Tuesday, June 27, 2017

State of the Province

State of the Province

In British Columbia, the pendulum swings with such velocity it destroys things, the only thing that destroys more is the rhetoric that moves it and resulting distortion of public perception.  The recent events in our provinces politics are no exception and they are a product of failing to build consensus on a foundation of reason. Once again, short-termism, election cycles, frivolous posturing and spin are taking us away from health and prosperity to waste and destruction. What is even more ridiculous, is that the only thing there is consensus on, is the use of a Carbon Tax as a deterrent to fossil fuel use; a proposition I can readily disprove and is just plain stupid. One watches in disbelief as contention fueled folly leads us like a pack of squabbling lemmings into the realm of ineffective policy.


I search every day for purity of thought in government policy – highest and best use, social goals, regional advantage, innovated education policy, disruptive economic policy, rural revitalization, rational medical policy – there is a void. There is a void because everybody is appeasing special interests and snuggling sacred cows; somehow we need to have the courage to question the status quo and design a future that holds prosperous people, social transcendence and a healthy environment.

To the socialists that clutch to mediocrity in the form of monolithic government institutions for security and salvation; I say that a truly generalised state of prosperity will never be found there and worse, institutions steal families and individuals. To the “top 1%” I say, pursue an exclusionary policy at your peril, Marx and Engels were created by exclusionary policy and their thinking has set motion several human disasters – disasters that can only be measured against the neglect of the working masses in the industrial revolution.  To the preservationists I say, we are the stewards of the earth now – the face of the earth is going to change, it is how you view that change that matters – Chernobyl, indisputably one of the largest disasters in history and it has created a wildlife refuge for short-lived mammals – that is everyone but us – it is a paradox that the thing you feared most generated what you love most – so have courage there is always a way forward. We live in the most beautiful and abundant place in the world, we can afford to be generous and we can afford to pursue a disruptive policy in the pursuit of a generalised state of prosperity and a healthy environment.



There are a lot of “inconvenient truth(s)” that people want to ignore – here’s one – if every resident of British Columbia ceased to exist today, every environmental concern presently at play on the global stage would continue unabated – the only thing lost would be BC’s bank of human capital that wants to protect the environment. So it makes no sense to “sacrifice” our children’s futures at the altar of example – but rather make sensible use of our natural abundance, to generate wealth, to lead the change we are seeking. If you believe for one moment that stopping the production of fossil fuels in Canada will somehow drive better behaviour in other actors – you are a na├»ve. The vast majority of other actors in the world will respond to one thing, less expensive energy - whether it helps the environment or not – so that is where the focus should be – viable alternatives.  A policy that works is made by people accepting reality, rather than people peddling altruism. Focus altruism on measured outcomes.



Here’s another “inconvenient truth”, there has never been a school in history that has taught a child, people teach children. There was a time that knowledge travelled painlessly from one generation to the next through the course of life - no institution in sight. We have created a collection of institutions that place a higher value on credentials and process, than on knowledge and that has translated into a society that places a higher value on the status of credentials than value added outcome.  Most education is really a supply management system, we have a situation where most people are underemployed or waiting to be employed. Clearly, one needs to guard against nihilism or destructive change and take care of people who now depend on various established systems for prosperity – the trend away from this reality is essential if we are to ever to transcend the constraints our institutions are putting on the human enterprise.  We can accomplish this if we provide more relevant, rapid and less costly knowledge transfer – and credentials that are measured by improved outcome rather than ink on a page.



Here’s another “inconvenient truth”, there are a collection of people who want to control human discourse – they want to centralise power and impose their view of the world. Their view is often outmoded or corrupted by various interests that are antithetical to progress. As a result, we have legislation with many very damaging externalities – public policy should have one goal – that the human enterprise is exercised in pursuit of the expansion of the human condition – happy, healthier and prosperous people; that is to say, the facilitation of the populous. Seed the economy in the way homestead policy built 1/3 of the United States net worth, by giving people opportunity to prosper.  We have many opportunities in British Columbia for such effort – forest renewal, the transition to “tree farming” from “tree extraction”, tourism, agriculture and high tech offer many opportunities for aggressive support by the government in the form of independent capitalization. Much of what we have is wasted on policy that lacks an extended vision –  and without a consensus, we shuffle from the pillar back to the post.  Here we need cast aside old modalities to let a thousand flowers bloom, to emerge as they will – we need only feed them.



