June 2006

Contents Related Letters

Re: “Beyond Shame and Outrage,” by Timothy Brennan

Timothy Brennan’s article exposes the vanities of the new breed of warrior intellectuals who have signed on to the 21st-century imperial project. Whatever their intellectual and ideological origins, and they are various, Michael Ignatieff, Niall Ferguson, Robert Kaplan and Thomas Friedman, among others, are self-proclaimed guardians of civilization against the onslaught of the new barbarians. What unites these thinkers is more their tone of studied hardness than any intellectual consistency. In their approaches to the challenges of failed states, terrorism and Islamic jihadism, they have contempt for those they see as soft liberals who hope for a world in which tolerance, the rule of law, greater social equality and peace might be sought without the power of empire to sustain them.

When he is asked tough questions about why he supported the American-led invasion of Iraq, Michael Ignatieff quickly mentions that he has been shot at. Apparently this arresting fact is among his qualifications to lead provincial Canadians who understand little of the real world. The fact that most Canadians were right that the invasion of Iraq would make the world a less safe place and that he was wrong doesn’t come into it. It’s a matter of tone, of pose.

It’s much the same when Niall Ferguson dares to challenge political correctness by quoting Rudyard Kipling’s “White Man’s Burden” approvingly. How better to shock us into realizing that despite the blots on its record, such as the massacre of hundreds of civilians by British troops at Amritsar in India in 1919, the British Empire was a good thing on the whole. His message is that the world needs America to take up where the British Raj left off.

Robert Kaplan, in a characteristic phrase, declares that “Machiavelli says good men bent on doing good must know how to be bad.” The realists love pithy, epigrammatic phrases that highlight their toughness.

Not all has been going well for these thinkers, however. The debacle in Iraq has been prompting some to leave their ranks. With his recent book, America at the Crossroads: Democracy, Power and the Neoconservative Legacy, Francis Fukuyama, whose The End of History and the Last Man proclaimed that the American way of life would become that of the whole world, has abandoned the cause. He has written that the invasion of Iraq was a foolish error that America could ill afford and has announced his departure from the ranks of the neoconservatives. Lately too, as a candidate for the leadership of the Liberal Party, Ignatieff has tried to put his pithy past behind him.

Rather than converging for underlying intellectual reasons, I believe these thinkers adopted a common muscular tone when it was opportune for them to do so. Now that the winds are less favourable for empire, these thinkers are likely to be blown to quite disparate destinations.

James Laxer
Toronto, Ontario

Re: “Death and Diamonds,” by Suanne Kelman

Suanne Kelman’s article is both cogent and thoughtful as it reviews Lansana Gberie’s A Dirty War in West Africa: The RUF and the Destruction of Sierra Leone, on the internal conflict in that country. The events portrayed are indeed horrible: the RUF brought death, destruction, maiming, rape, murder and chaos to the country—they destroyed it, and left an entire generation knowing only violence. However, there is a great silence in both Gberie’s and Kelman’s accounts, and the absent issue is in fact the heart of the matter that can explain the recent violence. It is the issue of redistribution policy, which is an attribute of most countries in tropical Africa and throughout the third world. This is a tool employed (in various forms) by many corrupt governments.

If diamonds provided the economic engine for the destruction, the underlying cause of the struggle resided in what can be termed “urban-elite bias” and the marked urban­rural disparity that existed in Sierra Leone for over a century, even before the time of formal colonialism. The peasants in the countryside were “ripped off ” during the British Protectorate and imagine their shock when the newly independent government continued their exploitation after 1961.

To understand this bias, you need to consider the contrasting lives of city dwellers and their kin in the countryside. The rural peasant in Sierra Leone was poor, living close to starvation and having little access to education, clean water, electricity or health supports. Life expectancy was about 30 years, and malaria was ever­present. The prospect for the young was a future dominated by elders and unemployment. Meanwhile, life in the city was far superior, especially for the friends of government, the elite. Life expectancy was about twice as long, infrastructure and services were available, as were power, water and jobs. And the young found freedom from age constraint in the city.

