I have made great use of the commitments made at the Williamsburg conference by the leaders of the seven industrial nations relating to the common defense of the West and the need to achieve comergence—i.e., integration of economic policies, particularly in the monetary, fiscal, and exchange-rate fields. The summit statements are the clearest and most comprehensive description of what has been taking place in the West, the putting in place of an informal supranational authority which could integrate the foreign-policy posture, the defence contributions, and the economic policies of the Western powers.
To repeat the substance of the decisions, the leaders of the seven leading industrial nations agreed:
1. In the statement on arms control: “We shall maintain sufficient military strength to deter any attack, to counter any threat, and to ensure the peace.” Also, “The security of our countries is indivisible and must be approached on a global basis.”
2. In the text on economic recovery: “To promote convergence of economic performance in our economies” and “focusing on near-term policy actions leading to convergence in the medium-term.” This goal was to be reached by following a pattern of non-inflationary growth of the money supply, appropriate interest rates, discipline over government expenditures, and convergence of exchange rates.
Williamsburg gives the impression that a community of the West has been created with authority over the participating nation-states. In fact, the leaders could do no more than agree to follow certain lines of conduct that would contribute to national and group security and to follow this up with appropriate economic initiatives.
Williamsburg as an exercise in public relations may or may not impress the Russians with the display of solidarity, but no international legal organization was created that could strip away elements of national sovereignty and so provide the unification that exists in the Soviet bloc. Not one of the Western leaders would have dared to accept openly the limitations of their sovereignty spelled out in the agreed press releases if these limitations were to be enshrined in an international treaty. It is worth repeating that the legal sovereignty of a state is incompatible with the existence of a supra-national authority that has a power centre of its own. A legal space is a universal space, although sovereign nations may choose not to exercise their rights in given situations. To the self-limitation of its sovereignty, Canada has been particularly prone.
Williamsburg did do something, and that something was to establish a political, but not a legal, power centre which integrated the military and economic strengths of all seven nations and directed this accumulation of power to the turning back of the Russian threat—the priority purpose of the informal, political union. This priority of the bloc immediately assumed pride of place over the internal needs of the individual member nations, whose citizens were counselled to lower their expectations and to bear the burdens of unemployment and inflation a little longer.
It is to be emphasized that the Williamsburg agreements are not binding on the nations involved, for the voluntary agreements can be reversed at any time that national interests may dictate. Nor are the Williamsburg agreements a step forward in the quest for world order and peace, because the conference did not bring forward that set of moral principles and postulates that might serve as the basis for a true international authority, founded on the sovereignty of nations that is limited only by their respect for the freedom and self-determination of other nations.
The unifying forces at Williamsburg were two: sixteen thousand nuclear warheads in the arsenal of the United States, and the material interest of the six satellites in keeping open the huge markets of the United States. To possess power is to wield it, openly, and brutally or quietly, but firmly. Canada has the sovereign right to refuse to test the Cruise, but our political leaders know the economic costs and recoiled before the consequences. For the Europeans, the economic sovereignty lost is deemed a small price to pay for the security of the nuclear umbrella and the American pledge to safeguard the security of Western Europe as its own. Given the growing demonstrations against the deployment of the nuclear missiles in Europe, the summit leaders may yet find the cost in political instability to be very high.
It is not in the American interest to keep the impassioned rhetoric alive—the evil of the East and the goodness of the West—thus creating the conditions of uncertainty and fear that will accelerate the pace of economic integration, and build a new Western economy composed of the resources of North America, Europe, and Japan with free movement of factors into and out of the United States heartland. So sweeping a unification of the Western economies, for the purpose of accumulating military and productive power, leads to the frustration of a constantly receding parity with an equally determined foe. There is no national security for either side in numbers, for parity at the level of a nuclear holocaust existed when each side possessed a thousand nuclear warheads. When today each side possesses sixteen thousand missiles, there is still parity and still the threat of holocaust—two republics of insects and ash.
For Canada the agreements reached at Williamsburg are simply more of the same. The three most sensitive areas for a nation jealous of its sovereignty are bound to be the areas of its relations with foreign countries, its defence arrangements, and its control of its money and credit. In all three areas, Canada agreed to follow the policy directions laid down by President Reagan and so confirmed again, for all the world to note, our membership in the American empire.
