Hello everyone who is reading this blog.
I put this up to get some thoughts out of my system for the election we just had, but this blogging tool has some interesting features, and I am surprised and flattered to see that this got 135 page views. (Hey, this isn't the Globe and Mail. Or even the Calgary Sun!)
Equally surprising is the geographical distribution. 76 views in Canada (no surprise), 41 from the US (hey, my relatives and friends are reading from abroad, cool!), 1 from Suisse (I'm guessing that's Michael - Servus!). But then I get a little confused. Who do I know in Portugal? Singapore? France?
Russia? 5 views from Russia? (C'mon, the FRS can't be interested in this - are they even called that anymore?) Spasibo!
So thank you all for reading! I do plan to write some more, but one thing I have noticed that disappoints me a little is a lack of comments. The posts address some fundamental civics and economics topics - but they are woefully simplified. That was a deliberate choice, first because I was not trying to answer questions so much as provoke them. (Yep, political trolling) The second, less obvious (I hope) choice was to mask my own ignorance. I think of myself as a widely read person, but no one in the era can know or read everything. By trolling a bit to get people thinking, I also hoped to get people talking or writing. We won't all agree (that's a good thing) but if we are respectful, we can often hammer a lot of nonsense out of the way in our forge of debate.
So I encourage comments. I'd love to hear from you. I'm not under the illusion that I'm right about everything (just most things).
...and thanks once more for reading.
Coming Soon: A look at poverty and criminal conviction from an economic view point.
Friday, October 23, 2015
Sunday, October 18, 2015
Leadership or not.
Well here we are, Election Eve. I am just getting this post in under the wire. If you recall, I started writing this series of essays because I was tired of debating minutae with people online. The details of why I did or did not like this particular party, or leader, or policy. Well it is good to dig into the details, but what I found was that the arguments people put forward often seemed to me to reflect poorly integrated values. Like, "we support cancelling the Long Form Census because it is in invasion of privacy", and then in the next breath defending very intrusive (and unsupervised) powers of investigation for security services. Well, do you believe in privacy or not? Under what circumstances? And so on. I think a lot of people are just supporting the party they "currently believe in" without taking the time to reflect and see whether or not that party actually aligns with their own personally held principles. I believe this happens because a lot of people never open up their mental closet of principles, haul them out, shake off the dust and have a close look at what they believe and why. And I think you should.
So I have been writing these posts with a dual purpose. To encourage you, my very appreciated reader, to take out your concepts of government and think about them. At a high level, and without considering a party or policy. Figure out what you expect from Government, and Leaders. The second purpose is that in writing these posts, I have been doing this myself. Not the first time for me, but as we grow we learn, and it was high time I had another look at what I believed, so that I could hope to make a good choice at the polls tomorrow. Or at least an informed one. Not just informed of the policies and character put forward by our politicians, but informed as to my own expectations as well.
Which brings me to the last one. I don't think that policy and promises are everything. In the course of a government's life many things will happen that are not forseen at the election. Recessions come and go, trade disputes erupt, trade deal opportunities materialize, wars, crime, scandal, it is all going to happen. So I want to choose someone who has, I hope, an approach to dealing with these issues with the way I want my representative to deal with them. First I must realize that there is no hope that my representative or PM will react as I expect in every situation. But will they listen? Will they listen to the electorate at a time in their mandate when they KNOW we will forget by the next election?
How can you know?
Well you can't, not completely. Politician images are carefully managed, and most especially during election times. But you can use a very simple technique - you can look at someone's record. What they said, how they voted. You have to use caution, because politics is a rough "game" people love to circulate misquotes and things taken out of context. Here's the thing though - it is usually very easy to check and find the original quote. Through the miracle of internet search engines, it is often possible to go back and get the full interview, find more parts of the story, and decide for yourself if that quote really represents what was meant. The Kim Campbell example I used in my first government blog post is an excellent example of this. PM Campbell was trying to express the fact they in the short, sharp fury of an election campaign, it is effectively impossible to reach a good, reasonable solution (including, especially a compromise solution). She "summed up" a much longer, and very reasonable explanation with "an election is no time to discuss serious issues" - which is of course the bit that was quoted and spread like wild fire. It is worth wondering, who was spreading the misquote? Who stood to gain?
It is difficult to discern and research these things during an election too - the truth will out, but it often takes some time. Not least because there are some places where a politician simply cannot win. When a politician changes his mind on an issue (often because a public outcry against their original stance) she runs the risk of being labelled for "flip flopping". Of being wishy washy. However, if the politician stands their ground, they risk being labelled as someone who doesn't listen to or respect the will of the People. How can you tell? Well for one thing, if you follow politics more often than just during an election campaign, you can see examples throughout that time which gives you a much better basis that a 40 or 80 day election campaign.
So the character of your chose candidate should be something of importance, and in my mind, also their leadership.
Leadership, it is not just giving direction. Leadership is about far more that telling the helmsman which way to steer, or taking the credit when things go well. A real leader inspires, and persuades. The show the way, by example. Indeed. most of the Leaders I've had the good fortune to work for, or with are free in sharing credit (where it is due) and quick to stand up and take responsibility for their team's errors (and all people and teams make errors - get used to it).
A Leader doesn't just implement an agenda, in effect telling people what they want. The best leaders have a goal or direction in mind, they articulate and persuade - but they also listen, adjusting their goal or direction in order to draw more people to that vision, while keeping in mind the constraints that restrict the direction. They are transparent, because they want people to want to come along.
A great example of this is Naheed Nenshi, Mayor of Calgary, who today posted a wonderful column in the Globe and Mail. It is not a short or easy read, why should it be? He's addressing a complex and important issue. So he does it justice, drawing on his personal experience, and his abilities as a communicator (crucial in a good politician) to get his point across. Agree or don't agree with him, but at least he makes a case, not a slogan. You can see it here.
If that all sounds a little idealistic, well it is. No leader will ever live up to all of that perfectly, but some try harder than others. There is a world of difference between leaders who manage their message through soundbites, repeated ad nauseaum as advertising, or as "talking points" by other members of the political team. And that's a legitimate part of a strategy of getting a message out. It is not legitimate when those talking points are used to ignore or deflect debate on serious questions or issues raised in debate. I always ask myself, do I really want to be represented by someone who, when questioned, never responds to the question? It strikes me as dishonest.
Why is that dishonest, well I view my MP, Cabinet Ministers and the PM as *employees*. My employees. The government I believe in is there to create that security so that I, and my family and friends and colleagues can go about our lives and careers in a reasonable and productive fashion - without undue disruption by people seeking to take advantage of society. To provide a social safety net (economic, physical, etc.). To do so in an economically efficient manner. To invest in the future of our society. For all these things I pay my taxes. See that, I PAY for these services, and because I am an "owner" of this society, that means I'm not just a customer, I'm a shareholder.
Which brings me to my last point before the election. Voting is not a privilege. In a democracy, voting is a duty. It is not only my tax dollars are work and at risk, it is yours too. Ours. If you don't vote (and I honestly don't care who you vote for) then you let down the side.
I work in Project Management and it is a real truism for us that "what gets measured gets done". Which is another way of saying that we go around holding people accountable. Sure some people are self starting and don't need to be watched in order to make their deadlines. I'm not one of them. I need to be held accountable - this is not a flaw, it is just human nature. Most of us need some pressure, some deadline, some knowledge of consequence if we fail to complete our task.