These disparities were not natural. In the colonial past, the city was favoured and the rural peasant exploited. The sad thing is such differences were continued and even enhanced by the redistribution policies of the newly independent government. They employed tools such as over­valued currency, food pricing, produce marketing, taxation, urban employment creation, etc. At the outset of independence these resources derived from rural peasants were intended to enhance national development with a focus of national economic development upon the urban centre. However, the dictatorial (corrupt and later one­party) state shifted the resources resulting from this rural­urban transfer into the hands of the elite. What was public was made private.

The former president, Siaka Stevens, is equally as villainous as Foday Sankoh and Charles Taylor: one source indicated that when he retired and left the country, he took a billion dollars with him (this money could have improved the lives of millions of peasants). This redistribution system was operated by Stevens’s government for almost two decades, briefly as a rural­urban reassignment but soon evolving into a peasant­elite transfer.

I wish to underline the fact that the causes of Africa’s poverty have two addresses, one in the world trade system and the other in local misrule using redistribution tools. As well, I would end with a cautionary note: these conditions (disparity and transfer) continue to exist and ferment in the countryside.

Dr. Barry Riddell
Editor, Canadian Journal of African Studies
Kingston, Ontario

Re: “NAMU and the Neoliberals,” by David Laidler

In his review of Eric Helleiner’s Towards North American Monetary Union: The Politics and History of Canada’s Exchange Rate Regime David Laidler makes two analytical points. First, he suggests that the proponents of a North American monetary union failed to take account of the political-historical obstacles facing their proposals, which explains why they were not adopted. Second, he argues that the Bank of Canada institutions and recent performance are perfect and therefore should not be changed.

On the first point I plead not guilty. Awareness of political obstacles has caused me to modify my detailed recommendations for NAMU institutions and practices to be different from those I would have recommended if only economic efficiency were at stake.

However, it is essential to the operation of a supra-national central bank that its member countries give up their own monetary sovereignty. There is no way to modify NAMU proposals to take account of the strong Canadian desire to remain sovereign and independent of U.S. influences, which both Helleiner and Laidler considered to be the most important political and historically based obstacle to NAMU.

At the same time I remain optimistic that Canadian nationalism is not an insuperable obstacle to NAMU. After all, both Canada and the United States gave up some national sovereignty when they joined the North American Free Trade Agreement, the International Monetary Fund, the United Nations, the North Atlantic Treaty Organization and other international organizations. The economic case for monetary union is as strong as is the case for free trade, which led to NAFTA.

Laidler is right in praising the success of Canadian monetary policy and related institutions in achieving price stability and full employment in recent years. However, Canada’s monetary policy should also be judged on the basis of its success in fostering productivity. By this criterion, Canada has not done particularly well by historic and international standards.

One reason is that the Bank of Canada during the 1990s allowed our exchange rate against the U.S. dollar to fall persistently and significantly. Tom Courchene and Richard Harris argued that these trends caused Canadian firms to face much higher costs of imported capital goods than did the Americans, resulting in relatively lower investment and productivity growth in Canada.

My own case for NAMU rests fundamentally on the fact that flexible exchange rates that are influenced by the interest rate policies of the Bank of Canada and by private speculators contribute much to the risk facing investments in Canada. This higher risk resulted in lower investment and productivity growth than would have been the case had the exchange rate been fixed permanently and credibly under the proposed NAMU institutions.

The size of this effect has been very large in recent years as the exchange rate against the dollar fell from $0.89 in November 1991 to $0.62 in January 2002 and then rose to $0.90 in May 2006. Firms cannot protect themselves against such exchange rate changes by any available hedging strategies and dealings in forward and futures markets.

