Media, Technology and Society

Praise for "Growing Global Leaders: The 'Hollowing Out' Solution"

I just read with great enthusiasm an article by Roger Martin, Dean of the Rotman School of Management, and Gordon Nixon, President and CEO, Royal Bank of Canada.

Basically, the article argues that the years 1990-2030 will involve a fundamental change in corporate structure in the world, from a world of many industrial centres and thousands of large corporations, to a world where a few major regions (and correspondingly countries) dominate activity in a particular industrial sector. Think Microsoft's domination of operating systems, or Hollywood's domination of movies. The authors refer to this phenomenon as "spikiness". The nations that put in place effective policies to make sure their nations companies are the ones that house "spiky" clusters of powerful companies are the ones with a more secure, safe future. The whole concern with "hollowing out" of national industries by larger international buyers and conglomerates is basically the symptom of this larger economic reorganization - a kind of second industrial revolution. The authors argue that the companies that positioned themselves well to take advantage of, and be leaders in the first industrial revolution dominated the global economy for the next century, e.g. Britain's succesful practice of the industrial revolution between 1780-1820 enabled it to be a world power for most of the next century. Similarly, nations that attract, retain and nuture clusters of spiky industries will be the nations whose companies acquire other companies, rather than the other way around. The authors also make some excellent arguments about tax policy and how poorly Canada's government is equipped to nurture strong, Canadian companies:

"Since 2003, seven companies, a full 15% of our precious stock of companies ceased to be Canadian companies and this trend may be accelerating. One company exited the list in a perfectly happy way - Placer Dome was acquired by Barrick, another Canadian company on the list. However, six were acquired by foreign firms, half ow hich (ATI, Domtar, and Masonite) were firmst hat built a global position between 1985 and 2003. that is a lot of hard Canadian work to get taken out by a foreign investor".

The authors then expose the inadequacy of current left/right thinking on tax. I just LOVE this paragraph:

"There is a very interesting relationship between corporate taxation strategy and socialist background: the more socialist the ethos of the country, the more the country has figured out how to be intelligent about corporate income taxation. In addition to Scandinavia clocking in at 19.6% the four OECD countries that were formerly Communist-controlled average a mere 14.2%. It is ironic indeed thatthe socialists are more pragmatic rather than ideological about business taxation. Canadian policy falls prey to an important categorical fallacy in respect to corporate taxation. Our logic of fairness holds that poor people make little income and should pay little tax; middle class people make moderate income and should pay moderate taxes; rich people earn lots of income and should pay high taxes; and corporations earn huge income and should pay really high taxes. But corporations are a different category altoghether; they aren't like rich people only richer. They are legal constructions whose purpose in the modern economy is to invest, innovate and create high-paying jobs. Taxing them highly, as all the socialists have figured out, works against them investing, innovating and creating high-paying jobs. As the socialists have figured out, the way to tax corporate activity is to tax at a personal level the earnings that rich people collect from the ownership of corporations....the question is not lower taxation overrall; that is not the fundamental problem. The question is not left versus right; that is a red herring. The question is how to structure taxation so that corporations have the best chance of becoming global leaders and well-to-do Canadian individuals pay their fair share of the overral tax burden".

A question I have for critics of Canadian tax policy, who argue Corporate taxes should be raised (Jack Layton?), would be whether those critics would be happier with non-Canadian corporations paying higher tax down the road? Small Canadian corporations with often competitiveness-handicapping regulatory restrictions face an uphill battle on the global scene; tax them and they will fall, only to give way to larger conglomerates that can use their market power to balance out the affect of an adverse business tax environment.

US Democrats Win Control of Congress

Six years of a Republican majority in the house of representatives and senate came to an end today. George Bush will somehow have to manage a concilliatory tone when he calls expected Democratic speaker of the house, Nancy Pelosi for a congratulatory call in the next couple of days. While news of whether the senate will pass into Democratic hands is uncertain at present, the implications of a republican president and a democratic congress hold several possibilities.

As some CNN commentators suggested, the results of this midterm election may portend a deadlocked, ineffective next two years, defined by a congress which challenges presidential power in ways Mr. Bush has never before experienced, and a president who can use his veto power to thwart congressional actions.