Here’s another “inconvenient truth”, institutional inertia is taking us to the wrong place, nowhere is this truer than our medical system. Everyone has worked under failed strategy, one tactical change after another and the system is screaming for more, staff are overworked, resources are short - service is low, people are left wanting.  The concern here is the care and wellbeing of the population, as opposed to, preserving the medical system as it now exists. There is an irrationality that has gripped the Canadian populous on this issue and it is true here in British Columbia. We have to draw on all models – models beyond medical service delivery and design a system the provisions cutting edge care in abundance – it can be done because it is done in other areas of service.   



Old ideas, old divisions and old thinking will take us to old places. We need to have the courage to forge a way forward that takes the long view, that can be counted on, that recognizes reality rather than pandering to existing in the box thinkers, we need to fragment group think at its source – the education system, we need to first educate and then finance our young people, we need to realize that prosperity for the poor is prosperity for everyone, we need infrastructure, we need rational environment policy – what we’re getting is political squabbling and lost opportunity.

China & the New Silk Road - Lessons for Canada


I’m often away from the news these days and now and again I turn on the Radio. One day I turned on the radio and they were talking about the New Silk Road, a Chinese initiative to build “new” trade access to Europe and Africa. The initiative brings several Arab countries into the trade picture, looks to Russia and others. It is about infrastructure to connect trading regions, highways, railways etc.  It is a massive initiative, it is visionary, it is real leadership. In management we always look to find the BHAG – Big Hairy Audacious Goal, the New Silk Road is such a thing.

The details of the initiative are less important than fact that China has gotten started on something that is interregional, that reaches out to many “incompatible” national actors and so promises peace and prosperity in the amalgamation of interests under the banner of trade. China sceptics will say this is all in China’s interests, I agree, that is only a problem if you believe China’s interests are mutually exclusive to other actor’s interests – of course, this is in no way the case. Other actors will only participate if they see value in the exchange. It does signal, however, that the “hermit nation” China once was, has now graduated even more dramatically onto the world stage.

Do I see a threat in this, yes – less from the fact that China is doing it and more from the fact that the West is so complacent it has failed to offer such leadership. We use to “do” leadership, Suez Canal, Panama Canal, Breton Woods, British Empire … you’re getting the picture – the west has too many chubby and comfortable people avoiding making waves to lead anymore.  China, by contrast, is emerging, emerging with the most powerful combination of authoritarian government, national homogeneity and a vigorous corporatist culture – if that sounds familiar it should, it is the combination the built the British Empire. We, rightly, let China into our markets so that it could transition from a generally reduced state to be a player at par on the world stage – they and we have a responsibility to ensure measured progress; they in working toward liberating the masses and us in exercising ourselves robustly.

When the wall first fell, there was optimism in the world – we were talking about building a bridge over the Bearing Straight – a North America / Europe connector – I remember my heart leaping at the prospect. Have we wasted that opportunity by miss-management – perhaps? I think that Russia could be convinced to contemplate such a project – imagine the impact if you will – of a Trans-world highway with a cloverleaf exit to the New Silk Road and inter-modal ground transport from Montreal to Johannesburg. It would have been nice to have initiated such a proposal and hence been able to more effectively define the project, now our only option is to augment and then compete to gain influence in what promises to be one of the most revolutionary “infrastructure” projects in world history.

China has in the main developed infrastructure that pays, that is, national high-tech infrastructure, transportation infrastructure, human capital infrastructure – there has been some overkill in some areas certainly, however, the focus is correct. There is an adroitness in authoritarian government that can and has in Canada’s case, get lost in democracies. Further, there is longevity in policy, a course is plotted and taken to fruition. This can be a bad thing too, as was the case with the Great Leap Forward that resulted in some 30 million souls starving to death – there is a balance to be struck to be sure.  The embrace of market incentives and a free market stance generally and trade has made a dramatic difference in the progress of the country.

