2025-04-20

The Contradictions of Mark Carney

A review of his 2021 book 'Value(s): Building a Better World for All'

Mark Carney grinning widely as he shakes hands with then-Prime Minister Stephen Harper
We are in the beginning of a mass extinction and all you can talk about is money and fairytales of eternal economic growth. How dare you!

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-- Greta Thunberg, speech to the UN Climate Action Summit (with Mark Carney in attendance), 23 September 2019

A few chapters into Mark Carney's 2021 book 'Value(s)', I must have had a sour look on my face, because my spouse asked me what was wrong. I explained what the book was, and started to read a couple paragraphs out loud. She winced and cut me off almost immediately: "What is this, a textbook?"

It was a fair question: Value(s) often reads like course material, with Carney rattling off a history of markets, theories of value, and responses to some of the many economic shocks and crises endured over the last couple centuries. It's generally pretty dry stuff, often repetitive, and the rare attempts at humour - there was something about soy latteccinos, for instance - don't really land. At points I got the distinct feeling that Carney was intentionally trying to weed out any casual readers. A 2021 review[1] of Value(s) in The Times complains that "Carney never seems sure who the book is for".

[1]

"Who is this book for?" is another fair question. The ideas are generally presented without judgement, and I'm guessing this is so that he can speak to people across a *somewhat* diverse range of ideologies, and convince them to adopt his approach of "inclusive capitalism"[2]. A slightly more cynical way to say this: Carney sits on the fence to avoid alienating readers, so that no matter what side of an issue a reader is on, they can always see their views being reflected by their good pal Mark Carney.

[2]

In truth, however, this book isn't for everyone, and doesn't include everyone. And although the objective tone makes it more difficult to suss out exactly what Carney believes, I think the best way to understand 'Value(s)' isn't by listening to what Carney says, but instead by watching out for the things he either refuses to meaningfully engage with, or that he leaves out entirely, over the book's 500-odd pages.

Spoiler alert: there are some conspicuous absences.

A limited imagination

The limits to Carney's political and economic imagination show up almost immediately, as he unveils the core of his book's vision in the introduction: a list of 'seven common values' for market participants to aspire to live by, drawn from "economic and political philosophers from Adam Smith (1759) to Friedrich Hayek (1960)" (p.16). And look, I won't deny there's some daylight between the ideas of Smith and Hayek, but no one would argue that they represent a wide spectrum of economic and political thought.

This makes Carney's rhetorical move here fairly clever: he represents this narrow range of thinking with seven words that *sound* like universal truths - words that could've been chosen by a think-tank committee, words with meanings broad and malleable enough that they won't be immediately offputting no matter what your political leanings are, words right at home in a corporate powerpoint presentation written by ChatGPT, words that say "this book is for everyone": dynamism, resilience, sustainability, fairness, responsibility, solidarity, and humility.

But a book can't really be for everyone, and it's precisely because of this veneer of inclusivity that we need to be conscious of what Carney is omitting. For the most part, although there's no shortage of progressive-sounding rhetoric, what's consistently lacking from 'Value(s)' is a recognition of the many ways that we can do things collectively and democratically, *outside* of the capitalist market system.

Economic democracy

Take Carney's history of money, for example, which spans the first six chapters of 'Value(s)'. Increasingly, economists have absorbed the lessons of Modern Monetary Theory (MMT) into their thinking, but you won't find any of them in this book. The core insight of MMT is that, for countries that issue their own 'fiat' currencies through central banks, dollars are created when the government spends them into the economy, and destroyed when taxed back out of the economy. It's a reversal of the old notion that governments have to receive tax revenue before they can spend money.

Why is this important? Well, once we understand that public spending isn't constrained by the amount of taxes collected (there are still other limits, such as the availability of actual resources, or inflationary pressure), we've opened up a lot of possibilities for how we can collectively and democratically allocate society's resources, rather than mostly relying on the "value(s)" held by investment fund managers, venture capitalists, or private banks who issue business loans and mortgages.

In short: it means *we* get to decide our priorities, rather than just the people with money deciding for us.

