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The Progressive Economics Forum

What are the Game Changers?

For those involved in social change work, these days can be frustrating ones. Just as the neoliberal order of tax cuts, deregulation, resource extraction and free trade seems to be maxed out, like the Energizer bunny it keeps coming back. Meanwhile, progressive forces (academics, unions, NGOs and political parties) can give a good fight from time to time, but overall are as fragmented as ever.

So how do we move ahead to create a movement for change that will excite people about the world that could be, and put our ruling class on the defensive? For starters, we need to better focus our energies on articulating a vision and some clear highly strategic “game changing” steps towards that vision.

Second, we need to name and challenge capitalism as an economic system, the manifestations of which are the root of most activist causes. Given the Spirit Level evidence on the health and social problems associated with inequality, a full-frontal assault on the causes of inequality is badly needed. And radical changes are also required that stop our economy from trashing the planet (or the planet will soon find its own ways of stopping us).

Third, it is worth remembering the lessons of the Regina Manifesto, which set out a list of key demands that were outrageous in the 1930s. But many of the ideas in the Manifesto were in fact implemented over the course of several decades. That is, the Left needs a long game, and is too often distracted by reacting to short-term policy issues.

The game changers need to be measures that fundamentally alter the balance of power between corporations (and compliant governments) and ordinary people, building on the successes that have remained resilient to the onslaught of expanding markets for for-profit enterprise (in BC, public auto insurance, BC Hydro, BC Ferries, the Agricultural Land Reserve, public health care and education are all examples that have held their own against right-wing governments; perhaps bruised but still very much alive). Game changers, almost by definition, need to be bold, and ordinary people need to see that such moves will improve their day-to-day lives.

Here’s a list of (and a short rationale for) a number of ideas that would fundamentally change the nature of the “game” rather than seeking modest improvements at the margins (many of which have had lengthier discussions previously on this blog):

Guaranteed income – The creation of a basic or guaranteed income at a sufficient level would greatly enhance the bargaining power of workers by removing the fear of destitution that forces people to take crappy jobs (or worse) in order to survive. It therefore puts upwards pressure on wages at the lower end of ladder. It might lead to a lower employment rate and reduced average hours of work, not necessarily a bad thing, but could also be a means by which society supports artists and other professions that are more marginal economically. A guaranteed income would have to be federal due to mobility issues, and probably would be best modeled on the OAS or CCTB with a long phase-out period, rather than a universal demogrant. This would also eliminate provincial welfare bureaucracies and the federal EI system, but importantly would consolidate all income support programs federally. This transfer would also be adjusted upwards to compensate for price changes arising from carbon taxes, higher energy prices and higher food prices, all of which are likely consequences of aggressive climate action plans.

Sectoral bargaining – Unions have made some headway in the low-wage service sector, but small shops and high turnover confound organizing. Sectoral bargaining is an approach to unionizing the service sector that would give broad sectors (retail, restaurants, security, etc) a vote on whether to demand collective bargaining and if approved, different unions could then make their pitches on ability to represent those workers. This would quickly increase union density across the economy and lead to wage compression. For employers, it puts all work on a level playing field, so that there are no competitiveness issues, and wage increases would generally be passed on to consumers in the form of higher prices. Another related model to study is the German model of regional wage-setting institutions, which goes even deeper to include works councils (shop-level management practices that include workers in decision making) and co-determined boards (that give workers in large companies half the seats on the board).

Reigning in corporations – As documented by the Aurora Institute and the film, The Corporation, reforms to the way corporations are chartered are necessary. Currently, shareholders and executives benefit from limited liability (e.g. in the case BP oil spill, shareholders’ losses are limited to the price they paid for their shares), free speech (in advertising and politics), and deductions for entertainment and meals (boxes at hockey games, for example) – all of which should be eliminated or modified. A maximum level of executive compensation (related to the pay at the bottom of the company) could be established. Corporations also benefit from an expensive legal system that allows them to sue individuals (or intimidate by threat of lawsuit) for all manner of things. Corporations can be a useful organization form but they should have to prove their benefit to society, with sunsets on their corporate charters and a process for renewal. And to the extent that their useful economic activities could be performed by public enterprises, worker-owned enterprises or cooperatives, so much the better.

