Published on 22 Feb 2015
Adam Smith was one of the first men who explored economic connections in England and made clear, in a time when Mercantilism reigned, that the demands of the market should determine the economy and not the state. In his books Smith was a strong advocator of the free market economy. Today we give you the biography of the man behind the classic economic liberalism and how his ideas would change the world forever.
November 18, 2015
Adam Smith – The Inventor of Market Economy I THE INDUSTRIAL REVOLUTION
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A maple-flavoured world’s first?
On the Mercatus Centre site, Laura Jones points out an unexpected Canadian first:
Canada recently became the first country in the world to legislate a cap on regulation. The Red Tape Reduction Act, which became law on April 23, 2015, requires the federal government to eliminate at least one regulation for every new one introduced. Remarkably, the legislation received near-unanimous support across the political spectrum: 245 votes in favor of the bill and 1 opposed. This policy development has not gone unnoticed outside Canada’s borders.
Canada’s federal government has captured headlines, but its approach was borrowed from the province of British Columbia (BC) where controlling red tape has been a priority for more than a decade. BC’s regulatory reform dates back to 2001 when a newly elected government put in place policies to make good on its ambitious election promise to reduce the regulatory burden by one-third in three years. The results have been impressive. The government has reduced regulatory requirements by 43 percent relative to when the initiative started. During this time period, the province went from being one of the poorest-performing economies in the country to being among the best. While there were other factors at play in the BC’s economic turnaround, members of the business community widely credit red tape reduction with playing a critical role.
The British Columbia model, while certainly not perfect, is among the most promising examples of regulatory reform in North America. It offers valuable lessons for US governments interested in tackling the important challenge of keeping regulations reasonable. The basics of the BC model are not complicated: political leadership, measurement, and a hard cap on regulatory activity.
This paper describes British Columbia’s reforms, evaluates their effectiveness, and offers practical “lessons learned” to governments interested in the elusive goal of regulatory reform capable of making a lasting difference. It also offers some important lessons for business groups and think tanks outside government that are pushing to reduce red tape. These groups can make all the difference in framing the issue in such a way that it can gain wide support from policymakers. A brief discussion of the challenges of accurately defining and quantifying regulation and red tape add context to understanding the BC model, and more broadly, some of the challenges associated with effective exercises in cutting red tape.
While I’m a huge fan of reducing the regulatory burden in theory, I can’t help but expect to be disappointed about the implementation in reality… (however, should the federal bureaucracy somehow manage to perform nearly as well as the BC experiment, it’ll be Justin Trudeau getting the credit for it, rather than Stephen Harper — but better that the country benefits as a whole rather than the former PM gets boasting rights.)
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The Trudeau legacy
At Gods of the Copybook Headings, Richard Anderson isn’t impressed with the PM, who he refers to as “our selfie Prime Minister”, and contrasts him with his father:
Canada is a bubble nation. We have so long been at peace, so long been rich and free, that much of the world beyond our borders is akin to another planet. The working assumption of the Canadian Left — Justin very much included — is that Islamist terrorism is the product of some grave misunderstanding. If only we were to constructively engage with those who oppose us peace would be at hand. All we need is a chance for dialogue and our graduate school acquired “conflict resolution skills” would restore humanity and decency. This is among the gravest misconceptions of our age.
Trudeau the Elder considered both the FLQ and the PQ threats to Canada’s survival. Yet his response to each was radically different. Terrorism was beyond the bounds of legitimate democratic discourse. Force must be met with force. He explained this with great care in his speech justifying the invocation of the War Measures Act. It shows a statesman — however deeply flawed in other areas of public policy — fighting to sustain a democratic government against violent usurpation. The speech is also a stark and sobering contrast to his son’s juvenile pronouncements.
Yet PET took a very different approach in dealing with democratic separatism. The PQ — however obnoxious and cynical — was a legitimate democratic force. When the Pequistes formed their first majority government in 1976 the response from Ottawa was to argue, cajole and bribe. The usual instruments of a democratic state. It would have been thought absurd and utterly unCanadian to have dispatched federal troops to arrest Rene Levesque and his cadre of petty ethnic nationalists.
Pierre Trudeau could only occasionally distinguish between bad and outright evil. He could crush the FLQ and then saunter off to Cuba to play sing-a-long with a mass murdering tyrant. Though at least at that point in history Fidel Castro was hardly a threat to world peace. Trudeau’s 1976 trip was a morally repugnant though not a dangerous act.
Islamist fanatics are very much a threat to the peace of France, Canada and the world. In his first test as an international leader Justin has shown a dangerous inability to differentiate between bad and evil. Since Canada is a smaller player in a big world that might not matter very much in the short-term. Yet sooner or later this evil will come to Canada and the man charged with our defence has shown himself to be pathetically inadequate to the challenge.
ESR on “Hieratic documentation”
Eric S. Raymond explains how technical documentation can manage the difficult task of being both demonstrably complete and technically correct and yet totally fail to meet the needs of the real audience:
I was using “hieratic” in a sense like this:
hieratic, adj. Of computer documentation, impenetrable because the author never sees outside his own intimate knowledge of the subject and is therefore unable to identify or meet the expository needs of newcomers. It might as well be written in hieroglyphics.
Hieratic documentation can be all of complete, correct, and nearly useless at the same time. I think we need this word to distinguish subtle disasters like the waf book – or most of the NTP documentation before I got at it – from the more obvious disasters of documentation that is incorrect, incomplete, or poorly written simply considered as expository prose.
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QotD: Piketty’s pessimism
Piketty’s theory is that the yield on capital usually exceeds the growth rate of the economy, and so the share of capital’s returns in national income will steadily increase, simply because interest income is growing faster than the income the whole society is getting. Let us therefore bring in the government to implement “a progressive global tax on capital” — to tax the rich. It is, he says, our only hope. Reading the book is a good opportunity to understand the latest of the leftish worries about capitalism, and to test its economic and philosophical strength. Piketty’s worry about the rich getting richer is indeed merely the latest of a long series going back to Thomas Malthus, David Ricardo, and Karl Marx. Since those founding geniuses of classical economics, trade-tested progress has enormously enriched large parts of humanity — which is now seven times larger in population than in 1800 — and bids fair in the next 50 years or so to enrich everyone on the planet. And yet the left routinely forgets this most important secular event since the invention of agriculture — the Great Enrichment of the last two centuries — and goes on worrying and worrying in a new version every half generation or so.
All the worries, from Malthus to Piketty, share an underlying pessimism, whether from imperfection in the capital market or from the behavioral inadequacies of the individual consumer or from the Laws of Motion of a Capitalist System. During such a pretty good history from 1800 to the present, the economic pessimists on the left have nonetheless been subject to nightmares of terrible, terrible faults. Admittedly, such pessimism sells. For reasons I have never understood, people like to hear that the world is going to hell, and become huffy and scornful when some idiotic optimist intrudes on their pleasure. Yet pessimism has consistently been a poor guide to the modern economic world.
Deirdre N. McCloskey, “How Piketty Misses the Point”, Cato Policy Report, 2015-07.
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