Carney’s First Year: Clear Eyed Abroad, Tone Deaf at Home

Weeks after it was delivered, Prime Minister Mark Carney’s Davos speech is still generating ripples—quoted in think tanks, parsed in Ottawa, and invoked as shorthand for a world tilting away from frictionless globalization.

“We knew,” Carney told that room of elites, high in the Alps in January, “the story of the international rules-based order was partially false.” Just because Canada benefited from it, Carney said, didn’t hide the fact that it was unfair. The rules didn’t apply equally to everyone. “The strongest would exempt themselves when convenient,” he said. Power, not principle, set the terms.

Carney likened this awareness to Czech dissident Václav Havel’s assertion that, until it collapsed, communism survived because ordinary people continued “living within a lie.” Communism’s power, Carney said, came from “everyone’s willingness to perform as if it were true.” When it comes to the old post–Cold War consensus, Carney argued, it’s time to stop living within the lie.

In many ways, it was a very good and necessary speech. Carney left Davos having punctured the fiction that the Donald Trump era of bullying and threats can be managed as if nothing fundamental has changed. That it landed on the same day that Trump released texts from Emmanuel Macron, in which the French president invited him to dinner, was a handy proof of point.

And yet, embedded in that confidence was a tension that went largely unremarked. Nearly a year into Carney’s time in power, it’s starting to come into view.

Carney’s argument rested on two ideas that sat—still sit—uneasily together. On the one hand, he spoke of sovereignty, of the need for Canada to secure its supply chains, deepen its industrial capacity, and reduce its exposure to geopolitical shock. On the other, he reaffirmed a faith in the very global systems whose unravelling has made sovereignty newly urgent: open capital flows, integrated markets, and rules-based co-operation led by familiar powers.

The contradiction was not rhetorical; it was structural. Davos itself is built on the promise that global integration can be managed, even as the world that gathers there is busily preparing for its limits. Carney’s speech captured that paradox perfectly. He offered a vision of Canadian independence that still depends, in many ways, on a global system stable enough to respect independence—the very thing he said is eroding.

More to the point, while Carney chose to name a contradiction at the heart of the old rules-based global project—the hypocrisy in the international system—he still stopped short of acknowledging how the economic model upon which that rules-based order rests will always reproduce similar gaps between promise and lived reality.

That is to say, Carney spoke of the lie undergirding the old global power structure but walked away without admitting an even deeper truth: that the economic and social system the old rules-based order put in place and relied on for its success—that is, free-market capitalism—is also partially false.

For decades, it preached free trade and open capital but depended on rising asset values at home to sustain political consent. Trade integration lowered consumer prices, but it also suppressed wage growth. That gap wasn’t filled by higher incomes. Instead, cheaper credit and rising house prices did the trick. Home equity, in many cases, substituted for wage growth. Which sort of worked. Until now.

Across the Western world, people face rising precarity, inflation, and an increasingly insider-driven, VIP-only, casino-like economy. The problem is not markets per se but rather the way free-market logic has been allowed to govern everything. Housing, labour, personal modes of communication—you name it. It all works this way now, without meaningful alternative or accountability.

And the underlying inequality has been intensified by the new tools we use to navigate all these aspects of our lives. At every turn, people find themselves exploited, above all, by things like algorithmically mediated systems that make them feel trapped in a state of perpetual confusion and uncertainty, addicted to manufactured scarcity via dynamic mechanisms like surge pricing, increasingly professionally dispensable—and frustrated that against these invisible mechanical systems, they have little to no recourse or agency.

But left with no choice, everyone continues, as the sense of arbitrariness accumulates. And the danger is that, in that state, people are liable to believe in all manner of solutions, from forced deportation to military invasion. When the system feels unaccountable, people look for places to assert control or for myths to believe in.

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During his Davos speech, Carney listed several moves Canada has made to begin the process of reorienting toward a new system of strategic alliances and trade partnerships. Domestically, Carney pointed out lowered internal trade barriers and fast-tracked investments in energy, AI, and critical minerals. Carney called this approach “value-based realism”—or, relying on one of his favourite terms, “we aim to be both principled and pragmatic.” All of this sounds nice, but even as it all may strengthen national resilience, if housing remains unaffordable, labour remains unstable, and digital platforms remain unaccountable, then daily life will still feel governed by forces beyond our reach.

In other words, what Carney offered are macro solutions to a legitimacy crisis that is experienced at the level of rent, work, debt, and time. And a new world order that shifts alliances but leaves the underlying model of asset-driven growth intact will not restore legitimacy. It will just change the geographic parameters of extraction. A key question Carney left unanswered is whose lives get easier, better, or more hopeful because of this new international arrangement? It can’t just be the people in that room in Davos. But it felt like it might be.

Carney’s job is not over. Having named the reality of geopolitics, he must now confront the one shaping daily life at home. Rebuilding the conditions under which Canadians feel their efforts, time, and participation in society still matter will take more than new strategic alliances and trade deals. Affordability, security, and agency won’t re-emerge automatically. They require policies that are equally honest about the domestic state of things.

Asking people to accept a new era of globalization, strategic competition, and selective openness while maintaining an economic and social model that makes daily life feel increasingly arbitrary, unaffordable, and unaccountable is to continue living “within the lie.” If the old order failed because it masked power and ignored inequality, then it follows that free-market capitalism did too.

A new world order that admits one truth but not the other is hardly better than what came before it. And it will repeat the same mistake, only this time it will have people live in an even higher level of abstraction. Not just that you know the system is broken, but that you know it at every turn. When you open a retail app, apply for a job, or wait for an automated decision that no one can explain.

It will be crueller version of the same problem—and not one a pretty speech can wish away.