Prof. Lester Thurow of the Massachusetts Institute of Technology, respected author of several books on economics, delivered a keynote speech at a policy conference of the Ontario Liberal Party in January. He pointed out that various schools of economic thought and economic policies all got stuck when it came to the hard reality of stagnating economies. While this is a world problem, Thurow advised his Canadian audience that rather than lament their difficulties, they should look for possibilities to exploit their advantages vis a vis the United States. Holding up Austria (in relation to Germany) as a model, Thurow said Canada should make itself more competitive than its giant neighbour to the south. "Canadians use the fact of living next to the US as more of an excuse than is valid. It is not an excuse for economic failure. It is guite right that Canada can't boom while the American economy sinks, but it is also guite right that you can do better, as opposed to worse, than the US economy."
Thurow also took aim at the problem of wage levels, pointing out that Canadian wages cannot go up faster than productivity. If they do, it means that some will benefit at the expense of others, or you will have inflation. The challenge is, said Thurow, to design "a set of institutions that delivers the bad news so that everybody feels he has been fairly treated." (Lester Thurow, "An Immodest Proposal for Canada", Canadian Business, April 1983, pp. 63-65.)
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