Quotulatiousness

December 29, 2025

Will 2026 finally be the year Canada abandons food cartels?

Filed under: Cancon, Economics, Food, Government, Politics, USA — Tags: , , , , , — Nicholas @ 03:00

For reasons unknown, Canadian politicians both left and right have been willing to sacrifice almost anything in trade negotiations except the cosy protectionist scheme we call “supply management”, which enriches a tiny number of farmers in Ontario and Quebec by keeping grocery prices significantly higher than the free market price. On his Substack, The Food Professor predicts that Prime Minister Carney will be forced to give up this market-rigging, anti-consumer scheme in the coming year:

Image from Agri-Food Analytics Lab, Dalhousie University

As we enter 2026, several forces are converging to reshape Canada’s food economy. Consumer empowerment — amplified by social media — continues to accelerate, while geopolitics, particularly tensions with our southern neighbour, are becoming increasingly disruptive. Together, these dynamics will push food policy issues that once lived in technical silos into the public spotlight.

At the top of that list sits CUSMA and supply management. Prime Minister Carney has signaled firmness on market access, backed by legislation that shields supply management from parliamentary debate. That protection, however, is unlikely to endure. Even if the United States has little genuine interest in exporting more dairy to Canada — and even if Canadian consumers show limited appetite for it — President Trump now understands, far better than during his first term, that supply management is a potent political wedge. The system protects roughly 9,400 dairy farmers who exert disproportionate influence over agricultural policy, while compensation payments continue to flow without any meaningful reduction in production or market share. For a growing number of Canadians, this arrangement increasingly resembles a closed loop rather than a public good. The irony is that global demand for dairy is rising and Canadian milk should be part of that growth story. Instead, the system prioritizes insulation over ambition — a missed opportunity at a time when competitiveness should matter most.

January 1 also marks the formal implementation of new front-of-package nutrition labels. Although these symbols have been appearing on shelves for some time, many consumers either overlook them or misunderstand their purpose. Their real impact has been largely invisible to the public: they have already reshaped how food companies formulate products, invest in research, and redesign portfolios. Whether the labels meaningfully change consumer behaviour remains debatable, but their influence on product development is no longer.

[…]

Finally, 2026 coincides with the United Nations’ International Year of Rangelands and Pastoralists — a timely moment to reset the debate around meat consumption and livestock production. Rangelands underpin global meat systems by converting grasslands — often unsuitable for crops — into high-quality protein. In a world where demand for animal protein continues to grow, portraying livestock as inherently incompatible with sustainability ignores nutritional, economic, and ecological realities. Well-managed grazing supports rural livelihoods, strengthens export economies, and can enhance biodiversity and soil health rather than undermine them. If policymakers are serious about food security, climate resilience, and affordability, 2026 should mark a shift away from apologizing for meat production and toward recognizing livestock as a strategic pillar of resilient food systems — not a sector to be regulated out of existence

July 23, 2025

Javier Milei is delivering “a man-made miracle” for Argentina

Filed under: Americas, Economics, Government, Liberty — Tags: , , , , , , , — Nicholas @ 03:00

Niall Ferguson‘s thread on the social media site formerly known as Twitter, thanks to the Thread Reader App:

While the world fixates on Donald Trump’s populist cocktail of reciprocal tariffs and big, beautiful deficits, @JMilei is delivering a man-made miracle that should gladden the heart of every classical economist and quicken the pulse of all political libertarians.

@JMilei has brought monthly inflation down from 13% to 2%. The economy is now growing at an annual rate of 7%. Investors no longer shun Argentine bonds and stocks — indeed, they were among the best investments you could have made over the past two years. After a brief upward jump, the poverty rate has fallen from 42%, when Milei was elected, to 31%

These are astonishing feats. And they have ramifications that go far beyond South America. Free-market economics and political libertarianism are sometimes dismissed as a fad of the “neoliberal” 1980s, long ago superseded by the new populisms of the left and the right. Not so. The world has never seen a government more radically libertarian than @JMilei. But the amazing thing is not that it is working economically. The true miracle is that Milei’s shock therapy is working politically.

With his leather jacket and late ’60s mop top, @JMilei is part–rock star, part–mad professor, dancing, singing, and screaming his catch phrase: ¡Viva la libertad, carajo! — “Long live liberty, damn it!” It’s as if Joe Cocker had gone onstage at Woodstock and sung “I’ll Get By with a Little Help from My Friedman”. Never in the history of democracy has a tribune of the people won power this way.

July 18, 2025

Argentina’s self-described anarcho-capitalist president

Filed under: Americas, Economics, Government, Media, Politics — Tags: , , , , — Nicholas @ 03:00

J.D. Tuccille says that Argentinian President Javier Milei may be the politician who has most successfully “defied the expectations of the chattering class” by not only winning the presidency but also by the completely unexpected turnaround of the national economy:

Drawing on official data, Reuters reports that Argentina’s “economic activity rose 7.7 per cent in April compared with the same month last year”. That was higher than expected and a welcome addition to news that the economy had grown by 5.8 per cent during the full first quarter relative to the same quarter the previous year. Early numbers put Argentina’s second-quarter growth at 7.6 per cent. By contrast, Canada’s economy grew at an annual 2.2 percent in the first quarter and the U.S. economy shrank a bit.