Voting is how we do that for politicians and government. I wrote earlier about the concentration of power in the PMO, how MPs are often "whipped" to support the government policy, sometimes against the wishes of their constituents or even their own beliefs. That's not great, but it is still not a disaster because you and me, gentle voter, can still hold government to account every four or five years. But that only works if we *all* get out and vote. If you have too few people voting, it becomes easier for politicians to practice "wedge politics" - where a policy is put in place favouring a small group that tend to vote as a block (or to pick on groups that other groups don't like, to achieve the same effect). In short, when a large fraction of the population doesn't vote, it becomes very possible to have small interests take control of the National (or Provincial, or Civic) agenda because they manage to mobilize and swing the election.
So get out and vote. It doesn't take a lot of time, it is surprisingly satisfying, and damnit, you owe it to me, to yourself, to every fellow Canadian.
And those still to come.
I hope these essays have helped you to focus on what it is you really expect from your government. I hope you have found your way to reliable internet information on the candidates and parties and what they stand for. Good luck! Choose well!
So I have been writing these posts with a dual purpose. To encourage you, my very appreciated reader, to take out your concepts of government and think about them. At a high level, and without considering a party or policy. Figure out what you expect from Government, and Leaders. The second purpose is that in writing these posts, I have been doing this myself. Not the first time for me, but as we grow we learn, and it was high time I had another look at what I believed, so that I could hope to make a good choice at the polls tomorrow. Or at least an informed one. Not just informed of the policies and character put forward by our politicians, but informed as to my own expectations as well.
Which brings me to the last one. I don't think that policy and promises are everything. In the course of a government's life many things will happen that are not forseen at the election. Recessions come and go, trade disputes erupt, trade deal opportunities materialize, wars, crime, scandal, it is all going to happen. So I want to choose someone who has, I hope, an approach to dealing with these issues with the way I want my representative to deal with them. First I must realize that there is no hope that my representative or PM will react as I expect in every situation. But will they listen? Will they listen to the electorate at a time in their mandate when they KNOW we will forget by the next election?
How can you know?
Well you can't, not completely. Politician images are carefully managed, and most especially during election times. But you can use a very simple technique - you can look at someone's record. What they said, how they voted. You have to use caution, because politics is a rough "game" people love to circulate misquotes and things taken out of context. Here's the thing though - it is usually very easy to check and find the original quote. Through the miracle of internet search engines, it is often possible to go back and get the full interview, find more parts of the story, and decide for yourself if that quote really represents what was meant. The Kim Campbell example I used in my first government blog post is an excellent example of this. PM Campbell was trying to express the fact they in the short, sharp fury of an election campaign, it is effectively impossible to reach a good, reasonable solution (including, especially a compromise solution). She "summed up" a much longer, and very reasonable explanation with "an election is no time to discuss serious issues" - which is of course the bit that was quoted and spread like wild fire. It is worth wondering, who was spreading the misquote? Who stood to gain?
It is difficult to discern and research these things during an election too - the truth will out, but it often takes some time. Not least because there are some places where a politician simply cannot win. When a politician changes his mind on an issue (often because a public outcry against their original stance) she runs the risk of being labelled for "flip flopping". Of being wishy washy. However, if the politician stands their ground, they risk being labelled as someone who doesn't listen to or respect the will of the People. How can you tell? Well for one thing, if you follow politics more often than just during an election campaign, you can see examples throughout that time which gives you a much better basis that a 40 or 80 day election campaign.
So the character of your chose candidate should be something of importance, and in my mind, also their leadership.
Leadership, it is not just giving direction. Leadership is about far more that telling the helmsman which way to steer, or taking the credit when things go well. A real leader inspires, and persuades. The show the way, by example. Indeed. most of the Leaders I've had the good fortune to work for, or with are free in sharing credit (where it is due) and quick to stand up and take responsibility for their team's errors (and all people and teams make errors - get used to it).
A Leader doesn't just implement an agenda, in effect telling people what they want. The best leaders have a goal or direction in mind, they articulate and persuade - but they also listen, adjusting their goal or direction in order to draw more people to that vision, while keeping in mind the constraints that restrict the direction. They are transparent, because they want people to want to come along.
A great example of this is Naheed Nenshi, Mayor of Calgary, who today posted a wonderful column in the Globe and Mail. It is not a short or easy read, why should it be? He's addressing a complex and important issue. So he does it justice, drawing on his personal experience, and his abilities as a communicator (crucial in a good politician) to get his point across. Agree or don't agree with him, but at least he makes a case, not a slogan. You can see it here.
If that all sounds a little idealistic, well it is. No leader will ever live up to all of that perfectly, but some try harder than others. There is a world of difference between leaders who manage their message through soundbites, repeated ad nauseaum as advertising, or as "talking points" by other members of the political team. And that's a legitimate part of a strategy of getting a message out. It is not legitimate when those talking points are used to ignore or deflect debate on serious questions or issues raised in debate. I always ask myself, do I really want to be represented by someone who, when questioned, never responds to the question? It strikes me as dishonest.
Why is that dishonest, well I view my MP, Cabinet Ministers and the PM as *employees*. My employees. The government I believe in is there to create that security so that I, and my family and friends and colleagues can go about our lives and careers in a reasonable and productive fashion - without undue disruption by people seeking to take advantage of society. To provide a social safety net (economic, physical, etc.). To do so in an economically efficient manner. To invest in the future of our society. For all these things I pay my taxes. See that, I PAY for these services, and because I am an "owner" of this society, that means I'm not just a customer, I'm a shareholder.
Which brings me to my last point before the election. Voting is not a privilege. In a democracy, voting is a duty. It is not only my tax dollars are work and at risk, it is yours too. Ours. If you don't vote (and I honestly don't care who you vote for) then you let down the side.
I work in Project Management and it is a real truism for us that "what gets measured gets done". Which is another way of saying that we go around holding people accountable. Sure some people are self starting and don't need to be watched in order to make their deadlines. I'm not one of them. I need to be held accountable - this is not a flaw, it is just human nature. Most of us need some pressure, some deadline, some knowledge of consequence if we fail to complete our task.
Voting is how we do that for politicians and government. I wrote earlier about the concentration of power in the PMO, how MPs are often "whipped" to support the government policy, sometimes against the wishes of their constituents or even their own beliefs. That's not great, but it is still not a disaster because you and me, gentle voter, can still hold government to account every four or five years. But that only works if we *all* get out and vote. If you have too few people voting, it becomes easier for politicians to practice "wedge politics" - where a policy is put in place favouring a small group that tend to vote as a block (or to pick on groups that other groups don't like, to achieve the same effect). In short, when a large fraction of the population doesn't vote, it becomes very possible to have small interests take control of the National (or Provincial, or Civic) agenda because they manage to mobilize and swing the election.
So get out and vote. It doesn't take a lot of time, it is surprisingly satisfying, and damnit, you owe it to me, to yourself, to every fellow Canadian.
And those still to come.
I hope these essays have helped you to focus on what it is you really expect from your government. I hope you have found your way to reliable internet information on the candidates and parties and what they stand for. Good luck! Choose well!
Thursday, October 15, 2015
Governments and the Economy
If there is one thing that pollsters and politicians declare often, it is that "it is about the economy". There are good reasons to believe that (not least because the biggest threat to an incumbent in a democracy seems to be an under-active economy, ask George H.W. Bush!). I think there's more to it than just the economy (as the voters of Alberta from a few months ago). But let's have a look at the economic angle anyway. One of the axes of security I think we should consider from our government is "economic security". But what do we mean by that?
