Facebook is a Canadian utility

So many Canadians use Facebook that it should be regulated like any other Canadian utility. No broadcaster or telephone company would operate in Canada without government oversight. We should make it comply with our regulations as with other communications utilities.

      image: Tod Maffin

It’s the most-used Canadian social media. Ninety-four percent of Canadians aged 18 to 44 have a Facebook account. Overall, 84 per cent of us have an account and 80 per cent check the site daily according to The State of Social Media in Canada, 2017.

Now, Facebook is about to become more integrated into our lives with an announcement May 1, 2108, of a dating service. CEO Mark Zuckerberg said: “And if we are committed to building meaningful relationships, then this is perhaps the most meaningful of all.”

Facebook’s phenomenal rise has made it a monopoly. Canadian professors Andrew Clement and David Lyon say:

“In light of Facebook’s overwhelming grip on the social networking industry, the commissioner of competition should investigate the company for its monopolistic behaviour (Globe and Mail, April 23, 2018).”

Facebook’s ascent has left governments behind. Other communications industries have taken decades to mature and regulations have kept pace. Regulators have had time to insure that TV, radio and telephone companies meet Canadian standards of privacy, identity and sovereignty.

“The Canadian Radio-television and Telecommunications Commission (CRTC) should learn to treat social-media enterprises as utilities,” says Clement and Lyon.

There’s a lot of misunderstanding about the nature of Facebook’s grip. It seems so personal that there’s a conspiracy theory claiming Facebook is eavesdropping on people’s conversations through their smartphones and using that insight to serve ads. Tech expert Avery Swartz finds this ironic:

“People find it hard to believe that computers could know so much about them, even though they are voluntarily feeding their information into the machine. For private citizens, Facebook’s targeted advertising is creepy. For advertisers, it’s captivating (Globe and Mail, April 23, 2018).”

Facebook doesn’t sell users’ data to advertisers. It sells access to data, so advertisers can target their ads to specific audiences. No wonder that advertisers like Facebook. They can place an ad for as little as one dollar a day and ad campaigns can be created for $100.

Targeted advertising is hardly unique to Facebook. It’s been around much longer than the internet. Big businesses target consumers by placing ads on certain TV stations at specific times. They distribute flyers to targeted neighbourhoods.

However, the issue is not targeted advertising. It’s the way that Facebook treats Canadians and whether its practices align with the values and practices imposed on other communications utilities.

There’s been a campaign to #DeleteFacebook but given how integrated the social medium is in the lives of Canadians, it’s not likely to succeed. An Angus Reid survey revealed that only four per cent plan to delete their accounts.

“Given its business model,” add Clement and Lyon, “Facebook on its own cannot meet the objectives of Canadian media regulations – advancing Canada’s identity and sovereignty, its social and economic fabric, universal accessibility, neutrality, affordability, openness, public accountability and rights protection.”

Canadians like Facebook. Now’s the time help Facebook like Canadians by making it truly ours.

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The financialized self

We have become entrepreneurs in the era of globalization.

Each of us is a little business, left to navigate the risky world of investments and the stock market. As a consequence, the role that the state plays in the welfare of citizens has been reduced.

    image: Proxim Group

Now retirement depends on how well we strategize financial speculations. It used to be that pensions were determined by salary and years of service, now it’s risk management.

As financialized subjects, we must consider economic cost–benefit calculations as the natural criteria for evaluating life choices.

The ethos of the financialized self is one of expertise in planning and managing investments. The study of finance has become the key to success. Kyle Liao and Jonah Butovsky explain:

“In viewing their actions through the prism of financial literacy, the individual (entrepreneur) becomes personally and solely responsible for the day-to-day ‘business’ of their lives (CCPA Monitor, Nov/Dec, 2107).”

We are exposed to the machinations of capitalism. If we aren’t skilled in managing our finances, it’s not the fault of capitalism -it’s ours for not being shrewd investors. And when we seek financial advice, it’s from advisors who are also trying to claw their way to the top. We become keys to their success.

TV shows reflect the financialized self. They become grim lessons of what happens when you are not a shrewd manager. Money Moron and Til Debt Do Us Part profile the financial mistakes of ordinary families.

In CBC’s Dragon’s Den, aspiring entrepreneurs pitch business and investment ideas to a panel of venture capitalists (“Dragons”) in the hope of securing business financing and partnerships. U.S., contestants competed for a one-year $250,000 contract to run one of Donald Trump’s companies in The Apprentice. Trump’s pretence as an astute entrepreneur propelled him to the presidency.

The message in both shows is obvious: We, the clever people who have made it to the top, will judge you poor schmucks and your pathetic ideas. The format reminds me of the movie They Shoot Horses Don’t They? in which the lives of a group of contestants intertwine in an inhumanely gruelling dance marathon that is rigged for all to fail.

