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If capitalism is broken, maybe it’s fixable

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FOR DECADES Joseph Stiglitz has argued that globalisation only works for a few, and government needs to reassert itself in terms of redistribution and regulation. Today the sources of his ire have grown more dire. Wealth inequality has become a hot-button political issue just as populists are on the march.

In Mr Sitglitz’s latest book, “People, Power, and Profits: Progressive Capitalism for an Age of Discontent,” he expands on his left-of-centre economic prescriptions. He believes that capitalism’s excesses can be tamed by the state providing a “public option” in areas like health care or mortgages when the market flounders.Get our daily newsletter

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As part of The Economist’s Open Future initiative, we conducted a short, written interview with Mr Stiglitz about his ideas. It is followed by an excerpt from his book, on what he calls “the transition to a postindustrial world.”

The Economist: You argue that right-wing populists aren’t wrong—capitalism is indeed rigged. How so?

Joseph Stiglitz: It’s rigged in the obvious sense: some—the rich and powerful and their children—have better opportunities than others, enabling the perpetuation of advantages. There is not the competitive, level playing-field described in textbooks: in sector after sector, there are a few dominant firms that create almost insurmountable barriers to entry. Too many become wealthy not by adding to the size of the nation’s economic pie, but by seizing from others a larger share, through exploitation, whether of market power, informational advantages or the vulnerabilities of others.

The Economist: How did we get into this mess? Is it all the Republicans’ fault, or can you place a pox on the Democrats’ house as well?

Mr Stiglitz: There has always been a battle: those with power and wealth want to maintain and augment it, even when it comes at the expense of others. They have resisted attempts to redress the imbalances, whether through antitrust laws, progressive taxation and expenditure policies, or labor legislation. But in a series of progressive reforms from the late 19th century through to President Johnson, progress was made in each of these arenas and America created the first middle-class society.

Then, with President Reagan, a new ideology came to prevail: leave everything to the market, the economy will grow, and everyone will be better off (what is called “trickle-down economics”). Instead, growth slowed and incomes for the vast majority stagnated. Some Democrats also bought into these ideologies, with accompanying policies of unfettered globalisation and financialisation.

Since Trump, however, the splits between the parties have grown ever larger, with the Republicans arguing for policies that would increase inequality and slow growth, as they increase the profits and power of corporations and further eviscerate that of workers and ordinary consumers.

Regulations to restrain banks and to protect the environment are being stripped away, taxes on ordinary Americans are being increased as those on corporations and the wealthy are being reduced, profits of pharmaceutical and health insurance companies are being increased as millions of more Americans are being left without health insurance. Life expectancy in America is, remarkably, in decline. And wages, adjusted for inflation, for people at the bottom of society remain where they were 60 years ago.

The Economist: You offer a wide range of solutions. Are there one or two that you see as a linchpin?

Mr Stiglitz: At the core is a new social contract, a new balance between the market, the state and civil society, based on what I call “progressive capitalism”. It channels the power of the market and creative entrepreneurship to enhance the well-being of society more generally. This will entail rewriting the rules of the economy, for instance, to curb market power of our 21st century tech and financial behemoths, to ensure that globalisation works for ordinary Americans, not just for corporations, and that the financial sector serves the economy rather than the other way around.

It entails increased government investment in technology, education and infrastructure—advances in science and technology and our ability to cooperate at scale. They are why our standards of living and life expectancies are so much higher today than they were 200 years ago.

With climate change providing an existential threat, both public programs and regulations have to be directed at creating a green economy. Essential in our ability to ensure that a middle-class life is accessible to most citizens will be a “public option,��� a government alternative, for instance, in the provision of mortgages, retirement security and medical care.

The Economist: Behind your reforms is a bigger role for the state. But if government is dysfunctional, endowing the state with more economic power is like giving a toddler a power-drill: who knows what damage will ensue? Aren’t you worried that your solutions fall flat if the system that caused the mess is incapable of managing the fixes?