Well first and foremost, most individuals don't seem to like the ups and downs of an economy much. I don't mean the thrill seekers or entrepreneurs who consider that a downturn is a buying opportunity, or who want to grab as much "cheddar" as they can in the boom times - and in Calgary we see a lot of both.
Day in and day out though, most people seem to prefer a "stable" and "strong" economy. Newspapers typically report on the unemployment rate (which is not as straightforward a concept as it sounds), Gross Domestic Product (GDP) and inflation. GDP is the total value of good and services we produce as a country. Inflation is the average rate at which prices for goods and services rise; usually measured by regularly pricing out a "basket of goods and services" which is called the CPI or "Consumer Price Index". The unemployment rate is a measure of the number of people looking for work - which is not actually the same as the number of people who don't have a job. In fact, we don't expect everyone to have a job (stay at home parents, retired people, children, etc.)
For some reason we hold our governments accountable for unemployment (which is fair, when it's low they like to claim credit as well), but why? Governments DO employ a lot of people, but usually not enough to dent the employment rate significantly. Well the answer is we use the unemployment rate as a metric for how healthy our economy is - but how can the government influence this?
Some ways are: the rate of corporate income tax (which can attract businesses from other jurisdictions, or vice versa, incentives (such as low interest financing for companies that buy from Canadian companies - the aerospace industry gets some of this), environmental legislation, permitting for projects, local or industry specific subsidies, or lower tax rates, and so on. What do we get in return for these expenses (and many of them are, one way or another)? Well, we get employment, investment opportunities, lower prices, etc.
Unemployment since 1971 looks like this:
If we put in the governments who were in power...(red for Liberal, Blue for Progressive Conservative, and Light Blue for Conservative Party of Canada), we see this:
The highest and lowest unemployment rates have been under Liberal governments, but all have had their share of ups and downs - and of course, the government only has a limited effect, lets add another measure and see...
The stock market index seems to correlate much better with the unemployment rate that the government - but not completely. So can you draw a conclusion? Well, correlation is not causation. We could also overlay business tax rates (all this data is from the Statistics Canada website by the way. It's not free, our tax dollars paid for it. So you should help yourself! - I did punch up the colours in paint, and I overlaid the governments)
So what can we conclude? Well correlation is not causation, but when I look at graphs like this, I think there are a lot more factors than just the government in play. This makes sense, we have trading partners who have good and bad years, and lots of things influence the economy. I believe that the "Government is in complete control of the economy" (one way or the other) idea was soundly disproved by the former Soviet Union.
Some tax expenses (whether they are actual money spent, or just taxes forgone by a lower rate) can be offset by gains. For example, a tax break for a company on payroll taxes might create more employment, which means more people paying income tax and more total revenue for the government, in effect, a smaller size of a larger pie. There is a concept that one can *optimize* the amount of revenue by finding a tax rate that yields the highest total revenue. This is called the Laffer Curve (although Laffer didn't come up with it). The idea is that a tax rate of 0% yields zero tax revenue. At the other end of the curve, if one taxed every bit of profit from individuals and companies, they would lose any incentive to earn, and so tax revenue would also drop to zero. Nice theory, and it seems sensible, but very few economists agree on where this optimum point is (for any given market) and worse, they don't even agree on the shape of the curve! So much so that George H.W. Bush once referred to this as "voodoo economics"...which led to a memorable scene in the movie Ferris Bueller's Day Off - and a movie career for Ben Stein.
If economics cannot agree on the rates and shapes, can we expect our government to get this right? (or blame them if they don't?) Well - maybe a little. They have a lot of empirical data and history, but they are not usually prone to experimenting much, very few people get blamed for being conservative in economics.
What about inflation? The oil shocks of the 70s led to massive inflation in the West, what's wrong with inflation anyway? Well if prices are rising faster than wages appear to, people feel poorer and spend less. If they spend on less goods, less goods need to be made, and then more people lose their jobs, who then don't spend as much. Other people see this and get nervous, and spend less as well, and so high inflation can lead to a recession. Well that's bad - why don't we just work to get inflation to zero? Turns out that's not so hot either. If people think prices are going to fall in the future, why spend now? Why buy a car for $25000, if you think it will be $23000 in 6 months? Once again, spending falls, jobs are lost, spending falls further.
Economists (and Central Bank Governors) seem to agree that a target or 1-3% inflation is desirable. So much so that most western Central Banks target this, and adjust their interest rates accordingly. They seem to feel that setting this "lever" in this spot is safest to keep the inflation rate from oscillating wildly. This doesn't actually prevent recessions cause by other reasons, but we have not had high inflation in the West since the mid 1980s, so there is some reason to believe this works.
But can we credit the government for this? Well not really. The target is now so universal, and it is not directly controlled by the government, but rather the Bank of Canada (BoC), which is an arms length organization. The BoC doesn't lend to individuals or companies, but it lends to banks, to keep them liquid through day to day variations (which means they can lend out more money, instead of having it sitting around). The BoC discount rate is (mostly) directly reflected in the Prime Rates that the Banks then lend out at to business and consumers. When the economy slows down, and inflation starts to fall, the BoC lowers the interest rate, making it more attractive for business to borrow and invest, and when things heat up, it can raise the rate to try and slow things down. But the BoC doesn't take direction from the PM.
So much for the direct influence of the government on the economy..except...taxation. What do we do with taxes anyway? Well taxes are a way for all of us to share in the expense of government itself. Nothing is free, courts cost money, so do prisons, diplomats, economic negotiators, Transport Canada Inspectors, Legislators - and their staffs, roads, the Army, Jet fighters, Search and Rescue Helicopters and so on. By spending our tax dollars the government provides services and infrastructure - but it also provides jobs. Many of our fellow citizens serve our country and get paid for it. In turn they spend in the private sector (as well as paying taxes themselves) which keeps the whole economy going.
Of course, that's the whole thing about the economy, it is people spending money that keeps everything going. When people stop spending, and just park their money - well that's where we get into trouble! If no one bought (insert the service or good you yourself produce here> what would you live off of?
There is another way the government can influence the economy - with taxation rates. Taxes can be placed on activities and behaviours it wishes to discourage. Cigarette taxes are an example. In the 1990s, governments discovered that raising taxes correlated with a decrease in cigarette sales, and in the smoking rate. There are limits to this, when the government raised taxes past a certain point, a large amount of smuggling started taking place, culminating with running gun battles on the Saint Lawrence River!
So if we think about economic security, and what we expect from the government, we need to think, not only about what we want them to do, but how they are to do it. Is it better to give out a subsidy? Tax a poor behaviour? Give a tax break for a desired behaviour? Should the government provide a service by hiring people and setting up a department? Or should it specify the service and hire a company in the private sector to provide the service?
Regulate emissions? Carbon Tax? Cap and Trade? Do nothing?
All these techniques are currently in use at some level of government in Canada. When you think about what you expect the government to accomplish, remember their tools are diverse, but also limited.
There is also another thing all politicians must worry about. With an election every four to five years, the window for accomplishing economic change *and getting the credit for it* is limited. Many times when you pull an economic lever, even if you do get a result, it can take years to become obvious, by that time, your successor may be in government, and you can just bet they will take the credit for it.
Well first and foremost, most individuals don't seem to like the ups and downs of an economy much. I don't mean the thrill seekers or entrepreneurs who consider that a downturn is a buying opportunity, or who want to grab as much "cheddar" as they can in the boom times - and in Calgary we see a lot of both.
