The rise and fall of globalization

As the sun sets on globalization, what will a new day bring? The new era will face challenges of rampant parochialism, environmental destruction, inequality and greed.

image: Timetoast.com

The dawn of globalization was unremarkable. Yanis Varoufakis, professor economics and former finance minister of Greece gives the date:

“On Aug. 15, 1971, then-president Richard Nixon announced the ejection of Europe and Japan from the dollar zone. Unnoticed by almost everyone, globalization was born on that summer day (Globe and Mail).”

Before Globalization, it was the dawning of a New Deal (1944). A clever plan, it gave America’s former enemies the resources to rebuild through arrangements such as the Marshall Plan. As an industrial power, the U.S. had shiny new things to sell; now Germany and Japan had money to buy them.

The New Deal ushered in a Golden Age of prosperity. Well-paying jobs, unionization, opportunity grew.  The middle class expanded and inequality shrank.

As a baby boomer, I remember that era. After I graduated from the Southern Alberta Institute of Technology in Electronics, I had a choice of well-paying secure, jobs. After I quit one job and traveled around the world, I easily found another.

The era of globalization in the 1970s promised to reduce global poverty. Before it began to rot at its core, it blushed with ambition.

“Mr. Nixon’s decision was founded on the refreshing lack of deficit phobia particular to American decision-makers,” says Varoufakis. “Unwilling to rein in deficits by imposing austerity . . . Washington stepped on the gas to boost them.”

World-wide prosperity also produced global industrialization. Americans went into debt to buy exports from Germany, Japan and later, China. The American administration didn’t seem to notice, or didn’t care, that cheap global labour was at the heart of industrial decay at home. Why should they care when money was pouring into the U.S. as well as cheap goods?

The flow of global money into the U.S. seems counterintuitive. If Americans were buying global goods, it would seem that the money should be flowing the other way. The magic of Wall Street made it happen.

The deregulation of banks was a catalyst for the financial wizardry of Wall Street. Global investors were attracted by higher interest rates generated by mystical, incomprehensible, investment devices such as derivatives. A lot of the investments went into loans to home-owners who had no way of repaying them.

Then, in 2008, the rabbit no longer emerged from the magician’s hat and the whole financial edifice fell apart.

All that remains of the sad tatters of globalization is massive inequality and loss of jobs in the Western world. Most money sits idle in the hands of the rich while the poor struggle without. Varoufakis characterizes it:

“Its crisis is due to too much money in the wrong hands. Humanity’s accumulated savings per capita are at the highest level in history.”

As globalization sinks below the horizon, two options emerge. One is the walled-state proposed by President Trump and the Brexiters in the U.K. The other is a Universal New Deal that redistributes global wealth, creates new jobs, and lifts the burden of consumer debt.

If such a new deal seems unlikely, it’s worth remembering that the first New Deal and globalization were as well. And if we need an issue to rally around and mobilize action, as World War II once was, we need look no further than the biggest threat to humanity: climate change.

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Self-administered death made easier

A new drug in Canada will make medically-assisted death easier. It can’t come soon enough.

image: Bayshore Healthcare

If I had a terminal illness that made my life a living hell, I would want medical assistance in dying (MAID). Since it has been legal in Canada since 2016, it should be easy. All I have to do is find a doctor who is willing to administer the drugs. And then make sure I’m living in the right place -that’s where things get tricky, as Horst Saffarek found out.

Horst Saffarek lived in a Catholic residential care facility in Comox, B.C. When his lungs began to fail, he wanted help in dying. The publicly-funded Catholic institution wouldn’t allow MAID at their facility, citing moral principles.

Horst was becoming frailer each day and breathing became difficult. His daughter, Lisa Saffarek, told CBC’s The Current:

“It’s scary, you know, especially when you can’t breathe, every moment is scary.”

Horst was faced with the choice of essentially suffocating to death or he could be transferred to a facility that allowed MAID. He was transferred to Nanaimo where he would have to wait ten days as required by law.

