Exploring of Neoliberalism in Canada

Answering the question: What has been the extent and impact of Neoliberal reforms in Canada? By Samuel Hammond [email protected] The following traces the history of Neoliberalism up to the present day, from the Classical Liberals of the 1700s, through to its revival following the New Deal, right up to the election of Stephen Harper, and assesses the impact Neoliberal reforms have had in Canada and the broader context, politically, economically, and socially. Part 1: A Brief History of Neoliberalism 1. What Neoliberalism is Neoliberalism is an ideology that expounds free markets and open trade on the basis of individual freedom but especially in the belief that neoliberal reforms will lead to economic growth and higher standards of living. While Liberal ideas, in one form or another, have existed and have been read and respected for centuries, neoliberalism refers specifically to the movement by many countries around the word towards the privatization, deregulation and liberalization of trade and economy in the 1980s and beyond. The term was coined by the critics of these policies, and is still used in the pejorative sense by most on the left who see neoliberalism as the disguised ideology of big business and transnational corporations1. But like the words Tory and Suffragette, terms originally considered insulting, the term neoliberal has, over the years, gained more neutral and descriptive connotations. 2. The historical origins of the Neoliberalism movement To fully understand neoliberalism in Canada one must begin to understand what neoliberalism means in the first place. As the neo prefix suggests, neoliberalism is ostensibly a revival of Classical Liberalism, the 19th century philosophy that put an emphasis on individual liberty and property ownership. Classical Liberal thought, though originating in England, is inextricably tied to the history of the United States

David Harvey: A Brief History of Neoliberalism, Oxford University Press, USA, 2005 (No page number as it is one of the central theses in the book as a whole). Other examples would include almost anything by Canadian author Naomi Klein, Noam Chomsky or Joseph Stiglitz and is closely associated with the general criticism of economic globalization.

as the basis of their Constitution and Declaration of Independence2. As such the U.S. made a supremely congenial context for the birth of the Neoliberal movement. As a modern movement Neoliberalism emerged in the United States only in the mid to late 1970s, though the seeds of the movement are found much earlier3. The Old Right dissenters of Franklin Delano Roosevelts New Deal harshly criticized the Great Depression reforms as a dangerous expansion of the size and scope of government, and for prolonging the Great Depression4. These early activists inspired a Conservative movement against the policies embodied by the New Deal, including the creation of the great Conservative magazine, the National Review, in 19555. The movement gained further support in the late 70s under the Jimmy Carter administration. Carters tenure was mired by poor economic growth and high inflation. The movement called for a Monetarist understanding of how to solve inflation, and so found a natural ally in Classically Liberal economists who were also Monetarists6. The conservative movement peaked with the election of Ronald Reagan in 1980. His election closely coincided with the election of Margaret Thatcher in the United Kingdom in 1979, and in 1984 with the election of Brian Mulroney in Canada. What these leaders had in common was a conservative outlook that, while not exactly neoliberal, certainly kept neoliberal company7.
2

Classical Liberal John Locke was the major influence for the declaration, specifically his theories of natural rights and his Second Treatise (1689). As Thomas Jefferson wrote to one Richard Paris on January 8th, 1789: "Bacon, Locke and Newton ... I consider them as the three greatest men that have ever lived, without any exception, and as having laid the foundation of those superstructures which have been raised in the Physical & Moral sciences." (http://www.let.rug.nl/usa/P/tj3/writings/brf/jefl74.htm) 3 The first known Neo-liberal only emerges with the first known Neo-liberal critic, since it is a term of dissent. The originator of Neoliberalism was thus likely Karl Polyani, who criticized Friedrich Hayeks Liberalism as a mere advocacy of free enterprise that only enhances the fullness of freedom for those whose income leisure and security need no enhancing. David Harvey: A Brief History of Neoliberalism, Oxford University Press, USA, 2005. Page 37. This echoes the modern lefts critique of Neoliberalism as only benefiting the already wealthy. 4 John T. Flynn: The Roosevelt Myth: A Critical Account of the New Deal and Its Creator, Devin-Adair Pub, 1990 (http://mises.org/books/rooseveltmyth.pdf) first printed in 1944. This is probably the most famous anti-New Deal work. 5 George H. Nash: The Conservative Intellectual Movement in America Since 1945, ISI Books: Wilmington, DE (pages 186-193). 6 Mitlon Friedman and Anna Jacobson Schwartz: A Monetary History of the United States, 1867-1960, Princeton University Press, 1971. ...is perhaps the most influential work in economic history of the 20th century. (http://www.cato.org/events/031121bf.html) Friedman is also perhaps the archetype neoliberal. 7 Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign, and then served on the President's Economic Policy Advisory Board for the rest of the Reagan Administration. (http://en.wikipeida.com/wiki/Milton_Friedman ; "Milton Friedman: An enduring legacy"). Thatcher, too, was a famous fan of Liberal economist Friedrich Hayek. In a letter the Iron Lady sent to Hayek she makes clear her vision of Neoliberal economic reform: The progression from Allende's Socialism to the free enterprise capitalist economy of the 1980s is a striking example of economic reform from which we can

