I never understood why Canada would restrict international players from disrupting sectors like telecom (a commodity really) but didn't seem to have any problem with Airbus taking over the CSeries program for almost nothing.
> but didn't seem to have any problem with Airbus taking over the CSeries program for almost nothing.
This is actually a somewhat amusing to bring up in this context, because US protectionism is what made that happen.
Boeing tried to kill off the C-Series by getting the US administration to impose 300% (sic!) import duties because ... it threatened US jobs. Airbus was targeting the program aggressively as well with tactics like price matching, so the CSeries was already struggling before that.
Bombardies only viable way out was to join a partnership with Airbus (which got 50.1%), so the planes could be manufactured in their Alabama plant and it could be positioned within the Airbus product range instead of competing.
The partnership was forced move, and quite a big middle finger to Boeing. The alternative would have probably been just shutting it down.
Perhaps the government doesn't like foreigns tapping Canadians' communications? The NSA listens in on its own citizens with the coöperation of the US telcos, so what chance would foreigners have?
Canada did prop up this program for quite a long time. It never achieved its sales goals. Moreover the money that they dumped into it was ruled illegal by the WTO. In true Trump fashion the White House overreacted and put 300% tariff to kill the program. Airbus rescued the program.
The comment about 'Canada blocking foreign investment out' is basically not correct.
Also, Telecoms, Banking and Communications are protected industries in every country, Canada is not special there.
If Canadian Telecoms Bell, Rogers and Telus went up for grabs, and even if Canada realistically had the same access to US markets - do you think Telus would be buying AT&T? Or the other way around?
It doesn't matter 'how well run' Canadian telecoms are (I don't think they are, but even if they were) - or how poorly US firms were run. The 'big' would eat the 'little'.
All of the 'good jobs' in Telecom like network planning, research, anything related to R&D, executive management - would go to the US. Canada would be left with 'Customer Service' and some local marketing.
There wouldn't really be that much gain for anyone, the net 'savings' would be marginal, and then, you'd be left with the Canadian government trying to regulate giant behemoths the size of entire sectors of the Canadian economy without much leverage.
That sector is verticalized with Entertainment and so with Bell, would go a whole bunch of TV / Cable stations etc.
Then AT&T/NBC would even more effectively be able to push their own programming, guests (who promote films, books, sports) and further push down anything remotely local towards hegemonic products.
So aside from the not-so-obvious economic advantages, there are quite a few externalities to worry about as well.
America in particular likes to push the concept of 'Free Markets' - because it has tremendous advantage in that context.
'Just Open Your Economy!' is the strategy of a 'Giant Economy' telling 'Little Economies' that 'We Will Devour Everything Of Value'. It's essentially a form of economic colonialism.
Adam Smith isn't exactly wrong, there can be many benfits to both sides, Canada has this kind of 'Gilded Cage' situation wherein it can maintain a very high standard of living by being next to the US, but it comes at the cost of losing the ability to do almost anything exceptional that in any way competes with the US.
The EU is not as unbalanced and they have different national constituents, with longer history and more potent foundational industries. Tiny Sweden makes Jet Fighters (!) which comes out of their cold war Air Force history of independence and a formerly relatively giant Air Force.
That America can have guys like 'Elon Musk' + Space X is a function of a few things, but at very least, it's scale.
The US is a huge market and only certain things can only be done at that scale. Most small countries do not have competitive automakers. Space X is essentially dependent on US Government contracts, at least indirectly.
Second, it's 'much bigger than it's peripherals'. This means that the US sucks all the talent and capital from neighbouring states into it's systems.
Think of the 'Silicon Valley' as not an 'American' place - think of it as an 'International Zone' that happens to be in the US. A 'super cluster' with a giant critical mass of talent.
Right now, arguably due at least partly to the inherent advantage that the Euro gives to Germany - Spaniards, French, Italians etc. are moving to Germany at considerably greater rates than in the other direction. That's where the industrial base will grow jobs from. Peripheral European states that don't manage to found their own competitive sectors will turn into places like Alabama and Louisiana where the talent vacates before it can establish into critical mass.
Third, another major artifact is inequality. Low-end jobs in American don't pay well, and they don't get benefits. The surpluses to the high side of the pyramid are huge. But when you take into consideration the 'off the books' economy, it's massive. California has almost 3 Million undocumented citizens, who are more likely to be young, more likely to be workforce participants, almost entirely working at the lowest end of the labour pool, and definitely earning far sub-minimum wage. Every manual activity from planting, to picking, to trucking, to food preparation and cleaning - everything but the 'front facing stuff' is often fulfilled by people 'off the books' and the consumer and corporate surpluses from that are gigantic. Add to that the downward pressure on wages ... and basically you have a giant wealth transfer machine with enormous surpluses floating into the hands of those with middle to upper class incomes.
Just consider what all of the US stats would look like if we accounted for those jobs, at those wages. What would GDP/capita start to look like, GINI coefficient, other measures of inequality and % 'uninsured', voting rights.
I'm not making a political comment here, it's a problem and a paradox, but pointing out the material advantages to the non-serfdom population.
This excess free cash-flow both on an individual level and corporate level enable so many things to happen, it's hard to fathom. It's so common in America for individuals to have hobbies i.e. drones, cars, travel, tech etc. that are 'really expensive', beyond the reproach of the middle class in other nations.
Relatively cheap energy, wide open spaces and relatively cheap land, especially compared to Europe for example, again, this has all sorts of 'unseen surpluses'.
So those are just a few of the differentiators and of course, there are so many more, it's complicated.
