Category Archives: Economics

The Last Post

In all likelihood, this is the last post on this site. The blog has run for precisely three years, this post aside, and was, in good part, a deliberate but modest exercise for me. During its first year (2013), I set myself the task of writing a post every week, and then did that, before tailing of to a more intermittent schedule. As I wrote in an earlier article, I have blogged as a creative outlet, for myself, because I actually enjoy the art and craft of writing, especially when I can do so on my own schedule.

Photo: Thomas Hawk
Photo: Thomas Hawk

Maybe the writing and posting is little more than the piteous human impulse to leave something behind, after we’re so soon gone: a small stack of notes, initials carved in the trunk of a tree, ‘handprints on the wall of the digital cave.’

My approach has of course meant that the size of the audience for this blog has been limited, to say the least, but I’m not too fussed about that. Its final value for me has lain elsewhere.

Maybe one day it will be appreciated as one small record kept during times which were changing as quickly as they have ever changed for humankind. The disruption of the digital revolution was in high gear back in 2012-13, and it seems to me that it has slowed some in more recent years. Robotic cars are coming on rather more slowly than did smart phones.

These days, it feels more like we are living in a time of reckoning with that technical, social, economic disruption, a time when many people are looking for someone to blame for the more difficult circumstances they suddenly find themselves living in. And, sadly, there are always politicians willing to step up and seize the opportunity afforded by those searchings, politicians like Donald Trump and Marine Le Pen. Clearly there is a price to be paid when change is not so well managed by those with control of the social and economic levers. If we don’t get effective progressive change then we get reactionary change, and reactionary change is doomed to fail, at least in the long run.

The most impactful change has of course been economic, the result of globalization in a capitalist society which makes having more, as opposed to less money ever so much more convenient and status boosting. Median incomes have stalled in the West, given global competition; jobs have disappeared, the kinds of jobs available have changed, and it is so much easier to blame immigration—the visible signs of change—than it is to blame, say, automation, which has been so much more likely to have undermined your economic well being.

What does it mean for the future? It’s always hard to say. Events are by their very nature unpredictable, and unforeseen events can quickly sway historical outcomes in big ways. As the human species continues to overrun the planet, we are going to have to wrestle certain problems—overpopulation, ecological damage (especially climate change), economic inequality—to the ground, or we are in for a rough ride.

Can we do so? It’s certainly possible. All it takes is the right choices, collectively and individually, made by the right people at the right times. Simple, right?

No, not so simple. But then, what we can do individually is restricted, so that makes it a little easier. Educate yourself, sit back, see the bigger picture, make choices for the greater good, rationally rather than out of frustration, resentment, anger or any of those other emotions which we then look to rationalize. Try to be aware of when you are acting selfishly, blaming others, speaking only to those from your own ‘tribe’, however that may be defined, whether by class, race, religion or nationality. Like it or not, we are all in this together. That colony on Mars will never be our salvation.

Maybe, just maybe, this blog has helped someone other than me to do these things, to maintain a wider perspective, clarify, stay calm and choose wisely. If so, bonus. Great. If not, that’s okay too. It’s helped me.

The Leisure Revolution

Yuval Noah Harari, in his 2014 book Sapiens: A Brief History of Humankind, has an interesting take on the ‘agricultural revolution'; you know, where, way back, we learned to plant crops and domesticate animals. He calls it “history’s biggest fraud.” Not in the sense that it didn’t happen. It did, leading to an increase in food supply and, consequent to that, the growth of cities. His contention is that it did not lead to a better life for humankind, neither a healthier diet nor more leisure time.

5121772432_283c4f57ed_zInstead it led to a less stimulating life with the increased likelihood of starvation and disease. The starvation came about as the result of periodic natural disasters, like drought, devastating the crops we came to depend upon, and the disease came about because urban conditions are much better for spreading illness than are rural ones. As to leisure time, Harari asserts that our hunter-gatherer ancestors ambled about a wide, natural territory, often able to harvest a diverse and abundant food supply, and to do so in fewer hours than it took the average farmer to feed his family a few centuries later.

Rutger Bregman, in his 2016 book, Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-hour Workweek, makes a similar argument about the industrial revolution. It did not lead to a more leisurely life. Bregman estimates that in 1300 the average English farmer worked about 1500 hours a year in order to make a living, whereas the typical factory worker in Victorian England worked twice that many hours just to survive. The 70-hour workweek was the norm in a city like Manchester in 1850, no weekends, no vacations.

