Excellent commentary. I find Harper’s agenda alarming to say the least. It bothers me more that so many people I talk to either don’t get it or don’t care. Yikes!

The real problem, I think, is education. It’s said that Americans know nothing outside of their own borders, but Canadians know nothing outside of their borders and the borders of the U.S. So when something needs reforming, the automatic assumption is that if we’re not going to be doing it the way we’ve always done it, we should do it the American way. No other options exist. It’s sad.

They are entrepreneurial because of the pro-business, libertarian policies they have. It is no fluke or coincidence. A nation’s policies have a profound impact on the character of that nation’s people. For Canada to continue to be a welfare state will sacrifice the entrepreneurial spirit of many of our citizens.

dave – first, let’s be clear that what harper wants is to bring canadian institutions in line with american ones. your point about policies is a separate argument, but an interesting one. unfortunately, i’m not sure the facts support your argument. i think that americans are more entrepreneurial is more cultural than policy. for example, canada has lower corporate taxes, for both small and large firms, a lower capital gains tax, significantly higher r&d tax incentives, etc. check out KPMG’s 2006 study and you should see that canada is very pro-business:
http://www.investincanada.gc.ca/en/1947/KPMG_Overall_Results_Booklet.html

One of the biggest factors that encourages small businesses and entrepreneurs is universal healthcare (which we don’t actually have in Canada, but at least that’s the goal.) This is because the health insurance costs associated with a heavily privatized healthcare system are generally borne by businesses and business owners, rather than by workers. In the case of small businesses, these costs are often too high, especially during the initial startup of a new business, and cause many companies to fold. This is one of the many reasons that the World Economic Forum has consistently rated public health care coverage among the leading factors which influence a nation’s competitiveness within a global marketplace.

My point, Dave, is that at least some of the characteristics of the “welfare state” that you claim Canada to be (inaccurately, by the way,) are quite beneficial to the “entrepreneurial spirit,” and to the economy as a whole.

GDP per capita may be taken as a rough proxy for degree of entrepreneurship. An examination of the top 10 (http://www.cia.gov/cia/publications/factbook/rankorder/2004rank.html) shows that those nations with the fewest social programs tend to have the highest GDP per capita. Norway is an exception because of its oil revenue. Also note that nations with fewer social programs also have a lot more economic activity that doesn’t make it into the GDP stats (more stay at home moms, more people working under the table because they don’t care about “qualifying” for social programs). This amplifies my point even more.

Devin:
The World Economic Forum has a pro-welfare state agenda. For you to quote them means as much as me using Bill O’Reilly or Rush Limbaugh as a source.

- Prime Ministerial powers that mimic Presidential powers
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Prime Ministers in many respects already are more powerful than presidemts. Try voting against your party in a parliamentary system and see what happens.

I disagree that Prime Ministerial powers are not more powerful than U.S. Presidents. Think about it — the election of President stands in for the election of the entire executive branch of government, since the President then appoints his entire unelected cabinet. The divison between legislation and executive branches is also used to justify ‘executive privilege’, i.e. the right for cabinet members not to testify before committees, etc. Presidents are commander-in-chiefs, which means they make important military decisions. Presidents can also veto legislation that is passed by Congress. Put in perspective, a PM’s powers are not as great as they may seem.

Party discipline is a different matter, I think – and not especially related to the PM’s powers. It’s more about the effectiveness in a parliamentary system. It has both its positive and negative side, for sure. If a vote is whipped, certainly limits a representative’s ability to vote his or her conscience on an issue. But, party discipline also mitigates the massive lobbying that goes on in DC on every vote. I think more free votes is a good thing, but on matters central to the platform of the government, it is reasonable to expect members to vote with the government.

“GDP per capita may be taken as a rough proxy for degree of entrepreneurship.”

Actually, GDP per capita is not a proxy for entrepreneurship at all. An entrepreneur is “a person who undertakes and operates a new enterprise or venture, and assumes some accountability for the inherent risks.” (wiki) This is different from general business activity. In effect, it is a specialized kind of business activity.

GDP-per-capita simply takes the entire value of goods and services produced in a country and divides by the number of people. It says nothing about how those goods and services are generated. So, its a mistake to equate overall wealth generated with entrepreneurial activity.

