No wonder the galactic federation spurns us — Canada can’t manage the one we have on Earth

While it may be easy to blame social media for spreading wild conspiracy theories, this time the source was the traditionally very credible Jerusalem Post, which on Tuesday published in English for the first time parts of an interview issued in Hebrew. Other credible sources, including NBC, have repeated the Post’s report, though without offering evidence the comments were true.

While CBC News clearly has no evidence to endorse the comments either, exploring the reason for our putative rejection may actually draw us irresistibly to the nearest provincial boundary — a concept evidently backed by University of Calgary economist Trevor Tombe.

Saving us from COVID-19

Tombe believes that thinking about how to pass the galactic entry test could push the Canadian economy into a new burst of activity that will help pull us out of the COVID-19 pandemic hole.

“Any galactic federation worth its salt would want to admit new members only once those members get their own houses in order,” he said on Tuesday shortly after the Jerusalem Post story was released.

And according to a paper published by Tombe last month, by failing to fix the kinks in our own Canadian federation — specifically in interprovincial trade — this country, at least, has proved it is not yet ready to play ball in the galactic league.

“It’s important to keep in mind what trade barriers are in Canada,” Tombe said, attempting to put himself into the mind of the intragalactic admissions committee. “They’re not tariffs or quotas on flows of goods from one province to another.”

And while aliens would likely have a lot of trouble telling the difference between a Canadian in one province from a Canadian in another, the trade barriers are based on what to a methane-breathing lizard would be absurd tiny quibbles.

Tombe calls it “friction” because businesses face a smorgasbord of rules that are different in every province.

A contractor can’t work in the next province because her first aid kits don’t meet their slightly different standards — or, the classic example, wine cannot be taken across borders because of differing provincial liquor rules, for which Conservative MP Dan Albas this week proposed a partial solution.

Paul Krugman on Alien trade

If Tombe has encountered an alien, he certainly didn’t reveal it, but that has not stopped other economic thinkers — including Nobel Prize winner Paul Krugman — from speculating using aliens as fodder for their thinking.

In a 1978 paper when he was an assistant professor at Yale University, decades before winning the Nobel Memorial Prize in Economic Sciences, Krugman famously addressed the issue in “The Theory of Interstellar Trade,” which was clearly hampered, he implied, when goods travel at close to the speed of light.

“This paper represents one small step for an economist in the direction of a theory of interstellar trade,” he wrote. “It goes directly to the problem of trade over interstellar distances, leaving aside the analysis of trade within the solar system.”

Krugman has since described the paper as a serious analysis of a silly problem (you might wonder if the galactic federation would agree) that he wrote to cheer himself up.

In a similar vein, economist Zachary Feinstein, an expert in financial engineering, wrote a paper about one of the Star Wars adventures, analyzing, among other things the cost of blowing up the Death Star.

“Economics and finance, much like the Force as explained by Jedi Master Obi-Wan Kenobi, is ‘created by all living things. It surrounds us and penetrates us; it binds the galaxy together,'” Feinstein wrote.

Co-operation makes us richer

Trevor Tombe’s analysis is somewhat more practical. As the COVID-19 pandemic erodes the Canadian economy, fixing the flaws in interprovincial trade is not just a nice thing to do; it would make the entire country richer.

Tombe estimates it would add about five per cent a year to the Canadian economy. The International Monetary Fund puts the figure in the same ballpark at about four per cent.

Five per cent may seem small at first glance, but that is the same as Canada’s entire financial and insurance industry. And the solution, he said, is relatively simple.

So far under the Canadian Free Trade Agreement, the provinces have hammered out at least one solution: negotiating the contents for a first aid kit that is acceptable in every province, but going through each regulation is time consuming and would delay those benefits for years or even decades.

“What we could do to speed things up is just to, across the board, say no matter what good or service you’re talking about, it is automatically compliant with our province’s standard if you’re compliant with any other province’s,” Tombe said.

And illustrating how wise and co-operative we were with our fellow provinces, and showing that we understood how co-operation makes everyone better off, would demonstrate to a galactic federation — should one actually turn out to exist — that we would make good members, he said.

“So this is something Canada should tackle before making an application.”

Follow Don Pittis on Twitter: @don_pittis