THE LIBERALS’ NEW ECONOMIC PIED PIPER.

BARTON WILL BE IN AN IDEAL POSITION TO RE-DELIVER HIS LONG ARTICULATED WORLDVIEW… FREE-MARKET CAPITALISM IS KAPUT

Politicians need intellectual anchors, people and ideas they can turn to and lean on when the going gets rough. For some time it has been clear that the Trudeau government, from the prime minister on down, is in dire need of big thinkers and solid ideological foundations. You can only get so far with a hug and earnest vacuity in pursuit of the government’s commitment to create the long-term conditions for corporate innovation and economic growth focused on the middle class.

To help fill that void, that emptiness of thought, Finance Minister Bill Morneau has turned to one of the wor ld’s great modern spinners of global management econobiz jargon. When Morneau notified Canadians Monday that a long-term series of federal deficits loomed in the future, he also announced the appointment of Dominic Barton to lead a new Advisory Council on Economic Growth.

Who is Dominic Barton? While a Canadian by nationality, Barton is a stranger to 99.9 per cent of Canadians, although he is no stranger to the 0.1 per cent who make up Canada’s corporate elite. His appointment Monday also reveals more about the future direction of federal economic policy than the size and scope of the Liberals’ federal deficits.

Since 2009, Barton has been the globetrotting Global Managing Director of the consulting firm McKinsey & Co. As Barton admits, he actually does no corporate consulting in his role as titular head of the worlds’ largest corporate consulting firm. Instead, he roams the world’s capitals of power delivering sermons to business leaders and Davosians on the failures of market capitalism as we know it and of the need for business leaders to rethink their roles.

Barton may not be an active consultant, but Morneau described his new role as a kind of guru of growth who would “meet regularly and report to me with advice on concrete policy actions.” Other members of the advisory council were not announced. As the council’s chair, however, Barton will be in an ideal position to re-deliver his long articulated worldview, which is essentially that Nobel economist Milton Friedman’s free- market capitalism is kaput and needs to be replaced by “deep-seated systemic changes.”

Almost on a daily basis, Barton has been meeting world leaders, addressing prestigious business schools and talking to corporate executives through organizations such as the Canadian Council of Chief Executives. In January he met with the Prime Minister of India in New Delhi; on Feb. 16 with the Prime Minister of Pakistan. In Davos, Prime Minister Trudeau dropped Barton’s name during one of his cheerleading events, with Barton in the audience.

In this international role, Barton has emerged as the Pied Piper of the idea that corporations should be vehicles for social responsibility, not profits. They should act for the welfare of all stakeholders, not just shareholders. As part of his routine, Barton often cites — as he did in January at a Yale School of Management performance — Milton Friedman as the creator of the conventional view that “the business of business is business,” quoted from a famous Friedman 1970 essay in The New York Times. Those words do not appear in the online version of the essay, but Barton dismisses Friedman’s view — that the idea of corporate social responsibility is “a fundamentally subversive doctrine”— as “completely wrongheaded.”

From his new adviser, Morneau can expect to hear a lot about the need for a revolution in thinking about the role of corporations in the Canadian economy, and the need for a more co-operative government-corporate environment. Bombardier, stand by.

One of Barton’s associates in this crusade for corporate reform is Mark Wiseman, head of the Canada Pension Plan Investment Board. In a paper they co-wrote, Focusing Capital on the Long Term, Barton and Wiseman deplored financial and corporate short-termism and the unrelenting pressure on CEOs to focus on quarterly results at the expense of the long-term health of their companies and the world economy. They call for pension funds and other investors to change focus away from “quarterly capitalism and toward a true long-term mind-set.” To get there, they said, requires “a crucial breakthrough” in which “the major players in the market, particularly the big asset owners, joined the fight” to institute what Barton calls “capitalism for the long term.”

Barton has spent more than half a decade repeating his stories and theories, the same anecdotes, the same factoids, as alleged evidence for his claim that short- term thinking created the 2008 financial crisis and the decline of corporate performance. A typical talking point: “The average lifetime of companies is shrinking,” he told his New Delhi audience. “If you were listed on the S&P 500 in 1935, the lifespan of a company was 90 years. Today it is 18 years.”

Whether that bit of trivia means anything in itself is unknown. In fact, there is little or even no evidence the shorttermism plague actually exists.

Martin Mauboussin, head of global financial strategies at Credit Suisse, identified the problem last year. The existence of “short-termism is very difficult to prove,” he said. Many of the commonly perceived symptoms of short-termism simply don’t hold up to scrutiny.

A lack of evidence was also cited recently by the University of Toronto’s Roger Martin. Whether excess short-term thinking is a problem or not “is fundamentally unknowable,” wrote Martin. “There is no control group; we can’t compare the performance of America with short-termism to that of America devoid of short-termism — or even prove beyond a doubt that short-termism exists in the first place.”

Evidence or not, long-termism is on the agenda in Ottawa. Maybe the idea is to come up with an argument to support the case for long-term deficits.