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This is a good subject to hang a blog post on, but I suspect that it has more to do with the political complexion of the government in power during a "change" election. That being said, Clinton and her epigones spent a great deal of the last election explaining why they couldn't fix America's economic problems in what seemed to be a fairly intuitive way (protectionism!) because existing social and legal norms constrained the Presidency. This is not something you hear argued very much in Canada.

So. . . .

This post is amateur political science at best. Inequality was high on Thomas Jefferson's farm but it was he, not his slaves, that started a revolution.

Inequality is not bad or good - it's the source that matters. Market driven inequality is not really a problem, rent seeking government inequality is a serious problem.

When Americans went to the polls this week they saw two wealthy people. Now which one got rich primarily by government? Americans have had enough of the rent seeking class.

Would it be fair to summarize that there is little difference between Canada and US but that little difference means a lot? How will the introduction of the CCB impact a future comparison (assuming there is no similar program in the US)? Any analysis of a government program must not only discuss the benefit but also the cost. Benefits = taxes or as the Conservatives would say taxes = benefits!

Avon: "amateur"

You have a valid point to make here about the sources and consequences of inequality. Please stick to that point, and try to avoid being unnecessarily negative.

just a side note: "Canada has the same culture ...." uum...Francophones? Quebec?

But more to the point: the post-election soul-searching in the US is in hot debate over whether the Trump victory was economic or racist/xenophobic. Probably both,and more, but does this post rest on the perhaps premature assumption that it was all economic?
In any case, I agree with the conclusion: we did see Ford nation, after all.
Can we be confident that enough voters feel that the established parties represent them that some populist outlier can't capture growing resentment? There is also - here too - the growing angry incivility evident in readers' comments and the blogosphere, which is also part of the story. And a decline of press discussion and analysis of platforms and issues, not to mention investigative journalism. Also part of the story.


I meant what I said about amateur political science. We've see the chattering classes come up with a thousand and one different "theories" for Trump's victory. Arguing that it's inequality is actually quite weak. It was Hillary who argued the most for redistribution during the campaign. I can make the argument go the other way just as easily. We won't get anywhere doing that.

Economists offer excellent insight. It is a beautiful subject. While I'm far more attracted to positive questions I recognize that there is great work done in normative economics too. But that does not give economists special licence to interpret issues in political science any better than the rest of the chattering classes.

A website like this is believed by people who read it because the people who post here are experts. The layperson cannot tell when you guys wander outside your expertise. They are likely to believe that somehow you "know" what caused Trump's victory when you are really no more informed than a columnist in the newspaper.

Stick to those things you actually have direct experience with - ideas you've calculated or can calculate - even when targeting the layperson. You can teach us something and we can debate based on our own experiences.

Avon: You are free to disagree with a point, and explain why. You are not, however, the editor of WCI, and we don't work for you. It it most definitely not your job to decide who can say what here.

But as a complement to Livio's point, I might point to this old post about contrasting trends in Canadian and US median incomes


Please don't misinterpret my message. I have a lot of respect for you and the rest of the economists who post on this blog.

All of you have a lot of power. People pay attention to all of you both in this venue and in the popular press. Even when others disagree with you we are all confident that you have carefully thought and worked through the details.

A post like this one abuses that power. It suggests a relationship - a conclusion, even, for Canada - that people will believe based on authority.

The reasons for Trump's victory are as varied as the sixty million who voted for him. It's a diservice to economics and political science to reduce it to trends in a couple of graphs.

