Federal Voting in Canada

May 20, 2016

The argument made that the Bloc and the Green Party should have a vote in the Canadian House of Commons (HOC) Committee to propose a new electoral system is, in my view, without much merit. If it has any, it is more so in the case of the Bloc with ten seats and 4.5% of the popular vote, than the Green Party with one seat and 3.5%. The Green party member could be considered an independent MP who happens to be associated with a party. In the future, any elected independent MP could claim some party affiliation to gain membership. In the 2015 election there were candidates from 18 parties other than the 5 with seats in the HOC.

This is an illustration of what could happen with an electoral system using proportional representation. Debate to-date assumes that only the five parties who at present have elected members will run candidates. If that was the case, then these parties would get more members elected at the expense of especially the Liberals and the Conservatives. But that will not be the case, as other parties will spring up, and the HOC could look like a case of measles with an array of parties, and increased difficulty in getting a majority vote on anything like a budget, unless each of the parties is bought off with taxpayers funds. To see what might happen watch Borgen on TV, a Danish series based on what takes place in the Danish parliament where there are many parties.

If there is change to the existing system, then some form of preferential voting appears preferable, where elected members retain links to ridings. Proportional representation, in my view, invites disaster for the governing process, and has not been favoured in referenda in several provinces. No province appears to be making any changes, suggesting that the present system is probably the least worst of those being considered. Regrettably, no party elected on a platform of electoral change can be seen doing the sensible thing and not making a change.

A Rehearsal for WW2 – The Spanish Civil War

May 17, 2016

 

I use to think that the interwar years were those of peace between two world wars. My mistake, which a reading of Adam Hochschild, Spain In Our Hearts, Americans in the Spanish Civil War, 1936-1939 (Houghton Mifflin Harcourt, 2016) makes clear. It illustrates the state of the global political economy, especially in Europe, North America and the Soviet Union at that time.

Economically, these were the depression years in North America, illustrated in prose by Steinbeck’s Grapes of Wrath and later in a movie. In the Soviet Union there were ghastly experiments taking place especially in agriculture, which led to many deaths through starvation. And in Europe the political choice for the future was seen by many to be between Fascism and Communism, with the prospects for capitalism and liberal democracy considered by many to be non-existent.

And yet the last survived in North America and Europe, and to various degrees in countries such as Japan and India, although not in many parts of the former Soviet Union, where elements of liberal democracy are a rare find.

The opponents in the Spanish Civil War were right-wing Spanish Nationalists and left-wing Spanish Republicans. When the war started, Spain was ruled by the Republicans who, having disposed of the monarchy, were to be overthrown by  Francisco Franco. He ruled Spain from 1939 until his death in 1975. From 1978 to the present, the country has operated as a constitutional monarchy which was not something Franco had planned for.

At home, Franco was backed by parts of the military, the Catholic Church and the wealthier classes especially the landowners. Abroad, he was supported by Hitler and Mussolini, as well as by certain interests in North America and Europe. Germany provided aircraft and pilots, using the occasion to prepare for warfare that was to follow in Europe after 1939. Texaco supplied fuel for Franco’s planes and tanks.

Some of the Spanish armed forces remained loyal to the official Spanish government run by the Republicans, but they were supplemented with foreign fighters from an estimated 50 countries, including the Soviet Union, France, the UK, US and Canada. These international brigades, organized by the Communist International, contained about 60,000 people overall, principally male, of which about 20,000 were active at any one time. A memorial to over 1500 Canadians who served in the Mackenzie-Papineau brigade during the civil war was unveiled in Ottawa in 2001. It is situated on Green Island off Sussex Drive.

Hochschild’s account of the war is based on interviews, correspondence and writings of those present at the time such as George Orwell (Homage to Catalonia) and Ernest Hemingway (For Whom the Bell Tolls). It is likely that there are no living veterans, but their descendants are still around. A book about the Canadian participants is Michael Petrou, Renegades: Canadians in the Spanish Civil War, UBC Press, 2008; and there are numerous titles (book and magazine) about other aspects of the war.

