baudrunner's space: A comparison of economies
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Monday, January 21, 2008

A comparison of economies

I'll bet that you thought that I was going to compare the economies of the U.S. and Canada, didn't you? At first glance that would not represent a very fair comparison, the Goliath economy of the U.S. to our paltry one-tenth of the population and surrendering half of our daily lives to the cold weather while we do our best Canadian version of living the American dream economy. Not fair at all. So let's direct our attention elsewhere. Let's take Canada and see if we can't make The Netherlands look good by comparison. It's surprising how easy that is. All of the following numbers are up to date and real and taken from the pages of the official CIA website's World Factbook.

Canadian flag             vs.             Dutch flag

The total budget of Canada currently sees revenues of $183.5 billions with expenditures of $181.8 billions. Its public debt is 65.4% of GDP and it has a current account balance of $20.56 billions. Its military expenditures account for 1.1% of GDP.

The total budget of The Netherlands currently sees revenues of $304.3 billions with expenditures of $306.5 billions. Its public debt is 50.8% of GDP and it has a current account balance of $50.17 billions. Its military expenditures account for 1.6% of GDP.

Canada exports about $405 billions worth of goods per year and imports about $353.2 billions worth. Canada's GDP falls about $136 billion short of being twice that of The Netherlands' while Holland's population falls about 124,460 shy of half of Canada's population. The Netherlands exports about $413.8 billions worth of goods and imports about $373.8 billions worth of goods. These are relatively healthy trade balances for both countries.

Canada has about 415,573 sq. km. of arable land while The Netherlands has about 154,294 sq. km. of arable land. Each country employs no more than 2% of its labor force in agriculture but it was only a few short years ago that Holland could claim to be the world's third largest exporter of agricultural products after the U.S. and France. Even through the 1970's The Netherlands exported more pork product to Canada than Canada produced.

Even though Canada has 202,080 km of coastline, including all those islands of course, The Netherlands has about 451 km of coastline but surprisingly this does not translate into a fair distribution of sea-going trading vessels in their respective merchant marines. The Netherlands has a total of 558 ships including 29 bulk carriers and 345 cargo vessels while Canada's merchant marine constitutes but 173 ships including 62 bulk carriers and only 10 cargo vessels. When seen in light of those numbers then the trade figures begin to make a little more sense. Economics is about trade.

One would expect Canada to show bigger numbers across the board but that is not the case. As to why that is isn't immediately obvious. Much has to do with the system of government. In Canada we have two essential parties which historically have shared power, the Liberals and the Conservatives. A similar situation exists in the U.S. with the Republicans and the Democrats sharing power. There are additional parties who are slowing eroding the historical trend in Canada but the situation in America is not likely to change any time soon. I am reminded of what Thomas Jefferson said to a colleague after signing the Declaration of Independence, "The one thing I fear the most is the tyranny of a two-party system".

European nations have a vast number of registered political parties and the trend is toward moving away from unilateral representation by only the majority party. The result is that every member of parliament or house is ideally a full partner in the governance of the nation, whereas in Canada or America the ruling party favors only its loyal members, at times leaving close to half of the government virtually impotent. It wouldn't surprise me if that lay at the root of Canada's problems. Every nation would benefit from full participation in government of all of its elected representatives, based on the idea that once the election is over it is over and the concept of opposition politics be held over to the next election campaign so that we can get on with the job of governing the country. The term "loyal opposition" is something of an oxymoron and many gifted talents were never realized because their parties did not win a majority of seats and invariably all the cabinet portfolios were given over to party members.

In a speech given by the Dutch Finance Minister in which he addressed a conference about the Scandinavian model, he stressed that the deciding contributors to economic prosperity lay in productivity and innovation, labour participation and budgetary policy. In other words, a happy people well served by their government produces more because sound fiscal management makes their happiness possible. A happy people's interests are served by their government as a matter of priority. A government cannot have ulterior motives and put its interest ahead of the people's, because that will serve only the interests of the few.

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