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Sean Speer: Where does Canadian conservatism go from here?

Commentary

What is the right path for the future of Canadian conservatism? 

With a Conservative Party leadership race now unofficially underway, we’re bound to hear various answers to this question in the coming weeks and months. 

As I wrote in the immediate aftermath of Erin O’Toole’s sacking as Conservative leader, such a fundamental question seemed less salient in the party’s two post-2015 leadership campaigns. There was a sense in those previous races that the Conservative Party’s basic policies and priorities remained, by and large, correct and the real issue for party members was to select a leader based on a combination of aesthetics and communications. The Conservatives required cosmetic change rather than ideational renewal. 

It’s not that there weren’t different perspectives represented in these campaigns including Red Tories, libertarians, populists, and social conservatives. The 2017 leadership race, in particular, involved candidates that reflected the full breadth of conservative ideas and values. 

But the overwhelming assumption was that the best path was to essentially double down on what had worked from 2006 to 2015 in terms of messaging, policies, and priorities. The line connecting Andrew Scheer’s “full-spectrum” conservatism in the 2017 leadership campaign and O’Toole’s “true blue” conservatism in 2020 was in hindsight rather straightforward. 

This time around one gets the sense that there will be more room for a bigger shake-up. Not only has the party lost consecutive elections, but the broader cultural, economic, and political context has significantly changed from the final days of the last Conservative government. 

The ongoing COVID-19 pandemic is the most immediate and obvious example. But there are various others including the pre-pandemic collapse of Canada’s balanced budget consensus, growing concerns about our long-term living standards, the pervasive rise of identity politics, and renewed questions about national unity and Canada’s place in the world. 

This complex mix of issues is occurring against a backdrop of growing populist energy on the Canadian Right and the increasing importance of social media in a moment when Conservatives are less trusting of traditional media sources. The eventual winner of the impending leadership race will need to navigate these various issues and challenges. 

The key point here is that the internal leadership process ought to be more introspective and substantive than the previous campaigns. There’s a strong likelihood that a message of simple continuity will be perceived by party members and the broader Canadian public as incommensurate with the country’s challenges and Conservatives’ own woes. It isn’t enough to merely cycle through its fifth leader in nine years. The Conservative Party needs to commit itself to a spirit of renewal and reform.

As a non-partisan media organization, we’ll leave it to active partisans to debate how best to bring expression to such a renewed sense of confidence and optimism within the party. But it does prompt a bigger question that I raised in response to last year’s federal budget: why are progressives winning the battle of ideas?

This isn’t a partisan question. It’s about the broader intellectual framework that’s presently shaping Canadian policy and politics. If in the two or three decades following the end of the Cold War, conservative ideas were in the ascendancy, as evidenced, for instance, by the rightward shift of the Liberal Party during this period, what’s changed? 

There’s an obvious risk that any answer to such a question is too deterministic. There are many factors at play including the interplay between the country’s evolving economic, demographic, and cultural conditions. It’s striking though, as economist Chris Ragan has observed, that we’ve gone from every major political party supportive of balanced budgets as recently as ten years ago to today’s new multi-partisan consensus in favour of larger and longer deficits. Something obviously changed. 

Journalist Andrew Coyne attributes it to a “victim-of-its-own-success” scenario whereby these ideational victories in the Reagan era caused conservatism’s intellectual muscles to atrophy. There’s also the declining salience of issues concerning deficits and debt which had been a policy advantage for conservatives. New and emerging issues such as income inequality, climate change, and race, identity, and gender are a less natural fit. 

One aspect of this question though that has bedeviled me is the lack of intellectual cross-pollination between elected Conservatives and the broader ecosystem of conservative academics, intellectuals, and think-tank scholars. That ecosystem is no doubt smaller than its left-wing equivalent due in large part to progressive dominance of universities, but it still comprises smart people and well-funded organizations and produces a lot of policy papers, op-eds, and other forms of analysis that in theory should be a key source of intellectual sustenance for Conservative parties across the country. That it hasn’t proven to be in recent years raises interesting questions about the impediments blocking the translation of these ideas into a practical political agenda. 

There are various factors that may explain the sources of the problem. Maybe our top-down politics and strict caucus discipline discourage the type of policy entrepreneurship that would have individual parliamentarians working with think tanks to cultivate and bring expression to new and interesting ideas. Perhaps the country’s low party financing limits have caused the Conservative Party to focus more on galvanizing its core voters with party orthodoxy than developing an inventory of new and possibly heterodox ideas. A series of minority parliaments has probably led to a greater emphasis on fundraising and party operations than ideation and policy development. And the rise of social media has created perverse incentives for politicians to prioritize soundbites over sound policy. 

But we shouldn’t solely blame politicians. Those of us who work in the world of conservative ideas and public policy also need to consider our own shortcomings, including our collective responsibility for these broader intellectual and political trends. We should ask ourselves tough questions about the work that we do, how we do it, and why we aren’t having more influence over the policy debate. 

Are we focused on the right issues? Are we missing out on key policy areas? Are we producing practical and concrete policy recommendations? Are we effectively communicating our ideas and policy thinking to the public and politicians?