Abolish intellectual property – Copyright and patents create monopolies that raise prices for consumers. Historically, laws have tried to strike a balance between the right of creators to benefit economically from their work and the rights of society to benefit from that work (which is inevitably the product of a whole society). It is not obvious at all that artists and inventors only create in the presence of strong IP laws. And in a world of large entertainment and pharmaceutical corporations with massive advertising budgets and huge upfront costs of production, this logic gets put on its head anyway. The result is that IP as we know it is a huge contributor the rising share of income going to the very top of the income distribution. Economist David Levine argues for going the opposite way: make Canada an IP haven where people from around the world can come specifically to innovate on the work of others, meaning this could create a lot of interesting tech jobs in Canada.

Reclaim the new “Commanding Heights” – Key sectors of the economy should be brought into the public sector through aggressive regulation, nationalization or creation of public competitors. In telecommunications, for example, Canada has the most expensive prices in the advanced countries due to the oligopolistic practices of a handful of large telecom companies. This could be remedied by regulating prices, nationalizing the “pipes” or using the CBC to create a low-cost public competitor that would force companies to reduce their massive profit margins. Similar cases could be made for banking, oil and gas, pharmaceutical drugs, forestry, mining – although the specific form and strategy would differ depending on the specifics of the industry.

Localize food – New arrangements that promote enhanced local food supplies, with sustainable agricultural practices would help in both mitigation of greenhouse gas emissions and adaptation to peak oil and climate change. This should build on farmers’ markets, buyers’ coops and community shared agriculture projects to include broad-based procurement of local food by public sector (schools, universities, hospitals, prisons, social housing units, BC Ferries, etc) combined with the extension of supply management to fruits, vegetables and perhaps other areas. This would be a benefit to farmers in terms of higher incomes, and, if well-designed, would end hunger and improve nutrition if in combination with an attack on fast food and convenience store junk (i.e. make unhealthy processed food the new tobacco).

Expand the scope of the existing public sector – This is similar to reclaiming the commanding heights but builds on areas where the public sector already has a strong presence. This would include developing an integrated system of early learning and care with the K-12 system, community centres and libraries (“hubs” of local public services with hours that extend well beyond the standard business day). It would expand the umbrella of public health care to dental care, vision care, physiotherapy and other preventative health services. It would bring natural gas distribution back into the public realm to re-create (in the case of BC) an integrated public utility for managing energy and demand-side management programs. It would create a consolidated Crown corporation to manage recycling in BC to close the loop on waste. It would create new housing stock for households of all incomes to build complete communities, and massively expand public transit and infrastructure for bikes.

Radical democracy – 19th century democratic institutions are not adequately meeting the needs of 21st century citizens. Redefining democracy could include deliberative processes, referenda, participatory budgeting, lower the voting age to 16, campaign finance reform, etc (Judy Rebick’s book, Imagine Democracy, is a good starting point). Like the New Politics Initiative of 2001, this is about asserting a new way of doing politics, rather than just a suite of policies. The new democratic regime must also create new powers for municipal governments to act in the interests of local citizens.

Public money creation – There is no reason why money creation (i.e. the expansion of credit) should be the sole domain of the chartered banks. The status quo means money is created to support enterprises that will be profitable (but not necessarily socially or environmentally beneficial), upon which taxes must be levied in order to support public services. Delinking public services from capitalism would mean creation of money would follow democratic priorities. The potential for inflation would be a concern, so implementation would require a phase-in period. But it is worth noting that in 2007, new money created through chartered banks was about $200 billion (an expansion of 10%, and equivalent to 12% of aggregate demand that year, but consistent with low inflation), an amount about the size of the total federal budget. The 2008-09 financial crisis revived the idea of money creation (rather than bond sales) to finance public sector deficits, and while the crisis has died down, looming deleveraging could make make public money creation a necessity.

Tax bads – Public money creation need not preclude good tax measures that alleviate other social and environmental ills. These include higher top marginal income tax rates to reduce inequality, Robin Hood taxes to reduce financial speculation, carbon taxes to reduce greenhouse gases, inheritance taxes to deter dynasties, and taxes on junk food, alcohol and tobacco. On the environmental side these taxes are instrumental to achieving prices that reflect the true costs of extraction, processing, distribution and consumption, and a shift towards closed-loop manufacturing systems.

Legalize pot and most other drugs – Perhaps this is not a substantive game-changer but this issue would allow the left to reclaim some space on the civil liberties side of the fence (and have some fun, too). It makes little sense to continue with prohibition, a system that fosters organized crime (which causes more harm than any health-related impacts of drugs), and criminalizes millions of consumers who are not doing any harm to others. Prohibition is a crusade that does not work in spite of massive public resources dedicated to it. Indeed, legalization would shine daylight on underground activities, create new work in Amsterdam-style “coffee shops”, and provide another source of tax revenue.

