Green Oil

By Satya Das

Being an energy superpower sit uneasily with Canadians: Alberta’s oil sands, the largest hydrocarbon deposit in the world, would be a blessing to many nations. Yet too many of our citizens see them as a burden.

We cringed when a global environmental awareness campaign, initiated by such luminaries as former U.S. Vice-President Al Gore, framed and branded oil sands production as “dirty oil.” A 2008 report predicting the demise of millions of migratory birds as a result of oil sands development gathered worldwide attention and coverage.

We do not think to assert that “dirty oil” could be turned into clean oil, with the application of strong political leadership, a stringent regulatory framework, advances in technology, and an insistence on best-practices in energy production.

Now, with the Obama administration championing a greener energy future, Albertans – the owners of the oil sands – and Canadians must learn to lead, for one compelling reason: geology has thrust leadership upon us, and this is a responsibility we cannot evade.

Beyond an accident of geology, we have a strong moral obligation to lead the responsible development and stewardship of the incredible wealth the oil sands represent. From my perspective, the option of abandoning the oil sands, leaving them shut in, would be an act of profound negligence.

There are some strong Albertan and Canadian voices calling for the easy appeasement of walking away from “dirty oil.” Such abdication would be comprehensively wrong. We can use the enormous wealth the oil sands can confer to build the common good. We can use it to pay for the transition to alternative energy, built on a platform of much greener hydrocarbon production.

It is not at all paradoxical to think that developing this high-carbon-emission resource in a more sustainable way will, in fact, accelerate the development of the low carbon economy: by giving us the means to pay for it, by investing in both the research and development and the implementation of this greener future. Nor is my thinking at odds with my own ecological values.

To the core of my being, I believe that the arrogance and hubris of our species leads us to disrespect and damage the bounty of nature. Since the beginning of the industrial age, we have despoiled our natural heritage with scant regard for consequences. We have forgotten the teaching of every great faith: one of humility in the face of nature, and the responsibility of stewardship. We are mere keepers and stewards of what we have inherited, and we must nurture the gifts of the natural world for future generations.

On the other hand, I enjoy the advanced lifestyle enabled by a massively prosperous market economy. And I know it is supported by the consumption of fossil fuels, which are the prime source of greenhouse gases. Is there a magic-bullet solution that will let me keep my lifestyle without despoiling the planet?

That’s the real question we need to explore. It’s especially pertinent for Albertans because we are the owners – and stewards – of the oil sands, the world’s largest hydrocarbon deposit. Unless we develop this resource as responsibly and sustainably as possible, we will continue to feed and even accelerate greenhouse gas production. I am enough of a realist to know that “not developing it” is in the realm of magical thinking. Consider: this is a $15 trillion asset, in a world that remains addicted to hydrocarbons. If we Canadians try to say “no development” are we really in any kind of position to stop those who want our oil? I suppose we can wave sovereignty and international law in the face of tanks – and tankers – as they roll in. Seriously, though, I come back to our obligation of stewardship. As owners we need to exercise our rights of ownership as responsibly as we can: because that’s the Canadian way.

After thinking through these issues for the last five years, I’ve put my thoughts together in a new book. It’s called Green Oil: Clean Energy for the 21st Century? and explores what it will take to turn the question mark into a statement. Green Oil is meant more to be a book of questions than definitive answers.

As Copenhagen draws closer, I am aiming to “set the table” for a thoughtful and comprehensive conversation on using the wealth generated by the responsible development of the oil sands to pay for and build a “green future” that will evolve away from fossil fuels.

Please join the conversation over the coming days, weeks and months at www.greenoilbook.com

Satya Das offers strategic advice and counsel to leadership in the public and private sectors. satya@cambridgestrategies.com

By Satya Das

Being an energy superpower sit uneasily with Canadians: Alberta’s oil sands, the largest hydrocarbon deposit in the world, would be a blessing to many nations. Yet too many of our citizens see them as a burden.

We cringed when a global environmental awareness campaign, initiated by such luminaries as former U.S. Vice-President Al Gore, framed and branded oil sands production as “dirty oil.” A 2008 report predicting the demise of millions of migratory birds as a result of oil sands development gathered worldwide attention and coverage.

We do not think to assert that “dirty oil” could be turned into clean oil, with the application of strong political leadership, a stringent regulatory framework, advances in technology, and an insistence on best-practices in energy production.

Now, with the Obama administration championing a greener energy future, Albertans – the owners of the oil sands – and Canadians must learn to lead, for one compelling reason: geology has thrust leadership upon us, and this is a responsibility we cannot evade.

Beyond an accident of geology, we have a strong moral obligation to lead the responsible development and stewardship of the incredible wealth the oil sands represent. From my perspective, the option of abandoning the oil sands, leaving them shut in, would be an act of profound negligence.

There are some strong Albertan and Canadian voices calling for the easy appeasement of walking away from “dirty oil.” Such abdication would be comprehensively wrong. We can use the enormous wealth the oil sands can confer to build the common good. We can use it to pay for the transition to alternative energy, built on a platform of much greener hydrocarbon production.

