The National Post is Canada’s second largest national paper.
Former minister’s demand for state intervention revives ideas Adam Smith exploded centuries ago
There has been a good deal of talk recently about a national energy strategy, which, for the Harper Conservatives, means market-orientation, and less red tape and politics. For others, however, it seems to mean something a little more dirigiste, something bigger, grander and all-encompassing. Surprisingly, this group includes former Harper government minister Jim Prentice, who is now senior executive vice-president and vice-chairman of CIBC.
A speech Mr. Prentice gave to the Toronto Board of Trade on Thursday was a jaw-dropper. It was the kind of mushy mixed economics that is regurgitated with tedious regularity every decade or two by those who have forgotten, or never understood, the lessons of economic history. Mr. Prentice appears to reject market orientation as unaffordable “ideological purity.”
Twenty years ago, Paul Tsongas, a Democratic U.S. presidential candidate, declared that “American companies need the United States government as a full partner if they are to have any hope of competing internationally. That means an industrial policy. Take a deep breath, my Republican friends. It’s a brave new world out there. Adam Smith was a marvelous man, but he wouldn’t know a superconductor or memory chip if he tripped over one.”
But Adam Smith would instantly have spotted a market-challenged mercantilist. Unfortunately, Mr. Prentice too has embraced the cause that Smith exploded more than two hundred years ago.
Modern mercantilists inevitably propose that some form of market turmoil, plus alleged technological, financial and other “challenges,” simply demand a positive role for government, and sure enough, on Thursday Mr. Prentice suggested that more government was needed to cope with the challenge of energy megaprojects, the decline of Ontario industry, and “the dawn of the Asian century.”
He invited examination of the great “transformational” Canadian infrastructure projects of the past, such as the St. Lawrence Seaway and the CPR, that “taught us that being bold, dreaming big, holds the potential to improve our collective fortune.”
Unfortunately, history only tends to teach us what we are inclined to learn. One might mention a few examples where government was sucked into private dreams, or dreamt big all by itself, but things didn’t work out so well. What about the Come-by-Chance refinery and those cucumber greenhouses in Newfoundland? Atomic Energy of Canada and the Candu reactor? The billions spent subsidizing exploration in the Beaufort Sea? The Quintette coal mine and the Vancouver Island natural gas pipeline? The Glace Bay heavy water plant? Bricklin? Sysco? Devco? Mirabel airport? Consolidated Computer? De Havilland? Ontario Hydro? Churchill Forest Industries? NovAtel?
Many Canadians are unfamiliar with these sorry stories, let alone their lessons, and that’s part of the problem.
For the rest of this column, please go to the National Post website: http://opinion.financialpost.com/2012/03/01/peter-foster-the-sorcerers-prentice/