During that period the NAMU currency circulating in Canada, Mexico and the United States would also have fluctuated against all of the currencies in the rest of the world, much like the value of the U.S. dollar did. However, the effect of such fluctuations on Canadian firms would have been minimal since 87 percent of their trade would have been within the NAMU currency area.

Herbert Grubel
Vancouver, British Columbia

A response from David Laidler

Canada’s monetary order, though not perfect, is coherent, is well run and deserves an “if it isn’t broken don’t fix it” defence against the only kind of NAMU that is politically feasible, namely the adoption of the U.S. dollar as Canada’s domestic currency. Grubel’s new North American currency and supra-national central bank are non-starters, because the U.S. has no interest in creating them.

Officials of both the Clinton and Bush administrations have unequivocally ruled out any change in monetary arrangements in this hemisphere that would commit them to policies serving the interests of any country but the U.S., so the only version of NAMU that is available would destroy the Canadian electorate’s ability to hold those who make monetary policy for them responsible for its consequences. It is not Canadian economic nationalism, therefore, but a Canadian attachment to accountable government that constitutes the political element in the case against NAMU.

Grubel seems to think that the Bank of Canada could have held the exchange rate constant during the 1990s with no further consequences, but such a policy would have needed very tight money. The resulting domestic stagnation would have had its own effects on investment, productivity and living standards.

David Laidler
London, Ontario

Re: ““Whatever Happened to Canada?”,” by David N. Biette

David Biette, the director of the Canada Institute at the Woodrow Wilson International Center for Scholars in Washington DC, sees Canada adrift in matters of foreign policy. In reviewing two books on Canadian international policy, Mr. Biette also makes his own case for how Canada should behave on this continent and in the world. Over many years of Liberal government in the post–Cold War era, he says, Canada’s “foreign policy drifted, presumably guided by superior Canadian ‘values’ and, clearly in many cases, by public opinion.”

Mr. Biette’s use of scare­quotes in describing Canadian values is presumably meant to communicate his skepticism that Canadian values actually exist and, if they do, that they might form a meaningful basis for a Canadian foreign policy that differs from that of the United States. As for public opinion, those who view it as a credible basis on which to construct policy in a democracy should be warned: international policy under the Liberals was not guided merely by public opinion, but by the “whims of public opinion” [italics mine], which are sometimes just “an emotional reaction to whatever George W. Bush does.” (How embarrassing for Canada to be the only country in which emotion­driven opinion can influence government policy.)

When polls find a lack of enthusiasm among Canadians for some elements of American foreign policy, we are not to understand that Canada is a nation unto itself, whose citizens have their own ideas about how to engage with the world. Instead, we are to understand that Canadians are merely being contrary. “By being different for the sake of being different,” Biette warns, “Canada has let itself become irrelevant in Washington.”

I find it intriguing that Canadian skepticism about the war on terror is read by some as whimsy or childish contrarianism, instead of a serious position that is shared by much of the world, and indeed many Americans. Why this unwillingness to believe that Canadian public opinion might be an important consideration, not least to the Canadian government?

There is no reason to doubt that Jean Chrétien refused to join the coalition of the willing in 2003 for serious reasons: that he did not believe there was sufficient evidence for the existence of weapons of mass destruction in Iraq, and that he doubted there was any meaningful link between the horror of September 11 and the brutal regime of Saddam Hussein. To most, his decision has proven not petulant, but prescient. In June 2003, a strong majority (69 percent) of Canadians supported their government’s decision not to participate in the Iraq war; a year later, the proportion of Canadians supporting Chrétien’s decision had climbed to 82 percent. In America, incidentally, a June 2006 Los Angeles Times poll found 54 percent saying “the situation in Iraq” was “not worth going to war over.” Also in June 2006, the Pew Center found American opinion nearly split on whether the Iraq war had helped (44 percent) or hurt (40 percent) America’s cause in the war on terror. In view of the legitimate concerns surrounding America’s reasons for going to war in Iraq, to suggest that Canadian policy vis­à­vis the United States during this period was a matter of mere nose­thumbing is insulting.