Others noted the possibility that Mr. Bush and the Pelosi-led house will strike a centrist balance, aiming to pass moderate legislation and actions which may satisfy an empowered alliance of moderate republicans and conservative democrats.

As far as policy on the Iraq war - the key issue in this election - Mr. Bush is not likely to change the course. He has nothing to gain politically from a pullout, and little to lose.

Attention now turns to the broader implications of this election. Is this result nothing more than a vote against the Republicans, as opposed to a decision actively in favour of the Democratic party's agenda? Most analysts suggest that, at this point, this is a referendum against the status quo, and the extent to which the GOP represents that unhappy set of policies.

Nonetheless, the disquiting last-minute surge in Republican support, as well as the nail-biting insecurity among Democrats over their ability to obtain a victory - despite an extraordinarily favourable political environment - suggests that popular support for the Democrats may not necessarily accompany this victory. In fact, it may simply allow a temporarily weakened Republican party to re-energize while they prepare to vigorously compete for the 2008 presidential campaign.

To succeed long term, the Democrats must turn their image around with this victory, and establish a reputation for competence, effective centrist social and economic policies coupled with rigorous defence of their constituent's interests. Alternately, the greater prominence their party has achieved holds the risk of highlighting a continuation of their historically lacking party organization and inability to inspire mainstream voters.

Barack Obama for President?

Speculating about possible presidential candidates is a time-tested occupation of pundits and people that just like to make ridiculously inconsequential prognostications about just about anyone with any possible chance of becoming the USA's commander-in-chief. Btw, doesn't "commander in chief" just sound American, in a way that "Prime Minister" doesn't? Quite. In any case, Barack Obama is a very interesting figure on the US political landscape, and the thought of him becoming president is vastly more intriguing to contemplate than other possible candidates such as John McCain or Mitt Romney.

Supporters say he appeals to black and white voters alike. He is also said to have an ability to connect with white rural and small-town voters - a trait Mr Obama puts down to his family background. (Source).

Why should you care? Obama had this to say on the Iraq war:

"When we send our young men and women into harm's way, we have a solemn obligation not to fudge the numbers or shade the truth about why they're going, to care for their families while they're gone, to tend to the soldiers upon their return, and to never ever go to war without enough troops to win the war, secure the peace, and earn the respect of the world," (Source).

Weigh in on Obama's presidential chances at Mens Vogue...

Shwarzenegger Shows Us How Its Done

Shwarzenegger is, on the global warming issue, a fresh, invigorating breath of air in what is mostly (atleast in US politics) a dense cloud of hypocrisy and myopic thinking. Well done governor. See the implications of the California governors landmark global warming legislation here....

Reflections on "Hegemony or Survival"

I just finished reading an article in the NYT noting that after Venezuelan president (or ruler, depending on how you look at it) briefly held up Noam Chomsky's "Hegemony or Survival" during his excited and hilarious speech at the United Nations recently, sales of this book have skyrocketed. As for Hugo's "standing where the devil stood" speech, it is absolutely fantastic to see someone match the verbal lunacy of good ol' GW with some equally silly allegations that Mr. Bush personifies old man satan himself. The part about the area "smelling like sulphur" was just priceless. Way to lay the proverbial smack down Hugo. I for one, would prefer something entertaining like that to Iranian president Mahmoud Ahmadinejad's more measured, calculating and frankly, scary approach.

In any case, apparently Hugo has prompted a significant rise in sales for Chomsky's several-year old book. Although I haven't yet read this book, the first few pages (which are available free) are very intriguing, and very worrying. Here is the introduction:

"A few years ago, one of the great figures of contemporary biology, Ernst Mayr, published some reflections on the likelihood of success in the search for extraterrestrial intelligence. He considered the prospects very low. His reasoning had to do with the adaptive value of what we call "higher intelligence," meaning the particular human form of intellectual organization. Mayr estimated the number of species since the origin of life at about fifty billion, only one of which "achieved the kind of intelligence needed to establish a civilization." It did so very recently, perhaps 100,000 years ago. It is generally assumed that only one small breeding group survived, of which we are all descendants.

