Getting the order of operations right: Why the Ford government’s attempts to save the economy won’t work, and what to do about it

TL;DR: To save the economy, first you gotta deal with the pandemic. Muddling around will only weaken the economy’s foundations.

I’m a big fan of academics staying in their lane and sticking to their areas of expertise. Subject expertise in one area doesn’t make someone worth listening to in another; all too often, it just muddies the conversational waters.

Which is why, a few tweets of despair notwithstanding, I’ve tried to limit my comments on the global coronavirus pandemic to things that I actually know something about, such as what sound policymaking looks like, and why Canada’s COVID Alert App did not reflect that. It’s also why I’ve been very careful not to say whether someone should or shouldn’t download the app; I’m not qualified to make that call.

Much better for all of us, I think, to leave that heavy lifting to those medical experts who know what they’re actually talking about, such as Dr. David Fisman, Dr. Andrew Morris, André Picard, the Globe and Mail’s longstanding public-health columnist, and Toronto Star columnist Bruce Arthur, who’s put in the hard work needed to understand the issue. No need for me, or anyone else, to give second-hand medical advice.

What I’m saying is, I’m no epidemiologist. But I do know something about the intersection between the economy and politics. And it’s this understanding that has me increasingly concerned about the backwards approach the Ford government (and, to be fair, most of the rest of the country) to the pandemic. Its recently announced colour-coded strategy, which outlines levels of restrictions linked to COVID prevalence in the community, is designed to keep the economy open as long as possible.

This approach is objectionable for several reasons, not least of which is that it effectively requires consumers to subsidize businesses at the risk of theirs’ and others’ lives. Support by the same consumer/taxpayer through government assistance for these same businesses, would impose merely a financial cost, not a health one.

Beyond that nasty moral quandary, this strategy is doomed to fail, even on its own narrow economic terms. (Although I’d note that actual epidemiologists don’t think too much of this approach in health terms, either.) Ironically, by focusing on keeping the economy open despite a rising number of infections, the Ford government will almost certainly end up hurting the Ontario economy more in the long run.

Putting the economy in its proper place

The Ford government’s policies seem driven by the assumption that there is a health-economic activity tradeoff: If you impose restrictions on economic activity to stop the spread of COVID, the economy will tank. From this perspective, Ford’s actions make sense. If you close the economy, growth stops, people are put out of work: None of this is a good outcome. So we want to keep the economy growing as much as possible.

Beyond the fact that empirical economic studies have shown this to be a myth, there’s also the problem that this view is rooted in some deeply held, but incorrect, beliefs.

Tucked away in the back of this health-economy tradeoff assumption is another widely held assumption, that “the economy” is equivalent to our measures of economic growth, namely the Gross Domestic Product.

The problem with this view, as the Italian economist Mariana Mazzucato discusses in her essential book, The Value of Everything, is that this focus on narrow measures of economic health such as the GDP misses the reality that the market economy – the part of society to which we attach prices – is deeply dependent on the parts of society that aren’t captured by GDP. And if you neglect these parts of society, then your economy will suffer in the long run. Which is my bet about what’s going to happen in Ontario.

Government spending is an investment, not a cost

An example, drawn in part from Mazzucato’s book (which everyone in public life should read): As many others have highlighted, child rearing, by parents and teachers, is not fully captured by GDP measures. Household work, including child care, is only included if it’s done by paid nannies or housecleaners, while teachers’ work only shows up as a cost in the national accounts. Treating teachers’ work as a cost helps explain why there is always such pressure to cut spending on schools (something Ford has been very interested in doing). That neither is considered part of the economy, like bars or banquet halls, helps to explain why they have been treated so haphazardly by the Ford and other governments when devising their pandemic response.

Ignoring the role of parents in raising children and treating teaching as a cost to be minimized is a huge mistake, both economically and socially. Instead of treating these activities as costs, we need to think of them (this is one of Mazzucato’s main points) as the basic investments needed to run a functioning society. Productive investments are the foundation of future innovation and economic growth. In other situations, we want to encourage spending on investments (say, in computers, new energy plants or research and development) in order to create a robust economy and society.