Of course, the rich are not always that clever. In the Great Recession of 2008, the geniuses who invented dubious investments brought the world to the brink of financial collapse. We, the reluctant citizen entrepreneurs, paid the price. The TSX lost 35 per cent of its value and it took five years just to get back where we started.

With interest rates so low on savings, and with wages that haven’t kept up with inflation, we have little option but to compete in the grim dance of capitalism. The FIRE industries (finance, insurance, and real estate) play the tunes.

Films, biographies, novels, television shows and online content about finance and financiers (lionized or demonized) are more popular than ever.

The inescapable logic of finance shapes public policy and social institutions, from hospitals and schools to scientific research labs, where the prime dictum is ‘risk management,’ ‘return on investment,’ and ‘market efficiency.’ The benefits of pure scientific research are abandoned.

The evolution into financialized citizens has had a profound effect on society. It reduces cooperation and treats everyone as competitors in the marketplace.

Basic income in the new world order

A basic income has been promoted from the left and right for years but nothing has come of it. Maybe new leaders and a new world order will change that.

  image: Steemit.com

Sometimes called a guaranteed annual income, it has been supported by progressives and neoliberals alike. Progressives argue that a basic income would help reduce poverty. Neoliberals say it decreases government bureaucracy by combining a number of social services like welfare, child benefits, employment insurance, and Old Age Security into one.

What politicians have failed to do, the leaders of technology may accomplish. They clearly see the loss of jobs due to automation. Innovators such Elon Musk, CEO of Tesla and Space X, says:

“There is a pretty good chance we end up with a universal basic income, or something like that, due to automation,” Musk told CNBC in an interview last year.

Facebook’s Mark Zuckerberg sees it differently. A vital society depends on everyone having the opportunity to create new ideas. That’s why billionaires like him should pay for a financial safety net that allows everyone to find their purpose.

“The greatest successes come from having the freedom to fail,” said Zuckerberg. “Now it’s our time to define a new social contract for our generation. We should explore ideas like universal basic income to give everyone a cushion to try new things.”

Zuckerberg is on to something when he suggests a new social contract. The failure to implement a basic income takes place in an old world order that values industrial jobs and resource extraction above those of human interaction. Industrial jobs have been reduced and more automation is on the way. Resource extraction is pushing the limits of what the earth can deliver, and pushing the conditions under which humans can live.

Jobs that involve human interaction, such as child and elder care workers, have been low-paying. What kind of crazy world order invented a system where monotonous, often dangerous, planet-threatening, industrial jobs pay more than jobs that nurture our future in children, and care for the frail and elderly?

A new world order would include Zuckerberg’s transfer to the poor through a new social contract and much more. Former Greek finance minister Yanis Varoufakis envisions an end to globalization and the start of a new era in which a basic income would be part:

“And we need a universal basic dividend that would be administered by the New Bretton Woods institutions and funded by a percentage of big tech shares deposited in a world wealth fund.”

By Bretton Woods Institutions, he means the World Bank and the International Monetary Fund. They helped rebuild the shattered postwar economy and to promote international economic cooperation.

Varoufakis is leading the post-globalization era in Europe with The Democracy in Europe Movement 2025. President Trump (don’t laugh) is leading the post-globalization era in the U.S.

Trump’s grip on reality may be somewhat tenuous but he does understand turmoil; he thrives on the thrill of the circus. His constituents have had it up to here with the existing order. Trump is tearing globalization apart with a world tariff-war.

These are exciting times. Where politicians failed, maybe tech leaders, global visionaries and clowns will excel.

 

The multi-tent government of B.C.

Big-tent parties are standard in politics but in government, they rule from a small room.

Image: TentPictures.com

Getting as many voters into your tent ensures a win in the first-past-the-post system. Once elected, a relatively small group will determine the direction of government. A smart leader will pick cabinet members with diverse opinions. An arrogant leader will dictate the agenda.

Site C dam was one of those ideas that should have been halted early once it became obvious it wasn’t needed. Former Premier Christy Clark blindly proceeded with it.

For all who could see, it was doomed.  Even to me, it was obvious. Three years ago, I wrote:

“An independent review of the project found that BC Hydro could supply the province with electricity, without the new dam, with modest growth in LNG production, until 2028.”

Clark forged ahead with Site C dam in the face of calamity, even as markets for LNG collapsed.

Premier Horgan was left with a no-win situation. If he cancelled Site C, he would make the thousands of unionized workers unhappy. If he approved it, it would make environmentalists unhappy. Horgan chose the pragmatic solution. David Eby, B.C.’s Attorney General, explains.

“The strategies of the previous government to avoid oversight and push the project ‘past the point of no return’ with the hope, achieved, of visiting financial ruin on the books of any government that would seek to cancel it, are unforgivable.”

