Tag Archives: Mackenzie King

Value(s) by Mark Carney: Intro, Humanity Distilled: Key Takeaways / Analysis

Mark Carney is a banker with a compelling track-record as well as a citizen of Canada, Ireland and the UK. He was born in 1965 in Fort Smith, Northwest Territories, Canada and has a global perspective and an impressive resume. At the same time, he could probably be your favourite prof in university. So there’s that too. In life, you should always plan for multiple paths, and so what makes this book doubly interesting is that it is possible that Carney will enter the political fray in Canada and / or seek more global posts as a thought leader in finance and banking. At the very least, teasing the thought of Carney as Prime Minister of Canada will sell a fair number of copies just for the opposition research. In a parliamentary committee testimony in May, Carney was interrogated by a conservative MP signaling that the Canadian Conservative Party is a bit scared and annoyed that Carney is helping Boris Johnson but also working with the Liberals… Guaranteed that if Carney was saying he wants to join the Conservative Party of Canada, the Tory caucus would sing his praises. Such is the absurdity of partisan politics. This book threads the needle across a fundamentally flawed ideological spectrum. And Carney offers the intellectual firepower and vision that Canada has struggled to cultivate within the legal/business class that dominate its representative democracy.

Value(s) basically advocates for the marriage of solidarity, a sense of fairness with the dynamism of markets. Markets, being social conventions, can be harnessed for good, according to Carney, who clearly lands closely to MacKenzie King, who also wrote a book before running for public office. That book was called Industry and Society which at the time was not widely read and was incoherent. The reason I mention MacKenzie King the Pragmatist In Chief is that he is typically on the top three best Prime Ministers of Canada list and Value(s) is easily the best pre-political primer since the Audacity of Hope. Value(s) is not really an emotive, poetic document but I think the rigour of Value(s) makes it a book that you can imagine is referred in 2121 as a historical document. Not kidding here. This book is really a doorway to better understanding how value has been approximated over the last few centuries.

Unfortunately, while Carney’s Value(s) is a blueprint for political leadership, it is also unapproachable for people with a reading level below Grade 8…(and maybe Grade 7 with a glass of wine because when you watch too much tv, you’re reading level slowly declines over time…the golden age of television has yet another unintended consequences, other then the decline of cinema)….. As such, this series of posts will explore his ideas (I hope clearly) as well as provide a tough critique where there is disembodiment between his theory and practice/reality. 

Private Sector experience:

  • Goldman Sachs (1990 to 2003)
  • South African international bond market launch and the Russian financial crisis were where he cut his teeth.

Current Private Sector roles:

  • Brookfields (2020 to present)

Public Sector experience: 

  • Deputy Governor of the Bank of Canada (2003 to 2008)
  • Governor of the Bank of Canada (2008 to 2013)
  • Governor of the Bank of England (2013 to 2020)

Current roles:

  • COP26 point-person on finance for Prime Minister Boris Johnson
  • UN Special Envoy on Climate Action and Finance

Political Leanings:

Note that Carney makes no mention of the fact that he is likely advising the current Prime Ministers Office and Cabinet Ministers in Canada, in Value(s). He is a prospective Prime Minister of Canada via the Liberal Party of Canada which is the default / natural governing party in federal Canadian politics. 

Mark Carney’s central question in Value(s) is: 

How do we bring some humanity into our capital-centric system of valuation? 

Since we observed that human nature supersede socialist command economies (acknowledging the fact that Wal-Mart and other companies are command and control entities), we ought not to try to escape capitalist markets of value measure, Carney argues, instead we should figure out:

How do we mitigate capitalism’s destructive power and harness its constructive power for a brighter future? 

The Parable of Pope Francis: ie. markets are humanity distilled…markets take out all the best of us

Carney recounts how Pope Francis invited him, then the governor at the Bank of England (salary of £480,000 per year) and other elite decision-makers, to a conference. The pope raised a glass of grappa and said “Humanity is many things – passionate, curious, rational, altruistic, creative, self-interested. But the market is one thing: self-interest. The market is humanity distilled.” The Pope’s challenge to these insiders is “to turn grappa back into wine, to turn the market back into humanity. This isn’t theology. This is reality/ This is the truth.”….and then everybody cheered and said saluti. (Page 3, Value(s))

  • How do we turn grappa back into wine?
  • What’s grappa?
  • The market is humanity distilled, markets of exchange are self interested actions distilled into a quantified format where the nuance is lost. 
  • Humanity is many things, our jobs as bankers is to turn this market back into true reflection humanity…..