The thing is, this is exactly what parents and schools do. Parents and schools are in the business of creating productive and responsible members of society – citizens and workers – upon whom our future economic and social health will depend. In short, you cannot have a well-functioning economy without strong support for families and schools. They are, without exaggeration, the foundation and engine of economic growth, prosperity and innovation.

To save the economy, secure the foundations of the economy

If we recognize that families and schools are investments and not costs, and that the non-economic part of society is the foundation of the entire economy, then we’re left with two main conclusions.

First, any sound economic policy needs to start by securing the foundations of the economy, in this case, families and schools, not just supply chains. Ensuring child care for essential workers, and spending the money needed to allow schools to stay open safely needs to come first in the health-and-economy order of operations. Education spending and family supports need to be seen as essential investments, not as costs to be minimized.

A similar argument can be made to argue for much more comprehensive support for business and workers. This may show up as a cost on the government’s balance sheet, and Conservative governments are particularly sensitive to safeguarding the public purse. But this spending needs to be thought of as an investment in the future health of the entire economy, not as a drain on the taxpayer. Leaving this job to consumers and the marketplace won’t work because to do so encourages disease transmission. Again, the economy can’t get back to normal with this disease running rampant. It’s an investment in future productivity.

Second, because a healthy economy depends on a healthy society, the appropriate health policy, from an economic perspective, is almost certainly a policy of eradication, not mitigation, while providing support to businesses and workers during the curve-crunching period. Countries like New Zealand, Australia and China, it would appear, got it right: COVID has to be stomped to the ground if we want the economy to recover.

Again, this inability to appreciate the importance of the family and of schools to the economy isn’t really a uniquely Ford or Conservative (big- and small-c) blind spot. It is the result of decades spent thinking too narrowly about how value creation happens, focusing exclusively on the private sector at the expense of the role of the family and the public sector as economic burdens, rather than drivers of productivity and innovation.

Addressing this blind spot is necessary to deal with any number of pressing issues, not least of which are promoting innovation and dealing with the climate crisis. For now, however, failure to get the order of operations right – deal with the pandemic, support businesses in the interim, save the economy – will continue to have costs measured not only in dollars, but in lives. The sad irony being that Ford’s policy, undertaken to save the economy will, in the end, almost certainly harm it.

Posted in Uncategorized | Tagged ,

What copyright scholars can learn from the Harper’s magazine “free speech” debacle

Nicholas Grossman has an excellent oped (h/t Mike Masnick) on that much (and justly) maligned Harper’s letter about cancel culture, free speech and stuff.

Grossman’s key point:

free speech defenders … miscast … their argument as a high-level defense of the principles that undergird a free society rather than what they’re actually doing: debating the parameters of socially-acceptable speech regarding race and gender.

To which I can only reply, precisely so.

The problem with the term “free speech” is that there are always always always rules governing speech. Always. The debate is never between free speech or no free speech because “free speech” is a floating signifier that boils down to “speech I agree with, or at least don’t feel threatened by.”

If people were clearer about this fundamental point – if we could get directly to discussing the parameters of socially acceptable speech – our public discourse could be improved in so many different areas. Not just with respect to political speech, the subject of Grossman’s article, but also in things like internet governance, where “internet freedom” plays the “free speech” role.

Copyright and the (non-existent) state of nature

And copyright, too. I’m writing an overview of copyright for a reference book and Grossman’s article articulated an uneasiness I’ve had about copyright scholarship that I’ve been trying to express for a while. In trying to explain what copyright is to neophytes, I’m struck, and not for the first time, how almost every analysis of copyright begins with the assumption that copyright imposes an artificial (state-created legal) restriction on the creation and dissemination of ideas, the corollary being that without copyright, ideas would be able to flow, well, freely.

The pithy apotheosis of this view is Lawrence Lessig’s comment praising “free culture,” not as in “free beer,” but as in “free speech.” Which should be our first hint that the state-of-nature understanding of knowledge and copyright just might have exactly the same problems as the “free speech” position.

Both the Lessig and the mainstream legal view of copyright is based on the assertion that knowledge is a public good (i.e., non-rival/non-excludable) in its natural state. As a former practicing economist, I understand the appeal of this approach, and it’s not like it’s 100% wrong, but I think it misstates the fundamental nature of knowledge – the thing being regulated here – in a way that has significant consequences for our understanding of copyright.

