On having a child
It is tremendously easy to have a baby. Of course, the hard part is to raise the child and be there for them throughout their life – regardless of the child’s personality, capacity’s and fortune. This past August, I had my first child, Samuel, who has been a true blessing. As I write this, he is trying to learn to crawl on his nearby play-mat.
As with other life events such as love, death of a close family member, bankruptcy, success or health issues – is hard to understand what something means without experiencing it first hand. Unsurprisingly, it is hard to convey what having a child and more importantly, having a human depend entirely on you, feels like until you actually hold one in your hands and stare into the depths of their eyes.
At my age of 36 many friends now have children and I have had the opportunity to spend time with older friends who already have grown or semi-grown children. They all explained the various benefits and challenges of raising a child and in all honesty this helped prepare for my own child. However, when my friends had children over the past few years, I would offer my congratulations and a gift, but the congratulations was not nearly as wholehearted as it is today. When I received congratulations from family and friends upon the news of the birth, I could hear a much higher level of enthusiasm in their voice. Once you have a child, you understand the true blessing that it is and you feel a much deeper sense of joy when someone else has their own child.
I have always felt that there are no shortcuts in life and we cannot reinvent the wheel. To life a full, happy life you need certain key ingredients; a meaningful purpose, a strong partner and ideally, children to take care of. Only through these things can you really experience the full spectrum of the human condition. Of course, some people cannot or choose not to have children and this is not meant as a criticism of their choice. Yet, without reproduction our species would disappear and without child rearing, our children would not survive. Like music, food, friendship, love and hate – there is undoubtedly an innate powerful desire to have and raise children hard coded into the depths of our genetic code.
My wife and I have been blessed with a healthy and easy baby. He sleeps well, eats well and barely cries. We are also in the most fortunate of situations with the presence of many family members who are more than eager to babysit and help. Colleagues and friends who do not have such a strong support system or who have difficult babies face a much, much greater challenge than us. It is therefore absolutely critical that our society continues to support families and especially those with more difficult situations. I am very proud that Québec offers subsidized daycare services for only 10$ a day as well as one year maternity leave, 5 weeks fatherly leave, and our Canadian government offers the world’s most generous child support program – the Canada Child Benefit Program, which offers up to $7,500 dollars per year per child based on your income. These programs make a world of difference and are critical to levelling the playing field for all children; giving them a fairer shot at success. Having a child may be easy, but raising a productive member of society is a huge challenge and this support system is critical to our society’s future.
Children are their own people. While they may look up to their parents until their teenage years, they are eventually on this planet to do their own thing. Too many parents project their own values, goals, and failed ambitions on their children. My modest hope is to empower our child to pursue success and happiness in this challenging world. There are no shortage of parenting articles or books, but my approach is to first say thank you to my wife, who inevitably does more than me, and then to offer a steady hand while our son faces the exciting milestones of life. I look forward to the journey ahead and I hope to encourage others to embark on the same rewarding adventure.Published on January 6, 2020
Capitalism and a market-based economy are not the same thing
Capitalism and a free market economy are not the same thing. While this may seem evident to many, there seems to be a general confusion that leads to all sorts of challenging discussions. If you aim to change or improve a system, it is first critical to properly understand it. To understand a complex system such as a modern economy you should probably start with some of the core organizing principles. How do we allocate resources among citizens? How free are citizens? How much control does a central authority have? etc. It is clear that we cannot address all of this in a blog post, but I wanted to point out one critical issue that keeps coming up in discussions – capitalism is a method of distributing resources in a society. In contrast, a market based system of exchange of goods and services is a mechanism to force organizations to improve their performance and the value they deliver. While there are strong linkages between the two concepts, they are not the same thing.
When discussing politics, the common refrain is that capitalism and our current form of democracy are the best systems we have and we should be content to keep plodding along. I will put aside the democracy issue for now, as that merits another post. There is a common social acceptance that capitalism was the driving force behind the insane economic growth of the last 300 years. From the industrial revolution to the latest AI startup, we tend to chalk up progress to the existence of capitalism. However, I would argue that we have a strong tendency to conflate capitalism and a market based economy. It is not simply a chicken and egg question (though it partially is). What came first, capital or innovation? Capital over the past millennia was generally stable and then exploded in the industrial revolution. What changed? We still had kings, aristocracy, the church and other organizing forces. Innovation allowed organizations to offer greater value in the form of cheaper goods – kicking off competition, which is a self reinforcing flywheel that has kept accelerating ever since.
Capitalism is commonly defined as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” This definition seems fairly clear, but I would argue that it conflates ownership with trade. Capital is a representation of the accumulation of something of value. You can have political capital, you can have social capital, you can have a variety of capital. It is not necessarily monetary, but it is something of value.
