Christopher Lind: The Moral Economy Column

Wearing Two Hats Gives Me a Headache

2011-05-26T09:00:00.003-05:00

We have a new Premier in British Columbia, Christy Clark. One of her first acts as Premier was to shred my labour budget for the year. I run a retreat centre in rural BC and we’d already set our budget when she announced an increase in the minimum wage. In a three stage process over one year the minimum wage will rise from $8/hr (the lowest in the country) to $10.25/hr.. It rose to $8.75 immediately. On November the 1st it will rise to $9.50 and on May 1, 2012 it will complete its rise to $10.25 (the highest is $11/hr in Nunavut). We hire many young people for the busy summer season and this announcement shredded that budget while giving us a year’s notice that more is to come.

I have been a union supporter all my life and my children have worked for the minimum wage for many years in different parts of the country. So, the social justice part of me cheered at this announcement. At the same time the business manager in me groaned at this sudden 10% increase in my labour budget. This battle between the two parts of my brain has kept me awake more nights than I care to admit.

It reminded of Ontario farmers I know who belong to unions in the auto plants in which they work, and who also support the idea that labour laws for farm labour should be different than labour laws for industrial labour. They are living a contradiction based on power. In the auto plants there are many workers and only a handful of employers. If the workers don’t band together the employers will take advantage of their disunity and cut wages and benefits.

In the agricultural sector, farmers grow larger and larger for less and less return. With this kind of pressure, farmers want to control their costs as much as possible and so panic at the idea that the price of hired labour might increase at the same rate as fertilizer or farm fuel. What is hard to see is how this focus on unionized farm labour is a distraction from the real issues.

What is real is the lack of power individual farmers have in the bargaining for the products of their farms. There are many farmers and only a handful of grain buyers or meat packers. It is agribusiness that protects its profit margin and captures the gains in productivity while farmers continue to struggle. They would be better off organizing to lower the costs of industrial farm inputs than heaping scorn on organized labour. The real target of farm labour organizing is migrant workers from Mexico and Jamaica who harvest fruit, grapes and tobacco on farms in BC and Ontario. God bless these workers who want what we take for granted like universal health care, education and pensions.

As an employer, next year I will still be paying minimum wage but the students I hire will be earning 28% more. I will probably spend less on capital improvements but it won’t make the difference between success and failure. As a person and a citizen I am pleased that the government is forcing me to do the right thing for my employees.

Wearing Two Hats Gives Me a Headache
Another Moral Economy Column
By Christopher Lind
May 26, 2011

Visit my website: christopherlind.ca
Visit my latest book: Rumours of a Moral Economy
For other moral economy blogs see moral-economy.blogspot.com
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This column is published in The Western Producer, Canada's largest agricultural newspaper

The Issue That Dares Not Speak Its Name

2011-03-31T09:36:00.002-05:00

Some years ago I was giving a talk in Red Deer on the farm crisis. Afterwards, I was approached by a young man who had always wanted to be a farmer. Recently he had put in an offer on a pretty half section of land but he was outbid by a Calgary lawyer. The lawyer wanted to build a country house for his family to use on weekends and holidays. Now the lawyer wanted to hire the young man to work the land for him. The young farmer was confused and distraught. I wondered: why isn’t he mad as hell? He was trying to be his own boss and now he was being offered a job as a hired hand. This is really a taboo subject, I thought to myself, because this is a problem of class!

In the first half of the 20th Century there were dramatic declines in the share of the national income earned by the richest members of various countries. This was a consequence of the power of organized labour to bargain for a greater share of corporate profits. Even though most farmers aren’t unionized, they benefited from there being fewer rich city types outbidding them for land. However, in the last two or three decades in the US there has been an almost complete recovery of income share by the richest 10% of the population and a corresponding decline in union membership and power.

Income inequality in the United States is the worst of all the developed countries. By the middle of the last decade, the top 20% of income earners earned almost half the total national income, which was 13 times the share of the poorest 20%.

The trend in Canada has been similar. Since 1998 Canada’s top 100 CEOs saw a 262% increase in compensation, pocketing an average of $9.1 million in 2005 compared to $3.5 million in 1998. Meanwhile, the average Canadian worker made just over $38,000 in a year, a 15% increase over the average earnings of $33,000 in 1998.

According to economist Armine Yalnizian, in 2004, the average earnings of the richest 10% of Canada’s families raising children was 82 times that earned by the poorest 10% of Canada’s families. This is almost three times the ratio of 1976 when it was approximately 31 times.

Some people think that social class is “the issue that dares not speak its name!” but I’m beginning to wonder. We now find ourselves in the middle of a federal election campaign. In spite of a lot of posturing the issues have not yet been defined. Is it possible the election could be fought on the question of whether we want to build a Canada that is more equal rather than less?

In 2004 the Leger Marketing Group surveyed Canadians and asked whether it is possible to fight against social inequality. A remarkable 74% said: yes! When asked which kind of inequality was the most serious, 28% of Canadians said income inequality, 27% said health care, 17% said education and 12% said housing. This was how Canadians felt 7 years ago and inequality has grown significantly since then. If I could wave my magic wand I would ask Canadian voters which political platform is more likely to shift income away from the corporate dragons of Bay Street and toward my neighbours who live from one pay cheque to the next.

The Issue That Dare Not Speak It’s Name
Another Moral Economy Column
By Christopher Lind
March 31, 2011

Visit my website: christopherlind.ca
Visit my latest book: Rumours of a Moral Economy
For other moral economy blogs see moral-economy.blogspot.com
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This column is published in The Western Producer, Canada's largest agricultural newspaper

Can An Economy Ever be Moral?

2011-02-09T07:47:00.003-06:00

Another Moral Economy Column
By Christopher Lind
February 2011

If I said Big Business can never be moral, would you agree with me? Why is that? In general, people are pretty cynical about commercial relationships. The bigger the business, the more cynical people are. With size, all relationships become more impersonal. You don’t know the owner and they don’t know you, your family or your community. “Buyer beware” is the dominant motto and you better be very careful if you want to protect yourself against the predatory practices of … (shall we make a list?) … oil companies, used car salesmen, cell phone companies, banks etc.

When I ask people what can be done to make the economy more moral, they typically respond with ideas for personal reform. Banks should have Codes of Ethics so employees are forced to be honest. Oil companies should have training programs for their executives so employees don’t lie, and so on.

These are good responses as far as they go, but that isn’t far. You see, I actually think big business can be moral but all of us are caught up in social systems that are far larger and more influential than our personal relationships. Strong personal ethics are necessary for a moral economy but they are not sufficient. A moral economy also requires a social ethic. What goes into a social ethic? There are many principles but one of them would be mercy.

Bankruptcy is an example of the principle of mercy applied to modern economies. Bankruptcy is a declaration that the commercial enterprise is broken and cannot be fixed. So, the principle of mercy is applied. The remaining assets are divided among the creditors according to certain criteria and the enterprise is over. The parties are now free to restart this or another enterprise. This principle of mercy applies both to personal bankruptcy and to corporate bankruptcy.

Sometimes bankruptcy is thought to contradict the principle of responsibility. We all agree that in general, people who borrow money should pay it back, whether they are individual homeowners or big corporations. In practice though, the larger the corporation the more likely it is to be rescued by governments. This is especially so if the corporation is so interconnected to other corporations that its failure threatens the whole lot.

In the United States pressure is building to address the contradiction as virtually bankrupt companies like the insurance giant AIG, and formerly bankrupt corporations like GM, pay out million dollar executive bonuses while homeowners continue to be foreclosed, because banks refuse to renegotiate mortgages. In this case mercy is being applied to investors and responsibility forced on homeowners. Some people argue that the contradiction should be resolved by forcing the same punishment on investors as on homeowners. I take the opposite view. Mercy is a powerful principle and should be available to investors and homeowners, farmers and students alike. It is a reflection of one of the oldest and widely supported moral rules known to humanity – the Golden Rule. Do unto others, as you would have them do unto you.

Visit my website: christopherlind.ca
Visit my latest book: Rumours of a Moral Economy
For other moral economy blogs see moral-economy.blogspot.com
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This column is published in The Western Producer, Canada's largest agricultural newspaper

Fairness and Transparency in Short Supply

2010-12-02T15:10:00.002-06:00

Another Moral Economy Column
By Christopher Lind
November 2010

I will never forget a story told to me by one of my students, a middle aged woman who had been married to a farmer for many years. They lived in rural Alberta. She needed to buy a new car so she went to the nearest town and discussed her needs with the salesman at the car dealership. When she came home she discussed her options and the prices with her husband. Her husband’s reaction was “Oh, that can’t be right. I’ll go talk to Fred myself”. The next day the husband talked to the same salesman at the same dealership and obtained a price $6,000 less than his wife had obtained the day before. His wife was furious. She had been deceived. The process of buying a car was neither fair nor transparent and all because of her gender.

Of course gender is not the only reason why a business transaction might be unfair. However, one has to wonder why any transaction would not be transparent except to hide some aspect of unfairness?

In Great Britain right now people are engaging in civil disobedience because education and welfare payments are being cut back. One of the parties in the governing coalition campaigned on the promise this would never happen. They were not transparent in their dealings and people complain the result is unfair.

In British Columbia, a protest movement has forced the legislature to hold a vote on the newly implemented Harmonized Sales Tax. Why do people hate the tax so much? Part of the anger is fuelled by the reality that the governing party campaigned on a promise not to raise taxes. Then, once elected, they brought in the HST which increased sales taxes on some items from 5% to 12%. Of course this happened in the middle of a major recession when most businesses had concluded they couldn’t increase prices by an equivalent amount. It wasn’t transparent and people conclude it's not fair.

Relationships on university campuses across Canada are becoming increasingly strained. The long term pressure is a lack of funding to match increasing enrollments. However, faced with that pressure many universities have engaged in behaviours that are neither fair nor transparent. For example, the underfunding of students has reached such a critical level that over 90% of Canadian universities now have food banks on campus. The University of Alberta has had one since 1991, now even the University of Lethbridge has one.

Hundreds of thousands of students rely on student loans to pay their tuition. The governments transmit these funds to the students through the universities who charge the students an administrative fee in turn. I know of one regional Canadian university who budgets almost a quarter of a million dollars annually to be received from these fees. Why should the poorest students be subsidizing the universities with borrowed money? These are the ones relying on food banks to eat. This practice is neither transparent nor fair.

If we want to build a moral economy we can start with some very simple requirements in our everyday transactions. Whether as a seller or a buyer, a worker or a manager, let’s start with a commitment to fairness and transparency.

Visit my website: christopherlind.ca
Visit my latest book: Rumours of a Moral Economy
For other moral economy blogs see moral-economy.blogspot.com
Visit my Facebook account: www.facebook.com/christopherlind2
This column is published in The Western Producer, Canada's largest agricultural newspaper

Knowledge For All

2010-10-13T09:44:00.001-05:00

Another Moral Economy Column
By Christopher Lind
October 2010

Yeah, yeah, yeah, the world is going to hell in a handbasket. So what can we do about it? This is one of the most challenging questions I hear. On the one hand the questioner agrees with me that things are deeply wrong. On the other hand they see the engine of destruction frozen in place and no mechanic in sight. What is to be done?

My own approach is two fold. On the one hand I focus on the moral values or ethical principles that have stood the test of time and have shown themselves to be reliable guides in stormy weather.

On the other hand I focus on the new possibilities that globalizing technology and new ways of thinking are making available. Take Wikipedia for instance. Wikipedia was only started in 2001 and as of January 2010 it was attracting 78 million visitors monthly to a site created by 91,000 voluntary contributors.

So Wikipedia is not only an online encyclopedia, it is also representative of a new way of solving problems, of forming community and of sharing knowledge. It is a mechanism for harnessing the power of the crowd.

One of the ways an unregulated market economy works is it allows for capital to find or develop monopoly situations which can be exploited until something breaks. One of those little situations involves the publishing of highly specialized but very important scientific journals. An example might be Nature, the most cited scientific journal. This year the University of California threatened to boycott the Journal because proposed subscription charges were going to increase 400%. In spite of the argument by Nature Publishing Group that they were simply trying to eliminate a historical discount benefiting UC and few others, the news resonated deeply with university librarians who had seen journal subscriptions increase in price faster than any other segment of their budget, often after journals were taken over by larger for-profit corporations.

A Canadian librarian from UPEI, Mark Leggott, is leading the rebellion. In his case the last straw was a science database subscription, Web of Science, which was increasing its price by 120%. His response, and the response of UPEI, was to cancel the subscription and then to organize an alternative based on the power of the crowd. The response is called “Knowledge for All” and it is being supported by the Council of Atlantic University Libraries. Knowledge for All is not a small project. The dream is to index all the world’s scholarly journals, which means something between 4 and 5 million separate articles annually, using an approach that could be called community driven, crowd sourcing or open source, or following a wikipedia model. It will save a lot of money too.

Librarians in PEI and elsewhere are saying the system is broken. However, instead of throwing up their hands, they are teaching themselves how to become their own mechanic. Relying on the shared frustration and shared ingenuity of the group, just like the farmers of yesteryear, they are proposing to build a brand new kind of co-op. It will be light on centralized administration and heavy on group participation. It directs the new globalizing technology to the service of the community and aims at Knowledge for All.

How cool is that?

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YouTube: The Empathic Civilization

2010-08-25T21:55:00.003-05:00

Unpaid work ignored once more

2010-08-12T20:14:00.002-05:00

Another Moral Economy Column by
Christopher Lind
12 August 2010

Meet Maureen. Maureen is a single parent of a sick child and this is how she describes her day. "I administer 10 hours of peritoneal dialysis. I prepare charts which are reviewed by doctors. I dispense medications around the clock. I change surgical dressings. I oversee daily vomiting sessions.... I order medical supplies.... I lift a 46 pound child countless times along with her wheelchair. I transport and lift 60 boxes per month of dialysis fluid. I oversee physiotherapy exercises.... I have the responsibilities of a doctor, a nurse and an orderly. All of these responsibilities are over and above the task of responsible motherhood."

I think Maureen is a hero. So are the hundreds of thousands of other parents who make responsible parenting a priority in their lives. In 1985 the Canadian Government endorsed a UN call to measure and value women’s household work. However, prior to 1996, the Canadian Census asked women like Maureen to report they had never worked in their lifetime. It was absurd but true.

The wall of indifference and incomprehension began to crack in the late 1980s when the National Farmers Union began a survey to quantify the work of farm women. Under the leadership of NFU Women’s President, Nettie Wiebe, they were able to persuade Statistics Canada to change the census. Previously, the census only allowed for one person to be listed as the farm operator and it was most often a man’s name whose was listed. After 1991 there were several slots available on the form and so women’s names could be listed as well. Like magic, the number of women farmers in the country increased dramatically.

Following the effort of the NFU, in 1991 a Saskatchewan housewife refused to fill out the compulsory long form census because it did not recognize her unpaid domestic work. Her name was Carol Lees. Canadian law says you can be arrested for refusing to fill out this census. Carol began picketing a federal government building in Saskatoon as a way of goading the government into following through on its threat.

This attracted the support of other women’s groups. Members of the National Council of Women joined her protest and the BC Voice of Women called on women to boycott the next census if questions on unpaid work were excluded. In 1993 Carol formed the Canadian Alliance of Home Managers to reduce the invisibility of unpaid work. In 1995, the Canadian Government gained great mileage at the World Conference on Women held in Beijing, China, by announcing they would include a question on unpaid household labour in the 1996 census.

As a result we learned that 91% of Manitobans over the age of 15, and living in private households, contributed unpaid work each week. We also learned that the total amount of unpaid work done in Canada is equivalent to 12.8 million full-time, full-year jobs. Two thirds of these jobs would be held by women.

The Canadian Government has now decided to scrap the compulsory long form census. The head of Statistics Canada has resigned amid the furor because the government was claiming the agency supported this change when clearly it did not. Lost in the debate is the fact the Canadian Government has also scrapped the question on unpaid household labour.

Good government policy should be based on sound data. By removing this question the government is preventing all government agencies including provincial and municipal agencies and not for profit groups from having access to sound data. Is there an agenda here? Of course there is. This move rolls back advances in gender equality by almost 25 years. This is the same government that has cut funding for women’s advocacy groups.

Maureen deserves better than that.

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Canada Post in Parliamentary Rummage Sale

2010-06-10T07:31:00.002-05:00

Another Moral Economy Column
By Christopher Lin

Rural Canadians are resilient, multi-talented people. However, they also depend on a few key institutions to support their div “ erse way of life. One of those institutions is the Post Office. Fortunately Canada Post recognizes their unique role. This is how the Crown Corporation describes its self-understanding on its website:

"For longer than Canada has been a country, Canada Post has been part of the bedrock of rural Canada. Today we remain the only company that serves all Canadians, in their communities, and this is not going to change.”

The last year was a difficult one for Canada Post. Its volume of mail dropped 8% in 2009 and this decline wiped out 5 years of steady growth. Even though net income increased, the Crown Corporation was unable to issue a dividend to the Government of Canada because of the challenging financial conditions.

Canada Post has a mandate to provide postal service to all Canadians. The reason it can carry out this mandate without a massive subsidy is because it can use the profit from more profitable routes to subsidize the less profitable ones. As you might imagine, the Canadian Government faces constant pressure to allow competition on those more profitable routes. It is only the pressure and vigilance from 843,000 rural Canadian households, the ones who most stand to lose from the decline of Canada Post, that keeps the cross subsidy intact.

This makes the initiative of the current federal government all the more puzzling. It has introduced an omnibus bill, C 9, to remove an exclusive privilege from Canada Post to deliver mail to addresses outside Canada. Now Bill C 9 does other things too. In fact, this single Parliamentary Bill amends over 80 separate pieces of legislation. It changes the rules for Credit Unions, it changes the rules for pensions, it even changes the agreement on social security between Canada and Poland. Possible the shortest amendment in the whole Act is the one paragraph that removes international mail delivery from the hands of Canada Post.

Why would the Government want to do this? Maybe because they have tried it twice before and failed – once before the election in 2008 and again when Parliament was prorogued in 2009. This time they have buried it so deep in other unrelated amendments it looks like they are hiding it. Omnibus bills are best used for fine tuning and technical adjustments of legislation. They are poor choices for substantive changes in policy.

What is at stake here is the question of solidarity of urban Canadians with rural Canadians. It is also a matter of fairness and whether rural Canadians can get access to the same level of service from the government as other citizens. It is also a matter of economic development. If Canada Post has to cut back on rural accessibility in order to cut costs, it will make it more difficult for new businesses to start up in, or relocate to rural areas.

