It was revealed this month that Canada’s Prime Minister has brought in economist Mark Carney as an adviser to assist with mapping out the government’s response to the COVID-19 pandemic. The CBC reported how Carney left his position as governor of the Bank of England “after guiding it through Brexit uncertainty,” but it seems that the media is as clueless to Carney’s political activism and ineptitude as the Canadian government.
Carney didn’t guide Britain through Brexit uncertainty, but arguably fuelled it by making unfounded or exaggerated claims about Britain’s future outside of the European Union (EU). He armed Members of Parliament who, for years, stood in the way of passing a Brexit deal through Parliament, with tales of doom and gloom that they used to constantly vote against fulfilling the government’s promise to leave the EU. Britain’s former Prime Minister Theresa May’s nightmarish task of passing a Brexit deal—even a deal that didn’t truly follow through on the promise of leaving the EU in its entirety—was made infinitely more difficult by Carney and his anti-Brexit bias.
The Bank of England, under Carney’s leadership, issued dire warnings to the politicians and the people of Britain about the potential of voting to leave the EU, leaving the EU, and of leaving the EU without a deal. Carney began his scare campaign in spring 2016, before the referendum, announcing that the Bank of England would give banks billions of pounds to help avoid a financial crisis following a vote to leave the EU. He claimed that Britain’s service economy would crumble as a result of voting to leave and that there would be a “reduction in financial stability.”
In August 2017, the Bank of England predicted 2017 exports would drop by 0.5 percent as a result of the decision to leave. The bank also predicted that business investment in the United Kingdom would drop by 2 percent. By 2018, however, we knew that year-on-year figures for quarter three showed an increase of 8.3 percent in exports and a 1.7 percent increase in business investment.
Carney was wrong about the immediate impact of the decision to leave the EU, and he was also wrong about the impacts of actually leaving.
In November 2018, Carney began issuing warnings yet again. The Bank of England published an analysis that suggested leaving the EU without a deal would see GDP contract by eight percent over a period of a year. It was no less than a prediction of total societal and economic collapse. It was so extreme that he was forced to walk back the claims.
Britain has since left the EU, and before the COVID pandemic forced millions of people to stay at home for months, the economy was doing just fine. Following Boris Johnson’s huge election victory in December 2019, that saw his Brexit-supporting Conservative Party win seats it hadn’t won for a century, the UK was enjoying the highest business confidence levels in years. Unemployment was dropping, and Brexit uncertainty was no longer impacting businesses because Mark Carney had given up issuing baseless and damaging predictions of the coming apocalypse.
The decision, therefore, to bring in Carney to help guide the Canadian government’s response to the COVID pandemic is an interesting one. Carney has proven his unwillingness to budge when it comes to his own political agenda and priorities. For Carney, Brexit was an inconvenience and the will of the British people something that he could overcome by using his position of considerable influence to scare the living daylights out of tens of millions of people.
Carney’s political activism didn’t’ just stop at Brexit, though. In December 2019, the United Nations Secretary-General Antonio Guterres announced that Carney would lead a new push to make sure that the global financial sector embraced “climate emergency” issues. Carney insisted that “investing for a net-zero world must go mainstream” and, as I have argued previously, initiated a push to completely shift global dependency away from fossil fuels well before renewable fuels have proven to be ready to take the reins.
Carney, it seems, is heavily influenced by political trends of the day—and in 2019, pre-COVID, it was the climate emergency.
The fact that Carney is now influencing decision making in the Canadian government on the economic and political response to COVID should be concerning to every Canadian, and is immediately recognisable as a problem to anybody who remembers the damage he caused during Brexit negotiations.
Wendy Carlin, Professor of Economics at the University College London, said in April 2020 that, “Like the Depression and the second world war, the Covid-19 pandemic will change how we talk about the economy and public policy.” She was right, and since then, many Western political leaders have indicated their willingness, or desire, to implement major transformative change in the wake of the COVID-19 pandemic.
That same month, Democratic presidential candidate Joe Biden said that the COVID crisis was a chance to make “Institutional changes,” before going on to employ Stephanie Kelton, the economic adviser behind Vermont Senator Bernie Sanders’ campaign who advocates Modern Monetary Theory.
On June 22, Canada’s Prime Minister also pondered the “opportunity” COVID presents for Canada, and how in the wake of the virus, people can “think about what kind of future we want to build together.” And right on cue, the CBC egged on the Prime Minister to keep true to his word and “seize” the opportunity to rebuild Canada.
Mark Carney will provide the Canadian government precisely what is needed to transform the economy, should they wish to be as bold as Joe Biden, in the wake of the COVID pandemic. The former governor of the Bank of England brings a wealth of experience in how to terrify politicians into doing something as radical and deeply troublesome as working against the instructions of the electorate. He also knows what it takes to plough ahead even when proven wrong, and this time around, he is surrounded by political leadership more willing to accept his advice than the British Conservative government has been since 2016.
Carney may not be the best decision for Canadians who want a return to normal, but he is ideal for people who want something radical, new, and potentially dangerous.
Jack Buckby is a research associate with the Frontier Centre for Public Policy.
