Quotulatiousness

August 23, 2012

The historical “locavore” diet: seasonal gruel and mush

Filed under: Environment, Food, Health, History, Media — Tags: , — Nicholas @ 09:40

sp!ked has an article by authors Pierre Desrochers and Hiroko Shimizu, on the disadvantages of the true locavore diet:

Perhaps the most ludicrous claim made by some ‘locavores’ — activists who argue that food produced near final consumers is superior in a myriad of ways to distant imports — is that the globalised food-supply chain is guilty of crimes against seasonality. Limiting our intake of fresh produce to whatever can be obtained locally at certain times of the year (and preserving the surplus for the remainder), we are told, will not only help atone for agri-business’ fossil fuel-driven ways and constrain us to live within regional ecological limits, but it will also make fresh local food more enjoyable when it is available. As one locavore puts it, ‘deprivation leads to greater appreciation’.

The emphasis on local seasonality by food activists, however, is problematic on several counts. For instance, why do militant locavores limit themselves to local seasonality when they could further insist on truly ‘native’ produce and livestock? Seen in this light, North American agriculture should be essentially limited to turkeys, farmed salmon and a few other fish and shellfish, sunflowers, blueberries, cranberries, Jerusalem artichokes and some varieties of squashes. (Though the really hardcore North American locavore could go even further by reverting to problematic native crops such as sumpweed, goosefoot, knotweed, maygrass and little barley that were replaced about one thousand years ago by Mexican imports such as corn and beans.)

Basic logic aside, limiting our food intake to local productions is a one-way ticket to chronic famines and malnutrition. Having in most cases no direct experience with massive crop failures, locavores typically ignore the historical and contemporary toll taken by factors ranging from droughts, floods, heavy rains and frost to hail, windstorms, earthquakes and tsunamis, to say nothing of insect pests, rodents, soil erosion and plant and animal diseases. Yet, the historical evidence on the issue is unequivocal. It was only the development of cost-effective long-distance transportation (primarily the railroad and the steamship) that finally eradicated famines through the large-scale movement of foodstuff from regions that had experienced good harvests to those that had struggled with mediocre ones.

August 3, 2012

How “you didn’t build that” strikes at “Bourgeois Dignity”

Filed under: Books, Business, Economics, Liberty, Politics — Tags: , , , — Nicholas @ 00:05

Virginia Postrel explains why President Obama’s “you didn’t build that” gaffe has lasted so long when usually politicians’ gaffes barely last a single news cycle, by outlining the arguments of a recent book by Dierdre N. McCloskey:

The president’s sermon struck a nerve in part because it marked a sharp departure from the traditional Democratic criticism of financiers and big corporations, instead hectoring the people who own dry cleaners and nail salons, car repair shops and restaurants — Main Street, not Wall Street. (Obama did work in a swipe at Internet businesses.) The president didn’t simply argue for higher taxes as a measure of fiscal responsibility or egalitarian fairness. He went after bourgeois dignity.

“Bourgeois Dignity” is both the title of a recent book by the economic historian Deirdre N. McCloskey and, she argues, the attitude that accounts for the biggest story in economic history: the explosion of growth that took northern Europeans and eventually the world from living on about $3 a day, give or take a dollar or two (in today’s buying power), to the current global average of $30 — and much higher in developed nations. (McCloskey’s touchstone is Norway’s $137 a day, second only to tiny Luxembourg’s.)

That change, she argues, is way too big to be explained by normal economic behavior, however rational, disciplined or efficient. Hence the book’s subtitle: “Why Economics Can’t Explain the Modern World.”

[. . .]

McCloskey’s explanation is that people changed the way they thought, wrote and spoke about economic activity. “In the eighteenth and nineteenth centuries,” she writes, “a great shift occurred in what Alexis de Tocqueville called ‘habits of the mind’ — or more exactly, habits of the lip. People stopped sneering at market innovativeness and other bourgeois virtues.” As attitudes changed, so did behavior, leading to more than two centuries of constant innovation and rising living standards.

