Admirers and detractors of Margaret Thatcher can agree that she will be remembered as one of the key political architects of our times. Along with her soulmate, U.S. President Ronald Reagan, she broke decisively with the post-war Keynesian welfare state and ushered in the still-enduring age of neo-liberalism.
Comparing inequality between societies is useful, if only to remind us that inequality is not like gravity: there is no “law of inequality”. Political choices matter. True, worsening inequality trends across the OECD countries indicate important structural forces are at work in labour markets and in making it harder for governments to redistribute wealth. But significant variation persists between countries, meaning that we are not fated to become ever more deeply unequal.
Most Canadians would agree that all citizens should be able to develop their individual talents and capacities and to meet at least their basic needs. We may differ on just how much economic inequality we are prepared to tolerate, but we generally agree on the importance of equalizing opportunities for all of us to live meaningful and healthy lives.
There is probably no single better indicator of how we are doing as a society than life expectancy. This varies a lot among countries at different levels of development – and differs to a surprising degree among the rich advanced industrial countries.
Congratulations to Statistics Canada for providing an update on top incomes in Canada, and for launching two new CANSIM tables allowing researchers to dig into the details.
While the income share of the top 1 per cent has slipped slightly since the Great Recession – likely due in large part to the reduced value of exercised stock options – their share of all income (10.6 per cent in 2010) still stands well above the low of about 7 per cent that was reached in the early 1980s.
Nobel Prize winning economist and political theorist Amartya Sen points out that “every normative theory of social arrangements that has at all stood the test of time seems to demand equality of something – something that is regarded as particularly important in that theory.” Even extreme neo liberals such as Robert Nozick who reject the goal of distributive justice and favour a maximum role for free markets and a minimum role for democratic governments demand equality of individual rights to freely participate in an economy based upon predominantly private ownership of property and free markets. Capitalism is all about equal access to individual freedom to deploy labour and capital as individuals see fit, as opposed to pre liberal economic systems based upon slavery and serfdom.
On January 16, the Macdonald-Laurier Institute published a study by former Statistics Canada analyst Philip Cross, entitled “Dutch Disease, Canadian Cure.” It argues that “after 10 years of a muscular dollar, Canadian manufacturers have adapted well to a strong currency – demonstrating that Dutch Disease is economic myth rather than reality.”
Mr. Cross argues, quite reasonably, that high commodity prices are not the only reason for the strong appreciation of the Canadian dollar after 2000. However, as Mark Carney noted in a recent speech, they are an important part of the story, explaining about one half of the exchange rate appreciation.
I don’t know whether it’s smugness or indifference, but we Canadians can be a self-deluding lot. Growing inequality, portrayed recently in The Economist as a global scourge, when viewed from Canada, seems to be a problem only for others.
After all, it was other countries’ banks that crashed in 2008. It’s in southern Europe that tens of thousands are taking to the streets. And it was in France and the United States that recent elections were fought over the fact that those who created the mess, the top 1 per cent, are still getting big bonuses and low tax rates.
Posted by Peter Puxley · November 22, 2012 5:53 AM
"The ideas of economists and political philosophers … are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." - John Maynard Keynes, The General Theory of Employment Interest and Money (1936)
In economics, hope and faith coexist with great scientific pretension and also a deep desire for respectability. - J.K.Galbraith, New York Times Magazine (June 1970)
The policy community praises the ideal of “evidence-based” policy – policy with a solid research base. In the real world, however, we all know that public policies, as implemented, are more often than not only vaguely related to research results and the best available data.
When Red Tories hear that union leaders, trade union economists, academics and thoughtful politicians of the left (and Red Tories believe there are many) are planning to engage and advocate on the issue of inequality, we have cause to worry a little. We worry because their focus is often on legislating outcomes that must be glaringly and unabashedly equal. We also worry about polemicists on the far right who argue that most unequal outcomes happen because the winners worked harder, took more risks, had more skill and well, that's how freedom and free markets are supposed to work, even though many of the winners were winners because their parents were or because they were at the right place at the right time. Both biases are deeply unhelpful to finding genuine solutions to inequality.
Posted by NationBuilder Support · September 27, 2012 11:06 PM
TORONTO—Ed Broadbent is calling on Canadians to take action on income inequality. During a speech last night to a packed room of Economic Inequality.ca supporters in Toronto, the Broadbent Institute founder challenged Canadians to demand leadership from their governments in reducing inequality.
“The rise of extreme income inequality over the past two decades of major political, economic, and social change has taken us too far in the wrong direction,” explained Broadbent. “Values and politics clearly matter. Canadians can have a more equal, fair and just society, but we need to make better political choices.”
A majority of Canadians are ready to take action. The Broadbent Institute conducted research earlier this year which shows that 77% of Canadians are concerned about growing inequality, and are ready to do their share – including 2 of 3 Canadians who are willing to pay higher taxes to protect our social programs.
“Extreme income inequality is the result of the rise of precarious and low-paying jobs combined with a growing ‘winner-take-all’ corporate culture,” added Broadbent. “I call on Canadians across the country to demand that their governments take meaningful action to reduce inequality now.”
To launch the next phase of the Equality Project, the Broadbent Institute will release a new paper on income inequality in the coming weeks.
The Broadbent Institute seeks to equip the next generation of progressive thinkers and activists with the ideas and tools they need to build a more progressive Canada.