Jonathan Brun

Time is the only asset you really own

­Most of us think our most valuable asset is our house, our car, or our investments. The natural reflex is to think of value through the prism of ownership, we think through the things that we own and then try to determine what is worth the most. In fact, the most valuable financial asset is actually the one that brings you the greatest amount of free cash flow or profits on an ongoing basis, but we can leave that discussion for another time. The thing with nearly all material possessions is that they can be sold, bought and replaced. For nearly everything you own or might want to own – you can always buy more of it if you have the means. There is only one thing you own, but that is really limited in quantity: time. Time moves forward regardless of your wealth or your regrets. It is that never ending river that pours forth and into the great void. You can ride the river for a time, but ultimately, we all end up in the same place. Time is the most valuable asset you own.

The average lifespan is about 80 years and many leave beyond that. If we argue that we begin to truly make choices around the age of 13, 63 years of adulthood represents 22,995 distinct days in which we can choose to party, study, work, love, travel, eat, live or engage in an activity of our choice. It is 22,995 chances to start anew, to make amends, or to take a different path. Of course, all days follow another day and too often tend to blur together. The point is not that change is easy or that each day should be lived to it’s fullest – but rather that we have both more time than we realize and less time than we want.

The concept that time is fleeting and precious is of course nothing new. Historically speaking, the average citizen had far fewer choices as to the use of their time. Born to a shoemaker in a small village with a controlling religious structure, it was all but inevitable that you would become a shoemaker in the small village and be part of that religious structure. In 2021, a sizeable percentage of the global population have a vast amount of choice as to the use of their time. With increased wealth, greater political and religious freedom and low-cost transport people have the ability to dramatically change the course of their lives if they so desire. This new challenge of deciding how to best allocate your time is not well understood or explained. Despite overwhelming choices, we often default into the patterns that our families, communities and mass media propose – consciously or not. Trying to navigate all the pressures and influences that are exerted on our brains is one of the greatest challenges modern humans face.

Time being so precious it is therefore imperative to use it wisely. I always like to say that life is simply a set of decisions followed by death. The thing is that most of us, myself included, often feel like the decisions we have to make are not completely free. Both small decisions about what to eat are limited by what’s in the fridge, what I know how to cook or at most, what restaurants are nearby. Large life decisions are often years in the making. You cannot go to medical school without years of hard work, good grades, and support to get you there. It is rather evident to most of us that both small and large decisions have severely constrained degrees of freedom and most of those degrees of freedom are often set by our own previous decisions. There are external events – health, luck, etc. that dictate our choices, but the choices we do make echo throughout our entire lives. The way my wife deals with me today is determined both by our ten-year history as well as what I said or did in the past five minutes. So, while there are an infinite number of things to do with your time – from studies to work to leisure – the “right” choice in any given moment is not always obvious or clear.

It is certainly hopeless to come up with any specific recommendations on time allotment. We all come from different environments, have different aptitudes, receive various levels of luck and express different interests. It is therefore only possible to make general recommendations and perhaps conceive of some principles one might consider applying to decision making.

Jeff Bezos, founder of Amazon, advocates for living according to a “regret minimization framework”. That is, you should make decisions such that you will have little to no regrets in life. Sounds nice (especially from a CEO who has destroyed businesses and employees the precariat), but it always reminds me of the excellent Onion article, “Man lives every day like his last, goes bankrupt”. Carpe Diem sounds nice in principle and being present in the moment is critical, but it is not a sufficient framework to live your entire life. Bezos is not really suggesting that we live every day like our last, but rather that we make decisions in our careers and lives so that we do not regret having not done something. He is advocating that we be bold and try to do the things we want to. In general, this seems like sound advice.

Another kitschy, but pertinent analogy that has circulated widely online which goes something like this: some CEO of some company, spoke of how we should prioritize our commitments:

Imagine life as a game in which you are juggling five balls in the air. You name them – work, family, health, friends and spirit – and you’re keeping all of these in the air. You will soon understand that work is a rubber ball. If you drop it, it will bounce back.

But the other four balls – family, health, friends and spirit – are made of glass. If you drop one of these, they will be irrevocably scuffed, marked, nicked, damaged, or even shattered. They will never be the same.