With the collapse of the Soviet Union there was a widespread agreement in the United States and abroad that Communism had failed. The governments of the developed world, and many underdeveloped countries, had experienced rather overnight the resurgence of Classically Liberal thinking, and so Russia and her former colonies, as well as countries around the world with similar economic woes, like Chile, took the advice of the neoliberal economists economists with the newfound credibility of public office on how to rebuild their beleaguered economies.

3. Neoliberalisms intellectual origin While the term neoliberal is much more contemporary in origin than the 1960s, Milton Friedman undoubtedly inspired it by persistently trying to reclaim the word liberal from its left-of-centre adopters, as in his famous 1960s Open Minds interview with Richard Heffner.8 When asked about being a conservative economist Friedman adamantly rejected the label: The true conservatives today are the people in favour of ever bigger government. The people who call themselves liberals today, the New Dealers, they are the true conservatives because they want to keep on the same path we're going on ... I call myself a liberal in the true sense of liberal, in the sense in which it means of and pertaining to freedom. While the conservative intellectual movement catered to many neoliberal sensibilities one cannot draw too close a connection. Friedman and others like him were not traditionalists in any sense. Neoliberalism has no position on the role of women in society or the nuclear family, for example, and in many cases was stridently opposed to conservative initiatives like the draft or the embargo against Cuba9. Milton Friedman defended neoliberalism correctly as a pragmatic economic ideology: regardless of what the founding fathers thought, it is true because it works. And while he clearly understood the connection between capitalism and

learn many lessons. ... But I am certain we shall achieve our reforms in our own way and in our own time. (Correspondence in the Hayek Collection, box 101, folder 26, Hoover Institution Archives) (http://www.naomiklein.org/shockdoctrine/resources/part3/chapter6/thatcher-hayek) 8 http://www.youtube.com/watch?v=RsgAgGCrFY0 @ 1:10 9 Milton Friedman's work against the draft began in December 1966, when he gave a presentation at a four-day conference at the University of Chicago. (http://www.antiwar.com/henderson/?articleid=10042)

freedom10, he would have abandoned capitalism if he could be made to think it would lead to worse outcomes for the majority11. With all this in mind, the intellectual hub of neoliberalism was most definitely the economics department at the University of Chicago in the 1970s. It was there where Friedman and the others pushed for a neoclassical view of the market that found minimal space for government intervention. And it is from these academic headquarters that neoliberalism shed its reactionary New Deal heritage and became a robust ideology all of its own. 4. Neoliberalisms reach today Today the influence of neoliberalism is as sweeping as ever. International institutions like the World Bank, World Trade Organization and the International Monetary Fund get branded as Neoliberal regularly for their promotion of financial and trade liberalization, and for applying pressure on developing countries to slash social programs. Moreover, far from turning back to the left, the Democratic, Labour and Liberal governments that succeeded Reagan, Thatcher and Mulroney adhered to an even closer understanding of neoliberalism. Bill Clinton and Jean Chretien both helped lower North American barriers to trade through NAFTA, just as both made dramatic cuts to social programs. And despite nice talk of a third way, New Labour in Britain basically accepted the Neoliberal consensus even finally giving the Bank of England monetary independence, a move straight out of Monetarist economics.12 With the acceleration of globalization and the rise of countries like China and India, the liberalising reforms that they borrowed from the west are being copied all over the world. So while debate on the margins of economic theory continues to take place, the basic policy proposals pushed by neoliberals are going nowhere. Part 2: Neoliberalism Invades Canada 1: Economic Parallels The attention paid above to what is largely an American history is very important for understanding neoliberalisms place in Canada. In any subject, but particularly
10 11

