whither or wither?

February 15, 2009 9:41 AM

What is the future of capitalism?
a) 3.0
b) Canada* ([1],[2])
c) 'smart growth' (viz.)
d) none of the above**

*cf. Spain ([1],[2])
**cf. trust networks

posted by kliuless (86 comments total)

As long as business schools keep teaching that labor is a cost (and not an investment), and the money that goes into execs'/investors' pockets is profit, we will be on the same path.
posted by hal_c_on at 9:57 AM on February 15 [11 favorites]

What is the future of capitalism?

b) Canada* ([1],[2])

Canada's problem is that there is not a lot of innovation here. We're a small country, and there is lack of access to capital. We depend on exports. We also depend on resource extraction, and energy.

I wish we were more like Denmark, which developed wind-turbine technology, or we were more like Finland (Nokia).

A healthy banking system means nothing with 10% unemployment, which is where we are going to be by the end of the year.
posted by KokuRyu at 10:05 AM on February 15 [5 favorites]

Oh, the answers always 'none of the above' when there's the option is there. Also, it wouldn't be so bad if capitalism went away.
posted by fuq at 10:08 AM on February 15 [4 favorites]

I know this is just how economies work these days, and I should get over it, but it still seems very strange to declare the Canadian banks "geniuses" for only lending out eighteen times as much money as they actually have, instead of twenty-six times.

A question which certainly betrays my complete ignorance of macroeconomics: other than the fact that you can't get there from here, what would an economy look like in which leveraged investments were impossible but the money supply was eighteen times (or twenty-six times, or 61x, whatever) what it currently is to make up for it? Would production grind to a halt for lack of investment, or would it all even out in the end?


Also, it wouldn't be so bad if capitalism went away.

What do you have in mind to replace it, exactly?
posted by ook at 10:12 AM on February 15

Marxism! (Ask any English major.)
posted by oddman at 10:13 AM on February 15 [5 favorites]

Ah, of course, how could I forget. Well, at least we got that out of the way early in the thread.
posted by ook at 10:15 AM on February 15

Well, if you tell me I have 2.0, then obviously I want 3.0. Especially if it costs a lot, so I can look down snobbily on those still only running on Capitalism 2.0.
posted by jamstigator at 10:23 AM on February 15

Oh, and if we're lucky, Steve Jobs is working on the new 'iconomy' to help us all out.
posted by jamstigator at 10:25 AM on February 15 [3 favorites]

Canada's problem is that there is not a lot of innovation here.

We'd have a lot more innovation, and productivity, if we started putting more money back into education and training. It would also avoid the aweful situation that's about to happen in places like Oshawa where you know the plant is going to close down but you don't have the means of changing trades, so you're stuck waiting for the layoffs to happen.

I think the division of education between the provinces has stopped us from a national standpoint of raising the bar and making education more accessible. Each province dismisses doing more by pointing out "we're doing better than some provinces" with those some provinces being in enough hurt that education isn't high on their priorities. We should be looking internationally and realizing that when stacked up to many European countries our education system needs a real boost. Smarter and better trained workers will make for more successful companies.
posted by furtive at 10:30 AM on February 15 [4 favorites]

We'd have a lot more innovation, and productivity, if we started putting more money back into education and training.

I absolutely totally agree. Post-secondary education should be free.
posted by KokuRyu at 10:32 AM on February 15 [3 favorites]

Usually after my empire gets too big I switch from free market to state property to cut down on maintenance costs, but if I'm not going for a domination victory or if I'm running an organized civilization I'll switch to environmentalism for the health boost to my cities.
posted by I Foody at 10:35 AM on February 15 [22 favorites]

we were more like Finland (Nokia)

I don't really see how Nokia makes Finland better than Canada.
posted by You Should See the Other Guy at 10:37 AM on February 15 [1 favorite]

You're comparing RIMM (with $6 billion in worldwide sales and 8,400 employees) with Nokia (with $65 billion in worldwide sales and 128,000 employees)?

Try again.
posted by SeizeTheDay at 10:41 AM on February 15 [3 favorites]

What do you have in mind to replace it, exactly?

Participitory Economics ain't perfect, neither is Marxism, but you know what, at least people are trying to think of alternatives. Also, it's a shame Marxism is forever tainted by 20th Century Communism because it's a damn good theory yet to be realised imo. Marxism is supposed to come after Capitalism but that is yet to be tested.
posted by twistedonion at 10:44 AM on February 15 [5 favorites]

Buddhist Economics
posted by Xurando at 10:49 AM on February 15 [1 favorite]

Also, it's a shame Marxism is forever tainted by 20th Century Communism because it's a damn good theory yet to be realised imo.

Kibbtuz?
posted by PenDevil at 10:52 AM on February 15

First bloke Rodrik sets his ideological stall out early with this: "Capitalism has no equal when it comes to unleashing the collective economic energies of human societies" and it never gets any better. Capitalism has found no equal because one cannot emerge until it is transcended or implodes. He gives a Pollyannaish overview side-stepping primitive accumulation and absent any notion of colonialism and its role in the emergence of the industrious revolution. Nothing on the long and bloody list of imperialist conflicts that have been intrinsic to capitalist globalisation either, and in general a failure to understand that merely because the contradictions have been shifted overseas, they have not gone away; quite the reverse, the destructive potential has been exacerbated exponentially as they play out now on a global stage. He does go on to allow that the only things that have permitted capitalism to survive have been the concessions won against its own logic by its reformers or opponents but then wants to appropriate these as evidence of its "infinite malleability."
What do you have in mind to replace it, exactly?
The economic democracy that will emerge from changed social relations when we win the class war :D. Alternative is a kind of global gangsterism for control of water resources amidst the smoking ruins of failed states. Bookies offering better odds on option two.
posted by Abiezer at 10:54 AM on February 15 [6 favorites]

Also, it wouldn't be so bad if capitalism went away.

