In his speech to the European Parliament last month, Carney kept planting (metaphorical) trees. He described how First World War Canadian lieutenant Leslie Miller had gathered acorns from a scorched French battlefield, smuggled them back home to Ontario, and planted them. In time, they grew into a fine oak forest. A century later, grafts from those oaks were replanted in France. “A profound circle of renewal was completed,” Carney told MEPs. 

Now, Carney wants to graft a our Canadian maple onto the European family tree. Today, he is hosting European Union leaders in Montreal, in the hope of establishing how Canada can become the union’s first ever “associate member”. But the bloc may just drop the offered title entirely, after major pushback from EU members who don’t want Canada formally in their club.

Carney is attempting to pull off a monumental act of historical reverse engineering — one that would see the New World returning to the shores of the Old. Finding itself in President Trump’s crosshairs, Canada is trying to pivot from being America’s dependent northern brother to Europe’s long-lost child returning home. “It is my strong personal view that the international order will be rebuilt, but it will be rebuilt out of Europe,” Carney has predicted.

The problem is that this reunion will not work out. While their roots intertwine, Canada’s relationship with Europe faces hard geographic, economic and cultural ceilings that cannot be overcome by mere treaties and titles. Canada is a non-native species on European soil.

Carney takes every opportunity to remind Canadians of their British and French “founding peoples”, even persuading King Charles to travel to Ottawa to open Parliament last year (Carney’s brother is the chief operating officer at Kensington Palace). Yet despite the current feud with President Trump, Canadians have far more in common with Americans. Our European ancestors, who threw caution to the wind and boarded ships bound for Canada, chose to leave the Old World behind for a reason: to seize individual and economic opportunity. To escape wars, class divides, and poverty. To build a new and different society.

What, then, is Carney hoping to get out of the EU? He has vowed to double non-US exports in the next decade and wants Europe to be a bigger trading partner, claiming the continent is even more economically enticing than China. He is particularly interested in European defense technology: Canada has inked a Canada-EU Security and Defense Partnership, and chosen German-Norwegian shipbuilder TKMS to build it a fleet of 12 new submarines. There’s also been talk of Canada joining an EU-Canada Digital Trade Agreement, Erasmus+ (the EU’s education program that allows students to study abroad), and Horizon Europe (the bloc’s funding program for research and innovation). There are rumors that Canada is aligning with Europe on AI regulations, pension investment, competition watchdogs, forest fire water bombers, and undersea telecommunications cables; it is also said to be taking part in the EU space program. But, most importantly, Canada has joined the European Broadcasting Union, clinching a spot in Eurovision and the chance to introduce the rest of the world to Inuit throat singing.

The Europeans, in turn, are interested in Canada’s critical minerals (lithium, graphite, and nickel), energy (liquefied natural gas, hydrogen), and the Canadian Arctic. A deepened Canadian partnership would make Europe less reliant on China’s rare earth deposits, America’s technology, and Russia’s oil. “Canada is truly the most European of the non-European countries,” Ursula von der Leyen, president of the European Commission, asserted during her State of the Union address in June. In September, she extended the associate member invite to Carney, whom she calls “dear Mark”. As she landed in Montreal today, the German politician signaled she hasn’t given up on granting Canada the new title, standing in defiance of many of her European colleagues.

The Canadian government views EU associate membership as its best chance of diversifying away from the US. (This is after Carney walked out of American trade deal negotiations in the eleventh hour because, as he put it, Canada’s sovereignty was being stolen.) Europhile Canadians see Europeans as kindred spirits equally devoted to democratic institutions, large social safety nets, and the defense of Ukraine. They dream about the possibility of greater freedom to live, study and work across Europe.

Those opposed to EU membership, however, are wary of Europe’s anemic economic growth, lack of technological innovation, and aging population, as well as its strict data rules, agri-food standards, and energy regulations. They fear that joining the EU could result in more migrants at our borders, as well as Canada having to send roughly 1% of its economic output to Brussels. They say that rather than surrendering our sovereignty to the Americans, we’d just be surrendering it to the Europeans. “We will never be the 51st US state. And we will never be the 28th EU state,” Conservative Party of Canada leader Pierre Poilievre told his supporters.

According to recent polling, around 81% of Canadians want closer integration with the EU, while remaining outside of the union. But Canadian support for closer integration falls to 49% when the prospect of EU membership is raised. The consensus is clear: Canadians want to have a closer relationship with Europe, but they do not want to become Europeans. 

This tension is evident in the difficulty the Canadian government has had describing the new “associate member” relationship — are we just dating, or getting married? The relationship is now up in the air, as members appear prepared to vote against the associate member designation. “We’ve definitely put the cart before the horse,” admitted one European diplomat. “Nobody really knows what it means,” said another. “The good news is it doesn’t matter about specific names or nomenclature,” said a visibly perturbed Carney responding earlier this week. “What matters is the difference that it will make to lives of Canadians.”

Talks around Canada’s new membership status have seen Germany, France, Italy and Greece push back. They don’t feel consulted. They are frustrated that Canada is receiving “association without accession”, reaping European rewards without meeting the standard requirements to gain membership.

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The obstacles to Canada’s European romance are numerous. On the economic front, 72.5% of Canada’s exports are sent to the US; the entire EU currently takes a measly 5.5%. In addition, 85% of Canada’s energy is sent to America. In a single month, Canada exports more to Oklahoma than Germany, more to Kentucky than France, and more to New Jersey than Italy.

Then there are the societal barriers. It is admittedly difficult to pinpoint a distinct Canadian culture: in many ways, Canada is already its own often dysfunctional union. A vast country of 10 provinces, three territories and two official languages is home to far North Inuit, Quebecker maple-syrup makers, Newfoundland fishermen, Albertan cowboys and everyone in between. Add to that the vexing interprovincial trade barriers that cost our country $200 billion a year, and it becomes clear we have our own issues getting along among ourselves.

Yet a shared Canadian culture does exist, and it is plainly different from Europe’s. Our ancestors left behind most of the Old World’s traditions, bloody revolutionary battles, and class hierarchies. We are a young country of just 159 years old. We are more individualistic. Our work often defines our lives. Living in the second-largest nation in the world, we spread out across our vast landscape. We live in larger homes and drive bigger cars: for 16 years straight, the Ford F-150 truck has been the best-selling vehicle in Canada. Then there’s the fact that within Canada, hundreds of Indigenous nations increasingly practice self-governance. Our nation is undeniably “un-European”.

While we hate to admit it, we share much with and depend on Americans more than anyone else. Two-thirds of Canadians live within 100 kilometers of the American border. The US covers 60% of the budget for our Arctic defense radar stations. English Canadians consume almost exclusively American arts and entertainment: in 2023, only 3.3% of our total box office revenue came from Canadian films. 

Currently, 56% of Canadians say they have more in common with European nations than the US. But the hostile American president has completely muddied the polls. Remove Trump from the equation and far more Canadians would agree they have more in common with Americans than Europeans. In the end, Carney’s best intentions, buttressed by globalization, technology and emotion, simply cannot trump geography, history and culture. As much as Canadians might want it to, Europe cannot fill Canada’s America-sized hole.

Prime Minister Carney keeps a map of his grandparents’ Irish hometown of Aughagower on his desk in Ottawa. He says it acts as a friendly reminder of where he came from. But that’s just it. The reality is Europe is where Canada came from, not where it is going.

Why, then, is the Trump administration appeasing China on trade, while picking fights with countries like Canada that are friends and allies of the United States? Why is America shaking down allies for cash and risking inflationary pressure at a time when the US economy can hardly afford more of it? The sheer irrationality and refusal to ease up lend President Trump’s trade war with Canada the aspects of a mad compulsion. 

Trade negotiations between Washington and Ottawa have dramatically collapsed in the last week. The industries involved include autos, lumber, plywood, clothing, dairy, and alcohol. There is no reason for the two countries not to be able to reach an accommodation on any of these questions, provided America doesn’t continue to treat friends like enemies.

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The automobile industry is a strategic industry, to be sure, but the issue in the US-Canadian trade diplomacy involves merely the location of supply chains in what is already an integrated North American market. As for the rest, nobody would describe dairy, alcohol, and plywood as sectors essential to American industrial, commercial, and military power.

Meanwhile, by 2023, China’s share of global manufacturing output surged to 28%, up from just 9% in 2004 — making it larger than the combined output of the United States, Japan, and Germany.  

Chinese manufacturing dominance, by the way, isn’t about “plastic trinkets,” free-traders’ shorthand of a generation ago for why we shouldn’t worry about giving up some industry to the Middle Kingdom. Thanks to a relentless and effective state-sponsored industrial- and trade-policy combination, China, once an exporter of low-value-added products like textiles, now leads the world in electronics exports. It enjoys a global market share of 32%, followed by 14% in the case of Taiwan. The American share of global electronic exports? A measly 5%.