Simplistic, but true. The CEO proclaiming such a parable could be the CEO of an arms manufacturer and the analogy would still hold true. The other issue at hand with such an cute saying is that many people inherit broken, damaged or toxic relationships with family or friends. In addition to protecting the healthy relationships you have, it is often necessary to change the relationships we have if we want to affect substantive change in our own lives. It has been said that one of the greatest challenges in life is knowing which bridges to keep and which bridges to burn. This is even more true when it comes to personal relationships as they can absorb a tremendous amount of time and energy. In general, I advocate burning few bridges, but sometimes it can be tremendously productive to cut out people who drain your spirit and energy. Optimizing your time is as much about who you get away from as it is who you invest energy in.

There are many thins that prevent us from making changes to our lives and optimizing our time for happiness or productivity. Luck, inertia, the accumulation of bad decisions, external social pressures, or the general human condition. In my opinion, one of the most common and challenging obstacles to decision making is sunk costs. This is a big problem for anyone who needs to make a change. Wikipedia defines a sunk cost as, “In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered.” The cost can be monetary, but often it is also your time, emotions, ego and sense of person. The reason so many businesses or people fail to make obvious and necessary changes is the sunk costs they have incurred. You got into a career or a relationship and have invested tremendous time and energy, you do not just want to throw that out. A business that has gone down a certain path and built a product, a brand or a factory is not likely to just throw that out for a new hopeful business idea. More than time or money sunk costs are emotional – they are intimately tied identity. Avoiding decision making based on sunk costs is a very big challenge for all of us.

There are various ways to overcome sunk cost decision making in the business world. One well documented approach is proposed by Geoffrey Moore in “Zone to Win”. In short, he proposes breaking up decisions making based on core business, offshoot business, completely new items and hybrid business ideas. Each zone then needs resources and autonomy to explore and push those ideas forward. In the business world you can split a company apart into various units and enable decision making to happen without the burden of sunk costs. At the personal level it is not quite so easy to split our persons into autonomous decision-making units! You cannot break yourself into four separate people. It is therefore essential to attempt to determine how we can avoid pursuing a path that is set by the sunk time and emotions we have placed in a job, an education, family, or friends.

One key tool to making change is making a problem visible. Too often we bury our problems under the rug, somewhat hoping they will magically disappear. Sometimes problems do fade away, so this tactic can work. However, many problems will only fester and grow if they are placed in a little box. It is therefore imperative that we bring our challenges to the forefront so that we are forced to confront them. In addition to looking at our challenges, we must also evaluate the resources we have at our disposal. There is no point in hoping to climb Mount Everest if we are 90 years old and have never climbed a mountain (though in today’s era of social media, anything seems possible). To address a problem, we can obtain more resources – money, training, education, – but our friend time is always lurking in the background. We cannot create more time and if we want to accomplish certain things, we must force ourselves to look at reality as it is. Making our available time, resources and options clear and prominent in our daily lives seems like a good way to help inform our decisions.

One tool that I particularly like is a life calendar that we have yet to put up on our wall, out of fear. A life calendar is a poster with 52 boxes across and 100 rows of boxes. This creates a matrix where every box represents a week of your life. The purpose is to tick the boxes as you consume your time, mark important milestones and ultimately remind yourself that you are running out of time. Now that I have two children it seems even more important to get them a life calendar and ensure we are all aligned around using our time as best we can. Children are the ultimate way of reminding us how fast time goes by and how each moment is unique and special (when they are not sick, crying, vomiting or yelling about something of course). Children are like object with large gravity, they alter the speed of time. With children, time moves insanely fast and therefore each moment is worth even more than it was before. Maximizing your time with kids is critical to their well being and your own happiness.  

The child educator Ken Robinson once opined, “A two-year old is not half a four-year old”. That is, a two-year old is something and a four-year old something entirely different. Time may have passed, and the child may have grown, but the child at those two ages are in fact (almost) two different children. We often think of time as distinct from things or we think of time as a measuring stick. This analogy is of course incorrect as we cannot separate time from space and objects. All things that occupy space, in this case human children, are linked to time and cannot be separated. The space-time continuum dictates that as time changes, so do we.