I’ve read McCloskey’s book and plan on reading the next one too. Earlier mentions of Bourgeois Dignity are here and here.

July 13, 2012

A more accurate title would have been The Locavore Delusion

Filed under: Environment, Food, Health, Media — Tags: , , , — Nicholas @ 08:58

Rob Lyons reviews the new book by Pierre Desrochers and Hiroko Shimizu:

The fundamental question underpinning both those earlier papers and The Locavore’s Dilemma is this: if local food is so great, why did a globalised food system develop at all? The answer, as Desrochers and Shimizu argue, is that the creation of a worldwide trade in food reduced prices, increased variety and improved security of supply. If there is a problem with this world market in food, they argue, it is that it is not open or far-reaching enough.

The online eco-magazine Grist ran an interview with Desrochers earlier this month. In a follow-up piece, readers came up with responses to the interview. One of these responses provides such a neat summary of the arguments in favour of local food that it is worth repeating in full.

‘I am a local-food advocate for many reasons: Taste: An heirloom tomato picked that morning runs circles around a hybridised tomato picked two weeks ago in Florida and gassed so it turns red en route; Quality: the better the soil and the farmer, the better the food; Nutrition: food sheds nutrients after it is picked. The longer it takes to get to market, the less nutritional value it has, comparatively; Transparency: I like knowing how my food is grown and harvested. I visit my meat producer; try that at a CAFO [concentrated animal feeding operation]; Environmental: A minimisation of the use of chemicals that wash into waterways, creating algae blooms, choking out life, or killing beneficial insects, including honey bees; Sane stewardship: I like to support farmers who create more naturally fertile soil, which is better able to resist pests, floods, and droughts; Pleasure: I buy local food at my farmers’ market because it’s more pleasant to do so than going into an air-conditioned grocery store. I see neighbours, chat with farmers, taste before I buy. Economic: I want my food dollars to support my local economy; Humanity: Animals and humans are treated better on the small farms I know than they are on the large ones; I value green open spaces: Supporting local farms with my money encourages those farmers to maintain those green open spaces rather than selling off to developers.’

As Desrochers and Shimizu explain, these ideas are either not necessarily true, are matters of personal taste or, more often, are completely wrong. Instead, the authors argue, ‘the available evidence convincingly demonstrates that long-distance trade and modern technologies have resulted in much greater food availability, lower prices, improved health and reduced environmental damage than if they had never materialised. Indeed, more trade and ever-improving technologies remain to this day the only proven ways to lift large numbers of people out of rural poverty and malnutrition.’

Let’s take those arguments for local food, one by one, using (though not exclusively) the arguments in The Locavore’s Dilemma.

July 2, 2012

What value do speculators offer?

Filed under: Economics, Food, Liberty, Media — Tags: , , , — Nicholas @ 10:17

In most newspapers, you don’t need to wait long to read some journalist beating up on evil speculators for the “damage” they do and the claimed “uselessness” of their activities. Tim Worstall points out that speculators are actually essential to smooth operation of free markets:

What is it that the speculator in food manages to achieve? They move prices through time. At the moment, there’s a drought, and so we think there will be less corn available for consumption next year, so its price goes up.

What would we like to happen? Should prices stay stable? We would all carry on using the amount of corn that we originally thought we’d get. And we’d run out — there may even be a famine. People tend to die in famines.

So what we’d actually like to happen is for people to prepare by consuming a bit less corn this year.

Some of this should come from substitution: farmers will feed wheat to animals not corn. Consumers might move from grits to weetabix for breakfast. Perhaps the fools putting corn into cars will move over to sugar cane to make ethanol from.

We would also like a supply effect: those who are currently growing corn might add a bit more fertiliser, take more care in harvesting, make sure less gets spoiled or lost in transport.

