Voting Systems – be careful what you wish for

March 25, 2017

There are numerous voting systems, none without bias. It is just that the bias favours different groups and so explains who supporters and opponents are. The recent Dutch national election reveals how proportional representation (PR) can work, and the implications if Canada chose a similar system. At present, the federal government has decided not to make changes. While criticized for reneging on an election promise, the government should be congratulated for retaining the status quo.

The Dutch example

The Netherlands adopted PR for its recent election. It works as follows. The country is treated as one constituency with 100 members elected according to the number of votes received by a party. There were 28 parties on the ballot and members elected for thirteen of them. It will take a coalition of four or five parties to achieve a majority for legislation to be passed.

A Dutch voter has no member representing her or his district if the voter has an issue to discuss. Maybe this works with a population of 17 million in a relatively small homogeneous land area, but I doubt whether it would in the widely distributed and varied Canadian situation. A voter in Newfoundland, Quebec and BC for instance would each want to be able to contact someone familiar with conditions in their location. This is one reason why a constituency system is more suited to Canada. There are others. It is possible to have a mixed system with some members elected in constituencies, and some chosen from a list of candidates proposed by parties. How the latter are chosen to be party representatives raises all sorts of issues.

In Canada it is sometimes thought that only the existing parties would run candidates if PR was adopted. This is unlikely as the case of the 28 parties on the Dutch ballot reveals. Under PR, The NDP and the Greens would have collected more seats, and the Liberals fewer seats in the 2015 Federal election, but only assuming that no other parties had formed and were on the ballot, an unlikely event.

With the existing first past the post Canadian system, you can end up with members elected with less than 50 percent of the constituency vote, but it seems to have worked out pretty well over the years not only here but in the UK and a number of other countries, …….and in contrast to the system south of the border where creation of an electoral college to elect a president and gerrymandering of Congressional districts have subverted representation.

When Provinces have held referenda on changing the Canadian voting system, there has been no strong support for change. Maybe the voters are smarter than those supporting change. To repeat, there is no unbiased voting system. Each favours some groups at the expense of others both in electing members and in the passage of legislation. A main check of the existing system is elections required at certain dates or with the defeat of the government.

A Future for News

March 8, 2017

Jodi Rudoren, Editorial Director of the New York Times Global, writes March 7th, 2017.

“The idea of NYT Global is to grow our audience around the world and to make The Times a truly international news organization. That means expanded coverage in Australia and Canada, where the decline of the local media has left readers clamoring for quality journalism.”

As a reader, it appears that the local print media in Canada is dying, at least in the case of the Ottawa Citizen, which has become an emaciated news sheet. There are some excellent columnists writing in various publications and appearing on TV, but in order to find out what is going on beyond the Canadian borders, and understanding how this might affect the country, one is forced to look elsewhere.

Each person is constrained by the 24 hours in each day and has to allocate time for news consumption by reading, listening and watching. The possibility of gaining quality access is expanding with developments in communications technology.

A Real Global Problem

March 7, 2017

The Environment

There is a problem with the environment which does not depend on conflicting opinions based on computer driven models as is the case with global warming. It is air pollution, clean air or whatever you call the ghostly daytime scenes in cities like Beijing, Delhi and now London.

The World Health Organization estimates that seven million people died from air pollution in 2012 which was about one in eight of all deaths in the world that year. It confirms that air pollution is the world’s largest environmental health risk. Most of the deaths are due to heart disease, stroke, lung cancer and acute respiratory infections.

London’s air pollution today is similar to that of the 1950s which was due to coal burning power stations and coal used to heat homes. Today a main reason is the use of wood burning stoves for heating. The pollution is visible and a health hazard.

Environment Canada publishes an Air Quality Health Index and on most days there are no problems similar to those found in the cities of some other countries. As a global issue it is large and visible where it occurs.

 

Forty days into the new US administration – some thoughts

March 3, 2017

1. Michael Moore called the election correctly, unlike almost all the news media pundits. He did so by observing the enthusiastic crowds at Trump meetings, and Clinton’s lukewarm crowd support, plus the fact that Sanders supporters said they would not back Clinton if Sanders was not the candidate. Most of the media forecast the outcome they wanted, not what voters were signaling, which the democrats did not want to hear.

