Stalled. Michael Hlinka
that self-interest drives principle?
When I was younger and far more naive, I believed that most individuals figured out (by whatever framework made the most sense to them — religious, secular humanist, whatever) what was “right” and what was “wrong,” and then this was the North Star that guided behaviour. But as I’ve become older, I increasingly believe that what most of us (you can pretty much read everyone) do is figure out what serves our self-interest (subject to bounded rationality), and then construct the belief system that best supports it after the fact.
I think — and I’m certain you do as well — that slavery is singularly immoral (we’ll return to this topic and the why of it later on). But I’m equally certain that previous generations reasoned that it was perfectly moral, largely because they believed it made their lives better, and came up with the necessary rationalizations to justify it.
QUESTION 5
Do you agree that self-interest drives principle?
☐ Yes.
☐ No.
QUESTION 6
Do you think that Canadian society should be understood as a collection of individuals, rather than a collection of groups?
☐ Yes.
☐ No.
QUESTION 7
Do you think that people should be held accountable for the choices they make?
The city I live in, Toronto, just went through a tumultuous period. Its then-mayor, Rob Ford, caused a great deal of controversy because he allegedly smoked crack cocaine. His defence seemed to be: first, you can’t really prove it was crack cocaine, now can you? And even if it was — I was so badly intoxicated that I didn’t know what I was doing, so I can’t be blamed.
Okay. But he made the choice to drink that much in the first place. An adult should realize that if sufficient quantities of alcohol are consumed, judgment is impaired. Therefore, even if we allow that smoking crack was an unforeseen consequence of alcohol abuse, it doesn’t stand as a valid defence.
On the other hand, one may well think that greater forces explain what we do and, if so, it would be unfair to hold individuals responsible for what they cannot control.
Do you believe in free will or not?
QUESTION 7
Do you think that people should be held accountable for the choices they make?
☐ Yes.
☐ No.
Time for full disclosure: I agree with all of those statements. Wait, let me take that back. I strongly agree with all of those statements. And everything that follows in Stalled will flow out of them as purely and, I hope, forcefully as a mountain stream fed by melting snow in the springtime.
If you don’t see the world this way (anything under five out of seven is a red flag), then do yourself a favour: put the book down right now. Let me quote Salt-N-Pepa: “This dance ain’t for everybody. Only the sexy people.”2
On the other hand, if you agreed with at least five out of seven, then fasten your seat belt and enjoy the ride!
Just one last thing: this book is going to be very anecdotal. Once you get into it, you’ll see that there is no shortage of research. But how we see the world is coloured to a great extent by significant events and single moments. Most of the anecdotes I’m going to relate can’t be “proven.” In some cases, they come from conversations I had years before. And I suspect that at least a couple of them may seem unbelievable to you because that’s how they seem to me, even today.
Skeptics may think I made them up. Critics may accuse me of being a “liar, liar, pants on fire” and I can’t defend myself except to say that at least a few of the anecdotes that can be proven are equally unbelievable as the ones that can’t.
Here’s how Stalled is organized.
Part One is a primer in neo-classical growth theory. This school of thought dominates contemporary thinking when it comes to explaining what causes economies to grow over time. Following the primer, I’m going to provide my unique addendum to neo-classical growth theory, because it seems to me that there is a missing link, as it were, in the economic growth evolutionary chain.
With the theoretical framework established, we move on to Part Two. It is divided into five main chapters that deal with the decades of the 1950s, 1960s, 1970s, 1980s, and 1990s. Each of these is followed by a shorter chapter that provides a little more detail about an important topic or idea touched on in the chapter.
My thesis — as I’ve already alluded to — is that over these fifty years Canadians of my generation enjoyed something unprecedented in human history: a half-century when the average citizen enjoyed a gigantic improvement in his or her standard of living.
I’ll be the first to admit that some arbitrary distinctions will be made along the way. Things develop over time. The crisp categorizations I’m making serve the goals of simplicity and clarity. I will be taking a bit of poetic licence (but just a bit) with timelines, et cetera. The purpose is to serve the narrative and to keep our eyes firmly fixed on what this book is about, and that’s an explanation of the swift economic ascent that followed the Second World War and of the flatlining we’re now experiencing.
Part Three covers the period from the year 2000 to the present day.
Part Four offers a set of very specific recommendations to jump-start a Canadian economy that I believe has stalled.
Part One
What Is Supposed to Make an Economy Grow?
If you were born in Canada in the 1950s — as I was — you pretty much took it for granted that life would always get better.
I was raised in Etobicoke, a western suburb of Toronto. When I was very young, our family bought a window air conditioner. We were one of the first families on the block to have one. Within a few years, who didn’t? About a decade after that, we had central air conditioning installed — an astonishing luxury that soon became commonplace.
Progress could be measured in an even more tangible way. In the 1950s, the average North American home measured less than 1,000 square feet. That increased to 1,200 square feet by the 1960s, 1,800 by the 1980s, and 2,400 by the year 2000.1 And as the houses were getting bigger, the average family was getting smaller — the best of all worlds! Quality of life was improving.
This wasn’t always the case in the human experience. The Dark Ages, a period spanning the fifth century A.D. to the fifteenth century A.D., was termed such because there was little improvement (if any) in the lives of average citizens. Since then, economic growth has been uneven, but for most citizens in the developed world life has improved immeasurably. This was particularly true in the half-century following the end of Second World War.
Because our DNA requires a framework within which to understand what we observe empirically, we’ve come up with theories to explain economic growth, in particular what has lifted the standard of living of those in the developed world. The Cobb-Douglas production function is central to “growth accounting” and the neo-classical framework. The phrase itself implies that there’s a way to quantify (or account for) economic growth. Some of the mathematical functions operate at a high level, but I’m far less interested in the fine details than I am with the broad brush strokes … and they go something like this.
Three factors drive economic growth:
quantity of labour (think number of hours worked productively);
amount of capital employed (think machinery used);
total factor productivity (an encompassing phrase that captures both technological advances and the possibility that we can organize ourselves more perfectly to produce more, given the same hours worked and the same amount of capital employed).
Let’s think about the Cobb-Douglas