Mr Stiglitz: All humans, and all human institutions, are fallible. That is true both in the private and public sectors: look at the devastation wrought by private banks in the 2008 crisis, a loss of GDP (from what the economy would otherwise have produced) cumulatively now estimated in Europe and America to be in excess of $10 trillion.

But government can and has worked well in many places, including in America. Both social security and Medicare have far lower administrative costs than private firms providing comparable services. Modern economics has made us sensitive to the underlying incentive problems in both the public and private sectors, providing tools to enhance efficiency and accountability. Oversight—including systems of checks and balances and an active free press—are essential, and this is again true, both in the private and the public sector.

The Economist: In an environment of post-fact politics, you marshal a lot of evidence to support your views—which counts for zilch if the political terrain disdains evidence. So how can your reforms stand a chance of being adopted, unless you go to battle armed with narrative, emotion, superficialities and a dash of embitterment?

Mr Stiglitz: I’m a Midwestern optimist—a position that is perhaps hard to maintain in the face of what has been occurring. I believe, however, that the vast majority of Americans can be moved by reason and evidence, but I also believe that “emotions” are also on the progressive side. There is something distinctly un-American about our un-level playing field, with 20% of American children growing up in poverty; or with so much power concentrated in the hands of so few firms—power that they repeatedly abuse.

Polls show that the vast majority of Americans support the policy positions which I advance in the book, and they want a restoration of true democracy. We have to curb the power of money in our politics and end the systematic attempts at disenfranchisement. Political engagement of the kind we saw in 2018—and the increasing awareness of young people of how much is at stake—hopefully is setting the stage for the return of the country to its progressive ideals.

Facilitating the Transition to a Postindustrial World
Excerpted from “People, Power, and Profits: Progressive Capitalism for an Age of Discontent” by Joseph Stiglitz (Allen Lane, 2019)

The US, like most countries in Europe, has been struggling to adapt to deindustrialization, globalization, and the other major shifts in its economy and society. This is another area where markets need the help of the government. Facilitating transition after the fact is extraordinarily costly and problematic. We should have done more to help those who were losing their jobs to globalization and advances in technology, but Republican ideology said no, let them fend for themselves. Government must anticipate the broad strokes of future structural shifts. Adapting our economy to climate change and to the changing demography are just two of many challenges of “transition” facing our economy and society in coming years. New technologies—including robotization and artificial intelligence— represent further challenges.

Recent and earlier episodes of such changes have generated one important lesson: the market on its own is not up to the task. There is a simple reason already explained: those most affected, for instance, those who are losing their jobs, are least able to fend for themselves. The changes often imply that their skills are less valuable. They may have to move to where the jobs are being created—and house prices in the growing parts of the country are often far higher. Even if, after training, their job prospects might be good, they don’t have the resources for retraining, and financial markets will typically only advance them the money at usurious interest rates. They lend at normal interest rates only to those who have good jobs, a good credit history, and good equity in their home—in other words, to those who don’t need the money.

Thus, there is an essential role for government to facilitate the transition, through what have been called active labor market policies. Such policies help retrain individuals for the new jobs and help them find new employment. Another tool for government is referred to as industrial policies, which help restructure the economy into the directions of the future and assist the creation and expansion of firms, especially small and medium-sized enterprises in these new sectors. Some countries, like those in Scandinavia, have demonstrated that well-designed active labor market and industrial policies can create jobs as fast as jobs get destroyed and can move people from the old jobs to the new. There have been failures, but that is because sufficient attention has not been paid to what makes for successful policies.

Place-based policies

As government pursues labor market and industrial policies, it needs to be sensitive to questions of location. Too often economists ignore the social and other capital that is built into a particular place. When jobs leave a place and move elsewhere, economists sometimes suggest that people should move too. But for many … with ties to families and friends, this is not so easy; and especially so since with the high costs of child care, many people depend on their parents so they can go to work. Research in recent years has highlighted the importance of social bonds, of community, in individuals’ well-being.