Rising prices causes both of those pretty neatly. Put up the price and people will use less, while suppliers will make more. And what is it that the speculators on the futures markets have done in response to this report of drought? They have raised prices.

June 28, 2012

What did Canada give up to get “2nd class seating” in the TPP negotiations?

Filed under: Cancon, Economics, Pacific, USA — Tags: , , , , — Nicholas @ 10:27

Michael Geist on the Canadian concessions to get a seat at the kiddy table for the Trans Pacific Partnership free trade negotiations:

…the benefits for Canada are hard to identify. The price of admission was very steep — Canada appears to have agreed to conditions that grant it second-tier status — and the economic benefits from improved access to TPP economies are likely to be relatively minor since we already have free trade agreements with four of the ten participants.

Given those conditions, why aggressively pursue entry into the negotiations?

[. . .]

Given Canada’s late entry into the TPP process, the U.S. was able to extract two onerous conditions that Prime Minister Stephen Harper downplayed as the “accession process.” First, Canada will not be able to reopen any chapters where agreement has already been reached among the current nine TPP partners. This means Canada has already agreed to be bound by TPP terms without having had any input. Since the TPP remains secret, the government can’t even tell us what has been agreed upon. [Scott Sinclair reports that the commitment is even broader, covering any chapter where provisions have been agreed upon]

Second, Canada has second-tier status in the negotiations as the U.S. has stipulated that Canada will not have “veto authority” over any chapter. This means that should the other nine countries agree on terms, Canada would be required to accept them.

This condition could be used to stop Canada from joining forces with another country on a tough issue during the late stages of the negotiation. For example, Canada and New Zealand both have copyright terms that last for the life of the author plus an additional 50 years. The U.S. has proposed that the TPP mandate a term of life plus 70 years. While Canada and New Zealand might be able to jointly block the extension, the U.S. could pressure New Zealand to cave on the issue and effectively force Canada to accept the change.

Getting rid of our government-mandated monopolies in the agricultural sector (a good thing) is not going to be worth the price of adopting American-style copyright legislation.

June 26, 2012

Sacrificing relations with your top trading partner for domestic political reasons

Filed under: Cancon, Economics, USA — Tags: , , , — Nicholas @ 07:59

In Foreign Affairs, Derek H. Burney and Fen Osler Hampson outline the sad state of the trading relationship between Canada and the United States:

Permitting the construction of the Keystone XL pipeline should have been an easy diplomatic and economic decision for U.S. President Barack Obama. The completed project would have shipped more than 700,000 barrels a day of Albertan oil to refineries in the Gulf Coast, generated tens of thousands of jobs for U.S. workers, and met the needs of refineries in Texas that are desperately seeking oil from Canada, a more reliable supplier than Venezuela or countries in the Middle East. The project posed little risk to the landscape it traversed. But instead of acting on economic logic, the Obama administration caved to environmental activists in November 2011, postponing until 2013 the decision on whether to allow the pipeline.

Obama’s choice marked a triumph of campaign posturing over pragmatism and diplomacy, and it brought U.S.-Canadian relations to their lowest point in decades. It was hardly the first time that the administration has fumbled issues with Ottawa. Although relations have been civil, they have rarely been productive. Whether on trade, the environment, or Canada’s shared contribution in places such as Afghanistan, time and again the United States has jilted its northern neighbor. If the pattern of neglect continues, Ottawa will get less interested in cooperating with Washington. Already, Canada has reacted by turning elsewhere — namely, toward Asia — for more reliable economic partners.

[. . .]

In Afghanistan, Canada is now rapidly scaling back its substantial commitment to the military mission, thanks to the United States’ increasingly erratic, if not embarrassing, direction. Canada has spent billions on the war and lost over 150 soldiers, proportionately more than any other ally, but has received no tangible dividend for its support on bilateral or multilateral issues of concern to it. Canada also participated in NATO’s mission in Libya — where a Canadian, Lieutenant-General Charles Bouchard, commanded military operations. Canada has no tangible interests of any kind in Afghanistan or Libya. Its participation in those countries, proportionately larger than any other ally, was intended primarily to strengthen the partnership with the United States on the theory that solid multilateral commitments would engender more productive bilateral relations. That proved not to be the case.

