Part 16 - WANTED: An All Inclusive Economic Model

Introduction

Just over a year ago, in our first blog titled, "Can We Revive the Canadian Economy?", we theorized that, "In the view of the dismal state of this country's affairs... one might infer that in spite of all its best efforts to revive the economy, the establishment must realize that is in a catch-22 situation, in so far as:

• On the one hand, the Canadian marketplace is severely handicapped by the extremely limited purchasing power meted out, to near or below poverty-line wage recipients, and doled out to the unemployed masses.
• On the other hand, governments cannot balance their respective budgets, due to this country's rapidly shrinking tax base, and the simultaneously increasing need for all types of welfare services.  One might also add that, Controllers and Treasurers -- looking for solution to deal with the problems -- appear to favour cutting vital services, as opposed to finding ways and means to increase their respective revenues."

A Year in Review

So what has changed over the past year?

• Literally all sectors of the economy, private and public, have been busy eliminating tens of thousands of jobs and management positions monthly.
• Many industries, previously proudly showcased as the jewels of the country, are either still being off-shored, on the chopping block, disintegrating, or vanishing altogether from the theatre of Canadian economy.
• Concurrently, the shrinking tax base is unable to keep up with the increasing demands placed on the social safety net, and is being dismantled, under the aegis of lack of affordability. 
• All in all, people are suffering tremendously and needlessly. Needlessly, because in spite of the potentially catastrophic situation, the ideologically bent establishment still turns a deaf year to realistic and scientifically proven proposals. Proposals that have the innate capacity to stop the downward economic trend and revive the economy.

But, Why Can't the Economy Recover?

There are a variety of contributors to explore:

• One reason is the fact that the economy has reached its saturation point and there is no incentive for further expansion.
• Another reason is that, throughout the years about 50% of consumers, that have an annual gross income of less than $30,000, have been steadily losing their purchasing power. As a result, the economy no longer requires as many workers to produce and deliver goods and services to the marketplace.
• Yet another reason is the ill advised entrepreneurial effort to reduce labour cost; not realizing that there is a direct correlation between the rate of wages and purchasing power.
• Let alone the fundamental reason, which is that the country's largest demographic group, labour/employees are totally excluded from the socio-econo-fiscal policy and decision-making process.
• On top of all of this, there is a deferential indifference in the public arena toward the economy.

So, What Should Be Done?

Several groups have struggled to address this question:

• Pro-establishment policy advisers, in response to this question, would adamantly insist that the economy is looking just fine and it should be left to its own devices to recover.
  To substantiate their claim, they would typically use an average statistical data, like the one that was published on July 17, 2012 in the "Folio, Net Worth" section of the Globe and Mail. This article indicated that, "the average Canadian household has $363,291 in net worth". The policy advisers hope that such answers will suffice. After all, the quoted amount of wealth should appear impressive to the casual observer.
• Independent analysts, however are not going to be impressed by the latter figure. They want to gain access to the entire spectrum of the "net worth folio". But such data is normally not available for the general public to scrutinize.
  Nevertheless, these no-axe-to-grind professionals know very well, that a percentile based "net worth" data set would reaffirm what their research, based on "income class" statistics has long revealed. Namely, that 50% of the active workforce, due to its limited purchasing power, is literally banned from the marketplace. Therefore, they suggest that it is time to seriously think about establishing an all-inclusive economic model, or face the possibility of an economic implosion.

In Search of a New Economic Model

For those who are resolutely committed to creating a new, all inclusive or socially responsible economic model, the concern is not about how to formulate such a model, but whether or not the subject is at all legitimate for public discussion.

So, in order to clear the decks, they intend to put the following question to this country's legal scholars: Is Canada democratically governed, or constitutionally ruled?

Are We Governed, or Ruled?

If Canada is democratically governed, then all segments of society – labour/employees, the unemployed, retirees, the disabled and other significant social groups, just like businesses/employers, professionals – should all equally have the right to form their own associations, to represent their respective members' interest directly, and to participate in the econo-political decision-making process as equal partners.

However, if labour/employees et al. – representing about 70% of society – are denied the right to form their respective association, then society cannot be considered free, and to all intents and purposes the excluded groups are discriminated against. And that, one would think, is patently illegal.

Competitive vs. Cooperative Model

Reviewing the history of business, it's difficult to understand why a century or so ago, presumably prudent leaders sitting at the helm of gigantic corporate empires, had not collectively decided to phase-out the competitive business model and phase-in a cooperative one. A model that is void of the combative "dog eat dog", "winner takes all", destructive conduct that has been responsible for innumerable catastrophic events… and even for international conflicts. As a result, who knows what's next in store?

An All-Inclusive Economic Model

To formulate an all-inclusive economic model, one might be tempted to look for inspiration from around the world, and synthesize such a model from some of the existing ones. In doing so, it might prove worthwhile to look at the examples of Switzerland's referendum system, Sweden's welfare arrangement, along with the socio-econo-fiscal policies of Singapore, Norway, Germany, France, Austria, and Australia. We could review this data to see how these countries have succeeded in creating an across-the-board, comfortable, and healthy standard of living for their respective citizenry.

