Jonathan Brun

Satyagraha

Basic Income Pilot Projects Won’t Work

For many years basic income advocates have lobbied for pilot projects to demonstrate the power of giving money to all citizens. Advocates all seem to use the short lived Dauphin, Manitoba project in the 1970s as an argument for further pilot projects. This lobbying by advocates of Basic Income led to two pilot projects – one in Finland and one in Ontario. Both are already over. The recent ending of the pilot project in Finland and the cancellation of the pilot project in Ontario, Canada mark significant setbacks for the Basic Income mouvement around the world.

The purpose of these pilot projects was to gather meaningful scientific data on the effects of basic income and use that to convince the public, bureaucrats and politicians that basic income was a feasible and logical idea. However, reason rarely works in the public sphere. Instead, both projects were shutdown or ended. The reason they were ended was certainly not financial or scientific, but rather political. Therein lies the problem, if basic income projects are launched by politicians, they will be shutdown by political situations.

Both of these pilot projects made a fundamental mistake – they targeted poor people. The projects were designed to show the benefits of a basic income over the traditional welfare system. They were not designed to show the benefits of a basic income for a wider part of society such as students, taxpayers or elderly people. By restricting the projects to people on or near welfare levels, the projects positioned themselves as yet another welfare program for the poor. As in most countries, the hard working, tax paying middle class has limited patience for welfare recipients. This is partially due to constricting disposable income and partially due to pure human nature. We have seen country after country downsize their social welfare programs in an attempt to balance budgets, gain votes or free up cash for other programs such as tax cuts. Almost no country in the past thirty years has increased the size of their welfare programs. This should be a (big) hint to basic income advocates.

It’s actually quite simple, most taxpayers have limited patience for people who do not work (for money). To think otherwise is simply idealistic and not aligned with the average (voting) population. At a recent discussion on basic income debate in Montréal, Québec, I asked the famed basic income expert Evelyn Forget how she thinks we should pay for a basic income. Her response was that we should raise taxes on corporations and on people. When I replied this seemed challenging in the current political and economic situation, she responded that it was the best way to do it and people would just have to “deal” with higher taxes.

I strongly believe that the way you finance a basic income is THE defining feature of a basic income. If you finance it through taxes, it will be viewed as another social welfare program not terribly different from numerous existing programs. This is a major problem. The entire idea of basic income is that it is different from other programs. If you finance it in the same way, through tax and redistribution, you are undermining the argument that makes basic income so appealing. Basic income is supposed to break the mold, join the left and right, simplify bureaucracy and give more freedom for individuals to build up their lives. If you fund it through taxes on workers, it will be viewed (rightfully so) as a transfer from workers to non-workers.

As an analogy to basic income advocacy, we can look at advocates for affordable housing. Both groups of advocates believe that what they are proposing is a basic right and should be made readily available. In the first case, basic income advocates argue that all members of a developed nation should have a minimum level of income that assures the essentials in life. Affordable housing advocates lobby that housing is a right, not a privilege, and it should be affordable for all members of society. I agree with both, but the way you go about implementing either is fundamental to the perception of the project by the general public.

For example, affordable housing levels in most western countries has actually decreased as an overall percentage of the housing market. This is due to the fact that affordable housing advocates are taking the same approach as the basic income advocates – namely that affordable housing is there to alleviate the stress of expensive housing and that the affordable housing should mostly benefit the less fortunate. By casting their lot in with the poor, they are severely limiting the base of their political support.

Contrast that with Vienna, Austria. In Vienna, about 50% of the housing stock is owned, managed and maintained by the City. Basically, 50% of the housing stock is a public good, not a private good. Rents are remarkably affordable for a world class city and this brings dynamism and diversity to all the neighbourhoods. However, the main reason this was possible (besides WW2) was because both the middle class and lower economic classes have a vested interest in the success of this public housing. This much larger political base assures that the affordable housing projects continue. Basic income needs to take the same approach and stop advocating for basic income pilot projects as welfare replacements or as a poverty alleviation tool. It may indeed by that, but you should not advocate for basic income in that way.

Contrast the success of these basic income pilot projects with the Alaskan Dividend Fund, that was instituted in 1976. The fund remains tremendously popular and has little risk of disappearing. Why? Because everyone gets it! No pilot project was done prior to the institution of the Alaskan dividend fund and no negative effects have emerged post implementation. If there is one path forward for basic income, it is through the implementation of a lower level of basic income, but that goes to everyone – especially hard working taxpayers who vote.

It is time for basic income advocates to change their tune and thing strategically about how they plan to convince the average person to vote for this. It may take a distinct political party (for another post) or a clear advocate of basic income such as Andrew Yang in the United States, who has placed basic income at the center of his presidential campaign. No matter how you look at it, trying to get basic income to become reality through the path of replacing or supplementing welfare payments is a doomed idea that will never work. Get the middle class on your side and you will win the war, do otherwise at your own peril.

Jordan Peterson is very dangerous

Council of Nikea, where the roman emperor became Christian.

There are two ways or organizing the world. The first method is the most common and the oldest. It involves the collective adoption of a set of social rules that are imposed though a mixture of state institutions, religious institutions and social pressure. Most traditional societies functioned this way. Grossly simplified, from an anthropological point of view, this way of organizing groups of people evolved first from a “respect your elders mentality”. The young and adults of a group could easily overthrow the elders of a group, but the elders managed to impose a set of rules and convince them to respect the wishes and opinions of the elders. This is referred to as a gerontocracy – where the old are in charge. This then evolved into a system where the old men were the dominant actors in a society and could set the rules, expel unruly members, arrange marriages, etc. Most religious societies and many aboriginal societies still function this way. See the Amish, the Hassidic Jews, religious Muslim society, etc.

The alternative way of organizing society is a loose set of rules that are mutable and changeable, with open membership to that society based on merit and physical and mental force. This way of organizing is more chaotic and unpredictable, but it can lead to more innovation and creation that upsets the current order. Examples of this are societies such as ancient Greece, ancient Rome, and of course, western society since the French Revolution – give or take a bit. No society is uniform and the switch between these two modes is not binary, parts of society can live in a highly structured environment while other parts are far more open and flexible. I live in downtown Montreal, an open and welcoming city, surrounded by a highly insular group of Hassidic jews. We get along, but we share few fundamental values.

These two ways of organizing society appeal to different people at different times. In times of strife or stress, order and rules are nice. In times of abundance and growth, flexibility and loose rules are great. For Western Civilization, the collapse of the Roman Empire gave rise to a static set of Christian rules. The collapse was largely due to the Muslim (read: old style world) expansion through North Africa and the Middle East around 750 AD. This expansion pushed the Roman empire north and finished it off after a slow death since Constantine converted to Christianity.

It took 1000 years for the Christian order in Europe to give way with the renaissance and the levy really broke with the enlightenment and the French revolution, where a static old order was literally decapitated. This opened up room for groups to manoeuvre and eventually led to the industrial revolution in Britain, creating material abundance and further disruption. Two hundred years later, give or take, we are feeling a backlash. With economic growth and wages slowing since the 1990s, certain people who were previously on top due to inherited wealth of the industrial revolution (read: white men) are starting to long for that old world order, one set by old men with clear rules.

Along comes Jordan Peterson. For those who have managed to avoid the guy, he is a University of Toronto professor who is leading a charge towards a return to traditional values. He published a bestselling book, 12 Rules to Life, that lays out a set of rules to put your life in order (and those of others too!). He is a very compelling speaker, storyteller and a passionate advocate for a return to something more primal, older, simpler and more ordered than our globalized, equal opportunity, women laden workplaces. He has a tendency to use hyperlatives and extrapolate from small issues to global crises that will create a world catastrophe. He equates the loss of traditional male masculinity with the death of god, for example. In this Vice interview, he states that “Can men and women work in the workplace… we do not know! [if women and men can work in the workplace]. Lipstick … is a sexual display in the workplace. A women [wearing makeup in the workplace who does not want to be sexually harassed] is hypocritical.” This is  a common strategy for Jordan, things are either clear and simple or unknowable. Nothing in between!

Peterson has been on many, many shows in the past few months and this is not to mention his own YouTube channel, that inclues thousands of hours of video. Whenever someone speaks that much, it is easy to pick and choose their mistakes. I do not know the guy, but after originally being intrigued by him, I find myself called to speak out against this false prophet who is contradictory, scheming and lying. He advocates for monogamy and honesty, but says he would vote for Trump. He refuses to dissavowe right wing white supremacists and believes that college campuses are festering pools or revolutionary children who need to be taught a lesson. I do not really have a bone in this fight, except that I believe in an open society that welcomes honest hard working people and strives to improve the lives of the next generation.

The best and most detailed damaging take down of Jordan Peterson that I have seen is the letter in the Toronto Star by his former mentor and advocate at the University of Toronto, Bernard Schiff. This is a man that housed Peterson and his family for months and lobbied the University to hire Peterson in the first place. In the article, Schiff states plainly,

“He was a preacher more than a teacher.” and goes on to say…

“Jordan is a powerful orator. He is smart, compelling and convincing. His messages can be strong and clear, oversimplified as they often are, to be very accessible. He has played havoc with the truth. He has studied demagogues and authoritarians and understands the power of their methods. Fear and danger were their fertile soil. He frightens by invoking murderous bogeymen on the left and warning they are out to destroy the social order, which will bring chaos and destruction.

Jordan’s view of the social order is now well known.

He is a biological and Darwinian determinist. Gender, gender roles, dominance hierarchies, parenthood, all firmly entrenched in our biological heritage and not to be toyed with. Years ago when he was living in my house, he said children are little monkeys trying to clamber up the dominance hierarchy and need to be kept in their place. I thought he was being ironic. Apparently, not.”

Need I say more? Of course, Peterson’s Darwinian social views also presupposes that there are no institutional prejudice towards certain people and that everyone as an equal shot at life. He seems to think that the game is not rigged and if you follow his 12 rules, you will be ok. To believe something along those lines it to be a complete idiot.

In this BBC interview, the interviewed really pins Jordan to his own cross. One of Jordan’s philosophical cornerstones is that Western society is by nature more individualistic and freedom loving than other society [read Asian and Muslim]. This is both clear and good according to Peterson. Yet, with a bit of pressure it becomes quickly apparent that there was nothing terribly individualistic about the Catholic Church (or the Orthodox Church for that matter). To be a member of Catholic society between 700 AD and 1700 AD was very much a collective act. All your sins could only be forgiven by the church and you could only reach heaven through a clear set of rules and an institution ruled by older [celibate] white men. By the way, Peterson was celibate before marriage. However, Peterson on the one hand labels himself as a liberty loving liberal who believes in individual freedom. Yet, he advocates for a set of clear rules that everyone should follow. Peterson is on the express train to hypocrisy town! The BBC hosts correctly identifies Peterson for what he is, “a fiery evangelical baptist preacher”.

What is so dangerous about all this? Peterson (and others) are creating a narrative for angry white men who feel that they are losing their place in this world. The place they presume to have, is at the top. The presumption of superiority is not based on skillsets, culture, or intelligence – it is based on looking at the past and saying, “that is how it was, that is how it should be”. Yet, the real reason western society excelled and grew over the past three hundred years (after 1000 years of stagnation) was not because of a strict set of rules or a set social hierarchy. Western society grew because we destroyed the rules of yore, tore down oppressive institutions, created the industrial revolution, took land and ressources from the weak and used slave labour to grow our wealth. It wasn’t pretty, but it did establish Western society as top dog. Losing this position is scary and some look towards the past for a solution. This is dangerous and not unlike past social convulsions.

Perhaps the most devastating attack on Peterson was done by standup comedian Jim Jeffries. Jim Jeffries came to fame thanks to a hilarious (and scary) video about gun control in the United States. He simply explained that Americans love their guns, not for freedom and liberty, but because guns are fun! He is correct.

In Jeffries’ interview with Peterson, her gets Peterson to very clearly state that we should not force people to bake cakes for homosexuals or blacks if the [professional] bakers do not want to. A few seconds later Jeffries confronts Peterson with the challenge of getting southern US restaurants to serve black people during Jim Crow era. Peterson’s position crumbles like the cheap deck of cards that it is. Peterson confesses he was wrong and we should force bakeries to serve everyone. At least Peterson admits he is wrong and frankly speaking, he is wrong – across the board on many issues. Peterson has other ridiculous positions such as the one where he says gay marriage is acceptable (barely) because it will reduce the amount of extra-marital sex homosexuals have and they may have sex with less people. Terribly utilitarian, terribly stupid.

Augustus, emperor of Rome

 

There is a tomb in Rome. The tomb of the first true emperor, Augustus. He inscribed his accomplishments and his tips and tools for governing Rome. He stated, you have to build, build, build and invest in conquest. That, my friends, is the solution.

To keep our world of progress and democracy alive, we must build and conquer new frontiers. We must build new technology, roads, bridges, Hyperloops, reusable space rockets, electric cars, artificial intelligence, technology to clean the oceans and the air, and robots to relieve us of menial tasks like driving cars and trucks. We must build social systems that distribute collective wealth to allow for each person to have an equal opportunity in life. We must build tools to communicate across cultures and preserve cultures. We must build systems that welcome immigrants and integrate them into our societies. We must build infrastructure so other countries and civilizations can grow and prosper. Through collective building, we align our visions. When we sent a man to the moon, the whole world looked up to the stars, together. Humans are social creates – we want pride, acceptance, comfort and opportunity. We can try to offer that one of two ways, through a strict set of rules that puts everyone in their place or through a collective effort to build a better world for which we do not yet know the rules.

Additional Links

Mary Beard Documentary on Rome

B2B SaaS in China

China is a large and tempting market for software vendors. In April 2017, our Canadian based SaaS B2B company Nimonik acquired a similar company base in Shanghai, China. The company in Shanghai is called Envitool and was setup in 2010 by a Swedish company.

Envitool is a Wholly Owned Foreign Enterprise (WOFE) and it offers an online service that helps businesses understand and monitor environmental, health and safety regulations. It also offers some consulting services that are critical to the use of the software system. When researching the market and legal requirements in the run-up to the acquisition, I read some interesting articles about selling software as a service in China and insightful articles on dos and dont’s on China Law Blog. Despite our research, there was not a lot of positive articles on B2B SaaS or SaaS in general in China.

