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products levelled, the Canadian dollar began its long decline in relation

to the United States dollar. When the Canadian government moved to

have oil and gas production owned in Canada [indeed, nationalized in

Petro Canada, which was later privatized in the neoconservative

reduction of government activities in the 1990s], during

the OPEC oil crisis, the Canadian dollar took a precipitous fall, from

about 90 cents to about 80 cents, from which level it continued its slow

decline in relation to the United States dollar.

This was a bad time for North America. The whole world suffered from

inflation with Euro Dollars and Petro Dollars in abundance, but North

America suffered from stagflation. It stagnated in productivity growth.

It had inflation and unemployment. It also experienced obsolescence in

its “smoke stack industries”. Iron and steel, and automobiles

were better made in other countries with cheaper labour and more recent

technologies. It looked like the beginning of the end of American

superiority. There was talk of the deindustrialization of America,

but, America was not going to fade all at once. Indeed, it was going

to recover its position.

At this time, when globalization was replacing nationalization, just

as nationalization had replaced regionalization in the United States

in the nineteenth century. American national industries, under threat,

became protectionist. The Congress took back from the Executive some of

the initiative in legislation related to commerce. Countervailing and

retaliatory duties were placed on incoming goods. Canadian exports of

fish, meat products, iron and steel, and forest and agricultural products

were favourite targets. In these circumstances

Canada began to seek an agreement on trade, and, indeed, before the

1980s were out, a Free Trade Agreement was achieved. The most important

part of the FTA was a “disputes settlement mechanism” by which Canada hoped

to stop United States neo protectionism from piecemeal destruction of its

exports to that country. The subsequent North American Free Trade Agreement

seems to have been motivated more by an attempt to get a market as large

as possible, and to permit the exploitation of comparative advantages

throughout the continent: a matter of intercontinental competition,

North America, vs. Asia, vs. Europe.

Tarnished Golden and Silver Ages

In the 1990s Canada accepted its attachment to the North American Continent

and its need to find a different entry into world markets, particularly

a niche in the market for manufactured goods. Of course, a strong

vestigial reliance on primary products remained, particularly in Western

Canada. Atlantic Canada is a more complicated case. The west continued

to rely on exports of primary products to rapidly industrializaing

Asian countries. Despite its general acceptance of the new global

situation, Canada remained in recession with sluggish productivty gains

through the middle of the 1990s.

In 1996 the economy of North America seems to have bottomed out. In 1997

and 1998, employment grew, productivity grew, inflation remained low.

GDP grew at an acceptable 3% to 4%. The United States, perhaps because it

had accepted the readjustment process of downsizing, privatizing,

deregulation, and reduction in wages, more than Canada had, [but more

likely because Canada had a more sever adjustment to make, and had to cope

with internal political problems related to the structure of the

federation and its entanglement with a more fully developed social welfare

system]

experienced a fuller recovery than Canada. Neither had a full

blown Golden Age. It was more likely a Tarnished Golden Age for

the United States, and a Silver Age for Canada. The United States

continued to have a serious deficit in trade, financed by imports of

capital. That is, superiority in production of goods continued to slip

away. In the provision of certain computerized services, of course, the

United State retained its lead. Canada continued to have high unemployment

and slow growth in productivity until late in the 1990s, and it continued

to rely to a significant

extent on “commodity” exports, the prices of which continued to fall until

1999. Real living standards in Canada fell over the 1990s.

In 1997, the advance of Asia ended, temporarily, and a fairly deep

recession set in. From an historical perspective, there was nothing

unusual in this. The frontier of the expansion of industrialism had

always experienced a boom and bust cycle. What happed in Asia was

typical. There was over expansion as the investment process itself

generated profits for projects that would never produce a profit

once the investment was in place. Gross inefficiencies and corruption

once again characterized the boom period of capitalistic expansion.

This became particularly evident in Thailand. Investment stopped,

pulling down the value of the baht, the Thailand currency. This meant

that Thai debts could not be paid, and Thai markets collapsed

This affected sales and profits in Malaysia, where similar problems and

a similar process occurred. Indeed, the “contagion” spread to most of Asia

outside of China and India, to Russia, and it would have spread to

Brazil, and then

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