China is also now the world’s largest car maker, responsible for a third of global output. And the country’s share of global shipbuilding, another high-tech, strategic-manufacturing industry, is even higher, at a staggering 56%. And while the Chinese lag behind the United States in commercial aviation, they control an estimated 80% to 90% share of global drone manufacturing — an industry with obvious military implications. 

OK, when it comes to the most strategic industries of the 21st century, America should be picking its trade fights with China, not with … Canada. But hey, at least when it comes to plywood, Canada is a bigger player in global markets than China. Oh, wait — China is responsible for more than 54% of global plywood exports and makes up to an estimated 70% of the world’s plywood.

Alcohol? Canada lags behind the leaders in alcohol revenue: the United States, China, and Japan.  Is Canada threatening to engross the world lumber market? Well, at least Canada exports more milk and dairy products (180,000 tons) than China (70,380 tons). And according to 2026 data, Canada exports more lumber than the United States.

America is threatened by a lumber gap!

In all seriousness, there is something perverse afoot here. While cracking down on Canada in trade disputes over non-strategic industries, the second Trump administration has appeased Communist China. The People’s Republic controls 90% of refining in rare earths, essential for advanced technology and manufacturing in many industries, and the Beijing regime hasn’t hesitated to use the leverage it gains from control of this strategic chokepoint. In April 2025, following Trump’s “Liberation Day” tariff announcements, China imposed export controls on a number of rare-earth minerals on which American and allied civilian and defense industries depend. 

Living up to the motto “TACO” — Trump Always Chickens Out — the president in May flew to Beijing to a summit with Chinese supreme leader Xi Jinping. According to the White House news release, “China will address US concerns regarding supply-chain shortages related to rare earths and other critical minerals, including yttrium, scandium, neodymium, and indium.” 

In return for this vague promise, the Trump administration won commitments from the Chinese regime to buy 200 Boeing aircraft — which will undoubtedly help China obtain technology to build its own rival aircraft industry — and promises to buy more US beef and poultry. America may have lost consumer electronics and drone manufacturing to the Chinese, but take solace: America’s chicken feedlots rule!

Those of us who have followed bad US trade deals for decades recognize the trick used by East Asian mercantilist nations, including Japan, South Korea, and Taiwan, as well as China. Knowing the power of America’s farm lobby in Congress, and the political weakness of US manufacturers, the East Asian mercantilists will graciously promise to import more American soybeans, beef, pork, or other agricultural commodities, if Americans agree to stop protesting their state-sponsored, trade-induced deindustrialization of the US economy.

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Team Trump, in short, is doing the exact opposite of what American strategy in the 21st century demands.

Strategy is the art of picking priorities. A rational American trade strategy would focus on a hard decoupling of the United States from market-Leninist China. In addition, to take advantage of economies of scale in manufacturing and increase global market shares, a rational American trade strategy would seek to pool the American manufacturing base with those of allies in Europe, Asia, and elsewhere that share America’s interest in reducing economic and military dependence on China. Even legitimate trade disputes with US trading partners, including Canada, should be kept off the front pages of the news media and subordinated to these two goals of Sino-American decoupling and allied solidarity.

Moreover, in order to work over many years and through changes of party control in Washington, a rational strategic trade policy should be backed by technocratic expertise and should seek to win bipartisan legitimacy. But Trump’s trade policy is personal and whimsical and finally incoherent. 

The worst part: instead of rehabilitating the use of tariffs as a legitimate instrument of American economic statecraft going back to the Founding Fathers, Trump is discrediting them in the eyes of the American people. No wonder the share of the US public that favors global free trade rose to 55% last year, up from 35% percent in 2024, when Trump was re-elected. Even among Republicans, free trade’s popularity rose to 34%, up from 20%, in the same period.

If the Chinese regime had possessed the power to plant a Manchurian Candidate in the White House in 2025, whose goal was to discredit economic nationalism in American public opinion, it could not have chosen a better agent than Donald “Tariff Man” Trump.

As Canadians greeted the announcement of Mark Carney’s cabinet, the expectation was that of far-reaching change. But a day after being sworn in, Canada’s new housing minister, Gregor Robertson, put an end to those hopes. Robertson, the ex-mayor of Vancouver — which saw one of the most severe localized housing crises — said home prices should not go down. Has his boss’s campaign pledge already been turned to dust?

This is a terrible start to a supposedly new era. What Canada needs is not just a total rupture with the Trudeau years but a break with decades of virtual NIMBY dictatorship under all parties, at all levels of government. At this rate, the divide between the generally affluent home-owning Boomers and Gen Xers and the downwardly mobile Millennials and Gen Zs is only likely to persist into the Carney era. This generational divide, of course, exists as well in the US, the UK, and elsewhere, but the Canadian context is distinct: owing to the lesser relative salience of culture war and immigration issues compared with other Western nations, it is now the central cleavage of Canada’s politics, in a way that it isn’t elsewhere.

So how great is the gulf between them? Statistics Canada shows a 65-67% gap between average Millennial household wealth ($493,423) and the equivalent figures for Boomers ($1,397,609) and Gen X ($1,485,654). On top of this, there is said to be $1 trillion in Boomer wealth set to be passed down soon, but even this is in doubt given longer lifespans and this cohort’s tenacity in holding on to what they have.

The reason for this disparity is real estate, which props up the economy. Young Canadians have either been excluded from homeownership by high prices and interest rates, with big cities like Robertson’s Vancouver and Toronto among the two most unaffordable cities in North America; or they are new homeowners who managed to buy properties but are now squeezed by rising mortgage payments.  Older Canadians meanwhile have seen the value of their properties soar over a much longer period.

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But this snapshot is part of a 60-year-old pattern whereby Boomers exert their influence as the largest generation. Because “Canada’s was the loudest boom in the industrialized world”, as the demographer David K. Foot has recounted, “Canadian boomers are a… more important factor in Canadian life than American boomers are in American life”. The subsequent history of Canada has been one of governments responding with reflexive deference to their demands. The growth of the public sector in the Sixties catered to their educational needs, while the Nineties-era turn towards fiscal austerity (and federal disengagement from housing) coupled with the rise of prohibitive zoning at local levels reflected this now middle-aged cohort’s intention to keep and grow their personal net worths.

They have maintained this goal — through ceaseless real estate appreciation — with fanatical discipline ever since. As Foot wrote, “It was just as inevitable that once the boomers were housed, the [housing] boom would end.”

But it’s not just their numbers that let the Boomers get away with so much: it’s also their enormous capacity for political cohesion. People who voted for the first time in 1965 kept voting at high rates — around 60-70% — throughout their whole adult lives. In contrast, later generations, especially Millennials and Gen Zs, mostly voted at the lower rates of 30-40% range, with few exceptions.

In fact, Foot failed to foresee how the Boomers would prolong their stranglehold well past their working-age primes. He predicted they would relinquish their urban properties and cash in early, mass migrate to smaller retirement towns, and gracefully free up space in the cities for younger cohorts, believing that not long after 2000, “houses will be what they were before the boomers entered the housing market, places to live rather than investments… the days of rapid and huge increases in house prices are gone.” Of course, this never happened — quite the opposite.

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Gen X is in a special position; though they were not able to benefit as quickly from the system set up by the Boomers, enough of them were nonetheless able to break into the housing market and build up household wealth as the price upswing was in its initial stages in the mid-Nineties and 2000s, an entry point that was closed off to many Millennials who came after. As a result, they even have a marginally higher average net worth than Boomers and are not in a position to break ranks politically with the status quo.

Naturally, the flip side of Boomer hyper-engagement is consistent Millennial and Gen Z non-engagement: countless youths who have abdicated their civic rights altogether, citing apathy or ignorance.

What we are dealing with here are gross sociological distinctions, which cannot be put down to partisan differences. Canadian and global outlets who covered the race put special emphasis on a supposed bond between the disenfranchised youth and the populist Conservative Party under Pierre Poilievre, just as the over 55s flocked to Carney: in this telling, the former voted on cost of living while the latter voted on anti-Trump nationalism, depicted with scorn in Right-wing media as a luxury issue for Boomers intent on drowning out the affordability debate with nostalgic invocations of their own postwar golden age.

Yet the polling data does not confirm this: yes, the Boomers have gone majorly for the Liberals, but surveys carried out in the lead-up to the election and in its immediate aftermath indicate a very close, competitive race for the youth vote, with apparent Liberal leads for the 18-35 cohorts. It was actually middle-aged Gen X males (along with the oldest Millennials) who went overwhelmingly for the Tories.

But it is enormously comforting for the Right to say that they have a strong lock on the youth vote, and they will continue to do so. To hear Poilievre speak, it is as if the housing crisis sprung up overnight in 2015 right as Trudeau was elected — instead of being the result of decades of joint Liberal and Conservative misrule, including the last Tory government of which he was a part. Other than deregulation, which really needs to happen at the municipal rather than the federal level, it is also hard to see Poilievre’s neo-Thatcherite agenda as anything other than a return to vintage Nineties Boomer conservatism; or as JD Vance said of him, “Mitt Romney with a French accent” (Poilievre doesn’t have an accent, but point taken).

