Mark Carney’s playbook may not be a pure WEF blueprint, but it is heavily influenced by stakeholder capitalism, ESG finance, climate-conscious industrial policy and multilateral institutionalism. (Credit: Fabrice COFFRINI/AFP via Getty Images)
The political ideology of our prime minister and his government cannot be adequately defined by the traditional right-left vocabulary of capitalism versus socialism. Rather, it is best described as corporatism or stakeholder capitalism as espoused by the World Economic Forum (WEF) and the Davos elites. That philosophical approach to the economy may be unfamiliar to most Canadians, but it influences how Mark Carney is governing the country and it has important implications for democratic accountability and individual prosperity.
It is not a conspiracy to say the WEF has exercised enormous influence over western governance during the past five decades. It operates quite openly, even if many people are unaware of its existence. Its founder, Klaus Schwab, once boasted about “penetrating” Justin Trudeau’s cabinet, more than half of whose members went through WEF leadership programs.
In a recent Substack article, physician and scientist Robert W. Malone outlines the WEF’s three underlying assumptions. 1. The major problems facing humanity are global and therefore require international co-ordination. 2. Such co-ordination is best achieved through a co-ordinated network of leaders from business, labour, government and civil society. 3. Private companies are instruments of public purpose and should be accountable, not only to shareholders, but more broadly to “stakeholders,” whose interests are mediated by the leadership class.
Malone points out that while corporatism shares with fascism the belief that organization of the economy should be co-ordinated by various elites, it is not fascist: it is internationalist rather than nationalist and not violent, militarist or racist. It does align comfortably with the Chinese Communist Party in its support for elite planning, the role of private enterprise in advancing public objectives, and the preference for technocratic management over elected decision-makers. But it rejects proletarian ideology and extensive state ownership and envisages a key role for large corporate participants.
Corporatism’s assumptions counter the historical liberal worldview based on consent of the governed, institutional accountability and rule of law. It differs from the free enterprise market economy where companies are accountable to shareholders who focus on profitability rather than external managerial direction that takes into account broader societal objectives.
The problems with the noblesse oblige WEF model are therefore both philosophical and practical. It undermines democratic and constitutional governance by empowering unaccountable actors with self-serving and ideological agendas and by imbedding bureaucratic structures that are hard to dismantle by normal electoral means. And, instead of market discipline, it relies on technocratic and state judgment to pick winners and losers and imposes a costly regulatory burden that increases risk and drives away capital. The effect is to undermine productivity and weaken economic performance.
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Europe, which is both culturally and intellectually receptive to the WEF, has implemented these principles in binding legislation through the EU Commission. Not surprisingly, the EU’s prioritizing of welfare, climate action and regulatory intrusion in the marketplace has caused its GDP per capita to fall significantly behind the U.S. Although Liberals hate to hear that Canada has lagged its southern neighbour for similar reasons, the data are irrefutable.
There are many Canadian examples of corporatism, some of which preceded Carney’s government. In 2019, the Canada Business Corporations Act (CBCA) was amended to codify the Supreme Court’s BCE case, which decided that directors owe a fiduciary duty, not only to shareholders, but also to employees, pensioners, creditors, consumers, governments and the environment. Once the judiciary and the state adopted stakeholder capitalism, the media quickly followed, making it conventional wisdom.
Mark Carney’s 2021 book, Value(s), is a paean to stakeholder capitalism, including the adoption of ESG (environmental, social and governance) reporting. His recently proposed sovereign wealth fund, to be financed by $25 billion in government debt, is classic corporatism in the form of industrial policy. It combines state and private capital from corporations, financial institutions and pension funds who together will select investments designed to advance currently favoured societal objectives. Although Carney is now talking up resource development, he conditions his support on incorporating sustainability, emissions reduction, Indigenous partnership, climate compatibility and international environmental commitments. This is not the “Drill, baby, drill” that has made the U.S. the world’s largest producer of oil and gas.
Carney supports a rules-based international order and co-operation among middle powers and multilateral institutions on economics and climate policy. He has an affinity for UN, WHO, IMF and central bank co-ordination. He is orienting Canada toward Europe and diversifying away from the U.S. and he has pushed for Canada to be part of a coalition of democratic middle powers rather than overwhelmingly tied to the American “hegemon.”
It may not be a pure WEF blueprint, but it is heavily influenced by stakeholder capitalism, ESG finance, climate-conscious industrial policy and multilateral institutionalism. That it differs fundamentally from core U.S. values may appeal to Canadian nationalists, but it won’t be as democratically accountable or as economically successful.
Joe Oliver was minister of natural resources and of finance in the Harper government.