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Sean Speer: Neoliberalism is dead. Long live neoliberalism


Klaus Schwab, President and founder of the World Economic Forum, delivers a speech in Davos, Switzerland, May 23, 2022. Markus Schreiber/AP Photo.

My former boss, think-tank entrepreneur Brian Lee Crowley, used to say that ideas are the most powerful thing in the world. If you can implant an idea in people’s minds, you can shape the unfolding of history.

Today we’re living through a period of intellectual tumult—a moment when history seems up for grabs.

There’s a sense that post-Cold War thinking—what Francis Fukuyama famously called the “end of history”—has lost its explanatory power in the years since the global financial crisis, the rise of populism, and the renewal of great power competition.

In this era of heterodoxy, the competition for the intellectual centre of gravity is fierce. New ideas and voices on both the Left and the Right are fighting to position themselves as the basis for a new political economy orthodoxy.

One such voice is Canadian progressive economist Armine Yalnizyan who has had a tremendous influence over our public policy debates during the Trudeau era. Last month, she won the 2023 Galbraith Prize in Economics from the Progressive Economics Forum and delivered the keynote lecture at the annual meeting of the Canadian Economics Association.

Her speech must be understood as a serious yet flawed critique of neoliberalism and the positioning of an alternative paradigm in the form of what Yalnizyan broadly refers to as “the care economy.”

Proponents of free markets and limited government must reckon with her arguments. Even if one (rightly) disagrees with her perspective, it’s clearly one that has found a lot of resonance within the Trudeau government and is bound to remain influential in progressive circles. It represents, in this sense, a “steelmanned” (or “steelwomaned”) version of the Left’s prevailing intellectual alternative to neoliberalism.

My off-and-on relationship with neoliberalism

Neoliberalism has become a somewhat elastic term—including among its critics—but a neutral definition might be that it reflects the post-Keynesian economic paradigm which places an emphasis on free markets, including lower taxes, globalization and free trade, and a less active role for the state in the economy.

As neoliberalism has come under fire in recent years, I’ve been part of these debates about its future. I first started to reckon with such questions in the aftermath of Donald Trump’s shocking election in 2016 and what it might tell us about creative destruction, the “forgotten people and places,” the urban-rural divide, middle-class dislocation, and the return of “geoeconomics.”

I was more open than I had previously been to significant course corrections to my own assumptions about politics and policy. I even flirted with industrial policy, place-based policy, national security-driven protectionism, and other departures from free markets and limited government. Ultimately though I’ve returned to my previous support for neoliberal ideas with a couple of caveats, including the need for government policy to better account for the unique characteristics of intangible capital and the rise of China.

I’ve reached this conclusion for two main reasons. The first is that it’s increasingly clear that our principal economic and social challenge is supply-driven economic stagnation for which the best solutions can still primarily be found in neoliberal orthodoxy.

Policymakers should be focused on boosting private investment and catalysing a supply-side revolution in energy, housing, health care, and so on. This calls for a conventional market-oriented policy response, including tax reductions on businesses and investors, deregulation, privatization, pro-competition reform, and a generally less intrusive state. We essentially need an updated version of Reaganism or Thatcherism to jolt us out of our current economic malaise.

The second is the magnitude of government failure over the past several years has reminded me of the inherent limits of state action. As I’ve previously written, in hindsight some of my thinking and writing overestimated the capacity of government to engineer particular outcomes in industrial development or science and technology. Even as the size of the federal public service has massively grown in recent years, the government has still proven itself to be challenged to merely deliver on its core functions like passport renewals or immigration processing. The notion that it could micromanage the end of the internal combustion engine or other ambitious progressive aims without significant distortions, inefficiencies, and waste is completely implausible.

A string of major government failures, including the collapse of our single-payer health-care system during the pandemic or the ArriveCan scandal or the unprecedented corporate subsidies for the electric vehicle industry, has set me straight. They’re a reminder that limited government isn’t just an ideological slogan. It reflects a realist understanding of the proper role and scope of government.

The limits of the care economy model

Which brings me back to Yalnizyan’s speech. I should say that I know and like her. She’s smart, interesting, and kind. Her case that care services—specifically long-term care—will demand a greater share of our society’s total resources is self-evidently true. She also raises important points about the working conditions and quality of services within this growing part of our economy. But Yalnizyan’s critique of neoliberalism and her case for the care economy—particularly a publicly-run one—as a new economic paradigm fails to grapple with the two points above.