A link between the world wars

The threads that bind 1918, the end of WW1, to 1939 and the start of WW2, include the global economic conditions, especially the burden of reparations imposed by the victors on Germany at the end of the war. Keynes accurately portrayed in Economic Consequences of the Peace the damage to future world order that these payments would create. They lead to the rise of Hitler and the demise of democratic institutions in that country.  At the same time, Mussolini, in cooperation with the Pope and Vatican, established a Fascist dictatorship in Italy. Both Hitler and Mussolini had supporters in the US, UK and other parts of Western Europe who were prepared to make a deal with the dictators.

Mussolini came to power in Italy in the 1920s about a decade before Hitler. God’s Bankers by Gerald Posner provides a good account of the Vatican’s cooperation with Hitler (reviewed in this blog March 28, 2016):

…Pope Pius XI signing the Reichskonkordat with ­Hitler, which, in return for winning a measure of freedom for German Catholics ­under the Nazis, assured silence from the Holy See over the forced sterilization of 400,000 people and then only the faintest of ­objections to the Holocaust. 

Another interwar thread was made up of the hyper-inflationary conditions in Germany, the economic depression in the US and elsewhere, and the pressure for political independence by a number of countries associated with European empires. Independence was to come in the postwar period. Today there are about 200 sovereign countries, although sovereignty often does not come with much political or economic independence, as Scotland may soon find out.

Adam Hochschild’s first rate treatment of the Spanish Civil War fits neatly into this inter world war period, describing a time of localised economic and military conflict, while the major combatants prepared for the main action which was to start in 1939 in Europe and the Far East.

The events described are based on the author’s personal interviews with survivors, and materials which participants recorded, often in letters, about their combat experiences. The war pit Spaniard against Spaniard, leaving tensions which remain, including issues of Basque and Catalan sovereignty. Today we can read about it but also view the war in a television documentary made a few years ago by Granada TV.

Everything old is new again

May 13, 2016

Globalization, the Internet, Silicon Valley and US politics, especially the wealth of a few, are all a repeat of the past. There have been other Silicon Valleys and moguls who became very rich.

Previous Silicon Valleys sprung up in Pittsburgh and Detroit, one with steel and the other with cars and trucks. Both withered on the vine and were replaced by California, New York and Boston where much of today’s venture capital is found, especially in communications and related industries. Both Pittsburgh and Detroit are making comebacks with university backed research in the case of Pittsburgh, and new startups around Detroit. One of Steve Case’s arguments in The Third Wave is that venture capital is migrating to many US cities not typically considered as entrepreneurial hangouts.

While American politics presents daily a sad sequence of Mad Magazine adventures, US business remains strong. It is the world’s strongest and most dynamic economy embedded in a third world political system, although parts of the economy spill over into tax havens like Panama.

The entrepreneurial forerunners of Bezos, Gates, Jobs, Page, Musk and Zuckerberg, were Carnegie, Ford, Morgan, Rockefeller, and moguls in the railroad and banking businesses. Public reaction to these titans was the passage of antitrust laws in the US, the Sherman Act, Clayton Act and FTC Act, and the 1889 Combines Act in Canada. Monopolies and price fixing were the focus of public outrage in this earlier period leading to this legislation and the prosecution of price fixing and mergers.

Steel, railroads, automobiles and banking are examples of developments which affected many industries, and were in many ways the equivalent to the way information technology is impacting all economic sectors today. When I was growing up (1934 and on), I seldom travelled far from home, when I did it was by bicycle, bus or train, certainly not air. When I communicated with family and friends, it was by letter, occasionally by telephone, but not long distance which was far too expensive. Telegrams were a cheaper means but provided nothing like Facetime, Skype and email. News came from newspapers and the radio with few broadcast stations. Public libraries were widely used for reading material, and music was sold on vinyl records often with one song per record.

Today, the allure of Trump to his supporters is because they feel disadvantaged as a result of the rapid pace of change in many economic sectors, resulting in either the loss of jobs or the receipt of lower salaries. One issue becomes the means of retraining the existing workforce, always more difficult for older workers, but similar changes have happened before. For example, in the printing industry, metal typesetters transitioned to keyboard typesetting. And the farming sector has become mechanized, so that less than two percent of the workforce now produces a far larger output than the thirty percent did a century ago.

