Free Trade? at 25, USA and Canada

Charge!!!   

There is a scene from the John Candy movie Canadian Bacon, where American military types realize that 90% of Canada's citizenry live within 100 miles (~160 km) of the American border. They pretend to fear an invasion. The fact is Canadians invade the United States regularly, every weekend. But when Canadians 'charge,' they do it with a credit card.

This month marks the 25th Anniversary of the Canada-United States Free Trade Agreement (FTA).

Reciprocity, as it was once called, pre-dates Canada, back then it was limited to raw materials, but in 1911 the terms were broadened and Reciprocity or free trade, was defeated when the Borden Conservatives rejected a treaty signed by the Laurier Liberals. The same arguments used against free trade then, were used in 1987, when ironically, the Mulroney Conservatives signed the FTA. A national election in 1988 confirmed the deal, which was apposed by the socialist NDP and left Liberals of the day. I'm sure Laurier would have been sickened by those modern era Liberals.

So if free trade has been around for a quarter of a century, why do Canadians in ever growing numbers choose to shop in the nearby border towns of the United States? Why are there services that provide "border wait times," for travellers - mostly Canadian - here, here, and here? The answer is simple, just have a look at the tariff chart below that was published in the National Post recently.

from the National Post

If all those items are 7 to 18% more expensive in Canada, AND, each province (except Alberta) has a sales tax plus a federal GST, you can see why many Canadians go on US shopping jaunts particularly since the currencies have been close to par for sometime now. Where I live in Ontario, there is a 13% HST (harmonized sales tax, federal and provincial) that may be avoided with a 90 minute trip to New York State. The potential savings on an item of clothing would be upwards of 30%! Lets not forget that shopping in upstate New York provides more selection and good sales too, because of "the economy of scale."

That phrase: "the economy of scale" is often used by Canadian wholesalers and retailers (as an excuse - but I'm not blaming them) to explain their higher prices. Yet the population of the Greater Toronto Area (GTA) is far larger than upstate New York, aren't we big enough here if we were part of that same New York State market? The simple answer is yes, we are big enough, and yes, we could be part of that market, but the invisible boundary that separates us from our neighbours in New York, adds various government costs to "protect" our industries here in Ontario. Some free trade.

So our political masters here in Canada try to protect the brassier and panty hose industry, while at the same time hurting the rest of the population and in particular those least able to afford brassieres and panty hose.

In that National Post article I've mentioned above, Terence Corcoran explains why free trade is due for a change.

BTW, for your enlightenment here is the trailer to Canadian Bacon, enjoy:

Ed & Ethan 0.5 are moving to a new format....

But, I made it to the final broadcast (in this format)...and some of the past broadcasts too. I like this one because I'm the only panelist along with Ed & Ethan. Have a listen:

Minarchy vs. Anarchy and the State

In libertarian circles the minarchy versus anarchy argument is ever present, and typically in a non-threatening way.

What I mean by "non-threatening" is that the anarchy is NOT the sort characterized by conservatives and liberals. You know the kind, rioters in black masks roaming the streets looting, pillaging, and causing general mayhem. That is not the libertarian view of anarchy, thats just rioting.

The libertarian view of anarchy coincides with the concept of spontaneous order. That concept describes how the unhindered the free market operates by imposing its own rules on itself, such that there is a "spontaneous emergence of order out of seeming chaos." One of the biggest proponents of that sort of anarcho-capitalism, as it is called, was Murray Rothbard.

My background teaching biology made it very easy for me to accept spontaneous order in economics and society. Anyone that has ever studied biology will know that organisms, be they plant, animal or protist, live within "self ordered" ecosystems. There is a producer level, and various levels of consumer, and any external interventions often disrupt the order of the ecosystem. So, you see its not a huge jump to spontaneous governance among humans, and I have written about this before, here, here, and here.

In the ReasonTV video below, Stefan Molyneux is interviewed by Matt Welch at FreedomFest 2012. If you live in or near Southern Ontario, Stefan Molyneux will be the Keynote Speaker at Liberty Now on November 3, 2012. Why not come out and challenge the self-confessed  anarcho-capitalist on his home turf? I'll be there too.

US vs. Canada Health Care: "A Mercedes Costs More than a Corolla"

Yes, "A Mercedes Costs More than a Corolla," even though they both seem to be able to do the same thing, that is carry people from one place to another. Certainly the Mercedes does the "carrying" in more style and comfort, but the end result is the same.

That comparison used in the following video from ReasonTV discusses the cost and availability of health care, including a brief comparison of the American versus the Canadian medical care systems. 

If the American system is the Mercedes, and the Canadian system in the Corolla, then the end result for patients should be the same, just difference between luxury and utility. But is it? Do Canadians get faster better service, or are wait times longer and access to care more restricted? 

I think a better and more appropriate comparison would be comparing the product of an ordinary X-Ray machine to the product a CT Scanning machine. Both products will give physicians an internal view of a patient, but the CT Scan will provide volumes more data for the physician to make an accurate diagnosis of an ailment.

In this commentary Michel Kelly-Gagnon, president of the Montreal Economic Institute, does have an interesting viewpoint.