Good Sunday Morning,
Before the industrial age, almost everyone engaged in some form of activity that would contribute to the wealth of society. Farmers and farriers, miners and flour mill workers, shoemakers and fishermen, all combined their skill with a natural resource to create something that offered value to their families, neighbours and communities.
Then the industrial age made it easy to to redistribute that wealth. We pulled it out of the ground and out of the oceans with ever increasing efficiency, processed it in factories and shared it mostly through blue collar jobs. Henry Ford showed us how the economic benefits of primary production and resource extraction could ripple through society as a result of the multiplier effect. I remember an old coal miner coming into my computer store and peeling off 25 one hundred dollar bills. He could barely talk, for talking aggravated his black lungs and induced coughing fits, but he wanted to buy a better future for his daughter.
As the primary extraction and manufacturing process became more mechanized, moving our wealth through the service sector took up an increasingly large percentage of the economy. It created its own stratification ranging from the proverbial McJobs to ridiculously over compensated 'investment bankers". Today, since our comfort in old age is no longer secured by having large families but by having large bank accounts, we needed to find ways to accumulate personal wealth. So today the fastest growing profit sector is financial services.
But storing wealth is inherently treacherous, as anyone who has ever tried to preserve their garden's bounty for consumption during the long winter months knows all too well. It's why we transport fresh produce half way round the world so that we can be nourished by them year round. But something happened on the way to the ball game. We lost sight of the critical difference between wealth creation and wealth redistribution. At no time in history is it more important than it is now to wrap our collective minds around these concepts.
Our modern wealth is not just locked up in our pantry or root cellar, it's locked up in mysterious places like stock markets and real estate. David Korten calls these assets "phantom wealth" as their value is not determined by the ability to feed and shelter us but by their attractiveness to the next investor who will offer us more than we paid for it. It has distorted our perception of wealth, so that now we haggle over pennies when it comes to paying our farmers for food, the most precious commodity on the planet, and take it for granted that stock options and investment banks breed billionaires at an ever prolific rate.
Preserving our portfolio has so preoccupied our collective thinking that the services of managing, insuring and borrowing against these assets generates more than 40% of corporate profits in the U.S. And if you are not personally investing in the market, take note of this fact: U.S. asset managers are currently meeting the pension management needs of over 60 percent of the global retirement market. According to the World Bank, the value of stocks traded as a ratio of global GDP ballooned from 9% in 1980 to over 160% in 2015. Phantom wealth indeed.
So what keeps this phantom wealth from collapsing? It's many things but at the core lies the story of unlimited growth. As long as we believe that tomorrow we will consume more than today, this game of compounding assets is perpetuated. The problem is that we have built this perpetual growth model on the extraction of a finite energy source. And while there is enough ancient sunlight in the ground to fuel growth for decades to come, it is becoming increasingly clear to global investors that there is a good reason these carbon fuels are buried underground; their side effects are proving perilous to our civilization.
But it's not just investors who are seeing the writing on the wall. There are communities in Canada and the US who have already felt the brunt of a changing economy. These boarded up company houses still stand along the road that leads to the working class neighbourhood, down wind from the now non existent Sydney steel plant and coking operation. The restaurant where I sometimes joined Liberal and Tory insiders during the era of Allan J. MacEachen to discuss the future of coal and steel in their weekly round-table, is now a vacant patch of gravel. The video that's linked to the image takes you to a coal mining community in the US that has suffered a similar fate. It voted for Trump. If the experience of Industrial Cape Breton has taught us anything, it's that holding on to outdated industries past their best-before-date is not only expensive but destructive to our communities.
So why do we insist on repeating our mistakes with oil? A quote that Al Gore has shared perhaps summarizes our dilemma best: "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" And if we think a salary has persuasive powers, just imagine what multimillion-dollar stock options can do to alter the perception (and morals) of perfectly rational human beings. “It’s all about the emotions." Carole Cadwalladr quoted in the Guardian "This is the big difference with what we did (to elect Trump president). They call it bio-psycho-social profiling. It takes your physical, mental and lifestyle attributes and works out how people work, how they react emotionally.”
Can Trumpism happen here in Canada? The prevailing wisdom seems to be no. Much is written about the preferential balloting of the conservative leadership convention and the inherent fairness and centrist tendencies of Canadians. But let's not forget there was a time when Trump was booed at the Conservative Political Action Conference which has, now that he is president, turned into a love-fest. Even though in a post Paris world, this clouded vision is being nurtured by a rapidly shrinking minority, they are pulling out all the stops to postpone the collapse of their empire. The big question we face as Canadians is this: For how long do we insist on being dependent on that plutocratic minority? We are witnessing a historic passing of the baton of global leadership on technology and climate from the United States to China. Do we really want to join the US in ceding that multi-trillion dollar market just to prolong the charade of big oil?