Steinbeck in the Grapes of Wrath portrays what happens to a rural population when a natural disaster and the depression hit simultaneously. But adjustment did occur eventually as a result of a combination of migration, retraining and a war. Today, people expect faster adjustment, and communications provides the means to lobby for change politically. It is just weird to see a business tycoon represent those who are much poorer, and feel disadvantaged by the system which makes him rich.

Today, some similarities exist with the French Revolution described in Wikipedia as follows:

The French Revolution was a period of far-reaching social and political upheaval in France that lasted from 1789 until 1799, and was partially carried forward by Napoleon during the later expansion of the French Empire. The Revolution overthrew the monarchy, established a republic, experienced violent periods of political turmoil, and finally culminated in a dictatorship under Napoleon that rapidly brought many of its principles to Western Europe and beyond. Inspired by liberal and radical ideas, the Revolution profoundly altered the course of modern history,  triggering the global decline of absolute monarchies while replacing them with republics and liberal democracies. Through the Revolutionary Wars, it unleashed a wave of global conflicts that extended from the Caribbean to the Middle East. Historians widely regard the Revolution as one of the most important events in human history.

I make no claim to be an historian, and Trump may be no Napoleon, but the political commotion in the US, and the rise of the right in many European countries, added to the turmoil in the Middle East and North (and other parts of) Africa, suggest that some fairly significant changes are afoot……especially if you believe everything old is new again.

What do Trump and wildfires have in common?

May 9, 2016

A short answer is that both thrive when suitable fuel is available. In the case of wildfires, it is super dry forests and underbrush fanned by winds, some of which are created by the fire; in the case of Trump, the spark is lit by a demagogue, and the fuel is the mass of workers and their families displaced by jobs due to technology, while the top one percent make enormous financial gains.

Nine months ago, few if any thought that Trump could win the Republican nomination, and if he did that he could win the election. Now he has done the first, and some pundits, not wishing to be so wrong again, suggest that he could win the presidency. Not only is there a core of Republican primary voters that fuel his support, but there are Democratic backers of Bernie Sanders who feel disadvantaged in many of the same ways as Trump’s supporters. Could some of these defect and support Trump? Could the anti-Trump Republicans just not vote?

What will happen is anyone’s guess, depending also on who controls the Senate and House, and who gets to be the Supreme Court appointee(s). It was less than a hundred years ago that Mussolini and Hitler came to power through a democratic process and then assumed dictatorial powers. Stalin and Mao took control using a slightly different route. There is no shortage of demagogues seizing power when the conditions are right, and no shortage of forest fires when the fuel is available. It would be a mistake today to focus on the person and not the conditions that allow the person to attract supporters.

The Third Wave by Steve Case – Review

May 1, 2016

When historians come to write about the birth of the internet and globalization, they will research what the entrepreneurs did and what they thought. Steve Case will be one of those sources, and his book, The Third Wave, An Entrepreneur’s Vision of the Future (Simon and Schuster, 2016) will an important read. Walter Isaacson, who provides the book’s forward, will be another source. Among his publications, Isaacson has written The Innovators: How a Group of Inventors, Hackers, Geniuses, and Geeks Created the Digital Revolution (Simon and Schuster, 2014). Both authors assess where we have come from and where we may be going.

Case’s title stems from Alvin Toffler’s The Third Wave published in 1980, and described by its publisher’s blurb as:
Sweeping across history and the future, this stunning portrait of a new civilization springing up across the globe…. It reveals the hidden connections among today’s changes – in business, family life, technology, markets, politics and personal life.

Toffler’s Third Wave, a follow-up to his Future Shock published in 1970, describes events following the agricultural and industrial revolutions. Case, on the other hand, examines the third wave of the internet revolution…..or a third wave of what Toffler was describing as his third wave.