Day in and day out though, most people seem to prefer a "stable" and "strong" economy. Newspapers typically report on the unemployment rate (which is not as straightforward a concept as it sounds), Gross Domestic Product (GDP) and inflation. GDP is the total value of good and services we produce as a country. Inflation is the average rate at which prices for goods and services rise; usually measured by regularly pricing out a "basket of goods and services" which is called the CPI or "Consumer Price Index". The unemployment rate is a measure of the number of people looking for work - which is not actually the same as the number of people who don't have a job. In fact, we don't expect everyone to have a job (stay at home parents, retired people, children, etc.)
For some reason we hold our governments accountable for unemployment (which is fair, when it's low they like to claim credit as well), but why? Governments DO employ a lot of people, but usually not enough to dent the employment rate significantly. Well the answer is we use the unemployment rate as a metric for how healthy our economy is - but how can the government influence this?
Some ways are: the rate of corporate income tax (which can attract businesses from other jurisdictions, or vice versa, incentives (such as low interest financing for companies that buy from Canadian companies - the aerospace industry gets some of this), environmental legislation, permitting for projects, local or industry specific subsidies, or lower tax rates, and so on. What do we get in return for these expenses (and many of them are, one way or another)? Well, we get employment, investment opportunities, lower prices, etc.
Unemployment since 1971 looks like this:
If we put in the governments who were in power...(red for Liberal, Blue for Progressive Conservative, and Light Blue for Conservative Party of Canada), we see this:
The stock market index seems to correlate much better with the unemployment rate that the government - but not completely. So can you draw a conclusion? Well, correlation is not causation. We could also overlay business tax rates (all this data is from the Statistics Canada website by the way. It's not free, our tax dollars paid for it. So you should help yourself! - I did punch up the colours in paint, and I overlaid the governments)
Some tax expenses (whether they are actual money spent, or just taxes forgone by a lower rate) can be offset by gains. For example, a tax break for a company on payroll taxes might create more employment, which means more people paying income tax and more total revenue for the government, in effect, a smaller size of a larger pie. There is a concept that one can *optimize* the amount of revenue by finding a tax rate that yields the highest total revenue. This is called the Laffer Curve (although Laffer didn't come up with it). The idea is that a tax rate of 0% yields zero tax revenue. At the other end of the curve, if one taxed every bit of profit from individuals and companies, they would lose any incentive to earn, and so tax revenue would also drop to zero. Nice theory, and it seems sensible, but very few economists agree on where this optimum point is (for any given market) and worse, they don't even agree on the shape of the curve! So much so that George H.W. Bush once referred to this as "voodoo economics"...which led to a memorable scene in the movie Ferris Bueller's Day Off - and a movie career for Ben Stein.
If economics cannot agree on the rates and shapes, can we expect our government to get this right? (or blame them if they don't?) Well - maybe a little. They have a lot of empirical data and history, but they are not usually prone to experimenting much, very few people get blamed for being conservative in economics.
What about inflation? The oil shocks of the 70s led to massive inflation in the West, what's wrong with inflation anyway? Well if prices are rising faster than wages appear to, people feel poorer and spend less. If they spend on less goods, less goods need to be made, and then more people lose their jobs, who then don't spend as much. Other people see this and get nervous, and spend less as well, and so high inflation can lead to a recession. Well that's bad - why don't we just work to get inflation to zero? Turns out that's not so hot either. If people think prices are going to fall in the future, why spend now? Why buy a car for $25000, if you think it will be $23000 in 6 months? Once again, spending falls, jobs are lost, spending falls further.
Economists (and Central Bank Governors) seem to agree that a target or 1-3% inflation is desirable. So much so that most western Central Banks target this, and adjust their interest rates accordingly. They seem to feel that setting this "lever" in this spot is safest to keep the inflation rate from oscillating wildly. This doesn't actually prevent recessions cause by other reasons, but we have not had high inflation in the West since the mid 1980s, so there is some reason to believe this works.
But can we credit the government for this? Well not really. The target is now so universal, and it is not directly controlled by the government, but rather the Bank of Canada (BoC), which is an arms length organization. The BoC doesn't lend to individuals or companies, but it lends to banks, to keep them liquid through day to day variations (which means they can lend out more money, instead of having it sitting around). The BoC discount rate is (mostly) directly reflected in the Prime Rates that the Banks then lend out at to business and consumers. When the economy slows down, and inflation starts to fall, the BoC lowers the interest rate, making it more attractive for business to borrow and invest, and when things heat up, it can raise the rate to try and slow things down. But the BoC doesn't take direction from the PM.
So much for the direct influence of the government on the economy..except...taxation. What do we do with taxes anyway? Well taxes are a way for all of us to share in the expense of government itself. Nothing is free, courts cost money, so do prisons, diplomats, economic negotiators, Transport Canada Inspectors, Legislators - and their staffs, roads, the Army, Jet fighters, Search and Rescue Helicopters and so on. By spending our tax dollars the government provides services and infrastructure - but it also provides jobs. Many of our fellow citizens serve our country and get paid for it. In turn they spend in the private sector (as well as paying taxes themselves) which keeps the whole economy going.
Of course, that's the whole thing about the economy, it is people spending money that keeps everything going. When people stop spending, and just park their money - well that's where we get into trouble! If no one bought (insert the service or good you yourself produce here> what would you live off of?
There is another way the government can influence the economy - with taxation rates. Taxes can be placed on activities and behaviours it wishes to discourage. Cigarette taxes are an example. In the 1990s, governments discovered that raising taxes correlated with a decrease in cigarette sales, and in the smoking rate. There are limits to this, when the government raised taxes past a certain point, a large amount of smuggling started taking place, culminating with running gun battles on the Saint Lawrence River!
So if we think about economic security, and what we expect from the government, we need to think, not only about what we want them to do, but how they are to do it. Is it better to give out a subsidy? Tax a poor behaviour? Give a tax break for a desired behaviour? Should the government provide a service by hiring people and setting up a department? Or should it specify the service and hire a company in the private sector to provide the service?
Regulate emissions? Carbon Tax? Cap and Trade? Do nothing?
All these techniques are currently in use at some level of government in Canada. When you think about what you expect the government to accomplish, remember their tools are diverse, but also limited.
There is also another thing all politicians must worry about. With an election every four to five years, the window for accomplishing economic change *and getting the credit for it* is limited. Many times when you pull an economic lever, even if you do get a result, it can take years to become obvious, by that time, your successor may be in government, and you can just bet they will take the credit for it.
Wednesday, October 14, 2015
A (Very) brief History of Government, or: How I learned to stop worrying and love the Senate
I said I'd do a short history of government, but I am a little reluctant to address that now. With the Federal Election bearing down on us, I really would like to address some other issues that are closer to where we are now.
Yet I have to remind myself that the reason I am writing this blog is to help people (and myself) sort out in their heads "why we need government?" and "what do we expect government to do?", because if you have those things sorted out in your head, you can hope to make a much more rational choice than just picking the party or Leader that a) looks best, or b) appeals to your particular set of cognitive biases most closely.
So while I am not going to tackle that historical progression of governments to our own (for now). I do want to put forward an essay describing some the structure of government we have, and why it was put there. Even some of the structures some people really hate (like the Senate) were put in place for good reasons. That doesn't mean they are perfect, or even relevant today, but I am a strong believer that, if you want to change something, you should probably know first, why it was put there to begin with. That way you can look at its relevance and successfulness somewhat objectively.
So I will have a go at illustrating some of our political structures. In that context I am going to deliberately focus on the English tradition - since I am focused on the Canadian end product.
