Ongoing appeals for more government intervention represent an ongoing aversion to the kind of relentless competition that is necessary for economic success.
Under the current Liberal government, Canada is undeniably becoming more and more socialist.
On issue after issue, the government has increased their role to the point where the state is seen by many as the only way for anything to be addressed.
Despite government attempts to ‘address’ problems often being the cause of those problems becoming more acute, the response from much of the public and media is often to seek even further government intervention.
This is a sign that expectations of government intervention have led to a deeply-ingrained belief that nothing can happen unless the government makes it happen.
That’s the kind of belief that can rob people of their sense of agency, and their willingness to compete.
Fear of competition
Endless demands for government intervention also manifests as a fear of competition. And that’s the kind of fear that is often found at the heart of stagnant socialist economies.
Stagnation occurs when innovation and productivity fades, and this is often the result of a lack of competition.
When the government always steps in to try and save those who lose in economic competition, that intervention hurts the winners. This is a huge problem, because it results in punishing people for being economically competitive. Just look at what the government is doing with Bill C-18. Government intervention designed to ‘save’ struggling legacy media outlets will end up not only hurting those outlets, but also hurting the many new media outlets that managed to compete successfully in the market.
Punishing success and rewarding failure with government intervention is deeply socialist, and it always results in economic decline – the kind of decline we see in Canada today.
So, what should be the response to this?
Embrace capitalist competition as much as possible
Canada’s economic and social problems are so immense that it would be absurd to think the government could do much through further intervention other than make things even worse. Rather, the government must step back, and let price signals reorient things.
What do I mean by this?
Well, the power of price signals and the freedom to both succeed and fail are what makes capitalism such an effective wealth and productivity generator.
Consider what I mentioned above, Bill C-18 and the government attempt to ‘save’ failing legacy outlets. Those legacy outlets have human resources who could be more efficiently utilized if they became independent journalists or worked for successful independent outlets. If the legacy outlets were allowed to collapse, those human resources would be freed up. But if those legacy outlets are propped up at the expense of taxpayers and independent outlets, there will be a double-loss.
Taxpayers will lose out by having our resources directed towards inefficient media firms.
Independent outlets will lose out by being artificially weakened and losing potential access to more human resources.
This may seem like a cold way to describe things, but this is how we have to think about the economy if we are to get Canada back on track to real per capita GDP growth.
Human resources and financial resources must be utilized more efficiently, and those who succeed must be rewarded in order to incentivize further success.
This means we need to cut taxes significantly, and hold down federal spending. Financial resources must be transferred away from the government and back to those who generated and earned those financial resources. The more money that is left in the hands of Canadians, the more the economy will be responding to price signals and adjusting accordingly, rather than having the government distort the economy through excessive inflationary spending based on political whims rather than economic reality.
One of the great things about capitalism is that it largely requires the absence of government action. Given that government action is a key source of many of our problems, this means a new government could improve the state of our country simply by stepping back and doing less. And this would be necessary to begin shifting Canadians out of the fear of economic competition.
As the government steps back, businesses would start to realize that improving their economic situation could only happen through increasing their efficiency. With no government stepping in to ‘save’ them, they would have to save themselves. And if they failed, economic resources would be freed up for better use elsewhere. Watching this, Canadians would see an economy that would perhaps appear more ‘scary’ and ‘chaotic’ in terms of competition, but that competition would begin to lift us out of our stagnation and raise our standard of living in real terms.
At the end of the day, Canada needs to halt our drift towards socialism, and increase our embrace of capitalism if we really want to restore the Canadian dream.
Spencer Fernando
Photo – YouTube