It is not at all paradoxical to think that developing this high-carbon-emission resource in a more sustainable way will, in fact, accelerate the development of the low carbon economy: by giving us the means to pay for it, by investing in both the research and development and the implementation of this greener future. Nor is my thinking at odds with my own ecological values.

To the core of my being, I believe that the arrogance and hubris of our species leads us to disrespect and damage the bounty of nature. Since the beginning of the industrial age, we have despoiled our natural heritage with scant regard for consequences. We have forgotten the teaching of every great faith: one of humility in the face of nature, and the responsibility of stewardship. We are mere keepers and stewards of what we have inherited, and we must nurture the gifts of the natural world for future generations.

On the other hand, I enjoy the advanced lifestyle enabled by a massively prosperous market economy. And I know it is supported by the consumption of fossil fuels, which are the prime source of greenhouse gases. Is there a magic-bullet solution that will let me keep my lifestyle without despoiling the planet?

That’s the real question we need to explore. It’s especially pertinent for Albertans because we are the owners – and stewards – of the oil sands, the world’s largest hydrocarbon deposit. Unless we develop this resource as responsibly and sustainably as possible, we will continue to feed and even accelerate greenhouse gas production. I am enough of a realist to know that “not developing it” is in the realm of magical thinking. Consider: this is a $15 trillion asset, in a world that remains addicted to hydrocarbons. If we Canadians try to say “no development” are we really in any kind of position to stop those who want our oil? I suppose we can wave sovereignty and international law in the face of tanks – and tankers – as they roll in. Seriously, though, I come back to our obligation of stewardship. As owners we need to exercise our rights of ownership as responsibly as we can: because that’s the Canadian way.

After thinking through these issues for the last five years, I’ve put my thoughts together in a new book. It’s called Green Oil: Clean Energy for the 21st Century? and explores what it will take to turn the question mark into a statement. Green Oil is meant more to be a book of questions than definitive answers.

As Copenhagen draws closer, I am aiming to “set the table” for a thoughtful and comprehensive conversation on using the wealth generated by the responsible development of the oil sands to pay for and build a “green future” that will evolve away from fossil fuels.

Please join the conversation over the coming days, weeks and months at www.greenoilbook.com

Satya Das offers strategic advice and counsel to leadership in the public and private sectors. satya@cambridgestrategies.com

Manufacturing Intelligence

by Matt Stambaugh

It’s here!  The Utopian ideal of free education for all is closer than ever thanks to the Interweb.  While the ‘open classroom’ concept has been evolving for several years, many prestigious universities and colleges are now offering high quality audio and even video recordings online of their classes.  I’ve been taking an online physics course (I know, N-E-R-D…) from MIT for the past several weeks and the quality is exceptional.  Some great places examples include;

• MIT Opencourseware
• UC Berkley Online
• iTunesU (Includes courses from Stanford, Oxford, and many more.  To access open iTunes, goto the iTunes Store, and then select iTunesU)

This is a spectacular idea.  Education is a powerful tool and I cannot applaud the participating institutions enough for providing this content.  I highly doubt that by posting topical and freshmen courses online they will lower their enrollments, while providing information and content that other schools and students from around the world can use to enrich the quality of their courses and educations.  What’s interesting is no Canadian post-secondary institutions currently offer this service (at least not that I could find), and only two of them – Athabasca and Capilano College – are part of the OpenCourseware Consortium.

Since most schools in Canada are largely funded with public dollars, there is a strong case to be made that schools should provide these courses online for public consumption.  This would allow Canadians to appreciate the high quality of our post-secondary system and perhaps help to increase our willingness to fund our universities and colleges so that we may continue to compete globally in the ‘knowledge economy’.  Or, if our schools stink, maybe forcing them to post some of their classes online will light the fire they need to increase the quality of their education.  In any case seems like a low cost/high return program.  Let’s get on it…

——————–
Matt Stambaugh is an Information Security Consultant who dabbles in media, primarily as a weekly national technology columnist with CBC Radio. This post is cross-posted to www.mattstambaugh.com.

by Matt Stambaugh

It’s here!  The Utopian ideal of free education for all is closer than ever thanks to the Interweb.  While the ‘open classroom’ concept has been evolving for several years, many prestigious universities and colleges are now offering high quality audio and even video recordings online of their classes.  I’ve been taking an online physics course (I know, N-E-R-D…) from MIT for the past several weeks and the quality is exceptional.  Some great places examples include;

• MIT Opencourseware
• UC Berkley Online
• iTunesU (Includes courses from Stanford, Oxford, and many more.  To access open iTunes, goto the iTunes Store, and then select iTunesU)

This is a spectacular idea.  Education is a powerful tool and I cannot applaud the participating institutions enough for providing this content.  I highly doubt that by posting topical and freshmen courses online they will lower their enrollments, while providing information and content that other schools and students from around the world can use to enrich the quality of their courses and educations.  What’s interesting is no Canadian post-secondary institutions currently offer this service (at least not that I could find), and only two of them – Athabasca and Capilano College – are part of the OpenCourseware Consortium.

