The Parallel Parliament

by Glen Pearson

Tag: economy

If You Want to Fix Poverty, Fix the Economy

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HE AWOKE FROM A DEEP SLUMBER A couple of weeks ago to the sound of phone ringing incessantly, but when he answered he didn’t mind. Angus Deaton was being informed by someone on the other end of the phone that he was being awarded the Nobel Prize for Economic Science. Interestingly, it was how he shed new light on persistent poverty that earned him the credit. Or as the Nobel committee put it:

“To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices. Angus Deaton has enhanced this understanding.”

Deaton wasn’t so much focused on large market trends as on the average household and how choices are made within it. The Nobel committee has recently honoured a number of academics who have shown through their research that markets are inefficient and that there is great difficulty in knowing what to do about it.  Poverty is beginning to gain traction because of its very unfairness.

For too long now – centuries really – we have placed the blame for being of low-income squarely on the shoulders of the poor themselves. The amount of times we have heard that certain people should just get a job, or stop wasting their money on trivialities, or should go back to school stretches almost to infinity.

But to think that way is to misconstrue what is really happening. Worse, it can bring out some of the worst of subtle prejudices when we blindly believe that people are poor primarily because they are too idle or lack ambition. In reality, it is the way we organize our societies and the way institutions themselves enforce that organizing effect that leads to fewer and fewer opportunities for those in low-income situations.

A huge percentage of the non-working poor have been deemed irrelevant by a market design that increasingly seeks the advantage of productivity without heavy labour costs. People by the thousands are losing their jobs to this trend and yet it remains easier for us to blame the unemployed than it is for us to ask serious questions about the very future of work itself. If capitalism can increasingly get by without people, why, then, do we continue to lay blame on those who have been cast off? No serious researcher can lay claim to the belief that endless possibilities lie before the poor. In-depth data reminds us that people are increasingly constrained because how we construct democracy, promote capitalism, and determine the destination of wealth is, ever increasingly, limiting the opportunities for industrious people to enjoy a more prosperous life.

The secret, of course, is not to change the poor but the systems that create them. Yet it remains easier to blame a person down and out on their luck than it is to confront financial policies, political parties, elite societal structures, or crony capitalism. And, as Angus Deaton recently pointed out in his Nobel prizing winning work, when households themselves make selections that enforce the current financial structure, even average citizens can play a troubling role in enforcing poverty.

The importance of all this is that we could change these realities, but only if we show a willingness to pay for a more equitable society – all of us, including companies. That would require us to develop economic structures that don’t deliberately impoverish those the market deems disposable.

And speaking of the word “disposable,” it is the very lack of disposable income that lies at the root of poverty, not those people who lack it. It was Gandhi who made the troubling observation concerning how the colonial systems resulted in grinding poverty by claiming that, “Poverty is the worst form of violence.” Prejudice is at its worst when we not only wrongfully demean people, but when it refuses to provide them opportunity. Benign bigotry can be just as violent as a clenched fist. An opinion in the lack of evidence is nothing other than prejudice. With all that is up against the marginalized, and the economic systems that keep them in despair, useless accusations is the last thing they need. Fewer things are more frightful than ignorance that leads to inaction.

 

 

It’s All Greek to Us

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AVERAGE CITIZENS CAN BE FORGIVEN for a general confusion and alarm emerging from the Greek debt crisis. The sheer financial numbers, opinions, and economic layers are dizzying. For every economic theory coming from established experts comes another established opinion stating exactly the opposite coming from others.

Let’s put the various viewpoints aside for a brief moment, if indeed we can, and consider the trends emerging from the crisis.

First, it’s not really the Greek currency that’s back of all these difficulties but the euro itself. Across the vast networks of the EU the rips appearing because of the competing policies from individual member nations are increasing and troubling. Britain particularly appears on a collision course with the EU framework, especially now that British PM David Cameron is just coming off a convincing win in the recent election. Yes, today it’s Greece, but tomorrow the crisis could shift in numerous directions across the old continent. Ambrose Evan-Pritchard, international business editor of the Daily Telegraph, was forced to conclude as a result of yesterday’s vote: “Leaders of the Eurozone have learned nothing, and forgotten nothing” – a conclusion that confounds us even further.