Mayr speculated that the human form of intellectual organization may not be favored by selection. The history of life on Earth, he wrote, refutes the claim that "it is better to be smart than to be stupid," at least judging by biological success: beetles and bacteria, for example, are vastly more successful than humans in terms of survival. He also made the rather somber observation that "the average life expectancy of a species is about 100,000 years."

We are entering a period of human history that may provide an answer to the question of whether it is better to be smart than stupid. The most hopeful prospect is that the question will not be answered: if it receives a definite answer, that answer can only be that humans were a kind of "biological error," using their allotted 100,000 years to destroy themselves and, in the process, much else.

The species has surely developed the capacity to do just that, and a hypothetical extraterrestrial observer might well conclude that humans have demonstrated that capacity throughout their history, dramatically in the past few hundred years, with an assault on the environment that sustains life, on the diversity of more complex organisms, and with cold and calculated savagery, on each other as well."

Read more here.

The frightening thing about reading Chomsky's arguments are his powerful intellectual rigour, and the intelligence with which he considers the human condition at present. His view is one of dispassionate rationality, calmly engaged in coming up with persuasive frameworks to describe how we can act irrationally on a massive scale. How is that humans can display impressive intelligence on an individual scale, and yet, when organized within various larger systems (of allegiance, belief, practice, etc), can act in a pathological manner?

Chomsky has described the act of purchasing an automobile as rational on a small scale, and yet, pathological on a wider scale. Perhaps this is just it. The over-arching negative consequences of human behaviour, especially that which takes place within advanced industrial societies, is too externalized from the individual actor. In economics, externalities prevent the individual from knowing the true costs associated with a given action.

While I do entertain considerable hope that the externalities that have so far 'allowed' humans to destroy the environment which sustains the survival of the species, and wage "cold and calculating" war on one another, these disincentives are likely to catch up to all of us - hopefully in time to preserve the opportunity for change. In many areas, there is hope. It is noteworthy that the incidence of global wars and conflicts has declined markedly since 1950. There are indications that the ozone layer is on the mend, after decades of perforation from harmful chemicals which were subsequently banned by international treaty. Why the record of ozone depletion and subsequent restoration is not a powerful symbol for the power of international ageeements such as Kyoto - I have no idea. 

Nonetheless, it is sobering to consider the condition of the species at this point in time. The demonstrated capacity of nation states and global humanity to act irrationally - as a whole - is scary. The supreme arrogance and disdain with which we conduct ourselves on this earth suggests that few of us ever really comprehend our situation. Do we know how insignificant we are as a species? Do we know how precious is our world, based on how rare our planet is?

In a few weeks I plan to visit an exhibit at a local science exhibition in Vancouver called "bodyworlds" featuring human cadavers in all their complexity and splendour:

"From entire bodies posed to highlight specific anatomical features to side-by-side comparisons of healthy and diseased organs, BODY WORLDS 3 is a stunning exhibit featuring almost 200 authentic human specimens". See more...

One of the conclusions people have made upon viewing this exhibit is, not just the horror of what human bodies look like when they have been damaged by cigarettes, alcohol and other substances, but also the startling conclusion that our differences - are skin deep. All of the concepts that we organize ourselves with as a species, religion, kinship structures, economic systems, nation states, etc, are all located within our consciousnesses.

There are alternate ways of organizing our world and our species. Perhaps we can see our societal structures for what they are - see them as artificial, as 'constructed'. Far too often, we label ourselves according to nationality, religion, gender, ethnicity. These labels are often necessary, of course. However, we often fall into the trap of believing these labels to be inherent and natural. We forget that concepts such as nationality, ethnicity and others, have a history. They didn't always exist, or atleast not as we currently understand them. Perhaps some day, we will grow beyond these barriers and differences, and act rationally as a species.

Think of it this way. Do you see "America" or "Canada" from the view of the International Space Station? No. You see a continent. You see a world of water. Borders are meaningless.

Think of how our planet looks 1,000,000 kilometres out into space. Do you see Israel and Palestine? Are those conflicts meaningful? No, they're pathetically insignificant. In fact, the whole world becomes insignificant. We, become insignificant. We're a tiny, tiny drop of sand in a big, big beach. As Carl Sagan noted in his book by the same name, things look a lot different when you see our world as a pale blue dot amidst an infinite cosmos.

