Downsize Democracy for 40 Years, Here’s What You Get

If you are searching for significant anniversaries for 2015, one that you might find illuminating is the publication of a book 40 years ago entitled The Crisis of Democracy.

The title would seem fitting today but that’s not the crisis its authors had in mind.

The book was commissioned by a new international boys club of finance capitalists, CEOs, senior political figures (retired and active) and academics from Europe, North America and Japan. The Trilateral Commission (TLC) could be said to be the birthplace of neoliberalism, a political theory that suggests progress depends upon “liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade.”

Alarmed by the spread of the liberal state and its economic and social interventions, the TLC was founded to reverse the welfare state and re-establish capital to its “rightful” place at the pinnacle of economic and political power. (It still exists but has been supplanted to some extent by the World Economic Forum.)

The TLC book concluded, in the words of its American co-author Samuel Huntington, that the industrial countries suffered from “an excess of democracy.” He wrote “the effective operation of a democratic political system usually requires some measure of apathy… on the part of some individuals and groups.” He bemoaned the fact that “Marginal groups, as in the case of blacks, are now becoming full participants in the political system.”

The TLC was just one of a growing number of institutions — forums, think-tanks, academic clusters, major media outlets — focussed on the same theme: that expectations of what government could provide had risen to a level that was now threatening the proper functioning of capitalist democracies. In Canada the most prominent and aggressive of these would be the Fraser Institute (FI), headed up Michael Walker (retired).

Walker told a group of worried corporate CEOs from B.C. that “if you want to change society you have to change the ideological fabric of society.” In short, you had to launch a culture war against the activist state. It would be a war against democratic “excess.”

The Fraser Institute (founded in 1973, the same year as the TLC) has been engaged in that process ever since on countless fronts and funded generously by well-endowed foundations and corporations. The guru for the FI was Milton Friedman, eventually the world’s pre-eminent neoliberal economist. At an FI forum on democracy, Friedman declared: “I believe that a relatively free economy is a necessary condition for a democratic society. But I also believe that… a democratic society, once established, destroys a free economy.”

At the time these political declarations were widely ridiculed, dismissed even by conservative politicians and writers. After all, the West was characterized by mixed economies (government and private investment) that were doing very well in terms of growth and profitability. High taxes on wealth did not prevent the rich from investing, government revenues were robust, unemployment was low, social strife in Canada was rare.

Fast forward 40 years and any new book with the title The Crisis of Democracy is likely to be chronicling the result of four decades of systematic assaults on the liberal/social democratic state. Indeed in contrast to Huntington’s “excess of democracy” complaint, the phrase “democratic deficit” has now been used by scores of writers and commentators. It is easy enough to chronicle the long list of attacks on democracy carried out by Stephen Harper as many have, and in the U.S. the domination of corporate money (backed by the U.S. Supreme Court) and outright theft of elections has democracy in that country on the ropes.

But it is the consequences of this decline and erosion of democracy that should be the most important focus of critics and citizens alike. The exceptionally successful four decades campaign to change the “ideological fabric” of society has put western civilization on a track to irreversible collapse according to a major study sponsored by NASA’s Goddard Space Flight Center. The study focused on population, climate, water, agriculture and energy as the interrelated factors that determine the collapse or survival of civilizations going back 5000 years.

According to a Guardian report on the study, these factors can coalesce and lead to civilization’s collapse if they create two critical social features: “the stretching of resources due to the strain placed on the ecological carrying capacity… and… the economic stratification of society into Elites [rich] and Masses (or ‘Commoners’) [poor].”

According to the study these two developments played “a central role in the character or in the process of the collapse” in the demise of the Roman, Han, Mauryan, Gupta and multiple Mesopotamian Empires as well as the Maya. The study provides convincing “testimony to the fact that advanced, sophisticated, complex and creative civilizations can be both fragile and impermanent.”

How far down the road to collapse are we? For my generation not so far that we will see the worst of it. But what is alarming is that all the signs are so dramatically obvious. And while the mainstream media isn’t yet talking about the end of our world, the issue of grotesque inequality and unsustainable resource depletion are somewhere in the media almost every week. Indeed inequality in particular has been a hot topic ever since the Occupy movement briefly swept the planet. Yet if you monitor the political debate in this country the two most important trends in our society and the world are virtually never mentioned except rhetorically. There are no serious policy prescriptions. Mass denial reigns. Or, as Freud stated, we are “knowing without knowing.”

Regarding income (and wealth) inequality, a 2010 study by the Canadian Centre for Policy Alternatives revealed that the top one per cent claimed close to a third of all income growth during the decade from 1997 to 2007. “That’s a bigger piece of the action than any other generation of rich Canadians has taken,” said Armine Yalnizyan, CCPA’s senior economist and author of the report. “The last time Canada’s elite held so much of the nation’s income in their hands was in the 1920s. Even then, their incomes didn’t soar as fast as they are today. It’s a first in Canadian history and it underscores a dramatic reversal of long-term trends.”

Internationally, the picture is just as bad or worse. Earlier this month Oxfam released a report revealing: “The combined wealth of the world’s richest one per cent will overtake that of the remaining 99 per cent by 2016…. ” The wealthiest one per cent — amounting to 72 million people — already owns 48 per cent of all global wealth. This trend continues to accelerate, flying in the face of all the evidence that it could ultimately be fatal for capitalism.

Is this really what the geniuses at the Chicago School of Economics like Milton Friedman had in mind? Did he really believe that “a democratic society, once established, destroys a free economy”? Would he have had any qualms about his policy prescriptions resulting in capitalism devolving into neo-feudalism or into Plutonomies? The term Plutonomies was first used by analysts at Citigroup in 2005 to “describe a country that is defined by massive income and wealth inequality.” The analysts singled out the U.K., Canada, Australia and the United States.

