to reach the Supreme Court was Cherokee Nation v. Georgia (1831), which the Court dismissed on the technicality that the court lacked of original jurisdiction, so the result was the Cherokee did not have a standing as a foreign nation, but the opinion did not rule on the merits, leaving the door open for a ruling on a resubmitted case. Former Attorney General William Wirt, the Cherokee's lawyer, argued that the challenged Georgia statute was void, inter alia, "[b]ecause it is repugnant to a law of the United States passed in 1803 entitled 'an act to regulate trade and intercourse with Indian tribes, and to preserve peace on the frontiers.'" Wirt also argued that the state statute violated the Cherokee treaties and the Contract Clause and the dormant Indian Commerce Clause of the United States Constitution. A similar argument was made in the Bill filed by Wirt in the Supreme Court. William Wirts arguments may have
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had a telling effect, for in a subsequent action, Worcester v. Georgia (1832) the court reversed itself, holding that the Cherokee were a sovereign nation and thus the Supreme Court did have original jurisdiction.
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After Cherokee Nation, the next such case to reach the Court was Seneca Nation of Indians v. Christy (1896). The New York Court of Appeals had dismissed the claim based on an interpretation of the Nonintercourse Act and an invocation of the statute of limitations for the state enabling act which enabled the Seneca to sue in state court; the Supreme Court dismissed the appeal because of the adequate and independent state grounds doctrine. The Act remained essentially un-litigated by tribes until Federal Power Commission v. Tuscarora Indian Nation (1960), where the Tuscarora attempted to avoid the condemnation of their land by the construction of a federal dam. The court held the Act inapplicable, but noted:
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It is certain that if [25 U.S.C. § 177] is applicable ... the mere 'expressed consent' of Congress would be vain and idle. For § 177 at the very least contemplates the assent of the Indian nation or tribe. ... [I]t follows that the mere consent of Congress, however express and specific, would avail nothing. Therefore, if § 177 is applicable ... the result would be that the Tuscarora lands, however imperative for the project, could not be taken at all.
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This dicta inspired Oneida Indian Nation of N.Y. State v. Oneida Cnty. (1974) ["Oneida I"], where the Supreme Court held that there was federal subject-matter jurisdiction for Indian land claims based upon aboriginal title and violations of the Nonintercourse Act. In Oneida Cnty. v. Oneida Indian Nation of N.Y. State (1984) ["Oneida II"], the Supreme Court held that tribes have a federal common law cause of action, not pre-empted by the Nonintercourse Act, for possessory land claims based upon aboriginal title; the court also rejected the following affirmative defenses: limitations, abatement, ratification or nonjusticiability.
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While Oneida II remains the only final judgement entered by a court in favor of a tribe bringing a Nonintercourse Act land claim, Oneida I inspired dozens of other land claims. After tribes won initial judgements in some of these claims, Congress reacted by extinguishing the claimed aboriginal title and compensating the tribal plaintiffs. These Indian Land Claims Settlements are collected in 25 U.S.C. tit. 19. For example, in Joint Tribal Council of the Passamaquoddy Tribe v. Morton (1st Cir. 1975), after the First Circuit held that the federal government was obliged to bring a suit on the tribe's behalf claiming 60% of Maine, Congress approved an $81.5 million settlement. In the case of the Narragansett land claim (D.R.I. 1976), Congress enacted a settlement after the court struck all the defendant's affirmative defenses (laches, statute of limitations/adverse possession, estoppel by sale, operation of state law, and public policy) and denied the state's motion to dismiss on the
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grounds of sovereign immunity and nonjusticiability. Similarly, in Mohegan Tribe v. Connecticut (D. Conn. 1982), Congress approved the creation of the Mohegan Sun after the court struck the defendant's affirmative defenses. With the Mashantucket Pequot Tribe and Wampanoag, Congress enacted a settlement before the courts had a chance to enter any rulings.
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Elements As stated in Narragansett, there are four elements to a Nonintercourse Act claim. In order to establish a prima facie case, plaintiff must show that: it is or represents an Indian "tribe" within the meaning of the Act; the parcels of land at issue herein are covered by the Act as tribal land; the United States has never consented to the alienation of the tribal land; the trust relationship between the United States and the tribe, which is established by coverage of the Act, has never been terminated or abandoned. More recently, the Second Circuit has stated: In order to establish a violation of the Non-Intercourse Act, the [plaintiffs] are required to establish that: (1) they are an Indian tribe; (2) the land at issue was tribal land at the time of the conveyance; (3) the United States never approved the conveyance, and (4) the trust relationship between the United States and the tribe has not been terminated.