In equally encouraging news, Argentina’s “monthly inflation rate has fallen below two per cent for the first time in five years,” according to the Financial Times. That’s still high in North American terms, but Argentina’s governments have a history of wildly expanding the money supply to pay off debt and finance expenditures, resulting in inflation rates in the hundreds and even thousands per cent per year. Inflation slowed somewhat in recent years, but it was over 200 per cent in 2023 and Milei was elected on a promise to stabilize prices — even if it meant adopting the U.S. dollar as the country’s official currency.

Importantly, the poverty rate in Argentina has also fallen to 38.1 per cent of the population at the end of 2024 from 41.7 per cent when Milei took office. Again, that remains very high, but it’s an improvement in a country where politicians have long seemed committed to keeping people poor and dependent on the state.

This wasn’t supposed to happen. In a November 2023 open letter, over 100 economists warned that Milei’s economic “proposals, rooted in the economy of laissez-faire and which include controversial ideas such as dollarization and significant reductions in public spending, are fraught with risks that make them potentially very harmful to the Argentine economy and people”.

The economists — including such academic luminaries as Thomas Piketty and Jayati Ghosh — warned of havoc if Milei implemented his free-market plans. Voters weren’t impressed by the forecast of doom; they chose the self-described “anarcho-capitalist” economist and his upstart political coalition over the standard-bearer of the dominant Justicialist Party.

The Justicialists have been the strongest force in Argentine politics since their launch in the 1940s by Juan Peron. Peron served as a military observer in Europe and apparently combined the worst ideas he encountered into a peculiarly Argentine ideology he called “justicialism”, better known as Peronism. At its heart, the ideology drops the pretense of any practical difference between socialism and fascism and promotes a brutal mélange of statist economic schemes. This means that, while most property and business activity is in private hands, it’s subject to government dictates, distortions, and control.

July 1, 2025

The Food Professor explains what Trump got right in his Trade War

Filed under: Cancon, Economics, Government, Media, Politics, USA — Tags: , , , , , , — Nicholas @ 03:00

On the social media site formerly known as Twitter, Dr. Sylvain Charlebois, aka @FoodProfessor explains how Trump’s Trade War strategy is working out for US interests, in contrast to the Trudeau/Carney governments’ approach:

The Globalism Hangover: What Trump’s Trade War Got Right

“Trump’s bombastic style aside, his nationalist approach to trade and food policy is forcing global institutions to justify their existence — and that’s a conversation Canada can no longer afford to ignore.”

For the past six months, President Donald Trump’s trade policies have been widely mocked, criticized, and condemned. Some of it is certainly warranted. The Wall Street Journal, for instance, recently likened his tariff-heavy approach to global trade as a direct path toward another Great Depression. But data out of the United States tells a more nuanced story — one that challenges conventional wisdom.

Despite persistent headwinds, the U.S. economy continues to outperform expectations. The Federal Reserve Bank of Atlanta projects second-quarter GDP growth at 3.8%. In May, the U.S. economy added 139,000 jobs, outpacing forecasts, while inflation remained subdued at 0.1% month-over-month and 2.4% annually. The U.S. trade deficit has been cut nearly in half, pointing to stronger export performance and a rebalancing of trade relationships.

Canada, by contrast, is showing signs of economic strain. The national economy is shrinking, manufacturing is struggling under U.S. trade pressure, and food inflation is outpacing general inflation. In short, our economy is not keeping pace—despite our public criticism of the Trump administration.

To make matters worse, the Trump administration has now halted all trade negotiations with Canada, signaling that our bilateral economic relationship holds little strategic value for Washington. For the U.S., Canada is no longer a priority — especially under a Carney-led government that has visibly pivoted toward Europe, a market still heavily invested in maintaining close ties with the United States. From an agri-food standpoint, this shift is consequential: access to our largest trading partner is narrowing, while Ottawa appears more focused on diplomatic optics than on securing stable, competitive trade channels for the Canadian agrifood economy.

This is the one thing the ‘Elbows Up’ crowd never understood — and still doesn’t. We’re not in a trade war with the U.S. There’s no war to be won. For Trump, this is about a realignment of the global order, plain and simple — one centered entirely on American supremacy.

Love him or loathe him, Trump is not destroying the U.S. economy — not yet, anyway. His unapologetically nationalist agenda extends far beyond tariffs. He has withdrawn U.S. support from key global institutions such as the WHO and is threatening to sever ties with others, including NATO and several UN-affiliated agencies. Among them is the Food and Agriculture Organization (FAO), the UN’s most authoritative body on food security.

At a recent event in Brazil, a senior FAO official acknowledged that fundraising dynamics have shifted. In the Trump era, governments are asking harder questions: Why should we fund the FAO? What domestic benefit does it provide? What used to be assumed support is now conditional — and arguably, more accountable.

This shift isn’t unique to Washington. Many countries are quietly aligning with the U.S. position, scrutinizing globalist institutions with renewed skepticism. Transparency and accountability are byproducts of this anti-globalist sentiment — something not inherently negative.

For decades, globalism pushed the world to believe that trade liberalization was the only viable path to growth and prosperity. It became conventional wisdom. But globalism has made some nations — and some people — richer, while leaving others behind. In the process, domestic sectors, including agriculture, were often sidelined or sacrificed in the name of global efficiency.

The problem with globalism, particularly in agri-food policy, is its tendency to pursue uniformity over relevance. Canada, for example, adopted the carbon tax under a globalist climate agenda that often overlooks the vital role food producers play in feeding people. Instead of being supported, the sector is too often vilified as a problem. But agriculture is not a liability — it is a necessity.