The pediatrician and speaker, Gabor Maté often mentions how he made the grave mistake of waiting for his children to grow up so that he, an intellectual, could interact with them. This behaviour is often common amongst men and creates major childhood issues. The concept that we must be equal or on the same level to interact properly prevents parents from enjoying unique opportunities to bond with their children. In fact, we often apply this same restriction as adults – we tend to interact with people who have similar levels of education, religions and world views. It is easier to interact with people similar to us, we have a better understanding of their world and can therefore relate. But, interacting with different people or with children who are at a different developmental stage can be incredibely rewarding if we do it with an open heart and mind. Time with a child can be exhausting, don’t get be wrong, but it can also be a glimpse into another world where there are no problems and true happiness is at hand at every moment.

When it comes to time spent with children, Cape Diem is certainly the way to go. My most memorable experiences from my own childhood were the times spent doing something challenging and fun – camping, hiking, skiing – with my family or friends. Gabor Maté speaks extensively about the importance of attachment in a child’s life. Children need to feel attached to their parents or guardians in a positive and reinforcing way. It is not about dependency, but rather through a deep sense of trust that this person will always be there to support me. I am convinced that the attachment both children and adults need is form of security against existential angst or the feeling of being pulled inexorably towards the abyss by the tide of the world. Knowing others are there for us is a life raft and bulwark against a deep sense of loss. For most of human history we have lived in tight-knit small communities. We have fought together, died together, and relied on each other for survival. Our need for others is very deeply ingrained in the human psyche. Our use of time must bear in mind these fundamental needs we all have.

At the end of the day, there is no magic recipe for the use of the time each of us is allotted in life. The most I can say for sure is that we should endeavour to support those we can, discard those we must, invest in a better future for ourselves and avoid living based on past errors or inherited baggage. Life is short and to make the most of it we must be honest with ourselves and with those we care for. We must face the reality we live in and question the assumptions we have been given by society, our families or our environment. If we have the necessary courage and fortitude, we can live the life we want to and die content that used our time as best we possibly could.

Published on October 4, 2021

When is enough enough?

One of the biggest challenges in life is knowing when to stop. In general, when something is going well and feeling good – we want more of it. There is this natural desire to expand the good things in life and extrapolate from where we are. I once saw a funny video on France Inter (that I cannot find) of a comedian explaining that the key element to having a good time at a party is to know when to stop drinking or consuming drugs. Far too often we start having a drink and then feel that lovely buzz, our brain – simple creature that it is – then tells our arms and mouth to have another and another and another and then it does not feel so good. The key element to make the party and the alcohol a success is to have the ability to say – stop, we are good here!

Our actions with money and work follow a similar pattern. We start making some money and buying pleasurable things and experiences. Our brain says – wow, that was great, lets work some more and spend some more. This puts us on a treadmill of earn and spend that frankly has no limit. Knowing how to tune that treadmill for the ideal pace is the crux of the challenge. We have all come across headlines of that 30 year old who retired after they saved every penny, they live in a micro house and only eat rice – but this extreme example of frugality is hardly applicable to the average person (let alone family) and abstinence of human pleasure is unlikely to inspire vast majority of us mortals. It is a bit like saying, “work out 8 hours a day and you can get to the Olympics” – not really applicable to the average Joe (not me at least). At the other extreme of this frugality are those who earn a sizable income, but then spend it all. I have seen and heard of many people who have apparently luxurious life styles – nice cars, fancy restaurants, big houses, designer clothes – but live on the precipice of bankruptcy. Like the fable of Goldilocks, the trick is to find the bowl of porridge that is not too hot and not too cold, but just right. This is much harder than it seems.

Good things have powerful effects on the body. The release of adrenaline during extreme activities or the release of endorphins during pleasurable experiences drive us to want to reproduce and augment those feelings. And, in some sense, there is a catch-22 in certain activities. To earn a lot of money, you often need to love money. When you love money you always want more. Similarly, in extreme sports – you need to love the thrill of jumping off a cliff or flying through the air to start in the first place and once you are on the bandwagon of extreme sports it can be as challenging to get off as if you were taking hard drugs. In the excellent movie, Lost World of Z, which is based on a true story, British explorer Percy Fawcett travels to South America in search of the source of a river and eventually a lost city. His first trip is a roaring success with archaeological discoveries and the safe return of his crew. With his newfound fame, sense of confidence and desire to go deeper into the jungle he leaves England with a new crew in search of a lost city. The second trip does go deeper into the jungle, but they do not find the lost city and the trip is more or less a disaster. At this point Percy Fawcett could settle into a comfortable retirement and spend time with his family. Instead, he decides to embark on another trip with his teenage son to try and find this lost city of Z. (Spoiler alert) Both Percy and his son disappear on this trip and never return. Simply put, Percy did not know when enough was enough – but maybe that was the point of the story.