Eventually things improved. By about 1940, in the West, the 40-hour, five-day workweek was fairly standard, a change led, surprisingly enough, by none other than Henry Ford.

And then, things truly began to look up. In 1956 Richard Nixon promised Americans a four-day workweek, and by 1965, prognosticators everywhere were predicting vast increases in leisure time, with workweeks of as little as 14 hours. There was considerable hand-wringing about the coming, perplexing problem of boredom, idle hands given to inflamed immorality and violence.

It all came to a grim, grinding halt in the 1980s. Today the average guy in the U.S. works 8.4 hours per work day, or 42 hours per week. That’s very little changed in the last 50 years.

The digital revolution has brought us an accelerated life, new, not always better forms of community, grotesque economic inequality, and, unlike the industrial revolution, persistent unemployment. (Many people, like weavers, were put out of work by the industrial revolution, but then it went on to deliver a slew of different types of employment, like shop foremen.) And so far, for those people still working, it hasn’t done much for additional leisure time.

The other factor in why many of us are busier these days is what Bregman cites as “the most important development of the last decades.” The feminist revolution. While in some countries at least the workload for individuals has decreased slightly, families these days are living a blur, because these days women are contributing about 40% of the family income, and working full time to do so.

It seems that, with the coming of the digital revolution, we’ve gone and done it to ourselves again. And here’s a disconcerting note; surveys show that many people today would rather earn more than work less—so that they can live the lifestyle they’ve always dreamed of. They’d rather have that bigger house, newer car, more fashionable outfit, and dream vacation than they would more leisure time. We might call this the consumer revolution, and it’s largely a post-WWII phenomenon.

What’s to be done? Well, it’s not in fact that mysterious. Economic answers come with things like a guaranteed annual income and a progressive tax regime that effectively redistributes wealth. And there is very solid evidence as to the validity of these economic remedies, much of it to be found in Bregman’s book.

But just as relevant to the modern leisure deficit is the fact that, as indicated above, we chose these outcomes. Not always consciously, and often incrementally, without realizing the ensuing consequences, but nevertheless we had and still have choice in these matters.

We can choose to live more simply, with less stuff. We can choose to buy a smaller home, drive an older car, purchase clothing at a second-hand store, and grow a garden.

Don’t like your job? Feeling like a wage slave? Have other interests you’d love to pursue?

It’s a choice.

London 1897

1897 was Queen Victoria’s Diamond Jubilee year; she had been reigning over her Queendom for 50 years, keeping Edward, her eldest son and thus heir, sidelined until he was by then in his late 50s. The current British monarch has of course done the same thing for even longer to her eldest son Charles, who is now 67.

Traffic outside the Bank of England, London, 1897
Traffic outside the Bank of England, London, 1897

Economic inequality was pervasive, glaring and much resented in Victoria’s England, fed by proceeds from the largest empire the world has ever known. (It occupied nearly a quarter of the earth’s total land mass.) Accurate data is hard to come by, but here’s how George Bernard Shaw came to describe the situation:

“It is in this phase of capitalistic development, attained in Great Britain in the 19th century, that Socialism arises as a revolt against a distribution of wealth that has lost all its moral plausibility. The inequalities [have] become monstrous.”

Such conditions gave rise to not only socialism (think Bernie Sanders), but communism, and Scotland Yard security forces kept a vigilant eye upon London’s Communist Working Men’s club, where various firebrands regularly called for overthrow of the existing government. Even more worrisome was the Epicerie Francaise, where international anarchists met and called for radical action of all sorts. French security forces had opened a Special Branch in London just to monitor the Epicerie.

In April of that year, a bomb exploded in the London underground, killing one and injuring more. The perpetrator was never identified, but most people blamed ‘foreigners,’ probably Italians. ‘Immigrants,’ we might call them today, probably Muslims.

In May, Guglielmo Marconi (a rich, well-connected Italian) sent the first ever wireless telecommunication over open sea when he transmitted, “Are you ready?” from the coast of Wales to Flat Holm Island, a distance of 6 kilometres. Unlike his scientific counterparts who favored the free exchange of knowledge (open source?), Marconi was the prototype of today’s successful start-up entrepreneur, brilliant, hardworking, but ever concerned that his competitors (and there were numerous) would steal his technology and exploit it commercially before he was able to.

Telegraphy was an established industry by this time, having been first introduced commercially in 1837. It had sped up the exchange of information unimaginably, from the top speed of a human or animal to virtually immediate, over vast distances. In freeing information from the movement of any physical object, telegraphy had revolutionized the global economy, as well as the media, that is journalism. Critics, however, complained that the telegram had resulted in the standardization of language, stripping it of its regional distinction and flair.