The cost of competing dam, Eby says, was the same as cancelling it; except in the first case you end up with an asset, essentially a mortgage paid over 70 years. Cancelling it would result in a debt, leaving the government with less money to spend on health, schools.

Horgan’s decision was sure to disappoint. You would think his fragile government would be doomed. However, Green leader Andrew Weaver is not keen to take down the government any time soon for two reasons. No one wants another election.

And both the NDP and Greens are eager to see proportional representation (PR) come to B.C. Since minority governments are typical in PR, it’s in the best interests of both the NDP and Green Party to see this government last as a demonstration that minority governments work.

Multi-tent governments can hold opposing views. While the overarching progressive banner would fly over government, different flags can fly over each tent. Pragmatists can huddle in one tent and environmentalists in another, grumbling at the other but placated in the comfort that they share the same basic values of fair wages, poverty reduction, human rights, and equality.

Multi-tent governments are a novelty in Canada. If a faction in one tent feels betrayed, they can vote to be part of the other tent in the next election –essentially an opposition built into government. With a divergence of ideas, the best plan is more likely to prevail.

Had a multi-tent government been in place when the BC Liberals were in power, Site C would probably not have proceeded. Instead, a premier with a big ego and tunnel-vision pushed the plan beyond the point of no return.

B.C. Government offers help to opposition in drafting bills

There’s more than practicality and clever politics behind the government’s offer to help the opposition to draft winning bills.

B.C. Attorney General David Eby (right). Photo: CBC

As a practical matter, it’s inevitable that opposition parties will get together and propose legislation that the government disagrees with. Since the Green and BC Liberal members outnumber the NDP, the proposed legislation would pass.

If they’re going to pass, the bills should be well-written. Attorney-General David Eby says:

“It’s an art to draft effective legislation, and we want to make sure the other parties have access to the professionals, if they are putting forward amendments that might actually pass (Globe and Mail, Oct. 18, 2017).”

The offer is politically clever because even well-drafted bills may never make it because the government has the power to call the bill to be debated or not. It could simply expire at the end of the current sitting. In fact, that’s what happens to most private-members bills –the government ignores them and they go away.

If the bill passes, it’s because the government wants, or will allow, it to pass. BC Green Leader Andrew Weaver’s private-member bill is a good example. It would allow ride-hailing companies such as Lyft and Uber into the provincial market. The BC Liberals are in favour of Weaver’s private-member bill. The NDP want to “study” it further because some supporters are not in favour of the gig economy.

If Weaver’s bill is allowed to pass, the NDP can have it both ways: constituents who like Lyft and Uber will be pleased, and to those who are opposed the NDP can say “the opposition made us do it.”

Andrew Wilkinson, the BC Liberal critic for the Attorney-General, is suspicious:

“It’s a trap,” he said. “It’s designed to make the Greens feel they are involved in the legislative process. BC Liberals recognize this as a false promise.”

Beyond practicality and clever politics, there is electoral reform to consider. The NDP and Greens are committed to electoral reform through proportional representation (PR).

The advantage to Greens is obvious.  They won only three per cent of the seats with 17 per cent of the popular vote. They could have won 15 seats based on PR (the actual number dependent on the model of PR.)

The existing system of voting hasn’t worked that well for the BC NDP, either. Since its founding in 1933, the NDP has only formed government for 13 out of 84 years. Their chances are greater under PR. In the last election, 57 per cent of British Columbians voted Green or NDP. Proportional representation often results in minority governments and that would put the NDP in power.

The BC Liberals oppose PR because division of the progressive vote puts them in power.

Electoral reform is more likely to pass in the next referendum with support of the NDP government in educating the public –support that the BC Liberals didn’t provide in the first two referenda.

The offer of help to opposition parties demonstrates that minority governments can work. Sonia Furstenau, Green’s spokeswoman for electoral reform, is enthused:

“This is great. This is a step toward having a legislature where all 87 members have the capacity to contribute to policy making. This is what democracy should look like.”

Cry for Venezuela

The dream of a socialist Venezuela has turned into a nightmare.

It’s depressing to see the disintegration of President Hugo Chávez’s attempt at political reform. Chávez, elected in 1999, was part of the “pink tide” that swept Latin America in the 2000s. He was one of the three musketeers of leftist governments in South America which included Lula da Silva of Brazil and Evo Morales of Bolivia.

The three denounced the Washington consensus of the 1990s which saw neo-liberal policies implemented: privatization of public companies, cuts to public spending on education and health care, foreign investment, and free market strategies.

The Neo-liberal experiment in the Latin Americas collapsed by the end of the 1990’s, leaving unemployment, corruption, inflation and increased inequality. Strained relations with the U.S. left an opportunity for China to partner with leftist governments.

