Government's overall effect on the old economic order
Rather than stimulating innovation and productivity growth, government provided...
1. Insulation from external and internal competition...In the interest of safegaurding national autonomy, foreign competitors were discouraged by tariffs. Domestic competition was discouraged with weak cometition laws
2. Forestalling the need for upgrading...factor costs (like oil) were artificially held down rather than making companies scramble to deal with real world conditions. Governments let the Canadian currency depreciate to reduce international costs
3. Direct intervention instead of business action....subsides and bailouts
4. Programs to distribute wealth, improve welfare and access to jobs has sheltered jobs in the short run but only delayed inevitable adjustment
5. Conflicting government policies and objectives - each layer of government has its own turf. Co-ordination is necessary in employment, research, enviroment, training, etc but instead they fight.
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