Update: Matt Gurney wonders if the palpable lack of reaction by Canadians to the laundry list of “slights” might possibly indicate that Canada is finally “growing up”:

You can’t say the essay is wrong. From Keystone XL to Buy America provisions in the stimulus packages developed by Congress, the U.S. has found occasion over the last few years to irritate Canada. But notably absent has been the kind of heated Canadian rhetoric you’d hear as recently as the Paul Martin era during the softwood lumber dispute. Nor does the Canadian public seem to be demonstrating much of the reflexive anti-Americanism that has always been a strange part of our national character.

We’ve long insisted that the U.S. treat us as a separate and sovereign country, and yet react with wounded outrage when they treat us as a separate country. Go figure. But given that Burney and his co-author are right, and America has repeatedly slighted Canada … and if we can agree that Canadians don’t seem particularly freaked out about it … good Lord, could it be that Canadians are, gulp, growing up?

June 25, 2012

If NAFTA was real free trade “it wouldn’t contain 22 chapters of rules and regulations”

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

Free trade is the way to go, if you want to benefit the consumer. Producers don’t benefit as much: it increases their competition and means that bad producers are more likely to go out of business. Protectionists always rely on the visible “damage” that free trade does to these bad producers and minimize or completely ignore the (larger) benefits to consumers.

Jesse Kline explains why moving toward freer trade will benefit most Canadians, and the drawbacks will be to those who are least able or least willing to face real competition:

Prime Minister Stephen Harper announced this week that Canada will join the Trans-Pacific Partnership (TPP) talks, along with he United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Mexico and, we hope, Japan. Some say this will be a historic free trade deal that will extend the NAFTA zone into emerging Asian markets; others believe the United States is using the process to impose its own draconian copyright regime on its trading partners, while protecting key industries, such as auto manufacturers. The truth is probably somewhere in the middle.

The problem is that the agreement is being negotiated under a veil of heavy secrecy. And if rumours that the negotiated sections of the agreement already contain over 1,000 pages prove to be correct, it is certain that the TPP will not give us anything resembling real free trade. Indeed, the Canadian public has little idea about what we are getting ourselves into, or how much the government knew about what it was agreeing to. Based on a leaked chapter of the agreement, it looks as though we just signed up for an entirely new copyright regime, a mere hours after the government passed its own made-in-Canada solution.

To the government’s credit, it is simultaneously pursuing trade deals with the European Union and China. But in these times of global economic uncertainty, we need to see the benefits of trade sooner, rather than later. Free trade leads to higher standards of living, and benefits society through lower prices and increased variety of consumer goods; it forces domestic industries to be more efficient. Fortunately, there is another way to achieve these benefits: The Canadian government could open our borders to the world by unilaterally removing all our trade barriers.

June 23, 2012

Trade deals as mutual disarmament pacts

Filed under: Cancon, Economics, Food — Tags: , , , , , — Nicholas @ 00:27

It’s a very sad commentary that the only way the current “pro-business” federal government can even consider scrapping our supply management monopolies is because “our trading partners forced us to”:

If the government were of a mind to get rid of supply management — it swears it is not — that is perhaps the only basis on which it could: our trading partners made us do it. Certainly it would not dream of doing so otherwise. Such is the power of the supply management lobby, especially dairy, that a suffocating consensus has settled over the issue, of a kind rarely seen in a democracy. Consensus is not even the word. Every party strives to outdo the others in the fulsomeness of its support. And not just every party: every member of every party, in every province and at every level of government. It’s quite creepy.