Since the acquisition we have learned that running SaaS in China is not as hard as you might think, but it does require additional resources, costs and complexities. For one, you need to pick the appropriate legal arrangement for your entry into the Chinese market. The company was already a wholly owned foreign enterprise (WOFE), but we did look at various options below.

Legal Options for SaaS in China

  1. Do business through a Reseller:

Keep the server is located outside China to reduce risk that the Chinese government would put up a firewall and block access. At a minimum, the reseller locates customers for the foreign company’s SaaS product. The reseller provides the ultimate customer with a username and password that allows the customer to connect to the foreign server hosting the SaaS product. The reseller collects the fee from the customer and deducts and pays applicable Chinese business and income taxes and then remits the remaining amount to the foreign software provider.

  1. Set up a WOFE

We estimated it takes about 6 months of time and  $50K to $100K USD for paid up capital. Once paid up capital is resident in China, restrictions apply to taking out 50% of it, once the WFOE is profitable. Basically, you need to park money in the company in China and you can never take all of it out.

  1. Do business through an Agent

Licence the your software to a Chinese entity that obtains the commercial ICP license that allows for offering the SaaS service to Chinese customers through a Chinese server. If a partnership type arrangement is set up, the Chinese Agent would invoice and collect payment from customers, and continue to be responsible for the operations in China.

  1. Do business directly in China from Overseas:

You are short paid for the amount of taxes (withholding tax 10% & VAT). Payments may be delayed and clients may not receive permission to send payment as they cannot easily send money overseas. As a non-Chinese company, it would be difficult to get approval to run the software on a Chinese server, and if run on a non-Chinese server, you run the risk that the Chinese government would put up a firewall and block access.

Key Lessons Learned So Far

For a variety of reasons we opted to acquire the existing WOFE and continue to run the company from China. We are in the process of integrating the data from the Envitool software into our more modern platform, NimonikApp. Once that is complete, we will move all of our clients and data to the new platform and offer only that to the Chinese Market. We maintained the legal entity in China, maintained our ICP licence and ensured that we have trademarks in China.

To setup the Swedish Envitool company in 2010, the services of Scandic Sourcing were used. This is a Swedish consulting company that helps businesses setup in China. They also offer back-office services related to accounting, taxes, payroll and other items. We are still using their services and are very satisfied. They work with our team to ensure that all of our documents and paperwork are in order.

Getting Paid

Though all the legal questions are fun and interesting, the main worry for many foreign businesses is “will I get paid and how!” If there is one thing the Chinese Government is serious about, it is the collection of Taxes. Invoicing in China is interesting, the workflow is as follows:

  1. We speak to an existing or a new customer
  2. We send them an order form with a quote, this order form is stamped with our company seal (called a Chomp)
  3. They sign and return the order form (sometimes in paper format and sometimes in electronic format).
  4. We then send a real invoice (FaPiao), this is printed from a specific machine that is connected to the government servers, so they know exactly how much we charged, when and to whom
  5. We stamp the invoice with another company seal (you have three different ones, one of which authorizes the sale of the business)
  6. We then physically send this invoice to our client
  7. Our client pays us via bank transfer
  8. We charge a 6% VAT on all of our invoices and we have to remit that amount immediately, not when we get paid.
  9. If an invoice never gets paid, it can be cancelled, but it is complicated. This happens in less than 2% of our cases.

I could go on with the intricacies of managing a team of Chinese sales and EHS experts, the cost pressure from local Chinese competitors and the demands for constantly increasing salaries – but I will spare those details for now. Long story short is that you can do B2B SaaS in China, but be prepared to invest at least 500 000$ before you see profit and make sure you work with local partners who really understand the system. Feel free to contact me with questions or comments, always happy to help a fellow weiguoren!

 

Who will lead the world?

Western media is biased against China. Then again, the west is biased against everything that is not western. From ancient democratic Greece, to the Roman Empire, to the Christian world, the renaissance, the enlightenment and the industrial revolution and putting a man on the moon – we think we are the the best off the best. Nevermind the slavery, the crucifications, the witch burnings, the constant warfare, rape, pillage, massive environmental damage, imperialism, the holocaust, foreign wars and the treatment of minorities – we are the best! We are taught at nearly every level of schooling that the logical endpoint of human societal development is the path the west is on, the ideal system, though imperfect is the liberal representative democracy. What if we are wrong?

History is a long and winding road, the victor never permanent nor clear. Today’s global geopolitical situation is as cloudy as it has been since the 1930s. Back in the 30s, many leading politicians and thinkers were engaged in a serious debate over the merits of capitalist market economies, fascist dictatorships and communist nations. Capitalist market economies won out, proving many smart people wrong. However, this does not mean that our system is the long term solution or that it beats all other potential solutions. It might, it might not. Today, the rise of populist protectionist anti-immigration nationalists in the UK, Austria, Turkey and the United States, contrasts starkly with the defence of globalization by China, France and Canada. To add to that, the ongoing regional wars in the Middle East create great uncertainty over the future of that part of the world. Where will Saudi Arabia, Lebanon, Iran and Tunisia be in 20 years? I have no clue. More and more, I am asking myself what Europe and its former colonies will look like 40 years? Will we still be the dominant economic an cultural powers or will we have returned to an Asia centric world that dominated the world from 400 AD – 1700 AD? If so, what will happen to the west?

For most of human history, the economic centre of the world was Asia. Asia had the most advanced technologies, the most complex societies and the wealthiest nations. For a variety of reasons, Europe emerged as a leading intellectual powerhouse with the Renaissance and then with the Enlightenment and the Industrial Revolution. This took about 800 years after the fall of the Roman Empire. Why this happened is well dissected in books such as Guns, Germs and Steel and other anthropological studies. One of the standard narratives we tell ourselves is that West’s rise required democracy and competition. We explain to our muslim friends or our Chinese friends that our democratic institutions allowed for the intellectual freedom that led to the three iterative improvements during the Renaissance, Enlightenment, and the Industrial Revolution.

Of course, there was no true democracy until 1776/1789, so maybe democracy was not the key. Despite a rather monolithic Church, the competing states and aristocrats in Europe along with physical mobility allowed for competition, innovative ideas and eventually, massive cheap labour for factories. In a sense, though there was no democracy until the late 18th century, Europeans had more individual liberty than Asians as they could and did move from one nation to another with their ideas and projects. The famous story is that of Christopher Columbus who visited three kings before obtaining the venture capital to set off for a route to the Indies and needing up in the Americas, the rest is history, as they say. We are told that without individual freedom in Europe, the momentous inventions and advances that led to most of our modern day wealth would have not been possible.

When the European powers controlled most of the world and invaded China in the mid and late 1800s, our production capacity was 10 times more efficient than China due to the use of fossil fuels and the invention of the steam engine. (See Richard Baldwin, The Great Convergence, p. 59). 10x times can be hard to imagine, but try to imagine a country that is 10x more productive than the United States (or Sweden) on a per capita basis. This discrepancy is so massive it would inevitably lead to domination of one nation by another and likely to a sense sense of superiority.

In contrast to clearly divided European powers post Peace of Westphalia, China had a centralized imperial system that shut its doors to outsiders and trade in 1422, starting its decline to a impoverished nation. Some argue that had China been more fragmented and more individualistic, it might have had the ability to innovate like the West. Additionally, its lack of rule of law and democracy prevented new innovative ideas or progress from being made. Some argue that Asia is less prone to innovation than the West, making a clear implication that the west and caucasians have an inherent cultural advantage. That is the story we are told and like all stories, it has an element of truth.

Culture is a technology. As Lawrence Lessig has said, our laws (and culture) are the source code of our society. The laws and regulations determine what we can and cannot do, the method of innovation in society, our interactions and the way we offer opportunity to those who strive to build something better. Culture enables us to interact with each other, it sets societal norms and defines what is acceptable and what is not. Cultural norms and legal systems change for better and for the worse. But, it should be noted that anyone can steal and borrow both our hard technology (plans to a nuclear plant) and our soft technology (culture).

Our culture that lynched blacks, castrated gays, and caused wars and devastation has changed dramatically for the better. Asian culture has and will evolve as well, so we must avoid assuming that the rise of China is a temporary event – inevitably to be set back by the realities of their lack of a liberal democracy. China Economic Quarterly made a point recently that the west has been predicting the demise of China for more than 20 years and that has not yet materialized (thought it does not mean it will not).

Between 1880s and 1950s, many educated and intelligent people believed that the World would move from capitalism to socialism. The tremendous progress made by the Soviet Union and then China in improving the welfare of their people seemed to signal that a centralized and powerful state would beat out a decentralized and less organized Western Democracy. Yet, the revelation of the excesses of Stalin and Mao along with the collapse of their economies laid bare the failures of that system, With the fall of the Berlin Wall, the victory of liberal democracy over communism that was not at all obvious in 1930 or 1950 became self-evident.

But what if we are wrong? What if the Chinese governance model of a strong state and the interaction of government bureaucracy, state owned enterprise and government officials is actually a better model than universal suffrage and representative democracy?

China’s rise is still confounding many researchers. It goes against the narrative that without liberal democracy, a nation inevitably collapses due to corruption and nepotism. Xi Jiping’s 3 and half hour speech in 2017 on growing Chinese power and their preparations to open their economy, invest in clean energy and engage the world would not have been imaginable 40 years ago. His shorter version at Davos hit many of the same critical points. Many western commentators still write it off as a ploy and that the country actually has little intention of doing what it says. The west seems to confuse what we want from what is and this can be a deadly mistake. With 6,8% growth in China and a stable political system that is generally well liked by its people, it is becoming less and less obvious who will collapse first – the West or China.

This interesting talk outlines how the Chinese political machine works:

One of the reasons the West continues to culturally dominate the world is the narrative of freedom and democracy. We can rightfully claim that our rule of law and low(er) corruption levels will carry us in the long term as investors and people prefer to live and be members of a society where they are not subject to arbitrary decisions by government officials. However, our story is starting to show cracks at the seams.

The United States, the most democratic country in the world, has severely overextended itself in the Middle East and its internal infrastructure is crumbling. Additionally, its continued problems of racism and the mass imprisonment of millions of its citizens is undermining its ability to convince anyone, let alone China, that it has the right political and economic model. The capture of Congress and even the presidency by lobbyists and powerful interests makes it difficult for anyone to believe that the US is less corrupt than the average country. Additionally, the US has lost a great deal of support in the developing world as its proposed solutions for development, offered through the World Bank and the IMF have failed to deliver real gains for citizens. More and more countries are looking to China’s model as an option for development.

Speed of delivery is a core part of the satisfaction of the recipients. From the mundane to the geopoliticical, speed matters. Domino’s Pizza is famous for its commitment to deliver your Pizza in 30 minutes or its free. Despite mediocre pizza, this time limit made Domino’s into a financial success. At the national level, the speed of the reforms politicians deliver is just as important as the type or reforms.

At the U.S. Republican National Convention during the 2012 US election campaign the Hollywood actor and director Clint Eastwood improvised a skit. He stood on stage, in front of the nation and talked to an empty chair. He rambled about the lack of progress and lack of change for the American people. The imaginary chair represented Barack Obama.

At the time, everyone mocked Eastwood for an incoherent speech, but looking back on it may have been prescient. Obama did make progress, but for a few reasons the progress he made was marginal and slow. No significant metric in the US moved significantly – education, infant mortality, social mobility or disposable income. Some people received cheaper college and some people got insurance, but in the grand scheme of things it was too little, too slow to stop the rise of Trump.

Speed is of course a double edged sword. You can move fast in the wrong direction and part of the reason we endorse representative democracy is to avoid fast decisions made by one person that lead to disaster. However, as more and more countries are turning towards the Chinese approach of making big and relatively fast decisions on a 5 year scale and using state tools to accelerate implementation – notably State Owned Enterprises. Western commentators often brush this off as a desire for third world leaders to clamp down on opposition and that China is simply offering them a dictatorship model, not an economic model. However, I think that more and more countries are looking seriously at the type of State Capitalism that China has demonstrated and saying – why should we outsource our projects and thinking to western companies and institutions? We need to build up our internal capacity and remain independent. It is of course much more complex than this, but at a high level, Western development models have hit a brick wall and the past poster children of our development models – South Africa, India and Brazil – have seen their rise stall.

If we cannot deliver economic growth to developing countries, at least we can show them the moral high ground of democracy and freedom, right? Yet, our moral high ground (which was dubious to start with is eroding due to our wars, growing nationalism, refugee crisis handling and high incarceration rates in the US. If the West loses its moral high ground it will be near impossible to counter Chinese political and economic initiatives in the developing world. Countries will increasingly turn towards a Chinese type model of a strong state, large state owned companies and limited individual freedoms and liberties.

Yet, the recurring response to all this is that the West will rise again. That our system of governance, imperfect though it may be, offers the greatest freedoms and the greatest opportunities for individuals to create value for society. That, despite our challenges, we will rise again and hold high the light of liberty that all humans desire. This is a dangerous strategy. Many empires and ideologies thought themselves better than everyone else and then crumbled. The West’s wealth is primarily built on technical innovation (steam engine, …) and a bit of exploitation of people (slaves) and natural ressources (colonies). We are still living of our lottery ticket from 1700 when we invented the steam engine, extracted natural resources and colonized the world. What happens when we use up our winnings?

There is no doubt that an overhanging question that remains for the great Chinese expansion is, “Can you develop a society with rule of law and low corruption within a one party system?”. In concept it would seem not. An independent judiciary requires a political system that is not beholden to one set of people. Yet, the Chinese Communist Party is a party that has changed dramatically in since its inception in 1921. It has gone from a Soviet allied party to the Great Leap Forward that tried some pretty insane things and then to the Cultural Revolution that attempted to put farmers in prestigious universities and now to a form of state(s) directed and dominated market economy that is focused on technology and science advancement. China has shown a tremendous ability to change over the last hundred years. The west has not, though our civil liberties have greatly improved, our political institutions are basically unchanged since 1776.

Political systems aside, there is one trump card: technology. At the end of the day, all other thing aside, the rulers of history had the best technology – the best tools for farming, for production, and for war. As Vladimir Putin recently said, “the country that controls Artificial Intelligence, will control the world.” If the West wants to stay competitive, let alone rule, it needs to dramatically accelerate technological innovation and its deployment into society. We know what we need to do – autonomous vehicles, AI, hyperloops, better food production, space travel – the governments need to have the courage to invest and to act. I fear that our governments do not have that courage, the fear failure more than they believe in the potential for big projects to pay off. If we can say one thing that is without debate, the Chinese communist party believes in doing things on a massive, massive scale. From high speed rail to electric cars and AI, when China decides to go big, it goes very big. The next economic revolution is coming and it is not clear the West will lead.