Trump’s message — wrapped, of course, in provocative and often abrasive language — is that one-size-fits-all global policies rarely work. Nations have different socio-economic realities, and those should come first. While cooperation is essential, so is recognizing local and regional priorities. In this sense, his “America First” approach is not without logic — especially when it seems to be yielding short-term economic gains.

For Canada’s agri-food sector, the lesson is clear: striking a better balance between global commitments and national imperatives is overdue. We should not abandon multilateral cooperation, but we must stop anchoring policy to global agendas we have little influence over. Instead, let’s define what works for Canadians — what supports our farmers, protects our food security, and reflects our unique landscape — while keeping the broader global context in view.

We are not there yet. But if this moment of disruption sparks a more realistic and regionally attuned approach to food policy, we’ll be better for it.

May 31, 2025

“U.S. libertarians [are] the best friends Canada doesn’t know it has”

Filed under: Cancon, Economics, Government, Law, Liberty, USA — Tags: , , , , , — Nicholas @ 03:00

In the National Post, Colby Cosh sings the praises of American libertarians for their work in trying to dismantle some of Donald Trump’s dubiously Constitutional extensions of presidential power:

The James L. Watson Court of International Trade Building at 1 Federal Plaza in Lower Manhattan, New York City.
Photo by Americasroof via Wikimedia Commons.

The U.S. Court of International Trade (CIT) issued a decision Wednesday that annuls various salvos of surprise economic tariffs, including ones on Canada, that have been enacted by President Donald Trump since his inauguration in January. I won’t lie to you: I had the same initial reaction to this consequential news that you probably did, which was “Hooray!” and then “Huh, there’s a U.S. Court of International Trade?”

This court is surely unfamiliar even to most Americans, no doubt because much of its work involves settling issues like “Do hockey pants count as ‘garments’ or ‘sports equipment’ under customs law?” Nevertheless, the CIT does have exclusive jurisdiction over civil actions involving U.S. trade law. It’s just that no president has ever before rewritten the tariff schedule of the republic in the half-mad fashion of a child taking crayons to a fresh-painted wall.

The American Constitution, from day one, has unambiguously assigned the right to set international tariffs to Congress. Congress is allowed to delegate its powers to the president and his agents for limited or temporary purposes, but it can’t abandon those powers to him altogether. Defining this legal frontier is what the CIT was asked to do, and their demarcation of it will now swim upward through higher appellate courts (its decision has been put on hold in the meantime).

The lawsuit was actually two parallel suits raising overlapping objections to the tariffs. One was brought forward by 12 U.S. states, and the other was filed by a group of tariff-exposed American businesses, including manufacturers of bikes, electronics kits and fishing equipment. The latter set of plaintiffs was roped together by the usual posse of heroic libertarians and legal originalists, including George Mason University law prof Ilya Somin.

About 24 hours after Trump originally announced the “Liberation Day” worldwide tariffs, Somin quickly blogged about how insanely unconstitutional the whole idea was, and concluded his article essentially by saying “I’m darn well gonna do something about this nonsense”. I don’t mean to suggest he deserves primary credit; I only intend to call attention, once again, to U.S. libertarians being the best friends Canada doesn’t know it has.

May 18, 2025

Trump today, Taft a century ago – interfering with Canadian federal elections

Filed under: Cancon, Government, History, Media, Politics, USA — Tags: , , , , — Nicholas @ 03:00

In the Coolidge Review, Amity Shlaes looks at the long-ago pre-Trumpian example of US interference in Canadian federal politics:

President Trump isn’t the first U.S. leader to turn a Canadian election with a few remarks. A little over a century back another president, William Howard Taft, managed the same feat.

The story starts in 1908, when outgoing president Theodore Roosevelt handpicked a successor, the lawyerly Taft. Taft won election. But from the eve of inauguration, Roosevelt began to voice doubts that Taft was up to the job. Word got around. Taft reacted to this disloyalty by attempting to prove he was no Roosevelt puppet. Where Roosevelt had invaded nations, Taft would write trade treaties. As Taft biographer Jeffrey Rosen writes, the motto of Roosevelt had been “speak softly and carry a big stick”. Taft’s maxim could have been “speak softly and carry a free-trade agreement”.

Taft’s marquee effort was to be a trade agreement with Canada, then lodged in the ambiguous status of “self-governing dominion”. As Taft noted, the dominion did have the freedom to conduct trade policy. Canada’s prime minister, Wilfrid Laurier, was a distinguished free marketeer. The political stars appeared to align. In his enthusiasm Taft praised Canada, practically crowing: “She has cost us nothing in the way of preparations for defense against her possible assault, and she never will … I therefore earnestly hope that the measure will be promptly enacted into law.” Such a treaty, Taft said, would mark a new “epoch” for North America.

In those days, tariffs represented a much more important share of U.S. federal revenues. Selling free trade was no easy work, especially not to Republicans, for whom tariffs were part of the brand. Then as now, trade treaties, unlike peace treaties, required support from both chambers of Congress. But again Taft sang his heart out, not only making the usual case for an “increase in trade on both sides of the boundary line” but also trying out wider arguments.