Yet virtually every economist or policy analyst of note agrees that supply management is a disgrace. The primary effect of the quotas — the intended effect — is to drive up the price of these foods, staples of most Canadians’ diets, to two and three times the market price. The burden of these extraordinary price differentials, of course, fall most heavily on the poor, a fact that ought to trouble self-styled “progressives” but evidently doesn’t.

But it isn’t only consumers who pay. Since the quotas are tradeable, the premium over market prices gets capitalized into the value of the quota. The right to a cow’s worth of milk production, for example, runs to about $28,000, meaning a farmer looking to get into the industry faces an initial outlay, for the typical 60-cow farm, in excess of $1.5-million — just for the quota, never mind the cows, the barn and the rest.

June 19, 2012

EU’s Barroso spurns advice from Canadian “nobody”

Filed under: Cancon, Economics, Europe — Tags: , , , , , , , — Nicholas @ 08:22

The EU is not taking Prime Minister Stephen Harper’s advice gracefully. In fact, they’re not taking it at all:

Maybe it was the 35 C heat here on Mexico’s Baja Peninsula. Maybe it was the pressure of the crisis he faces back home.

Whatever it was, when I asked European Commission president Jose Manuel Barroso here Monday why Canada should risk its financial good name to bail out European banks, Barroso blew a diplomatic gasket.

“We are extremely open and we are engaging our partners but we are certainly not coming here to receive lessons from nobody,” he harrumphed.

That “nobody” is apparently our PM. How dare a mere Canadian politician offer criticism of the European Union, the greatest political achievement of mankind?

In Barroso’s eyes, the fiscal crisis in Europe is not even Europe’s fault. It is the victim in all of this. For that reason, the rest of the world ought bail it out, even though, as Prime Minister Stephen Harper has noted, the so-called euro area of 27 countries is the single largest and wealthiest economic unit in the entire world.

Harper has told Barroso just that, saying that if Canada — or anyone else — is going to kick in to a US$430 billion pool administered by the International Monetary Fund, then Europe is going to have to release the chokehold it has had on the IMF.

And of course, no negotiation with the EU is complete without some hard-to-misunderstand threats from the Eurocrats:

But Barroso wasn’t finished. In the middle of his tirade, he trotted out a thinly veiled threat that a Canada-EU free-trade deal was at risk unless Harper comes to his senses and sends Canadian cash to the continent.

“We are trying to conclude an important agreement on trade with Canada. Why? Because all the other parts of the world look at Europe as a source of possible growth for them. And, in fact, they also have an interest. The sooner the situation is stabilized in Europe, the better for them,” he said.

QotD: The mottos of “High Liberalism”

Filed under: Economics, Government, Liberty, Quotations — Tags: , , , , — Nicholas @ 07:45

The story is, in a few brief mottos to stand for a rich intellectual tradition since the 1880s: Modern life is complicated, and so we need government to regulate. Government can do so well, and will not be regularly corrupted. Since markets fail very frequently the government should step in to fix them. Without a big government we cannot do certain noble things (Hoover Dam, the Interstates, NASA). Antitrust works. Businesses will exploit workers if government regulation and union contracts do not intervene. Unions got us the 40-hour week. Poor people are better off chiefly because of big government and unions. The USA was never laissez faire. Internal improvements were a good idea, and governmental from the start. Profit is not a good guide. Consumers are usually misled. Advertising is bad.

Thus Anderson: “Externalities, asymmetrical information, and other collective action problems are … pervasive in economic life. Countless ways of conducting business reap gains for some while imposing unjust costs on others. Create a cartel. Stuff rat feces in sausages.” Thus Freeman: “It is a truism to say that in order to achieve the benefits of an efficient market economy (increasing productivity, greater economic output, increasing productive capital, etc.), the basic rules of property, contract, and exchange must be structured [by government] to realize efficient market relations.”

No. The master narrative of High Liberalism is mistaken factually. Externalities do not imply that a government can do better. Publicity does better than inspectors in restraining the alleged desire of businesspeople to poison their customers. Efficiency is not the chief merit of a market economy: innovation is. Rules arose in merchant courts and Quaker fixed prices long before governments started enforcing them.

