Monthly Archives: March 2007

Our Economic Pyramid Scheme

Some mornings, for no discernible reason, I wake up much earlier than others. That means that I get to hear Metro Morning’s business analyst Michael Hlinka, who throws in his daily two cents on the CBC Radio One morning show at around 6:45am. Yesterday morning was one of those days.

I used to live in Michael Hlinka’s building. He’s extremely friendly and outgoing, and we’ve had several good chats. Both before and after meeting him, I’ve often listened to him and agreed strongly with whatever he had to say. Yesterday morning was not one of those days.

Hlinka was reacting — like everyone else — to the new Statistics Canada census data that was released the day before. To make a long story short, Canada’s population is growing faster than any other country in the G8. Most of the attention in Ontario has been focused on Milton (one of my old stomping grounds), which has grown by 71% in just five years.

Hlinka was ecstatic at this “great” news. You see, he explained, (and I’m paraphrasing here) we used to have this guy named Malthus who thought that population growth was all bad and would eventually cause society to collapse. Now, however, we’re enlightened, and understand that population growth is, without reservation, a good thing, because people create wealth, so more people means more wealth. Also, we’re going to have a large retired population soon, so we need lots of younger people to pay for the care of the older ones. And, ultimately, we need to keep making more and more stuff (he actually used the word “stuff”), because we need more stuff swirling around all the time to keep this whole machine running.

In other words, Hlinka was arguing that we need to encourage infinite population growth in order to support infinite economic growth. It’s becoming increasingly clear to me that the dogma of perpetual economic growth has been given the status of infallible religion by many, and is causing otherwise intelligent individuals to ignore the blatantly obvious.

Let’s start here: surely we can agree that population cannot grow forever. We don’t give this much thought because it doesn’t seem like an immediate problem, but even if we’d argue about how much the Earth’s human population can grow (or if it’s already too high), we have to acknowledge the fact that all ecosystems have a carrying capacity, and that at the end of the day this planet of ours has limits.

From there, we have to agree that economic growth, at least as we know it now, is pretty tightly linked with population growth. That’s why some economists get excited about growing populations. It’s also why Ronald Wright has described our current economy as a pyramid scheme: it only works as long as you’re constantly introducing new inputs of people and resources.

Arguments like Hlinka’s, that people “create wealth,” are fundamentally flawed. In a resource-based economy, people do not “create” wealth, they extract it from the Earth. Or, in other words, they move it from the public realm to the private. In that case, a resulting increase in a country’s GDP is actually a measure of how much natural capital has been used up. That’s like taking $20 out of the bank and claiming that by so doing you had generated $20.

Now sure, this is all just semantics as long as you’ve got another pay cheque on the way. But in the case of the tar sands, for example, currently one of Canada’s largest sources of economic growth, there’s no chance of having that bank account replenished. What we’re calling “wealth creation” in the tar sands is just a one-time massive withdrawal from a savings account that took millennia to accumulate.

But this is a conversation that we as Canadians (and especially politicians) don’t have very often, probably because most of us don’t know where to begin solving the problem. For example, some might (wrongly) approach it from the population end, suggesting we need government-mandated population control. But that presents too many human rights concerns, and is often unworkable. Others would choose to blame immigration, without recognizing that immigrants (a group to which all of us save Aboriginals belong — and, on a long enough timeline, them too) contribute great value to our country and define who we are as a people. (Not to mention the fact that population is a global phenomenon, making any attempt to deal with it by geographic isolationism not only morally questionable, but environmentally and practically ineffective.)

So, as we approach solutions, we need to start by guarding against temptations towards xenophobia or drastic measures. We’re all in the same boat here. Then, we can focus on the good news. For example, it turns out that birth rates stabilize as women’s rights and access to education increase, and as poverty and infant mortality decrease. Surely those are desirable goals anyway. Also, we need to tackle the economic side of the problem. Many economists (including Dr. Peter Victor at the University of York) are developing resilient economic models that don’t depend on the pyramid scheme of growth.

In fact, we already have a model for that: the human body. We only grow until around the age of eighteen, but does that mean we stop developing, learning, or getting better? Let’s start to have a conversation about how we can be more without having more.

Whether we agree on if growth is good or not, the reality is that it can’t continue forever. We’d better deal with that fact, or else it will deal with us. And besides, we already have a word for something that grows forever in an unrestrained way. It’s called cancer.