Stephen, Frances,
Livio wrote a post and put it up -- presumably for the readers to relate. Avon gave a reaction, which is his right. He was not impressed with the analysis, and said so, which, again, is his right (I happen to agree with it). He did not, originally, request something else or acted editorially in any way. It was actually you who tried to act as editors towards him. Only then did he elaborate -- in a constructive way, too.
Given that a blog is a give and take between authors and readers, and readers face the need to choose the few blogs we can follow, I'm a bit surprised of this reaction. Avon spent his time to give you frank feedback, and he's a well-known blogger with high quality comments. This was a gift that should not be refused

Honestly, I'd prefer an honest, if harsh, rebuke whenever I stray, even if it is, in the first moment, unpleasant. The only way to learn, really

There's a lot of passion in this subject at the moment, and I appreciate where Avon is coming from. He's probably gone a little hoarse defending his position in the last week or so. I also suspect that the different trajectories of the American and Canadian economies fail to explain the results of the 2015 and 2016 elections. As I've said, it is probably as simple as that Canadian "change agents" were the Liberals because the Government was the Conservatives, while the situation was reversed (in key voters' minds, since the American system is so frustratingly diffuse and opaque) in the United States. The complicating factor is that there are 50 state elections in the United States; my suspicion is that the analysis can be narrowed to the question of what moved voters in the Old Northwest and Pennsylvania. (Hoosier Country, si vous comprendait que je dirai. [I've messed up the tenses, haven't I?])

That doesn't change the fact that "amateur" was a drive-by. Liveo Di Matteo, scarcely the front page's resident Maoist, wrote a deeply economically informed post that bears on the question of whether we should privilege an economics-based explanation. A political scientis who wrote that post could equally easily be labelled an "amateur" for talking about "per capita gdp" and like that.

Avon: I could understand a self-styled libertarian approving Trump for not paying its taxes. But the basis of his fortune is inherited wealth, a good chunk of the rest comes from not paying the invoices to its suppliers and his business acumen is having performed no better than half an index fund.


Please refrain from bulverism. I don't support Trump and if I were an American I would not have voted for him. I don't support his brand of politics or populism.

But whether I supported Trump or not has nothing to do with advancing ad hoc theories about why he got elected or what it means for Canadian politics. It's a little more complicated than "inequality" solved by confiscatory taxation and redistribution.

"A post like this one abuses that power."


Livio drew some comparisons between the US and Canada regarding distribution of wealth. He was reporting information. OK, there was a subtext pointing to some possible political consequences for Canada.

From your reaction you obviously don't like what he said. You hardly refrain from displaying your neoliberal values in these comment pages time after time. You have every right to as far as I am concerned. But you have endeavoured on this occasion, in effect, to lambast someone whose writings offend you and your values, merely because they offend you and your values.

There is no abuse of power. Livio's contribution was 95% information. Your contributions have been 95% over-the-top reaction.

And to say something such as: "Market driven inequality is not really a problem, rent seeking government inequality is a serious problem.", is drawing a very, very long bow, in my opinion of course.


It's not my "neoliberal" values that are offended. It's my sense of what constitutes good scholarship.

Saez writes excellent papers and I enjoy reading people who I disagree with. I usually learn something.

What I object to is chi-by-eye cause and effect statements - especially when made by respected economists who are trying to educate the public.

Simon Wren-Lewis posted an interesting chart in a recent blog:


The chart shows the distribution of the share of income growth during the period 1975 - 2007.

The top four nations, in terms of distributions favouring the wealthy, are all English speaking.

The US has elected a "renegade" conservative. The UK voted for Brexit. In Australia, mid year elections saw the rise of the rightist One Nation party from virtually nothing, taking approximately 10% of the popular vote. Canada is sitting in the middle of this mob. Livio's post may have made some "chi-by-eye" conclusions (and I don't think he did), but I would say Canadians may have something to think about.

My guess, FWIW: It's not so much about distribution of income. It's because Canada controls immigration. It's not just the numbers (as a % of population); it's because immigrants *ask* and are *invited* to join.

I expect that's testable. Livio has compared Canada vs US, which fits both hypotheses. But there are other countries.

"It's not so much about distribution of income."

Isn't income distribution and immigration related?

Immigration introduces workers who are willing to work for lower rates of pay than local workers and are not interested in organized labour. Business benefits, local workers are disadvantaged.