As we contemplate the answer to this critical question, it's perhaps good to remind ourselves again of the real power that is being unleashed by the technological convergence currently underway. Photosynthesis has been the primary source of energy for life on this planet for billions of years. But until now we have been relegated to a parasitic existence, relying on complex food chains that begin with this marvel of nature. Our reliance is so complete that all aspects of our civilization depend directly or indirectly on another organism's ability to harness energy directly from the sun. For thousands of years this has been the case. And now, in just a few short decades we will transition from this analog, relatively labour intensive, past to a technologically automated, digital future. Humans have developed the technology and scale to draw all our energy directly from the sun.
In India, Solar power is becoming increasingly cost-effective and rapidly scalable, writes Jake Schmidt for the NRDC. "In 2016 the country commissioned the largest solar plant in the world at 648 megawatts, and it was built in a mere eight months—that’s much quicker than the three to four years it takes to build a similar-size coal power plant. This month, an even bigger solar plant of 750 megawatts attracted record low bids of about $0.04/kWh, validating the government’s decision to cancel four coal power plants and effectively choose solar as the preferred energy source for meeting India’s rising energy demands." The same article points out that Chile’s auction just set the world’s lowest price for solar power at $0.03/kWh.
Unlike coal-fired power plants, once built, a solar array does not need miners to sacrifice their health, rail cars to transport the coal, or extensive support industries to provide endless inputs. It just sits there and produces a continuous stream of wealth in the form of energy. The elusive fallacy of trickle-down economics evaporates like a drop of dew in the afternoon sun. The digital revolution challenges us to find new mechanisms which actually work equitably. Ensuring that this new wealth is properly distributed and applied to the benefit of all will require a level of political engagement unprecedented in human history.
Elon Musk seems to understands this. At the World Government Summit in Dubai Musk told a crowd what Greens have championed for some time, that universal basic income is 'going to be necessary'. While the rise in automation could increase society's wealth, it will be generated by as much as 50% fewer workers. We need to find new ways of redistributing the wealth of our digital age. A recent entry into the NDP leadership race also supports the call for a guaranteed minimum income. Bernie Sanders has not faded into the background but instead continues to lead a revolution. German Greens have reached out to us in Canada to help build a united alternative to right wing, plutocratic populism. By shining our spotlight on positive developments and effective strategies to migrate sustainably and equitably into a digital future, we can offer what has become the rarest commodity of all: Hope.
We can unite in many ways to build that culture of hope, equality and sustainability. We can write letters to the editor in support of alternative thinking like the Guelph initiative to rescue Electoral Reform in time for our 150th birthday. We can share the latest articles on the energy revolution far and wide on social media, always including the cabinet, to make sure they are constantly exposed to an alternate view. And we can just gather with friends around food, drink and good conversation to lift each others spirits. That's in fact what we are doing here in Saanich-Gulf Islands on St. Patrick's day. If you live anywhere near the Saanich Peninsula, please join us for this fun event.
We are on the right side of history. If we unite our voices, we can help this country resist the perilous tendency of clinging to the past. Lets embrace the future with gusto together instead.
Have a fabulous week,
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Thank you for a long, but very informative letter – exploring how we got to where we are – and a sense of where we are going. Such an explanation is most helpful, for those of us who have lived through a measure of this span of social and economic change, and even more so for young people who have not had that opportunity to develop such perspective. Sadly, most people would not be aware of the larger picture of how the world of commerce is evolving, with many not even motivated to look beyond changes that personally affects them such as immediate loss of work, therefore impacting how they are able to live a life of consumption which they have come to expect!
What struck me most in your letter were these words… “The elusive fallacy of trickle-down economics evaporates like a drop of dew in the afternoon sun. The digital revolution challenges us to find new mechanisms which actually work equitably. Ensuring that this new wealth is properly distributed and applied to the benefit of all will require a level of political engagement unprecedented in human history.”
So true… but it also opens the question, what sort of meaningful activity for all can be found in a society in which technological changes mean there is not work for everyone,yet a guaranteed minimum income is provided? It is my observation that most people fulfill their need for a purpose in life through the efforts they direct towards their ‘job’ or a sense of productivity at something they work toward accomplishing.
Simply having enough money on which to live, and time on our hands, will not necessarily equate to a happy population. For many people it can lead to all sorts of negative and anti-social behaviours and lifestyles. One does not have to look very far to see this materialize. Little issues can become larger than they should be amongst people who have’ too much undirected time’ on their hands. The best way for everyone to feel as though they ‘belong’ is to have meaningful things to do that contribute to their society in a positive way.