Threadneedle Street Thinking:

Carney argues that radical changes are required to build an economy that works for everyone within that economy (staying vague about global, national or local economy). His audience is certainly white dominions / advanced countries that he is most familiar with as a private and public sector banker. He is threading the needle between capital or monied interests and some social democratic concepts, nominally speaking. 

In order to come to that conclusion that we need our system of valuation to be adjusted to reflect more what it does presently, first Carney asks you to consider

  • What is value? 
  • How is it grounded? 
  • Which values underpin value? 
  • Can the act of valuation in the market also reflect values in society? 
  • Are we under-valuing what matters most? 
  • Why is Amazon worth $1.5 trillion while the value of the actual Amazon rainforest(s) is $0 trillion?
  • As Oscar Wilder said “we know the price of everything and the value of nothing?” 
  • As Albert Einstein said “not everything that counts can be counted, and not everything that can be counted counts.”
  • As John Kay said “profit is to business as breathing is to living. Profit is not the purpose of business, it is necessary but not the purpose.”
  • Have we moved from a market economy to a market society? Carney says “yep” and then asks how do we bring back humanity in our calculation of value?

Valuation and markets are disconnected. Values represent the principals of behaviour. Rawlsian idea of the veil of ignorance, not utilitarian or libertarian. 

Three Crises: 

  1. Credit, 
  2. Covid, 
  3. Climate change

Imposes costs created by this generation on future generations. 

To stop the catastrophe, we need:

  • Dynamism
  • Resilience
  • Fairness
  • Responsibility 
  • Solidarity shared
  • Humility: to act as custodians 
  • Sustainable globalization 
  • Markets are incentives to build social capital. 
  • Help us realize our potential. 
  • Leaders have to earn their legitimacy.
  • Great leadership is ethical…….next Carney will look at how value is determined historically….
Introduction: Humanity Distilled Chapter 1 Objective Value
 Chapter 2 Subjective Value Chapter 3 Money & Gold
 Chapter 4 Magna Carta  Chapter 5 Future of Money
 Chapter 6 Market Society Chapter 7 Financial Crisis
 Chapter 8 Safer FinanceChapter 9 Covid Crisis
 Chapter 10 Covid Recovery Chapter 11 Climate Crisis
 Chapter 12 Climate Horizon Chapter 13 Your Values
 Chapter 14 Values in Companies Chapter 15 ESG

Analysis of Introduction Humanity Distilled:

