A Free Market Libertarian History of Canada? George Woodcock’s failed effort, at 30.

In stark contrast to that all-too-Canadian tradition of Canadian–focused scholarship being funded by the Canadian state, through various government subsidy programs, I am attempting to execute a free market approach to funding my efforts at writing a free market libertarian history of Canada. If you’re interested in learning more about this initiative and, bless you, sponsoring my efforts, please have a look at the relevant page on my website: http://michaelmcconkey.com/libertarian_history.html

My aspiration in writing such a book is to use Rothbard’s approach in his histories as something of a template: i.e., focusing both upon bringing a free market libertarian eye to the analysis of Canadian history as well as bringing to light and exploring the contributions to libertarianism by Canadians. Canadians have actually played important roles in the libertarian movement. For some interesting examples, see the prospectus for this project available from the website page cited above. (Anything to get you to the pledge page!) An example of what I mean by applying a libertarian eye to Canadian history is provided below.

Part of what inspired me to this project was the recognition that – as far as I can tell – there just is no such thing. (Anyone who is familiar with a libertarian free market history of Canada – however old it may be – please bring it to my attention; I suspect there may be something pre-WWI.) In my efforts to try and identify such an approach, the best I could come up with was George Woodcock’s Confederation Betrayed: the Case against Trudeau’s Canada. It was published in 1981, at the height of the constitutional repatriation quagmire, and was very much a document of its time. Still, as part of his project of criticizing Trudeau’s vision, Woodcock was very concerned to put events into historical context. So, while on the face of it the book was a contemporary polemic, it very much involved a reading of history. I bought the book within the first few years of its publication. I don’t recall what I made of it then, but was quite interested to see what I’d think of it now – at its 30 year anniversary. I was also surprised to discover I still have the original copy I’d bought back then.

Woodcock did over the years call himself a libertarian and an anarchist, but I have no illusions about this. I knew he was very much in the anti-capitalist, George Orwell, stick-up-for-the-little-guy, kind of anarchism. He was perhaps more along the lines of the rather odd phrase commonly used, “libertarian socialist.” So, as I took up the book, my expectations weren’t too high. Still, even at that, upon rereading the book, I was shocked to see the sentences coming from the pen of a purported anarchist – of any kind.

The gist of Woodcock’s argument in the book is that the central Canadian merchant-banker-state elite managed to get a highly centralizing constitution passed in the form of the British North American Act, in 1867. However, for reasons logical, legal, and customary, the provinces had long been able to resist this centralist tendency – often with the help of the Judicial Committee of the British Privy Council, which, prior to repatriation of the constitution, was the final court for Canadians and tended to support provincial autonomy. Woodcock, though, saw Trudeau’s manoeuvres of the early 1980s as efforts to re-assert the centralized dominance of the BNA and undermine provincial autonomy. This leaves him in the position of defending state sovereignty at the provincial level. This is an approach which I’ve always found strange among libertarians. Of course, there is benefit in units that allow people to vote with their feet, but there’s a paradox in that the less sovereignty the local units have the less relevant the feet-voting is – yet the more sovereignty they have less the less opportunity there can be for feet-voting. But I digress.

So, this approach was already a bit off-putting for me to see from Canada’s most famous anarchist. But, as one gets deeper into the book, the problems become much more serious. The bottom line of it all is that Woodcock has no serious economic analysis – at all. He certainly doesn’t understand or have any analytical appreciation of market dynamics. Instead, when he does talk about economics, he lapses into the warmed over tepid stew of Keynesianism and Canadian economic nationalism that were all the rage in the 1970s. He refers disapprovingly to “foreign interests”, “branch plants” and “American monopoly capitalism.” Indeed, one might think at this point they were reading one of those Canadian classics from the 70s: Kari Polanyi Levitt’s Silent Surrender; Teeple’s Capitalism and the National Question in Canada; or Ian Lumsden’s delightfully named, Close the 49th Parallel. Such evocative titles! This kind of thinking was certainly prevalent at the time Woodcock wrote Confederation Betrayed, but I would have expected something more from a self-identified libertarian anarchist. While the book is rampant with this kind of thing, I’ll focus here just on the chapter dealing with the National Policy of 1879.

For those who don’t know their Canadian history, in the late 1870s the Canadian state constructed a set of policies that created a specific synergy. Overall, this approach came to be known as the National Policy. There were three main planks at work: very high tariffs on industrially produced goods; an aggressive settlement program in the prairies to get a wheat industry booming; and transportation infrastructure – primarily railways – between the prairies and the industrial centres in the lower Great Lake and St. Lawrence River area. The high tariffs did – and if you read the parliamentary debates of the time, clearly were intended to – force U.S. manufactures to set up branch plants in the industrial heartland of the country. This created a situation where a “national” economy could be created by shipping wheat from the prairies to the more populated centre and industrial goods from the lower Great Lakes and the St. Lawrence out to the prairies. Some Canadian scholars heralded this brilliant strategy as a heroic achievement in nation-building. Some more cynical scholars, such as R.T. Naylor, in his two volume work, History of Canadian Business, shows that Canadian capital formation was almost entirely in the mercantile and banking sector. And these were the same people, acting through the various Canadian and pre-BNA governments, who put together both confederation and the National Policy. What they were doing was some clever rent-seeking work, creating an economy off of which they could prosper without any need for risky industrial or agricultural investment. In fact, a serious free market libertarian history of Canada would likely be forced to conclude that the very creation of political Canada (beginning with the, 1840-41, Act of Union) was nothing more than a by-product of a delirious and shameless rent-seeking frenzy.