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Tribal status The Passamaquoddy and Narragansett cases, supra, are examples where the plaintiff has prevailed despite not being federally recognized tribes (the Passamaquoddy obtained federal recognition through the Maine Indian Claims Settlement; the Narragansett gained federal recognition in 1983, five years after the Rhode Island Claims Settlement Act). Although federal tribal status is prima facie evidence of the first element, the Act also applies to unrecognized tribes.
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If the tribe is unrecognized, the defendant may defeat the plaintiff's prima facie case either by showing that the Indians did not constitute a "tribe" at the time of the conveyance, or at the time of the litigation; thus, the defendant may show that the plaintiff is not the successor in interest to the tribe whose lands were illegally alienated. The leading case where the defendants prevailed on this element is Mashpee Tribe v. New Seabury Corp. (1st Cir. 1979). Alternatively, the action may be stayed until the Bureau of Indian Affairs makes a tribal status determination (and eventually dismissed if the BIA concludes the plaintiffs are not the successors in interest). The Pueblo were initially interpreted not to be "Indians" for the purposes of the Nonintercourse Act; however, this holding was subsequently overruled.
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The elements given above are for a tribe. The United States, acting in its capacity as a trustee, may (and has, successfully) bring an action on behalf of a tribe. The federal government was vested with similar power to enforce the anti-alienation provisions of the Allotment Acts. Conversely, individual Indians have no standing under the Act. This is true even if individual plaintiffs attempt the certify a class of all tribal members; the tribe itself must sue. Covered land Unlike the Confederation Congress Proclamation of 1783, the Nonintercourse Act applies to land within the boundaries of a state, including the original thirteen. The First Circuit in Passamaquoddy and the Second Circuit in Mohegan Tribe, supra, held that the Nonintercourse Act applies to the entire United States, including the original thirteen. No defendant has yet persuaded a court otherwise.
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However, the defendant will defeat this element if the challenged conveyance occurred before 1790. The Confederation Congress Proclamation of 1783 may cover conveyances between 1783 and 1790, but the only court to consider it held that the Confederation Congress had neither the power nor the intent to prohibit conveyances to states within their borders. The Royal Proclamation of 1763 may cover conveyances between 1763 and 1783; however, the only court to examine such a conveyance found that it satisfied the requirements of the Proclamation. For example, the conveyances at issue in Johnson v. M'Intosh (1823) occurred on July 5, 1773 and October 18, 1775, but neither party to the suit was indigenous.
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Federal non-consent Through the policies of Indian removal in the East and Indian reservation-creation in the West, the federal government removed Native Americans from most of their ancestral land. However, examples of Congress approving a state action that alienated land are rare indeed. Congress would have to pass a statute with express language, or the Senate would have to ratify the treaty alienating the land, to secure such federal approval. The view taken by several of the Indian Land Claims Settlements is that Congress may consent to such conveyances retroactively; this view has not been tested in court, although it is likely to be upheld because the power of Congress to extinguish aboriginal title without compensation is plenary.