Sports athletes who play past their prime, politicians who overstay their welcome and celebrities who fail to recede from the spotlight are all examples of our human foible of addiction. Power, money, fame are as powerful as any drug. The most extreme cases of these excesses are the tragic cases of suicide and mental breakdowns. It is easy to point to these famous people and say, “I am not like that” and indeed, most of us do not have substantial power, money or fame. However, we all have some level of power, money and fame and it is often more than we actually need or want. I recall an aging family man who had accumulated a beautiful house, a cottage, cars, boats and other man-toys. Despite his high income and and good health, he found himself spending most of his time making bill payments and taking care of his possessions. When he visited his university aged son in his student apartment, he marvelled at the simplicity and at the happiness his son exhibited. Of course his student’s detachment from material possessions was largely driven by his limited means, but the impact of his limited responsibilities naturally had a very liberating effect on his son. To a certain extent, movies like American Beauty hit on this theme, but I personally love The Onion article, “Executive Quits Fast Track To Spend More Time With Possessions” – it makes the obvious omission of his three children.

I suppose the the ultimate challenge here is not to know when to stop, that is very challenging, but to know what success looks like. The task at hand is to determine what you want. To live fully, we must be explicit in our desires with both ourselves and those in our lives. Creating clarity in our aims, plans and desired ultimate outcomes allows us to set boundaries. Lives and relationships that fail are often ones where people did not take the time to outline success and were afraid to discuss their limits. Sometimes that fear of discussion is due to social pressure or anxiety or insecurities that we have accumulate over time, but there is no good outcome when you keep your true desires hidden from others. If you do not create clarity of your desired life, others will impose theirs on you and your life will become theirs – if only partially. Parents do this to children all the time, families do this to their members and bosses do this to staff on a regular basis.

Numerous studies show that people have no increased happiness past a certain income level (though a new study casts some doubt on that). Well being and happiness are challenging topic, which this blog post certainly cannot adequately address. Regardless of the money required to feel good in life, it is clear that our society generally heaps praise and admiration on those who reach the greatest heights in wealth, fame, or sport. This culture of venerating excess is somewhat linked to the marketing industry and our consumer economy, but even before the modern era human society placed disproportionate fame on those who went to the extremes of the human condition. Religions venerated martyrs, armies promoted heroic battle, kings promoted chivalry and beauty (especially female) was always top of mind in all societies. Humans have an innate desire to always want more and that is perhaps the greatest driving force for the development of society. It has pushed us to invent, create and build and it has led us to attain levels of security and comfort that no one could have anticipated. Having attained a certain level of comfort for many, we must focus on improving comfort for those who do not have it and thinking about a broader challenge of setting the stage for the next evolution of civilization. Today, with our environmental challenges and our mental health crisis it is time for us to spend more time on helping people understand when enough is enough.

Published on August 12, 2021

On Housing – Land (Part 1 of many)

There is a story that the Talmudic sage Rabbi Hillel was confronted by a person who wished to convert to Judaism. Asked how he could go about such a religious transformation, the Rabbi responded, “”What is hateful to you, do not do to your neighbour. That is the whole Torah; the rest is the explanation of this—go and study it!”. Put another way, he said that do unto others what you would have them do unto you, the rest is commentary. In many ways, housing is a fairly similar in both its simplicity and its complexity. I think that the current housing issues can ultimately boil down to “housing prices are supply and demand, everything else is commentary”.

While the reality may indeed be that the housing market determines the housing prices, the truth is that many cities and countries are paying a steep price for exorbitant housing prices that are driven by market failures. In Canada, where this crisis is particularly bad, over 3.3. million families are contributing over 30% of their revenues to housing. Historically low interest rates have allowed many people to get into the housing market and have kept payments under control. However, it is well understood by homeowners, government and policy makers that increased borrowing costs would likely drive many families to the brink. One argument homeowners provide for spending so much money on housing is that their home is an investment. This is patently false. Any home is a physical thing and as such, it degrades. Even with regular maintenance and upkeep, a physical object will always be in worse shape than when it is originally built. Just think of cars – how many cars appreciate in value over time? So, if houses themselves are not appreciating in value – what is? Land. Land in desirable locations with the ability to have a house (physically and legally) is the element of this equation that is continuing to appreciate. Of course, housing without land is not possible so the two are tightly interlinked, but it is ultimately the land that is the constraining factor. We cannot make more land and the right to build has come under increasing regulation which reduces the ability of people, companies and organizations to build cost effectively. There are many solutions to this problem, but the real problem is the collective will power for us to change.