In any event, Canada’s youth is still up for grabs, even as young and old jostle for the favor of the governing Liberals who have historically been the big-tent brokerage party par excellence. In the 20th century, Liberal leaders brokered ingenious compromises to reconcile the divergent interests of competing groups in Canadian society: English and French, East and West, capital and labor. Today, they must do the same with the Boomers and their children; they must first admit, however, that a zero-sum standoff currently exists between them, instead of ignoring the problem in the first place as Robertson did as mayor in Vancouver, and as Trudeau did as prime minister.

Enough first-time voters responded to Carney’s pledge of a Second World War-style, nationally directed industrial policy to get “government… back in the business of building affordable homes”, that is, to mass manufacture homes at scale: the very idea that his housing minister can’t seem to contemplate. But what will it take for such an ambitious plan to actually succeed?

Carney will need to compensate the Boomers and Gen Xers whose home values will start tumbling once new units enter the market en masse. A creative way to do it would be to find ways to deploy the older cohorts’ own wealth toward funding the construction boom, perhaps through the issuance of special Canada Construction Bonds that pension funds and retirees can purchase, the returns on which would be drawn from the profits to be generated by the resulting newly manufactured affordable unit sales. This is exactly the kind of financial alchemy that Carney should be able to perform. The “counteroffer” to the Boomers could then be supplemented by seniors’ discounts, subsidized nursing care, and the construction of retirement villages as part of the new industrial policy.

Whatever the case, young Canadians must realize (as well as young Americans, Britons and anyone else with this challenge) that the conflict will be settled not on the terrain of patriotism or political ideologies but of raw self-interest. Beating the Boomers at their own game will be the only way to humble them.

Long ago, it was reasonable to hope that voters thinking of voting for a scary ultra-Rightist in order to annoy the centrists whose policies kept them down might come to their senses the moment that scary ultra-Rightist looked likely to win government. Something like that happened in France in 2002. Back then, middle-class socialists, young ecologists and working-class communists lined up at the polling stations alongside conservatives to give 82% of the national vote to Rightist Jacques Chirac so as to keep ultra-Rightist Jean-Marie Le Pen — the father of the French ultra-Right’s current leader — out of the Elysée. But this is not what happened in France 25 years later, or in Canada or Australia last week.

In 2002, six years before Western capitalism’s near-death experience, Chirac defeated Le Pen because the socialist and the communist parties directed their voters to him. Under the slogan: “We vote for you today, we oppose you tomorrow morning!”, voters who were at odds with the establishment voted for an establishment figure in order to keep a neofascist out. All the while, they retained their allegiance to parties of the Left. In contrast, Emmanuel Macron won by annihilating the parties of the Left.

Working-class voters, who were suffering the consequences of the centrists’ austerity policies, were incensed with Macron, a former banker determined to impose “green” taxes on them while giving tax breaks to his haute bourgeois mates. With nowhere else to go, these voters drifted en masse to Le Pen. Then something startling happened: Macron and Le Pen grew co-dependent, their mutual antipathy notwithstanding. The more austerity he imposed on the many, the deeper their discontent and the higher her support. And the higher her support, the better able he was to appeal to anti-fascists to hold their noses and vote for him in order to keep her out.

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As this dynamic co-dependency grew, the ultra-Right won a staggering 40% of the national vote in the June 2024 parliamentary elections. There is nothing on the horizon to suggest that this trend is unravelling. In this light, history may well remember Macron more as the liberal center’s gravedigger than its redeemer.

Cut to last week and the decisive defeat of the Rightist Canadian and Australian parties that tried, and failed, to ride the Trumpian wave. Mark Carney and Anthony Albanese won because President Trump made it impossible for them to lose. By threatening to annex Canada, and by slapping tariffs on an Australia that not only has never missed an opportunity to bend over backwards to accommodate Washington’s every whim but also runs a trade deficit with the United States, it is as if Trump was determined that his Canadian and Australian copycats lose last week’s elections. Nevertheless, under the surface of Carney’s and Albanese’s victories, it is not difficult to discern social trends similar to those that rendered Macron’s victory decidedly Pyrrhic.

In Canada, after 11 years of ruling, the Liberals failed to appeal to the large sections of the working-class who either abstained or voted for the conservatives. When the Liberals nevertheless secured a razor-thin majority, they did so by cannibalizing, Macron-style, the Left-of-center (the NDP and the Parti Québécois). In Australia, Labor’s landslide victory obscured the fact that it won with a historically low percentage of the primary vote. Although it won most seats in the working-class suburbs of Sydney and Melbourne, Labor did so on second preferences, while continuing to bleed first preferences — especially amongst the immigrant communities which used to be the party’s most reliable vote reservoir. As in Canada, Australia’s centrists won by feeding off the only Left-of-center force, the Greens, but had no luck in unseating a significant number of Right-leaning independents (the so-called Teals).

So far, so very similar to the political dynamics in France. What makes these similarities so fascinating is that they have taken place in such different countries. France’s economy is joined at the hip to that of Germany and the rest of the European Union. Australia and Canada, on the other hand, are resource-based economies integrated into the energy-industrial-military complex of the United States.

Because of its location, Canada sells 75% of its exports to America, while also directly investing more of its capital in the US than the US invests in Canada. As for geographically isolated Australia, its economy is also deeply intertwined with US conglomerates, albeit indirectly. While Australian mining companies have long been in the business of extracting fossil fuels and digging up gargantuan volumes of the country’s red earth before shipping it all to Japan and China, this roaring trade with Asia’s two superpowers is predicated on the US sourcing two crucial resources from China and Japan: manufactured goods and savings.

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This is why the political trends in Canada and Australia are similar to those in France. Despite their vast differences, the three economies are hooked into the same US-centric global surplus-recycling mechanism, whose deep crisis is steering their politics in a direction inimical to the centrists’ medium-term prospects. Politicians like Macron, Carney and Albanese may score impressive victories, but they have no plan for stemming the secular decline of their influence over their increasingly restive electorates. For years now, these electorates have been pummeled by the undercurrents of the global recycling mechanism — a mechanism that once drove their countries’ growth and stability.

The essence of this global mechanism (which I once labelled the Global Minotaur) is simple. Since the Seventies, America’s deficits have provided East Asia (first Japan, then China) and Europe (primarily Germany) the demand for their factories’ manufactures. In return, the European Union, Japan and later China sent their accumulated profits to Wall Street to be recycled into US private and public debt, some equities, and real estate. A Chinese official once described this mechanism to me as a “dark deal”. “Our Dark Deal with the Americans,” the official explained, “turns on the US trade deficit, which keeps demand for our manufactures high. In return, our capitalists invest the bulk of their dollar superprofits into America’s FIRE”. (The acronym stands for “Finance, Insurance, and Real Estate.”) “Once this process got underway, America shifted much of its industrial production to our shores.”

The problem with this global recycling mechanism was that, to function smoothly, it had to generate larger and larger imbalances: greater trade deficits for the US and more accumulated savings for Northern Europe and East Asia. But there are limits to how large imbalances can grow. Ruptures are inevitable. The longer they are delayed, the greater the pain they inflict — a truth that centrists never acknowledged, not even when it was tearing down their houses.

Trump’s greatest strength comes from asking the pressing question that the centrists refuse to countenance: what comes after the Dark Deal? What comes after the imbalances built on the US trade deficit have proven unsustainably massive? Scott Bessent, Trump’s Treasury Secretary, put it succinctly in a recent speech at the IMF: “Everywhere we look across the international economic system today, we see imbalance… This status quo of large and persistent imbalances is not sustainable… The persistent over-reliance on the United States for demand is resulting in an evermore unbalanced global economy.”

Their proposed solutions may be wrongheaded, half-baked, even crazy, but at least Trump’s team has identified the problem. Voters may not understand that these unsustainable imbalances are at the root of their plight, but enough of them have the sixth sense to intuit that Trump’s people are on to something, unlike the centrists who act like King Canute ordering the tides of discontent to reverse course.

Inexcusably, centrists treat Bessent and the rest of Trump’s economic team as Neanderthals. They forget that the people they celebrate as the architects of the globalized capitalist order, an order which they now mourn, had warned them in good time. On 10 April 2005, when no one was interested in bad news stories, Paul Volcker, the man who had helped design the devastating Nixon Shock and later headed the Federal Reserve during the formative years of the Dark Deal, foreshadowed everything Bessent is now saying:

“What holds [the US economic success story] all together is a massive and growing flow of capital from abroad, running to more than $2 billion every working day, and growing… As a nation we don’t consciously borrow or beg. We aren’t even offering attractive interest rates, nor do we have to offer our creditors protection against the risk of a declining dollar… We fill our shops and our garages with goods from abroad, and the competition has been a powerful restraint on our internal prices. It’s surely helped keep interest rates exceptionally low despite our vanishing savings and rapid growth. And it’s comfortable for our trading partners and for those supplying the capital. Some, such as China, depend heavily on our expanding domestic markets. And for the most part, the central banks of the emerging world have been willing to hold more and more dollars, which are, after all, the closest thing the world has to a truly international currency… The difficulty is that this seemingly comfortable pattern can’t go on indefinitely.”

