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  • Betting on Bitumen: Alberta's energy policies from Lougheed to Klein June 8, 2017
    The role of government in Alberta, both involvement and funding, has been critical in ensuring that more than narrow corporate interests were served in the development of the province’s bitumen resources.  A new report contrasts the approaches taken by two former premiers during the industry’s early development and rapid expansion periods.  The Lougheed government invested […]
    Canadian Centre for Policy Alternatives
  • Canada-China FTA will leave workers worse off June 2, 2017
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    Canadian Centre for Policy Alternatives
  • Faulty assumptions about pipelines and tidewater access May 30, 2017
    The federal and Alberta governments and the oil industry argue that pipelines to tidewater will unlock new markets where Canadian oil can command a better price than in the US, where the majority of Canadian oil is currently exported. Both governments have approved Kinder Morgan's Trans Mountain Expansion Project, but a new report finds that […]
    Canadian Centre for Policy Alternatives
  • Weathering the storm: is this the end of CRA’s political activities audits? May 5, 2017
    Yesterday, following a panel’s recommendation to allow charities more freedom to speak out, the federal government decided to suspend the Canada Revenue Agency’s controversial political activities audit program. Indeed this is good news for Canadian charities. Everyone at the CCPA is proud of the role our organization has played in challenging these audits and in […]
    Canadian Centre for Policy Alternatives
  • Unauthorized dams built in BC's northeast for energy companies' fracking May 3, 2017
    A subsidiary of Malaysian state-owned Petronas, the company behind a massive Liquefied Natural Gas plant proposal near Prince Rupert, has built at least 16 large unauthorized dams in northeast BC to trap water used for fracking operations, the Canadian Centre for Policy Alternatives has learned. Read the report.
    Canadian Centre for Policy Alternatives
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Adam Smith did not wear an Adam Smith necktie

OK, so this is not about the Canadian economy. But I woke up this morning with that phrase about Adam Smith ties in my head and had to track it down – the Adam Smith tie being the burkha of free market fundamentalists, and as a result, a fitting gift to guest speakers at Fraser Institute functions.

The quote comes from an economist named Herbert Stein, a former Chair of the President’s Council of Economic Advisors in the Nixon administration, writing in the Wall Street Journal, April 6, 1994, who reflects on what Adam Smith, way back in 1776, actually said in The Wealth of Nations:

[T]he people who wear the Adam Smith tie are not doing so to honorliterary genius. They are doing so to make a statement of their devotion to the idea of free markets and limited government. What stands out in WofN, however, is that their patron saint was not pure or doctrinaireabout this idea. He viewed government intervention in the market with great skepticism. He regarded his exposition of the virtues of the free market as his main contribution to policy, and the purpose for which his
economic analysis was developed.

Yet he was prepared to accept or propose qualifications to that policy in the specific cases where he judged that their net effect would be beneficial and would not undermine the basically free character of the system. He did not wear the Adam Smith necktie.

These cases were numerous, and some of them are surprising. I give here a list, certainly incomplete, largely derived from Viner’s article on Smith written for the sesquicentennial of the WofN. (The parentheses are mine.)

The government could legitimately do the following:

— Protect the merchant marine and give bounties to defense-related manufacturing industries.

— Impose tariffs on imports in order to bargain for reduction of tariffs by other countries.

— Punish, and take steps to prevent, dishonesty, violence and fraud. (Does this include the SEC, and would prevention of violence justify measures to assist ghetto youth?)

— Establish indicators of quality of goods, such as the sterling mark for silver. (Does this justify the Food and Drug Administration, the Federal Trade Commission and the Consumer Product Safety Commission?)

— Require employers to pay wages in cash rather than in kind. (Could the government conversely require employers to pay part of wages in the form of health benefits?)

— Regulate banking.

— Provide public goods, such as highways, harbors, bridges and canals. (What about railways, airlines?)

— Run the post office. (Also telephone, the information highway?)

— Grant patents and copyrights.

— Give a temporary monopoly to a trading company developing commerce in new and risky regions. (Is this industrial policy, managed trade?)

— Require children to have a certain level of education.

— Provide protection against communicable diseases.

— Require the streets to be kept clean. (Environmentalism?)

— Set a ceiling on interest rates.

— Impose discriminatory taxation to deter improper or luxurious behavior.

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