So what’s the take away from China’s success for us, Canada, the provinces and communities? First, sit down and clearly define a 25 year and 50-year infrastructure program founded on consensus from interest groups, commit to the program via legislation that isolates it from the rigours of the political process, and execute with vigour and integrity.

What would this infrastructure program look like?

1.       Education – no buildings – intellectual capital
a.       Intellectual Capital is infrastructure – I submit the most important infrastructure, the challenge we have is convincing people to donate time and energy toward valuing it and communicating that value in dollars and cents – the language universally understood by all.
2.       Big pipes for the internet and a world network of server stations
3.       Nationwide Communications
4.       Road, Rail, Sea and other transport – Transmission Lines, Pipe Lines etc.…
5.       Conservation, the general greening of infrastructure, infrastructure support for alternate energy sources.

China’s intellectual capital is growing exponentially, China generates 300,000 engineers annually, we do a tenth of that – engineers apply technology. The world’s knowledge is nearly doubling every 6 months – the fax machine was invented in WW2 and the technology only gained penetration into the population in the 1970s. We need people to convert a mountain of latent technology into usable products and services, it is the world’s weakest link – Canada needs to occupy this space. Disruptions like a transistor radio, the computer will become a weekly event – so knowledge acquisition can no longer have a massive institution attached to it with four, six and eight year time frames to action. In WW2, the time it took to train a piolet was measured in weeks, basic training was six weeks – they were farm boys who had just left the age of horse farming – surely we can get a doctor up and running faster than eight years or a carpenter faster than four years. We are warehousing our best, brightest and most vigorous population in universities for nearly a decade, think what they could do if they learned on the run as I have and many others have. It is far more efficient to set about a task and collect the knowledge needed for that task than to try and educate yourself for every eventuality or contingency; properly structured knowledge transfer can do this – self-paced, independent and freely accessible are the order of the day.

While China’s infrastructure program is less than perfect, it is better than ours. The Chinese transformation has lessons for us, we would be wise to avail ourselves of them and act decisively. If we meander along as we have, or let the political pendulum send us to and fro, the Chinese assent will be both wasted on us and will likely consume us. 

What's the issue with consumerism


There are a lot of groups in society that rail against consumerism. I have a hard time clearly interpreting the semantics in the discourse, some view consumerism as an attack on the earth, others see as a frivolous pan-societal addiction – an instant gratification fest – and others see both these elements as reasons to speak out against it. I am inclined to agree with both these positions, they are valid concerns. What is invalid, however, is attaching these concerns to a market economy. A market economy does manage to sell some stupid junk, but please remember, it provides a larger portion of essentials. Please examine the most commoditized markets – FOOD – it comes to those is market economies in such abundance that we get too much. You can argue that the world food distribution system is faulty because there is a bottom billion, please also remember, that the bottom billion, for the most part, are outside the Anglo / Euro economic sphere. – our task is to have them join use in prosperity.

The Dollar Store dilemma; trinkets abound and even the poor can buy them in abundance – one piece of plastic after another is an affront to the environment and effects an ill in the development of children, whereby, children exist in a mountain of frivolous simulation absent focused activity. There is a triple whammy here, there is the initial true waste of resources, there is the distraction from learning and there is an inter-generational conditioning factor whereby, children accept the culture of pacification by distraction. So consumerism in this context is a concern, it is a cultural element made possible by the efficiency of the market system. The solution is to change the cultural element, as opposed to the annihilation of the market economy. This phenomenon is in no way a call to Trotskyism, it is rather a call to enlighten the affected to the ills of their ways and to show them the path to a fulfilled and whole existence.

The challenge that emerges out of the fight against consumerism is, that people are oft times raising the alarm to the ill, to channel attention to a political objective, rather than, to seek solution within the context of contemporary society. They tend to point to consumerism as an inevitable extension of the market economy and offer it as a part of a complex of factors that doom humanity to ruin under the rubric of capitalism. I am here to say that consumerism is damaging and requires a concerted effort by civil society and government to educate and redirect, AND the market economy has delivered more prosperity to the populace than any other system in human history – so it should be maintained and enhanced rune under the rubric of capitalism.