I can only imagine the terror that he was going through: struggling with every agonizing breath and seeing relief being delayed.

“Dad was obviously very frail,” said Lisa Saffarek, “We did need to transfer him. He was ended up, you know, his oxygen levels were falling, and we wanted to try and meet his wishes.”

The transfer from Comox to Nanaimo, an hour and a half ride by ambulance, was gruelling. Horst Saffarek died the day after the transfer without the comfort of MAID.

Not only was Horst Saffarek’s suffering needlessly prolonged, but his family felt anguish as well. Lisa and her sisters had planned to spend the last moments of their father together but they were robbed of that:

“But it just – it took away from us being able to celebrate dad and just to enjoy our last moments with him.”

The law protects doctors by allowing them to opt out of MAID. Institutions have no such legal option. Religious healthcare facilities receive public funding same way that others do. If a procedure is legal, and public funds are involved, how can an institution prohibit it?

In small centres like Comox, religious healthcare facilities are the only ones in town. Because they employees are not necessarily religious, and neither are the patients, the title “religious facility” loses meaning. In reality, they are public facilities with an historic religious origin.

The solution is to take matters into one’s hands. A new drug has been made available to make that happen. Secobarbital, the most common drug used in many countries, is now available in Canada. Unlike existing drugs that can take a long time, Secobarbital is fast-acting, doses are a relatively small in volume, and self-administration is easy.

Existing drugs can take hours, even days, to work. They taste bad. They don’t work if they cause nausea and vomiting, or when the patient falls asleep before consuming the large volume required.

For those who suffer from an agonizing terminal illness but live in remote or small communities where there is only one doctor who doesn’t provide MAID, or they live in a care home that decides to flout the law, Secobarbital could provide relief.

Horst Saffarek’s experience leaves me wondering why I should suffer the vagaries of the anachronistic legacy of institutions, and other’s moral values, that impose themselves on my life and death. Whose life is it, anyway?

 

 

The future of blockchain mining in B.C.

Blockchain mines look nothing like copper mines. They are banks of computer that toil away at solving complex calculations. Blockchain is the digital ledger used by many cryptocurrencies such as Bitcoin. Because the computers generate heat, they could be used to warm the greenhouses to grow the tonnes of marijuana needed for Canada’s budding legal market.

  image: coindesk.com

Blockchain is a revolutionary way of tracking secure, indelible transactions of any sort not just cryptocurrencies. Experts say it will revolutionize businesses in every field. Manav Gupta, chief technology officer of IBM Cloud Canada, is enthusiastic:

“We view blockchain as having the potential to change all of technological interactions the same way that the internet changed communication in the nineties (Walrus magazine, Jan/Feb, 2018).”

Where the value of Bitcoins is highly speculative, the value of blockchain is solid. Unfortunately, that doesn’t stop blockchain from being caught up in a goldrush mentality. Irrational investors are madly rushing into some dodgy speculations. Convinced that anything with “blockchain” in the title is “the next big thing,” investors threw $2 billion into blockchain startups worldwide. One company saw shares rise 394 per cent by just adding “blockchain” to its name.

Blockchain can be used to secure any vital records such as medical files, business deals, legal agreements, tracing shipping containers, farm-to-market food security; even professional and academic records which are now open to fraud. Walmart and Nestle have already invested in blockchain.

Bitcoin miners loan their computers to solve the complex blockchain calculations required for each transaction. Miners are paid in Bitcoins in return. Drew Taylor has a Bitcoin mining operation in his Montreal house. He earns about $3,000 a month and pays additional costs of $200 for electricity. The computers generate a lot of heat. “But essentially it is free heat for at least one room,” he told CBC Radio’s The Current.

The amount of power used for each Bitcoin transaction is shocking high. Alex de Vries monitors the power used in Bitcoin mining. Just one transaction uses as much energy as the average B.C. household uses in 13 days. That’s 300 kilowatt-hours for each transaction. Researchers are looking for ways to reduce the power consumption.