Current social problems are not resolved when a plan that simply involves directing funds is undertaken. It takes more than money to effect change, for unless real human effort, initiative and engagement are included in the process, the desired outcome is rarely reached. Also, a degree of oversight and accountability is required, otherwise funds will be misappropriated – by guess who – those with access to the funds. Again, a few benefit at the expense of the many!
Being at ‘work’ also provides a social network in which there is often found a commonality, even an understanding of how society works. It has been a platform from which such understandings are formed and perpetuated. Through my lifetime, and for the first time in human history perhaps, we have watched more people in North America and Europe have more access to a fairer distribution of wealth, only to watch this erode and swing back to an imbalance that is once again benefitting a smaller number, to the detriment of the greater population. This can be seen as a reversal of fortunes, taking us back to the way life for most of us has been throughout human history.
As you explained in your letter, this erosion of fairer distribution of wealth is occurring as we move into a world in which the Technological Revolution is, in many ways, supplanting the changes brought about by the outcomes of the Industrial Revolution. Just as a fabulously wealthy elite grew from the endeavours and ownership of industry, the changes brought about by the ongoing Technological Revolution are showing to be equally effective in creating another fabulously wealthy elite. What is different this time around is that it is leaving in its wake a population with a much keener sense of entitlement to decent living conditions – and a future for their families. Let us remember though, not everything can be accomplished digitally, or in the world of virtual reality! Some things remain in the realm of basic and very real necessities that must be provided for by real human beings.
Indeed, it is a political and social challenge to find the balance for all under such circumstances. And in a world where there are simply soooooo many people. We do have to make the change from the established forms of energy to save the planet – and ourselves. A transition plan is essential to that end, for the will and support of the people is necessary. It cannot happen immediately, but with a definite plan that can be seen to be working – while keeping people employed. Look what hateful behaviour raises its ugly head when people are out of work and see their futures dissipating – xenophobia at the very least!
Therefore, the Green Party will make the biggest impact if it can come up with a tangible TRANSITION PLAN, one that people can see has possibilities for them to have meaningful and productive work as we move into a better future. I cannot foresee such changes coming about without electoral reform. We simply MUST have a more effective mechanism through which we can work together to change how we do things, politically and actually, to be able to contend with the new challenges brought about by of the Technological Revolution in which we live.
Perhaps this is a good letter to send to PM Trudeau!!!
Just wanted to share this article with you. It’s intelligent, well-researched and factual. China recently announced their commitment to invest at least $360 billion in renewable energy R&D over the next three to four years in pursuit of their plan “to dominate one of the world’s fastest-growing industries “ https://www.nytimes.com/2017/01/05/world/asia/china-renewable-energy-investment.html?_r=0
Meanwhile, Canada’s political “leaders” continue to ignore their opportunity to transition the country to become a leading source of the sustainable business and renewable energy education, research, technology and products the rest of the world will not only demand, but need, in the future. In my opinion, it may be one of the greatest sustainable small business development and job creation opportunities this country has ever had, and without the cost of destroying our larger economy – our environmental life support systems. Unfortunately, this opportunity is at risk of being lost due to the successful efforts of powerful petro-bank lobbyists to highjack and corrupt our political processes into serving their profit agendas.
In Canada, the wholesale extraction and export of our resources by multi-national corporations, and the vast downstream economic opportunities derived from them, is nothing new. If you’ve lived in BC long enough you have witnessed how rapid raw log extraction and export by multi-nationals destroyed the majority of downstream economic opportunities in the sector for British Columbians. Less widely known is that forest exploitation trumped forest management with the result that salmon escapements in many of BC’s fjords declined severely or disappeared altogether due to destruction of spawning habitat from excessive logging activities, causing further economic loss to those dependent on fishery resources.
More Canadians need to go Howard Beale (“I’m as mad as hell, and I’m not going to take this anymore!”) soon, and demand their politicians embrace the opportunity we now have to become leaders in the transition to a renewable energy infrastructure founded on sustainable, domestically controlled business practices. The alternative is to accept our role as “hewers of wood and drawers of water” and allow the continuing rapid extraction of our resources until they’re rendered unprofitable or obsolete. At that point, which is probably not far off, we will be an environmentally-compromised nation heavily-invested in obsolete businesses and workers lacking the education, expertise and infrastructure necessary to compete in the next stage of economic evolution.
That’s my Sunday morning rant. Hope you enjoy it. If not, delete.