Carbon quotas – This is an alternative approach to carbon pricing (carbon taxes) that would allocate to households (or individuals within a household) a share of the annual (and shrinking each year) carbon budget. Because high-income families lead much more carbon intensive lifestyles than low income families, they would have to buy quota from households that had an excess – that is, the system is inherently redistributive, while providing greater certainty about GHG reductions than a carbon tax.

That’s my 12-step program, for now anyway. I’m not particularly hung up on any of these ideas and am interested in others’ thoughts on game changing initiatives. Over to you.

Enjoy and share:

Comments

Comment from Christopher Albertyn
Time: September 1, 2010, 4:48 pm

I’d add, have a link between the highest earners and the lowest earners in each organization; and introduce a transaction tax on money market, stock market transactions (other than on the issue of new shares, where the investment will actually go to into real production)

Comment from Paul Tulloch
Time: September 1, 2010, 5:53 pm

I think one that is missed is one that I have been thinking about for quite some time. A new ubiquitous information based accountability process for monitoring and processing price and competition.

In short-when you think about where the capitalist project has went with the nature of competitive process and the production process, we need a fundamental paradigm shift.

Profits are what seemingly guide the organization of the productive assets. However- get behind the scenes- some of the largest bureaucratized production systems in the world right now are many transnational corporations who many cases control more waelth and assets than most nation states. I dare say the whole pricing competitive model seems to be quite a fixed process these days. It has strayed so far from the original objective. We need a new accounting for these entities. We need to defuse this whole notion of competitiveness and efficiency. These actors are not competing and their efficiency does not include many of the key social and green variables that need to be accounted for. We need a new model to quantify what success means in terms of organizing and producing. Profits no longer cut it.

In the age of information- I do believe very very strongly that the whole notion of innovation and productivity in which many state that the prevailing system has proven to maximize, is actually in many cases very far off in terms of maximizing the potential.

There is a better way- and it lay with information and breaking free from the ingrained notion that profits are the end all to be all. They are in fact, in the current form, with a true accounting of all that go into the production process- the antithesis- and a measure of destructiveness and on many levels.

Comment from Travis Fast
Time: September 1, 2010, 6:18 pm

Thanks for that Marc. For the first time in a long time I will go to sleep tonight feeling a little less lonely and much more hopeful. Glad to see a least someone in the respectable left is thinking big again.

I would just add legalize and “tax” drugs. Prohibition is a double waste of resources: enforcement costs money and by definition taxes are not collected.

I am going to write the second part of the post on transforming social democracy.

Comment from zenon garnett
Time: September 1, 2010, 7:13 pm

Great article! You had me until “lower the voting age to 16,” if anything it should be higher (most Canadians don’t learn about poly sci until college)! How’s 25 sound?

Also the education system – free post secondary? Or at least cheaper?

Comment from Declan
Time: September 1, 2010, 9:56 pm

Too busy to give this the attention it deserves (mostly I agree), but my quick reaction was that this post followed two posts on this blog obsessing over GDP, when, in my opinion, the acceptance/promotion of GDP as a de facto measure of the well-being of society is one of our biggest problems.

Comment from Darwin O’Connor
Time: September 2, 2010, 6:17 am

Radical democracy

This should be first on your list. The main reason these ideas are rejected is because people don’t trust the government. This trust must be gained before any of these things can be implemented.

One reason people don’t trust the government is that it is under a lot more scrutiny then corporations, with the media and opposition parties looking for the next big scandal. Obviously reducing scrutiny of the government isn’t a good idea, but increasing scrutiny of large corporations would show the people they are at least as wasteful and corrupt as government and produce other benefits, as well.

Localize food

I suspect local food is a fad that doesn’t produce significant environmental benefits compared to, say, biking to the grocery store. Some foods are suited to different climate and land conditions then others. Eating only local food means that some of the food will be grown in less then idea conditions, resulting in less efficient land use and require more inputs. I don’t think the carbon emissions from food transportation needs special treatment over other sources of carbon emissions.

Comment from Andrew Jackson
Time: September 2, 2010, 6:48 am

That is a good list to debate Marc but I beg to differ on GAI as you propose it which reflects a narrow liberal view of income security programs. There is a clear rationale for EI as an income stabilizer to provide temporary income support as opposed to an income tested redistributive program, and for EI as an individual income stabilization program, not a family tested program (as I assume your GAI would be.) Are you going to fold CPP into your GAI as well?