The best place to locate Bitcoin mines is in places where the electricity is cheap. Montreal has relatively cheap hydroelectricity. Iceland has a large mine because the majority of their energy comes from geothermal and steam. Unfortunately, not all cheap energy is as green. China and India do most of the mining where the electricity is cheap but produced by burning dirty coal.

Once B.C.’s Site C dam is completed we will have lots of cheap, surplus electricity that could be put to use in blockchain mining.

Blockchain mining is comparable to copper mining because both use a lot of electricity. Highland Valley mine near Kamloops uses as much electricity as 60,000 homes, about twice what Kamloops uses.

An advantage of blockchain mining is that a secondary industry could use the waste heat. Marijuana greenhouses could use the computers as heaters so that not one kilowatt hour would be wasted. In addition, blockchain mines could be located near the dam to avoid the cost of transmitting electricity.

The digital mine would employ workers close to home in small towns in B.C. Instead of using our dam power to run LNG compressors, we could put people to work mining digital dollars and growing marijuana for Canadian’s burgeoning market.

Minimum wage hike is boon to economy

Higher minimum wages are good for the economy but you would never know it from Ontario’s experience. Their hike to $14 dollars per hour has taken an ugly turn. Seattle’s experience was quite different.

image: Toronto Star

The upset in Ontario is centered on Tim Horton franchises. Cuts to benefits have triggered public outcry in support of employees. Demonstrations took place across Canada at Tim Horton shops last Friday organized by Leadnow.org.

The franchisees, themselves, have been abused by their owners: Brazil-based Restaurant Brands International Inc. RBI has been squeezing franchisees for more profits.

Franchisees in Canada have joined their American counterparts in suing the parent company. The Canadians formed the Great White North Franchisee Association and in their statement of claim, they complained:

“Since the time of the corporate takeover of Tim Hortons, the relationship between Tim Hortons and its franchisees has become more adversarial than amicable.”

It’s a toxic business plan that has left franchisees, employees, and customers with a bad taste in their mouth that a double-double won’t sweeten. The flap is damaging the iconic Tim Hortons brand.

Seattle’s experience was quite different. Employers took the wage increase to $15 dollars an hour as a challenge. Toronto-based Lending Loop surveyed of Seattle businesses. Their CEO Cato Pastoll explained: “It kind of forced people to make some just general good business decisions (Globe and Mail, October, 2017).”

Low wages discourage productivity because cheap labour can make inefficient businesses profitable. Higher productivity involves streamlining operations and introducing technology. It’s notable that these measures are changes that employers make -low productivity is not the result of “lazy” employees.

One Seattle furniture store eliminated low-wage entry level positions and empowered employees to become more productive. One employee was so motivated that he contacted condo owners and offered deals on furniture for new tenants. The store owner was pleased with the boost in morale: “Find out what makes your staff excited and empower them to be part of it with you,”

“It’s really easy to become angry and start acting in injudicious ways,” said an owner of a nail salon in Port Angeles, Washington. He and his wife could have cut back on staff, or turned them into commissioned workers, but they streamlined operations instead. The time taken for each procedure was standardized which meant that more clients could be booked. An automated time-keeping system eliminated the time to manually fill out time sheets. Under different circumstances, staff might have resented seeing more clients a day but with an increase in wages, they were more willing to focus on work.

Contrary to the calamity predicted by some doubtful business owners, higher minimum wages don’t result in more unemployment. Studies done by the Organization for Economic Co-operation and Development show those countries with higher wages shift employment from formerly low wage sectors such restaurants to higher wage areas such as technology.

The owners of Tim Hortons could improve profits though the introduction of technology.  I notice that McDonalds has automated kiosks where you can both order and pay for your meal.

Higher minimum wages are a boon to the economy because businesses save costs by keeping experienced workers and reducing training costs; productivity and profit margins are improved; and local economies are enhanced with worker’s new spending power.

His health, her health

Medications affect women differently than men but you wouldn’t know it from prescribed drugs.

