Bureaucrats feed on resource dollars

By Colleen Underwood

The amount of government involvement appropriate in public policy was hotly debated at the Fraser Institute’s Student Seminar held Jan. 27 in Edmonton.

Topics included privatization of water services, private property rights, Banff national park and natural resource wealth distribution. Guest lecturer Paul Stanway, Editor-in-Chief of the Edmonton Sun, discussed media’s role in reporting economic issues.

In attendance were high school, college and university students from across Alberta. After each of the guest speakers presented their research, students gathered into small discussion groups to debate these issues.

"The issues are presented somewhat unbalanced," noted Helene Vegh, a student from Red Deer College. "The focus is on an economic point of view."

Fred McMahon, Director of the Social Affairs Centre at the Fraser Institute, compared the inverse relationship between countries with natural resource wealth and their economic growth. He uses the Netherlands’ economic situation, known as Dutch Disease, as an example where "the Dutch sucked all of the resource wealth out [of their country], stuffed it into government, [thereby suppressing] economic activity."

McMahon also discussed the "perverse relationship" that exists between government and Canadian natural resources, specifically in the case of Atlantic Canada, which he claimed led to their inflated social programs and high unemployment.

McMahon emphasized that government expenditures tend to increase–resulting in expanded safety social nets–upon the discovery of natural resource wealth. Consequently, this leads to a failing economy.

The Fraser Institute’s seminars are supposed to "introduce students to the concept of a free market economy," said Lydia Miljan, Director of the Alberta Initiative of the Fraser Instiute. The Fraser Institute, founded in 1974, directs the attention of Canadians to the relation of competitive markets to their respective country’s standard of living.