REVIEW OF LINDA MCQUAIG, THE CULT OF IMPOTENCE: SELLING THE MYTH OF POWERLESSNESS IN THE GLOBAL ECONOMY (VIKING, 1998).
Catholic New Times, 28 June 1998; on the web by permission, August 2003
Impotence has made headlines this spring. A drug called Viagra that allegedly cures it has been released south of the border. Demand is high.
Against such a background, this book's title sounds bizarre. Why would a cult of impotence exist? As McQuaig points out, Canada's political and financial elites display on most matters an aggressive, can-do, testosterone-charged machismo. But not when it comes to reducing unemployment, maintaining the social safety net, or otherwise managing the economy for the benefit of the Canadian public.
On these matters, she says, the elites insist on their incapability with the fanatic single-mindedness that marks a cult. They excuse their poor performance with fatalistic pat phrases like "round-the-clock capital markets," "the globally integrated economy," and "information at the cutting edge." To McQuaig, Finance Minister Paul Martin sounded on one occasion "almost like Patty Hearst during her abduction."
In support of her thesis, McQuaig chronicles the fate of economists who have offered the current Liberal government various forms of political Viagra. There is banker Douglas Peters, who carried Keynesian prescriptions with him to Ottawa, after his election to Parliament in 1993. His prescriptions ignored, he sat the 1997 election out. There is Rodney Schmidt, a young economist in Finance in 1994, who defended a tiny tax on currency transactions as a remedy for political impotence. By the end of the book, Schmidt was working for an NGO in Vietnam.
The tax Schmidt defended (and that McQuaig believes would work) is the brainchild of American Nobel Laureate James Tobin. The idea is for governments to appropriate a fraction of one percent of the value of each transfer of capital across national boundaries. The Tobin tax would be low enough so as not to deter long-term investment. Its bite would be felt on the short-term, almost hour-by-hour megabuck transfers that hold governments in terror of doing anything that might displease the high rollers of global finance. Even a small toll on these short-term transfers would discourage them, enabling governments to regain some control of their national economic policies. Tolls collected on transfers still made would bolster the public treasury, giving governments the wherewithal to act.
In prose unusually engaging for economic writing, McQuaig describes the cool reception in Ottawa both to the Tobin tax and to him personally. She also describes the indifference of most professional economists to the proposals for reducing unemployment of another Nobel-Prize-winning economist, William Vickrey.
McQuaig portrays the cult's practitioners no less clearly than she does the dissenters. The true believers control the Finance Department, the Globe and Mail, the Bank of Canada, and the current Liberal government. High unemployment rates are natural from their point of view, derived in great part from "free-market zealot" Milton Friedman. If the unemployed were given jobs, inflation would rise and the sky would fall.
McQuaig makes a compelling case. Among the many single-issue obsessions in our postmodern world, the cult of political impotence in federal politics is among the worst. Cults of a religious or academic kind may be crazier, but this one tears at the very fabric of our common life, the fabric that joins those of us with jobs to those without.
What is the origin of this strangest of cults? McQuaig gives the short answer: it serves elite interests. To the extent that the richest fifth of the population can make itself believe it is powerless to improve the lot of the poorest fifth, it frees itself of guilt for leaving the poor behind.
Like Maude Barlow, Tony Clarke, and most other social democrats, McQuaig glosses over the longer answer, the cultural answer to which the Viagra hoopla points. With subsistence needs satisfied and under the influence of mass media, Canadians have in the main lost interest in politics, except in so far as it enables and enhances private enjoyment of goods and services. The common preoccupation is with individual performance in shopping malls, stock markets, lotteries, fitness gyms and bed. To the politically inactive, political impotence does not matter very much.
As if to lend McQuaig's thesis further support, both the Globe & Mail and Maclean's panned this latest of her illuminating books on the Canadian economy. In the Globe, Peter Newman pronounced that despite her "discovery of available options, our impotence remains uncured and probably untreatable." In Maclean's, John Geddes applauded McQuaig's independence of mind but worried that the loonie's value might fall. In the room the big men come and go, talking of Michelangelo.