Oligarchical despotism

Most of our large banks have operations in the United States…

How many American banks have operations in Canada?

How many American telecom players operate in Canada?

How many American dairy producers have access to the Canadian market or vice versa?

How is political power concentrated in Canada versus the American system?

What are the barriers to entry in the Canadian market versus the American market?

How competitive is the Canadian market versus the American market?

Oligarchical despotism is a form of governance characterized by a small group of powerful individuals or families, known as an oligarchy, who hold effective control over a society or state. In this system, the ruling elite often exercises despotic or tyrannical power, often serving their own interests at the expense of the broader population.

— The Family Compact, a network of influential individuals in Upper Canada during the early to mid-1800s, epitomized oligarchical despotism. These loyalists monopolized political, economic, and social power and set the stage for the framework that would govern Canadian society in the future. Their control extended over legislative, bureaucratic, and judicial realms, stifling democratic reform and responsible government.

Originating from political appointments made to unelected branches of government — something Canadian subjects certainly witness in abundance today — they upheld a hierarchical class structure favoring their interests. The Family Compact, characterized by close relations and preferential treatment, enforced loyalist ideology and resisted democratic influence.

Contrasting this historical oligarchical dominance to today, the top 87 wealthiest Canadian families each hold thousands of times more wealth than an average family. This concentration of wealth surpasses that of the bottom 12 million Canadians combined, highlighting the persistence of oligarchical structures albeit in a modern economic context.

COVID further exacerbated this gap, with Canadian billionaires growing their wealth by 51% since the pandemic began, while at the same time those in the bottom half of the income distribution saw their average total income decline by nearly 7%. Such disparity underscores a system wherein a select few maintain immense economic power to the detriment of the majority.

Key features of oligarchical despotism include:

Concentration of Power: Power is concentrated in the hands of a few individuals or families who control key institutions of the state, such as government, military, and economy. This concentration enables the ruling elite to make decisions unilaterally and without accountability.

— The Prime Minister and the Cabinet wield significant power in Canada’s political system, often at the expense of parliamentary oversight. This can lead to accusations of executive dominance and a lack of accountability. That the current office holder is part of a political dynasty of unilateral operators certainly doesn’t detract from the optics of tyranny. The Senate and many other facets of Canadian governance exist primarily as bastions of patronage.

The Prime Minister possesses certain prerogative powers, such as the authority to dissolve Parliament and call elections, as well as the power to appoint senators, judges, and thousands of other key officials including the head of state that supposedly restrains his office, all without the advice and consent of parliament.

Limited Political Participation: Oligarchical despotism typically restricts political participation and representation to a select few, excluding the majority from meaningful involvement. Elections, if they exist, may be manipulated to ensure the continued dominance of the ruling elite.

— Canada’s unilateral executive appointments, lack of direct election for the executive, absence of term limits, and executive control over election timing reduce citizens’ influence over government composition and policies. Without direct election, citizens have limited control over the executive, potentially leading to prolonged incumbency and a lack of fresh perspectives.

Executive control over election timing raises fairness concerns. Absence of subnational constitutions limits citizen rights assertion and subnational government accountability. Limited electoral choice further restricts citizen influence. These characteristics indicate a political system with limited citizen participation, input, and influence, raising concerns about democratic legitimacy, representation, and accountability across various government levels.

Suppression of Dissent: Opposition is often met with repression, censorship, or violence. Freedom of speech, assembly, and association may be severely curtailed to prevent challenges to the status quo.

— The court ruling on the government’s use of emergency powers to suppress the “Freedom Convoy” protests found it unreasonable and a violation of Charter rights, indicating governmental overreach. Prime Minister Trudeau’s use of emergency powers, including protester arrests and bank account freezes, coupled with plans to appeal the ruling, suggests a tendency to quash political dissent through legal avenues.