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Useful articles on China

A Chinese Empire Reborn – The New York Times
Brrr … Xi’s short-sighted pollution policy goes up in smoke
What to do about China’s “sharp power” – Sunlight v subversion
Do you still want to bet against China?
Year 2018 in China
Behind the Fall and Rise of China”s Xiaomi
The traditional Chinese dance troupe China doesn’t want you to see
China’s Top Ideologue Calls for Tight Control of Internet
Maybe China Can”t Take Over the World
Wang Huning: China’s Antidote to Strongman Politics
The Western Elite from a Chinese Perspective – American Affairs Journal
China Busts a $3 Billion Underground Bank as It Tightens Its Grip on Money
China Looks to the Dumb Money for Its Financial Industry
China”s Quest For Clean Air Could Hit You in the Wallet
What a debt crisis in the provinces says about governing China
4 Attitudes of Chinese Young Women Impacting Their Lingerie Preferences | Jing Daily
Pollution curbs set to make skies clearer – China – Chinadaily.com.cn
Air Quality in China: Improving But Still Not Healthy
As Trump turns his back on the world, the stage is set for President Xi | Larry Elliott
China’s Silk Road Illusions
Opinion | Will the Next Steve Jobs Be From China?
We are obsessed with Brexit and Trump: we should be thinking about China | Martin Kettle
Xi Jinping heralds “new era” of Chinese power at Communist party congress
China’s Electric Car Push Lures Global Auto Giants, Despite Risks – The New York Times
The future China chooses will dictate the future of the planet
China encourages environmental groups to sue polluters
‘My job is to clean up the environment. China really wants to do that’
In the shadows of high-rises, Shanghai’s small neighbourhoods struggle to survive | Aeon Videos
“You should consider our feelings”: for Chinese students the state is an extension of family | Merriden Varrall
As Bike-Sharing Brings Out Bad Manners, China Asks, What’s Wrong With Us?
China Should Beware What It Wishes For
Global automakers call on China to ease “impossible” electric car rules
10 Chinese Megacities to See Before You Die
The changing face of growing old in China
Is China Outsmarting America in A.I.?
China”s Asian Dream
World”s biggest building project aims to make China great again
China can deflate the world’s largest credit bubble in an orderly fashion
Inside Alabama’s Auto Jobs Boom: Cheap Wages, Little Training, Crushed Limbs
As Hong Kong Chooses Its Next Leader, China Still Pulls the Strings
China Poised to Take Lead on Climate After Trump’s Move to Undo Policies – The New York Times
China to Plant ‘Green Necklace’ of Trees Around Beijing to Fight Smog – The New York Times
The miracle of reading and writing Chinese characters
Welcome to Yiwu: China”s testing ground for a multicultural city
More than 100 Chinese cities now above 1 million people
“Half these apartments are empty”: Mao’s former home city struggles with growth
China Pushes Legal Overhaul That Would Bolster State Power
China’s Plan to Build Its Own High-Tech Industries Worries Western Businesses – The New York Times
Chinese premier declares war on pollution in economic overhaul
China builds world”s biggest solar farm in journey to become green superpower #GlobalWarning
Out of China’s Dusty Northwest Corner, a Solar Behemoth Arises
China”s premier unveils smog-busting plan to “make skies blue again”
Beijing is replacing its entire taxi fleet with electric cars to fight pollution
Gas-to-electric cab conversion in Beijing brings opportunity worth 9 bln yuan
Elon Musk reaffirms UBI prediction at World Government Summit | Basic Income News
China”s Outstanding B2B Invoices Grow | PYMNTS.com
Selling your software in China
What’s Causing Those Capital Outflows From China: QuickTake Q&A
China “eliminating civil society” by targeting human rights activists – report
Why Europe Is Warning of Pax Americana”s End
How Xi Jinping”s global ambitions could thrive as Trump turns inward
Getting Money Out of China: The Reality Has Changed | China Law Blog
SaaS in China: The 101 | China Law Blog
Selling Software as a Service (SaaS) in China
Foreign SaaS in China: Get off of my cloud
Is Your WFOE in China Optimized? Find Out Where You’re at Risk of a Crash Landing…
Watch Out For Saas Startups in Asia

Business Books for Scaling Up a Successfulish Startup

When I started Nimonik in 2008 I had read some key books on business and software. Nimonik is my main occupation and our stated goal is to Improve the world by helping businesses comply with environmental, safety and quality regulations. We offer a software as a service and now help over 500 companies track and comply with both regulations and internal standards. Though we are doing well, the company is still in its infancy.

Many of my friends think I know what I am doing and they ask me about their business ideas or how to get started. To help, I thought I would discuss a bit of the knowledge I have acquired and that now helps Nimonik grow sustainably. Ten years ago, I blogged that books such as Good to Great and Getting to Yes were respectively helpful in understanding leadership qualities of great CEOs and negotiating tactics for getting deals done. Both of those books were critical to what we have done at Nimonik. Another key book that helped us start was the 37Signals book on developing software, Getting Real. The book and blog posts by 37Signals came to my attention prior to starting Nimonik and they had a major impact on our choice of the programming framework Ruby on Rails and our approach of building clean and focused software based on the user’s real needs. For anyone looking to start a software project, I think Getting Real is a critical book to read.

10 years after I first blogged about Good to Great, I have learned a lot and made many mistakes. Starting a business is one thing, growing it is way harder! Nimonik was a tiny and fragile operation between our start in late 2008 and 2013, we were focused on securing key clients and slowly growing our operations and our product. In retrospect, we probably underinvested in the company and this hampered our growth. When we started, my two partners and I put in $25,000 and started with two clients who provided revenues of about $40,000 per year. However, the counter point is that had we taken in more investment, we likely would have wasted more on the mistakes that we did make. Who knows!

Starting in 2013, the company started to pick up steam and we have seen a doubling of revenues nearly every year since then. In 2016 we acquired a Toronto based company that was both a supplier and a competitor and in 2017 we acquired a company in China that had good market penetration there. Both of these deals were primarily equity swaps and the book Getting to Yes and its companion book, Getting Past No, were instrumental in our negotiating tactics to obtain a fair deal for all the parties involved. This KMPG webcast, Why most Acquisitions Fail has been very helpful for our integration of the two companies we have acquired. These books were all critical to keeping us alive, but growth was another challenge.

Starting in 2015-2016 we started to have growing pains. Staff turnover was higher than we wanted and team members were struggling to adapt to a small organization that was growing. I must admit that I was underprepared for growth and struggled to figure out what type of leadership I should offer, what I should prioritize and how I could delegate responsibility. Happenstance is a critical part of life. I regularly play hockey and though I must admit to being a fairly poor player, I believe that everyone (and especially entrepreneurs) should engage in regular team sports – it really helps clear the mind and it sets a weekly pace with regular games. One day, in the hockey dressing room one of my teammates mentioned an entrepreneurs club he was part of and I explained some of my challenges. He recommended a book, Scaling Up.

I read the book fairly quickly after the meeting and it opened my eyes. For any entrepreneur who wants to grow their business, I cannot recommend it highly enough. In contrast to many business books, Scaling Up is very actionable and clearly explains the four critical parts of a successful operation.

  1.  Attract and keep the right people : People

  2.  Create a truly differentiated strategy : Strategy

  3.  Driving flawless execution : Execution

  4.  Having plenty of cash to weather the storms: Cash

Though we have not yet implemented everything in the book, we have clarified our mission, our values, improved our cash position and improved our retention by leaps and bounds. There is a good summary of the book here. Through the Scaling Up Newsletter (which I very highly recommend), I was put onto other critical books.

Confessions of a Pricing Man is an amazing view into the world of pricing. At Nimonik, we feel regular pressure from certain clients to reduce costs and with other clients we see opportunities to offer more services at higher prices. Our challenge has been how to price our services to maximize our profit and minimize lost opportunities. This book is a must read for anyone running a business. If there is one message it hammers home, over and over again, it is that you must focus on profitability – not revenues. This same message was passed along to me by one of my uncles a few years ago.

My uncle was a mid-level manager at a company in France. The company built and sold systems for train navigation to the French national railway company (SNCF) and to many metro systems in France. He worked there for many years and at a certain point, the owners of the business wanted to retire. It was a family owned business and my uncle, having been a manager and having raised a family did not have a large investment fund he could use to acquire the business from the owners. However, he had made a critical insight into the business, the French rail and metro companies were tied to this supplier. This supplier’s products were the best on the French market, having been developed by the French military and it would be very challenging for the French rail companies to switch suppliers. This meant that the rail navigation supply company he worked at had pricing power which it was not using. My uncle ran around and gathered as much money as he could and even then it was not enough. He explained to the widowed owner of the business that he could not pay the price they wanted, but that he could pay out of future earnings. Remarkably, she agreed.

After the acquisition, my uncle simply went to their customers and informed them of a substantial price increase. Of course, they objected and fought. He held firm and informed them that they could simply purchase other products if they wished, knowing full well they could not easily do this. Eventually, the customers agreed and overnight, the business became highly profitable. He then went on to sell the business a few years later and he intelligently played two potential acquirers against each other. He leveraged the French-German rivalry of the acquirers to get them to outbid each other and he increased the purchase price of his company by over 50%!

Of course, this all sounds very easy in retrospect, but it took good timing and smart moves. He had worked at the company for many years and so he knew the industry and the owners, he was at the right place at the right time and he had the courage to increase pricing overnight. My uncle always told me, “Profits are all that matter, not revenues.”. Confessions of a Pricing Man propounds the same message and offers fascinating examples of different markets, businesses and strategies to improving the profitability of companies.

The last book to mention is Mastering the Complex Sale. This book outlines what it takes to make sales to large companies with committees, competitive bidding and complex and imperfect decision making processes. At Nimonik we sell mostly to mid and large organizations – L’Oréal, FedEx, Bosch,… and though our contracts are relatively small – $5,000 – $80,000 per year, we are faced with complex decision making and conflicting priorities from our clients. Our sales strategies and tactics have been developed mostly by trial and error and gut feeling. We tried more and less aggressive tactics, more or less phone calls, more or less email, and a variety of permutations in between.

To date I have been responsible for most of the larger deals we have signed at NImonik and as I tried to scale our sales operation I kept hitting a wall with the sales team. They could land smaller contracts, but the larger, more complex contracts kept coming back to my desk. It was partially domain knowledge, but I could tell it was more than that. I tried training, explaining and doing problem shooting with the sales team, but it did not stick. They kept asking me questions like, “How do I gain the client’s trust?”. This question baffled me, I would simply reply, “By being trustworthy!”, but that was not enough. We needed a how-to guide for the sales team.

The book, Mastering the Complex Sale is the best framework for larger complex deals that I have found and we are starting to implement it at Nimonik. Here is an excellent summary of the book here, which states,

A smarter way to sell transforms the conventional sales pitch that customers must endure into a high quality decision-making process that customers value. It transforms salespeople from predators into valued business partners in the customer’s mind. It transforms the sales process from premature presentations to a process of mutual confirmation. And it transforms the conventional solutions-based, seller-first approach to sales into a diagnostic-based, customer-centric approach. In fact, a smarter way to sell, Thull [the author] persuasively argues in Mastering the Complex Sale, is to stop selling in the conventional sense and adopt a practical proven approach called Diagnostic Business Development (or the Prime Process).

There are other great business books that I have read recently, such as Double Double, High Output Management, Only the Paranoid Survive and Epic Content Marketing. However, if you are in a decision making position at a company, whether it is your own or someone you work for, I think that the three books mentioned above are the most powerful and actionable business books I have found so far. My colleagues, who completed MBA programmes at prestigious schools agreed that they probably could have skipped MBA school and simply read those books – it certainly would have been a lot more cost effective!

 

 

How to Save the World – Liquid Feedback, Basic Income and More Politicians

Canadian Prime Minister Justin Trudeau recently announced he would not be reforming the electoral process despite making a very clear and unequivocal commitment to do just that during his most recent election campaign. He said, “election will be the last federal election using first-past-the-post.” But we all know campaign promises are meant to be broken, silly rabbit! Trudeau claimed that there was no consensus concerning the type of electoral system we should put in place and there was not enough momentum to change the current system. While both points are true, I believe the real reason he did not move forward with the change was simple: the return on investment was not there.

Parliamentary Westminster democracies and Republics are broken in too many ways to count. Political journalist Andrew Coyne wrote a great piece in the Walrus outlining the accumulation of power in the prime minister’s hands and the disempowerment of members of parliament, and therefore citizens, over the past century. He dives into more detail in his recent talk (“Our Broken Democracy“) and even proposes some solutions to our situation. He chalks up the failure of Canadian democracy to things like the nomination power that the Prime Minister has over each MP (the PM can choose not to sign the MPs card and thus disqualify the person), the nomination of judges and many other government positions, the lack of proportional representation and the tight party lines that are enforced by the whips and the prime minister’s office.

While Coyne’s points are valid, he makes a most common mistake: he is reasoning from analogy, not from first principles. His proposed reforms to our system assume that our system has the correct foundation and that Westminster parliament is still appropriate to our situation. Nearly all of his proposed solutions exist in other democracies in some form, Germany has mixed-proportional representation, the US elects its judges and France does not hold to party lines. The system is broken and Coyne is is trying to put Humpty Dumpty back together with pieces from other democratic systems.

Changing an electoral system is a huge undertaking, it requires discussion with civil society, bureaucrats, politicians from different levels, societal education and much, much more. I cannot think of any country that has made a significant reform to its electoral system outside of a seismic event such as an economic or political collapse. The reality is that any electoral system we could imagine – within the realm of the existing systems – is just not that much better than the current system. Preferential voting, mixed proportional, proportional or something else might improve our ‘democratic performance’ by a couple percent (whatever that might mean) – but the cost to implement the change would be massive.

As I discussed in my 2012 TEDx talk, Canadian democracy needs much more than a fresh coat of paint. We are talking about a system that was designed before electricity, the internet, cars, trains, and planes. The US Republican system, as an example, still has a number of procedural rules that are based on the travel time by horse and buggy to and from Washington D.C.! Coyne and many other democratic reform activists seem constrained by their assumption that radical change is not possible or desirable. Or perhaps radical change – that is, attacking the root of the problem – does not even enter their train of thought. Who knows.

