Alberta Premier Danielle Smith is facing fierce criticism for using taxpayer money to meet American far-right pundit Ben Shapiro in Florida as part of a recent fundraiser for conservative think tank PragerU.
Author
- Junaid B. Jahangir
Associate Professor, Economics, MacEwan University
At the event, Smith and Shapiro reportedly joked about U.S. President Donald Trump annexing Canada .
Smith also praised the United States for turning away from 2050 climate targets , spoke of a "net zero ideology" and promoted the importance of Albertan oil and gas to Americans.
Smith was initially opposed to retaliatory tariffs against the U.S., but eventually acquiesced . Nonetheless, she recently scoffed at a poll that showed a majority of Canadians (68.1 per cent), even in the Prairies (58.8 per cent), support retaliatory tariffs on oil and gas.
Those defending her Florida appearance argue that Smith intended to reach out to a conservative American audience to present Alberta's case in the face of Trump's tariffs.
She appeared to attempt a balancing act as she stressed the harms of tariffs without strongly pushing back against Trump's annexation rhetoric.
The problem with subservience
I've argued that a better response to Trump's tariffs would be countervailing power, not abject subservience. Additionally, Smith's approach to Trump's anti-Canada actions doesn't reflect the will of Canadians who are pushing back democratically through consumer boycotts of American goods.
Smith's critics also argue that she cannot achieve more than social pleasantries in her forays to the U.S. to hobnob with right-wing personalities. Generally, the approach of talking to the far right is contingent on various factors , including subject matter and timing, to be successful.
The benefits of Smith exchanging social pleasantries and pleading her case with the far right in the U.S. comes at the cost of breaking rank from the united stand Canadians need given the perceived existential threat to their country.
Additionally, Smith shared a platform with those who hold hardcore beliefs about women's autonomy, LGBTQ rights and who peddle pseudo-academia in the " intellectual dark web ," sending a troubling message to many Canadians.
The economics of Smith's approach
Understanding Smith's response on retaliatory tariffs requires understanding the economics behind it.
Smith has an undergraduate degree in economics. But textbook neoclassical economics itself is problematic. I've already addressed the shortcomings of mainstream neoclassical economics on climate change in both mainstream and academic work .
In his book Economism, American law professor James Kwak highlights the problems with Economics 101 as it's taught at universities around the world. He argues it leaves students with simplistic soundbites long after they've graduated that informs their political thinking in later life.
This could explain Smith's approach that rests on free market fundamentalism (based on unfettered trade with smaller government and more private entrepreneurship ).
Her economic approach complements her libertarian approach that apparently involves courting right-wing groups that are often small government proponents.
Neoclassical economics on tariffs
When it comes to tariffs, textbook economics extols the benefits of free trade without addressing serious issues of environmental degradation and working conditions. Those studying this mainstream economic school of thought may have been left with the overwhelming impression that when the U.S. imposes tariffs, it only hurts itself.
Harvard economist Gregory Mankiw's bestselling principles textbook shoots down arguments about how tariffs save jobs, protect infant industries, strengthen national security and prevent unfair competition.
Several Canadian economists don't see economic merit in retaliatory tariffs and relegate the issue to politics. Trained within the mainstream neoclassical model, they also view tariffs as categorically harmful.
Doing nothing in response to tariffs then becomes the default response, based on the argument that governments would make things worse by intervening in the market .
Australian economist Steve Keen has pointed out that mainstream economics did not have much to say about the global financial crisis in 2008. This is partly because of the belief in what's known as the "efficient market hypothesis " that contends stocks always trade at fair value.
In terms of this "do nothing" approach in neoclassical economics, Smith's response on retaliatory tariffs is therefore not surprising.
Alternative economics approaches
My approach to teaching economics is aimed at prioritizing worker rights, equality, environmental standards and local resilience, especially in the wake of the COVID-19 pandemic when supply chains were disrupted. I also believe unanimity is required for retaliatory economic sanctions and boycotts to work.
That's because retaliatory tariffs and separate radical responses work when co-ordination difficulties and the "free rider" problem - meaning an individual benefits from collective effort without contributing - are minimized. A united front is required, which Smith is violating when she goes rogue in courting the American far right.
Alternative economic approaches critical of mainstream perspectives are already promoted in Canada by academics like Rod Hill and Tony Myatt .
These perspectives don't categorically reject tariffs. Instead, they highlight the role of targeted tariffs and focus on local resilience and workers' rights, offering an alternative to the status quo.
Overall, these new models are a better alternative to Smith's style of subservience, or do-nothing approaches based on inertia that has seeped into mainstream economics. Both of these outdated responses to American tariffs seem particularly dangerous during this tumultuous period in Canada-U.S. history.
Junaid B. Jahangir does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