Theoretically, of course, neoliberalism says the state should not intervene in the efficient functioning of the market — resulting in prosperity for everyone. But the theory, according to neoliberalism authority David Harvey, was simply hijacked by the elites to fleece the system — bailing out the financial sector with trillions of taxpayers’ dollars and failing to re-regulate, while gutting labour and environmental regulation. Government actions reveal neoliberalism as “more of a practical attempt to restore elite class power than as a theoretical project driven by the works of [Friedrich von] Hayek or Friedman.”

The NASA study is not optimistic about our chances of avoiding eventual collapse given the failure of other civilizations. It says “collapse is difficult to avoid…. Elites grow and consume too much, resulting in a famine among Commoners that eventually causes the collapse of society.”

Warnings go unheeded. The NASA reports says “historical collapses were allowed to occur by elites who appear to be oblivious to the catastrophic trajectory (most clearly apparent in the Roman and Mayan cases).”

How close are we to collapse? The study points out that the process can extend over decades and even centuries. Yet some of the supporting empirical studies (by KPMG and the British Office for Science) suggest a perfect storm that involves food, water and energy could occur within 15 years.

The NASA study highlights two trends — resource depletion and inequality — as the key factors in civilization collapse. But there is a third and it explains why historically elites have been “oblivious” to their unfolding catastrophes. That factor is the political system of the particular civilization. Designed to govern and manage social and economic life before it became corrupted, and still in the hands of the benefiting elites, these governing systems were simply incapable of incorporating the idea of collapse into their thinking.

What would have to happen for us to escape the same fate?

Canada’s choice: Austerity or prosperity

Imagine for a moment two societies living side by side. One has discovered the wheel and uses it. The wheel makes life easier for workers and boosts the economy for everyone. Prosperity reigns. The society next door is well aware of the wheel and watches as its neighbours move inexorably ahead, becoming wealthier, more efficient and healthier while creating more leisure time for cultural activities.

But the ones who reject the wheel aren’t those who do the work in this society. Those who refuse it are the governing elite, the priests, the official advisors and scribes who have incorporated a moral objection to the wheel into the state religion.

Use of the wheel is thus proscribed by faith, not reason. All practical arguments in its favour are rendered useless.

While Canada is not exactly a next door neighbour to Norway and other Scandinavian countries, there is no excuse for not knowing and emulating the proven success of those nations. What’s their open secret? Replace the wheel in this story with robust government engagement in the economy and you have pretty much all you need to understand about why Norway, Sweden and Denmark are doing so well economically and socially. And why Canada is destined for inexorable decline.

Indeed, Canada’s government is so dedicated to the religion of austerity that it could easily appear to some future anthropologist that our civilization declined in relentless pursuit of downsizing itself. Unlike the Maya, who apparently outgrew their social and economic structures, we seem determined to deliberately dismantle ours.

Canada and Eurozone countries are suffering from what Martin Wolfe, writing in the Financial Times, calls “chronic demand deficiency syndrome.” It is not that governments are unaware of the problem of deficient demand. John Plender, another Financial Times economist, focuses on the Eurozone, which, he writes “is being driven towards deflation by a moralistic drive for austerity which does nothing to arrest rising debt as a percentage of gross domestic product… ” He could just as easily be talking about Canada where collapsed oil prices are poised to accelerate a deflationary situation already threatening because of weak demand.

A recent study on Norway, Sweden and Denmark, titled “How Can Scandinavians Tax So Much?,” demonstrates how national governments can actually address underlying structural demand weaknesses — or rather, in their cases, how to prevent such weaknesses from developing in the first place. The key is not just high government spending but a dedication to revenue collection that comes as close as possible to eliminating leakage in the tax system.

The top marginal income tax rate in the three countries is between 60 per cent and 70 per cent compared to 43 per cent in the U.S. and about 50 per cent in Canada. Add in other taxes like consumption and payroll levies and the average Scandinavian worker gets to keep just 20 per cent of her paycheck. In the U.S. that same employee keeps 63 per cent.

How can such high tax rates (which would be denounced as ‘punitive’ here) result in some of the best economic outcomes on the planet?

How can the Scandinavian countries studied produce such high standards of living, high labour participation rates, highly profitable corporations and high placements (all higher than Canada) in the world competitiveness sweepstakes?

Here is how. Unlike in Canada, where Prime Minister Harper openly demonizes taxes (“I don’t believe any taxes are good taxes”), Scandinavian governments have totally committed themselves to collecting all the revenue due to them.

According to the study’s author Henrik Jacobsen Kleven: “First, the Scandinavian tax systems have very wide coverage of third-party information reporting and more generally, well-developed information trails that ensure a low level of tax evasion. Second, broad tax bases in these countries further encourages low levels of tax avoidance…. Third, the subsidization or public provision of goods that are complementary to working — including child care, elderly care, transportation and education– encourages a high level of labour supply.”

With the governments pumping billions of dollars into the Scandinavian economies there is no “chronic demand deficiency syndrome.” They do not rely on debt-financed consumer demand and the reduction of private consumer spending makes for more rational economic decision-making overall.

The U.S. has accomplished what appears to be a stable recovery by also rejecting the austerity obsession and engaging in repeated rounds of quantitative easing — artificially pumping money out into the economy though bond purchases. Canada meanwhile is actually sucking billions out of the economy through tax cuts to sectors (corporations and the One Per Cent) who aren’t spending it.

The dominant view of taxing and spending in this country has been carefully constructed over a period of 30 years. It is that taxes take money out of the economy and undermine investment. This claim is now revealed as nothing less than an outright lie.

But it should surprise no one. A 1985 book, Government Limited by John Calvert, revealed just how much government spending stimulates the economy and bolsters the private sector. Calvert pointed out that most government spending ends up in the coffers of private businesses: police departments buying cars, hospitals buying pharmaceuticals, governments buying paper, building ships, constructing highways, bridges and ports. Fully 12 per cent of private sector employment in 1984 was directly attributable to government spending on goods and services.

But that doesn’t even count the direct spending of government employees whose salaries represented 22 per cent of non-investment income. That translated into 12 per cent of total spending on private goods and services. Transfer payments — welfare, family allowance and pensions — accounted for 13 per cent of spending on goods and services. The tax revenue for these expenditures came largely from individuals rather than corporations so that rather than a drain on corporate investment, government spending is in fact a subsidy to business. Withdraw it and thousands of businesses would simply go bankrupt.