Since most schools in Canada are largely funded with public dollars, there is a strong case to be made that schools should provide these courses online for public consumption.  This would allow Canadians to appreciate the high quality of our post-secondary system and perhaps help to increase our willingness to fund our universities and colleges so that we may continue to compete globally in the ‘knowledge economy’.  Or, if our schools stink, maybe forcing them to post some of their classes online will light the fire they need to increase the quality of their education.  In any case seems like a low cost/high return program.  Let’s get on it…

——————–
Matt Stambaugh is an Information Security Consultant who dabbles in media, primarily as a weekly national technology columnist with CBC Radio. This post is cross-posted to www.mattstambaugh.com.

Let’s Focus our Aid

by Matt Stambaugh

Successful foreign aid programs are notoriously difficult to execute, and in the past appear to be as much of a PR tool for governments as an actual attempt to provide assistance to those in need around the globe.  This is not always due to nefarious reasons on the part of our leaders, but it appears that the global foreign aid system is rather complicated and difficult to manage to say the least.

As such, in order to ensure public dollars are most effectively deployed, perhaps we as a country should focus our efforts on being the best at one or two specific niches of aid, instead of responding in a haphazard way to global issues, attempting to spread our dollars a mile-wide but only an inch deep. Our government is starting down this path by further focusing the number of countries that receive aid, but there still doesn’t seem to be a specific focus for our primary aid agency, CIDA.

To start, why don’t we pick a specific global need and strive to become the best at responding to this issue. These goals shoud be measurable and results-based.  For example we could become the most effective country in the world at providing potable drinking water to developing nations or areas affected by a natural or man-made disaster. Recent developments in nano-technology such as the Lifesaver bottle or Lifestraw allow for measurable results in an area that requires fresh water (the Lifesaver bottle is currently marketed to militaries and adventure seekers so a special ‘humanitarian’ cost structure would have to be negotiated).  The next time there is a hurricane Katrina Canada would have a repeatable process to initiate immediately that would allow for potable water to arrive in the stricken area.

Or perhaps Canada could be the world leader in providing and developing micro-electrical stations to communities, a technology that would potentially provide experience and innovations at home that could then be marketed world-wide. Basic education, micro-credit, and food security are all other areas that we could focus on developing niche expertise in.

While there are a variety of options to choose from, it’s time for our national aid strategy to focus on excellence in a specific solution, not just on what countries will receive aid. We have limited resources to spend on aid, let’s make sure that we are very, very effective when it comes time to help those in need around the world.

——————–
Matt Stambaugh is an Information Security Consultant who dabbles in media, primarily as a weekly national technology columnist with CBC Radio. This post is cross-posted to www.mattstambaugh.com.

by Matt Stambaugh

Successful foreign aid programs are notoriously difficult to execute, and in the past appear to be as much of a PR tool for governments as an actual attempt to provide assistance to those in need around the globe.  This is not always due to nefarious reasons on the part of our leaders, but it appears that the global foreign aid system is rather complicated and difficult to manage to say the least.

As such, in order to ensure public dollars are most effectively deployed, perhaps we as a country should focus our efforts on being the best at one or two specific niches of aid, instead of responding in a haphazard way to global issues, attempting to spread our dollars a mile-wide but only an inch deep. Our government is starting down this path by further focusing the number of countries that receive aid, but there still doesn’t seem to be a specific focus for our primary aid agency, CIDA.

To start, why don’t we pick a specific global need and strive to become the best at responding to this issue. These goals shoud be measurable and results-based.  For example we could become the most effective country in the world at providing potable drinking water to developing nations or areas affected by a natural or man-made disaster. Recent developments in nano-technology such as the Lifesaver bottle or Lifestraw allow for measurable results in an area that requires fresh water (the Lifesaver bottle is currently marketed to militaries and adventure seekers so a special ‘humanitarian’ cost structure would have to be negotiated).  The next time there is a hurricane Katrina Canada would have a repeatable process to initiate immediately that would allow for potable water to arrive in the stricken area.

Or perhaps Canada could be the world leader in providing and developing micro-electrical stations to communities, a technology that would potentially provide experience and innovations at home that could then be marketed world-wide. Basic education, micro-credit, and food security are all other areas that we could focus on developing niche expertise in.

While there are a variety of options to choose from, it’s time for our national aid strategy to focus on excellence in a specific solution, not just on what countries will receive aid. We have limited resources to spend on aid, let’s make sure that we are very, very effective when it comes time to help those in need around the world.

——————–
Matt Stambaugh is an Information Security Consultant who dabbles in media, primarily as a weekly national technology columnist with CBC Radio. This post is cross-posted to www.mattstambaugh.com.

Dead Aid: Dead On or Dead Wrong?

John W. McArthur — CEO of Millennium Promise, an international non-profit organization that supports the achievement of the Millennium Development Goals to halve extreme poverty by 2015 — argues in a blog post that “when holding a hammer in your hand, every problem can look like a nail. Dambisa Moyo’s book Dead Aid gives fresh meaning to this old adage, applying the perspective of a top-tier investment banker to the plight of the poorest people in Sub-Saharan Africa.”

