The one-year anniversary of Jack Layton’s passing has inspired numerous memorials and tributes, making it clear the late federal NDP leader inspired affection.
But given the public fondness for Layton, it’s important to parse his proposed ideas, precisely because plenty of people still advocate similar policy.
However, good intentions (and Layton had that in spades) do not necessarily lead to good outcomes. They are never enough to create a country with peace, prosperity, order and good government.
So for those who desire a job-creating country of opportunity, where merit and not political connections get you ahead, and where families can prosper, Layton’s proposals would have been disastrous.
Many of Layton’s policy ideas were contained in his 2004 book, Speaking Out—Ideas That Work for Canadians. Space does not permit an analysis of each one. But in general, his positions—opposition to free trade, a preference for higher taxes, support for corporate welfare, and demands that public pensions be invested "locally"—result from the errant notion that without even more politically-directed decision-making, we would all live in a "unidimensional greed economy."
In that world, which he accused fiscal conservatives of favouring, nothing else would matter but money.
Nonsense. Arguments about whether the private sector or government should perform some task or deliver some service, and the cost of each, are debates over means. It’s not a tussle about desirable ends, i.e., a better country.
Layton often over-focused on the pleasant sounding means but ignored the actual results. Thus, he favoured subsidizing automakers (to "save" jobs) even though such government action picks corporate winners and creates losers among their competitors (and their employees). He liked the notion of "community decisions" which sounds nice but only means some small business is at the whim of the not-in-my-backyard crowd. The late NDP leader also wanted rent control. He didn’t see how that would kill the supply of new rental units.
Layton also complained much about globalization and free trade, arguing it gave too much influence to companies and not governments. But this too was wrongheaded. As long as regulations and laws apply to every company, domestic or foreign, friends of some political leader or not, no one company gets to obtain monopoly control.
And ironically, one benefit of freer trade for Canada and our companies is to ensure more consistent access to a large market like the United States.
Regrettably, there are exceptions even in existing ‘free’ trade agreements. But trade clashes such as softwood lumber or beef could multiply a thousand times without NAFTA. A protectionist White House and Congress could shut their border to everything Canadians sell—and nothing could be done about it. At least with even imperfect trade agreements, there is some expectation and also a process for resolving trade disputes. Layton’s position would have made Canada more vulnerable to protectionist American sentiment, not less.
The core of Layton’s mistake on matters economic and political was that he believed overmuch in the possibility of politicians and bureaucrats to direct the economy instead of letting consumers and businesses communicate their preferences directly.
But when more control over economic decisions is given to the same people who already have plenty of political and bureaucratic power over our lives (politicians and civil servants), the potential for corruption multiplies. That’s because, as Lord Acton once pointed out, power corrupts and absolute power corrupts absolutely.
When economic decisions are not based on merit, or on a sensible reading of what consumers want and need, but instead centrally directed with proximity to the levers of power, everyone else is locked out of the economy looking in.
This is exactly what happens in banana republics. There, more arbitrary power is taken by politicians that allows them to deny or approve this or that development or business operation, this as opposed to setting neutral laws and regulations in place that apply to all, domestic or foreign, a friend of the political class or not.
Such a tight political/bureaucratic/economic connection is exactly how the system works in Russia, Argentina, Venezuela, too many African countries, and a plethora of other broken and underperforming economies. The result is not more prosperity but less, not Switzerland but Sicily. It is especially harmful to those on the margins of society whose opportunities for good jobs and good incomes evaporate as a result.
Layton underestimated the dangerous nexus created when economic decisions are taken out of the hands of consumers and shareholders and placed in the hands of politicians and bureaucrats. His ideas would have made Canada and the world poorer, with the most vulnerable being the first to suffer.