McQuaig speaks of power

by Sylvain Comeau

The government feigns helplessness to camouflage unfair or unpopular policy decisions, left-wing economist and author Linda McQuaig told a Concordia audience last week.

"It's pretty obvious that Canada is heading toward a society more oriented toward free markets and the private sector, and less toward the public good," said McQuaig, whose latest book, The Cult of Impotence, has nothing to do with Viagra. "But that's clearly not the direction Canadians want to go in."

Canadians are allowing this to happen because they have been told that the government has no alternative.

"For years, we were told that we can't have full employment or social programs because of the deficit. Now the federal deficit has disappeared, yet the government still says that it has no choice, and that they are powerless to enact the social programs we want because of the global economy. That is simply not the case."

McQuaig contends that claims of powerlessness are an excuse for the heavy social service cutbacks of recent years.

"Students have certainly taken the brunt of these cuts. Accessibility to post-secondary education used to be something we cherished; now universities are on their way to once again becoming elitist institutions. It's not realistic to ask people to take on $40,000 or $50,000 in debt before they even start working; and when they get out of school, they don't know if they'll find a job."

Governments also pretend that they must acquiesce to the financial elites. "I'm not saying that there aren't any restrictions on government; financial markets are extremely powerful," she said. "But that is largely because of the power that governments have handed over."

While technology now allows the rapid movement of capital, "what has really changed is the political willingness of government to stand up to financial markets."

Financial markets have become a giant global casino, McQuaig charged, rife with dangerous and rapid short-term speculation rather than long-term investment. She contends that the Asian currency collapse was triggered by a rush out of Asia by currency speculators. One solution would be adopting the Tobin Tax, which is named after Nobel-prize-winning economist James Tobin.

"This would be a very small tax, applied every time that money is exchanged from one currency to another." McQuaig explained. "It would give governments some control over the movement of capital. As it is, that movement puts governments under pressure because markets threaten to withdraw capital if governments don't do what they want."

McQuaig added that Finance Minister Paul Martin was actually interested in the Tobin Tax at one point, and wanted to put it on the G7 agenda, but the idea was shelved by the Liberals.

McQuaig predicted "dramatic reforms to the international financial system" in the wake of the Asian crisis. But it is vital for the public to get involved in the debate. "So far, the debate has been between the policy-makers and Bay Street. We really need a revolution in our own minds. The biggest obstacle is that people have given up. They believe that governments are powerless, so they let the government off the hook. The government has the power, if it has the political will."

McQuaig is the bestselling author of The Wealthy Banker's Wife and Shooting the Hippo.