Introspection and renewal, in other words, shouldn’t be limited to partisans. There’s an onus on the country’s conservative intellectual and policy class to similarly think about how to bring greater political expression to our ideas and values. 

It seems to me that progressive intellectuals have done a more effective job at establishing greater proximity to the policy process and producing more practical and relevant advice. Some of this, as mentioned, may merely reflect the current mix of dominant policy issues, but one gets the sense that it’s more than that. A combination of progressive ideas and politics have slowly yet surely brought the centre of Canadian politics to them. 

In response to these leftward developments, there can be a tendency on the part of conservative writers and scholars to summarily reject progressive policies but not communicate a comprehensive and practical alternative. This approach is an intellectual and political loser that invariably contributes to a vicious cycle of embattlement and marginalization. As one of The Hub’s contributors recently observed, it’s not enough for Conservatives (or conservatives) to articulate what they’re against; they also need to define what they’re for. 

The upshot is that this disjunctive political moment should be more than another round of swapping party leaders as an end in itself. It should be a call to the broader world of Canadian conservatism to ask itself about the right path for the future of its intellectual and political movement. That’s the first step to renew its sense of energy and purpose and ultimately challenge the progressive ascendancy in our politics. 

Opinion: Business needs to focus on business

Commentary

In Canada and other Western countries, there are increasing demands for a fundamental overhaul of the role of business in society. But in making their case for reform, prominent business leaders and intellectuals often misrepresent the status quo, minimize the power of markets to deliver broad prosperity—including environmental improvements and social progress—and present their proposals as costless. In reality, however, such radical recommendations to effectively socialize business will fail to achieve their intended goals and impose enormous costs.

Essentially, this new frontier of top-down socialism—whether it’s called stakeholder capitalism or environmental, social, and governance (ESG)—requires businesses to prioritize loosely defined goals (including environmental and social goals) over goals directly related to their businesses. The claims of advocates, that such activities enhance profits, render the need for government action via laws and regulations redundant because if these activities were actually good for profits, firms would undertake them voluntarily. 

Stakeholder capitalism (and ESG) promotes fundamental changes to the role of business in society, which will inevitably reduce firm profitability. Firm resources are reallocated from business priorities such as research and development, supply chain enhancements, and worker training, towards other endeavours unrelated to operating businesses.

But the goal of businesses, since their inception, has been to provide a return to owners by efficiently producing goods and services the public wants and is willing to purchase. Businesses are forced by competition to worry about the needs and wants of their customers, figure out innovative ways to produce and deliver goods and services, and provide post-sale support to promote future business. The only way around this market discipline is for businesses to secure protection or preferential treatment from government.

It’s also unclear why advocates of stakeholder capitalism and ESG assume that businesses—owners, executives, and managers—can identify and execute environmental and social goals better than non-profits or democratically elected governments. Harvard law professors Bebchuk and Tallarita, in their paper “The Illusory Promise of Stakeholder Governance“, conclude that stakeholder capitalism will fail to achieve its stated goals while also diminishing the accountability of corporate leaders because of its opaque and subjective nature (a recent analysis found more than 600 ESG reporting frameworks, many of which conflict with one another).

Perhaps the most salient fact, however, is that these so-called reforms are unnecessary. The historical evidence is clear that societies that rely more on individuals, families, entrepreneurs, and businesses to make bottom-up decisions rather than governments (top-down), enjoy higher standards of living, improved quality of life, greater social progress, better environments, and interestingly more peaceful societies—the stated goals of stakeholder capitalism and ESG.

The idea that businesses ignore the communities where they operate or fail to treat their employees fairly seemingly ignores the real world around us. Consider how many local sporting, cultural and youth events are sponsored by local businesses. Or think about the lengths that businesses go to retain and attract workers.

Finally, this push for greater spending by businesses on non-business-related priorities occurs while business investment in Canada is collapsing. A number of prominent economists including the governor of the Bank of Canada have noted that economic recovery and rising living standards cannot sustainably occur without increased business investment.

Business investment (excluding residential housing) declined by 4.0 percent between 2015 and 2019 (before the COVID recession) compared to an increase of 30.8 percent between 2004 and 2008, the equivalent period before the last recession. Investment in only factories, plants, machinery, and equipment declined by 6.5 percent (2015 to 2019) compared to an increase of 33.9 percent (2004 to 2008). As prominent economist Jack Mintz recently argued, recovering and improving business investment should be the single priority of the federal government and yet it wasn’t even mentioned in the recent throne speech. 

It’s within this context that advocates for stakeholder capitalism and ESG want businesses to reallocate increasing amounts of resources to activities unrelated to improving profitability, thereby further discouraging business investment. Again, contrary to the rhetoric, there’s an opportunity cost when firms divert resources to unprofitable activities. If these ideas were actually good for profits, firms would undertake them voluntarily.

There’s little evidence this new brand of top-down socialism, whatever its label, will result in better economic and social outcomes. Indeed, the answer to many of society’s current problems is less, not more, government. We should rely more, not less, on individuals, families, entrepreneurs, and businesses to direct the resources of society. History is clear—when we do, we achieve many of the goals espoused by today’s reformers, but with the benefit of a prosperous economy.