Russian economy collapses. Canadian economist wins Nobel Prize. Do non-aboriginal Canadians get it?

• Author: Fenwick, Fred R.

What did the West learn from the collapse of the Russian economy? Probably, what we think we learned is the truth at the very basis of the market economy, the form of organization of resources that the West claims to operate under. That is to say, that with all of its blemishes, the free market economy in which decision making about allocation of resources is distributed over a rather larger number of individuals (the public) is inherently more efficient than the centralized and planned economies of the old Soviet Bloc.

How efficient would the economy be if it was all public? Probably about as efficient as the Post Office or the Worker's Compensation Board. On the other hand, how fair would it be if it was all private? This practical mix of how much of the economy is generated in the private sector and then how much is transferred to the public sector (usually by taxation) is what every sovereign nation grapples with.

In Canada we insist on trying to be more fair than America and do this by transferring wealth from the private to the public sector for health care, better education, and the other programs that we feel (at least partially) define us as Canadians. We also are familiar, if not comfortable, with the consequences of those transfers such as higher taxes, a lower dollar, and the brain drain of money, people, businesses, and comedians going south.

So perhaps it is not surprising that the key economic theories concerning capital flow between nations as influenced by exchange rates and interest rates were proposed by a Canadian. Dr. Robert Mundell, originally from British Columbia, is the 1999 winner of the Nobel prize in Economics.

Right. But this is supposed to be a column about aboriginal law, so why aren't we talking about native logging or fishing rights and the responsibility of aboriginal nations in dealing with their resources? Because in a very real sense, the economy is what all the fuss is about!

We live in the real world and we all have to make a living every day to support ourselves and our families, and to pay the taxes that allow our governments to fund our chosen public initiatives. Citizens not only must have access to the economy in order to make a living, but they also must have access or opportunity to create a sufficiently large private economy to employ most of the workers. This is the lesson of the collapse of the Russian economy, the regular experience of the Canadian economy competing with the American...