Four Critical Books on the Structure of Society

A great book I read a couple years ago is A People’s History of the World by Chris Harmen. The book charts the rise and fall of societies from the points of view of the working classes. Written by a self-proclaimed Marxist who applies the lens of class struggle to world history, it covers a wide array of political movements and outlines some of the underlying trends. The book puts in perspective our own system and how much of our democratic institutions were built by the male and older middle-upper class to allow them to retain control of the system, while appeasing some of the democratic demands of the people. The systems put in place in the British, French and American revolutions were done to ensure an orderly transition from kings and queens to a political elite that could be controlled by the same, but slightly larger, entourage.

A book that goes well with this one is David Graeber’s Debt, which charts evolution of debt in society. Debt and the way we treat it determines much of our social fabric. Who owns what is largely determined by who owes what. This essential book compares societies around the world and across time and proposes some radical changes to our current financial framework. I cannot effectively summarize this masterpiece, but you can read the short essay that David Graeber wrote himself. If the book does anything, it shatters your view that the system we have today is inevitable or ideal. Debt and our indebtedness through mortgages, credit cards, medical debt and student debt is a massive burden on society that is killing the potential of billions of people.

The trend of accumulation of power in the upper classes has come back to the forefront with the blockbuster book, Capital in the 21st Century by Thomas Picketty. The central thesis of the book is that when economic growth is less than the return on capital, wealth moves towards the top of society. That is, a worker who is basically riding economic growth through wage increases can never catch up to a person who is earning their revenues through return on capital. The historic norm for return on capital, most of which is housing, is 5%. So growth below that leads to an accumulation of wealth at the top. Of course, the book outlines the case and the structure of capital in a much more detailed way that we should all try to understand. Growth in the west is currently just above 2%, but between WWI and about 1970, it was near or above 5%. Coincidentally that period saw the rise of the middle class, free education, universal healthcare and massive technological innovation.

We have now returned to a situation where owning a building is potentially more lucrative than riding on society’s innovative capability – this is a dangerous situation. Since wealth (specifically capital that can be leveraged or become liquid) is simply a storage unit for power, we seem headed towards a return to a plutocracy of some sort. Despite the common assumption that we live in a democratic society where the government is held accountable by the people, power – both political and financial – has actually shifted away from the population in the past forty years and into an elite of extremely wealthy individuals.

However, over the past fifty years a significant portion of the population has been made docile by television, video games and low cost products from emerging markets. Our own greed and sloth have led us to a situation where the good jobs are gone and the future does not look that great. While the majority of society’s situation has stagnated, our elite accumulates more power and a great deal more money thanks to globalization and the segregation of the supply chain of major corporations. The excellent book The Great Convergence explains how there are three key elements to a society’s economic structure: The movement of goods, ideas and people.

The first pillar, goods, was made much cheaper with the invention of the steam engine, allowing Europe to move its goods to markets around the world. Previously, you could only sell to local shops. The second pillar, ideas, has been made extremely cheap through the Internet and telephone, allowing companies to move their knowledge to emerging, low-cost markets. This has led to a convergence of salaries around the world. The cost of labour in Eastern China is now approaching the cost of labour in the United States. The last pillar, the movement of people has not been solved. It is still rather costly to move people around the wold, but telepresence systems, hyper loops and high speed trains may change that. For now at least, the book paints a clear picture of globalization and the impact it has had on the working classes in the “western world” – basically it has killed a lot of their jobs.

Moving back to politics, which is intrinsically linked to economics, we can see that the political trends around the world are only getting worse thanks to endemic corruption. In the United States, where unlimited political contributions by corporations are a sad reality, the situation is even worse. Super PACS, which allow money to be funnelled to political messaging, have taken over the political system. It is not just the paid advertisements that get set by a wealthy elite, the messaging in those paid advertising and the issues they focus on inevitably get carried over into the “mainstream” press and even the “fake news” sites. Larry Lessig of creative commons fame, is putting together a Super PAC to end Super PACs (TED Talk)). He is trying to raise a large amount money to change the public financing laws. We will see how that works out, I have my doubts. Countries such as Canada have strict donation systems and I am not certain that our political system is significantly better. On a side note, he who must not be named, was elected with a much smaller campaign budget than Clinton. This may indicate something as to the value of Lessig’s initiative.

From what I can tell, the only reasonable remedy to our current trajectory is a dramatic shift away from our current form of governance. If there is one country we should look to for recent inspiration, it would be Iceland. During the 2008 financial collapse, Iceland was plunged into crises due to capitalist cowboys who took out massive loans on behalf of unwitting taxpayers and gambled on the financial markets. During the collapse, creditors came calling and in response to attempts by bankers from the city of London and New York to claim those loans, Iceland nationalized the banks, wiped out the loans and re-wrote its constitution (which was later overturned, but hey, they tried!). While Canadian banks are in good condition, they are continuing to underwrite incredulous housing prices and credit card debt with little hesitation. We will see what recent interest rate hikes have on the market. We might want to have a public discussion on the subject of debt, profits and what role banks have in democratic society. As mentioned, money, the money supply and power are intrinsically linked. You cannot realistically meaningfully reform political power without reforming the capital structure of society. And reforming capital structures is even harder than reforming political structures!

Government Structure

The previous Canadian government applied massive budget cuts to our public broadcaster/educator, cut science research and reduced capacity of Statistics Canada – these are all ways to blind the electorate and future governments. In discussions with people in the current administration, they have pointed out the need to rebuild parts of the Canadian public service and that until this is done, certain policies and proposals have stalled.

With a reduced government, it is easier for to turn to private interests as a solution and privatize “underperforming” assets. You can see the evidence of this shift with the the now common public-private partnerships and the Greek financial crisis. Even in the sensible, polite and peace loving country of Canada, we have let both our provincial and federal governments remove democratic power and transfer it to closed door meetings and financial interests as illustrated by our recent international free trade agreements that were not discussed publicly until they were complete.

In terms of solutions, we need to leave our Westminster or Republican box and return to first principles. If we want a government for the people, by the people and of the people, we should start our thinking from scratch. A simple patchwork of mixed proportional representation, reformed prime-ministerial powers and reformed party leadership powers are not enough to fix our situation. We must think much, much bigger. We are facing massive environmental and economic challenges. The planet is warming faster than ever and countries we once laughed off as uninviting and non-competitive have taken over in technologically advanced industries such as high speed trains, electronics and satellites. In addition to our current problems, our society has stagnated – the United States can no longer send humans to space, a billion people are hungry, we have 27 million slaves in the world and full-time employment at minimum wage is below the poverty line.

A friend of mine once explained that you should wait for new technology to be 10 times or 1000% better before you change your machine. This is true of televisions, computers and other things. If it ain’t broke, don’t fix it… unless you have something that is 10X more powerful.

So in light of all that, we need to think seriously if we can reform our way to a solution or if we need to start talking about a major overhaul of our democratic system. Here are three ideas that might have an impact.

1. Dramatically increase the number of elected officials

With 338 federal MPs, about 100 MNAs per province and a few city councillors per city, it is too easy to control and co-opt the system. In the 1980s British television series, “Yes, Minister” and “Yes, Prime Minister”, the UK PM asks his political advisor for suggestions on how to reform the borough level political system.

She counsels a scheme recently put forward by a Professor Marriott, which would give power back to the people by making town halls genuinely accountable. This involves making each councillor responsible for just 200 local residents, which would then lead to a large local council that would report to a smaller executive committee. Councillors would then be in close contact with those that voted for them — and would have to listen to their concerns. By the end of the episode, the civil service, fearful of losing power to “the people” teams up with power hungry politicians, who think they know better than the average citizen, to convince the prime minister that the idea is ridiculous.

Scientific studies have shown that the average human has evolved to live in a community of 250 people, we are comfortable knowing and interacting with that many people. In ancient times when a tribe expanded beyond those numbers, they would break off and form another group. If one person can only know 250 people then I would propose we should have 1 representative per 250 people. In Canada, with 35 million people that would be 140 000 representatives – they could either be spread out across the various levels of government or we could enforce that ratio of 1:250 for each level of government. At that ratio, Québec would need 64 000 representatives and in Montréal, 6 000 representatives. Not that China is exactly a democracy, but the Communist Party does have 89 million members, or about 1 in 12 Chinese or probably 1 in 8 adults. Their way of functioning is fascinating and merits a closer look. The long term potential of the Chinese system is debatable (as is the West’s), but it is surely working for most Chinese right now.

Getting that many people to have a coherent discussion and make decisions was impossible before the Internet. The German Pirate Party has proposed an interesting solution to the issue of delegating authority in large groups. Their system called Liquid Feedback allows a person to offer your vote on a subject matter (i.e. Environment, Economic Policy,…) to someone else. However, you ca withdraw your vote delegation at anytime!

During election time, because of my involvement in politics, many of my less politically inclined friends ask me for whom they should vote. Many of them would happily hand me their vote if they could. The beauty of the Liquid Feedback system is that you can hand off your vote to someone else, but you can also withdraw it at anytime. So, if you really trust someone on copyright reform and someone else on agriculture policy you could hand off your votes on those issues to people you trust, but if you change your mind or if they change their positions, you can withdraw your vote. Such a system starts to approach a true democracy.

A combination of a radical increase in the size of representative bodies and the delegation of votes with withdrawal powers would make it much harder to lobby and co-opt the system. It would also force many more people to actively Think about public issues and consequently spend less time on items that do not contribute to the advancement of society.

Convince a larger group of people of the merits of a policy, rather than a small isolated group should inevitably lead to policies that benefit more people. To reach consensus in large groups, you actually need to propose sensible policy with facts and reason. Aboriginal groups’ decision making process was restricted due to the lack of a written language (see my post here). Their need to discuss and reach consensus rather than create a policy and enforce it through written directives, was an inspiration for the leaders of the American revolution.

2. Limit the number of terms

The initial concept of representative democracy was that a person would volunteer some of their time to represent their community and then return to their line of work. A true democratic politician cannot be a professional politician, they should be a member of society who wishes to contribute their time, knowledge and experience. I would propose that no representative should be allowed to serve more than two or three consecutive terms. In combination with the increase in the number of representatives, this would result in a tremendous churn of people through the democratic system. Interestingly, China cycles its top members between State Owned Enterprises (Crown Corporations), various governmental departments and actual positions in the party. China also has mandatory retirement ages. This shuffling of the political deck would result in two things – more people would familiarize themselves with democratic institutions and it would avoid the creation of power bases amongst a clique of people.

Admittedly, the downside to term limits is that it can create lame duck situations where civil servants and other pretenders to power know they can wait out a curent representative’s term. It is critical that this not only apply to the President, as in many countries, or else you end up having lame duck presidents while members of parliament or congress bide their time and build up political capital that can reach beyond that of the executive leader.

We have this inherent tendency to reason by analogy. In fact, we should reason by first principles – we should not say, “How can we make the current parliamentary system slightly better through the copying of another system such as mixed proportional?”, we should instead reason by asking, “how do we best represent the interests of society and ensure we collaboratively design a future where we all benefit the most possible in the long term”. A true democratic system would entail more fluid exchanges with policy makers and a larger representation of the population’s wishes in policy making. Part of the solution is increasing the size of the elected body to offset the growth of the number of employees in the public service and the wealth accumulation in private industry, both of which represent important forms of power in society as well as inertia that prevents any change.

3. Basic Income

To be clear, my criticism of our mixed-economy capitalism is not indictment of capitalism in general. Our current framework of liberal representative government and Keynesian policies has succeeded in providing massive amounts of material wealth to the majority of citizens. Despite the fact that many people have been left behind, a visit to a typical supermarket is a friendly reminder of our tremendous wealth. Who is not blown away by the quantity, variety and quality of the food available in your average supermarket?

Yet, most will also agree that society has not completely fulfilled its promise of equal opportunity and justice. How can we affect change that moves us forward? The way society functions is primarily dictated by the distribution of power and capital in that society as described above. The well-known Golden Rule says, “Treat others as you wish to be treated”, but there is a more sinister version, “He who has the gold, makes the rules”. Our current power structure has not changed significantly since the instauration of representative democracy in the 18th century.

In the 18th century and early 19th century, most of the western world transferred power from a land-owning aristocratic class to a body of elected representatives in the form of a Republic (i.e. America, France) or a Parliamentary democracy (i.e. UK, Canada). These representatives are elected through universal suffrage in one elector format or another. Despite the inventions of the steam engine, electricity, cars and the internet – the electoral model for distributing power in society has not substantially changed.

Money is a form of accumulated power. Currently, the vast majority of citizens are trapped by their financial situations. We are tied down by a combination of high property costs, the expense of raising children and overspending due to our consumer culture and advertising industry. Few of us have time to get involved in social change or in our communities. We do not contribute due to a lack of time, but for a lack of economic freedom which zaps our energy and motivation. Basic Income, a movement that is gaining traction around the world, is a potential solution to some of society’s ills.

To change the world, you must change the power structure. Yet, to change the structure within the current structure is extremely challenging. This is largely why it has not happened and why it took revolutions, blood and tears in nearly all countries to affect meaningful change. In his excellent Essay, “Enough with this Basic Income Bullshit”, Nicolas Colin outlines his criticisms of Basic Income. Largely, it boils down to a skepticism that people are willing to sacrifice life and limb for a Basic Income. He says “This is yet another reason why I’m skeptical about basic income: I simply don’t see the movement behind it. It’s intellectually seductive, a lot of people like the idea, but I’ve never met anyone for whom basic income is literally a personal question of life and death.” He is right.

From my point of view, the current electoral system will never implement a meaningful basic income unless a massive crisis hits society. In Switzerland, where a referendum on the subject was held last year, the results were interesting. At firs the elected officials were open to the idea, but once they understood that Basic Income was a transfer of power to the citizens, they unanimously voted against it. The population of the conservative country did vote for it to the tune of 30%, not bad for a first try!

The only type of basic income that elected representatives might support is one that simplifies bureaucracy and reduces government costs. This could be a either a low amount or a negative income tax. In other words, what our politicians might support is a program that transfers power from the bureaucrats to the politicians. As they say, the quickest way to be disappointed in someone is to expect them to act against their self-interest. Expecting our elected representatives to vote to remove power from their own hands is a recipe for disappointment.

