The Triumph of Canadian Socialism

More

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.

Jump to comments
Presented by
Get Today's Top Stories in Your Inbox (preview)

This Short Film Skewers Hollywood, Probably Predicts Disney's Next Hit

A studio executive concocts an animated blockbuster. Who cares about the story?


Join the Discussion

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

Video

In Online Dating, Everyone's a Little Bit Racist

The co-founder of OKCupid shares findings from his analysis of millions of users' data.

Video

What Is a Sandwich?

We're overthinking sandwiches, so you don't have to.

Video

How Will Climate Change Affect Cities?

Urban planners and environmentalists predict the future of city life.

Video

The Inner Life of a Drag Queen

A short documentary about cross-dressing, masculinity, identity, and performance

Video

Let's Talk About Not Smoking

Why does smoking maintain its allure? James Hamblin seeks the wisdom of a cool person.

Writers

Up
Down

More in Business

Just In