Australia (I am Australian), has a visa system which allows the concessional importation of skilled workers supposedly on the basis of shortages. I have a friend who has a son who studied accountancy. He spent three years applying for over 300 positions. I think he received only one acknowledgement from all his applications. Earlier this year, the press carried an article saying that Australia had imported over 5,000 accountants under the aforesaid visa scheme in 2014/15.

I can totally understand why Brexit, One Nation and Trump feature in the national politics of the relevant countries.

Henry "Isn't income distribution and immigration related?"

Yes. But immigration of high-skilled people will tend to make the distribution of income *less* unequal. (It's the opposite for low-skilled people).

Something that differentiate Canada from the US is the much smaller share of population in small cities. From a regional economics (second subject of interest for humble IO guy) standpoint, what is striking is the very weak second and third tier urban network.
Maybe because we urbanised somewhat more lately than the US, we had an urbanisation pattern more similar to a third-world sudden urban explosion in major cities, bypassing smaller towns completely, like Thailand where Bangkok has almost 6M inhabitants and the second-largest city, Nonthaburi, less than 300K. (Since my early childhood and I'm not that old, my native QCity metro area has almost tripled in size).

It is difficult to feel put upon by east coast elites when most everybody is part of it, whatever we might feel about the CBC TO crew or la gang du Plateau (Montréal media elites)...

To gain traction,the rural part of the CPP is forced to ally itself with a much bigger and ultimately controlling urban business wing. In QC, the very weak vaguely Trumpian CAQ is barely able to go outside its potting soil in the QCity northwestern suburbs and south western rural hinterland (nothing in the prosperous and long settled south eastern part, sociologists and historians to the rescue please).Interestingly, a good many of these voters are not only below average in education but are rather recent immigrants from our own Appalachia.

Bush II support came from places smaller than 125K. Trump from an even higher support from places smaller than 50K. In Texas, all major cities, San Antonio,Austin,Fort Worth,Dallas and even H freaking ouston were majority HRC.

And don't forget that we don't have the heritage of slavery and the 1830's Jacksonian democratic revolution when franchise was extended from rich whites to all white males.

As for minorities, whatever the canadian political discussions may be (no trolling please),franco-canadians are a very weak substitutes for African Americans in silent thinking.

"But immigration of high-skilled people will tend to make the distribution of income *less* unequal."


That's an interesting way to slide an argument around - not. It is businessmen who benefit absolutely.

Tell me, how did my friend's son's income benefit from the visa scheme in question? (BTW he is now retraining as a surveyor.)

Why do you think businessmen are motivated to employ overseas accountants - definitely not because they are better trained?

I don't think it matters - high skilled/low skilled/no skill - the effect is to drive down workers income.

And in Canada this phenomenon is much smaller.So is the sense of despair.
Read 12th paragraph and maps.
I live in a small isolated blue-collar city (though a regional services center with lots of white-pink collars plus a good amount of professionnals) but we don't see that stupefying amount level of drug abuse and suicide.

"Something that differentiate Canada from the US is the much smaller share of population in small cities."


A fair point.

Has Canada lost a manufacturing industry? I know Australia has.

Like Australia, Canada is resource rich and benefited from the rise of China, until recently.

If Canada has not lost a manufacturing industry owing to globalization, then perhaps the politics will be different.

The point about big cities is that they offer a better chance of reorienting the workforce.

The small resource city where I live has known 2 crashes in my lifetime, with the attending housing boom and bust,personnal bankrupcies and suicide. Last year 2 out of 12 paramedics had to be evacuated for PTSD treatment after seeing too many suicides. In a small city, you know who you are unhooking from the ceiling or disconnecting from the exhaust pipes.

Meanwhile Quebec City lost all its garment and shoe industry and became a center for science research and computer games and imaging. The former Dominion Corset factory is now the Faculty of Architecture and design.

