Is Mark Carney eyeing Trudeau’s throne? Canada has always been a capitalist plaything

The battle lines for Carney in Canada would be very similar to the contest between Remain and Leave: making an explicit connection between his enemies in Britain and those in his home country, Carney reminded his audience: “Brexiters promised that they were going to create Singapore on the Thames, [they] actually delivered Argentina on the Channel… Broken Britain… sound familiar?” — a reference to Poilievre’s case that “Everything is broken” in Liberal-governed Canada.

Indeed, Carney would make for a far more intellectually compelling opponent and foil to Poilievre than the distinctly non-intellectual Trudeau, since the two represent two diametrically opposed conceptions of capitalism. On the one hand, Poilievre, like his UK counterparts Rees-Mogg and Liz Truss, believes in the primacy of unfettered markets and the individual as the surest agents of prosperity — to the near-total exclusion of the state, a view generally referred to as “neoliberalism” or what their common inspiration Margaret Thatcher dubbed “popular capitalism”, Right and Left-wing versions of which have, of course, predominated in the West since the Eighties, corresponding with a rise in inequality. On the other hand, Carney embodies a distinct form of political economy with roots in Canada’s past, in which states and corporations alike work to harness market forces toward common good outcomes, what Carney calls “mission-oriented capitalism” (something his frenemy Boris Johnson might have endorsed in his more communitarian phases). This is an approach that may in theory hew close to social democracy, but which in practice elevates a class of corporate elites to manage society’s competing interests. Neither seems particularly inspiring but Canadians may soon have to make a choice between them.

Today, the neoliberal model that Poilievre holds to has been much dissected and debated: he will try to roll back superfluous local regulations in the hope that market forces will deliver, without further need for guidance. But much less is known about the paradigm and lineage that Carney belongs to. What exactly would a Carney government look to do?

One way of answering the question is by shedding more light on Carney’s historical antecedents. For this, we may turn to Peter J. Cain and A.G. Hopkins’s theory of gentlemanly capitalism, which posited that the strategic and economic policies of the British Empire in its heyday, encompassing Canada in its founding era in the 1860s, were determined by transnational financial elites in the City of London, as opposed to the provincial manufacturers and smallholders whom the desire for colonial markets is sometimes attributed. The modern equivalent of the “gentlemanly capitalist” class would be typified by the Mark Carneys and Klaus Schwabs of the world: their outlook was shaped more by their shared material interests, straddling the empire, than by their local and national attachments.

Canada’s global orientation has often been determined by the direction of capital flows. As historian Andrew Smith has shown, in his application Cain and Hopkins’s thesis to the Dominion of Canada in particular, 19th century Canadian elites were resolutely pro-British because, in the age of “Anglo-Globalization,” that’s where all the big investments came from. By the same token, 20th-century Canadian elites became pro-American because the centre of wealth and power had transferred to Wall Street and Washington. In the 21st century, then, it is no surprise to see Carney fraternising with Schwab, Christine Lagarde, Larry Fink and other such figures at places like COP26 and the World Economic Forum. Just as previous generations of Canadian rulers had to “kiss the ring”, so to speak, so must he. And it is easy in this era of populist discontent for critics to attack Carney over his golden rolodex: they may charge that the shady and corrupting influence of “globalist elites” would be inescapable under a Carney administration — whereas Poilievre has explicitly banned his future ministers from ever setting foot at the WEF.

Yet there is a reason for this lasting concord between Canada’s rulers and the lords of finance, namely that for a country so large and so sparsely populated, there is never enough capital in Canada to service its insatiable developmental needs, whether it is the construction of railroads to settle the frontier or the production of armaments to win the Second World War. Thus, the nation’s two longest-serving prime ministers, the Conservative Sir John A. Macdonald and the Liberal Mackenzie King were known (and criticised in similar terms) for their cosiness with the reigning globalist elites of their day, whether it be the mighty Barings Bank in Macdonald’s case or the Rockefellers in King’s: it is fair then to say that from imperial times to today, Canadians have never stopped “kissing the ring,” whoever may be wearing it.

If Carney truly wanted to follow in the footsteps of these great Canadian statesmen and make a difference, he would turn his golden rolodex from a political liability into a policy asset, that is, a means to solving the greatest challenge confronting Canada today: the housing crisis, ranked as among the most severe in the developed world. After all, Carney once raised an astronomical sum of $130 trillion for financing climate investments at COP26, something he could not have done were it not for his intimate connections with asset managers and institutional investors the world over: could he do something similar as PM? Solving Canada’s exorbitant housing shortage is said to cost $1 to 2 trillion, a fraction of what Carney gathered for the climate. He could then employ his technocratic expertise in blended finance and public-private partnerships to steer those investments toward a national industrial policy geared toward the mass manufacturing of housing for both the rental and ownership markets (an idea that is slowly taking shape among certain policy thinkers). This would be a titanic financial endeavour that could generate hefty returns for investors in the decades ahead, since the only thing that matches the astronomical costs of Canada’s housing crunch is the astronomical demand underlying it.

For there are millions of young middle-class Canadians, including even the children of affluent families now priced out of emulating their parents’ standard of living, who are willing to spend their hard-earned dollars on the dream of owning a home, but are practically prevented from doing so by the draconian Nimby-ism of local governments across Canada. There is, in other words, a vast underserved market potential which a coalition of large investors could profit from: Canadian household debt is estimated to be at a staggering $3 trillion. It is precisely the kind of problem that calls for the large-scale coordination that only “mission-oriented capitalism” can mobilise.

Whatever the case, there is a strong chance that future politician and Liberal leader Carney will act in ways that confirm every accusation of elitism and arrogance that his Conservative opponents have levelled since his return to Canada. (One can hardly read his book Values without getting a sense that he just knows so much more on so many topics than you and all your friends.) But all the ambition and lust for power in the world would probably be worth it if he could deliver on the one, all-consuming issue that threatens Canada’s social peace and economic prosperity.

Of course, there is also the possibility that Carney, whether he ever wins an election or not, would just end up like Trudeau, who said all the right things at the start only to fall short miserably — in which case, Carney and Canada’s Liberals should prepare themselves for a lifetime of panic and pearl-clutching. For they will have handed power to Poilievre’s Conservatives indefinitely, before being exiled into a state of perdition that another Canadian expatriate-turned-Liberal messiah, Michael Ignatieff, once aptly referred to as Fire and Ashes. If Carney isn’t careful, that could be the title of his next book as well.

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Michael Cuenco is a writer on policy and politics. He is Associate Editor at American Affairs.

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