Jim Balsillie
speaker
218 appearances
1 recordings
1 series
first heard Mar 2025
last heard Mar 2025
Jim Balsillie’s voice in public audio — every appearance, attributed to the second.
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Well, comparative advantage, it was done by David Ricardo, Ricardian comparative advantage, that says you may produce cups better than me and even saucers better than me. But if I can produce saucers comparatively better than I produce cups relative to you, if we trade, we're both better off. So it's a principle of comparative advantage.
Okay, lay that out one more time because everyone needs to understand this. So if you make a cup for $2 and a saucer for $1, and I make a cup for $3 and a saucer for $2, and I'm going to mess up my logic here, I'm absolutely worse than... than you on both, but I'm comparatively better on cups, because I'm only 50% more expensive rather than 100% more expensive.
So if I ship you cups and you ship me saucers, That will rise the tide of everybody. So everybody has an incentive to trade on physical goods based on comparative advantage.
You trade on Riccardi and comparative advantage. Okay. That's a material-based core principle of liberalizing trade. Now, when you go to an ideas economy, which is based on a principle of restriction and monopoly, somebody wants to be the landlord and somebody has to be the tenant. And you can compete on absolute advantage or you can be the landlord 10 out of 10 times.
It's not a cooperative system anymore. It's a rival system. And what that means is if you're a big, strong guy, You get everything. You do what's called strategic behavior. And that's what we're experiencing right now. And the piece I wrote on We're All Economic Nationalists Now, I talk about the strategic behavior, Trump 1.0. Biden took all of those things and added many more.
which you can read it, and I won't go into them now, but he did many very substantial strategic elements of behavior. Trump first, then Biden. Biden did more than Trump. In relationship to Canada. Yeah, and then Trump took it to a whole other level very, very recently. And so it's an era of strategic behavior, which means it's not a cooperative-based system.
And Canada believed in the multilateral rules-based order. This is a shared global project. And my exhortation is this is an absolute advantage era that leads to strategic behavior. And if you don't focus on being reasonably sovereign, reasonably strong, you become the one they pick on.
And it's very profitable for a nation state to pick on a weak state, especially one that has some good assets to pick and wither Canada in the era of Trump.
And we also thought that it was a multilateral rules-based system where control and ownership of strategic assets doesn't matter. And we're learning a very hard lesson that who owns it and controls it is really the only thing that matters. It's really matters a lot. Yeah. And so we're paying a very, very sorry price for that inattention to our economic policies.
We're giving tens of billions of dollars to foreign battery companies where we had no domestic control, no very small domestic value add. And now, and what was happening to Canada, and the U.S.
played a very clever game, and Western Europe played along, and the Southeast Asians got really good at this, that they said, if you want to play in the production economy, leg number one, you've got to sign up to these rules on leg number two.
So we own all the ideas. Well, if you get really good, you can start to own some too, but you've got to be very high-functioning, of which the Western Europeans and the Southeast Asians are. Right. And now what America's doing is saying, just kidding. I want the rules for this intangibles economy.
And I'm now even going to do more strategic behavior and pull the rauka out under the production economy, which is a form of neo-feudalism. that you have to pay a tax to the sovereign. And there's, you know, there's an aristocracy and then there's a non-aristocracy. Well, we're going, that's what I mean by without a passport. Yeah, yeah, yeah. And so, and here we are, here we are.
Yeah, I'm trying to spend most of my time with you today characterizing what's going on. I've only said one normative thing to date so far in this, which was my belief in capitalism in a liberal democracy as the best way for human flourishing. And I'm going to give you what I plan to be only the second normative thing that I plan to say today that I think...
that Trump's behavior is un-presidential, it's unprovoked, it's unkind, it's almost certainly illegal, though, though hard to enforce. Yeah, which matters. But in the characterization, I'm also going to say that I think he miscalculated and it's actually been unwise and is counterproductive to America's interests and actually in Canada's interests if we seize it.
So I think this is a fascinating... And to sort of, for Canada, to quote the famous Yogi Berra, when you reach a fork in the road, you got to take it. Right. And so Trump sees Mexico as just a commodified labor to lowest cost for blue-collar candidates to commodified labor at white-collar workers. And it's all going to be subsidized.
And so I actually think the appeasement – there's a little bit of benefit in appeasement and diplomacy because you inform the U.S. that he may have to dial a few things back a little bit because it's counter to Americans' interests, not because he's – compassionate to Canada economically or socially or security-wise. But I think he's said what he is. He believes that...
that they are the empire, that you must pay a tax for the privilege of participating with the empire, interrelated with the empire. He wants to rename the Internal Revenue Service, the External Revenue Service, and that people's taxes domestically can go down in the US, and that it's paid for through tariffs.
And in economics, in prosperity, in a global system, the number one objective is to improve your terms of trade. And terms of trade is really simple, that it's the ratio of the price of what you sell to what you buy. And if you get a better price for what you sell, your terms of trade go up. If you pay more for something that you buy, your terms of trade go down.
And that's the whole game is terms of trade. And we thought that it was about comparative advantage, get out of the way. And America realized that it's about
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