  • Not a Light Read: Carney is a bit academic and pretentious and so I don’t know that this book will be widely read, therefore, I have provided these detailed summaries for the benefit of others who don’t have the time but the inclination. This book is not a light read….
  • Well Sourced: Academics like to detail to the reader ‘what you are going to learn before you learn it.’ Value(s) does this. Typically, this is a no-no. Mark Carney presents his book as a well sourced academic textbook rather than a public intellectual page-turner, it ought to be distilled which is what I’m attempting to do here. Note also that there is bias of course in the academic work that Carney sources…consensus is rare, making jobs for academics plentiful. 
  • Grounded Enough?: Mark Carney has the financial and global connections / rolodex and the experience from one of the most successful investment banks, for 13 years, which means he’s likely cut-throat. Or did he get where he is through sheer intellect? It isn’t clear that politics is in his blood. Politics is about winning, fighting off the other candidates and horse trading / cutting deals. Often, the choices are between bad and worse. Carney hasn’t been in that circumstance as much based on his writings here. Yes, he’s been in the top public / private sector tower of central banks but very far from the general economy or the consequences of his actions (the data that describes the consumer price index is a bit different from the abject poverty in rural Canada for example). Ironically, I speculate Carney may be more like the bankers who leveraged and imploded Canadian ABCP asset backed commercial paper in Chapter 7 then he realizes. Monday morning quarterbacking the financial crisis and being lucky doesn’t = great leadership. Having said all that, he’s still pretty cool.
  • All That Glitters: At the Bank of England, Mark Carney explains as the governor touring the gold vault that those gold reserves are mostly pointless beyond a back-store of value. The gold is less valuable now that it is NOT the basis of central bank money management since finding new gold mines used to mean inflation automatically. The British pound is a FIAT currency after-all.
  • Financial Community Is More Selfish Then Carney Lets On: One thing that will come up multiple times in Value(s) is that Carney underplays just how much investor folks are more self-interested then altruistic compared to a bell-curved population average. There is a stronger interest amongst financial specialists to capture a value / capital / make money which is why some folks getting into finance in the first place. This mentality is what Bill Maher / Marxism / Socialism ridicules. That ridicule asks what did you do to become so wealthy, BitCoin enthusiasts or stock speculator? Reading the market? Fundamental analysis? Financial players are mostly in the value capture game rather than value creation game and so their service is more to help price assets and to allocate capital which is valuable to be sure….but they definitely of incentivized by making money themselves over that of allocating scarce capital….
  • Multiple Pathways: Perhaps influenced by his British spouse (“happy wife, happy life”), Carney is very much a British man with a Canadian accent, the book is written in British English with “s” and not “z” for equalise, organise and characterise, autumn instead of fall. In the Audible (audiobook) version of Value(s), Carney pronounced aluminum the British way (“Ali-min-ium” and not the Candian way “Aluminum”.) Expect that as a line of attack if he does join the political fray via the Liberal Party of Canada. There are multiple pathways for Carney, Canadian PM, best-selling author and another global post. It’s a win-win to suggest he’ll enter Canadian politics….it sells more books.
  • Market Logic and the Ideological Spectrum Are Illusions: David Simon another brilliant man (wrote ‘The Wire” HBO show) and Mark Carney have much in common: they both protest capital as the problem and solution. I have long maintained that money is a proxy for value. It’s the values that people price that is the problem/opportunity. The wealthy tend to value putting a high price on drug offences and sending drug dealers to jail. David Simon makes a relatively cursory case for mitigating the negative effects of capitalism but the problem he and Carney have is that it is what is in human nature that needs to be harnessed. We are cruel to be kind and we are adaptable to how value is measured.
  • Gell-Mann Amnesia Effect: If Carney says one thing that I think is a bit wrong, then does that error mean the areas in which he is an expert and I don’t have enough knowledge could also be wrong as well? This is known as the Gell-Mann Amnesia Effect. David Simon’s criticism of political donations do lack a bit of nuance…off topic, I know, but Simon is right about the Ideological Spectrum and is a brilliant TV writer but his views on political donations are a bit warped; The Wire and Political Donations. David Simon is misguided on political donations, first it’s often reverse causation, interests donate to the horse they think will win and or aligns with their views already. And no one will ever prove my case or otherwise conclusively as politicians vary. Second, if a politician collects $1M from special interest X and $500K from special interest Y in which Y is the opposite of X. Then the politician is not perfectly beholden to either X or Y donor, is she? Boom! The politician has $1.5M from donors that he/she will show to be satiating. Same with any one voter or one million voters. Gather up trust, potentially betray said trust with the plausible deniability of the legislative process…that is how politicians operate in a representative democracy, it’s ugly but true.
  • Writing This For A Long Time: Mark Carney’s PhD thesis was “Dynamic advantage of competition.” In one sense, that’s obvious but not for people doing the dynamism. Competition is really bad for the people doing the creating. Makes you strong yes, but no one willingly supports competition at the entrepreneurial level. So this hits on the issue of the expert may not be the most appropriate person to build the future. 
  • Euro-Ameri-centric? Is Carney really talking about Anglo-Saxon and European conceptions of value for the most part or where is the line there? Does his message resonate with different cultures that he doesn’t work in very much? Is Value(s) getting translated into Mandarin? Will the general public read this book as closely as I have? 
  • Another MacKenzie King Mention Here: From a political perspective, Carney is aligned with the 3rd way style Labour party of Britain that can create successful coalitions with various interest groups with competing appreciations for economics. His embrace of the market as well as some undefined mixture of solidarity is not novel, it is precisely what MacKenzie King did by showing he could work with both labour and management in contract disputes. 
  • Expert/Metaphor Disconnect, Should the Pope Be Dictating Public Policy? Is it possible to turn grappa into wine? People of all socio-economic statuses drink wine, but grappa is a very European thing…is the Pope out of touch or is Mark Carney out of touch? Or am I missing out on the finer things in life? Is the Pope really just saying that human nature suggests that we need to impose agreeable behaviour? The folks who typically self-select into banking are focused on enhancing their own interests (and their shareholder by the way) by maximizing shareholder value, buying low and selling high and thus capturing value. To a certain extent value creation through the allocation of resources is certain value facilitating and thus partial value creation and value capture….
  • Great Speaker: Carney gave a commencement address for the University of Toronto, 2016-2018 MBA program which was further insight into his thinking

