Opinion | Mark Carney is uniting the world’s middle powers. Here’s what comes next - Toronto Star
Prime Minister Mark Carney is uniting middle powers. Here, he addresses the European Parliament in Strasbourg, France.
Jon Shell is Executive Producer of the Gloves Off Podcast, Chair of Social Capital Partners and a Director of the Canadian Anti-Monopoly Project.
It can be hard to see the through-line in the fury of Mark Carney’s travels. To pull ourselves out of the orbit of the United States and to preserve our sovereignty, Canada is making agreements around the world. Yet, each new agreement trades some amount of sovereignty to get something we want.
Things finally became clear this week with Mr. Carney’s speech to the European Parliament . For middle powers, achieving sovereignty means breaking free of monopolies. That’s what the fight is really all about.
Earlier this year in an article titled ”How to Fight an Economic War,” Edward Fishman wrote that in economic warfare “states don’t weaponize interdependence — they weaponize dependence.” He laid out how countries — primarily the U.S. and China — build “chokepoints,” which are near-monopolies on resources that the world needs, and then use those monopolies to coerce others. He also issued a warning: overusing a chokepoint for leverage will lead countries to build alternatives, even at impractical cost.
Prime Minister Carney has quickly validated Fishman’s concerns by proposing that “Canada and Europe should secure our strategic autonomy through deep cooperation in — critical minerals, defence industrial capacity, AI and compute, energy security, space, and payments.” That list has one thing in common: each is currently monopolized by either America, China or both. Mr. Carney is calling for no less than a coordinated revolt against the hegemons’ monopoly strategy.
Those monopolies exert enormous pressure on other economies. U.S. technology dominance pulls in more than half the world’s venture investment, attracting the best entrepreneurial talent and funding the acquisition of other countries’ most promising companies. This suppresses growth and creates a brain drain in Europe, Canada and other middle powers including Australia and South Korea. American companies’ control over digital infrastructure acts as an ever-increasing tax on everyone else.
China uses its staggering control over critical mineral refining both to coerce other countries into accepting their terms and to defend their position as the world’s manufacturing superpower. As other countries struggle with fragile supply chains, China is dominating in high-tech industries such as electric vehicles.
And the U.S. and China are battling to dominate A.I., the next great monopoly opportunity.
These Chinese and American monopoly positions aren’t mere happenstance. China has been pursuing their critical minerals strategy for years. For their part, when a U.S. company achieves a monopoly position, they act aggressively to protect it against foreign regulation and competition.
Both Mr. Carney and European Commission President Ursula von den Layen made it clear that enough is enough and they will act to recapture independence. But what would that entail?
First, they need to build. Talking about “building” is easy. The hard part is for liberal democratic middle powers to build things that provide a strategic, and not an economic, return. The Chinese critical mineral monopoly arose because the West’s reliance on market forces resulted in no building at all. Working together, Europe and Canada have the scale and resources to build the physical and digital infrastructure needed to reduce their dependence, even if each project is uneconomic on its own.
Second, they have to say “no” a lot more often. This will be a challenge for countries so used to the free flow of trade and capital in a globalized world. But for the strategy to work, monopolies must be prevented from extending their position, whether its further Chinese acquisitions of resource assets or American tech giants acquiring promising upstarts before they can compete. Government procurement can attack monopoly market share directly, the way France, Germany and Spain are moving away from monopolist data-integrator Palantir. Using the full power of the state to target monopoly market share buys time for building to work.
Finally, co-ordinating regulatory policy is key, especially for technology. A.I. presents a critical test case, as the U.S. is making it clear they oppose regulations that impede their growth, while China is equally intent on domination, while protecting their citizens through regulation at home. Collectively, Canada and the EU have the scale to put a drag on A.I. growth, giving space for domestic innovation while keeping their residents safe.
When monopoly is defeated, sovereignty, freedom and growth are a result. Opportunity grows for middle power entrepreneurs to become global leaders, reversing the flow of capital and talent. Hope returns that young people can build exciting and successful lives at home. As these difficult actions face opposition both domestically and from the hegemons, it’s these outcomes that Mr. Carney and Ms. von der Layen will need to keep front and centre. After decades of ignoring the problem, the middle power revolt against the monopolies might finally begin.
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Jon Shell is Executive Producer of the Gloves Off Podcast, Chair of Social Capital Partners and a Director of the Canadian Anti-Monopoly Project.
Opinion articles are based on the author’s interpretations and judgments of facts, data and events. More details