What’s your take on Dambisa Moyo’s Dead Aid? Why not register now to see what she has to say for yourself?

John W. McArthur — CEO of Millennium Promise, an international non-profit organization that supports the achievement of the Millennium Development Goals to halve extreme poverty by 2015 — argues in a blog post that “when holding a hammer in your hand, every problem can look like a nail. Dambisa Moyo’s book Dead Aid gives fresh meaning to this old adage, applying the perspective of a top-tier investment banker to the plight of the poorest people in Sub-Saharan Africa.”

What’s your take on Dambisa Moyo’s Dead Aid? Why not register now to see what she has to say for yourself?

Buy-buy Nortel, Bye-bye Canadian R&D spending

The international competition for R&D is extreme (source).

• China’s R&D spending has grown by 22 per cent a year since 1996.
• Australia spends 2 per cent of GDP on research and development, having grown 8 per cent a year since 1996. Not satisfied with this, government recently released its innovation policy agenda to 2020.
• Austria, Denmark, Germany, Iceland, Switzerland, Taiwan, and the United States spend more than 2.5 per cent.
• Finland, Japan, South Korea, and Sweden spend more than 3 per cent.
• Israel spends more than 4 per cent.

Canadian industry research spending in 2007 was only 1.03 per cent of the country’s GDP, putting Canada in 12th place among the industrialized nations. According to Statistics Canada, the private sector spent $16.3 billion on R&D in 2008, up slightly from $16.1 billion in 2007 (source). The majority of the private sector investment in R&D is actually done by a small handful of companies: in 2007 the top two private R&D investors spent more on R&D than the next eight investors combined (source). Those top two were Nortel and BCE.

More troubling, R&D spending by Canadian businesses has been decreasing since 2002 (source).

University of Toronto President David Naylor recently addressed the Economic Club of Canada on May 14, 2009. Naylor is worried that Canada is still falling behind in many innovation metrics. He thinks research-intensive universities need to step up to fill this troubling gap. He also argues that ongoing misunderstandings of the role of government, business, and universities in innovation, which he discussed in his speech.

Now that Nortel is being broken into a million little pieces, what will happen to Canadian R&D spending?

The international competition for R&D is extreme (source).

• China’s R&D spending has grown by 22 per cent a year since 1996.
• Australia spends 2 per cent of GDP on research and development, having grown 8 per cent a year since 1996. Not satisfied with this, government recently released its innovation policy agenda to 2020.
• Austria, Denmark, Germany, Iceland, Switzerland, Taiwan, and the United States spend more than 2.5 per cent.
• Finland, Japan, South Korea, and Sweden spend more than 3 per cent.
• Israel spends more than 4 per cent.

Canadian industry research spending in 2007 was only 1.03 per cent of the country’s GDP, putting Canada in 12th place among the industrialized nations. According to Statistics Canada, the private sector spent $16.3 billion on R&D in 2008, up slightly from $16.1 billion in 2007 (source). The majority of the private sector investment in R&D is actually done by a small handful of companies: in 2007 the top two private R&D investors spent more on R&D than the next eight investors combined (source). Those top two were Nortel and BCE.

More troubling, R&D spending by Canadian businesses has been decreasing since 2002 (source).

University of Toronto President David Naylor recently addressed the Economic Club of Canada on May 14, 2009. Naylor is worried that Canada is still falling behind in many innovation metrics. He thinks research-intensive universities need to step up to fill this troubling gap. He also argues that ongoing misunderstandings of the role of government, business, and universities in innovation, which he discussed in his speech.

Now that Nortel is being broken into a million little pieces, what will happen to Canadian R&D spending?

Branding Canada: A Big Step for Identity Building

By Ed Bernacki

Paul Lavoie’s message about ‘brand’ Canada is dead on.

I lived overseas for 13 years and continue to work internationally. I am dumbfounded by the lack of ‘Canada’ internationally.
When speaking at international conferences, I often ask the audience if anyone can name a product from Canada. Few people can—even if they own a Blackberry.

The main response is “maple syrup.” RIM makes little effort to promote its “Canadianness.” In Australia, Lululemon makes no obvious link to Canada, nor does McCain Foods.

Why is there no advantage to showing off a product’s Canadianness?

Italy, Sweden, Norway are being joined by the Aussies and other countries with strong national brands that add to the nation’s bottom line.

Canada is world class in a small number of industries but our collective inability to create branded consumer products for the world is simply bizarre.

We need a new vision and a new confidence and conviction that we Canadians can create products with global appeal and then create the brands and infrastructure to sell to the world.

The idea of a brand for Canada is a big step forward for building our identity around the world.

——————————-
Ed Bernacki is an internationally sought after speaker on how to manage ideas. He is the author of several books, from how to be an idea factory to how to design more innovative conferences. He can be found at www.wowgreatidea.com.

By Ed Bernacki

Paul Lavoie’s message about ‘brand’ Canada is dead on.

