There is a term which more or less began with Karl Marx and his Communist Manifesto and went on to be popularized by Joseph Schumpeter, an Austrian-American economist of some renown. I haven’t thought much about Joseph since frequenting the Loeb building at Carleton University in the late 1960s when his book, Capitalism, Socialism and Democracy, had a certain cachet among aspiring political science students who careened between classes, demonstrations and Alice B. Toklas brownies. The term is creative destruction. Marx saw it as the inevitable destruction of capitalism fuelled by greed. Others more recently apply the term to the constant turmoil of innovation and destruction in free markets as technology liberates new wealth and destroys old companies who are complacent or just unlucky. Think Polaroid. Closer to home, think RIM.
Canada is entering a year of Creative Destruction. The big things that have defined us for at least half a century are under attack. Let’s look at some of the early indicators.
Health care: The federal government is getting out of the business. It has signalled commitment to a funding formula with no conditions and no discussion. This is unprecedented in recent memory. The battles over what health care is going to be in this country are over. It will be what individual provinces decide it is going to be, and if you are a smaller province you are on your own. It is no longer a Canadian health-care system.
Politics: The Liberal Party has just decided to let anyone in the country who pretends to support the Liberals vote in the next election of a Liberal Leader. This is unprecedented and follows their own creative destruction in the last election. In their view they have nothing to lose.
Environmental Policy: Nothing creative; just destruction.
Agriculture: The Wheat Board is no more in Western Canada notwithstanding the clear majority support of farmers in the region. Farmers in due course will pay a huge price. It is dismembering an institution that served farmers well for more than 75 years. See who is making money in 10 years and who is not.
Business: RIM is on the ropes, Target replaces Zellers, China is a buyer in the oil sands, a hedge fund is seeking to dismiss the board of CP rail for being, well, too Canadian. The federal government prefers foreign ownership to domestic ownership, which was made clear during the Vale strike in Sudbury. Wealth and leadership will leak to other jurisdictions.
Trade: The new perimeter border agreement with the United States will have major implications for food safety and labelling in Canada. As a practical matter, if not legislative fiat, Canada will be giving up its sovereignty on these matters to a country where regulations are bought and paid for by major companies.
Labour: From the predictable but still breathtaking demand by Caterpillar Inc. that workers at its new acquisition, Electro Motive, in London, Ont., take a 50 per cent salary cut to the lockout of 800 workers at Alcan (fairly recently bought by Rio Tinto) in Quebec, there has been a continuing hollowing out of Canadian ownership, which often leads to a violent repricing of labour. It will continue.
Culture: The U of T just sold the book publisher McClelland and Stewart to Random House, owned by Germany’s Bertelsmann, in spite of laws in Canada keeping book publishers Canadian-owned. The PostMedia Network Inc., which owns most of Canada’s dailies—which used to be owned by the Southam family, and then Conrad Black, and then Lenny Asper—now wants Canadian ownership rules changed so it can sell out to foreign interests. It ran out of Canadian buyers to flip newspapers at a profit. The cultural polices that bred thousands of Canadian magazines, kept newspapers Canadian-owned, put Canadian singers and songwriters on our radio stations, and saw a Renaissance in Canadian writing is over. Between corporate greed and stupidity, and a disinterested federal government, the era is over.
There is no denying we are in a period of accelerated creative destruction. The question is do we value who we have been, and will it inform our response? Do we know what we stand for, or will money and technology trump everything? Will we be conscious or comatose, intimidated or animated, informed or ignorant, passive or deliberate?
It’s going to be a hell of a ride.