I can't help but invoke utopian narratives such as Star Trek as inspiration for what a species behaves like once it has had its small consciousness expanded. In the age of the "federation" classifications according to nationality on Earth are insignificant. The rationality of personal wealth maximization is no longer "the guiding force" behing human activity (well, for societies within the global capitalist order). Instead, the species is important, and the way the human species behaves is important. How "earthlings" treat other species on their home planet is important, especially when it comes to relating to other species from other worlds. Perhaps it would help if we were to realize we were not "alone" in the extraterrestrial sense. In such an albeit impossibly unlikely case, we would be forced to reckon with how we "appear" as a species. Perhaps being forced to accept responsibility not as individuals, or nations, but as humans, we might act towards a good which goes far beyond our narrow self-interests.

In an economic sense, if "the good of the species," which inherently depends upon the welfare of other species - can become an individual preferences, than the selfish pursuit of this good can result in a better future for all. I still believe that rational self-interest explains more of human behaviour than do other theories. Yet, this theory does not have to bind us all to selfish material maximization. "Rationality" need not involve materialism, but rather 'other goods'. These other goods, generally neglected in the current order of things, need to become central again.

Consider the concept of 'honour'. For many, the desire to be recognized and honoured among peers outweighs incentives around material maximization. It is not difficult to conceive of how a society can reorganize itself to create incentives for an individuals rational self interest, which if pursued, don't destroy the earth, but rather preserve it, as well as human society. This concept is highlighted in a utopian novel by 19th century author Edward Bellamy, who argues for non-capitalist system of labour and incentives.

Well, there's a lot to consider. The future need not be hopeless, but it is certainly better to be "safe" than "sorry". It is in that sense that everyone should read Hegemony and Survival, especially if you are on the right. Everyone who is not clued in about climate change should inform themselves. Pick up a science journal. Visit davidsuzuki.org. Enlighten yourself. There is no excuse for ignorance.

In the broader sense of evolutionary survival, it is still an open question as to whether it is better to be smart than stupid. Personally, I would place my bet on a) bacteria b) ants or c) cockroaches. Humans would be a distant 10 the 24th power, or perhaps an even smaller number if we're still driving SUVs in a decade.

News and Blogs....

• Bush promises 'consequences' for Iran on that country's plan to ignore nuclear deadline. Also trots out plan to rescue US republican mid-terms through unprecedented speeches on 'terrorism'. Honestly, who will tune in?
• Foo fighters go drinking with miners.
• Hatchet man Donald Trump fires co-executioner Carolyn Kepcher, installs daughter. What kind of real business works like this? 
• More on the anti-SWC crusade: stamping out equality in the name of....equality pretty much sums it up.
• Schwarzenneger passes global warming legislation in California. Hopefully this results in a change in political direction on this issue for moderate republicans.

Yes. Lets Eliminate Status of Women. Because Women have achieved Full Equality in Canada.

File this under the totally ridiculous pile. Along with news that plan b (birth control) took so ridiculously long to get approved by the U.S FDA. Unbelievable. But I digress. Apparently, several conservative blogs in Canada have signed on to a campaign to eliminate the Trudeau era, and therefore inescapably evil government department called "Status of Women Canada" - a department created to advance the project of women's equality. Yes, lets go BACKWARDS shall we? Why stop there? I know several REAL women that would be simply delighted to lose their legal personhood as well, so they would technically only ever be the property of individuals of the male variety. I cannot wrap my mind around this.

"Says blogger Steven Janke of Angry in the Great White North: “Any women's group that does not subscribe to a ‘woman as the victim' view is likely to leave empty-handed if it were to ask for funding.”" (globe and mail).

Has women's equality been achieved yet? Even if it is achieved, there would still be utility in having a government organization in charge of ensuring that gender equality is advanced as much as possible in the corridors of power in this country, to ensure that gender regression doesn't occur in the future.

Just yesterday, the Liberal Party met in Vancouver to discuss ways that the party could become more gender inclusive and reach out to younger women in hopes of making the party more equal in the future. Granted, conservative bloggers do not necessarily speak for the federal conservative government, but where there are social conservatives, ridiculously regressive crap often follows.