This amendment, buried in bin 15 of the rummage sale known as Bill C9, may seem small but its implications are huge. If you care about your rural postal service, call your MP and ask that this fundamental policy change be given its own bill and its own dedicated debate.

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This column is published in the Western Producer, Canada's largest farm newspaper.

Do Good and Do No Harm

2010-04-17T20:02:00.002-05:00

Another Moral Economy Column
By Christopher Lind
April 8, 2010

In the 13th century, Thomas Aquinas summed up our ethical imperatives with the phrase “Do good and do no harm”. This was not original to him. He was affirming what he learned from early Greek philosophers. The medical profession makes the same claim, which it learned from Hippocrates over 2,000 years ago. This simple formulation expresses a very powerful and complex moral command.

For example, humanity is hungry for energy. Even as we fret about the consequences of releasing so many greenhouse gases into the atmosphere from burning oil and gas, we also frantically search for new ways of expanding our dwindling supply. One of the dramatic new developments in the energy field has been the re-evaluation of our supply of natural gas stored in shale rock formations. The largest formation of this type in North America is the Marcellus Shale, which lies underneath New York, Pennsylvania, Maryland, West Virginia and Ohio. It also extends underneath Lake Erie and into southern Ontario between Port Stanley and St. Thomas. In 2002 it was estimated that this shale formation contained 1.9 trillion cubic feet (TCF) of recoverable natural gas. Only 7 years later that estimate was increased over 100 times to 262 TCF. (The largest shale gas field in Canada is the Horn River basin in northeastern British Columbia with an estimated 25-50 TCF of recoverable gas.)

The difference in the estimates has to do with new techniques of recovery. Through a process called hydraulic fracturing, small explosions are created underground by pumping in fluids to create pressure. These explosions create fractures that release the gas and allow it to be extracted. The fluids are mostly water and so many people are concerned about competing uses of water. Similar concerns about water use are raised with the Bakken shale formation in Saskatchewan and Manitoba and even the Tar Sands in Alberta. In an arid climate, who gets first use?

The fracturing can also change the flow of underground water aquifers creating risks for nearby communities. A small amount of the fluid (0.49%) is made up of a variety of chemicals like ethylene glycol (used in antifreeze) and petroleum distillates (used in makeup remover). It used to contain diesel oil, which contains benzene (a carcinogen). In densely populated eastern North America these concerns have caused intensive environmental reviews.

To be concerned about energy production in an energy hungry world is a morally good thing. However, there are two major ethical concerns that need to be addressed. Firstly, it makes a moral difference if we are working to feed someone who is malnourished or if we are feeding someone who is a glutton. No one can argue that North Americans are malnourished when it comes to energy. We are the biggest energy pigs on the planet.

Secondly, when we work to accomplish something good, we need to make sure we are not also causing harm. It would be unethical to increase our energy supply at the cost of polluting our water supply.

Some decisions do require a moral balancing of goods. We might be willing to divert water from golf course irrigation to energy production but we would probably be unwilling to divert it from food production. Food is essential but my favourite six iron maybe not so much.

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This column is published in the Western Producer, Canada's largest farm newspaper.

FOOL ME TWICE, SHAME ON ME

2009-12-16T16:04:00.004-06:00

Another Moral Economy Column
By Christopher Lind
December 2009

I have been ashamed of my country only twice in my life. The first time was when we declared war on Iraq in 1990. The second was last week when I listened to a British journalist upbraid Canadians for allowing our government to undermine new international action on climate change. I never thought Canada would declare war in my lifetime and I never thought my Canadian government would undermine collective efforts to do the right thing internationally. I was wrong on both counts.

The connecting issue for both of these events is oil, or as the Beverly Hillbillies used to say “black gold, Texas tea”. In 1990 we were protecting Western interests in the oil resources of the Middle East. In 2009 we are protecting Western interests in the Alberta tar sands. I am not sure we are protecting Canadian interests because I don’t know what interests Canada would have in polluting the Athabasca watershed, destroying 500 sq. kms of landscape, increasing the cancer risk of nearby populations and increasing Canada’s greenhouse gas emissions by 5%. On the other hand, the Government of Alberta says there are 173 billion barrels of oil that can be recovered from the tar sands using today’s technology. At $50 per barrel that means there is over $8.6 trillion to be made, and more as the price of oil rises. A lot of people have an interest in that.

People feel shame when they see themselves as others see them, and their behaviour contradicts their stated values and beliefs. It makes us want to cover ourselves, or hide because a real part of ourselves feels exposed. It was more than a little irritating to be shamed and exposed by a Brit. After all, what crime could Canadians commit that Britain hasn’t done many times over? On the other hand, the feeling of shame suggests the journalist had touched a nerve. Why would I feel shame if I had nothing to hide?

Even though it seems like this is a debate about mining in Alberta, it is really about you and me. Even though I live in Toronto I am fully implicated in this issue. I drive a car that burns gasoline. I heat my home with natural gas. My pension fund earns income from Suncor and some of the other 91 commercial projects located there. My government wants to make the politics of climate change to be about what the Chinese will or won’t do, and what the Indian government will agree to or won’t. But the climate is changing more because of what Canadians and Americans are doing than anyone else. The average Canadian produces almost 5 times more carbon dioxide than the average Chinese produces and more than 10 times what a citizen of India produces. My government is being mean and petty, selfish and deceitful; but if you and I don’t change the way we live, we’ll be no different.

If you’re old enough to remember the cartoon strip “Pogo” then you’ll remember cartoonist Walt Kelly’s most famous line “We have met the enemy and he is us”. Kelly used that on a poster for the first Earth Day in 1970. It’s still true.

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This column is published in the Western Producer, Canada's largest farm newspaper.

ARE WE ALL IN THIS TOGETHER OR NOT?

2009-10-31T19:40:00.002-05:00

Another Moral Economy Column
By Christopher Lind
October 2009

Every other day I open the newspaper and read some new speculation about another federal election. Will we, won’t we, and what story will we tell ourselves this campaign is about? Given the crisis we are still in the middle of, the story should probably be an economic one.

Prime Minister Harper seems to be anticipating this because he keeps goading the Leader of the Opposition into saying how he would deal with the new fiscal deficit. Harper inherited a fiscal surplus and proceeded to eliminate it by cutting taxes and increasing spending. Now he is trying to scare the electorate into believing his opponent would raise taxes, whereas Harper would not. Liberal Party leader Ignatieff is then put in the fantastic position of declaring that he would not raise taxes because a growing economy would automatically raise government income.

Can we please start speaking honestly to each other? The fiscal deficit has been created in three ways. Firstly the federal sales tax (GST) was cut from 7% to 6% and than to 5% by the Conservatives. Secondly, the economy has gone into recession because of the fallout from the collapse of the housing bubble in the US. Thirdly, government spending has increased in order to stimulate the economy and all the parties agreed to this.

I am confident that things will turn around. However, when they do, our increased income won’t pay off the deficit all by itself. We will also have to reduce our discretionary spending so we can get back to reducing our debt, which is now much bigger than when all this started. (Societies always have a debt because we are constantly investing in the future, but that’s another story)

There are only two ways we can do that. Either we can raise taxes or we can cancel or reduce services. The Liberals like to trumpet their achievement of slaying the deficit dragon in the mid-90s. How did they do that? Well, first of all they refused to reduce or eliminate the 7% GST introduced by Brian Mulroney’s government, thereby increasing revenue. Then they reduced funding to the Provinces to pay for health, education and welfare, thereby cutting expenses. Those provincial funding cuts caused provinces to cut back welfare rates, introduce or increase healthcare premiums and reduce funding to school boards. So, the deficit was paid for in part by the poor, the sick and the young.

So, here’s a News Flash: I do want taxes to be raised and I want a debate about whether that should be through increasing the GST (a 1% increase generates about $11 billion/yr) or increasing income taxes. I worry about Harper’s plan because I am afraid he will ask the weakest members of society to pay for it. I worry about Ignatieff’s plan because this is exactly what the Liberals did last time. From my point of view we should all pay for this together because we’re all in this together. Is that so hard to talk about?

Joseph Heath tells a funny story that relates to this. He is in an auto repair shop when the customer ahead of him starts criticizing her bill. “How much of this is taxes?” she asks, “I just want to know how much those bastards are taking from me!” After further conversation the woman announced she had to leave because she was late for her shift as a nurse. “Wait a minute”, replied Heath, “you’re a nurse, at a public hospital? That means you work for the government! Those ‘bastards’ are using this money to pay your salary. That’s like Tom Cruise complaining about the price of movie tickets.”

Heath’s point is that the right wing has convinced the population that the government is a consumer of wealth (like a parasite) whereas the private sector is a producer of wealth, whereas the public sector actually contributes to the economy just as robustly as any other sector. This attitude is deeply rooted in some segments of the US. One of the attitudes I commonly heard expressed in Saskatchewan was that the government is the biggest co-op going – healthy attitude that!

Joseph Heath teaches philosophy at the University of Toronto. His latest book, Filthy Lucre was published this year by Harper Collins.

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WHEN MORALITY IS AGAINST THE LAW

2009-08-29T11:20:00.002-05:00

Another Moral Economy Column
By Christopher Lind
27 August 2009

Have you ever downloaded music from the Internet? Do you know anyone else who has – a son or daughter perhaps? Have you ever sent a copy of a song you liked to a friend? When you did, were you sharing a treasured experience and giving a gift; or were you shoplifting and passing along stolen goods? Those are very different images for the same activity aren’t they?

Joel was 16 in 2003 when he received a letter demanding $5,250.00 for 7 songs he had downloaded through a file sharing service on the Internet. Joel was scared by this official and legal letter demanding payment so, with help from his parents, he sent along a cheque for $500 and explained that he was a high school student and couldn’t afford anything more than that. They offered to settle for $3500 and his cheque was returned.

Joel graduated from high school and moved to Boston to attend university. Four years had passed when he received a notice requiring him to appear in court. He was being sued, along with some 30,000 other people, by companies like Sony Music, Warner Brothers and Arista records, all coordinated by the Record Industry Association. Joel offered to settle for $5,000 but the record companies now wanted $10,500.

At this point a Law Professor offered to represent Joel in court. Charles Neeson holds the William F. Wed Chair in Law at Harvard University where he is also the founder and Co-Director of the Birkman Center for Internet and Society. Prof. Neeson believes that the Internet is a digital version of the old common grazing lands of the 17th century. Prof. Neeson believes the Internet was started as an open domain but has recently been fenced off by capital investors who want to increase their profits through new exclusive property rights.

Joel lost his court case this summer, as expected. He was found guilty of downloading 30 songs and required to pay compensation of $22,500 per song. That means $675,000. He will appeal.

Sociologists will tell you that markets are embedded in society through law, politics and morality. However, it is possible for markets to partly embedded and partly disembedded. The market for property rights in digital music is embedded in American law through the Digital Theft Deterrence Act. However, it is not embedded in morality. Not only are there professors and academic institutes that think digital file sharing is not theft, there are artists too. John Perry Barlow, lyricist for the famous musical group, the Grateful Dead, believes that the online world presents us with a new form of the ‘gift economy’ “where no moral blameworthiness attaches to non-commercial sharing”. When new markets are created, morality is often contested. When public libraries were created, large publishers campaigned against them because borrowing books was going to take away their profits. It is still possible to find old paperbacks with a notice inside the front cover warning the reader that this book could not be lent or even resold.

Markets require legitimacy – political, legal and moral legitimacy. When Mahatma Gandhi marched his followers to the sea in order to make their own salt, he was breaking the British law by refusing to pay the salt tax. Was he a criminal? According to the British colonial legal system, yes. Was he morally right? According to the Indian people, even more so.

You can follow Joel’s story for free at http://joelfightsback.com

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THE MORAL ECONOMY OF THE HEART

2009-07-03T06:56:00.003-05:00

Another Moral Economy Column
By Christopher Lind
June 25, 2009

There is a story I often heard in Saskatchewan about a farmer who had to make his way to the barn in the middle of a blizzard. In order to find his way back to the house, he tied a rope to the back door. When he was finished tending to the animals in the barn, all he had to do was follow the rope in order to find his way back home.

If the truth be told, I never actually met a farmer who had done that, but I heard the story often. It may not have been historical truth but it contained great truth all the same.

Part of its appeal is that the story is archetypal – there are many versions of it in different cultures. For example, in Greek legend, Theseus, the son of the King of Athens, volunteers to enter the maze on the Island of Crete in order to kill the dreaded Minotaur, a monster who was half man and half bull. Theseus’ lover, Ariadne, gives him a ball of thread which he unrolls as he travels deeper into the confusing cave. This allows him to find his way out after the Minotaur is dead.

We can relate to the story of the farmer in winter in many ways. The farmer’s journeys from home to the workplace. The winter blizzard is beyond his control – success is represented only by survival. The blizzard is dangerous and ultimately disorienting. In the middle of this life threatening confusion, how do we find our way back home?

The current economic recession is like the blizzard. It may be caused by humans but from the perspective of any one person it is dangerous, confusing and beyond my control. The best I can hope for is survival.

The current storm is causing all kinds of damage to the workplaces of our lives. For some of us, our workplace has disappeared; for others it will be a long time before it is fully functional. What is the rope we cling to? What thread can we follow to guide our way home?

In the myth of the Minotaur we learn that the thread comes from the desire of our heart. It is Ariadne’s thread. It links the head and the hands and the feet but it is governed by the heart. We sometimes call it vocation. Over the years I have found that farmers are equally divided between those who see farming as one business among others, and those who see it as a ‘calling’ – a vocation. The American writer Fredrick Buechner says that vocation “is the place where your deep gladness and the world’s deep hunger meet”.

In this time of economic recession, confusion and disorientation, many people will be searching for a way home. Now is the time to test your and my fundamental values and ask if we have organized our life in a way that connects our deep gladness with the world’s deep hunger. Now is the time for each of us to build a moral economy of the heart.

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WHAT’S FAIRNESS GOT TO DO WITH IT?

2009-05-07T11:56:00.003-05:00

Another Moral Economy Column
By Christopher Lind
May 7, 2009

The French working class really has style. You have to hand them that. When 20 angry workers at the 3M plant in Pithiviers, south of Paris, told Director Luc Rousselet he couldn’t leave until he improved the severance packages for 110 laid off workers, they fed him mussels and fries for dinner. What a way to get noticed.

It sure beats the leaden style of the European ruling class. The French energy giant Total, announced the biggest annual profit in French corporate history and less than a month later announced the elimination of 550 jobs. French President Nicolas Sarkozy provided 12 billion Euros to the automotive sector and the German tire maker Continental, responded by eliminating 1210 jobs in Clairoix, north of Paris. No moules et frites for this CEO, they threw eggs at him. In the ultimate French insult, the eggs weren’t even cooked!

Scottish pensioners took a more pedestrian route when they picketed the home of former Royal Bank of Scotland CEO Sir Fred Goodwin. How could he have been rewarded by having his pension doubled to over Cdn $1 million when he led the bank into bankruptcy and their savings into ruin? In Connecticut, activists organized a bus tour to homes of AIG executives who received $220 million in retention payments after the US federal government invested $182.5 billion to prevent total collapse.

Canadians are so much more restrained. Where were the pensioners of the Toronto Star when CEO Rob Pritchard resigned after 8 years on the job and received an $11 million cushion for his fall? Does it make a difference that the Toronto Star is not bankrupt yet? They only lost $180 million last year, the stock price fell 70% and they laid off 500 people.

On what basis would we say that people are justified in their outrage? Pritchard’s settlement was approved by the board. The German tire company broke no laws when it laid off 1210 workers.

The common complaint is that these payments are not fair. Why should the bosses get a fat severance check while the workers lose their pensions and get a pink slip? What’s fairness got to do with it, you ask?

Well, contrary to certain ideological claims that economics is a value-free science, all economies are embedded in a set of moral assumptions about how our common life should be organized. When we limit the discipline of economics to matters of scientific technique, we render the moral foundation of our economy invisible.

Communities can tolerate a lot of variation in economic practice but when the variations become both extreme and common, then people react. In times of crisis, ordinary people rise up and insist on a renewal of the moral foundations of our economic life. They insist on fairness rather than bias. They insist on subsistence for all rather than affluence for a few. They insist on compassion for the vulnerable rather than indifference from the elite.

These are the characteristics of a moral economy and they become visible in times of crisis – just like these.

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So You Want To Be A Moral Billionaire?

2009-03-13T08:13:00.009-05:00

“Do you know any billionaires who are moral?” He looked like he could play nose guard for the Hamilton Tiger Cats but he was actually a commerce student at the Mississaugua campus of the University of Toronto. We had just finished an interfaith seminar on the economic crisis.

“What you’re really asking is whether it is possible to be both rich and ethical”, I replied.

“Yeah. That’s right.” My mind was immediately flooded with images of people I knew who had become rich through indifference to the welfare of others but I knew that’s not what the student wanted to hear. He wanted a role model – someone he could look up to and hold onto. I told him the story of Bob Stollery.

Bob was an engineer who led a management buyout of Poole Construction Limited in 1977 when all the management consultants told him he was crazy to do so. He then proceeded to build up the renamed PCL Ltd. Into the largest construction company in Canada and one of the 10 largest in North America. Among it’s other high profile projects it is currently in charge of rebuilding and expanding the Pearson International Airport in Toronto without ever shutting it down.

Having transformed the company Bob proceeded to sell off his ownership stake over time through an employee share ownership plan. As part of his personal succession planning he put his wealth into a family foundation as a way of teaching his children how to be philanthropists.

After the destruction of 9/11 I said to him in passing “Oh, you must be pretty busy now, bidding on all those construction projects in New York City.” “No, not busy at all” he replied. “Why not?” “Well, we decided a long time ago that there was too much corruption in the building industry in the American north-east. If we entered that market, it would change the culture of our company. So we decided we just wouldn’t go there.” I almost fell over. This man had built his company into one of the largest construction companies in North America without competing in what must surely be one of the largest single markets – and on moral grounds. I thought Bob would be a great role model for the aspiring Islamic billionaire before me.

It was a good and necessary answer but it was also an insufficient answer. The students in the seminar knew there was a connection between the failure of our economic system and the failure of our morality but they kept wanting to interpret the problem as a failure of personal morality. If only we had had honest moral people in charge, instead of liars and thieves, (they seemed to be thinking) we wouldn’t have gotten into this mess. Well, actually, I don’t think that’s true.

