J.D.M. Stewart taught high school history, among other subjects, for thirty years in Montreal, Panama City, and Toronto. This is the graduation address he would give to his students if the opportunity presented itself. 

Students, parents and guardians, fellow teachers. Thank you so much for giving me the opportunity to address you, the graduating class of 2024. It is a special privilege for me to speak today as I move on from teaching after thirty years. I cannot think of a greater honour than to be able to be here with you.

It may not come as a surprise that in my final opportunity to be with you I want to talk mostly about one thing: Canada. You have heard me say in the classroom that Wilfrid Laurier, our first francophone prime minister, once said “Canada has been the inspiration of my life.” That has been a guiding principle for me throughout my career as a teacher—and actually before it as well.

Let me tell you why.

There has been a sentiment lurking about during your years in school positing the idea that Canada is a country not worth celebrating; that Canada should feel embarrassed by its history; that Canada is a country without an identity. I know one young person who said last year that she was afraid to wear her “Canada” t-shirt on July 1 for fear of being ridiculed. I felt this was a sad consequence for a country that has been the envy of the world.

Now, I know where some of this is coming from. Our prime minister has apologized repeatedly for numerous mistakes in Canadian history. It comes from media coverage of the reckless tearing down of statues of the country’s first prime minister, Sir John A. Macdonald, without checking the facts. It comes from those who say we should play down our military history and give it less attention in the classroom; and it comes from the crowd of people who feel that the only way forward for Canada is to find all of the things at which Canada has failed. This view is not the Canada that is celebrated in the world.

Take what happened last year in our own Parliament. Ursula von der Leyen, the president of the European Union, spoke to a joint session of the House of Commons and Senate. Here is what she said:

Tens of thousands [Canadians] lost their lives in the trenches of Belgium, in the heat of Sicily and on the beaches of Normandy on D-Day…The united democracies freed us from dictatorship. Thus, we owe our democracy also to you, the people of Canada. And we will be forever grateful for the sacrifice your parents and grandparents made, and for the invaluable gift of freedom.

That is high praise. Dr. von der Leyen gets it. She also reminded us that “You, the people of Canada, have built this country as a community that is open to all, beyond ethnicity, language or religion. A true community of values.”

I believe in Canada the way the president of the EU does. My view is not that different from Wilfrid Laurier’s, in fact. You have learned during your years at school that there have been moments in Canadian history that we wish had been different. That is perfectly normal and understandable. But Laurier said, “We cannot unmake the history of the past.” Then, I feel like he was speaking directly to you, Class of 2024, even though he spoke the following words in 1902:

“As to the history of the future, I hope it will continue to be what it is today, that is prosperity, cordiality, good fellowship, and goodwill amongst those whose privilege it is to be inhabitants of this good land of Canada.”

Of course, it will only be that way if you all play your part.

Enough about Canada—at least for now. I know that you are moving into a challenging world. One in which there is misinformation and disinformation; worries about owning a home one day; climate change; war. This is a difficult moment for everyone. But there are some universal truths that will stand you in good stead while you continue your education. When I dealt with many of you who worried about your marks, I always counselled that as hard as it may be to hear, the marks you get in high school will not mean anything in the future. What is more important is to be a good person. Do your colleagues want to work with you on a team? Do you smile when interacting with people? Are you respectful? Do you use their names in conversation? I even have a note card from a student who graduated a few years back who told me how important this lesson was.

I also encourage you to speak up with confidence. Use your voice. Speak up when you hear something inappropriate. Speak up when you disagree. Many of you, I know, have felt it is better to be silent than to offer your opinion for fear of being judged. That is not the kind of society we want. If there are no debates on issues of the day, how will we make a better country? Listen to others and ask others to listen to you. Seek common ground. That may sound difficult, but the more you try to find common ground, the more others will, too.

I want to conclude by circling back to Canada. Some years ago there was a well-known British Columbia journalist named Bruce Hutchison. Very famous in his day. In 1942 he wrote a book called The Unknown Country, where he said, “No one knows my country, neither the stranger nor its own sons.” You have a great future ahead of you and many of you will travel. But make part of that travel discovering what Canada is about. This country is vast and the only way for all of us to understand each other better is to meet with people from different parts of this great Dominion. When Laurier went to western Canada for the first time he said upon his return, “I left home a Canadian to the core. I return ten times more a Canadian.” Maybe you will feel the same way.

In the end, all of this is up to you. You are the agent of your own success. You will decide how to spend your time. Each of you can make your own difference in your own community, in your own chosen profession. Canada actually relies on all of you to continue working to make it the best country it can be. And knowing something about how we got here is essential. You may not know this, but the motto of the Order of Canada, the country’s highest civilian honour, is Desiderantes Meliorem Patriam: They Desire a Better Country.

In my final words to you as a teacher, I urge you to be part of the national project that is Canada. Make it a better country.

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.