In the beginning there was Monarchy...actually there were tribes and chieftains before that, but that's going pretty far back and really, it is Monarchy where we derive most of our current structures. Monarchy, one guy in charge of everything, mandated by God, and typically hereditary. Some forms allowed female succession, some didn't. Marriage could cause political divisions to merge and become larger, but kingdoms and territories could also be split between children. Then there were variations on rules of succession, disagreements, and even fraud. In the end, the whole system started because, as groups got together and cooperated (either by conquest, or marriage, or amicable unions) one person came out at the top of the hierarchical structure. Since the more successful rulers tended to expand, there came a time when that one person could not control everything. And so there came to be, nobility. This just made everything creakier, because although now there were more people working on the ruling thing, there were also more people trying to rise in the hierarchy.
Under the Feudal system, there were nobles who controlled bits of land. They almost owned them really, except that actually the King did, and the nobles controlled them for Him, and that control was hereditary, unless it was taken away. Confused yet?
Peasants worked the land and paid heavy rents to the nobles. So don't feel too sorry for the nobility. In return the nobles provided protection from bandits, invasions etc. Sort of. The armies had to come from somewhere, and had to be paid and fed using the taxes and rents from the peasants (and nobles). Nobles provided the "professional" soldiers, and then sometimes levied (i.e. demanded military service from) a proportion of the peasant population. The King (or Queen) was at the top of the pyramid, and controlled foreign policy, made sure the nobles were doing a good job. The King also had a lot of the money, set the highest rules, and delegated the rest to the nobles. The King (sometimes nobles) would provide dispute resolution - judgement - between parties with disputes, as well as criminal justice.
Well some of the time. Fact is, this system was vulnerable to the same thing as all human systems. It depends on everyone knowing their job, and doing it faithfully and well. Unfortunately, sometimes people are not competent, or they don't care, or they have a high proportion of bad days, etc. Worse, there were no courses in "good government", you were educated by your predecessor if you were lucky. (Well, if the people you ruled were lucky). Besides, as the kingdoms got larger, it got harder and harder for the King to do everything (and live a life fit for a King). So courts were invented. They were appointed by the King, and they tended to keep the King's interest in mind. This didn't always suit the nobility. (Or the peasants)
Along about 1215 there was a war between the King and a group of nobles, largely because the King was abusing the Royal Courts to extort money from said nobility. King John lost, and was forced to sign what we now know as Magna Carta. This "Great Charter" placed the first legal limits on a King. As a result, it was annulled by the Pope at the time, which led to a second round, which was once again won by the Barons. And so it was renegotiated, and signed again. It went back and forth for a while, and there were several versions, which eventually evolved into something more...Parliament. (Yes yes, I am leaving out a LOT, not least the religious aspects - I encourage you to read up on it, it's interesting stuff!)
While it has not always been enforced, obeyed, or even respected, in the end, we in the English parliamentary system trace a lot of the rights and structure we take for granted back to this document, and the revisions, evolution, and improvements in it which have become our Law.
With Magna Carta, we gained a number of rights. Not directly, as most of them did not apply except to nobles and some freemen. Most are no longer applicable at all, but believe it or not, three clauses are still "on the books" (in England and Wales).
Two of them concern the liberty of the Church of England, London and several ports in the UK, but the one that most concerns us in Canada is this:
Due Process of Law:
In short, we are protected by law from arbitrary harassment by the powers that be, whichever powers those be. This was originally put in place because King John was ripping off his Barons using his courts. Power may corrupt, but over time it can also lash back. That can sting a bit.
Later writers noted that it was not just Kings who could abuse their authority:
The United States took this to a new level, when, not only did they write a constitution which forbade their government from doing many things (like Infringing on Freedom of Speech) they interpret these restrictions very strictly, which has both advantages and disadvantages. In addition they constructed their governing system very carefully with "checks and balances" designed so that no one could easily override the rights of others. The US has a three way balance between the Executive, Legislative and Judiciary branches of their government.
The Dutch have gone even further, successfully suing the government to obey the environmental laws they have actually passed, and winning.
A citizen in British Columbia (David Stockell) once took things to a spectacular level, attempting to sue a winning politician (Premier Glen Clark) for electoral fraud, for having asserted that the Provincial Government books were "balanced" during an election campaign, only to have numbers come out later showing a deficit. The suit was unsuccessful; apparently the Barons forgot to mandate truthfulness in election campaigning back in 1215.
Canada too has a system of checks and balances. In Canada the Executive is a subset of the Legislature, although it is (in theory) subordinate to the legislature. One of the concerns in Canada today is the gradual concentration of power in the Prime Minister's Office, (the apex of the Executive) which has been occurring throughout the last two or three decades under governments of both parties which have held power.
The Prime Minister is (usually) also the Leader of the party in power. Since the party can control whether or not a candidate is nominated for Parliament (the Leader must sign the nomination papers) as well as controlling funding for staffing, campaigning, etc, the party has a lot of power to exercise in trying to control individual Members of Parliament. The Party leaders can apply a lot of pressure as to how they vote, and in some cases, even what they say in the House of Commons. Thus there is currently concern in Canada about whether or not the Executive (the Prime Ministers' Office and the Cabinet) are truly subordinate to Parliament, or whether it has become the other way around.
This does not mean that Parliament is completely powerless however. It remains the case that the governing party may only do so with the consent of parliament, and in the case of a minority parliament (where the government lacks an absolute majority, but rather governs because it controls the most seats) it is quite common for a government to lose a "vote of confidence" which can send everyone back to the polls. It can also result in a coalition government (two parties who, together have a majority, that agree to share power). In practice though, a majority government is not overly limited by Parliament, since the party can "whip" the members of the caucus into performing as ordered.
And leave us not forget the electorate. Elections must be held within 5 years, (although the PM has the right to call them sooner, this is still the case with our "fixed election date law") and governments ignore the electorate and this timing at their peril.
Other major "checks" in Canada are the Judiciary, which is charged with interpreting the Laws that Parliament passes (and rejecting them if they violate the constitution or Charter of Rights and Freedoms) and the Senate, which is also known as the "Chamber of Sober Second thought". The role of the judiciary is pretty easy to understand in principle, so I won't go into it.
A lot of people think of the Senate as a leftover from an older age, and a place where political actors are rewarded with an easy retirement plan and no work. But the Canadian Senate is an interesting body. Members are appointed by the Crown on the advice of the Prime Minister, and serve until 75 years of age. This means that a long serving PM has a good chance of "stacking" the Senate with people loyal to his party. This then has an interesting effect in the light of Canadian politics. Since the approval of the Senate is required to pass bills, a long standing government has a chance to protect their legislative agenda to some degree. Governments in Canada tend to switch parties every 8 to 11 years (this is not a statutory requirement, it seems that the Canadian electorate only has a tolerance for so much from one leader or party). Even with a majority government it is almost always necessary to contend with a minority in the Senate, at least for a few years. This means that there is some pressure on a new, incoming government, to make smaller changes that are more likely to win Senate approval, rather than large, wholesale changes that would undo the previous government's work. This slow turnover of Senators allows the Senate of Canada to act as a kind of brake on the speed of change in Canada. While this can be frustrating for a newly elected government and their supporters, it does protect the country from rapidly oscillating policies.
