Bank of Canada’s Poloz might be spooked by an unnatural economy: Don Pittis – Business – CBC News

Many Canadians with high debt loads fear the potential impact of interest rate hikes. Given some strange factors in the economy, it’s difficult to predict when the next hike might come.

Source: Bank of Canada’s Poloz might be spooked by an unnatural economy: Don Pittis – Business – CBC News

This is a pretty bizarre story. Pettis reports that Stephen Poloz, the Bank of Canada chief, says his usual models for figuring out what’s going on in the Canadian economy aren’t doing the job anymore. The economy, he argues, is behaving strangely.

Well, I don’t think ‘the economy’ is behaving strangely at all. In fact there is no such thing as the self-contained ‘Canadian Economy’ any more that there is such a thing as exclusive Canadian weather. The problem Poloz is having is that his models have never worked and will not work in the future either. His models are based on the country, Canada, as the basic unit of analysis when in fact, global finance capital should be considered the basic unit of analysis.

Not all of them, but most countries are beholden to global finance capital. Veblen would call politicians and the likes of Stephen Poloz “Guardians of the Vested Interests”. There is very little left of national sovereignty. Harold Innis argued in the late 1940s that Canada only had sovereignty for about 6 months in 1926 when the British and American empires were almost equally influential north of the 49th parallel. Since then it’s been downhill.

More important, the shift to globally based production makes a mockery out of the notion of ‘Canadian’ manufacturing.  Corporations based in the West have transformed Chinese society (and many others in the so-called Third World)  by moving most of their productive capacity there. The Chinese have gotten jobs, certainly, but also killer pollution. We, in fact, have exported jobs and pollution. We should be proud of ourselves. Of course, it could be no other way and we, as ordinary citizens, are not to blame. It’s almost impossible to figure out what’s really going on out there but we get the odd hint now and again from the mainstream media, although they are focussed on scandal and misbehaviour like tax evasion rather than on the real story.

The course of history is pretty much fixed: globalization has been in the works for centuries and will end with the complete integration of the globe’s economic power. It’s getting to the point where national governments are becoming a major fetter to the process of the expansion of finance capital and will be soon in a position where they won’t even be able to pretend that they have any control over their own economic lives. Their currencies are objects of speculation with traders making billions guessing on which currency will go up relative to others. Their ‘trading’ relations are increasingly governed by international bodies like the World Bank, the World Trade Organization and other multinational agreements. One example of how silly the situation: when General Motors moves a  car from Brampton, Ontario to some place in Michigan, the economists call that international trade. Who’s leading who around by the nose here?

Of course Canada has stagnant wages and low inflation. There is a growing divide between labour’s productive capacity, including knowledge and training, and the needs of business and industry. Labour is not ready for the new global economy and, frankly, governments don’t give a shit because if corporations need cheap labour they know where to find it, and it won’t be in Canada. Jobs in Canada are increasingly precarious, often short term, without benefits and job security. There are a few people driving around in Mercedes’ and BMWs, but most people are sucking air driving their Toyotas they bought on credit over 7 years, and just hanging in there hoping things don’t change too radically, too quickly.

People are strung out on personal debt. Yet Poloz says the economy is doing just great. Poloz and his counterparts all over the world need new economic models, ones that are global is scope and focussed on capital accumulation and concentration if they want to understand anything about what’s going on. Statistics Canada, like all national statistical agencies, is seriously behind the times too, collecting national statistics. A long time ago Harold Innis told a gathering of his colleagues that it was about time that they (e.g., social scientists, economists, political economists, and historians as well as the statisticians at Stats Can) ceased allowing national governments to lead them around by the nose. I’m not holding my breath waiting for this to happen. There are some good international agencies collecting statistics, but unfortunately they have to rely on national agencies like Stats Canada. We need a real, global agency that can follow the bouncing buck wherever it leads.

So Poloz should go trick or treating. A big bag of Nestlé’s chocolates might tell him more about what’s going on than his outdated models of how the world works.

Of course, the situation is not as simple as I’ve laid it out here. The complexity of the global economy has got to challenge the best computer modelling software that exists.This is just a teaser. I haven’t even mentioned export processing zones. Fortunately, there are scholars out there trying to figure things out. Bill Carroll at UVic is one of them. He’s working on corporate supply chains. We need more Bill Carrolls. Enough for now.


The “Canadian Economy?”