Three years later, Wall Street crashed. Two decades of centrist denial followed, bought at the price of gigantic money printing for the few and harsh austerity for the many. With Volcker and his ilk sidelined by the governing centrists, the political center began to fragment across the West — with deficit countries like France, Canada, Australia and the United Kingdom (not to mention my country, Greece) closer to the eye of the storm. It was only a matter of time before someone like Trump would rise up, the inevitable outcome of the centrists’ refusal to acknowledge that the global surplus recycling mechanism, the Dark Deal, was dead in the water — just as its predecessor, the Bretton Woods system, was before President Nixon killed it in 1971.

Sure enough, Trump’s policies are unlikely to rebalance the world economy. While some manufacturing will return to America, automation will render this a jobless growth surge. Big Tech’s burgeoning cloud rents will further undermine any actual rebalancing. China will probably move on, gradually transforming the Brics into a Bretton Woods-style system anchored by the yuan. The European Union will fail to rebalance its internal macroeconomy, sinking deeper into stagnation. The planet’s climate will go haywire.

But, though Trump’s policies may not work in the US, France, Australia, Canada or anywhere else, his willingness to upend a broken global system is enough to garner political support for, at home, unprecedented authoritarianism; and abroad, a confrontation with China that casts doubt on our species’ long-term prospects. Meanwhile, centrists stuck in their delusion that the Dark Deal can be sustained are condemned to keep losing even when they win.

Instead, they have delivered a muddled, mixed result that neither fully confirms nor denies either of these projections. With the long, dramatic count not yet completed, it looks like the parliament will be divided between a returned but humbled Liberal government under Prime Minister Mark Carney, holding on to minority status, and a rising but still not triumphant opposition Conservative Party under Pierre Poilievre. Both these parties made sizable gains, the more consequential performance likely coming from Poilievre, who stole a number of working-class seats from progressive parties. But both will nonetheless also have to deal with the sting of dashed expectations. Neither side was handed a decisive victory: Carney and Poilievre each fumbled the historic leads they held at different turns of the campaign, failing to provide a compelling or unifying vision of leadership before the electorate.

This is a sharp turnaround in fortune for the Tories. Not long ago, they enjoyed a 25-point lead, with an expected 200-seat landslide; but the resignation of Justin Trudeau powered-up by Donald Trump’s tariff war scrambled their strategy. As a result, the ruling Liberals were sufficiently emboldened to expect their own mega majority at the outset of the race.

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By Michael Ledger-Lomas

At the time of writing, the Liberals had 167 seats, just five short of the 172 needed for a majority in the House of Commons; the Conservatives had 145 seats, the separatist Bloc Quebecois had 23, the left-wing New Democrats seven, and the Greens one. One leader, Jagmeet Singh of the NDP, has lost his seat, and remarkably, despite his party’s upward movement, Poilievre is in danger of losing his own — which is located next to the constituency that elected Carney to parliament for the first time.

All those hoping for a return to stability after a half-decade of minority rule face only further volatility. There was neither a Blue nor a Red Wave — only more uncertainty, as Canadians face an aggressive threat to their independence in Washington, and a dangerously divided parliament in Ottawa. This would be a trying enough in ordinary times, but these are not normal days.

Roughly two and a half years ago, Poilievre’s Conservatives began their steady ascent to frontrunner status, where they would stay until just a few months ago. The headwinds were with him, as he looked set to become the Canadian incarnation of a global wave of revolt against liberal elites. Poilievre found a formula for translating the populist energies that roiled America and Europe into a distinct local context: he downplayed culture war concerns, which never really took off in Canada, and instead played up the cost of living, tying creeping inflation and spiraling housing costs to Trudeau.

A singular focus on Trudeau’s unpopular carbon tax, distilled by the slogan “Axe the Tax”, seemed to resonate with working-class voters; indeed, it was so effective that it caused the Liberals to cave in the middle of 2023, catalyzing a chain of events that would end with the ousting of Trudeau in January of this year. But success came too early, as the party proved too slow to react to the change at the top, sticking to their anti-Trudeau playbook even as Carney succeeded him; then Trump began issuing threats of annexation, followed by a barrage of tariffs, declaring economic war.

Poilievre had ample opportunity to shift his narrative to one of existential national defense but only did so belatedly or half-heartedly. Instead, the Tory leader banked on affordability, which he intended to hang like a millstone around Carney’s neck: after all, Trump may be the issue of the moment, but how could Canadians forget the “lost Liberal decade” during which Trudeau’s policies, as Poilievre tells it, exploded the cost of living?

Carney, though, canceled Trudeau’s carbon tax on day one, distancing himself from the former PM and rendering useless Poilievre’s Trumpian schoolyard taunt (“Carbon Tax Carney”). Outflanked on patriotism and weakened on affordability, the Conservatives were backed into a political corner.

Meanwhile, Poilievre’s provincial counterpart in Ontario, Doug Ford — with whom a blood feud has now broken out — proved how Canada’s Tories could win in the age of Trump: weeks before, he called and decisively won a snap election centered on tariffs, precisely what Poilievre didn’t do. The federal party had also managed to antagonize provincial sister parties in Nova Scotia and British Columbia, which could have boosted Poilievre’s chances. Repairing the fissures of the conservative movement will be vital for the Canadian Right if they are to continue their quest for national power.

An earlier Poilievre pivot away from his Trudeau-era slogans and towards recognition of the Trump threat could have prevented the bleeding of support. Poilievre was shown to be right, however, in refusing to choose between affordability and Trump, as the spate of working-class votes he stole from the New Democrats in industrial and suburban Ontario can attest. These seats, some held by the union-backed NDP, were expected to defect to Carney rather than Poilievre, who ended up benefiting handsomely.

But the Tory leader could still have been more creative in blending the two issues, that is, showing how the US trade war would compound an already weakened economy. But he was much too cautious in scaling back his counterpunches against the Yankees, as if fearing to cross a line with parts of his base who might still admire the president. In any event, while Poilievre may have secured the best conservative result since 1988, he fell short. If he loses his own Ottawa-area seat, it will be a desperate (but not fatal) embarrassment.

Not that Mark Carney has covered himself with glory. He also had a reasonable hope of marching to power with a thumping majority. When the campaign started, the Liberals were heavily favored to pull off the impossible: a majority after a decade in government. But though they have secured a fourth mandate, it is a vulnerable one. It can survive only by scrapping together ad hoc supply-and-confidence deals with New Democratic and Bloc Quebecois MPs — precisely the dynamic that exhausted the energies of the late Trudeau government, while at the same time facing an aggressive and empowered Conservative opposition.

In the end, Carney’s professions of a new direction for the Liberal government failed to move the needle. The baggage of the Trudeau era proved too much: too many families and young people felt as if they aren’t getting ahead; working-class Canadians in industrial cities such as Hamilton and Windsor identified with Polievre’s “boots-not-suits” message, rather than the expert reassurances of Carney and the old Trudeau ministers; and crucially, the multicultural “905” Greater Toronto Area suburbs, where Canadian elections are won and lost, broke the Liberal “red wall” there to elect just enough Conservatives to deny Liberals the advantage in Ontario, effectively blocking the Liberal Party’s path to a majority.

The government’s disastrous mismanagement of the housing, immigration, and law-and-order files has hit hard in these suburbs, where immigrant communities themselves felt the brunt of overpopulation and a surplus of non-integrable newcomers. Indeed, the surge in crime rates and the appearance of tent cities in these otherwise respectable middle- and working-class neighborhoods are what may have lost the Liberals their formerly reliable and vital bedrock of support.

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Only in Quebec did Carney’s Liberals make significant gains, mostly at the expense of the separatist Bloc Quebecois, whose social democratic base feared the prospect of a Poilievre government so much that they voted against their nationalist inclinations to hand Carney enough to claim the win. With 24 seats, however, the same Bloc, which rejects the very idea of Canada, as it exists, may play the part of kingmaker in the hung parliament, further testing national unity in this already fractious federation.

With these results, governing will be far from easy for Carney, and after a short, raucous 45th parliament, Canadians may well have to return to the polls later this year or next to dispel the indecision that has descended over Ottawa. While there were no decisive winners, the loser of this race may just be the national interest, which desperately needs a stable majority government as Canada fights for its sovereign existence and standard of living against a vicious and implacable foe.

At the start of his ministry, Mark Carney made a bizarre gesture: he winked at the camera as if to cross the fourth wall and communicate something to those watching; on social media, Carney was then compared with the protagonists of House of Cards: a shrewd Machiavellian figure who comes in from the shadows to seize and hold power against great odds. Instead, what we Canadians got was a House of Cards in the more literal sense, a fundamentally unstable structure that can be blown away at any time by a strong gust of wind. And a storm is brewing across the border.