Until the British conversion to Free Trade in 1846, the Canadian colonies were content to be suppliers of raw materials to the mother country. After the withdrawal of British preferences, Canada sought and was granted reciprocity with the United States in 1854. When the treaty lapsed in 1865, Canada remained a supplier of resources and importer of manufactured goods, an integrated member of the continent’s economy. Canada did not so much lose her independence as choose not to exercise it.
Canadian independence would have required some show of control over our resources, the land, the people, and the capital arising therefrom as well as the markets for goods and services and the surpluses they yielded. But all this was as freely available to Americans as to Canadians. And similarly with American resources and markets which were as open to the initiative, imagination, and drive of young Canadian entrepreneurs as to their own citizens. There were tariffs, but these were no more than excises, inland duties collected to finance railways and industrial expansion. From the beginning of Confederation, Canada was part of an economy in which the factors of production moved freely and goods did so with a slight surtax, an economic union that has just stopped short of full political unification.
As for defence, the Monroe doctrine applied to Canada as much as to any other nation in the Americas—at least as far as the United States was concerned, and that was all that counted. When it came to foreign affairs, we were taken for granted by foreign powers, who rightly assumed that we would follow the policies either of the motherland or the rich neighbour to the south. To most nations, friendly as they were, we were considered passive, even faceless, and seldom with a contribution to make. Canada did not have a minister of external affairs until 1946, a condition that served to emphasize our slow maturing as a nation.
I take the Williamsburg economic declaration for what it is, a clear and unequivocal request that Canada integrate its economic policies with those of the United States and adapt its resources to operate in a unified market system. Accepting this demand means that we make U.S. purposes and goals our purposes and goals, and their priorities our priorities. We give up the possibility of providing a framework in which a free and independent Canadian society may be built. If we are forced to accept as our own the objectives of other nations pursuing military superiority and nuclear supremacy, we have no right to call ourselves a nation. I prefer to believe that we are a nation, that we can follow a more independent course, and that we have the objective of greater employment for our people and an improved standard of living for the less fortunate in our nation.
Canada is at a crossroads. Our major market, the United States, can no longer afford free trade. If the United States operated in a fully free-trade environment, their trade deficit would be well beyond the $70 billion projected for this year. Worse, basic industries such as steel, heavy equipment, cars—the very core of a defence posture—would quickly collapse. Since this is unthinkable, it is obvious that the U.S. will become increasingly protectionist and press down more heavily on export markets such as our own.
Canadian history is a story of long-lived reliance on the export of natural resources. New sources in South America and Africa, with lower labour costs, are the competitors that are closing down our mines and refineries. As well, many of these nations have no other means of paying down their huge debts and interest charges than by increasing the volume of raw-material exports to the industrial West, thus earning the foreign exchange necessary to meet their commitments.
It is obvious that new directions are being imposed on us as the foundations of traditional economic policy, resource exploitation, and capital imports are crumbling beneath us. The decisions that we make in the eighties will make us a satellite economy operating on the fringes of the American empire unless we take stock of ourselves, our institutions, our human and material resources and resolve to put in place the political and economic structures that will provide us with the means and time to effect an evolving self-transformation.
It is time that Canada affirmed her independence as a sovereign state. We are not an accident of geography, nor are our traditions, culture, and languages to be written off in the alleged efficiency of a global economy. Nor can we yield control of our markets and means of production to others in the pursuit of some pseudo-internationalism.
I am not arguing against the possibility and hope in a great human family. I am simply saying that such an achievement, if it does come, will be an affair of the heart, the mind, and the spirit, not the result of organizing production on a world scale that maximizes skyscraper wealth, corporate cathedrals, and capital accumulation, leaves labour alone in the market place, and ends in the global homogenization of consumption and cultural patterns. The promise by globalists of a greater gross world product that would provide a rising standard of living for all people is an illusion and thoroughly dishonest.
Every nation must, if it is to satisfy the desires and needs of its citizens, have control of its economy. If the resources and the revenues from markets and production accrue largely to others, then the nation becomes dependent and vulnerable. An economy as a support system must also provide the non-exchange activities of a community, the universities, hospitals, cultural and social purposes, the spiritual elements that define a state as resting, not on material power alone, but on a system of moral values, intellectual freedom, and social responsibility.
