Limits to Liberalism
| Author | Jeanne Kirk Laux |
| Published date | 01 March 1991 |
| Date | 01 March 1991 |
| DOI | http://doi.org/10.1177/002070209104600106 |
| Subject Matter | Article |
JEANNE
KIRK
LAUX
Limits
to
liberalism
The
conclusion
of
a
free
trade
agreement
between
Canada
and
the
United
States
is
just
one
expression
of
a
wider
revitalization
of
the
norms
of
liberalism.
Despite
the surge
of
neo-protection-
ism
in
the
early
198os,
it'is
clear
that
the
overarching
policy
choice
for the
i99os
is
state-sponsored
liberalism.
Canada's
Con-
servative
government
is
more
typical
than
exceptional
in
arguing that
the
path
to
economic
renewal
can
no
longer
pass
through
Keynesian
style
intervention.'
Everywhere
govern-
ments
proclaim
their
liberal
values,
whether
as
dogma
in
the
case
of
Britain
or
as
necessity
in
the
case
of
France.
International
competitiveness
is
the
objective,
and
to
reach
it
they
will
select
market-driven
policies,
minimizing
the
direct intrusion
of
the
state
in
the
economy. Not
only
a
renewed
commitment
to
trade
liberalization
but
initiatives
to
open
financial
markets
and
dereg-
ulate
national
economies
-
most
dramatically
the
preparations
for
a
Single
European
Market
-
confirm
the
trend.
Fundamental
changes
in
the
world economy,
captured
by
the
term
globalization,
underpin
the
new
liberalism.
Globaliza-
Professor
of
Political
Science,
University
of
Ottawa,
Ottawa,
Ontario;
co-author
(with
Maureen
Appel
Molot)
of
State
Capitalism:
Public Enterprise
in
Canada
(1988).
The
support
of
the
Donner
Canadian
Foundation
to
the
Queen's
University
project,
Canada
and
the United
States
in
a
Changing
Global
Context,
for
research
assistance
is
gratefully acknowledged.
Background
work
on
the
aero-
space
industry benefited
from
SSH
R:C
grant
41o-84-1
15
1.
i
The
Conservatives'
new
political
economy
is
set
out
in:
A
New
Direction
for
Canada:
An
Agenda
for
Economic
Renewal
(Ottawa:
Department
of
Finance,
8
November
1984).
International
Journal
xL-vi
winter
19911-i
114
INTERNATIONAL JOURNAL
tion
refers
to
the
reorganization
of
production and
finance
on
a
world-wide
scale
which
has
redefined
the
bases
for
competition.
Michael
Porter,
the
Harvard
Business
School
guru,
argues
that
'competition
in
many
industries
has
internationalized
...
firms
compete
with
truly
global
strategies
involving
selling
worldwide,
sourcing components and
materials worldwide
...
They
form
alliances with
other
firms
from
other
nations
to
gain
access
to
their
strengths.'2
The
new
competitive
conditions
favour
those
companies,
typically
oligopolies,
which
rely
on
technological
change
as
much
as
price
to
increase
their
shares
of
the
world
market.
In
Canada,
the
president
of
the
Canadian
Manufactur-
ers'
Association
warns
that
only
companies
able to
restructure
using
international
investment
and
inter-corporate
research
and
development
(R&D)
alliances to
compete
globally
will
sur-
vive
the
1990s.
3
Globalization
also
refers
to
the
recognition
by
policy-makers
that
the
leading
firms
consider
a
global
strategy
to
be
the
key
to
success.
To
enhance
a
nation's
'competitive
advantage,'
the
prevailing
wisdom
counsels
governments
to
offer
these
firms
a
permissive economic
and
social
environment.
4
My
principal
thesis
is
that
permanent
statist
interests
place
limits
to
liberalism
in
a
competitive
global
economy.
Globaliza-
tion combines
with
liberalism
to
pose
a
policy
paradox
for
gov-
ernments:
they
must
somehow
reconcile
the
prevailing
norms
of
market
competitiveness
with
statist
concerns
for
national
eco-
nomic security
-
with
the
political
need
to
achieve
a
level
of
productive
activity
sufficient
to
provide
the
employment
and
revenues
required
to
underwrite
social
welfare.
All
agree
that
globalization
makes
national comparative
advantage
highly
mutable
so
that
defensive
measures
to
protect
national
firms
2
Michael
Porter,
The
Competitive
Advantage
of
Nations
(New
York:
The
Free
Press
1990),
14.
3
Cited
in
'
"Most
competitive
decade"
predicted
for
business,'
Globe
and Mail
(Toronto),
24
February
1990,
B 1.
4
The
concept of
competitive,
as
opposed
to
comparative,
advantage
is
elaborated
in
Porter,
Competitive
Advantage.
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