Marconi’s new wireless technology was disruptive and often begrudged. When he later succeeded in transmitting a wireless message across the Atlantic Ocean, he promised that he would undercut the cost of sending a telegram via ocean-bottom cable by 60%.

In the heyday of its popularity as a medium, the average telegram was about 12 words, or about 60 characters.

Electric cars made their first appearance in August of 1897, as London taxis. They disappeared from the roads two year later. Their biggest flaw was likely the excessive weight of their batteries.

Meanwhile, over in America, September saw the Sheriff and his men from Lucerne County, Pennsylvania fatally gun down 19 striking mineworkers, while injuring many others. The murdered men were immigrants, all were unarmed and all had been shot in the back; several had suffered multiple wounds. Protests ensued, sometimes violent, and the Sheriff and his deputies were eventually arrested, only to be later acquitted.

The French expression, ‘Plus ça change…’ is an abbreviated version of a maxim usually translated to English as, ‘The more things change, the more things stay the same.’ Indeed, some things change, (especially technology; the fastest motorcar in London in 1897 topped out at about 35 miles per hour), and some things don’t. One website defines the expression as the “resigned acknowledgment of the fundamental immutability of human nature and institutions.” Touché.

So there it is for you. A little historical perspective on today’s turbulent times. Never a bad thing.

Global Culture

Cultural industry. It sounds like an oxymoron. ‘Culture’ relating to the artistic or creative, and ‘industry’ describing business interests, on a large scale. At the very least, it seems a rocky marriage.

The term is most often applied to the electronic arts, as they are called: music and motion pictures, the artforms which lend themselves to mass duplication and distribution. No one talks about the dance industry, or the sculpture industry.

The cultural industry I’m most familiar with is the motion picture one, and indeed, someone once referred to the movie industry as ‘too much of a business to be an art, and too much of an art to be a business.’ That just about encapsulates the conundrum.

In Canada, unlike the U.S., the movie and television industries have always needed public subsidy. The costs of production are simply too high, and the Canadian marketplace too small, for the indigenous production companies to survive. That’s been the argument at least.

I can recall, back in the mid-80s, when the Canadian Film Development Corporation, originally founded in 1967 to advance the Canadian movie biz, became Telefilm Canada, charged with promoting and funding the Canadian ‘audiovisual’ private sector, that is television as well as movies. People from the agency were talking about how it was intended to grow production companies from the nascent stage, but then to gradually withdraw its funding as those companies matured and became financially independent.

In the 90s, Telefilm still explicitly required funded productions to be ‘distinctly Canadian.’ These shows were to be stories told by Canadians, set in perceptibly Canadian locales, in which Canadian audiences could recognize themselves. So too were so-called ‘lifestyle’ and ‘industrial’ shows excluded from support; game shows, talk shows, that sort of thing.

downloadAs we rolled into the new millennium, TV shows like Flashpoint, Orphan Black and Rookie Blue made little effort to clarify where their episodes were shot (Toronto), although Rookie Blue did, in its latter seasons, begin to actually use Toronto street names. Rookie Blue also, in its final season last year, received over five million dollars in subsidy from the Canada Media Fund, a public-private partnership administered by Telefilm. That in addition to the considerable monies the production company would also have received via both provincial and federal tax credits. The parent company for Rookie Blue is E1, a multimedia corporation, headquartered in Toronto, with revenues in 2015 of more than $1.5 billion Cdn. You’d have to consider that mature.

And today, when Paperny Entertainment, a Vancouver-based production company owned by E1, produces World’s Weirdest Restaurants for the Food Network, surely a ‘lifestyle’ distributor, that show can access all the same government subsidies that can any other TV show.

At the same time, I don’t mean to sound alarmist bells here. The situation I’m describing is not unique to Canada. It was probably naive to think, back in the 80s, that production companies could be weaned from the public funds which did so much to create the business model by which they grew and prospered. And god knows governments everywhere are competing (some say in a race to the bottom) to offer ever more generous tax credits to attract the industry, given that it pays well, is labour intensive, and relatively non-polluting.

Governments everywhere have also fought to exclude cultural industries from the various free trade-type agreements that continue to proliferate in our times. Ultimately though, the problem is beyond national controls, subject to the same global economic and technical forces which are inexorably interconnecting the planet. As Catalina Briceño, Director of Industry and Market Trends at the Canada Media Fund, wrote in a new report, “[the] globalization of tastes is supplanting cultural differences.”

