Home » Uncategorized » Democracy & Prosperity are Intertwined. Canada is Moving in the Wrong Direction under Harper.

Democracy & Prosperity are Intertwined. Canada is Moving in the Wrong Direction under Harper.

The scariest book I’ve read this year is …..
an economics book called “Why Nations Fail” by Daron Acemoglu and James A. Robinson (no relation).

The subtitle is ” The origins of Power, Prosperity, and Poverty,” The section that is giving me nightmares is about the Congo. A string of absolutist and dictatorial rulers from as far back as the 15th and 16th centuries used state income to buy friends. They needed to buy support from local elites in order to stay in power.

The line that made me stop an think about Canada is on the top of page 91. After describing how various poor countries stay poor, Acemoglu and Robinson say of the governing elites of the perpetually poor countries

“..their interests are to extract income and sustain their power.”

Most days I would have said “that is pretty obvious!” and read on, but that day I had been explaining how the conservatives were buying votes with a whole series of targeted projects and tax give-aways. I had complained about the use of slanted government-funded ads. I had gone on about how the changes to the election act mean that taxpayers are paying to keep the Conservatives in power.

You may not believe this last point, so iIll explain it.Under the Elections Act if I give $100 to the party of my choice, I get to deduct $75 from my taxes. This doesn’t seem too bad until you notice that the politically committed voters are getting a subsidy from on the voters who don’t contribute as much.

Then what happens? The party spends “my” $100 on attack ads or some other legitimate election expense, and after the election the government gives the party back most of that money. There is an “election expenses reimbursement” which subsidizes 50% of the national campaign expenses of any party that obtains at least 2 per cent support, or at least 5 per cent in the ridings in which they presented candidates.

In addition to this, the parties’ riding organizations are also reimbursed 60% of all expenses incurred by their candidates in each riding where they obtained at least 10% of the votes, plus 100% of allowable “personal expenses”. Now my $25 contribution has bought $100 worth of ads and the local party has $60 in the bank for the next election. If you are not a political contributor you have multiplied the value of my money by 6.4. My thanks to you!!

It is a neat scheme and there is no question that works powerfully in favour of Mr Harper and the Conservatives.

What struck me when I read

“..their interests are to extract income and sustain their power.”

was that we are seeing here in Canada exactly the behaviour that has kept so may other countries poor. Mr Harper has found ways to extract public money to sustain his power.

Acemoglu and Robinson argue that the countries that have managed to stop their leaders from doing that are the ones that became wealthy. They list Canada as one of the democracies that successfully limited the power of leaders to extract money from others in order to sustain their power.

If Acemoglu and Robinson are right — and if Mr Harper wins again by spending taxpayer money — Canada has begun to slide away from both democracy and prosperity. That is a pretty scary thought.

https://en.wikipedia.org/wiki/Federal_political_financing_in_Canada#Public_subsidy_of_contributions

1000px-Public_funding_of_Canadian_federal_political_parties_in_2009_by_party_and_by_mechanism_sm

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