Bearing this in mind, the only path to a real universal basic income (or a Citizen’s Dividend as I prefer to structure it) is through a Political Party. A political party must be born that holds at its core that a basic income is a fundamental right that allows for a decent standard of living to all. The party must have a clear net dollar figure and a clear proposal for changing the current tax system. Though they need this issue at their core, this party must not fall into the trap of being perceived as a one-issue party (i.e. Green Party) and must have concrete proposals for all areas of society – economy, environment, family, immigration etc. A basic income political party must rally a variety of actors to its defence, forming such a coalition would be a monumental task – not unlike the work of American or French revolutionaries. It seems the Germans, innovative as they are, have started the first Basic Income Political Party.

Forming a political party whose number one priority is a basic income would allow for a few benefits. First, it would allow basic income advocates and supports to center around a party. It would allow for political donations and related tax benefits to support a group of basic income advocates. And thirdly it would put pressure on existing parties to adopt pro-basic income positions to try and offset the movement.

A friend and well-known activist, Dmitri Roussopolous, recently brought to my attention a little known fact. He explained that most progressive initiatives start at the municipal level, not the national or state level. Accessing power at the municipal level is much easier than at the state level and the formation of a policy or political position at the municipal level is within grasp of a motivated group of citizens. Once established at one municipality, the policy can spread to other cities as it demonstrates it viability. A Basic Income Political Party may be best starting at a city level and creating a basic income at the municipal level through municipal taxes, congestion charges, and tourist taxes. The media attention this would create for the idea and the movement would be significant. Though a basic income at the municipal level would be lower due to the revenues available, it could be a real tool to convince others that it is a sound policy and that it will not lead to mass laziness.

The reality is that civil society is still trying to fight for change using 20th century tools – primarily protests, strikes, unions and other such mechanisms. In our globalized and technologically advanced world, civil society is struggling to compete with complex trade agreements, powerful and addictive technologies, a highly advanced advertising industry and a certain status quo that believes the defeat of communism marked the end of all major political discussions. To truly make an impact in everyone’s lives, we need a solution that will free citizens to participate in public life.

Ancient Greek democracy was based on slavery. Free men of Athens could participate in debate because they had slaves working for them. The slaves took care of the more basic tasks – construction, agriculture, food preparation and transportation. Today, we have the opportunity to create our own slaves through our technological innovations. Thanks to machinery from the steam pump to the washing machine to the airplane, we have and will replace a great deal of our drudgery with technology. Try to do your laundry by hand and you may realize how liberating that washing machine is!

Deep meaningful change can not come from a minority of society. The means of organization and communication of the masses are too powerful for any minority of a society to rise up and seize power. Additionally, due to the international economic system, markets and external relations, any attempt by a small minority of the population to change things will be crushed. As such, the only way to affect significant change in the structure of society is to convince a majority of people to follow us.

We must build an army of people motivated by their own personal interests, the interests of their children and a general desire to improve things. Humanity’s deepest and most powerful desire is to be free. As the late Robbin Williams said, when playing the Genie said in Aladdin, “But oh, to be free. Not to have to go “Poof! What do you need, “Poof! What do you need, Poof! What do you need?”. To be my own master. Such a thing would be greater than all the magic and all the treasures in all the world. But what am I talking about? Let’s get real here, that’s never gonna happen. Genie, wake up and smell the hummus.” No Genie, it is possible.

In my view, basic income is the most direct and powerful way to free ourselves and start a new form of society. A significant portion of society is caught between their revenues and their debts, they must meet their mortgage payments, accept less desirable jobs or compromise their decisions to satisfy their short term needs. If we can free people from short term anxiety and accompanying mental issues, we may be able to free the metaphorical genie from the bottle – and then who knows what will happen. As a side note, perhaps one reason many companies are started by upper middle class people – Gates, Musk,… – is that they have a certain freedom to experiment.

The list of society’s problems are long and complex. The list goes from overfishing, environmental degradation, sectarian wars, economic collapse, to populist nationalists! These issues are overwhelming to any of us and it is far easier to tune out than it is to engage. Basic income would enable us to confront many of these issues as we would free up parts of our brains to think about issues other than short term requirements.

What Next?

Capital structures of society are tightly bound with power structures. Changing one, changes the other. Which head do you tackle first? The answer is likely not easy, but if we can consider the idea of increasing the representation of the people in the power structure, offering a basic income and increasing the churn of elected officials, we should move closer to a society where the average citizen has a better shot at accomplishing their goals and society can make wiser decisions.

The only way to affect such massive change is to fight. In all likelihood, the fight will fail. But, it is worth it none the less. To keep our system and to keep switching from red to blue, blue to red, seems like an exercise in madness. It is challenging to consolidate these ideas into an essay, but the four books mentioned are fascinating and worth a read. If it were up to me, a basic income, liquid feedback and term limits would be the top three priorities for a society. With these three ingredients in place, anything is possible.

Thoughts on China in 2017

The most desired thing in the world is respect. Everyone wants to be respected and to be proud of who they are and what they have done. This is what drives us to spend most of our money on a variety of goods we do not really need, it is what pushes some to spend great sums on weddings and it is what leads countries to war. Respect and the desire for it are a principal driving force at all levels of society. As Aretha Franklin said, “R-E-S-P-E-C-T, it’s what I want!”

I lived in Beijing in 2006 and returned in 2010 and now 2017, the changes are staggering. I write this post from a bullet train travelling at 303 km/h on a high speed rail network that is larger than the rest of the world’s combined. There was no high speed train in China in 2006. When I left Beijing, there were three subway lines, there are now 18. Shanghai moves 3 Billion people a year on its subway system. China has built a giant canal from the south to the north to bring fresh water, it has built thousands of kilometres of the most advanced rail system in the world and it is installing more solar panels every year than all other nations combined! China has achieved change on a scale few could have imagined. Alain Peyfritte, the French Sinologist wrote a book in 1973 titled “Quand la Chine s’éveillera, le monde tremblera” – translated to “When China wakes up, the world will shake”. The world is shaking.

On my most recent trip I met with lawyers, bankers, entrepreneurs, environmental and safety consultants, business owners and ordinary folks on trains. Many voiced criticisms of China and showed a real frustration with corruption in government and a lack of individual freedom, yet the general mood is extremely optimistic. Nearly everyone felt that China would continue to develop and it would turn a corner on environmental issues and transition to a consumer economy. They felt that the ship had so much momentum and the leaders, though not perfect, had a genuine and indomitable desire to make China a world power – that nearly nothing could stop China ascendancy.

Air quality in the major cities is a big problem. While I was in Beijing, the Communist Party had its annual gathering and magically, the air cleared up thanks to the shutdown of certain coal fired power plants and other factories.

The good news is that Beijing continued to operate and the economy was not harmed despite the plant shutdowns – meaning that China could likely safely shutdown many of its coal power plants and continue to operate. In fact, China plans to reduce its coal consumption by 800 million tonnes by 2020 (from about 3.4 billion) and install 103 GW of new solar power capacity (they currently have 74 GW). In 2017, Beijing announced that all city taxis that are bought or changed must now be electric, Shanghai has offered free licence plates for electric cars, and during the annual Communist Party meeting this weekend, Chinese leaders declared war on air pollution and promised a blue sky for all Chinese. China also introduced a much improved environmental law in 2015 that is progressively starting to take effect. China is poised to shift into a new greener gear that will firmly place it as a world leader. Already, five of the world’s six largest solar panel producers are Chinese.

Poverty remains very real in China, but we can find poverty everywhere and any visit to parts of the US will remind you that you can be both a Global Superpower and have tremendous poverty and exclusion. China may only have one aircraft carrier (a Russian one at that), but it is building up its military and the announcement by Trump that the US is scaling up their military does not sound good. Let’s be frank, China and the US are unlikely to go to war – at least not directly and if they did both parties would have major casualties. However, a critical part of establishing a sustainable world order that is beneficial to most people must include a newfound respect by the West for China. During the first League of Nations, the predecessor to the United Nations, the Japanese delegation and Asian people were not accorded the same rights as people of the western nations. This lack of respect for Japan and the Japanese led to a shift towards militarism and isolationism that contributed to the second world war.

The West is used to being in charge. This is despite the fact that China was the most advanced nation for most of human history. We will need to learn to live with a powerful China and to respect it or we will be doomed to conflict. This transition will be very difficult. It is one thing to tolerate a person or a nation, it is entirely different to treat them as an equal. Can the United States treat China as an equal? Or, is their pride and self confidence so high that they cannot consider China to be a true partner?

If you read western media, especially US, about China, there is often a very condescending tone. This is also true of coverage of countries such as France, the US is always better and the other countries are either too lazy, too corrupt, or cheating in some way. I recall reading an article a few years ago about how GE had re-engineered a water heater they made and was going to onshore production back to the US. The article implied that the Chinese did not understand great engineering and that these brilliant US engineers were able to outsmart the Chinese, simplify production and bring it back to America! There are great American engineers of course, but there are equally great Chinese engineers. To say otherwise comes close to racism. Regardless, GE sold its household appliance division to Chinese firm Haeir in 2016 for 5.4 Billion. Thinking you can outsmart China is a very dangerous position to have.

On the military front, the US actions in the South China Sea seem excessively arrogant and dangerous. The US has claimed certain islands to not be Chinese territory and they regularly navigate war vessels near Chinese territory, this cannot continue. Imagine if China had war ships, destroyers and aircraft carriers a couple hundred miles off the California Coast or near New York City, would the US tolerate that? As the golden rule says, “Do unto others as you would have them do unto you”. This is especially true when the person you are treating is growing in power and strength. Who wants China to come back in 25 years and say, “remember how you treated us in 2017, now it is our turn”. If the US and the west cannot implement the golden rule with China, we will be in for a big, complicated and unpleasant situation.

The West often criticizes China for human rights abuses and indeed there is much room for improvement. However, we should not forget that over 2.2 million people are in jail in the US, much of western wealth was built on extreme violence, expropriation of ressources and slavery, and the second world war led to the mass extermination of 6 million innocent jews, communists and other dissidents. So human rights is something the West has had to invent and adapt to over the course of the past 60 years or so – not exactly ancient history. The West does have a right to criticize China for human rights abuses, but we should perhaps look at the situation in a broader context. China’s priority is peace, stability and prosperity. This unfortunately probably requires some forms of coercion that are not ideal. To grow the economy in China, avoid mass uprisings, maintain some form of environmental progress, somewhat control corruption and keep the various political and financial interests satisfied is a task with a complexity that is hard to measure.

Where will the world go from here? With Trump in the US, Brexit in Europe, Xi Jiping in China and general economic stagnation in the West it is very hard to say. One thing is certain, if the West does not begin to treat China as an equal and with the same respect they offer other western countries, we will have a problem. China may indeed want to dominate their sphere of influence in Asia, but that is no different from the Monroe doctrine the the US domination of the Americas for most of the 20th century. Frankly, China has been far less active at organizing coups and propping up dictators than the US – yet. As a Canadian, I think there is an important potential role for Canada to play a peacemaking, educational and conciliatory role between China and the United States. This must be done if we are to avoid the words outcomes of a growing power that hits a wall set by the established power structure. We all want respect, China, Canada, the US included – if we can offer genuine respect for each other there is hope for a strong and prosperous future. Without respect, we are lost.

On Immigrants

Basic Income as a Solution to Capitalism’s Structural Problems

Thomas Picketty’s seminal book Capital in the 21st Century outlined some of the underlining principles of capitalism. His main thesis is that if the return on capital is greater than economic growth, wealth inequality grows. The rich get richer because they can earn a greater return on their investments than the growth of wages. This ensures that those without capital cannot catch up to those with.

This is a critical and structural problem of our current capitalist system and if left uncorrected, it will lead us back to an aristocratic world with elites too powerful to touch. The gap between return on capital and economic growth must be closed to ensure a level playing field for all.

Capitalism is fantastic. It has brought tremendous material prosperity, advances in science and technology and a general security to the world. While it is a great system, it needs adjustments, like any machine might. One adjustment that could very well save it from its own destruction is the institution of a basic income. A basic income in and of itself is not the solution, it is rather the effect it will have on the economy and the change to society’s power structure.

A principal cause of the post-war economic prosperity identified by Picketty was the destruction of capital during the wars. During WW1 and WW2, capital to income ratios – that is the amount of capital in society to the income of society – went from 8 to 1 to 3 to 1. The subsequent growth and accumulation of wealth at the top of the ladder has led us back to a world where capital to income in society is back at the dangerous levels of 8 to 1. The last time this happened, we had demagogues, fascists and dictators take over the most prosperous countries in the world.

There are other ways to destroy capital: inflation, a tax on capital or through economic growth that is greater than return on capital. All three of these would reduce the relative weight of current capital in society and thus encourage individuals and corporations to invest in productive assets – factories and such. One interesting analysis of this situation was presented by Oliver Heydorn at the 2015 North American Basic Income Guarantee (NABIG) conference in New York city. He explained how the difference in accounting practices for capital expenditures and operational expenditures (where you can depreciate capital expenditures) leads to the same gap between the return on capital and wages that we see with Picketty. Oliver is a social creditist and their political theories merit a closer look. Social Creditists stipulate that due to certain accounting practices and monetary policy, we inevitably obtain a growing gap between the revenues from labour (salaries) and the return on capital investments. This leads to a labour force with less and less purchasing power as the costs of goods increase faster than their wages do. This loss in purchasing power leads to less consumption which compounds into less jobs and a stagnant economy. We are living in that world now.

Social Creditists promote the idea of a central authority that monitors prices and cost of living and wages and issues currency in concordance with the gaps. Specifically, they advocate that “The solution to these problems is to create and issue a sufficient volume of debt-free money in the form of the compensated price and the National Dividend to equate the rate of flow of final prices with the rate of flow of consumer purchasing power.”

A National Dividend could very well be seen as a basic income. It would provide more purchasing power to the average citizen and rebalance the relationship between capital and income, bringing us back to a better situation not unlike that of the 1950s, 1960s and early 70s.

Bibliography

http://www.socred.org/blogs/view/a-national-dividend-vs-a-basic-income-similarities-and-differences
http://www.peoplescapitalism.org/presentations/PeoplesCapitalismpaper3.pdf
http://www.ssc.wisc.edu/~wright/Published%20writing/paper%20for%20basic%20income%20studies.pdf
http://www.pieria.co.uk/articles/how_basic_income_will_save_capitalism

On Trump and Revolution

Rome survived Caligula. Caligula, the roman emperor who named a horse senator, organized mass orgies and committed numerous atrocities and ruled over Rome from 37 AD to 41 AD. Rome, being a large and powerful empire with a bureaucratic system, survived and even grew under Caligula’s divine leadership. Similarly, America will continue to grow with Trump in power. The American Presidency, as Elon Musk said, is a captain-ship of a very large vessel with a small rudder. The impact of the president is completely blown out of proportion by the media. A good or a bad president has much smaller impact on American society than most think.

