Archive for May, 2016

Canadian Content – Milking the System

May 31, 2016

 

What do cows and culture have in common? Both crave protectionism, supply management for dairy products and content quotas for culture. While technology has driven a stake through the heart of cultural protectionism, Canadian dairy content at present remains intact.

The Liberal government is re-examining Canada’s cultural policies, which includes the hoary issue of the nature of Canadian content and whether it needs protection. Robert Fulford speaks of this in the National Post (May 27th, 2016)

 “Canada notably lacks a collective imagination. Individual novelists find ways to develop Canadian stories that win both national and international readers. But for the CBC “our stories” remains an empty slogan, a claim that commanding and important legends live offstage, waiting for broadcasters to bring them to life. Federally mandated Canadian content regulations express a yearning for a more robust national spirit, but it’s not something you can regulate into existence.”

On the same general topic, Andrew Coyne in the National Post (May 25th, 2016) writes

“… “American” TV, much of which is created by Canadians. As if the other paradoxes and contradictions of cultural nationalism were not enough, there is no self-evident definition of “Canadian content.” How do we define a Canadian? Parentage? Place of birth? Residence? What makes a Canadian story? Written by a Canadian? Set in Canada? “Identifiably Canadian themes,” whatever they are? 

Now add together all the moving parts needed to make a film or TV show — producers, directors, actors, writers, “in-betweeners” — and you have the absurdity of CanCon as it is actually practised, teams of dedicated bureaucrats using precision-crafted calipers to determine that, say, a Blue Jays broadcast from New York is Canadian but a Bryan Adams song is not.”

Lobbyists for retaining CanCon are the cultural industry associations, their lawyers and academics who feast on the policies.

So should cultural nationalism be supported? The answer here is a conditional yes, but not as presently structured. Questions to be answered include:

What is a Canadian story?

When do Canadians create them?

Why should Canadians listen/view them?

What happens if Canadians don’t read, listen to or watch them?

I will try to address some of these questions and suggest some policy options, one of which is to do nothing and let audiences decide. This is pretty much the view of Andrew Coyne, and one which has merit.

One qualification I would make is to recognize that at the birth of film-making, radio and TV, there may have been an infant industry argument for granting some support/and protection, so that Canadian producers and distributors could get started. This was one reason for establishing public broadcasters like the BBC, CBC and ABC (Australian Broadcasting Corporation) in a number of countries, although not in the US….ok, PBS and NPR have elements of public broadcasting.

The difficulty is that once the infant is supported it is never weaned from the public teat. Canada made the mistake, in my view, of funding its public broadcaster with a combination of public funds and commercial advertising revenue, unlike the BBC and ABC. If the public broadcaster is to remain, it should not be in competition with private broadcasters for commercial revenues.

What is Canadian?

Content is usually considered Canadian if it is authored, acted/performed or produced by Canadians, involves Canadian writers, actors, performers etc, or Canada is where the money to produce it is raised and spent. Some connection to Canada is required. A movie made in Canada about Denmark would likely be considered Canadian content, while a movie made in Denmark about Canada would not. All sorts of anomalies arise.

In the case of current policies, whether Canadians are actually the audiences for Canadian defined content does not matter. For example, the audience for CBC English language TV has been declining markedly, and French language TV to a lesser extent.  CBC radio in both languages has experienced a lesser decline. It does not broadcast commercials.

A private Canadian broadcaster is required to distribute a certain amount of Canadian defined content regardless of whether anyone watches it. It is a push as opposed to a pull strategy where audiences choose to see certain programs. Check the channel packages you are forced to purchase with channels you never watch. Or imagine going to the grocery store and being told that if you want to buy a cabbage, you have to buy a turnip as well.

 Why the need?

The need for Canadians to create Canadian stories is argued to be good for national cohesion and as an aid to education. Canadians need to know about Canada, and the media is an important avenue for this to happen if it transmits the “right” content. So goes the argument.

The problem is that Canadians often do not fall into line. They choose to spend their time with other types of print, sound and visual content. Never more so than now, when the internet age makes it possible to access content either for free (if you own the right hardware) or at low cost and in a wide variety of locations.

So is there another way to proceed? That is to meet the desire of governments to support the arts, which is a branch of education, and to get larger Canadian audiences to pay for the output and delivery?

An alternative approach?

Those most in need of support are in the early stages of their artistic careers, where they have yet to gain a reputation and a track record whether as author, director, producer, performer, artist, etc. Similar to the support given to education and athletes at an early stage of their careers, assist those developing cultural related talents.

Subsidies directed to those who are already established can be both a waste, and a disincentive to survival without dependence on state support. The state does have a role, but it is with measures like copyright and patents to support those who are creative and who do succeed.

In today’s world (globalization and all that), creative opportunities have expanded as it becomes easier for artists to reach larger audiences. Challenges will remain to be rewarded financially from all those who benefit as audiences from artistic work, but this has always been the case. Today, the technology makes it easier to create and publish works, even though the competition for audiences has also increased. Music groups, for example, use the internet to distribute their productions for free with the aim of becoming known and then being paid. Apprentices in the trades face a similar situation.

Like the success of dairy farmers in retaining supply management, the cultural industry lobby in Canada has captured the politicians and bureaucracy to provide increased funding and protection without Canadians necessarily consuming it. Benefits accrue to certain cultural participants but not necessarily to Canadians as consumers.

There is a case for certain types of government support for creative endeavor by Canadians (I prefer to call it that rather than Canadian content). At the same time, there is a need to wean the lobbying groups off the existing so called cultural teats that have been used by all three levels of government. An alternative is to direct support to those at the outset of their creative careers. But at some point they need to be able to stand alone and not turn to the nanny state.

 

Having spent a lifetime in academia with tenure and as the recipient of grants, I realize a similar argument can apply. Here new technology may also bring about change, the subject for a future posting. With a colleague Keith Acheson, I did write Much Ado about Culture, North American Trade Disputes (University of Michigan Press, 1999) which dealt with these issues. We were unable to find a Canadian publisher interested in publishing this book.

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.