One morning soon, I hope to wake up to a world where we place a higher value on quality over quantity, and where we measure genuine progress. And please, no more stuff for stuff’s sake.

Video of Climate Change Rally

I’m still going to create a version of this video that also includes footage of the crowd and is a bit more polished, but for the raw record of what went down last Sunday, here’s my speech to the “Canadians for Kyoto” climate change rally that took place in Nathan Phillips Square outside Toronto City Hall. Special thanks go to Garfield Lindsay Miller for the videography.

A Negative, Times a Positive, Equals…

Yesterday’s climate change rally (“Canadians for Kyoto”) in Toronto (part of a series that happened across Canada) was a lot of fun, and served the purpose of making it clear that environmental issues are important to Torontonians and Canadians. There were musicians, comedians, climate change experts, and (just when you thought it was safe) politicians. I spoke on behalf of the Green Party, while Maria Minna and Jack Layton spoke for the Liberals and NDP, respectively. (The Conservatives were invited, but didn’t show. Maybe they forgot to change their clocks.)

I also learned an interesting lesson about image. (Though, now that I think about it, it’s the same lesson I learned in elementary school math class.) For our three speeches, we were asked by the organizers not to attack any other political party, and instead keep to a positive message of what we wanted to see done. I respected that request (I’ll have video evidence of this fact up within a few days), while Maria and Jack, well, didn’t. The result is that the National Post reported on the rally with the headline “Tories knocked at Kyoto rally,” and the following opening paragraph:

Politicians from the NDP, Liberal and Green parties used a rally in support of the Kyoto Protocol on climate change to press political attacks against the Conservative government.

That’s just not true — I didn’t do anything of the sort. What’s interesting though, is that as far as the National Post reporter was concerned, we’d all taken the same low-road. All politicians are the same, you see. All we do is attack each other and resort to mud slinging.

Don’t get me wrong, I’m not blaming the reporter. In fact, I suspect he has accurately reported the event the way most people will remember it. That’s the problem. What was supposed to be (and for the most part was) a positive, uplifting, and inspiring event got reported as if it was simply an opportunistic partisan attack-fest. The point is, politicians have that power; if we choose to, we can bring everything down to the lowest common denominator.

It’s something to keep in mind the next time you’re listening to a group of us speak. Who’s raising the level of debate? Who’s lowering it? And what’s the net result? Don’t fall into the trap of thinking we’re all the same; we’re really not.

20% by 2020

That’s the goal that the European Union set for itself yesterday. It falls short of the Stern report’s recommendation of 30% by 2020 and 60% by 2050, but it’s still a good, ambitious and achievable target. It’s also miles above Canada’s reduction targets, which, well….

Any successful business or undertaking understands that targets are important because, without them, you have no measure of success. They also need to be SMART, which means in part that they have to serve some greater strategy (namely, preventing the planet from shaking us off like a wet dog). That’s why it’s important to set the aggressive targets that our scientists tell us are necessary, instead of lax targets that derive from political laziness. This is one of those “do it right or don’t do it at all” kind of things.

Another good reason to set aggressive targets is that we’ll be far better off if we over-shoot on carbon emissions reductions than if we underestimate what’s necessary. Consider Elizabeth May’s recent response to someone who still questions the science of climate change:

Obviously, I am in conversation all the time with people who don’t buy the science. The question is this: on the chance that I’m wrong that action needs to be taken on climate change, what are the consequences for society? Then apply it the other way. What if the people who say — we don’t have to do anything, we can keep burning fossil fuels — what if they are wrong? If they are wrong, the consequence is that every coastal city on the planet is flooded, life becomes unbearable, civilization and social structures crumble within the next 20 to 50 years.

If I am wrong– which would be lovely news — and we did all the things on the Green party’s agenda, for instance if we met the Kyoto targets, we’d have a society that was more competitive, had less air pollution, and which would be embracing the low-carbon technologies of the future. Just based on the price of oil and our over-dependence on petroleum products, we’d be better off no matter what.

Finally, we need to set some targets so that we can get on with achieving them. The question of what kind of action to take is the only real debate left. The good news is, there are no shortage of great ideas. Toby Heaps over at Corporate Knights has done a great job of outlining a plan. The Toronto-Dominion Bank has also released their plan. (Both of which, by the way, are largely consistent with what the Green Party has been saying for years.)

And yet, at this rate, in 2020 we’ll still be going in circles. Let’s not let that happen.