There has been more ink shed on Trump than perhaps on any other politician. I recognize the irony of my publication of year another blog post on the subject. Yet, his victory is a massive signal to those of use who are far removed from the reality of many blue and white collar workers. My brother lives in London and he was flabbergasted by Brexit. He and I had no clue of the levels of anger in the US or the UK that sent both countries down a path led by isolationist and nationalistic leads with dubious track records as members of the human race. People seem so fed up with the lack of progress by the establishment that they will overlook personal faults and outright lies. This is not the first time, nor will it be the last time that a person rises to power in an unexpected way. For a more in-depth analysis of the worldwide rise of populists and the actual electoral strategy of Donald Trump take a look at HyperNormalization by British documentarian, Adam Curtis.

An American colleague once told be a story. A private equity company bought a manufacturing company. The investors came out from New York to the plant and asked the workers to build a stage outside the factory for a big announcement. The staff built a big wooden stage, with a podium, and a staircase. The investors asked them to gather all the employees for an announcement. With the hundreds of staff gathered, the investors got up on the stage and promptly announced that the factory was being moved to Mexico and they were all fired.

This story is not uncommon. Part of the fault is our own, we want cheap products. Our societal dictate that the all powerful consumer must have a cheaper iPhone, a cheaper car, or a cheaper flight. Don’t get me wrong, who wants to spend more than they have to? But, the consequence of these moves to low cost countries is now truly hitting home. The people who worked at these factories, all across America, Canada and other developed countries are revolting. People who once had good unionized job with a good pension and a path to a home and two cars is working as a greater at Wal-Mart. Not only has this happened to line workers at a factory, it has happened to middle managers, executives and top earners who previously had a good quality of life and a path to success for their children. People are angry and rightfully so.

Some commentators said that Trump’s victory was Whitelash against progress on social and racial progress. They say that the vote for Trump was a vote against a black president and black lives matter. There is no doubt that the US is a very racist place, both in the north and the south. You can simply read books such as Between the World and Me, A Case for Reparations or The Arc of Justice to see how racism is very deeply embedded in US society (and most others too). The presidency tends to cycle between the left and the right, which is not surprising. One team wins, the other adjusts and comes back. Back and forth we go. The arc of history is long and may bend towards justice, but it is not straight. Southern pro-slavery president Hayes was a response to Lincoln and emancipation. Nixon was a response to Lindon B. Johnson and the Voting Rights Act and Trump is a response to Obama. However, I think that Trump was a response to the lack of change Obama brought, not the actual change that did occur. Obama did not get much done for black Americans, did not create high paying jobs or reduce the American deficit, or improve government services substantially. Many people who voted for the Hope of Obama, voted for the Greatness of Trump. People want progress and they will go where that is offered with honesty. Clinton represented nothing – just more of the same.

Trump, for all his numerous faults, really believes in himself and he makes a compelling case. I remember an interview during the primaries on Fox News where Trump really made an impact, he is an expert communicator – much like George W. Bush. He just speaks in a different tongue that the educated class, one that appeals to a significant portion of the US population who had to suffer through the US public school system. This video compilation, selectively chosen, certainly makes Trump look great and revolutionary.

Personally I am a horrible predictor of politics. I thought Clinton would win, that Trudeau had no chance and that George W. Bush would never win in 2004. So, my opinion is not exactly worth much. Will Trump be able to execute on his promises, such as his 100 day plan, unlikely. Congress, despite being Republican, is fundamentally pro-big business due to campaign finance laws. Corporations might bite on the tax cuts, the oil and gas exploration and other items, but it will be simply amazing if Congress goes along with term limits (an idea I actually agree with) or the destruction of NAFTA. I am sure they will work something out.

With Brexit and Trump, one thing has become clear. Our societies have been cleaved in two – educated urbanites working in open-space offices with espresso machines (I plead guilty!) and a working class in lousy jobs, diminishing purchasing power and no prospect of measurable improvement. In many ways, this actually reflects the natural tendency of capitalist societies and has been thoroughly documented in Picketty’s book, Capital in the 21st Century. His research shows that the period after WW2 was an exception and what Trump supporters or Brits or even the French refer to as the 30 glorious years after the war, was a historical anomaly that was only possible due to the massive destruction of capital during the war and very high tax rates.

As soon as capital can earn money faster than a worker can, society dives back into a world of the haves and have-notes where it is nearly impossible to cross the chasm between the two. Can we go back in time to the boom years of the 50s- late 70s. Yes, it is possible, but it would take a worldwide war on the accumulation of capital at the top and a massive redistribution or quantitative easing for the people along with a revolution in the electoral system and a new division of power. How likely is that to happen without war? Not likely, but not impossible.

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Also, this Munk Debate on the rise of Trump is pretty good.

Comment battre Denis Coderre

Depuis trois ans, Denis Coderre est maire de Montréal. M. Coderre est un politicien extrêmement habile qui a réussi à rallier de nombreuses personnes incluant plusieurs conseillers de Projet Montréal. Il faut avouer que M. Coderre a amélioré la ville et il semble un bien meilleur maire que son prédécesseur, M. Tremblay. Malgré cela, les failles dans sa façon populiste de gouverner commencent à apparaître. Ses initiatives telles que l’ouverture des bars jusqu’à l’aube ou l’interdiction des pitbulls se font démonter devant les tribunaux. Des contrats à des amis de M. Coderre, des votes rapides sur de gros contrats de TI ou encore l’espionnage des journalistes de La Presse commence à illuminer les vraies priorités de Denis Coderre.

En contrepartie, Guillaume Lavoie est une personne posée qui prend le temps de réfléchir avant d’agir. Je dirais que la meilleure façon de comprendre Guillaume Lavoie est de consulter le Collège néo-classique qu’il a cofondé et qui offre des cours sur la rhétorique, les grands textes philosophiques et divers enjeux qui permettent de « se faire une tête en comptant davantage sur sa culture générale, sa capacité d’analyse et de liens avec le contexte historique…». Selon moi une capacité à réfléchir dans un contexte dynamique et avec une vision à long terme est la qualité fondamentale d’un leader.

Pour battre un politicien populiste, ça nous prend quelqu’un avec des croyances profondes. Un populiste pourra toujours battre un technocrate de l’establishment, nous venons de le voir aux États-Unis et au Royaume-Uni. Il faut offrir une vision claire et précise. J’ai pu connaitre Guillaume à travers mes travaux à Montréal Ouvert et notre lutte pour les données ouvertes et il a été parmi les premiers conseillers à nous appuyer. Il a vu, justement, que les données ouvertes permettent à la ville de prendre de meilleures décisions et de mieux consulter le public sur des enjeux importants. Je pense que Guillaume offre une vision claire de la ville qu’il souhaite avoir : transparente, démocratique, sécuritaire et bien gérée et ce, au bénéfice de tous les citoyens.

Sans transparence, nous n’avons pas de démocratie. Guillaume a d’ailleurs très bien expliqué dans une lettre à La Presse la contradiction entre des conseillers qui ont un pouvoir de vote, mais qui n’ont pas l’information nécessaire pour voter de manière informée. Les documents qui accompagnent des contrats de dizaines de millions de dollars peuvent être donnés aux conseillers quelque heures avant le conseil ou même pendant une réunion de conseil! On ne peut pas bâtir une ville moderne, démocratique et bien la gérer de cette manière. Chaque année la ville dépense environ cinq milliards de dollars et si nous n’améliorons pas notre façon d’octroyer les contrats, nous ne nous sortirons jamais de nos chantiers de construction, de nos nids-de-poule ou de la corruption. Todd Park, l’ancien directeur des technologies du gouvernement américain a dit: « les deux problèmes fondamentaux des gouvernements modernes sont l’approvisionnement et la gestion des ressources humaines ». Sans résoudre ces deux immenses failles, les gouvernements ne peuvent pas avancer.

L’Allemagne et le nord de l’Europe sont les champions de la gestion gouvernementale et de la qualité de vie. Un élément commun qu’on retrouve dans ces pays est une réflexion et analyse approfondie pour tout changement de politique. Cette démarche et son contraste avec les façons de faire au Québec qui est, franchement ‘broche à foins’. Le manque d’analyse des budgets et des décisions dans le secteur public est très bien expliqué par Bill Gates dans un TED Talk. En bref, sans un changement de notre façon de penser les politiques publiques, nous ne pouvons pas espérer que les choses changent. Guillaume Lavoie offre de faire les choses autrement.

Shifting the Narrative on Wealth, the State and Deserving People

In the excellent talk below, Yanis Varoufakis, Greece’s former Finance Minister lays out the compelling case for basic income. One of his key points, which basic income advocates should take to heart is the imperative to shift our social narrative on work, labour and the creation of wealth.

Yanis explains how we currently view the State and the private market as separate entities, when in fact they are one and the same. Without one, you cannot have the other. To convince people that a basic income is the logical and ethical thing for society to do, we must reframe the discussion as a dividend for the members of a society that produces wealth. There is no such thing as private wealth. All wealth is built upon the contributions of others – past and present. Without the invention of the internet and computers, I would not have my current job or company and without government, the internet would not exist – nor would the other private companies whose technology we use. Whether we like it or not, all wealth is communal. This point is also convincingly argued in Peter Barnes book, With Liberty and Dividend’s for All. If all wealth is created communally, then its benefits (or profits) should be distibuted to the community that created it. That is how dividend’s work for shareholder’s in a company and that is how a basic income could work.

Basic income advocates must also confront the other hard truth about a basic income: it is given to all and there are no deserving and undeserving members of a society. Not only is there no easy way to determine deserving vs. undeserving people, the very concept of designating some as deserving creates a power structure where bureaucrats can determine who is helped and who is not. I remember seeing a few years ago, in Toronto, a fantastic ad about why a punk on the street could not get a job. The ad was between the subway lines and about 10 ft from the viewer. It read, “Why can’t street kids get a life?” followed by large block of small text that could not be read from a distance, but presumably has a complex explanation, followed by “That’s why.” Life is complicated. A basic income would be a dividend for all members of a society to improve their chances in life – all while removing some of the arbitrary power government currently has.

Lastly, Vanis makes an excellent point that the wealthy already receive dividends and their children or relatives who did not earn the wealth are not terribly deserving of those dividends. Why does Paris Hilton deserve a dividend, but a kid from a working class family does not deserve one? In fact, both of them should have a dividend in the form of a Basic Income. I put this argument and others to a skeptical earner of a dividend, Stephen Bronfman who inherited money from his father’s business successes. Though he was unconvinced the beginning of the talk, he came around to being open to the idea by the end and I hope to fully convince him soon.

The time for basic income is coming, but to get us there we will need to shift the narrative we tell each other and our children about the origins of wealth and who deserves it. Wealth can only be created if there is a state and the rule of law and the more wealth we inherit, as a society or as an individual, the more wealth we can create. A society with inventions and discoveries to work off of, will create more wealth than a primitive society starting from scratch. Without calculus or antibiotics, today’s civilization cannot exist. A basic income is the fairest and simplest mechanism for us to create wealth while ensuring everyone can fully participate in society and reach their full potential.


 

On another note, Yanis Varoufakis book on the EU and the Greek crisis is fantastic : And the Weak shall Suffer what they must?. It provides clear (if opinionated) economic insights into the challenges of international monetary systems and the fundamental contradiction of a common currency between export nations (i.e. Germany) and import nations (i.e Italy). Canada overcame this challenge of export provinces and import provinces with a strong redistribution system between the provinces called ‘Equalization Payments‘. Québec has received about 5 billion dollars in annual transfers for the past decade, helping avoid the social and economic collapse as we see in Greece today. If you are interested in the history of the gold standard, Bretton Woods and the current impasse in the EU, the book is well worth the read. Also see his discussion with Chomsky on this topic and others.

 

 

 

Liberal Party of Québec or Bust?

What will it take for anglophone Quebecers to vote for a party other than the Liberal Party of Quebec? That will be the question of an upcoming evening of discussion between anglophone, francophone and unidentified Quebecers on May 4th. For over 40 years, Québec has been divided into sovereigntist and federalist parties, with the Liberal Party of Quebec holding power for the vast majority of that time thanks, in part, to a core base of voters who have no other option.

While massive emigration hit the province after the first and second referendums, those that stayed remain stuck in a frustrating situation of having to vote for a party that has been unable to turn our economy around. Despite numerous majority governments, the Liberal Party of Quebec has failed to create substantial economic growth, they have been tainted by corruption and their most recent proposals sound like more of the same. To believe that by electing the same people year over year, tied to the same interest groups, we will have a different outcome smells of insanity.

Yet, who to vote for? The PQ and Quebec Solidaire are proudly sovereigntist at all costs and the CAQ proposed a temporary 10 year moratorium – hardly comforting. Some of us have gotten angry, others stopped voting and most just tune out in frustration. Yet this behaviour of tuning out of Quebec society leads to a reinforcement of the two solitudes and a lack of fresh ideas and new blood into institutions that desperately need different perspective. Michael Sabia, from Ontario, has successfully led the Caisse de Dépot to outperform the markets while investing our pension money in Québec and abroad. Our crown corporations such as the Hydro-Québec, Loto Québec, SAQ and others are in desperate need of fresh takes on their mandate as they stagnate and fail to improve. The same can be said of our government and public institutions. Quebec still receives seven billion dollars a year in transfer payments, has lower economic growth and a lower family income than almost anywhere in Canada.

It is time to change and it is time for the anglophone and allophone communities to seek different electoral options than the Liberal Party. Because the Liberal know they have these votes locked up at every election, they have little incentive to invest in the concerned ridings – mostly on the island of Montreal. Ever wonder why Montreal has so little political power, run-down schools, and poor roads? Simply travel to the swing ridings in the suburbs and you will see where your tax dollars are going. Until anglo and allophones start to have options other than the Liberal Party, the situation is unlikely to change.

