Opinion: The desperate need for a return to economic growth

A Canadian flag in the Old Port in Montreal, Que. Photo by ANDREJ IVANOV/AFP via Getty Images files

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The country feels like it’s falling apart. Productivity has flatlined. Growth has stalled. The cost of living is way up. Housing prices have skyrocketed. Out‑of‑control immigration has led to growing anti-immigrant sentiment. The health-care system is besieged as the population ages. Crime is on the rise. The wealthy are fleeing to lower-tax countries. Public finances are in tatters. The fraying of the social fabric makes national unity less certain, while the threat of regional separation risks tearing the country apart. Even a newly-elected government is finding serious reform elusive. And the threat of U.S. tariffs looms over it all.

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Many Canadians have had enough.

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Except that the country being described is actually the United Kingdom, whose problems sound a lot like ours but in many ways are worse. In fact, Britain may be where we’re heading if we don’t pursue drastic economic reform.

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In the 1980s, Dutch Disease supposedly caused problems for resource-based economies whose buoyant exchange rates priced their other industries out of world markets. In the 2020s, Canada and the U.K. are suffering what could be called “Anglo Disease,” where bloated, deficit-spending governments are a drag on national economic potential, stalling the engine of progress and generating stultifying stagnation.

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There is a prescription for Britain’s ills, however, and Canada’s, too, if we pay attention. It comes from Jon Moynihan, an Oxford- and MIT-educated corporate leader, now a member of the House of Lords, whose 2024 book Return to Growth: How to Fix the Economy may be the most urgent policy read in years. In it, Moynihan cuts through the political and statistical noise and provides a practical policy road map rooted in data, history and what in recent years has become uncommon sense.

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Moynihan identifies three “devils” dragging Britain into stagnation: ballooning government spending, punitive taxation and suffocating regulation. His counterpoint? The three “angels”: free markets, free trade and sound money.

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His road map is unapologetically ambitious:

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The argument is moral as much as economic: growth is a bulwark of democracy, social cohesion and prosperity. Britain’s problem is not a lack of capacity but a lack of will: an entrenched political class that mistakes management for leadership.

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Moynihan makes the critical but obvious point that “if an economy can grow large enough, then only a small percentage of GDP needs to be confiscated in taxes to pay for needed services.” That’s why economic growth — the creation of more pie, rather than over-sharing of a gradually shrinking pie — should be policy’s over-riding goal. Without growth, countries cannot afford the social services that allow them to be largely socially democratic and mostly peaceful and egalitarian.