The Unnecessary Evil: An Answer to Canada's High Unemployment

Raj S. Gandhi is a professor of sociology at the University of Calgary.

We need not resign ourselves to perpetual high unemployment in the Canadian economy, says Ruben Bellan. But eliminating it will require a radical change in our attitudes to government spending and borrowing. It is spending — by the public, by business, by governments — that puts people to work.

A crucial step in curing our ills, Bellan argues, is to rid ourselves of the mistaken assumption that federal government borrowing is always bad for the economy. Federal deficits caused by borrowing are not like other types of deficits. As long as the money the federal government borrows within Canada comes from the same people whom it serves, it is money that we as Canadians owe largely to ourselves, not an incapacitating burden but simply money transferred from one pocket to another. Bellan points out that the government ended the Great Depression of the 1930s with immense borrowing and spending in World War II; it could eliminate today’s unemployment by applying a fraction of the financial power that it mustered in wartime.

The full employment demanded by society is entirely possible in our free enterprise system, says Bellan, if only we could see beyond the myth of today’s conventional economic and political wisdom.

Not all social scientists will agree with Bellan’s arguments or ideological conviction. Those of sharply different ideological orientation would call government-intervention suggested by Bellan a “necessary evil.”