Additionally, Bill C-63’s proposal for civil penalties for hate speech, alongside existing criminal laws, not to mention its ex-post-facto provisions raises free speech concerns, potentially leading to self-censorship and stifling legitimate discourse. The history of misuse of hate speech complaints by the Canadian Human Rights Commission (CHRC), yet another body unilaterally appointed by the executive, highlights the risk of further suppression of dissent and infringement on free speech for political purposes. Financial incentives for complaints and subjective interpretations of hate speech exacerbate worries about curtailing free expression and association.

Corruption and Cronyism: Oligarchical despotism is characterized by widespread corruption and cronyism, where opportunities are reserved for those with ties to the ruling elite.

— With so many examples to choose from it’s hard to know where to begin on this front, but the SNC-Lavalin affair is as good as any. The RCMP’s investigation into the SNC-Lavalin affair faced obstacles due to limited access to crucial information, notably cabinet confidences, raising concerns about transparency and accountability. Prime Minister Justin Trudeau’s alleged attempt to influence legal matters undermines judicial independence and may serve political or corporate interests unfairly.

Partisan influences, evidenced by the adjournment of the parliamentary committee meeting, hinder accountability efforts and perpetuate a culture of impunity. The RCMP’s handling of the investigation, constrained by restricted information and perceived superficial examination, calls into question the integrity of law enforcement agencies. This situation highlights how corruption and cronyism thrive through opaque decision-making, political interference in legal proceedings, and the prioritization of partisan agendas over justice and accountability.

Suppression of Economic Freedom: Oligarchical despotism involves heavy government intervention in the economy, restricting economic freedom.

— Canada’s supply management system for egg, poultry, and dairy products illustrates the limitations on economic freedom through various factors. Price fixing and control hinder market responsiveness, leading to higher consumer prices and reduced choice. Protectionist measures shield domestic producers, stifling competition and innovation while maintaining incumbents’ dominance.

Regulatory capture by industry stakeholders perpetuates the system, disadvantaging consumers. The system’s inequitable impact disproportionately affects lower-income households, contradicting social welfare goals. Despite criticism, bipartisan political support and vested interests impede reform efforts, hindering market-oriented approaches. Overall, the system restricts economic freedom, distorts price signals, and perpetuates inefficiencies, detrimentally affecting consumers and societal welfare.

Distorted Price Signals: Price signals may be distorted due to government manipulation, leading to inefficient resource allocation.

— Canada’s single-payer health system, acting as a monopoly, distorts price signals by eliminating market competition. With the government as the sole insurer and controller of healthcare financing, there’s no competitive pressure on providers to innovate or control costs, while at the same time, many provinces sink a third of their budgets or more into financing them.

This lack of market dynamics can lead to arbitrary pricing decisions, inefficiencies, and limited patient choice. Patient outcomes are dead last among ‘developed’ countries on a wide variety of metrics while at the same time adverse effects and malpractice affect 1 in 4 users over their lifetime and remains the third leading cause of death.

Without the feedback mechanism of competitive pricing, resources may be misallocated, leading to underinvestment in certain areas and overutilization in others. As a result, the system may struggle to adapt to changing healthcare needs and advances in medical technology, impacting both quality of care and cost-effectiveness.

Rent-Seeking Behavior: The concentration of power creates opportunities for rent-seeking behavior, diverting resources away from productive uses.

— Rent-seeking behavior in the Canadian economy is evident in various forms, hindering innovation and economic growth. Canada’s sluggish GDP growth, coupled with stalled productivity, reflects a persistent lack of innovation and weak competitiveness. Instead of fostering a competitive environment, government policies often cater to specific industries through regulations, tariffs, and subsidies, shielding them from competition. This reliance on government protection fosters a business environment where firms seek favors rather than competing on merit.

Consequently, Canada experiences a loss of business dynamism, with fewer new firms entering the market and leading corporations losing global competitiveness. To address this, Canada needs to reevaluate its public policies, prioritizing competition, innovation, and entrepreneurship over rent-seeking behavior and protectionism. Such a shift is essential for fostering economic growth and ensuring long-term prosperity.