What do you have in mind to replace it, exactly?

democracy, please.
posted by eustatic at 10:55 AM on February 15 [9 favorites]

This is America. People do whatever the fuck they feel like doing, you got a problem with that? Because they have a right to. And because they have guns and no one can fucking stop them. As a result, this country has one of the worst economies in the world. When it gets down to it-we're talking trade balances here-once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwaves in Tadzhikistan and selling them here-once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel-once the Invisible Hand has taken all those historical inequities and smeared them out into a broad global layer of what a Pakistani bricklayer would consider to be prosperity-y'know what? There's only four things we do better than anyone else:

- music
- movies
- microcode (software)
- high-speed pizza delivery
posted by mark242 at 10:59 AM on February 15 [4 favorites]

e) Iceland?
posted by terranova at 10:59 AM on February 15 [1 favorite]

Post-secondary education should be free.

No, it shouldn't.

When I attended university, I witnessed many people who were getting an education that was essentially free: their parents were paying the entire shot. Many of those many people underperformed because they valued their new-found freedom from the parents more than they did the opportunity for education.

If there is to be free post-secondary education, it should be reserved for those people who actually perform. Far too many people do not value free things. Students need to pay up front (access to education loans is fine). Reimburse them when they prove that it is worth investing in them.

Also, Canada has a shitload of research and innovating going on. If you don't see it, it's because you're not looking.
posted by five fresh fish at 11:03 AM on February 15 [4 favorites]

Shared decision-making systems like participatory economics, economic democracy, marxism et al all sound really awesome right up until the day when you serve on your first committee or board and see first-hand how good they are at making decisions.
posted by ook at 11:05 AM on February 15

You're comparing RIMM (with $6 billion in worldwide sales and 8,400 employees) with Nokia (with $65 billion in worldwide sales and 128,000 employees)?

Try again.

RIM and Bombardier are exceptions to the rule. How much better off would southern Ontario be if there were more companies like Husky , rather than a bunch of auto-parts suppliers that are dependent on (and totally integrated with) the fortunes of the Big Three automakers in the United States.

Why do construction workers make up 10% of the labour force in British Columbia? Why are the Alberta oil sands the de facto economic engine of Western Canada and the Maritimes?

Vancouver has a fairly large game development sector, but since it does not generate any unique intellectual property, all of these folks exist to serve rather than create. So when EA experiences troubles, the entire games sector in Vancouver is in trouble.

Quebec has a creative, Ubisoft, but that is dependent on a favourable tax regime that no other jurisdiction in Canada is willing to replicate.
posted by KokuRyu at 11:08 AM on February 15

I'm not worried, another Bubble will come along and save capitalism aaannnyy moment now.............?
posted by peppito at 11:10 AM on February 15

Also, Canada has a shitload of research and innovating going on. If you don't see it, it's because you're not looking.

If you only knew more about what I do for a living. Most innovation in Canada is locked up in the universities, which, since the 1990s, have received most of the funding for R&D research, rather than private industry. It's estimated that about 1% of IP generated by universities is actually commercialized. Tech transfer is a huge problem for Canada.

Currently, SR&ED is the only comprehensive federal (and, to some extent, provincial) program in Canada designed to encourage innovation in the private sector.
posted by KokuRyu at 11:12 AM on February 15 [1 favorite]

democracy, please.

Quoted for truth.
posted by dunkadunc at 11:26 AM on February 15

Says FFlaherty: "The credit crisis we're facing is the result of unbridled greed. We need to bridle greed."

this is the exact opposite of the current government's (fraser institute/ctf-inspired) ideology. they could at least be honest about the fact that the banking situation in canada is mostly a) an accident and b) due our wholesale liquidation of raw natural resources for the US market. i mean, this is the same government that indtroduced legislation that would allow credit card down-payments on homes and 40-year mortgages, right? (they essentially ended the latter when they realized what a bad idea it was).

also, what KokuRyu said.
posted by klanawa at 11:32 AM on February 15

Canada pride representz! Actually I'm very worried about the extent we depend on the US to buy our stuff. If I were going to be trying to boost the Canadian economy I'd be fixated on improving cross-Pacific and Atlantic transport to diversify the market we have available. The location is both a blessing and a curse, and being on the leading edge to shift cargo to Asia and Europe more cheaply and efficiently would be a blessing with our staples based economy. As well as that, it'll help mitigate the cultural influences of the US. It would also tie the country together better, improve arctic security and help

Sadly transoceanic rail is an impractical pipe dream and teleportation limited to a particle, but vertical transport could use some more innovation.
posted by Phalene at 11:40 AM on February 15

I think there will be turn to no capitalism, world without money what has no real value anyway! Anyway its interesting point of view, you can find more information about this here: The Venus Project
posted by simmzu at 11:44 AM on February 15

e) "A Boot Stamping On A Human Face.........Forever"
posted by lalochezia at 11:45 AM on February 15 [7 favorites]

What do you have in mind to replace it, exactly?

Morality.
posted by Forrest Greene at 12:05 PM on February 15 [2 favorites]

oh man, do I really have to click all those links to find out whether this is a great post?
posted by krautland at 12:09 PM on February 15 [1 favorite]

What do you have in mind to replace it, exactly?