Of course we have withdrawn billions since 1985 — over $60 billion a year in abandoned revenue at the federal level if you go back and count Paul Martin’s huge tax cuts in 2000-2005. If we had that money back to spend, the vast majority of it would ultimately end up being spent in the private sector. And that might actually convince Canadian corporations to invest some of the $626 billion in idle cash it is now sitting on. (An IMF report recently chastised Canadians corporations for accumulating idle capital at a faster rate than any other country in the G7.)

Around the world the religious orthodoxy of unfettered capitalism is being questioned on many fronts. But not in Canada. The 2008 financial crisis had the effect of throwing into question the neoliberal orthodoxy of the gradual disappearance of the nation-state as a key player. Conflicts between states now abound and citizens in EU countries are demanding actions that conflict fundamentally with the EU collective wisdom. As the Financial Time’s Mark Mazower states, “… by discrediting the more mythical idealisations of the market, [the crisis] has encouraged the restoration of state power as a goal in itself.”

It is a trend vigorously resisted by the Harper government at every turn.

Some in the financial world have even begun talking about taking an old tool out of the state tool box that would allow deficit spending without going into hock to the banks and international lenders. That tool is monetizing government debt. In other words, ending the absurd “independence” of central banks and using them to create the money supply, allowing governments to borrow effectively from themselves at near zero interest rates (as they once did). This would have the added benefit in Canada of ending the irresponsible practices of the Canadian private banks and their reckless creation of a housing bubble.

But that’s a radical solution that is beyond the pale in Harper’s world.

Another global trend that Harper has been trying to avoid is the ending of tax evasion by corporations and wealthy individuals through the global harmonization of corporate taxes. This objective, being pursued most seriously by EU nations, also has its roots in the revival of nation-state power: countries are desperate for revenue to fund national democratic governance.

None of these trends is universal but the spectre of another crisis, much worse than the last, is challenging free market orthodoxy everywhere. Those countries that take up the challenge first and most effectively are the ones that will survive the next disaster.

In other words, the “wheel” is now a known to be powerful invention and the only question remaining is who will embrace its use first or last.

So far, Canadians must continue to watch their Scandinavian neighbours use the wheel and prosper while we remain captives of the free market priesthood.

Norway is the logical choice of neighbour to compare ourselves to, if you can stomach it.

In Canada we have virtually given away our energy heritage through criminally low royalty rates over a period of some 70 years. Norway bargained hard with oil companies to develop its relatively new-found resource — and kept ownership of it. The result, as reported in The Tyee, is a heritage fund of (as of a year ago) CAD$909.36 billion. That puts tiny Norway $1.5 trillion ahead of us and while each Canadian has a $17,000 share of our $600 billion debt national debt, each Norwegian has a $178,000 stake in their surplus. Norway puts aside a billion dollars a week from its oil resource.

But all that oil money aside (literally), Norway actually funds its government services through taxes which its citizens gladly pay. And why not? As The Tyee’s Mitch Andersen reported: “Norwegians enjoy universal day care, free university tuition, per capita spending on health care 30 per cent higher than Canada and 25 days of paid vacation every year.”

We on the other hand live in a country where a third of citizens believe in Harper’s fiscal self-flagellation, in an extremist religion that calls upon us all to deliberately impoverish ourselves. Hallelujah.

Why Canada’s Job Future Is Sinking like a Stone

Canada’s economy is increasingly at the mercy of a risk-averse, inept corporate elite addicted to government tax breaks. They are enabled by an ideologically addled government which is incompetent.

It is a deadly combination — a dumb and dumber team dragging us backwards at a time when the world is hoping there won’t be another economic collapse.

Recent media reports reinforce what we have known for decades about the Canadian corporate elite. One highlighted Canada’s dismal performance when it comes to research and development, the other our pathetic efforts at broadening our markets for exports. More and more evidence piles up that we are de-industrializing — reminding me of the Star Trek episode where the whole crew starts devolving. Captain Picard is destined to become a pygmy marmoset. I wonder what the end point for Canada might be?

An OECD study reported in the Globe shows that Canada has dropped out of the top ten in R&D spending and now ranks 12th. While we de-industrialize and fall back on raw resource exports, previously underdeveloped countries — Taiwan, India and Brazil — are now outspending us as they industrialize.

We continue to decline in the World Economic Forum’s World Competitiveness Index as well. For 2014-2015 we rank 15th.

Even worse, in the category of “innovation and sophistication factors” we rank 25th.

In 1998 our overall rank was sixth. Some of the countries that now beat us: the United Arab Emirates, Taiwan, Hong Kong and Singapore.

Canada’s dramatic decline in R&D has a continuing negative impact on labour productivity as well. According to OECD figures for the year 2012 we stood at 73 per cent of the U.S. benchmark of 100. This failure to increase labour productivity through investment in new machinery and innovation has a huge impact on our standard of living and the domestic economy: as wages stagnate and personal debt increases domestic consumption starts to flatline — and that further suppresses investment.

The other media report that reveals the pathetic level of government and corporate leadership on the economy focused on our complete failure to look to India as a potent export market. It is the fastest growing economy on the planet yet Canadian corporations and their government partners seem asleep at the switch.  Kevin Carmichael in the Globe and Mail quotes the president of Canada-India Business Council: “We’ve got to get in here fast or we’re going to miss the boat. You’ve seen a rush to the gates [from other nations]. We seem to be taking a slow walk.” Currently exports to India account for a minuscule .63 per cent of Canadian exports — and just under half of that is raw materials.

Canada scarcely does better in other emerging nations: our top three destinations for goods: the U.S. takes 74.5 per cent, China 4.3 per cent and the UK 4.1 per cent. Australia, a Pacific nation we compete with is far more diversified: China 29.5 per cent, Japan 19.3 per cent, South Korea 8 per cent, India 4.9 per cent.

