The Canadian Quandary: Economic Problems and Policies. Rev. ed.

Jason Gregory Zorbas is a sessional lecturer in the Department of
History at the University of Saskatchewan.

Harry G. Johnson was one of Canada’s most prolific and influential economists and The Canadian Quandary is a collection of nearly two dozen articles, speeches, and reviews written by him between 1958 and 1963. The book is divided into five broad sections that explore economic nationalism, tariffs, monetary policy, international monetary coordination, and the affluent society. The Carleton Library Series edition of The Canadian Quandary also includes a thorough introduction to Johnson and the rest of the book by William Watson, the chair of the Department of Economics at McGill University.

A constant theme in The Canadian Quandary is Johnson’s rejection of the economic nationalism that defined the economic policies of the Diefenbaker and early Pearson governments. Johnson argues that the premise of the so-called “Canadian quandary”—that free trade with the United States creates economic benefits but at the cost of the Canadian identity—is flawed. Rather, he insists, free trade and open markets create wealth that also flows to the Canadian government, making it better able to finance those social policies that define the Canadian state. It quickly becomes apparent that Johnson was no American-style small-government conservative, but instead embraced the idea that government should fund projects that boosted social capital, which he then believed would provide important economic benefits to the nation.

In contemporary Canada, some 55 years after The Canadian Quandary was written, many of the book’s important themes remain the focus of intense debate. The cost of continuing free trade with the United States is but one example and it is often possible to superimpose Johnson’s arguments directly onto the debate. Thus, The Canadian Quandary remains an important work even decades after it was written. Furthermore, one does not need a background in economics to read and appreciate it, as Johnson’s prose makes it accessible to the non-economist. For anyone exploring the questions surrounding the direction of the Canadian economy, The Canadian Quandary is an essential read.