An entrepreneurial economy typically is driven by more small and medium sized business — that is, many individuals who have taken control of their own destiny and are their own boss — rather than fewer, large corporations that generate most of the wealth (which results in fewer bosses and more employees).

An entrepreneurical economy empowers individuals to pursue their own business interests. To that end, having the basic necessities to flourish (security, health, education, etc) is a necessity of empowering individuals. If you view things like subsidized child care spaces as simply ‘welfare’, then you misconstrue its goal: to empower those who want it to be able to return to the workforce or go back to school. It’s one thing to lament programs that don’t empower people or generate social or economic benefits beyond their actual costs (and we should undertake reforms to ensure gov’t spending does generate benefits), but its quite another — and incorrect — to lament programs that are necessary to provide opportunities for individual success – things like education, health, child care, etc. Economic and social studies both confirm that state involvement in education, health, child care, etc. do generate social and economic benefits beyond their actual costs. In other words, they are good investments – and that should be the measure of whether to use public dollars or not.

Also, if you look at Scandinavian countries — which I would gather you view negatively since they are welfare states par excellence — generous maternity leaves allow parents to take significant time off, still get compensated, and without risk of losing their job. Thus, a small public investment can allow parents to stay at home with their kids, which from a social perspective is surely a good thing, no?

The point here is that we need to look at government spending carefully – and weed out ineffective hand-outs that don’t generate social or economic benefits, from ones that are vital to empowering individuals to pursue their own interests. A common mistake people make is to paint all public spending with the same brush because some programs are ineffective. Let’s fix the problematic programs instead of throwing out the baby with the bath water.

Dear Democratic Space:
This is in regards to your response about Prime Ministerial versus Presidential power. First of all, I must say that all in all you wrote a good article. I agree with some of your points more than others, but regardless of whether I agree with the various details, I think it was a good article, I only take particular exception to the fact that you claim that the president has more power than the Prime Minister. I understand that party discipline is an issue in and of itself, but I do not think it is totally unrelated either. You illustrate that there are pro and cons to the issue of party discipline, but by the same token, I believe we would thus have to admit that presidential powers (or Prime Ministerial powers if you will) also has pro and cons. While on the surface it appears that a president has more power than a Prime Minister, I do not believe that this is the case in reality. Yes it is true that the President has veto power, but a veto can still (albeit with a super majority) be overturned. Furthermore, a President cannot write bills. Sure he can make a powerful State of the Union speeches, but he is at the mercy of Congress which does not have to be controlled by the same political party of the President. While it is true that the President can hire and fire cabinet members (as well as various judges and Ambassadors) they still need to receive the support of the Senate to receive anything more than a recess appointment. In a Presidential system, cabinet members cannot vote on bills. Meanwhile, in a parliamentary system, cabinet minister can vote, but must vote with the Prime Minister to keep their jobs. While it is true that some Prime Ministers have to deal with a minority parliaments, that is more a function of a multi-party system versus a Bi-Party system rather than that of Prime Ministerial power. While, at the present time the President of the United States shares party affiliation with a majority of the Senators and House Representatives, this has not always been the case. Furthermore, many countries in the world with a presidential system have multi-party political system. I would also argue than even if a president’s political party controls congress, he (or she) is at the mercy of the whips and house leader to pass his agenda. I do not recall hearing the expression “lame Duck Prime Minister.” All in all Presidential systems (versus parliamentary systems) have pro and cons and Bi-Polar systems (versus multi-party systems) have pro and cons. Whether I agree with you on the details or not, I admire your efforts to promote democracy, but I have to respectfully disagree stronger on this particular detail.

democraticspace:
Fine – you don’t like GDP per capita as a proxy for measuring the relative levels of entrepreneurship in various nations. What objective measure of entrepreneurship do you propose? What easily obtainable statistic would be best?

You say
“Also, if you look at Scandinavian countries — which I would gather you view negatively since they are welfare states par excellence — generous maternity leaves allow parents to take significant time off, still get compensated, and without risk of losing their job. Thus, a small public investment can allow parents to stay at home with their kids, which from a social perspective is surely a good thing, no?”