For decades, alarms about lagging productivity

Where I live, in Powell River, B.C., the evidence of our race to the bottom is stark. An endless stream of huge log booms go by my window, most headed to China which not too many years ago bought one of the local mill’s paper machines, packed it up and sent it home — to process our trees.

The more things change the more say the same — especially when it comes to corporate leadership. Two studies on Canadian competitiveness by Harvard Business School’s Michael Porter, one in 1991   and one in 2001, concluded: “The absence of intense local rivalry combined with customers who were not demanding produced weak pressures for firm productivity and upgrading…Research uncovered key weaknesses in the sophistication of company operations and strategy.”

Canadian firms that did “compete” internationally took the easy way out — exporting almost exclusively to the U.S. and relying on “natural resource advantages or lower labour costs than other G7 competitors instead of sophisticated products and processes.”

Is it even possible to change corporate culture or at least engage in a little behaviour modification? Do we — that is the government — have to treat our (ridiculously over-compensated) CEOs as adolescents to get them to deliver?

After all we have given them literally everything they have asked for starting with the original free trade deal with the U.S., deliberately suppressed wages, a shredded safety net, and the gutting of regulations.

None of it has had any impact. Their performance has been getting worse for almost two decades.

What’s Harper got against manufacturers?

So what does Stephen Harper do? He rewards corporate ineptness and irresponsibility by providing one of the lowest corporate tax rates in the 34-nation OECD. It doesn’t matter that all this free money just goes into the cash reserves of the country’s largest companies (now totaling over $600 billion). Why doesn’t it matter? Because Stephen Harper doesn’t actually care if they invest in anything. The point of his tax cuts was never to stimulate investment — it was to jettison government revenue in aid of dismantling the activist state and making it impossible for future governments to act.

The only sector Harper even thinks about is oil and gas. If that seems a bit over the top have a look at the Carol Goar’s Toronto Star story on the phantom $200 million fund to stimulate Ontario manufacturing. The money, formally announced a year ago, was slated for something called the Advanced Manufacturing Fund and it was first mentioned in February last year. The goals were laudable, including: “To support transformative technologies and foster collaboration between universities and the private sector.”

The problem, says Goar (using information dug up by the NDP’s Peggy Nash) is that “To date, not a single project has been approved. Not one dollar has been released. Not one job has been created.”

Two hundred million might sound like a lot of money to promote manufacturing in one province but the fact is that given Canadian corporations’ appalling record of investment in innovation and “sophistication of company operations and strategy” government engagement is absolutely critical. The manufacturing and high tech sectors are in desperate need of the kind of guidance that can only come from a smart industrial strategy. Otherwise Canada faces a continued decline in its value-added sectors and export markets. Ontario has lost 300,000 manufacturing jobs in the last ten years — that’s more than one in four.

If the goal is to create “transformative technologies” (the word green comes to mind) then $200 million is just lunch money. But the Harper government is so opposed to government intervention it can’t even bring itself to spend the money it actually allocated.

Everything oil wants

Imagine if even 10 per cent of the largesse and free passes showered on the oil and gas sector was used to create what the Advanced Manufacturing Fund was established to do.  According to the IMF Canadian subsidies to the oil sector, in real dollars and avoided externality costs, amount  to $34 billion a year.

If you have been taken in by the spin that this sector creates thousands of jobs in other provinces then think again. The entire resource sector accounts for only 7 per cent of the economy and is one of the worst job creators we have. Two reports, one by the IMF and another by the Canadian Energy Research Institute in 2011 revealed just how little the oil and gas sector contributes to jobs and GDP growth.

Commenting on the reports, Frances Russell highlighted the fact that “Canada’s energy sector created only 1.7 per cent of all new jobs in Canada from 2007 to 2012.” That was just 13,000 jobs. Compare that to the 22,000 jobs created in a single month, December 2013, in health care and social assistance. “The energy sector accounts for only 0.1 percentage point of the average 2.25 per cent annual GDP growth over the last decade,” according to the IMF.  As for the alleged benefits accruing to other provinces, a dollar invested in the tar sands boosts manufacturing in the rest of Canada by three cents and GDP in Ontario by four cents. And if none of the pipelines from the tar sands were built? The economy would grow 0.5 per cent less by 2020.

The potential for Canada to be leading in many new areas of innovative green growth has been squandered for years and continues to be ignored.

Instead Canadian governments shower the oil and gas sector with obscenely large subsidies and allows risk-averse and timid added-value sectors to languish in the ferocious competition for global markets.

To add insult to injury we hand over billions in tax cuts that could be used to become genuinely competitive.  Dumb and Dumber was a bad movie. But this one’s worse.

Four Prime Questions about Harper’s Response to Ottawa Shooting

Two weeks after the senseless murder of a soldier on Parliament Hill (and another earlier in Montreal) there are several things we know and many we don’t. Obvious questions have been asked and inconvenient ones have been left aside.

We know — and indeed could predict one second after the shooting — that Stephen Harper would use it as an excuse to expand the security and surveillance state he has been constructing.

We know that the shooting was not a terrorist act, but a criminal one, regardless of what the RCMP and CSIS, eager to enhance their political role and resources, are saying. (Within an hour of the shooting an over-eager CSIS official was declaring hopefully, “this will change everything.”)

We know that the enhanced security measures and police powers will do nothing to help us understand, let alone deal with, the root causes of what the Harper government claims is an existential threat to Canada and the West (but is content to deal with symptoms).

We know that there will be no additional resources from governments to deal with mental illness as Mr. Harper plans to cut billions from medicare. There will be no revisiting of the issue of gun registration in spite of its obvious importance in dealing with such incidents. And there will be no effort on the part of our Christian fundamentalist PM to counter the anti-Muslim backlash he knows he is contributing to by hyping the terrorist threat.