There is a difference between personal morality and social ethics. Personal morality has to do with the decisions made by individuals and social ethics has to do with the cultures of organizations and the behaviour of corporate and social systems. Many of these thoughtful and upstanding students will be hired by Canada’s banks and they should have prosperous careers in front of them. However, if shareholders continue to judge bank performance only by the rise in share price each quarter, the CEO will be forced to ratchet up the pressure on each division to increase profit. Eventually that trickles down to the 30 year old loans officer who is pressured to shift a farmer into a variable rate loan or increase the interest rate on a line of credit to a small business owner. When increased profit is the only criteria by which we judge all of economic life, social ethics disappears and only personal morality remains.

A parallel took place in the 1970s and 1980s during the debate about the ethics of lending money to the apartheid South African Government. Canadian banks were heavily implicated in this activity and the South African government was using some of the money to re-equip its military and police force. The first reaction of Canadian banks was to say information on its lending activity was private and it would be unethical of them to divulge this information. The second line of defense was to say it would be unethical of them to pass moral judgment on how the money was to be used. They were lending to a sovereign government with a good credit rating and that’s where the conversation should stop. The public pressure increased and eventually the Canadian banks stopped supporting the apartheid regime. More interesting for our purposes were the unofficial reports from bank insiders. They indicated that pressure from the public changed the debate around the boardroom table. Conversations about ethics were now happening for the first time and the cultures of the banks as organizations were changing.

Our current economic crisis has been precipitated by reckless and unethical behaviour in the investment banking sector (Lehman Brothers, Bear Stearns etc.) and by the shadow banking sector – insurance companies like AIG operating as if they were investment banks. This behaviour could only succeed if good people were kept silent on a continuing basis. They can be silenced by organizational cultures that reward deceit and punish truth telling.

Bob Stollery is a good role model not just because he was rich and moral at the same time. He is also a role model because he understood that corporations generate and maintain cultures that can promote ethical or unethical behaviour and these cultures are more powerful than any one individual.

Among his many gifts to the community, he was instrumental in building the Stollery Children’s Hospital in his hometown of Edmonton, Alberta. Bob Stollery died in 2007.

Posted 13 March 2009 . For additional reading on the moral economy, visit www.christopherlind.ca The Moral Economy Column by Christopher Lind is published in The Western Producer, Canada's largest agricultural newspaper. Your comments are invited on this blog.

WHAT MORAL VALUES WILL GUIDE THE FUTURE?

2009-01-14T16:25:00.021-06:00

At the end of January Canada’s Parliament will reconvene and the federal government will introduce a new budget. Later in the spring, provincial governments will also introduce new budgets following the lead of their federal cousins. The failure of Canada’s government to recognize the seriousness of the global economic crisis last fall led to a political crisis and almost a constitutional crisis when the Governor General agreed to prorogue Parliament. Everyone expects the new budget to represent a change in course with a plan to stimulate the economy through tax cuts, infrastructure spending and deficit financing. This represents the new consensus strategy in the world’s largest economies but it fails to explain what moral values will guide the new plan.

We are in the middle of a systemic failure in global financial markets. Over the last 30 years, these markets have been deregulated by governments who worshipped the cult of efficiency and saluted the flag of freedom. This political shift, known as neo-liberalism, has allowed global markets to be manipulated in favour of the short-term interests of the wealthiest and most powerful among us. They have been directed to support the private goals of a few rather than the shared goals of the many. The same failed global economic system that has now crippled international trade is also responsible for the increasing disparity between rich and poor.

By all means, let us change course, and do so dramatically – but in which direction?

The goal of the consensus strategy involving massive spending plans or tax cuts seems to be the resuscitation of the very same pattern of unsustainable consumption that has recently collapsed. For example, worldwide, governments seem prepared to spend trillions of dollars to recreate the old destructive model while simultaneously refusing to invest meaningfully in efforts to combat climate change. [1] We have already heard some Canadian political leaders say their anti-poverty initiatives may have to be delayed as if social and ecological justice initiatives were luxuries we cannot afford in these distressed economic times. [2] I find myself asking: are there any moral values guiding public policy in response to the economic crisis?

For over 30 years in international ecumenical circles, the Christian Churches have been developing a series of ethical principles that have come to be known as principles of Ecojustice. These principles affirm there is no contradiction between seeking justice in human society and seeking wholeness in all of Creation. They were articulated at the World Council of Churches assembly in Nairobi in 1975 and developed further at the WCC Assembly in Vancouver in 1983. Though we affirm these ethical principles out of our own tradition, they are not exclusively Christian. They have developed in other religious traditions as well. [3] They have also developed in a parallel way through the United Nations, first with the World Commission on Environment and Development in 1983 and 1987 [4], then with the Rio Earth Summit in 1992 and finally with the Earth Charter in 2000. The Ecojustice principles involve attention to solidarity, sustainability, sufficiency and equity.

Solidarity

This ethical principle involves a commitment not to abandon other people or creatures, but to stand with them as companions and allies – in one earth community. Using the principle of solidarity as a guide to economic and political restructuring means strengthening our social safety net with a national social housing initiative and living wage provisions.

Sustainability

This ethical principle requires us to adopt environmentally fitting habits of living and working that enable life to flourish. It involves utilizing ecologically and socially appropriate technology. Where this technology is new, it will require major new investments appropriately organized so everyone can benefit. Our current carbon based economy, which treats the atmosphere as a sewage lagoon without end, is clearly unsustainable. The principle of sustainability is key to the ethical re-orientation of our economy and society.

Sufficiency

This ethical principle requires a standard of organized sharing, which requires basic floors and definite ceilings for equitable or “fair” consumption. The scandal of child poverty in Canada is an example of the absence of this basic floor for consumption. The outrageous escalation of executive compensation in recent years is an example of the absence of any meaningful ceiling for equitable consumption. The resources of the world are sufficient for everyone’s need but not for everyone’s greed. If we enacted the principle of sufficiency, we could eliminate poverty and redress the imbalance in Creation.

Equity

This ethical principle refers to fairness in decision-making as well as in outcomes. It requires socially just participation in decisions about how to obtain sustenance and to manage community life for the good in common and the good of the commons. It also requires an examination of the ethical floors and ceiling referred to in the principle of sufficiency above. Particular attention needs to be focused on those who have historically been marginalized in decision-making and power sharing. A political crisis has forced pre-budget consultation with opposition political parties. What would it take to enact the equity principle by having pre-budget consultations with those living in poverty, women, Indigenous people and racial minorities?

Footnotes

[1] two months ago the parties to the Kyoto Protocol (which include Canada) refused to contribute any more than US$80 million to the UN Adaptation Fund designed to help the poorest countries tackle the effects of climate change they are already experiencing। The real need is for almost ten times that amount.

[2] “Economic woes might delay poverty agenda: McGuinty”, Canadian Press, 16 Sept। 08।

[3] See the multi volume book series World Religions and Ecology edited by Mary Evelyn Tucker and John Grim, Harvard University Press।

[4] The World Commission on Environment and Development was first formed in 1983. The Commission was chaired by Gro Harlem Brundtland and issued a report in 1987 entitled Our Common Future.

christopherlind.ca

RE-EMBEDDING THE GLOBAL ECONOMY

2008-11-13T08:55:00.014-06:00

Are you surviving the biggest economic crisis in 75 years? Most of us have been watching it unfold from a distance. First it was Lehman Brothers, Bear Stearns, AIG, HBOS, Fortis Bank, and now it’s Iceland, Hungary, Ukraine and Belarus. If these events haven’t yet affected you directly, they will.

If you are a farmer you may find that declining oil prices have reduced the demand for ethanol and lowered the price of corn. The prices of other crops will also fall as speculators unwind their positions. In western Canada, oil and gas exploration will be reduced meaning fewer off farm jobs in the wintertime. As consumers delay discretionary purchases, manufacturing output will fall leading to rising unemployment. Housing prices will fall and jobs will be lost in construction. If you work in the university sector (as I do) you will be faced with hiring freezes as have already been announced by universities in Miami, Boston, New York and Waterloo. If you are a small business owner and you finance your inventory with a line of credit, you may find your bank reluctant to keep lending. Any institution with significant endowment funds, like charities, schools and hospitals will be faced with reduced revenue and foundations will have less money to grant.

Some of these effects are typical characteristics of a recession and so some people interpret this as just another turn of the business cycle. However, normal recessionary cycles respond to falling interest rates and fiscal stimulus by governments. This phenomenon is not responding to such stimulus and the American Federal Reserve Board has reduced interest rates almost to zero. What’s really happening and what can we do about it?

An alternative explanation is that we’re in the middle of a global crash. The roots of the crisis are in the global financial sector and the crash is the direct result of the globalization of that sector. In this process of financial globalization, national financial markets have been linked to form a single global market for credit, debt and currency. This global market has become either unregulated or insufficiently regulated because the corporations that dominate this market are larger than the national governments that used to regulate them and we have not yet invented the new global institutions that will be required to regulate this new market. For example, Iceland has had to be rescued by the International Monetary Fund after its largest banks failed. The largest Icelandic bank had assets 6 times larger than the GDP of the whole country. Could Switzerland rescue UBS, which has assets 484% larger than that country’s GDP? Credit Suisse is 290% larger than its home country’s GDP as is ING in relation to the Netherlands. Three of the five largest banks in the world are headquartered in the UK (RBS, HSBC and Barclays). Britain has already rescued RBS. Can it afford to rescue the other two without help? (For a chart showing the relationship between the assets of banks and the GDP of their home countries, go to this website from the Financial Times).

In my last column I quoted the work of the Hungarian economic historian, Karl Polanyi, whose name is now popping up all over. In Polanyi’s most famous book, The Great Transformation, he described how the Industrial Revolution caused economic forces to become dis-embedded from feudal society. These forces now operate in their own sphere called the economy. The relationship between the economy and society was reversed and instead of society determining the nature of economic relationships, the economy began determining the nature of social relationships. Society was refashioned in the image of the economy and we inherited a market society governed by a market system. This revolution was traumatic because it threatened humanity. The Great Transformation of his book title was humanity’s response of self-protection. In order to survive we had to invent new institutions like trade unions, pension plans, and unemployment insurance. We even invented the modern nation state so that the boundaries of political regulation would correspond more closely to the boundaries of economic activity.

Today, we are living through the same kind of upheaval. The corporate agents of the national financial sectors of our economies have become dis-embedded from the regulatory frameworks of the nation state. They now exist in a new space called the globalized economy. This space is now so threatening to human society that even as prominent a champion of free market capitalism as George W. Bush is prepared to nationalize portions of the U.S. banking sector to prevent further destruction.

When economic forces are becoming disembedded from the restraints of the old society, there emerge champions of deregulation – “let the market decide!”, they cry. In the late 18th century it was Adam Smith who was arguing that if everyone was simply left to pursue their own self-interest, these actions would be guided to achieve the common good of wealth creation as if by “an invisible hand”.

The social upheavals associated with the rule of the invisible hand included market induced famines, periodic shocks of industrial unemployment, dramatic increases in the gap between rich and poor, homelessness and waves of human migration as landless farmers sought to escape their poverty traps.

In the late 20th century, at the time of the globalization revolution, it was Milton Friedman who was arguing that markets freed from regulation were a precondition to human freedom in a modern society. We are currently living through the same social upheavals as before, following once more on the implementation of policies of market deregulation. Unsurprisingly, conservative think tanks like Canada’s Fraser Institute and America’s Heritage Foundation have been celebrating Iceland as one of the freest countries of the world. The deregulation of Iceland’s financial sector was engineered by disciples of Milton Friedman, like Davíð Oddsson the Prime Minister from 1991 – 2004.

The solution to the chaos caused by dis-embedded markets is obviously the re-embedding of those markets in new systems of political regulation. That’s one of the ways an economy becomes a moral economy. The other way is by making society more just. An economy dis-embedded from society is an amoral economy because an economy left to itself has no conscience. An economy embedded in an unjust society is an immoral economy. Society supplies the conscience but in this case it is a bad conscience.

Where might those new systems of just political regulation come from? As I write this, leaders of the 20 largest national economies are preparing to meet in Washington at a global summit to plan a response to the global financial crisis. What’s symbolically significant about this meeting is that it is no longer sufficient for the leaders of the seven largest national economies (the G7) to meet, consider and decide for the world, as they have done so often in the past. It is neither politically, nor economically feasible to make decisions about world trade without China, India and Brazil being at the table – and they will not be silent. Some commentators call this meeting the new Bretton Woods, recalling the meeting in Bretton Woods, New Hampshire in 1944 when representatives of the Allied nations met to establish the institutions and rules required to re-establish world trade after the cessation of World War II. These expectations are too grand for this meeting but the hope is exactly correct. It may be that this meeting will set the wheels in motion and we may, in time, look back on it as the start of a new Great Transformation.

As for Canada, two ways we can respond to the crash and make our society more just at the same time is by strengthening our welfare system and making major investments in social housing. Increasing transfer payments to the poor will address social inequality and boost consumer demand for economic staples. Investing in social housing will boost employment in the construction sector and help make poverty history.

Posted 13 November 2008. For additional reading on the moral economy, visit www.christopherlind.ca

MORAL HAZARD OR MORAL ECONOMY: THE ETHICS OF ECONOMIC BAILOUTS

2008-10-18T11:39:00.001-05:00

Another weekend, another financial bailout. Will it be enough? Last week it was Washington Mutual, America’s largest Savings and Loan being packaged up for the government’s favourite financial holding company JPMorgan Chase. Last March the American government intervened to ensure the investment bank, Bear Stearns, was sold off to the same outfit. Who will it be next week? Which pillar of Hercules will come tumbling down signaling, once more, the end of the world as we know it?

On September 7th the government rescued the two largest mortgage insurers, known by the nicknames Fannie Mae (FNMA) and Freddie Mac (FHLMC). Many commentators worried that the March and September interventions created a “moral hazard”. This is an obscure term from the insurance industry that tries to predict how someone insured against a risk may act in such a way as to make the risky behaviour more likely. For example, some people think it is more likely that a house insured against fire is more likely to burn down than one not so insured. In this context, the lack of a mid-September government bailout for Lehman Brothers was said to be an object lesson for investors – the government will not insure you against your own reckless investments. In the light of the subsequent rescue of the insurance giant AIG, a better definition seems to be the privatization of profits and the socialization of losses.

In the Canadian context, there is a different kind of moral hazard at work. For many years now, the Canadian government has been encouraging people to contribute more to their personal Registered Retirement Savings Plans (RRSPs). In 2000 the contribution limits started to increase after years of fixed rates and even cuts in the mid 90s. In 2008 the RRSP limit is 18% of earned income to a maximum of $20,000. This increase typically means an increase in investments in the stock market. Since the percentage of working Canadians with company pension plans has decreased over the last 10 years, this means the federal government is encouraging Canadians to rely on their own private investments to secure their retirement.

Canadians clearly are prepared to do that since approximately 50% of Canadians who file income tax also invest in RRSPs. But Canadians also expect that these government sanctioned and supported investment vehicles are properly regulated to ensure their interests are protected. To the extent that Canadian banks and investment houses have participated in sub-prime and higher risk mortgage pools from an insufficiently regulated American housing market, it appears that these institutions have behaved with less attention to risk than their fiduciary responsibility warranted. Did they believe the American government would bail them out? Do they believe the Canadian government will bail them out? Are Canadian financial institutions exhibiting signs of morally hazardous behaviour? I think they are.

Moral hazard is not just a matter of outright dishonesty. (Extreme versions of it are called fraud.) According to the Insurance Institute of Canada, moral hazard is more likely a consequence of carelessness and poor management. In a political climate where de-regulation and self-regulation is the flavour de jour (see the food inspection industry), Canadians properly expect their government representatives to ensure they are not exposed to the excesses of the cowboy capitalism they see to the south. Government encouragement of private investment to secure the common good of stable and dependable retirements, implies an obligation on the government to ensure those investment markets and managers are not reckless.

However, there is also something going on bigger than issues of moral hazard. The financial crisis is being described as a crisis in the American housing market caused by imprudent lending to homeowners. This is true as far as it goes, but it doesn’t go far enough. The sub-prime mortgage crisis is just the presenting issue. Any number of events could have precipitated this crisis. Rather, the crisis reveals the extent of and risks in the globalization of deregulated financial markets, and it could be worse.

The German government has rescued three banks in the last year because of American mortgages. However, they probably wouldn’t be able to rescue Deutsche Bank, which is so large it has liabilities the equivalent of 80% of Germany’s Gross Domestic Product. The British Government has now rescued two banks, Northern Rock and HBOS, because of their exposure to this debt. They probably wouldn’t be able to rescue Barclay’s Bank, the buyer of Lehman Brothers assets, whose liabilities are greater than Britain’s entire GDP. The largest insurance company in the world, AIG, has needed rescue because it has been selling insurance against this kind of default. The American government has been forced to act not only because it is an election year, but also because they need to satisfy Japanese and Chinese lenders. Foreigners hold 45% of the debt issued by the US Treasury with the largest investors being Japan (13%) and China (10%). If those countries start moving their money into Europe instead, the American dollar would fall rapidly - just as rapidly as interest rates would rise.

So, the world’s financial markets have expanded and integrated. But there has been no corresponding expansion and integration of regulation. Instead, the dominant voice of the last 20 years has been one of de-regulation. In consequence the livelihood of the whole modern world is now at stake.

In the 17th century, Isaac Newton proposed three laws of motion. His third law states that “for every action, there is an equal and opposite reaction.” In the 20th century, the economic historian Karl Polanyi proposed a similar kind of law. He said when market forces under capitalism expand, they are met by a countermovement aiming at the conservation of society, nature and production, using protective legislation and other instruments of intervention. This double movement in the 19th century he called the Great Transformation. It was how modern industrial society was born, complete with trade unions, pension plans, social housing, and healthcare.

We now desperately need another Great Transformation and if we’re lucky, we may be at it’s beginning. It is timely, then, to ask: by what values will this intervention be guided? Let me suggest four.

Matthew’s Gospel (7:26) reminds us to build our houses on a solid foundation, not on sand. That means our financial systems, like our ecological systems, have to be sustainable.

In order for the system to be sustainable, we have to be clear about what is sufficient for our common life. So far we have organized our affairs to achieve the maximum growth possible. What would “enough” look like?

Most people want some basic standards of fairness applied to income and employment, hence the desire to limit CEO pay for companies receiving public financial aid. This is the principle of equity.