There are rumours of an Québec NDP and of a new party tentatively titled ‘Orphelins politiques’. Neither of these are likely to take power soon. The other option for engaged anglophones may be to infiltrate a non-sovereigntist party and attempt reform, the CAQ or PLQ being the only options. There are no easy solutions. Yet, inaction on this critical issue of a viable political party that can rally anglophones, allophones and francophones and that is not called the Liberal Party is likely the only way to change things or force the existing parties to change. Until then, we will remain on our little merry-go-round that takes us nowhere productive.

TEDxQuébec – Un revenu de base pour tous

On Haiti and Freedom

Haitians are a proud people and for good reason. They were the first colony to free themselves from slavery and overthrow a ruling class. The revolution, set off in part by the French Revolution, led to a bloody battle and punishing reprisals from European nations. Some two hundred years ago, one of my ancestors, Philibert Fressinet was a commanding officer in an invasion force sent to Haiti by Napoleon in the worlds then largest naval fleet to attempt to recapture the wealthy colony of Saint-Dominique (now Haiti) and re-instate slavery. In some ways, I wanted to go Haiti to absolve my ancestors sins and to see for myself what a revolutionary colony looks like. It’s not pretty.

I have travelled to poor places before – Ethiopia, rural China, Mongolia and others – but Haiti in 2015 is truly a place in desperate need of massive assistance. The Haitians fight for liberation started in 1791 and allowed them to free themselves from the bonds of slavery, but it left them in a political quagmire that lasts to this day. Walking through the streets of Port-au-Prince or smaller cities you see abject poverty nearly everywhere, yet you also see tremendous pride in the faces of everyday citizens. This fascinating contrast is difficult to explain. The expressions on their faces are different from any other non-white people I have met. Nearly all people of colour around the world were subject to colonialism at some point in time – everyone from the aboriginals in Canada to the people of Africa and Asia. When I visited Tanzania many people did not look you in the eye, their head and eyes turned downward upon sight of a white person as if to say they were subjugated. I would claim that this is even true in the United States with African Americans. An ingrained inferiority complex beaten into certain peoples takes generations to root out of a society. Some mouvements can accomplish the feat of instilling pride in a oppressed people and one of the most recent attempts was the Black Panthers, who led a fight for equal rights and dignity in the 1970s before imploding due to FBI sabotage and infighting. They had a similar image of pride in their eyes.

The leader of the Haitian uprisings, Toussaint l’Ouverture perhaps explained it best when he stated that he planned

“to cease to live before gratitude dies in my heart, before I cease to be faithful to France and to my duty, before the god of liberty is profaned and sullied by the liberticides, before they can snatch from my hands that sword, those arms, which France confided to me for the defence of its rights and those of humanity, for the triumph of liberty and equality.”

The Haitian people, if anything, are about freedom – freedom of spirit and of body. You can see this passion and righteous freedom in their eyes like I have not seen in may other people, except those of the ruling classes in other countries.

Haiti is tiny and mountainous an has over 10.32 million people who congregate in the valleys and near the water, making towns and countryside incredibly dense. The deforestation and its impacts on agriculture and sustainability are well documented in book such as Collapse by Jared Diamond. Simply flying over the country you can see the demarcation with the Dominican Republic, which has remained forested thanks to strictly enforced laws. All this to say that Haiti has a serious and not easily remedied problem: too many people and not enough land and resources.

The second main issue I could see in Haiti is that anyone with either an education or a bit of wealth leaves the country. This emigration empties of the country of a potential middle class. After the revolution some of its leaders got greedy and established a ruling elite not dissimilar to other central and Latin American countries. One leader, Henri Christophe ruled the north and even thought it was a good idea to reproduce, in exacting detail down to the specific titles, the aristocratic structure of Europe. This ruling elite has continued to exist until today and they seem to have little interest in developing the country. Much of the the aid money sent to Haiti often ends up in their hands. Without an educated middle class to counter the power of an elite, it becomes very difficult to establish the rule of law and build up an economy.

Third, foreign intervention is not new to Haiti. After the 1791 revolution and under threat of invasion, reparations estimated at 20 billion 2015 dollars were paid by Haiti to France for loss of property including Slaves. Successive interventions occurred over the years up to the American invasion in 1915. Today, foreign intervention is more subtle, but it is a major influencing factor on the politics and opportunity for the Haitian people. From controversial deals that prevent the application of Haitian law in a section of the North Coast and potentially an island Carnival Cruises has leased out land for foreign tourists to enjoy. The massive investments by foreign embassies, aid organizations and other non-profit groups has an impact on the relationships between foreigners and Haitians and between Haitians themselves. These investments, often done behind back-doors, makes it challenging for an economy to be built as Haitians will often use aid money to buy products from China or the Dominican Republic instead of building factories for their own production. In short, a system of dependency has been created that is sadly aligned with some of the interests of the ruling elite and certain foreign entities.

It would be nice to say that I am optimistic for Haiti, but I fear I cannot be. With no president and increasing violence, Haiti seems to be in a situation that cannot easily be corrected. There are so many problems that any realistic solution would need to involve the relocation of millions of people, the investment of billions of dollars and the return of educated émigrés. If there is one thing Haiti undeniably has it is honour and pride in their remarkable revolution that is well documented in C.L.R. James book, The Black Jacobins. It would be a great victory to see Haiti prosper, but if there is any lesson to be learned from them, it is that one should not understate the power of foreign countries, corrupt elites and revolutionary fever.

Montreal Stores around the World


The economic and political power of cities is on the rise due to changes in the economy and continued migration to urban areas. Montréal, like other cities, must continue to invest in itself if it hopes to compete on the global stage.

As a born and raised Montrealer, I may be biased. Though our city has much to offer, we are often cast in the shadow of larger cities such as Toronto, New York, and Paris. To compete for investment and tourism dollars, Montréal must focus its attention on its killer features. Of course, I think most will agree that we need political and economic reform along with more devolution of power from the province to the municipality and an integrated transportation system to efficiently move goods and people. But beyond reforms, we need something essential to our growth – investment. The quickest path to more revenues is more people, leading to higher property value and more economic activity.

If we want Montréal to become a strong city, it must advertise its specificities on the competitive world stage. We cannot and should not compete with major financial centres such as London, Hong Kong, New York or with the mega-cities of Mexico City, Istanbul and Shenzhen. Montreal is unique in many ways and we should advertise that uniqueness to attract business and tourism. I propose that we capture and bottle the unique Montreal flavour, creating a physical presence for others to taste and visit at home: Montreal Stores.

One simple solution to some of our economic woes is to drive more tourism dollars to our economy. With a 320 million person country next door and a strong US dollar, this should be a straightforward proposition. Instead of promoting ourselves through closed off Canadian Embassies or Québec delegations, we should build on success in the private sector and perhaps the greatest retail experience of all, the Apple Store. An Apple Store lets you test their new products, get consultations on the best products for you and even attend courses, lectures and musical events centred around the company’s products. A Montreal store would follow a similar model.

Having recently visited to New Orleans, I was struck by the number of Americans who traveled to New Orleans to visit the old French Quarter, listen to Jazz, drink cocktails and enjoy fantastic food. Montreal has many of the same cultural and culinary attractions as New Orleans and we are as close to the United States as one can get. The same American tourists who visit New Orleans for a modest amount of diversity and culture are the same tourists we want to visit Montreal. Curious Americans who want some culture, but might not be inclined to travel to Europe or Asia can come to visit us, in Montreal.

To promote our unique attributes and drive tourism to our city, Montreal should establish store fronts in cities around the world (even Canada). I would start with a storefront in the busy tourist filled French Quarter of New Orleans. The same tourists that travel to New Orleans are ones who would be thrilled to come to our Jazz Festival and enjoy our amazing choice of restaurants. This storefront, with an operating cost of a few million dollars a year could be modeled the Apple Store. Instead of iPads and iPhones, we would promote our music, innovation, language (french!), culture and food. The side-by-side promotion of our cultural uniqueness with our high tech industry and generous tax credit system might even incite some companies to open offices here. The goal of each Montreal Store would be to generate more revenue through tourism than it costs to operate, which strikes me as an easy target. The stores could host and promote Montreal musicians, innovative companies, art and culinary showcases to lure new people to our island city.

These tangible stores would help Montreal promote itself as a cultural and business hub for US tourists and businesses. Of course, we must also engage in a number of reforms here at home, but bringing US dollars onto our island would provide some key financing for our other projects. It’s time that Montreal take the bull by the horns and unabashedly promote itself as the fun, francophone and high tech hub that it is.

Four Ideas to Change the World

Time passes by so fast, I have been busy at Nimonik and had little time to write about the things I see in this crazy world. Luckily, NASA just announced the discovery of a 0.98 similar planet, so we can have a back-up planet if we do not sort out issues here. We will however need some form of traveling device near the speed of light to get there, or faster. Elon Musk? If Elon cannot solve it, here are four ideas that I am really passionate about these days and that I think can change society for the better. Read on about them if you can, I hope to elaborate in more detail in the near(ish) future.

  1. Liquid Feedback – A system to make decision making democratic and fluid.
  2. Rolling Jubilee – debt annulment for medical debt or the creation of a debtors union to free people from quasi-debtors jail. Don’t forget to read the great 5,000 years of debt.
  3. Basic Income – Distribution of common wealth (land tax, spectrum charges, pollution charges) to all citizens on an equal basis. Great book here on Citizen dividends, another term for basic income.
  4. A Tax on Capital – reduce the influence of capital in society and encourages people to invest their money in active assets that produce goods and services, as opposed to become rentiers living off the work of others. Read Pikettys Capital in the 21st century, best book in a long, long time.

Response to The Walrus Prostitution Debate

Here is a recent letter to the Walrus that I wrote. If you are interested in Canada, The Walrus is a great publication.

Traffic Jam

As the organizer of a recent debate on the new prostitution bill, C-36, I am familiar with the emotional discourse surrounding sex-trafficking numbers (“Dirty Tricks,” December). Both sides of the broader debate, for legalization and for abolition, have a tendency to distort statistics. And as Alexandra Kimball indicates, each side has a hidden agenda: the legalization camp sees money to be made, while the abolitionists see sin.

We cannot deny that this debate is a moral one, and not simply a matter of mathematical analysis. Should society simply condone the selling of sexual services, primarily by women to men? Progress requires equality, and the abolition of prostitution is a stepping stone toward greater gender equality. As long as it is profitable and socially acceptable for women to sell their bodies, the practice will continue. The solution is to remove the demand from the market and encourage women to seek alternative means of employment. Sweden’s prostitution laws (passed in 1999 and the model for Bill C-36) have led to a precipitous drop in human trafficking and the sale of sexual services in that country—numbers, yet again.

What’s clear: we must choose between believing our fellow Canadians sometimes have to resort to prostitution to earn a living, and believing that we can offer them something better.

How to build a Citizen Movement for Basic Income

This is the text to be presented at the North American Basic Income Guarantee Conference in New York City on February 28th, 2015. More information on the conference here.

 

Introduction

Hello, my name is Jonathan Brun, I previously founded two citizen action groups that successfully lobbied for more government transparency – or what we call open data – in Montréal and in the province of Québec. I am the Québec spokesperson for the Canadian Basic Income Network and the cofounder of the Québec Basic Income citizen initiative. I am a web entrepreneur and obviously passionate about basic income.

This talk is aimed to help those who are looking to organize around basic income. It is of course not a comprehensive guide or contextualized to your environment. I hope it helps some organizers here in the United States and elsewhere structure your efforts, build them out and exert influence. I believe basic income is possible in our lifetimes, but it will require thousands of hours of hard work, dedication and discipline. The following steps are not comprehensive, but I believe they are essential to any citizen initiative.

The five steps I wish to cover today in about 10 minutes are:

1. Building an Identity
2. Getting Organized
3. Spreading the Message
4. Growing a Mouvement
5. Exerting Pressure

1. Building an Identity

The first step to any mouvement is to clearly lay out your own identity. Who is the Basic Income mouvement and why does it exist? When people hear about Basic Income they should immediately have a clear picture in their mind of the organization, its aims, goals and its way communicating. Ask yourselves this, if the Basic Income Mouvement were an animal, which animal would it be?

This need for an identity is essential to any successful organization – non-profit or for-profit. What do we think when we are asked what the World Wildlife Federation is, Greenpeace, the United Farm Workers, the Teamsters, The Tea Party, The Occupy Mouvement, etc. There is an image that comes to mind within a few seconds, that image will define the way people react the following things you say – so it is of the utmost importance.

Part of building an identity is branding. In a modern society, such as the United States or Canada, we have tough competition of people’s attention – and donations (eventually). Our competition is not so much other non-profits or other mouvements, but rather the media landscape in general. People are bombarded with advertisements and content 24/7 – they see advertisements and information all day, every day, on their televisions, radios, computers and phones. If we want to gain even 5 minutes of the average person’s attention, the Basic Income mouvement must be presented in a catchy and professional manner.

This requires a professional logo, powerful copy on websites and printed material, a great catch phrase and even more. The recent social mouvements in Ukraine and Thailand and elsewhere had a number of common features – one of which was a colour. A colour or colour scheme is a powerful symbol – think of the national flags or the major corporations we know about, their colours are a pillar of their identity. This is not recent and includes everything form the thirteen colonies to the french revolutionaries, who used the red white and blue to symbolize their difference with the ruling classes. The Basic Income mouvement should consider adopting a colour that allows itself to be easily identified. This colour would then be used on t-shirts, communications and other items. In Canada, we are adopting purple to ensure we are not tied to a political party and it is a colour that is not commonly used – it also has a link to peace.

The fonts and layout used on the website and the printed materials must also be consistent. Building an identity requires  number of pieces, but it should not be taken lightly or disregarded as something for large organizations, well funded political mouvements or corporations. No mouvement can be successful without a strong and clear identity.

2. Getting Organized

It has been said that there are two challenges in building a sustainable mouvement – getting organized and staying organized. Basic Income, in North America at least, has yet to get organized. It may therefore be premature to discuss staying organized, but it is something we should keep in the back of our minds. Part of the reason that the civil rights mouvement fell apart after the death of Martin Luther King, was that its organizational structure was terribly poor. But I digress, let’s discuss getting organized.

Start small, but use scalable models. In the business world, when someone is proposing a new venture, one of the first questions is, “Is it scalable”. Which means, with more capital or ressources, does your model grow in a cost effective manner. If your model cannot grow cost effectively and generate a profit, then you are not scalable, which is a death sentence. While the initial work done by any organization is typically arduous and labour intensive, it needs to lay a foundation on which the organization can sustainably build up its structure.