Early in 1911, Taft infused urgency into negotiations by threatening Canada via ultimatum: Team up with the United States, or there might be a “parting of the ways”. Hunting votes at home, Taft wrote a private letter to the still influential Roosevelt. Appealing to the imperialist in his predecessor, though not very hard, Taft suggested such a treaty might render Canada “only an adjunct of the United States”. Historians debate whether the “adjunct” letter was leaked or stayed private over the course of the 1911 negotiations. Lawmakers on the Hill, in any case, began to speak in similar tones.

Next, Taft called a special session of Congress. Congress warmed to the treaty but pounded the imperialist angle as much as Taft’s main case. “I hope to see the day when the American flag will float over every square foot of the British North American possessions, clear to the North Pole,” thundered the soon-to-be House Speaker, James Beauchamp “Champ” Clark of Missouri.

Such statements did not elude Canadian ears. Some loathed the treaty for pulling Canada farther from Britain; others, independence minded, loathed the idea of trading the thumb of one empire upon them for the thumb of another. By the time Taft signed the Tariff Reciprocity Agreement in July 1911, Canadian reciprocity opponents were on the march. By September, Canada was rejecting in a landslide referendum Taft’s and Laurier’s work.

As The Literary Digest commented in 1912, these flamboyant statements from U.S. politicians were handy weapons for Canada’s treaty opponents. They had put into Canadian Conservatives’ hands “an excellent club with which to cudgel the Liberals and their brilliant leader, Laurier”. Laurier himself was defeated in an election as well, on the argument he was pandering to the U.S.

April 29, 2025

The US Cancels Tariffs and Saves the World – W2W 025

Filed under: Economics, Europe, History, Japan, USA — Tags: , , , , , , — Nicholas @ 04:00

TimeGhost History
Published 28 Apr 2025

After seeing the devastating effects of the trade war that ravaged the global economy between the world wars, in 1948 the US is determined to usher in an age of free trade and global cooperation that will last until the spring of 2025.
(more…)

April 17, 2025

Canadian labelling regulations save us from “too many vitamins”

Filed under: Australia, Britain, Bureaucracy, Cancon, Food, Government, Health — Tags: , , , , — Nicholas @ 03:00

In the National Post, Jesse Kline points out that Canadian food label regulations have become so nit-picky that they prevent safe and accurately labelled foods from Australia, Britain, and other countries from being sold here:

Marmite from the UK and Vegemite from Australia, two of the products at risk of Canadian over-regulatory twitches.

Shortly after winning the Liberal leadership, Mark Carney travelled to Paris and London to shore up our trading relationship with our European allies.

Yet it is noteworthy that Canada is one of only two countries that has not yet ratified the United Kingdom’s accession into the CPTPP, meaning that we don’t enjoy the benefits of free trade with the country with whom we share a system of government and a King. Meanwhile, France is one of a handful of countries that has yet to ratify the free-trade agreement between Canada and the EU.

If we can’t even agree to implement trade deals that have already been negotiated and agreed upon with countries that have such deep historical ties to Canada, what hope do we have of improving trade with our other partners around the world?

Part of the problem is that Canada refuses to follow the example of countries like Australia and New Zealand, which successfully phased out their own systems of supply management years ago with great success.

As a result, supply management has proven to be a sticking point in virtually every trade negotiation we’ve entered into, and is a constant source of tension even among countries we have free-trade deals with.

But we have also fallen into the trap, along with our European friends, of over-regulation. Modern bureaucratic states impose so many restrictions on commercial enterprises, it often becomes uneconomic to market their products in other countries.

Canada, for example, imposes stringent labelling requirements to ensure product information is available in both English and French, and that nutritional information conforms to our very specific requirements.

None of this is necessary, especially in an age in which we can hold a phone up to a box of French crackers to see what it says. But the problem extends far beyond language or disagreements over the recommended daily intake of fibre.

As the CBC reported on Monday, Leighton Walters, an expat from Down Under who owns several Australian-themed coffee shops in the Greater Toronto Area, was told earlier this year by the Canadian Food Inspection Agency (CFIA) that he was no longer allowed to sell the roughly $8,000 worth of Vegemite he had imported because it contains … too many vitamins.

Under current regulations, only a select list of products are allowed to contain added vitamins. Vitamin B-rich spreads like Vegemite and its British equivalent Marmite are not among them because … well, just because.

A similar situation arose a decade ago when reports that the government had ordered Marmite and the Scottish drink Irn-Bru to be taken off the shelves of a British supermarket in Saskatoon caused outrage on both sides of the pond.

The CFIA later clarified that only versions of those products formulated specifically to meet Canadian requirements — i.e., those that don’t contain added vitamins or a specific type of food colouring — are allowed to be sold in this country. Because heaven forbid we trust that other advanced Commonwealth nations would have reasonable enough food safety standards.

We have quite literally regulated ourselves into a corner. We can’t even import spreads like Marmite and Vegemite — which have been staples of British and Australian diets for decades — not because they’re unhealthy or unsafe, but because they don’t conform to our nit-picky regulations.

April 10, 2025

Canadian political aspirations to being “very mid” on the world stage

Filed under: Cancon, Government, Media, Politics — Tags: , , , , , , — Nicholas @ 03:00

In The Line, Matt Gurney reflects on a recent statement by caretaker prime minister Mark Carney about Canada taking a “leadership role” on the international stage and supplanting the United States under President Trump:

Oh, we will, eh?

Don’t get me wrong, I like the sound of it. He’s certainly manifesting that elbows-up spirit that seems to be so impressing Canadians.