More generally, decisions about where to locate are not efficient. Too many people may want to crowd into the big urban centers, causing congestion and putting strains on local infrastructure. Among the reasons that factories moved to rural areas … was that wages were low, public education ensured that workers had enough skills nonetheless to be highly productive, and our infrastructure was sufficiently good that it was easy to get raw materials into the factories and the finished goods out. But some of the same forces that had led to low wages are now contributing to the problem of deindustrialization. Wages were low in part because of lack of mobility—with perfect mobility, wages (skill-adjusted) would be the same everywhere. But this lack of mobility is key to understanding why deindustrialization is so painful.

In short, we need policies focusing on particular places (cities or regions going through stress), in what are called place-based policies, to help restore and revitalize communities. Some countries have managed such policies extraordinarily well: Manchester, England, the textile capital of the world in the nineteenth century, has reinvented itself—with help from the UK government—as an educational and cultural center. It still may not be as relatively prosperous as it was in its heyday, but it is instructive to compare Manchester with Detroit, which the United States simply let go bankrupt.

Government played a central role in the transition from agriculture to a manufacturing economy; it now needs to play a similar role in the transition to the new economy of the twenty-first century.

Social Protection

One of the most important detractors from individual well-being is a sense of insecurity. Insecurity can also affect growth and productivity: individuals, worrying about whether they will be thrown out of their house or lose their job and only source of income, can’t focus on the tasks at work in the way they should. Those who feel more secure can undertake riskier activities, often with higher payoffs. In our complex society, we are constantly confronting risks. New technologies may take away jobs, even if they also provide new ones. Climate change itself presents untold new risks, as we have recently experienced with hurricanes and fires. Again, large risks like these and ones associated with unemployment, health, and retirement, are risks that markets do not handle well. In some cases, like unemployment and health insurance for the aged, markets simply do not provide insurance; in other cases, like retirement, they provide annuities only at high costs, and even then, without important provisions—such as adjustments for inflation. That is why almost all advanced countries provide social insurance to cover at least many of these risks.

Governments have become fairly proficient in providing this insurance—transaction costs for the US Social Security system are a fraction of those associated with comparable private insurance. We need to recognize, however, that there are large gaps in our system of social insurance, with many important risks still not being covered either by markets or by government.

[…]

Conclusions

Changes and reforms are necessary to achieve a more dynamic economy, growing faster, an economy that serves people, and not the other way around. Many of the policies are hardly novel—variants of these policies have worked successfully in other countries. It’s not the economics that are difficult. It’s the politics.

Even if we get the politics right and succeed in achieving the reforms described here, attaining a middle-class life may still be difficult: even families with reasonable jobs may not be able to have an adequate retirement or afford to send their children to college. Just as, traditionally, farmers helped each other raise a new barn, and just as families pull together in times of need, our society works best when everyone works together. The positive agenda of restoring growth for all is part of the broader ambition of making a middle-class life accessible to all.

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Toronto-area rapper blames systemic racism for months of misdiagnosis

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TORONTO — When Matthew John Derrick-Huie went to the doctor with chest pain and shortness of breath in 2017, he didn’t know he was about to embark on a two-year medical nightmare.

The 24-year-old Canadian rapper who goes by the stage name “John River,” told CTV News that he went to the emergency room five times before doctors took him seriously and on that fifth visit, they gave him a spinal tap to test for meningitis.

“I felt I had been trying and pushing so hard with every fibre in my body,” he said. “I’m not a quitter. I don’t think I’m weak. I don’t believe in giving up in any capacity in my life and even for me, I was unbelievably outmatched.

For the next 60 days, River visited family doctors, specialized clinics and emergency rooms as often as 30 times in search for an answer, but failed to find one. Some doctors told him he was suffering from anxiety and depression and prescribed him antidepressants, but he knew that wasn’t the issue.

“One physician told me that I was in a depressive state and I just didn’t realize,” he said.

“I said: ‘Respectfully, I lost my house twice when I was 17, my cousin who used to live with us was murdered…with all due respect, if I was going to have an anxious breakdown, I feel like it would’ve happened already.’”