The beginnings should be simple. The United Farm Workers, led by Cesar Chavez, defended the rights of farm workers, but when they started they did so in a simple format not dissimilar to certain corporations such as Tupperware. They organized discussions at people’s homes, around their kitchen tables, by doing this for five months, they were then able to call a general convention that brought together farmers and their families to define a common way forward.

Now, one challenge with comparing basic income to other social mouvements is this: “Who is most concerned with basic income?” In all likelihood it is the underprivileged and the disenfranchised, though a good article by Geoff Simmons in New Zealand laid out 10 potential people who would benefit most: Students, The Working Poor, Volunteers, Entrepreneurs and a few more. However, should we base a Basic Income mouvement around this group of people – the poor and students, it is likely going to affect our identity – making basic income  harder sell to the middle class and the political elites. To ensure a broad base of support for the mouvement, we must create  coalition of groups that all have something substantial to gain from basic income. If they have too little to gain, they will not mobilize their ressources to help.

So, getting organized requires that we very actively reach out to anti-poverty groups, right wing government reduction groups, student organizations, volunteer networks and single revenue homes while also explaining the tax benefits to the middle and ruling classes. This process will take a significant amount of time and lots of hard work.

3. Spreading the message

Once a base has been established, the next step is to spread the message. This can be done through a series of tactics. Publicity stunts, such as the coin deposit done by the swiss mouvement help in attracting press attention. Op-eds, and articles in the mainstream press would help as well. But, the key element is the need to leverage existing institutions to help scale the mouvement.

On a side note, we all know there is growing mainstream press coverage of basic income and people in high places murmuring things about it. Even Bill Clinton was seen carrying the book, With Liberty and Dividends for all, that covers the need for Basic Income. However, do not confuse this with spreading the message about a Basic Income Mouvement – we are talking here about spreading the message that a mass citizen mouvement is requesting basic income.

Many successful social mouvements in the United States leveraged powerful organizations that already had scale such as religious organizations. In New York, where religion is perhaps less prominent in people’s lives, we often forget the importance of the Church, Mosque Synagogue or Temple in people’s lives. Everything from the Civil Rights mouvement to the Farm Workers to anti-war mouvements were able to effectively leverage religious institutions to both spread their message and position themselves as a just and holy cause. This piggy back effort can also be applied to other groups such as unions, non-profit groups and celebrities. It can be an important tool to spreading the message farther and faster than what we can do alone.

4. Growing a Mouvement

Once you are organized, a major challenge is maintaining momentum. You must constantly keep your troops motivated, at attention and willing to take action. This can be done in a number of ways.

You can organize events, conferences and common meals. One key element is that the members of your mouvement must see progress and small victories, or else they get frustrated and leave. For example during our effort for more government transparency, we hosted letter writing campaigns where we sent hand written letters to elected officials, many of them got a response, which led them to remain motivated. We also hosted Hackathons, which is an event that brings together technologists and other people to design technological solutions to problems. In Montreal, corruption had been making headlines for the last few years and so we leveraged or piggy-backed on this problem to organize an event called “Hacking Corruption”. The event brought together bureaucrats, technologists, journalists and others to build technological solutions to help fight corruption. Due to its timing, catchy headline and our identity, we were able to get 300 people, 10 politicians and most of the local, provincial and national media to cover the event. The visibility brought us new members, but more importantly it reenergized the existing base of volunteers.

Another thing to mention when growing a mouvement is how to handle motivated highly volunteers. As you grow and attract new people to your mouvement, you inevitably come into contact with highly motivated volunteers who are willing to go above and beyond typical requirements. It is essential that you empower these individual to take action and demonstrate that they are valued by the organization. If you do not, you risk losing them and they may start rival organizations. However, some motivated volunteers, can have difficulty following orders or sticking to a party line, so you must find a way to frame them into something productive that they are satisfied with and that allows you to maintain control over the messaging. This is perhaps one of the more challenging parts of growing an organization and each volunteer who wants to go beyond the typical tasks needs to be treated according to their specificities.

In summary, to grow a mouvement you need to piggy back on existing movements, groups or actions. You need to empower individuals and you must achieve small periodic victories to keep the troops motivated.

5. Exerting Pressure

When civil rights leads met with Franklin Delanor Roosevelt and asked for help for African Americans, he replied “Make me”. By this he meant that the social mouvements must form enough pressure so that the decision makers are obliged to act and have a public legitimacy to do so.

During our efforts to increase government transparency, we identified people within the city administration who were already advocating for our policy. We did this through LinkedIn – which is a powerful tool. We met with these people, off the record, to gain insights into how the city worked and why the policy had not already been done – who was opposing it, who was for it and what were the key roadblocks inside the administration. This is essential information, that is actually easy to obtain, and will pay huge dividends.

You can apply pressure from outside an organization, but your mouvement can also allow people within the organization to apply pressure. When we started the group, there were already people within the city administration who had been asking for such a policy. However, because there was no external pressure on the city, the higher-ups could point out the lack of public support and dismiss the internal demands of the employees. Just as we are competing for the attention of the general public when trying to promote basic income, we are also competing for the attention and decision making time of the powers that be. Our outside group empowered our insider allies to go back to their superiors and apply pressure.

Ultimately, effecting massive change on government or society requires us to identify the current pillars of support for a policy or system and systematically move those pillars of support to our own goals. We do not want the pillars to crumble, as that leads to anarchy (see Libya), but we want to transfer their weight bearing capacities to our structure.

I hope this has been useful information and that you an use it to build a citizen mouvement for Basic Income in the United States.

**Bibliography**

From Dictatorship to Democracy – Gene Sharp
Bearing the Cross: Martin Luther King, Jr., and the Southern Christian Leadership Conference by David Garrow
Why David Sometimes Wins – Strategy, Leadership and the California Farm Worker Mouvement – Miriam Pawal
Bolivar: American Liberator  – Maria Arana
The Black Jacobins – C.L.R James
Walk to Freedom – Nelson Mandela
Ghandi an Autobiography – Mohandas Karamchand (Mahatma) Gandhi
René Lévesque, un homme et son rêve – Pierre Godin
The Victory Lab: The Secret Science of Winning Campaigns – Sasha  Issenberg
The French Revolution: A Very Short Introduction – William Doyle

http://blog.okfn.org/2011/09/12/how-to-build-an-open-data-initiative-for-your-city/

The CBC Must do Slow TV and More

slow-television

Over the past few years I have come to know many journalists at the CBC/Radio-Canada and as a concerned Canadian citizen, I have grown worried about the fate of our public broadcaster. This summer and fall, I had the pleasure and privilege of sitting down with Shelagh Kinch, head of CBC Québec, and twice with Hubert Lacroix, president of CBC/Radio-Canada. The meetings were all a closed-door frank discussions of the challenges our public broadcaster faces in this evolving media landscape.

I went into the meetings as a skeptic, thinking that Lacroix might be doing Harper’s biddings with the cuts he has implementer or thinking that the CBC did not really want to change. During the three meetings, both Hubert and Shelagh expertly outlined the important changes the organization is making to trim costs and modernize its service offerings. They confronted challenges – from Aboriginals who felt left out of the CBC reporting to millennials who hated their simple apps to rural communities who were not getting coverage. They spoke truthfully and honestly and I am now convinced there is progress.

High Tech Solutions

The apps are looking better and specific projects such as the World Cup video player and the Sochi Olympics show the CBC understands the potential for digital tools to compliment and augment content. Yet, the cuts continue and one wonders how much innovation and high quality content they will be able to produce with their reduced staffs and budgets. There is enough commentary on their need for better technology, going mobile and going online – so I will not add to it.

Low Tech Solutions

Though the CBC needs to keep its apps, online solutions and interactive productions up to speed with consumer expectations, there is an area that the CBC has yet to tap. The national Norwegian broadcaster, NKR, recently embarked on a simple, counter intuitive and powerful type of show: Slow TV.

One of their producers recently gave a hilarious and inspiring TED Talk on the subject. The concept is ridiculously simple, film apparently mundane events in real time and show them on television. The Norwegians did a seven hour show that filmed a train crossing the country, then they filmed a five day boat journey from southern Norway to Northern Norway, then a show an 8 hour show that included cutting and burning firewood and most recently, they filmed 8 hours of salmon fishing, it took 3 hours to catch the first fish!

There are a few remarkable things about this. First, over 20% of the Norwegian population tuned in at some point to these shows. Secondly, it build a link between Norwegians as the events filmed were all closely tied to their National identify. And lastly, the shows go against everything you are taught about the modern viewer – that you need action, plot-lines, big budgets and drama to keep someone engaged. Of course, Slow TV cannot replace all forms of television, but it is a beautiful compliment to our frenetic lives and bombardment of our minds with action, explosions and violence.

As you watch these shows, you are forced to slow down your own thinking and you suddenly start to see the layers and nuances that exist in life. You watch someone cutting firewood and you slowly see the scares on their hands, the look in their face and the forest around them. You see details and perhaps you even start to construct a plot. Was this person who is cutting wood a good father? Was he a good son? How did he end up where he is? Of course, you do not and will not get the answers, but just having the time to ask the questions changes the way you see yourself and your fellow citizens.

The CBC should produce Slow TV. They can start with just one show and like the NKR, it should be an annual or semi-annual event. The show should focus on something Canadian and it should help build our national identity. Perhaps the Trans-Canadian train, a long sled ride across the north, a long canoe trip, fishing, or some other event. Slow TV would be a low-tech, low-cost solution that makes Canadians wake up to the need for a National Broadcaster to link us together and maintain our national identity.

No Magic Solutions

Yet, despite progress, there are no magic solutions. A number of interesting statistics were highlighted by Hubert Lacroix. In short, the CBC only receives $29 per Canadian per year and has a mandate to serve all Canadians, in two languages and in six time zones. In contrast, the Norwegian broadcaster, NKR, receives 180$ per Norwegian. Also of note, the cuts did not start under Harper, but have been a continuous trend for the last twenty years. If you also include the current massive migration of ad revenue to online platforms such as Facebook and Google, the CBC is between a rock and a hard place.

funding-chart
It is easy to say, “Be like the BBC” – produce more and better content and you’ll get more funding. However the BBC gets $ 97 per Brit (and there are more of them) and they only have to serve one time zone in one language, it’s like an NHL team competing against a junior hockey team.

Despite the underdog story, the CBC has clearly thought through their options and there are many smart and devoted people working there. They have summarized their strategy in the CBC Plan for Us All, which lays out their attempt to modernize their offerings and go digital. The plan is good, but ultimately not enough. Hubert Lacroix is a very smart man and I believe he is sincere in his attempts to save the CBC, despite what some former Radio-Canada journalists might believe. Beyond government cuts and ad revenue issues, there are problems with the unionized workforce that protects older employees and reduces their ability to hire young digital natives, there are also inherited costs of infrastructure and a perception in Western Canada that the CBC is not worth anything. The list of problems is long, but the key element here is a lack of resources.

At the end of the day, the CBC needs to drive eyeballs and ears to their content and the best way to do that is through high quality and differentiated content – such as Slow TV. Easier said than done. When top-quality productions like House of Cards cost 7 million dollars to produce, for one hour of television and the most costly CBC show ever, The Border, cost 1.3 million dollars an hour to produce, it is clear that the CBC cannot compete with HBO and Netflix. Ultimately the English part of CBC is competing with the United States and so far, Canadians seem to prefer US shows. The CBC could cut a lot of mediocre shows, but that still won’t be enough. And, it is notoriously hard to pick winners and losers based on scripts. The head of a major Hollywood studio once said, “If I had said yes to all the films I refused and no to all the films I produced, I would be in the same place.” With the current funding, the numbers just do not work and there is no clear way the CBC can dig itself out of its current death spiral.

Sure, they could try and emulate some other broadcasters with higher quality reporting. They could try and jump on a variety of internet platforms that the ‘cool’ kids are using, Facebook, Twitter, today and Quartz and Medium tomorrow. Tackling multiple and ever changing platforms is a very hard challenge and likely futile, it requires intimate understanding of the nature of the platforms and constant adaptation to new platforms. It strikes me as unsustainable for the CBC to chase after all these broadcast channels. The only way to bring back the CBC is to produce great, innovative and Canadian content.

To produce great content, in a market that is overshadowed by Hollywood, we need to decide as a society if the CBC is something Canada believes in. At first, I was a skeptic of the CBC’s desire to change or to invest in new talent. They have been slow to move on data journalism, online access to content, mobile apps and data visualization – but they are headed in that direction. Their plan is good and their top brass seem keenly aware of the need to move faster. Now, there remains only one remaining piece in the ‘Save the CBC puzzle’, Canadians.

A public broadcaster is a societal decision. We must decide if we want one and if we do, we must give it the means to fight in a competitive market and produce great content. Each Canadian should contribute, from one source or another, as much as the average of the top twenty countries, 82$ per year. That would nearly triple the current funding and would allow the CBC to actually invest in it’s people, which represent 70% of its costs, and its technology. Frankly, more money is the only solution for our public broadcaster and the only people who can make that happen are Canadians. Canadians need to wake up and choose between a well funded CBC or no CBC at all.

So, in no particular order are four crazy ideas for the CBC.

1. Become a Landlord Not a Tenant.

The CBC is proposing to sell its real estate and become a tenant of newer, more modern buildings. It has closed large buildings in Canadian cities and is downsizing its physical footprint. Instead, the CBC should grow its footprint and use the extra real estate to offer affordable rents to emerging artists and innovative technical organizations who can work with and compliment CBC offerings – helping plant good ideas in the CBC.

2. Move away from Windows and costly web hosting

CBC could likely save millions of dollars by movings its computer terminals away from Microsoft products and movings its hosting solutions to lower cost hosts.

3. Reduce the footprint in Toronto and grow operations in Montreal, or other low cost cities

By moving a good portion of operations to Montreal or other Canadian cities, salaries and real estate costs could be dramatically reduced from the current downtown Toronto operation.

4. Go on a Strike and/or Run

To wake Canadians up to the reality of the funding at the CBC, the staff and administration could hold an unlimited strike. The risk is of course Harper shuts down the CBC, but the upside is he might be forced to increase funding – a little friendly wager shall we say. Hubert Lacroix likes to jog, so perhaps during the strike he could run across Canada – Terry Fox style – to raise awareness for the CBC and its handicap. It could even be filmed as Slow TV!

I hope you will join me in encouraging the CBC and its attempt to modernize and grow for a 21st century audience.