Following my last post where I look at Statistic Canada’s analysis of intergenerational income in Canada without coming to any conclusions, today, I intend to make one specific point. That point also relates to a Statistics Canada post today on labour productivity in Canada.

The point I want to make has already been make frequently enough. Harold Innis, the pre-eminent political economist who worked at the University of Toronto and who died in 1952 and his mentor and predecessor, Thorstein Veblen, the even more pre-eminent economic historian who taught in various American universities and who died in 1929 both in their own ways decried the use of statistics on a purely national basis. The transnational nature of corporate power and control has been studied carefully by scores of scholars over the decades. See in particular the work of William Carroll at UVic and the network of scholars with whom he is associated worldwide. In my own dissertation (1981) I argued following Innis that the weather doesn’t stop at national borders, nor should statistical analysis.

In an age where corporations are spread all over the globe and where a head office may be in one country, research and development in a couple of others and commodity production in several others, how does it make sense to talk about the ‘Canadian’ economy? If StatsCan wants to get with the times it needs to begin to follow corporations in the various parts of their businesses wherever they happen to be. It’s telling that the former Canadian Manufacturers’ Association is now the Canadian Manufacturers’ and Exporters Association. With the massive reductions in value-added production in Canada over the past half century, the concept of ‘Canadian’ manufacturing is losing its relevance. This is even more true when we consider that the extractive industries in Canada, especially in the petroleum industries are 95% under foreign control.

There is no such thing as the Canadian economy. The sooner we accept that and change our patterns of gathering data the sooner we will get an accurate picture of the global reality of ‘the economy.’ Of course Statistics Canada is there to serve the Canadian government so it’s by it’s very nature political. Harold Innis warned decades ago that scholars should not let politicians lead them around by the nose. It seems like that’s exactly what has happened for a long time now and is still the driving force of data collection in StatsCan.

I deal with this topic in several posts. Check my archives for more.

Now, back to writing. Do you have any themes you’d like me to address here?

Time to get back to writing. Several ideas have come to mind as themes for blog posts. One is mapping. In the 1980s and 90s I taught mind mapping, a note making method created by Tony Buzan, and that spurred me to research mapping in general as a means of understanding the world using line and metaphor. That, in turn, motivated me to look into language, semantics and semiotics. That led me to the work of Alfred Korzybski and especially his book, Science and Sanity (I have a copy). He coined the famous phrase: The Map is not the Territory. It is one of the most complex books I have ever read on mapping and metaphor and destroys the myths we have about sanity, insanity, science and reality. It also dissects the idea of science. I also discovered many books by the likes of Umberto Eco (The Theory of Semiotics), Mark Johnson and George Lakoff. Lakoff and Johnson wrote one of my favourite books. It’s called Metaphors We Live By. I used all of these books – and hundreds of others, of course – extensively in my lectures. Words are metaphorical by their very nature as are maps and all representations. Dictionaries are essentially closed systems of metaphors. There’s lots more to be said on this subject, making it a strong candidate for future blog posts.


Another theme, one that I’ve already addressed quite a lot, is the relationship of nationalism and capitalism, especially as they relate to the rise of global finance capital and what we call globalization. The rise of global finance capital was bound to produce the kinds of backlash among the working classes of the world as labour becomes an increasingly smaller component of capitalist production. The general public tends to cling to the notion that the nation-state is a means of controlling and promoting economic production and jobs in the face of growing finance capitalist expansion. People don’t think using highfalutin terms like I use here. They do, however, know that their world of work has become more and more precarious, tenuous and fragile. They know that little by little jobs ‘Canadian’ jobs are being eliminated by automation and exportation. They don’t know that there are no “Canadian’ jobs, just jobs in the capitalist world. They have also been convinced that having a job is the way to happiness. Anyone in their right mind knows that ‘work’ is not often a means of acquiring happiness, whatever that means.

Employment is alienating, no matter how we cut it. Work, however, is a different thing and humans by their very nature are producers of goods, makers of things (homo faber).

As we get squeezed between the need to pay our rents and mortgages and the increasingly insecure labour market, something has to give. The tension brought on by ‘austerity programs’ and ‘structural adjustment programs’ imposed on debtor countries by the World Bank and other transnational organizations in cahoots with national governments will be released somehow. Can you say ‘open rebellion’ and ‘violence in the streets’? Trump’s disaffected followers are just the spark that could ignite and then fan the flames of violence in America. People will find scapegoats upon which to heap their fears because they have no idea who their real enemy is.

