Text of my speech to the IMFC Family conference
On March 11 I was the keynote speaker at the Institute of Marriage and Family Canada’s conference on family policy. I spoke about what we know today about the relationship between the health of the institution of the family and the transmission between the generations of values essential to democracy, freedom and the rule of law. Below is the text of that speech.
The Future of Federal Transfers
I was recently invited by the Federal-Provincial Relations Division of Finance Canada to participate in a panel discussion in Ottawa on the future of federal transfers to the provinces. Here is the text of my remarks.
Social change: Paul Wells say Fearful Symmetry shows the way
In this week’s Maclean’s magazine Paul Wells spends a lot of time discussing Fearful Symmetry and the social policy changes it portends:
“For next steps, many conservatives are turning to Fearful Symmetry: The Fall and Rise of Canada’s Founding Values, a new book by Brian Lee Crowley, an economist and founder of the new Macdonald – Laurier Institute.
Crowley does not regard himself as a social conservative. But many who do see themselves that way like what he’s saying. To caricature a complex argument, Crowley says the modern welfare state has overextended itself, is unsustainable, and causes more harm than good to institutions like the family. These trends will only get worse when an aging population sharply increases the cost of delivering most social programs. One size can no longer fit all. Social services will have to be narrowly aimed at those who need them most, and delivered only as long as recipients are willing to improve their behaviour by attending to their family, keeping or seeking a job, and so on.
Government is no good at any of that and, in the opinion of most, shouldn’t try. “It is precisely for this reason, in my view, that we have seen in both the United States and the United Kingdom a growing use of the private sector, including the not-for-profit and so-called faith-based charities, for the delivery of social services,†Crowley writes. “Such private agencies may be more demanding of their clientele and expect more in the way of improvements in behaviour.â€
Crowley’s book was published last autumn. It seems to have been barely one step ahead of the news. This month’s Throne Speech contained a single line saying the government “will look to innovative charities and forward-thinking private-sector companies to partner on new approaches to many social challenges.†Such charities and companies were much in evidence at the Manning Centre conference. The changes Crowley anticipates are expected and embraced by social conservatives.
Meanwhile, the federal Liberals are still defending policies from five years ago, policies Harper has taken pains to ensure future federal governments won’t be able to afford, with his GST cuts and his massive cash transfers to the provinces. If the Liberals cannot begin to make a case for a return to larger, more activist — and more expensive — state-run social welfare, then Stephen Harper’s social conservative revolution will only accelerate.
IMFC Family conference 2010 – audio clips
On March 11 I was the keynote speaker at the Institute of Marriage and Family Canada’s conference on family policy. I spoke about what we know today about the relationship between the health of the institution of the family and the transmission between the generations of values essential to democracy, freedom and the rule of law. Below are some audio clips from my talk.
The Aboriginal Wizard of Oz
This is the first in a wonderful series of articles in The Australian by Noel Pearson, an Australian Aborigine and the Director of the Cape York Institute for Policy and Leadership. Mr Pearson is clearly part of a world-wide awakening among young Aboriginal leaders questioning whether the social service state can really solve the problems of Aboriginal peoples, as opposed to Aboriginal people rising up and taking their own fate in their hands. Every word in this series applies with equal justice to the deplorable plight of Aboriginals in Canada. As Mr Pearson writes:
What my opponents and sceptics from the Left have failed to understand is that when we talk about disempowerment being the singular and devastating feature of Aboriginal Australia, we mean that our people have had their responsibilities taken away from us. Responsibility is power. If we want our people to be empowered, then we need to take back the responsibilities that the welfare state has stripped away from us.”
Noel Pearson’s original article generated a plethora of mostly predictable commentary of the type “Non-Aboriginal Australians would love to have the kind of all encompassing tax-financed welfare services that Aboriginals enjoy.” Pearson’s rebuttal, also in The Australian a few days later, is a joy to read:…
There is no freedom of private choice and action when governments have assumed responsibilities that are normally undertaken by responsible parents and individuals. That government intervention has crowded out the responsibilities of individuals, families and communities is my point.
It is a misinterpretation of history to say that service provisioning followed a lack of responsibility. Aboriginal people never chose welfare as the basis of their inclusion in the country’s citizenship. They wanted equal wages, not welfare. They wanted a hand-up, not a handout. They wanted freedom from discrimination and racism.
But the welfare state regarded Aboriginal people as helpless and hopeless. It has never had any expectations of Aboriginal people. Or disadvantaged people generally. That is why it has stepped into their lives to such an extraordinary degree.