In any event, this is an interesting story, which our libertarian history of Canada will provide the opportunity to explore in much more detail. Woodcock’s treatment, though, as I’ve suggested above, was dismaying. Now, he is correct in observing that the National Policy was a form of exploitation of the West by the Centre – tariffs always serve exploitation purposes for somebody. Yet, he doesn’t seem to lament the state’s facilitation of selfish rent-seeking activity so much as the biased application of that activity. So, while he is correct in condemning the arrangement that forced Western wheat farmers to buy agricultural implements and machinery from central Canadian industrial producers that was inflated in price, often of inferior quality and could only be shipped at exorbitant rail costs, he doesn’t draw the logical libertarian lesson from this: simply, the tariffs should have been removed so that the Western farmers could trade with geographically closer U.S. industrial centres, if they got better offers there. Instead, Woodcock complains that the West wasn’t industrialized through interventionist state policy. As a more recent example of this kind of thing, he cites the ship building industry in his (and my) province of residence, British Columbia. He goes on at great length about what a spur to the economy of British Columbia was WWII, as the federal government invested in B.C. ship building and all its ancillary spin off industries. Great, heady days in lotus land thanks to the multiplier effect of war! Anyone versed in Austrian economics understands the silliness of this “war saves the economy” argument. If that’s all it took to save the economy, then every depression we should just build a bunch of battle ships, take them out into the middle of the ocean and sink them.

Woodcock, for all his cynicism about the self-interest of the mercantile capitalists seems strangely oblivious to the fact that while a small group of industrialists get rich from war and some workers increase their employment, WWII was a time of terrible rationing and hardship. It was hardly the high life. Resources that should be used to meet human needs and desires were redirected to the killing machinery. And, of course, all this was financed with taxes – the property of productive people expropriated by the state! It seems odd that a libertarian anarchist wouldn’t recognize this. Odder still was that he bitterly laments the federal Canadian government’s withdrawal of “investment” from the B.C. shipping industry. After telling the sad story of this disinvestment, he comments (presumably with intended irony):

An extraordinary situation developed, in which Canada, one of the great exporting countries in the world, sent out its wheat and other products and received its imports almost entirely in vessels flying foreign flags. Vancouver has one of the most splendid harbours in the world, and in any other country it would be sending its own registered vessels to every part of the oceans. But visit Vancouver’s deepsea wharves, its grain elevators along the waterfront, the docking facilities of its oil refineries, and you will rarely see a shop that does not bear on its stern the name of some foreign port of origin. (93)

You see what I mean about the 70s-style economic nationalism? Such economic nationalism, of course, when it comes right down to it, is simply a leftish version of mercantilism. I don’t claim to know the economics of the situation described here, but I’m guessing that the reason that Canadian wheat and oil merchants used foreign ships was that it was less expensive than the ships that could have been produced on the market in B.C. And that would have been the reason that no B.C. entrepreneurs were interested in investing their own money into building all the ships so coveted by Woodcock, in British Columbia. Instead, he argues that the Canadian state is supposed to expropriate people’s property as taxes to fund a ship building industry in B.C. to provide shipping services, which apparently were readily available at acceptable cost to the relevant merchants, on the open market. Again, this is a strangely statist, interventionist argument for a self-declared libertarian anarchist.

He continues this line of argument on the next page: “Why have successive federal governments failed to take the simple measures – such as transportation clauses attached to wheat sales agreements – that would have ensured Canadian-produced goods being carried to a substantial extent in Canadian-produced ships?”(94) Maybe because that would have been an inappropriate intervention in the economy and actually would have cost the Canadian merchants money, paying for excessive transport costs. Woodcock, I repeat, is correct insofar as his point is that there has been a double standard. Throughout the history of Canada the merchant-banker-state complex of central Canada has pursued policy that serviced that region at the expense of the rest of the country: the National Policy of 1879 raised the cost of industrial goods to the west; the National Energy Program of 1980 had the feds superseding their constitutional authority to extract sub-market priced oil from the West. These are historical facts about the history of the country. The remedy, though, surely was not to expand still further the central (whoops, I mean federal) state’s intervention, but rather to roll it back.

It is strange for a self-identified libertarian anarchist to not see that. In any event, a reading of the book reveals this kind of thinking runs throughout. Woodcock may have provided us one of the more interesting critical revisionist histories of Canada, but it is nowhere close to being a libertarian history of Canada. That projects remains to be done.

 

George Woodcock (1981). Confederation Betrayed: The Case against Trudeau’s Canada (Maderia Park, B.C.: Harbour Publishing).

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3 Responses to “A Free Market Libertarian History of Canada? George Woodcock’s failed effort, at 30.”

  1. I certainly do not have enough good writing, with an Austrian Economics analysis of Canadian history to draw from when I feel the need to beat Canadians over the head with. I pretty much always have to draw on examples looking at the United States. I'd support this work in any way I could – including tossing a few bucks into it.

    You have my support Michael.

    Andre Lalonde in Ontario.

    Cheers!

  2. mstob says:

    Fantastic!

    I look very much forward to any such attempt at thinking Canadian history.

    You mention Teeple's Capitalism and the Canadian Question. I am reading that right now and can recommend the first two essays as far as that book goes. Yes, I cannot agree with all the claims of the authors but it is well worth the information.

  3. Walter Foddis says:

    Best of success, Michael! Very much looking forward to your completed work.

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