It’s no surprise then that, especially with dramatic movies and television shows, creators and producers design them to play like home product in several markets. Rookie Blue aired on Global in Canada and ABC in the U.S. Orphan Black premiered on Space in Canada and on BBC America in the United States.

John Fawcett, one of the creators of Orphan Black, certainly did his best to put a positive spin on the situation in an interview with Entertainment Weekly in 2014: “To be honest, we don’t want to say we’re American and alienate the Canadians, or say we’re Canadian and alienate the Americans. The bottom line is we’re one big happy family. We’re just a little bit further north than you.”

Nice. As culture and industry evolve globally, their marriage begets family. I can get behind that. The family part at least. Happy? Maybe not quite so much.

Immigration

I am in awe of an immigrant. This is someone who has severed ties, forever, with everyone who has ever supported them, and with everything that has served to define them. Friends, family, home, country, culture, familiarity in general; all that and more the immigrant has chosen to leave behind, with no intention of ever returning to stay.

Maybe it’s simply a reflection of my own middle-class background in one of the most peaceful and privileged countries on earth, but I can’t imagine making that choice. It seems an incomprehensibly difficult transition to complete, lonely, deeply unsettling, arduous in every practical way. And more than anything, for me, I can’t imagine permanently breaking the family tie, the ancestral line which, however inconsequential or little known, has brought me to where I was born and raised. Every immigrant must know, in their hearts, that their children will grow up to be fundamentally different from all the family members who have preceded them, that they will never enjoy the blood bonds that they would have had they lived in their country of origin. To immigrate is to accept that you must begin a whole new family history.

I have a friend who, in emigrating, gave up a career as a librarian to become a janitor. I once worked in a restaurant with a man who had been a lawyer in his home country, and who was now host at that restaurant, seating the customers. I know of couples who have not been able to manage the change together, where one or other of the two couldn’t make the leap, and so returned home, ending the marriage. And of course we all know of the people who literally risk their lives for a chance to emigrate. (To me, these people are by definition not immigrants, nor ‘economic migrants,’ but refugees.)

Sue Waters photo
Sue Waters photo

Give me your tired, your poor, 

Your huddled masses, yearning to breath free, 

The wretched refuse of your teeming shore, 

Send these, the homeless, tempest-tost to me,

I lift my lamp beside the golden door.

 These words are of course the inscription on the Statue of Liberty, and they could hardly be more ironic at a time when Donald Trump leads the polls among Republicans running for President, while proposing that a wall be built along the entire U.S.-Mexico border.

The very idea that we can draw an imaginary line along some part of the earth, then say, ‘The land on this side is ours; you are not allowed to enter or stay,’ is basically bizarre. Sure, we collectively agree to a set of laws which lends force to this prohibition, but morally, can it be justified? If so, why? Because we got there first, then organized to keep others out? Seems pretty thin justification to me.

Years ago, I watched a short film by madcap artist Byron Black (sadly it doesn’t seem to exist online), in which Byron furtively approaches a small concrete pylon marking the Canada-U.S. border as it crosses Point Roberts, the western-most peninsula descending from Canada across the 49th parallel, making ‘The Point’ a tiny but separate part of the American empire. Byron steps carefully over the pylon, then waits apprehensively for the wrath of god and government to descend upon him. It doesn’t; no bolt of lightning, no megaphone voice telling him to lie face down on the ground, nothing. It goes on, but suffice it for me to say that the piece ends with Byron gleefully hopping back and forth across the border, maniacally celebrating his ability to flaunt the power of big government. For my money, the film surgically and hilariously impales the notion of ‘border.’

Recently, Gboko John Stewart, a young man from Liberia, applied for and was granted admission to Quest University in Squamish, BC. Initially the Canadian government denied him a visa for entry because of the Ebola outbreak in his home country. Reasonable enough, you might say. An international quarantine was in effect against this virulent disease. But once Liberia was declared Ebola-free by the World Health Organization in May of 2015, Mr. Stewart applied again for a visa. And again he was refused; this time because some nameless bureaucrat was not satisfied that he would leave Canada at the conclusion of his time at Quest.

I have never met Mr. Stewart; know little about him. He works as a freelance journalist and radio host in Monrovia, and, from his writings, it’s clear he is skilled in the English language. He’s also an activist, deeply involved in an organization called HeForShe, which calls for men to support the equality of women. Mr. Stewart presumably never expressed an interest in staying in Canada permanently, but regardless, and despite my limited knowledge of him, I have to think he should be exactly the sort of person my country might be prepared to admit, temporarily or otherwise.

