Category Archives: economy

Knowing limits

Adapted from remarks delivered to the York Model United Nations in February 2009, and recently rescued from my drafts folder.

batmanIn the film The Dark Knight, there’s an exchange between Bruce Wayne and Alfred Pennyworth about limits. Specifically, Alfred warns Bruce that he needs to “know his limits.” Bruce first rejects this idea, claiming that “Batman has no limits.” When Alfred points out that, while that may be true, Bruce Wayne does have limits, Bruce counters that he “can’t afford to know them.”

“And what’s going to happen on the day that you find out,” Alfred asks.

“We all know how much you like to say ‘I told you so,'” Bruce says.

“On that day, Master Wayne,” Alfred says, “even I won’t want to.”

People within the green movement have been talking about limits for years. On a finite planet like ours, there are limits to growth, whether you’re talking about energy generation, the economy, or how much we can squeeze out of the environment. In fact, the recognition of limits has often been used as the key distinction between the Green party and other political parties. In 2004 David Suzuki was the keynote speaker at a federal Green party convention in Bragg Creek, Alberta where he told us that the Green party was the only party that understood limits to growth.

Contrary to popular belief, and despite the party’s own messaging and positioning, most Greens I know have been very concerned about an impending economic collapse for years, and have been focused on it as the core challenge we should be addressing. We have recognized that the environmental, economic and energy crises are interrelated and must be dealt with in a coordinated fashion.

The response from most people to these realities, including our political leaders, has first been one of denial (“we have no limits”) then one of inconvenience (“we have limits but we can’t afford to know them”). The first goal of the green movement was to convince people that it was better to understand our limits and discover them on our own terms rather than encounter them unexpectedly in a way that would have disastrous consequences.

By many measures, that objective was not met. I don’t mean to say I’ve lost hope for a better future, because I have not. But realistically, many of the things we should and could have prevented will now come to pass. There were limits to how far we could push destructive economic growth, and we have learned (some of) them. There are limits to how much we can abuse and take for granted our environment, and we are beginning to learn them. There are limits to how long we can continue to exploit our current sources of energy at current rates, and we are rushing towards them. We are stumbling towards the triple E crisis instead of meeting it on our own terms.

The day has arrived where we can now say “I told you so.” And on this day, we don’t want to. Nor should we waste our breath. The fact that we’ve allowed the great challenges of our time to become even greater only means that we must focus more than ever, and work harder than ever, on solving them. Every time we miss the mark, we will redouble our efforts and start anew.

Learn the name Umair Haque

“The AIG bailout was the most pernicious kind of cronyism – not even crony capitalism, but crony socialism. When we zoom out, that’s exactly what the curiously lopsided payoffs hedge funds get are. ..

What was, with the AIG bailout, a mere crack in the economic firmament is now a gaping fissure. The result of the financial coup d’etat is a Great Divergence: we we have two economies running in parallel: capitalism for the poor, and socialism for the rich. The former essentially subsidizes the latter endlessly and perpetually.”

Heroes 2008: Peter Victor

Torontoist invited me to contribute to this year’s Heroes and Villains (“the people, places, and things that we’ve either fallen head over heels in love with or developed uncontrollable rage towards over the past twelve months”). Below is my hero entry. Interesting to read similar sentiments in The Toronto Star.

In the years leading up to the present economic collapse, economist Peter Schiff made numerous appearances on American news networks foretelling the coming maelstrom with uncomfortable accuracy. His prescience was roundly rewarded with mockery, not just from the other guests but also from the network hosts themselves. (Torontoist can’t help but feel a certain amount of empathy with Schiff. In last year’s Heroes and Villains, we wrote that “the subprime mortgage crisis, which began late last year but really picked up steam in the last few months, is not going away. In fact, it is a trigger incident that will continue to unravel the American economy into 2008, almost certainly leading to a recession and likely a depression.” That entry, for what it’s worth, received only 1.1% of the villain votes. It’s fine. We’re over it.)

Now that some of the worst-case economic predictions are playing out, smugly saying “I told you so”—while satisfying—isn’t particularly helpful. Many of the economic myths we’ve grown up with are being systematically dispelled, so simply rebuilding the economy as it was before this collapse is inadequate. Instead, we must re-imagine how our economy functions and what we expect it to do for us.

Enter Peter Victor, an economist at York University. For the last several years, Victor has been pursuing, in his words, “a topic which is anathema to most members” of his profession. Specifically, the idea that “people in rich countries can and should manage without economic growth,” not just because “it is implausible that the biosphere can support the nine billion people…who are expected to be on the Earth by mid-century at a standard of living remotely like that of current day North Americans,” and not just so that “people living in poorer countries can enjoy the benefits of economic growth where it really makes a difference,” but because “there is plenty of evidence to show that economic growth is doing very little to increase the happiness of most of us in rich countries.”

Victor’s timely new book Managing Without Growth: Slower by Design, Not Disaster argues that government should shift its focus away from economic growth as its pre-eminent policy objective towards more effective measures of well being, and offers specific ideas on how to get there within a Canadian context.

Like Peter Schiff, Peter Victor will likely face strong opposition from some. Proposing to overhaul some of our most basic assumptions about how economies should function is no easy task. But that’s part of what makes it courageous, and perhaps just a little bit heroic.

Innocent oversight

Dear Rodney,

Thank you for placing a carbon tax estimator on the Progressive Conservative Nova Scotia Caucus website. As someone like you who is engaged in our democracy, I always appreciate it when our elected officials make an effort to educate the public about their various policy choices and what the impacts of those choices could be.

It’s in that spirit that I draw to your attention a critical missing component of your carbon tax estimator. As you know, the Liberal Green Shift plan, as well as the more detailed and aggressive Green Party “green tax shift” on which  it is based, both hinge on a carbon tax being offset by reductions in other taxes, primarily payroll and income. Your carbon tax estimator attempts to tell people how much they would pay in carbon taxes, but does not also allow them to calculate how much they’ll save in reduced income and payroll taxes (what someone more clever than I has called a “tax cut on everything”).

This oversight, which I’m sure is innocent and accidental, inadvertently gives Nova Scotians a very inaccurate impression of what a green tax shift would actually mean for them. I trust that you’ll address this error promptly now that it has been brought to your attention.