The Misguided Conservative Ideal: R.B. Bennett and the Western Canadian Reaction between 1930-1935.

The Misguided Conservative Ideal: R.B. Bennett and the Western Canadian Reaction between 1930-1935.

A fair amount of a party’s political success relies on good fortune. Steve Martin the comedian famously that ti……ming….is everything. If this is the case, R.B. Bennett was the most unfortunate Prime Minister in Canadian history. This essay will re-evaluate the Conservative party’s response to the Great Depression in Western Canada, accomplishing four objectives in order to defend Bennett[1]. First, it will outline R.B. Bennett’s adherence to Liberal capitalist order. Second, this essay will assess the Conservative party’s response to the agricultural crisis in the Canadian West. Thirdly, it will analyze their misfortunes in the West and the public response to the Conservative efforts. Finally, it will conclude that international economic stagnation, Western agricultural failure, philosophical discord inevitably led to Bennett becoming a victim of political circumstance. Hence politics is high risk, so one should try to start a term in leadership when the economy is expected to grow.

The tragedy of Richard Bedford Bennett is rooted in a political philosophy that was no longer sustainable in the 1930s: the Liberal capitalist order. According to Ian Mackay, the classical liberal model was “hegemonic in Canada from the mid-nineteenth century to the 1940s”[2]. Unfetter laissez-capitalism was prominent internationally and its philosophy of individualism had a significant influence in the Conservative party of Canada and on its 8th leader. Bennett advocated small-government principles in an era were these ideals were most acceptable to the Canadian public, particularly in Western Canada. The child of a staunch Methodist mother, Bennett developed a strong Protestant work ethic [3] and through the help friend Max Aitken, Bennett became a Western millionaire lawyer espousing the virtues of liberal capitalist order. As a Conservative House of Commons representative for Calgary, Alberta, R.B. Bennett “thought of himself as Calgarian. It was his home; it was where he had made his way in the world”[4]. Eventually, being a convenient candidate, the Conservative party found both his ideology and his allegiance to the West strategically appealing choosing Bennett as their leader at the 1927 Convention[5].

The Great Depression of the 1930s transformed unemployment into the single most challenging threat to the liberal order. Throughout the 1920s, the urbanization process continued across Canada while in the Prairie West, agricultural expansion continued unabated. According to Struthers, “until the development of the Canadian West as a major wheat-producing region between 1896 and 1930, few economic links existed to bind the diverse regions of Canada together”[6]. The Palliser Triangle represented potential prosperity for the impoverished European family and despite the economic imperialism of the east and several minor depressions, their desire for self-sustaining autonomy had been realized. Unfortunately, the Great Depression hit Western Canada the hardest.

An unprecedented catastrophe occurred as two events crippled Western Canadian prosperity. The first event was the global phenomenon triggered by the US stock market crash of October 29th, 1929. The result locally was that the price of wheat fell 40 per cent on the price index while overproduction of wheat exacerbated the crisis[7]. The second event was environmental crisis that curbed agriculture further. Drought caused by change in wind interactions between the Gulf of Mexico and Pacific streams, and imprudent cultivation practices, localized in Western Canada, meant that the soil could literally blow away (Seager, Watkins, Struthers). Compared to other constituents, “the plight of farmer in western Canada was rather worse. Canada’s backbone, the prairies, was broken, not by the depression alone, but by depression and drought”[8].