Finally, ordinary people are wondering why all the government money is going to rescue private investors when ordinary homeowners are under water. They are looking for some collective support. They are looking for solidarity.

We’ve had enough of moral hazards. It’s time we had a moral economy.

Faster, Higher, Stronger

2008-09-13T22:29:00.003-05:00

We‘ve been hearing a lot about excellence in sport recently and it always gives me an uneasy feeling. What do people really mean by it? It sometimes sounds like this: gold means excellent, bronze is close but not very.

I believe in excellence but my excellence includes ethics.

I don’t want to rain on the Michael Phelps or Usain Bolt parade but doesn’t the Olympic movement need them so we will forget about past champions like Canadian Ben Johnson or US track star Marion Jones? Johnson had his gold medal in the 100 M race at the 1988 Seoul Games rescinded because of steroid use. Jones won 3 gold and 2 bronze at the 2000 Games in Sydney. She is not competing in Beijing for two reasons. First, the IOC has barred her from these games and stripped away her medals after she admitted to using steroids before the Sydney Games. Secondly, she is currently in a Texas jail having been convicted of perjury.

The Tour de France is the most famous cycling race in the world. It is currently on the brink of collapse because drug cheating is so widespread. Tour champion Floyd Landis has been discredited in spite of his denials. Several corporate sponsors have refused to back their teams and now whole teams have quit the race after their riders were caught blood doping. The American satirical magazine, The Onion, has started selling versions of the yellow bracelets made popular by cycling champions. Their bracelets read “Cheat to Win”.

Can sports ever be ethical? Let me tell two stories that will say yes. The Velux 5 Oceans yacht race covers 30,140 nautical miles and is held once every four years, just like the Olympics. In 2006, in the middle of the Southern Ocean, British racer Alex Thomson was in 3rd place when his boat overturned causing irreparable damage to his keel. His nearest competitor was Mike Golding, 80 miles ahead of him in 2nd place. Mike Golding turned his boat around and sailed back to perform a very complicated rescue.

Mike Golding’s actions were not unprecedented. This kind of accident is common enough in sailing that assistance is obligatory. Failure to assist is grounds for disqualification. Mutual assistance is part of what it means to be excellent in sailing.

Story #2: In April of this year, the Western Oregon Wolves were playing the second game of their softball doubleheader against the Central Washington Wildcats. The winner would proceed on to the Division championships. In the second inning, with two runners on base, Wolves outfielder Sara Tucholsky hit the first home run of her college career. In her excitement she neglected to touch first base. As she turned around to retrace her steps, he knee buckled and she lay on the ground writhing in pain.

Baseball rules prevent teammates from helping each other to round the bases. Acting on instinct, Wildcat first baseman Mallory Holtman looked at shortstop Liz Wallace and together they carried Tucholsky around the bases, allowing her to touch her one good leg on each one. The Western Oregon Wolves ended up winning the game 4 – 2 and went on to the NCAA tournament.

Most news reports described that as a tale of good sportsmanship. I call it excellence.

Fuel vs. Food

2008-06-27T15:12:00.002-05:00

Do you support Bill C33? This is the Canadian legislation requiring biofuels as a percentage of all fuels sold in Canada. The legislation currently before the Senate, allows the Government to require up to 5% renewables in all gasoline sold here or up to 2% of all diesel fuels. I was asked this question recently and my answer is yes, BUT! Here’s why.

Some people claim that converting corn to ethanol is driving up the price of food. Others say it is taking food away from the poor. Let’s deal with the price of food first.

Commodities are enjoying record high prices due to droughts, crop failures, increased demand from China and India, and financial speculation. Some of the increase in the price of corn comes from the diversion of 30% of the US corn crop to ethanol production. The elevated price of corn does affect the price of some other crops and in Canada there is some conversion of wheat as well. However the long term price of wheat and other grains continues to go down not up. If you factor inflation out of the price, wheat sold for $800/tonne in 1918 but that was during wartime. At the end of WWII it peaked again at almost $600/tonne. The long term trend is around $200/tonne except for occasional spikes, like now. When people criticize our government for an ethanol policy that will increase the price of farm commodities, I say hurray because the current high prices won’t last and anything that prevents farm bankruptcy is a good thing.

Now what about the other argument, that biofuels take food away from the poor? This is a more powerful argument but it is confusing if we only look at it from a North American perspective. We think of agriculture and oil both in terms of exports not imports. In Europe, most oil is imported. Europeans want 10% of all transport fuels to be agriculturally based by 2020. According to the UN Right to Food program, Europeans would have to dedicate 70% of all their arable land to this purpose in order to meet this target. Clearly they expect to meet their targets by importing agrofuels from Latin America, Africa and Asia. Not only can they preserve their own farm land but it is cheaper too. Ethanol that costs $1 to produce in Europe costs $0.30 in Brazil.

So, it is in the southern hemisphere where food will be taken away from the poor. Already edible maize is being replaced by industrial maize. Last year the cost of maize tortillas in Mexico increased in price by 400% causing riots by people for whom this is their staple food.

My guess is everyone would agree that the real payoff with this new technology is not the conversion of seeds (food) into biofuels. It is the conversion of waste (used oils like French fry oil) into biodiesel and wheat straw and wood chips into what is known as cellulosic ethanol. My “yes” has to do with my support of a market for biofuels, making the investment in new technology commercially viable and increasing the income of farmers. My “BUT” means I refuse to be indifferent to the hunger of peasant farmers in the global south. Our goal has to be the conservation of fuel, conversion of waste and the guarantee of the right to food.

Speculators Have Two Faces

2008-06-03T18:47:00.001-05:00

Speculators are never popular. We associate such people with naked greed. They profit from our misery. No one wants to be known as a speculator.

An alternative word is investor or risk manager. To be an investor is to have confidence in the future. To be a risk manager is to be prudent and wary, concerned about dangers ahead.

These two words can sometimes be two faces of the same activity. When I purchase life insurance, I am managing a risk. I don’t often think about how the insurance company that sells me the policy is speculating on the chances of my death, even though they are.

Farmers invest in the future with every spring planting. They manage their risk by pre-selling their crop. Investors purchase those contracts for future delivery because they are speculating that the price will be higher on the delivery date than the price they have paid ahead of time. In order for this market to work properly, farmers need investors prepared to speculate and investors need farmers prepared to speculate too. When the environment stays stable, this market works, and adds to the stability overall.

The market for managing risk in food commodities has started to become dysfunctional. The futures market for wheat on the Chicago Board of Trade is twice as volatile in 2008 as it was in 2007. How volatile is that? Well, that’s six times as volatile as the price of gold, the Dow Jones Industrial Average or the price of European currency on the foreign exchange market.

What is the explanation? Some people blame the drought in Australia, and some blame the low level of wheat stocks world-wide. After all, world wheat consumption has exceeded production in six of the last eight years. Some blame a general increased demand from China and some blame a spill over effect of tight rice supplies and transferred demand. Some even blame increased ethanol use since 30% of the US corn crop is now going to ethanol production and farmers are switching out of wheat and into corn.

Probably all of these factors contribute to the volatility but drought and changes to supply and demand are factors we have seen before and they haven’t had this level of impact. One of the new features is the dramatic increase in investments made by Wall Street pension and hedge funds. According to the New York Times, as much as $300 billion of new money has been invested in these speculative plays. Although the Chicago Board of Trade has offered futures contracts since 1959, only recently have they also offered options on those futures contracts.

Where have we seen this before? In 1971, when President Nixon took the American dollar off the gold standard, a market was created for foreign exchange. Such a market always existed but the volatility of the market was very low since most currencies were related officially or unofficially to the American dollar and it was pegged to the price of gold at $35/ounce. The market was considered so insignificant, the Swiss based Bank of International Settlements didn’t start measuring it until the 1980s, and then only on an experimental basis. That same institution now estimates that market to handle over $3 trillion dollars daily. The danger of this market is that it is bigger than all of its regulatory bodies. When the market was only a third of its current size it was already larger than all of the reserves of all of the central banks of all of the industrialized nations put together.

There is not yet a consensus on the causes of increased volatility in the commodities markets, but, if I had to speculate (!) I’d say the unregulated increase in speculative investments has destabilized long standing relationships between producers and consumers, increased costs to farmers, and increased risks to us all.

Is Agriculture a Public Good?

2008-03-17T23:00:00.001-05:00

Soft fruit growers in Ontario are currently caught between two competing visions of the role of government in protecting the public interest. CanGro Foods (part of Kraft Foods Canada until 2006) recently announced that they were closing their fruit and vegetable processing plants near Niagara-on-the-Lake (St. David’s) and London (Exeter). This closure will put nearly 300 people out of work. It will also leave 150 pear and peach growers without a buyer for their products. The pear harvest of 3,000 tons is worth $1.8 million while 6,000 tons of clingstone peaches are worth $2.5 million. One more plant closure might not seem remarkable except that the St. David’s plant is over 100 years old and is the last tender fruit cannery east of the Rocky Mountains.

The federal government has refused to stop the closure but has offered about $1600 per acre to help with the costs of removing the fruit trees. According to at least one study, the cost of removing trees and replanting for a different crop is closer to $15,000 per acre. It only takes three months to close a processing plant but it takes 10 years to rip out mature pear trees, replant and bring the fruit to a marketable stage. How long does it take to secure the future of domestic agriculture in Canada?

Underneath the question of whether the government should be directly involved in ensuring the viability of domestic agriculture in Canada lies a conflict of visions over the meaning of the public interest. On the right side of the debate is a vision of the public interest as the accumulation of intersecting private activities. They have no meaning as such but they do generate conflict and the role of government is to set the rules of conduct so disputes can be resolved. When modern American style conservatives call for small government, this is what they have in mind. The federal government response to the CanGro closure reflects this vision.

On the left side of the debate is a vision of the public interest as a version of the common good. Some activities contribute to the common good and some do not. Protecting the most vulnerable members of our society would contribute to the common good even though they do not represent a numerical majority. From this perspective the role of the government is to actively contribute to, promote and defend those aspects of our common life that help to define who we are and who we want to be.

Donald Ziraldo is the former President and co-founder of Inniskillin Wines. He thinks another buyer for the cannery could be found if a market for its production could be secured. Since CanGro will be keeping their Del Monte, Aylmer and Ideal brands, even if they’re now filled with pear halves from China, he wants the government to help create a new “Niagara” brand. He then wants the Ontario Government to adopt a “buy local” policy for all its institutions. The Government of Ontario employs 65,000 people and is the second largest employer in the Province after the Federal Government. If the Government adopted a “buy local” policy just for the food services catering to employees, and if every employee spent just $5 a day on lunches and snacks, $6.5 million a month would be directed towards local agriculture.

This is a bold and imaginative vision but it treats domestic agriculture as a matter of the public interest, and the government as its defender. Where we stand on the vision has a direct and practical impact on the future of domestic agriculture in Canada.

Mining Companies Challenged by Demands of Ecojustice

2008-01-17T13:09:00.000-06:00

Is social justice compatible with environmental justice? If social justice requires economic expansion and environmental justice requires industrial regulation, aren’t these two concerns moving in the opposite direction? Solidarity is one of the principles of ecojustice but it is also an ethical concept drawn from struggles between people. It is union members that sing solidarity forever, isn’t it?

Another ecojustice principle is “socially just participation”. This makes sense when we are talking about the American presidential primaries; how can it make sense in an environmental sense?

Let’s start with money! Canada’s currency is closely tied to the values of our commodity exports. As oil reaches $100 per barrel, investors look at all the profits being made in the oil patch and bid up the price of Canadian assets. This increases the pressure to eliminate the barriers to resource exploitation. Profits are there to be made now. Ethical concerns for the state of Creation tomorrow don’t calculate as easily.

The logic of the oil patch also applies to the rising price of gold and other minerals. Mining often happens in remote regions and frequently occurs on land where title is disputed by indigenous peoples. For example, the Canadian company Goldcorp, owner of a Red Lake, Ontario gold mine, currently operates a mine in Guatemala in defiance of the wishes of local indigenous communities. When Canadians express their solidarity with aboriginal groups in Canada or Central America, they are expressing their concern for social justice and environmental justice simultaneously.

One of the concerns of the indigenous communities in Guatemala was over the use of cyanide in the mining process. This is also a concern of Canadians. Mining companies routinely use Canadian fresh water lakes as industrial waste dumps (called Tailings Impoundment Areas) complete with toxic chemicals. According to Mining Watch (a Canadian non-for-profit environmental and social justice coalition), there are currently applications to engage in this activity in Sandy Pond, Newfoundland, Bucko Lake, Manitoba and Fish Lake, British Columbia along with 10 other sites across the country. While current figures from the Canadian Mining industry are not available, in 2005 the US mining industry released 530 million kgs. of pollutants. The chemicals released in tailings and waste rock included almost 840,000 kg of cyanide, 1.6 million kg of mercury and 77 million kg of arsenic. It’s no wonder the Canadian Catholic Bishops said “the Cry of the Earth and the Cry of the Poor are One”.

The Canadian Churches have also been reflecting on these issues of social and environmental justice. In a document reflecting on guidelines for biotechnology, the Canadian Council of Churches include the following principles:
• We carefully and comprehensively consider benefits and/or harm to all creation both now and in the future.
• We share responsibility for the common good of all people and creation.
• We pay particular attention to the implications for the poor, the marginalized, the weakest, as we seek to do justice, love kindness and walk humbly with God.
• We advocate and nurture dialogue across the whole community to ensure all voices are heard and considered.

In these guidelines you can clearly see the ethical standards of solidarity and socially just participation being applied. Ecojustice is neither a contradiction nor an option. If we want to build a moral economy in a sustainable society we will require a relationship with all of Creation that has sufficient resources for all.

What if the Earth Could Speak?

2008-01-17T12:44:00.000-06:00

What if the Earth could speak? What would it say? Would it laugh with joy or cry out in pain? This is a hard concept for us to grasp. Increasingly people are beginning to realize that thinking of the Earth as the third rock from the sun is a product of old ways of thinking and also a major problem. It is more helpful to think of Earth as an interdependent set of communities that move through cycles of life in fragile ecosystems.

Humans represent one system of life but not the only one. All living things that breathe, share the same molecules of oxygen and carbon. The water that makes up most of the human body is the same water in which fish swim. Earth includes rocks but it is primarily a place of life. That’s why we call it Creation. When the Earth speaks, it is the communities of the Earth that are speaking. As the ancient wisdom of Job puts it:

“ask the animals, and they will teach you;
the birds of the air, and they will tell you;
ask the plants of the earth, and they will teach you;
and the fish of the sea will declare to you. (Job 12: 7-8)

Over the last 50 years, we have been struggling to find language to describe the ecological crisis in which we find ourselves. Rachel Carson cautioned us about chemicals and silence in her book The Silent Spring. Aldo Leopold encouraged us to recognize ourselves as one part of the biotic community in his Sand County Almanac. Increasingly people are using the language of ecojustice to call for a different relationship between ourselves and the rest of Creation.

Ecojustice calls for a right relationship among all the communities of Earth. It takes as its starting point that humans do not stand apart from Creation but are one integral part of a complex system of living relationships. Ecojustice generates standards of sustainability, sufficiency, participation and solidarity that need to be met for justice to be achieved.

How do these standards apply? In Alberta, an area the size of Florida is being mined for heavy oil saturating ancient layers of sand. This is four times larger than Vancouver Island. Much of the oil is mined using steam and processed with water. The oil mining operations are licensed to divert 349 million cubic meters of water from the Athabasca River, twice the amount used by the city of Calgary. The oil companies are required to rehabilitate the mined land to the state of its previous biological productivity but since none of this has yet happened on a large scale, the standard of sustainability has not yet been achieved.

The standard of sufficiency seems the most difficult test to meet. It seems obvious that Canadians are extremely wasteful of both fossil fuels and water. The only country more wasteful is the United States, which is the destination of most of this mined oil. Surely only a radical change in consumption patterns could justify an extraction process that produces five times as many greenhouse gases as conventional light crude.

These are only two of the four standards and so far we are not meeting them. The oil industry is the economic engine of western Canada and nobody wishes for rain during a parade. However, the claims of Creation for ecojustice are serious ones. When Earth catches a fever, everyone gets sick.

Will Credit Unions Go the Way of the Wheat Pools?

2007-10-08T18:25:00.000-05:00

How fitting that the only remaining symbol of the venerable Saskatchewan Wheat Pool are the letters SWP, used for shares traded on the Toronto Stock Exchange. The company is now formally called Viterra after having purchased Agricore United. So all the institutions reflecting the desire of western Canadian farmers to change the balance of economic power in farming, the Alberta Wheat Pool, the Manitoba Pool Exchange, United Grain Growers (all combined in Agricore United), and the Saskatchewan Wheat Pool, have now disappeared. I have no doubt that Viterra will be good at its job. It’s just that it is now doing a different job than the old farmer owned cooperatives did. Encouraging cooperation among farmers is no longer their mission, increasing return on investment for shareholders is.

The shift in name reflects a shift in values and that shift in values took place a long time ago. It took place over ten years ago when Saskatchewan Wheat Pool changed from a cooperative organization owned by its farmer-members to a competitive enterprise owned by its shareholders.

Values exist within institutions because they direct human behaviour; they help to organize and direct our resources. Institutions need to educate about and review their values on a regular basis for at least two reasons. Activities evolve over time and can become disconnected from values. In this case our activities need to be revised. Cultures also evolve over time and values are always understood in relation to culture. When values become disconnected from culture, the values need to be re-interpreted. Institutions that fail to educate about values can have members who are not committed to them. Institutions that fail to review their values can have practices that don’t make any sense.

When the Saskatchewan Wheat Pool transformed itself from a farmer owned cooperative to a shareholder owned agribusiness, the rationale was one of financial necessity – the business environment had changed, the Pool needed capital and the best way to get it was from the equity markets. However, the debate was carefully managed and many dissenters felt they weren’t given a full opportunity to make an alternative case. Another way to think about that event was to say that there was already a disconnect within the organization between values and practice. The reorganization was a realignment based on a different set of values.

Education is one of the seven values adhered to by cooperatives, as defined by the International Cooperative Association. The seven values together are:

Voluntary and open membership.
Democratic member control.
Member economic participation.
Autonomy and independence.
Education, training, and information.
Cooperation among cooperatives.
Concern for community.

So here’s a question for farmers and former members of the various cooperative organizations that died in order to make Viterra possible. When did the education and review of cooperative principles stop happening?

We have lots of other cooperative organizations in our society. Maybe the best examples are the credit unions that emerged in the same period of Canadian history as the wheat pools.

