Is Canadašs Economy a Model for America?
- From: PolishKnight <marek1@xxxxxxx>
- Date: Mon, 14 Jan 2008 18:07:43 -0500
Worthy of a thread on it's own:
http://www.hillsdale.edu/news/imprimis.asp
Mark Steyn
Author and Columnist
Mark Steyn¹s column appears in the New York Sun, the Washington Times,
Philadelphia¹s Evening Bulletin, and the Orange County Register. In
addition, he writes for The New Criterion, MacLean¹s in Canada, the
Jerusalem Post, The Australian, and Hawke¹s Bay Today in New Zealand.
The author of National Review¹s Happy Warrior column, he also blogs on
National Review Online and appears weekly on the Hugh Hewitt Radio Show.
He is the author of several books, most recently America Alone: The End
of The World as We Know It, a New York Times bestseller and a number one
bestseller in Canada. A Canadian citizen, Mr. Steyn lives with his
family in New Hampshire.
The following is abridged from a lecture delivered on the Hillsdale
College campus on September 29, 2007, at the second annual Free Market
Forum, sponsored by the College¹s Center for the Study of Monetary
Systems and Free Enterprise.
Is Canada¹s Economy a Model for America?
I WAS A bit stunned to be asked to speak on the Canadian economy. ³What
happened?² I wondered. ³Did the guy who was going to talk about the
Belgian economy cancel?² It is a Saturday night, and the Oak Ridge Boys
are playing the Hillsdale County Fair. Being from Canada myself, I am,
as the President likes to say, one of those immigrants doing the jobs
Americans won¹t do. And if giving a talk on the Canadian economy on a
Saturday night when the Oak Ridge Boys are in town isn¹t one of the jobs
Americans won¹t do, I don¹t know what is.
Unlike America, Canada is a resource economy: The U.S. imports
resources, whereas Canada exports them. It has the second largest oil
reserves in the world. People don¹t think of Canada like that. The
Premier of Alberta has never been photographed in Crawford, Texas,
holding hands with the President and strolling through the rose bower as
King Abdullah of Saudi Arabia was. But Canada is nonetheless an oil
economy?a resource economy. Traditionally, in America, when the price of
oil goes up, Wall Street goes down. But in Canada, when the price of oil
goes up, the Toronto stock exchange goes up, too. So we are relatively
compatible neighbors whose interests diverge on one of the key global
indicators.
As we know from 9/11, the Wahabbis in Saudi Arabia use their oil wealth
to spread their destructive ideology to every corner of the world. And
so do the Canadians. Consider that in the last 40 years, fundamental
American ideas have made no headway whatsoever in Canada, whereas
fundamental Canadian ideas have made huge advances in America and the
rest of the Western world. To take two big examples, multiculturalism
and socialized health care?both pioneered in Canada?have made huge
strides down here in the U.S., whereas American concepts?such as
non-confiscatory taxation?remain as foreign as ever.
My colleague at National Review, John O¹Sullivan, once observed that
post-war Canadian history is summed up by the old Monty Python song that
goes, ³I¹m a Lumberjack and I¹m OK.² If you recall that song, it begins
as a robust paean to the manly virtues of a rugged life in the north
woods. But it ends with the lumberjack having gradually morphed into a
kind of transvestite pickup who likes to wear high heels and dress in
women¹s clothing while hanging around in bars. Of course, John
O¹Sullivan isn¹t saying that Canadian men are literally
cross-dressers?certainly no more than 35-40 percent of us ? but rather
that a once manly nation has undergone a remarkable psychological
makeover. If you go back to 1945, the Royal Canadian Navy had the
world¹s third largest surface fleet, the Royal Canadian Air Force was
one of the world¹s most effective air forces, and Canadian troops got
the toughest beach on D-Day. But in the space of two generations, a
bunch of tough hombres were transformed into a thoroughly feminized
culture that prioritizes all the secondary impulses of society?welfare
entitlements from cradle to grave?over all the primary ones. And in
that, Canada is obviously not alone. If the O¹Sullivan thesis is flawed,
it¹s only because the lumberjack song could stand as the post-war
history of almost the entire developed world.
Today, the political platforms of at least one party in the United
States and pretty much every party in the rest of the Western world are
nearly exclusively about those secondary impulses?government health
care, government day care, government this, government that. And if you
have government health care, you not only annex a huge chunk of the
economy, you also destroy a huge chunk of individual liberty. You
fundamentally change the relationship between the citizen and the state
into something closer to that of junkie and pusher, and you make it very
difficult ever to change back. Americans don¹t always appreciate how far
gone down this path the rest of the developed world is. In Canadian and
Continental cabinets, the defense ministry is now a place where an
ambitious politician passes through on his way up to important jobs like
running the health department. And if you listen to recent Democratic
presidential debates, it is clear that American attitudes toward
economic liberty are being Canadianized.