Mitlon Friedman: Capitalism and Freedom, University Of Chicago Press, 1982 http://www.youtube.com/watch?v=0PaN9M4WwHw @ 1:20 & 4:20. In this interview Friedman makes clear his consequentialist position. If it [the capitalist system] didnt work it would be an impossible goal. Historically, Classical Liberalism has a rich utilitarian and consequentialist underpinning to it, too, in, for example, utilitarian Liberal philosopher John Stuart Mill. Even Adam Smith made his case for the free market by pointing out how selfish actors, through the invisible hand of the market, can inadvertently benefit others. And in matters of international trade, David Ricardos theory of comparative advantage advocated free trade on the basis of greater productivity not a moral argument about freedom of mobility rights or what have you. 12 http://en.wikipedia.org/wiki/Bank_of_England_Act_1998

economics, neighbouring countries have immense influence on one another thus making the history of either irreducible at the international level. As proof of this, just like in the U.S. the 1970s were a period of economic turmoil in Canada. As made evident by this graph from the Bank of Canada, inflation during the 1970s was out of control, in spite of high interest rates13.

For many young Canadians today, who do not remember the high rates of inflation in the 1970s and early 1980s, it is difficult to appreciate why inflation matters; they have only experienced a world of low and stable inflation inflation so low and so stable that most probably ignore it completely Inflation was coupled with rampant unemployment in eastern Canada as well as growing provincial and federal budget deficits. Canadas problems mirrored those in the United States, but far from being a North American phenomenon, economic performance was declining globally. In Britain for instance, garbage was piling up in the streets of London. It was their Winter of Discontent,14 their largest general strike since 192615 all manifestations of the general economic dissatisfaction and uncertainty that stretched around the world. 2: A Monetarist in Saskatoon Gerald Bouey, born in Saskatchewan in 1920, was a veteran of the Second World War. With the spectre of inflation over Canada and the world he was appointed governor to the Bank of Canada in February 197316. His policies were distinctly
13 14 15

http://www.bankofcanada.ca/en/ragan_paper/inflation.html http://www.themoneyillusion.com/?p=5164 http://libcom.org/history/1978-1979-winter-of-discontent

influenced by the Monetarist elite of the neoliberal movement. As Pierre L. Siklos writes in his 2002 The Changing Face of Central Banking: An accountant by training, his tenure is notable for the Saskatoon manifesto and the strategy of gradualism that ... would gradually reduce money growth and, therefore, inflation. 17 Milton Friedman, who was visiting Canada at the time, commented on Boueys September 22nd Saskatoon monetary manifesto by saying, "It is a marvellous speech. It is the best speech I have ever heard a central banker give...I could have written it myself."18 The effectiveness of Boueys actual policy changes was nevertheless mixed. The Strategy of gradualism was, as Siklos writes, a failure on both technical and policy grounds, [and] provided Boueys successor with the opportunity to move the Bank of Canada in an entirely new direction. This doesnt change the fact that inflation under Boueys watch did fall markedly before John Crow succeeded him in 1987, and Crows own policy prescriptions were decisively Montetarist in nature too. In a public lecture he delivered in 1988 he spelled out the goals of monetary policy as to achieve a pace of monetary expansion that promotes the stability in the value of money ... a policy aimed at achieving and maintaining stable prices19. That is: to suppress inflation. Friedman would be proud.

3. Deregulation and Privatization In the 1970s Canadian national corporations were in financial trouble. Many were operating at a loss and basically all were failing to promote the public interest, supposedly their main directive. Responding to these facts was a period commercialization where publically owned institutions were instructed to follow mainstream business principles. Philosopher and author Joseph Heath writes of this period in his excellent 2009 book Fithly Lucre: A 1974 government directive instructed the Canada National Railroad to be profitable20, and a new director was
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http://www.thecanadianencyclopedia.com/index.cfm? PgNm=TCE&Params=A1ARTA0000907 17 Pierre L. Siklos: The Changing Face of Central Banking: Evolutionary Trends since World War II, Cambridge University Press, 2002 (Page 105). Online copy: http://books.google.ca/books?id=O8aOTK378pIC&pg 18 Quoted in Lamontagne, Business cycles, p. 84. Gathered from Trudeau and Our Times: The heroic delusion, by Stephen Clarkson and Christina McCall, 1994 (Page 461). 19 Crow, J. W. (1988), The Work of Canadian Monetary Policy, manuscript, Bank of Canada Review, February. Page 4. 20 Garth Stevenson, Canadian National Railways and Via Rail, in Allen Tupper and G. Bruce Doern, Privatization, Public Policy and Public Corporations in Canada (Montreal: Institute for