An economy which uses markets as the most efficient means of exchange but with good regulation from society (aka government) to curb abuses and unsustainable practices, and a society/culture which recognises that capital is an important part of that economy but not more important than labour?

Also, I hope that we, as a collective developed world society/culture, will begin to recognize that high inequality between capital and labour undermines the demand which makes our economy work, and also that our cultural orientation will move strongly away from priviledging growth to valuing stability and sustainability, and the maintenence of the livelihoods of all in society as important to that stability.

I think we could do far worse than to use William Cecil, Elizabeth I's chief advisor, as an example of sophisticated economic thinking. He was a man who realized that in a world of growing disparity (the later 16th century), the loss of livelihoods for the poor would make them a burden or even threat to the whole of society - and who oriented his economic policies around clamping down on those which threatened livelihoods (such as depopulating enclosures) while encouraging the development of small scale manufactures to put people to work. He wasn't anti economic development - he was anti- dumb economic development that hurt more than it helped society. He encouraged the free market, but had no problem with roping it in when it didn't serve the needs of society.

Now, he lived 350 years before Keynes and, being a politician rather than an economist, probably didn't realize that manufactures - and the incomes they generated for the labourers, who could begin to consume more of what they made, generating further growth - would eventually become an extremely important part of the British economy, making this small and not that fertile island one of the richest nations of the world, as it did for the Dutch in the 16th and 17th centuries. (But only one part - this development was heavily supported by colonialism as well - as Abiezer points out above - and the capitalist world really hasn't come to terms which decidedly unfree-market colonialism played in modern western development).

There is a whole universe of possibilities between Marxism and Reaganism - and maybe we should stop looking to the extremes for answers, and instead look to history and research and a better understanding of the relationships between markets and societies. It's not possible to simply control economic exchange - the failures of 20th century Centralized economies have show that effective economies are far too complex to direct with any efficiency. But that doesn't mean we should let markets run roughshod over our society - nor those who gain the most power out of letting the markets run wild. They are like economic pirates - and pirates, though exciting, are still dangerous to the rest of us. Instead we should see markets as tools that we wield to make our world work - and just like any good tool, they should have safety handles - aka regulation - to protect what is really important: the people who make up the society.
posted by jb at 12:12 PM on February 15 [21 favorites]

Oh - and for the sake of our planet, we will throw out that old canard that economic growth is limitless.

Economic growth might be, but our planet is not - and it's no good having a limitless economy when everyone is dead. Cockroaches don't like to shop.
posted by jb at 12:15 PM on February 15 [3 favorites]

enjoyable post. i liked the format. unusual but not annoying. A+ would click again.
posted by Super Hans at 12:23 PM on February 15

What do you have in mind to replace it, exactly?

"You, a single person, don't offer a workable solution to a problem, centuries in the making, which affects everyone in the world. Therefore please stop pointing out that there is a problem."

There will be no one-size-fits-all system that descends from the sky to replace capitalism everywhere. Part of the problem with capitalism is that it now fancies itself a one-size-fits-all system which descends from the sky (often literally, in the form of munitions) to replace whatever previously existed. State socialism was much the same disaster with a different flavour. Anyone who says they know the way to replace the current predicament is deluded or dangerous, and anyone who asks for it is either being disingenuous or dangerous.

Capitalism will always continue in various forms in various places. But in many other places, it won't. And where it is replaced, it will likely be over decades, through countless local experiments, withdrawals, transformations, schisms, and evolutions. There are already places and spaces in the world where capitalism doesn't hold much sway. These places will probably start multiplying as the global economic system shows its weaknesses. Maybe they will eventually start to join together in to some sort of new monolithic global system, but to be honest, I hope they don't.
posted by regicide is good for you at 12:27 PM on February 15 [10 favorites]

Oh and yes, great post, by the way.
posted by regicide is good for you at 12:28 PM on February 15

it's a damn good theory yet to be realised imo.

"Here guys. We're gonna give you absolute power. Once you educated us in the new classless society, give up all your power and control and join us on the farm."

Yeah. Great idea.

We'll have a sensible economy (and society, etc.) when revolution becomes a lifestyle and not a way to swap tyrants.
posted by cthuljew at 12:35 PM on February 15

Fun reading from the dusty world of old pamphlets for the crude reductionists of Marx:

Marx refused to invent recipes for the cooking pots of the future, but he did better – or worse – than this: he wanted to show that historical necessity – like some blind fate – was leading humanity to a situation of crisis where it would face a decisive dilemma: to be destroyed by its own technical inventions or to survive thanks to a leap in consciousness which would allow it to break with all the forms of alienation and servitude which had marked the stages of its history. Only this dilemma was fated, the actual choice would be left to the social class which had every reason to reject the existing order and to establish a fundamentally different mode of existence. The modern proletariat was potentially the material and moral force that was capable of taking up this universally significant task of salvation. However this potential force could not become real until the bourgeois period had been completed. For the bourgeoisie too had a historical role to play. If it had not always been conscious of this, then its apologists had had the task of reminding it of its civilising role. In creating the world in its image, the bourgeoisie of the industrially developed countries embourgeoisified and proletarianised the societies which progressively fell under its political and economic control. Seen from the viewpoint of proletarian interests, these instruments of conquest, capital and the State, were just means of servitude and suppression, but when the relations of capitalist production and therefore of capitalist States had been firmly established on a world scale, then the internal contradictions of the world market would reveal the limits of capital accumulation and provoke a state of permanent crisis which would endanger the foundations of the enslaved societies and threaten the very survival of the human race. The hour of the proletarian revolution would sound the world over.

