Social-Economic Goals and the Economic Council of Canada

Horowitz nicely points out, the Brokerage Theory is morally bankrupt, but since it is used by a coalition of political and economic elites in Canada, it employs immense "word power" against its opponents. Any attempt to bring class into Canadian politics threatens the brokers who manipulate Brokerage Politics. Any such attempt must come from the left. And so any attempt will be described in the general media as communist inspired, not because it might be, or because it Review Essay: SOCIAL-ECONOMIC GOALS AND THE ECONOMIC COUNCIL OF CANADA;:s, T.K. RYMES The Economic Council of Canada's Third Annual Review, Prices, Productivity, and Employment1 must be regarded, I think, as an intermediate Report which, so to speak, marks a breathing space between the Council's work on growth which was the prime concern of the Second, and which we are told will be the main concern of the Fourth Annual Review. It is impossible in the space of these brief remarks to take cognizance of the large number of points raised by the Council about the Canadian economy , its immediate future, and its relevant past. I propose to limit my remarks to two basic questions which come to mind upon reading the Review . First, the Council seems to have adopted an extremely unfortunate propensity to examine ex post facts as revealed to the Council by an admittedly imperfect data system and to assume that the relationships exhibited amongst such facts portray the causal relationships which have led to these results. The second major point is that the Council still seems to be unclear as to ~I am indebted to Professor N. H. Lithwick for a number of helpful discussions about the Council's work. 50 would make the slightest difference if it was, but because the word communism excites the right Pavlovian response in the electorate when no rational argument can be thought of. Does all that mean the parties in Canada are doomed to vapid talk about "issueless elections" and "coalitions of all social forces?" Does it mean that the left is doomed in Canada? By no means. Neither Professor Horowitz nor I think so, at any rate. the nature of its responsibilities. In this latter respect, the Council has yet, in my view, to indicate clearly different mixtures of the possible goals of full employment, price stability, economic growth, balance of payments equilibrium, and a reasonable distribution of regional income. By that I do not mean that the Council has not, as a result of its analysis, attempted to argue that the outcome of private and government decisionmaking in the Canadian economy will lead should or could lead - to certain levels of unemployment , certain rates of growth, certain balance of payments and balance of trade positions , etc. What I do mean is that the Council has not yet presented us with different combinations of these goals in such a way that the participants in the public debate about economic affairs can assess, of course with the help of research by the Council and other bodies, the benefits to be derived as compared to the cost of the different possible. combinations of goals, and then, through the customary democratic processes, make a particular choice amongst one or a mixture of such combinations. The Council has begun in this Review to present us with the possibility that there may be conflict amongst the social goals in which Canadians seem to be primarily interested, and that there may be costs involved in reducing such conflicts; but it has not yet begun to investigate the required number of policies which are necessary for the simultaneous achievement of any particular combination of Revue d'etudes canadiennes goals, and the optimum way in which these instruments or policy variables may be combined. On these criticisms I shall elaborate further in these notes. It has been long recognized that one of the problems which confronts a market economy in which the government takes responsibility for the maintenance of full employment is that the achievement of a full employment level of activity may incur the cost of a general upward movement of prices. When the government sets its monetary and fiscal policies so that...