It wasn’t until River’s family took to social media that they were able to find a doctor who would take a look at River’s case. The doctor soon discovered River’s brain was sagging in his skull due to low cerebrospinal fluid levels. The doctor believed River’s spinal canal had been leaking since that meningitis test two months prior. Cerebrospinal fluid leaks are a known complication of spinal tap procedures. 

”I understand (cerebrospinal fluid) leaks are what some people would call a rarity and a difficult diagnosis, but I don’t think that’s applicable here,” he said.

Rivers questions why doctors didn’t follow up with him after the original operation and given him an immediate treatment to fix the leaking.

“They knew they had given the patient a procedure in which you told him: ‘For the next two days, you may feel like you want to die.’ If you don’t proceed with a follow-up procedure, one would have to assume that that patient is still out there.”

River required eight months of recovery and also wonders why no one would listen to his pleas for help.

“I absolutely, unequivocally, no doubt, feel that it absolutely had to do with the fact I was a young black man,” he said.

River adds that he felt multiple instances of racism as he dealt with health-care providers, including one visit when a nurse accused him of visiting the hospital solely for drugs.

“She said to me: ‘I know you are here for drugs, why don’t you just tell us which drugs they are and we’ll expedite this process,’” he said. “How is it within a two-minute time period (that) you were able to come to the distinction that I either came to your hospital to abuse narcotics or to sell narcotics?”

River said it was only after he spoke publicly about his medical situation on Twitter that other members of the black community reached out to him with similar stories dating as far back as the 1970s.

Dr. Onye Nnorom, a family doctor who works with the University of Toronto to advance the health of black people in Canada, said River’s experience in the health-care system is one of many similar stories she’s come across.

“I do hear about experiences of racism and I’ve heard about it not only from my patients, but also from family members (and) from colleagues, so it is certainly a problem,” she said. “I think one of the biggest problems is that we’re not able to collect data to demonstrate it.”

Nnorom adds she’s also heard from black patients who’ve been accused of seeking drugs instead of medical care.

“The (health-care provider) is making assumptions about their appearance and thinking that they’re a drug dealer,” she said. “That’s going to affect the way the health-care provider is able to diagnose and treat the patient.

“From the patient’s end, that really makes a person feel like they’re not being respected.”

Racism within the Canadian health-care system is not only an issue among black Canadians. In 2017, an external review found several Indigenous women had felt pressured into sterilizing themselves immediately after childbirth at a hospital is Saskatchewan.

Additionally, a report concerning the case of Brian Sinclair, who died of a treatable bladder infection in 2008, found emergency staff at a hospital in Winnipeg ignored him for 34 hours because they assumed he was homeless or intoxicated.

In 2018, the Canadian Public Health Association acknowledged that “we are all either overtly or inadvertently racist and that the influence of this racism affects the health of individuals and populations” and offered several recommendations for all levels of government and health-care providers, including a complete review of their policies and to provide “system-wide anti-racism and anti-oppression training for all staff and volunteers.”

Kathleen Finlay, the CEO and founder of The Center for Patient Protection, called River’s treatment “appalling.” 

“Anytime a person presents multiple times to a hospital or a health-care provider for the same symptoms or worsening of their symptoms, that should send up big red flags, that should not be happening,” she said. “Fortunately, the outcome here worked out well, but patients can actually die in these situations.”

The Ontario Ministry of Health declined to comment directly about River’s case, but said in a statement Thursday that the government “is committed to providing all people in Ontario with a health-care system that is focused on them.”

“(The People’s Health Care Act, 2019) states that the health-care system should be centered around people, patients, their families, and should be guided by a commitment to equity and to the promotion of equitable health outcomes,” a spokesperson for the department wrote in the statement.

The ministry adds it does not collect data on a patient’s race that could be used to measure access to treatment.

River, who was nominated for a MuchMusic Video Award in 2015, took two years away from music to deal with his health situation. He has since returned to his promising career and plans to advocate for equality within the health-care system.