I know such replies will be met with indignation. But think it possible you may be mistaken, and that merely because an historical or economic premise is embedded in front page stories in the New York Times does not make them sound as social science. It seems to me that a political philosophy based on fairy tales about what happened in history or what humans are like is going to be less than useless. It is going to be mischievous.

Dierdre McCloskey, “Factual Free-Market Fairness”, Bleeding Heart Libertarians, 2012-06-16

June 2, 2012

Tim Harford on the basic daftness of “Buy British” policies

Filed under: Britain, Economics, Government — Tags: , , — Nicholas @ 10:35

The same is true for “Buy American”, “Buy Canadian”, or “Buy Australian” programs, too:

The government could at least encourage everyone else to “buy British”.

An intriguing concept. But I don’t understand how this would support the British economy at all. Imagine the whole country collectively agreed not to buy fancy foreign muck unless it was at least 20 per cent cheaper than a comparable British product. Imports would surely take a beating. Assuming the rest of the world simply ignored our silly British ways and did not retaliate, exports would — at first — be unaffected.

Isn’t reducing imports exactly the desired effect?

But such an imbalance of exports and imports would not last. British exporters, flush with the foreign currency they had earned, would seek to spend it, or to find somebody else who wanted it. No one holding pounds would be terribly interested — everyone has, after all, agreed not to buy foreign products unless they are particularly cheap. The only way to get pounds in exchange for dollars, euros and yen would be to offer a premium.

In other words the value of the pound would have to rise.

Of course. And after it had risen a respectable amount, those foreign products would be cheap enough to buy again. Imports would recover. And exports would suffer from the stronger pound. They would and the eventual result would be that we would still buy some foreign products. To the extent that British domestic substitutes flourished, there would be an equal and opposite effect on British export industries.

So there’s no point in a “Buy British” campaign?

You might just as well run a “screw British exporters” campaign.

May 26, 2012

Andrew Coyne on Harper’s real “hidden agenda”

Filed under: Cancon, Economics, Government — Tags: , , , , — Nicholas @ 09:32

We’ve been hearing about Stephen Harper’s “hidden agenda” for nearly a decade and it’s about time for some of it to finally come to light — what’s the point of having a hidden agenda if you never actually implement any of it? Andrew Coyne thinks he’s detected the real thing:

It is becoming more difficult to accuse this government of having a hidden agenda. Not because it hasn’t tried, mind you. But while it remains as obtuse as ever about its intentions, the signs of an agenda are by now unmistakable. Where before it had attitudes, or at best stances, it is beginning to sprout what look remarkably like policies.

To be sure, they are modest, even piecemeal. They are often poorly communicated, where the Conservatives deign to communicate them at all. More often they are simply dropped on the unsuspecting public without consultation, or jammed through Parliament with little debate or scrutiny, quite apart from monstrosities like the omnibus bill.

But put them together and they have all the markings of an agenda:

  • Reform of Old Age Security, not only raising the age of eligibility by two years (starting in 2023, and phased in over six years) but offering higher benefits to those willing to keep working past the standard retirement age.
  • Free trade agreements, now being negotiated with virtually everything that moves: Europe, India, Japan, the Trans-Pacific Partnership, the ASEAN group.
  • Reform of immigration policy, across every category: skilled immigrants, refugees, investors, entrepreneurs, with an emphasis on recruiting immigrants with demonstrable economic prospects.
  • Reform of employment insurance, announced this week, to give repeat users, in particular, fewer excuses to refuse available work.
  • Moreover, the government is at last beginning to implement the Red Wilson report on productivity, four years after it was delivered, with recent reforms opening the door to foreign takeovers in the telecommunications sector (for companies with less than 10% of the market), and raising the threshold asset value for automatic review of foreign takeovers to $1-billion.