According to the globe and mail report, the government is not as yet, politically suicidal enough to touch this issue, and although some are worried about what might happen if Stephen Harper were to form a majority, I personally suspect Harper primarily wants power, and if he has to sacrifice the social conservative project to do so, well so be it. That's my feeling, I could be wrong.

Either way, this file needs to be relentlessly watched to ensure that this valuable department doesn't fall by the wayside. It is indeed embarrasing as Liberal MPs pointed out for Canada to be engaging in assisting a country, Afghanistan, which has more female representation than this country.

Should Canada be doing more to help those on Welfare?

According to the National Council on Welfare, "it's a moral outrage that Canadians on welfare are receiving some of the lowest payments in 20 years."

"A report released Thursday by the National Council on Welfare suggests the 1.7 million Canadians on welfare in 2005 saw some of the lowest welfare rates since 1986.

"We have forgotten about these people and I think it's morally disgraceful," said John Murphy, the chair of the council" (cbc news).

Most striking among the provinces record of declining welfare payments is Alberta - Canada's richest provice, which pays among the least to welfare recipients. This is not particularly surprising, considering Alberta's long history of economically conservative public policy-makers.

But is it good policy? Is it fair?

It would seem that on the one hand, having below-subsistence level welfare payments for those who could otherwise work (or educate themselves to increase their employability) decreases the incentive to choose welfare over market-based sources of economic survival.

On the other hand, are those who are on welfare wrongly classified as being "employable" or capable of training themselves to become employable? Are they mentally ill, afflicted with substance-abuse issues, or behaviourally incapable of obtaining employment?

It doesn't seem logical necessarily to increase welfare payments to those in economic need purely because there is an excess of money in the provincial treasury. What is the best public policy choice? How will increasing welfare payouts affect existing market incentives to find a job, and or obtain workplace training?

More Non-Confidence Shennanigans....

The Canadian parliament appears to be hard set on winning the "news generator of the year" award. Hardly a day goes by without a news conference called by one of the opposition parties panting about broken alliances, new alliances, other opposition leaders that act like chickens (Conservative Leader Stephen Harper of the NDP leader, Jack Layton), and on it goes.

The opposition parties are still trying to act like they have no confidence in the government without actually voting out the government in an official non-confidence vote - all in the interests of allowing the government to function well enough to pass bills and actions favoured by the opposition, while at the same time, making it clear to the government that they have no REAL confidence in it, and, not appearing to be the "bad guys" who would dream of calling a Christmas election.

Sound confusing?

At the same time, the opposition parties, especially the NDP are worried about calling an election just after Christmas as well, since that might be a time when many Canadians are still away on holidays. Similarly, the NDP leader Jack Layton appeared to have committed a faux pas in demanding a February election date, since much of February will coincide with Chinese celebrations of the new year - for Jack Layton's wife, Toronto City Councillor Olivia Chow (OOPS!), and many in British Columbia and elsewhere in Canada, this may involve ten-days of celebration and travel to the Chinese mainland to visit family. This is especially problematic since the NDP enjoys a relatively high level of support in BC...

Welcome to Parliamentary Shennanigans Act II.

The Moral of the Story: The opposition parties come across precisely as Paul Martin would like them to: indecisive, immature, conflicted, divided, and most importantly, un-leader-like.

Ultimately, this whole charade could end up playing in the Liberals favour. Drastically, zero attention is being focused (outside Quebec, where that province obsesses over Gomery without end, or emotional bankruptcy) on the Gomery report and charges of liberal government corruption.

Meanwhile, the Prime Minister and his party unveil economic reports, spurn playing the "politics" of the opposition parties and continue to "govern the country".

A better liberal government advertising campaign couldn't be dreamt up if one tried. 

US Popular Discontent: A Boon for Democrats?

Hurricane Katrina. Iraq. The Valerie Plame Affair. Skyrocketing Oil Prices. Federal Budget Deficit. Divide between "Have's and Have Nots." Tom Delay's Indictment. Harriet Miers. The Lewis Libby Affair.

All of the above factors have stalled a vigorous Republican governmental agenda which, following the fall 2004 election, had seemed insurmountable. A series of polls conducted by the Pew Research centre in October have painted a stark picture of malaise towards key US institutions: the government and business (especially oil firms, unsurprisingly).

