Insecurity and the Economy

Our community is experiencing severe housing and food insecurity. The increasing numbers of people living in tents and depending on food banks indicates that action by the government is essential and urgent.

Homeless in the Ball Park

 

The 2023 CBC Massey Lectures, The Age of Insecurity, feature filmmaker and writer Astra Taylor who explains how society runs on insecurity and how we can change it. The lectures are also available as a book, The Age of Insecurity: Coming Together as Things Fall Apart, from House of Anansi Press.

Taylor takes a deep dive into the history of capitalism and explores how, paradoxically, the ways that we’ve been encouraged to achieve security — purchasing health and wellness products, buying life insurance, acquiring property — actually work against us.

She also looks forward at the ways we might be able to achieve true security, using collective action. 

But today, we also live in an era of manufactured insecurity, imposed on us from above. Consumer society, Taylor argues, capitalizes on the very insecurities it produces, making us all insecure by design.

How we understand and respond to insecurity is one of the most urgent questions of our moment — nothing less than the future security of our species hangs in the balance. (Taylor, 2023)

Agnieszka K. Wielgosz serves as a vocal sustainability/ regenerative wellness advocate. She is the woman behind CEI Collective, serving the creative needs of wellness professionals, regenerative & green living brands to grow and make a dynamic impact.

When we consider the phenomenal speed at which the USA ramped up industrial production during the Second World War, or the efficiency with which developed nations are able to respond to natural disasters, we see that notions of “money” and “the economy” quickly fall by the wayside.

If only we allocated the same amount of resources and effort into the health of our global community!

It’s a well established fact that modern societies with advanced levels of technology could easily provide all the resources required for their citizens to live in ample comfort and safety, without having to resort to money, credit, bartering or worst of all, debt.

With shared responsibility and co-owned resources, humanity would quickly overcome the artificial boundaries that currently separate us, leaving us free to pursue a better way of living whilst caring for our shared environment. (Wielgosz, 2020)

A report by Lars Osberg tracks Canadian income inequality through 75 years of growth and recessions and speculates about the post-COVID-19 future. 

Although the Keynesian consensus on the importance of full employment to balanced growth and social stability enabled growing real wages and stable inequality, it was replaced, after a surge in inflation in the 1970s, by Neo-Liberal policies that emphasized budget balance and low inflation. But slowing growth and the concentration of income gains at the top produced widening income gaps, increasing discontent and political instability—even before COVID-19 hit. In the post-COVID-19 era, the Green New Deal emphasizes social and environmental sustainability, and is reflective of the economic policy changes that likely lie ahead. This report has contrasted the balanced growth and stable inequality of the Keynesian consensus era, 1946–1980, with the unbalanced growth and increasing top-end income shares of the Neo-Liberal years that followed. It has also contrasted the policy choice facing both past regimes—how to share the gains from growth—with the possibility that a post-COVID-19 world will be dominated by a more depressing choice: how to allocate the costs of contraction. As always, future policy choices will be conditioned on prior experiences. The era of Keynesian consensus decision-making saw full employment and the sharing of the gains from economic growth as central issues because that generation had experienced the costs of social instability. And although they could not solve the problem of inflation, they left a social insurance system and a history of stable inequality to their Neo-Liberal successors, which muffled initial discontent with the high unemployment, stagnant middle-class wages and increasing inequality of Neo-Liberalism. Neo-Liberalism solved the inflation problem but could not produce a fair distribution of the gains from economic growth—and that matters. When social insurance protections are dismantled and top-end incomes grow faster than middle-class incomes, inequality and insecurity increase over time. So the legacy of Neo-Liberalism includes the populist political reaction of those who were left behind in the Neo-Liberal decades and those who were, and will be the casualties of the COVID-19 years. The legacy of Neo-Liberalism also includes a global climate crisis. Those failures of Neo-Liberalism will condition Canada’s responses to the challenges of the post-COVID-19 world. (Osberg, 2021)

Prior to the Keynesian consensus era, 1946–1980, Crown Corporations, including Wartime Housing Limited built thousands of homes in Canada.