Jeffrey Simpson reviews Fearful Symmetry
Fearful Symmetry in the Halifax Herald
This review first appeared in the Halifax Herald on January 3. It is no longer available online so I’m reproducing it here.
Socialist policies will be history, Crowley predicts
By JEFFREY SIMPSON
BRIAN Lee Crowley predicts that Canada is on the cusp of a profound economic and cultural change that will take the country back to its ideological roots, even if they are unfamiliar to many citizens.
Crowley, the well-known conservative thinker who founded the Atlantic Institute for Market Studies, makes a compelling argument in his recently published book, Fearful Symmetry: The Fall and Rise of Canada’s Founding Values, that the last five decades spent as a nation with socialist leanings has been merely an aberration. Read more
Bélanger and Migué on Fearful Symmetry
Economists Gérard Bélanger and Jean-Luc Migué have an interesting piece in the National Post of 5th October arguing against some of the case I make in Fearful Symmetry attributing the rapid growth in government in Canada to a combination of the rise of the Boomer generation and a separatist Quebec nationalism.
One of the main points they raise against my argument is that growth in government was occurring all over the world, and especially in the western world, and therefore to attribute the growth in government in Canada to these two factors in Canada is to miss the larger picture of change affecting all western societies.
This would be a fair criticism, if it were true. But of course it isn’t. Indeed I spent an important part of the book tracing the growth of government spending in Canada, comparing it to our counterparts in the US (with whom we shared almost identical patterns of government growth for over a century, until the 1960s), and demonstrating that there were in fact two “camps” among Western industrialised societies. One was essentially the US, Canada and Australia, the other was much of Western Europe. The first group proved remarkably more resistant to the growth of government than the latter. But Canada in the Sixties and Seventies essentially changed teams. After a century of following in America’s footsteps, we suddenly and brutally changed camps. Over the ensuing few decades, America’s share of GDP devoted to government rose 6 percentage points. Ours rose over 20. As I say in the book, the zeitgeist in favour of larger government no doubt explains part of the growth in Canada. But it is the speed and size of the change over such a short period, that requires supplementary explanation in Canada, especially since the political class remained committed to small and limited government right up until the early 1960s, as I again show in the book.
As for the rise of a separatist Quebec nationalism only emerging in the 1970s, Migué and Bélanger must have lived through a very different history than I did. The Sixties were a time of radical nationalist ferment that was frightening the life out of the political class in Ottawa. The B&B Commission was named in response. The PQ was formed in the late Sixties from the merger of two other separatist political parties that had been agitating for some time. This was the time that mailboxes were blowing up in Montreal and the FLQ was issuing manifestos. Jean Lesage won the 1960s election on a platform of Maîtres chez nous, and Daniel Johnson won the 1966 election on the slogan of Égalité ou indépendence. The federal Liberal Party went and recruited les trois sages (Trudeau, Marchand and Pelletier) in the mid-Sixties as an attempt to strengthen their response and Trudeau was clearly made leader of the party because he was seen as the man able to respond forcefully to what was happening in Quebec, as indeed he did in the FLQ crisis in 1970.
It is historical revisionism pure and simple to say that because the PQ only made its entrée into the National Assembly in 1970 with a quarter of the vote or because the first referendum only occurred in the late Seventies (with half of French-speakers voting to give the government a mandate to negotiate sovereignty-association) that therefore nothing had happened in the decade preceding or that politicians in Quebec City and Ottawa were not already responding to the rise of a separatist nationalism in the province.
Tom Courchene responds, after a fashion
One of Canada’s most respected social thinkers and a man who has been a great inspiration to me personally, Tom Courchene of Queen’s University, wrote an op-ed in The Globe responding to my own. Mine was a summary of some of the arguments in Fearful Symmetry, focused in particular on the recent news that Ottawa was about to expand the number of seats in the Commons to reflect the growth of BC, Alberta and Ontario. Quebec and all the other provinces would gain no seats, implying a relative loss of not only population but political influence as well. Professor Courchene’s article was clearly intended to be a rebuttal to my piece, but like Andrew Coyne and several other readers who wrote to me, I found its arguments to be a bit mystifying.
OK, he spends the first third of the article agreeing with me. But the place where apparently he and I diverge is when I wrote that the shifting distribution of seats was a symptom of a larger malaise, especially for Quebec, which I described as “a society that cannot pay its own way or reproduce itself, that is highly dependent on transfers from the rest of the country, and that is losing its political influence.†Professor Courchene felt called upon to defend Quebec’s honour.