In 1980, Toffler could only imagine how economies and societies might develop. Thirty-six years later, Steve Case, provides an update and leads the reader into an idea of what the future of the internet might bring. It is written by someone who has played a major role in this ongoing revolution both as an entrepreneur, and as a person who has known other entrepreneurs and their companies. He is described as follows on the US Presidential “Jobs and Competitiveness” website”:

Steve Case is one of America’s best-known and most accomplished entrepreneurs and philanthropists, and a pioneer in making the Internet part of everyday life.    Steve co-founded America Online (AOL) in 1985, when the Internet was in its infancy.  Under Steve’s leadership as Chairman and CEO, AOL became the world’s largest and most valuable Internet company.  AOL helped drive the worldwide adoption of a medium that has transformed business and society.  AOL’s early focus on ease of use and social media set the stage for its rapid growth, and at its peak nearly half of Internet users in the United States used AOL. In 1992, AOL became the first Internet company to go public, and was the best performing stock of the 1990s, with a 11,616% return.   At the peak of the Internet boom, Steve negotiated what remains the largest merger in business history, bringing together AOL and Time Warner in a transaction that gave AOL shareholders a majority stake in the combined company.   To facilitate the merger, Steve agreed to step down as CEO when the merger closed in 2001.  He served as Chairman of the Board of the combined company (then known as AOL Time Warner) until 2003.

Steve Case provides a rich menu of observations on the internet revolution and globalization. My choices derive from my tastes. Other diners should read the book to find what satisfies their appetites. In the interests of brevity, I will summarize mine, in no particular order, as follows.

  1. The road to entrepreneurial success is never smooth. Many projects never make it, and the ones that do proceed often face dead-ends and are forced to take new routes. Nothing new in this, but Case provides chapter and verse of how it worked for him. Many entrepreneurs are reluctant to document setbacks.
  2. Entrepreneurial success is often a case of getting the right team together to deal with different aspects of the project, where the members feel free to criticize (assess) each other. This is similar to what happened with a successful comedy team like Monty Python, where success resulted from a team effort by individuals who had to suppress their prima donna genes.
  3. Individuals who succeed in internet related endeavours need not have much or any post secondary education. They will often read in a wide range of subjects, play mind games like chess or solve a Rubik’s Cube, experiment with machines in their garage or basement, and have a sports related interest like basketball, fitness, running, yoga, or tai chi.
  4. Once a firm is set up and receives venture capital, it may carry on for a time losing money and having to depend on angel investors. Maintaining good relations with those supplying the money in the early stages is crucial, or the project will often die on the vine.
  5. Steve Case provides a clearly written case of what worked and what didn’t in his own case. He illustrates how success often depends on having the right team of players providing various inputs. Often one person is celebrated as the successful entrepreneur, but it is because he (or occasionally she) has a support group that makes it possible.
  6. Unlike many in the private sector, Case explains the importance of the role of government in nurturing new ventures, which are going to upset the way existing industries are organized. As technology affects industries, so governments will have to make policy changes to ensure that the economic and social benefits filter down.

 

  • Familiar internet related names include, Geoff Bezos, Sergey Brin, Steve Case, Bill Gates, Steve Jobs, Pierre Omidyar, Larry Page, Steve Wozniak, Mark Zuckerberg, and companies like Amazon, AOL, Apple, eBay, Facebook, Google, and Microsoft…try matching people with companies. These names are related largely to the first two waves of the internet. What Steve Case writes about is how these and other companies will affect individuals, industries and economic activities in the future.
  • For example, education and health care absorb a large share of resources in all countries. They are expensive to run and often have inefficiencies which can be reduced by the use of technology. Education is experimenting with online classes. At one time I thought they might replace many onsite classes, but what seems to be happening is that onsite lecturers are often providing online versions of their courses to accompany the lectures. Students have the option of attending the live lecture and an online version, or only the online version. If the live lecture is at 8.30am, it’s not difficult to imagine what the choice will often be. Another issue is to decide how to give a credential for taking an online course which is recognized by employers, a not unsolvable problem, especially if there is money to be made.
  • Healthcare is developing means to monitor and prescribe for patients at a distance which can revolutionize the way these services are delivered. The technology is involved with medicine in many other ways.
  • Airbnb in 2015 was valued at $25bn. It is the largest hospitality provider in the US and does not own a single hotel (Case 2158 on eBook edition)….a challenge to the hotel industry.
  • Uber has shaken up if not destroyed the traditional taxi industry. The company does not own a single car, but acts to provide the service. The next stage, driverless cars and more importantly driverless trucks will bring further radical change to the taxi and trucking industries. Watch out for protests by truck drivers.