The thing is, just like political speech, commercial or creative speech is always governed by rules that determine who should be allowed to create, what they should be allowed to create, and who should be allowed to disseminate and access these works. There is no state of nature for creative speech, or knowledge for that matter. “Chewbacca” does not exist in the state of nature. Our favourite Wookie, and knowledge generally, are human creations. Creative speech, like all knowledge, is constituted by rules. Rules define. They set parameters. They include and exclude.

What I wonder is whether what we take as knowledge’s supposedly non-rival and non-excludable nature is actually an expression of a situation in which there are very loose limits on the controls that society is either willing or able to impose on the creation, dissemination and use of creative works. Stated in another way, there are always rules and norms at work in the constitution, dissemination and use of knowledge.

This is not just a twee academic exercise: it has real implications for how we consider knowledge regulation. Framing copyright as something imposed on otherwise “free” knowledge sets up a false dichotomy between restrictions and freedom. This false dichotomy, I think, accounts for much of why copyright debates, when they flare up, descend so easily into ideological grudge matches. Why do you hate artists? Why do you want to criminalize creativity? (Although the obscene amounts of money at stake also likely has something to do with it.)

Just as with Grossman’s “free speech” debate, strong-copyright proponents and copyright critics are not actually arguing about respect for artists versus cultural freedom, but about the parameters of socially acceptable commercial and creative speech. Which is how these things usually play out: the best writers highlight the role of balance between owners and users in copyright. And of course copyright law is all about dictating winners and losers. But that assumption about the state of nature is always there, lurking in the background.

Ditching the state of nature starting point in our copyright discussions would allow for a more honest, straightforward discussion and frank assessment of the stakes at play, rather than hiding behind empty platitudes such as “respect for the creator” or “free culture.” It would highlight that the choice is not between freedom and restriction, but between different rules.

This approach would start by asking the questions, What parameters – that is, permissions, limits and restrictions – should we place on creative and commercial speech? And, what groups, norms and forms of creative expression do we wish to favour, recognizing that there are always tradeoffs?

No monopoly on virtue

Starting our analyses from the acknowledgement that there are always rules, and that these rules will always advantage and disadvantage certain groups, norms and forms of creative expression, would hopefully force both strong-copyright proponents and copyright critics to realize that neither has a monopoly on virtue. It would recognize that even our insanely overprotective copyright regime – seriously, there’s not a person who has ever lived who ever made a decision about what to create based on whether their descendants will get a payout in 150 years – does not destroy creativity. It shapes it. It rewards some creators and punishes others.

Does the current copyright regime shape creativity in a positive or negative way? You can probably guess my overall position. But I’ll also acknowledge that “overly” (from one perspective) restrictive sampling rules pushed hiphop overall in a direction that it might not otherwise have gone (relying more on unidentifiable samples, some artists switching to live instrumental music). Is that a win or a loss?

There isn’t a definitive answer to that question, which must be worked out politically. Answering the question of where we should set the parameters of “socially acceptable speech” when it comes to creativity raises the same questions, with lower social stakes, as the current debates over race and gender. And like that debate, it’s highly political. But just as with the debate over political speech, it would be helpful if we could confront the real issues head-on in a way that recognizes that there are no optimal solutions, just trade-offs that will always favour some people and ideas over others.

Posted in copyright | Tagged , , , ,

Brad Mehldau: That’s the stuff

In late March 2010, I was seven months into my field work in Mexico City, living on my own in a tiny studio apartment at the back of a garage (an apartment complex’s garage, not a working garage) in the south of the city. Now, Mexico City is the bee’s knees, and I loved my time there. I even have fond memories of that apartment and the people I met there (hi, Evi and Hugo!). But being away from home for that long can wear you down.

One evening I decided to see a solo piano show. I figured it might be a nice way to relieve some of that stress. I didn’t recognize the name of the artist because I didn’t really follow the jazz scene.