"Meanwhile Quebec City lost all its garment and shoe industry and became a center for science research and computer games and imaging."

I wonder how many seamtresses/cobblers become computer programmers?

I wonder how many corsetiers design high rise buildings?

Two responses to the conversation involving Avon above.

The best thing about WCI is the comments. The comments are good #1 because we have great commentators who are smart and well-informed and engage with the subject under discussion, and #2 because Nick and the rest of the gang engage with the comments.

But if the comments start getting overly negative, I personally won't read them. I have no desire to have some anonymous person lecture me on how I should "Stick to those things you actually have direct experience with". And if there's no comment section, and no dialogue, there's no point in me writing stuff here on WCI, especially when I could put stuff in the Globe or elsewhere and get paid for doing so.

Incentives matter. If the comment section of WCI starts to become an unpleasant, angry and hostile place, I will start doing precisely what I do when I write for the Globe - completely ignore the comments, never read them, and never engage. But if there is no dialogue, writing for WCI won't be so much fun, and II will start putting more of my writing elsewhere and less of it here.

And to those of you who figure "that doesn't matter, we'll just get more of Nick." Nick can't do this on his own. He needs the rest of the team, otherwise the task of feeding the beast becomes too much for him.

I do not wish to create a negative environment. I wish to challenge bluntly.

On the wci I am about the only blogger who comments from a Friedman/Stigler point of view. Nearly every other commentor is progressive, hyper-progressive, or unread in economics. I have hoped that my comments over the years have helped people understand a different perspective with breadcrumbs for further reading.

I will never make an ad hominem attack. But I am ruthless with ideas. I will never resort to bulverism or question motives although I am routinely attacked in such a manner. None of the bloggers here have called out that behaviour.

In this instance I make no apology for my comments. Professionals get taken seriously - the public believes you. As a cause-and-effect statement, this post widely miss the mark. There are people who spend their careers sorting through political science issues and it's not this chi-by-eye approach.

To discover truth we must doubt. We must passionately doubt. What remains after doubting is how we learn. If I can upset an idea with a second of doubting, I call that out immediately.

If you would prefer that I not comment any further on the wci I will respect your wishes.

Garment workers didn't became computer programmers. But in a big city with a very good educationnal system their children did. And those who lost their job didn't lose health insurance and at least a minimum retirement income not tied to their employment history(Old Age Pension and if necessary Guaranteed Income Supplement) didn't sent them into economic misery and total despair.
The 70's were tough and a few years ago I published here a spreadsheet showing the improvement in employment in QC (province, not city of the same name)since 1966. (Québec,Québec, city so nice they name it twice.)
There is something very useful in a big city with a functionning social net.

"Inequality was high on Thomas Jefferson's farm but it was he, not his slaves, that started a revolution. "

Had his slaves started a revolution, they would have been brutally put down.

"Inequality is not bad or good "

The kind evident in Canada and the US is bad, morally and for the economy.

Avon Barksdale: "If you would prefer that I not comment any further on the wci I will respect your wishes."

I think that would be best. Your interpretation of "challenge bluntly" is not in keeping with the tone here.


"If you would prefer that I not comment any further on the wci I will respect your wishes."

My preference would be for you to continue commenting, but cut the snark - there's no need to tell Livio that his post is " is amateur political science at best".

But if that doesn't work for you, yes, I would really appreciate it you stopped commenting on my posts.

Nick is fine with you commenting on his.