To some extent, these differences between the two countries were present
at their creations. America¹s Founders wrote of ³life, liberty and the
pursuit of happiness.² The equivalent phrase at Canada¹s founding was
³peace, order and good government² ?which words are not only drier and
desiccated and stir the blood less, but they also presume a degree of
statist torpor. Ronald Reagan famously said, ³We are a nation that has a
government, not the other way around.² In Canada it too often seems the
other way around.
All that being said, if you remove health care from the equation, the
differences between our two economies become relatively marginal. The
Fraser Institute¹s ³Economic Freedom of the World 2007 Annual Report²
ranks the U.S. and Canada together, tied in fifth place along with
Britain. And here¹s an interesting point: The top ten most free
economies in this report are Hong Kong, Singapore, New Zealand,
Switzerland, United States, United Kingdom, Canada, Estonia, Ireland,
and Australia. With the exception of Switzerland and Estonia, these
systems are all British-derived. They¹re what Jacques Chirac
dismissively calls les anglo-saxon. And he and many other Continentals
make it very clear that they regard free market capitalism as some sort
of kinky Anglo-Saxon fetish. On the other hand, Andrew Roberts, the
author of A History of the English-Speaking Peoples since 1900, points
out that the two most corrupt jurisdictions in North America are
Louisiana and Quebec?both French-derived. Quebec has a civil service
that employs the same number of people as California¹s, even though
California has a population nearly five times the size.
In the province of Quebec, it¹s taken more or less for granted by all
political parties that collective rights outweigh individual rights. For
example, if you own a store in Montreal, the French language signs
inside the store are required by law to be at least twice the size of
the English signs. And the government has a fairly large bureaucratic
agency whose job it is to go around measuring signs and prosecuting
offenders. There was even a famous case a few years ago of a pet store
owner who was targeted by the Office De La Langue Française for selling
English-speaking parrots. The language commissar had gone into the store
and heard a bird saying, ³Who¹s a pretty boy, then?² and decided to take
action. I keep trying to find out what happened to the parrot.
Presumably it was sent to a re-education camp and emerged years later
with a glassy stare saying in a monotone voice, ³Qui est un joli garcon,
hein?²
The point to remember about this is that it is consonant with the
broader Canadian disposition. A couple of years ago it emerged that a
few Quebec hospitals in the eastern townships along the Vermont border
were, as a courtesy to their English-speaking patients, putting up
handwritten pieces of paper in the corridor saying ³Emergency Room This
Way² or ³Obstetrics Department Second on the Left.² But in Quebec,
you¹re only permitted to offer health care services in English if the
English population in your town reaches a certain percentage. So these
signs were deemed illegal and had to be taken down. I got a lot of mail
from Canadians who were upset about this, and I responded that if you
accept that the government has a right to make itself the monopoly
provider of health care, it surely has the right to decide the language
in which it¹s prepared to provide that care. So my point isn¹t just
about Quebec separatism. It¹s about a fundamentally different way of
looking at the role of the state.
The Two Economies
So, granted the caveat that the economically freest countries in the
world are the English-speaking democracies, within that family there are
some interesting differences, and I would say between America and Canada
there are five main ones.
First, the Canadian economy is more unionized. According to the Fraser
Institute report, since the beginning of this century, the unionized
proportion of the U.S. work force has averaged 13.9 percent. In Canada
it has averaged 32 percent. That is a huge difference. The least
unionized state in America is North Carolina, at 3.9 percent, whereas
the least unionized province in Canada is Alberta, with 24.2 percent?a
higher percentage than any American state except Hawaii, Alaska, and New
York. In Quebec, it¹s 40.4 percent. If you regard unionization as a
major obstacle to productivity, investment, and employment growth, this
is a critical difference.
I drive a lot between Quebec and New Hampshire, and you don¹t really
need a border post to tell you when you¹ve crossed from one country into
another. On one side the hourly update on the radio news lets you know
that Canada¹s postal workers are thinking about their traditional
pre-Christmas strike?the Canadians have gotten used to getting their
Christmas cards around Good Friday, and it¹s part of the holiday
tradition now?or that employees of the government liquor store are on
strike, nurses are on strike, police are on strike, etc. Whereas you
could listen for years to a New Hampshire radio station and never hear
the word ³strike² except for baseball play-by-play.
In a news item from last year, an Ottawa panhandler said that he may
have to abandon his prime panhandling real estate on a downtown street
corner because he is being shaken down by officials from the panhandlers
union. Think about that. There¹s a panhandlers union which exists to
protect workers¹ rights or?in this case?non-workers¹ rights. If the
union-negotiated non-work contracts aren¹t honored, the unionized
panhandlers will presumably walk off the job and stand around on the
sidewalk. No, wait...they¹ll walk off the sidewalk! Anyway, that¹s
Canada: Without a Thatcher or a Reagan, it remains over-unionized and
with a bloated public sector.
