Tuesday, January 03, 2006

The Glee Club for Growth

Paul Wells, praising a Globe editorial, writes that
it is insular to argue about how to share wealth without thinking seriously about how it is created.
So what is it if we argue about how to create wealth (the only argument that's been allowed in the newspapers of this country since, oh, before I was born) without thinking seriously about how it is shared? Growth is important. This isn't exactly Earth-shattering. But Wells' liberal (indeed, Hayek-ian) idea is used to justify so much really malevolent policy.

As just one example, we have for the last 25 or so years in this country conducted a Hayekian experiment - orient policy towards growth, without too much concern for how the new wealth is shared. The result? An entirely predictable and lopsided vacuuming of new wealth to the top echelons of the powerful. Almost none of the new wealth created since 1980 has gone to the bottom 80% of the population, as repeated studies by everyone up to and including Statistics Canada show. An even more vivid example of the social costs of growth at all costs can be seen in China.

Is growth important? Unquestionably. If nothing else, an immigrant country cannot support a growing population on a static economy - simple math denies it.

But growth alone is no guarantee of rising fortunes. A rising tide does not, in fact, raise all boats. Some just sink, and we let them drown. This is why Jack Layton is right on corporate tax cuts, and Paul Wells, the Globe and Mail, and the two biggest political parties in parliament are wrong. It is ridiculous to suggest that these corporate tax cuts are necessary to secure further growth - Canada already has one of the lowest tax rates in the industrial world. Paul Martin is giving away money not because it's necessary or right for Canada, but because it's all he knows how to do.

We need a strong, social democratic voice in this country to reorient our priorities. Am I calling for a Mugabe-style confiscation? God no. But this country desperately needs a more egalitarian type of economic governance, even if (gasp! horror!) that shaves a tenth of a percent off of GDP growth.

1 comment:

Paul Wells said...

Hayek-ian? Oh, you flirt.