The Tyee

The Tyee is your independent daily online magazine reaching every corner of BC and beyond.

Jul 182013
 
MiltonFriedman

How Milton Friedman's ruthless agenda led to Edward Snowden's grim revelations.

from The Tyee

Our current incarnation of capitalism — variously referred to as savage capitalism, extreme capitalism or euphemistically as the "free market" (free of any constraints) — is in one of its periodic crises. For years many assumed that the smart people who ran the system and benefitted from it would find a practical way to fix it. The problem is that the solutions are all framed within an ideology that makes that extremely unlikely. That ideology, neo-liberalism, is like a religion. Once you are a true believer you see other solutions as heresy.

Milton Friedman, the Chicago School economist whose extreme economic theories helped transform the English speaking world, was not fond of democracy. While most academics would shy away from suggesting that democracy was a problem, not Friedman. At a conference on Freedom, Democracy and Economic Welfare in 1986, he challenged an audience member who had placed democracy at the pinnacle of human achievement — not so, said Friedman. "You can't say that majority voting is a basic right… That's a proposition I object to very strenuously." He later wrote: "One of the things that troubles me very much is that I believe a relatively free economy is a necessary condition for a democratic society. But I also believe… that a democratic society, once established, destroys a free economy."

The transnational corporations that now rule the world owe their dominance and financial capital in no small measure to the global application of Friedman's ideas. In the service free economy — which really means unfettered capitalism and the pathological greed that underpins it — Friedman's followers have made sure that democracy's threat has been quashed.

The illusion of 'freedom'
But the "free economy" romanticized by Friedman and his ilk is anything but. Completely dominated by giant corporations whose wealth outstrips all but the richest nations, economic freedom does not exist for anyone else, including the vast majority of businesses who are at the mercy of financial institutions and mega-corporations. This says nothing of workers whose "freedom" to sell their labour now means they are free to compete with those who earn a few dollars a day thousands of miles away from their communities.

A free economy has always been a euphemism for liberated capital, and globalization is its obvious expression. While the behaviour of genuine markets as envisioned by Adam Smith were actually rooted in the customs, mores and culture of communities, this is less and less often the case. Market behaviour is now typically that of Goldman Sachs or hedge funds. Their coldly calculated and amoral decisions affect every community on the planet and everyone living in them.

But this 30-year history of liberating capital has had exactly the effect that many predicted: a persistent consumption crisis. Capitalists cannot sell all the goods and services they are capable of producing. The crisis has been delayed a number of times — most notably by the globalization of production.

But the 2008 meltdown stripped away all the camouflage from a system that could not prevail. In Canada as well as in other developed Western nations, the crisis has been delayed by cheap goods from China and other low-wage countries, and by the liberal use of credit. But nothing in nature or economies stays the same for long and these two factors can no longer save extreme capitalism from its crisis.

The latest report to demonstrate just how dire the situation is was actually ordered up by Jim Flaherty himself in apparent response to Justin Trudeau's focus on the middle class in his leadership campaign. The report revealed that after-tax income for the middle 20 percent of Canadians (the classic middle class) had increased by just seven percent between 1976 and 2010 — or .2 percent a year. (1976 just happens to be the year that the campaign to liberate capital began in earnest.) This just reaffirms the 2008 figures from the Centre for the Study of Living Standards report, which showed just how out of balance the power of capital had become over labour. The increase in annual median earnings (adjusted for inflation) for a full-time, full-year employee between 1980 and 2005 was a mere $53 — in other words a real increase of about $2 a year.

The myth of shared productivity gains
As stunning as that figure is, even more revealing is that labour productivity over that period increased 37 percent. One very concrete way of comparing the power of labour and capital is to examine the share of the proceeds of increased productivity each receives. This time capital took it all — virtually every dime over a 25 year period. Had incomes grown at the same rate as productivity, the median income would have been $56,826 in 2005 instead of $41,401. But they didn't. Capital took it all because it could, because year by year democracy and its constraints on the "market" were steadily eroded.

In that missing $15,000 a year you can find the crisis of consumption Canadian chapter. If millions of Canadian workers and families had actually kept pace with productivity, the astonishing level of debt they now face would be much lower and they would be spending money in the economy. Last October the debt to income ratio of Canadian families hit a new record of 163.4 percent. The comparable figure in the US — where it is also considered dangerously high — is 110 percent. As if that wasn't bad enough, money borrowed against home equity totals $206 billion, equal to 12 percent of Canadian GDP (it's four percent in the US).