Mark Carney, however, understands the need for action. The new Canadian Prime Minister made two important observations last week. The first was to recognize that his nation’s mutual relationship with the US, based on trade, investment and defense, is over. It’s that straightforward. Then he went on to say something with a clarity I have yet to hear from any European leader: “We will need to dramatically reduce our reliance on the United States. We will need to pivot our trade relationships elsewhere. And we will need to do things previously thought impossible at speeds we haven’t seen in generations.”

The UK did attempt such a dramatic change with Brexit. It severed a similarly, deeply interwoven relationship. Britain had failed to make the right policy decisions to allow its membership of the EU work to its advantage. But it has subsequently failed to make the right policy choices in order to prosper outside the EU. Contrary to certain predictions, the economy has not collapsed. But it does continue to disappoint. Neither the UK, nor Europe, seems to have learned the lessons of Brexit.

Imagine if it had happened on a larger scale – imagine if the biggest country had left the club. If Germany had made the decision to leave, the entire EU would have had no choice but to reboot their model. The US disengagement from European security and economic cooperation is on even a bigger scale and there’s no sign of a reboot.

America has occupied a role in the world’s economic and financial architecture that nobody else wanted to fill. But Trump is determined to undo this. He has imposed trade tariffs on steel and aluminum; on cars; on China; and even on Mexico and Canada. No longer willing to be the lender of last resort to the global economy, he is already calling Wednesday “Liberation Day”, when an announcement on his so-called reciprocal tariffs is expected. These are already higher and more comprehensive than what the President promised during his election campaign.

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Not content with disrupting the global economy, Trump has also upended the transatlantic security relationship. NATO will remain formally operational. But the unconditional nature of NATO’s security guarantee, as enshrined in Article 5 of the treaty, is unrecognizably different from Trump’s transactional version. He has repeatedly said he would only supply protection to NATO members who are willing to meet agreed defense spending targets.

This was borne out in the leaked Signal messages, in which administration officials discussed classified military operations. The most worrying aspect of this for us is not the security breach. It is the absolute disdain they expressed for the Europeans. I, too, have criticized Europe’s failure to meet agreed defense spending targets. I have also characterized the European beggar-thy-neighbor mentality. But when Pete Hegseth, the US secretary of defense, calls Europeans “free-loaders”, and JD Vance says that he hates “bailing out Europe again”, then it isn’t a comment, it is now policy. The conversation may have ostensibly been about the US attack against the Houthis — but it was the Europeans who were really shot down.

So where do we go from here? First, Europe needs to stop reacting, and start acting. Reaction is for losers. The EU is gearing up to retaliate, but just look at what happened when Trump imposed tariffs on steel and aluminum. Ursula von der Leyen, the European Commission president, immediately announced retaliatory EU tariffs. Trump shot back the next day with a tweet, in which he threatened 200% tariffs on European wines and champagne. Under pressure from France and Italy, Europe’s largest wine exporters, the Commission immediately went into retreat and postponed the retaliatory tariffs. This is the problem when you run large and persistent trade surpluses. You think you are strong and successful, but in reality, you are weak and dependent, and vulnerable to protectionist trade policies. A trade surplus means that there are a lot more European goods in the US than US goods in Europe. We are going to run out of things to tariff long before Trump does.

Europe is talking about placing tariffs on services. It has some leverage here. The US runs a surplus in services against Europe. So here, the tables are turned. But Europe’s goods surplus is twice as large as its services deficit. And we should remember that it is consumers who pay the tariffs. The US public might be less upset about a tariff on a German car because alternatives exist in the US market; meanwhile European consumers are completely invested in Apple’s franchise of services, for which there are no alternatives.

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It is not just the trade imbalances that favor the US. In extremis, America could pull the plug on Europe’s access to the US financial markets. The European economy would collapse overnight. They might talk about “strength and self-confidence” and insist, as Robert Habeck did, that they will not back down, but there is no scenario in which Europe, or Canada, can win a trade war against the US, not even aim for a draw.

But they could take action. They could do what Carney is suggesting and change their economic models. If the US is going to stop buying European goods, then Europe will have to buy its own. This means a calculated expansion of investment and demand. Most of this would have to come from the private sector — but the public sector would need to support this actively. It would require a complete recalibration of the bloc’s economy: lower taxes, possibly a temporary overshoot of public borrowing, but primarily a lot of deregulation to free up the entrepreneurial spirit. It is what the UK should have done after Brexit —and didn’t.

The EU, perhaps with Canada’s help, should start to promote the euro as a rival to the dollar. This would not be a marketing exercise. Again, it would require a reboot of how Europe conducts economic policy. Rather than running trade a surplus against the rest of the world, Europe should attempt to fill the role the US is vacating under Trump and start to import more than it exports.

All this is possible in theory. But, alas, I don’t see it happening. Just look at the backlash in the UK after the Labour government imposed a few minor welfare cuts, mostly to disability pay. Europeans enjoy comprehensive welfare systems, like Universal Credit in the UK, or the Citizens’ Income in Germany. The US spends far less on these sorts of social transfers than the Europeans do. Where the Europeans have housing benefits, the Americans have shelters and food stamps. Carney is right that the economic transformation required is beyond anything we have seen in generations.

I doubt that Europe’s coalition governments and fragmented parliaments have the political will and the majorities to deliver such change. The Europe I know is comfortable but divided — a combination not conducive to change. I think it is more likely that the Europeans will once again fail to rise to the occasion. They may find it more expedient to pay Trump the protection money he is asking for, as a quid pro quo for security guarantees. The Europeans will become poorer as the years pass, and the dollar will remain the leading global currency. In other words: Trump wins.

Those Europeans who complain the loudest about Trump are the same who will oppose the action needed to make us more independent from him. They will oppose higher defense spending, lower welfare spending, lower taxes, deregulation and prying open business cartels to allow new generations of entrepreneurs to take their place. At EU level, they will oppose the removal of internal barriers to the single market, and the reversal of Net Zero, corporate governance and the tech legislation which has become such a burden for European companies.

When Trump makes his big announcement on Wednesday, I expect the Europeans will either scream and make empty threats, or fall into depression. And they will all be focused on the man. But what they should do is get Trump out of the picture and start to take action.

Canada’s prime minister has the advantage of being one step ahead of Europe. He has accepted the enormity of the situation and is thinking about what next. The Europeans, though, are stuck in a dead-end littered with cans from the past, and unfortunately there’s nowhere left to kick them.

The phrase “sleeping with an elephant” has come to define US-Canadian relations in the minds of many Canadians. But since President Trump launched his second term in Oval Office, the elephant has been neither friendly nor even-tempered. In fact, its twitches and grunts have recently become more like angry kicks and menacing roars, especially with Trump’s imposition of a 25% tariff on most goods from Canada.

Rather than meek acceptance, however, the response in Canada has been a surge of nationalist sentiment. Only, at the helm of this patriotic revival is a new prime minister, Mark Carney, for whom the substance of Canadian identity amounts to little more than . . . globalism, multiculturalism, and liberal proceduralism.

Trump has offered varied justifications for his punishing tariffs. He alleges an uncontrolled stream of illegal immigrants and fentanyl pouring across the border, notwithstanding the Canadian government’s serious efforts at interdicting such flows. He is on much firmer ground when he points to the trade imbalance between the two countries, with Canada running a significant trade surplus with the United States; about 20% of what Canada produces is consumed by Americans.

At a meeting in Mar-a-Lago, Justin Trudeau, the recently ousted prime minister, protested that such tariffs would “kill the Canadian economy”, eliciting from Trump a suggestion that Canada would be better off as the 51^st state. This line was initially heard by most people as a jest, but Trump has become fixated on the idea. Remarks about the US-Canadian border as an “artificially drawn line” have fueled fears that his real endgame is annexation.

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Perhaps Trump is just trolling, something that certainly wouldn’t be out of character for him. But a recent post on his Truth Social website signals that he may mean business. “The only thing that makes sense is for Canada to become our cherished Fifty First State”, he wrote. “This would make all Tariffs, and everything else, totally disappear”. Trudeau, for one, takes Trump at his word, stating that he believes the real aim of the tariffs is nothing less than “a total collapse of the Canadian economy because that will make it easier to annex us”.

Trump’s tariffs and his annexation rhetoric have had consequences that he surely did not intend. Canadians have never been big flag-wavers, but sales of Canadian flags have skyrocketed, American liquors are being pulled from store shelves, grocery stores are slapping labels on domestically produced items, and many people are scrapping travel plans to the United States. A movement to boycott US goods is underway.

The tariffs have also been a godsend to the governing Liberal Party. Trudeau’s plummeting approval ratings threatened to deliver his party a crashing defeat in the election to be held later this year. But when Trudeau’s unpopularity prompted his resignation, the Liberals were forced to replace him as party leader and prime minister. Mark Carney, an economist and banker with no previous experience in elected office, won in a landslide in the party vote. Like a phoenix rising from the ashes, the Liberals are now inching their way back up in the polls, though they still face a steep uphill climb.