A few points. First, with respect to inequality being "good" or "bad", what I have found in my research to date (with a paper forthcoming on the topic in Social Science History) is that more rapid economic growth can be correlated with higher inequality. The severity of wealth inequality as a social problem therefore depends on if the economy is growing and there is mobility over the course of the life cycle or if the wealth distribution becomes calcified so that mobility and opportunity become rarer. Second, the greater wealth inequality in the United States relative to Canada has been a long standing feature - going back into the nineteenth century - and therefore government redistribution while perhaps a factor after 1945 in affecting wealth distribution, cannot account for all of the differences between Canada and the United States. Third, I did post the link to the paper on which this post was partially based and the paper incidentally also includes the UK. Over the course of several centuries, Canada has exhibited less wealth inequality than both the United States and the UK (there is a simple regression result showing this). What is interesting however, is the decline in wealth inequality in the UK especially since the 1950s. As a result, Canada is presently in between the US and the UK when it comes to measures of wealth inequality. Fourth, I think extremes in wealth and income are a factor in fostering political discontent but I would never insist they were the only factor. Both candidates in the end had unpalatable qualities with Mr. Trump's being much more dramatic. Donald Trump's victory is partly rooted in his core constituency being more devoted to his cause and making it a point to vote whereas Hilary Clinton's supporters in the end seem to have been more likely to stay home - at least in a number of key states given she did win the popular vote overall. Finally, thank you to all for your commentary and thank you to my co-bloggers for their comments. I like to post my thoughts here from time to time reflecting material I am working on and my take on policy issues and welcome any and all feedback and think it good if some debate is stirred. However, in the end what I post is something drafted relatively quickly, designed to be accessible to an array of readers, asks some questions or venture some speculations and ultimately is more like "thoughts in progress" than a fully refined and completed academic dissertation covering all the bases. This is supposed to be fun, provocative, as well as informative and I think the WCI site does a superlative public service in providing such a venue. Cheers. Livio.

Regarding the point that "but Hillary promised more redistribution," I don't think that's the salient factor.

If you squint a bit, Trump's core economic message was one of equalizing market income. He didn't want to expand the safety net, he wanted to bring back the coal mining and manufacturing jobs. This integrates with the core perception of Americans as an individualist, 'bootstraps' culture where government assistance is borderline shameful (with a heaping serving of contradictions on what counts as 'assistance', but never mind that).

An open point for sociological research would be the link between inequality and political discontent. Anecdotally, American culture has extremely little resentment for the ultra-rich (see Trump!), so "the rich are getting richer" isn't a sufficient storyline. Maybe it's more related to inequality within a social class? If rural white Americans collectively see themselves as 'middle class' and compare themselves to better-educated and vaguely-foreign but otherwise similar people in better-off cities, that might justify the resentment.

One curious structural change in the US has been the divergence of employment-population ratios between those with a university education and those with just a high school education. Unemployment for both groups increased with the 2008 recession and fell thereafter, but that's not the full story. The high-school educated group has always had a lower employment rate, but the gap increased by 2-2.5% over the recessionary period and has remained consistent.

If we're looking for economic factors behind Trump's success, I'm hesitant to invoke very long-term trends for the proximate cause.

As an addendum, there may be a regional or racial component to this. Employment levels for high-school-only white and black adults both fell substantially during the recession (and proportionally more for blacks), but employment levels for the latter group seem to have been recovering since the end whereas it has remained flat for the former.

This supports an idea that rural whites feel 'left behind' by a disinterested government. This narrative would say that in 2008 everyone felt that the economy was bad and the government needed to help, but by 2016 a good chunk of rural America felt that the offered help had passed them by.

Mind you, we shouldn't over-sell this either. Clinton did receive more votes than Trump, it's just that his voters were better-distributed for the electoral college. This isn't a story of a massive popular awakening, it's one of about 5% of voters changing their minds versus 2012.

I agree with Jacques. In fact I find out hard to picture where there is a true Canadian "rust belt." Hamilton and Windsor might come to mind but Hamilton is very much part of the GTA Golden Horseshoe Metropolitan Area. Even Hamilton itself has shifted relatively successfully from heavy manufacturing to services. Windsor is always pointed out as the hard luck story of the Canadian economy but even in Windsor things always have seemed better than across the river in Detroit.