In so doing he said, for example, that while obviously Quebec’s weight would fall in the Commons, it would remain the same in the Senate. True but, as the French say, quel rapport? Is Professor Courchene seriously suggesting that the ultimate backwater in Canadian political institutions, our unelected Senate, will suddenly become the new avenue through which Quebec will exercise the kind of powerful political influence it has enjoyed in recent decades? If that were the case, I think you’d find Senate reform, giving Quebec the same number of seats as all other provinces, would rapidly move up the public agenda. He argues that falling seats in the Commons for Quebec will mean an abandonment by Quebec voters of the Bloc and a return to the fold of one or more federalist parties. But part of the argument I made in my op-ed is that as the Commons expands, and Quebec’s representation remains static, their ability to cause minority governments (as is the case today thanks to the Bloc) or to bestow majorities (as in much of the previous century), will be heavily diluted. It won’t disappear. It will just become less and less decisive. It is just arithmetic. Michael Bliss makes a similar point about Conservative Party electoral fortunes in today’s Globe.
But what really mystified me, coming from the father of the argument about “transfer dependency” which Professor Courchene helped to popularize in Canada in the 70s and 80s, was his attempt to make it appear that Quebec was the source of many highly desirable changes in Canada, most of which were only made possible by big, and badly designed, transfer programmes. Now far be it from me to deny that Quebec has been a valued and welcome member of Confederation, and I agree with him that the legal and linguistic diversity that Canada enjoys is in large part due to our perfectly legitimate efforts to accommodate Quebec and French-speakers. But as Professor Courchene quite well knows, because he has read my book and I have discussed it with him, many of the changes he singles out as gifts Quebec has bestowed on Canada, I argue have been the result of a sordid bidding war between Ottawa and Quebec City to keep Quebeckers from voting to leave Canada. Moreover this bidding war, by putting huge piles of cash on the table for Quebeckers to quarrel over, has created a society deeply mired in rent-seeking, or what I call PUPPETRY (people using political power to enrich themselves by plundering you).
The whole reason that Quebec is losing political and demographic weight is because its vast expansion of the state and its shift from being a society concerned with productive effort to one concerned with PUPPETRY have caused the emergence of that “society that cannot pay its own way or reproduce itself, that is highly dependent on transfers from the rest of the country, and that is losing its political influence.â€
Among the many social dysfunctions that have emerged in Quebec since the Quiet Revolution, let’s list a few: low employment rates, low productivity per capita, low investment rates, low in-migration, low fertility, low family formation rates, high welfare dependency, high out-migration, high taxes, high debt, high divorce, suicide and abortion rates. Now why ever would you describe that as “a society that cannot pay its own way or reproduce itself, that is highly dependent on transfers from the rest of the country, and that is losing its political influenceâ€?
Yes, as Professor Courchene points out, Quebec has been an innovator in social policy, although my gloss on that is that the innovation helps to create dependence on the state and is part of the problem. He cites cheap daycare as an example. On the other hand, that is a policy so far looked on in much of the rest of the country with scepticism, is very expensive and by no means an unalloyed blessing to parents and children, and is only possible in Quebec because of large transfers from other provinces who do not offer such services, when the transfers are supposed to guarantee that less well-off provinces can offer reasonably comparable services to richer ones. I think our history of transfers has been an unhappy one that has fuelled Quebec’s economic and population weakness and Professor Courchene’s defence of them makes him, in my view, a defender of a system that has done Quebec little good and much harm.
He attributes our “multiculturalism” to Quebec. Again, I disagree. In fact multiculturalism was opposed by Quebec as a dilution of their preference for a narrower and old-fashioned two-nation Canada, and the debate over the extent to which cultural minorities should be accommodated has been loudest and most ill-tempered in Quebec, leaving aside the extent to which Quebec has used its provincial powers under the constitution to marginalize the English-speaking population, a stain on Canada’s record of linguistic tolerance and diversity which I document in Fearful Symmetry.
And that brings us to Professor Courchene’s last point: Quebec has been the spear-tip of a movement in favour of “collective rights” that helps to distinguish us from the United States. Well, as a Laurier liberal, a believer in individual liberty, responsibility and accountability under the rule of law, I personally think that “collective rights” are harmful to democracy, are an unwelcome departure from our legal, moral and political tradition, and are unnecessary to distinguish us from the United States. Canadians were different from Americans before e.g. Bill 101 allowed the French-speaking majority in Quebec to oppress the French-speaking minority that wanted to send their kids to English-language schools (an example of how collective rights are really code for majorities oppressing minorities). Surely we only need to distinguish ourselves from American on points where they are wrong and we can do better. Anything else is difference for its own sake, an unworthy prize and one for which we should be unwilling to sacrifice our freedoms and moral tradition.