But, like — Carney knows which country he’s in, right? Canada? The one full of Canadians? Because as I heard him say what Canada would do in response to the accelerating American withdrawal from global affairs, I couldn’t help but note that there is a problem here.

Canada isn’t a leader. Canada doesn’t lead.

Even as I write this, I know it’s going to be a fraught statement. Canadian patriotism is a bit supercharged right now. It’s nice to see. But a lot of stupidity gets overlooked — or even caused — by patriotic outbursts. Internal dissent becomes a lot less popular when everybody is sewing the Maple Leaf onto their backpack. So I want to make my point respectfully and politely, largely to spare myself the agony of wading through idiotic replies for a few days. So here goes: many Canadians do indeed lead in their fields, and there is nothing inherent about Canada that makes us incapable of exercising leadership. If Mark Carney remains prime minister — or if someone with similar ambitions should replace him and make a point of pursuing a policy of broad-based Canadian global leadership — I don’t write that off as a doomed proposition.

There is more that we could choose to do. There are practical constraints that would bind us, and we’ll talk about those in a minute, but just to get into the spirit of the moment: sure. We could choose to exercise global leadership.

But we would first have to start with the recognition that it has been generations since we have actually tried to do that. This is not a moral judgment on Canada or Canadians. It is simply a recognition of the historical record. This country has not pursued a national policy — or even a series of smaller policies that take on a greater form in the aggregate — that sought to establish this country as a leader in the world.

If we’re being honest, we’ve typically pursued almost the opposite policy, and deliberately. I’m not saying we’re slavish followers. But this is a country that for generations has been quite comfortable thinking of itself as an overachieving middle power, nestled comfortably in a supporting role for allied countries that do seek to lead. Usually the Americans. Maybe sometimes the British or French. Or something like the UN or NATO. We’ve never claimed to land the hardest punches, or tried to. We’d settle for punching above our weight. We haven’t tried to conquer or command or even compel. In the words of a member of the incumbent government, our aspiration largely maxed out at wishing to convene.

But, of course, as we’re learning these days, Canadian politicians of almost all parties (Maxime Bernier is the only exception I’m aware of) consider the beneficiaries of our trade-distorting supply management system to be the only ones whose interests they always champion:

The most interesting field of international relations, though, and the most germane to what Carney said on Liberation Day, is in the field of trade. Canada definitely likes trade. I’ll even give some credit here to both Liberals and Conservatives. It has been broadly understood that Canada thrives when we have access to markets all over the world. The pursuit of expanded trading relationships has been a bipartisan priority for Liberals and Conservatives alike … so long as it doesn’t cost us anything on the domestic political front.


And yes, I’m talking about dairy. Some other things, too. But mostly the milk and eggs.

Seriously. Scroll up a bit. Look at that big quote I dropped in at the top from Carney. Watch the CTV feed again. Canada is going to pursue a role of leadership in defending liberalized free trade?

Really? Forgive me for squinting. I’m struggling with my middle-aged eyes to find the tiny text appended to Carney’s pledge that notes that “conditions apply”. Because that very same Mark Carney has already gone out of his way to say that protecting Canada’s supply-managed dairy and egg producers is an absolute, unbendable priority for him and his party.

So yes. Let’s all pledge ourselves to a new era of Canadian leadership in defence of free trade and unfettered market access, right up until the moment some weirdo foreigner gets it into their pathetic little brain that they should be allowed to sell me a stick of butter. Because that ain’t on, friends. Let’s get our elbows up, and bury them deep into this wheel of filthy xenocheddar.

April 8, 2025

Free trade, the once-and-future left wing cause

Filed under: Britain, Economics, History, Politics — Tags: , , , , , — Nicholas @ 05:00

Let’s join Tim Worstall on a brief trip into economic history, when free trade was a pet issue for the left (because it helped the poor and the working class) and protectionism was the position of the right (because it helped the wealthy and the aristocracy):

The people who suffer here are the consumers in the US. The people who benefit are the capitalists in the US. Which is why free trade always has been a left wing position. True, many lefties in recent decades have somewhat strayed from the one true path but given that it’s Trump imposing them some seem to be coming back. Although how much of that is about TDS and how much about reality is still unknown.

We’ve also got that little point about what happened last time around:

That all started with eggs. There’s fuss about eggs in the US at present. My, how history echoes, eh?

There’s only the one logical, moral or ethical position to have upon trade. As I’ve pointed out before with my model trade treaty:

Note that this applies to all ideas about tariffs — with the one exception of national security where we are indeed willing to give up direct economic benefit in order to keep the French at bay. To tariffs for industrial policy, tariffs for Green, tariffs for trade wars, tariffs as revenue raisers, tariffs, see?

We should remind ourselves that the opposition to Adam Smith and his ideas came from the conservatives. Cobden and the Manchester Liberals were the left wing betes noires of their day. The Guardian was actually set up as a newspaper to push their ideas including that dread free trade.

We did actually get free trade too, in 1846. Which, not by coincidence, is when the Engels Pause stopped happening. Which was, itself, the observation by Karl’s buddy that while the British economy had grown lots — industrialisation, capitalism, etc. — the living standards of the base people hadn’t, not very much. Of course, he was missing a bit — that ability to have a change of cotton underwear even for skivvies (aha, skivvies for skivvies even …) would only feel like an advance to those who had, previously, had to wear woollen knickers. This changed, living standards for the oiks began to rise, strongly, once we had free trade.

Now, there are a few of us still keepers of that sacred flame. But just to lay out the basic argument.