Yet another check in Canada is the governor general. Although seen as a figurehead of State by many, the governor general remains an important portion of Canada's democratic structure. No law is valid with their assent, and their involvement is fundamental in our election cycle. A great example of this was the 2008 prorogation of parliament. A minority government was threatened with a vote of non-confidence by the opposition parties. To buy time, the Prime Minister requested the prorogation (end of Parliament until summoned again by the GG) of Parliament, thus heading off the confidence vote, and remaining in power. Governor General Michelle Jean granted the unprecedented request, despite popular disapproval of the decision. It was later revealed that the prorogation was granted on condition that 1) Parliament would be recalled soon, and 2) that a Budget be presented as soon as it was. Since a budget is always a vote of confidence, and since the budget did pass, the seeming constitutional crisis was averted. This was a recent and stark reminder that the governor general remains a constitutional actor, and not merely a figurehead in Canadian politics.
There is a last check and balance that I want to highlight that has evolved in Canada, being brought in in 1982. Canada's has an unusual "Notwithstanding" clause. It works like this, if the Government (federal or provincial) passes a law that is found to be non-conforming with the Constitution, the government may rewrite the law to state "The Constitution Notwithstanding... <insert law here>". It is an escape clause from the constitution itself! It is in fact a check on the check! Of course, the government still has to pass the Senate, and then face the electorate and justify that clause (and no Federal Government has yet tried it), but the Quebec government has used it to maintain the Quebec Language protection law that was ruled unconstitutional by the Supreme Court of Canada.
I will leave this blog post here. It wasn't much of a history post, but I did want to examine why we have some of the odd governmental structures we have - it is good to keep in mind why we have a Senate, and Courts, and a Constitution. Especially in a time where some of the discussion is about changing or abolishing them.
One wonders if some of these institutions are victims of their own success? Have they have successfully protected us from abuses for so long that we no longer remember what those structures were put in place to protect us from in the first place? I would argue that this is often the case.
Next time: Economic Security, the Bank of Canada, and does the Government *actually* control the economy?
Yet I have to remind myself that the reason I am writing this blog is to help people (and myself) sort out in their heads "why we need government?" and "what do we expect government to do?", because if you have those things sorted out in your head, you can hope to make a much more rational choice than just picking the party or Leader that a) looks best, or b) appeals to your particular set of cognitive biases most closely.
So while I am not going to tackle that historical progression of governments to our own (for now). I do want to put forward an essay describing some the structure of government we have, and why it was put there. Even some of the structures some people really hate (like the Senate) were put in place for good reasons. That doesn't mean they are perfect, or even relevant today, but I am a strong believer that, if you want to change something, you should probably know first, why it was put there to begin with. That way you can look at its relevance and successfulness somewhat objectively.
So I will have a go at illustrating some of our political structures. In that context I am going to deliberately focus on the English tradition - since I am focused on the Canadian end product.
In the beginning there was Monarchy...actually there were tribes and chieftains before that, but that's going pretty far back and really, it is Monarchy where we derive most of our current structures. Monarchy, one guy in charge of everything, mandated by God, and typically hereditary. Some forms allowed female succession, some didn't. Marriage could cause political divisions to merge and become larger, but kingdoms and territories could also be split between children. Then there were variations on rules of succession, disagreements, and even fraud. In the end, the whole system started because, as groups got together and cooperated (either by conquest, or marriage, or amicable unions) one person came out at the top of the hierarchical structure. Since the more successful rulers tended to expand, there came a time when that one person could not control everything. And so there came to be, nobility. This just made everything creakier, because although now there were more people working on the ruling thing, there were also more people trying to rise in the hierarchy.
Under the Feudal system, there were nobles who controlled bits of land. They almost owned them really, except that actually the King did, and the nobles controlled them for Him, and that control was hereditary, unless it was taken away. Confused yet?
Peasants worked the land and paid heavy rents to the nobles. So don't feel too sorry for the nobility. In return the nobles provided protection from bandits, invasions etc. Sort of. The armies had to come from somewhere, and had to be paid and fed using the taxes and rents from the peasants (and nobles). Nobles provided the "professional" soldiers, and then sometimes levied (i.e. demanded military service from) a proportion of the peasant population. The King (or Queen) was at the top of the pyramid, and controlled foreign policy, made sure the nobles were doing a good job. The King also had a lot of the money, set the highest rules, and delegated the rest to the nobles. The King (sometimes nobles) would provide dispute resolution - judgement - between parties with disputes, as well as criminal justice.
Well some of the time. Fact is, this system was vulnerable to the same thing as all human systems. It depends on everyone knowing their job, and doing it faithfully and well. Unfortunately, sometimes people are not competent, or they don't care, or they have a high proportion of bad days, etc. Worse, there were no courses in "good government", you were educated by your predecessor if you were lucky. (Well, if the people you ruled were lucky). Besides, as the kingdoms got larger, it got harder and harder for the King to do everything (and live a life fit for a King). So courts were invented. They were appointed by the King, and they tended to keep the King's interest in mind. This didn't always suit the nobility. (Or the peasants)
Along about 1215 there was a war between the King and a group of nobles, largely because the King was abusing the Royal Courts to extort money from said nobility. King John lost, and was forced to sign what we now know as Magna Carta. This "Great Charter" placed the first legal limits on a King. As a result, it was annulled by the Pope at the time, which led to a second round, which was once again won by the Barons. And so it was renegotiated, and signed again. It went back and forth for a while, and there were several versions, which eventually evolved into something more...Parliament. (Yes yes, I am leaving out a LOT, not least the religious aspects - I encourage you to read up on it, it's interesting stuff!)
While it has not always been enforced, obeyed, or even respected, in the end, we in the English parliamentary system trace a lot of the rights and structure we take for granted back to this document, and the revisions, evolution, and improvements in it which have become our Law.
With Magna Carta, we gained a number of rights. Not directly, as most of them did not apply except to nobles and some freemen. Most are no longer applicable at all, but believe it or not, three clauses are still "on the books" (in England and Wales).
Two of them concern the liberty of the Church of England, London and several ports in the UK, but the one that most concerns us in Canada is this:
Due Process of Law:
NO Freeman shall be taken or imprisoned, or be disseised of his Freehold, or Liberties, or free Customs, or be outlawed, or exiled, or any other wise destroyed; nor will We not pass upon him, nor condemn him, but by lawful judgment of his Peers, or by the Law of the land. We will sell to no man, we will not deny or defer to any man either Justice or Right.
(quoted from Wikipedia, https://en.wikipedia.org/wiki/Magna_Carta#Great_Charter_of_1215)
In short, we are protected by law from arbitrary harassment by the powers that be, whichever powers those be. This was originally put in place because King John was ripping off his Barons using his courts. Power may corrupt, but over time it can also lash back. That can sting a bit.
Later writers noted that it was not just Kings who could abuse their authority:
The one pervading evil of democracy is the tyranny of the majority, or rather of that party, not always the majority, that succeeds, by force or fraud, in carrying elections.
In fact this was known in antiquity to the Greeks, but that's a lot more history. Ironically, these days we don't need protection from the King so much as Parliament! Fortunately, we have the right to take our own government to court to prevent them from abusing us. We see this most commonly in legal challenges to law under our Constitution, or Charter or Rights and Freedoms. But it all comes from a time when Government, in the form of a King, abused their authority.(quoted from The History of Freedom in Antiquity, 1877 Lord Acton)
The United States took this to a new level, when, not only did they write a constitution which forbade their government from doing many things (like Infringing on Freedom of Speech) they interpret these restrictions very strictly, which has both advantages and disadvantages. In addition they constructed their governing system very carefully with "checks and balances" designed so that no one could easily override the rights of others. The US has a three way balance between the Executive, Legislative and Judiciary branches of their government.
The Dutch have gone even further, successfully suing the government to obey the environmental laws they have actually passed, and winning.