Many more examples could be quoted about how traditional economic sectors will be affected, and there is much more to garner from this book. I strongly recommend it to anyone interested in how entrepreneurship works, and how these evolving technologies will impact economies and societies. It is a must read for entrepreneurs, and for those of us with grandchildren who are going to live in this changed environment.

Aid and Organization

April 25, 2016

 

Prompted by Hugh Segal’s latest book Two Freedoms (Dundurn Press, 2016) concerning Canadian foreign policy, two further issues struck me, Canada’s aid policy, and the country’s relationship to the US. The former has a large and growing lobby of those wanting more, for results that are frequently disappointing, while the latter is the elephant in the room, and often means that foreign policy is tightly interwoven with domestic policy.

Previous postings resulting from reading this excellent book were made on April 20th and 22nd, 2016

Foreign Aid

There is widespread support in Canada for foreign aid in general, but intense competition by NGOs clamoring for a larger share, in addition to a well organized lobby of those wanting a bigger overall budget. It is now just under C$5 bn a year. That’s not much when spread around the world.

What would C$5 bn buy in 2016?  Remax reports prices for different Canadian cities. Assuming C$500,000 to buy a house, the aid budget would buy the equivalent of 10,000 houses a year spread over Asia, Africa and Latin America, where much of the aid is spent. And part of the budget is used for administrative purposes at home and abroad. As I see it, Canada, at the federal level, is not spending much on foreign aid, and there is a substantial literature documenting the way it is often misspent abroad….and sometimes at home.

A more hopeful sign is the amount sent abroad from Canada as remittances by, for example, Haitians in Canada to their families in Haiti. In total to all countries, remittances are about five times the amount of official Canadian aid (see http://cidpnsi.ca/canadas-foreign-aid-2012/). Should this be considered as part of a country’s foreign aid? Should more of it be encouraged? Can the cost of transferring private remittances be lowered?

Then there is the issue of reverse aid. Canada and other developed countries encourage students from developing countries to study in Canada. If they don’t return to their homelands, this does not help development abroad, but it may help the Canadian economy. Canada, similar to other countries, makes it easier for those who have studied in Canada to stay……good for us, not so good for them.

Too much emphasis, in my view, is placed on the size and distribution of the federal aid budget, and too little on closely related activities like remittances and reverse aid flows. Not surprisingly this is due to the pot of federal money being available for aid projects, and the lobby groups which spring up to administer them. One suggestion – if aid is to contimue, it should be concentrated on the education of women in developing countries. Studies show that this leads to positive results.

 

The US – a mix of domestic and foreign policy interests

Canadians often resent the impact that the US has on Canada, combined with a perceived lack of attention given by the US to Canada – an exception perhaps being sports. When there is an emergency like an ice storm, crews are sent from the US to provide assistance, and the reverse is true, leading to times of increased public awareness. In many policy arenas however, Canada is not a problem, and there are many other countries for the US to contend with abroad.

The two countries have extensive official presences. Canada has an embassy in Washington and consulates or trade missions in thirteen US cities. The US has an embassy in Ottawa and consular offices in seven Canadian cities across the country. Provincialy, Alberta, Ontario and Quebec have fully-staffed Washington offices, while Manitoba has a part-time representative. Other provinces are represented by lobbyists in Washington, a nice gig for former US ambassadors to Canada.

 In 2015, 75% of Canada’s exports and 66% of imports came from the US. At one point, the Ambassador Bridge linking Windsor and Detroit, an estimated 10,000 commercial trucks cross per weekday in both directions (over 2.5 mil per year). In other provinces, there are land, air and water crossings of persons and commerce, as well as the transmission of electronic signals over the air and by satellite and other means. Various statistics of trade and people flows illustrate how particular parts of Canada (and the US) are affected.

The US has an enormous impact on Canada in so many areas that Canadian foreign policy becomes increasingly intertwined with  parts of domestic policy, leading provinces and cities to want to be at the table when foreign policy negotiations are underway. While this has always been the case to some extent, today’s interdependencies between foreign and domestic policy require thought to be given to the administrative structure for their management. Today’s world is far different from when the forerunner of Global Affairs Canada was established, and while changes have taken place they perhaps need further revision. One alternative, which has happened, is for foreign policy to be made in the Prime Minister’s office, and the department bypassed entirely.

