Global Trade: Should Saskatchewan be an Australia or a Tasmania?: The breadth of human collaboration has defined prosperity for eons.

Commentary, David Seymour, Trade, Uncategorized


Getting to the right answer in public policy debates is never easy, but what makes it completely impossible is asking the wrong question from the start. When Premier Wall says he “doesn’t understand how we could benefit” from a BHP Billiton takeover of Potash Corp, he is implying that the future should happen according to the confines of his own imagination. 
He should consider how ever wider collaboration has produced previously unimaginable wealth throughout human history, and instead ask why any government would want to block such things as this potential investment from afar.
Since that takeover is from Australia, please bear with me and consider a historic parable from that part of the world. 
In his wonderful new book ‘The Rational Optimist,’ author Matt Ridley describes how the first people migrated to present day Australia from Africa some 40,000 years ago. Some of them made it to Tasmania, at that time connected to the rest of Australia by land (yes, sea level change occurred even before industrial development). 
After that a very sad thing happened. Tasmania was separated from the mainland by rising sea levels, and the people remaining on the Island not only failed to develop their culture, they regressed. The archaeological records show that after the Bass Strait separated them from the rest of Australia, ancient Tasmanians made fewer and less sophisticated tools as time went on. They generally lived shorter and more brutish lives as a result.
They were unable to support a population of more than a few thousand, or regain contact with the Australian mainland.    Ridley argues that their problem was their limited numbers. Because ideas are free once somebody’s thought of them, a person in a small community has access to fewer people’s ideas and therefore fewer ideas overall than someone in a large one. In a vicious circle, fewer technologies kept fewer people alive. 
Tiny Tasmania simply had too few people for a sophisticated society to evolve. Conversely, societies connected to more people have always consumed a wider range of goods by drawing on a wider range of minds.
In the modern world natural physical barriers to trade are less relevant, but political ones remain with us. When the leader of our province asks for step by step justifications of global commerce, he chills it. He raises the level of our own “Bass Strait” by restricting our commercial contact with the “mainland” of the global economy.
When his government decides to make decisions based on reports from the Conference Board of Canada, as he says he is waiting to do on this issue, he echoes past political leaders who extinguished the human flourishing in their jurisdictions by way of assuming that willing buyers and sellers can’t really judge their own best interests, but rather must operate only through select channels allowed by bureaucracy.
Today, beneath the technicalities of what a takeover of Potash Corp would mean for CanPotex (the provincial government sets resource royalties no matter what) and the latent xenophobia that occasionally rears its ugly head in the comment sections of newspaper websites, we face a simple choice. Do we want to be part of a large and open economy with a free trade in resources and ideas, or do we want to fill in our own “Bass Strait” that isolates us from the mainland of the global economy?
Do we want to entertain a new management approach that is not necessarily better but certainly different and therefore enriches the range of ideas in our economy, or do we want to be parochial and hold them out? Should local shareholders in PotashCorp have the choice of selling to the highest bidder on a global market and redeploy their capital as they see fit, or should their selling options instead be constrained to what is acceptable to the politics of relative isolationism?
If the ancient Tasmanians had been conscious of the world and the possibilities beyond their tiny island, one suspects their answers would have been obvious. Unlike them, we have a choice.
Let us hope that Premier Wall understands what trade and collaboration across borders and regions has done for human living standards throughout our history as a species. Hopefully he’ll stop asking how being fully plugged into global commerce could possibly benefit Saskatchewan, and instead ask how it could not.