As valiant as our grandfathers were at Vimy Ridge, Chrétien’s decision must stand alongside their valorous achievement as another occasion when Canada proved it was a nation—and that values, even Canadian values, are real and matter in foreign policy. That Chrétien’s decision was backed by public opinion then, and even more so now, suggests a course for Canada that is the exact opposite of Mr. Biette’s advice that “Canadian foreign policy needs … strong leadership from the top.” On the contrary: Canada needs a foreign policy directed by its own values and interests, not always the same as those of the superpower to the south. It also needs policies acceptable to its people—not directed by “strong leadership” that runs counter to what Canadians believe to be right. Canada must be directed from below, not from above, as in any democracy.

Finally, there is the question of realism. Those who disagree with the United States are often accused of being unrealistic in one way or another (naiveté is an especially common problem, it seems). If Mr. Biette or others in Washington believe Canadians’ ideas about Canada’s military capabilities, political influence and the state of the world are misguided, a good first step would be to make a sound case for why Canadians should change their thinking—not to dismiss, and urge our leaders to dismiss, Canadian public opinion as ignorant contrarianism.

Michael Adams
Toronto, Ontario

Re: “The Wal-Mart-ization of Wheat,” by Ingeborg Boyens

For the most part, Ingeborg Boyens’s review of our book is accurate and fair. However, she has inserted a few misleading claims that deserve a response.

She states that our work is “part of the campaign to win … wider acceptance” of transgenic wheat. She is putting words in our mouth, and in doing so completely misrepresents our goal. We provide economic analysis using a commonly accepted framework. All of our assumptions are stated, and our work can be replicated. The Canadian Wheat Board and other industry stakeholders agree that a full benefit-cost analysis of the economic impacts of genetically modified wheat is necessary. This is precisely what we set out to accomplish, and we believe that our book provides economic analysis on a very important Canadian agricultural issue. We conducted a complete, relevant and accurate analysis with the information available over the 2002–04 period.

The reviewer states that we used a real options approach (a modified benefit-cost analysis), which resulted in a “rosy picture of an engineered future.” This statement is also misleading. The Canadian Grain Industry Working Group on GM Wheat, which consisted of representatives from a broad spectrum of the wheat industry, including the Canadian Wheat Board and the Canadian Grain Commission, endorsed the real options approach for the purposes of evaluating the introduction of transgenic wheat. Traditional benefit-cost analysis would conclude that transgenic wheat should be introduced if the economic benefits outweigh the costs. Real options analysis, on the other hand, is a more conservative approach that accounts for the fact that decisions are made in an uncertain world. Because of the uncertainty, the expected benefits must exceed the expected costs by a significant amount before the introduction of transgenic wheat is recommended. Our analysis indicates that the time for introduction of this specific type of transgenic wheat is already here.

The reviewer is correct that we do not directly address gene flow issues with genetically modified wheat, but incorrect when she says “the authors don’t deal with the issue of how farmers will deal with volunteer Roundup Ready wheat that comes up where it shouldn’t in subsequent years.” In fact, our analysis of the farm level benefits of Roundup Ready wheat addresses the control of volunteer wheat using conventional herbicides.

Colin Carter, Derek Berwald and Al Loyns
San Francisco, California,
and Saltcoats, Saskatchewan

A response from Ingeborg Boyens

The authors’ efforts at an unbiased “real options” analysis of the economic benefits of genetically engineered wheat are unfortunately undermined by the fact that their research was financed by Monsanto Canada and was based on the company’s own data regarding its Roundup Ready wheat. And although the authors may want to portray their assessment as pure economic analysis, they do bluntly state in the book that they were hoping to trigger a “gestalt shift” in the worldview towards biotechnology.

Ingeborg Boyens
Woodlands, Manitoba

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