And, once again, I find myself struggling to understand the helplessness and frustration he must feel at the anonymous, arbitrary power that denies him a chance at his educational dreams.

When it comes to immigration, tragically, none of it seems to make any sense.

 

Discrepancies

Pete Muller photo
Pete Muller photo

This photograph was published in the July 2015 issue of National Geographic magazine. It was taken in a village in southern Guinea, during the recent Ebola outbreak which had its epicentre in that part of Africa.

The young girl sitting on the blanket looks distinctly uneasy. Before her, the caption tells us, a traditional “healer” is preparing to exorcise the “malign spirits” which may have caused the girl to contract the Ebola virus. We see the healer’s face encrusted in white; a bit of green vegetation is wrapped around one wrist; he carries a kind of sceptre, a decorated stick.

What’s most remarkable about the photo is to be seen in the background, among the small group of villagers who have gathered to watch the exorcism—two young men hold up their phones, videoing the process.

The elements of the discrepancy seem almost too much to set side by side, and yet, there they are. A rankly superstitious practice which tracks right back to a mention in the Dead Sea Scrolls (i.e. before Christianity), smack up against the latest in 21st century communications technology. How is this possible?

The fact is today’s world is rife with such discrepancies; it’s only that they’re usually further removed from one another. In whole villages in rural Afghanistan not one person may be able to read and write. In the city of Helsinki, with a population of almost one and a half million, you will be hard pressed to find anyone over the age of 15 who cannot read and write. (The literacy rate In Afghanistan is 28%, among females less than 13%; in Finland the rate is 100%.)

Carlos Slim, the Mexican business mogul, has a net worth of more than $77 billion U.S. The average hotel receptionist in Mexico brings home $4260 U.S. in pay over the course of one year.

In California, it is illegal for mental health providers to engage in “reparative therapy” for LGBT minors. In Uganda, you may be sent to jail for up to 14 years for failing to report a suspected homosexual.

More than half of new lawyers in Canada are women. In Saudi Arabia, women cannot drive a car, vote, or leave home except in the company of a male chaperone.

In all these cases, the divergence is just too great. And no one, anywhere, should attempt to justify these differences via the notion of ‘culture.’ They remain in place because it is to the advantage of the privileged group that they do so.

Does digital technology close these gaps, or drive them ever wider? The answer is complex. Certainly those phones held up by the two young men in Guinea offer them opportunities for information-gathering and commerce that are unprecedented historically, potentially meaning that their lives are ‘lifted’ economically, educationally, socially. But at the same time, the very persistence of superstition, illiteracy, and poverty means that, if those two young men rise up, the gap between them and those next to them who believe in the power of exorcism will grow.

The rising tide of digital technology most assuredly does not lift all boats, any more than the growing wealth of the economic elite trickles down, in any effective way, to those living at the bottom of the financial hill. Any time the separation between two sets of people grows too great, whether it be the Mayan priests ruling over Palenque in the 7th century, or Marie Antoinette and her husband ruling over France during the final years of the 18th century, it does not bode well for us.

In today’s global village, the discrepancies which exist internationally present problems on a scale not seen before, and I mean that quite literally, because we are more aware of these problems than we have ever been before. We no longer have to wait for an emissary to return to court, after a year-long mission, to know about the conditions of a far-off land and its people. But, at same time, today’s problems are of a distressingly familiar order.

Those at the peak of today’s societal pyramid are doing just fine, thanks. What’s called for are measures to assure that the pyramid does not get any higher, that it in fact flattens, delivering greater equality of rights, education, health care, and economic opportunity to all people everywhere.

I’m sounding frighteningly socialistic to some I know, but the lessons of history are there for all of us to observe, and we ignore them at our peril. It is in our own interests to help those being left out or behind, wherever they live, because the discrepancies of today’s world are a threat to us all.

Full Circle

There’s some interesting reading to be found in a paper released by the Canadian Media Production Association last week. It’s titled, Content Everywhere: Securing Canada’s Place in the Digital Future, and it offers up an effective survey of the current media landscape. At first glance, suffice it to say that recent trends continue:

* Video progressively rules on the internet—YouTube now has more than one billion unique viewers every month, with 100 hours of video uploaded every minute.

* ‘Cord cutting’, that is escaping the tyranny of cable ‘bundling,’ continues for consumers—an American who owns an iPad now has a 65% likelihood of being a member of the cord cutter tribe.