 

Let Others Do It

April 22, 2016

Canadian defense policy

Ambulances and fire engines spend most of their time waiting for a call. When it comes, we expect something to happen, not to be told sorry, but the staff and equipment are not available. With an understaffed and under-equipped military, successive Canadian governments have left defense policy in a state of unreadiness. If events at home or abroad call for action, Canada’s ability to respond falls short of what might be expected of one of the world’s wealthier nations.

Another way to look at it is that Canada has contracted out to others, and especially to the US, the capability to respond if the country is threatened and defense forces needed. Don’t be surprised if a future American administration asks us to pay an annual fee for the services provided. After all, some have proposed getting Mexicans to pay for building a wall on the US-Mexican border.

(This has always seemed a bit odd, because if a drone can deliver parcels for Amazon, surely one could deposit a person over the wall, and people could be hired to give advice on building tunnels.)

Canadian defense personnel are well trained and perform admirably when required to do so, but there are not enough of them, meaning that funds are not available to recruit, train, equip and retain them. The statistics are well known relative to those of other countries.

The number of army, navy and airforce personnel, level of defense expenditures, and number of ships and planes are low in absolute and relative terms in comparison with others. And it is not the amount of equipment owned, but what actually works that matters. Repeatedly documented is the age of Canada’s fighter planes and helicopters, and the decrepit state of its small navy. When it needs naval support, it has to rent or borrow from others. The Russians must feel threatened that a single Canadian ship was patrolling the Black Sea before having to withdraw for maintenance.

Luckily there are a few determined academics and journalists who document these issues. Politicians of all stripes see few votes in allocating money to defense, preferring to spend it on foreign aid and offering Canadians further entitlements at home.

Hugh Segal highlights these and other issues in Two Freedoms, Canada’s Global Future (Dundurn , 2016), where he writes p.166, “At present, our forces have a patrol deficit, a logistics deficit, an intelligence deficit, a training deficit, and the federal budget has an operational deficit.”  Academics like Jack Granatstein and Fen Hampson amongst others make a similar case: Hampson writes “We remain comfortable within the American cocoon.” And journalists including David Pugliese and Matthew Fisher actually visit troops on the ground, and provide the public with the current state of military play. There is one further dimension I would add.

Canadian forces are sent into combat zones to provide advice and training to foreign fighters, with the impression given to the Canadian public that they will not personally engage in fighting, and if fired on will not respond. The latter is not part of the Canadian mantra of peace-keeping. But it defies common sense to expect Canadian advisors, who come under attack, not to respond to protect their lives, nor should they be expected not to respond.

A related reality for Canadians to understand is that by directing allied fighters where and whom to shoot and bomb, after you have helped refuel their planes, and by making military sales to allied forces which actually fly attack missions, you are engaged in direct combat roles. While Canada wants to appear to be partially pregnant, it has to realize that the condition does not exist either in peace or war. You go in or stay out.

How others know us

April 20, 2016

Hugh Segal has written Two Freedoms, Canada’s Global Future (Dundurn Press, 2016) in which he discusses the future direction of Canadian foreign policy. It is written clearly, succinctly and provocatively. His proposals recognize the past and argue for change. Retired and active bureaucrats will be irritated by some of the ideas proposed. This is exactly what is needed, and probably intended, to generate debate and hopefully some changes, although these are hard to bring about even with a new government. As the Cardinals and Vatican bureaucrats know, popes come and go, while many of them will outlast him.

Segal proposes that foreign policy should aim to achieve two goals, freedom from fear and freedom from want. All else should follow from these. Implicit, but not stated is that Canada’s foreign policy today has lost its focus and needs to be brought back to the objectives which he proposes. I find his case persuasive.

Segal also writes, “Today’s Canadian foreign service is based on a post-war model. It sees as its primary roles the monitoring of economic, political and strategic developments around the world……It can best be called a “monitoring and sustaining operation,” one that is supervised by an establishment that has typically seen Foreign Affairs as a practice for a certain elite, preferably of the Oxbridge variety, and not really in the purview of ordinary citizens or communities. Its default position is one of passivity, which is abandoned only if some aggressor threatens the nation, or new government comes along with a more activist bias – something that officials seek to discourage at every opportunity (p.109).”