A nation must believe in itself, or the worth of its people will never be realized. A nation must take, as its fundamental priority, responsibility for the welfare and standard of living of its people. We cannot accept the optimism and belief of the nineteenth century in a natural order built upon the creativity and enterprise of the individual. Nor can we believe that the vast conglomerates of the twentieth century have anything other than their own accumulations of power and wealth as goals.
As it applies to Canada, the Williamsburg continental integration signifies not only the placing of all our resources, physical and human, at the disposal of the American heartland, but would force the subordination of Canadian policies and interests to the objectives of the Western bloc. Military security in a nuclear world demands alliances and formal agreements. It does not require the subordination and subjugation of friends and allies. Canada’s sovereignty demands that she be treated as an ally, not a satellite.
The nation-state is not through as an economic unit nor is it in decline because of the revolution in transportation and communication facilities. The so-called family of nations is a noble idea, but it is not, as Hegel pointed out, a reality. For centuries past, nations have been sensitive to the possible accession to power of the military forces and religious systems that even now control many parts of the world. The democratic nations of the West, however, have avoided these threats, which bring to power an authoritarian militarism or an unyielding fanaticism.
And yet we in the West are witnessing—quietly at first but now with an accelerating pressure—the increasing dominance and power of the commercial and industrial giants over our political institutions, a condition that will inevitably lead to a dictatorship of the left or right. A General Eisenhower warned of it, a Prime Minister Trudeau admits it.
The disarray in modern society comes from the argument that the sovereignty of the nation-state restrains the growth and efficiency of the corporation. Therefore the corporation must be freed from the control of the state, for only in this fashion can it take advantage of its true potential, size, economies of scale, and extended horizons.
It is clear that the nation-state and the corporation are operating on different levels. The corporation maximizes its own future, its own growth. For the nation-state, the heart of the economic system must be the distribution of what is produced in the nation, the power of the society to consume equalling its power to produce. The logic of the corporation is to grow, the responsibility of the state is to achieve a fair distribution. And so the conflict continues, because there is no moral consensus on what is fair, only the illusion that all nations must encourage bigness if they are to share in tomorrow’s alleged plenty—for the love affair with bigness is the sentiment that the future will be better.
It is as Uncle Ernst says in Howards End: “It is the vice of a vulgar mind to be thrilled by bigness, to think that a thousand square miles are a thousand times more wonderful than one square mile, and that a million square miles are almost the same as heaven. That is not imagination. It kills it.”
To think that a world is better than a hundred nation-states—or a thousand—is an illusion. There could be no single, most efficient application of the world’s resources unless there were a single interest, but there is no single goal, or set of goals, to which such an application may be divided. The goals and aims of people are as varied and diverse as there are regions and communities and coalitions within the nation. In other words, choices and allocations are made through the processes of politics, which is the market place through which infinite needs and wants are given their priority and importance. In a democratic society, it is the political decision that, for better or for worse, ends the bureaucratic quibbling, silences the squalling screams for privilege and preference, and alone can provide the order and stability which will protect the individual in a world of conflicting claims and incessant struggles for power.
The nation-state is not in decline. It remains rooted in the soil and the hearts of its people. For a period after the Second World War there was an excessive internationalism that saw the rise of bureaucratic organizations such as NATO, OECD, GATT, and the United Nations itself, which sought to practise sovereignty without the basic element of authority, the power to enforce. Thus the United States ignores the condemnation of GATT for its DISC program, France pulls its forces out of NATO, and members are blandly indifferent to the boring nostrums of the OECD. These organizations can fulminate, they can recommend, but they have no power of their own.
For a generation, Canada has accepted the limitation of its sovereignty by these international organizations in the interests of establishing firm standards of international conduct. When all goes well, there is a disposition to accept the costs, but when unemployment soars and the claims of international bodies erode the sovereignty of the nation-state, the period of self-limitation of state powers is bound to come to a close.
National sovereignty and international authority cannot exist together. The danger of Williamsburg is that Canada accepts informally—for reasons of economic retaliation, political pressures, or balance-of-power tactics—what cannot be put into place legally. There can only be one legal order in Canada that may be flouted by a dominant and brutalizing neighbour. But there cannot be two legal bodies occupying the same space.