Unfavourable opinion towards business corporations has risen from 22% in 2000 to a two-decade high of 45% in late October.

Government, faring little better, has slipped from a high of 82% favourability in 2001 to just 44% percent of people expressing positive general opinion in late October.   

According to the research data, no one issue stands out as the root cause of these low favourability levels. Perceptions of corruption and cronyism along with mismanagement of key domestic policy events and issues (Hurricane Katrina, Fiscal Management, Foreign policy) have all contributed to overall poor favourability levels.

However, do negative perceptions of such nebulous institutions as 'government' translate into equally negative opinions of both federal parties? According to the survey, the results are still quite differentiated between parties, although not all malaise towards the current federal government translates into support for the opposition party, the Democrats. In fact, opinion towards Democratic leaders is just as negative as that of Republican leaders, at 32% approving, and 48% disapproving. That said, the Democratic party as a whole appears to be gaining in favourability as the Republican party absorbs the bulk of popular criticism. This trend may indicate "favourability by comparison," as opposed to public support based on the Democratic parties stance on issues, achievements and merits.

Indeed, many political commentators have noted an absence of visible Democratic criticism of government policy and management - most notably during the Hurrican Katrina Crisis. From a Democratic standpoint, this can be viewed in both a negative and positive light. In negative terms, it may signal that some support for the party is weak, being contingent on negative opinion of the governing Republicans. On the positive end, it signals to party leaders that there is an unexploited opportunity to carve out more party Democratic support from flagging right-leaning Democrats and frustrated moderate Republicans.

Clearly, there is room for the Democratic party to upend many long-held pillars of support for George Bush's Republican administration. Mr. Bush campaigned for office promising fiscal discipline, an isolationist foreign policy and honest governance. According to popular and critical perceptions of the ballooning federal deficit, a solidly neo-conservative foreign policy stance and the Libby and Plame affairs, Mr. Bush is on thin-ice with all three platforms.

Internationally, Mr. Bush and his administration are often seen in skeptical terms. Bush's Summit of the Americas speech advocating Latin American countries to strive towards "increasing democracy" and "securing free trade" through adherance to the rule of law struck many world leaders and policy experts as hollow. Canada's prime minister, Paul Martin, had just previously admonished the US administration at a Washington Economic conference for failing to abide by a NAFTA ruling on a softwood lumber dispute between the two countries.   

Although many economists and policy analysts regard the Democratic party as hardly less prone to sympathy for "anti-trade" domestic lobby groups, room certainly exists for the Democratic party to exploit international apathy towards the governing Republican administration. Although such a stance might help earn the votes of some business conservatives, a more likely route to popular support may lie in exploiting American views of the Republican administration as essentially untrustworthy. In this regard, 40% see the Democratic party as being capable of governing in an honest and ethical fashion, as opposed to 30% for the Republican party, a disparity not seen since 1994 (link).

With all this public opinion seemingly in favour of the Democrats, are there actual indications that a thaw in US conservatism is on the upswing? Well, maybe. US Democrats have jubilantly declared victory in off-year elections for governor in the states of New Jersey and Virginia. In California, a series of key proposals by Republican governor Arnold Schwarzenegger limiting the political power of public sector unions, increasing teachers probationary periods and mandating that teens obtain parental permission for abortion were decisively rejected by voters.

However, Republican party governor of New York, Michael Bloomberg, easily defeated his democratic rival during the same week - in a solidly Democratic state no less. Although some news sources such as the New York Times have attributed this victory to the weakness of Bloomberg's opponent, this election underscores the simplistic fallacy of obtaining national prophesies from often very regional political trends.

While these signs of discontent towards the general direction of the US and its governing republican party, there is no reason to confidently predict a Democratic victory in the 2008 federal election. As Republican strategists have pointed out, the redistricting of several congressional districts (especially in Texas) in that parties favour have reduced the number of trully competitive seats. Democrats would need to dramatically increase their public presence, perhaps obtain a new party leader if the current leader, Howard Dean, fails to appeal to moderates in both parties, and vigorously outline their own agenda for the future if they are to seriously entertain the prospect of overturning the current conservative political hegemony, however stalled it might be.