Average wages in an economy are determined by average productivity in that economy. Trade doesn’t, therefore, change wages — not nominal wages that is. Trade does change which jobs are done. That working out of comparative advantage means that we’ll do the things we’re — relative to our own abilities — less bad at and therefore are more productive at. Trade increases domestic productivity and thereby, in the second iteration, raises wages.

Trade also — obviously — gives us access to those things that J Foreigner is more productive at than we are — those things that are cheaper if Foreign, J, does them. This raises real wages again because we get more for our money. We’re better off. This is true whatever the tariffs our own exports face.

Finally, trade doesn’t affect the number of jobs in an economy — that’s determined by the balance of fiscal and monetary policy.

So, who benefits from trade restrictions? Well, the people who lose out from free trade are the domestic capitalists. Pre-1846 it was the still near feudal landlords in fact. What killed those grand aristocratic fortunes was not war nor tax — pace Piketty et al — it was free trade which destroyed agricultural rents.

The same is true today. The people who benefit from tariffs are the domestic capitalists who get to charge higher prices, make larger profits, as a result. The people who lose are all consumers plus, over time, all domestic workers as well. Tariffs increase the capitalist expropriation of the wages of the workers that is.

Tariffs are a right wing, neo-feudal, impoverishment of the people. Free trade is the ultimate leftypolicy to beat back the capitalists.

February 19, 2025

A brief nod to the shade of Missouri Representative James Beauchamp “Champ” Clark

Filed under: Cancon, Economics, Government, History, Politics, USA — Tags: , , — Nicholas @ 03:00

I was aware that the greatest Liberal Prime Minister in Canadian history, Sir Wilfred Laurier, had lost an election on the basis of a negotiated free trade deal with the United States, but I was not aware of exactly how that happened. Colby Cosh provides the gory details that got Laurier out of office for good:

Funny thing I noticed: Friday marked the anniversary of the 20th century’s most remarkable explosion in Canadian-American relations, which took place on the floor of the U.S. House of Representatives in 1911. On that day, Feb. 14, Missouri Democratic congressman James Beauchamp “Champ” Clark gave a short speech in defence of a free-trade agreement that had been hammered out between the (Republican) Taft administration and Wilfrid Laurier’s Liberal government.

Clark, a progressive and witty westerner who had already been chosen to become Speaker of the House in April, was widely expected to be the Democratic nominee for president in 1912. He was, in other words, a man who counted. And on the floor of the House, he advocated passage of the free-trade deal on grounds that eventually doomed it: namely, that it was a conscious step toward total American absorption of the Dominion of Canada.

When Clark’s remarks hit the newspapers up north — and no news story hit harder between 1900 and the dawn of the Great War — there was a spasm of anti-American and pro-Empire feeling throughout the country. As any schoolbook will tell you, this helped lead to the defeat of Laurier and the ruin of the trade deal in September 1911’s general election. This gaffe is indeed now what Clark is best remembered for, along with his eventual fumbling away of the 1912 presidential nomination to an unassuming professor named Woodrow Wilson.

When I was an undergraduate, we all had to have it explicitly explained to us that back in Edwardian days, the Liberals were the party of free trade, and the Conservatives the great defenders of tariff protection (although Sir John A. had sometimes sought without success to kick-stark “reciprocity” negotiations with the U.S.). Perhaps the most confusing feature of the 1911 controversy to students of today will be Champ Clark’s idea that the U.S. government would want to lower trade barriers to facilitate eventual annexation of Canada, rather than raising them to mutually punitive levels as a matter of crude antagonism.

Between Confederation and Champ’s time, Americans often just assumed as a matter of course that Canada would fall into their laps without any need for aggression or invasion. We northerners would eventually see that the benefits of American citizenship were more valuable than our romantic imperial attachments, and we would come beat down the door. This was certainly Clark’s own idea, and it created no controversy among Americans themselves when he expressed it.

Of course, in Laurier’s day “liberal” meant something closer to the modern sense of “libertarian” than it does to the current incarnation (or shambling corpse) of that party.

February 16, 2025

Free-market economist grapples with a new kind of tariff

Filed under: Business, Economics, Government, Politics, USA — Tags: , , , , — Nicholas @ 03:00

With US President Donald Trump seemingly utterly entranced by the possibilities of killing off as much world trade as he can using tariffs, I did not expect to read that renowned libertarian economist David Friedman is not sure about the latest kind of tariffs being proposed:

I have finally encountered a kind of tariff that I am not sure I am against. The idea is to impose the same tariff on another country’s exports that they impose on your exports. A tariff makes the country that imposes it worse off, a fact that neither Trump or most of the media appear to understand — Vance may — but it makes the country it is imposed against worse off as well. Imposing a tariff can be in the interest of the politicians who impose it for public choice reasons, as a way of buying support from a concentrated and well organized interest group such as the auto industry at the expense of a dispersed interest group such as their customers. That is one of the two reasons tariffs exist, the other being that the false theory of trade economics is simpler and easier to understand than the true theory.1

But another country’s tariff barriers against your exports make both your country and its politicians worse off. So if imposing tariffs on their imports results in tariffs being imposed on their exports, it might be in the interest of the politicians as well as the country they rule to lower, even abolish, their tariffs — and free trade, zero tariffs, is my first best tariff policy.