Take the sleep drug Ambien, for example.  After the drug had been placed on the market, it was found to have a dramatically different effect on women. The U.S. Food and Drug Administration found that five times as many women were experiencing driving impairment eight hours after taking the drug. As a result, doctors now prescribe “sex-specific” Ambien which is a lower dose. In Canada the drug is sold under the name Sublinox. But sex-specific prescriptions are the exception rather than the rule.

Doctors prescribe the same drugs for men and women even though they have only been tested on men. Researchers have known about this weakness of drug trials for a long time. Dr. Marcia Stefanick, professor of medicine at Stanford University explains:

“Indeed, drug metabolism, tolerance, side effects and benefits differ significantly between the average man and woman for many widely prescribed medications, with women having a 50 to 70 per cent higher chance of adverse reaction (Scientific American, September, 2017).”

Despite knowing of the difference, few women are included in trials. In a review of 258 trials of cardiovascular treatments, only 27 per cent of the participants were women, and of those only one-third were reported by sex.

Despite years of “Red Dress” campaigns, most people and many physicians still think heart disease is a man’s disease. They are surprised to learn that heart disease is the number-one killer of women, far exceeding deaths from breast cancer. Physicians are less familiar with the symptoms of heart disease in women. In men, the main symptom is chest pain, whereas in women symptoms can include back pain, nausea, headache and dizziness. Women’s symptoms are seen as “atypical” because men don’t report them.

Chauvinistic blindness excludes half the population.

Heart disease also involves the build-up of plaque in the arteries. Men, and older women, tend to suffer from a blockage in one location. Younger women are more likely to have diffuse plaque along the entire artery with the same effect. Because a local block is not found in a younger woman, she could be diagnosed as “free from of heart disease” even though at risk of a fatal heart attack.

The other sex is sometimes overlooked in trials. Men are often neglected in studies for ailments thought to be unique to women. Osteoporosis, characterized by reduced bone strength, is considered a woman’s disease because white women are twice as likely to suffer a bone fracture as white men. As a result, fracture prevention trials include few men. But one-third of hip fractures are in men –and they have worse medical outcomes than women

Men are more susceptible to viral, bacterial, parasitic and fungal infections than women; the exception being sexually transmitted infections such as HIV and herpes which is more prevalent in women. However, women’s resistance to infection comes at a price. Women constitute 70 per cent of cases where a robust immune system attacks her own body in autoimmune diseases.

Professor Stefanick lauds the Canadian Institutes of Health Research for promoting the inclusion of sex and gender in drug trials and wishes the U.S.  Government would do the same. She adds:

“We need further mandates, through policy and funding restrictions, to ensure that female biology makes it into textbooks and testing protocols.”

Failure of NAFTA could be good for our creativity

It’s a toss-up on whether the North America Free Trade Agreement will survive. The fifth round of discussions has concluded in Mexico and Foreign Affairs Minister Christie Freeland is not optimistic. “Hope for the best and prepare for the worst and Canada is prepared for every eventuality,” she said.

     image: AgWeb.com

Failure of NAFTA will have only a slight negative economic impact. If the U.S. terminates NAFTA, as the unpredictable President Trump has threatened to do, trade would revert back to rules of the World Trade Organization. Under those rules, the added tariffs would only add 1.5 per cent of the cost of goods exported to the U.S. according to a study from the Canadian Centre for Policy Alternatives.

With “trade” in the title, you could think that’s what NAFTA about. And since Canada is a trading nation, you could conclude that NAFTA is vital to our economy. While NAFTA offers some advantages, it has a number of disadvantages such as the investor-state dispute settlement provisions that allows foreign firms to sue governments. And exports of Canadian softwood aren’t even covered.

However, trade deals like NAFTA are not primarily about trade. Trade takes place without them. These trade deals are actually about protection of corporate interests such as “intellectual property” which is not property in the usual sense. It’s a means of commodifying artistic and technological creations such as brands, music, movies, patents, and software.

