"THE MARKET" IS A CONVENIENT EXCUSE

Bill Daly

Our world has become almost completely dominated by a system of beliefs and doctrines that stem from something now described as "The Market".

But few could offer a consistent explanation of what it is. Politicians have become very good at referring to The Market, as if it is the complete answer to nearly every difficulty.

It is not uncommon, for example, to hear comments such as, "the psychology of the market" or "the effects of market forces".

It's the pat explanation offered whenever their policy changes result in home industries being swept aside by lower priced imports, or public assets are traded off to foreign multinationals.

"It's the market" is a very convenient excuse. It absolves the politician from any personal responsibility for the problem.

Those whose instincts tell them there's something not quite right about that, are often unable to articulate their opposition, because of the intimidating effect of the mass of propaganda.

It's as if it's all pervasive, everywhere at all times � which sounds like a definition of God, or at least of a false god. Indeed, for its adherents, The Market is as much a religion as for any other sort of believer.

themselves a piece of empire to take as a souvenir of their public service. That has become the pattern in Canada as well � notably in the case of the privatization of the CNR by another high official. With rewards like that, what is the message being sent out to other high civil servants? Don�t be stupid! Cut yourselves a slice of the public domain and take it onto the stock market. Surely there should be a period of, say, three years during which no high official in the employ of the government and involved in a privatization on that side is allowed to accept an executive position in the privatized company.

The Eves government assures us that they are considering all options.

However, the most logical option of all has not even been mentioned. It is to be found in article 18 (c) of the Bank of Canada Act: �The Bank may buy and sell securities issued or guaranteed by Canada or any province.� That obviously authorizes the BoC to hold Ontario Hydro bonds guaranteed by the province of Ontario. Were that done, the interest Hydro would pay on them would go almost wholly as dividends to the sole shareholder of the BoC. Since 1938 this happens to be the Government of Canada. In 1938 Ottawa bought out 12,000 private shareholders of the Bank of Canada, found�ed only three years earlier by a Conservative Government. Since an alleged inability of government agencies to raise capital has been cited as reason for privatizing Hydro, why has the government made no use of the BoC�s facilities?

The money spent by Ottawa to buy out private shareholders of the BoC � compounded over 66 years � represents quite a figure. Using that investment to allow Hydro or similar utilities across the country to finance their retirement of the �stranded debt� would be simple justice. Nuclear power was not dreamt up by the management of Ontario Hydro. It was the official policy of Ottawa. Today, indeed, nuclear power is being revived by the G8 powers to cope with possible oil shortages arising from the Near Eastern confrontation. Herb Dhaliwal, Canada�s Natural Resources Minister, after the recent G8 meeting, told reporters that he �was a little surprised by the degree of pro-nuclear sentiment from other G8 countries around the table yesterday.�

What is needed to deal with such �strand�ed debt,� past and future, is an undertaking by Ottawa to use its power in the Act (14(2)) to instruct the Governor of the BoC to arrange for loans to Ontario Hydro to finance the �stranded debt.� This could be amortized over an appropriate term under an arrangement between the federal government and the province of Ontario: a portion of the loan interest reaching the federal government as dividends of BoC would be remitted to the Hydro companies for financing and amortizing the �stranded debt� � the fruit of federal nuclear power policy. Similar arrangements would, of course, be available to the other provinces.

William Krehm

�from Economic Reform, June 2002