2. The Democrats nationally are now in the weakest position they have been in for decades with no obvious leadership candidates. They have lost Senate and House seats, governorships and control in a growing number of states. They did however get about three million more of the popular vote in the presidential contest. While this does not count in the way presidents are elected, it reinforces the message that the country is divided.

3. The newly elected president does not read mainstream media, although his staff does. He Tweets and watches cable news networks, especially Fox News. His behaviour suggests a cocktail of narcissism and mental instability. This seemed to change with a measured and lengthy speech to the joint Congressional Houses on Feb. 28th. The speech contained spending proposals which would vastly inflate the budget deficit and weaken the US dollar and raise interest rates. However the stock market has boomed since the election…..go figure.

4. The involvement of Russia in the election is still unknown, but after a brief honeymoon period between the US and Russia there are signs of future instability due to contacts between Republican cabinet appointees and Russian officials before the election. This could be linked to Trump’s tax returns which may show that he had funding from and commercial ties with Russian businesses.

5. Elected Congressional Republicans are having a hard time knowing how to respond to the President’s proposals. Some they like, but some they strongly oppose, and so does Ivanka.

6. A personal prediction (few turn out to be accurate) – the President’s close advisers, Bannon, Priebus, Conway, Spicer and Miller are unlikely to hold these positions a year from now. They helped to shape the campaign rhetoric but may not be the most adept advisors for governing.

7. Leading firms in the mainstream media are labelled as providing ‘fake news” when they criticize the new administration. These firms seem to be hanging in and retaining their influence and may become the most effective critics of the government.

Prediction – Marie Le Pen will win the French election.

What does populism mean?

February 22, 2017

Populism is a loosely defined term which seems to refer to actions taken by any group within a society which is fed up with conditions affecting them, low wages, unemployment, refugees, immigration and so on.

It is used to describe the reasons for Brexit in the UK, terrorism/racism/immigrants and unequal income distribution in the US, and refugees and related conditions in countries such as France, the Netherlands, Italy and even Germany.

In Canada, according to Wikipedia, populist movements describe the Social Credit and the Reform Party in Alberta, Creditistes, the Union Nationale and PQ in Quebec, the federal Liberal party under Prime Ministers Mackenzie and Laurier, labour parties leading up to the CCF and NDP, and support for various premiers of Ontario.

This seems to be rather all inclusive referring to any time when a group in society becomes activated and organizes politically. It merely describes contemporary political conditions. A recent case of populism today would be Ford Nation in Toronto, where one segment of the city feel that they are taxed for the benefit of another. The Ford brothers used this to their political advantage.

It does not seem to be a useful term unless the reasons for it are given.

Census helps to define Canada

February 21, 2017

A satellite view of Canada at night shows lights along the US border and precious little north of that. The 2016 Census reports that 83 percent of the population of 35 million lives in cities of 10,000 or more, 40 percent in the 15 largest cities, and 8 percent in Toronto. Immigrants have accounted for about two-thirds of the 5 percent population increase over the past five years.

These few facts show that

  1. The landmass of Canada is largely unpopulated, not unlike the eastern seven time zones of Russia. Canada’s maritime boundaries are virtually unprotected at least by Canadian forces with its under equipped navy and airforce. The US is the de facto defense provider, although the NORAD agreement has been in place since the 1950s.
  2. Recent immigrants like previous ones prefer to live in cities, and many head for Vancouver, Toronto and Montreal. They don’t want to live in rural areas where there is masses of space but limited services. (Note, all Canadians are immigrants, arriving at different times, including native peoples who are traced to Africa and migrating over the Russian land bridge to North America around 60,000 years ago. In this sense, there are no indigenous people. All arrived at different times in the past. Those that arrived after 1500 brought diseases which helped to decimate those who arrived earlier.)
  3. The immigrant wave, from say 1500, came, settled and stayed. Until recently, they had no cell phones or wifi that could keep them in daily contact with family and friends at home. Travel and communications were expensive. Today’s immigrants are less connected to Canada in this regard, especially with the reduced cost of travel and communications.
  4. Life was hard for early immigrants. Access the Doukhobor website to see a photograph of women harnessed to a plough, as evidence of the hardships faced by those who arrived in Canada around 1900.
  5. Conditions for today’s immigrants are different. Some will want to stay. Others may decide to return home when and if conditions improve and are in transit. Canadians have largely welcomed recent arrivals, although there is resistance to those crossing the US border and applying for refugee status, as is permitted by Canadian law. Unlike the refugee crossing from North Africa and the Middle East to Western Europe, North America is bordered by the expanse of the Atlantic and Pacific oceans which gives rise to different physical barriers. Policy enforcement also differs here, although it has resulted in an estimated 11 million illegal immigrants in the US and perhaps 500,000 in Canada….no one knows.