The first Canadian credit union was organized in 1900. Now almost 1 in 6 Canadians belong to one and they join 136 million people in 91 countries who do the same. In a recent survey a majority of Canadians reported that they received better service from credit unions than any of the banks. Forty years ago it would have been impossible to imagine the Saskatchewan Wheat Pool no longer being a cooperative. Could the same thing happen to the credit union movement?

Remembering With A Purpose

2007-08-23T10:52:00.000-05:00

Did you forget where you put your keys last night? Do you sometimes forget the name of your best friend? Forgetfulness is common, especially as we get older. But some things we think are important to remember and others we want to forget. When we have painful or traumatic experiences there seem to be two common approaches to them. One voice says we should forget them in order to put them behind us - get on with our lives. Another voice counsels us to remember the pain because if we submerge them beneath the waves of our conscious mind our lives will be directed by hidden forces and we will never be truly free.

The moral economy is also influenced by memory. In 18th century England when bread shortages were created by new marketing schemes, rural women demanded that bread be sold according to the just price established by royal statute. The law in question had been created 150 years earlier to be used during times of famine. For the first time, people were experiencing a famine created not by nature but by the market system. The women remembered the law and insisted that it be enforced. Justice in commercial relationships and care for the community were key elements in their identity. By remembering the law and acting on their memory, they were refusing to be diminished and insisting that these values be carried forward into the future.

In South Africa, the Truth and Reconciliation Commission created the conditions for the truth of life under apartheid to be told. By validating the truth of the experience of ordinary people, the Commission made sure that the experience could never be denied. South Africans would always have to remember who they have been and where they came from. Across Canada every December 6th, there are spontaneous memorials to the 14 young women who were gunned down at Montreal’s L’Ecole Polytechnique in 1989. They were all engineering students and their crime was being female. Canadians remember because it is important not to forget that society is still so patriarchal that being female can get you killed. We will never be free of this hatred if we allow ourselves to forget. So, we remember with a purpose.

Soon it will be August the 6th. This year it will be 62 years since we (the western allied powers, including Canada) dropped the first atomic bomb on Hiroshima, and three days later a second one on Nagasaki. Over 200,000 people died as a result of those two bombs. We remember those events, but for what purpose, to what effect? Remembering the atomic bomb means remembering our capacity to do the most unspeakable things to each other. In order to be free we have to remember what horrors we are capable of. We remember so that it will never happen again. We cannot truly commit to change our behaviour unless we confess what our behaviour has been. We want to remember ourselves as compassionate, caring and just. We want to think of ourselves as good. We can only be just in the future if we make a point of remembering with clarity, our willingness to be the opposite.

Readers who want to read more on memory from a theological point of view could turn to Miroslav Volf's The End of Memory: Remembering Rightly in a Violent World, Eerdmans 2006.

Decimation & Indifference Threaten Creation

2007-06-27T12:56:00.000-05:00

Should we care that industrial production and globalized trade are doing to our marine life what it has done to our land and agricultural life? It is and I think we should.

Decimation was the practice and indifference was the attitude we used to eliminate the bison from the western Canadian prairie. Then we applied industrial principles to the cod fishery on the Grand Banks with the same attitudes and results.

The common Friday dinner of fish and chips used to be made with cod and halibut. Now it’s mostly made of Pollock. More than 3 million tons of Alaska Pollock is caught annually in the North Pacific, mostly in the Bering Sea. Half of it is caught by the American fishing fleet using factory freezer trawlers. In addition to fish and chips you’ll also find Pollock in fish sticks, imitation crab meat, Chinese fish balls and many other fish formulations. If you choose the fish option at Dairy Queen, Arby’s, Burger King or McDonalds, you’ll probably end up eating Pollock.

Since Pollock can grow to over 3 ft. in length and weigh over 20 kilos, you might wonder how it can be transformed in to so many different shapes and flavours. The reason is because most Pollock is made into Surimi, a Japanese-style fish slurry. The fish is cleaned, rinsed to remove the smell and then pulverized into a gelatinous paste. It is then mixed with additives like starch, egg white, salt, vegetable oil, sorbitol and soy protein. Different seasonings are added depending on where in the world it will be eaten. In order to prevent it from spoiling in cold storage, sugar is added (up to 15%) which can make it a problem for diabetics. According to the US Department of Agriculture, fish surimi contains 15% protein, 6.85% carbohydrate, almost no fat and 76% water.

Some people think we are being clever by finding new uses for fish species we ignored previously. On the other hand, the need for new uses has been created by a callous disregard for the consequences of current fishing practice.

Our search for new species is called “fishing down the food web” because we are taking the food from the mouths of larger fish and mammals. This is causing all kinds of marine behaviour we have never seen before. Dolphins have been observed attacking seals for the first time. Killer whales have been feeding on otters.

Fishing down the food web means we are also taking the immature members of those same larger species, thus doubling the fatal consequences. Dr. David Pauly of the Fisheries Centre at UBC likens this practice to “eating our seed corn”. He argues that if we continue with the logic of feeding farther and farther down the food web, eventually we will be forced to figure out how to take plankton and turn it into plankton surimi so we can make imitation varieties of all the fish species we used to have, but have no longer.

We are all part of the web of life – you, me, the salmon, cod, whales and kelp. We are all dependent on each other for oxygen, nutrients, food and life. If we continue our practice of decimation and indifference, eventually we will do to ourselves what we have done to the rest of Creation.

The Challenge of Sustainability

2007-04-02T15:31:00.000-05:00

Have you noticed an increased use of the term “sustainable development” recently? Maybe it’s the increased environmental awareness that causes people to fall back on this term in an uncritical way. In the same way I have also noticed an increased use of the term “sustainable prosperity”. Who could be opposed to sustainable prosperity? Don’t we all want our prosperity to be sustainable?

One way to think critically about these concepts is to ask the question: sustainable for whom? For example, sustainable development of the forest industry may not lead to forests that can sustain all the animals that now live there. Similarly, sustainable prosperity for cities may not lead to sustainable rural populations.

In the 1970s, ethicists working for the churches recognized that environmental health also required an increase in social justice. At that time they began to speak of the need for just, participatory and sustainable communities and societies.

In the 1987 Brundtland Commission Report on Environment and Development, the authors called for a global set of ethical principles to guide the transition to sustainable development. People hoped that the nations gathered for the Rio Conference on the Environment in 1992 would pass such a document but not enough nations would agree. In 1994, the Canadian Internationalist Maurice Strong teamed up with former Soviet President Mikhail Gorbachev to renew this effort and three years later the Earth Charter was released. It has since been endorsed by over 2,000 organizations representing millions of people and is thought to represent an international consensus.

The third of the Charter’s 16 principles calls us to “build democratic societies that are just, participatory, sustainable and peaceful.” Over the last 20 years there has been a definite shift in international circles away from the language of sustainable development and toward the language of sustainable communities. In this context, sustainability becomes a moral imperative to remove the barriers to justice and a fair distribution of resources, so everyone can be empowered to protect the other communities of creation with whom we share this planet. Another term for this is ecojustice.

One of the ways sustainability is understood by the Earth Charter is in terms of sufficiency. One of the sub-principles calls on all of us to “adopt lifestyles that emphasize the quality of life and material sufficiency in a finite world”. Over the last 30 years, anthropologists have begun to use the term “moral economy” to describe the principles used by rural and farm groups to justify their rebellions against widespread economic change. These rural groups do not rise up in response to just any change. They rise up against changes that threaten their very livelihood. They rise up against forces that challenge their ability to even exist. The principle of sufficiency requires us to recognize that sometimes my desire for more threatens your ability to get anything at all.

The future of rural Canada does not depend on a strategy of sustainable development or sustainable prosperity. It depends on the whole of Canada pursuing a strategy to create sustainable communities. That means a strategy that recognizes the link between social justice and environmental integrity, and claims sufficiency as a necessary goal for everyone.

Economic Lessons My Father Taught Me

2007-03-01T09:51:00.000-06:00

My father died last month. He was 91. During his 50 years in business, he tried to teach me some lessons about life and money. This is what I learned.

1) When you make an agreement, write it down. I came from a family of five children. Every Saturday allowance would be dispensed like cups of navy grog - five cents for the youngest, twenty-five cents for the oldest and gradations in between. These dispensations were recorded in a ledger with deductions for misbehaviour. Disputes about who received what were resolved by reference to the ledger. As we grew older, allowance stopped and loans began. Each transaction was private but each was accompanied by a promissory note. When you make an agreement, write it down.
2) Cut your cloth according to your needs. As an orphan, my father could not afford to go into debt. He only bought what he needed and what he could afford. He didn’t drive when he could cycle and he didn’t cycle when he could walk. He was always well dressed but if you looked closely, his clothes were always well mended. It was from him that I learned how to darn socks. He had learned the difference between wants and needs. “Don’t cut your cloth according to your wants”, he would say, “cut it according to your needs”.
3) Don’t forget where you come from. My father befriended a man who lived alone in a rooming house in Hamilton. What little family he had, he was alienated from. My father picked him up hitchhiking and brought him by the house where he was paid to do some gardening. We called him Popeye because he spent most of the time on the verandah, smoking a borrowed pipe and telling stories about the war. This went on for years. One day, after we had driven him home, I asked my father why we did this. He said, “There was a time when I had no family to speak of and I lived in a boarding house too. Don’t forget where you come from, that could be you.”
4) Pick up the pennies and the dollars will take care of themselves. My father was an inveterate recycler. He saved newspapers and rolled them into fireplace logs. He never discarded anything if he could avoid it. He took special pleasure in his early morning raids on the local lovers’ lane where he could collect bottles and cans to be returned for cash. It was inconceivable to him that one would pass by a penny on the street and not pick it up. “Pick up the pennies”, was his motto, “and the dollars will take care of themselves”.
5) Every budget, no matter how small, has room for the common good. Every week my father attended church and made his financial contribution. This was in addition to other charities he supported regularly. We received our allowance on Saturday but on Sunday we were expected to donate a portion to the church. These days we are all encouraged to set up an RRSP and “pay yourself first”. This was not my father’s view. His view was that first of all, we need each other in order to survive. Therefore, investment in community is a necessary expense and every budget, no matter how small, has room for the common good.

INVESTING IN EQUALITY LEADS TO PEACE PRIZE

2006-12-18T14:25:00.000-06:00

What wonderful news that Muhammed Yunus and his Grameen Bank were awarded the Nobel Peace Prize this year. What a high profile recognition that increasing inequality leads to conflict and increasing equality leads to peace.

In 1976, Professor Yunus launched an action research program aimed at reducing poverty by extending credit to the poorest of the poor in Bangladesh. (Grameen means ‘rural’ or ‘village’ in the local Bangla language.)

The Grameen system is compellingly simple. A group of 5 prospective borrowers is formed. Only two can receive the first loan and the whole team ensures the loan is repaid since only then can the others borrow money. No collateral is used other than the trust offered by the community. A track record is quickly established and borrowers who successfully repay the first loan can then borrow larger amounts. The first loan made was for $27. Since 1983 the Grameen bank has lent $5.1 billion to 5.3 million people and adds more than 1% to the Gross Domestic Product of Bangladesh annually.

Some realities are hidden by these figures. Dr. Yunus’ action research project became a bank through government legislation and received support from both the central bank and the nationalized commercial banks. The Grameen bank is 90% owned by the poor whom it serves with the government owning the remaining 10%. Most of the borrowers are women and the loan repayment rate is 95%.

Readers familiar with the credit union and cooperative movements will recognize some familiar features in this arrangement – especially the emphasis on self-help activities and collective action to promote economic and social development. I began to wonder if there were any modern Canadian examples continuing to work in this tradition. I immediately thought of Father Greg MacLeod.

Greg is a Catholic Priest who grew up in Cape Breton, an economically depressed but socially vibrant part of Nova Scotia. In 1976 he created a community development corporation named New Dawn Enterprises. One of its first challenges was to deal with the shortage of dentists on the island of Cape Breton. New Dawn built and equipped a dental clinic and then persuaded a newly graduated dentist to occupy it. The young dentist was attracted because he didn’t need to borrow money to establish himself. New Dawn then repeated this process until Cape Breton had established a good reputation as a place to practice dentistry. Over 25 years the number of dentists on the island increased from 2 to 70.

New Dawn also responded when a local rope factory was being sold and relocated to the United States. The factory had been built with government money and locals thought they should have a chance to revive it before it was taken away. It was the women of the community who blockaded the factory site and prevented it being removed and it was New Dawn that negotiated the purchase. The rope factory is now a thriving commercial venture. Today, there are ten different companies operating under New Dawn Enterprises with assets of $20 million.

Both Prof. Yunus and Fr. MacLeod have demonstrated that when communities get behind an idea they bring something with real value to the table. Economists are beginning to call this ‘social capital’. It is as valuable as financial capital but you won’t find it under the mattress. You find it in your relationships in community.

First published November 30, 2006

Are Rural People Better Off When Cities Prosper?

2006-10-04T17:52:00.000-05:00

Are rural people better off when cities prosper? That’s one of the questions I asked myself when I read the recent report by the Conference Board of Canada “Canada’s Hub Cities: A Driving Force of the National Economy”. The report argues that government money (a portion of the gas tax) should be invested more in Canada’s largest cities than in smaller towns. According to this logic, Alberta would be better off if the gas tax generated by the smaller towns of Grande Prairie, Hardisty and Oyen were invested in Calgary or Edmonton rather than being distributed more evenly. According to the Conference Board of Canada, the economy of Alberta (as measured by the Gross Domestic product) would grow more, and all Albertans would be more prosperous if governments targeted the largest cities for investment.

I remember talking to a young Albertan some time ago who wanted to move from his parents’ farm and buy a farm on his own near Olds, AB. He put in a bid on a good working farm and found he was outbid by a lawyer from Calgary. The lawyer wanted a weekend country place. The farm land offered him scenic beauty but he had no time to be an active farmer. The lawyer turned around and hired the young farmer to farm the land for him. From the point of view of Gross Domestic Product, the value of farmland in the area increased because of this sale and therefore the wealth of the area increased as well. According to this way of measuring, the region became more prosperous. From the point of view of the young farmer, he went from being a prospective land owner to being a tenant – a journey his grandparents had in the opposite direction when they immigrated and homesteaded so many years ago. Is the community better off as a result of this shift? Has our collective wellbeing increased?

The Conference Board of Canada report assumes that an increase in economic activity in a region means that everyone is better off. This is clearly not the case. Saskatchewan’s economy can be growing even while the vast majority of its small towns are dying. A close reading of the report reveals a tiny footnote at the end that admits “that some of the communities that converge do so, not because their rates of GDP increases are so fast, but because their population is declining. This is not a happy story.” A better question to be asked is ‘are we better off’? Are we more healthy, more literate, more balanced, more community minded and more generous? Are we realizing the goals and values we cherish for our society?

The Canadian Index of Wellbeing is a new initiative sponsored by the Atkinson Foundation and chaired by former Saskatchewan Premier, Roy Romanow. It seeks to measure not just the growth in economic activity but the extent to which we are realizing our values and goals and whether we are leaving to our children a better world. It is developing a set of indicators that will measure “educational achievement, economic security, a clean environment and social equity.” With these kinds of measuring sticks we can distinguish between the kind of economic growth that depopulates rural Canada and the kind that promotes health and clean air.

Economics is not value free but its values are well hidden to the untrained eye. Congratulations to the Atkinson Foundation for helping us ask and answer the right questions. You can learn more about this initiative at www.atkinsonfoundation.ca/ciw.

First published in August 2006

Spiritual Values Seek Political Expression

2006-10-04T17:23:00.000-05:00

Apparently there are some people in my town that want to kill me and my friends. That is the allegation at least. According to the press, there is quite a lot of evidence to support this charge. I have friends who work on Parliament Hill, family members who work at the CBC and I am frequently walking in downtown Toronto. These are all places named last week as potential targets of terrorist attacks.

I am used to people in Canada importing conflicts from abroad. People of Irish descent have been supporting different sides of the Irish civil war for ages. More recently it has been Eastern Europeans, Kashmiris, Tibetans and Chinese. But the terrorist threats against targets in Toronto and Ottawa are not like these others. These threats come from Canadians and are made against Canadians. Their objective is to force political change in Canada’s relations with other nations, most specifically with the United States and Afghanistan.

The last time this happened in Canada was 35 years ago during the FLQ crisis. At that time an armed group kidnapped politicians and killed one. They were trying to achieve the political goal of Quebec as a sovereign and independent state.

The current group of violent, Canadian plotters also has a political agenda – the release of Muslim political prisoners and the withdrawal of Canadian troops from Afghanistan. But they also share an Islamic faith. How will we understand this?

One of their distinctive characteristics is their spiritual motivation. They identify themselves coming from a shared religious tradition, Islam. Some are converts from another faith (Hinduism & Christianity). Some have been active trying to convert others.

One of the characteristics of contemporary western culture is that we live as if our material and spiritual worlds can be separate. When we live as if they are separate, we tend to live as if one of those worlds doesn’t really exist. Some of us will live in a spiritual world and pretend that the material world doesn’t exist, won’t last or doesn’t matter. We will live in isolation from the world or wait until the apocalypse or become indifferent to the worries of the world.

Others of us will live only in the material world and pretend the spiritual world doesn’t exist, is something you grow out of or is a private choice that has no real consequence for anyone else. Both of these points of view are distortions of reality. Our spiritual life is real and seeks expression in the material world. Spiritual values make real claims on people and communities. Disagreements about spiritual values will create real political, social and economic conflicts but they will be hard to see if we pretend they don’t exist.

By the same token the material world is also real and also seeks expression in our spiritual life. Our political, social and economic realities seek affirmation in spiritual terms. Political movements seek to bring in a new order, social movements make claims of fundamental identity and economic movements make claims to salvation. If we continue to deny our spiritual reality we will refuse to come to terms with the meaning of our most fundamental choices.

The Canadian terrorist suspects seem to be trying to turn their spiritual values into a political reality. They feel their spiritual identity as followers of Islam to be under attack by Canadian military involvement in Afghanistan. According to opinion polls, most Canadians seem unsure about our country’s involvement there. Why do we have over 2,000 troops there? Are we not peacekeepers? We seem to be in armed combat yet we are told we are not at war? Are we really trying to support the reconstruction of a war-torn country or are we protecting American economic interests in the Middle East?

