2013-12-27

Quebec A Laggard Economy

From Le Quebecois Libre:

"...I also take it for granted that in the history of mankind, freedom has been the exception. Prior to the Industrial Revolution, the average human lived on between one and three dollars a day. But from that point on, for the first time in human history, per capita income in a few European countries and particularly in the USA began to grow rapidly. This was the result of economic freedom, which enables entrepreneurs and small businesses to flourish. The free-market system proved to be the greatest engine for prosperity and opportunity. Doubt about the effectiveness of policy is of course rejected by advocates of state planning. At the same time, this belief in government is far from the demonic perception of the free market by "warmists," who often claim that endorsement of free-market economics implies rejection of climate science.
 

As far as the distribution of income is concerned, the political left in Quebec (and to a lesser extent elsewhere) counts on the hand of government to move people up the economic ladder. In fact, this never works, despite its good intentions. Conservatives and libertarians by contrast understand from experience that the only way to help people climb the economic ladder is to provide them the opportunity to pull themselves up one rung at a time. Studies consistently confirm that countries with higher levels of mobility and economic freedom have poverty levels as much as 75 percent lower than countries that are less free. Quebec and continental Europe show that more government is not the way to do this. Both have had higher levels of public spending than the United States, and both have had lower GDPs per capita."

"Quebec is a lagging province to the extent that its share of the Canadian population, of GDP and of the labour force has declined since the Quiet Revolution. The population’s movement and its corresponding change in GDP indicate that in a provincial economy, integrated into a national economy, adjustments are realized by quantities, not prices or income per capita, except for the price of land and local services. Because land is a resource in fixed supply, its price increases faster in Ontario than in Quebec. The adjustment process continues until real income per capita has equalized across the two provinces. The wide divergence in total growth between Ontario and Quebec has been entirely capitalized in the price of land and local services. Thanks to people's mobility and lower growth of the Quebec population, Quebec residents have participated in the rise in the Canadian standard of living. This result entails a drawback however: To the extent that less mobile Quebecers have not suffered from lower per capita income, they are less likely to resist state control."

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