Not that long ago, I heard a CBC news anchor announce that Canada had
³created 56,100 new jobs in the previous month.² It sounded like good
news. But looking at the numbers, I found that of those 56,100 new jobs,
4,200 were self-employed, 8,900 were in private businesses, and the
remaining 43,000 were on the public payroll. In other words, 77 percent
of the new jobs were government jobs paid for by the poor slobs working
away in the remaining 23 percent. So it wasn¹t good news, it was bad
news about the remorseless transfer of human resources from the vital
dynamic sector to the state.
The second difference between our economies is that Canada¹s is more
protected. I was talking once to a guy from the Bay area who ran a gay
bookstore, and he swore to me that he¹d had it with President Bush and
that he was going to move to Vancouver and reopen his bookstore there. I
told him that would be illegal in Canada and he got very huffy and said
indignantly, ³What do you mean it¹s illegal? It¹s not illegal for a gay
man to own a bookstore in Canada.² I said, ³No, but it¹s illegal for a
foreigner to own a bookstore in Canada.² He could move to Canada, yes,
but he¹d have to get a government job handing out benefit checks. His
face dropped, and I thought of pitching one of those soft-focus TV
movie-of-the-week ideas to the Lifestyle Channel, telling the
heartwarming story of a Berkeley gay couple who flee Bush¹s regime to
live their dream of running a gay bookstore in Vancouver, only to find
that Canada has ways of discriminating against them that the homophobic
fascists in the United States haven¹t even begun to consider.
The third difference is that Canada¹s economy is more subsidized. Almost
every activity amounts to taking government money in some form or other.
I was at the Summit of the Americas held in Canada in the summer of
2001, with President Bush and the presidents and prime ministers from
Latin America and the Caribbean. And, naturally, it attracted the usual
anti-globalization anarchists who wandered through town lobbing bricks
at any McDonald¹s or Nike outlet that hadn¹t taken the precaution of
boarding up its windows. At one point I was standing inside the
perimeter fence sniffing tear gas and enjoying the mob chanting against
the government from the other side of the wire, when a riot cop suddenly
grabbed me and yanked me backwards, and a nanosecond later a chunk of
concrete landed precisely where I had been standing. I bleated the usual
³Oh my God, I could have been killed² for a few minutes and then I went
to have a café au lait. And while reading the paper over my coffee, I
learned that not only had Canadian colleges given their students time
off to come to the Summit to riot, but that the Canadian government had
given them $300,000 to pay for their travel and expenses. It was a
government-funded anti-government riot! At that point I started bleating
³Oh my God, I could have been killed at taxpayer expense.² Say what you
like about the American trust-fund babies who had swarmed in to
demonstrate from Boston and New York, but at least they were there on
their own dime. Canada will and does subsidize anything.
Fourth point: The Canadian economy is significantly more dirigiste
(i.e., centrally planned). A couple of years ago it was revealed that
the government had introduced a fast-track immigration program for
exotic dancers (otherwise known as strippers). Now as a general rule,
one of the easiest things to leave for the free market to determine is
the number of strippers a society needs. But for some reason, the
government concluded that the market wasn¹t generating the supply
required and introduced a special immigration visa. To go back to
President Bush¹s line, maybe this is one of those jobs that Canadians
won¹t do, so we need to get some Ukrainians in to do it. Naturally, the
exotic dancers are unionized, so it¹s only a matter of time before the
last viable industry in Quebec grinds to a halt and American tourists in
Montreal find themselves stuck in traffic because of huge numbers of
striking strippers. What governmental mind would think of an exotic
dancer immigration category?
Fifth and obviously, the Canadian economy is more heavily taxed: Total
revenue for every level of government in the U.S. is approximately 27
percent of GDP, while in Canada it¹s 37 percent. And yes, that 37
percent includes health care?but you would have to be having an awful
lot of terminal illnesses each year to be getting your money¹s worth
from what you¹re giving to the treasury for that.
Canadian Dependence on the U.S.
Yet, having criticized Canada¹s economy in various features, let me say
something good about it: It doesn¹t have the insanely wasteful federal
agricultural subsidies that America has. In fact, if a Canadian wants to
get big-time agriculture subsidies, he¹s more likely to get them from
the U.S. government. I¹m sure most people here know that very few actual
farmers?that¹s to say, guys in denim overalls and plaid shirts and John
Deere caps with straws in the stumps of their teeth?get any benefit from
U.S. agricultural subsidies. Almost three-quarters of these subsidies go
to 20,000 multi-millionaire play farmers and blue chip corporations.
