Andrew Coyne: The whole point of revitalizing manufacturing is misguided. | So Good News

Rudyard Griffiths, executive director of The Hub, Globe and Mail columnist Andrew Coyne, as part of the Ontario Chamber of Commerce’s Ontario Economic Summit on November 22, 2022. A revised “Munk-style” debate featuring Bill Robson, president and CEO of the CD Howe Institute. Ontario cabinet minister Sandra Pupatello and the Hub’s own editor-in-chief Sean Speer. The debate’s resolution reads: Settle it: Ontario needs to reform as part of its growth plan. Pupatello and Speer seconded the motion. Coyne and Robson oppose it.

What is a “revision”?

Taking out the wording means the government should be forced to tax and make them here instead of deciding whether to make things in Ontario or somewhere else that works best for them. Ondine. Otherwise, they should be bribed with subsidies.

Why do we want to do this? Significantly, We want to be an attractive place to invest in Ontario: it has the lowest costs; Due to best trained workforce etc. But what are the reasons for forcing or bribing the economy here?

One argument is that it is generally better to produce goods here than to import them: the case against imports. In other words: the case against trade that protectionists have been working hard for centuries.

other more modern Acknowledging the general issue of trade, but the shocks of today’s world—supply chain disruptions; It is argued that we demand an exception—the production of commercial arms by unfriendly nations.

First of all, let’s start with this: the idea that the government should force or bribe businesses to invest in Ontario, rather than simply do it where they will invest of their own free will.

When a business is bribed or threatened to invest somewhere, we should note that the investment usually only lasts as long as the bribe or threat exists.

But in fact the gist of the exercise is misleading.

The reason we trade with others is not just for business; For everyone—because it makes economic sense that some things should be produced here and not elsewhere. That is not trade with other countries. This is because Ontario trades with other provinces. This is because Northern Ontario trades with Southern Ontario.

Rather than everyone trying to do it themselves. We specialize. We work separately. We do our best, They do their best; They exchange with each other. Both sides gain from the other’s technological knowledge and capital, as do the resulting economies of scale. Trade makes both sides better off. Otherwise, it will not take place.

What should be produced here? Who should decide what else should be produced? Simple: Consumers. Why consumers? Because that’s what business is all about. We produce things for one reason only: to consume them.

What consumers should produce through the choices they make in the marketplace; how It determines who—and where. Consumers drive businesses to lower costs and higher productivity. It is the only reliable way to improve living standards.

When consumers are prevented from playing that role. When we substitute government choices for consumer choices; We’re talking about some other criteria than what prices or productivity—or living standards—should apply. It may be a lot, but it is not a “progress plan”.

What is the more sophisticated issue based on security of supply? Shortages of critical commodities that arise during the pandemic; things like vaccines and masks; Since then, global supply chain disruptions; Russia and China are ready to use trade as a weapon: these are all important lessons.

But what are those lessons? Do businesses need to tell the government how to mitigate supply chain risk? No. (4) Generally speaking, businesses can figure this out on their own. But what about important goods? As some have argued that we shouldn’t be so exposed, the lesson is that we shouldn’t rely on foreign suppliers and make them all ourselves.

Or should we be better prepared? That is, In anticipation of such a crisis, we should stock up on these goods; or should make advance contracts for them. Well – but nothing says it has to be produced here. We still buy from the lowest cost supplier wherever we can find it. We just need to plan ahead.

Exceptions are hostile actors like Russia or China. Yes, Trade makes both sides better off. But I don’t want to make them better, even if it means making myself feel a little worse. As Europe has learned, we do not want to leave ourselves hostage to the desire to support us in a crisis.

All of this allows us to trade more with countries other than Russia or China, and less with them: “sharing friends,” as it’s called. If we narrow our trade circle a bit, they are for countries; Not exactly our friends. At least not our enemy.

Do not start the case to revise. Yes, We should prefer the things we buy in countries that are plotting to destroy us. not much, Shouldn’t we love that they’re made in Ontario?