Saturday, March 28, 2009

Ian Brodie and the End of Idealism

John Geddes has a disturbing account of how Harper's former Chief of Staff Ian Brodie considers the GST cut to be a resounding success, even though by any economic standard (and he admits this) it was a terrible idea. Why? Because the purpose of the GST cut was not, apparently, to help the economy or the Canadian people.

The purpose of the GST cut was merely to get the Conservatives elected.

The whole article is worth a read, not only as an insight into Conservative strategy, but as a numbing indictment of the political process as a whole. It's kind of depressing, actually - especially since he might be right.

One person made the following comment about the difference between business and government:

A business is about making profit and we all know it is about making profit. Some of the sales may be result from marketing, but the marketing is very targetted and driven by detailed market analysis. If they don’t base their decisions on facts they will fail, the owners will lose some money and then go and start a new business. Plus as a consumer I can choose not to buy from one company or another.

A government is representing its constituency and we don’t have an option to go get ourselves another government and the government gets to tell us how much we have to spend after we’ve “bought” it and can change what we bought after the fact. And then if the policies fail, or screw up, it is other people who lose money.

It's actually a reasonable point in many ways, and I'm sure it was well intended. And yet, I just couldn't help myself:

Thank you for that fine analysis of 18th century capitalism. Allow me to introduce you to the 21st century:

Business is about making profit for its shareholders - unless it is merely about moving money around in a way that gives the appearance of making a profit. Sales (if the business still indulges in such a quaint practise as selling things to people) result from maximizing the market share, usually by undercutting competitors through integrating the supply chain and cutting costs by any means necessary, then absorbing and thereby eliminating their competitors before jacking up the prices.

If they don't base their decisions on facts they will fail, but it will not be called 'failure'. It will be called 'restructuring', or 'divestment of assets'. Or maybe 'Iceland'. In any case, by the time such a failure is recognized, everyone involved in the decision-making process will have cashed out and moved to a tax-sheltered island somewhere. And someone will blame the government, but for all the wrong reasons.

As a consumer, I can choose to time travel back to the 18th century, when there was still legitimate competition between locally owned businesses whose owners were accountable to their customers and not solely to the value of their stock options.

The problem with governments is they have convinced us that we are their customers, when in fact we are their shareholders.

There. I feel a little better now.


  1. "The problem with governments is they have convinced us that we are their customers, when in fact we are their shareholders."

    Very well said.

  2. Yes indeed! I shall steal that fine phrase for future use in our discussions at
    Good post Jennifer...