Second, the recent financial compromise reached in the last few hours in many ways is as infuriating and harsh as the earlier arrangements that led to the Greek revolt in the first place. According to recent economic reports, the new deal creates levels of austerity more severe than its previous counterparts. Following 31 hours of grueling torture, the EU got its questionable deal, but for Greece, as Evans-Pritchard adds, “the terms are harsher by a full order of magnitude than those rejected by Greek voters in a landslide referendum a week ago, and therefore can never command democratic assent.”

And herein lies the deeper problem. For almost two centuries it appeared as though democracy and finance walked a similar path, albeit with frequent tensions. The world’s managers – financial, corporate, and political – are still attempting to hold to the line they believe necessary for future prosperity. Citizens, however, now harbour increasing doubts as to whether the global financial system acts in concert with the ideals of democracy itself.

This dislocation grows every day and in every financial quarter. Greece’s leaders can’t just expect the EU to bail them out every time and then pretend as though their debt doesn’t matter – they at times borrowed irresponsibly. Yet the EU is also realizing that soon enough what took place among the citizens of Greece will surely happen again, and perhaps spread across the continent – partly due to irresponsible lending. Though President Obama supports the outcomes of this week, it was only a few months ago that he observed, “You can’t keep squeezing countries, like Greece, that are in the middle of depression.” That is exactly how the Greeks feel, and whether people agree with it or not, it is a sentiment creeping into other nations.

Spain and Portugal are about to head into national elections, with the present governments enacting heavy austerity measures for dealing with debt while arousing increasing anger among voters at the same time. France and Italy will go to the polls at a later time, but the opposition to austerity measures has found significant support in those countries, with the developments in Greece surely not far from their minds.

In real terms, Greece’s problem has become our dilemma. How else to explain the surging popularity of Bernie Sanders south of the border? That he was popular was no surprise, but that he could raise millions of dollars and pick up as much momentum among Americans as he has must surely signal that democracy is increasingly at odds with the global financial practice of austerity.

Regardless of our opinions on the Greek crisis, we must all become more concerned over the growing gap between democracy and economic viability, as much as the expanding chasm between the rich and the poor. New York Times writer and economist, Paul Krugman, noted a few years ago that, “For most Americans, economic growth is a spectator sport.”  As the signs from Greece and the rise of the anti-austerity movement are revealing, citizens are now pouring out of the stands and onto the field. This is going to be a melee of significant proportions, and only adroit leadership, and economies heavily seasoned with humanity, will find their way through this next difficult phase. Regardless of which side you are on, or even if, like most of us, you just remain muddled, it’s in everyone’s interest that a global consensus be achieved.

 

 

 

 

 

Working Without Meaning

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INCREASINGLY AT THE LONDON FOOD BANK WE ARE encountering those recently without work or holding down one or two minimum wage jobs as they seek to make ends meet for their families. It’s an endlessly disillusioning process – one showing no sign of abatement.

But this is the new world, the new economy, the new reality of employment. Millions are facing it, and despite training and education they are witnessing that link between work and wealth disappear in real-time and with real fallout. We see what happens when democracy stumbles along through cycles of low voter turnout and the dysfunction that inevitably follows. Suddenly power migrates upward, with citizens cut off from it in ever-increasing ways. Well, it’s now like that with employment. Wealthy owners and shareholders move farther off into the world elite as workers watch them disappear over the horizon in an endlessly globalized world. Unless corrected, this de-linking will result in the ultimate separation between democracy and wealth.

Aristotle used to say that “pleasure in the job puts perfection in the work.” Well, not so much anymore. Surveys continue to point to the disillusionment and dissatisfaction experienced by workers as their direct association with wealth creation and production disappears.

As we proceed down this path, we are confronted with a developing world of ironies and opposites. Employability replaces employment. There are people without jobs and jobs without people. Part-time jobs are easily outnumbering full-time ones. Employment numbers go down as people giving up looking for work increases. A growing number of people are working with declining benefits, or none at all, as employment legislation comes under the gun. Rapidly disappearing are the pensions, occupation safety initiatives, employment insurance, and meaningful work environment so necessary to healthy productivity.