I lived overseas for 13 years and continue to work internationally. I am dumbfounded by the lack of ‘Canada’ internationally.
When speaking at international conferences, I often ask the audience if anyone can name a product from Canada. Few people can—even if they own a Blackberry.

The main response is “maple syrup.” RIM makes little effort to promote its “Canadianness.” In Australia, Lululemon makes no obvious link to Canada, nor does McCain Foods.

Why is there no advantage to showing off a product’s Canadianness?

Italy, Sweden, Norway are being joined by the Aussies and other countries with strong national brands that add to the nation’s bottom line.

Canada is world class in a small number of industries but our collective inability to create branded consumer products for the world is simply bizarre.

We need a new vision and a new confidence and conviction that we Canadians can create products with global appeal and then create the brands and infrastructure to sell to the world.

The idea of a brand for Canada is a big step forward for building our identity around the world.

——————————-
Ed Bernacki is an internationally sought after speaker on how to manage ideas. He is the author of several books, from how to be an idea factory to how to design more innovative conferences. He can be found at www.wowgreatidea.com.

Schreiber’s Circus

by Matt Stambaugh

While I am sure to be missing something, why are we still hearing updates on the Mulroney/Schreiber train wreck?

Unless there is a possible outcome whereby taxpayers are able to claw back some of money awarded to Mulroney in the Airbus libel suit this form of entertainment seems better left to the arena of American Idol, where Kris vs. Adam  can keep us gossiping for at least a couple more weeks. I don’t think anyone is going to change their opinion of either individual in this case at this point, and if Mulroney broke some tax laws then let the justice system play out and we can all move on.

Amazing how we focus on his tax bill but almost no one wants to talk about the lasting impact of the failed Meech Lake or Charlottetown Accords that gave us a decade of Quebec separatist resurgence evolving into the recent awkward truce between our two founding nations.  Or the fact that the introduction of the GST may have been one of the most painful, but important modifications of our tax structure in the previous century as consumption taxes have an important role to play in regulating our economy (albeit hopefully when matched by accompanying reductions in income or payroll taxes).

What are your thoughts on the GST, should we be lowering it at all costs, maintaining it where it is, or increasing it once the economy picks up  in an attempt to keep our federal budget in the black for the future?  Is it time for Canada to have a serious look at it’s federal tax structure, especially with the movement to Harmonized Sales Taxes (HST) in more and more provinces?

——————–
Matt Stambaugh is an Information Security Consultant who dabbles in media, primarily as a weekly national technology columnist with CBC Radio. This post is cross-posted to www.mattstambaugh.com.

by Matt Stambaugh

While I am sure to be missing something, why are we still hearing updates on the Mulroney/Schreiber train wreck?

Unless there is a possible outcome whereby taxpayers are able to claw back some of money awarded to Mulroney in the Airbus libel suit this form of entertainment seems better left to the arena of American Idol, where Kris vs. Adam  can keep us gossiping for at least a couple more weeks. I don’t think anyone is going to change their opinion of either individual in this case at this point, and if Mulroney broke some tax laws then let the justice system play out and we can all move on.

Amazing how we focus on his tax bill but almost no one wants to talk about the lasting impact of the failed Meech Lake or Charlottetown Accords that gave us a decade of Quebec separatist resurgence evolving into the recent awkward truce between our two founding nations.  Or the fact that the introduction of the GST may have been one of the most painful, but important modifications of our tax structure in the previous century as consumption taxes have an important role to play in regulating our economy (albeit hopefully when matched by accompanying reductions in income or payroll taxes).

What are your thoughts on the GST, should we be lowering it at all costs, maintaining it where it is, or increasing it once the economy picks up  in an attempt to keep our federal budget in the black for the future?  Is it time for Canada to have a serious look at it’s federal tax structure, especially with the movement to Harmonized Sales Taxes (HST) in more and more provinces?

——————–
Matt Stambaugh is an Information Security Consultant who dabbles in media, primarily as a weekly national technology columnist with CBC Radio. This post is cross-posted to www.mattstambaugh.com.

Searching for the New Jerusalem

by Phil DeMont

When Gene Lang talks about the desire to find a new paradigm, he essentially is looking for a new way to view the world. In this case, the economic world.

The old model, based upon freer and freer markets, certainly does appear to have broken down. As a result, public policy practioners are trying to find a new set of ideas to replace the governing economic tenants.

Thus, much like politicians of the past century, these analysts are now looking for a new path of enlightenment – a “new Jerusalem” to use a term made famous by former NDP leader Tommy Douglas.

That voters and political types are seeking a different way should not come as a surprise.

After all, Canada, Europe, the United States and most industrialized countries are stuck in a long-standing – and generally perplexing – recession.

Seemingly endless drop
Started by consumers who were exhausted after prodigiously spending for the previous eights years or so, a gentle economic slowing became a full-fledged monetary smack-down as the global credit crunch turned mortgage and corporate lending into a very risky business.

As a result, executives at formerly-solid financial institutions found core assets worthless and flew off as fast as their private jets would take them to various national, provincial and state capitals. They were seeking taxpayer-funded bailouts lest their firms too become economic casualties of the worst slowdown since the Great Depression.

