No not that Coyne the other Coyne: James Coyne the governor of the BOC from the mid 50s to the start of 60s. Given I was not even born yet why do I care? There was a presentation at Laval today by one Mr. Schembri who argued that when push came to shove with the government of the day over monetary policy Coyne got the heave ho. Nothing controversial there. Coyne did resign. But it was the conclusion of the speaker I found a trifling…well let us just say… sans thought.
His conclusion (almost always a he) was that the Coyne affair proved that, in dire straights, the government controlled monetary policy. For the life of me I could not figure out why this warranted two hours of the audiences’ time. Any run-o-the-mill political scientist or constitutional scholar could have told you that. Neither in the BNA of 1867 nor in the Charter of the early eighties is the BOC mentioned. Nor does the BOC have any status in constitutional convention. Simply put, the BOC exists as a beast of simple legislation. As such, it serves, as it were; at the leisure of legislature (after all we are talking about a parliamentary system here).
So why had Mr. Schembri schlept all the way from Ottawa to point out the painfully obvious–painfully obvious I might add because even sans the Coyne affair he could have made the same point given the legal status of the BOC? The economists in attendance were of course in some other worldly ontology: had the government of the day–armed with data hindsight and the latest and greatest data manipulation techniques–been right? That was their murder mystery.
Mine is of another dimension in the time space continuum that counts as legitimate scholarly inquiry (well that of course depends on who you talk to). I was still trying to figure out why this Mandarin had made the trek north. Surely, given Laval’s impressive faculty of law we had no need of him, his presentation, or the Coyne affair to clue us into the legal status of the BOC. To repeat: the BOC serves at the leisure of the legislature.
The plot thickens. In the hollowed halls of central banking, outside of the ECB and its predecessor the Bundesbank, the BOC has been consistently ranked as one of the most “politically” independent central banks in the world. Indeed in the annals of monetarism it was the BOC who blazed the failed trail of monetary contraction. Volcker would come next and bathe the whole of advanced capitalism in the monetarist glow: a monetary induced recession of international proportion (as an aside, Volker is said to have commented in an off-the-hook interview with some friends of mine just how shocked he was at the tenacity of Canadian unions in the face of his cold bath: good on you comrades).
Yet from the time of Coyne’s dramatic resignation–he resigned because he would not serve the people as constitutionally sanctioned in law (oh well we all serve our own Gods I suppose…paging doctor Cromwell or is it St. Thomas Moore?)–to the present, the sitting government of the day has been more disposed to give the BOC “political freedom” rather than less.
And it is this empirical fact which the speaker was deafeningly silent on. Since the Coyne affair the BOC has enjoyed more not less autonomy from the politics of the day!
This is where the real action is: how is it that as an institution, despite its legal status and with the precedent of the Coyne affair to boot, the BOC has managed to increase its autonomy: despite enjoying no formal autonomy in constitutional law?
Beg the obvious, win the scorn: another day; another tantrum.