Klein, Seth. (2020) A Good War: Mobilizing Canada for the Climate Emergency. Toronto, ON:ECW Press.

Wartime Housing in Halifax

 

The abstract from the Masters Dissertation of Jill Wade (1984) entitled Wartime Housing Limited, 1941-1947 : an overview and evaluation of Canada’s first national housing corporation asks the question of why did the federal government not reconstitute WHL as a permanent, low-rental housing agency.

Between 1941 and 1947, a federal crown corporation called Wartime Housing Limited (WHL) successfully built and managed thousands of rental units for war workers and veterans. At the same time, an Advisory Committee on Reconstruction study (the Curtis report) described the enormous need for low and moderate income shelter throughout Canada and recommended a national, comprehensive, and planned housing program emphasizing low-rental housing. Instead, in 1944 - 1945, the federal government initiated a post-war program promoting home ownership and private enterprise; it neglected long-range planning and low income housing. Thus, an interesting question arises. Why did the federal government not reconstitute WHL as a permanent, low-rental housing agency (Wade, n.d.)

The evidence of stagnant middle-class wages and increasing inequality is seen in the growing numbers of homeless people and the increasing importance of food banks and soup kitchens in our community.

Feed Nova Scotia essential for food security

The role of the government to protect the health of Canadians was essential during the Covid 19 emergency. Government Action, similar to wartime programs, to guarantee the right of Canadians to adequate housing and access to healthy food is urgently required now.

References

Klein, Seth. (2020) A Good War: Mobilizing Canada for the Climate Emergency. Toronto, ON:ECW Press.

 

Osberg, L. (2021, March 2). From Keynesian Consensus to Neo-Liberalism to the Green New Deal. | Canadian Centre for Policy Alternatives. Retrieved November 21, 2023, from https://policyalternatives.ca/publications/reports/75-years-of-income-inequality-canada 

Taylor, A. (2023, June 16). The Age of Insecurity. 2023 CBC Massey Lectures. Retrieved November 21, 2023, from https://www.cbc.ca/radiointeractives/ideas/2023-cbc-massey-lectures-astra-taylor/lecture-1-curas-gift 

Wade, J. (n.d.). Wartime Housing Limited, 1941-1947 : an overview and evaluation of Canada's first national housing corporation. Open Collections. Retrieved November 21, 2023, from https://open.library.ubc.ca/soa/cIRcle/collections/ubctheses/831/items/1.0096317 

Wielgosz, A. K. (2020, October 20). A New World is Possible: An Introduction to Resource-Based Economies. Agnieszka K. Wielgosz. Retrieved November 21, 2023, from https://agnes-wielgosz.medium.com/a-new-world-is-possible-an-introduction-to-resource-based-economies-5def63e87e2a 

CST and Papal Positions

Tony Annett's book Cathonomics explores how Catholic tradition can create a more just economy. The encyclicals published during the papacies of recent decades offer a view of economic activity in relation with the pursuit of the common good.

Better world

The rise of neo-liberal attitudes to economic development in recent decades has created a paradigm that threatens the priority of striving for the common good.

John Paul II incorrect as neo-liberal

John Paul II was concerned about some aspects of market ideology.

JPII concern about markets

Profit seeking, self interest and accumulation in the market were concerns of Pope Benedict.

Benedict's concern about profit seeking

Pope Francis identifies a technocratic paradigm that cannibalizes economic and political life.

Pope Francis identifies a technocratic paradigm

From 1978 to 2023, encyclical publications from the Vatican have presented the case for concern about the effect on the common good of the dominant economic policies of our time.

References

Annett, A. M. (2022). Cathonomics: How Catholic Tradition Can Create a More Just Economy. Georgetown University Press.

Capitalism Taxes and COVID

 

Stephan Richter and Uwe Bott, January 26, 2021 are no fans of neo-liberalism.

Rising tide floats all yachts

 

In an article for the globalist they look who is now suddenly disavowing it. Klaus Schwab and the World Economic Forum are running away from their past 50 years of tax cuts for the rich that failed to trickle down, an economics study says.