The falsehood that Canada mainly exports
The impression left by many economic writers is that Canada is primarily an export economy, but the fact is that some 70 percent of the economy is domestic. If people aren't spending and the global economy is struggling, capitalism has a problem. Capital, in its drive for complete liberation from community and society, has outsmarted itself. In Canada the largest corporations are now sitting on some $700 billion in cash that they can't invest in productive activity because demand has flatlined.

To solve the consumption crisis, governments and the corporations they serve need to put money back in the hands of people who will spend it. But the iconic One percent can only spend so much. It is they who have scooped up most of the increased wealth in the past 30 years, creating a level of income inequality not seen since 1928. Yet, to shift income to middle and working class families would entail once again constraining capital, something no political party, not even the NDP, even hints at.

The one remaining method of increasing disposable income is, of course, cutting taxes which governments have done with reckless, ideological abandon for the past twenty years. Yet even here some 60 percent of the total wealth "liberated" at both federal and provincial levels has gone to the wealthiest 10-15 percent and to large corporations. For the latter these tax cuts have simply added to their mountain of unusable cash.

Tax cuts actually threaten to exacerbate the crisis, not solve it. While few CEOs dare admit it, government spending actually is the best way for corporations to externalize many of their costs: health care, education, social stability and perhaps most obviously, physical infrastructure. A CCPA study released last January concluded that Canada would have to spend $30 billion a year for the next decade to bring infrastructure spending back to historic levels. Ottawa accounted for 34 percent of such spending in 1955 in the days when our current infrastructure was being built. But by 2003 it was down to 13 percent.

It would be instructive for someone to calculate how much of the $700 billion of unspent corporate cash came from corporate tax cuts — and then apply it to the social and physical deficit.

“One of the things that troubles me very much is that I believe a relatively free economy is a necessary condition for a democratic society.  But I also believe…that a democratic society, once established, destroys a free economy.”

The delusion that drives government cuts
This refusal of the federal government to collect adequate revenue to address this huge deficit in infrastructure is one of the best examples of just how perverse neo-liberal ideology has become. A modern economy cannot function efficiently with crumbling infrastructure — roads, bridges, mass transit systems, sewer and water systems — yet government policy continues to contribute to the crisis. And this is just one category of service that corporations rely on. Cuts to education, medicare and the lack of investment in social housing and child care are equally irrational from a business perspective.

Yet the current management committee of capitalism will respond to its crisis based on the theory that got them here in the first place — Milton Friedman's edict that democracy is the problem. The greater the crisis, the more democracy will have to constrained. If the medicine doesn't work, increase the dose. Inequality will not be addressed, it will be institutionalized.

And here you have the rationale for the gradual development of the security/surveillance state. Is the United States ahead of Canada on this front? We can't know for sure. But the massive invasion of privacy and violation of civil liberties in the US exposed by whistle-lower Edward Snowden has been justified as the necessary price Americans have to pay to keep them safe from terrorism. It is more likely the price Americans — and perhaps Canadians — will be forced to pay as extreme capitalism anticipates future domestic resistance to its behaviour.

Jul 052013
 

More work needed to understand potential impacts of waste storage, industry-funded review finds.

from The Tyee

"More work is required before anyone knows how an estimated 300-million tonnes of tailings from the proposed Red Chris mine will eventually affect water in the upper Stikine watershed of northwest B.C., concludes a confidential industry-funded review acquired by The Tyee.

"The report, paid for by mine owner Imperial Metals at the urging of the Tahltan Nation, recommends a comprehensive field investigation including additional drilling, groundwater collection and monitoring wells be undertaken as a way of addressing existing information gaps.

"'…Studies completed to date are not sufficiently detailed to fully assess/monitor potential environmental impacts due to seepage from the tailings storage facility on the downstream aquatic environment,' concludes the study presented early this year to a panel of First Nations, government and industry overseeing the permitting of the proposed mine, which is scheduled to begin operations by May 2014. …"

Full story

Jul 042013
 

Canada has signalled that it will not, like the U.S., move to hamper trade with Bangladesh as a result of a recent factory collapse that killed over a thousand garment workers in April.

Meeting in Brunei on Tuesday on the sidelines of the 20th ASEAN Regional Forum (ARF) Ministerial Meeting, Foreign Minister John Baird reportedly told his Bangladeshi counterpart, Dipu Moni, that Canada did not intend on taking any steps to reduce the bilateral trade between the two countries, which last year amounted to US$1.6 billion

"Canada does not believe that workers in the sector should be punished through any kind of trade restrictions," Baird is quoted as saying in a press release from the Bangladeshi Foreign Ministry.