For their part, politicians, besieged by voters concerned about possible unemployment and shell-shocked company-types relaying ever-gloomy news, drifted between a ‘shoulder-shrugging’ re-emphasis on market forces to bootstrap a recovery and pushing as much cash at as many different industries as possible.

The later appeared based upon a theory similar to throwing cooked pasta at a wall – some of it is bound to stick.

That leaves analysts flipping through obscure academic journals in the hope – much like the judges on American Idol – that they will uncover some hidden gem of untapped talent.

Too much – not too little – agreement
Unfortunately, the problem is not impending theoretical detective work. Instead, political types find themselves in a world where economists in fact believe they have already done the heavy lifting and are roughly saying the same thing.

But, while that consensus might satisfy the canons of academic debate, it does precious little to assist elected officials who are stuck trying to deal with common concerns in an era of economic uncertainty.

This was not the world that public policy faced thirty years ago.

Back then, the economic debates were the stuff of philosophical kings. Milton Friedman and John Kenneth Galbraith faced off over the true role of government; Paul Samuelson battled Martin Feldstein over how people reacted to taxes. And Robert Lucas yelled at everyone.

The fights were fun to watch and the outcomes important to politicians and academics alike.

The boring consensus
Unfortunately, over the years, economists have narrowed the areas of disagreements. No one argues anymore about whether the money supply matters or whether taxes act as a disincentive for work or whether people will act to frustrate government policy, all crucial debates in the 1970s.

Instead, questions arise over arcane details such as the applicability of withholding taxes for corporations or what goods should be exempted from a general consumption tax.

Such discussions are important but hardly illuminating a path to a new economic nirvana.

The consensus has left politicians essentially to their own devices in dealing with the current economic downturn.

Even in the latest round of stimulus, the goal is not to inject enough cash into the economy to generate sufficient buying and lending activity, an essentially Keynesian idea.

Instead, elected leaders are trying to show enough commitment to an economic recovery to induce financial institutions to lend and companies to borrow, a kind of fiscal boosterism rather than straight-up economic stimulus.

In fact, the economic consensus over the past thirty has killed off the economist as public policy adviser.

After all, as economists mouth the same truisms, political parties, which thrive on exploiting differences, will turn to other advisers in different sectors, such the environment or social areas, to highlight policy debates.

The new consensus has turned economists into painters, able to describe what they see but distinctly unable to change the picture.

And, until someone comes along with a new General Theory of Employment, Interest and Money (Keynes) or A Monetary History of the United States (Friedman and Schwartz), economists will become increasingly irrelevant, unable to articulate policies to change a society’s current course.

————
Philip DeMont, a veteran print and television journalist based in Toronto, is a co-author (with Eugene Lang) of Turning Point: Moving Beyond Neoconservative.

by Phil DeMont

When Gene Lang talks about the desire to find a new paradigm, he essentially is looking for a new way to view the world. In this case, the economic world.

The old model, based upon freer and freer markets, certainly does appear to have broken down. As a result, public policy practioners are trying to find a new set of ideas to replace the governing economic tenants.

Thus, much like politicians of the past century, these analysts are now looking for a new path of enlightenment – a “new Jerusalem” to use a term made famous by former NDP leader Tommy Douglas.

That voters and political types are seeking a different way should not come as a surprise.

After all, Canada, Europe, the United States and most industrialized countries are stuck in a long-standing – and generally perplexing – recession.

Seemingly endless drop
Started by consumers who were exhausted after prodigiously spending for the previous eights years or so, a gentle economic slowing became a full-fledged monetary smack-down as the global credit crunch turned mortgage and corporate lending into a very risky business.

As a result, executives at formerly-solid financial institutions found core assets worthless and flew off as fast as their private jets would take them to various national, provincial and state capitals. They were seeking taxpayer-funded bailouts lest their firms too become economic casualties of the worst slowdown since the Great Depression.

For their part, politicians, besieged by voters concerned about possible unemployment and shell-shocked company-types relaying ever-gloomy news, drifted between a ‘shoulder-shrugging’ re-emphasis on market forces to bootstrap a recovery and pushing as much cash at as many different industries as possible.

The later appeared based upon a theory similar to throwing cooked pasta at a wall – some of it is bound to stick.

That leaves analysts flipping through obscure academic journals in the hope – much like the judges on American Idol – that they will uncover some hidden gem of untapped talent.

Too much – not too little – agreement
Unfortunately, the problem is not impending theoretical detective work. Instead, political types find themselves in a world where economists in fact believe they have already done the heavy lifting and are roughly saying the same thing.

But, while that consensus might satisfy the canons of academic debate, it does precious little to assist elected officials who are stuck trying to deal with common concerns in an era of economic uncertainty.

This was not the world that public policy faced thirty years ago.

Back then, the economic debates were the stuff of philosophical kings. Milton Friedman and John Kenneth Galbraith faced off over the true role of government; Paul Samuelson battled Martin Feldstein over how people reacted to taxes. And Robert Lucas yelled at everyone.