Reciprocal reduction of tariffs is, of course, a routine objective of trade negotiations. What Trump appears to be proposing is to automate the process. That might have some advantages. It would reduce the amount of time and effort spent on trade negotiations. More important, it would make it harder for a government that wanted to keep its tariffs to pretend to its citizens that negotiations for mutual reductions had broken down over details.

It is not obvious what “reciprocal tariffs” means in practice, because tariffs, typically, are on particular goods. China imports oil and exports textiles. If they impose a tariff on American oil there would be no point to the US retaliating by imposing a tariff on Chinese oil — we don’t import Chinese oil.

    Under the Plan, my Administration will work strenuously to counter non-reciprocal trading arrangements with trading partners by determining the equivalent of a reciprocal tariff with respect to each foreign trading partner. (Reciprocal Trade and Tariffs Memo)

It isn’t clear what “the equivalent” means. One possible approach would be to figure how much revenue a country collects from tariffs on American exports and set a uniform tariff on that country’s exports set to bring in the same amount of revenue. That would be simple and would reduce the political support for tariffs, since they could not be targeted to protect specific industries.

For which reason I don’t expect it to happen. The closest version that seems politically plausible is a nonuniform tariff schedule that brings in the equivalent revenue. Unfortunately that would let the administration protect favored industries with tariffs high enough to reduce imports, and revenue, to near zero.

Of course, the target country could, in a true system of reciprocal tariffs, solve the problem by reducing their tariffs to zero.

February 8, 2025

Interprovincial trade barriers in Canada

Filed under: Cancon, Economics, Government, History — Tags: , , , — Nicholas @ 03:00

In the National Post, Jamie Sarkonak pours some icy cold water on the fever dream that we can fix what ails us economically with this one neat trick:

Understand what an interprovincial trade barrier is: it isn’t a simple matter of repealing tariffs, because internal tariffs don’t exist — provinces aren’t allowed to impose them. Instead, barriers take the form of red tape that differs in shade by province; if there are 10 provinces that each regulate, say, what shape of toilet seat is required to be used on a construction site, expect 10 different rules on the matter (Ontario requires a gap at the front of the seat; Alberta doesn’t care).

For Canada’s toilet seat manufacturers, that’s another level of complexity that can complicate production and make it costly to expand to new jurisdictions.

Now repeat the mental exercise for every other provincially regulated product: food, alcohol, pesticides, lumber and so on. And again, with all the other provincially regulated things you can buy but not hold: massage therapy, legal services, hair and aesthetic services, provincially regulated securities.

It adds up to a lot, and that’s by design: in 1867, the Constitution explicitly handed authority over most sectors to provincial governments. Provincial regulations, and by extension, interprovincial trade barriers, are central to provincial autonomy.

Theoretically, rule consolidation is a good deal. It would be far easier to do business in Canada if it worked more like one country with one set of rules, rather than a heterogenous group of 10 micro-states packed into one.

On the taxpayer side, there are savings to be had, too: regulatory bodies use public funds and there are (theoretically) savings to be had by centralizing the offices of 10 different sheriffs into one. Estimates vary, but lifting barriers is thought to add a boost of $80 billion (International Monetary Fund) to $200 billion (Canadian Federation of Independent Business) to the economy.

But standing in the way of free-trade utopia are the practical considerations, the big one being protectionism. Making its case in the Journal de Montreal, William Rousseau put it well: “The abolition of these barriers can even be economically harmful, because for each barrier that blocks a company from the rest of the country, there is a Quebec company that benefits from it and whose business model takes this barrier into account.” The exact same can be said for any province.

This is why I thought well of Pierre Poilievre’s recent trial balloon about ways to coax the provinces into reducing interprovincial trade barriers by … let’s be honest … providing a financial bribe from the federal government. By allowing the individual provinces to “capture” some of that “lost” revenue, it may provide enough incentive to start dismantling at least some of the structural barriers to free trade within Confederation.

February 2, 2025

QotD: Tariffs

Filed under: Business, Cancon, Economics, Quotations, USA — Tags: , , , , — Nicholas @ 01:00

Who is punished by tariffs on imported goods? Let’s go through the steps. The Canadian government imposes high tariffs on American dairy imports. That forces Canadians to pay higher prices for dairy products and protects Canada’s dairy producers from American competition. What should be the U.S. government’s response to Canada’s screwing its citizens? If you were in the Trump administration, you might retaliate by imposing stiff tariffs on softwood products built from pine, spruce and fir trees used by U.S. homebuilders. In other words, the U.S. should retaliate against Canada’s harming its citizens by forcing them to pay higher dairy product prices, by forcing Americans through tariffs to pay higher prices for wood and thereby raising the cost of building homes.

Walter E. Williams, “Economics Reality”, Townhall.com, 2020-02-04.

January 17, 2025

Trump’s demands include some things that would be quite beneficial to Canada

Filed under: Bureaucracy, Business, Cancon, Economics, Government, USA — Tags: , , , , , , — Nicholas @ 03:00

In the National Post, Bryan Schwartz suggests that some of the things Trump has raised as issues in Canada/US trade would be economically sensible for Canada to address because they’d reduce costs of doing business in Canada which would be good for all Canadians (except the crony capitalists in the blatantly protectionist “supply management” cartels):

US President-elect Donald Trump trolling about Canada becoming the 51st state of the union does seem to have directed attention to our bilateral trade situation wonderfully.