Carney’s victory speech on 9 March tapped into the rising nationalist sentiment. Switching back and forth from English to French, Canada’s two official languages, he called out Trump for “trying to weaken our economy”. But more than the Canadian economy is at stake, he warned: “The Americans want our resources, our water, our land, our country. If they succeed, they will destroy our way of life.”

What exactly did Carney mean by the phrase “our way of life”? Hockey, maple syrup, Tim Hortons, and politeness come to mind. But the features of Canadian identity that Carney highlighted were all political or institutional, such as universal health care and the country’s strong tradition of social programs and wealth redistribution. He also lauded Canada’s much-vaunted policy of multiculturalism: “America is a melting pot. Canada is a mosaic.”

“America is not Canada. And Canada never, ever, will be part of America in any way, shape, or form”, he declared to an enthusiastic audience. He made it clear that the future of Canada now depends on pivoting away from economic integration with the United States to seek more “reliable” trading partners.

Carney also sought to attach the odor of Trump to the opposition party, insinuating that the Conservative standard-bearer Pierre Poilievre “worships at the altar of Donald Trump”. To accuse Poilievre of kneeling before the US president may be an overstatement, but he has voiced support for many of Trump’s policies and has a reputation of being cozy with MAGA types. He recently accepted the endorsement of Elon Musk, an action that may come back to bite him.

Still, Carney is an unlikely champion of Canadian nationalism. Born in the Northwest Territories, he spent most of his adult life outside Canada, studying at Harvard and Oxford, then working for Goldman Sachs in London, New York, and Tokyo. After a stint as the governor of the Bank of Canada, he in the same role at the Bank of England. He holds both British and Irish citizenship, making him an EU citizen.

From the perspective of nationalism, it is noteworthy that he stoked controversy at the helm of the Bank of England when, prior to the Brexit vote, he decried leaving the European Union as the “biggest domestic risk to financial stability”. Many interpreted his remark as a political intervention that overstepped his job description.

Carney also has strong ties to globalist elites, with memberships in the G30, the World Economic Forum, and the Bilderberg Group. In short, he is the quintessential Davos Man, a cosmopolitan technocrat and financial bureaucrat with a newfound fondness for nationalist rhetoric.

Arguably, what Carney defends as “our way of life” is a vision of Canadians as good global citizens pulling their weight within the rules-based international order that Trump seeks to dismantle. As Canadian political scientist Tyler Chamberlain has observed, “Canadian identity is bound up very closely with multilateralism, international organizations, and free trade. That’s the kind of nationalism that is playing well today”. Meanwhile, Canadians watch American television, cheer American sports teams, and “think like Americans in many ways that really matter — but we have health care.”

Carney is a specimen of what Canadian political philosopher Ron Dart calls liberal nationalism, which is of relatively recent vintage, the chief precedent for the present moment being Prime Minister Pierre Trudeau’s trade disputes with Richard Nixon. “Liberal nationalism usually emerges from a position taken by the United States at a given moment that threatens certain elements of the Canadian economy”, says Dart. It tends to be reactive and narrowly focused on economics.

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It differs from what Dart calls High Tory nationalism, “which comes from a much deeper grounding in the Canadian soul”. Its most prominent exponent in the 20^th century was the philosopher George Parkin Grant, but it harks back to the founding of Canada as a nation that sought to preserve British and French traditions that were foreign to the society taking shape in the United States. Instead of placing a premium on liberty and individualism, like the Americans, the Canadian High Tory tradition aspired to a more orderly society oriented toward the common good of the whole.

Over time, however, Canada was transformed into what Grant called a “branch plant satellite” of the United States, a supplier of raw materials to the superpower that had emerged postwar as the “spearhead” of the dynamic liberal capitalist order. As early as 1965, Grant lamented that Canada was ceasing to exist as a sovereign nation. Dependent on the United States for both markets and defense, Canada was being absorbed, culturally and economically, into the behemoth to its south. Canada’s formal political independence might still persist for some time, Grant thought, but only due to a kind of inertia.

Grant believed that Canada was being swallowed up into an emerging global order helmed by the American hegemon. In a surprising twist, the American republic that now threatens Canadian sovereignty is a nation in open revolt against that liberal hegemonic order. Living within the gravitational field of the United States, Canada has always retained ties to its older roots in Europe. Ironically, Trump is now forcing Canada to become more internationalist in the name of Canadian nationalism.

But Dart believes this current upsurge of liberal nationalism is shallow. Though intensely felt at the moment, it is also likely to be ephemeral, lasting only as long as MAGA’s reign, since it is motivated by an external threat rather than a living memory of older Canadian traditions. “If you have no memory of anything”, he says, “then what holds you together? What holds Canadians together at this point is anti-Trumpism.”

After years rising through the ranks of the transatlantic financial elite, Carney has done little to deflect such rumours: in fact, a spate of high-profile speeches in recent weeks convey the impression that he is angling for something more than a plum retirement spent writing ponderous meditations on the future of capitalism. But if the ex-governor of the Bank of England is indeed biding his time for a shot at the top job, Carney will have to distance himself from Trudeau’s most unpalatable policies, while also positioning himself as the better alternative to Poilievre. And it appears he is doing just that, with public statements criticising Trudeau’s signature carbon tax and the recent, much-hyped federal budget, which he argued could have been delivered with more fiscal prudence.

Naturally, Carney has attacked Poilievre as well, for being a “lifelong politician” — as opposed to a Harvard-trained economist like himself — whose tax cut-heavy programme is a “Pavlovian reaction of extreme conservatism… based on a basic misunderstanding of what drives economies.” So far, his strategy for outshining both Trudeau and Poilievre involves brandishing his credentials as a technocrat who can pontificate on interest rates and business cycles in a way that his two would-be rivals never could. However, Poilievre, who has excelled with his pugilistic, anti-elitist rhetoric, will no doubt relish this contrast of images and may take notes from the likes of Jacob Rees-Moog (a Poilievre lookalike both physically and ideologically), who clashed with Carney in the lead-up to the 2016 Brexit referendum.

The battle lines for Carney in Canada would be very similar to the contest between Remain and Leave: making an explicit connection between his enemies in Britain and those in his home country, Carney reminded his audience: “Brexiters promised that they were going to create Singapore on the Thames, [they] actually delivered Argentina on the Channel… Broken Britain… sound familiar?” — a reference to Poilievre’s case that “Everything is broken” in Liberal-governed Canada.

Indeed, Carney would make for a far more intellectually compelling opponent and foil to Poilievre than the distinctly non-intellectual Trudeau, since the two represent two diametrically opposed conceptions of capitalism. On the one hand, Poilievre, like his UK counterparts Rees-Mogg and Liz Truss, believes in the primacy of unfettered markets and the individual as the surest agents of prosperity — to the near-total exclusion of the state, a view generally referred to as “neoliberalism” or what their common inspiration Margaret Thatcher dubbed “popular capitalism”, Right and Left-wing versions of which have, of course, predominated in the West since the Eighties, corresponding with a rise in inequality. On the other hand, Carney embodies a distinct form of political economy with roots in Canada’s past, in which states and corporations alike work to harness market forces toward common good outcomes, what Carney calls “mission-oriented capitalism” (something his frenemy Boris Johnson might have endorsed in his more communitarian phases). This is an approach that may in theory hew close to social democracy, but which in practice elevates a class of corporate elites to manage society’s competing interests. Neither seems particularly inspiring but Canadians may soon have to make a choice between them.

Today, the neoliberal model that Poilievre holds to has been much dissected and debated: he will try to roll back superfluous local regulations in the hope that market forces will deliver, without further need for guidance. But much less is known about the paradigm and lineage that Carney belongs to. What exactly would a Carney government look to do?

One way of answering the question is by shedding more light on Carney’s historical antecedents. For this, we may turn to Peter J. Cain and A.G. Hopkins’s theory of gentlemanly capitalism, which posited that the strategic and economic policies of the British Empire in its heyday, encompassing Canada in its founding era in the 1860s, were determined by transnational financial elites in the City of London, as opposed to the provincial manufacturers and smallholders whom the desire for colonial markets is sometimes attributed. The modern equivalent of the “gentlemanly capitalist” class would be typified by the Mark Carneys and Klaus Schwabs of the world: their outlook was shaped more by their shared material interests, straddling the empire, than by their local and national attachments.

