I'd like to thank the Franklin expedition and its many follow-ups for definitively settling the irritating argument between the private sector and the public sector over who's the problem and who's the solution. That dispute has consumed vast amounts of oxygen since Ronald Reagan and Margaret Thatcher ginned it up in the 1980s. The answer is: it's a stupid argument to start with.
Reagan and Thatcher said government wasn't the solution, it was the problem; business was the solution. Business leaders who liked the sound of that funded think-tanks like the Fraser Institute, which generate studies showing government activities like public schools or the Canada Pension Plan are inefficient and superfluous. Meagrely funded leftish think-tanks like the Canadian Centre for Policy Alternatives fire back defending the public side.
But look at this week's discovery of the wreck of the Erebus (or the Terror). It was headed by Parks Canada (public) with a role for entrepreneur Jim Balsillie's Arctic Research Foundation along with others that get tax breaks from the government. The technologies involved had public money in their development. There are profs -- an archeologist from Waterloo, an anthropologist from Manitoba -- who are basically public servants, along with those from Parks Canada and the Canadian Hydrographic Service, which somehow survived the Harper cuts that targeted programs like the Experimental Lakes Area.
This is a hybrid picture, like Franklin's original expedition. He was a navy lifer but his voyages had commercial motives and backing: they meant to open trade routes. When he took time off from exploring, he became governor of Van Diemen's Land (Tasmania), where many Canadians were incarcerated and were rented out as cheap labour to local landowners. More public-private blending.
In Franklin's era there were conflicts over which party held political power and whose interests they served (landowners, manufacturers, merchants) but no grandiose abstract debate on public versus private altogether. They were assumed to coexist and need each other. When labour parties and unions arose, the context expanded to include their interests, too.
Economist Mariana Mazzucato's new book, The Entrepreneurial State, takes a bold step in "debunking" this fake construct. (Steve Paikin interviewed her on TVO this week.) She doesn't just argue that public spending (on defence) was crucial in basic advances like computers and the Internet. That's well-known. She also shows how U.S. public money funded product innovation way down the line, including some of the smallest details of the iPhone! She says the necessity of venture capital is highly exaggerated. Private investors are now far too focused on short-term profit to take real risks. It's governments that do it. The private sector then steps in when results are assured, to take the credit and the profits.
You could read her book as a blow on behalf of the public sector in the debate. But it works even better as a rejection of the debate's terms. There's no neat private-public division, that's just spin. There's actually society, a complex hybrid. Take the process of fixing potholes. Is that public or private? Or busing students to public schools. Even at those levels, it's all entwined. You cannot unscramble this omelet or neatly separate its ingredients back out. Only intellectuals like those at the Fraser Institute could even imagine it's possible.
Is Stephen Harper anti-public sector? Of course not, though he might like to deploy the lingo. But this week he also deployed Canadian forces to Iraq, as well as those flying uselessly above Ukraine. That expands government even as he moves to downgrade EI -- not to shrink government but because it serves his aims. He spends public money searching for Franklin's ships in order to undermine the Liberal hold on the Canadian narrative (peacekeeping, medicare, etc.). He kills off information from the long-form census but adds it in the form of Arctic history.
It's like the bogus conflict of the individual versus society. What's with the versus? Individuals can only flourish in strong collectivities where the basics are looked after and personal gifts can then be nurtured. You'd need your Ayn Rand ideological blinders on to think otherwise. As the late Tony Judt lamented (quoted by Maria Mazzucato): "We simply do not know how to talk about things anymore."
This column was first published in the Toronto Star.
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