On the surface, it is easy to chalk up high housing prices to a failure to build new homes faster than population growth and the degradation of the housing stock. New construction shortages are well documented (Scotiabank report). These shortages are due to a number of factors – land availability, labour availability, capital availability, construction material and regulatory hurdles. On the question of land restrictions, which are substantial, it should be noted that cities like Toronto, Vancouver, New York, San Francisco, Shanghai, Paris, and others all have physical limitations (oceans for New York, Shanghai, San Francisco, and Vancouver or a big Lake for Toronto) or political limitations (intra-muros for Paris). Cities with less physical limitations – such as Montreal, Phoenix, Dallas, Austin and many others can expand in all directions – which significantly helps facilitate construction and therefore housing prices. When compounded with population growth, these physical limitations are likely a substantial portion of the cause of high housing prices.

If we put aside land restrictions, there are still many other factors that lead to high housing prices – the free-market capitalist ownership model, building costs, increasing size and obsession with homes as central to people’s identity and many other factors. This post cannot address all of these complex and intersecting issues, but suffice to say that the solution to the housing crisis is first and foremost: Build homes faster than population growth. Once we accomplish that, we can begin to talk about alternative ownership models and other factors. I will end this post with a few resources that have shaped my thinking on housing.

How Vienna offers affordable housing (see Singapore too!)

Construction Physics Substack

THE GEOGRAPHIC DETERMINANTS OF HOUSING SUPPLY – ALBERT SAIZ 2010, MIT Press

Published on August 8, 2021

Economic Model Fallacy and Risks for Basic Income Movement

Preface

This short essay is a collection of thoughts on economic models in general and their utility for the advocacy of basic income. The subject of the economic impact of a Universal Basic Income (UBI) is perhaps covered elsewhere in the literature, if so I would be most interested in learning about it. 

In 2020, UBI Works, a Canadian non-profit organization for which I am an advisor commissioned an economic modelling report on the effects of basic income on the Canadian economy. This agent based model was developed and simulated by the Canadian Centre for Economic Analysis. The report models three possibilities: continuation of the status quo, the Ontario basic income pilot and the UBI Works proposal. The UBI Works proposal is for a universal 500$ a month dividend and a $1500 a month minimum income guarantee for all Canadians 18 years and older. This essay is a collection of my thoughts on the use of this report for advocacy, lobbying and organizing.

Let me be forthright and clearly state that I am somewhat prejudiced against economic modelling or modelling of human behaviour in general. My underlying suspicion is you can get a “model” to say many different things. When political opponents argue over the economic impact of taxes we are effectively arguing over an economic model. The fact that models can be twisted to say different things undermines credibility of the model in the eyes of non-believers and on the flip side, it gives a false sense of confidence to the believers of whatever the model claims to show. In addition to the fact that the underlying assumptions of a model can potentially change there is also the significant element of the potentially vast number of items that were left out of the modelling. For example, did the model account for labour market changes, impacts of tax changes, disincentive to work due to behavioural change on specific groups within the labour market? The possibilities are endless and with a generalized model of the entire economy it is near impossible to accurately predict the impacts of major policy changes that would affect everyone. 

The main places where I have been exposed to complex models have been in Life Cycle Analysis of products and services, in climate change and in modelling the stock market. In all three cases (but especially the latter two) these are models of human behaviour on a vast scale with innumerable underlying variables and assumptions. The issues I have seen with these models is that you can change a small set of variables and have a huge impact on the outcome of the model. This large variance in consequences based on changed inputs referred to as the butterfly effect where the wing flaps of a butterfly on one side of the world leads to a hurricane on the other. The underlying science of the butterfly effect is Chaos Theory which remains both fascinating and scientifically sound. When you affect change on the scale of a full UBI it is probably impossible to predict the effects across all the facets of society.