May 6, 2012

One of the worst moves African countries can make

Filed under: Africa, Economics — Tags: , , , — Nicholas @ 09:55

Tim Worstall at the Adam Smith Institute blog:

You don’t have to go far into NGO land to find people arguing that poor countries need to protect their baby industries from the big bad wolves of international capitalism. That trade barriers are a good idea, that infant industries need to be nurtured and, as is the way of these things, the Washington Consensus is the imposition of the poverty that the poor suffer from.

That this is entire nonsense does not stop those idiots wearing ideological blinkers from repeating it. Which is something of a pity as it really is trade, openness to it, which drives economic growth:

    In recent years, sub-Saharan African countries have grown remarkably. According to data from the Penn World Table 7.0 (Heston et al. 2011), average annual real GDP per capita growth from 2005-9 has been over 2.5% (3.5% when excluding 2008 and 2009). This recent growth performance is remarkable given that, for over four decades since 1960, real GDP per capita growth in sub-Saharan Africa was dismal, averaging less than 0.5% per annum.

We are, as we know, talking about the poorest of the poor and any uptick in their fortunes has been both extremely difficult to find and extremely welcome when it is.

One thing that might be remembered is that, post-colonialism, most sub-Saharan countries did in fact follow the policies of infant industry protection behind tariff and licencing barriers. It was the falling apart of this in the 80s and then the gradual adoption of good old neoliberalism in the mid to late 90s which has turned the numbers around.

April 16, 2012

Stephen Harper’s “world view is based on the premise that the United States is in relative decline as a superpower”

Filed under: Cancon, Economics, USA — Tags: , , , , — Nicholas @ 09:39

Eugene Lang has an interesting view of how Stephen Harper has changed since coming to power and how this is reflected in Canada’s foreign policies:

Stephen Harper became Prime Minister six years ago with little interest in or experience of international affairs. He was a domestic policy wonk — particularly interested in economic and fiscal affairs. Yet, in about half a decade, he has fashioned the clearest Canadian foreign policy posture in at least a generation, whether you like that posture or not. We can now speak of a Harper Doctrine which forms the cornerstone of our foreign relations.

In a largely ignored interview with Maclean’s magazine last summer, the Prime Minster stated: “We also know, though, the world is becoming more complex, and the ability of our most important allies, and most importantly the United States, to single-handedly shape outcomes and protect our interests, has been diminishing, and so I’m saying we have to be prepared to contribute more, and that is what this government’s been doing.”

These remarks are an important insight into the Prime Minister’s perception of the changes in America’s geopolitical position, and how Canada should respond. They suggest his world view is based on the premise that the United States is in relative decline as a superpower, and that Canada must step up to the plate to help our distressed ally police the world. It is a striking acknowledgement. And it was not just words.

Canada has been needing to diversify its trading relationships to reduce its dependence on, and exposure to, the vagaries of the US economy and the meddling of the US government. President Obama’s recent decision to veto the Keystone XL pipeline is merely the latest spur to get Canada to work more closely with China and other growing economies rather than be subject to presidential whim in our dealings with the US.

During his first half-decade in office Stephen Harper was putting most of Canada’s economic eggs in the American basket, as had his predecessors — from Brian Mulroney to Jean Chrétien to Paul Martin. The Prime Minister was accused of willfully ignoring unprecedented economic opportunities in China.

But that is a thing of the past. Over the last year, the Harper government has embarked on the most ambitious trade and economic diversification agenda in memory. Ottawa is now pursuing free trade agreements with India and the European Union simultaneously. The government has done a 180 on Chinese trade and investment, actively and aggressively pursing both. Canada is trying hard to become a member of the Trans Pacific Partnership, a multi-lateral free trade agreement centred in Asia. And now Canada has begun free trade negotiations with Japan, the world’s third largest economy. Little of this was on Ottawa’s radar screen 18 months ago.

