Glance at just about any publication from the Fraser Institute and other conservative think tanks, and you will be told that too much government social spending and too much regulation of the job market damage growth and job creation. There is, we are told, an ineluctable trade off between social equity and economic efficiency.
Yet this does not readily show up in international comparisons. Germany and some Northern European countries have built highly productive economies and enjoy low unemployment despite being much more equal societies than the United States or Canada.
There is also little evidence of an equity-efficiency trade-off within Canada. Consider the case of Quebec's social and economic performance compared to other provinces.
The run up to the recent Quebec election prompted a revival of the argument that only federal transfers keep that fiscally-challenged province afloat. For example, Mark Milke of the Fraser Institute argued in the National Post that Quebec is “massively subsidized by the rest of Canada.”
This argument is hugely over-done. And it contradicts a more effective and positive argument for federalism, namely that it has been no barrier to the construction of a distinctive and progressive social model in Quebec.
Comparing inequality between societies is useful, if only to remind us that inequality is not like gravity: there is no “law of inequality”. Political choices matter. True, worsening inequality trends across the OECD countries indicate important structural forces are at work in labour markets and in making it harder for governments to redistribute wealth. But significant variation persists between countries, meaning that we are not fated to become ever more deeply unequal.