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2013-10-28 The Politics of Economic Policy and the Structure of the Canadian Economy.docx

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Western University
Political Science
Political Science 2211E
Adam Harmes

The Politics of Economic Policy and the Structure of the Canadian Economy October 28, 2013 Today’s Topics 1. The Relationship Between Ideas and Interests 2. The Political Spectrum in Canada and the U.S. Neoliberalism Goals and Policies -Individual Freedom -Less Government -Lower Taxes -Less Social Spending -Fewer Regulations -both businesses and consumers -e.g. consumers should have the right to buy cigarettes and drink big sodas -Weaker Unions -Free Trade -Milton Friedman: Capitalism and Freedom Neoliberal Beliefs -Free Markets -More efficiently allocate resources -Stimulate innovation -Self-correct problems -Decentralize economic and political power -a lot more faith in free markets that benefit social outcomes -free markets stimulate innovation -competition drives innovation -supply and demand; market will automatically solve these problems – no need for government intervention -too few people control economylead to problems concerning individual freedom KW Goals and Policies -Efficiency and social justice -More government -Higher Taxes More Social Spending -More Regulations -Stronger Unions -Managed Trade 1 -in immigration issue: neoliberals would favour immigration because they advocate for freedom of movement and movement of labour -Keynesian welfare: less likely to favour immigration because if more people immigrate to U.S., they would take over jobs from union workers -e.g. urban planning: neoliberals advocate for freedom of building buildings anywhere -vs. interventionist Keynesian welfare: more planning, more interventions by government; restricted to building it in this specific area Explaining Causes of Problems Neoliberal -Individual responsibility -Government Intervention -Homelessness -Individual’s fault -Financial Crisis -Country’s fault -Solution is less government Keynesian-Welfare -System not individual -Market failures and inequality -Homelessness -Systemic causes -our market isn’t increasing jobs -Financial Crisis -Financial system -Solution is government intervention -e.g. did we deregulate financial market too much Ideas and Interests -Robert Cox: -“All theory is for someone for and for some purpose -Theories often rationalize interests of specific groups Ideas and Interests Neoliberal -Firms -Wealthier Individuals -support less regulation on businesses 2 Keynesian-Welfare -Unions -support pro-union laws -want more regulation -businesses don’t want stronger unions because they don’t want unions to demand for higher wages and benefits -SocialActivists -Environmentalists -small businesses in general are more in favour of neoliberal theory -but if you’re competing with other foreign competitors (due to subsidies from their government or lack of tariffs), you would want the government to protect you and your interests against those competitors Interests -More powerful groups prefer less rules as they have resources to take care of themselves -Less powerful groups prefer more rules to level the playing field -equality of outcomes, equality of opportunities Different Interests Focus on Different Problems Neoliberal -Focus on competitiveness and productivity to justify tax cuts -Focus on deficits and problems with social programs to justify cuts -e.g. talk about government spending more and more money -complain about having a deficit and not having a surplus Keynesian-Welfare -Focus on social problems to justify programs -e.g. issues such as homelessness and poverty -Focus on market failures to justify regulation -focus on failures that businesses make -e.g. Wall Street bankers and their spending habits, bailout, etc.
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