Enter the new Western Conservative leader R.B. Bennett in the 1930 federal election. Unemployment proved to be decisive in the election campaign, most of which was confined to the drought stricken western provinces. Liberal leader Mackenzie King’s electoral strategy was to deflect responsibility onto western provincial jurisdictions under section 92 of the BNA Act making him seem “quite removed from the economic calamity that was beginning to preoccupy Canadians”[9]. Conversely, R.B. Bennett’s Western campaign promised to “initiate whatever action is necessary…or perish in the attempt”[10] and to use grain tariffs “to blast a way into the markets that have been closed to you”[11]. The Conservative party gained a sound majority government.

R.B. Bennett’s new 1930 mandate hinged on his solution to the unemployment crisis which was looming over Western Canada and expectations were high. Unfortunately, the drought proved to be a serious liability for Bennett’s economic recovery plans. His pro-business, anti-interventionist inclinations provided little assurance to the millions of unemployed who were becoming increasingly desperate and agitating for change. According to Struthers, “the Tory leader was convinced that the present depression was a passing, mostly seasonal phenomenon”[12]. He was patently wrong. To be fair, many other countries adhering to liberal capitalist order did not believe the crisis would last for long either[13]. As a consequence of this trust in past precedent, the Conservative solution was based in short-term policy implementation rather than long term initiatives that would conflict with the notion of balanced budgets and laissez-faire.

The capitalist philosophical crisis haunted Bennett. There was philosophical discord in Bennett’s party between Liberal capitalism and extensive government interventionism, so R.B. Bennett “who was [posturing] a radical change in government policy to ensure prosperity”[14] but merely implemented minor relief plans that did not engage the federal government substantially in provincial jurisdiction. The Conservatives established the 1930 Relief Act, which relied on municipal and provincial funding for implementation with a federal expenditure of 28 million[15]. It was doomed to failure. Unfortunately, “Bennett had no way of ensuring that the money was fairly and wisely spent”[16] and there was a general lack of finances on the other levels of government regardless. By 1931, Bennett governed under the Statute of Westminster but such monumental achievements[17] were overshadowed by the economic situation, which was still gradually deteriorating most significantly due to the devastation of the prairie wheat crisis shared only by the American west[18]. “The price collapse of 1930 had beggared many wheat farmers, and a spring drought meant that there would be no 1931 crop at all in some areas”[19]. With the wheat economy bust, 54 per cent of the nation’s population worked in towns and cities, and urban issues like old-age pensions were the most pressing of the day[20].

After the collapse of Bennett’s unemployment relief efforts in the spring of 1932, he commissioned social worker Charlotte Whitton to write a two-hundred-page report on the Western crisis that was the growing liability on his government. As the director of the Canadian Council on Child Welfare, Whitton’s the most astonishing revelation was the argument that almost “40 percent of those then receiving relief in the West did not really need it…” adding that “…the plight of the people was pitiful but it was ‘not one deriving from the present emergency’ and therefore should not be supported by federal relief”[21]. The 100,000 transients in the West, she warned Bennett, were “getting out of hand” [22] and called for more social workers like her for the relief effort. This is exactly what Bennett wanted to hear since he maintained the liberal order “attribut[ing] the social turmoil not to hard times, but to foreign agitators and communist sympathizers.”[23] Whitton served to confirm, in Bennett’s mind, that the distinction between lethargic and desperate unemployed was distorted and that there was widespread abuse in the relief system. Having ignored the finer points of Whitton’s solution, Bennett established a direct relief method for the transients beyond the creation of paved roads that characterized his previous Relief Act.

As Conservative party strategy, transients could provide the focal point for the Western crisis. Bennett’s ideology suggested that the urbanization of transients was pejorative, he feared that “peace, order, and government would be disrupted by a Soviet-style revolution”[24]. Knowing the rural life well, Bennett believed that the people should be forced ‘back to the land’[25]. As a solution, Army General Andrew McNaughton’s proposed a scheme called PC 2248. He argued that “by taking the men out of the conditions of misery in the cities and giving them a reasonable standard of living and comfort,” McNaughton explained persuasively, “…the government would be ‘removing the active elements on which ‘Red’ agitator could play’[26]. Removing transients from urban centres would mean the crisis could be over or at least less visible.