The bigger questions remain to be asked and so they won’t likely be answered. They include:

1. What freedoms must we now erode and why? Mr. Harper, who eagerly adheres to the (simplistic) idea that jihadists “hate our freedoms,” might reasonably be asked to explain why he is so eager to destroy those freedoms in response to the jihadists’ “war” against the West. Isn’t that exactly what they want — or does Harper want to rid us of freedoms so the jihadists won’t hate us so much? Wouldn’t a genuine response be to celebrate and enhance our freedoms even more (perhaps by ending the auditing of groups critical of the government)?

2. What is producing Canada’s homegrown jihadists? This is another question the government seems decidedly uninterested in: what is it about our Western societies — supposedly the model for the entire world, morally, culturally and socially superior — that alienates some young people so much that they can suddenly decide it’s all right to kill innocents and it’s worth dying for a cause so remote and alien to their lived experience that it is scarcely possible to believe they can understand it let alone truly embrace it? Could it possibly have anything to do with 35 years of neoliberal assault on community and consumer capitalism’s failure to provide meaning to their lives beyond purchasing the next electronic gadget?

3, What is the most effective response to radical Islamists? Yet one more question not being asked is what would a rational, enlightened (we are enlightened, right?), effective response to so-called “radical” Islam look like? The “this changes everything” gang certainly don’t intend to change Canada’s foreign policy or recommend a change to its allies. Yet it is key to any long-term solution.

There are countless experts and historians who are eager to address the issue. And we know what they would say about Stephen Harper’s efforts to transform Canada from a moderate, middle power with a history of virtually inventing UN peacekeeping, into a shrill, warmongering nation ever ready to rattle its (insignificant) sabre at any opportunity.

The fact that these two unconnected killings were not terrorist acts doesn’t mean such acts cannot or will not happen. And while Mr. Harper puts on his warrior’s armour and militarizes the government’s response, he ignores the impact of his reckless Middle East foreign policy on escalating such threats. Canada’s ham-handed policies actually do put us at risk.

According to a report in the National Post, on Sept. 21, ISIS spokesman Abu Muhammad al-Adnani “urged ISIS supporters to kill Canadians, Americans, Australians, French and other Europeans…. Rely upon Allah…. Do not ask for anyone’s advice and do not seek anyone’s verdict.”

This threat is clearly connected directly to Canada’s policies and its determination to join the war against ISIS. Harper, in what has become his standard adolescent response to events in the Middle East, bravely declared he would not be “cowed by threats while innocent children, women, men and religious minorities live in fear of these terrorists.” Yet Canada’s contribution is laughably minuscule — but just big enough, perhaps, to put us at risk of a future attack. And all, as usual, for domestic political consumption as evidenced by the total inability of the government to explain its mission.

To their credit the opposition parties in Parliament, the NDP and the Liberals, voted against the ISIS mission for most of the right reasons: what exactly was the mission, what were the government’s expectations, how was success being defined, what Canadian interests are being served and why six months? Not one of these questions was answered and instead the questioners were treated to the usual contempt from the prime minister.

4. Can we learn from how we got here? We are supposed to learn as children that actions have consequences so I suppose we are left to conclude that current leaders of the Anglo-industrialized countries (in particular) were badly neglected by their parents. A catastrophic failure of imagination on the part of the West has led us to this point. It’s worth tracing back to its origins. The first failure belonged to Zbigniew Brzezinski, Jimmy Carter’s national security advisor, and the key architect of the mujahedeen war against the Soviet Union in Afghanistan. Before the U.S. began arming, financing and training the original handful of religious zealots opposed to the godless Soviets, they were a threat to no one.

In an interview that appeared in 1998, Brzezinski revealed his impoverished imagination when asked if he regretted creating Islamic terrorists: “What is most important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred-up Muslims or the liberation of Central Europe and the end of the Cold War?”

ISIS would not exist had the U.S. not created its predecessors. And this failure of imagination is replicated year after year in the White House, in the Strangelovian world of NATO and now in Ottawa. Imperial hubris, wilful ignorance, political opportunism and sheer incompetence still determine Middle East policy. Harper enthusiastically bombed Libya, with the unintended but predictable consequence of handing over thousands of tonnes of sophisticated weapons to another branch of radical Islamists. He gives Israel absolute carte blanche in its savaging of Palestinians, alienating even moderate Arabs throughout the region, and now he pointlessly tweaks the tail of the ISIS tiger.

Harper’s every act in the name of Canada creates more jihadists. We are just lucky that an attack on Canada initiated by ISIS is extremely unlikely.

From Israel to ISIS: Harper’s ‘Orwellian’ foreign policy

It’s getting difficult to remember a time when the Canadian Parliament actually tried to make principled decisions regarding foreign policy and our place in the community of nations. But we should try. Perhaps a first step in returning to such a time was the decision of the NDP and Liberal Party to oppose Stephen Harper’s most recent ill-considered and cynical march to war with his decision of join the bombing of Iraq.

Harper’s amoral political calculations about who and when to bomb people has little to do with any genuine consideration of the geo-political situation or what role Canada might usefully play – or even in what Canada’s “interests” are. So long as he is prime minister it will be the same: every calculation will be made with the single-minded goal of staying in power long enough to dismantle the post war activist state. The nurturing of his core constituency includes appeals to a thinly disguised pseudo-crusade against Islamic infidels, a phony appeal to national security (preceded by fear-mongering) and in the case of Ukraine a crude appeal to ethnic votes.

Reinforcing this legacy is a mainstream media that lets him get away with it and in particular refuses to do its homework while the bombing – or posturing – is taking place and then refuses to expose the negative consequences of the reckless adventures. The result is what cultural critic Henry Giroux calls “the fog of historical and social amnesia.” The three most obvious examples are Harper’s extremist policy in support of Israel, his joining with France and the US in the catastrophic destruction of the Libyan state and his infantile posturing on the Ukrainian Russian conflict. And now we have Harper’s mini-crusade (six fighter-bombers for six months) against ISIS or the Islamic State. With rare exceptions the media has gone along with him at every turn, treating Canadians as children incapable of navigating the nuances of foreign policy.