Codetermination Difference

While remarkably, all the aforementioned countries have achieved their current, cut above, social economic status through rational and Democratic Ways and Means, some states have even to one degree or another, incorporated the principles of codetermination into their constitutions.

In essence, the Codetermination Law, as it has become known, has elevated these countries from a constitutionally ruled status to an all-inclusive and truly democratically governed one.

Mechanics of Reviving the Economy

In order to effectively revive the Canadian economy, the socio-econo-political establishment should:

• Abandon all of its costly efforts of competing on the global market, since by applying "2010 average hourly compensation costs in manufacturing" (aka labour costs) – as per US Bureau of Statistics – the odds are 35.67 to 1.36 against Canada.
• Formulate and implement a Codetermination Law. This law would guarantee the rights of all segments of society – including labour/employees, retirees, the unemployed, the disabled, and significant others – to become active participants in the econo-political decision-making process of this country.
• Phase-out the current economic model, which is based on competition, and phase-in a cooperative one, starting on the home front and then making a case for its international acceptance at the UN. Especially, since it is common knowledge that competition fosters domination, exploitation, destruction ... And all around waste. In contrast, cooperation delivers mutually acceptable and equitable results at a high degree of efficiency, through planning and division of labour.
• Concentrate on economic self-sufficiency, geared to the full use of the natural and human resources of this country, while keeping environmental protection always at the forefront – at least until the age-old "divide and conquer" system is replaced with a "divide and cooperate" policy.
• Diversify the economy to its fullest extent.
• Seek out markets for our surplus raw, semi-finished and finished products. This should be an organized carefully calibrated activity, but only as a sideline to the points above.
• Eliminate poverty and unemployment by:
• Applying the power of volunteerism to make home ownership affordable for the masses. Furthermore, this method could also yield many on-site job training and job creation opportunities.
• Putting EI funds into productive use by creating meaningful public or private contractual job creation programs.
• Increase the pay rate of low-wage earners by 30% to 5% across six lowest income classes to a maximum of $35,000 gross annual income. This measure alone, has the capacity to expand the economy and generate about 500,000 jobs within one year, without a significant change in the inflation rate.
• Introduce our scientifically proven plan for creating "full employment without any loss of income".
• Reject and renegotiate unfair trade agreements that interfere with codetermination principles and self-determination rights.

But, What If This Country Is Constitutionally Ruled?

If the legal scholars find that Canada is constitutionally ruled, then of course laborers/employees, the unemployed, the retirees, the disabled, and other significant social groups have no direct decision-making power to speak of.

That is to say that, about 70% of the public should just submit to whatever the ruling class decides for them; which may or may not include a gradual return to an era of slavery.

Summary

The "a year in review" section above clearly reinforces the initial findings of The Buerger Alliance, namely that the establishment is still in a catch-22 situation. And, the ongoing austerity program does not appear to have helped either.

However, the situation could easily be turned around and remedied by adapting an all-inclusive economic model, and by applying the principles of  the "codetermination and cooperative management model", aided by a host of mechanics to revive the economy, defined in detail through the articles published on our blog at buergeralliance.blogspot.com.

Read More

• Eric Reguly's article "Legends of Sleepy Hollow" – Report on Business, The Globe and Mail, July 2012. 
• Derek DeCloet's article "Clear the Track" – Report on Business, The Globe and Mail, July/August 2012.
• "The Unfair Trade: How our Broken Financial System Destroys the Middle Class", by M.J. Casey.
• "Power Inc." by Dave Rothkopf

Food for Thought

• On Free Trade: "The potential for abuse of the system is enormous" – Anthony Fell, Pres. of Dominion Securities Inc. 1987 – Report on Business, The Globe and Mail, July/August, 2012.
• On the US - Canada Free Trade Agreement: "This deal may be quite beneficial to business, especially to multinational corporations. But greater returns to business might not necessarily be in the best interest of the country." – Frank Stronach, Chairman, Magna International Inc. – RoB, The Globe and Mail, July/August 2012.
• On the Issue of Who Creates Jobs: "Customers create jobs. Middle-class customers with proper purchasing power" – Nick Hanaver, US Venture Capitalist – Fareed Zakaria, GPS, CNN, July 8, 2012.
• On the Subject of Tax Evasion: "Wealthy individuals may have been hiding as much as US$32 trillion offshore", according to Tax Justice Network, a UK-based organization – AFP/ Report on Business, The Globe and Mail, July 24, 2012.
• On the Topic of Recession: "Increase consumer purchasing power and the recession is over", Bill Moyers, Broadcaster - Aid to former US President, Lyndon Johnston.  – Public TV KCTS9, August 5, 2012.