By late 1932, relief camps for single, unemployed males administered by the Department of National Defense were being established to extract transients from urban centres where political turmoil could ensue[27]. Even in a public speech, Bennett asked “every man and woman to put the iron heel of ruthlessness against”[28] emerging political challenges to the Liberal order. With the plan underway, the RCMP began removing transients from the trains in Western Canada and relocating them in work camps outside of urban centres. Bennett’s obsession with balanced budget, social order from civil unrest particularly Western Canada’s third party challenges was Bennett’s pre-occupation from 1931 to 1933[29]. The bulk of the Conservative election platform has been converted into policy by the summer of 1932”[30]. Imperial economic conference of 1932 failed to solve the problem of Great Depression highlighting the unavoidable impact of global economic collapse[31]. The ‘Bennett Buggies’ having been entrenched as a sarcastic criticism of the state of affairs.

In January 1933, Bennett added to his administrative blunders when the Western provincial leaders asked that the federal government to be entirely financially responsible for direct relief[32]. Bennett’s frustrated response failed to mitigate deep resentment from western premiers, like Pattulo of BC and Gardiner of Saskatchewan, when he attacked them for fiscal ‘extravagance’ and suggested that “the Prairie Provinces give up old age pensions, telephones, and electrical service to ‘maintain the financial integrity of the nation’”[33]. Fiscal concerns of Bennett were calling for the burdensome western provinces to deliver balanced budgets. Ultimately, Bennett had to pick up the slack of their supposed incompetence. Bennett was not interested in spending money Canada’s government didn’t have. “It was no wonder that a discouraged R.B. Bennett talked openly of retirement in the fall of 1933”[34]. He and his Conservative party rejected full-scale state intervention as long as feasibly possible. Reform was now crucial.

By 1935, there were more than two hundred camps in the system serving mostly Western Canada. Regardless of the historian’s political leanings, their description and analysis of these camps is resoundingly negative. According to Wilbury’s account, those on relief were “inmates of the government labor camps”[35] casting a grim light on Bennett’s failed solution which may have exacerbated the problem. According to Struthers, “the Department of National Defence relief camps represent one of the most tragic and puzzling episodes of the Depression in Canada”[36] and would be Bennett’s greatest blunder. “The camps soon became a liability, though, disliked by the unemployed, labour unions and the general public”[37]. Unfortunately for Bennett, the military styled DND camps would be referred to as ‘slave camps’ that “symbolized everything wrong with Bennett’s approach to the depression and eventually provoked the most violent episode of the decade”[38]. Struthers is referring to the scathing actions of Bennett in regard to the Regina Riot.

The Conservative government’s strong-arm tactics using Bennett’s “iron heel of ruthlessness”[39] had a devastating effect on Western Canadian support. The On-to-Ottawa Trek was a protest from BC headed to Ottawa and had been “violently broken up two thousand miles from its goal”[40]. 120 people were arrested at the July 1st, 1935 Regina Riot which ended a police officer’s life. Some confusion between historians exists over whether Bennett took control of the RCMP in Saskatchewan in order to hold them in Regina with Section 98 of the Criminal Code[41]. Other than the Winnipeg General Strike of 1919, the Regina Riot of July 1, 1935, is probably one of the larger civil disturbance in Canada history. Highly critical of Bennett’s ineffectual leadership, Struthers adds that the riot was a “fitting conclusion to Bennett’s five years in office for it symbolized the failure of the unemployment polices pursued by his administration”[42].

Out of desperation, R.B. Bennett turned to CBC public radio announcements in early 1935. Bennett’s New Deal echoed the interventionism of Roosevelt’s response to the Great Depression in 1933[43]. Developed by Bennett’s brother-in-law, Herridge’s New Deal attempted to placate the emergence of third party challenges in Western Canada. With projects to strengthen the Farm Loan Board etc, Diefenbaker claimed the broadcasts were enthusiastically received in Saskatchewan[44]. The obvious criticism that it took far too long in the term for the Western electorate who were mobilizing around new parties. The ‘Bennett Buggies’ had already been entrenched as a sarcastic criticism of the state of affairs. For Bennett it was too little too late and as Herridge ploy backfired[45]. King played the strategy of supporting the New Deal based on the merits of the proposal instead of allowing Bennett to use the bill as an election promise squandered by Liberal opportunism. King made no promises during the election campaign and won, the Regina Riots and the ‘slave camps’ ruined Bennett’s chances in Western where Social Credit and CCF were poised to split the vote. Other successes like providing for an eight-hour day, a six-day work week, and a federal minimum wage[46] are hardly observed in historical recollections or are deeply undervalued. While Bennett was, and is still, often criticized for lack of compassion for the impoverished masses, documents show that he stayed up through many nights reading and responding to personal letters from ordinary citizens asking for his help and often dipped into his personal fortune to send a five dollar bill to a starving family[47].