It turned out to be a great decision. The show itself was an intimate performance in the wonderful Lunario of the Mexico City National Auditorium (both are fantastic venues — I saw Massive Attack, Franz Ferdinand and the Pet Shop Boys in the Auditorio Nacional and Au Revoir Simone, Bomba Estereo, and I think Hello Seahorse! at the Lunario). It turned out be be exactly what I needed: an evening of mellow and calming tuneage.

But what really made it a memorable evening was when, during one song, I thought I heard a song I recognized, and which sounded a lot like Smells Like Teen Spirit. Because that’s what it was.

The incongruity of hearing a Nirvana song (and Massive Attack’s Teardrop!) at a piano recital buoyed my spirit for days afterwards. I still smile when thinking of my unexpected delight at hearing it. What a fantastic show.

It was only afterwards that I discovered that pop covers are kind of Brad Mehldau’s thing, in addition to being a fantastically talented jazz pianist. I’ve been a fan ever since.

I bring this up today because as of a few hours ago, he has a new album out. Suite: April 2020 is his reaction to the pandemic isolation everyone’s been dealing with. And damned if he didn’t pull the same trick on me again!

It’s been a pretty intense week of writing, revisions and meetings — minor stuff compared to the epic upheavals occurring everywhere, but still stuff that one needs to deal with. Solo piano was exactly what I needed.

Anyway, I gave it a listen, and it’s wonderful. As music does sometimes, it faded into the background. Until, while I was intensely focusing on just the right wording for a paragraph on data governance, I hear a familiar melody…

And it’s Neil Young’s Don’t Let It Bring You Down. And immediately I’m back in the Lunario in Mexico City, same feeling of unexpected recognition, same wide smile on my face, the same lifting of tension I barely realized I was carrying.

If you like solo piano music, I can’t recommend it highly enough. I’m not saying that it will automatically make your life better, but I’m also not not saying that it won’t do that. It’s just great.

(You can hear Mehldau’s take on Smells Like Teen Spirit on his 2015 album 10 Years Solo Live, or listen below.)

Posted in Music | Tagged , ,

Reflections on an inflection point

Since we’re going through what seems to be a world-historic moment, I’m using this space to record my impressions about the current U.S., um, situation. We’ll see how well they’ll age.

If the United States makes it through the next couple of weeks, let alone to November, as a democracy, it will be in large part because the U.S. military refused to go along with Trump’s naked desire to send them into American cities to kill their fellow Americans. Which brings to mind two things.

The last American democratic guardrail?

First, in terms of the norms and institutions that were supposed to safeguard American democracy against Trump, this is really last-line-of-defence stuff. Trump has spent the past four years eviscerating one norm after another, bending the bureaucracy and intelligence agencies to his will to the extent that the Department of Justice now sees itself as Trump’s personal law firm, which is not the way it is supposed to work. By failing to convict him for obvious crimes in January, the Republican-controlled Senate made explicit the previously implicit deal to allow Trump to act with no checks on his increasingly unhinged actions.

But we finally might have discovered the last remaining democratic norm in the United States: the deeply ingrained reluctance of the U.S. military to intervene in domestic politics or to attack American citizens (and thank goodness for it).

The visceral reaction of American military leaders, and the public generally, to Trump’s self-interested military machinations reminds me of the 2017 Alabama Senate election, in which a deep-red state showed that it would rather give a Senate seat to a Democrat than someone accused of multiple instances of sexual assault and child molestation. That election turned out well for supporters of basic human decency and showed that there were some things that even diehard American partisans refuse to excuse.

We’ll see how the next few weeks go for American democracy, but at the moment there seem to be at least two norms that unite an otherwise-polarized country.

The military decides

The second thing has to do with the role of the military in this conflict. In unstable societies when it’s brought into play, military action or inaction is usually decisive in determining outcomes. This fundamental power of the military is often obscured in stable and (relatively) peaceful countries like Canada, with a long history of civilian command of the military. In such countries issues rarely get to the point where the military feels it is forced to choose between obeying or not obeying civilian orders.

That everyone is paying so much attention to which way the military will swing — will they obey Trump, their civilian Commander in Chief, or will they follow the Constitution? — betrays exactly how weak the U.S. state is at the moment. In an even halfway stable, non-failing state, things would never have gotten this far. We’re so used to thinking of the United States as a stable colossus that it can be hard to see these signs of weakness for what they are.