On the one hand, basing our arguments on economic growth allows us to confront UBI challengers’ criticisms that a UBI would bankrupt the country. On the other hand, using a complex model opens up to new fronts of opposition and criticism. It will also change the discussion from one about rights and freedoms to one about GDP and government debt. Which argument do we want to have and which argument can we win in the eyes of the policy makers of Canada and the Canadian public?

Is Basic Income an economic, a social or a political challenge?

To be fair, most big issues are a combination of social (philosophical), political and economic rights. These three are more often than not intertwined in a myriad of ways. However, it is critical to determine which type of challenge we are facing and adjust our strategy and tactics in accordance. 

A social problem is one that primarily affects relationships between groups of people based on features specific to those people and who they are. One such example could be LGBTQ rights. This group was discriminated against based on their sexual orientation and it took a social movement to change this. Generally speaking they did not experience political marginalization or economic repression due to their sexual orientation. They were however prevented from fully expressing themselves and being accepted as complete members of society. This has recently changed thanks to decades of arduous work. 

An economic problem is one where the primary issue is access to capital and revenues for a group of people. It can also be a situation where certain people are subject to more difficult economic situations and require additional support to excel and fully participate in society and the economy. One such example could be single mothers who require additional financial support from their ex-partners or from the state to raise their children such that their children are healthy and can access the same services as their peers. Another example of economic challenges could be the right to strike or form unions. This has political elements, but a worker who cannot strike is a worker who is bound to a job and has his economic opportunities repressed due to a lack of capital.

A political situation is one that is primarily about power. The distribution of powers between the federal government and the provinces is a political challenge. The distribution of power between the state and the individual is ultimately about politics. Women’s right to vote was a political problem when it was finally resolved in the 20th century. The relationship between voting groups on key issues such as taxes and other items is a political problem. Unlike a social problem, in a political problem you cannot make everyone happy and compromises must be made between the different groups. This last point is why so many political changes happen incrementally and not at once. Big changes upset too many people (sometimes bigger changes are better though).

In my opinion, basic income is primarily a political reform program. While a basic income will have a massive impact on the economy, it is first and foremost a political challenge because it is ultimately about a transfer of power from the state to the individual and from the wealthy to the poor. If you tax the wealthy and distribute the money through a basic income or if the government takes on debt (prints money) you will be reducing the political and economic influence of capital holders (this is currently happening in 2021). Both approaches to changing the economic balance have their pros and cons which must be carefully evaluated. No country can easily impose massive new taxes or print substantial amounts of money without significant internal and external political consequences. 

In general, political reform is enacted by those in power due to pressures from an organized political movement or through decisions by leadership. It is therefore critical that UBI advocates either gain the strong support from those in power for basic income, place our own advocates in power, build a wide scale political movement or a combination of these three approaches. The current Liberal government of Canada is potentially the most pro-UBI government in Canadian history. With Prime Minister Trudeau and Chrystia Freeland at the helm, there is a strong desire to help the least fortunate and neither the prime minister or the finance minister are fiscally conservative. Additionally, Jean-Yves Duclos is the president of the Treasury Board and a long time advocate of UBI. Lastly, the balance of power is currently held by the left leaning NDP who are sympathetic to UBI. The need to transition the economy through the COVID pandemic is yet another excuse to enact UBI. The current COVID crisis has conclusively shown that the government can dramatically increase debt and can act quickly when required – two key ingredients for the implementation of UBI. That being said, there remain massive political, historical and psychological hurdles to the implementation of a true UBI in Canada.

The most successful political reform is incremental in nature and not revolutionary. Very rarely do systems in established and developed countries radically change in peacetime. Attempts at major overhauls of systems inevitably come up against vested interests and inertia. One recent example is the controversial overhaul of the American Healthcare system. After numerous attempts and decades of effort by very powerful people, Obama was finally able to squeak in a program that kept insurers, companies, and many citizens happy. It also upset a lot of people and is currently being attacked by the right. In the case of Obamacare the vested interests of the healthcare industry are very powerful. These same forces are trying to overturn Obamacare and they may very well succeed. A true basic income, like the one UBI Works is proposing, is a reform of an even greater magnitude than Obamacare. Like that battle, we are facing very strong vested interests in the current non-basic income world. We would be fools to underestimate or dismiss the vested interests aligned against UBI.