 

It also means tackling global mega corporations, especially those based in the United States. Beginning with their often-grotesque tax shenanigans, they are the real free riders in a troubled world. Their systematic effort to avoid paying their fair share — and thereby to contribute to preserving democracy and fairness in our societies — can no longer be tolerated. Holding these mega corporations to account firmly — even breaking them up — is in their own collective self-interest. For unless this happens, the essence of what these companies ultimately depend on the most — i.e., a consensus in favor of continued global integration — will vanish. It is already brittle enough.1

Aimee Picchi reports for CBS news that a paper, by David Hope of the London School of Economics and Julian Limberg of King's College London, that examines 18 developed countries — from Australia to the United States — over a 50-year period from 1965 to 2015. The study compared countries that passed tax cuts in a specific year, such as the U.S. in 1982 when President Ronald Reagan slashed taxes on the wealthy, with those that didn't, and then examined their economic outcomes.

Per capita gross domestic product and unemployment rates were nearly identical after five years in countries that slashed taxes on the rich and in those that didn't, the study found.  But the analysis discovered one major change: The incomes of the rich grew much faster in countries where tax rates were lowered. Instead of trickling down to the middle class, tax cuts for the rich may not accomplish much more than help the rich keep more of their riches and exacerbate income inequality, the research indicates. "Based on our research, we would argue that the economic rationale for keeping taxes on the rich low is weak," Julian Limberg, a co-author of the study and a lecturer in public policy at King's College London, said in an email to CBS MoneyWatch. "In fact, if we look back into history, the period with the highest taxes on the rich — the postwar period — was also a period with high economic growth and low unemployment."2 

Patrick Foulis writes in the Economist about a new type of creative destruction as Covid-19 is up-ending capitalism. Business top dogs will face a new climate in which three tenets of modern business—the primacy of shareholders, globalisation and limited government—are in flux.

A stakeholder capitalism

 

Firms will be under pressure to pay less attention to shareholders and more to workers. The pace of global buybacks almost halved in mid-2020 and won’t bounce back fully even as profits recover. The stagnation of globalisation means that more multinationals will have to operate as federations of national businesses and will be unable to reap the full efficiency gains from being run as a single globally integrated organisation. And as the size of government expands everywhere, the levels of regulation and taxes will inevitably rise. For the top 3,000 global firms the median effective tax rate paid has dropped from 33% two decades ago to just 22% now; the only way is up. At the end of this recession the world of business will have been shaken up—and so will the rules of capitalism.3 

The business that survives COVID 19 will likely increase responsibility to stakeholders, balance global trade with local production, and work in greater partnership with government policy objectives.

 

References

1	(2021, January 26). Klaus Schwab and the World Economic Forum Run Away from .... Retrieved January 26, 2021, from https://www.theglobalist.com/world-economic-forum-klaus-schwab-neoliberalism-capitalism-corporate-responsibility/
2	(2020, December 17). 50 years of tax cuts for the rich failed to trickle down, economics .... Retrieved February 8, 2021, from https://www.cbsnews.com/news/tax-cuts-rich-50-years-no-trickle-down/
3	(2020, November 17). The World in 2021 - Covid-19 is up-ending capitalism | The World .... Retrieved February 9, 2021, from https://www.economist.com/the-world-ahead/2020/11/17/covid-19-is-up-ending-capitalism

 

Seize the COVID moment to remake the world economy

 

Klaus Schwab discusses The Davos Agenda 2021: What is stakeholder capitalism? Its history and relevance are in the book Stakeholder Capitalism: A Global Economy that Works for Progress, People and Planet.

Moving to a new economic system?