 

I would suggest that change will require, in particular, understanding two sets of factors. First, the world has changed in a number of ways which means that the conduct of foreign relations has to be revised. And second, as a result of some of these changes, foreign and domestic policies are more intertwined than in the past.

A diplomat working in 1900 would have difficulty in recognizing today’s world.

  • World population has risen from 1.7 bn in 1900 to 7.4 bn today (Canada from 5.3 mil to 36 mil).
  • Transportation costs by land, sea and air have fallen, which opens up the possibility for travel and with rising real incomes more people can afford it. Freight costs have also fallen.
  • Declining communication costs mean that people in one part of the world can know in real-time what happens elsewhere. The refugees from the Middle East all seem to be carrying cell phones. Newspapers and letters are not how people get most of their information. By the time a diplomatic report is filed it may be too late to be useful.
  • From 1950, the world economy grew as did the number of sovereign countries. These are now members of international organizations, many of which fall under the UN umbrella. In 1945, the UN had 51 member countries. Now it has 193, of vastly different geographic and population size and per capita income. All are supposed to be sovereign but in an interdependent world, this need not mean much especially for the smaller fry. If Scotland becomes independent, it will have to make concessions to join the EU and other international organizations, thereby limiting its sovereignty. The same is true for larger economies but size matters, and some can and do exercise more power than others.

 

Secondly, at least since the 1950s, and especially in today’s world, foreign and domestic policy are so intertwined that negotiations with other countries need to be handled so as to recognize the interdependencies. Of course, other departments and levels of government have had input into diplomatic negotiations, but the cooperation has not always worked well and needs to be restructured.

Consider the topics of trade, aid, immigration, the environment, industry, agriculture, communications, and transportation all of which have separate federal departments or agencies, as well as domestic and foreign implications.  Add to these the interests of provincial and municipal governments, and you have a raft of interests to organize for international negotiations.

Note: Other aspects of Two Freedoms warrant discussion which I will attempt in future postings. A former student told me to keep each entry brief….a wise suggestion.

Searching for employment openings

April 17, 2016

The third industrial revolution beginning around the 1960s has forced many occupations and industries to alter the way they operate. For example, all branches of the media, education, health care, the configuration of industries and occupations have undergone some transformation. Over time, different skills are needed requiring existing workers to be retrained, and new workers to receive the necessary training.

Consider two examples:

  1. Farming, over the past hundred years, has gone from being less labour to more capital intensive with mechanization, new strains of grains and breeds of cattle. More output is produced using both the product of researchers working in labs and less direct farm labour. In the past, refrigeration and railroads made an enormous difference to both output and the distance between producer and consumer. Those losing their farm jobs either had to retrain or move to another occupation. Adjustments were easier for some than others.
  2. Computers and the internet have an enormous impact on the way many goods and services are produced and distributed. Authors can deliver manuscripts electronically to publishers, who in turn make them available for readers to peruse and buy online. Cut out of this business are printers, wholesalers, bookstores and libraries, although the last may loan hard copies as well as eBooks.

In earlier times, changes occurred with the introduction of steam, the internal combustion engine and electricity. It is debatable which of these have had the greatest impact, and perhaps it is unimportant to know the answer. What is of interest is who is affected, and how capital and especially labour can adapt to the changes today.

The adjustment process is often associated with the argument that good, meaning higher paid, manufacturing jobs have been lost, while there has been a growth of lower paid unskilled jobs. Some, especially older workers, may find it difficult to retrain at all. For example, those employed using metal print type found it difficult to adapt to computer typesetting. Some did, while those entering the labour force have the opportunity to receive the education and training required by the technology in use today.

 

Employment statistics today show the allocation of firms to industry classes defined in earlier times, when the inputs and the technology used by these firms were different.

Consider agriculture. Employment in agriculture is about 2% of the Canadian labour force today, compared with around 40% in 1900, while agricultural output has expanded enormously. This is due to the output of the farm machinery industry (eg. tractors and combine harvesters), refrigeration, transportation, research into the production of new strains of grains, vegetables and fruit amongst others. Those working in these industries are counted as employees of these industries, not as agricultural employment. The loss of farm related jobs is not as great as imagined.