-- Marx: theoretician of anarchism Maximilien Rubel
posted by Abiezer at 12:53 PM on February 15 [9 favorites]

Capitalism 3.0? But I don't have the cybernetic enhancement for Economy 2.0 yet!
posted by Pronoiac at 1:01 PM on February 15

The way to save capitalism for its economic virtues is counter intuitive to its current practice, but could only be implemented as of now. Simply put, it is a state where everything that is sold has a final price determined by a central computer program that sets a penalty or reward for the product based on its necessity to the economy, and perhaps to the person buying it. For some, a brand new car would be very cheap (perhaps even free, or on an instantly approved loan), while milkshakes and french fries would be inflated for most people who buy them regularly. The difference would be credited to the supplier from overcharges elsewhere. It's a trade for the "lost sales" (which we have too much of now, but not tabulated as such). This would replace all sales taxes of course (and food stamps, and tax credits).

Note that these methods are already in place now, but too little too late, and rarely at the point of sale before the fact. For example, the fed makes adjustments to rates of interest; economists track any and all economic data; financial aid for students take into account the wealth of their parents; and people are taxed and get refunds based on their earnings, etc.
posted by Brian B. at 1:47 PM on February 15

What about moving away from debt based money ? This would be an interesting starting point for a discussion.
posted by wuwei at 1:50 PM on February 15

You forgot Poland.
posted by humanfont at 1:51 PM on February 15

"We're gonna give you absolute power. "

Marxism != absolute power, in the same way Capitalism != Democracy.

Rid yourself of the bogeymen! The Cold War is over.
posted by twistedonion at 3:07 PM on February 15 [1 favorite]

Excellent and very comprehensive post, kliuless. Sort of a hobbyhorse à la carte, if you'll pardon the mixed metaphor. Everyone gets to pick their favorite topic.

And so:

Phalene - Actually I'm very worried about the extent we depend on the US to buy our stuff. If I were going to be trying to boost the Canadian economy I'd be fixated on improving cross-Pacific and Atlantic transport to diversify the market we have available.

KokuRyu - Most innovation in Canada is locked up in the universities, which, since the 1990s, have received most of the funding for R&D research, rather than private industry. It's estimated that about 1% of IP generated by universities is actually commercialized. Tech transfer is a huge problem for Canada.

These concerns, plus the slowing productivity of our economy, are the top three problems Canada faces today. Well, that and the neverending regionalism that seems to be written into our DNA.

We've got a good country. We're still young, but not as young as we used to be. The birthing pains and Golden Spike founding-a-nation stuff took up the latter 19th and most of the 20th centuries. Now with this current crisis we've been tested and our system has shown that it's strong. The next challenge, IMO, is expanding beyond the old limits into a bigger future.

In a way, Canada is like a racehorse that's spent it's whole life in a small fenced off paddock. Now the gate is open and we can run. We're made to run, and we want to do it, but we're also a bit scared and want to stay on familiar ground. Our relationship with the US and our conservatism are the fenceposts of the paddock, but I think that this nation has unlimited potential, and with a little reconfiguration and some courage there's nothing we can't do.
posted by Kevin Street at 3:18 PM on February 15 [4 favorites]

Yeah, I'm not buying that the Canadian model is so laudible. The only reason our banks didn't implode is that they're an entrenched oligopoly, with no incentive to compete. They earn $1.50-3.00 of every Canadian dollar transaction through banking and interac fees. That's basically a private 1% sales tax on the average $20 expenditure, and it nets them obscene profits.

So instead of a crash, we get a slow sucking continuous drain on our economy. That's cold comfort.
posted by Popular Ethics at 3:19 PM on February 15 [2 favorites]

Why do construction workers make up 10% of the labour force in British Columbia?

Er... because we have a helluva lot of construction going on?

Why are the Alberta oil sands the de facto economic engine of Western Canada and the Maritimes Alberta?

FTFY. Because they have a helluva lot of oil going on?

These questions are either subtle or stupid.


Most innovation in Canada is locked up in the universities

And yet the Working Opportunity Funds are choc-a-bloc full of highly innovative startups, several of which have made a mint for the funds. Not to mention that the TSE and the smaller SEs are full of small tech companies that are leaders in their fields. Plus the hundreds and thousands of very small ventures that are not public companies, but are innovative leaders.

For a country with a small population, we have a lot of companies that are creating new ideas and building new things.


the banking situation in canada is mostly a) an accident and b) due our wholesale liquidation of raw natural resources for the US market

And most mostly because Paul Martin did not allow the banks to do what they wanted to do, which was to follow in the footsteps of the American system. That decision was very much not an accident.

I wish we would put Paul Martin back in charge of our economy. The man is an asshole, but he's a sensible one.


f I were going to be trying to boost the Canadian economy I'd be fixated on improving cross-Pacific and Atlantic transport to diversify the market we have available.

Damn straight. Also, we need to quit shipping our raw resources off for processing. It is god damn stupid that BC ships whole logs off to China to be made into lumber and furniture. That shit can and should be done by us.


the internal contradictions of the world market would reveal the limits of capital accumulation and provoke a state of permanent crisis which would endanger the foundations of the enslaved societies

The L-Curve. When a mere 1% of the population has 90% of the wealth, something has to break. I see no reason why the L-Curve shouldn't be flattened.
posted by five fresh fish at 3:22 PM on February 15 [1 favorite]

Most innovation in Canada is locked up in the universities.

What percentage of US innovation is by and for the military? I googled but failed.

I ask because I have known chemists, mathematicians and even psychologists who have received high-paying job offers from the USA all the time... but they're always from military contractors, and so they turn them down on moral grounds.
posted by rokusan at 3:26 PM on February 15

RIM and Bombardier are exceptions to the rule.