Regarding Israel, Harper, with widespread support in the media, has gone so far as to try to establish criticism of Israel as a kind of Orwellian “thought crime.”  By declaring repeatedly (and even threatening supportive legislation) that criticism of Israel was anti-Semitic Harper hoped to establish what Orwell referred to as “protective stupidity” – a kind of mass denial of the obvious. Freud referred to it as “knowing with not knowing” and when it comes to most of Canada’s military adventures it is epidemic.

In Afghanistan the war went for so long that the facts eventually broke through the protective stupidity but only partially. Even with the total failure of the mission to accomplish a single worthwhile goal it is likely that most Canadians still see it as having been a “good war.”

Everyone who reads the news or watches it on television “knows” that Libya is now a failed state, swarming with literally scores of heavily armed and murderous Islamist militias, and facing an almost total collapse of central government authority and public services (formerly the best in Africa). Life in Libya is ten times more insecure and dangerous now than it ever was under the “madman” Gadhafi. Yet we choose not to know what we know.

This was supposed to be a humanitarian mission – the much-touted “duty to protect” principle in action. The catastrophe of the failure soon spread of course to Mali and elsewhere as Gadhafi’s carefully constructed balancing of competing tribal interests collapsed. In the ensuing chaos massive supplies of weapons seized by the “democratic forces” were distributed to lunatic militias (including ISIS) across the Middle East. But still there are no mea culpas, no accountability, and no price to pay for the misery created. The cheerleading pundits have gone silent as if they had never written a word in support of the war. Planned amnesia.

As Giroux puts it: “Neoliberal authoritarianism has changed the language of politics and everyday life through a poisonous public pedagogy that turns reason on its head and normalizes a culture of fear, war and exploitation.”

Harper’s response to the Russia-Ukraine conflict has been similar: a maximum of infantile, simplistic sabre rattling rhetoric with an absolute minimum of reflection on the historical context or even the immediate facts of the situation. This is foreign policy for the willingly – if not willfully – ignorant. We are encouraged – or perhaps enlisted is a better word – to treat facts and history with a disdain bordering on contempt. Facts, context, history and thoughtful anticipation of the consequences of our actions – all of this is for sissies and Putin apologists. The nay-sayers are all Neville Chamberlain clones.

The fact that the boys with their military toys in NATO have been provoking Russia for twenty years, encircling it with hostile regimes aligned with or members of this military alliance, promising to put missiles on its border, breaking promise after promise made in agreements with Russia – it’s all irrelevant. So is the fact that the “revolution” in Kiev – don’t dare call it a coup, the thought police will knock on your door – was promoted with millions of American “democracy” dollars.

And the fact that the movement was hijacked by neo-Nazis? Just an inconvenient detail to be assigned to the amnesia machine. And the consequences? Just how is driving Russia away from integration with Europe (which it had been seeking throughout Putin’s rein) and into the arms of the imperial Chinese in Canada’s interests? The $400 billion natural gas deal Putin signed with China – accelerated and made a certainty by NATO’s aggression – will likely kill BC’s dream of billions in LNG investment (a silver lining in my view but hardly a smart move for an “energy super-power”).

All of this is swept aside when foreign policy is decided in a kindergarten class instead of a graduate class. But there will be no lasting consequences for governments – Harper’s or anyone else’s. The structure of protective stupidity is in place and without a radical change in consciousness the current political consensus will prevail. All will be forgotten.

Which brings us to the Islamic State. Here, too, the conventional approach to making intelligent foreign policy is cast aside on the basis of reacting to a handful of Westerners being beheaded (as happens on a regular basis already to citizens of Saudi Arabia). Can it be possible that our policy-making has been reduced to this level of drunken barroom reaction? We know that ISIS did this precisely to provoke a Western military response. But “we don’t know.” We prefer denial and the simplistic – the notion that we can correct twenty-five years of imperial hubris, ignorance and gross incompetence by Western powers by bombing our own creation.

Ooops, sorry for introducing a fact here – a bad habit. The West created these murderous madmen decades ago when the US funded, armed and advised the nascent Mujahedeen to drive the Russians out of Afghanistan. They are now a permanent feature of the Middle East and beyond, an evolving monster the US Defence Department and CIA lost control of a long time ago. Yet politicians like Obama and Harper think we can correct it with bombs. Ironically after decades of treating their citizens like children, our governments are reduced to behaving like them.

Why New Euro-Canada Treaty Is a Gift to Oil Firms

By sheer coincidence the media has recently been filled with stories that reflect the parallel universes we seem to be living in. The first were the stories about the international climate summit and the huge climate march (and hundreds of smaller ones) that preceded it – punctuated by the launch of Naomi Klein’s powerful call-to-action book This Changes Everything: Capitalism versus the Climate adding to the power of the moment.

But while climate activists were demonstrating and some 100 world leaders were making pledges to finally get serious about climate change many of those same leaders had already put their name to an international investment treaty parts of which seems to have been virtually written by the same oil companies targeted for criticism and calls for greater regulation. That agreement is called the Comprehensive Economic Trade Agreement (CETA), in the news recently because of yet another photo op with Harper signing it with European leaders.

While there has been attention paid to some key provisions of CETA – such as its investor state rules, its impact on Canadian drug pricing and its curbs on governments’ ability to buy local – there has been almost nothing in the media about CETA’s chapter on domestic regulation. But a new Canadian Centre for Policy Alternatives report on CETA suggests there should be because the articles of that chapter seem designed to kill efforts to regulate the resource industry. In other words just as governments need to get deadly serious about reducing our dependence on fossil fuels they are tying their own hands through new restrictions on their right to regulate.

CETA’s domestic regulation chapter would be more aptly called “Gifts for the Oil and Gas Industry”. These CETA provisions are so biased in favour of corporations it is easy to picture industry execs sitting at the elbows of CETA’s negotiators, guiding their pens as they draft the agreement. Short of an international treaty banning all government regulations outright, CETA gives the oil and gas industry virtually everything it has been asking for, for decades. Of course these anti-regulation gifts are also available to other sectors including the mining industry but given the special place in Harper’s universe reserved for Alberta’s oil patch it’s not hard to see where the impetus came from.