Futurists like Jeremy Rifkin talk about the likelihood of “a near workerless information society.” For all intents and purposes, he believes that employment reached its peak years ago and a steady decline is now sinking in.

Then we get those confusing declarations about how it isn’t government that creates jobs, but the free market. But with capitalism enjoying more freedoms that ever in history, we are left to wonder: where are the jobs if this declaration is true? The real answer, naturally enough, is that consumers provide the incentives for job creation. Yet what happens when consumers, or all those people on minimum wage or no wage at all, have little disposal income to utilize? If work is still the way people earn their livings, how can any future be productive if people can’t find the jobs required to sustain such a construct? If wealth can be increasingly generated by investing in more wealth, why would investors, or companies, show any real interests in making their profits in the historic fashion by hiring workers?

We’re in a bind and it’s becoming increasingly clear that the vital connection between work and meaning is imploding. Having a job used to mean holding status in a community. One provided for her or his family. Skills were important, and applying them with diligence was highly regarded.

Our political parties, and the great structure of bureaucracy around them, know all this to be true, but instead they talk about jobs as though everything is normal. Fair enough; we’ve been hearing that for decades. The real question, however, is how can they get all this new wealth and fragile employment in the same room? Or will they even try?

Can we envision a different kind of economy, where work among the elderly, education, those in need of mental health support, the sick, homeless, poor, in libraries and culture, those requiring work training, those in research, or in community and international development take on greater importance? Of course we can, but that would mean partnering with the wealth generators within capitalism to produce a healthy consumer context and better quality of life for everyone. We wait in vain for a political or a free market commitment to that kind of venture. But should it not happen, then both capitalism and democracy will continue on the parallel slide they are already experiencing, and nothing but an agitated and alarmed citizenship can save them.

On October 2, 2015, the London Poverty Research Centre at King’s University College, London, will hold a special economic conference where two economists – Mike Moffatt from the Ivey Business School and the Mowat Centre, and Armine Yalnizyan, from the Canadian Policy of Policy Alternatives – help us to consider the nature of modern employment and what must be done to put meaning back into it and into our communities.

 

 

 

 

 

 

 

 

Say the Word

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WE OFTEN ATTEMPT TO DEFINE THE WORLD WE LIVE IN by the use of a word or a phrase. We had the Stone, Iron, Industrial, Information, and now Technological Ages. When society is moving along without too many extremes, the requirement for words isn’t as essential, but when things get out-of-place or rocky we fall back on singular phrases or words to capture our predicament.

Aldous Huxley noted in his Brave New World, “Words can be like X-rays if you use them properly. They’ll go through anything. You read and you’re pierced.” Thus we got the “Roaring Twenties,” the “Depression,” the “Era of Civil Rights,” or the universal “Globalization.”

Slowly, inexorably, a new term is consistently showing up in conversations and media venues that is remarkable for its ability to draw together, into a kind of rough consensus, voices that heretofore remained divided by ideological fences. That next word is “Inequality,” and it’s about ready to become the caption of our era, our footstep in history’s timeline.

“Inequality” hardly requires much context anymore because we have been living it every day, not just in developing nations, but in what once seemed the endlessly prosperous Western countries, like our own. The amount of commentary it has received in the United States and Britain has placed it front and centre in any coffee shop or policy discussion. Canada is quickly catching up the longer it takes prosperity to return to our national life.

Perhaps it won’t. Our hard-earned reputation, mostly established in previous times, appears to be eroding as the economic gap between the rich and the rest is opening up a tear in the Canadian fabric. The real issue is not so much about how much wealth the top 1% has acquired in recent years but the amount not gained by the rest. There is something wrong; we can sense it but look in vain for any serious political or economic leadership to shrink that chasm.