Only a Canadian (and one who has no idea what "program accounting" entails) could cite Bombardier with anything approaching approval. There's another aerospace company just down the road that's far more meritorious.

but it still seems very strange to declare the Canadian banks "geniuses" for only lending out eighteen times as much money as they actually have, instead of twenty-six times.

That's pretty glib, and leverage ratios when expressed that way tend to confuse rather than illuminate. Another way to say it is that equity at banks was 4% of assets in the US and 5% of assets in Canada. Which buys you room for 1% more defaults (not exactly, as defaults aren't usually total losses, but close enough for MeFi) in steady state. The bigger differences:
1. Canadian banks are deposit-rich (compared to the US, not compared to Asian banks) and are thus less reliant on wholesale funding.
2. Canadian banks post superior ROEs (mid teens over the cycle) because unlike US banks, they don't beat each others' brains out by competing. They behave anticompetitively.
3. With (comparatively) minor exceptions the Canadians did not engage in SIVs and conduits.
4. The lending books in Canada are (comparatively) mortgage-heavy. With vanilla mortgages.
5. The vast majority of private mortgage insurance in Canada is written by the CMHC, a full faith and credit government agency.

What should still concern investors:
1. If the CMHC actually has to make good on enough of its promises, the loonie will fall to half of parity.
2. Just like those idiots everywhere else, the Canadian regulator blessed the trainwreck known as Basel II. And they do it more like the FSA than APRA. (Australia being the other "safe bank" English-speaking country)
3. Certain banks (TD, for example) have very, very little tangible common equity-- when you strip the goodwill from the assets, not much equity is left (2-3% IIRC, meaning that TD is levered about 40x, if you want to think about it that way).
4. The stresses on the loan book will soon emerge in the energy patch and Ontario's manufacturing center-- neither of which have seen a prolonged recession for quite a while.
5. ABCP (.pdf) appears to be dealt with, but it's still a nightmare.

Don't forget that all the Canadian majors have investment banks. Which you can use to serve whatever political ends you'd like.
posted by Kwantsar at 3:40 PM on February 15 [2 favorites]

twistedonion : Capitalism means several monopolies ruling your life. Communism means one monopoly ruling your life. So capitalism wins every time. As you say, there are far more "participitory" economic systems, but the left definitely hasn't freed itself from certain basic miss-conceptions about human nature. You should read "Towards a Darwinian Left" by Peter Singer.
posted by jeffburdges at 4:06 PM on February 15 [2 favorites]

It's OK - capitalism has identified a source for renewing its cadre.
posted by Abiezer at 4:14 PM on February 15

>Why do construction workers make up 10% of the labour force in British Columbia?

>>Er... because we have a helluva lot of construction going on?

Oh, there has been for the past 6 or 8 years, the lions share of it in the lower mainland, and a big chunk of that residential (tiny concrete boxes in the sky!), all inspired by greed and stupidity and a bizarre inability to learn from history and see the handwriting on the wall. That's turned around very quickly in the past 8 or 12 months, and it's going to get a lot worse. Olympics notwithstanding, most of that 10% is going to be out of work in the next year or two, for a good long while. From what I've been reading, many are out of work already. BC's in for a world of hurt over the next five years, I think, even more so than everyone else is.

>Why are the Alberta oil sands the de facto economic engine of Western Canada and the Maritimes Alberta?

>>FTFY. Because they have a helluva lot of oil going on?

Well, they did, when oil was over $100 a barrel, and, again, people got greedy and shortsighted and ignored history. Now that it's back under $40, things are not so rosy, of course. Of course, with oil, it's a fair bet that over the medium to long-term, the price will climb again. But not before a lot of the explosive growth in northern Alberta, in particularly, collapses quite spectacularly.
posted by stavrosthewonderchicken at 4:23 PM on February 15 [1 favorite]

Speaking as a Canadian who has done business for a US manufacturer in both Canada and the US, Canadians are definitely more cautious and less ambitious with their purchases and investments. This national characteristic of caution, coupled with the apparently smarter management of Canadian banks, is what has left Canada less affected than other countries.

Of course in years past Canada has been lambasted for excess regulation, timid investors, and other factors which meant that we had lower growth during the booms. (But we grew enough, thank you all the same.) And, we're still resource-rich, which is a bonus.
posted by Artful Codger at 4:39 PM on February 15

We'd have a lot more innovation, and productivity, if we started putting more money back into education and training.

This needs to be repeated until the cows come home.
posted by Vindaloo at 4:41 PM on February 15

You Lot!
posted by Lipstick Thespian at 4:47 PM on February 15 [2 favorites]

I have two stupid questions about inflation in Canada :

1) Doesn't the CADs historical tie to USD grant Canada considerable protection against hyperinflation? But likely not against mild deflation.

2) Could Canada theoretically switch to USD if their currency ever ran off the rails?
posted by jeffburdges at 5:16 PM on February 15 [1 favorite]

Capitalism means several monopolies ruling your life. Communism means one monopoly ruling your life.

And Socialism means having significant public control over the/those monopolies, to ensure that in return for the security of a monopoly market, the corporation is operated in the best interest of the public.

I think a number of excellent examples can be found in British Columbia. Our automobile insurance semi-monopoly, for instance, has some of the lowest rates in Canada, is active in identifying and funding the redesign of high-accident intersections, and schedules rates such that people who have proven themselves high risk by putting themselves in an accident are paying one helluva lot more than those of us who have proven ourselves low risk by never being in an accident.