Other places like Timmins or Sudbury are cited as hard luck stories but the immediate urban areas have actually done OK economically do the high level of public sector employment and generally have not voted for "populist" politicians. The closest think to a Trump "wave" in Canada were the Reform/Alliance Parties and the BQ back in their 1990s heyday.

Clearly Trump did well in Appalachia and the Appalachian Mountains really don't cross into Canada in any significant sense(Technically the Gaspe' is the far northern edge of the Appalachian chain).

I do think there is a larger story behind Livio post. Canada in many ways was immune to the more left leaning Obama wave back in 2008. Remember the 2008 Canadian election and the coalition "crisis."

Canada has a prohibition against broadcasting false or misleading news. The absence of Fox News and its ilk I think has had a huge influence in preventing the rise of a Trump-like figure in Canada.

The Appalachians form the southermost part of Québec along the US frontier which essentially is the water divide between the St-Laurent basin and the Atlantic coast. The inhabitants exhibit an attenuated form of Appalachian behavior. The area have been thouroughly studied after the 1980 referendum and before the 2008 provincial election.
The BQ isn't remotely Trumpian except in the utterances of the Gazette-G&M-TOStar-McLeans bizarre universe..


I was probably thinking the BQ as Trumpian only in the degree they split off from Mulroney's Conservatives at the same time as Reform. Probably the closest analogy to a Trump in Canada would be Bill Vander Zalm and the BC Socred's or the various Ontario Landowners Association type groups. Even these though seem unconvincing as true Trumpian constituencies. They are all more "traditional" Pre Trump right leaning social conservative rural populist groups that have very little to say for example about free trade or globalization.

I will also note Trump did quite poorly in Northern Vermont in the towns alongside the Eastern Townships. Trump's support only kicked up east of Route 91/55 in the so called Vermont Northeast Kingdom.

**Also after thinking about this more I suspect former BQ leaders Lucien Bouchard, Gilles Duceppe and Jean Lapierre(if he was still alive) care very little for Trump and his policies.

I appreciate the piece as it's a very good question. We can debate the reason, but Canada truly is the last decent country out there. I was born in the UK and am a dual citizen-so I could go back there if I wanted to. But the British have shot themselves right in the face just like we have.

A lot of the tension in the US election centered around immigration (connected to race), trade (arguably connected to race), and race.

The legacy of slavery in the US impacts basically every issue down here to some extent and it still weighs heavily on trust between different populations. I can't really overemphasize that. It's rarely the issue at hand, but it almost always influences how we understand the issue at hand. In this regard, the US may be more similar to Israel than to Canada.

Immigration in the US has often been mostly uncontrolled by the government. Geography makes a big difference here. Canada has (more that any other country?) achieved a high rate of immigration while at the same time maintaining an immigrant population with levels of achievement very similar to those of native-born Canadians. The US has not. That leaves many (non-white) immigrants destined to stay in the lower rungs of society. That's a recipe for inter-ethnic conflict.

The idea that the poor in the US are mostly people of color (for the above reasons) has clouded the debate about redistribution, which has created this intractable mess of poor people who want help but don't want redistribution. So, what's the solution? Blame China (never Germany, though...). They stole our jobs. Trade is bad.

Here again, the situation is different in Canada. Canadians see more evidence of the importance of trade because Canada is a smaller market. It's easier for Americans to fool ourselves into thinking we could get by just fine without trade.

I'm not saying that the central arguments in the campaign were racist. I'm saying that race had an impact on how people perceived the issues.

To summarize, Canada has made some excellent policy decisions to avoid Trumpist crises: Don't have lots of slaves, don't border a developing country, and don't be as large as the nearby markets.

I am concerned about figure 1. Supposedly, the plots of GDP vs. time are per capita, with inflation removed. Yet the plots still look exponential, although I suppose a quadratic could be fit to them. (If not a quadratic, then definitely a quartic.) I am concerned they the inflation hasn't truly been factored out, but instead underestimated.

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