This article originally appeared in the Financial Post. Below is an excerpt from the article, which can be read in full here.
By Philip Cross, July 14, 2023
Anaemic economic growth has become so routine in Canada since 2014 that it is worth recapitulating the benefits of sustained high growth. Over the centuries, economic growth has powered vast improvements in measures of well-being, such as life expectancy, health, housing quality, leisure time, food intake, energy security, political freedom and democracy. Today faster economic growth would help Canada meet the challenges of the huge debt incurred during the COVID pandemic, a growing population and an aging society. Even the leader of Britain’s Labour Party, Keir Starmer, acknowledges that “economic growth is the absolute foundational stone for everything.”
Russia’s invasion of Ukraine is a reminder that money is needed to finance a nation’s defence and survival in war. Napoleon famously said that three things were needed to fight a war: “The first is money. The second is money. And the third is money.” The history of central banking reflects the importance of finance to waging war. The Bank of England was founded to assist Britain’s government to finance war with Napoleon’s predecessor, Louis XIV, while the first two attempts at creating a central bank in the United States were made to help deal with the country’s war debts.
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