But they also highlight the enormously high stakes of the current moment. If the military follows the Commander-in-Chief into American streets (well, not follow, because Trump is a coward), all bets are off. Worst-case scenario, it would mean that the U.S. military, the sole holdout against Trumpism, would be under the control of a naked authoritarian (as shown by his actions this week). Such a move could well be the death knell for American democracy.

But if the military refuse to follow Trump’s wishes, and if Republican voters (even a minority of them) give Trump the Roy Moore cold shoulder, then there’s a good chance that Trump will effectively be neutered in his last few months in office.

At least that’s how it seems to me, from my side of the Canada-U.S. border. For what little it’s worth, I’m hopeful that the norm will hold. But there’s no certainty that it will.

Posted in Trump, U.S. election, United States | Tagged ,

Where are the calls for Trump to resign?

One of the most baffling aspects of U.S. politics over the past four years has been the continued and ongoing failure of American professional, media and academic elites to rise to the existential challenge that Donald Trump poses to the United States’ very existence as a democratic republic. As seriously as the United States’ political class takes Trump – and pretty much everyone worth listening to agrees that he’s bad news – one is left with the sense that even after four years of his increasingly unhinged and unshackled behaviour, they’re still not taking him seriously enough.

I’ve had that thought many times over the past four years, but it came to mind again this morning when I came across Ben Mathis-Lilley’s Slate article titled, “Remove Trump now.”

Because Mathis-Lilley is absolutely, 100%, obviously correct. Of course Trump must be removed from office immediately. He is a clear and present danger to the American political and social system and to the international order. Police brutality against blacks long predates Trump, but Trump is obviously making things worse.

No, that’s not quite right. He’s not just making things worse; he’s threatening to deploy the U.S. military against Americans. (Which he has a lot of leeway to do, even under current U.S. law.) That’s so obviously insane coming from a supposedly democratic country that it hardly bears mentioning. He’s goading the demonstrations along and he could very well irreversibly damage the U.S. political system. Once the military is in play against their own people, all bets are off.

And we’re not even talking about how many Americans have died because of his botched handling of the novel coronavirus pandemic. Until he’s removed from office, the United States will continue to suffer needless deaths from the pandemic and, likely, continued police-on-civilian violence and protests.

What’s striking about Mathis-Lilley’s clear-headedness, though, is how unusual it is to actually read, in a major U.S. publication, a call for Trump’s removal, when it’s so obviously and bleedingly necessary, and has been for years.

Where are the calls for Trump to resign? Where are the calls for Senators and Trump’s Cabinet to do their duty and remove him? Where are the Democrats’ ongoing investigations into every aspect of Trump’s obvious and ongoing criminal behaviour?

Because that’s what a functioning country with a self-respecting political class would do. Like, say, Brazil. (Although I see that George F. Will has also called for Trump’s removal.)

Blind spots

I’m not completely sure about why so few influential Americans have not been calling for Trump to resign, although I have a theory that it’s partially explained by demographics. Basically, if you’re white, male, professional and economically secure – and that’s a whole swath of the professional class right there – the more likely you are to see Trump as dangerous, but not as an extraordinary or existential threat. If you’re none of those, you’re closer to the line of fire, which helps to clarify things immensely.

To take a small example, when Run the Jewels released RTJ 3 on Christmas Day 2016, I very briefly wondered how Killer Mike and El-P (and especially Killer Mike) had been able to turn around an album that so ably captured the current mood, since so few people were predicting a Trump victory. Of course, I quickly realized that Mike and El didn’t have to do much themselves to capture the current mood, since Blacks in America were no strangers to the stress that White Americans now felt themselves under. There’s a reason why Charles Blow has been the most stridently anti-Trump New York Times columnist.

The blind spot, in general, runs deep, and every day offers a new example of how badly so many smart Americans are misreading the room. In today’s Globe and Mail, David Shribman (an American who currently teaches at McGill) acts as if the problem with Trump’s reactions to pervasive civil unrest is that he hasn’t heeded the lessons of his predecessors. In other words, he’s offering advice to a president (“These are the low-hanging fruit of the White House history gardens – reading ripe for the picking. Mr. President, gather ye rosebuds of wisdom while ye may.”) when it’s the president that’s inflaming the situation, and has been unceasingly for four years.