* As the market penetration of the so-called OTTs (‘Over The Top’ online streamers like Netflix, Amazon and Hulu) continues to grow—one of the OTTs now reaches almost half of all American households; over 60% of the 18 – 24 demographic—they are moving increasingly into the financing of original content.

The ‘old boys’, the established television networks, know all about these trends of course, and so they have, in recent years, moved actively, if still hesitantly into the digital realm. In Canada, Bell Media launched Crave TV in 2014, Rogers and Shaw finally birthed Shomi, and CBC now has an online comedy channel called Punchline. (Conventional TV’s great strength increasingly remains of course in the provision of live events, mostly sports, but also news, and of course the odd award show, although it’s interesting to note that ratings for the Oscars this year were down about 15%.)

Ben Templesmith photo
Ben Templesmith photo

Overall, the evolving picture is of the online media industry maturing, in all the good and bad that that entails. Perhaps most disconcerting is a subtitle within the paper which reads: “Many things about OTT look like TV.” AOL greenlit 16 original series in 2014, all of them featuring major celebrities or movie stars. Pitch meetings with the big-league OTTs are usually booked through agents or entertainment lawyers these days. And we can all be sure that when David Fincher, after House of Cards, pitches his new series, he’ll be strolling into the Netflix offices past a long line of waiting, lesser-known producers who once hoped that the web would provide them with new and different opportunities. Sigh.

And of course, as the paper, points out, creators for the web face a unique set of additional challenges, even as the process morphs into something distressingly familiar. Chief among them are ‘discoverability,’ and an overcrowded marketplace. The gatekeepers for the online game may no longer be the same, but the smaller players still face a huge disadvantage when it comes to putting bums in the seats. They simply don’t have the resources to compete with the big guys at marketing, or at perhaps hiring the talent which comes with a built-in audience.

And finally, if you’re a Canadian hoping to succeed with online content, you face an added problem with financing, because as slow as the big broadcasters have been to move into the online space, the established ‘legacy’ funders, like Telefilm Canada and the tax credit programs, have been even more lead-footed. Because online revenues have been so difficult to realize, these agencies have been extra adept at shuffling their feet and avoiding eye contact whenever, for instance, documentary filmmakers with an online-only audience in mind have come calling.

I’m reminded of the final scenes in George Orwell’s classic Animal Farm, when the pigs move into the farmhouse, begin to walk upright and wear clothes. Or of Daron Acemoglu and James Robinson’s incisive explanation of Why Nations Fail, describing how it is that, following revolutions, tyrants like Robert Mugabe replace tyrants like Ian Smith, how Joseph Stalin replaces Csar Nicolas II. The digital revolution may not have yet completed itself, not yet come right round in what Acemoglu and Robinson term “the vicious circle,” but the streets have gone quiet again. It may be that no one has been sent off to a “knacker” or to the gulag, but if you were among those who dreamed of a better world, or maybe even who manned an online barricade, well, purchase a ticket and get in line. It seems that all along, the digital revolution was for sale, to the highest bidder.

The Role of Government

It’s the statistic that got everyone’s attention. A recently released study by Oxfam, the international agency dedicated to combatting poverty and injustice, warns that the richest 1% of the planet’s citizens will soon possess more than the remaining 99%.

The nation's representatives? Michael Riffle photo
The nation’s representatives?
Michael Riffle photo

In an interesting related factoid, The Upshot (a ‘data-driven’ undertaking from The New York Times) reports that the richest 1% of Americans, on average and after excluding capital gains, have seen their incomes increase by $97,000 since 2009; the 99% have seen their average income fall by $100 in that time.

In Canada the situation is less dire, but the trend is in the same direction. In the 1980s, as reported by the Broadbent Institute, the top 1% of Canadians received 8% of all national income; that figure has now risen to 14%.

In that same article in The Upshot, writer Justin Wolfers, professor of economics at the University of Michigan, wonders why it is that “robust employment growth over recent years” has not generated more broadly based income growth in America.

Well, surely part of the answer has to be the structural changes wrought in the economy by the digital revolution. The London taxi drivers currently protesting the arrival of the Uber app are just the latest in a now long line of workers who have found themselves displaced by hi-tech changes in their industry. And those workers, once displaced, rarely find themselves able to land alternate employment at higher wages. As has been pointed out by authors like Erik Brynjolfsson and Andrew McAfee, the people not being displaced by computers—once we get past the coders themselves—tend to be folks like waiters, gardeners and daycare workers; not exactly the sorts pulling down the big bucks.