More Thinking on the Subject

 

OPEN MARKETS - The Challenge they are Presented


I should premise my comments here by saying "I am a believer" in the market economy. I am a believer because I have watched it work so often and so well, and, conversely, I've seen other modalities fail profoundly. The Market economy is an extension of the natural inclination for human beings, to interface with the environment to further their wellbeing and the wellbeing of their offspring.  We live at the apex of human existence in Canada right now, look closely at what has gotten us here – good governance, family, effort and community – most importantly though is human enterprise.  Early in Canada's development, the government decided it needed people and it said to Europeans – come to Canada and we will give you land. Thousands answered the call, from all walks of life, from all nationalities and together we built a country that is widely considered the best in the world. Certainly, there were mistakes made, but even the negatively affected by the European focus are better off here in Canada than most people the world over. Quibble if you will over details, be disgruntled if you must, but remember if you will, the privilege that being Canadian grants.

When I say "business" people affected by modernity and related institutions often grimace – they think exploitation and a number of other thoughts they've been conditioned to think. Business, enterprise, capitalism is people finding ways to extract a livelihood and prosperity from the earth. There is at times a long and winding road between the earth and the modern financial system; it behoves us all to remember the interconnection.

Every layer of abstraction between the populous and the earth is an opportunity for someone to profit. People use regulation, legislation – governance generally to better themselves – this reality can create distortion between the fruitful utilisation of the "earth" or the highest and best use of the earth absent government intervention relative to what actually transpires. There are other considerations at play certainly, however, the challenges associated with economy mostly stem from distortions facilitated by governance. The question is, does policy, governance, fairly represent the actual activity of people OR, does policy, governance, distort the activity of people or misdirect benefit. The goal of all policy should be to permit the human enterprise to occur absent coercion or distortion and to facilitate human enterprise generally. The "bum rap" "capitalism" has gotten is the perception of many in the populous that "enterprise" has corrupted governance in a manner that is detrimental to the populous. It is true the corporations have lobbied effectively for their interests and hence they have gained distorting advantage in some areas, as it is true, that large labour organisations have lobbied effectively for their interests. The fact that these interests have gained prominence in legislation is no fault of the parties, it is the fault of leadership (governance) for failing to develop systems that govern to the highest and best good, rather than, governance that falls prey to special interest.

Increasingly, the two primary and most represented actors affecting the political space – big business and big labour – are drawing society as a whole toward a regulatory regime that suits their interests and in doing so, they are constraining and or distorting the market for the third leg of the economy which consists of artisans, artists, small business, self-employed, farmers etc. The fragmented nature of the third leg of the economy precludes as concentrated of a lobbying effort relative to the other two legs of the economy. This phenomenon, if left unaddressed, will result in an ever increasing concentration of wealth and influence flowing to large corporations, labour unions and government. We need large corporations, we need government and we have labour unions (due to bad governance and greed on the part of employers). The question becomes, what is the right mix?  It is my ardent desire to raise the alarm, that in Canada we are increasingly becoming institutionalised, that there is a trend away from self-reliant and independent individuals of the sort the third leg of the economy produces. This is occurring because of the combination of mass media, mass markets, mass education, massive lobby efforts and the resulting regulatory realities have created so many barriers to entry that "independents" have a difficult time entering markets or participating in an effective way. 

It is a Faustian circumstance that has incumbent actors in the market effectively precluding other entrants due to incumbents being able to control access to the market via regulation.  It is a paradox that the thing best for the advancement of the human condition, is most resisted by economic players – the best thing being disruption and or creative destruction – there is a vibrancy that emerges from one operational model falling and new more effective one filling its place that moves the human condition forward rapidly.  In a vibrant economy, absorption of new technologies is rapid and attempted by several actors generating a circumstance that heuristics provide the best outcome; dramatically contrasted to government institutions where absorptive capacity is extremely limited and so advancement is stagnated. 