Too many UBI advocates assume the locaI is clear and the evidence is overwhelming. When I ask UBI advocates why no country in the world has a true UBI, I get a variety of responses that could be summarized as “governments have just not seen the light”. Like many progressive initiatives, advocates make the fatal error of presuming that others will agree with them if only they had access to the same information. This presumption has sunk more progressive political movements than any other reason. The reason we do not have UBI anywhere in the world is not simply a question of inertia, ignorance or laziness. 

Politicians and power brokers have strong vested interests that will not be simply overcome with logical arguments and evidence. If it were that simple, we would be tackling climate change, offering free university tuition, higher minimum wages, free medical assistance and low cost housing. In Canada we are failing to do most of these things despite clear and compelling economic evidence that we should. To affect political change we need to do many things, but one critical element is to present our program in a new light that casts it as a different solution than traditional welfare solutions. We also need to demonstrate how UBI is an evolution of the current system and not a radical departure. These two seemingly opposites – novelty and continuity – are critical to obtaining establishment support and mobilizing new people.

The UBI model that allows us to achieve this balance of new and old is a basic income in the form of a dividend. A universal and unconditional return on our common assets is a new and innovative way of viewing government and citizenship without upsetting the elite. It also reflects our common understanding of the concept of shareholders in a corporation who receive dividends from the profits of an operating business. In my opinion the dividend model is the most politically viable option as it breaks the traditional welfare state program model without seeming too crazy. It is no longer about tax and spend, wealth transfers, government debt, or bureaucracy – it is about becoming a shareholder in our common future. A dividend form of UBI offers a new narrative and a new way of proposing basic income. UBI Works proposes such a model, but it does not specify that it has to be funded through common assets. This is a risky approach as the most powerful vector of attack on a UBI is its funding model. Due to the massive scale of a UBI program, you simply cannot separate the proposal from the funding model. Without a defined funding model we will be rightfully attacked as just another welfare program. Offering a “pick your own adventure” list of potential funding sources, as UBI Works has done, is appealing because it gives the impression that UBI can be supported by a wide base of people. However this path of vagueness will inevitably lead to internal conflict and battles as we approach our goal of a UBI. Instead of fighting over UBI, we will fight over funding models and that may very well sink the entire endeavour.

Nearly all debates are won or lost on the underlying assumptions that are snuck into a debate (see this excellent Youtube video). The way you frame an issue determines how people will think about it. When abortion is framed as “killing babies” you elicit a very different emotion than when it is framed as a health or women’s rights issue. If we frame UBI as an economic issue, people will rightfully question if UBI is the best way to improve the economy. 

Returning to the specific economic model commissioned by UBI works and conducted by CANCEA, we need to carefully analyze the frame that it sets up for our advocacy. Once the debate over UBI is framed in the minds of citizens and politicians, it will be very difficult to change. Once that is done and we are faced with options within that frame, it is near impossible to break free.The challenge I see with this economic model, beyond the challenges inherent in any large scale economic model, is that it is proposing a tax and spend model for basic income. The model seems to favour little to no government debt despite record low interest and the emergence of modern monetary theory (MMT). I am curious why the model comes to the conclusion that government debt is the bad way to go. Regardless of the reason, if we propose this economic model as the best economic policy option for UBI – this proposed model is in fact proposing the largest tax increase since 1940.

The model does show that the basic income program will create many new jobs and good GDP growth. While this seems like a good outcome, I would argue that there are lots of ways to spend 230 B additional dollars per year that will generate jobs and GDP growth. We could invest 230 Billion more in research and development, universities, startups, on export oriented activities, or myriad of other programs in place to distribute this type of investment. Yes, UBI will solve poverty and create economic growth. However I like to remind people that the government’s priority is not to eliminate poverty. If it were, we would have done it. Government priority will always be to create security and to increase economic productivity. Poverty is viewed as a nuisance or a cost of doing business. We do not need an economic model to show that UBI is better than nothing – we know that. We need a model to show that UBI is better than the alternatives with the same resources allocated to them. 

If an economic model is not that helpful for the UBI case due to the underlying variability in the model, the tax and spend approach or the lack of a comparison with a similar sized investment – we should carefully think if this advocacy tool will harm or help us. Can the economic model hurt our efforts for UBI? The model is likely to help convince a few people and most likely to be appreciated by people who are already firm believers in UBI. My biggest concern is that the model becomes a red herring that will distract us from the core mission of moving the voting population on the issue. 