A citizen in British Columbia (David Stockell) once took things to a spectacular level, attempting to sue a winning politician (Premier Glen Clark) for electoral fraud, for having asserted that the Provincial Government books were "balanced" during an election campaign, only to have numbers come out later showing a deficit. The suit was unsuccessful; apparently the Barons forgot to mandate truthfulness in election campaigning back in 1215.
Canada too has a system of checks and balances. In Canada the Executive is a subset of the Legislature, although it is (in theory) subordinate to the legislature. One of the concerns in Canada today is the gradual concentration of power in the Prime Minister's Office, (the apex of the Executive) which has been occurring throughout the last two or three decades under governments of both parties which have held power.
The Prime Minister is (usually) also the Leader of the party in power. Since the party can control whether or not a candidate is nominated for Parliament (the Leader must sign the nomination papers) as well as controlling funding for staffing, campaigning, etc, the party has a lot of power to exercise in trying to control individual Members of Parliament. The Party leaders can apply a lot of pressure as to how they vote, and in some cases, even what they say in the House of Commons. Thus there is currently concern in Canada about whether or not the Executive (the Prime Ministers' Office and the Cabinet) are truly subordinate to Parliament, or whether it has become the other way around.
This does not mean that Parliament is completely powerless however. It remains the case that the governing party may only do so with the consent of parliament, and in the case of a minority parliament (where the government lacks an absolute majority, but rather governs because it controls the most seats) it is quite common for a government to lose a "vote of confidence" which can send everyone back to the polls. It can also result in a coalition government (two parties who, together have a majority, that agree to share power). In practice though, a majority government is not overly limited by Parliament, since the party can "whip" the members of the caucus into performing as ordered.
And leave us not forget the electorate. Elections must be held within 5 years, (although the PM has the right to call them sooner, this is still the case with our "fixed election date law") and governments ignore the electorate and this timing at their peril.
Other major "checks" in Canada are the Judiciary, which is charged with interpreting the Laws that Parliament passes (and rejecting them if they violate the constitution or Charter of Rights and Freedoms) and the Senate, which is also known as the "Chamber of Sober Second thought". The role of the judiciary is pretty easy to understand in principle, so I won't go into it.
A lot of people think of the Senate as a leftover from an older age, and a place where political actors are rewarded with an easy retirement plan and no work. But the Canadian Senate is an interesting body. Members are appointed by the Crown on the advice of the Prime Minister, and serve until 75 years of age. This means that a long serving PM has a good chance of "stacking" the Senate with people loyal to his party. This then has an interesting effect in the light of Canadian politics. Since the approval of the Senate is required to pass bills, a long standing government has a chance to protect their legislative agenda to some degree. Governments in Canada tend to switch parties every 8 to 11 years (this is not a statutory requirement, it seems that the Canadian electorate only has a tolerance for so much from one leader or party). Even with a majority government it is almost always necessary to contend with a minority in the Senate, at least for a few years. This means that there is some pressure on a new, incoming government, to make smaller changes that are more likely to win Senate approval, rather than large, wholesale changes that would undo the previous government's work. This slow turnover of Senators allows the Senate of Canada to act as a kind of brake on the speed of change in Canada. While this can be frustrating for a newly elected government and their supporters, it does protect the country from rapidly oscillating policies.
Yet another check in Canada is the governor general. Although seen as a figurehead of State by many, the governor general remains an important portion of Canada's democratic structure. No law is valid with their assent, and their involvement is fundamental in our election cycle. A great example of this was the 2008 prorogation of parliament. A minority government was threatened with a vote of non-confidence by the opposition parties. To buy time, the Prime Minister requested the prorogation (end of Parliament until summoned again by the GG) of Parliament, thus heading off the confidence vote, and remaining in power. Governor General Michelle Jean granted the unprecedented request, despite popular disapproval of the decision. It was later revealed that the prorogation was granted on condition that 1) Parliament would be recalled soon, and 2) that a Budget be presented as soon as it was. Since a budget is always a vote of confidence, and since the budget did pass, the seeming constitutional crisis was averted. This was a recent and stark reminder that the governor general remains a constitutional actor, and not merely a figurehead in Canadian politics.
There is a last check and balance that I want to highlight that has evolved in Canada, being brought in in 1982. Canada's has an unusual "Notwithstanding" clause. It works like this, if the Government (federal or provincial) passes a law that is found to be non-conforming with the Constitution, the government may rewrite the law to state "The Constitution Notwithstanding... <insert law here>". It is an escape clause from the constitution itself! It is in fact a check on the check! Of course, the government still has to pass the Senate, and then face the electorate and justify that clause (and no Federal Government has yet tried it), but the Quebec government has used it to maintain the Quebec Language protection law that was ruled unconstitutional by the Supreme Court of Canada.
I will leave this blog post here. It wasn't much of a history post, but I did want to examine why we have some of the odd governmental structures we have - it is good to keep in mind why we have a Senate, and Courts, and a Constitution. Especially in a time where some of the discussion is about changing or abolishing them.
One wonders if some of these institutions are victims of their own success? Have they have successfully protected us from abuses for so long that we no longer remember what those structures were put in place to protect us from in the first place? I would argue that this is often the case.
Next time: Economic Security, the Bank of Canada, and does the Government *actually* control the economy?
Wednesday, October 7, 2015
What's a Government For? Parte the seconde
Sorry for the break in posts, life is busy. :)
So in the last post I kind of outlined a list of what the government does (in Canada, and many western countries anyway), and even got as far as starting a kind of definition. Let's flesh out that definition a bit.
Based on what I have posited so far, we could say that a "Government is a group of people who set the rules of our society."
Ok, that's pretty obvious, but what are those rules? And what for? That's where we started. Well we set rules for physical security (no one make take things from others without their permission - including their life, freedom or sense of security). We have economic rules like those for contracts (formal agreements that two parties create to govern exchanges of materials or services) . We have rules that say what belongs to everyone in our society, and how much (if anything) people must pay to develop or use those resources. We have rules to protect our drinking water, to control how much pollution may be put into the air we all breathe and so on.
We have rules for making rules! And rules for picking rulers.
Well all that is fairly straightforward, at least at the high level we're working at. If it was really this easy we wouldn't need...lawyers!
How do we decide what needs a rule? And how do our legislators set the boundaries that the rules define? Here is where we, and by "we" I mean each of us, need to start understanding what, exactly, we expect our government to "do".
I'd like to go back to boundary conditions again. How much security?
Well I don't want to look over my shoulder and wonder if the guy next door will decide to just take my house away while I'm sleeping. (I know he wouldn't we get along well over the fence, but still, in principle it could be anyone). So I at least want a little security.
On the other hand, I don't know anyone who wants to live in bubble wrap, protected from every nuance and up and down of life. So to say that governments should provide "security" I don't mean that The Government should try to step in and solve every problem. Lock us each into our homes every night and kiss us goodnight, and set a watchman on every corner. Meh.
We all have different tolerances for risk though, and different tolerances in different areas of life. People who are successful in business often want less rules in trade, but lots of rules to protect their wealth and the property they have built up. Funny how that works.
Speaking of wealth, all these rules cost money to enact and enforce, which brings a whole new dimension to this thing we call Government. It has to be paid for.
Yeah you all saw that coming. We live in the real world, and every rule the government makes costs money at some point. Which means we have to pay fees, taxes, fines, whatever in order to keep the wheels running.
So far we have identified a couple of key axes that we can start to measure what we want from Government.
The amount of security it provides (more or less)
The amount of money it costs (more or less).