Farm subsidies are supposed to help the farm belt. But there¹s a map of
where the farm subsidies go that you can find on the Internet. And
judging from the beneficiaries, the farm belt runs from Park Avenue down
Wall Street, out to the Hamptons, and then by yacht over to Martha¹s
Vineyard, which they really ought to rename Martha¹s Barnyard. Among the
farmers piling up the dollar bills under the mattress are Ted Turner,
Sam Donaldson, the oil company Chevron, and that dirt-poor, hardscrabble
sharecropper David Rockefeller. But what you may not know is that also
among their number is Edgar Bronfman, Sr., who isn¹t just any old
billionaire, he¹s the patriarch of Montreal¹s wealthiest family, owner
of Seagram¹s Whiskey, which subsequently bought Universal Pictures. So
the U.S. taxpayer, in his boundless generosity, is subsidizing the small
family farms of Canadian billionaires. As a Canadian and a broken-down
New Hampshire tree farmer myself, I wondered whether I could get in on
the U.S. farm program, but as I understand it, it would only pay me for
a helicopter pad on top of my barn and a marble bathroom in my grain
silo.
Edgar Bronfman¹s dependence on U.S. taxpayers is symbolic of more than
just the stupidity of federal agriculture subsidies. In the end, there¹s
no such thing as an independent Canadian economy. It remains a branch
plant for the U.S. Over 80 percent of Canadian exports come to America.
From time to time, nationalist politicians pledge to change that andstart shipping goods elsewhere. But they never do because they don¹t
have to?they¹ve got the world¹s greatest market right next door. So when
people talk about the Canadian model as something that should be
emulated, they forget that it only works because it¹s next to the
American model. The guy who invented the Blackberry email device is
Canadian, but it¹s not been a gold mine for him because he¹s selling a
lot of them in Labrador or Prince Edward Island. It¹s been a gold mine
because he¹s selling a lot of them in New York and California and in
between.
Canadian dependence on the United States is particularly true in health
care, the most eminent Canadian idea looming in the American context.
That is, public health care in Canada depends on private health care in
the U.S. A small news story from last month illustrates this:
A Canadian woman has given birth to extremely rare identical
quadruplets. The four girls were born at a U.S. hospital because there
was no space available at Canadian neonatal intensive care units.
Autumn, Brook, Calissa, and Dahlia are in good condition at Benefice
Hospital in Great Falls, Montana. Health officials said they checked
every other neonatal intensive care unit in Canada, but none had space.
The Jepps, a nurse and a respiratory technician were flown 500
kilometers to the Montana hospital, the closest in the U.S., where the
quadruplets were born on Sunday.
There you have Canadian health care in a nutshell. After all, you can¹t
expect a G-7 economy of only 30 million people to be able to offer the
same level of neonatal intensive care coverage as a town of 50,000 in
remote, rural Montana. And let¹s face it, there¹s nothing an expectant
mom likes more on the day of delivery than 300 miles in a bumpy twin
prop over the Rockies. Everyone knows that socialized health care means
you wait and wait and wait?six months for an MRI, a year for a hip
replacement, and so on. But here is the absolute logical reductio of a
government monopoly in health care: the ten month waiting list for the
maternity ward.
In conclusion, I¹m not optimistic about Canada for various reasons?from
the recent Chinese enthusiasm for buying up the country¹s resources to
the ongoing brain drain?but also for a reason more profound. The biggest
difference between Canada and the U.S. is not that you crazy, violent,
psycho Yanks have guns and we caring, progressive Canucks have
socialized health care, but that America has a healthy fertility rate
and we don¹t. Americans have 2.1 children per couple, which is enough to
maintain a stable population, whereas according to the latest official
figures, Canadian couples have only 1.5. This puts us on the brink of
steep demographic decline. Consider the math: 10 million parents have
7.5 million children, 5.6 million grandchildren, and 4.2 million
great-grandchildren. You can imagine what shape those lavish Canadian
social programs will be in under that scenario, and that¹s before your
average teenage burger-flipper gets tired of supporting entire gated
communities and decides he¹d rather head south than pay 70 percent tax
rates.
So, to produce the children we couldn¹t be bothered having ourselves, we
use the developing world as our maternity ward. Between 2001 and 2006,
Canada¹s population increased by 1.6 million. 400,000 came from natural
population growth kids, while 1.2 million came from immigration. Thus
native Canadians?already only amounting to 25 percent of the country¹s
population growth?will become an ever smaller minority in the Canada of
the future. It¹s like a company in which you hold an ever diminishing
percentage of the stock. It might still be a great, successful company
in the years ahead, but if it is, it won¹t have much?if anything?to do
with you.
In that most basic sense, American progressives who look to Canada are
wrong. Not only is Canada¹s path not a model for America, it¹s not a
viable model for Canada. As Canadians are about to discover, the future
belongs to those who show up for it.
.
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