“The only thing that’s on my mind every day is how much pain I went through,” he said. “I could never consciously allow somebody else to go through what I went through.”

“If we save one life because of the pressure that we apply today, then I can say to myself: ‘OK, I did my job.’”

River’s first song since the ordeal, titled “Burn the Boats,” discusses his misdiagnosis and how he is now “back from the dead” following the complications.

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ROTHENBURGER: What we need in this country is a special racism court

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ANOTHER PERSONALITY LOST his job Friday over racist remarks.

The latest offender is Calgary Flames head coach Bill Peters, who resigned after revelations he used racist slurs against a player a decade ago.

The case is pretty typical when it comes to process. An indiscretion is revealed, social media lights up, an employer assesses the damage and acts accordingly. Loss of employment is often the resulting punishment.

There’s got to be a better way, a practical approach based on common criteria and effective assessment.

Aside from legislation against hate speech, the court of public opinion has mostly been in charge of defining racism and the appropriate punishment for those found guilty of it.

Social media are the vehicle of choice both for committing acts of racism and for meting out retribution, but racism means different things to different people.

Quoting the dictionary definition of racism is of little use, since we have a habit of either expanding it or contracting it to fit our own opinions for each situation. As an exercise, consider the following, and rank them according to your own view of the seriousness of the offence.

1. A hockey commentator chastises “you people” who immigrate to Canada but don’t wear poppies on Remembrance Day.

2. A prime minister is found to have worn “brownface” at costume parties.

3. An NHL coach makes racist remarks to a hockey player.

4. A woman taunts people sitting near her in a restaurant, saying they aren’t true Canadians.

Are any of these situations more egregious than the others? What factors do you consider in defining them as racist, or not, and in making your own judgment as to what should happen?

In each of those cases, apologies weren’t enough. Don Cherry tried to apologize but was fired anyway. Justin Trudeau apologized and almost, but not quite, lost his job. The woman in the restaurant apologized but was fired. Bill Peters apologized but was suspended, then resigned.

Immediacy isn’t always an extenuating factor, either. Cherry was immediately fired from his TV job, and so was the Lethbridge woman in the restaurant, but Trudeau’s and Peters’ indiscretions happened years ago. There seems no statute of limitations when the public’s indignation is aroused.

What about intentions? Does it matter if someone offends inadvertently, or is ignorance no excuse? It’s pretty clear, for example, that Trudeau wasn’t trying to be racist — he just likes to dress up on occasion, and has a habit of making bad choices.

Was Don Cherry intentionally being intolerant, or did he just get carried away with his fervor about the need to honour veterans? Many have said the latter. Did Cherry understand that “you people” is widely viewed as being racist, or is it just the way he speaks?

Clearly, there’s a difference between using racial slurs to intentionally belittle someone, but is the end result the same?

Premier John Horgan last week announced the creation of the Resilience BC Anti-Racism Network. By the sounds of it, it’s mostly an information, training and prevention program, not one that hands out punishment, but it might prove to be an important step.

The move came after Ravi Kahlon, the NDP MLA for Delta North, spent his summer travelling the province gathering ideas on how to deal with racism. He’s flying the idea of fining people for lesser offences relating to racism, the kind that currently don’t make it to court.

None of the examples I gave above was prosecuted other than by public opinion which, as I said, carries a lot of weight. The offences weren’t committed by organized hate groups, weren’t part of any campaign against minorities, didn’t involve violence.

But they have consequences, both to the perpetrator and the target. Society has decided it’s no longer the sort of thing we just put up with. The question is, how can their seriousness be defined, and how can appropriate repercussions be decided? There are no guidelines, and it would help if there were.

So, following up on Kahlon’s idea, what if a sort of bylaws court for hate offences was developed that could take care of things like the Burnaby convenience store case in which a customer berated clerks for not speaking English, or the examples above?

After all, we could take the position that racism is racism is racism, and one example is as ugly as the next, but is that really fair?

