Trump points finger at wrong culprit

COMMENT Job losses stem from technology advances, not bad trade deals

Bank of Canada Governor Stephen Poloz delivered a terrific speech last week that is definitely worth a read, basically about how “creative destruction” is mostly at play behind this ever- declining share of manufacturing employment across the globe, no longer just confined to the developed world, either.

Here are some of the more lucid findings:

“Economists’ understanding of the evolution of economies is based on hundreds of years of history. Advances in technology lead to higher productivity and greater production, which in turn permit the development of new economic activities and increased specialization in jobs. Over time, the lion’s share of these new activities has arisen in the service sector. Joseph Schumpeter called this process ‘ creative destruction,’ because improving how we do things destroys the old while creating the new.

The key facilitator of this growth process is trade, both domestic and international; otherwise, we would all have to be jacks-of-all-trades.

Let me illustrate with the Canadian experience. At the time of Confederation, about half of working Canadians were employed in agriculture in one form or another. Of course, technological advances led to enormous increases in productivity, creating opportunities for people to move away from farms and into cities.

New technologies, coupled with t he newly available workforce, sparked the creation of whole new activities, both in manufacturing and in services. By the 1920s, only onethird of Canadians were still involved in agriculture.