This is a challenge in two parts. For those of us who are religious (and especially Muslim), this is a challenge to articulate the spiritual values we are deeply committed to that are deeply present in our society. These spiritual values include the dignity of every person, male and female, the real tolerance of difference and the practice of democratic decision-making.

For the rest of us, the challenge is to consider how the world’s dominant empire, based on economic globalization, American military interests and western culture, represents a violent threat to other cultures, other interests and other ways of doing business. Westerners tend not to think of this empire in spiritual terms but other groups experience their whole way of life and being in the world as threatened. For them this is a crisis on all fronts, including the spiritual, and they seek spiritual sanction for their political responses.

First published in July, 2006

How Big Is Your Family Circle?

2006-05-09T23:11:00.000-05:00

Did you have a good Easter weekend? Did your family gather around the table and break bread together? Who was there? Was it just Mom and Dad and the kids or is your family bigger than that?

In North America the idea of family is something we fight about. One of our fights is whether the concept is reserved for the biological family or whether it can encompass a larger variety of social forms. Some conservative Christians like James Dobson, founder of Focus on the Family demand a return to the traditional Christian family. Focus on the Family is an evangelical organization dedicated to “helping to preserve traditional values and the institution of the family.” It is opposed to divorce, abortion and homosexuality as social practices that undermine the family. Its publications approvingly quote and publicize others who promote the concept of the natural family which is defined as “married mom and dad, with children”

Recently I was in Thailand attending a Christian conference. Over the course of the week a small group of us formed strong social bonds. In addition to this Canadian, there was a man from Costa Rica, a man and a woman from Argentina, a woman from South Africa and a man from Greece. We were all adults, mixed genders, multi-racial, multi-lingual and not related by blood or marriage. And yet, we shared food together, lent money to one another, traveled together, rescued each other and cared for one another. We drew a wide circle and called it family.

Is it too much to call this family? I don’t think so. Families have taken many forms over the last several thousand years. In Old Testament times the average Hebrew household numbered between 50 and 100 people. In North America it averages between 2 and 3. At the time of the Roman Empire, family could include slaves, clients and tenants of the property. The evangelical scholar Rodney Clapp concludes that “what evangelicals call the ‘traditional family’ is in fact the bourgeois or middle-class family, which rose to dominance in the nineteenth century – not accidentally alongside capitalism and, a little later, America as the ascendant world power.” The form of the family is a response to economics, politics and culture. What’s important is not the form of the family but the ethics of the family. Is it good? Is it safe? Is it caring and open to others? Does everyone participate in the decisions that affect them?

Freedom and mutuality, peace and justice are some of the characteristics of an ethical family. Does that mean constructed families are more moral than given families? No, even democratic institutions can be unethical if they do not care for and protect the rights and interests of minorities and dependent members.

I recently came across a poem that illustrates the ethics of family life. The author is Edwin Markham.

“They called me heretic and thing to flout
and drew their circle to keep me out;
but love and I had the wit to win:
we drew our circle to take them in.”

Does your family circle invite people in or keep others out?

First Published April 20, 2006

A Moral Economy Can Warm Your Body and Your Soul

2006-05-09T23:04:00.000-05:00

Climate change is back in the news. The glaciers are melting, North America is warmer than normal and northern Europe is colder than normal. That’s why they refer to extreme weather events instead of global warming. It’s really all about increasing chaos and the change that will be required for us to pull back from the abyss.

In my last column I challenged you (and me) to change. I claimed that we could and should increase our energy efficiency by 30% over the next 15 years. Some readers have challenged me for ideas. Where are the practical ideas for how we can achieve these goals?

Municipalities and companies have all kinds of ideas. The City of Prince Albert, Saskatchewan is looking to recover the heat in wastewater and use it to cut the energy costs of its wastewater treatment plant. The City of Toronto is using the cool waters from deep in Lake Ontario to provide air conditioning to the downtown core. The international chemical company, Air Liquide is running an experiment in Quebec with hog farmers. They are trying to determine the feasibility of capturing methane from hog production and turn it back into an on-site fuel source.

But what about the challenge I issued to myself? I already think of myself as being energy efficient. I live in a small house. I walk to work. I am passionate about public transit. As my old household appliances give way to age, I have replaced them with more energy efficient models. Privately though, I wondered if I had set the bar too high. How I would achieve additional energy savings because I still need to save another 30%.

This fall I installed a programmable thermostat on my furnace. A friend had installed one and made wild claims for its efficiency. I was skeptical but decided to experiment. I programmed the furnace to a lower temperature from after bedtime until one hour before I arise in the morning. Last week I received my gas bill and compared my energy consumption year over year. After less than 6 months in operation my energy use has declined by 24%. Yes, this winter has been warmer than others but the energy saving is still substantial. In Ontario, natural gas prices have just increased by a staggering 40% but my energy bill is actually declining.

Maybe global climate change is not the most pressing issue in your mind. Maybe saving money is not your highest priority, though I would find that hard to believe. If that is true, consider this. Since the change in thermostat, my valentine and I have had more intimate moments than either of us can remember. The crisp night air draws both of us together under the covers for whole body embraces, warming for body and soul. So, if environmental responsibility doesn’t turn your crank and shaving costs doesn’t tickle your fancy, consider the fringe benefits of recycling body heat. You can cool it down and heat it up all at the same time. (And I bet you thought the moral economy was boring, didn’t you?)

First Published February 23, 2006

Convicted by Climate Change

2006-01-06T20:46:00.000-06:00

I was convicted in Montreal. I had plenty of company – between 5,000 & 10,000 others. We were all convicted of failing to stop, of failing to understand and of failing to do enough to combat global climate change. I am talking about the meetings held to discuss the Kyoto Protocol under the United Nations sponsored Framework Convention on Climate Change.

Canada signed this agreement and promised to reduce its greenhouse gas emissions by 6% from 1990 levels before 2012. Since that time, our emissions have increased by 24%.

Why should I worry about this? Isn’t this someone else’s problem? Actually, that is the attitude of the US Government. With only Australia for company, they have refused to sign on to the Kyoto Protocol in spite of having helped to draft it (as Bill Clinton was at pains to point out) and in spite of being the world’s largest greenhouse gas emitter. In a critical and dissenting response, 195 American cities have signed on to meet Kyoto style emission reduction targets. Ten American states have also signed on including California with its famous Republican Governor. The head of the American Business Council for Sustainable Energy has also urged action because corporations need government agreement before they invest the billions of dollars needed to change industrial and consumer practice.

Maybe the best way of understanding the problem is to say that the Earth is running a fever. The average body temperature of the Earth has already increased by almost one full degree. The average temperature at the poles is increasing more rapidly. In the MacKenzie River Valley, running north into the Arctic Ocean, the average temperature has increased by 1.7 degrees. Once the average body temperature increases by over two full degrees the icecap over Greenland will melt. This will increase the percentage of freshwater in the North Atlantic, interrupting the Gulf Stream current, cooling northern Europe. It will raise ocean levels, flooding Prince Edward Island, small countries in the Pacific and parts of Manhattan. Not all areas of the world will experience increased water levels. Instead, the St. Lawrence River system is expected to have water flows decreased by 24% and water levels in Lakes Huron and Michigan are expected to decrease by between 0.5 and 1.5 metres within 45 years. It is expected that we will have more extreme weather events, more oscillation between flooding and drought, and more storm patterns in new places. Already in 2004 Argentina experienced the first recorded hurricane in the South Atlantic.

I was convicted in Montreal because I became convinced I was part of the problem and I needed to be part of the solution. Changes in government policy are necessary but they won’t be enough. I need to change. Cities across the world are challenging themselves to reduce their greenhouse gas emissions by 30% by 2020. We need to do the same. It will take government action to shift from coal fired generating stations to wind, solar and biomass generation, but it will take the concerted effort of committed and convinced citizens to decrease our electrical, gas and oil use. The beginning of a cure for our global fever is to increase our energy efficiency by 30% over the next 15 years. This will only happen if we all do it together.

First published in December 2005

Money for the Love of It

2006-01-06T20:44:00.000-06:00

Did you wish you were an oil worker in Alberta last month? Did you find yourself wondering what it would be like to share millions of dollars with a group of your closest friends? You can’t win if you don’t play! That’s what some people say. Other people say: don’t do it! Money is the root of all evil.

Funny thing is, when people say money is the root of all evil, they are actually misquoting Scripture. In the New Testament, in the first letter to Timothy 6:9 we read “But those who desire to be rich fall into temptation, into a snare, into many senseless and hurtful desires that plunge them into ruin and destruction. For the love of money is the root of all evil;” Notice that this passage does not say that the rich have fallen into temptation, only that the desire to be rich leads there. Money is not the root of all evil but the love of it is.

I don’t begrudge the lottery winning oil workers a dime. Let them enjoy it, I say. On the other hand, I can fairly predict their closest and most cherished relationships will change because of it. Other people will love this new money and want to treat it as their own. Family will expect lavish presents and treats. Friends will expect free drinks and cheap loans. Stores will no longer offer a neighbourhood discount. They are no longer poor. They are now rich and others will covet what they have and manipulate themselves into a share of it.

There are a few choices open to them. They can spend it quickly so that it’s gone - that kind of party normally leaves a big hangover. They can give it away to family and worthy causes. They can buy a farm (see the first option!), or they can invest it and move to a new location where neighbours don’t know about their sudden change in circumstances, Arizona maybe. The least stressful might be option #2 – share the wealth, enhance your community and preserve your relationships.

I have no grievance with lottery winners but I am adamant about opposing lotteries. They deceive people. They distract us from the problems of low farm income, an inadequate minimum wage and inadequate pensions and instead focus our attention on fantasies of the good life. They don’t expand the supply of money, they encourage the love of money and that’s where the sin comes in. Money is a means to an end. Don’t confuse it with the end itself. The world needs stronger, more sustainable, more just communities. Money can help with that but the love of money will get in the way of that.

For years my father bought lottery tickets, though he never won more than $10 to my knowledge. I was always critical of this practice even though I harboured a secret hope that he would win! God bless the lottery winners, but God save me from wanting what they have.

First Published in November 2005

The Moral Economy of the New Orleans Crowd

2006-01-06T20:42:00.000-06:00

1773. That’s what New Orleans reminds me of. In 1773 in Cornwall, England a group of tin miners rioted. There was a scarcity of wheat in the local market. Some local grain dealers had begun shipping Cornish wheat to the London market in order to profit from the higher prices instead of selling it locally. Seven or eight hundred miners went to the local grain merchant and offered 17 shillings for 24 gallons of wheat. When they were refused, they broke down the cellar doors and took it all away without paying anything.

In 1766 the Sheriff of Gloucestershire describes a similar scene. A mob had formed “consisting of the lowest of the people such as weavers, mecanicks, labourers, prentices, and boys etc…” They went first to the gristmill where they made off with the flour and wheat. Then they went to the local market where they set and enforced a lower price for grain. Finally they went to farmers, millers and bakers selling all manner of foodstuffs at prices they set, giving the money to the owners. According to the Sheriff, they “behaved with great regularity and decency where they were not opposed, with outrage and violence where there was: but pilfered very little…”

Why does this remind me of New Orleans? Because in the examples above the common people were remembering and re-establishing a moral economy. They remembered that in times of mass hunger there were generally accepted moral principles that governed how people should behave. Prices should be fixed and the poor and hungry should be provided for. The English historian E.P. Thompson called this the “Moral Economy of the English Crowd”.

When a father wades into a pharmacy looking for looking for pop and diapers because the water is unsafe to drink and babies need to be changed regardless, is it random lawlessness or responsible parenthood? When some neighbours steal a van in order to evacuate a senior’s home the civic authorities have abandoned, is it theft or bravery? When local police break into a WalMart and set up camp, helping themselves to provisions, is it looting or setting public priorities over private ones?

Part of the reaction around the world to this disaster has to do with the apparent abandonment of moral principles by the highest authorities. Consider by contrast the reaction in Canada to the Red River flood of 1997. The rich were not rescued and the poor left to drown. The influential were not fed while strangers starved. The healthy were not carried away while the sick were left to fend for themselves. All were treated equally because flood waters have no respect for social class. In 1997 students lined up to sandbag because everyone takes their turn. German soldiers training at CFB Shilo offered engineering and transportation assistance because they had the resources and we had the need. When the people of St. Anne’s prepared their curling rink for evacuees, the fact that their neighbours were from the Roseau reserve was secondary. They were people first and different cultures second.

When the authorities down south dispatched military personnel to protect property instead of the poor, they violated some of our most deeply held moral values. If you said to yourself, “this is not how a civilized country is supposed to behave!” you were echoing a memory going back hundreds of years. Broad social purposes require leadership. If the government won’t provide it the people will.

First published in September 2005

Culture Is the Work of Many Hands

2006-01-06T20:40:00.000-06:00

In my neighbourhood, you can find poetry in the elbow of a sidewalk, in the shelter of a covering elm. I walk my dog and detour so I can receive this gift – no purchase required. A stranger has erected a music stand on the grassy verge, a stranger to me but a member of the commons nonetheless. Its black plywood top is covered in a plastic sheet and beneath it, changed on a weekly basis like the linens, is a sheet of photocopied verse. Last week it was a poem by Marge Piercy. “I want to be with people …who are not parlor generals and field deserters but move in a common rhythm when the food must come in or the fire be put out”. It reminds me of the prairie. It reminds me of a place where food and culture are tenuous. They persist only through the work of many hands.

It reminds me of the homes on Echo Lake in the Qu’Appelle Valley, with their pastel siding and folk art lawns. It reminds me of the 20 ft. high chokecherry sculpture in Lancer, and the 30 ft corn stalk sculpture in Taber. It also reminded me of the mammoth slogans painted on barns, miles from any main roads. It doesn’t matter how many people read it, the farmers have something to say and by God, they are going to say it!

My poetic neighbour shares something with the artistic and vocal prairie farmer. They are reflecting on their lives, taking a point of view, expressing their identities, and adding to the beauty of their environment. They are making their own lives visible and in so doing, claiming public space for proper public purposes. They are engaging in activities that are open and accessible to all, that seek the general welfare of the community and they are doing it for the stimulation and enjoyment of all. This is the ancient meaning of the word – public. It is not concealed and in no way private.

Sadly, it is now common to find political leaders claim the opposite - that there is no such thing as a public purpose or a common good. There are only collections of private goods and interests. The notion of a public welfare and a common good is now so strange that we tend to treat public space as empty space. How easy it has become to think of empty space as commercial space that hasn’t yet been sold. By contrast, these poetry patrons, painters and rural activists are cooperating in the subversive activity of reclaiming public space for public use. They seek no commercial reward and work hard to promote the common good as they understand it. They remember a different world and they can imagine one too. All of us have this capacity but like any muscle or civil right, if we don’t exercise it we will lose it.

“Greek amphoras for wine or oil,
Hopi vases that held corn, are put in museums
but you know they were made to be used.
The pitcher cries for water to carry
and a person for work that is real.”

- from “To Be of Use”, by Marge Piercy, published in CIRCLES ON THE WATER, 1982, Alfred A. Knopf.

First Published in August 2005

Let's End Mandatory Work After 65

2006-01-06T20:39:00.000-06:00

Ontario is planning to end mandatory retirement at age 65. Ontario will then join Alberta, Manitoba, Quebec and New Brunswick as provinces that have ended this practice.

Most people I know want to retire as soon as they can afford to do so. They have worked hard in one occupation and look forward to a chance to do something different. Some want to paint or play or volunteer or travel. Some want to work at different jobs on a part-time basis. There are two kinds of people who want to keep working after 65. The first type are those people whose identity is tied up in what they do. They may be lawyers or ministers or doctors or farmers who think that what they do is who they are. For them, if they stop doing, they stop being and no one should be able to force them to end their identity and existence.

The second type of person is the person who can’t afford to stop working. They don’t have enough money. They may be clerks or small business people, homemakers or farmers. In the 1960s when the Canada Pension Plan was created, our society was greatly concerned with poverty among the elderly. Our response was to create the CPP as a universal plan. It was thought to provide one leg of a three legged stool for all seniors. The other legs were supposed to be private savings and employer pension plans. Poverty among the elderly has been greatly reduced since 1966 but our three legged stool is still very wobbly. One of the legs is less than half built. Only 40 % of working Canadians participate in a company pension plan. The other 60% will only have the CPP, Old Age Security and whatever they’ve been able to save for their retirement – typically not much more than the value of their house. This is an issue that affects women particularly because they tend to spend fewer years in the paid work force but live longer than men after 65. I know many social workers (mostly women), who have dedicated their lives to improving society and who will retire with next to no company pension. In England the government is considering a new law that would require all employers to enroll their workers in some form of pension plan.

One of the best examples of what life looks like when there are inadequate pensions can be found on Canadian farms. 20% of all Canadian farms are being run by farmers over the age of 65 with annual net farm income of less than $16,000. Many of these would happily hand over the operation to a new generation if they could afford to do so. Demanding an end to mandatory retirement provides only half a solution because it only describes half the problem. Canadians need adequate pensions if they are going to have any real choice about when to retire. People need support in order to be free.

First Published in July 2005

The Economics of Family Life

2006-01-06T20:37:00.000-06:00

I’m middle aged. Like most of my friends I care simultaneously for children in school and aging parents at home. The older my children get the more important economics becomes. They don’t live in my home anymore but I continue to help pay for their schooling. I pay for dinners, trips and other activities too depending on whether they’re in the same city as me. Sorry kids, I take that back. Better I should say there has always been an economic dimension to our relationship, going back to my first purchase of baby formula, but the economic is not dominant. Our relationship is dominated by affection, memory, shared values and reciprocity. In other words, we form a community – an intimate community, a family.

The same is true of my parents. They turn 89 and 90 this year and they don’t live with me either. Yes, there is an economic dimension to our relationship but it’s not the most important dimension. When I change my father’s clothes or remember for my mother her best friend’s name, I am acting out a familial role that is older than human settlement on the Canadian Prairie. We are being family, one to another.

In formal economics the most common elements of nature, like water and air, are described as ‘externalities’. That is, they are external to the formal economic model and are treated as if they were free. They already exist, you don’t have to buy them and they exist in abundance. That’s true in the abstract but not in the world we inhabit. In the world of you and me, air and water are provided through plants, trees and the hydrologic cycle. They belong to all of Creation and they have very real limits. Indeed, we are bumping up against those limits so frequently, that we are challenging our neighbours to plant more trees, burn less fossil fuels and use water more carefully. Treating air and water as external to the economy is a major threat to our survival.