 Today, the stakeholder concept is ready for a comeback, albeit in an updated, more comprehensive form. We are facing a whole set of social, economic, and health crises, and the best response to these challenges, would be for all actors in society to consider more than their narrow and short-term self interest. So what could stakeholder capitalism look like today, and how does it differ from the stakeholder management my father’s generation intuitively implemented in the 1960s and 1970s?1

 

Social Contract in the 70's

Terence Corcoran asks if the long battle against turning shareholder corporations into tools of 'public purpose' is now lost? In the words of Klaus Schwab, the 82-year-old German economist who founded the World Economic Forum in 1973, the existing corporate enterprise model, the shareholder version that has dominated much of the world’s economic progress over the past century, needs to be replaced. Over the week of Jan. 25, the Davos Dialogues will aim to seize the COVID moment to remake the world economy. “It is essential for leaders from all walks of life to work together virtually for a more inclusive, cohesive and sustainable future as soon as possible in 2021.” The stakeholder movement does not deny the success of the shareholder model, often described as part of the triumph of neoliberalism.

Canada’s top government-based pension plans, from the Canada Pension Plan Investment Board to the Ontario Teachers’ Pension Plan — the country’s largest shareholders — are now backing the stakeholder movement. They want to know “how companies identify and address issues such as diversity and inclusion, human capital, and climate change” along with “social inequity, systemic racism and environmental threats.”2

 

Stephan Richter, Director of the Global Ideas Center, a global network of authors and analysts, and Editor-in-Chief of The Globalist, and Uwe Bott, Chief Economist of The Globalist Research Center and Senior Editor at The Globalist, suggest that Klaus Schwab and the World Economic Forum are running away from their past by suddenly disavowing neo-liberalism. Schwab notes that “For the past 30 to 50 years, the neo-liberalist ideology has increasingly prevailed in large parts of the world. This approach centers on the notion that the market knows best, that the ‘business of business is business,’ and that the government should refrain from setting clear rules for the functioning of markets. Those dogmatic beliefs have proved wrong. But fortunately, we are not destined to follow them.”

It also means tackling global mega corporations, especially those based in the United States. Beginning with their often-grotesque tax shenanigans, they are the real free riders in a troubled world. Their systematic effort to avoid paying their fair share — and thereby to contribute to preserving democracy and fairness in our societies — can no longer be tolerated. Holding these mega corporations to account firmly — even breaking them up — is in their own collective self-interest. For unless this happens, the essence of what these companies ultimately depend on the most — i.e., a consensus in favor of continued global integration — will vanish. It is already brittle enough.3 

Daniel Araya, Contributor to Forbes, AI Advisor, and Policy Analyst, asks if The Venus Project could be the next stage in human evolution.

The term “Resource Based Economy” was first coined by Jacque Fresco, the founder of The Venus Project. Fresco believed that a Resource Based Economy could support the scientific integration of automating technologies (AI and robotics) and engineering systems in providing the highest possible living standards.4

https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fspecials-images.forbesimg.com%2Fimageserve%2F5f4ae74ae2aa5c77bd707f4e%2F960x0.jpg%3Ffit%3Dscale

 

The COVID crisis has shone a light on the deficiencies in the present economic and monetary systems to address a worldwide existential threat. Oskar Gonzalez has produced a Video on the transition to a resource-based economy.

A Balance is Needed

 

The just distribution of wealth, the challenge of inequality, and the need for worldwide coordinated action in a crisis point to the need to reconsider the effectiveness of neo-liberal capitalism and the current monetary system to best support the common good.

 

References

 

1	(2021, January 22). What is stakeholder capitalism? It's History and Relevance .... Retrieved January 25, 2021, from https://www.weforum.org/agenda/2021/01/klaus-schwab-on-what-is-stakeholder-capitalism-history-relevance/
2	(2021, January 22). Terence Corcoran: The murky rise of Klaus Schwab's .... Retrieved January 25, 2021, from https://financialpost.com/opinion/terence-corcoran-the-murky-rise-of-stakeholder-capitalism
3	(2021, January 26). Klaus Schwab and the World Economic Forum Run Away from .... Retrieved January 26, 2021, from https://www.theglobalist.com/world-economic-forum-klaus-schwab-neoliberalism-capitalism-corporate-responsibility/
4	(2020, September 1). Is The Venus Project The Next Stage In Human Evolution?. Retrieved January 26, 2021, from https://www.forbes.com/sites/danielaraya/2020/09/01/is-the-venus-project-the-next-stage-in-human-evolution/