-Caveat Lector- from: http://www.zolatimes.com/V3.29/pageone.html <A HREF="http://www.zolatimes.com/V3.29/pageone.html">Laissez Faire City Times - Volume 3 Issue 29 </A> ----- Laissez Faire City Times July 19, 1999 - Volume 3, Issue 29 Editor & Chief: Emile Zola ------------------------------------------------------------------------ Canada Wins at the UN Numbers Game by Peter Topolewski On Monday, July 13th Canadians celebrated because, for the sixth consecutive year, the UN named Canada the best country in the world in which to live. At least that�s how most Canadian media outlets reported the UN�s most recent Human Development Report. While placing first in the UN survey of 174 countries could never be a bad thing, Canada cannot lay claim to the title "Best Country" without a fighting word from, most likely, half the world. At the very least, the UN report and the Canadian response deserve a closer look. There are many problems involved when comparing the "livability" of countries. How do we quantify the range of values that to different people make a place livable? And why should countries be compared in the first place? We will overlook these aspects, however, and simply note that the UN compiled its list based on the Human Development Index (HDI). Where the UN once measured a country�s well being by its GDP, today the UN measures it by the HDI. According to the UN the goal of development is to create a society in which people can live long, healthy and creative lives. The UN purports to measure this development with the HDI � an index that combines GDP, life expectancy, and education. HDI: an Amalgam of Bad Statistics UN statisticians felt the GDP focused too much on material and financial wealth, and the presumption that a high GDP translates into a safe, well-educated, and humane society did not, for them, hold water. But despite their best efforts, the HDI is plagued with its own problems. The education factor, for instance, is based on a literacy rate supplied by each country; nearly all the countries that finished in the top 10 reported a 99.1 percent rate that most educators would dismiss as a patent fantasy. GDP is a factor in the HDI calculations, but many critics contend not a large enough one, particularly in light of an HDI formula that gives less weight to per capita income among high-income countries than low-income ones. (This is based on the assumption that, for example, a $100 increase in annual income makes more of a difference to a Filipino making $1000 a year than to a Saudi making $30,000.) As a result, when the time for tallying comes, Canada�s slightly higher longevity and rate of literacy more than compensate for a GDP that is US$5,000 smaller than America�s. All the UN�s subjective number crunching leaves one wondering what the HDI measures after all. Syndicated columnist Andrew Coyne wrote, more or less eloquently, in the July 14 National Post that the HDI measures how well a country meets the UN�s HDI criteria. But, according to the UN, the HDI measures how well or poorly a country translates its income into the well being of its citizens. Taken this way�that is, without second-guessing the point or the process of measuring it�Canada�s place atop the list is something for Canadians to cheer about. With a refrain that almost sounded like "See what Canadian socialism gets you", the cheerleaders pointed out that the stagnant GDP, the high taxes, and top-heavy government are worth it because (when money isn�t everything) they deliver the goods. The problem is that while the cheerleaders are cheering, many Canadians are looking at droves of homeless people, a child poverty crisis, a collapsing health care system, and long unemployment lines, and wondering: Can this really be the best place in the world to live? That depends on your tastes, but consider this. IMD International, a Swiss executive management school, ranked Canada 10th in competitiveness out of 47 countries. Among the factors most adversely affecting Canada�s competitiveness: �a declining productivity growth �3 times more work days lost per person than the 47 country average �an average corporate tax rate 10 percentage points higher than the 47 country average �a total direct and indirect tax bill that is 36.5 percent of GDP, compared with the 47 country average of 31 percent �government expenditures of 57 percent of GDP The proper response to these disappointing numbers is, of course, "See what Canadian socialism gets you!" Keeping Canada No. 1 on the List At the head of this mixed bag of cheer and fear is the hopelessly pragmatic Jean Chretien. He�s been at the helm since 1993, the first year Canada topped the UN�s Human Development Report, and, whatever value the HDI has, it is tempting to say that Chretien�s government is responsible for keeping Canada number one on the HDI list. More importantly, he�s done it while beginning to address Canada�s tax and competitiveness problems. Sure, Chretien is as much a Canadian dictator as we should expect in the current system of government. He believes strongly in patronage, stifling debate, obscuring facts, strong-arming provincial governments, and grabbing tax dollars under any guise. But he operates in such a cheery, low-key manner that controversy, when it�s noticed, slides off; and he steps aside so that his Cabinet can take his bullets. His style frustrates the media, for he sets his own timetable and agenda, and they cannot goad him into showing his hand before he�s ready. But his approach has perhaps made him the near perfect doctor to administer the medicine Canada needs. Under his guidance Canada has actually had budget surpluses in the billions of dollars. They came by way of taxes, unemployment insurance premiums dumped into general revenue, and spending cuts; but cries over the sources died with little fanfare and Chretien continued as though nothing unjust transpired. As he likes to stress, the important thing is that some of the money is actually being used to pay the $580 billion debt. The rest will go toward tax cuts (imagine that!) and increased spending on social programs. If the surpluses continue to grow, there is some hope that the government may even get back to doing what it�s supposed to, such as repairing the dilapidated highway system and investing in research and development (which would both go a long way to improving the country�s competitiveness). The government might even properly pay and supply the bare bones military. That if is a mighty large one, however. With social activists preaching that the surplus has been built at the expense of the poor, and with Chretien�s own Cabinet eager to spend every last penny of it, he will need to wisely wield every bit of his huge power to ensure the surplus is not squandered. Only if Chretien can show Canadians something positive without resorting to the old spend-happy, socialist ways can there be any hope of proving that there is an alternative to big taxes and big government. That might not be his goal, but if he continues along the route he�s on, he could open the door to an eventual change in the Canadian mentality � and perhaps even the system. If the surplus doesn�t produce something positive for Canadians (namely, a large tax cut), it is difficult to imagine the government not spending like mad to placate an angry population eager for more good ol� government programs. Then, of course, we�ll be stuck with the same roller coaster of Canadian socialism. No, make that ride the of Drop of Doom, for, with a continuation of the current system, Canada will have an increasingly tough time topping the UN�s, or anyone else�s, list of best places to live. ------------------------------------------------------------------------ Peter Topolewski was born in Canada in 1972. Against the odds that seem stacked against everyone at birth, he is just now beginning to learn that the society and system of authority one is born into is not the society and system of authority one must accept. He lives and works in Vancouver, where his corporate communications company is based. -30- from The Laissez Faire City Times, Vol 3, No 29, July 19, 1999 ------------------------------------------------------------------------ Published by Laissez Faire City Netcasting Group, Inc. Copyright 1998 - Trademark Registered with LFC Public Registrar All Rights Reserved ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. 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