It’s my opinion that the US economy is being held back at least in part because of fears of what the federal government may do — instead of smoothing the worries of business, the government is stoking them and adding to the uncertainties that make business decision-making less bold. The more regulatory changes the government makes (or even hints that it might make), the less investment will be made in areas that might be affected by those changes. The current presidential election campaign with its naked fanning of class warfare isn’t helping the situation either.

Since the global financial crisis, the evidence has mounted that the United States is in economic decline. Its system of government seems congenitally incapable of coming to grips with America’s fiscal crisis. For the first time in living memory, the U.S. recovery from recession has been weaker than Canada’s. The United States continues to have a higher unemployment rate than Canada, virtually unheard of historically. The American economy is amazingly resilient and might yet come back strong, but right now the evidence suggests a long period of relative economic stagnation south of the border. This is the most important structural change affecting Canada since Stephen Harper became Prime Minister.

April 13, 2012

“Brzezinski[‘s] … realpolitik approach … is actually refreshing in today’s age of flippant air-bombing humanitarianism”

Filed under: Books, Economics, Government, History, Military, USA — Tags: , , , , , — Nicholas @ 08:24

Sean Collins reviews a pair of books that — rather than signing on to the idea of America as terminal-phase western Roman Empire — perhaps go too far in the other direction. The books are The World America Made by Robert Kagan and Strategic Vision: America and the Crisis of Global Power by Zbigniew Brzezinski:

It is clear that the US faces a number of challenges, especially with regard to its stagnant economy and gridlocked politics. But more and more, the country’s specific problems are overshadowed by creeping fears of national decline. This backdrop of decline extends beyond domestic economics to contemplating whether America’s influence in the world is diminishing, in particular relative to emerging powers like China.

[. . .]

Brzezinski is not only old, he’s old-school, too. His realpolitik approach, which includes Cold War concepts like containment, is actually refreshing in today’s age of flippant air-bombing humanitarianism. For example, he quite baldly comes out and calls for the US to lead an effort to expand the West (via NATO and the EU) to include Russia and Turkey. This, he says, is necessary to prevent Russia from striking out on its own, or allying with China. Brzezinski is also still very mindful that great-power politics have not disappeared, and could re-emerge more forcefully. More than once, he speculates that Asia today resembles Europe before the twentieth-century world wars, and argues for care to ensure that a new conflagration does not break out.

The two authors’ respective approaches to American relations with China illuminate their differences in approach. Kagan is blunt, arguing for an antagonistic stance. He calls on the US to ‘press for greater democratic and liberal reforms’ in China (and in other authoritarian nations), and to promote free trade and markets, and thus ‘push back’ against state capitalism in China. In contrast, Brzezinski urges a diplomatic approach, one that attempts to reach mutual agreement while preventing China from becoming a too-dominant regional power. He is opposed to the Obama administration’s recent ‘Asia pivot’, which calls for more US troops in the region. In an interview with Edward Luce in the Financial Times, Brzezinski warned: ‘We have to focus on Asia, but not in a manner that plays on everyone’s anxieties… It becomes very easy to demonise China and they will demonise us in return. Is that what we want?’

[. . .]

This is illustrated by their treatments of the recent wars in Iraq and Afghanistan. On the surface, the two seem to take very different lines. Kagan was bullish at the outset of both wars and, consistent with his general style in the book, he quickly skates right past such awkward issues. Brzezinski, in contrast, is damning, highlighting how the wars have undermined America’s ability to project its power. But the fact is that neither author really spends much time thinking about them. This is telling: both prefer to speculate about the future rather than face up to the reality of recent foreign-policy moves. Oddly, neither author examines either President George W Bush’s record or President Obama’s record. When Brzezinski does address the Bush administration’s foreign policy, his analytics go out the window and he just sneers. We are left believing that the interventions in Iraq and Afghanistan were nothing more than purely subjective mistakes made by Bush and his vice-president, Dick Cheney.

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