And the other major factor of course has to be the whole trickle-down, anti-regulatory economic wave that began to swell back in the days of Reagan/Thatcher, and which continues to roll over us today. The financial crash of 2008 is the most obvious example of what economic deregulation can mean to all of us, but, more generally, as times have toughened in the Western economies (that is as we have seen the onset of globalization), people have tended to increasingly resent the hand of government in their pockets. Neo-cons have encouraged this attitude at every turn, and so the back doors have been increasingly left open, allowing the rich to sneak into the kitchen, then scoop up ever larger portions of the economic pie.

The single greatest triumph of the Republican Party in America has been their ability to convince a great many white, working-class Americans that the Party has their backs, when very few propositions could be further from the truth.

We have seen, in recent decades, a steadily growing anti-government sentiment provide steadily growing opportunity for the rich to get ever richer. And let’s be very clear about one thing. The growing bank accounts of the mega-rich are not the best means for growing the economy, for easily apparent reasons. Those guys simply don’t have to spend their money the way us poorer people do, just to stay ahead of the monthly bills. Here’s a TD Bank study that makes this point.

Now no one should rightly go about saying more government is the answer to all our socio-economic woes. Anybody who has ever dealt with a government office in a time of acute need knows that these bureaucracies can be inefficient, self-serving and sometimes obnoxious, even vindictive. But greater government management of the current economy? Well, how much more evident could that need be?

Robert Reich's formula for government intervention.
Robert Reich’s formula for government intervention.

 

 

 

 

 

 

 

 

It comes down to some fairly old-fashioned ideas like a guaranteed annual income, higher minimum wages, and a more progressive income tax regime. Scary stuff for a whole lot of people. But if you’re one of them, if you’re one of those people who finds the idea of more government anathema, an outrageous infringement upon your economic freedom, you should recognize that if your opinion prevails, then what you see now is what you will see later.

Only worse, if that can be imagined.

 

Just Like Yesterday

Meet the new boss.

  Same as the old boss.

from Won’t Get Fooled Again, by Pete Townshend

 

The guardians of the old media have found a brilliant way to exploit the denizens of the new. By dangling the carrot of access to television—a mature industry where recognition and revenue remain solidly in place—the executives who stand at the gates to TV can cause the multitudes who populate the online realm—an industry where revenue is dispersed very unevenly and recognition is highly fragmented—to work tirelessly to promote their exclusive brands. It’s perfect.

In recent times, those clever folks who control TV have evolved the method of the online competition in order to shamelessly advance their corporate brands. Offer those who create content for the web—especially of course those who operate within the social media arena—the chance to create for TV, and those creators will toil doggedly, nearly interminably on your behalf, and they will do so without a cent of actual remuneration, and on the slimmest of chances at success. How great is that?

The Canadian Broadcasting Corporation has just concluded a nation-wide contest where 285 comedy creator-teams submitted video ‘teasers’ in pursuit of a single (although lucrative at $500,000) prize of the production of a half-hour TV special. The competition ran over ten weeks, and the teaser was only the beginning of the work demanded of these aspirants. Each week, in addition to the endless amount of online ‘sharing’ these teams were obliged to do—if they were to have any realistic expectation of prevailing in the contest—these teams had to produce a new video ‘mission’ on a specified theme (‘The Do Over,” “The Differentiator” etc.).

Likewise Telus, a corporation with a more regional territory (Alberta and BC), have just run the ‘Storyhive’ competition, where hundreds of applicants chased 15 grants of $10,000, leading finally to one winner gaining $50,000 toward the production of content for Optik TV, the television service owned by Telus.

It’s a truly prodigious amount of work done by talented people on the behalf of others for absolutely no monetary recompense. The competitions are won of course via online voting solicited by the contestants, and don’t think it’s anything like a democratic, one email address, one vote mechanism. No, visitors to the relevant site (where you must of course register) ‘earn’ votes by repeated visits, or, more germanely, online promotion of the corporate site. For CBC and Telus it’s win win win; for 99%+ of the contestants it’s lose lose lose. And, if it’s necessary to drive home the point of this losing game, in the Telus competition, in winnowing the pitched projects down to the final 15, there is not one iota of critical adjudication applied; it is entirely determined by online voting. In other words, at least until that first significant selective step, Telus does not care one whit about the actual creative quality of the submissions; they care only about the quantity of online visitation they are able to achieve.

Let me be very clear about my take on this process. It’s manipulative, exploitive, and vile. The folks behind it should be ashamed of themselves.