At a broader level I do not think voters ever vote based on economic programs. Beyond taglines such as cutting government tape or improving medicare, how many people are mobilized by economic reform and GDP growth? We may think that policy makers and the government are mobilized by economic reports and to a certain extent they are. However, it is ultimately politics and votes that determine if a policy will be adopted by the government. Does UBI get the government votes or risk losing parts of the population? A government is supposed to guide the country towards prosperity. However the government must do so within the constraints and established interests of the donors and the electors and the mood of the day. They also typically do not have the time for massive overhauls of programs – if they did, we would have resolved many known problems with our welfare state by now. No one operates in a vacuum – least of all government.

When US civil rights leaders famously met with Franklin Delano Roosevelt and asked for political reform, FDR replied, “Make me.” Ultimately this is the task of the UBI movement – we must make the government put UBI in place. We should have no illusion – there are powerful forces aligned against UBI. To put it frankly, there is no way an increase in government spending of the magnitude required to fund a full UBI will appeal to fiscally conservative or wealthy people. Wealthy people (in which I include the top 10%), have one overriding interest – protect their assets. As cynical as this may seem it bears out time and time again. With the exception of inheritors, the majority of the wealthy class earned their money by being a professional. Their perception is very much that they deserve what they have. The wealthy are interested in policy changes, but only if it means little to no change to their status or way of life. If we propose UBI as a radical redistribution of wealth it will go nowhere. If we propose to take away RRSP and TFSA and other tax advantages there will be massive political push back and I doubt any serious politician would dare to propose that. If we print money at the rate we are doing now the lions of austerity will eventually rear their heads and roar with all their might. In short, it is extremely hard to take things away from people – especially powerful people.

My purpose is not to undermine the hard work and investment the basic income movement is making in this economic model. Hopefully some of the points above illustrate the risks of promoting the study that links 230 billion in new spending to theoretical jobs, growth and massive tax increases. Ultimately we need a clear strategy to advocate for UBI and the strategy cannot be “try to make everyone happy” because we all know that is not possible. The famous definition of strategy by Michael Porter is, “deliberately choosing a different set of activities to deliver a unique mix of value.”. How does this economic model define our strategy and establish the frame of the public debate? Will this economic model convert the unconvinced, bring in new allies or block attacks from opponents? We must carefully analyze the consequences of an economic argument for UBI – there are many – but the way we frame it will set the stage for the grand debate to come.

Tiny Reference

(NY Times)

Published on April 24, 2021

Management Principles

I began my company, Nimonik, in 2008. Since then I have learned a great deal about management, people, challenges and issues. There are already thousands of books on management and I recommend some on my Recommendations page. Whenever I think of management I think of the television show The Office (US Version). The main character in the show is a bumbling office manager with a big heard and a bit of a slow mind. Despite his gaps in competence and sometimes questionable judgment he turns out to be the best manager at the office. In one episode, he reveals that he is working on his very own management book. He has titled the book, “Somehow I Manage” and all the pages are blank. This is the best explanation of management I have ever heard.

In all seriousness, the few management principles that I have learned (the hard way) are as follows. This list is likely to change over time…

  1. Hire motivated people and do not demotivate them.
  2. You cannot manage people, you can only manage performance. Hold people to performance standards and ignore almost everything else.
  3. Different people want very different things in life. Figure out what the person wants (just ask them) and then give them that if you can.
  4. Hire people for the skill you need. Ignore all their other merits and defaults (up to a certain limit). Do not hire people for their overall skillset – hire them for JUST skill you need.
  5. Do not promote people who do not want to be promoted.
  6. Establish a pay scale that is clear and transparent for all. We have a scale with technical and management points that combine to determine your pay scale.
  7. If someone is creating negative energy in a work environment, remove that person or get them to stop creating negative energy.
  8. If you are a boss, do not try to be friends with your staff (this varies based on levels of seniority). If you are a business owner, do not try to be friends with your staff. Leave your staff space to have fun without you.
  9. Set the example.

This list will surely grow over time and these ideas and tips come from various people, experiences and books I have had the pleasure of meeting. I never took a management class in my life, except the class recommended by the great Michael Scott- the school of life!

Published on March 20, 2021