An unfettered market is very effective at delivering goods and services at reduced managerial cost. In Canada the CRTC controls communications and media, they constrain the supply of related goods and services in a number of different ways and as a result, in Canada, we pay more for media and have less variety of product and service. 
An open market means that there is an opportunity for non-incumbents to enter readily, that regulation is directed only at health and safety and never supply of product or services. In the new world in order for new technology to find its way to use, we need open markets – regulations for health and safety are a must – otherwise, the government needs to stay out of the way.  

We have attained an exceptional standard of living in the West, in Canada especially, we have the solutions. The Anglo / European economic complex has enjoyed immense success. There are improvements to be made to build out prosperity to the populous generally under the rubric of the Anglo / European economic complex. The core of the system, the engine, the market, works. The markets work because they are nothing more than people doing what people have always done with a common modality of interface – that being a currency. 

CLICK BELOW - More Thoughts on the Subject

Government Scale & Accountability    

Thursday, June 1, 2017

Get Real on Climate Change and NO IMPACT Fossil Fuel Use

When contemplating the management of the transition to no impact from fossil fuel, one must begin with an accurate map of reality. In listening to the recent debate that has flared up as a product of recent election dynamics in British Columbia, one realises that the map of reality being relied on in many cases is grossly inaccurate.

(Carbon Tax fails to deter fossil fuel use - the premise it is presented under)

Reality one - we have to transition over a period of 40 to 50 years and it takes money to find other solutions. Reality two - there is insufficient fungibility in energy products to permit demand to be met by none fossil fuels. Reality three - whether Canada produces oil or not, world demand for oil remains the same and world consumption remains the same.

As a young person, I used to worry a lot about the issue of fossil fuel use. There were very dire predictions about the year 2000, the predictions were made, 2000 came and they simply never transpired; so from my perspective, the “scientists” have a credibility gap. It is important to note that the perception of a credibility gap and the absence of concern are different; I believe attention to the issue is required – I just have heard the rhetoric before. So remain calm and let's think this through, people need to tone down the rhetoric.



The climate change solution lies in a multitude of approaches from conservation, to mitigation, to new energy sources AND no impact fossil fuel use. The transition time needs to be contemplated in terms of decades - 40 to 50 years. It will take strong leadership and clear vision to get there. The reality is we will be calling on all solutions, including mitigation, because, the inertia associated with fossil fuel use is so strong. To fail to weigh this reality fully is folly, folly in finding a solution, folly in caring for the earth and folly in damaging our economy and by extension our ability to drive change.

What is concerning to me is the degree of isolation there is in the contemplation of the issue, there is an inclination to ignore reality.  The fossil fuel nihilists scream for the end of fossil fuels and offer no viable alternative. Please see below, this is where we are, this is the reality check – transition to alternatives is a 40 to 50-year process. There is a demand for fossil fuel, it will be filled, Canada can supply it and extract the wealth necessary to facilitate transition OR we can give the money to Nigeria, Iran, Saudi Arabia, Venezuela … it is more than stupid to curtail our industry, it is irresponsible in the extreme.



There is also an inclination within the environmental community to “reduce” the use of the natural environment. This inclination tends to shrink more than the impact on the earth, it tends also to reduce the expectation of possibility – a culture of limitation has evolved: in the 1950s we were going faster, farther, higher – in 2015 we are seeking to reduce movement. It is important to note, however, that the West has this inclination while many others are just forging ahead absent an aft glance. We can build pipelines and transport oil safely - and we have too for all the reasons stated above.


WE NEED TO GET OUR OIL TO MARKET 

The effort people spend fighting the Oil Industry should be directed to developing technology and the safe use of fossil fuel. People tend to forget how good of a fuel fossil fuel is and using is in no way the problem, emissions are. We could, as a transition strategy, devote efforts to the safe use of fossil fuel more aggressively. A far better strategy is to dedicate substantive resources to new technologies rather than fighting Canada's oil industry. 

Finally, I believe in a market-based economy, I believe in that the efficiency of business can be directed in a manner that harmonises human activity with the earth. Many of the people I listen to speak on the issue have a blind spot when it comes to economics, worse they have a prejudice against economic thinking. The very best way to understand people and their interface with the earth is to look at the capsulized view of human activity financial data provides.

Take a look at the two graphs below AND TELL ME WHY THE GOVERNMENT THINKS CARBON TAX WORKS.