The care economy (as defined by childcare, health care, and long-term care) may produce social value and no doubt has economic effects, but the notion that it “may become the biggest driver of our future economic growth” ought to be interpreted as a warning rather than a desirable outcome. It says far more about the underperformance of Canada’s economy than it does about the growth potential of short-term consumption spending on care services.

The problem here is that Yalnizyan has the causality backwards: care services aren’t the foundation of economic growth; economic growth is the foundation of care services. We can only afford to provide high-quality care services if the economy is throwing off the resources to pay for them. It’s not a coincidence for instance that these services tend to be better funded in high-income countries.

There’s a good case in fact that if one preferences higher spending on care services, then he or she ought to support growth-enhancing policies. And that doesn’t even account for the strong relationship between higher rates of economic growth and innovation and the potential for health-care innovations to address the supply and quality issues that Yalnizyan rightly raises.

The other main problem with her speech is that she doesn’t account for the obvious challenges of state capacity or limits of state action. It’s underpinned by a well-intentioned but false understanding of government intervention. The real trade-off isn’t between “plunder capitalism” and a perfectly efficient state. It’s between the self-correcting mechanism of markets versus the inherent inefficiencies of state mandates or monopolies.

Yalnizyan’s argument that “the care economy is too important…to surrender it to market forces” is an example of this type of wrong-headed thinking. There are plenty of important functions in our society that are subjected to market forces. There are also ones that are sheltered from them and perform poorly. No one for instance would dispute that health care is important but it’s hard to argue in the face of a government-induced wait-time crisis that it’s producing good outcomes. The point is that judgments about whether markets or government should be responsible for allocating resources or providing services in a particular sector should be based on evidence rather than her philosophical preferences.

The whole discussion reminds me somewhat of Noble Prize-winning economist George Stigler’s famous line: “We may tell the society to jump out of the market frying pan, but we have no basis for predicting whether it will land in the fire or a luxurious bed.” The only adjustment that I’d make to his metaphor is that recent evidence suggests that landing in the fire is a strong bet.

It shouldn’t be lost on readers that the areas that Yalnizyan targets—childcare, health care, and long-term care—face persistent supply shortages unlike most of the rest of the economy. She would presumably attribute them to a market failure. But given the extensive role of the state in these areas (including funding, regulation, and direct delivery), there’s a strong case that the real problem is government itself.

An underlying problem in Yalnizyan’s analysis may be in her selection of historical antecedents. Her remarks were set up as a dialogue between John Kenneth Galbraith who favoured the mixed economy model and Stigler’s University of Chicago colleague, Milton Friedman, who was a champion of free markets. There’s a good case though that she needs to reflect a third voice in the conversation: James Buchanan and the public choice economists who were generally less committed to freedom in and of itself than Friedman but had a much clearer eye about the limits of government than Galbraith.

Any calls for bigger government that don’t reckon with public choice dynamics are invariably setting themselves up for failure. One might have quarrels with market outcomes but that’s a necessary yet insufficient condition for government intervention. Buchanan and others powerfully showed that the real question is whether, in the face of the invariable distortions and inefficiencies inherent to state action, it will actually produce superior outcomes. The answer is often no.

Yalnizyan’s speech is still highly worth reading. It provides a clear and well-reasoned case for progressive economics at a time of intellectual churn and debate. But as a serious alternative to neoliberalism, its failure to put forward a credible vision for economic growth or grapple with the clear limits of government itself ultimately leaves it better suited for the intellectual fire pit than a luxurious bed.

Joanne Archibald: Endless open-ended deadlines are failing students and teaching bad habits


Students are shown at Dawson College in Montreal, Monday, August 23, 2021. Graham Hughes/The Canadian Press.

I’m concerned. I’m concerned that in universities across this country, we are failing to teach our students important lessons about critical thinking, responsibility, and consequences for their actions. These days it seems that extensions on assignments, papers, projects, and exams are handed out like influencers hand out discount codes on Instagram. This lackadaisical deadline policy is causing more harm than good. It is bound to have lifelong consequences.

