Seamanship Quotation

“In political activity, then, men sail a boundless and bottomless sea; there is neither harbour for shelter nor floor for anchorage, neither starting-place nor appointed destination.”
— from Michael Oakeshott's
Political Education” (1951)

Tuesday, May 17, 2011

Banks, Toronto’s stock exchange and Harper’s free enterprise credentials.

It’s difficult to be an economic populist when you’re in power and you can’t keep cutting taxes or take hard positions on issues that will be vetted by your own regulatory processes. Yet, economic populism—confidence in free markets and less so in massive public and private institutions—is at the heart of Stephen Harper’s new center-right coalition and needs exercise.  
Occasionally, the Conservative Party’s free market reflexes would benefit from a good fight with that other tradition in Canada—economic concentration to build “national champions” and “achieve scale and efficiency.”
While he probably will stay above the fray, others in his party should feel free to express themselves.  If Conservative MPs can challenge the National Wheat Board, surely some of their feistier voices could take on the “Maple Group”—an alliance of four of Canada’s major banks and five of the country’s largest pension funds to buy the TSX, Canada’s largest stock exchange. It is estimated that the purchase would concentrate 80 % of trades in Canada.
A National Post story included this objection:
"If Canada wants to take a massive step backward to the dark ages of fixed pricing and non-competitive markets, this is the way to go," said an investment banker who asked not to be named.”
There is a counter offer and there will be regulatory hearings to establish the facts and survey the benefits and risks. However, the above quote only hints at one concern that should be addressed as a matter of principle. Too few people in business feel free to identify themselves when questioning the aims of such gigantic commercial interests.
Market economists will warn that a “national champion” can end up being just another fat behemoth.  Economic populists and classical liberals can also agree that building gigantic centers of commercial power not only can lead to commercial favoritism and lax practices but also less vigorous and less open public debate.
This is concern about economic power and its impact on public discourse is everyone’s business and need not wait onor be solely the responsibilityof public officials at the federal Competition Bureau.

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