Let us be clear on this. Canada is sovereign, but we can be craven because we fear the economic sanctions and the loss of affluence that we now enjoy. This fear may have a foundation in reality. On the other hand, it is at least possible that what we fear is merely fear itself.
In any event, Canada has no choice. It cannot maintain the role of purveyor of raw materials for the simple reason that too many less-developed nations are taking over our markets with lower costs. We simply have to enlarge and diversify our industrial strength. There can be no question that the multinational corporation must adapt to the priorities and policies of the nation in which it operates as developer of resources, processor of goods, and supplier to markets. National policies do not conform to the motivations and objectives of the corporations that the state has admitted to the economy; it is the other way around. And this applies to domestic as well as multinational companies.
In a world in which the pressure on resources is growing from the two directions of, on the one hand, increasing demand with growing populations and rising standards of living and, on the other hand, the significant exhaustion of resources, it becomes evident that the private sector, motivated by its own growth, cannot be the final arbiter and allocator of resources between the corners of the earth, between consumption for today or investment for tomorrow, between the poor and the rich nations.
Limited sovereignty is not sovereignty at all. Hence, no nation can permit the corporation, domestic or multinational, to operate beyond the legal reach of its law. The sovereignty of the state demands that it maintain and secure the control of its own economy, the life-support system of its citizens. Canada has surrendered the value of too large a percentage of its lands, resources, and markets to corporations that have demanded the rights and privileges of absolute ownership as a condition of investment.
As the United States becomes increasingly protectionist, Canada will become increasingly isolated. In fact, it will become not only isolated but vulnerable, as Canadians realize that imported technology and ideas do not create new comparative advantages and that tariff protection does not foster an improved standard of living or allow infant industries time to grow.
Similarly, the emphasis on the export of natural resources before the competition of new nations financed by flows of foreign, including Canadian, capital. It is time that we left the field to the new arrivals of the third world.
New economic policies intend a change in direction, the switch from former ways into new paths. The costs become immediately apparent as change forces adaptation, offends the pride of policy makers, and disrupts ancient investment patterns. The benefits are in the future, but the costs are here and now—individually, corporately, and politically.
The new policies must come down hard on the old failures. Foreign capital never claimed to be a panacea for all our weaknesses. It was we who thought so. We forgot that foreign capital could not make up for the sale and export of our wealth and the emigration of our youth. We did not have enough control of ourselves or our economy to realize that, first and above all else, capital must be made and must be retained at home. By giving away the value of our resources, we never could accumulate the surpluses that would have enabled us to finance and invest in the balanced growth of the Canadian economy.
What can politics do? first, it must accept the responsibility of sovereignty and the supremacy of politics in deciding the allocation of resources and the directions of future development. Let the economists decide the application and costs of the directions chosen. Secondly, Canada can grow and be of value to the world and to itself only by being an independent, sovereign state, and it can do this only by the control of its own economy and politics.
The ultimate norms directing Canadian policies cannot be the interests of other nations, no matter how powerful, or the fear of their reprisals. Our aims will be truly Canadian when they arise out of the hearts and minds of our people, not when they are dictated at summit conferences or by ambassadorial pressures.
Our political leaders have much to work with. Not only the lands and people which we have always had, but the same burning desire that led so many Canadians to look for challenge elsewhere exists in today’s generation. We have all the means to create a viable and gainful economy if we can find the leadership to put it all together.
A nation has an inner structure and vitality that imposes a pattern on its environment. Understanding and having confidence in the spirit and capacity of a people is an essential quality of sound political leadership.
Rene Dubos, in his book A God Within: A Positive Philosophy for a More Complete Fulfillment of the Human Potential, quotes Michelangelo expressing his feelings on looking at a block of marble:
The best of artists has that thought alone,
Which is contained within the marble shell.
The sculptor’s hand can only break the spell,
To free the figures slumbering in the stone.
The potential and the capacity of Canadians to do great things in and for the world is there. It needs the political leadership and a belief in ourselves to break the spell.
The challenge facing our political leaders is to establish a clear and distinct Canadian identity as an independent state, a worthy ally, but an unwilling satellite.
An identity is clear when our policies, whether in the fields of trade and commerce, external affairs and defence, work in the same direction; an identity is independent when we have control of our own economy, money and credit; it is distinct when Canadian national interests and objectives, with full regard for the interests and choices of others, alone determine our attitudes.