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Canada’s global orientation has often been determined by the direction of capital flows. As historian Andrew Smith has shown, in his application Cain and Hopkins’s thesis to the Dominion of Canada in particular, 19th century Canadian elites were resolutely pro-British because, in the age of “Anglo-Globalization,” that’s where all the big investments came from. By the same token, 20th-century Canadian elites became pro-American because the centre of wealth and power had transferred to Wall Street and Washington. In the 21st century, then, it is no surprise to see Carney fraternising with Schwab, Christine Lagarde, Larry Fink and other such figures at places like COP26 and the World Economic Forum. Just as previous generations of Canadian rulers had to “kiss the ring”, so to speak, so must he. And it is easy in this era of populist discontent for critics to attack Carney over his golden rolodex: they may charge that the shady and corrupting influence of “globalist elites” would be inescapable under a Carney administration — whereas Poilievre has explicitly banned his future ministers from ever setting foot at the WEF.

Yet there is a reason for this lasting concord between Canada’s rulers and the lords of finance, namely that for a country so large and so sparsely populated, there is never enough capital in Canada to service its insatiable developmental needs, whether it is the construction of railroads to settle the frontier or the production of armaments to win the Second World War. Thus, the nation’s two longest-serving prime ministers, the Conservative Sir John A. Macdonald and the Liberal Mackenzie King were known (and criticised in similar terms) for their cosiness with the reigning globalist elites of their day, whether it be the mighty Barings Bank in Macdonald’s case or the Rockefellers in King’s: it is fair then to say that from imperial times to today, Canadians have never stopped “kissing the ring,” whoever may be wearing it.

If Carney truly wanted to follow in the footsteps of these great Canadian statesmen and make a difference, he would turn his golden rolodex from a political liability into a policy asset, that is, a means to solving the greatest challenge confronting Canada today: the housing crisis, ranked as among the most severe in the developed world. After all, Carney once raised an astronomical sum of $130 trillion for financing climate investments at COP26, something he could not have done were it not for his intimate connections with asset managers and institutional investors the world over: could he do something similar as PM? Solving Canada’s exorbitant housing shortage is said to cost $1 to 2 trillion, a fraction of what Carney gathered for the climate. He could then employ his technocratic expertise in blended finance and public-private partnerships to steer those investments toward a national industrial policy geared toward the mass manufacturing of housing for both the rental and ownership markets (an idea that is slowly taking shape among certain policy thinkers). This would be a titanic financial endeavour that could generate hefty returns for investors in the decades ahead, since the only thing that matches the astronomical costs of Canada’s housing crunch is the astronomical demand underlying it.

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For there are millions of young middle-class Canadians, including even the children of affluent families now priced out of emulating their parents’ standard of living, who are willing to spend their hard-earned dollars on the dream of owning a home, but are practically prevented from doing so by the draconian Nimby-ism of local governments across Canada. There is, in other words, a vast underserved market potential which a coalition of large investors could profit from: Canadian household debt is estimated to be at a staggering $3 trillion. It is precisely the kind of problem that calls for the large-scale coordination that only “mission-oriented capitalism” can mobilise.

Whatever the case, there is a strong chance that future politician and Liberal leader Carney will act in ways that confirm every accusation of elitism and arrogance that his Conservative opponents have levelled since his return to Canada. (One can hardly read his book Values without getting a sense that he just knows so much more on so many topics than you and all your friends.) But all the ambition and lust for power in the world would probably be worth it if he could deliver on the one, all-consuming issue that threatens Canada’s social peace and economic prosperity.

Of course, there is also the possibility that Carney, whether he ever wins an election or not, would just end up like Trudeau, who said all the right things at the start only to fall short miserably — in which case, Carney and Canada’s Liberals should prepare themselves for a lifetime of panic and pearl-clutching. For they will have handed power to Poilievre’s Conservatives indefinitely, before being exiled into a state of perdition that another Canadian expatriate-turned-Liberal messiah, Michael Ignatieff, once aptly referred to as Fire and Ashes. If Carney isn’t careful, that could be the title of his next book as well.

In reality, however, these announcements have turned out to be little more than PR stunts. Take the case of Brookfield, a Canadian asset manager that employs Carney as its vice chair. Last year, it announced that it was “net zero across its $575 billion asset portfolio”, only for it to be revealed that the company had in fact invested billions of dollars in fossil fuel projects, including a coal port and an oil sands pipeline. Following public outcry, Carney issued a statement in which he admitted that he was talking of “avoided emissions” — not overall emissions. And this from the man who is in charge of leading the world to Net Zero…

Carney’s back-pedalling is revealing of how companies are using “creative” interpretations of Net Zero to greenwash their image while continuing to make billions from fossil fuels. The truth is that governments haven’t fared much better. In recent years, several emission-reducing policies have been rolled out — mainly market-based emissions-trading systems, carbon taxes and subsidies for renewables. Meanwhile, huge sums of money have been poured into experimental technologies such as carbon capture and storage (CCS), with hitherto very poor results. Yet fossil fuels still account for around 80% of the world’s energy. Newly industrialised economies, first and foremost China and India, today account for 35% of global emissions. On the other hand, developed countries have seen their emissions decline.

That said, one thing is clear — while the West is clearly responsible for the overwhelming majority of past emissions, future emissions are going to be driven primarily by newly emerging economies. Regardless of what we do in the West, the billions of people who still live in poverty in countries such as India, not to mention those in Africa, and who legitimately aspire to the comforts of industrialisation, will drive a colossal surge in energy demand in the coming years. Projected worldwide consumption of all types of energy 30 years from now is about 50% higher than today, most of it in poorer countries.

This usually invites two types of response: the Malthusian-pessimist kind, which claims that this is intrinsically unsustainable, and that the world can’t afford the massive increase in fossil fuels that the widespread development of the Global South would inevitably entail; and the naïve-environmentalist kind, which contends that developing countries can rely on solar panels and wind turbines to sustainably grow their way out of poverty. Both of these responses share one thing: they’re wrong.

What’s interesting, however, is how these two approaches overlap when it comes to Net-Zero polices in the West. Climate ideology has become a dangerous mix of end-of-days apocalypticism, with thousands of young Westerners now suffering from “climate anxiety”; of individual scapegoating, where ordinary citizens who bear little responsibility for systemic problems are guilt-tripped into thinking that they bear the burden for potential ecological collapse; and of eco-authoritarian hubris, based on the notion that the West needs to drastically accelerate its process of decarbonisation.

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A perfect example of the latter is Dutch prime minister Mark Rutte’s recent proposal to drastically cut back nitrogen emissions (70-80%) in the country’s farming sector. The consequence of such a reduction would be to close down around 30-50% of the Dutch livestock and agricultural industry; according to the government, 11,200 farms will have to close and another 17,600 farmers will have to significantly reduce their livestock.

Understandably, the decision has sparked massive protests among those who see this is part of a wider plan by green elites to “reset” the international food system. They point out how Rutte himself is a golden boy and an Agenda Contributor of the World Economic Forum, among the most vehement proponents of Net Zero. According to the protesting farmers, one of the underlying reasons for the move is to squeeze small farmers out of the market, thus allowing them to be bought out by multinational agribusiness giants. To make things worse, the Netherlands is Europe’s largest exporter of meat and the second-largest agricultural exporter in the world, just behind the United States, meaning the government’s plan would cause food exports to collapse at a time when the world is already facing a global food and resource shortage — a disaster caused by the same global elites who are now peddling Net Zero.

This isn’t just happening in the Netherlands. In July, thousands of protesters stormed Sri Lanka’s presidential palace and forced the president and prime minister to resign. As in the Netherlands, the protests were sparked by the government’s decision to ban fertilisers and pesticides in favour of organic, climate-friendly alternatives — a decision that devastated millions of the country’s farmers and caused an artificial food shortage that plunged nearly two million Sri Lankans into poverty, and turned the country from rice exporter to importer. The defenestrated prime minister, Ranil Wickremesinghe, was also, like Rutte, a devoted member and Agenda Contributor of the WEF; in 2018, he published an article on the organisation’s website titled: “This is How I Will Make My Country Rich by 2025”. (Following the protests, the WEF swiftly removed the article from its website.)

In light of all this, it’s easy to see why a growing number of people view Net Zero as either a case study in utter incompetence or, even more troublingly, as the latest example of “crisis capitalism”, whereby crises are exploited (and in some cases engineered) by ruling elites to push through restructurings of the capitalist system — usually by concentrating capital and power in the hands of fewer and fewer people in a manner that would likely face unsurmountable popular opposition in “normal” times. We saw it happen with the financial crisis, with the pandemic, with the war in Ukraine. Now it is being repeated with the climate crisis.

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This is not to say that the climate and environmental crises are not real — they very much are. What we need to do is retain the capacity to separate the reality of a problem from the establishment’s political use of the latter. There are several good reasons for decarbonising our economies; climate change is just one of them — and arguably not even the most important. Fossil fuels are incredibly polluting, causing millions of deaths every year. They also, as we are now learning, make us dependent on a handful of countries that actually produce most of the world’s fossil fuels. So, moving beyond fossil fuels is fundamental, even simply from a geopolitical standpoint — and we mustn’t let the disastrous decisions currently being taken by globalist elites in the name of decarbonisation distract us from that.