With the unavoidable crisis in Western Canada, the resignation of the popular H.H. Stevens in 1934, the “most talked of with regard to Reform in the West”[48], the formation of the Reconstruction Party (a renegade faction of Bennett’s party driven by a distrust of Bennett’s attachment to large corporations)[49] and the emergence of the Social Credit and Co-operative Commonwealth Federation, the Conservative party’s electoral revitalization for the 1935 election was doomed. It did not help that the organizing party machine put together by A.D McRae had died out in depression years[50]. Ultimately, the Conservative party could not solve the international problem of the depression. The result of Bennett’s failure was that the Western electorate rejected ordinary political parties for alternative expressions of protest. The public discontent in the West translated into electoral collapse losing half of all popular support in the four Western[51]. “Furthermore, despite the prevalence of hardship in western Canada, the depression would not bring immediate victory to the new party in the 1935 election”[52]. This position is expanded by Dough Owram, who points of that “the world was forced to operate in ruthless competition which creates maldistribution of wealth and ‘gives rise to the violent fluctuations in the purchasing power of consumers”[53].

Unable to overcome the Depression, Bennett lost the 1935 election to his Liberal opponent, Mackenzie King. New leaders gained support by promising to help struggling constituents and to stand up to Ottawa. Electoral math problem SMD screwed him 18.7% drop in the support in 1935 election from 1930 47.5%(site) wikipedia). His larger failings were in the dealing of specifics in Great Depression, particularly federal-provincial relations with the four western provinces, the DND camps and the Regina Riot. The massive majority gained by King is more telling of the single member district electoral system than Bennett’s failures. King actually didn’t need the west to make a massive majority. Stevens Reconstruction party took 8.7% directly out of the Conservative party caucus** How much of the depression is truly Bennett’s fault is impossible to gage and historians seem to debate over the depth of his ineptitude rather than the successes he achieved. The 1935 election sealed Bennett’s fate as a failed leader, but this is only one side of a complex diverging understanding of Bennett and his accomplishments under the most dire of circumstances. While various writers describe to a degree the details of R.B. Bennett’s political strategy during the depression, they vary on the emphasis of his success or failure. Stevens and Tim Buck came back to haunt him electorally speaking.

At once a man of decidedly ill repute and a statesman often-misunderstood, R.B. Bennett did the best he knew how. Bennett receives a negative historical analysis because Canadian historians forget the philosophical mindset of the era. Unfortunately, Bennett is the antithesis of the welfare state; few can argue that Bennett was successful in his laissez faire policies. Had Bennett been re-elected, in a counter-factual analysis, his perceived ineptitude during the depression might have evaporated as World War II would have hailed him with the political capital and economic upturn needed. King and the Liberal Party were the beneficiaries of Bennett’s failure. In that sense, Bennett was Canadians history’s most sacrificial prime minister.

The success of the New Deal is in debate in the United States. 1937 there was another recession in the US. WWII was the ultimate solution.

Disclaimer: I don’t stand by any assertions in this paper; it was written 10 years ago and am not responsible for it’s content. So there!


Work Cited

Berton, Pierre. The Great Depression 1929-1939. Toronto: McClelland and Steward Inc, 1990.

Morton, Desmond. A Short History of Canada: Fifth Edition. Toronto: McClelland & Stewart Ltd, 2001.

Orwam, Doug. The Government Generation: Canadian Intellectuals and the State: 1990-1945. Toronto: University of Toronto, 1986.

Seager, Allan and Thompson, Herd John. Canada 1922-1939: Decades of Discord, the Canadian Centenary Series. Toronto: McClelland & Steward Ltd, 1985.

Struthers, James. No Fault of Their Own: Unemployment and Canadian Welfare State: 1914-1941. Toronto: University of Toronto Press, 1983.

Maclean, D. Andrew. R.B. Bennett: The Prime Minister of Canada. Toronto: Excelsior Publishing Company, Ltd, 1934.