appointed with an explicit mandate to implement the necessary changes. In 1978, the Air Canada Act instructed the airline (with somewhat comical understandment) to run its operation with due regard to sound business principles and, in particular, the contemplation of profit. 21 As Heath points out, similar stories unfolded in France and Spain, where socialist parties imposed commercializing reforms upon the state sector. Similarly, the Canadian reforms just like the change in monetary policy took place under the left leaning leadership of Pierre Trudeau. Subsequent governments in Canada and elsewhere would go on to fully privatize many of the commercialized public industries. Far from being a right wing neoliberal conspiracy, directed by the likes of conservative Brian Mulroney, much of the privatization that occurred in the 1980s was in effect ceremonial, as the industries had for years been operating as if they were already private by state mandate. ... By 1994 there was essentially no difference in the behaviour of Texaco (private), Petrofina (public), and BP (mixed).22 Much of the shift towards a neoliberal world order was therefore guided by mere economic reality: Governments and public corporations alike cannot run huge deficits indefinitely, and must eventually make cuts and reforms regardless of the leaderships personal political philosophy. The effects of the 1980 reforms were still striking, though, at stemming economic decline. As economics professor Scott Sumner recently wrote: Growth [had] been slower [in the US following neoliberal reforms], but thats true almost everywhere. What is important is that the neoliberal reforms in America ... helped arrest our relative decline. The few countries that continued to gain on us were either more aggressive reformers (Chile and Britain), or were developing countries that adopted the worlds most capitalist model.23 4. Free Trade Agreements

Research on Public Policy, 1988). 21 Joseph Heath: Filthy Lucre: Economics for people who hate capitalism, HarperCollins Publisher Ltd. 2009. (Page 197). 22 Joseph Stiglitz, Whither Socialism?, MIT press, 1994 (page 250). As paraphrased by Joseph Heath. 23 http://www.themoneyillusion.com/?p=5164

On October 4th, 1988 Canada under Brian Mulroney signed a Free Trade Agreement with the United States. Over a ten year period it sought to eliminate barriers to trade and liberalize investment conditions. Before the ten year period was up, however, new Prime Minister Jean Chretien and President Bill Clinton returned to the negotiation table, this time with Mexico, in 1994. The new agreement called NAFTA expanded the scope of the tariff reductions, and removed some outright, while addressing some of the concerns had with the first agreement by including environmental and labour safeguards.24 There was no single catalyst for the expansion of free trade across North America. Ultimately it came with the slow recognition of Canada and the United States merging societies. Both faced nearly identical economic problems and both profited from nearly identical policy reformations, for instance, not to mention the cultural convergence that was taking place at the same time. The countries were already highly interconnected, in other words, and so an official FTA, if anything, seemed rather overdue. Nevertheless, neoliberal policy advisors were already standing by, ready to give their two cents on the form of the agreements. And by and large NAFTA was drafted as a neoliberal policy, with a focus on productivity and little attention paid to the believers in the fidelity of particular cultural norms, or economic sovereignty. The effects of changes to trade policy are difficult to evaluate when so much is being changed at once. However, based on the criteria of economic growth, efficiency and productivity NAFTA has been an undeniable success. In NAFTA Revisited Gary Clyde Hufbauer and Jeffrey J. Schott write the following as the bottom line on NAFTA: NAFTA was designed to promote economic growth by spurring competition in domestic markets and promoting investment from both domestic and foreign sources. It has worked. North American firms are now more efficient and productive. They have restructured to take advantage of economies of scale in production and intra-industry specialization. The US and Canadian economies have performed well during the NAFTA era, growing by average annual rates of 3.3 and 3.6 percent, respectively...25 Hufbauer and Schott are here echoing a widespread consensus among professional economists, and are by no means simply right wing ideologues. Indeed, both are
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http://www.cfr.org/publication/15790/#p3 Gary Clyde Hufbauer and Jeffrey J. Schott: NAFTA Revisited: achievements and challenges, Institute for International Economics, 2004. (Page 61) Online copy: http://books.google.com/books/p/inst-intl-economics? id=Hf12VNRekqEC&vq=It+has+worked.+North+American&ie=ISO-88591&source=gbs_navlinks_s