I like to look at these things in terms of axes, so that we can, for any given measure, decide where on the axis we want to be (lots of security or very little)
There are more. First, which securities?
I can think of:
Physical
External Security (defence)
Economic
Environmental
Moral
Political
What about paying for things:
User Pay? (Fees, Value Added Taxes, Tolls),
Everyone pays (income taxes, wealth taxes, property taxes)
Let's flesh these out a bit. I'm using the pattern of Western Government as an example for now. Later I plan to look at some of these items and we can challenge whether a government is the best we to provide particular services.
Physical Security is fairly straight forward, it is the protection of life and property inside the country. But that's not just a police force, it is a judiciary, a prison system, possibly rehabilitation and education programs (assuming you prefer criminals to become contributors to society after you have punished them)
External Security. Navy, Army, Air Force (in order of seniority). Actually not just the armed forces, to be secure we also need a diplomatic corps (fighting is messy and expensive. Arguably the greatest wartime leader of the 20th Century, Sir Winston Churchill said:
Economic. Possibly the most complex. Economics is not all the well understood, possibly because a lot of it involves predicting the future, something that no one is very good at. Economic security can be both internal and external, with rules for accounting, tax law and enforcement (if the government runs out of money it can't do the job!), trade deals with other countries, rules of commerce (to keep trade running smoothly), a judiciary (to adjudicate and enforce and interpret) and central banks to provide and regulate currency (which is more efficient than a barter economy).
Environmental could be included under "Physical" security, but I think clean air and water deserve their own section. Resource Extraction and Sharing can also be here, but they could be under economic just as easily. Unless we choose to let everyone take what they want, but then that's one end of the axis, isn't it?
Moral. Possibly the most contentious of the things government regulates. What is acceptable behaviour in our society? This one gets conflated with physical security as well, since some immoral behaviours are harmful to people. It is also true that in a diverse society, morals can be very different from one person to the next - and such morals are often based in religion, which is always a very personal and often deeply held set of beliefs.
On that subject, where does the authority of our governers come from? Who told them they could make and enforce rules, and collect taxes? Next up, a short history of governments...
So in the last post I kind of outlined a list of what the government does (in Canada, and many western countries anyway), and even got as far as starting a kind of definition. Let's flesh out that definition a bit.
Based on what I have posited so far, we could say that a "Government is a group of people who set the rules of our society."
Ok, that's pretty obvious, but what are those rules? And what for? That's where we started. Well we set rules for physical security (no one make take things from others without their permission - including their life, freedom or sense of security). We have economic rules like those for contracts (formal agreements that two parties create to govern exchanges of materials or services) . We have rules that say what belongs to everyone in our society, and how much (if anything) people must pay to develop or use those resources. We have rules to protect our drinking water, to control how much pollution may be put into the air we all breathe and so on.
We have rules for making rules! And rules for picking rulers.
Well all that is fairly straightforward, at least at the high level we're working at. If it was really this easy we wouldn't need...lawyers!
How do we decide what needs a rule? And how do our legislators set the boundaries that the rules define? Here is where we, and by "we" I mean each of us, need to start understanding what, exactly, we expect our government to "do".
I'd like to go back to boundary conditions again. How much security?
Well I don't want to look over my shoulder and wonder if the guy next door will decide to just take my house away while I'm sleeping. (I know he wouldn't we get along well over the fence, but still, in principle it could be anyone). So I at least want a little security.
On the other hand, I don't know anyone who wants to live in bubble wrap, protected from every nuance and up and down of life. So to say that governments should provide "security" I don't mean that The Government should try to step in and solve every problem. Lock us each into our homes every night and kiss us goodnight, and set a watchman on every corner. Meh.
We all have different tolerances for risk though, and different tolerances in different areas of life. People who are successful in business often want less rules in trade, but lots of rules to protect their wealth and the property they have built up. Funny how that works.
Speaking of wealth, all these rules cost money to enact and enforce, which brings a whole new dimension to this thing we call Government. It has to be paid for.
Yeah you all saw that coming. We live in the real world, and every rule the government makes costs money at some point. Which means we have to pay fees, taxes, fines, whatever in order to keep the wheels running.
So far we have identified a couple of key axes that we can start to measure what we want from Government.
The amount of security it provides (more or less)
The amount of money it costs (more or less).
I like to look at these things in terms of axes, so that we can, for any given measure, decide where on the axis we want to be (lots of security or very little)
There are more. First, which securities?
I can think of:
Physical
External Security (defence)
Economic
Environmental
Moral
Political
What about paying for things:
User Pay? (Fees, Value Added Taxes, Tolls),
Everyone pays (income taxes, wealth taxes, property taxes)
Let's flesh these out a bit. I'm using the pattern of Western Government as an example for now. Later I plan to look at some of these items and we can challenge whether a government is the best we to provide particular services.
Physical Security is fairly straight forward, it is the protection of life and property inside the country. But that's not just a police force, it is a judiciary, a prison system, possibly rehabilitation and education programs (assuming you prefer criminals to become contributors to society after you have punished them)
External Security. Navy, Army, Air Force (in order of seniority). Actually not just the armed forces, to be secure we also need a diplomatic corps (fighting is messy and expensive. Arguably the greatest wartime leader of the 20th Century, Sir Winston Churchill said:
"Jaw, Jaw is better than War War".Churchill was also a big fan or innovation (for example, he helped in the development of the Tank), and espionage (See "Defence of the Realm, The authorized History of MI5"). In this day and age we should also include cyber security too.
Economic. Possibly the most complex. Economics is not all the well understood, possibly because a lot of it involves predicting the future, something that no one is very good at. Economic security can be both internal and external, with rules for accounting, tax law and enforcement (if the government runs out of money it can't do the job!), trade deals with other countries, rules of commerce (to keep trade running smoothly), a judiciary (to adjudicate and enforce and interpret) and central banks to provide and regulate currency (which is more efficient than a barter economy).
Environmental could be included under "Physical" security, but I think clean air and water deserve their own section. Resource Extraction and Sharing can also be here, but they could be under economic just as easily. Unless we choose to let everyone take what they want, but then that's one end of the axis, isn't it?
Moral. Possibly the most contentious of the things government regulates. What is acceptable behaviour in our society? This one gets conflated with physical security as well, since some immoral behaviours are harmful to people. It is also true that in a diverse society, morals can be very different from one person to the next - and such morals are often based in religion, which is always a very personal and often deeply held set of beliefs.
I left Political for last, because I suspect many people do not think of "Political Security" that the government should provide. I am however, the child of an immigrant, and in visiting "the old country" I have seen at first hand the political and economic results of a military coup, of rampant corruption and a lack of respect for the rule of law, and I have even had the good fortune to see that country recover somewhat from those challenges. Political security is about ensuring that the rules that are enacted are actually respected, followed (for the most part) and that those that break them face consequences. Political security is also needed in our transitions from one set of governers to another. The world is full of examples where elections are won, only to be ignored. One of the greatest strengths of our society is that, when defeated, the losing legislators pass the reigns to the next set of legislators peacefully and with respect. For a great example I quote former Alberta Premier David Hancock, who tweeted
"Congratulations @RachelNotely 1st govt swearing in I've not been participant since 1997 - still moving + emotional from this perspective"I believe we are spoiled in Canada on the subject of political security. It is something we should always keep an eye on, because without it, we lose the chance to easily influence our governers.
On that subject, where does the authority of our governers come from? Who told them they could make and enforce rules, and collect taxes? Next up, a short history of governments...
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