Biting the (invisible) hand that feeds us
by Robert Fulford

(The National Post, 12 April 2008)

Friedrich von Hayek, the great Austrian economist who wrote The Road to Serfdom and won the Nobel Prize in 1974, never expressed any interest in Canada. In my view, however, he understood us better than we understand ourselves. Had we consulted his work, he could have told us why Canadians show an aversion to business even as we depend on it.

For generations, Canadians have regarded free enterprise as a necessary evil at best. In private, we may regard it as a positive good, but just about no one outside the business world takes that position in public. This seems to me a fundamental mistake. It distorts the operation of governments, the use of tax powers, the treatment of disadvantaged regions and much more.

Capitalism creates most of our jobs and we would all be desperately poor without the entrepreneurs who keep the economy alive and the financiers who invest in our corporations. But that's no reason, as Canadians see it, to look upon business with anything but suspicion.

Of course, only a few Canadians will declare themselves anti-business, and an even smaller minority will argue for replacing free enterprise with a command economy directed by bureaucrats and politicians. But we tolerate business rather than admiring it.

We do not rejoice in the successes of the business class. We applaud them not for what they do best, building the corporations that make us relatively rich, but for what we see as commendable activities, the donation of money to hospitals, universities and other good causes.

We believe passionately that we must control business and we act as if business will flourish no matter how much we burden it with regulations -- or how much we tax it. In the Canadian view, business exists to be taxed. We assume it is a cow we can milk forever. Business will always be there, will always succeed and therefore will always be available to provide us with jobs and money for whatever social purposes we decide.

Friedrich von Hayek explained much of this, most eloquently in a little book he wrote late in life, The Fatal Conceit. It comes down to an issue of pride. He argued that while socialism flatters intellectual pride, capitalism insults it. Socialism requires complicated thought but capitalism seems to function according to its own evolved rules without direction from bureaucrats and without high-level planning. The "fatal conceit" in Hayek's title is the belief that "man is able to shape the world around him according to his wishes."

People in government who pride themselves on being expert in "public policy" love to organize social institutions according to the best theories. They have an idea of how things should work. When the world works otherwise, the public-policy bureaucrats feel intense disappointment.

Aside from encouraging the thicket of regulation that surrounds every kind of enterprise, our antibusiness cynicism undercuts the possibility of thinking seriously about society and has a demoralizing effect on our national spirit. We are all in business, or dependent on business, yet we regard the business world as in many ways alien, a place of unbridled greed. In a sense, we dislike ourselves, and for no reason except an outdated ideology.

Deirdre McCloskey, in her book The Bourgeois Virtues: Ethics for an Age of Commerce, says we must somehow "regain a virtuous respect for who we are." She claims that capitalism (and only capitalism) gives people the time and resources that make intellectual and moral growth possible. Wealth gives us the chance to develop our finer feelings; to cultivate friendships and families, to fall in love, to enlarge our knowledge of the world. Seen that way, capitalism is the least oppressive system invented so far.

Few of our politicians, over the last three generations, have ever had much that was good to say about business. The chief political hero of the late 20th century, Pierre Trudeau, never uttered one kind word about business, so far as I recall -- and nobody thought that odd. His father's business made Trudeau personally rich and business generated vast fortunes for Ottawa to spend. This contradiction never interested Trudeau. He was exceptional in many ways but in his attitude to business he was a typical Canadian.

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