The threatened Trump tariffs would hurt both the United States and Canada in many ways. But the U.S., with a larger and more productive economy (on a per capita basis), is better able to sustain the immediate pain. The economic pressure on Canada is, therefore, serious and credible.

Canada should first address issues that are of particular importance to the Trump administration. The incoming president tends to emphasize national security, even over economic nationalism. The authority of the president, under the inherent powers of the office and congressional statutes, is greater if the issue relates to national security.

The same holds under international trade agreements. The president can raise issues that Canada can address in a prompt and reasonable manner. These include border security and increasing Canada’s commitment to contributing its fair share to international alliances, which would include increasing military expenditures.

Second, Canada should recognize that external pressures can provide opportunities to do things that are in this country’s own interests, but are otherwise politically difficult. Outside pressures have in the past encouraged Canada to adopt several measures that are good for the country, such as reducing pork-barreling and regional favouritism in government contracting.

Canada’s dairy protectionism provides a good example of a trade concession that would benefit Canada, as it is unfair to lower-income Canadians and, in the long run, hurts the industry itself. An industry more exposed to competitive pressures would be incentivized to be more productive and seek to expand into international markets.

Australia has shown how such marketing boards can be abolished in a manner that gives some time to the industry to adjust and ultimately benefits all concerned. Canada could similarly rid itself of its outdated and counterproductive Freshwater Fish Marketing Corporation, as well. To the extent that the United States pressures us to eliminate such supply management systems, it is actually doing us a favour.

Likewise, given that the U.S. is moving away from suppressing free expression in cyberspace, Canada would benefit from joining such initiatives rather than continuing down the path of having government or big companies effectively engage in censorship under the guise of fighting “disinformation”. The best remedy for any wrongheaded speech is rightheaded speech, not censorship.

At Dominion Review, Brian Graff steals a line from George C. Scott’s portrayal of Patton who said (in the film, not in real life) – “Rommel, you magnificent bastard. I read your book!” after reading the book of Trump’s Trade Representative, Robert Lighthizer:

Lighthizer wrote a book (released in June 2023) about his trade views and experience entitled No Trade Is Free: Changing Course, Taking on China, and Helping America’s Workers, which I just read. I only became aware of Lighthizer in November, in part because of a review of his book in The Guardian.

I don’t think Lighthizer is a bastard (literally or figuratively). He is hardly magnificent, but his book should be required reading for Canadians interested in our upcoming negotiations with the US. Our government would learn how best to counter the US by preparing a strong strategy and going on offence even before negotiations begin.

In short, we should not give away anything for free. This is Lighthizer’s position in matters of trade. For example, Canada should not volunteer to meet the two percent defense spending target ahead of negotiations. If anything, Canada should be accusing the US of whatever complaints we can muster. Trump might complain about the Canadian border being porous when it comes to people and drugs, but we can make the same claims, and add on the fact that the US should do more to stop the flow of illegal guns into Canada across our southern border.

Lighthizer provides a history of the US based around the idea that the US revolution and the constitution were a reaction to the mercantilist policies of Britain, which wanted to export manufactured goods and import only raw materials, while also limiting US trade with the rest of the world. Here is Lighthizer’s essential view:

    Today, the tide has turned against the argument for unfettered free trade, in no small part because of the changes we made in the Trump administration. More broadly, evidence and experience have shown us that free trade is a unicorn – a figment of the Anglo-American imagination. No one really believes in it outside of countries in the Anglo-American world, and no one practices it. After the lessons of the past couple decades or so, few believe in it even within that world, save for some hard-core ideologues. It is a theory that never worked anywhere.

This is his critique of the neoliberal free trade approach:

    According to the definitions preferred by these efficiency-minded free traders, the downside of trade for American producers is not evidence against their approach but rather is an unfortunate but necessary side effect. That’s because free trade is always taken as a given, not as an approach to be questioned. Rather than envisioning the type of society desired and then, in light of that conception of the common good, fashioning a trade policy to fit that vision, economists tend to do the opposite: they start from the proposition that free trade should reign and then argue that society should adapt. Most acknowledge that lowering trade barriers causes economic disruption, but very few suggest that the rules of trade should be calibrated to help society better manage those effects. On the right, libertarians deny that these bad effects are a problem, because the benefits of cheap consumer goods for the masses supposedly outweigh the costs, and factory workers, in their view, can be retrained to write computer programs. On the left, progressives promote trade adjustment assistance and other wealth-transfer schemes as a means of smoothing globalization’s rough edges.

This section is also key:

    … mercantilism and a free market are dramatically different systems, with distinctions that are important to note. Mercantilism is a school of nationalistic political economy that emphasizes the role of government intervention, trade barriers, and export promotion in building a wealthy, powerful state. The term was popularized by Adam Smith, who described the policies of western European colonial powers as a “mercantile system.” Then and now, there are a vast array of tools available for countries seeking to go down this path. Mercantilist governments, for instance, frequently employ import substitution policies that support exports and discourage imports in order to accumulate wealth. They employ tariffs, too, of course, and they limit market access, employ licensing schemes, and use government procurement, subsidies, SOEs, and manipulation of regulation to favor domestic industries over foreign ones.

The focus of the book, and the main villain, is China, followed closely by the World Trade Organization (WTO). Canada gets less than 77 mentions, Mexico gets 99 mentions in the first 352 pages of 576 (the e-book stops counting at 99), and Japan gets 99 mentions in the first 400 pages. Compare this to China, which gets 99 mentions within the first 101 pages alone.

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