I’d like to share an excerpt from A Concise History of Business in Canada by Graham D. Taylor and Peter A. Baskerville. This passage appears at the beginning of Chapter 17, titled, â€œThe Incomplete Leviathanâ€. That chapter in turn, begins the fifth part of the book, called, â€œThe Age of the Activist State.â€ The passage below very much justifies those titles. It deserves to be read and then reread.
As earlier chapters have made clear, government intervention in the market economy was hardly a twentieth-century novelty in Canada or in other industrializing countries. Long before Confederation, governments were involved in schemes to encourage the development of canals and railways, promote industry, and attract foreign investment through direct subsidies, public loans, tariff duties and drawbacks, and patent laws. Governments at all levels have continued to play this promotional role through the present. Regulatory measures â€“ to restrict exploitation of child labour, prevent adulteration of food products and other commodities, and establish safety requirements in mines and factories â€“ were also in place by the late nineteenth century, although the means of enforcement often left something to be desired. There were even ventures into public enterprise, usually the result of failures on the part of private companies to complete projects deemed to be essential to the economy: most of the canals wound up in in government hands and the Intercolonial Railway linking the Maritimes to central Canada was undertaken by the federal government in the 1870s.
At the turn of the century, several new factors generated pressures for governments’ more systematically activist role in the economy. The emergence of large-scale enterprises and the integration of local and regional markets into a national system presented novel and unanticipated problems for public authorities. Farmers, owners of small businesses, industrial workers, and urban consumers clamoured for measures to protect their interests against the perceived economic power of big business. In times of economic hardship, governments were pressed to assume greater responsibilities for alleviating distress. The demands of modern warfare, peaking around the middle of the century, required an unprecedented degree of economic co-ordination of the nation’s resources. As the role of government expanded, public officials acquired increasing confidence in their ability to control the course of events, stimulating new interventionist initiatives. While business leaders continued to employ the rhetoric of laissez-faire liberalism, their enterprises were increasingly enmeshed in a web of governmental relationships, embracing public contracts, subsidy arrangements, regulatory agencies, and joint public/private undertakings.
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