There are also very good reasons to doubt that decarbonisation is really the elites’ end goal. For all the talk of Net Zero, a recent study of $634 billion in energy-sector subsidies in 2020 found that around 70% went to fossil fuels and only 20% went to renewable power generation. In 2021, support for fossil fuels actually increased compared to previous years. Things have become even worse since the start of the war in Ukraine, as several European countries have turned to coal and even fracking in a desperate attempt to replace Russian gas supplies.

All this casts serious shadows over elites’ claims of having decarbonisation at heart. But there’s one thing that more than any other raises doubts about their good faith: the fact that while they keep coming up with increasingly fantastical solutions to CO2 emissions, they largely keep ignoring the only existing technology that can help us rapidly phase out fossil fuels once and for all — without disrupting Western societies, and without denying the rest of the world the living standards they legitimately aspire to. I’m talking, of course, about nuclear energy.

The reason nuclear energy is largely absent from the decarbonisation debate is that the latter is based on a lie: that we can generate all the world’s energy needs from renewable sources — primarily wind and solar power. This has become a mantra for much of the climate movement, but it’s a delusion.

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Aside from the problems arising from covering colossal tracts of land with wind turbines and solar panels (which require hugely polluting rare earth elements, most of which are in China) to meet the world’s growing energy needs, the fact is that both are intermittent and energy storage technologies don’t come close to what would be needed. Even with a high percentage of renewables, a stable, constant source of energy would still be needed — and that’s either going to be fossil fuels or nuclear energy. As James Hansen, the Nasa climate scientist who first warned the world about the dangers of climate change in the Eighties, has pointed out, nuclear is “the only viable path that has been proposed for rapid global decarbonisation”.

This, then, is the great Net Zero lie: it’s primary goal isn’t remedying the climate crisis. After all, a solution to the crisis stands right in front of us — only to be ignored by our political and financial elites. Faced with such deception, it’s hardly surprising that many are starting to question their motives; and in more and more countries, are starting to let it be known that they have had enough.

Carney, of course, is a near-perfect specimen of homo financicus, a recent offshoot of common humanity that seems to sleep less, read more, earn more, do more than the rest of us. Among other things, Value(s) could be a field-guide to the subspecies: its PhD-holding author runs marathons, gets up before dawn to meditate and read the Classics. He analyses international finance with penetrative intensity. A father of four, he’s 56 years old but doesn’t even have the grace to look it. Some people think he looks like George Clooney. If he sometimes sounds a bit pleased with himself, we should remember that he has quite a lot to be pleased about.

But if Carney himself is relatively easy to describe, his book is much less so. Several famous names have had a go. Subtitled Building a Better World for All, it comes larded with glowing quotes from the likes of Bono (“a radical book that speaks out accessibly”) and Christine Lagarde (“Indispensable”). These endorsements are a pointer to the worst thing about the book: Carney’s namedropping. He frames the entire narrative as the result of a slightly over-written lunch with the Pope, and his cast of characters comes from the upper slopes of Davos. Not that Carney is wowed. Most super-famous people are disappointingly normal, he declares, though he admits to being impressed by Emmanuel Macron, the Grand Shiekh of the Al Azhar Mosque, Bono himself, and Greta Thunberg.

Unlike some of the names thus dropped, Thunberg’s walk-on part in this book makes sense. The author meditates long and hard on the greatest problem facing twenty-first century politics: climate change. He’s impressive on the technical and intellectual challenges involved in making huge changes now to avert a disaster that could still be several decades and many electoral cycles away. But can a matinee idol technocrat with a big brain and sharp suit take the people with him? Is Value(s) Carney’s first step into real politics?

He certainly likes to talk about “leadership”, dedicating page after page to the topic. But sadly, it turns that out what he means, most of the time, is “management”. Cue endless lists of the sort of bland wisdom familiar to anyone who’s ever set foot in a business school:

“Leaders are different in that they have to decide. In the end, to lead is to choose… When you take decisions as leader, it will obviously help greatly if they are the right ones… People will respect a leader who has integrity and who is benevolent, but they won’t always follow them if they are not deemed to be competent.”

Sometimes this stuff is sprinkled with some erudition and cod humility: “When I worked at the Bank of England, I would remind myself each morning of Marcus Aurelius’ phrase ‘arise to do the work of humankind’.”

Frankly, the classical references are easier to swallow than some of the jargon. Carney’s thoughts on the nature of the company, corporate purpose and how to encourage businesses to behave better — and make a profit by doing so — are genuinely impressive. If politicians engage with them, we may end up with a better, fairer and more sustainable capitalism. But Carney’s editors haven’t helped him welcome new readers to the subject. See, for instance: “IIRC is working with IASB, GRI and SASB to create a cohesive interconnected reporting system (though the IMP work).” To which even readers who like to think they’re au fait with corporate governance reform might say: WTF?

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Carney’s lapses into impenetrable jargon are understandable; he’s never really had to communicate clearly to the masses. Yes, central bankers talk in public, but generally as opaquely as possible. Among his global colleagues, Carney was a chatty charmer, but the bar was low. He talks a good game about always remembering the need to win and maintain public confidence — and even makes a stab at claiming deep legitimacy for independent central banks by invoking Magna Carta. But the truth is that, while those banks are given considerable autonomy by politicians to take decisions that have profound effects on the lives of voters, they are not directly accountable to those voters.

Carney is no rabble-rouser. His idea of the BoE getting down with the people is updating the portraits on bank notes. More telling is what he doesn’t mention. Nowhere, in almost 600 pages, does he find space to discuss quantitative easing — the “extraordinary” monetary policy that continued on his watch. Creating new money to buy bonds, and lower interest rates, had a profound social and political impact. It saved businesses and saved jobs; without it many people, especially younger and poorer ones, would have suffered significant hardship. But the side-effect was pumped-up asset prices. Effectively, central banks made people who own property much richer, and made it much harder for people who don’t own property to buy it. Voters are owed more of an explanation for this than Carney offers.

But when you have a hammer, problems look like nails. If you’ve worked as a carpenter, you tend to want to make things out of wood. And so Carney is keen to take the model of independent central banking into climate change policy, proposing “independent Carbon Councils” that would make quite profound decisions about the price of carbon emissions. He’s careful to maintain that, in the end, elected leaders must sign off big distributional decisions, but makes no bones about trying to find ways to keep those decisions away from voters: “Delegating responsibilities helps insulate decisions with significant long-term implications from short-term political pressures.” Never mind addressing such pressures, let’s just duck them — a novel approach to “leadership”.

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For all that, Carney’s book is still good — and the best bits are very good indeed. Unlike some global-minded liberal types, he recognises that the nation still matters. He sees patriotism as not just legitimate, but a way of actually helping countries work together on big problems. He understands that markets haven’t worked for everyone and won’t without sensible state action. He offers a lot of ideas about things like skills, education and employment that would make economies more productive and societies fairer. And his critique of “market societies” in which common values have been eroded, and individualism trumps social obligation, should be read and absorbed by every technocratic centrist wondering why those terrible populists do so well despite their terrible policies. “Building social capital requires a sense of purpose and common values among individuals, companies and countries,” Carney says.

That might sound like an uncontroversial statement of post-liberal orthodoxy — but remember that Carney himself is no post-liberal. He’s not just a Goldman Sachs-educated archduke of Davos: he’s a potential Liberal Party prime minister of Canada. And whereas the current holder of that title, Justin Trudeau, has largely embraced the identity politics that is rendering liberalism illiberal and unattractive, Carney’s book has no time for any of that — or for Trudeau himself. Other technocratic leaders get approving namechecks, but there’s not a single word about Canada’s current PM. Subtle, eh?

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Value(s) has enough ideas to fill a manifesto, but gives no overt sign that Carney is plotting a political career — an omission that suggests he wants to keep his options open. Could homo financicus make a sudden evolutionary jump to become a full-blooded politico? Less accomplished men have done so before him: Macron is an ex-banker who had a fraction of Carney’s experience when he took the Elysée; Trudeau, on the other hand, was a supply teacher. Barack Obama a law lecturer.

But those leaders are not the real comparators here, not least since they have all, in different ways, failed to live up to expectations. The liberal centre, the tribe of just-do-what-works technocrats, has lacked truly successful leaders since Bill and Tony were taken from us. Clinton and Blair were policy wonks and globalists who could still instinctively feel the mood and priorities of people who loved their communities and their countries. They have had no true heirs. Obama talked the talk, but in the end couldn’t hide his scorn for “bitter” people who “cling to guns or religion”. David Cameron put on a decent act but lacked conviction or spine. Even his greatest fans wouldn’t claim Joe Biden will define an era in the way Clinton and Blair did.

Could Mark Carney take the good ideas from his impressive book and try to make them work in the messy world of politics?  If he did and it worked, he’d be the closest thing the real world has seen to the West Wing’s Jed Bartlet: a liberal intellectual technocrat with a devout Catholic’s social conscience — every sensible centrist’s political fantasy. But then, fantasies are fictional for a reason.