 

The latest census and geopolitical conditions are factors describing the circumstances facing Canadians today.

 

Cultural Appropriation

February 15, 2017

The Shattered Mirror

February 8, 2017

 

 

The Shattered Mirror – News, Democracy and Trust in the Digital Age proposes increased bureaucratic input and public funding for a sector rocked by new technology.

What Uber has done to the taxi business and Airbnb to accommodation, has invaded all forms of media including news reporting and distribution. Daily newspapers are haemorrhaging advertising revenues and many have been forced out of business, or to adopt different means of distribution. Many other sectors are affected by technology such as education with the offerings of online courses. Existing suppliers fight back to maintain at least some semblance of the status quo, often lobbying governments for increased support. Ultimately new technology usually wins and a new breed of entrepreneurs rise to fill any gaps to provide the desired goods and services.

The process is part of Schumpeter’s stages of creative destruction which benefits consumers, and those producers who adapt. Those who lose appeal to the government for support. Such is the case for The Canadian Public Policy Forum’s latest report The Shattered Mirror, News, Democracy and Trust in the Digital Age which examines how technology has affected traditional news media. It argues that the public is poorly served by the new digital news providers and that democracy is at risk with, for example, the reporting of fake news.

Since the 1950’s numerous reports have examined the Canadian media including news. They include:

1951 Royal Commission on National Development in the Arts Letters and Sciences (Massey Report).

1961 Royal Commission on Publication (O’Leary Report)

1970 Special Senate Committee Report on the Mass Media, (Davey Report)

1981 Royal Commission on Newspapers (Kent Report)

1982 Report of the Federal Cultural Policy Review Committee (Applebaum Hebert Report)

2006 Senate Report on the Canadian News Media (40 recommendations and 10 suggestions).

 

All recommended measures of protection and support to which The Shattered Mirror adds its contribution. Written by a person who has had a distinguished career in journalism, this almost assures that the recommendations will include further government support for the industry. It succeeds in this regard. It would be the same if dairy farmers were asked for advice on supply management or academics on university funding.

The report contains thirteen proposals. Many require additional administration of funds and rules which in total would require both added bureaucratic overhead and time spent by firms to qualify for the funding.

Two proposals provide the tenor of the report and the tortuous process that would be required to comply with the provisions.

  1. In the proposal to extend provisions of Section 19 of the income tax act to other media. Producers of eligible news will be required to show that: (Recommendation No.1).

At least 75 percent of editorial payroll and 75 percent of their eight most highly paid employees are Canadian individuals or personal-service companies.

At least five percent of the company’s revenue generated in Canada is spent on editorial operations, with a significant amount for civic-function journalism.

 

  1. Creation of a fund managed independently from the government (Recommendation No.5).

Creation of the Future of Journalism and Democracy Fund would provide financing for digital innovation, especially in its early stages, and be directed at those operators who produce civic-function journalism at the national, regional and local levels. To qualify, enterprises would have to be Section 19-compliant and deliver original news on digital platforms that are refreshed at least once a week. The fund would cover a maximum of 75 percent of the cost of a project. The ability of applicants to attract support from other partners would factor into the grant decision.

