Political Economy Camada Global Think Tanks Term Paper

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¶ … Tanks Application to Real-World Economics

Study of Three Think Tanks

The Canadian economy is undoubtedly heading for recession. According to the April 2008 Economy in Brief, released by the Department of Finance each quarter, symptoms reeked of the adverse political condition, in which the business cycle has experienced a downturn for two consecutive periods. According to the brief statement, the employment rate lingered at its 33-year low of 5.8%; and the GDP growth rate of 0.8% was the slowest growing GDP since 2003. As the GDP growth rate slowly climbs, the rate of domestic demand is not waiting for it. Instead, the domestic demand boomed at 6.9%, the highest it has been in 11 years (Economy in Brief). In order to deal with this situation of increasing demand and decreasing supply, the Canadian Department of Finance and political agencies must decide what actions to take in order to pull the country from inevitable recession.

In order to make this decision, economic and political officials must work together in order to apply economic and political theories, choosing the theory that is must likely to work for the country in its current political and economic situation. Though some have traditionally separated economics and politics as two separate disciplines, they are interconnected intimately. Not only do economists have a right to produce academic economic policies that can be applied to real life situations, but also the public has a right to consider, review, and express their opinion on these policies.

A primary venue through which this is done is the think tank. These organizations are staffed by individuals who believe in certain economic policies, and who seek to influence government officials to change their policies in alignment with the think tank's policy. By studying think tanks, students of political economy can learn how abstract political and economic theories can be applied to real world problems. By surveying three think tanks -- the Center for the Study of Living Standards, the Canadian Center for Policy Initiatives, and the Montreal Economic Institute -- in regards to political ideology, similarities and differences, and application to real World Economics, one can observe the importance of think takes to the Canadian political economy debate.

Although all three think tanks claim to be independent research agencies without political goals, through examining publications and policies of each of the institutes, they can be classified as advocates of a certain political and economic ideology. For instance, the Center of Living Standards, a think tank established in 1995, can be classified as a Socialist think tank.

According to Greg Albo's 2007 Monthly Review article, Canadian Political Science has long been concerned with the "constitutional distribution of power."

Because the ideology has a long history in the country, Socialism has been a focus of these studies. For this reason, a variety of Canadian think tanks are concerned with this political ideology, and assuming that the Centre of Living Standards is one of those sites is not difficult to do. But once one examines, the information contained on the site, assuming is no longer necessary. Specific site publications and claims reveal that the think tank could be nothing but socialist. The Center's public information lists its objectives as to "contribute to a better understanding of the trends in living standards and factors determining trends through research," and to "contribute to a public debate on living standards by developing and advocating specific policies through expert consensus" (Overview of Activities).

According to Ludwig Von Mises, a Socialist Economic policy a system in which everyone serves each other in a market society and is served by them in return. Albo gives a history of Canada's Socialism and the existence of the Welfare State, in which the government is responsible for intervening in the government in order to assure the welfare of each of its citizens. The Centre of Living Standards suggests that it holds these beliefs that the government should provide for each person's welfare and that people should serve and be served equally in the economy by each other. Specifically, the center lists it research advocacy activities as "the equitable sharing of productivity gains among all groups in society can contribute significant to better living standards," in addition to other research regarding living standards (Overview of Activities).

The centre's publications similarly suggest that the think tank promotes Socialist tendencies. Reports and articles making implications about labor productivity and living standards are most prevalent among the site's projects. For example, Paul Boothe and Richard Roy published an article in one of the think tank's journals entitled Business "Secotor Productivity in Canada: What Do We Know." In the article, the authors argue that productivity is not only necessary for macroeconomics, but also that it is important for all "Canadians' future prosperity" (3). It is primarily for this reason, therefore, that the authors intended to research the reasons for poor productivity in the nation. Similarly, in Joseph Heath's Should Productivity Growth Be a Social Priority, the author suggests setting aside the "there's no such thing as a free lunch" concept of opportunity cost that has pervaded Neoliberal economic ideas in the modern era and considering whether or not productivity is a social problem (227). Based on the assertions listed in the think tank's information and the majority of publications published by the organization, therefore, the Centre for the Study of Living Standards can be classified as a Socialist think tank.

Like the Centre for the Study of Living Standards, the Canadian Centre for Policy Initiatives describes itself as a "non-partisan research institute concerned with issues of social and economic justice" (Research and Activities). Older than the Centre for the Study of Living Standard, the Canadian Centre for Policy Initiatives was founded in 1980 and conducts research about the social equality of different types of economic policies and economic theories. Though many of the Canadian Centre's policies are similar to the Centre for the Study of Living Standard's policies, the former can be considered an Interventionalist think tank rather than a Socialist Think Tank.

Though Mises is a renowned classical liberalist who contributed greatly to both that movement and the libertarian movement, his definition of Interventionalism can be contrasted with his definition of Socialism. According to Mises, an economy and government is Interventionalist when it "wants to do more," meaning when it interferes with the economy. This definition includes governments and economies that are not as Interventionalist as the Socialist state. For instance, Interventionalist governments and economies include those that have not gone so far as to implement the total welfare state, in which the government controls every aspect of the economy, but instead the economies and governments that interfere in some aspects of the economy. An Interventionalist theory of economics suggests that governments should intervene in some aspects of the economy, and it is this theory that is supported by the information contained in the Canadian Centre for Policy Initiatives think tank.

For instance, the think tank published a series of editorials that advocate the Canadian government's intervention in Canadian economics. One of the areas in which the think tank suggests the government intervene is environmental standards. In February, Marc Lee penned an editorial on the think tank's web site that lauded the government for its tax on greenhouse gas emissions, calling that decision "newsworthy," but the author goes no to suggest what more the government must do in order to change unacceptable environmental standards in order to benefit every resident of the country. Because it is in the best interest of the public, according to Lee, the government must require businesses to use devices that cut down greenhouse emissions. Although one could argue that this article is more of an example of Socialist policy then Interventionalist policy, the article makes the difference by warning the government that intervening in the form of taxes may not be a beneficial decision as it may increase costs for low income families and students' education costs.

A second think tank publication that echoes the organization's Interventionalist leanings. Habiba Zaman's editorial, "Workplace Rights for Recent Immigrants," suggests that conditions for recent immigrants in the work place are not optimal. Habiba offers both an interventionalist solution to the problem, asking the government to raise their wages, and chiding the government for intervening to make reporting services more difficult for immigrants.

Both the Centre for the Study of Living Standards and the Canadian Centre for Policy Initiatives are similar in that they attempt to find solutions to social problems through the field of economics. Similarly, both think thanks advocate government intervention in order to achieve the optimum solutions for problems. The major difference between the sites is the extent to which both do the latter. The Centre for the Study of Living Standards, a socialist think tank, advocates a welfare state, or one in which the state is in complete control of the economy. Similarly, this think tank suggests that a country's society shares the entire country's profits and each citizen is treated… [end of preview; READ MORE]

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