The fights were fun to watch and the outcomes important to politicians and academics alike.

The boring consensus
Unfortunately, over the years, economists have narrowed the areas of disagreements. No one argues anymore about whether the money supply matters or whether taxes act as a disincentive for work or whether people will act to frustrate government policy, all crucial debates in the 1970s.

Instead, questions arise over arcane details such as the applicability of withholding taxes for corporations or what goods should be exempted from a general consumption tax.

Such discussions are important but hardly illuminating a path to a new economic nirvana.

The consensus has left politicians essentially to their own devices in dealing with the current economic downturn.

Even in the latest round of stimulus, the goal is not to inject enough cash into the economy to generate sufficient buying and lending activity, an essentially Keynesian idea.

Instead, elected leaders are trying to show enough commitment to an economic recovery to induce financial institutions to lend and companies to borrow, a kind of fiscal boosterism rather than straight-up economic stimulus.

In fact, the economic consensus over the past thirty has killed off the economist as public policy adviser.

After all, as economists mouth the same truisms, political parties, which thrive on exploiting differences, will turn to other advisers in different sectors, such the environment or social areas, to highlight policy debates.

The new consensus has turned economists into painters, able to describe what they see but distinctly unable to change the picture.

And, until someone comes along with a new General Theory of Employment, Interest and Money (Keynes) or A Monetary History of the United States (Friedman and Schwartz), economists will become increasingly irrelevant, unable to articulate policies to change a society’s current course.

————
Philip DeMont, a veteran print and television journalist based in Toronto, is a co-author (with Eugene Lang) of Turning Point: Moving Beyond Neoconservative.

Wanted: One Paradigm Shift

By Eugene Lang

Today’s global economic crisis is producing a fundamental change in the relationship of government to the economy. A paradigm shift is underway, the effects of which will be felt for many years to come.

There have been two similar paradigm shifts since the end of the Second World War, both borne of crisis, and both shaped the basic governing framework in western democracies for decades. The first began in the late 1940s and lasted about a quarter century. This is what we might call the Keynes-Beveridge model, named after the great British intellectuals John Maynard Keynes and William Henry Beveridge.

After World War Two, western governments were petrified by the prospect of a return to Depression as the war economy de-mobilized. The ideas of Keynes, Beveridge and their disciples were seized upon to varying degrees to avoid a return to economic contraction, high unemployment and social unrest. The underlying assumption was that markets almost always require government intervention to function properly. Economies would be fine tuned through fiscal and monetary policy to ensure steady economic growth and an end to recessions. This would be linked to the building of a “welfare state”–replete with innovations like unemployment and health insurance–to support growth and protect citizens from the worst effects of an unfettered market economy.

The Keynes-Beveridge model was “on the shelf” for post war governments to pull down, its intellectual foundations having been worked out over the previous decade. And it served most countries relatively well, supporting the prosperity and social progress of the 1950s and 1960s.

By the mid 1970s, a new economic crisis—characterized by the twin evils of high unemployment and inflation—took hold. The old post war paradigm seemed incapable of fixing this problem; some saw it as exacerbating the malaise by fuelling inflation and contributing to inefficient and sclerotic economies. A paradigm shift was in order. Then as before a body of intellectual work was on the shelf for governments to adopt. The new approach was what we might call the Friedman–Thatcher model, named after the great American economist Milton Friedman and former British Prime Minister Margaret Thatcher. The model called for an all out assault on inflation through rigorous control of the money supply, plus tax cuts, fiscal discipline and a smaller, less intrusive government, underpinned by an over-riding emphasis on the free play of market forces. In contrast—or even in reaction to–its predecessor, this approach assumed markets require little if any government intervention to function properly.

To varying albeit diminishing degrees, the Friedman-Thatcher model has provided the basic governing framework for many western governments, especially the Anglo-American democracies, for the past quarter century. It has been widely credited with contributing to the prosperity of the past two decades.

But the current economic crisis has exposed the flaws in this model. Its core notion that markets should be put on a high pedestal has been discredited.

A paradigm shift is once again called for. However, unlike earlier eras, there is no alternative intellectual model that can be pulled off the shelf and adopted by governments as a framework. The essence of the Friedman-Thatcher model was so widely accepted–even among centrist and centre-left governments like New Labour in the UK, the Chretien-Martin Liberals in Canada and the Clinton Democrats in the US–that no one bothered to develop an alternative framework for governing in the event the model broke down. We had reached the end of history–the superior model had triumphed and would last forever.

Today, some have suggested that we are all Keynesians again. That is true in the short but not the long run. Keynesian fiscal stimulus is a hallmark of how governments from China to Canada, from conservative to social democrat, are trying to deal with the current recession. It is the only proven way to help jolt economies back to life and prevent a deflationary spiral. But it is hard to imagine that once growth returns, the world’s leading economies will embrace the post-war fine-tuning of economies and expansion of social programs that characterized the 1950s and 1960s.