– See more at: http://thetyee.ca/Blogs/TheHook/2013/07/03/Canada-Trade-Bangladesh/#sthash.N2EX9QOR.dpuf

Canada has signalled that it will not, like the U.S., move to hamper trade with Bangladesh as a result of a recent factory collapse that killed over a thousand garment workers in April.

Meeting in Brunei on Tuesday on the sidelines of the 20th ASEAN Regional Forum (ARF) Ministerial Meeting, Foreign Minister John Baird reportedly told his Bangladeshi counterpart, Dipu Moni, that Canada did not intend on taking any steps to reduce the bilateral trade between the two countries, which last year amounted to US$1.6 billion

"Canada does not believe that workers in the sector should be punished through any kind of trade restrictions," Baird is quoted as saying in a press release from the Bangladeshi Foreign Ministry.

– See more at: http://thetyee.ca/Blogs/TheHook/2013/07/03/Canada-Trade-Bangladesh/#sthash.N2EX9QOR.dpuf

Canada has signalled that it will not, like the U.S., move to hamper trade with Bangladesh as a result of a recent factory collapse that killed over a thousand garment workers in April.

Meeting in Brunei on Tuesday on the sidelines of the 20th ASEAN Regional Forum (ARF) Ministerial Meeting, Foreign Minister John Baird reportedly told his Bangladeshi counterpart, Dipu Moni, that Canada did not intend on taking any steps to reduce the bilateral trade between the two countries, which last year amounted to US$1.6 billion

"Canada does not believe that workers in the sector should be punished through any kind of trade restrictions," Baird is quoted as saying in a press release from the Bangladeshi Foreign Ministry.

– See more at: http://thetyee.ca/Blogs/TheHook/2013/07/03/Canada-Trade-Bangladesh/#sthash.N2EX9QOR.dpuf

Canada has signalled that it will not, like the U.S., move to hamper trade with Bangladesh as a result of a recent factory collapse that killed over a thousand garment workers in April.

Meeting in Brunei on Tuesday on the sidelines of the 20th ASEAN Regional Forum (ARF) Ministerial Meeting, Foreign Minister John Baird reportedly told his Bangladeshi counterpart, Dipu Moni, that Canada did not intend on taking any steps to reduce the bilateral trade between the two countries, which last year amounted to US$1.6 billion

"Canada does not believe that workers in the sector should be punished through any kind of trade restrictions," Baird is quoted as saying in a press release from the Bangladeshi Foreign Ministry.

– See more at: http://thetyee.ca/Blogs/TheHook/2013/07/03/Canada-Trade-Bangladesh/#sthash.N2EX9QOR.dpuf

Foreign Minister says workers shouldn't be punished through trade restrictions.

from The Tyee

"Canada has signalled that it will not, like the US, move to hamper trade with Bangladesh as a result of a recent factory collapse that killed over a thousand garment workers in April.

"Meeting in Brunei on Tuesday on the sidelines of the 20th ASEAN Regional Forum (ARF) Ministerial Meeting, Foreign Minister John Baird reportedly told his Bangladeshi counterpart, Dipu Moni, that Canada did not intend on taking any steps to reduce the bilateral trade between the two countries, which last year amounted to US$1.6 billion

"'Canada does not believe that workers in the sector should be punished through any kind of trade restrictions,' Baird is quoted as saying in a press release from the Bangladeshi Foreign Ministry. …"

Full story

Jun 272013
 

Hydrologist finds prediction efforts crippled by poor monitoring systems.

from The Tyee

"Canada's greatest flood, which has severely crippled Alberta's infrastructure and forced the evacuation of more than 100,000 homes, caught flood prediction authorities unprepared, says one of the country's top hydrologists.

"'We were caught flatfooted on this,' says John Pomeroy, the Canada Research Chair in Water Resources and Climate at the University of Saskatchewan and a resident of Canmore.

In the Rocky Mountain town, creeks overflowed their banks, destroying scores of homes and parts of the TransCanada highway before a flood warning was even issued.

Full story

Jun 172013
 
Income inequality "tear at the very fabric of society."

