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Glimmer of economic revival(ism)

By Daniel M. Ryan
web posted February 2, 2009

Last week, the Minister of National Revenue announced a contest for Youtube filmmakers to produce an engaging film to get us Canadians to pay our taxes. Like all officially-sponsored contests of this sort, the result will be disappointing to some: the tradition of artists as critics is sunk too deep into the arty culture. There are too many passed-along bad memories of the bullying patron for this contest to produce a winning film that's real artwork. The Dionne Quintuplets scandal only reinforced that cynicism, which was already centuries old as of the 1930s. Really, the best that can be hoped for in the winning film is contagious enthusiasm.  

Nevertheless, it's an interesting idea because it speaks to the times. It's also one of those policies that, although native to Canada, would make a smooth weave into American fabric. Because of the words "voluntary compliance" in the original U.S. Revenue Code, it's conceivable that the American government will also hold such a contest in the near future.

If there's any rule of thumb that holds up in Canadian-American relations, it would be: Canadians seem like Americans only for so long. Every now and then, we Canadians affirm our national differences by acting strangely (by American standards.) There are lots of examples, usually homely ones. Beer's a good one. In America, beer tends to be a working-class drink; in Canada, on the other hand, beer is widely enjoyed even in the upper strata. The reason why is, Canada's most legendary brewery was controlled by a solidly upper-class clan by the name of Molson. The most known Molson scion, Hartland, was not only president of Molson's Breweries but also a Canadian Senator. He also was a World War II pilot, and one of the tireless minority of speakers who got the U.S. in World War II after he was injured in the battle-theatre. The rest of the family was less headline-worthy, but are of the same station in life. Consequently, the beer of Canada is seen by us Canadians as somewhat classy (if not rustic.)

This combo of agreeable similarities masking profound differences also shows up in policy. Like the Obama administration, the Harper government is incurring big deficits in order to bail out the national economy. The two governments doing so in concordance, and using similar prioritizations, suggests they're in lockstep. This similarity ends, though, with this particular "Canadian kicker:" Canada now has Tax-Free Savings Accounts for getting the national savings rate up. This kind of policy, despite allowing investment, wouldn't make much headway in D.C.

Yes, we Canadians do tend to veer into counterintuitive directions. It'll be seen if American politicians pick up on the Youtube-contest idea and see a wider economy-boosting significance therein. There is one, but it's one that Canadians will likely take a pass on.

All OECD governments are deeply in hock – all of them. The idea that a government should not incur any debt at all is so out of the mainstream, it's beyond shocking: it's exotic. In the regular world, the optimum is incurring sovereign debt up to the point where the currency, banking system, and/or economy is threatened. Even the relatively mild stricture that enjoins governments to surplus in normal times no longer speaks to the mainstream. It's considered too restrictive on governments, even though it's a near-beer compared to the old mercantile ideal of complete freedom from any sovereign debt.

If there's any revolutionary standard between deficit avoidance and debt abjurement, it's one that takes its cue from what China is already known for. Put simply: it's the regular use of the bully pulpit to exhort plain citizens into becoming rich, so as to widen and deepen the tax base. The resultant tax revenues would be earmarked for paying down a national debt generally seen as intolerably huge.

One interesting aspect of this proposal is that it's been hidden in plain view for close to a generation. Not so for "Japan Inc.": once the Japanese powerhouse struck the public consciousness, pundits and experts were quick to advocate importing Japan-style dirigisme into the United States. On the other hand, no pundit of note has beaten the drum for any U.S. president to emulate Deng Xiaoping. No expert has produced an advanced study forecasting the economic-growth effect of "It is glorious to be rich" becoming a near-official motto. For a nation that normally is quick to produce and air such retool jobs, there's an intriguing absence.

Especially since there's a case to be made for it, given present and future governmental liabilities. Using the bully pulpit to exhort wealth-seeking, at an official level, would have a parallel effect on Americans as Chinese. Although the U.S. government's present financial woes (a looming retirement and health-care crisis) dwarf post-Mao China's (systemic famines,) there are enough seeable storm clouds to make for a sense of crisis and urgency. It wouldn't have the same impact on America as China, but it would have a similar one. And: a conjoined exhortation to pay one's taxes, like the one Canada's Minister of National Revenue is calling for, would keep it grounded in American-style "public purpose."

Perhaps this crusade will be taken up by the Government of Canada, but it seems unlikely at this point. There's less of a government-liability crisis brewing in Canada, and us Canadians tend to rank the public peace above strong growth. Placing the productive, value-centered and go-getting in the vanguard doesn't seem worth the cost of putting up with the money-hungry, callous and bullyish in the limelight. The appeal of growth within pastorality tugs more at our hearts than the "Canadian tiger" does. Us Canadians tend to like, or at least put up with, our critics.

I'm almost tempted to note a real commonality between Canadians and Americans in this regard…almost. ESR

Daniel M. Ryan is an irregular columnist for LewRockwell.com, and has an undamaged mail address here.


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