A new framework for governing, post Friedman-Thatcher, is now required. But at this point no one really has a clue what it will look like. And rather than emerging from the academy as in previous eras, the alternative framework will likely get pieced together over time by governments as they try to find ways to prevent a similar economic crisis from happening again. It will be much less determined by a theory of government’s role in the economy, and much more through learning by doing, through trial and error. That might prove to be a good thing, leading to a more flexible, lasting, pragmatic and appropriate framework. After All, as Edmund Burke once said, there is nothing more dangerous than governing in the name of a theory.
———————–
Eugene Lang, a co-founder of Canada 2020, is a best-selling author, as well as an expert on international defence and security and economic policy issues. This article first appeared at The Mark.

By Eugene Lang

Today’s global economic crisis is producing a fundamental change in the relationship of government to the economy. A paradigm shift is underway, the effects of which will be felt for many years to come.

There have been two similar paradigm shifts since the end of the Second World War, both borne of crisis, and both shaped the basic governing framework in western democracies for decades. The first began in the late 1940s and lasted about a quarter century. This is what we might call the Keynes-Beveridge model, named after the great British intellectuals John Maynard Keynes and William Henry Beveridge.

After World War Two, western governments were petrified by the prospect of a return to Depression as the war economy de-mobilized. The ideas of Keynes, Beveridge and their disciples were seized upon to varying degrees to avoid a return to economic contraction, high unemployment and social unrest. The underlying assumption was that markets almost always require government intervention to function properly. Economies would be fine tuned through fiscal and monetary policy to ensure steady economic growth and an end to recessions. This would be linked to the building of a “welfare state”–replete with innovations like unemployment and health insurance–to support growth and protect citizens from the worst effects of an unfettered market economy.

The Keynes-Beveridge model was “on the shelf” for post war governments to pull down, its intellectual foundations having been worked out over the previous decade. And it served most countries relatively well, supporting the prosperity and social progress of the 1950s and 1960s.

By the mid 1970s, a new economic crisis—characterized by the twin evils of high unemployment and inflation—took hold. The old post war paradigm seemed incapable of fixing this problem; some saw it as exacerbating the malaise by fuelling inflation and contributing to inefficient and sclerotic economies. A paradigm shift was in order. Then as before a body of intellectual work was on the shelf for governments to adopt. The new approach was what we might call the Friedman–Thatcher model, named after the great American economist Milton Friedman and former British Prime Minister Margaret Thatcher. The model called for an all out assault on inflation through rigorous control of the money supply, plus tax cuts, fiscal discipline and a smaller, less intrusive government, underpinned by an over-riding emphasis on the free play of market forces. In contrast—or even in reaction to–its predecessor, this approach assumed markets require little if any government intervention to function properly.

To varying albeit diminishing degrees, the Friedman-Thatcher model has provided the basic governing framework for many western governments, especially the Anglo-American democracies, for the past quarter century. It has been widely credited with contributing to the prosperity of the past two decades.

But the current economic crisis has exposed the flaws in this model. Its core notion that markets should be put on a high pedestal has been discredited.

A paradigm shift is once again called for. However, unlike earlier eras, there is no alternative intellectual model that can be pulled off the shelf and adopted by governments as a framework. The essence of the Friedman-Thatcher model was so widely accepted–even among centrist and centre-left governments like New Labour in the UK, the Chretien-Martin Liberals in Canada and the Clinton Democrats in the US–that no one bothered to develop an alternative framework for governing in the event the model broke down. We had reached the end of history–the superior model had triumphed and would last forever.

Today, some have suggested that we are all Keynesians again. That is true in the short but not the long run. Keynesian fiscal stimulus is a hallmark of how governments from China to Canada, from conservative to social democrat, are trying to deal with the current recession. It is the only proven way to help jolt economies back to life and prevent a deflationary spiral. But it is hard to imagine that once growth returns, the world’s leading economies will embrace the post-war fine-tuning of economies and expansion of social programs that characterized the 1950s and 1960s.

A new framework for governing, post Friedman-Thatcher, is now required. But at this point no one really has a clue what it will look like. And rather than emerging from the academy as in previous eras, the alternative framework will likely get pieced together over time by governments as they try to find ways to prevent a similar economic crisis from happening again. It will be much less determined by a theory of government’s role in the economy, and much more through learning by doing, through trial and error. That might prove to be a good thing, leading to a more flexible, lasting, pragmatic and appropriate framework. After All, as Edmund Burke once said, there is nothing more dangerous than governing in the name of a theory.
———————–
Eugene Lang, a co-founder of Canada 2020, is a best-selling author, as well as an expert on international defence and security and economic policy issues. This article first appeared at The Mark.

Age of big government or of big idea government?

A few days ago Economic Development Minister Michael Bryant delivered a bold speech to the Canadian Club of Toronto. He talked about how the Ontario government will need to “pick winners,” the role of government during an economic crisis, and what he calls “reverse Reaganism.”

The coverage was extensive (here, here, here, and William Robson’s reaction here).

Have your say: Is the age of big government back or is it the age of big idea government? What does this mean for the future of the Public Service? Does it have the skills, temperament and capacity to pick winners?

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