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(Side note: for anyone wanting a really basic intro to MMT, here's a great interview with Stephanie Kelton on The Daily Show)

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But again, despite the growing acceptance of MMT by many mainstream economists, including folks like Nobel laureate Paul Krugman[3], Mark Carney doesn't even mention these ideas in his book. It's puzzling, because ostensibly, Carney is exploring how society can re-orient our economic systems toward tackling things like the climate crisis, while also building a more fair, just, and inclusive world.

I say ostensibly, because the longer I kept reading, the more it became clear that, when it comes to how we can go about addressing our collective needs, Carney places a lot more faith in market-based solutions than in democracy. Financial markets, though, invariably allocate more power to those with more money (and more money to those with more power), while democracies - at least ideally(!) - give everyone a relatively equal voice. Wasn't 'fairness' one of those seven values?

[3]

* * *

Again and again, it's the same curious thing. In a book that spends several hundred pages looking at societal crises, and steps we might take to mitigate or avoid them in the future, the New Deal gets mentioned only in passing:

"Following the 1929 Wall Street Crash, alongside the sweeping social reforms in Roosevelt’s ‘New Deal’, the Securities and Exchange Commission (SEC) was created with a clear purpose: to protect investors, to maintain fair, orderly and efficient markets and to facilitate capital formation."

Now, the phrase "sweeping social reforms" is accurate, sure, but it hardly feels sufficient for Carney to write just three words about the transformative programs that the United States introduced over the course of 1930s, including Social Security, protection of unions through the National Labor Relations Act, an end to child labour, a national minimum wage, and a 40-hour work week. Maybe Carney isn't mentioning any of these things because he wants to focus on markets. But the problem with that is, markets don't exist in a vacuum, and the role of government isn't simply to "catalyze investment", or facilitate the operations of private industry.

Markets erode values

Speaking of societal transformation, it's also pretty shocking that there's zero mention of either the Green New Deal or Canada's Leap Manifesto[4] in any of the chapters that discuss how we might meaningfully address the climate crisis.

[4]

Once more, rather than looking to democratic systems as a way forward, we're asked to look to the market for solutions. It's just that we need a friendlier, more enlightened market! Carney seems to believe that market actors just need a few government-provided incentives, and investors just need to have access to better reporting on climate risk, along with the strength of character to align their investments with their values. From there, the market will take care of the rest, apparently.

It's maddening. Carney clearly understands that markets are corrosive to values, writing, "most goods are not changed by being in the market, but, as we shall see, putting a price on every human activity erodes certain moral and civic goods"(p.158). Yet he clings to the idea that we can miraculously transform markets into systems that produce equitable outcomes. How? By appealing to virtues that markets don't reward. Markets reward self-interest, and it's a vicious cycle: the more self-interested you are, the more capital you're likely to accumulate, and the more capital you accumulate, the more power you have in setting the direction of the market. It's not rocket science!

Basic necessities should not be subject to the whims of the market

And while Carney does warn against the commodification of various things (on page 158 he asks rhetorically, "should there be a market in the right to have children?"), he never stops to wonder if there are things that are subject to the whims of the speculative market today, but that should instead be *decommodified* - like geared-to-income rental housing, say, or other necessities of life.

Because, as Malcolm Harris points out in his must-read review[5] of Ezra Klein & Derek Thompson's 'Abundance' - a book that in many ways sounds eerily similar to 'Value(s)' - the market will never provide society with abundant housing, because investors wouldn't get the returns they want:

Capital is reluctant to enter industries that are easy to enter, for fear competition will drive out the profit. The abundant solution to a lack of housing is to make it easier for developers to build for increased density: the more units that come onto the market, the less landlords will be able to charge. But the same supply mechanism that pushes down prices discourages capital from the sector. As Yogi Berra might’ve said: No one invests there, it’s too crowded. If what developers experience as an “excess” of supply stops them from projecting the same high rent levels, their lenders might just decide to put their dough in crypto instead. There’s no reason to assume a market equilibrium point at which investors are satisfied with their projected returns and Americans of all income levels enjoy an abundance of high-quality housing.
[5]

Climate tech-solutionism

Turning back to climate, there are similar dynamics. Solar and wind power are much cheaper sources of energy for consumers, but oil & gas have higher returns for investors, and therefore extraction continues to grow. To be fair to Carney here: 'Value(s)' argues that governments need to put a predictable and steadily growing price on emissions, and that will definitely help to make fossil fuels less investable too.