Back when we had a telephone monopoly, rates were tightly controlled, quality of service was held to a high guaranteed standard, the company was responsible from end-to-end including servicing at their cost all problems from pole to earpiece, and was made to upgrade systems over time not by shuffling crappy old systems down the line from big city to small town, but by purchasing new equipment period.

We've lost all that from the telephone company by allowing a semi-oligopoly. Meanwhile, I pay as much for my phone bill as my parents did forty years ago. All the cost, none of the gain — but, boy, look at how the profits for the phone company have soared!

Key components of our society operate most efficiently as a natural monopoly or oligopoly. The least we can do is regulate them in our own best self-interest. It's not like we really have a choice in the matter: we can not allow them to fail through the greed of short-term thinking.
posted by five fresh fish at 5:49 PM on February 15

Could Canada theoretically switch to USD if their currency ever ran off the rails?

I can not imagine a situation in which Canadians would accept such a change. Especially as we are typically far wealthier than Americans, in terms of our personal savings/household worth.
posted by five fresh fish at 5:54 PM on February 15

Canada: "Peace, Order and Good Government".
USA: "Land of the Free, Home of the Brave".

I think this is the "Canadian difference" they are referring to.
posted by sporb at 6:30 PM on February 15 [1 favorite]

George Soros: A Plan for Economic Recovery
posted by ornate insect at 6:53 PM on February 15

BC is also an example of exactly what not to do: BC Rail, BC Gas, BCTel, etc. And don't even get me started on TransLink...
posted by mek at 7:05 PM on February 15

give up all your power and control and join us on the farm

Join us on the farm? You clearly don't understand how Marxism works.
posted by Civil_Disobedient at 7:39 PM on February 15

Reduce world population by 50% and you can run economies using about any system you want.
posted by tkchrist at 7:47 PM on February 15 [2 favorites]

These questions are either subtle or stupid.

You sure come of as being smug and condescending, which means you don't have the skills to effectively argue your viewpoint in a debate.

Construction jobs are not productive, high value jobs, and are not sustainable. They depend on booms, and now that we're in a bust, are among the first people to become unemployed. A tremendous amount of training resources are needed to prepare workers for construction jobs. It would be a lot better if some of these folks became manufacturing technologists (one or two steps above working on an assembly line, as they can actually design simple systems) or something like that.

The Alberta oil sands, while a crucial economic engine, are also distorting Canada's labour market. You can hop on a direct flight from Goose Bay to Fort Mac and work for two weeks, and then fly back home and take two weeks off.

This insatiable need for workers means that other parts of Canada that need workers can't get them. It also \gives little incentive for local governments to figure out a way to springboard their moribund economies into the 21st century. And, once again, the oil sands are hiring and employing people who are not particularly productive. Take away the oil sands and these people are unemployed.

Compare that to a RIM employee. RIM is always faced with international competition, and so it is always innovating new solutions - it's got a workforce that can do that.

Working Opportunity Fund is good, but it's a symbolic drop in the bucket. We need more access to capital. Canada needs bigger companies. Sure, there's a lot of innovation going on, but tech companies in Canada are typically small - less than 100 employees - and they usually end up being sold to foreigners.

Compare Vancouver to Seattle. Seattle is home to companies like Microsoft, Amazon, Real Networks... the list goes on. There's a steady stream of founders or other employees who have cashed out and can act as angel investors.

Vancouver doesn't have that. You've got MDA and PMC Sierra. The biotech cluster is dying. The games sector is a service industry. You have a few boutique VCs and a smalltime angel community. Government will not pick winners and actually invest in a particular industry.
posted by KokuRyu at 7:50 PM on February 15 [1 favorite]

BC Rail, BC Gas, BC Tel, and BC Hydro are all examples of what to do, IMO. They were publically-controlled monopolies. If there were issues with those corporations, it is because we did not exert our public control.

Now, of course, we have no control.
posted by five fresh fish at 7:51 PM on February 15

Exactly my point., fff, sorry to be ambiguous about it.
posted by mek at 8:15 PM on February 15

Most innovation in Canada is locked up in the universities, which, since the 1990s, have received most of the funding for R&D research, rather than private industry.

I believe that's true in the US as well. However, innovation isn't "locked up" in the universities, since it's government funded and therefore available for commercial exploitation, if anyone cares to take the risk. Commercial enterprises rarely come up with the key inventions - that's usually done by academics - but they are great at taking the core invention and turning it into profit.
posted by Mental Wimp at 9:03 PM on February 15

I think a number of excellent examples can be found in British Columbia. Our automobile insurance semi-monopoly, for instance, has some of the lowest rates in Canada

Funny. My roommate from Quebec seems to recall paying half as much for his insurance coverage and they don't have a monopoly. Then there's the things they don't pay for by making up statistics to justify not covering them. "I'm sorry Mr. Pseudology but in BC people only replace their windshields once every 10 years." Then there's the way they shortchange you on damages and try to weasel their way out of their contract using any means neccessary. Worst of all, they never sell their insurance policies except through independent distributors so if your policy is misrepresented they deny any responsibility. (I assume this is normal for any insurance company but I don't see why we need a monopoly if this is going to happen anyways).

If you live in BC and get into a car accident the best advice I can give to you is to refuse to answer any question they ask not pertinent to the accident.
posted by Pseudology at 9:20 PM on February 15

The way to save capitalism...is a state where everything that is sold has a final price determined by a central computer program that sets a penalty or reward for the product based on its necessity to the economy, and perhaps to the person buying it.