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Trust relationship In Passamaquoddy, supra, the First Circuit held that only Congress, and only with a clear statement, can terminate a federal-tribal trust relationship; acts of state governments are irrelevant. Congress has done so with several tribes under Indian termination policy. Since South Carolina v. Catawba Indian Tribe (1986) it has been understood that the Nonintercourse Act does not protect the lands of terminated tribes; there, the termination act was held to have triggered the state statute of limitations with respect to the land claim. Affirmative defenses Courts have considered and rejected several affirmative defenses to Nonintercourse Act suits. However, there are two affirmative defenses that have been accepted by some courts: state sovereign immunity and the equitable doctrine of laches. State sovereign immunity
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The structure of the original Constitution and the text of the Eleventh Amendment gives states sovereign immunity from most suits; there are exceptions: when the state consents to suit; when the federal government abrogates sovereign immunity by statute; when the federal government is the plaintiff or plaintiff-intervenor; and the category authorized by Ex parte Young (1908). In several cases, Nonintercourse Act plaintiffs have satisfied one of these exceptions. However, the Nonintercourse Act itself does not abrogate state sovereign immunity. Moreover, the authority is clear that the Ex parte Young exception does not apply. Therefore, plaintiffs must obtain the intervention of the federal government or relegate themselves to suing local governments and private land owners. Further, in actions against states, Indians are not entitled to the presumption of 25 U.S.C. § 194, which applies only to "persons." Laches
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Four dissenting justices would have barred the tribes action based on laches in Oneida County v. Oneida Indian Nation of N.Y. State (1985), a question the majority did not reach. The Second Circuit adopted the view of the dissent in Cayuga Indian Nation of N.Y. v. Pataki (2d Cir. 2005), and since then no tribal plaintiff has been able to overcome this affirmative defense in that circuit. Cayuga erased a damage award of $247.9 million, the largest ever awarded under the Act. Other provisions Definition of Indian country In addition to regulating relations between Indians living on Indian land and non-Indians, the 1834 Act identified an area known as "Indian country". This land was described as being "all that part of the United States west of the Mississippi and not within the states of Missouri and Louisiana, or the territory of Arkansas." This is the land that became known as Indian Territory.
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Trading posts One of the most defining aspects of the acts was the establishment of a series of "factories" which were officially licensed trading posts where Native Americans were to sell their merchandise (particularly furs). The factories, which officially were set up to protect the tribes from unscrupulous private traders, were to be used as leverage to cause the tribes to cede substantial territory in exchange for access to the "factory" as happened with the Treaty of Fort Clark in which the Osage Nation exchanged most of Missouri in order to access Fort Clark. Property claims According to U.S. Attorney General William Wirt:
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[T]he United States agree to pay [the Creek Indians] certain specific sums of money, out of which payments there is a reservation of $5,000 to satisfy claims for property taken by individuals of the said nation from the citizens of the United States subsequent to the treaty of Colerain, which has been or may be claimed and established agreeably to the provisions of the act for regulating trade and intercourse with the Indian tribes, and to preserve peace on the frontiers. State nonintercourse acts The Nonintercourse Act did not pre-empt the states from legislating additional restraints on alienation of Native American lands. Many states, including nearly all of the original Thirteen, enacted similar statutes for at least some lands during at least some time periods. Other state statutes, or constitutional provisions, incorporated the English common law as it had evolved up to that point. New York A New York State enacted March 31, 1821 provided:
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[I]t shall be unlawful for any person or persons, other than Indians, to settle or reside upon any lands belonging to or occupied by any nation or tribe of Indians within this state; and that all leases, contracts and agreements made by any Indians, whereby any person or persons, other than Indians, shall be permitted to reside upon such lands, shall be absolutely void; and if any person or persons shall settle or reside on any such lands, contrary to this act, it shall be the duty of any judge of any court of Common Pleas of the county within which such lands shall be situated, on complaint made to him, and on due proof of the fact of such settlement or residence, to issue his warrant, under his hand and seal, directed to the sheriff of such county, commanding him, within ten days after the receipt thereof, to remove such person or persons so settling or residing, with his, her or their families, from such lands.
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South Carolina A 1739 South Carolina Provincial Council statute required a license from the Crown or Governor for a private party to purchase lands from Indians. Notes
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References Susan C. Antos, Comment, Indian Land Claims Under the Nonintercourse Act, 44 Alb. L. Rev. 110 (1979). John Edward Barry, Comment, Oneida Indian Nation v. County of Oneida: Tribal Rights of Action and the Indian Trade and Intercourse Act, 84 Colum. L. Rev. 1852 (1984). Robert N. Clinton & Margaret Tobey Hotopp, Judicial Enforcement of the Federal Restraints on Alienation of Indian Land: The Origins of the Eastern Land Claims, 31 Me. L. Rev. 17 (1979). Daniel M. Crane, Congressional Intent or Good Intentions: The Inference of Private Rights of Action Under the Indian Trade and Intercourse Act, 63 B.U. L. Rev. 853 (1983). William E. Dwyer, Jr., Land Claims under the Indian Nonintercourse Act: 25 U.S.C. 177, 7 B. C. Envtl. Aff. L. Rev. 259 (1978). Francis J. O'Toole & Thomas N. Tureen, State Power and the Passamaquoddy Tribe: A Gross National Hypocrisy, 23 Me. L. Rev. 1 (1971).