Is Saskatchewan the counter-example?
In response to my op-ed about the addition of new seats to the House of Commons in the Globe of 26/9/09, one reader wrote in with a familiar objection:
Brian Lee Crowley, in attributing Quebec’s loss of national political influence to its pursuit of a “big state strategy” , conveniently chooses to overlook a province that does not support his thesis. Saskatchewan , with its family of crown corporations and large public sector, is currently a national leader in economic growth, investment and in migration. Even the recently elected Conservative government has chosen not to interfere with this arrangement, recognizing that its low cost infrastructure and public services provides the province with an economic advantage.
Busted! My whole thesis has just been disproved and my career is in tatters because I forgot about Saskatchewan.
I don’t think so.
Back when Saskatchewan was a bastion of Canada’s founding values, a vigorous work ethic, small government and low taxes, it rapidly grew to become the third largest province in Canada by population. Alberta was its poor cousin. Both provinces have magnificent resource endowments. Both provinces faced the same commodity-based economies, boom and bust cycles, etc. Tommy Douglas used the provincial government to broaden access to health care and to build infrastructure, but made it very clear, as I show in the new book, Fearful Symmetry, that he had no interest in creating big social welfare programmes that might create dependence. He was a vigorous advocate of workfare. When equalization was first put in place in the late 1950s, Alberta was a recipient, as was Saskatchewan. Saskatchewan, not Alberta, was tipped in the early days to be the centre of the western oil and gas industry.
Then what happened?
Saskatchewan largely lost its way. Oh, it didn’t go badly wrong, as Quebec and much of the Atlantic provinces did. But it didn’t get things right either, as its very similarly situated neighbour, Alberta, largely did. Saskatchewan rubbed along for years, no economic out-performer, but no basket case either. Some years it was on equalization, some years it was off. The anti-business attitude of the government scared off the oil and gas industry, which set up shop in Alberta, which had a much more encouraging tax and regulatory regime. When the CCF became the NDP, policymaking soon became more heavily dominated by public-sector unions, who naturally favoured big government, high taxation and high levels of public sector employment. For an economic model that the Globe’s letter writer celebrates, it hardly created an economic powerhouse. Most years Saskatchewan’s population barely grew, the province lost population relative to the rest of the country and it attracted no immigration to speak of.
Over the last 35 years (1973–2007), the population of Saskatchewan has
grown from roughly 912,000 in 1973 to its current level of 997,000 in 2007
(9.3% growth). This stands in stark contrast to the population growth experienced
by Alberta (101.4%) and British Columbia (85.0%) over the same
period. Even neighboring Manitoba (17.8%) managed to post population
growth that exceeded that of Saskatchewan. Indeed, Saskatchewan’s population
growth of 9.3% (1973–2007) ranks ahead of only Newfoundland &
Labrador, which actually experienced a decline in its population of 7.2% over
the same period.
Private investment levels were poor:
In terms of net business investment per worker—the accumulated
investment by business (adjusted for the number of workers and inflation)—
Saskatchewan fairs [sic] poorly for the period between 1978 and 2007 when
compared to the western provinces and the national average. As of 2007,
Saskatchewan ranked 9th among all Canadian provinces in terms of net business
investment per worker. Indeed, Saskatchewan’s performance was only
49.4% of the national average as of 2007.
The results for the more narrow measure of business investment,
namely net business investment in machinery and equipment (adjusted
for the number of workers and inflation), are equally as poor. By 2007,
Saskatchewan had the lowest level of accumulated per-worker net business
investment in machinery and equipment among all Canadian provinces.
Indeed, Saskatchewan’s performance of $7,175 in accumulated net business
investment in machinery and equipment in 2007 was only 38.1% of the
national average, 73.0% of that achieved in Manitoba, and just 15.8% of that
achieved in Alberta.
Saskatchewan suffered from many of the dysfunctions of Quebec, with the happy exception that, being next door to BC and Alberta, it could export its unemployed and many of its retirees.
Our letter-writer now claims that Saskatchewan’s big government model explains its current economic success. But then that model was the one that was in place during the years of relative economic under-performance as well, and so he must accept that the model is responsible for that under-performance. He can’t have it both ways. The really interesting question, then, is why are things different now, because it is certainly true that Saskatchewan is enjoying a bit of a boom and may be the only province to grow in 2009.