The seeds of Venezuela’s collapse were sown from the start of Chávez’s presidency. Part of it had to do with the ego of the populist president. He believed that he was the people’s true champion and to ensure that he remained in power, he abolished the legislature’s upper house. Despite his public rhetoric of democracy, Chávez was consolidating power in himself.

Chávez’s policies were popular as many were lifted out of poverty with food subsidies, education, and welfare; all funded by the state-run oil company. But things went downhill after the workers of the oil company went on strike in 2002. Chávez fired 18,000 of them and replaced them with 100,000 of his supporters. Since the new workers had few of the technical and managerial skills necessary to run the plant, production fell even as global oil prices boomed.

To make up for falling oil revenues, Chávez borrowed money to fund popular programs leaving Venezuela the most indebted country in the world.

Chávez’s successor, President Nicolas Maduro, worsened the crisis. Unable to pay for subsidies and welfare programs, he printed money. This drove up inflation making basic goods unaffordable. He instituted price controls and fixed the currency exchange rate, so that imports became prohibitively expensive. Businesses shut down. Maduro printed more money, and inflation grew again. Food became scarce. Unrest deepened, and Maduro’s survival grew more contingent on handouts he could not afford.

In a country with the world’s largest proven oil reserves, food has grown so scarce that three of four citizens reported a weight loss averaging 19 pounds in a year.

The collapse of Venezuela’s economy surpasses the Great Depression of the dirty thirties says Ricardo Hausmann, former minister of planning of Venezuela:

“Put another way, Venezuela’s economic catastrophe dwarfs any in the history of the U.S., Western Europe or the rest of Latin America.”

Where words fail to describe the calamity, numbers help. Instead of thinking of lost of wages in currency, think of them as measured in the cheapest source of calories. Minimum wage, so measured, declined to just 7,005 calories per day. This is insufficient to feed a family of five, assuming that all the income is spent to buy the cheapest calories. One-half of Venezuela works at minimum wages.

City streets are marked by black markets and violence. The last reported murder rate, in 2014, was equivalent to the civilian casualty rate in 2004 Iraq.

Venezuela’s heartbreaking fall leaves dreamers of a better world in mourning.

Good riddance to B.C. LNG

There were lots of things wrong with former Premier Christy Clark’s plan to produce liquefied natural gas but let me start with the good.

image: the Tyee

At least it was a plan that labour and business could agree to. It was a provincial strategy that had workers and industry pulling together in the same direction.

It was an ambitious plan but unrealistic from the start. Markets for were weak and no one wanted to develop the plants. Now one of the last players, Petronas, has pulled the plug.

I can only speculate why they bailed out only one week after the BC Liberals were defeated. Was there some deal with the Clark government to provide concessions such that the LNG plant would be built regardless of whether it was viable? It’s not inconceivable considering how much political capital Clark had invested in the project.

Or was it because of Canada’s so-called anti-business climate, including high taxes, environmental reviews, and Indigenous land claims? Instead of recriminations, let’s celebrate the passage of Petronas says economist Jim Stanford.

Stanford has a unique perspective of LNG projects in B.C. and Australia. He’s a professor at McMaster University in Hamilton, Ontario, and lives in Sydney, Australia.

“In fact,” says Stanford, “far from blaming government red tape for the collapse of this misguided project, we should be collectively grateful. Those rules likely saved us from wasting tens of billions of dollars on the biggest white elephant in Canadian history.”

Stanford’s analysis shoots down an impression I had. I wrote that Australia was a LNG success story and that Australia’s early entry into the market was why B.C.’s plants were doomed. I now realize that Australia’s experience was not as rosy as I thought.

When Asian gas prices started to surge in 2009, Australia decided to chase after those markets. Unlike Canada, Australian developers faced few environmental hurdles and Australia’s Indigenous people had little negotiating power.

What followed was a spectacular construction boom in which $200 billion Australian was spent on LNG plants.

The boom had a dramatic effect on Australia’s economy. Their dollar, now at par with Canada, spiked up to $1.30, resulting in what economists call the “Dutch disease.” When Australia’s currency rose dramatically, the price other countries paid for Australia’s products rose. As well, imports were cheaper. Exports fell, imports rose and Australian factories could no longer compete. Australia became deindustrialized including the shutdown of their auto industry.

With the drop in gas prices, Australia’s LNG online plants are marginal. Boom towns that sprung up during the construction years are becoming ghost towns. Housing prices have collapsed.

Gas plants are selling into markets at discounted prices. Unlike Canada, Australian plants don’t have to supply the country first and so, ironically, there is a shortage of gas in Australia and a glut of gas on world markets. Domestic prices have doubled because of diversion to export markets.

B.C. has no economic strategy. Only one per cent of our GDP comes from mining, oil and gas and most from finance and real estate.

Our new NDP government faces a challenge. In our polarized political climate, unifying strategies are rare. Just ask former Premier Clark.