Only a fool attending the four-day Couchiching Institute on Public Affairs conference, which ended yesterday, August 8, would have expected a clear, one-word answer to this ambitiously high-flown question (referring to the financial meltdown) because it is evident that since we are by no means out of the woods – WHAT woods? it was asked – not even the brightest of the bright can tell. By the way, not many fools were there.
But many bright people were – including one incumbent finance minister (Jim Flaherty) and two former finance ministers (Paul Martin and Michael Wilson). The Watershed-aspect of the question was naturally the one that appealed to the historian, Margaret MacMillan, who wondered whether 2008, the Year of the Breakdown, will be a “transformative” event future historians would rank with the revolutionary year 1848, or 1913, the year the U.S. Federal Reserve was created, or 1929, the Year of the Crash.
The “wasted opportunity” aspect interested the environmentalist, Thomas Homer-Dixon, and the economist, Jeff Rubin, both of whom reminded us of the pedagogical effects of crises – crises as shock-treatments – and insisted that “innovation, innovation, innovation” was the obvious but ever-more-elusive recipe for sources of alternative energy.
They also dealt with less obvious variations of these themes. Canada’s much envied talent for regulation of financial institutions was diagnosed by Nicholas Le Pan and Angela Redish and, of course, enabled Jim Flaherty to highlight Canada’s relatively good performance. Strongly critical of the financial establishment’s behaviour during the meltdown was Armine Yalnizyan, and highly discouraging was Anne Golden’s account of Canada’s mediocre competitiveness and productivity. She made us wonder what qualities were required to improve our record, questions of special interest to Roger Martin. Alex Himelfarb had much to say about the limited but far from insignificant role of the state in economic matters. Shifts of global power – to China, India, Brazil – received due attention as well, and made Doug Saunders describe eloquently the watershed events driving the poor in Asia and Africa from rural areas into the cities, echoing comparable migrations among industrial nations some centuries ago.
So naturally there were no clear answers, and none were to be expected since, as some economists told us, clear answers were an impossibility when questions were raised about “complex systems.” (Is that an alibi?) One positive result emerged clearly – that in today’s world only global solutions can work. As a result of the meltdown, the G8 and, even more so, the G20 have moved to the centre of global decision-making.
All that leaders in power can do, however, is create conditions that make it possible for people and markets to operate as efficiently as possible. A pre-condition for all leaders, those in power and those out of power, is that they examine and debate political and social questions as freely and seriously as informed citizens do every August – young and old – on the pleasantly productive shores of Lake Couchiching.