In formal economic models, families are also treated as ‘external’. They exist, you don’t need to buy them and they exist in abundance. But that’s not really true either. In the world of you and me, lots of families are broken and all the adults have jobs or want them. Very little time is left over for volunteer activity. If we want people to take on the job of care giver to the elderly, we have to pay them.

Now my parents prefer to be cared for at home. They are healthier, more settled, more connected and less confused than they would be in an alternative environment. Besides, they prefer their own bad cooking to someone else’s bad cooking! They have care and it’s paid for.

Air and water may be external to economic models but they are not external to how we breathe or what we drink. In the same way families are not external to how we live or who we care for. Economics are not the most important dimension of family life but neither can it be ignored. If we pretend it doesn’t exist, we won’t survive.

First Published in May 2005

Ontario Agriculture Needs Sustainable Communities

2006-01-06T20:34:00.000-06:00

The problem with public farm protests is they always happen in the winter when the weather is miserable and nobody wants to be outside. You’d think that when the National Farmers Union joins forces with the Ontario Federation of Agriculture on any issue, it would be a pretty big story. But it was freezing cold at the beginning of March when the tractors started to circle around Queen’s Park in downtown Toronto. I’d guess about 1,000 farmers were milling about trying to stay warm. There were buses from near London and others from the Windsor area. Others were from east of town near Kingston and the Ottawa valley.

The farmers were united in protesting a lack of government support for family farms, but divided in the specific issues each wanted to pursue. One Middlesex farmer had just sold three cows into the market and netted $20 each. The Essex County farmers were on about the new Ethanol plants being built with Canadian government support near the US border. They were located there so they could access cheap corn subsidized by the US government. Another farmer was protesting the new green belt legislation. He had borrowed money to buy a neighbouring farm and now the bank was after him because the farm could not be developed for housing and its value had dropped.

I was most struck by a mixed farmer from the Peterborough area. His grandparents had settled the farm of 200 acres in 1872. He was now 68 and the only reason he could live comfortably is because he had a pension from the giant paper company Domtar. He had worked for Domtar for 39 years. His family farm was not sustainable and hadn’t been for over 40 years. He was out in the cold, trying to support the family farm he had been subsidizing with off farm work his whole life.

All these farmers wanted provincial government action to preserve family farms. Yet it’s been clear for many years that Ontario’s rural strategy has been to treat farm land as subdivisions in waiting. The only other interest the government seems to have is in farms that can be players in the industrialized world market. One of the ironies is that the provincial government is accused by farmers of placing urban needs before rural needs. They don’t. One of the growing needs of urban Torontonians is for food they feel confident eating. Increasingly, urban dwellers want to know where their food is coming from and who is growing it. Are their farming practices safe and sustainable? Urban dwellers don’t get that answer from the world market. This year I bought a leg of Ontario lamb for my Easter dinner. I didn’t have a choice between Saskatchewan lamb and Ontario lamb. I did have a choice between Ontario and the world market, mostly New Zealand. I even paid a premium for local production. New Zealand farmers are not bad people. It is just that I can exercise no control over the food system there. I don’t have the necessary information nor the political influence.

If the provincial government really wanted to serve the interests of urban dwellers, they would introduce policies that supported sustainable agriculture within local sustainable agricultural communities. That way rural and urban people would both feel more safe and secure.

First published in April 2005

Slow Food

2006-01-06T20:31:00.000-06:00

Our family ate a slow dinner over the holidays. Fourteen people, three courses – We had gathered from six provinces for the occasion. There was enough time to change places between courses so most people had a chance to chat with everyone else who was there. Does it sound like Christmas on the farm? Actually it was at an award winning restaurant that has committed itself to the international slow food movement.

In 1986, McDonald’s opened a hamburger franchise beside the Spanish Steps in Rome. For the Italians, it was the last straw. In order to repel the invasion of fast food, Carlo Petrini, a famous and popular food writer, launched the ‘Slow Food Movement’. Its message is very simple: ‘Eat well and save the planet’! This movement now has 78,000 members in over 50 countries. Outside of Turin they have started a University devoted to gastronomic science.

How will this movement save the planet? First of all the movement is committed to ‘eco-gastronomy’. This means that eating well goes hand in hand with saving the environment. So the movement is committed to preserving heritage varieties of foodstuffs. In Canada there is an agricultural underground of people deliberately cultivating old and uncommon varieties of carrots, potatoes, wheat, rye and flax in order to preserve them. These people are the first heroes of slow food. They are part of the resistance movement for global biodiversity.

Secondly, restaurants committed to slow food are committed to local sourcing of their produce. This means that Jeff Crump, the Head Chef at the Ancaster Old Mill where my family dined, made sure he served a delicate butternut squash soup because he had a local supplier in the middle of winter. Even though he couldn’t provide certified organic venison, he still provided deer meat from a farmer he knew and could observe following organic principles. Disciples of slow food are supporters of local farmers.

Followers of slow food are fighters against the obesity epidemic in North America. It takes fifteen minutes for the brain to register the signal that you have eaten too much. In most fast food restaurants, your meal is over by then. If you take more time over a meal your body will be able to complete the information circuit and moderate its intake. At the University of Toronto, the Human Resources Department is trying to promote work/life balance by persuading faculty and staff to stop eating lunch at their desks. They want people to reduce stress and achieve balance by working less, socializing more and moving about frequently.

In my twenty years of work on rural issues, I can’t count the number of times I heard people say ‘we want to put the culture back in agri-culture’. Well, now there’s a larger, international movement trying to do the same thing. It’s not against trade. It promotes the global trade of unique products, but it is pro-local. By focusing on the benefits of food grown locally and consumed socially, it has touched a nerve at the heart of our modern madness. Do farmers really want to become bio-industrialists? Well, neither do consumers.

First Published in January 2005

Common Security

2006-01-06T20:30:00.000-06:00

In our new home in downtown Toronto, we live walking distance from a cinema. It has become our new Friday night custom to take in the early show, other things being equal. Last month, things weren’t equal.

As we strolled hand-in-hand behind the Bay, I saw a 1970 Dodge convertible make a slow and deliberate three point turn. It was being maneuvered with the stately efficiency only a senior citizen would value as it headed on a certain path toward a parking space on our side of the street. Somewhere in between points two and three, a dark, lone figure appeared on the horizon. Headphones, hooded sweatshirt, baggy shorts and one leg rooted to a skateboard, he flamingoed his way toward us. Neither his speed nor his trajectory altered as he headed for the intersection of the convertible’s tire and the city’s curb. The senior driver knew nothing until the intruder thumped on his car. The road had been clear last time he checked. As he completed his automotive pirouette, the one legged boarder was boarded and exploded with rage. He picked up his transportation and smashed it with all his weight through the passenger side window. The driver was torn between rage and protectiveness. Even while he yelled out he was sprawled across the back seat protecting his three year old Afghan hound from the shards of shattered glass.

Police were called and the movie missed as we tried to calm the dog. The driver chased the boarder to no avail and received some medical attention from a passing paramedic. The police called back the next day since, in Toronto on a Friday night, they only respond to gun calls.

One week later, I was walking home from the grocery store early on a weekday evening. Heavy bags and construction rubble are a bad combination if you’re not paying close attention, and I wasn’t. Ass over tea kettle is the expression my father used to use. When I stopped rolling, the groceries were spread over five square metres and my hands and knees scraped raw. It took a good five minutes to re-assemble my self and my belongings. When I resumed my journey I passed two parked cars, each with drivers – one on a cell ‘phone and one doing nothing. It took me another block to realize they had witnessed my collapse and stayed rooted to their seats, refusing to acknowledge my distress. What combination of fear, inattention and indifference kept them distanced from my plight?

There are some in our society who claim that there is a direct relationship between how much money we spend on police and how secure we are. I hold a different view. Police play a necessary but small role in the security of our society. What is far more important is the security we hold in common. I invest in the security of my community when I respond to the senior citizen who has been victimized. He started out a stranger and became a friend. The frozen witnesses to my own accident refused to invest in common security because they refused to invest in community. We were strangers in the beginning and strangers in the end. If we want to be more secure, what we need are not more heavily armed police but stronger communities.

First Published in November 2004

Poverty By Postal Code

2006-01-06T20:29:00.000-06:00

I have just moved back to Toronto after almost 20 years in Saskatoon. When friends from western and rural Canada come to visit they are sometimes overwhelmed by the noise, the speed and the wealth of this city. What they sometimes miss is how much poverty has grown here and how that didn’t always used to be the case.

In the late 1970s and early 1980s I lived right downtown. It was crowded and busy then too, but one of the things I liked most about Toronto was the strong and coherent neighbourhoods. People didn’t live in the city so much as they lived in Cabbagetown, Chinatown, Little Italy and the like.

Toronto’s United Way Agency has now published a study that documents this growth in poverty and it focuses on Toronto’s once famous neighbourhoods. Called “Poverty by Postal Code” the study uses data from the Census taken over 20 years to show how poverty has become more concentrated in more and more neighbourhoods.

In 1981 the number of families living below the poverty line in Canada was 13%. Toronto mirrored the country with 13.3% of families living in poverty. Since that time Canada’s poverty rate has declined slightly to 12.8% while Toronto’s has jumped to 19.4%.

When more than 26% of families in a neighbourhood live below the poverty line, the United Way study calls that a higher poverty neighbourhood. In 1981 the study identified 30 such neighbourhoods in Metropolitan Toronto. In 1991, that number doubled to 66 neighbourhoods and in 2001 it doubled again to 120 neighbourhoods. In 2001, 43.2% of Toronto’s poor families lived in these higher poverty neighbourhoods. 66% of all Toronto’s neighbourhoods now exceed the 1981 national average for families in poverty.

There are now over 160,000 children growing up in these poor Toronto neighbourhoods. That’s almost the population of Regina (178,225) where the family poverty rate is only 11%. If you think all this poverty is a function of unemployment you’d be wrong. 90% of all employable persons in these neighbourhoods have jobs, which is only 3% less than the rest of the city. These people are hard working people in minimum wage or part-time employment. They live in rental accommodation and a high percentage are new Canadians.

The single biggest factor contributing to this rising poverty rate is the high cost of housing. This comes from the brutal elimination of government support for social housing and the failure of the market to provide a low cost alternative. 25 years ago I moved into a mixed income housing cooperative in Toronto that provided 10% of its units as rent-geared-to-income. This is an example of the kind of program that was “collateral damage” in the war against the deficit. The report calls this poverty by postal code. I call it poverty by policy. The United Way argues that “no one should be disadvantaged or excluded from the mainstream, based on where they live.” This is a point of view rural Canadians can understand.

First Published in October 2004

E. H. Ted Scott: Heart of the Nation

2006-01-06T20:26:00.000-06:00

Several weeks ago I attended a prairie funeral in Toronto. An overflow crowd of more than one thousand people, including the Governor General Adrienne Clarkson, jammed the aisles of St. James Cathedral to hear Scripture read by former Prime Minister Joe Clark and retired Senator Lois Wilson. We heard a letter of condolence and praise written by the freedom fighter Nelson Mandela. We listened to a sermon in which former South African Archbishop Desmond Tutu declared himself to be “a slightly less bad person for having known [the deceased]”.

Who were we mourning and whose life were we celebrating? Born in Edmonton, Alberta in 1919, raised in Caron, Saskatchewan, Edward Walter Scott worked in Prince Rupert, Winnipeg, Toronto, and Kelowna before being elected as Primate of the Anglican Church of Canada in 1971. Archbishop Scott (everyone called him Ted) led the Anglican Church for 15 turbulent years. During this time he consistently pushed the Church to focus its attention on the places where morality and economics intersect.

In Prince Rupert and in Winnipeg Ted had significant first hand exposure to the racist policies of the Canadian Government and Canadian Churches in dealing with the First Nations. He supported the dismantling of the residential school system. In the 1970s, when the Government created the Berger Inquiry into the effects of a proposed oil pipeline in the Mackenzie Valley, Scott helped lead the Anglican Church into a relationship of solidarity with the Dene of the Northwest Territories. When he was criticized by business leaders for being too confrontational, he replied “I couldn’t be a disciple of Christ, and take it seriously, without realizing there are times for confrontation on moral and ethical issues.”

Apartheid was an example of institutionalized racism that Canadians were more united in fighting because it was so far away. In the early 70s Canadian Church leaders began meeting with bank executives to discuss their international loan policies. In the face of resistance, leaders like Ted Scott began attending Annual General Meetings of the banks and proposing resolutions on behalf of Church shareholders to change lending practices.

Church members began placing stickers on their cheques that read “No Loans to Apartheid”. The stickers gummed up the automated cheque processing machines forcing them to be processed by hand. By 1978, the first Canadian bank announced it would make no new loans to South Africa and soon the other banks followed suit. He called his effort to end apartheid “the greatest challenge of my life.”

In 1986 Prime Minister Mulroney appointed Ted as Canada’s representative on the Commonwealth Eminent Persons Group to pressure South Africa to end apartheid. That same year he managed to visit Nelson Mandela in prison. In 1994, Ted attended Mandela’s installation as President of the Republic of South Africa.
While he was Primate, Ted Scott the prairie preacher’s kid, was formally adopted by the Nisga’a in gratitude for his support of their aboriginal rights. There was a great debate about which of the four clans – eagle, wolf, killer whale or raven – he should be adopted into. Finally, the women decided that since he was the spiritual leader of All the People, he should be adopted into All the Clans. His Nisga’a name was ‘Gott Lisims’. It means ‘Heart of the Nation”.

Ted Scott’s biography, by Hugh McCullum, is entitled “Radical Compassion: the Life and Times of E.H. Scott”. It is available from the Anglican Book Centre in Toronto or the World Council of Churches in Geneva, Switzerland.

First Published in July 2004

Has Monsanto Won a Pyrrhic Victory?

2006-01-06T20:24:00.000-06:00

Once upon a time in the Greek Mediterranean, many years ago, there was a King named Pyrrhus. His armies fought a battle at Asculum in the region of Apulia. He won the battle but the casualties were so high that his army was almost eliminated. His victory cry was so poignant, it has survived for thousands of years: “One more such victory and we are lost”!

Ever since then, a victory gained at too great a cost has been known as a Pyrrhic victory. Has Monsanto won a Pyrrhic victory?

In the battle between the biotech giant Monsanto and the Saskatchewan farmer Percy Schmeiser, the Supreme Court of Canada has declared Monsanto to be the victor. By the same 5-4 margin that defeated the claim of Harvard to patent its genetically modified mouse in Canada, the Court found that Monsanto had a valid patent on the genetically modified genes contained in Roundup Ready Canola. It also found that their patent had been infringed when Percy Schmeiser saved seeds from plants that survived the spraying of Roundup herbicide, replanted them, harvested them and sold the seed, all without signing a Technology Use Agreement with Monsanto or paying them $15 per acre as required.

While the Court found that Percy Schmeiser used the GM seed, it also found that he did not profit from this use and so reversed a lower court ruling awarding Monsanto damages and declined to award Monsanto court costs for the case. So, Monsanto won no money from the case, spent close to $1 million prosecuting the case and received negative publicity worldwide for over five years for pursuing it.

Furthermore, they have declined to proceed with the introduction of Roundup Ready Wheat though they carefully refuse to say that will never happen. How much has this cost them? According to the court documents, in the year 2000, up to 5 million acres in Canada were planted to Roundup Ready Canola, 40% of Canada’s Canola crop that year. At $15 per seeded acre, Monsanto earned $75 million in Canola licensing fees, not including the revenue from selling seed or from selling the herbicide. Conceivably, they could have earned much more from wheat, still the dominant crop in western Canada.

Later this year the Schmeiser case may boomerang on Monsanto as organic farmers in Saskatchewan proceed with their class action alleging that Monsanto and Aventis have contaminated the fields of organic canola growers with genetically modified strains on which these companies hold the patents. If patent holders have the legally enforceable right of monopoly over their creations, are they also liable for the damage these new genes do?

When I was about 8 years old my mother parked her station wagon under a shady tree on a downhill slope while she played tennis nearby. My younger brother and I were left in the car to play. I played the driver! You can imagine what happened. Without turning on the engine, I managed to shift the car into neutral. As my mother practiced her backhand, her car and precious cargo silently accelerated into the nearest lamppost. My mother owned the car. Even though she wasn’t driving it, she was liable for the damages resulting from its use. I no longer recall whether my mother won her tennis match, but if she had, it too would have been a pyrrhic victory.

First Published in June 2004

Increasing Poverty Is a Matter of Public Policy

2006-01-06T20:20:00.000-06:00

Five years ago I traveled to India. It had been 20 years since I had spent any time in the 3rd World and I felt my assumptions needed shaking up. I was right. Everything about India was different – the sights, the sounds, the smells and the tastes – or so I imagined. Since that time I have begun to see India all over Canada.

I thought of the sub-continent a few weeks ago when I met Richard. In his early 30s, Richard approached me on a Sunday afternoon as I was walking home from Church. He had been laid off from Magna Auto Parts. “Do you have a job for me? I’ll do anything!”

The proportion of unemployed people receiving EI benefits has declined significantly in Canada, from 87% in 1990 to 36% by 1998.

Last week I was napping when the doorbell rang. Startled, and a little dazed, I ran to the door to greet a thin middle-aged man, standing in front of his bicycle. “I would like to clean up your front yard in return for a small donation. I don’t have a penny. I’m completely broke.” I looked down at my front steps and the leaves and winter rubbish that had collected beneath them. My entire property is 14 feet wide and less than that to the sidewalk. I figured it would take 10 minutes to clean it, fifteen minutes to do it well. “Sure”, I replied. “Go ahead”.

Twenty minutes later, he summoned me to the door. “Are you married, sir?” “Yes, why do you ask?” “Because she’s really going to love this”. “Are you married?” I asked. “Well that’s the thing, you see, she’s got everything. I figured it was better that way. Just leave it all. That’s why I’m in the hostels. They’re not very good you know. They’ve become crack houses – and noisy too. You can never get any sleep.” Truth be told, I didn’t want to know.

According to an April 2000 study, people who use food banks in Toronto have, on average, $4.95 a day to spend on all their needs other than rent - food, transportation, utilities, laundry, school supplies, personal toiletries, etc. In 1995, the average amount was $7.40.

I made a $10 donation. “I don’t mean to be ungrateful sir, but I’m just doing some calculation in my head. I don’t have anything and if I had $12 I could get a ‘pay bed’ and a hamburger and a coffee.” I had a toonie in my pocket so I added it to the paper.