It is the will of Landru!
posted by justsomebodythatyouusedtoknow at 9:28 PM on February 15

mek: Ah, you mean what we have lately done with those corporations is a textbook example of what not to do (ie. privatize). Yes, indeed.

Pseudology, your windshield is a consumable in Canada: the road grit is guaranteed to destroy it as part of everyday normal driving. Nonetheless, ICBC will replace eroded windshields for the cost of the deductible. They know that it's cheaper than to have a driver end up in an accident because he couldn't see out the windshield.

My sister-in-law had a parked car totalled by a driver who fell asleep at the wheel. ICBC happily paid the replacement cost, the damage to the garage, storage of items that were in the garage while the garage was under repair, and cleanup.

My wife was run over. ICBC happily paid not onl for her hospital stay, but a lot of physical therapies after she came out of the hospital, including physiotherapist, massage therapist, healing hands touch, a gym membership, various health aids during the home recovery phase, so on and so forth. They went to every length to ensure she had the very best chance of a full recovery.

The settlement for her not becoming fully recovered was an ordeal, yes. No worse than that with any other insurer: they take big-money cash payout seriously.

My father stupidly totalled his vacation van while doing maintenance on it. His own damn fault, but ICBC payed out without qualm.

My every experience with ICBC, and the experience of everyone I know who has had a vehicular claim, has been superlative. My one and only beef was the hell they put my wife through while negotiating the cash settlement for her life-long injuries.

Also, I do not believe for one moment that your friend was receiving equal coverage for half the cost in Quebec. He may have been paying half as much, but he was not getting the same coverage. This I will guarantee.
posted by five fresh fish at 9:42 PM on February 15

BC is also an example of exactly what not to do: BC Rail, BC Gas, BCTel, etc. And don't even get me started on TransLink...

Let's not forget BC Hydro, which despite being superficially one of North America's "greenest" energy companies (in the sense that even large-scale hydro power generates no greenhouse gases), is simultaneously also one of the continent's most bizarrely intransigent opponents of (non-hydro) renewable power and distributed power and anything else even vaguely innovative. I mean freaking Epcor (which runs several of the dirtiest coal plants in Canada) has a more progressive strategy than BC Hydro . . .

/CanadianEnergyPolicyWonkFilter (aka LeastPopularFilterEver)
posted by gompa at 10:00 PM on February 15

Pseudology, your windshield is a consumable in Canada: the road grit is guaranteed to destroy it as part of everyday normal driving. Nonetheless, ICBC will replace eroded windshields for the cost of the deductible. They know that it's cheaper than to have a driver end up in an accident because he couldn't see out the windshield.

Not anymore they don't. I got a letter in the mail explaining why they refused to do it. Something to do with modern buisness practices.
posted by Pseudology at 10:13 PM on February 15

3F
I have a friend who is recovering from a broken neck, pelvis and head damage that would seriously disagree. She pays for rehab and waits, and waits, then begs for for compensation. I'm no professional, but picking at the wounded sucks balls. She is not thinking straight and the bean counters are taking full advantage. Maybe things have tightened up, but I wouldn't approach ICBC without a good lawyer these days.
posted by qinn at 1:10 AM on February 16 [1 favorite]

I believe that's true in the US as well. However, innovation isn't "locked up" in the universities, since it's government funded and therefore available for commercial exploitation, if anyone cares to take the risk.

In Canada, innovation and IP funded and generated by universities is controlled by universities. Therefore, this IP is not easily transferable to the private sector.
posted by KokuRyu at 8:49 AM on February 16

Well, Pseudology, blame it on the asses we elected, who have been slowly whittling away ICBC's monopoly. No doubt they'll be like Telus: just another unregulated member of an oligopoly, perfectly free to fuck us over a barrel and us without a say in the matter.
posted by five fresh fish at 8:53 AM on February 16

The moment you bring in a lawyer, qinn, the gloves are taken off. The last thing you want to do is to take that path.
posted by five fresh fish at 8:54 AM on February 16

FFF, your love affair with ICBC notwithstanding, BC has been by far the most expensive jurisdiction I have bought car insurance with.

Very quick google yields this

Table 1 shows that in straight dollar comparisons, three of the four most expensive average auto insurance premiums in Canada in 2005 were in British Columbia, Saskatchewan, and Manitoba, with British Columbia being the most expensive overall. In a straight dollar comparison, the least expensive average auto insurance premium in 2005 was in PEI.

Admittedly, this is from a Fraser Institute report, but there you go.

More on the topic of the thread, I suspect that part of the reason that Canada is looking good is that it is somewhat out of phase, and lagging a little. Let's check in a year from now, and see how the country (and its banks) have been doing once the full impact of the implosion of BC construction, Alberta's energy and Ontario's auto manufacturing sectors have come in. I hope I'm wrong...
posted by bumpkin at 9:19 AM on February 16

tkchrist: Reduce world population by 50% and you can run economies using about any system you want.
OK, Do you volunteer to go first?
posted by Popular Ethics at 11:15 AM on February 16

OK, Do you volunteer to go first?

How do you want to answer that kind of dipshit statement?

You understand that endorsing reducing world population and family planning is not an endorsement of euthanasia or genocide or the untimely death of anybody presently on the planet. In fact it's a leading principle to avoid such a horrible thing.

If we keep going the way we are wide spread famine, misery for much of the planet a certainty.

And before you waste bandwidth let me predict the next tiresome comment you will make.

"If only you selfish people in the west who endorse would reduce it's consumption and then there would plenty to go around... blah blah blah." It's like a script. People who snark "you first HURF DURF." will inevitable go on to make the next fallacious argument, usually involving some appeal to racism as a motive. Well then if that is your arguemnt then I can counter with the equally fallacious "No YOU first... sell your car and house. Give up your TV. Live in the woods." Etc.

