American Exceptionalism and the Economic Role of the Public Sector: Canada and the US Compared

Abstract

The American public exhibits an exceptionally strong bias against public sector activity in the economy. Why this is so is investigated by applying the traditional literature on “American exceptionalism” and the comparative method. A defence of an active role for government in the economy is developed, based on social and institutional economics. The traditional explanations for American exceptionalism given by Sombart, Commons and Perlman are outlined. A comparison of the Canadian and US politico‐economic cultures is employed as a means for evaluating the validity of the arguments in the traditional exceptionalist literature. Although those investigating American exceptionalism have often compared the US with Europe, it is argued that Canada makes a better subject for comparison with the US. This is because the two countries are very similar, yet exhibit different attitudes toward the public sector.