international trade specialists26 and have no reason for dishonesty or exaggeration and their appraisal of NAFTA is certainly not completely positive. They point out that free trade cannot technically create anything other than better opportunities opportunities no one can guarantee are taken and that NAFTA and free trade was never meant to be a miracle cure. But to completely dissect NAFTA would take an essay, and indeed an entire book of its own. The important point is that, in net, NAFTA has been an obvious boon for Canada and her amigos to the south. Part 3: Conclusions and Finalities 1. Liberalisms Fellow Travelers In the 1920s and 30s the fellow travelers were people artists, writers and activists who supported the 1917 Russian Revolution but who were not members of the Communist party. In United States in the 1950s, when Joseph McCarthy and his brand of communist paranoia reached their heights, a fellow traveler became anyone who supposedly sympathized with the Soviet Empire but was not a card carrying communist.27 McCarthy and his ilk asserted that the fellow travelers were promoting views that, while not completely communist, were close enough while staying palatable to the general public. This would shift the definition of mainstream political opinion further left, all in order to make full-blown communism seem less radical by comparison. This assertion had the effect of not only indicting communism, but anything that appeared left of centre, but this is not the point. McCarthys fellow traveler conspiracy is an inverse parable for the most salient effect of neoliberalism in Canada: the rebranding of formally radical opinions as relatively mainstream. In Canada free-market think tanks like The Fraser Institute and the Atlantic Institute for Market Studies, are the home for the purest neoliberal thought just as Chicagos economics department and similar think tanks are in the U.S.28. These institutions are extremely influential but oddly their exact policy proposals are almost never perfectly implemented. The Fraser Institute, for instance, would largely privatize Canadas universal health care system and treat global warming as a socialist myth. Yet all major parties believe in global climate change. And Stephen Harper would, before he could flutter an eye lid, be immediately ousted in an election if he even hinted at reforming health care along Fraser lines. The role of organizations like the The Fraser Institute, through its insistent and loud neoliberal aggrandizement, is actually to make liberalizing policies but not quite full blown neoliberalism more palatable to the publics intuition. The Fraser Institute has many sympathizers on the right and in the centre who are not quite
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http://www.iie.com/staff/author_bio.cfm?author_id=62 Both authors are fellows of the Institute for International Economics. 27 http://en.wikipedia.org/wiki/Joseph_McCarthy 28 http://www.cato.org/

card carrying neoliberals, but nonetheless share neoliberal goals (growth, integration and minimalist government); theyre liberalisms fellow travelers. The institute is like the guy in the negotiating room who demands a million dollars upfront, to make the second attempt at half a million seem closer to the right price. O.K. the public says, privatizing health care seems a little radical, but what about Canada post? In this sense, the lack of The Fraser Institutes precise policy measures being implemented says little about the state of neoliberalisms intellectual epicentres. Rather, it hints at the cultural success of Canadian neoliberalism at moving a historically left wing country further right, in many ways, than the United States. 2. Canada: Neoliberal paradise? More right than the United States? Canada is also, not coincidentally, (and one mustnt forget) home to some of the most vocal left wing, anti-globalization groups too29; not to mention Torontonian Naomi Klein, whose books No Logo and Shock Doctrine are likely the most popular anti-neoliberal books on the market today. Not as a nation as a whole, but in terms of the political establishment, and certainly in places like Calgary, yes: Canada is practically a neoliberal paradise. The conservative/neoliberal Heritage Foundation ranked Canada seventh in terms of economic freedom, above even the US, and fifth in terms of business freedom for 201030. Were a country of entrepreneurship, private property and free enterprise. Under Stephen Harper five new free trade agreements have been drafted with markets around the world in only the last 2 years, including a major one with the European Free Trade Association31; and over 10 other FTAs are pending negotiation. Indeed, it is difficult to think of the last big economic win for the Canadian left. 3. The cons Neoliberal economics has created a lot of wealth for Canada. The haunting question for neoliberals is how and where that wealth has been concentrated. A persistent 5% GDP growth rate isnt as desirable if all the gains go to a few billionaires. Yet it is simply a fact that over the last 3 decades income inequality in Canada and the US has increased dramatically.

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http://www.fraserinstitute.org/newsandevents/commentaries/3264.aspx A typically extremist Fraser Institute editorial attack against anti-globalists: the anti-globalists join hands with old-fashioned dictators and aspiring dictators who use violence to break up meetings of democratic leaders, academics and political thinkers. 30 http://www.heritage.org/index/topten.aspx 31 http://www.international.gc.ca/trade-agreements-accords-commerciaux/agracc/index.aspx?lang=en#free Panama, Jordan, Columbia, and Peru are the others.