Waite, P.B. The Loner: Three Sketched of the Personal Life and Ideas of R.B. Bennett 1870-1947. Toronto: University of Toronto Press, 1992.

Watkins, Ernest. R.B. Bennett: A Biography. London: Secker & Warburg, 1963.

Wilbur, Richard. The Bennett Administration: 1930-1935. Ottawa: The Canadian Historical Association Booklets, No. 24, 1969.

Walter D. Young. Democracy and Discontent: Progressive, Socialism and Social Credit in the Canadian West, Chapters 1-3: 1-56


Wikipedia, Canadian Federal Election, 1935.



[1] Given the context, his paradoxical compassionate letters to the poor while rejecting government intervention demonstrates that a philosophical discord within his Conservative ideology was a barrier to full scale government intervention. Intervention wouldn’t have amounted to much though BECAUSE I conclude, ultimately, that Bennett was screwed by forces beyond his or any Western nation. Only a war would help King in re-election.

[2] McKay, Ian. “The Liberal Order Framework: A Prospectus for a Reconnaissance of Canadian History”. Canadian Historical Review (2000), pp. 625.

[3] Waite, P.B. The Loner: Three Sketched of the Personal Life and Ideas of R.B. Bennett 1870-1947. Toronto: University of Toronto Press, 1992, pp. 24.

[4] Waite, P.B, 54.

[5] Glasford, Larry A. Reaction and Reform: The Politics of the Conservative Party under R.B. Bennett, 1927-1938. University of Toronto Press, 1992, pp. 26.


[6] Struthers, James. No Fault of Their Own: Unemployment and Canadian Welfare State: 1914-1941. Toronto: University of Toronto Press, 1983, pp. 5.

[7] Young, Walter D. Democracy and Discontent: Progressivism, Socialism and Social Credit in the Canadian West: McGraw-Hill Ryerson Ltd., 1969, pp. 43.

[8] Watkins, Ernest. R.B. Bennett: A Biography. London: Secker & Warburg, 1963, pp. 181.

[9] (Morton, 211)

[10] Election speech, R.B. Bennett, June 9, 1930.

[11] Glasford, 96.

[12] Struthers, 48.

[13] Thompson and Seager in Canada 1922-1939: Decades of Discord,

[14] Berton, Pierre. The Great Depression 1929-1939. Toronto: McClelland and Steward Inc, 1990, pp 141.

[15] Glasford, 114.

[16] Struthers, 50.

[17] Part of Bennett’s legacy being the independent of the dominions within a new British Commonwealth.

[18] Wilbur, Richard. The Bennett Administration: 1930-1935. Ottawa: The Canadian Historical Association Booklets, No. 24, 1969, pp. 7.

[19] Seager, Allan and Thompson, Herd John. Canada 1922-1939: Decades of Discord, the Canadian Centenary Series. Toronto: McClelland & Steward Ltd, 1985, pp. 213.

[20] Struthers, 47.

[21] Ibid, 77.

[22] Berton, 136.

[23] Glasford, 121.

[24] Berton, 141.

[25] Struthers, 92.

[26] Seager, 268.

[27] Glasford, 122.

[28] Ibid, 121.

[29] Ibid, 123.

[30] Ibid, 117.

[31] Ibid, 116.

[32] Struthers, 145.

[33] Seager, 254.

[34] Glasford, 134.

[35] Wilbury, 17.

[36] Struthers, 95.

[37] Ibid, 122.

[38] Struthers, 96.

[39] Glasford, 121.

[40] Seager, 272.

[41] Berton, 323.

[42] Struthers, 136.

[43] Seager, 263.

[44] Glasford, 155.

[45] Glasford, 159.

[46] Seager, 264.

[47] Seager, 212.

[48] Glasford, 168.

[49] Ibid, 138.

[50] Ibid, 100.

[51] Conservative Popular Vote change 1930-1935: 49.3% – 24.9% BC, 35.0%-17.5% AB, 33.6%-18.0% SK, 44.1%-27.9% MB.

[52] Young, 55.

[53] Orwam, Doug. The Government Generation: Canadian Intellectuals and the State: 1990-1945. Toronto: University of Toronto, 1986, pp. 219.