Capitalism is a form of social organization that is based on people and institutions with capital making decisions. You could contrast this to Socialism, where it is a society that collectively makes decisions or with Aristocracy where it is the king that makes decisions based on divine right. Some would say that we cannot simplify capital to be a generalized concept of counting “value” as that would be too simplistic and too vague, but let me continue on this tangent. A critical error in the definition above is to limit capitalism to the ownership by private interests. Many countries have state run companies, meaning they are owned by the state. The current Chinese political and economic system is often referred to as state run capitalism because the Chinese government is so active in the economy via the companies it owns and controls. So, capitalism should be better defined as a system where those who own the capital make the decisions – be they state, private or other.
Despite using money on a daily basis, many of us and I did not know that money really is. In most school textbooks, we are taught that money is a tool for exchange – it allows me to buy something from you without trading directly in what I have (chickens for example). However, this concept of the origin of money is utterly false and lacks any substantial anthropological evidence. To learn more, simply consult David Graeber’s essay on debt.
So, what is Money? Money is a quantification of value. Money is a representation of assets (value) and debt. In fact, money was invented by the ancient Sumerian temples who were trying to quantify their assets – cows, grain, wine,… and track who owned what to whom. Money, ultimately, is a score-keeping system. It is, an accounting mechanism. Anyone who has run a business or done complex tax returns will know that the “score-keeping system” we use for managing money is far more complex than a simple point system.
In contrast to scoring goals in a game, money is not created in the same way. Money is issued (today at least) by a central bank. In reality money is not issued so much as created by the issuance of credit. The central bank issues credit, not money. When you hold a $20 bill in your hand, it is a note of credit from the government to you. You do not actually have $20, you have credit and in counterpart the central bank has a debt. However, if we start to look at all of money as an accounting system – which it is – then we can begin to realize that the game is rigged.
There used to be a social movement called the Social Credit (notice the use of “Credit” in the name). Without going into detail, this movement identified how the current accounting system used by businesses and by owners of capital was rigged against wage workers. In short, the way we account
Free Market Economy
A free market economy is defined as “The free market is an economic system based on supply and demand with little or no government control.” Another way of stating this would be to say that a free market is a competitive market where different actors – private or public – can freely compete for resources and customers. When the aristocratic system fell apart during the industrial revolution (and after), it was largely because the industrialists competed and beat the aristocrats in creating greater value to citizens. They offered work to peasants and produced much more value than the traditional agricultural based system controlled by the aristocrats. My own French family came from an aristocratic family in France that saw their relative wealth evaporate as they stayed centred around agriculture and ownership of land, while new industrialists build factories. Eventually, may family sold their Chateau to the family of are large grocery chain. What has driven the vast majority of the innovation and wealth we see today is not capitalism itself, but rather competition.
Forcing people, companies and governments to compete with each other in order to create as much value as possible is the principal source of our wealth. As with any competition, we must have clear rules and that is where rule of law comes in and it remains a primary function of governments to establish and enforce the rules we use to compete. Different rules will lead to different outcomes and it is therefore critical to select the right rules for the right situation. Capitalism is a series of rules about the ownership of capital – despite being an important rule, it is only one rule among many. However, I wish to highlight that it is the competition among actors that drives our wealth – not simply ownership of capital.
The current political and economic elites have successfully conflated the concepts of capitalism (the private ownership of capital) and competition, telling us that their version of Capitalism is the best system for society. The truth is that the rules we are currently using are not fair to workers or the unlucky. The game is rigged, the house will always win. In Thomas Piketty’s seminal book, “Capital in the 21st Century”, he outlines how owners of capital can generate returns on their capital that is superior to the growth in wages of workers without increasing the value they create. The classic example is the owner of an apartment building or land that generates returns greater than inflation. An apartment building does not create much value, and yet an owner of an apartment building can earn more money than workers. In consequence, the capitalist class (the private owners of capital) can grow its wealth faster than the working class and the gap between the two continuously increases until you have social unrest, war, revolution or some other large event that destroys capital and resets the balance. Social
If we want to generate more value in society, we need to look for ways to increase competition. We need to look for rules that will enable people and organizations to compete to their full potential and not be handicapped by poverty, disease or bad luck. We need to identify rules that will allow small businesses to scale and grow. Rules need to be found and implemented that ensure international commerce is fair and equitable. We need to improve our accounting rules so that the true costs of environmental pollution, labour, resource consumption and other externalities are included in the costs of production and the cost of goods sold.
