The Lost Massey Lectures (31 page)

“Canada has the smallest domestic market of any major industrialized nation. That market, in addition, is more deeply penetrated by import goods than any of the other industrialized nations.

“These factors make it difficult for Canadian manufacturers to achieve sufficient scale of operation to support world scale technology, to permit adequate research and development activities, or to compete effectively in world markets.”

It sounds plausible. But if we lift our eyes from Canada, doubts must creep in. Not only Norway, Sweden and Denmark, but Switzerland, Belgium, the Netherlands and Austria all have very much smaller populations than Canada. Small size does not seem to have handicapped their economies. And of course many very large nations have underdeveloped economies and great poverty—India, China and Nigeria are obvious examples.

Suppose we were to look at Norway or Sweden in comparison with the Soviet Union; or at the Netherlands in comparison with much bigger Spain or even Britain. And then suppose we were to decide that the differences among these nations' economies must be caused by the differing sizes of their domestic markets. In that case, we would have to come to exactly the opposite conclusion from the one endorsed by the minister of industry I quoted. We would have to conclude that a small domestic market is an important asset and a large domestic market a severe handicap.

Obviously, the size of a nation doesn't determine how vigorously its economy develops, or how prosperous the economy is. Other things are more important than size.

The trade between Canada and Norway is, in microcosm, much like the trade between Canada and the United States. That is to say, only 15% of what we send to Norway is processed and manufactured goods. But half of what we get from Norway is processed and manufactured.
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So here is Canada behaving like a semi-colonial nation, and little bitty Norway, which isn't even a member of the European Economic Community, behaving like a nation with a more highly developed economy.

We send Norway nickel ores and ore concentrates, raw material. Norway sends us back nickel anodes, cathodes, ingots and rods, more than $100 million worth in 1979.
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Some of the processed and manufactured goods traded between the two countries are similar in kind. For instance, Norway sells us thermometers, we sell Norway thermostats; we trade each other mining equipment, sound amplifiers, semi-conductors, carpets, mittens, toys, hockey equipment and quite a few other things. But Norway sends us 29% more
kinds
of manufactured and processed items than we send Norway.

Moreover, of the twelve chief items each country trades with the other, only three of Canada's are manufactured goods, while six of Norway's are. Norway's biggest exports to us include items like skis, farm machinery and commercial fishing equipment. Yet Canada is a much bigger farming country than Norway, with a much bigger domestic market of farmers and we also have big domestic markets for commercial fishing equipment and skis.
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Why, then, are we importing these things, and in big quantities, too?

As for what the minister I quoted calls “world scale technology,” Norway does fine. Glancing through the news items in the Export Council of Norway's 1979 annual,
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I find, for instance,
that a Norwegian company is exporting to the United States and to Sweden a computer controlled system for maintaining a vessel in exact position without need for anchors; another is building and equipping five fertilizer factories for the Soviet Union; another is selling underwater seismic equipment to China for geophysical survey work. Still another has built a branch plant in Brockville, Ontario, prepared to supply about 100,000 pairs of skis annually for the Canadian domestic market.

Norway makes tools of the trades for its own domestic producers, then exports those tools, too. We get fish canning machinery from Norway.
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There's a big difference between simply canning fish on the one hand, and also making the machinery to do it, on the other.

Norway struck oil after Alberta did, but Norway is already one of the world's most advanced countries in the invention and manufacture of several items used in oil production,
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and is a leader in the creation of new safety procedures and techniques.
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One of Norway's many growth industries during the past decade has been the production of non-polluting electric smelting furnaces. First they were developed for Norway's own producers; now hundreds of them have been supplied to other countries as well.
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Now hear J. J. Brown, the historian of Canadian technology:

“Canadians have made contributions to world science and technology out of all proportion to their small numbers. Some Canadian inventions made possible major world industries, but we have ended up importing from England, Belgium, Italy and the United States billions of dollars worth of equipment invented here. This is our basic problem as a nation . . . If not corrected soon, it will leave us unable to compete as an industrialized nation in the modern world.”
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To be sure, small nations can have miserable economies. Many do. So do many big nations. Norway, throughout its whole economy—consumers' goods as well as producers' goods like those I've mentioned—takes a creative approach. Canada, concentrating mainly on exploitation and export of resources, by and large does not take a creative approach. Sheer size is quite irrelevant in this area; size is not the Canadian economic problem. Economic arguments for or against the independence of Quebec cannot stand on the issue of size alone.

Is it a step backward or downward to make smaller things from bigger things? Is progression from big to small a sign of decline and disintegration?

Clearly, sometimes it is. The Chrysler motor company, if it survives as an entity, is going to be smaller than it used to be. Indeed, it is already smaller. Chrysler's share of the automobile market has been shrivelling, its deficits have been growing. Once the company was young, vital, growing, on the ball. But its recent history is a glum tale of failure—failures in judgement and forecasting, failures to learn from its competition, failure to understand the limitations of what it was doing, failure to consider other possibilities and pursue them.

Getting smaller often means things like that. As we all know, sovereignties, like automobile companies, can shrink or collapse because of inner decay or because they are nibbled and eroded by rivals, or both. That has always, so far, been the eventual fate of great empires; at the very moment when their power seemed most invincible, their wealth most enviable, their achievements most astonishing, the worm was already at work, the decline was in the making, the centre was no longer holding, things were beginning insidiously to disintegrate. For a country, getting smaller, or being cut up into smaller pieces, can certainly have connotations of dwindling, ebbing, sickening, decaying, disintegrating, failing.