Consider automobile manufacturing. Output is more automated now than in the past, requiring less labour on the production line. At the same time, persons are needed to build, program and maintain the machinery used in production. These won’t be counted as part of automotive employment but as part of other industries. Similar changes can occur when a manufacturing firm has an accounting and legal department, and then decides to contract out the work to independent firms. Manufacturing employment declines and services employment rises. The output may remain unchanged.

A survey of employees by wage level does show that the proportion of lower wage and part-time jobs has increased. Why? It can mean that existing workers have not adjusted to the requirements of different industries and sectors, and may do so in the future. It may be that new workers are not receiving the type of training required by firms. More students do seem to be gravitating to community colleges, where trades are taught, either in conjunction with university classes or as a separate course of study. The conclusion that Canada is losing well paid jobs has to be understood in context.

An undergraduate degree in the arts does not hold out good job prospects, unless accompanied by postgraduate study, and work experience mixed in with academic study. A strong CV includes volunteer as well as paid work while studying and definitely during vacations. It may start with baby-sitting, gardening and dishwashing. There is no shortage of these types of jobs. Also an employer will search the internet for postings and communication by an employee applicant. Nothing is confidential and never has been.

NDP Continue to Waffle

April 14, 2016

 

Everything old is new again best describes the Leap Manifesto which, at its Edmonton convention, the NDP approved for further discussion. Leap follows Waffle and is applauded by Liberals and Conservatives, who see it as further eroding support for the NDP. In the 2015 Canadian federal election, the party lost 51 seats and official opposition status. If Leap had been there during the election, the NDP would have been competing with the Green Party for the smallest number of seats.

Michael Den Tandt writes

“As for the party, it has now cast its lot with the Lewises and their Manifesto. This amounts to a plan for Canada to cast aside the free market in favour of a deeply protectionist, managed economy, in which the happy citizenry drive state-funded electric go-cycles fuelled by state-funded wind turbines and live in straw bale houses that don’t require heat in winter. It is an addled, cockamamie vision like something out of Orwell, or the fevered imagination of British Labour leader Jeremy Corbyn.” (Vancouver Sun, April 9, 2016)

Alberta NDP Premier Rachel Notley comments “These ideas will never form any part of policy. They are naive. They are ill-informed. They are tone deaf.”

Robin Sears, a left leaning advocate, sees it as the product of “loony leapers.”

 

Two aspects of the Manifesto are what it represents, and the role played by three generations of the Lewis family. The NDP has always had a far left wing. In 1971 it emerged as the Waffle group lead by Jim Laxer, which was later barred from the party because of its extreme views. Today, Leap signals a re-emergence of the far left, and a challenge to moderate socialists.

David, Stephen and Avi Lewis, father, son and grandson have all played a role in left-wing politics. David Lewis had a distinguished career in Canadian politics as leader of the NDP from 1971, when he defeated a Waffle candidate on the fifth ballot. He had a reasonable leftish view of corporate private ownership in line with those of Tommy Douglas. In the 1972 federal election, he described Canadian corporations as “corporate welfare bums,” which did not endear him to some. In 1974, David Lewis lost his seat and resigned as NDP leader.

Son Stephen Lewis was elected to the Ontario legislature in 1963, and became leader of the Ontario NDP in 1970, at which time there were internal party struggles with the Waffle group. The NDP became the official opposition in 1975, but lost this role in 1977. In 1978, he resigned as party leader and as MPP, and took up the role of public intellectual.

At the party’s 2016 Edmonton Convention, Stephen Lewis was the keynote speaker where, for some reason, he declared himself “insufferably buoyant” about the future after the party’s federal loss of 51 seats and official opposition status. He noted that he had led the Ontario NDP to three successive second or third place finishes. In one of these it lost official opposition status. At convention time in Edmonton, the party stood at about eleven percent in the polls.

Grandson Avi, a broadcaster and filmmaker, has never been elected to a legislature. He is author of the Leap Manifesto, which so far has not only strengthened the other parties, but created a split within the NDP. It has probably undermined the Notley government’s ability to be re-elected in Alberta, while it is debated within the party for the next two years.. Little wonder that Liberals and Tories are applauding this outcome.


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