In short, our accounting system is broken and it needs an overhaul. There are a number of options and the ones I have advocated for include basic income, affordable housing and free education. Capitalism left uncontrolled will eat itself. It is the role of society and government to constantly update the rules of the game to ensure that society is driven to increase the sustainable value it creates for future generations.Published on December 22, 2019
Why Andrew Yang is the best candidate to beat Donald Trump
Andrew Yang was the first person to announce his run for the Democratic ticket. An entrepreneur of Asian descent, he often starts his stump speeches by asking “What is the opposite of Donald Trump?” and then replied, “An Asian man who loves math!”. Who could disagree with that? The one person who can beat Donald Trump in 2020 is a down to earth, normal person who speaks coherently and truthfully about the challenges facing America and the world.
Yang’s principle policy is a Freedom Dividend – a $1000 monthly cash transfer to all US citizens. Yang is proposing to institute a true basic income in the United States which would establish an economic foundation under the feet of 300 million people. A $1000 a month is not enough to live off of or stop work, but it is certainly enough to return to school, search for better employment, help your family and invest in your future. For the past six years, I have been involved in the basic income movement in Canada and the science and the politics are clear – we need a basic income to offset the precarity of the modern economy and provide more freedom to all citizens.
Yang has already received the endorsement of Elon Musk, our generation’s greatest technical visionary and entrepreneur. The proponents of basic income span the political spectrum from Martin Luther King Jr. to Milton Friedman. Basic income or a freedom dividend is a policy brings together former Trump supporters who are frustrated with their economic precarity and it also attracts left-wing progressives who want economic justice for all. A freedom dividend is a policy deeply is rooted in the American identify of individual independence and autonomy. Basic income was first proposed by Thomas Paine, an American revolutionary. With a $1000 per month, you would be free to make the choices you know will improve your life and of those close to you.
Financial precarity is a huge determinant of our mental health. Living paycheck to paycheck takes a massive toll on our brains and increases our stress. Yang advocates for a massive investment in the mental health of all citizens through a Freedom Dividend, but also through access to marriage counseling and mental health experts. In short, he proposes a return to a more humane society where we set up the tools and systems to allow people to reduce their mental stress and build a better future.
The other Democratic candidates are professional politicians. You can see it in their schedules, in the way they talk and in the way they spin things. Yang is anything but a politician. For better or for worse, he is willing to tell us the truth. He explains that it is too late to stop global warming and we need to think about mitigation, he explains that mental health is in freefall across the US and that the only way to transition to a brighter future is with a massive cash transfer. Like Trump, Yang speaks from his (very different) heart.
Yang also proposes concrete action on gun reform, universal health care and a suite of other policies. Just watch his recent breakdown (available on YouTube) during a gun reform event where a woman who lost her 4-year-old to a stray bullet asked Yang what he would do. Yang, a father of two young children, could not keep the tears back and anyone could see he was a genuine father who has had enough of gun violence in the United States. Yang is a real person we can all relate to. The United States has a history of swinging the presidencies between radically different people. From Lincoln to Johnson and Nixon to Carter, America has a dual identity it is constantly vacillating between. Yang is the opposite of Trump in every way. If we want radical change and a return to sanity, Andrew Yang is the best pick for the democratic ticket and the future or our southern neighbour.
I have no affiliation with the Yang Campaign and I am not a US Citizen. This is a personal opinion and does not reflect the opinion of the organisations I represent.Published on August 23, 2019
Xi Jiping: The Backlash – Review
Xi Jiping: The Backlash by Rory McGregor is the best (short) overview of the current geopolitical situation between China, the smaller powers (Canada, Singapore, Australia) and the larger powers (Germany, USA). He accurately diagnoses the challenges of smaller powers and China’s internal challenges. It seems Xi has a tight grip on power and the loyalty of the party, along with few rivals. The track China seems to be on is a return to authoritarian rule by party officials, with less respect of the rule of law. The use of trumped up charges to imprison Canadians, the picking and choosing of which imports they allow and other terribly mercantile behaviours does not bode well for China in the long-term.
A China that punishes those who defy it will likely contribute to an isolation and separation of China from many potentially friendly powers. Having spent two years of my life in China and having met many amazing Chinese people, I am concerned the country is headed back towards arbitrary rules that will create uncertainty for individuals, families and businesses. My Canadian friend who is based in Hong Kong, married to a Chinese woman with two children and speaks fluent Mandarin is quite skeptical on the stability of the communist party. Despite Xi’s efforts to avoid the collapse seen in the Soviet Union and the following appropriation of resources by the Oligarchs, it is unclear how China can simultaneously develop a thriving market economy and employ arbitrary rulings to cajole countries, people and businesses into compliance.