Wealthiest one percent own half of the globe's assets.

from The Tyee

Eric Zuesse, writing for AlterNet.org and The Tyee, reviews a preliminary report of Branko Milanovic, lead research economist at the World Bank.  Milanovic finds "global inequality is much greater than inequality within any individual country" because the inequality between countries adds to the inequality within any one of them.  The gap in wealth is even larger than the gap in annual income, he says, with the wealthiest one percent forming an extremely exclusive global club of the "old rich."
 
And in addition:
Jason Hickel writes, narrates and directs this short video looking at the extreme truth of how wealth is divided globally, for Global Policy Journal.
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Jun 142013
 

Revelations comes amidst release of  almost 8,000 pages of documents used in review of memo.

from The Tyee

"Almost $1 million was siphoned from the Ministry of Jobs, Tourism and Innovation to increase the nearly $2.5 million budget for the multiculturalism portfolio a year before the provincial election campaign, according to documents gathered for the in-house review of the BC Liberals' Multicultural Outreach Strategy.

"The outreach strategy was outlined in a 17-page leaked memo that included plans to coordinate party and government resources to 're-engage with ethnic voters' and find 'quick wins' in apologizing for past injustices, such as the Chinese head tax. The leak became known as a 'quick wins' scandal, one that dogged the Liberals throughout the election.

"The final report on the review, led by Premier Christy Clark's deputy minister John Dyble, found that several staffers breached the code of conduct by mixing BC Liberal work with their government jobs. …"

Full story

Jun 122013
 

Company insists it cares 'tremendously' about workers as dispute drags on.

from The Tyee

"For a month now, international furniture giant Ikea has been embroiled in a tough labour dispute with over 350 unionized employees at its Richmond, BC, outlet. The $100-million store has operated on reduced hours, with a skeleton staff of managers and some Teamster workers who have broken with their union to cross picket lines.

"A BC Labour Relations Board ruling on June 5 ordered the company to 'cease and desist' from using some non-unionized workers who've helped keep the store open during the dispute. A few of those workers were brought in from outside BC.

"As well, union members who crossed the picket line at the embattled store will face an internal Teamster 'trial' this week that could see them expelled from union membership. …"

Full story

Jun 102013
 

Recent investigation found province's pipeline network experiences an average of two crude oil spills a day.

from The Tyee

"Apache Canada has reported a significant pipeline rupture and spill about 20 kilometres northeast of Zama, Alberta, in the northeast corner of the province.

"A pipeline carrying contaminated waste water to an oil injection disposal well site ruptured on June 1, and spilled an undisclosed amount of waste water into the muskeg.

"'We are still investigating the volume spilled right now,' said Apache spokesman, Paul Wyte. 'The line was shut in and the spill has been contained and we have already begun remediation.'

"According to a recent Global News investigation, Alberta's 400,000-km long pipeline network has experienced 31,453 hydrocarbon or liquid spills in the last 37 years. That works out to two crude oil spills a day. …"

Full story

May 302013
 

"Global inequality is much greater than inequality within any country": researcher.

from The Tyee

"The lead research economist at the World Bank, Branko Milanovic, will be reporting soon, in the journal Global Policy, the first calculation of global income inequality, and he has found that the top eight per cent of global earners are drawing 50 per cent of all of this planet's income.

"He notes: 'Global inequality is much greater than inequality within any individual country,' because the stark inequality between countries adds to the inequality within any one of them, and because most people live in extremely poor countries, largely the nations within three thousand miles of the Equator, where it's already too hot, even without the global warming that scientists say will heat the world much more from now on. …"

Full story

May 292013
 

Pressure mounts for concrete political measures to end unfair labour practices.

from The Tyee

"Violence has erupted in Bangladesh, following the world's worst garment industry disaster last month, as thousands of workers gathered in the country's capital on Monday demanding better pay conditions. Police charged batons and fired rubber bullets and tear gas as angry protesters demonstrated outside the capital's main factory district, blocking the main highway in the Ashulia industrial area, home to the world's largest manufacturing factories such as Walmart.

Raw: Violence Erupts on Bangladesh Streets

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"Up to 20,000 people took part in the protests, with more than 50 people injured by police intervention. Ashulia chief police Badrul Alam defended the action, arguing that workers had attacked police, throwing stones and striking police vehicles.

"'They were demanding higher wages. We fired rubber bullets and tear gas to disperse them after they became violent and occupied a road,' he told the AFP.

"The demonstration is part of a rising string of protests over the past month. Since the April tragedy, a million people have signed petitions calling on global corporations like Gap and Walmart to end unsafe labour practices in Bangladesh, with hundreds protesting at stores across the country. …"

Full story