It could be worse, Stephen Harper could really be an economist

Special to The Globe and Mail

A bust of Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three U.S. presidents, sits on display at Stanford University in California on Nov. 16, 2006. (PAUL SAKUMA/AP)

Except for a few who addressed me as Her Majesty, last week's column, " If Stephen Harper's an Economist, I'm The Queen of Sheba," found considerable agreement. I've been moved to look deeper into the strange, powerful mystique that surrounds economics and economists.

I have now concluded that's it's hard to know what's more terrifying: that Stephen Harper claims he's an economist - sorry, a trained economist - or that he might actually be an economist. The first merely leads to a crisis of his credibility. The second leads to a crisis for our economic future. Imagine the future of Canada in the hands of today's mainstream economists. The mind boggles.

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Imagine a so-called scientific discipline based on the proposition that humans invariably act on the basis of rational calculation and complete knowledge. This is not science; it's blind, irrational faith.

Imagine promoting an economic system that busts as often as it booms and that always leaves an abundance of losers in its wake.

Imagine belonging to that fraternity of maven who are responsible for the economic and financial meltdown of the past two years.

Imagine that your "science" proffers wrong answers as often as right ones. Imagine that you make weather forecasters look prescient.

Imagine insisting that in return for much-needed loans, poor countries must agree to exactly the same kind of reckless de-regulation that enabled Wall Street to trigger the global economic meltdown.

I guess the best definition of an economist is someone with a PhD in economics, but really that's crudely simplistic. The accumulated wisdom of mainstream economics is now divided into many, many sub-disciplines and branches, so that specializing in one can leave you entirely ignorant of all the others - a very lucky thing, some may well think. You have your micro-economics, macro-economics, mathematical economics, non-mathematical economics, econometrics, and the latest school, me-economics, which specializes in techniques to undermine the economy while making yourself rich beyond the dreams of avarice. Graduates earn an ME.

You might say that an ordinary economist is someone who guesses wrong about the economy while an econometrician uses computers to guess wrong about the economy. A comparable dynamic distinguishes micro- and macro-economists. The first are wrong about specific things, the second about everything.

Lucky for us, our Prime Minister is not an economist like any of the above. Like thousands of other Canadians, he has an MA in economics. But seriously, who doesn't? What Stephen Harper can say is that a couple of decades ago he studied some economics. But of course a little economics can be worse than none at all.

Here's the problem: Besides the various branches, there are different schools within the study of economics, some less extreme in their embrace of the magic of the market than others. As it happens, Stephen Harper emerged from the Calgary School, inspired by the Chicago School and its saint, Milton Friedman. In this sect, ideology trumps evidence every time and delusional fantasies about capitalism are treated as axioms.

One of Prof. Friedman's laws, for example, goes as follows: "Few trends so thoroughly undermine free society as the acceptance by corporate officials of any responsibly other than to make as much money for their stakeholders a possible." This natural law has been enthusiastically embraced by the world's corporations, including, for example, the many Canadian mining companies operating in poor countries.

Mr. Harper was a zealous student who graduated as a true believer. He swiftly took his new faith to places where reality was whatever the organization needed it to be - the Reform Party, the National Citizen's Coalition, the new Conservative Party of Canada, and, of course, the Government of Canada. After much peer-reviewed analysis, I have now concluded that Stephen Harper's immersion in faith-based economics explains a great deal about the past four years of Conservative rule. In no other way can we account, for example, for the Great Census Debacle.

To take another interesting example: Despite (because of?) his particular training, Stephen Harper completely failed to notice the present recession until it was heavy upon us. "My own belief," he announced confidently in the fall of 2008, "is if we were going to have some sort of big crash or recession, we probably would have had it by now. "

Only days later he thoughtfully advised Canadians growing heartsick over the ramifications of the worst recession since the 1930s, "I think there's probably some great buying opportunities emerging in the stock market as a consequence of all this panic." Gordon Gekko couldn't have put it better.

Our trained-economist PM was on a real roll. He unleashed his Finance Minister to launch an extended war on Dalton McGuinty's Ontario, warning investors it was "the last place to go" if you want to invest. Hell, why not sabotage the entire Canadian economy for political ends? As the Harper-friendly National Post gently noted at the time, "Even economists who agree that Ontario should lower its business taxes question whether Jim Flaherty may be doing more harm than good by publicly … trashing the province as the 'last place' investors should put their money." Those "wondering" economists - they don't miss much.

Mr. Harper, brandishing his credentials, insists Canada is largely out of the recession he once insisted it wasn't in. Like his beloved role models, the American Republicans, he promises anxious Canadians a splendid fantasy: a balanced budget, no cuts to services, no tax increases for anyone and indeed tax cuts for rich corporations. Here is the true mark of the real economist, with blind faith and miracles replacing reality. If Rob Ford can do it…

But Rob Ford can't. Preparing the way for the real conservative agenda in the United States, Canada, Toronto and elsewhere, the British government is ferociously slashing services and benefits for those most victimized by the economic crisis while those who caused it continue to reap incomprehensibly vast rewards.

The government is ending measures to stimulate a slowing economy, although as 300 American economists stated earlier this month, "History suggests that a tenuous recovery is no time to practice austerity." How these 300 escaped their training is very suspicious. We in Canada have our own band of untamed rebels, led by the remarkable Hugh Mackenzie, Armine Yalnizyan and Jim Stanford, who are not advisers to the government.

Who needs research, evidence, empirical analysis? All are seen as bothersome distractions Stephen Harper's Ottawa. That's why the scientists who work for government agencies on critical issues of water and air quality, or toy safety, or food safety, or travel safety, are consistently ignored in favour of "research" done by private-sector interests on their own sector.

That's why the government so blithely spends billions on dubious fighter planes, prisons, summits and the like (and I naively thought Conservatives loathed wasteful governments), goes ahead with billions in corporate tax cuts, and promises to balance the budget. One more Harper re-election, and there goes services and benefits.

Can a government that has forfeited all claims to credibility actually sell itself as the best economic managers for Canada? Can Canadians really be so forgetful, so credulous, so gullible? Is Rob Ford just the beginning?

Gerry Caplan has a PhD in African history but is uncertain about whether he is a historian