September 23, 2023
HERE'S MY TAKE
Most media ignored it. The UK’s Daily Mail called it a “left-wing love-in.” But last weekend’s Global Progress Action Summit did attract two sitting prime ministers (including Canada’s Trudeau) as well as four notable former prime ministers (including Tony Blair) and a likely prime minister-to-be, UK Labour Party Leader Keir Starmer. The emerging stories include Prime Minister Trudeau admitting that progressives need to up their messaging game and fiery comments from UN Special Envoy on Climate Action and Finance Mark Carney. He dissed a former British prime minister for reducing the UK to “Argentina on the Channel” while arguing that “life-long politicians masquerading as free-marketers” end up diminishing both politics and business. Much of the Canadian social media take-away, however, wondered what Carney’s performance might mean for Canadian politics.
Carney’s arguments about the business-political nexus have broader implications beyond his own career ambitions. Thinking out loud here, the summit leaves me with two take-away musings.
If these musings are correct, this matters far more than the gossip regarding Mark Carney in the context of the Liberal Party’s leadership succession. On that file, I’d note that Prime Minister Trudeau retains adequate control of the party and caucus to make this his decision, not Carney’s (at least for now). Since most of the scuttlebutt comes from those who aren’t Trudeau confidantes, I’m not inclined to put a lot of stock in their speculation.
Raw political calculus of publicly available data in fact suggests the opposite. Besides, Prime Minister Trudeau will turn 52 in December and has the best job he will ever hold. Staying gives him a chance to be prime minister for two more years with the possibility of another term after that. The only personal upside for leaving early is to avoid defeat. However, fighting is in his DNA. Trudeau clearly has a passion for implementing his vision for Canada and an antipathy to conservatism. One gets the sense that beating Pierre Poilievre in an election is something he would relish.
But Trudeau and Carney’s interests aside, it’s the more consequential ideas of how progressivism will advance that got me thinking. Promoting left-wing ideas through business might seem intuitively contradictory. Lefty cultural critics aren’t usually known as business-friendly. They are often leading the charge about how capital and monied interests corrupt the public good for private gain. But listening to Rudyard Griffiths argue that Canadian business leaders in general, and conservatives in particular, are not really defending market forces as the driver of business, made me wonder. Griffiths cited the banking, communications, agricultural, transportation, and media sectors as examples where business has accepted “managed competition” rather than rely on market forces. Big business has made a Faustian bargain which welcomes the largesse of managed competition in exchange for helping governments achieve other objectives. Part of this is understandable given Canadian geography. Transportation and communication companies are spared the market realities of high costs to service remote areas in exchange for making their services broadly accessible. But the habit has gone well beyond providing accessibility and regional equality. This week, execs were called on the carpet to account for the price of groceries, an issue apparently government regulation is better able to solve than markets. The fact that the 1970s story of wage and price controls proved “largely unsuccessful” doesn’t seem to deter this impulse.
Not that Mark Carney’s 2021 book, Value(s): Building a Better World for All, mentioned the price of milk (at least as I recall) but it did focus on socially harmful market consequences. Carney warned about the danger of a market economy becoming a market society, an echo of an essay Cardus (then the Work Research Foundation) published almost two decades ago, validly pointing out the dangers of markets getting too much power.
But, Carney’s thinking goes much further than that valid critique. In fact, he says he wants to use markets to create “a virtuous circle of major investment, greater decarbonization, more jobs and faster growth.” Using that as our focus, we would do well to pay attention to how interventions in the market are designed. It’s hard to nail down precise numbers, but it’s claimed that $150 trillion US worth of investment in the “green economy” is required over the next five years to meet climate commitments. Insofar as there is a demand for these products driven by a cultural prioritization of this issue, this is an example of the market working. So, for that matter, is a carbon tax. Putting a price on carbon rather than socialising the problem by using regulation or the public purse to pay for carbon, is actually a market solution. (Note, this is a different argument than saying the carbon tax as structured in Canada, which arguably is too small to change behaviour but still large enough to hurt affordability and worsen inflation, is a market solution. But that’s a political hot potato for another time, and is not the point I am making here.)
But there’s a second part to Carney’s case. He also argues that “the plumbing of the financial system has to be put in place so that financial institutions, whether they're banks or pension funds or insurers or asset managers, have the information, the tools in the market so they can take climate change into account. So in other words, it's a fundamental driver of every investment decision or lending decision.” This is where I part ways with Carney, at least as I understand him. At the core here is not letting markets force transitions to reflect changing cultural values. Rather it is to “rig” the system so that rule-makers (and not market participants) shape market outcomes. Elevating climate change so that it is the “fundamental driver” of every investment decision seeks to restrict the movement of the market’s “invisible hand” that balances the multitude of factors–climate, treating employees properly, providing quality goods and services, respecting human rights, etc.
Business decision-makers seem to be accepting this agenda of tipping the market’s scales, not only when it relates to climate but also on other issues. Increasingly it amounts to the imposition of a progressive agenda by unbalancing the business scales in order to achieve certain political or cultural outcomes. To be clear, I have no difficulty with boycotts (where consumers express their values through their choices and publicly declare their reasons); businesses choosing their priorities as an expression of their values (even publicising and defending those choices); or society as a whole having public arguments about the urgency of social issues, climate included. Markets are a place where cultural values are expressed.