You'd think that the best solution here would be to have governments use that carbon pricing revenue to build a nationalized system of inexpensive and plentiful solar and wind power. This doesn't generate massive profits for corporations, obviously, but it seems like the best outcome for people in general. If your primary objective, however, is to turn crises into investment opportunities, you might have other ideas. I hope you're sitting down: Mark Carney has other ideas.

Recall the quote from Greta Thunberg at the beginning of this post: "We are in the beginning of a mass extinction and all you can talk about is money and fairytales of eternal economic growth. How dare you!". Mark Carney also quotes this speech in 'Value(s)', and even thanks Thunberg in the acknowledgements. But he's only really quoting her so he can clap back, saying, "we won’t get to net zero without innovation, investment, purpose and profit ... continued growth isn’t a fairy tale; it’s a necessity." (p. 370) But is this view objective, or is it just self-serving? "Developing the climate transition as an asset class is arguably the largest opportunity [for investors]", Carney tells us on page 490. Hmm.

* * *

Either way: what are these opportunities, specifically? Well, we *don't* hear much about things like cycling infrastructure, mass transit, community gardens, or, I dunno, medium-density non-market housing. Those won't generate profit! Instead, we're offered a smorgasbord of unproven, non-transformative, and/or potentially counter-productive ideas.

In the 'unproven' category we have Carbon Capture & Storage, which Carney says are likely to capture "about 80-90 percent of the CO2 stream" (p 332), as an adjunct to actual decarbonization of most sectors. But experts from both environmental organizations *and* fossil fuel companies agree on this: the economics of CCS simply don't add up.[6]

[6]

A non-transformative idea: EVs are obviously better on emissions than gas vehicles - but they don't change much about the logic of our built environment, social relations, or economies. Because they're heavier, EVs wear out roads and tires faster, resulting in different forms of pollution. Canada's mining sector, however, must love the idea of getting paid big bucks to dig holes in the ground to extract the metals and minerals used in EV batteries.

Carbon offset markets are largely counter-productive, since they mostly just provide a way for corporations to continue emitting, but in most cases "don't really work".[7]

[7]

And then we have hydrogen fuel, which Carney says "may one day" be transported using existing gas pipelines.(p.322) But if he's done his research, then Carney knows that it's not so simple: according to MIT, gas pipelines can currently only blend in around 5-8% hydrogen without damaging the pipeline itself - and would need extensive retrofitting or outright replacement[8] in order to distribute 100% hydrogen fuel. Even still, I'm going to make a prediction: despite those limitations, the idea will be used as an excuse to fund the construction of new gas pipelines that are destined to become stranded assets - if we're actually serious about ending fossil fuel production. File this one under 'unproven' and 'counter-productive', I guess?

[8]

Bad bets

If Carney's track record on picking climate solutions is starting to look a little bit lacklustre, then brace yourself, because he's something of a techno-optimist in other sectors too.

Among the things Carney might, in retrospect, regret having mentioned in 'Value(s)' - (be sure to check out the links):

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[10]
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[12]

A not-so-stellar track record, actually

Suffice it to say, these are all examples of Carney's tendency toward overly rosy assessments of technological developments. Maybe he thinks he sees something that the rest of us don't? Maybe he's just trying to be an enthusiastic supporter of the folks who move in the same circles he does?[13][14] Or maybe he's just 'talking his own book'[15] in the investment sense of the phrase: Brookfield either has, or had, investments in many of the companies and sectors that are talked up in *Value(s)* - from shares in Shopify, to multi-billion dollar AI data centre ventures in Europe.

If that's the case, then *Value(s)* is a book that's for the market, in more ways than one.

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