Suppose this special court operated under a set of criteria such as the ones I’ve mentioned. How much time has passed since the incident? Was an apology offered? Was the offence intentional? What language was used and to what degree are the terms offensive? Did it involve an overt slur? Did it occur in a public setting? Was it a first or second offence?

With those things in mind, our brief list might rank the restaurant rant and Peters’ insults ahead of the others, followed by Cherry and Trudeau. You might view it differently but the point is that one offence isn’t always the same as another, and that penalties should be somewhat different from one another.

Should those penalties involve community service? A public apology? Fines based on a system similar to traffic offences?

Such a system would have to be complaints based, and it would be a challenge to enforce. But each time it was, it would make a statement that if you engage in racist talk or actions, even though it falls short of violence or an all-out hate campaign, you’ll pay a price.

And, employers could make decisions based on these independent evaluations by the court system, instead of on the highly fallible court of public opinion.

Mel Rothenburger is a former mayor of Kamloops and newspaper editor. He writes five commentaries a week for CFJC Today, publishes the ArmchairMayor.ca opinion website, and is a director on the Thompson-Nicola Regional District board. He can be reached at mrothenburger@armchairmayor.ca.

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Remembering everyday violence against women and girls on Dec. 6

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It’s the National Day of Remembrance for the 14 women who were killed at the L’école Polytechnique in Montréal for being women and for being students in a discipline that, at the time, was wholly male-defined.

Across the nation and on different social media platforms, the remembrance is being marked by symbols and personal testimonies.

It’s a reminder that the violence has not ended despite the overworked sector of civil society — women on the front lines in shelters, rape crisis centres and counselling centres.

While the collective outpouring of grief that marks this day is anchored in a remembrance of the murders of women at the polytechnique, it is also imperative that high-profile acts of violence don’t overshadow the everyday, routine forms of violence that women suffer.

Six deaths every hour

The report of the Canadian Femicide Observatory for Justice and Accountability notes that around the world, every hour, six women are killed by men they know.

Femicide, or the killing of women because they are women, is underpinned by patriarchal ideologies that define how women should comport themselves. This ideology, grounded in the belief that men own women and that women need to be controlled, is also at the heart of gender inequities.

A woman places flowers on the monument dedicated to Maryse Leclair during a ceremony at Place du 6 décembre in Montréal on Dec. 6, 2003, to commemorate the 14 women slain by a gunman at l’École Polytechnique engineering school in 1989. THE CANADIAN PRESS/Paul Chiasson

Although the tragic events at the polytechnique occurred 30 years ago, women and girls in Canada today continue to suffer from the effects of patriarchal ideologies. They experience that patriarchy differently, depending on where they are located in the matrix of domination — the axes of race, class, gender, religion, age, ableism and sexuality that criss-cross society and heighten the vulnerabilities of some women more than others.

The Missing and Murdered Indigenous Women and Girls Inquiry reveals the extent to which Indigenous women, girls and LGBTQ+ are dehumanized and subjected to violence. Canadian statistics reveal that a woman is killed every five days by an intimate partner or a family member. Murder is the finality in the continuum of violence that women and girls experience.

Privilege does not shield

We can’t forget these deaths — the murders that are reported in short, terse paragraphs in the news, or that are accounted for only by organizations situated in particular communities, or remembered by close family and kin.

These deaths testify to the presence and power of patriarchal values and traditions. Similarly, while groups like the incels have attracted power and attention, they remain the tip of the iceberg. There are countless everyday expressions of male power and violence that work to constrain women.

Much like how the focus on racism that tends to be restricted to the actions of extreme hate groups and their acts of violence, the systemic, everyday racism that permeates society also needs to be named and dealt with.

The takeaway of the murders at the polytechnique is this — violence that is endemic and coursing through society is violence that crosses the boundaries of race, class, age, sexuality, gender and religion. It’s violence that is anchored in the view that women are inferior, less than men, and to be controlled by men.

The 14 women killed at the polytechnique were white, middle class and educated, and this did not shield them from patriarchal violence. What then about the women who have no such privileges? How best can we remember them?

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