But I won't. It's a stupid line of reasoning both ways. The fact is there ARE too many people on this planet. Resource over consumption or not.

If you don't raise that argument and actually want to think about the issue? Reduce consumption. Abso-fucking-lutely. But it won't be enough. Not at a population growth curve we have on the ground right now. It's too late for that.

Not to have functioning ecosystems, oceans, wild places, wild animals, clean air and water. You want those things you can't have 8 billion people. Not living in in semblance of free societies. no way. World population is going to be 8-9 billion very soon. We cannot sustain that many people on present technologies with out catastrophic impact to the planet even if the west goes on a austerity diet materially. Anyway. Consumption IS going to go down. Due to energy. In the wake of that population is going to contract drastically. It will be a horror show. But only if we do nothing. Only if we cling to these idiotic sentimental ideas about having a many babies as we want.

If we reduce population AND reduce consumption then everybody has a chance at much higher standard of living. If we don't? 90% of the planet is going to live sustained misery with little freedom and under strict tyrannical controls.

And in fact I, yes, I went first. As I have chosen to not reproduce.

But if this typically ignorant comment is a demonstration of you and your offspring's potential contribution to the world? I may yet endorse forceful euthanasia.
posted by tkchrist at 12:17 PM on February 16

James K. Galbraith: What is to be Done? Next Steps for Economic Recovery
posted by homunculus at 12:38 PM on February 16

tkchrist - pretty much the only way to successfully reduce population growth is to raise living standards though. There's various estimates of how many fewer people are around thanks to China's family planning policies, which have been been very strictly enforced, but it's only really been rising incomes among sections of the poor that have seen a drop in population growth pressure such that it will stabilise in the next couple of decades if things follow current track. For all the sorrow and suffering the family planning policies created over the years, their long-term impact will have been nugatory (plenty of experts here disagree with me on that and I'm sure you will!) - excessive consumption by the Chinese population was only a smallish factor in the environmental fucking of the country compared to macro development policies.
posted by Abiezer at 12:50 PM on February 16

Should have said "pretty much the only way to successfully reduce population growth is to raise living standards and provide an reasonable expectation of economic stability"
posted by Abiezer at 12:52 PM on February 16

Should have said "pretty much the only way to successfully reduce population growth is to raise living standards and provide an reasonable expectation of economic stability

Well I think that we should give nuclear war a shot before trying out YOUR crazy theory.
posted by the quidnunc kid at 2:58 PM on February 16

tkcrisht: And before you waste bandwidth let me predict the next tiresome comment you will make.

Don't put words in my mouth. I'm not your straw man. I recognize that the worlds resources are far too overtapped to keep the current population level at western levels of consumption. But shouting "we should all stop breeding" is at best glib, and at worst dangerous. It suggests that you don't recognize that it is economically advantageous for poorer populations to have large families. Any policy which enforces global family planning would serve to keep these populations poor. That's why I asked (dipshittedly) if you would go first, i.e. if you're advocating a vastly disproportionate allocation of power, you should volunteer to subject yourself to its worst consequences.

Abiezer has it right. People choose to have smaller families when their incomes support it. Already Europe and the American upper classes have a negative population growth. We have to put the horse before the cart. At current income growth rates, the world population is expected to top out around 9 billion in 2070, and then start declining. We need to either a) get that to happen sooner, at a smaller number, or b) figure out how to support that many with fewer resources. I have some thoughts on the latter option, but that's another conversation.
posted by Popular Ethics at 3:59 PM on February 16 [1 favorite]

It suggests that you don't recognize that it is economically advantageous for poorer populations to have large families. Any policy which enforces global family planning would serve to keep these populations poor.

The studies I've encountered say pretty much the opposite. You seem to be quoting popular sentiment that justifies withholding family planning (and it's only a short leap to suggest that crippled children increase the family coffers through better begging strategies). I question whether anyone plans for large families in order to increase their wealth, since many surveys find that poor people have children for local social status, while citing help in their old age. (Note that these are the same considerations industrial societies encounter when considering family planning, where many still view children as cheaper labor and a steady supply of pension funding.) Social considerations for having children are also intertwined within traditions that compensate for extremely high mortality rates, and these traditions less often favor a woman's choice at all. The bottom line is that large families lead to hardship for the families, but income for the retired.

Excerpt from the last page::

One possible response to the fact that large families have high poverty rates would
be to say that there would be less child poverty if there were fewer large families. It
seems unlikely that a general policy to discourage large families would be either
desirable or workable. Not desirable, because the national fertility rate is already
below replacement levels, and the extra children in large families are needed to
contribute to the population of working adults in future decades. Not desirable
because there may be personal advantages to having many children, or to having
many brothers and sisters, which counteract the economic disadvantages identified
in this analysis. Not desirable because parents’ fertility decisions are, and should
remain, their own choice. And not workable because such choices seem largely
impervious to the opinions and policies of governments as to what the ideal family
ought to look like.
posted by Brian B. at 10:33 PM on February 16

In Canada, innovation and IP funded and generated by universities is controlled by universities. Therefore, this IP is not easily transferable to the private sector.
posted by KokuRyu at 11:49 AM on February 16 [+] [!]

That's not true. I know someone who developed some very important healthcare technology as part of her PhD, and this was sold by her lab to a private company (for millions of dollars which, of course, she did not see), and is being marketted by this company. This happens all the time in Canada.
posted by jb at 8:09 AM on February 17