But that is different from changing the “fundamental driver” of decision-making. Using the norms of the various spheres of society (the market, the workplace, the church, etc.) to promote an outcome is different from trying to change the norms of the spheres themselves. Markets are a collective process of stewardship. They manage the inputs of capital and labour to produce goods and services. They have a natural impulse toward growth. Politics, on the other hand, is (or should be) about justice. Justice is ensuring that each is given their due. It is about fairness and a focus on the common good.
To be sure, markets work best when players act justly, just as politics works best when politicians act stewardly. But there are different tools required in different spheres just as there are fundamentally different drivers of decision-making. It’s one thing for a progressive agenda (or any other political agenda) to find expression in the market choices of society. One would expect market choices to reflect the culture and value priorities of any society. However, it’s quite another to try and change the norms of the market sphere so only specific hoped-for outcomes are possible. The power of markets comes from their freedom, not their coercion.
Freedom in markets creates the space to reward the innovation and creativity of new ideas. Rigging the process of one sphere to fix the problems of another almost always ends badly for both. Hearing Mr. Carney openly advocate for this makes me think, “This can’t end well.” I’d be most curious to hear from you, to what extent you agree or disagree.
WHAT I’M READING
Finding Reliable Sources
Last week’s musings on our tarnished maple leaf prompted several thoughtful responses from readers. One pointed out the challenge of understanding foreign affairs with inadequate and diminished media sources on which we rely for both information and interpretation. These issues often require expertise to grasp complexities and nuance that are not generally available. I found myself reflecting on this as I followed coverage of several events this past week: Monday’s allegations voiced in Parliament that the government of India is implicated in the murder of a Canadian citizen; Prime Minister Trudeau’s Wednesday meetings at the United Nations, and Friday’s speech by Ukrainian President Zelensky to the Canadian Parliament. Understanding the important issues here requires access to privileged details and accurate framing and interpretation more comprehensive than any of the coverage I have found at least to date.
Needed but Best Not Used
David Moscrop uses the trial of convoy leaders Chris Barber and Tamara Lich for their role in organising the 2022 Ottawa convoy protest/occupation (the label assigned being a likely indicator as to one’s views on the matter) to reflect on the relationship between politics and the courts. It is clear that both the 2022 Canadian convoy and the January 6, 2021 march and assault on the US capitol were politically motivated events. While the rule of law is essential to keep democracy’s machinery operating, relying on the courts to do so ends up undermining democratic legitimacy as the perception will always be that the political class is defending itself from “the people.” The justice system is needed to uphold democracy, but “its best moments are the moments when it’s not needed.“
Volunteering is Good
It’s a given that the Philanthropist Journal is pro-volunteering, but this article helpfully frames the argument not so much on the good that is done, but on the benefit to the volunteer. In the midst of a loneliness epidemic, it is clear that volunteers are more connected to their communities and end up with a greater sense of meaning and belonging, proving again that often when you give, you are the recipient of the greater gift.
Aiming for 85%
This Wall Street Journal piece argues that always going at 100% ultimately leads to less productivity than aiming for 85%. Apparently, the lower target leaves margin for creativity and confidence that in the long run brings superior results.
MEANINGFUL METRICS
Truth and War
The proverb “truth is the first casualty of war” has been traced to Samuel Johnson in the 18th century, but the Ukraine-Russia conflict dominating the United Nations meetings this week prompted me to double-check some current data. The proverb is a caveat, and sources obviously have their own biases, but for situations like this, I turn to private companies that collect data to sell to businesses as more reliable sources. Statista is one such company. It estimates there have been 9,614 verified civilian deaths and 17,535 injuries in Ukraine since the Russian invasion in February 2022. The international support for Ukraine has been led by the United States and European Union central institutions with Canada ranking sixth in providing support. Russia is presently spending approximately 4% of its GDP on its military while Ukraine is spending over 33%. In raw numbers, the Russian army at 1.3 million is more than two and a half times larger than Ukraine’s 500,000. Counting up front-line soldiers, Russia has over four times as much manpower as Ukraine.
TAKE IT TO-GO
Good-bye: More Than a Seven-Letter Sentence?
“Why do you insist on signing off each Insights with a paragraph of puns when a single seven-letter compound word, united by a hyphen, does the trick?” I interpreted this well-meaning question from a reader as an expression of curiosity rather than judgement, although a jury might reasonably disagree. The defence I offer, however, is two-fold. I’m a word-o-phile. Describing “good-bye” as a seven-letter compound word is like describing a rose as a thorny stem with a bunch of petals. That prompts neither Robbie Burns nor romance, let alone the recollection of the rose’s intoxicating and fragrant magical aromas. Being offered a farewell bouquet is a form of love language, not a punishment.
There’s also a Freudian tip to long good-byes. When I was a kid and our family would visit another home, the good-bye signal began with Dad noting the time, standing up, and suggesting, “This was nice but we need to be on our way.” Mom would need to tell “one last thing,” and so we knew we still had at least 20 minutes. Once we bundled into our winter coats at the door, someone would need to use the washroom. They’d know to hurry, and five minutes later the wheels would be rolling, the window rolled down so that we could call out again what a wonderful evening we all had and that we should do it again soon. The window roll-up would be serenaded by the honking of good-byes. The driveway honks would end and there would be a moment of silence until we were far enough down the street that the home was about to disappear from view, which was the signal for the final honk. Only then was the good-bye considered complete.
Saying good-bye with a seven-letter hyphenated word? That would be considered punishment. (That is, unless you paid for your copy of Insights, in which case it would be a good-buy.)
Until next Saturday.