Over my last three years as a teaching assistant and fellow at Queen’s University, I’ve witnessed the growing problem of students asking for extensions across a variety of disciplines firsthand. Often it’s even at the eleventh hour before submission or even after a deadline.

And the requests are being met with the approval of instructors. It’s anyone’s guess as to why. Perhaps because the accommodation list has simply become so long that it is easier for us to just say yes to all extension requests. Or maybe it’s because it saves us time and paperwork to just say yes without actually looking into whether a request is actually warranted. I am guilty of this myself, avoiding the challenging conversations and just accepting the request.

Don’t get me wrong: there are Canadian students with legitimate requests for accommodation and consideration, and they should be supported. We strive to provide a learning environment that is equitable for all, and accommodations are absolutely part of that process. Furthermore, as someone who has had a health crisis interrupt a course, I understand that things inevitably come up that are beyond a student’s control. There are important policies in place to help these students navigate life’s unexpected challenges, and they should also be upheld.

But what we are seeing is there are far more extension requests in the “I just didn’t have time” camp, or of the “I’ve got too many things due at once” variety than there should be. This represents the failure of instructors to impose hard deadlines in addition to enforcing the consequences if those deadlines are not met. The fact that these students feel they can ask for these extensions means they are used to getting what they want, and it’s starting to feel as if it’s coming from a place of entitlement.

Part of the problem is what has become the ad hoc nature of extension policies. Some professors have three-day grace periods—so say June 7 is the deadline, a student will actually have until June 10 to hand their assignment in without penalty. Other instructors give you a full seven extra days after the project is supposed to be completed to submit without penalty. Others have “a feel free to request any extension”’ policy. Some courses have zero late penalties, or give a one percent or two percent or five percent penalty after a certain number of days. Still other professors have no late policy at all. It’s confusing! For us as teaching assistants, for students, and for instructors.

My biggest concern is that we are hampering the students who have legitimate learning differences or exceptionalities and a documented need for extra time. If everyone gets an extra seven days, does that not negate the extra time for students who have legitimate needs? No, says Ontario university guidelines.

Making accommodations for students who don’t particularly need them can get in the way of learning objectives as well. The problem extends beyond assignment deadline extensions. In some university classes, students who fear public speaking are now allowed to do group projects alone, or participate online rather than coming to class. Those who come to class don’t necessarily have to take part in discussions, with instructors permitting them to instead submit their participation in written form.

However, this fails to help the student learn how to engage in a respectful discussion of ideas and prevents the student from learning to develop their own voice and share their thoughts. In just about every job setting, the ability to verbally communicate your ideas is an absolute necessity. Sometimes this is a necessary shortcut—it would be impossible to have 60 students in a one-hour online tutorial answer questions verbally—but in smaller classes, where one of the core learning objectives is engaging and debating readings and their ideas, we are stunting the growth of our shy students by allowing them a way out of speaking out loud.

Universities are supposed to be places where young people learn to think critically, explore different ideas, and develop skills that will serve them in our competitive workforce. These include skills like research and writing, synthesizing material, public speaking and presentation skills, group work, time management, handling anxiety, stress and discomfort, and multitasking. It also includes handing things in on time.

By allowing what seem to be unlimited extensions with few consequences for late submissions, we are not helping young people figure out how to stickhandle through a stressful period, assess and prioritize tasks, and manage their competing workload. How will this play out for our students in the workforce? Imagine being in your very first job after university and asking your boss for a seven-day extension with no consideration for how your late work will hold up other members of your team. It could result in an angry client, frustrated management, or the loss of a project.

Former First Lady Michelle Obama once said: “Life is practice…And I tell my girls this every day. You are practicing who you are going to be. If you’re a whiner, you’re practicing being a whiner. If you’re spoiled, you’re practicing that. That doesn’t just go away. You have to start practicing who you want to be.”

We need to help students practice getting things done on time by holding them accountable. They will thank us for it five years down the road when they have developed a sense of time management. By then they will have certainly forgotten the five percent late penalty levied against them for a tardy paper. If we want students to succeed in life, we must treat them like the adults they are becoming, not the children they used to be.

Going forward, I will work to ensure a fair but firm policy for my students because my biggest goal is to help them succeed not only in class but in developing life skills. University is a time of major life change, and it is important that we help our students grow into adulthood with the best possible skillset and an understanding that being dependable and accountable are assets for life.