 

Proposals regarding the CBC fail to note shrinking audiences especially for English language television. CRTC Annual Monitoring Reports (available online) show the CBC’s share of the English language television market fell from 13.2 percent in 1994 to 7.5 percent in 2000 and to 5.1 percent in 2012. While government financing has remained around $1bn, this segment of its mandate has been shrinking, so that on a per viewer basis the funding has been increasing.

If the CBC is to survive, consideration should be given to it being funded only by government and not selling commercials. The latter puts it in competition with private broadcasters, allowing it to use public funds to buy programs like major sporting events. In the UK and Australia, the public broadcaster is funded almost entirely by government, with far less angst being created between public and private broadcasters. A government owned broadcaster, if one is needed, can devote its attention to its public service mandate and have a far lesser concern for audience size.

 

The Shattered Mirror focuses on the importance of civic-function journalism defined as the coverage of elected officials and public institutions, from legislatures, judicial and quasi-judicial bodies and city halls to school boards and supporting public services. That is important, but in a globalized world coverage of what happens outside Canada is increasingly important. Much of this can be accessed online from websites and blogs run by people whose judgement I personally respect in different news related fields, and superior to many traditional news sources. In broadcast media, my preference is for The Agenda on TVO and the PBS Newshour. In both instances the anchors are informed but do not insert their own opinions, unlike what prevails with the CBC and CTV.

There is much more to comment on in the report. As it stands it argues the case for supporting more of the same with increased bureaucratic input. It deserves further discussion.

Services are everywhere, some well and some less well paid

February 4, 2017

Economic policy is being driven by the belief that good paying manufacturing jobs are being lost and replaced by lower paying service sector jobs, and that the manufacturing jobs can be recovered by protectionist trade policies and subsidies.
It is the case that the share of employment classified as manufacturing is declining and that of services increasing, but the reasons and implications need to be understood. This phenomenon is occurring in all developed countries. A similar change took place in earlier times, when the share of employment in agriculture declined while agricultural output increased. The loss of agricultural jobs was offset at least in part by growth in other parts of the economy, especially manufacturing. What needs understanding today are overall changes in the economy and how jobs classified as manufacturing and services are recorded.

Employment data by firm and industry are collected on a plant and enterprise basis where the enterprise may consist of several plants. Each plant typically employs a combination of manufacturing and service sector personnel. The former include assembly line workers and the latter accounting, legal, secretarial and others. While the latter appear in national statistics as employees in the manufacturing sector, they are actually providing service-type employment.

If a firm decides to contract out the accounting and legal work to service sector firms which specialize in these activities, then manufacturing employment declines and services employment increases. Overall employment may remain unchanged.
(By the way a similar phenomenon occurs when plants and firms are allocated to industries. If a plant produces mainly automobiles but some bicycles, it will be allocated for reporting and data collection purposes to the industry where most of the production occurs, in this case automobiles. The bicycle industry will in turn under-report production of those bicycles produced in the automotive industry).

The loss of jobs in manufacturing can occur because manufacturing firms reorganize their operations by outsourcing service sector jobs. The reverse may be true if they insource certain services. The former case may be one reason for the loss of manufacturing employment. As technological change occurs, manufacturers are continually changing their production processes. The use of robots for humans on assembly lines will reduce the number of assembly line manufacturing workers, but increase the number of workers required to service the robotic equipment, positions that did not previously exist.

The services-manufacturing dichotomy means that a worker who uses a wrench on the assembly line is classified as a manufacturing employee, while a worker who programs a computer to instruct the robot to do the same work is a service worker. The distinction between what is considered manufacturing and services work can be messy.