He is the problem. He has been the problem. He will continue to be the problem. Offering advice to Trump is a nonsensical strategy and a waste of time. It’s also the kind of advice you only offer if you don’t fully grasp the true danger of the situation.

In contrast, Gary Mason, also writing today, has the advantage of foreign eyes. He sees clearly that “Mr. Trump is a divider, not a healer. … With a long, hot summer still ahead, and an unstable bigot in charge, the country is entering times more perilous than I can remember.” That’s just about right.

So what are you going to do?

There’s a defeatist and somewhat smug cynicism to the four mantras that excuse all action to deal with the root of the problem. The Republicans control the Senate, and they won’t go against Trump’s base, so impeachment’s off the table. He’s surrounded by sycophants and relatives who would never turn on him. Plus, the House tried impeachment already and it didn’t work (see excuse #1). And – my favourite – Americans can throw him out in the election, five months from now (plus two more months during which time he’ll still be in power).

Can’t win; don’t try.

Leave aside the damage that an increasingly desperate Trump can do in seven months. These are cynical reasons because they pretend a political wisdom they don’t possess, the wisdom of the pundit that treats politics like a game played under the disinterested gaze of those for whom these events lack any significant weight.

They miss two crucial facts about politics, and what it means to be a citizen. The first is that everything can be bought into play. In politics, supposed inevitabilities are not laws of nature. Pressure can be brought to bear to change outcomes. Every one of those four excuses can be changed through the application of political pressure. And despite all its flaws, the U.S. political system is just about the most amenable in the world to political change.

In the quest to seem wise in the ways of the world, many observers have forgotten the second fact about politics and protests generally, which is that you don’t protest because you know you’re going to win, but because it’s the right thing to do. You do it because an injustice is taking place, and you have an obligation to do your best to remedy it. You do it to be able to keep your self-respect. You do it because it is how you stand up for your values.

Do you want to avoid normalizing Trump? Well, this is exactly how to do it: By refusing for an instant to accept that he is in any way qualified, capable or legitimately entitled (due to his numerous crimes and violations of his presidential oath) to be the U.S. president. Demand his resignation ceaselessly. Insist that those with the power to remove him do their jobs.

The United States is in an epic moment that will be recounted for generations, not just by historians, but by playwrights and storytellers. The Trump administration will get its Shakespearean measure of justice in the fullness of time. And while Shakespeare 2256 is writing his play about a fool king and the downfall of a once-proud country, people are going to look back at this moment and wonder why Americans were so complacent.

Time to #OccupyDC

As a Canadian and sometimes-scholar of U.S. politics, I usually focus on how U.S. policies affect Canada and global politics. It’s bloodless sport for a foreigner to point out the many, many, many foibles in U.S. politics when you don’t have any direct skin in the game. But I also live in the country next door, and Canada is the country most likely to bear the brunt if events go completely pear-shaped.

So take this advice, from a not-disinterested observer, for what it’s worth. Academics, op ed columnists, pundits, everyone with a platform: Please start demanding Trump’s resignation or his removal, not so much because you can make it happen now, but to create the conditions that can make it happen, and so you don’t come off too badly in the eyes of history and your children. Because it’s the only thing that will end your current nightmare and allow you to deal with the other ongoing nightmares like climate change, police brutality, income inequality, and so on.

Everyone else: Again, this is a suggestion from a White Canadian guy, so take it for what it’s worth, but channeling the current protests into a March on the White House could be a useful way to move from protest toward action. Call it #OccupyDC. It’s the perfect time for a long-term protest. The weather’s great, the economy’s shut down, and students (the engine of so much social change) will be doing their classes online in the Fall.

Surround the White House. Come up with a short list of, say, five demands (Demand #1: Trump’s resignation.), and stay there until they’re met. If you can’t make it to the White House, target every non-Romney Republican in the same way. Change the political facts.

That’s a big ask, and its success is far from guaranteed. But so long as Trump is in power, things will only get worse.

Posted in Trump, U.S. election, United States | Tagged , ,