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Francis Paul Purcha, America Indian Policy in the Formative Years: The Indian Trade and Intercourse Acts 1790—1834 (1962). Deborah A. Rosen, Colonization Through Law: The Judicial Defense of State Indian Legislation, 1790–1880, 46 Am. J. Legal Hist. 26 (2004).
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Further reading John M.R. Paterson & David Roseman, A Reexamination of Passamaquoddy v. Morton, (1979). External links Text of the Acts: 1790; 1793; 1796; 1799; 1802; 1834 Indian Trade and Intercourse Act in Chickasaw History - Chickasaw.TV Intercourse Act Legal history of the United States Indian Territory Pre-statehood history of Oklahoma Presidency of George Washington Acts of the 1st United States Congress Aboriginal title in the United States 1790 in American law 1793 in American law 1796 in American law 1799 in American law 1802 in American law 1834 in American law 7th United States Congress 23rd United States Congress
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United Empire Loyalists (or simply Loyalists) is an honorific title which was first given by the 1st Lord Dorchester, the Governor of Quebec, and Governor General of The Canadas, to American Loyalists who resettled in British North America during or after the American Revolution. At the time, the demonym Canadian or Canadien was used to refer to the indigenous First Nations groups and the descendants of New France settlers inhabiting the Province of Quebec.
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They settled primarily in Nova Scotia and the Province of Quebec. The influx of loyalist settlers resulted in the creation of several new colonies. In 1784, New Brunswick was partitioned from the Colony of Nova Scotia after significant loyalist resettlement around the Bay of Fundy. The influx of loyalist refugees also resulted in the Province of Quebec's division into Lower Canada (present-day Quebec), and Upper Canada (present-day Ontario) in 1791. The Crown gave them land grants of one lot. One lot consisted of per person to encourage their resettlement, as the Government wanted to develop the frontier of Upper Canada. This resettlement added many English speakers to the Canadian population. It was the beginning of new waves of immigration that established a predominantly English-speaking population in the future Canada both west and east of the modern Quebec border. History American Revolution
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Following the end of the American Revolutionary War and the signing of the Treaty of Paris in 1783, both Loyalist soldiers and civilians were evacuated from New York City, most heading for Canada. Many Loyalists had already migrated to Canada, especially from New York and northern New England, where violence against them had increased during the war. The Crown-allotted land in Canada was sometimes allotted according to which Loyalist regiment a man had fought in. This Loyalist resettlement was critical to the development of present-day Ontario, and some 10,000 refugees went to Quebec (including the Eastern Townships and modern-day Ontario). But Nova Scotia (including modern-day New Brunswick) received three times that number: about 35,000–40,000 Loyalist refugees.
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An unknown but substantial number of individuals did not stay; they eventually returned to the United States. As some families split in their loyalties during the war years, many Loyalists in Canada continued to maintain close ties with relatives in the United States. They conducted commerce across the border with little regard to British trade laws. In the 1790s, the offer of land and low taxes, which were one-quarter those in America, for allegiance by Lieutenant-Governor Simcoe resulted in the arrival of 30,000 Americans often referred to as Late Loyalists. By the outbreak of the War of 1812, of the 110,000 inhabitants of Upper Canada, 20,000 were the initial Loyalists, 60,000 were later American immigrants and their descendants, and 30,000 were immigrants from the UK, their descendants or from the Old Province of Quebec. The later arrival of many of the inhabitants of Upper Canada suggests that land was the main reason for immigration. Resettlement
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The arrival of the Loyalists after the Revolutionary War led to the division of Canada into the provinces of Upper Canada (what is now southern Ontario) and Lower Canada (today's southern Quebec). They arrived and were largely settled in groups by ethnicity and religion. Many soldiers settled with others of the regiments they had served with. The settlers came from every social class and all thirteen colonies, unlike the depiction of them in the Sandham painting which suggests the arrivals were well-dressed upper-class immigrants.
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Loyalists soon petitioned the government to be allowed to use the British legal system, which they were accustomed to in the American colonies, rather than the French system. Great Britain had maintained the French legal system and allowed freedom of religion after taking over the former French colony with the defeat of France in the Seven Years' War. With the creation of Upper and Lower Canada, most Loyalists in the west could live under British laws and institutions. The predominantly ethnic French population of Lower Canada, who were still French-speaking, could maintain their familiar French civil law and Catholic religion.