Part of this theme revolves around the nature of capital and the evolution of social, economic and cultural systems. This form of evolution has been a major theme in my teaching practice.

I just might pick up this theme again in future blogs.

How could I leave out sex? Of course I will deal with sex and its role in our lives in future blog posts, but I want to also consider aspects of our language around sexuality and the pornography industry in particular. Why do we so often refer to sex as dirty? And what do we make of the fact that we are born between shit and piss? How do we  culturally and psychologically address the mess that happens in labour with the wonderfulness of babies and their eventual and necessary deaths?

Contradictions abound in our cultural creations around sex and sexuality. We love the act of sex and lovemaking, but we are supposed to do it in very prescribed ways between approved partners. Tell that to teenagers with sex pheromones bleeding out of every pore of their bodies and it becomes ludicrous. Bodies will trump social rules more often than we would like to consider. Of course, sexual mores have become increasingly lax over the last few decades, but that doesn’t mean that they’ve completely vanished.

Living in interesting times: Stephen Harper’s betrayal of Canadian Sovereignty.

It’s interesting to me that a Conservative prime minister like Stephen Harper could be so anti-nationalist while constantly protesting his love of Canada.  He had good teachers, however, in Brian Mulroney and the Liberals Paul Martin and Jean Chrétien, who, each in their own way, undermined Canadian sovereignty.   It seems odd, doesn’t it, that the ‘leader’ of a developed country like Canada would be so intent on seeing it marginalized in the name of capital.  I’ve written about this in previous blogs. Of course, there’s always been tension between the interests of the nation-state and that of capital.  Now it seems we are living in the end times of the much-beloved institutions we call countries and the Harper government is leading the charge over the cliff, carving off bits and pieces of the resources of this country and making them available at rock bottom prices to global finance capital while we, the citizens of Canada, must sit by and watch our country being slowly dismantled.

Not that I’m a huge nationalist myself.  I’m not any kind of ‘ist’ in this discourse.  I understand the dynamics of history, particularly the political economy of capital accumulation, the impoverishment of greater and greater segments of the global population and the destruction of the environment along with the disappearance of countless species of animals.  Studying all of this has been my life’s work.

Historically, we’re on a course, a course that will not be reversed and at best can be slightly mitigated in its negative effects on all of the global inhabitants, especially humans.  Things will eventually get better for everyone, but not before they get a lot worse.  The Harper government is the handmaiden of your disenfranchisement and  the leading thrust in the destruction of the democratic process.  We’re inevitably on our way to a world government with the global population having no voice in governance.  Oh, there may be elections in the future, but they will be token nods to the concepts of real democracy, just as in Canada today.  Our education system is designed largely by people who have drunk the Kool-Aid of national sovereignty, trade between countries and parliamentary political representation. Our youth know nothing about global capital accumulation and the inevitable intensive concentration of capital.  If anyone learns anything these days about how the world really works, it’s in spite of the education system not because of it.

Private capital accumulation created countries during the bourgeois revolutions in Europe starting in the 11th century or thereabouts, but that evolutionary process was not without variation.  Some European countries got a leg up with the early concentration of political power in fewer and fewer hands in larger and larger political units.  Countries as we know them slowly evolved out of the amalgamation of small, independent political units.  France was, for hundreds of years, made up of clans, the Breton, the Normand, the Alsaciens, the Savoyards, etc… Britain was, as we know, an amalgamation of many, sometimes warring factions, such as the Normans, the Saxons, the Angles, the Danes, the Welsh, Scottish, etc… In the 19th Century, these same countries imposed the same kind of political organization on much of the rest of the world with virtually all of Africa split up between European colonial powers between 1873 and 1896.  Same thing happened all over the rest of the world.  Now the process is being rationalized with the World Trade Organization, the World Bank and the International Monetary Fund among many other organizations encouraging the global release of restrictions on global capital accumulation.  The indebtedness of many countries is contrived and used as a means of disenfranchising national sovereignty, and that process proceeds apace.   As I noted above, private capital accumulation created countries, and it will lead to their destruction.

Look forward to a more concerted assault on national sovereignty by national governments and, in response, the need for greater and greater vigilance and social action.  What we’ve come to know as the Arab Spring will look like a picnic compared to what we will can expect in the future.  Syria is a case study in how national leadership can make war on its own people.  Expect more of that, much more.