Tavia Grant of the Globe and Mail, reporting on a recent inequality study, wrote the following in April/May 200832: Earnings among the richest fifth of Canadians grew 16.4 per cent between 1980 and 2005 while the poorest fifth of the population saw earnings tumble 20.6 per cent over the 25-year time period, Statistics Canada said in its 2006 census release on income and earnings. Earnings among people in the middle stagnated. The reason relates to both the monetarist in Saskatoon and the expansion of free trade. Tight monetary policy rewards savers, because high interest rates and low inflation leads to higher rates of returns. This is great news for investors and habitual money hoarders, but almost irrelevant if you live pay check to pay check (like recent immigrants) and downright nasty if youre trying to pay off a mortgage. So while wealth floods Canadas markets a disproportionate return will be had by the already rich.

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Furthermore, as Canada opened its economy to the globe, the larger labour pool pushed down wages among the unskilled working classes. This is arguably not a bad thing, though, because it is indicative of growing competitiveness and rising wages in undeveloped countries. Also, in general, cheaper labour leads to cheaper goods. That is to say, some of the losses in nominal wages were made up for in cheaper goods and services; and it is certainly hard to deny how cheap consumer goods have gotten.
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http://www.theglobeandmail.com/archives/the-rich-the-poor-and-the-chasmbetween/article682203/ 33 http://www.bcrealtor.com/d_bkcan.htm The period between 1980 and 1990 saw interest rates that were regularly over 10%.

This trend is not inevitable, however. The economy of Sweden, for example, ranks 4th most competitive in the world; is, as an exporting country, hugely involved in international trade; and over the last few decades has been privatizing, deregulating, and suppressing inflation quite well. Sweden is, despite its social democratic heritage, a high-growth neoliberal style economy34. Nevertheless, Sweden has greater income equality than was ever achieved in the Soviet Unions 70 year long history35. Not only that, but when you consider the level of net income transferred, Sweden surprisingly transfers less income per capita than the U.S. of A. 36 Increased neoliberalism and equality are simply not mutually exclusive. 4. The End In this paper I have outlined the origins and effects of neoliberalism in Canada. Neoliberalism has Permanently changed Canadian monetary policy Shifted the political compass of the country rightward Improved economic productivity, growth and standards of living Created a greater variety of goods and services (a by product of trade) Made Canada and the US more interconnected via free trade and a similar politics Increased the income gap Stagnated lower earners wages and made the economy more skill oriented And lead to the decreased role of the state, both domestically and geopolitically

This is quite a list of achievements in the span of 30 years or so, but unfortunately for the vanity of neoliberal big-wigs, most of this was probably inevitable. Left wing governments were deregulating and privatizing out of necessity. The world is, whether we like it or not, globalizing. And the economy of Canada would have restructured similarly anyhow.

34 35

David Harvey: A Brief History of Neoliberalism Joseph Heath: Filthy Lucre: Economics for people who hate capitalism, HarperCollins Publisher Ltd. 2009. (Page 58). Thats worth repeating for emphasis: Swedish capitalism is more egalitarian than Soviet communism. 36 http://freakonomics.blogs.nytimes.com/2010/05/25/who-spends-more-on-social-welfarethe-united-states-or-sweden/? utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+FreakonomicsBlog+ %28Freakonomics+Blog%29&utm_content=Google+Reader

The question of neoliberalisms legacy remains. Ultimately, from where I stand, the neoliberal project, as envisioned by the Hayeks of the world, has failed to meet its full objectives. Social programs and bank and financial regulations still exist, and are still necessary to a vibrant and equitable economy. Sweden is more neoliberal than it was in the 70s, certainly, but Milton Friedman would never have approved of their redistributive program. The principles of a healthy Canadian economy are to be found in what David Harvey calls circumscribed neoliberalism37. The Neoliberal movement was the conceptual and intellectual spine to a necessary corrective in international economic policy, away from an inflation happy, micromanaging state capitalism. Despite its pragmatism, it was still too idealistic (indeed, neoclassical economics is all about ideals) to be a practical end in itself. The future of Canada depends on taking the good of neoliberalism, but not taking it too far. We are better off as a fellow traveler; (to paraphrases Irvin Kristol) neoliberals, mugged by reality.

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David Harvey: A Brief History of Neoliberalism, Oxford University Press, USA, 2005. (Page 115)