Most trade and investment agreements are full of obscure legalese, but the Domestic Regulation chapter of CETA – is actually relatively simple to understand. So check it out. The restrictions on regulation you will find are right out of the oil and gas industry’s wish list. Chapter 14 on Domestic Regulation provides so many grounds for regulations to be challenged that almost any regulation could conceivably be ruled in contravention of the agreement.

CETA places an absolute value on the ease with which corporations can get approval of their projects. It demands that parties ensure “…that licensing and qualification procedures are as simple as possible and do not unduly complicate or delay the supply of a service or the pursuit of any other economic activity.” (Article II.7) Requiring that oil and gas companies do environmental assessments, archaeological studies or get approvals from different levels of government is clearly a process that could be made simpler by doing away with these requirements. Obligations to consult with the public and First Nations certainly complicate the regulatory process and cause delays.                                                                                       Whether or not governments have simplified their licensing processes to the absolute maximum extent possible and are not causing “undue” delays or complications would be up to a panel of trade lawyers to decide in the event of a dispute. They could look at examples from the most deregulated jurisdictions to determine what is “as simple as possible.” China, for example, allows corporations to ignore requirements for environmental impact assessments (EIA) and just pay a small fine after the fact. An article in Businessweek reveals the results of the “simple” Chinese process: “In November 2013 an oil pipeline burst in Qingdao, killing or injuring more than 100 people; a faulty EIA process was partly to blame for the deaths. As Chinese environmental journalist Liu Jianqiang commented in reference to the Qingdao disaster, ‘It is common in China for EIAs to be faked and planning assessments to simply not exist—and so our country is littered with such ticking time bombs.’”

CETA’s Chapter 14 requires that all regulations that governments have not expressly excluded from the agreement must be “objective” and “established in advance”. (Article 2.2) Given that these terms are not defined they can mean anything that a trade tribunal decides they mean. While the word “objective” might not seem threatening in most contexts, here it is loaded with danger for public interest regulation. If a tribunal interprets “objective” to mean ”not subjective”, existing regulations could be challenged. Why? Because they are based on a government regulator’s effort to balance competing interests – a necessarily “subjective” exercise. If licensing approvals are based to some extent on public opinion of a project, this too could mean licensing decisions are not “objective.”

And what does it mean to say that regulations have to be “established in advance”? Does that mean that new regulations cannot be introduced? Even if this provision is just interpreted to mean that regulations cannot be changed once an application has been approved, there are very good reasons why a government might need to impose new regulations on operations that are already licensed. BC’s Mount Polley mine spill is a perfect example of where a government had to impose new requirements on established mines after a catastrophic regulatory failure. CETA could make that impossible in the future.

Disputes arising out of so-called “trade” agreements are decided by tribunals of corporate trade lawyers. These dispute panels are nothing at all like any public court of law. The model is taken right out of the international commercial dispute resolution process – designed to settle narrow disputes between commercial entities. As such there is almost no room for taking into account interests other than commercial interests. This is square-peg-in-a-round-hole territory.

But at least in other trade and investment agreements governments are allowed to defend their regulations as necessary to protect human health and the environment. Either by intent or sheer carelessness, this defence is not applied to the domestic regulation chapter of CETA. For example, if environmental assessments are challenged as “unduly” delaying oil and gas development, a government would not be able to defend these assessments as necessary to protect the environment. EU governments could go to bat for their oil giants Total and BP – and force Canadian governments to gut licensing regulations for the whole industry.

Just as the world is trying to come to grips with the growing climate crisis and Canadians are increasingly skeptical about a national economic strategy relying on expansion of the tar sands, CETA threatens to make action on those concerns increasingly difficult. Environmentalists point out that the faster you develop the tar sands, the worse it is for climate change but CETA could make it extremely difficult to slow down their expansion. There are many good reasons to hope that CETA never actually comes into effect, but perhaps the best is to preserve the policy space needed to address climate change.

Work in the age of anxiety

Working Canadians, from blue collar workers to middle class professionals to hamburger flippers are facing the worst economy insecurity, most stressful working conditions, the slowest increases in real income and the most cynical anti-worker governments literally since the 1930s. At the same time the 1% and the powerful corporations which make them rich have not been so privileged in terms of wealth, income and political power since the pre-crash 1920s.

Yet in those days when there was virtually no state protection for workers, unions were illegal, police were more brutal and economic security for many non-existent there was a level of militancy, courage, social solidarity and sheer determination that was at once stunning and inspirational. It terrified that day’s 1% and following the depression and war it brought the only concessions to workers capitalists have ever agreed to.

Which raises the question: Why is there no militancy today, why no sustained and focused solidarity or even simple courage in facing powerful adversaries? Some of this passivity clearly has to do with the rapidly evolving security and surveillance state and the fear it deliberately fosters. But it started elsewhere and over twenty years ago. And it is rooted in an almost universal anxiety. We can explore it by asking the question, What’s an economy for?

If you think the now conventional answer to that question is obvious you haven’t been paying attention to the free market propaganda machine over the past four decades. When now retired Michael Walker was hired to head up the Fraser Institute almost 40 years ago he told his corporate backers “If you want to change society you have to change the ideological fabric of society.” And that’s what the FI and other think tanks (and media owners) proceeded to do with a patient but relentless attack on conventional notions of what a good society and the role of its economy entailed.

In those pre- corporate globalizations days it was conventional political and social wisdom that the economy served the nation and by inference the community and families. The Bank of Canada’s dual mandates – unemployment and inflation – were still competing but full employment was one of the few shared policy objectives of all three federal parties. It wasn’t until the early ‘80s that inflation took a serious bite out of the accumulated wealth of the West’s economic elite. That changed everything and “inflation-fighting” became the obsession of the West’s central banks.