Comment from Bill Bell
Time: September 2, 2010, 9:25 am

I like the overall apparent intentions behind your list. I’d be extremely wary of expanding some parts of the public sector though because they are so insensitive to the needs and wishes of their clients. In the case of the public education system the real clients, students and parents, seem to come dead last. I believe radical changes would be required in Canadian culture to get democratic and egalitarian behaviours out of the many of the people employed in systems like these.

Comment from John Calvert
Time: September 2, 2010, 9:38 am

Thanks for initiating this, Marc. To the suggestions you and others have made, I would add one more: require all Canadian citizens to file taxes. Currently there are just over 1 million Canadians who are not residing in Canada. Our tax system is based on the British system of residency, not citizenship. If you are out of the country for six months and a day you do not pay Canadian income tax. This is a huge loophole which I believe many wealthy Canadians use to avoid paying tax in Canada. In contrast, the US system requires all US Citizens to file tax returns on their world wide income. If you have the benefits of citizenship, you should also accept the responsibilities of citizenship. If we are concerned about raising revenues to support public programs, we should be prepared to link citizenship with the obligation of filing – and paying – taxes on world wide income. This does not mean double taxation for those legitimately working abroad as we have tax treaties with many countries that enable individuals to offset taxes paid to another government against Canadian tax liabilities. But it does mean that those who are avoiding Canadian tax by virtue of not being resident would finally have to pay their fair share.

Comment from Liam Young
Time: September 3, 2010, 3:17 am

I think you’re definitely on to something and the general intent addresses the malaise and stress that most progressives in Canada and elsewhere feel.

However, while I think your list is too long, I’ll add some ideas for discussion. The unfortunate reality is that when you give progressives more than a dozen things to disagree about, it will ensure we stay fractured and misaligned.

I agree with Darwin O’Connor and his suggestion that radical democratic reform, coupled with localization of not just food, but also energy production, goods and services, news media and so on are critical.

I would add media. Progressives need to have a better say in what happens with news and information in this country. Right now, the Quebecors and CanWests are ‘poisoning the well’ of public opinion and act as mouth-pieces to the Harper regime. We need a national news co-op that any citizen could contribute to.

I would alter your comment about IP. Open-source is the less radical starting point. All research, information and statistics that are produced by any level of government should be left open to the public in formats that people can use to make this information more useful. This is a basic starting point that will accelerate as you ‘encourage’ universities, colleges, hospitals, non-government organizations, etc to join the open route.

The situation with corporations can also be simplified, as we wouldn’t be able to radically alter 200 years of capitalism in the making without objection. Instead, we come out with a simple message that if you screw up, you lose the right to do business. Be generous and apply the ‘3-strike rule’: You lose your corporate charter and right to sell in Canada or elsewhere if you do something that contravenes the will of the people.

As you implement this, I would also implement a strategy devoted to non-profits and co-ops, both of which are basic alternatives to the corporation. With these organizations, the emphasis is less on the bottom-line and more on ALL stakeholders. A final thought on the corporation: I would establish a permanent working group and think tank (I suppose the Progressive Economic Forum would be a good start) that would explore other means of production, resource gathering, distribution etc that shift away from the profit motive.

Religion is another issue worth considering, although it would be wise to avoid lunging for the throats of religious organizations and people, since 95% of the population still believes in something other than the here and now. Progressive policies should look at ways to remove the charitable tax status of religious organizations and begin a process of taxing their property, first as a form of penalty and then as a form of permanent change.

On the international front, it’s safe to say that Canada has lost its way with the UN, potentially the most influential and ‘corrective’ organization humanity has ever assembled. Our foreign policy must be directed by a simple notion of respect and peace as opposed to ‘shock and awe’. We used to be a part of this greater idea and we can make our way back.

Finally (although I feel I’ve barely scratched the surface), you need to speak to the need for a vast public infrastructure of digital technology. Canada is lagging with investment in new technologies and it’s mainly because our monopolies in Canada have no incentive to change. We need to advance the level of digital infrastructure and ensure that it remains in the hands of the public and that it remains open. The private sector can lease from it if they want, but we’ll always have a public option that can’t be cut off.

Comment from Liam Young
Time: September 3, 2010, 3:22 am

One last thought: we are out of control with defense spending. Stephen Harper and the Conservatives have made a commitment to spend more than $50 billion per year of weapons and the military.