Nations with generous maternity leave benefits have very low birth rates. Low birth rates weaken the nation relative to the rest of the world in the long run. Eliminate maternity leave benefits and use that same money as a baby bonus would be much more prudent public policy. But it would give the lefties a heart attack.

dave – there is virtually no difference in fertility rates between countries without generous maternity leave policies, like canada (1.61) and those with generous maternity leave policies, like sweden (1.66). low fertility is typical in all developed countries – it is a consequence of affluence, which is why most developed countries also promote immigration as a way to ensure the sustainability of their social programs. even in the u.s., among non-immigrant, the fertility rate is similar to canada’s (the high fertility of low-income immigrants pushes overall u.s. fertility to around 2.1).

as to the use of a baby bonus to encourage having kids, the evidence from quebec doesn’t support your claim that it is more prudent than maternity leave. in 1988, quebec introducted very generous baby bonuses in order to increase fertility. by 1997, the program was canceled, and called “a lamentable failure”. Quebec’s fertility rate did edge up (from 1.4 to 1.5), but so did the rest of Canada’s during that period, without the generous baby bonuses.

as for measuring entrepreneurship, there are many ways, though there is no consensus as yet. there are two schools of thought: look at individuals or look at business entities. some use the ratio of self-employed, or those owning their own businesses. others prefer to look at the change in work type – from paid to self-employed labor. there are also several index out there – kauffman, TEA, etc. others use the number of start-ups as a metric. check and the TEA and Kauffman indexes and see what you think.

The basic concept that US economic success has been based on some particular, unusual quality of its people is wrong in the first place.
US economic success has been based on the fact that, like Canada, it started as a large territory whose resources were largely unexploited, with lots of land that was free once we got rid of the people living there; like Canada, it also had the advantage of few and fairly safe borders. It became a superpower where Canada did not mainly because the US is generally temperate in climate whereas lots and lots of Canada is boreal or arctic, and from the beginning there were more settlements in what became the US. Because of this and probably some other factors, the US population was and remained much larger. GDP per capita between the two is close although the US is higher; in purchasing-power-parity terms, the median Canadian is slightly better off. It seems pretty likely that if Canada had instead ten times the population of the US, it would be Canada that was the superpower. It seems likely that if Japan, say, occupied half a continent full of resources that were never touched until 200 years ago, it would be Japan that was the great superpower.
This is “Guns, Germs and Steel” territory here–the major determinant is geography, not mystical properties of the Volk.
So while I’d say it’s true that US success has been in part despite its institutions, rather than because of them, the institutions were not failing to hold back the genius of the American people, they were failing to hold back the geographic advantages of the United States. At the moment I’d say those institutions are getting closer and closer to success in holding back those advantages. We’d do best not to try to follow suit.

democraticspace said:
“— generous maternity leaves allow parents to take significant time off, still get compensated, and without risk of losing their job. Thus, a small public investment can allow parents to stay at home with their kids, which from a social perspective is surely a good thing, no?”

Large corporations and large public employers have a large workforce to serve as a buffer and they can rotate/promote people within teams to cover for absences, while hiring termporarily at the entry level positions.

But I am a small business owner (7 workers) and these leave programs are very difficult to implement. We are a diversified business where each person is practically his/her own department. Yes, people are crossed trained to back each other up for holidays. In the end, we have seven people with significant training and experience. If one person leaves for an extended period, then the impact is tremendous and the new hire requires about 6 months to fully replace the absent person. By then, the absentee is back to work. So the cost to the business of these extended leaves is very high.

While I support leave with public compensation (maternity, paternity, illness, family care) there is no compensation for the impact on the small business and the programs actually hurt business. I sell this selfishly and still support the programs; I only wish that they were better adapted to small businesses.

Tom.

I personally view American public as being insensitive by their reaction -that can be characterised as inaction – to many a horror that the US has beein comitting on the mankind worldover.

Hiroshima-Nagasaki, Vietnam, Kambodia, Afghanistan, Iraq,… And still george Bushes get elected as presidents! The current Bush is such a shameless fellow who alleges god to have directed him to wage war on Iraq!

On one hand US is the most advanced country and its president – the most reactionary and the Americans -the most insensitive!