Barriers to Entry: Oligarchical despotism erects barriers to entry in the marketplace, protecting incumbent firms and stifling competition.

— Barriers to entry in the Canadian economy are substantial, with the country ranking high in terms of regulations and restrictions on foreign investment. The OECD’s Product Market Regulation and FDI restrictiveness indices highlight Canada’s position as one of the most regulated and restrictive economies. These barriers include limitations on foreign businesses, state-owned monopolies, and explicit regulations limiting competition.

Industries such as air transportation, telecommunications, and agriculture face significant restrictions, hindering competition and innovation. Conservative estimates suggest that over one-third of the Canadian economy is shielded from competition, suppressing incentives for productivity and innovation. Removing these barriers could significantly enhance productivity growth and improve living standards for Canadians.

The deliberate increase in immigration levels by the current government amidst the pandemic, despite housing market constraints, benefited specific groups, particularly those involved in housing investment, while exacerbating socioeconomic challenges. Homeowners, leveraging their properties through reverse mortgages, reap profits, consolidating wealth and power while working-class families are displaced and young individuals remain unable to afford homeownership.

Such policies reflect a manipulation of governmental policy for self-interest, fostering corruption and collusion. By exploiting vulnerable populations and widening socioeconomic gaps, this underscores the oligarchical nature of Canadian governance, wherein a select elite perpetuates its dominance at the expense of the well-being of the populace, using a pandemic in order to solidify power and tilt the scales towards their favor.

Canada’s reliance on unchecked immigration and temporary foreign workers has not only exploited vulnerable workers but has depressed wages for low-skilled workers, amplifying the wealth chasm between the affluent and the working class. The prioritization of business interests over worker welfare has eroded governmental accountability, shielding elites from scrutiny.

Ill-planned immigration has served to exacerbate urbanization and housing crises, reinforcing policies favoring corporate interests over social cohesion, neglecting immigrant and citizen welfare alike.

The prevalence of oligarchical despotism in Canada, characterized by concentrated power, limited political participation, suppression of dissent, corruption, and economic restrictions, has profound implications for the nation’s governance, economy and future. Historical precedents, such as the Family Compact, illustrate the enduring nature of elite control, regardless of supposed partisan involvement, over Canadian society and institutions.

Contemporary manifestations of oligarchical dominance, exemplified by the concentration of wealth among a select few, further exacerbate socioeconomic disparities, particularly highlighted during the COVID-19 pandemic. The manipulation of governmental powers, as seen in policies favoring specific groups at the expense of the broader populace, underscores the oligarchical nature of Canadian governance.

Moreover, the distortion of market forces through monopolistic privileges enjoyed by entities like crown corporations and the healthcare system impedes competition and innovation, hindering economic growth and prosperity for all Canadians. Barriers to entry in the marketplace, rent-seeking behavior, and distorted price signals perpetuate inefficiencies and stifle entrepreneurial spirit.

The maple syrup is sweet, but it’s all aboot where you live, who you know and who you’re related to. Since 1867 Canada exists, not as a country, but as a proprietary colony — an exercise in racketeering vis a vis the American market — created primarily to serve as a protection racket for the benefit of a handful of oligarchical interests, to insulate them from any ‘dangers’ a broader competitive marketplace might present.

Ultimately, oligarchical despotism contradicts the principles of a free market economy, where voluntary exchange, competition, and individual freedom are paramount. Instead of fostering prosperity for all, it consolidates wealth and power in the hands of a privileged few, perpetuating socioeconomic inequalities and hampering the well-being of the broader population. Thus, addressing these systemic issues is crucial for ensuring a more prosperous future for Canadians.

“Fed Chair Powell delivers remarks at the Washington Forum on the Canadian economy”, April 16, 2024. https://www.youtube.com/live/QqwuXkUUJwc