908B64B197|4 years ago
the_duke|4 years ago
> but didn't seem to have any problem with Airbus taking over the CSeries program for almost nothing.
This is actually a somewhat amusing to bring up in this context, because US protectionism is what made that happen.
Boeing tried to kill off the C-Series by getting the US administration to impose 300% (sic!) import duties because ... it threatened US jobs. Airbus was targeting the program aggressively as well with tactics like price matching, so the CSeries was already struggling before that.
Bombardies only viable way out was to join a partnership with Airbus (which got 50.1%), so the planes could be manufactured in their Alabama plant and it could be positioned within the Airbus product range instead of competing.
The partnership was forced move, and quite a big middle finger to Boeing. The alternative would have probably been just shutting it down.
throw0101a|4 years ago
Perhaps the government doesn't like foreigns tapping Canadians' communications? The NSA listens in on its own citizens with the coöperation of the US telcos, so what chance would foreigners have?
* https://en.wikipedia.org/wiki/Room_641A
* https://en.wikipedia.org/wiki/PRISM_(surveillance_program)
As a Canadian I would certainly like more competition, but I can certainly see the reasoning.
project2501a|4 years ago
you mean a utility, right?
InTheArena|4 years ago
jollybean|4 years ago
Also, Telecoms, Banking and Communications are protected industries in every country, Canada is not special there.
If Canadian Telecoms Bell, Rogers and Telus went up for grabs, and even if Canada realistically had the same access to US markets - do you think Telus would be buying AT&T? Or the other way around?
It doesn't matter 'how well run' Canadian telecoms are (I don't think they are, but even if they were) - or how poorly US firms were run. The 'big' would eat the 'little'.
All of the 'good jobs' in Telecom like network planning, research, anything related to R&D, executive management - would go to the US. Canada would be left with 'Customer Service' and some local marketing.
There wouldn't really be that much gain for anyone, the net 'savings' would be marginal, and then, you'd be left with the Canadian government trying to regulate giant behemoths the size of entire sectors of the Canadian economy without much leverage.
That sector is verticalized with Entertainment and so with Bell, would go a whole bunch of TV / Cable stations etc.
Then AT&T/NBC would even more effectively be able to push their own programming, guests (who promote films, books, sports) and further push down anything remotely local towards hegemonic products.
So aside from the not-so-obvious economic advantages, there are quite a few externalities to worry about as well.
America in particular likes to push the concept of 'Free Markets' - because it has tremendous advantage in that context.
'Just Open Your Economy!' is the strategy of a 'Giant Economy' telling 'Little Economies' that 'We Will Devour Everything Of Value'. It's essentially a form of economic colonialism.
Adam Smith isn't exactly wrong, there can be many benfits to both sides, Canada has this kind of 'Gilded Cage' situation wherein it can maintain a very high standard of living by being next to the US, but it comes at the cost of losing the ability to do almost anything exceptional that in any way competes with the US.
The EU is not as unbalanced and they have different national constituents, with longer history and more potent foundational industries. Tiny Sweden makes Jet Fighters (!) which comes out of their cold war Air Force history of independence and a formerly relatively giant Air Force.
That America can have guys like 'Elon Musk' + Space X is a function of a few things, but at very least, it's scale.
The US is a huge market and only certain things can only be done at that scale. Most small countries do not have competitive automakers. Space X is essentially dependent on US Government contracts, at least indirectly.
Second, it's 'much bigger than it's peripherals'. This means that the US sucks all the talent and capital from neighbouring states into it's systems.
Think of the 'Silicon Valley' as not an 'American' place - think of it as an 'International Zone' that happens to be in the US. A 'super cluster' with a giant critical mass of talent.
Right now, arguably due at least partly to the inherent advantage that the Euro gives to Germany - Spaniards, French, Italians etc. are moving to Germany at considerably greater rates than in the other direction. That's where the industrial base will grow jobs from. Peripheral European states that don't manage to found their own competitive sectors will turn into places like Alabama and Louisiana where the talent vacates before it can establish into critical mass.
Third, another major artifact is inequality. Low-end jobs in American don't pay well, and they don't get benefits. The surpluses to the high side of the pyramid are huge. But when you take into consideration the 'off the books' economy, it's massive. California has almost 3 Million undocumented citizens, who are more likely to be young, more likely to be workforce participants, almost entirely working at the lowest end of the labour pool, and definitely earning far sub-minimum wage. Every manual activity from planting, to picking, to trucking, to food preparation and cleaning - everything but the 'front facing stuff' is often fulfilled by people 'off the books' and the consumer and corporate surpluses from that are gigantic. Add to that the downward pressure on wages ... and basically you have a giant wealth transfer machine with enormous surpluses floating into the hands of those with middle to upper class incomes.
Just consider what all of the US stats would look like if we accounted for those jobs, at those wages. What would GDP/capita start to look like, GINI coefficient, other measures of inequality and % 'uninsured', voting rights.
I'm not making a political comment here, it's a problem and a paradox, but pointing out the material advantages to the non-serfdom population.
This excess free cash-flow both on an individual level and corporate level enable so many things to happen, it's hard to fathom. It's so common in America for individuals to have hobbies i.e. drones, cars, travel, tech etc. that are 'really expensive', beyond the reproach of the middle class in other nations.
Relatively cheap energy, wide open spaces and relatively cheap land, especially compared to Europe for example, again, this has all sorts of 'unseen surpluses'.
So those are just a few of the differentiators and of course, there are so many more, it's complicated.