But more than that it also became the weapon of choice of free-marketeers like former Liberal finance minister Paul Martin who with the co-operation of the Bank of Canada used extreme inflation targets (and subsequent high interest rates) to actually suppress economic growth and deliberately create high levels of unemployment. Few people recall that under Martin’s ideological war on inflation throughout most of the 1990s, unemployment hovered around 9% – higher than it is now.

Martin’s war on inflation was actually a war on labour, justified by the signing of the FTA and subsequently NAFTA. It was all about global competitiveness and that meant driving down the cost and power of labour. Enforced high unemployment was perhaps the most powerful weapon but dramatic cuts to EI eligibility and the elimination of the Canada Assistant Plan (CAP) were effective as well. The CAP transferred money to the provinces and was targeted specifically at establishing a minimum national standard for welfare. With its cancellation and replacement with a lump sum (for health, education and welfare) the provinces radically reduced social assistance rates and shifted money into the politically popular items like Medicare.

Pro-business provincial governments, following the example of the labour flexibility imperative of Ottawa, took their own initiatives and gradually reduced the enforcement of labour standards which protected non-unionized workers from draconian working conditions.(Like below-the-poverty-line minimum wages.) The overall effect definitely made labour extremely “flexible” – in other words more vulnerable to the whims of employers large and small than at any time since the 1930s. The corporate and neo-con propaganda machine worked overtime to frame all of this as good for the “economy” – an abstract notion that translated in reality as good for corporations.

And having been redefined as taxpayers and consumers, rather than citizens, the affected working people have been suckered into thinking they and their legitimate needs are the problem – and they have to make sacrifices for the good of the economy. Or they have been convinced that they will benefit as taxpayers – even if they suffer as citizens.

Over the past few years a stream of reports have revealed just what that sacrifice has entailed. It has even fostered the use of a new term to describe modern working life: precarity. The numbers are scary. The Canadian payroll Association’s annual poll revealed recently that 51 per cent of Canadian employees would be in real financial trouble if their paycheck were delayed by a week. A week. A quarter of those surveyed said they couldn’t pull together even $2000 to deal with an emergency. Almost half said they were spending all their income – or more – on basic family needs. The savings rate is now below 4% – it was 15% in the 1980s. Personal debt is at record levels, some 160% of annual income and no wonder: the real income gain of the average employee between 1980 and 2005 was a measly $52 – two dollars a year. The only thing keeping many families afloat is rising house prices. But 17% of mortgage holders will be under water if rates rise just 1.5%.

According to the Toronto Star’s Carol Goar labour market statistics suggest we are becoming a nation of part-timers: “For the past year, the only part of Canada’s job market that has showed any sign of life has been part-time employment. The numbers are striking. Since last autumn, Canada has created 50,000 part-time jobs but lost 20,000 full-time positions.“ And while we like to see ourselves as an industrialized nation we are actually going backwards in terms of value-added jobs. For years now Canada has had the second highest percentage of low-paying jobs in the OECD.

Goar’s conclusion is backed by a recent TD Bank report called “Part Time Nation.” Statistics Canada has reported that the number full time jobs have declined by 13,600 since May 2013. And it isn’t just blue collar workers or those in the low wage service industry who are affected. This imposed “flexibility” strikes deep into the middle class. A recent report  on part-time faculty at Laurier University revealed that despite Ontario university students paying the highest tuition fees in Canada over 52% of them (up from 38% in 2008) at Laurier are now taught by sessional lecturers or contract academic staff (CAS). The pay difference between a CAS and full-time faculty member is staggering – with the latter making between $80,000 and $150,000 a year while a CAS teaching exactly the same class load will earn about $28,000. And they get no benefits and no job security – signing new contracts every session, even with decades of experience.

One of the most valuable studies on the state of work and life is the 2012 National Study on Balancing Work and Caregiving in Canada. This is the third time the study, by professors Linda Duxbury of Carleton University and Christopher Higgins of the University of Western Ontario, has been done in the past 20 years. It is a tracks the (ever-worsening) work-life imbalance of thousands of individual workers and the situation it reveals is grim. “Almost two-thirds of us are working more than 45 hours a week – 50-per-cent more than two decades ago. Work weeks are more rigid, with flex-time arrangements dropping by a third in the past 10 years. … More than half of the survey’s respondents took work home with them, putting in an average of seven extra hours a week from home. To top it off, only 23 per cent of working Canadians are highly satisfied with life. That’s half as many as in 1991.”

As in the previous studies the authors observe that most working families effectively have no family life. The extreme demands of employers have in fact delayed or even prevented couples from having children. “One-third of Canadians feel they have more work to do than time permits. That number rises to 40 per cent when family roles are taken into account.”

This, then, is the core of the age of anxiety. Precarity, combined with the deliberate creation of fear through constant surveillance, the security apparatus and the demonization/criminalization of dissent starts to answer the question of why there is no militant resistance to savage capitalism or even sustained social solidarity. According to the Institute for Precarious Consciousness (IPC)   “Each phase of capitalism has a particular affect which holds it together.” In the 1920s is was simple misery and militant social and labour movements were the response which ended the effectiveness of misery as a form of social control. But, says the IPC, “One aspect of every phase’s dominant affect is that it is a public secret, something that everyone knows, but nobody admits, or talks about. As long as the dominant affect is a public secret, it remains effective, and strategies against it will not emerge.”

That, the authors suggest is the situation we find ourselves in today. “Today’s public secret is that everyone is anxious. Anxiety has spread from its previous localised locations (such as sexuality) to the whole of the social field. All forms of intensity, self-​expression, emotional connection, immediacy, and enjoyment are now laced with anxiety. It has become the linchpin of subordination.”

How do we expose the public secret? We need to actually communicate with each other. “People have to be socially isolated in order for a public secret to work. This is true of the current situation, in which authentic communication is increasingly rare. Communication is more pervasive than ever, but increasingly, communication happens only through paths mediated by the system. Hence, in many ways, people are prevented from actually communicating, even while the system demands that everyone be connected and communicable.”

Expose the secret. Get rid of the cop in your head. Phone your friends. Re-occupy.

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