Canadian Federalist Party

Regeneration of Canada’s Institutions (865 words)

Economists have gone down many paths in their attempts to identify why the Western nations accelerated their prosperity gaps with the rest of the world. Nowadays there appears to be widespread acceptance that the multiplicity of institutions, private and government, social, cultural and religious, combine to produce either more wealth or produce elite exploitation of rents from the masses.

Economies stagnate when structures promote centralized rent from the masses, rather than distribution of capital assets. As every institution matures it trends towards becoming a rent monopoly unless reform and innovation stimulate competition and new growth.

In recent times, institutions like OPEC, government autocracies, sovereign wealth funds, industry oligopolies, energy giants, drug cartels, etc. extract wealth and don’t contribute competition or new growth into their realms. They are truly slowing down growth and development in their economies when they should be revitalizing themselves and sharing their wealth with consumers and society. Their self-interest and greed could easily pave the way to their financial downfall and the economic stagnation of the countries where they operate.

Niall Fergusson’s, The Great Degeneration, How Institutions Decay and Economies Decline, (2012) reveals the major institutional forces that emerge and dominate economic progress or stagnation throughout history and in countries around the world today. The CFP, Canadian Federalist Party, has a 100 Year Vision for Canada in which we begin to study and improve our institutional framework so that the power, creativity and innovative spirit of our Canadian citizens can be released from the constraints that have tightened and divided our economy over the past half century.

Canadians don’t need a social revolution to raise our standard of living. We merely need to redefine our institutional purposes in line with enabling capital accumulation and capital access. Families must be enabled to obtain sufficient wealth to responsibly assume financial risk for innovations. This is not possible as long as we are renters instead of owners. Our debts merely strengthen the institutions that let us use their capital. We must seek out and revise or eliminate regulations that impede competition and thus aid large financial elites to control Canada’s capital assets.

Of course, Canada needs many large institutions that facilitate global trade opportunities, but these institutions should also have a responsibility to help Canadians create more widely distributed private capital pools. If this responsibility is ignored, then wealth greedily flows into the few hands of the rich elite with their power to corrupt the political and financial institutions.

The wealthy Western democracies have a relatively brief opportunity to get off this path towards stagnation and narrow institutional wealth dominion. At this moment in economic times, Global Enterprise is accelerating its acquisition of global wealth (and in many instances with powerful government allies). Canada may have very little time left to restructure the institutions functioning within our economy.

For growth and prosperity to thrive, the freedoms and liberties of capital control and ownership of private property, must be released. The paths of increasing legislated controls and excessive security stifle the distribution of capital throughout our society. Every barrel of oil, tree we cut, diamond we mine, crop we grow, items we manufacture, services we provide and hour we work, produces new Canadian capital. An incentivized population will accelerate our capital expansion and distribution.

Many Canadians, especially those already working within our existing institutions, need not fear the changes and improvements we need to make. In fact, working within these institutions should result in modest capital accumulation by all families. By introducing innovations within these organizations, Canadians will enable greater capital flows into their families. Quite possibly, these existing institutions can spin off new institutions and thus create the capital expansion cycles we need.

In my opinion, it is important that Canadians understand that a quantity of fiat money (mostly recorded in electron databases) is only as valuable as the capital asset it is attached to. Banks and speculators have trillions of dollars tied to over-valued assets, many of which are debt obligations tied to real property. But Canada also has $CDN trillions we haven’t even discovered or produced yet.

The discussions are already tense concerning the Generational Debt Burden Canadians have incurred over the past 40 years of forward spending and commitments. (Interested readers should click on the “Statistics” tab on the Bank of Canada website.) There one will see over 120 pages of future financial obligations Canada has to other nations’ capitalists extending out past 2025. Government pension obligations are equally intimidating. Our present financial circumstances could appear as the Golden Years if we don’t begin to change these institutions that are sucking us into a whirlpool of debt burden on future Canadians.

Once we lose our financial autonomy, we become slaves to our debtors. Canada needs to accelerate its production of capital and its distribution of capital throughout our communities. We must not rely upon a “slave revolt” far off into our future.

God bless Canada!

Jim Reid CFP Founder