No doubt many things could be mentioned, but here are two that I think are key: lower taxes in Saskatchewan and policy fumbles in next-door Alberta.
Since 2001, Saskatchewan has been converging on the low tax policies of its neighbours to the west after years of high taxation. In 2001 the province reduced personal income tax rates and raised the thresholds at which those rates kicked in. In 2006, the NDP government our letter-writer praises for their left-wing bent, took a leaf from the copy book of nasty neo-cons like Ralph Klein and Gordon Campbell and cut corporate taxes. And not by a little. The CIT rate went from 17% to 12% (i.e. dropped by about a third) and those particularly nasty corporate capital taxes were largely eliminated.
Next door in Alberta, the government launched a review of the royalty regime in the oil patch just at the moment of the collapse of prices. The certainty and good business climate the industry had enjoyed for years were badly damaged. Exploration and development activity has fallen sharply. Premier Wall of Saskatchewan went out and made it clear to the companies that his province was now open for business, and they have come in significant numbers to check out the new business climate. Ed Stelmach is celebrated in Saskatchewan as the province’s biggest supporter.
Other decisions are helping. The removal a few years ago of the restrictions on non-residents owning Saskatchewan farmland have increased investment in the province. A few minor changes to the interprovincial-trade deal throwing open cross border trade between BC and Alberta (the so-called TILMA), has made it possible for Saskatchewan to sign on in just the last few days.
As for the alleged superiority of the Crown corporation model in Saskatchewan, the evidence for this claim is poor as well. While the current government may have had to promise not to privatize on a large scale in order to minimize attacks by the province’s extremely well-organized, well-financed and vocal public sector trade unions, the evidence is poor that the Crown model has served Saskatchewan well. Just one example: the privatization of the Crown telephone service in next door Manitoba gave an excellent chance to compare the two models. The result:
Ten years after the Manitoba government devolved MTS, the results for company size and profitability are dramatic. Despite slight advantages to SaskTel early on, MTS today earns twice the revenue, has three times the assets and employs 20 per cent more people.
Since the telecommunications market is highly competitive and federally regulated, MTS could not have achieved such growth by gouging customers or providing a more inferior product. In fact, service levels in both provinces remain essentially similar according to a Frontier Centre analysis of prices, geographical coverage and numbers of customers served. Nonetheless, the differences between MTS and SaskTel are vast, and the only noticeable cause is their ownership model.
Saskatchewan has momentum, but it has absolutely nothing to do with the legacy of tired old policies of the past. Even the NDP was jettisoning those policies before they lost power, and the Saskatchewan Party is pushing in the same direction. Apparently the Globe’s letter-writer is one of the last Saskatchewan residents still yearning for policies abandoned even by the province’s social democrats.
Good intentions are not enough
In a follow up column to his two-part series on Fearful Symmetry, Globe columnist Neil Reynolds talked about the dissenters among his readership:
“In this space last week, economist Brian Lee Crowley advanced his intriguing theory that demographic changes will compel Canada to return to the classic liberal principles of personal responsibility and limited government. A number of readers dissented. “Don’t be so greedy,” one of them wrote. “We have found in our character a generosity that has mandated, by the authority of democratically elected governments, the equitable distribution of wealth among most of our people.”
“He suggested that people who find wisdom in Mr. Crowley’s newly published book, Fearful Symmetry: The Fall and Rise of Canada’s Founding Values, possess “hard little hearts.” These hard-hearted people, he said, think that economic losers should be made to suffer.”
Neil goes on to cast some doubt on this proposition in his own way. Now let me add my own view that the dissenters have missed the point. If they ever pick up Fearful Symmetry they will discover in it an impassioned plea for a reform of social programmes so that those programmes will stop doing so much harm to the most vulnerable in our society. Good intentions, the desire to help those less fortunate, are laudable impulses. But we too often make the mistake of simply throwing money at the problem through ill-designed social programmes, such as EI and many kinds of provincial social welfare, that end up trapping our most vulnerable citizens in a near-permanent dependence on benefits. In the book I make the case that this is a far worse fate than being a productive member of our society, even in a relatively low-paying job.
Work is one of the key ways in which we develop our humanity, contribute to our community and become free people pursuing our own goals. These are essential elements of the fully human life. When we design social programmes that make that harder to achieve, we are not being “generous” or “caring”. We are being destructive and using tax money as a cheap salve to our inflamed consciences. If you pick up the book you’ll see that I also argue that this view of the centrality of work and the importance of keeping the most vulnerable out of the clutches of the well-meaning welfare state is increasingly accepted across the political spectrum.