Magnus Lodefalk, who has studied this issue for both Sweden and other industrialized countries, notes the following: (Review of World Economics (2014) 150:59-82)

Manufacturing in industrialised countries is intensifying its use of services, and there are indications that the share of services in total turnover is rising. On the input side, the ratio of bought-into value added services has increased since 1995 across all manufacturing industries, and in-house services production has also expanded. The manufacturing sector increasingly employs mathematicians, engineers, computing professionals and business professionals. Services used or produced by manufacturing firms include research and development (R&D) services but also extend to knowledge or intangible capital services more generally, as well as to services such as telecommunication and transport. On the output side, the share of services in total turnover also has grown since the mid 1990s for some countries. Regarding export, Lodefalk studies Sweden and finds that manufacturing’s service exports have more than doubled between 1998 and 2006. There are arguments for the ability of services to support exports in manufacturing. Services may help firms to overcome costly informal barriers, such as asymmetric information, in international trade. Changes on the demand side in industrialised countries are also likely to favour manufacturing firms that increase the services content of their offerings.”

 

 This is not to ignore the simultaneous growth of low paid service sector jobs in food and beverage operations and homecare businesses among other. What is happening is the simultaneous growth of highly paid skilled jobs in manufacturing and some services, and the growth of low paid service sector jobs in certain areas. The medium skilled jobs are in decline or growing slowly. A TED lecture by David Autor (Dec.2016) is worth viewing as it sets out how the skill structure of the labour force changes and is always changing.
The implications include the need for retraining existing members of the labour force and assuring that young people, new entrants, get the right skills. There is nothing new about such advice except that the speed of change may be faster now and educational and training institutions slower to provide the required skills. People can expect this to happen throughout their working lives.

Cultural Diversity

January 28, 2017

Does protection promote cultural diversity?

In 1997, I was invited to be a member of the Cultural SAGIT (Sectoral Advisory Group for International Trade for the Canadian government). Mostly the members were drawn from the different cultural sectors such as print, audio-visual and live performing arts. Lawyers advising these groups were members as well those representing industry and employee organizations. Each represented a lobby group and did so forcefully. In addition bureaucrats, mainly from Heritage Canada, were in attendance to record the views of the members.

As the lone academic unassociated with any cultural sector, unless you count education, but with an interest in public policy, I found the expressed viewpoints interesting, but almost unanimously concerned with either continuing or increasing financial support and protection for the cultural industries. Subsidies and protection should be maintained or increased was the general tone of the discussion. In international fora France and Canada were strong supporters for continued protection while the US opposed it. I questioned the protectionist viewpoint.

All this took place while two events were occurring. One was a series of trade negotiations where cultural protectionist policies were being challenged by some countries, especially the US, as in the case of subsidies and content policies for the audiovisual sector, especially for film and TV.

The second was the influence of technology on both the production and distribution of cultural content. Audiences for over-the-air programs distributed by established public and private radio and TV networks were declining as new online delivery services were being created. The latter expanded viewer choice, and with the internet allowed audiences to select content from all over the world. At the same time print newspaper distribution and associated advertising were declining and have continued to do so.

In the case of public broadcasting, for example, while financial support was maintained audiences were shrinking. Thus on a per viewer basis the subsidy was actually increasing. For example the federal government has maintained its subsidy to the public broadcaster at around a billion dollars per annum while with declining audiences, especially for English language television, it means that on a per viewer basis the subsidy has increased. It costs more to service Canadian TV audiences. Meanwhile those in favour of public broadcasting still argue for either maintaining or increasing the subsidy. CRTC Annual Monitoring Reports (available online) show the CBC’s share of the English language television market fell from 13.2 percent in 1994 to 7.5 percent in 2000 and to 5.1 percent in 2012.

Technological change has also affected the print media with a sharp decline in the distribution of hard copies of books, newspapers and magazines and the ability of consumers to obtain content from an expanding array of online content providers from around the world.

Within the past two decades, the developments have been so major that the ability to protect the cultural industries in the traditional ways – a combination of public ownership, restrictions on foreign ownership, Canadian content requirements and subsidies to Canadian producers – has lessened. Protectionist policies no longer work. Technology has undermined them.

The Cultural SAGIT members were presented with these changes, which became more pronounced with time, but chose to ignore their impact arguing that it would, or might, be possible to perpetuate the protectionist policies by negotiating in UNESCO an International Agreement on Cultural Diversity. This came about in 2005 with the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions.

How the Convention has worked out will be the subject of a future posting. Much is posted on the UNESCO website, but often outsiders are unable to open certain pages related to this Convention.