But let's go back to industry for a minute, this time to the Standard Oil Company instead of the Chrysler Corporation. Back at the turn of the century, Standard Oil was not only a huge American corporation, but an outright monopoly. So ruthless were its methods of squeezing out or taking over competitors, and so powerful had it become, that in 1911, in a famous anti-trust judgement by the U.S. courts, Standard Oil was dissolved into more than 30 different companies. I'm not going to list all the new corporations that came into being this way, but four of them are among the largest oil companies in the world: Standard Oil of New Jersey, which became Esso, now Exxon; Standard Oil of California; Standard Oil of New York, which became Socony, now Mobil; Standard Oil of Indiana, which became American or Amoco. Some of the others were Atlantic Refining Company, Anglo-American Oil Company Limited, Colonial Oil, Continental Oil, Standard Oil of Ohio, ten pipeline companies, and a rail-road tank car operation.
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In short order some of the progeny became more profitable than the original company, and many of them individually came to exceed or rival it in size. The first three offspring I mentioned by name, Exxon, Standard Oil of California, and Mobil, taken as a group, today absolutely dwarf the original Standard Oil.

I for one don't wish the oil companies well—or, rather, I don't wish well their function of providing oil for fuel. I hope that particular function shrivels, dwindles and ebbs in the future, succumbs to the rising use of safe renewable forms of energy. But whatever happens to the oil industry in the future, that does not change this fact: when Standard Oil, a big entity, was reduced to smaller entities, the process at work was not at all the same as Chrysler getting smaller.

Looking at an amoeba under the microscope, we may happen to catch it disintegrating. Or we may see it being engulfed, eaten
up whole, by another organism. But we may also see it dividing. Look, two amoebas where there was one. Making little ones out of big ones, then—whether amoebas, Standard Oil companies, or new nations like Norway—can mean not disintegration but birth, with the chance for new vigor that birth implies.

In all vigorous economic life, division like this happens constantly. Perhaps it will surprise you as much as it did me to learn that restaurant employment is one of the largest categories of employment in Canada. In Ontario alone, over a quarter of a million people are employed by the restaurant industry.
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But once I knew that the restaurant industry operated on such a scale, I was not surprised to learn that the industry is rife with amoeba type division. Here are a very few examples from Toronto: a chef from Winston's started Corner House; the manager of Café de L'Auberge and his brother, the maitre d' at the Constellation Hotel, started Quo Vadis; the maitre d' from Le Provençal started Casa Baldo; a chef at Auberge Gavroche started Jacques' Omelettes; a chef from Truffles started Cafe Jurgens; the manager of Three Small Rooms started Fenton's. All are thriving, the children as well as the parents.

In creative, developing economic life, the amoebas don't always divide into more amoebas. The people who manage to spin off new organizations out of their experience in older ones don't always reproduce that older enterprise. They often are able to build new ideas into their previous experience and create new kinds of enterprises. This is a chief way an economy diversifies and retains its vitality. When that process stops in an economy, the economy stagnates.

“Big things turning into smaller things” thus has two different and opposite meanings. One implies decay and disintegration, the other implies birth and renewal of vigor. Once we recognize this, we can make more theoretical sense out of Norway's separation
from Sweden, and the vitality that both countries and their economies displayed afterwards. And we can at least hope, with reason I think, that if Quebec does insist on separating at some time in the future, the kind of division at work will be new birth.

I have tried to keep away from speculative thinking for the most part, sticking instead to how things are in real life. But to conceive of new nations as being spin-offs from existing nations does raise a speculative question about some of today's large nations. When we look through the lens of history at big sovereignties of the past, we see that they reached a time when they behaved like decaying and disintegrating organisms. Must this always happen? What if they had behaved in time, while they were still reasonably vigorous, like dividing amoebas? Is this a means by which nations, like so many other organisms, could renew their vitality instead of stagnating and withering?

Bigness means power, as long as the bigness is combined with vitality. Power is the great attraction of bigness. Practicality is not at all its long suit. For one thing, big units make such big mistakes with such big consequences. Small things make mistakes and fail too, but in the sum of things these can more easily be absorbed, written off, taken in stride. The Chrysler company, it's said, is too big to let fail; the consequences are too big, even if in fact it has failed.

An old English nursery rhyme says this:

“If all the seas were one sea,
What a great sea that would be.
If all the trees were one tree,
What a great tree that would be.
If all the axes were one axe,
What a great axe that would be.
If all the men were one man,
What a great man that would be;
And if the great man took the great axe
And cut down the great tree
And it fell into the great sea,
What a splish-splash that would be.”
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Yes, what a splish-splash the big empires make when they fail, and big companies make when they fail, all the big things make when they fail.

Bigness has another hazard, perhaps less obvious. The English biologist, J. B. S. Haldane, about half a century ago wrote a delightful short essay called “On Being the Right Size.”
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He pointed out, among other things, that sheer size has much to do with the equipment an animal must have. Insects, being so small, do not need oxygen-carrying bloodstreams. The oxygen their cells require can be absorbed by simple diffusion of air through their bodies. But being larger means an animal must take on complicated oxygen pumping and distributing systems to reach all the cells.

Haldane presents us with an interesting principle about animal size: Big animals are not big because they are complicated. Rather, they are complicated because they are big.

Haldane's principle, it seems to me, also applies to institutions, companies, governments, organizations of all sorts. The larger they are, the more complications they require: coordinators, liaison people, prescribed channels of communication, administrators, supervisors of supervisors, whole extra departments devoted to serving the organism itself. A small organization can get along without a bureaucracy. A big one cannot.

Big organizations are not big because they are complicated. Rather, they are big because they produce a huge output of telephones or have a lot of welfare clients or govern a very big population. But they are complicated because they are big.