Lilly is a third year political science student at the University of Toronto. This article originally appeared on the Prairie Policy Centre website.
Saskatchewan residents have found something new to worry about.
Gone are the sleepless nights over the shrinking population, the jealous glances at Alberta’s economy and the MLAs lying prostrate at the feet of all remaining skilled workers, begging them to stay in the province to salvage Saskatchewan’s economy.
The latest perceived threat to our province is growth and prosperity. Saskatchewan’s annual population growth was the third highest of all provinces, with inter-provincial migration accounting for the majority of the growth.
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The workers are returning, wages are increasing and we are having second thoughts.
Despite the nearly universal distaste for poverty, many remain skeptical of economic growth. A “fixed pie” mentality is prevalent in Saskatchewan society – the belief that wealth can only be acquired at the expense of another.
Wealth is only the consequence of exploitation when coercion plays a role in the profit-producing interaction. When a government gains a surplus, it does so at the expense of the taxpayer. A wealthy government is not so much a sign of proficiency but of an unnecessarily tax-burdened populace.
When profit is achieved through un-coerced co-operation, such as in private transactions through the market, both parties benefit from the transaction.
In an economy based on government-run industry, such as in Saskatchewan, it is easy to forget that most economic transactions are based on co-operation and competition, not forced patronage to a monopoly.
A common perception of economic growth is that it benefits only a few individuals, increasing inequality and leaving the poor behind. Fears of a widening income gap abound.
Proponents of this negative worldview fail to take two important things into consideration: economic mobility and the level of absolute poverty.
The number of people living below the poverty line has decreased from 40 percent to eight percent over the past 50 years.
So, while the wealth of those in the higher income brackets may be increasing at a quicker pace than those in the lower brackets, conditions do continue to improve for all members of society.
The second factor is social mobility of the lowest class. A recent release by the Fraser Institute detailed how, in a study that observed the income trends of Canadians over a five year period, “a total of 45 percent of those families in the bottom two quintiles of earned income moved up at least one quintile over the five-year period.”
People living in poverty in Canada have a great chance of advancing up the economic ladder.
Instead of looking at the economy as a fixed pie, it is more accurate to think of it in terms of an escalator, with the individual actors who begin at the bottom moving up the escalator as their experience increases. Income mobility is a more accurate measurement of an effective economy than income equality.
The very realizations that led to the abandonment of the fixed pie mentality give birth to a new fear of growth.
Economic prosperity is a reflection of increased production. Resources are more fully utilized and become strained.
The ecological toll of economic growth is one of the more fashionable political fears, and one of the most effective for promoting interventionist government policies.
When given the choice between higher taxes or the possible destruction of earth, it becomes difficult to dissent.
Stunting economic growth is justified by the belief that we are depriving future generations of necessary resources.
This attitude prevails despite an overwhelmingly positive trend over the past decades toward economic and social prosperity and the general agreement that wealth transfers should take place from the rich to the poor.
As noted in a recent study from the Cato institute, “if per capita income grows at two percent a year, people 100 years from now will be approximately seven times wealthier than we are today.”
When we attempt to conserve resources for future generations, we effectively attempt to transfer wealth from the relatively poor to the relatively rich. This policy is contrary to most moral teachings and common sense.
We have every reason to believe that future generations will be far wealthier and enjoy a higher quality of life than we are accustomed to. Though we certainly rely on nonrenewable resources today, there is little reason to assume we will continue to draw upon the same resources as our technology advances.
The history of technological development is one of substitution. No technology since the birth of civilization has been sustainable. All have been replaced as people devised better and more efficient technologies.
It takes quite a bit of imagination to construe increased economic prosperity as a road to starvation.ÂÂ
The potential positive impact that humans have on the productiveness of their surroundings is enormous.
In the most basic sense, think of how much more nutrition can be gained from cultivated land compared to virgin soil. Observe the oil industry, where estimates of the world’s total endowment of oil have increased faster than oil has been taken out from the ground.
Technology has become more efficient so we better utilize available resources. In societies where market economies are the primary method of societal organization, the greatest threat to quality of life is not scarce resource, but an aging population as a result of a fertility rate too low to support an increasingly burdensome welfare state and sustain a vibrant workforce.
The grass may be always greener on the other side, but in the case of Saskatchewan, we really have crossed over to greener pastures.
To attempt to slow the economic growth in Saskatchewan, once so eagerly sought, would be foolish. Regardless of the political policy you favour, whether you wish to see less government intervention in every aspect of society or you believe in a forced redistribution of wealth, the ability of market forces to create wealth is unmatched.
Saskatchewan’s future depends on its ability to create the wealth required to pay for health care, education and infrastructure.