It is repeatedly said that this past recession is still leaving its fingerprints all over our present life. Research by numerous groups, including the International Monetary Fund, point to the real possibility that growing income inequality actually delays any economic recovery and also shortens the periods of prosperity that follow downturns. As we wait in vain for our economy to bounce back from a recession that supposedly ended a while ago, perhaps we would be better to ask why so little is happening, and if part of that reason is the economic inequality in this country, then the sooner we get at some kind of solution the better off we will all be. But first we have to talk about it in all seriousness. – what its persistence presence means to our national life and the future of our children. Should we persist on this path, the word “equality” will eventually be removed from our national lexicon.

In the movie, Ender’s Game, one of the main characters makes an astute observation: “There are times when the world is rearranging itself, and at times like that, the right words can change the world.” The opposite is also true: the wrong words can diminish us – “inequality” perhaps being the prime example.

Taking Civil Society Global

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SO, THE WORLD DOESN’T SEEM TO BE DOING SO GREAT. As Henry Kissinger reminds us in his latest book, World Order, the dominant governance system developed during the Cold War is giving way to outright confusion around the globe. No one knows quite how to pick up the pieces and fashion something more equitable and prosperous.

Brazil, China, Russia, even Iran, are challenging the status quo in everything from nuclear power to climate change. The traditional players, like Canada itself, seem to be in some kind of holding pattern, preferring to hold their cards close than actually get out there and assist in developing a better global order.

The European Union has 28 members, dismal economic growth, a troubling economic decline, and a badly fraying network that at times seems doomed. There is Spain, with its 27% adult unemployment and a deeply disturbing 52% youth unemployment. No one yet knows what kind of bankrupt Greece might have on the world economy.

And that hotbed of global complexities that has been with us for decades – the Middle East – appears more unstable than ever.

The governing elites appear constantly flummoxed with a world in change, just as the markets and their investors remain jittery over what lies over the horizon for the global economy.

All this means an opportunity for civil society groups around the world to develop a different kind of architecture, where human values, mixed with economic and political reform, might shine a light on a better way forward. “Pie in the sky,” some will surely say, but they’re wrong. The United Nations has never witnessed more activities around citizens engagement and is reformatting many of its funding formulas to resource the efforts. This isn’t just about grand protests or rebellion, but about a teeming amount of examples where people are organizing to reshape policy, to recapture those places where people actually live, and to develop ideas where “wealth” isn’t merely the paradise of the few.

All this is happening when the civic space is actually in decline. One organization, CIVICUS, monitors global threats to the public space and has concluded that 193 countries are, in fact, undergoing civic decline through. This civic renewal isn’t happening as a matter of course, but as a distinct response to what millions of citizens are regarding as the threat to the way of life they want. And that danger is coming from powerful forces that can never be defeated without global cooperation among civil society groups themselves.

The shutting down of open media, the refusal to allow civic gatherings, dubious imprisonments, the pulling of charitable status of charity and non-profit organizations who speak out against what is going on in many Western nations – these and so many more injustices are now producing an opposite and, at times, and equal reaction.

These organizations aren’t stupid; neither are they naïve. Refusing to merely blame spineless governments for these lack of protections, they are also going hard at the financial sector for attempting to make billions out of all this confusion and mess.

All this isn’t about just specific issues like climate change, poverty, conflict, war, and unemployment. Ultimately it’s about whether civil society groups can join hands around the globe and count on one another to guard each other’s backs and to work together at serious ideas of reform. Europe is far ahead in such matter, with Americans now increasingly showing signs of stirring.

Which leaves us with Canada. All these things bring angst to us as well, but Canadians remain docile in the face of media monopoly, government obtuseness, environmental decline, and a new poverty class that threatens to undermine much of what is prosperous unless we take the problem seriously. Canadians are not an apathetic people, but they are distracted and increasingly check out of those things that might bring about the needed reforms.

The technological tools are our disposal would instigate the envy of every generation that preceded us, and yet we can’t seem to marshall them to capture the public space back and guarantee individual liberties in the process. Yet all the technology means little if there is no political will, and right now Canadians are less inclined to engage in official political exercise than they have been since Confederation. They are engaged, but just not in those areas what change must happen the most – the hubs of power.

“Security is not a license for people in authority to hide tactics they would never openly admit using,” says John Hemry, and yet we are seeing everywhere and globally. One lantern won’t shed enough light, but millions just might.

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