America normally supports trade deals because they benefit most. The deals enforce corporate interests, and in the U.S. corporate interests = government interests. The reason that the U.S. is so interested in intellectual property is because it’s one of their biggest exports. Culture, what the U.S. calls entertainment, makes up one-third of American exports. American movies are seen in theatres around the world. U.S. pop songs are heard in the streets. Kids play American-made video games. American inventions such as the iPhone are ubiquitous.

An indication of how poorly President Trump understands the American economy is his rejection of the Trans-Pacific Partnership. It was a license for U.S. corporate giants to impose protection of intellectual property. I celebrated its demise after Trump cancelled the TPP but I had to wonder what (if) the president was thinking.

The demise of NAFTA would lift a weight off of Canadian creativity and allow it to flourish.

Michael Geist, Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa, was asked to advise a Senate Open Caucus meeting on modernizing NAFTA.

“To my surprise, the shift in focus to a post-NAFTA world was liberating, opening the door to considering Canadian policies that have previously been viewed as unattainable given intense U.S. pressure on intellectual property policy that favours ‘Americanization’ of global rules,” he said (Globe and Mail, October 20, 2017).

By loosening the grip of the U.S. on creativity, Canadians can market their innovations globally; innovations such as software developed by Blackberry for self-driving cars and recently sold to the Chinese firm Baidu.

Of course, our intellectual property needs protection. With the U.S. out of the way, international agreements can be struck that encourage innovation while protecting creators without one player holding a big stick.

Germany pays customers to use electricity

German power companies paid customers to use electricity on one hundred occasions in 2017. Companies paid customers a lot relative to what they normally receive -1,720 times more per kilowatt hour.

   photo: CleanTechnica

The reason why power companies were so eager to pay customers had to do with the wind. Wind turbines were generating too much power on the grid and they had to dump it quickly. Surplus electricity is a dangerous problem that has to be corrected quickly.

While wind turbines can be switched off quickly, fossil fuel and nuclear sources can’t. Power grid managers have to agile to compensate for gusty winds.

The problem with surplus electricity is that voltage quickly rises and that can damage equipment. Power grid engineering is complex but one thing is simple: power in equals power out. Managing the grid requires a balance in the production and consumption of electricity. The sum of all the power used by your TVs and toasters, and all that of your neighbour’s, equals the power produced by generators. If the power produced is more than what’s used, something has to give.  What gives is a precipitous rise in voltage.

Christmas Day, 2017, was pleasantly warm in Germany and the wind was strong. As well, demand was abnormally low being a holiday when factories and offices are shut down. Suddenly, the wind blew and power companies had to shed a lot of power from the grid. So the plea went out from power companies to start wasting electricity. Turn on your electric heaters and all the lights in your house. Open the doors. We’ll pay a lot is you do.

Too much wind power is not unforeseen. Germany spent $250 billion to develop wind turbines and they now produce 20 per cent of the country’s power. The remainder of Germany’s power comes from fossil fuels and nuclear.

Germany has obviously solved one part of the greenhouse gas problem by investing heavily in renewable sources but the other side remains unresolved –how to store surplus energy. Battery technology doesn’t have the capacity to store huge amounts of power. If it did, surplus wind power could have been stored.

Batteries will work on a smaller, household scale. Elon Musk sells his Tesla Powerwall battery for $7,000 and it holds enough power to run your house for about 3 days. Imagine being paid to store electricity and then to use it to supply your energy needs for days? In Germany, you’d be doing yourself and the power company a favour.

If you live in B.C., not so much. British Columbia has the enviable position of generating power by hydroelectricity; 95 per cent of it with the remainder by natural gas plants.

B.C. can’t reduce greenhouse gas emissions substantially by switching to wind and solar. Small scale installations in houses can reduce the cost of electricity for homeowners. Because dams hold stored power, storage of surplus electricity is not a problem.

Germany has reduced the burning of fossil fuels with wind and solar. Now, if they could only find some way to store the surplus electricity.