Tau Zero photo
Tau Zero photo

But, as with so many of the changes wrought by the digital revolution, neither is this obnoxious game about to go away. The television executives who have invented it have mined gold for themselves, and they could care less about the fact that almost all of the losing contestants have nothing good to say about them or their contest. Those losers are simple collateral damage in the winning war for online traffic, and thus advertising dollars.

It’s odd and slightly unsettling that (as described in a recent article in The New Yorker magazine) KingBach, a top star on Vine, an online video site where content episodes last a sum total of six seconds, dreams of making it on TV and in the movies, where fewer people will watch him.

Welcome to the new world of mass media, which looks altogether too much like the same old world. The ‘young adult’ demographic still watches far more TV than they do online video. YouTube will make less than $4 billion in advertising this year; CBS will earn more than $8 billion.

Pete Townsend’s prayers may well have been in vain.

Where Have All the Dollars Gone

Sir Robert Borden addressing the troops, 1917 Biblioarchives
Sir Robert Borden addressing the troops, 1917
Biblioarchives

In March of this year, lawyers acting on behalf of the Canadian government asserted that the government has no special obligation to Afghan military veterans as a result of a pledge made by Prime Minister Robert Borden back in 1917, on the eve of The Battle of Vimy Ridge. Borden assured the soldiers then preparing for battle in France (more than 10,000 of them would be killed or wounded) that none of them would subsequently “have just cause to reproach the government for having broken faith with the men who won and the men who died.”

The March court filing came about as a result of Canadian soldiers earlier suing over the government’s new “veterans charter,” which changes the pension-for-life settlements provided to soldiers from previous wars to a system where Afghan veterans receive lump sum payments for non-economic losses, such as losing limbs. It’s not difficult for any of us to understand that this change is all about our government saving money.

Also in March of this year, the Vancouver School Board announced a budget shortfall of $18.2 million. Reluctantly, the Board is considering an array of cutbacks, including school closures, ending music programs, and keeping schools closed for the entire week surrounding Remembrance Day. My kids have now moved on past public schools, but I clearly remember, for all the years they were enrolled in Vancouver schools, a steady and discouraging series of annual cutbacks; librarians disappearing, field trips becoming rare events indeed; at one point even the announcement that the temperature in schools would be turned down.

I lack the expertise to offer any detailed economic analysis as to why our governments are these days unable to meet obligations to veterans and school children that they were able to meet in the past, but here’s one bit of crude economic breakdown that causes even greater wonder. The Gross Domestic Product per capita in Canada in 1960 averaged $12,931 US; in 2012 it averaged $35,992 US, adjusted for inflation. In other words, the country is today producing three times as much in the way of goods and services per citizen as it was back in 1960, presumably enabling the government to collect far more in the way of taxes, per person, than it could four-plus decades ago. And yet we can no longer support veterans and school children in the way we did back then.

A large part of the explanation is of course that governments these days are addressing a whole lot of social concerns that they weren’t in 1960, never mind in 1917, everything from drug and alcohol treatment centres, to the parents of autistic children, to modern dance troupes. It may well be that this growing list of demands outstrips the three-times-bigger ratio of available government funds. It may even be enough for one to lament what Washington Post columnist Charles Krauthammer (an example of that rare beast, the genuinely thoughtful conservative pundit) calls “the ever-growing Leviathan state.” It may… or it may not.

One theory has it that, in the post-war decades, right up until the 70s, the Canadian economy was legitimately growing, more products, more services, more jobs. Since the 80s, any increase in or even maintaining of profit ratios (and thus disposable incomes) has come as the result of increased ‘efficiency,’ fewer people producing more goods and services through better technology and less waste. (More cutbacks anyone?) If that’s true, then things are only going to get worse, as these finite efficiencies produce ever-diminishing returns.

Whatever the final explanation, it’s not likely a simple one, and whatever the economic answer, it’s not likely to be easily achieved. Too often a current government has only to promise fewer taxes for voters to flock in their direction, regardless of known scandal, evident mean-spiritedness, or obvious cronyism. We tend to assume that the ensuing government cutbacks won’t arrive at our door. And so long as they don’t we remain generally unrepentant for our self-centeredness. The moment they do—the moment an alcoholic, or autistic child, or modern dancer appears inside our door—our attitudes tend to shift.

Thus, as we stand witnessing a time of waning of western economic domination (see DEP, from the archives of this blog), it seems we can be sure of only one thing: it’s a matter of priorities. If school-age children and wounded veterans are not our priority, then who is?