I love the Chinese people and the country, but there is a very dark trend emerging in China – whether it is the police state they have built with 24/7 global surveillance, the internment of Xinjiang Muslims, or the international actions they are taking to pressure smaller countries and dump product into foreign markets. The Chinese people are both nationalistic and revolutionary. If you put them into a corner, they fight. Just look at Hong Kong. With the economy still growing at 6% a year, it seems unlikely that the party will lose popular support in the short term. The longer term issues that will undermine the rule of the communist party can be summarized as demographic, liberty and rule of law.
The demographics in China are already negative and getting worse. They have very low birth rates and the working population is already decreasing in absolute and relative size. With less workers and less babies, housing values will decrease and a tremendous amount of the Chinese assets are built on property valuations. This carries from the individual families who feel they are wealthy due to owning apartments to the provincial and city governments who derive taxes from property values. Property value is fundamentally tied to demographics. If your population decreases, property values decrease. It can quickly turn into a chain reaction.
All people want freedom. They want freedom to choose their mates, their careers and their future. If Chine continues to restrict emigration and movement this will frustrate the people. It is unclear how much they will do this. Over 100 million Chinese already leave the mainland on trips and return every year. The question will be centred around the upper middle class Chinese and how they view the future of their own freedom. If they are concerned it will be heavily restricted, you will see an outflow of people and money to other countries and a potential large-scale rescinding of Chinese nationality. This is hard to predict and it remains a major threat to the stability of the party. Without the entrepreneurial middle class, the Chinese economy does not work (nor does any other for that matter).
Similarly, the steps backwards on the rule of law internationally will likely lead to similar issues internally. If China is willing to punish Canadian farmers and Swedish salmon farms because of international politics, it seems clear they will use arbitrary rulings to control their own people. No country can develop in the long-term without a reasonable rule of law. Without it, businesses leave, people leave, morale is killed and people will not invest.
Building an empire is all about faith. It requires the country’s leaders and its people to have faith that they are on a divine mission. They must believe that the future will be better if they are active and invest in the country. Empires collapse because people lose faith. It is fare more fragile than we might imaging. With their actions and their challenges, China is running a real risk of losing the faith of the international community, the business world and its own people. If two of these pillars tumble, China will not be able to achieve its dream of a becoming a regional (maybe global) power and welcoming Taiwan back into its fold. Only time will tell, but I highly recommend this book to understand some of the challenges China currently faces.Published on August 10, 2019
Citizen Dividend vs. Basic Income
The biggest problem with basic income is its name. Andrew Yang, the candidate for the Democratic Party of the United States, has been touring the US and advocating for the establishment of a Freedom Dividend. The re-framing of a basic income as a dividend is absolutely critical to its success in the public discourse. A dividend is defined as “A dividend is the distribution of reward from a portion of the company’s earnings and is paid to a class of its shareholders”. I would argue that we are all shareholders in the society’s we live in.
While the ultimate objective of a dividend and a basic income remain the same, the critical difference is the structure of the program. In general, basic income advocates position the program as a new form of wealth redistribution that is simpler, fairer and easier to administer. The huge challenge with making the sales pitch in that way is quite simple. Citizens do not want more social programs. Of course, certain citizens do want more social programs, but it is a small minority of the overall population and they are typically activists on the fringes. The vast majority of the voting population has no interest in more taxes and more programs. A dividend allows you to avoid this massive roadblock to implementation.
Peter Barnes wrote an excellent book on the subject, With Liberty and Dividends for All. He basically argues for a dividend that is funded on “public assets”. This would include items that are, in theory, the property of society and not the property of individuals or corporations. That way, we can avoid the perception and counter-attack by the right that this is yet another tax and spend program. We could apply taxes and levies on environmental permits (which allow pollution into our common air, water, soil,…), taxes on the sale of wireless spectrum, land taxes (not property taxes), levies on natural resource extraction, tourism taxes, etc. These revenues could be put into a fund and invested. Part of the returns of this fund would then be distributed as a basic income (oops!) – a dividend to all members of society.
August 3, 2019
By implementing a citizen dividend, we would achieve most of the objectives of a basic income, but we would bypass the insurmountable mountain of political barriers to a traditional basic income program. Who could argue with a citizen dividend on public goods? When you are born into a society, you typically receive citizenship and certain fundamental rights. A dividend would become a fundamental right you receive upon membership. You would benefit from the increased wealth of your society and you would be offered the financial freedom to invest in your future, help your family and contribute to the further enrichment of your society. With a citizen dividend, all citizens’ interests would be better aligned and we could start to move forward towards a fairer and freer society.