We all know that we would all be better off if we didn’t spend this money at all or if we invested it in different kinds of infrastructure (digital, hospitals, schools, pension plans, etc).

Comment from Larry Kazdan
Time: September 4, 2010, 9:51 pm

Many thanks for this great overview! You may be interested in the 12-Point New Economy Agenda which appears in a new book by David Korten and which is summarized at http://www.aliveworld.com/members/ben/blog/archive/2009/05/08/summary-of-a-12-point-new-economy-agenda.aspx

I note immediately many similar ideas! My appreciation to all who contribute to the Progressive Economics Forum!

Comment from Rodger Levesque
Time: September 5, 2010, 12:51 am

@Liam Young’s “We need a national news co-op that any citizen could contribute to.” Check out http://www.mediacoop.ca/

Comment from Rodger Levesque
Time: September 5, 2010, 11:07 pm

I don’t understand Andrew Jackson’s objection to your first suggested Game Changer, Guaranteed Income, but your final sentence describing this idea suggests nothing toward systemic change. “This transfer would also be adjusted upwards to compensate for price changes arising from carbon taxes, higher energy prices and higher food prices, all of which are likely consequences of aggressive climate action plans.” If taxes and prices are rising in response to climate action plans wouldn’t simultaneously rising incomes defeat the purpose of the action plan? I’m assuming that reducing energy consumption would be an aim of the plan.

I see you’ve put food costs in there as well, and understand that reduced food consumption may be a problem.

I wonder if income leveling programs might serve capitalist systems. What about Guaranteed caloric and nutritional needs and Guaranteed housing? Income topping perpetuates markets and consumerism. Guaranteed health and housing programs would be more socialist. Food and housing distribution programs, as well as community health practitioner programs for monitoring the physical well being of individuals might scare the hell out of “ordinary people” who might rather cash their GI checks at Moneymart and buy their goods from Walmart, but a social care program shouldn’t be scary.

Bertrand Russel makes the argument for food distribution in his Praise of Leisure, it’s a pretty solid argument, because he explains how during wartime government food distribution systems were able to feed soldiers who had been completely pulled out of the production system. This huge population made zero contribution to national production efforts and yet the government was able to keep them fed and in fighting shape for years. The capability has a history. Food for a massive idle population, in a capitalist production sense, is a historical reality and a contemporary possibility.

Comment from Andrew Jackson
Time: September 7, 2010, 9:41 am

Here is an earlier post of mine re GAI which should be clearer re my concerns

http://www.progressive-economics.ca/2008/02/11/gai-proceed-with-caution/

Comment from Rodger Levesque
Time: September 8, 2010, 12:24 am

@Andrew: That earlier post makes it clearer where you are coming from. It’s interesting how confused conversations about change can become. Your post and comments on GAI make perfect sense if the concern is being progressive in the sense that standards of living are raised or maintained within the system.

The idea that the left is “fractured and misaligned” is present in this thread, and I’d say we’re talking around different areas of interest. Your concerns are far more immediate and practical. I find your concern with maintaining individual consumer income levels, distasteful because the individual consumer is a capitalist construct. And I’m sure the food and housing distribution program I suggest which would allow no individual consumer choice, is more than distasteful to those who value consumer choice. But I was inspired by Marc Lee’s line that “we need to name and challenge capitalism as an economic system, the manifestations of which are the root of most activist causes.”

I want to try to clarify the confusion that could lead to the idea that the left is misaligned. What you are doing is criticizing policy as it is being written, within the confines of the current system. Which is necessary because the current system can be better or worse.

But what Marc is doing is imagining ways to change the game. We don’t live in a democracy, and I’d argue that because of capitalism’s inherent inequality and privatized decision making that affects the entire social, (radical) democracy is anti-capitalist.

This discussion is necessary. The idea that a woman’s independence is protected by individual income protection programs is one I would not argue against. But again protecting individual income is a capitalist value. We’ve all heard the arguments that link capitalism and human rights, but it seems Marc Lee is making the opposite argument.

I also tend to agree with you that a family based program could be oppressive. The difficulty I’m having is that I think that an effective challenge to capitalism will come from us learning how to live (democratically) together. If we discuss things within the capitalist frame Andrew Jackson’s concern for individual income needs to be considered, but if we are challenging capitalism we need to develop democracy at the domestic level and socialize food and housing at the community level.

I think we can do consider both these simultaneously without feeling fractured if we understand that we live now and believe in development and a future.

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