This is not the first time a beggar has negotiated with me. It has happened several times on the streets of Toronto. But its still not as sophisticated as it is in India.

Lawrence worked as a driver at the Indian Institute where I was teaching and would sometimes take me on errands around the city. He distinguished himself by being one of the few people who did not ask me for money. Then, the day before I left India, he asked me to become a sponsor for his children’s school fees. Several hundred dollars annually is not a lot by Canadian standards but it was a negotiation just the same.

Where I live in downtown Toronto, I pass anywhere from two to ten beggars on my way walking to work. This does not include the young couple in their early twenties who sleep on the porch of my parish church. They can’t receive social assistance because they don’t have a permanent address.

In 1996, families represented 46% of the people using hostels in Toronto ; in Montreal it is estimated that 4,000 to 5,000 youth are homeless and that 30-40% of homeless people are women.

The biggest challenge for compassionate Canadians is coming to terms with the fact that increasing poverty is a function of public policy. We could change it if we wanted to. Do you?

Sentences in Italics are taken from documents of the National Anti Poverty Organization.

First Published in May 2004

Are There Questions We Don't Want Answered?

2006-01-06T20:18:00.000-06:00

Remember when Canola was western Canada’s Cinderella crop? Back in the mid 90s, canola was the crop that was bolstering farm revenues when wheat prices were low. (We didn’t know wheat prices could go lower!) Bright yellow was the colour of money. When herbicide resistant canola was introduced in 1996, farmers rushed to adopt the new technology. Western Canada’s second most widely planted and second most valuable crop was now going to show increased yield with reduced inputs. It took 3 years for 60% of the crop to be planted to genetically modified strains. According to its promoters, there was going to be all upside with no downside. Now we have to ask, who has Cinderella been sleeping with?

Genetically modified crops are controversial. Debates have raged about their health and safety. This has overshadowed the debate about the legal, social and economic impact of the new technology. The Schmeiser case is the one place where some of these concerns have been aired. Percy Schmeiser has argued that his fields have been contaminated by ‘roundup ready’ canola. Monsanto has accused him of infringing their patent by growing their seed without payment.

Now it turns out there is research to show there is widespread contamination of canola seed stocks by herbicide resistant strains. A 2002 Agriculture and Agri-food Canada study examined 70 certified canola seed lots and found 50% of them were contaminated. 25% had contamination levels exceeding the standard for certified seed. A 2003 University of Manitoba study examined 27 seed lots and found contamination in 26 of them. 14 of them (more than 50%) had contamination greater than the purity guideline for certified canola seed (0.25%). Three of them had contamination greater than 2%. The authors of the Manitoba study concluded that cross contamination in the pedigreed canola seed production systems occurs at such a high level, the use of pedigreed canola seed can no longer guarantee the absence of herbicide resistant strains. This is a problem for all canola growers. Farmers who plant a conventional canola crop purchased from a certified seed grower can now be fairly sure they will have some herbicide resistant seed. For one or two years following, they will have volunteer canola resistant to the most popular herbicides forcing a more expensive application of other chemicals and limiting the choices of crop rotation. Some of this contamination probably comes from gene movement through cross pollination and the rest probably comes from mixture in commercial seed handling and packaging. The system is simply not designed to handle tolerances this fine.

Now we have a proposal to introduce wheat genetically modified to be herbicide resistant. What obligation do we have to protect conventional wheat farmers from the collateral damage arising from GM wheat? This winter we had a dramatic lesson on how fragile is an agricultural activity highly dependent on trade. One sick cow and the whole Canadian beef industry was decimated. What would happen if we discovered that our certified wheat seed stocks were contaminated with GM wheat? What would happen to our wheat exports if we could no longer guarantee they were GM free? What would happen if one or more certified wheat growers sprayed a corner of their plots with a popular herbicide and not all the plants died? There are some questions to which we don’t want answers.

The University of Manitoba study was written by Friesen, Nelson and Van Acker and published in the American Agronomy Journal 95:1342-1347 (2003). The 2002 study was by Downie and Beckie for Agriculture and Agri-food Canada, Saskatoon.

First Published in March 2004

Christmas Presents as a Subversive Activity

2006-01-06T20:16:00.000-06:00

It has become my Christmas custom to send a care package to my brother and his family in the United States. Poor disadvantaged souls that they are, if it weren’t for me they wouldn’t have access to Mackintosh toffee, Smarties or Quebec Maple Syrup. Truth be told, the most fought over gift is usually the sturdy canvas Saskatoon Coop bag I wrap them all in. Various family members compete to see who will walk down the streets of Richmond, Philadelphia or Washington with this handsome carryall.

It is also my custom to enclose a jar of Saskatoon Berry Jam in Kris Kringle’s sack. I have yet to find anyone who could resist that sweet/tart delight. This year however, I hesitated to do so. This year the US Food & Drug Administration issued new rules preventing the importing of commercially produced jams, jellies and sweets without a special permit. The Post Office won’t accept such parcels without evidence of the permit having been secured.

How to respond to such nonsense? Shall we stand on our high horses (always at the ready!) and denounce the surreptitious protectionism of such a move. Or is there a nationalist shelf higher up the wall from which we can castigate the barbarians who suggest that anything ‘foreign’ is inferior.

This policy is so absurd, it leads me to a different response. Many people have written about how America was traumatized by the events we have come to know as 9/11. But the suicide aero-bombings of Washington and New York were only the end of a string of shocks to America’s self-confidence, self-image and sense of security. In 1995, it was born and bred American citizens who blew up the federal building in Oklahoma City. In 1999 it was born and bred American teenagers who slaughtered the innocents in a high school in Columbine, Colorado. All of these events together have disturbed the quintessentially modern (and North American) expectation that bad things don’t happen to good people.

One response is to conclude that insufficient precautions have been taken. So, let’s now be suspicious of everybody and everything – even Saskatoon Berry jam. Another response is to root out evil at its source, especially if its source can be located in another country. My response is to lament the wasted efforts and also the lack of leadership. Most Americans of my acquaintance are appalled at the direction their Government has taken them and can’t wait to vote for Jed Bartlett.

My other reaction is to redouble my efforts to build international bridges of mutual respect and understanding. I don’t believe evil can be eradicated. I do believe it can be contained. Evil thrives in the darkness. Its containers are built in the broad light of day.

Saskatoon Berry jam is as much a cultural product as a food product – just like the Coop bag. Its export is one of the planks on that international bridge of understanding. The Post Office and the FDA were obstacles but they were not insurmountable. My brother visited me in December and took the presents back in his car. On Christmas morning he went ‘out’ and ‘about’ with a distinctly Canadian flavour in his American home

First Published in January 2004

The Moral Hazard of Politics

2006-01-06T20:14:00.000-06:00

What guarantee do we have that newly elected governments will follow through on the promises that were made in the election campaign? Right now we have new governments in Newfoundland, Ontario and Saskatchewan. We have a new government every time there is an election even if we re-elect the same party. When political parties want our vote, they will promise outcomes that are popular even if they are hard to deliver. In the cold light of a post election winter morning, their behaviour may not match their promises. In that case, do voters run the risk of moral hazard?

Moral hazard refers to changes in behaviour by one party to a contract without the knowledge of the other party. Normally, moral hazard is written about from the perspective of the larger or more powerful group - for example, an insurance company or a government agency underwriting a farm income stabilization program. It is the company or the government agency that encounters the ‘hazard’ because of the immoral behaviour of the individual farmer who acts differently now that they are insured. However, it is also possible to look at it from the perspective of the smaller or weaker party. An individual farmer can enter into a contract with a seed company or government agency expecting one kind of behaviour and then experience a very different set of behaviours once the contract has been signed. This deliberate change in behaviour is an act of bad faith.

When you and I discuss this on coffee row, we remind ourselves to read the fine print and insist on full disclosure. That’s because we have been trained to accept “buyer beware” as the only moral principle that applies. Insurance companies talk about moral hazard because they rely on an additional and different moral principle. This is the principle of “utmost good faith”. Insurance companies have to trust their clients to behave the way they say they are going to because they can only afford to check a few contracts on a random or high risk basis.

In a similar way, voters accept the promises of political parties on the basis of “utmost good faith”. Voting them out in five years time is one kind of check on their behaviour but a rough and incomplete one.

Do political parties engage in immoral behaviour when they fail to keep their election promises? Sometimes yes and sometimes no. Promises are made on the basis of certain assumptions and often politicians do not control the realities on which they are based. The collapse of the stock market, or the beef export market cannot be anticipated and may radically alter assumptions about government revenue, expense or both. On the other hand, provincial governments may encourage expectations of growth or federal support when they know these outcomes are highly unlikely. They may promise to protect a community asset and then eviscerate it by another means. The capacity for deception is part of human nature. Theologians call it human sin. Economists call it moral hazard. It does exist. Everyone can experience it and everyone, farmers, insurance companies and politicians included, can engage in it.

First Published in November 2003

What's Moral About Moral Hazard?

2006-01-06T20:12:00.000-06:00

We acquired a puppy this spring. In addition to his charming habit of jumping up and down and wetting the carpet every time we return home, he has also taking to burying his toys in the corner of our sofa. This involves a lot of digging and scratching. Now, it also involves the purchase of a new sofa.

Having diligently search for a high quality sofa at the cheapest possible price, I discovered a good sale at The Bay. I also discovered The Bay will sell insurance against damage to the sofa regardless of the source of the damage. I specifically asked whether it covered damage covered by animals and I was assured it did. If I buy the sofa, would I be any less diligent at preventing my puppy from damaging it because of the insurance? If I would, maybe I should save the premium of over $100 and just step up my diligence?

In the insurance industry, this is called the problem of moral hazard. It has its origins in fire insurance and the proposition that the incidence of fire among a group of insured home owners will be greater than the incidence of fire among the same number of uninsured home owners. This is thought to be because those who are uninsured will be more diligent at reducing risks than those who are insured. Although I can find no statistical data to prove this point, the proposition is widely accepted as true. Moral hazard is different from cheating and fraud. It merely refers to the possibility that the presence of insurance will change the behaviour of the insured.

The concept of moral hazard has also been extended to changes in behaviour between two parties to a contract without the knowledge of one of the parties. This is why the concept of ‘moral’ hazard implicitly suggests ‘immorality’. In agriculture, moral hazard often refers to the changing behaviour of farmers in the presence of a program of government support.

Prudence is also part of morality. Aristotle considered it a virtue. It refers to the need to take very carefully calculated risks, to be wise in practical matters. When I arrange my finances so as to minimize tax and maximize my after tax income, I am being neither unlawful nor immoral. I am being efficient and prudent. I try and exhibit this behaviour in all my commercial transactions and in relation to all government programs. My behaviour is not immoral, it is prudent. All actions can have unintended consequences, including government programs. Farmers shouldn’t be penalized for being prudent and they shouldn’t be thought of as immoral for being program efficient. From my point of view, I can find nothing moral about moral hazard.

First Published in September 2003

The Moral Economy of Food Quality

2006-01-06T20:10:00.000-06:00

Have you ever noticed how bottled water is marketed with images of snow capped peaks? It is as if the water inside was melted straight from the Columbia ice-field instead of drawn from a stand-pipe in Richmond B.C. What’s being sold is a quality, both real and perceived.

Last month I motored through the United States. As I stopped to fill up with (still cheaper) American gas, I noticed a sign outside the duty free store advertising “Canadian Jam”. Why, I wondered, would a US merchant be promoting Canadian jam to American tourists? Quality, I concluded. Canadian food products are often seen as being more pure and of higher quality. It might even be true.

As a result of the first Free Trade Agreement, Canada’s wine producers developed a program of quality assurance, the Vintners Quality Alliance. Now a wine buyer can go into any Canadian liquor store and pick out a VQA bottle. This bottle is guaranteed to have 100% of its grapes grown in the identified Canadian region and to be of good quality.

On the other hand, sometimes quality is strictly in the eye of the beholder. Some years ago I dined at the famous Boston restaurant “Legal Seafood”. The menu boasted only the “finest American fish” – nothing imported. I wondered how the store could tell the difference between a Maine lobster and a Nova Scotian lobster? I also wondered how the restaurant could stay in business if it routinely insulted the tourists who ate there? On a visit this spring I noticed this language had changed.

Part of living successfully in a world characterized by cultural diversity is a recognition and acceptance of different cultural, religious and moral values. The word ‘quality’ can refer to culture (some cultures prefer white bread over whole wheat), religion (food that is not prepared according to Jewish Law would be of unacceptable quality to Orthodox Jews) or morality (a casserole made with meat would be morally unacceptable to vegetarians). As consumers become more aware of the geographical distance between their dinner table and the place of production of their food, they will seek to reduce the moral distance by purchasing goods from suppliers they trust. These suppliers must be in a position to guarantee the qualities of the goods they produce.

I recently spoke with a beef operator with a farm near Fort Frances, Ontario. They breed and raise their own stock and then slaughter and market direct to consumers in southern Ontario. It is a closed system (less vulnerable to a BSE outbreak) except for the feed they import from a single farm in the US. It is not an organic operation but a natural one – no growth hormones and antibiotics only for the treatment of disease. People pay a premium for this beef knowing that the farmer has the same values they have.

Quality includes safety from disease but is much more than that. Quality is not singular. There are many qualities about which different populations will need assurance. Canada is not only capable of meeting quality standards; it is well placed to set the standards for the next generation of food producers.

First Published in July 2003

Even War Has a Moral Economy

2006-01-06T20:09:00.000-06:00

“I’ll tell you my position on the war if you’ll tell me yours?”
“You first.”
That’s how the conversation started with a waitress in an Edmonton restaurant earlier this month. As it turned out, both of us were appalled by what was going on. Neither of us wanted any more killing. We wanted it to stop. Why were we afraid to just come out and say so? Who would hear us if we spoke out clearly?

Moral action can often have costs. Sometimes those costs are economic. Canada’s opposition to military intervention in Iraq without UN support was a moral as well as a political stand. Is there a cost to this moral stand? Perhaps. Certainly the American ambassador to Canada, Paul Celluci thinks so. Recently the ambassador has warned us of the consequences of publicly disagreeing with Washington. The decision by President Bush to host a visit by the Australian Prime Minister rather than visit Ottawa this fall is widely interpreted as a public rebuke for our lack of solidarity.

Canada likes to think of itself as a sovereign, independent nation acting in a community of other independent states. What difference would it make to describe us as a dependency of the American empire? Is our relationship to the US now any different from the relationship of Poland to the USSR twenty years ago?

Some Canadian business leaders want to create a customs union with the US. This would prevent the next President from taking retaliatory economic action the next time Canada decided to act contrary to perceived American interests. The cost of such a customs union would be that trade would need to happen on American terms. In effect, Canada would have to agree to give up the very capacity for independent economic action that some Americans find so threatening.

Canada is not the only country made anxious by the new willingness of the US to impose its will on the world. Actually, most of the rest of the world is now significantly more afraid of the United States’ unwillingness to hold itself accountable to the Community of Nations. We have good reason to be more fearful when the Commanders of the world’s most powerful military refuse to abide by the Geneva Convention on the treatment of prisoners of war or when they refuse to hold themselves accountable to the International Court of Justice for war crimes.

There is another model. On issues of culture, Canada has aligned itself with France to gather countries together to discuss how culture (films, TV, music, books etc.) can be protected from American domination through trade agreements. What would happen if we aligned ourselves with others to discuss how rural culture and local agriculture can be protected from American domination through trade agreements?

There are many patriotic Americans that think traditional American values have been abandoned by contemporary American foreign policy. By charting a different course, Canadians can also support their American cousins in calling their country to account. Canada’s moral leadership may have an economic cost but the most important moral leadership almost always does.

First Published in April 2003

Banks Will Be On the Agenda in 2003

2006-01-06T20:05:00.000-06:00

Have you noticed how the banks are changing their names these days? The Royal Bank of Canada is now RBC and the Bank of Montreal is now BMO. The names are changing because words like “Royal”, “Canada” and “Montreal” don’t play well south of the border. Of course, rural lending plays even less well.

It is now five years since The Royal Bank of Canada and the Bank of Montreal announced plans to merge. A political firestorm engulfing rivals Paul Martin and Jean Chretien put those plans on ice. But you should expect Bank mergers to resurface on the national agenda this year regardless of who wins the Liberal leadership race.

These two Canadian banks marked each other’s dance card early because they wanted to take advantage of the newly minted Agreement on Financial Services announced by the World Trade organization one month earlier. This Agreement was aimed at reducing national barriers to transnational financial companies. The political roadblock in Ottawa meant these banks had to move to plan “B”. What does plan “B” look like? It looks like expanding internationally or moving into businesses not associated with banks.

Take the Royal Bank for example. RBC is the largest bank in Canada with 2001 net income of $2.4 billion, an increase of $800 million since 1997. In November of 2000 they bought Liberty Life Insurance in the US. Liberty operates in 6 states and provides a good foundation for growing an insurance business. In June of 2001, RBC also bought Centura Banks in the south-eastern US. Centura has US$14 billion in assets.

Why would Canadian banks follow this strategy? All around the world banks are merging and getting larger. As global trade grows, businesses want to deal with only one lender even though they are operating in several countries. The competition is to see who will be the largest bank in the European Union or in NAFTA or in Asia. For example, Crédit Agricole, which started as a farmer owned cooperative, just bought the city based Crédit Lyonnais to create the largest bank in France and the second largest in Europe. The largest bank in Europe is Deutschbank although some people wonder if it’s even German anymore since more than half its Executive Committee is made up of foreigners.

RBC is very clear about its motivation. It’s Annual Report claims “our approach is to encourage every business segment to grow internationally …. In addition, many of our clients are expanding in the US and seeking service capability in that market.”

The winners in this strategy will be international businesses who will be better served by this new arrangement. The losers will be small Canadian towns and small businesses with less financial clout. Rural people may be able to exert political pressure by lobbying the federal rural caucus with some clear, practical ideas. Small towns can insist that bank mergers not force the closure of the only remaining bank. They can also insist that proper regulatory mechanisms be put in place to govern sectors where a virtual banking monopoly exists. Maybe the Feds could insist that all banks with a Class A charter commit a certain proportion of their assets to agricultural lending? Finally, they can ensure that Credit Unions have the same access to the insurance business that banks will shortly have. Banks have grown wealthy because of the protected environment we created for them. We shouldn’t be shy about insisting on reciprocity. You can express your opinion by contacting the Charles Hubbard, Chair of the Standing Committee on Agriculture and Agri-food, and Liberal M.P. for Miramichi.

First Published in January 2003