Stalled. Michael Hlinka

Чтение книги онлайн.

СКАЧАТЬ to forty-five wore their country’s uniform. In addition, one million Canadians worked in essential war industries while two million were engaged in “essential civilian employment,” which included agriculture, communications, and food processing. At the time, Canada’s population was just over eleven million. This meant that — once you separated out the very young and very old — more than half of all Canadians participated directly in the war effort.

      And even if you didn’t participate “directly,” your life would have been affected. Commencing in 1942, basics like meat, sugar, and gasoline were rationed. Everyone was called upon to sacrifice.

      However, those sacrifices were trivial compared to the one made by the 45,000 who gave their lives.1 That represented 0.4 percent of the population. The high school I went to had 1,200 students. Simple probability would suggest that at least five young (most likely) men from Etobicoke Collegiate would have lost their lives. My guess is that most Canadians knew at least one person who never came back. It’s a sobering thought. Yet I believe that there were positive consequences. A world view was forged by the fire of war; a common mission unified Canada and laid the foundation for the spectacular success of the 1950s and 1960s.

      I try to put myself in the shoes of Mr. Smith and others like him and think what would have driven them when they returned home. I’m guessing it came down to something like this: the Second World War was so horrific that sensible people wanted to do everything in their power to ensure it never happened again. (This desire was made even stronger by the recognition that with the development of nuclear weapons a Third World War might mean the end of civilization as we knew it.) A very clear line could be drawn between the outbreak of the Second World War and the rise of Hitler. An equally clear line could be drawn between the rise of Hitler and Germany’s economic ruin after the First World War. Rational, peace-loving people saw the connection between prosperity and peace, and so (as of 1950) 13.7 million2 Canadians set themselves to building the country.

      I wasn’t around at the time. But my gut tells me that a general consensus emerged around the following:

       we can’t afford another world war;

       we only made it through and won because everyone who was able-bodied did his or her fair share and just flat-out sucked it up when the going got tough;

       after all we’ve been through, we deserve to enjoy some of the good things in life — but you’ll only get those if you work for them. Nothing in this world comes delivered on a silver platter; and

       all Canadians are in this together. Bombs don’t differentiate between the rich and the poor.

      It was around these principles and the desire for peace and prosperity that the 1950s unfolded.

      The desire for peace, the desire not to see another world war led to Canada’s enthusiastic support for the United Nations and peacekeeping missions.

      And key to the country’s economic progress was the view that individuals, not the government, were responsible for themselves and their well-being. Government took care of “peace and order.” There was no belief that it was the duty of the government to take care of individuals. That was each person’s responsibility.

      However, government did play an important role in economic development. It was called upon to provide essential services; then citizens, acting either as individuals or as part of a group — whatever they preferred — would take care of producing the goods and services that made life worth living.

      One of the things that government provided was infrastructure. Two important initiatives from that era were the Trans-Canada Highway Act of 1949, which saw the construction of the Trans-Canada Highway begin in 1950, and the building of the Yonge subway line in Toronto. (A quick aside. I’ve lived in Toronto all my life and it is the biggest city in Canada. I’m using the Yonge line as representative of the kind of projects that were happening all across Canada and, indeed, North America.)

      Work on the subway began in September 1949. A technique called “cut and cover” was employed. A large trench was dug into Yonge Street and steel beams were then laid across the trench and covered with dirt and asphalt, which allowed cars and pedestrians to keep using Toronto’s main thoroughfare while work proceeded under tires and feet. Fourteen thousand tons of steel, 1.4 million bags of cement, and five years later, there was a line that ran from Eglinton Station to Union Station, allowing more people to get to where they had to go more quickly and efficiently.3

      The building of the highway system did essentially the same thing: it facilitated activity that produced goods and services of real value.

      There is a great deal of confusion about how infrastructure spending creates wealth. Most people — mistakenly — believe that the value is in the work itself. Nothing could be further from the truth. The value of infrastructure spending is that it creates efficiencies that otherwise wouldn’t exist.

      Imagine that there are three towns of equal size, located several hundred miles apart. Right now, it’s physically impossible to get from any of the three towns to any of the others. This means that each must be self-sufficient in producing what it needs. For example, Town One would have a small factory that makes furniture, a small factory that makes shoes, and a small factory that makes clothing. Let’s say that each factory employs twenty people. The same situation is true for Towns Two and Three. They have similar factories of similar size, and altogether 180 people work to make the necessary furniture, shoes, and clothing for the people of the three towns.

      Then, a highway is built that joins them. You can now quickly get from Town One to Town Two, Town One to Town Three, and Town Two to Town Three.

      Economies of scale are critically important in manufacturing — the opposite of diminishing returns. If it takes twenty people to produce one hundred pairs of shoes a week, it won’t take forty to produce two hundred — it might only take thirty. Instead of needing sixty people to produce the necessary shoes for all three towns, thirty-five might be enough.

      Look what just happened. The same output is accomplished with thirty-five people, meaning that twenty-five can turn their energies to something else. This is the kind of efficiency that is fostered by the right kind of infrastructure spending.

      Note — and this is important: It wasn’t the building of the highways that made Canada wealthier.

      Again, a simple model helps make the point.

      Let’s imagine that instead of building a highway that linked Towns One, Two, and Three, the same resources were spent on roads that went nowhere, that were never used by a single person. How can that possibly be understood as adding value? There would have been negative value, because the time and energy wasted could have been used for productive activity — that is, making more furniture, shoes, and clothing!

      The subway system or any good public transit system impacts the real economy in a slightly different way. It makes it possible for the human capital of a municipality to be used in the most effective way possible.

      Another example: I am a highly skilled carpenter who lives in the west end of a city. But all the factories that need my services are in the east end and I have no way to get there. Meanwhile, there is a highly skilled welder who lives in the east end of that city. But all the factories that need his services are in the west end and he has no way to get there. It might be that I’m okay at welding and the welder is okay at carpentry, so we are able to get jobs close to where we live. However, in this case, human capital is not being maximized.

      Public transit systems that get people quickly to and from where they can add the most value are clearly accretive to СКАЧАТЬ