The Triumph of Canadian Socialism

So Canadian households are now richer on average than Americans, according to Stephen Marche.

On July 1, Canada Day, Canadians awoke to a startling, if pleasant, piece of news: For the first time in recent history, the average Canadian is richer than the average American.

According to data from Environics Analytics WealthScapes published in the Globe and Mail, the net worth of the average Canadian household in 2011 was $363,202, while the average American household's net worth was $319,970.

A few days later, Canada and the U.S. both released the latest job figures. Canada's unemployment rate fell, again, to 7.2 percent, and America's was a stagnant 8.2 percent. Canada continues to thrive while the U.S. struggles to find its way out of an intractable economic crisis and a political sine curve of hope and despair.

The difference grows starker by the month: The Canadian system is working; the American system is not.

Marche calls Canada's superior model "a hardheaded (even ruthless), fiscally conservative form of socialism".

I couldn't find the study from Environics etc. The numbers don't seem to align with the Fed's recent figures (see page 17 of Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances). The Fed looks at US family (not household) net worth in 2010 (not 2011). It finds a median net worth of $77,300 and a mean of $498,800--so I wonder about the definitions. Still, the main thing going on is pretty obvious. The net worth of US families fell sharply between 2007 and 2010 because of the collapse in US house prices. Median net worth fell by nearly 40%; mean net worth by nearly 15%. Canada hasn't had a house price collapse (though looking at prices in Toronto makes me want to say, "not yet").

I don't know whether I'd put Canada's success in avoiding a house-price collapse down to hardheaded socialism, or to having smaller, more cautious, and better regulated universal banks.

I do think it's a shame Americans aren't more curious about what goes on in Canada: There's a lot to learn, especially from its health-care system. But you can also exaggerate the differences--as people in both countries are apt to do. General government spending in the United States was 41.9% of GDP in 2011; in Canada it was 43.2%. (In 2007, before the recession intervened, the figures were 36.9% for the US and 39.4% for Canada.) I guess that makes the difference between hard-headed socialism and capitalism red in tooth and claw about 2 percentage points of GDP.

Reihan Salam makes some interesting comments on the piece, and winds up puzzled that the gap in net worth between Canada and the US isn't even bigger.

Presented by

How a Psychedelic Masterpiece Is Made

A short documentary about Bruce Riley, an artist who paints abstract wonders with poured resin

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus


How a Psychedelic Masterpiece Is Made

A short documentary about Bruce Riley, an artist who paints abstract wonders with poured resin


Why Is Google Making Skin?

Hidden away on Google’s campus, doctors are changing the way people think about health.


How to Build a Tornado

A Canadian inventor believes his tornado machine could solve the world's energy crisis.


A New York City Minute, Frozen in Time

This short film takes you on a whirling tour of the Big Apple


What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we save the night sky?

More in Business

Just In