Category: Economics

Matters of money

House prices in Canada

Many journalistic sources have been commenting on the possibility that house prices in Canada have risen at unsustainable rates. Recently, The Economist printed:

Household debt has climbed to almost 170% of post-tax income. House prices rose by 20% in the year to April. Looked at relative to rents, they have deviated from their long-run average by more than any other big country The Economist covers in its global house-price index. In Toronto, one of two cities, along with Vancouver, where the boom has been concentrated, rental yields are barely above the cost of borrowing, even though interest rates are at record lows. In its twice-yearly health-check on the financial system, published this month, the Bank of Canada concluded that “extrapolative expectations” are a feature of the market. In other words, people are buying because they hope, or fear, that prices will keep rising.

They also note that house price inflation in Toronto is above 30%.

To me, a lot of this coverage seems to miss the link between house price inflation and global wealth inequality. People who own valuable assets have, in many cases, seen their wealth rise rapidly, while those reliant on wages have seen it stagnate or fall.

I think governments ought to be thinking much more seriously about policy mechanisms to curb inequality, including wealth taxes and guaranteed minimum incomes. This is both because much of the accumulation of wealth by the wealthy has been undeserved and because inequality distorts politics and social relations, making it harder to confront other problems.

Related:

Lots of significant climate news

CPSA is keeping me busy, but there have been some interesting news stories in the last few days:

Overall, recent developments are worrisome. We know how short a window there is for action capable of hitting the Paris Agreement’s targets, and yet we continue to make contradictory policy choices.

UTAM’s first ESG report

As called for in President Gertler’s “Beyond Divestment” decision, the U of T Asset Managament Corporation (UTAM) recently released their first report on incorporating environmental, social and governance (ESG) factors into the management of the school’s $9 billion portfolio (PDF).

I’m pretty tied up with the Canadian Political Science Association conference from tomorrow to Thursday, when I will be presenting a paper on pipeline resistance, but I will give it a close look afterward.

The original student group that primarily implemented the U of T divestment campaign has dissolved, but there are still efforts at subsidiary bodies like colleges and CUPE 3902 and there is at least some student interest in reviving a university-wide campaign.

Democracy and fossil fuels

The rise of mass democracy is often attributed to the emergence of new forms of political consciousness. The autonomy enjoyed by coal miners lends itself to this kind of explanation. There is no need, however, to detour into questions of shared culture or collective consciousness to understand the new forms of agency that miners helped assemble. The detour would be misleading, for it would imply that there was some shortage in earlier periods or other places of people demanding a less precarious life.

What was missing was not consciousness, not a repertoire of demands, but an effective way of forcing the powerful to listen to those demands. The flow and concentration of energy made it possible to connect the demands of miners to those of others, and to give their arguments a technical force that could not easily be ignored. Strikes became effective, not because of mining’s isolation, but on the contrary because of the flows of carbon that connected chambers between the ground to every factory, office, home or means of transportation that depended on steam or electrical power.

Mitchell, Timothy. Carbon Democracy: Political Power in the Age of Oil. Verso; London. 2013. p. 21

Two responses:

First, it’s unfamiliar to think of fossil fuels as a positive force for social welfare.

Second, perhaps the familiar climate activist strategy of building a social movement is insufficient and we need to think about what means (if any) can align power with the objective of a stable climate.

Establishing a Responsibility to Repair

The concept of Right to Repair is meant to help consumers and tinkerers keep their vehicles, electronics, and other equipment going, despite the preferences of manufacturers that they buy something new or at least pay the original builder for any repairs.

In a more sustainable world, we can imagine a Responsibility to Repair, where any manufacturer of a product intended to be durable – from a phone or laptop to a car or house – would be expected to support repairs by providing blueprints and source code, by making spare parts available, and by designing products in the first place so that failures can be repaired (a) by individual users (b) by third-party repair centres and (c) by the company itself.

This is the opposite of the Apple philosophy of keeping everything secret, building machines that cannot be taken apart, and throwing away anything broken to replace it with something new.

In a Responsibility to Repair world, governments could keep track of all devices which consumers report as broken and impossible to fix, and then press companies to comply with regard to those items. Companies that refuse could face sactions from fines to losing the right to advertise to losing the right to make products in certain categories.

It would be the end of planned obsolescence, and the start of a much more sustainable form of consumerism. Even for companies that close down, this approach would create multiple benefits, since their design specifications and software would be openly available and their products would be designed with public repair in mind from the beginning. If one big jurisdiction like the EU were to establish laws of this kind, the benefits would be felt around the world.

Canada and climate ethics

On Friday, I presented my paper “Canadian Climate Change Policy from a Climate Ethics Perspective” at the Centre for Ethics’s graduate conference: Imagining 150: The Ethics of Canada’s Sesquicentennial.

The paper was well received and the conference overall was worthwhile and a welcome variation on the standard political science gathering.

Labour art project denied

Ages ago I submitted a photo essay to the Canadian Labour Congress for their “Workers’ Rights and the Struggle for Social Justice” project.

It was meant to be funded as part of the (at least dubious, and almost certainly offensive, given that people have lived here for many thousands of years) Canada 150 celebration.

The call to photographers in June 2016 explained: “The CLC invites photographers to participate in a historic exhibition on workers’ rights, social justice, and equity.” They went on to say:

Workers have historically taken the lead role in fighting for social justice issues, which have had an impact far beyond the workplace and into every part of the daily lives of Canadians. Therefore, the exhibition will be both a celebration of victories and an opportunity to take stock of the continuing struggles for social justice. Where have we succeeded as a social movement?

In the end, the people behind the proposal (Vince Pietropaolo and John Maclennan) told the photographers that it’s not going to happen due to lack of funding.

As such, I am making my photo essay submission public: Victories and continuing struggles.

Peter Dauvergne on environmentalism as a social movement

Saying mainstream environmentalism now reflects the interests and concerns of the rich is like coming upon a river of spawning salmon and noting the colour red. There are naturally many shades of difference. Not all of the mainstream, everywhere, has to the same extent come to embrace markets, corporations, and technologies as solutions. Nor does everyone have equal faith in the value of economic growth, CSR, and eco-consumerism as ways to move toward global sustainability. And nor is everyone equally pragmatic, calling for “evolution not revolution.” Environmentalism will always be a “movement of movements,” with a great diversity of values and visions surfacing out of a turbulent sea of informal groupings and formal organizations. Environmentalists share a commitment to try to protect the environment, yet sharp differences even exist in the understanding of the word “environment,” from those who mean nature (wildlife and ecosystems) to those who really mean living spaces for humans (cities, towns, parks, and beaches).7 (p. 6-7)

…

7. The phrase “movement of movements” is more often used to describe the global resistance to capitalism and globalization than to characterize global environmentalism. I use the phrase, however, to emphasize the diversity of environmentalism, which itself overlaps with movements against capitalism and globalization (and for global justice). For a discussion of this phrase in relation to anti-globalization activism and alter-globalization campaigns (offering social justice alternatives to globalization), see Tom Mertes, ed. A Movement of Movements: Is Another World Really Possible (Verso, 2004). For a sense of the great diversity of environmentalism, see Further Readings, “Environmental Activism (“insider” critiques of),” “Environmental Discourses and Movements (varieties of),” “Environmental Justice Movements,” “Environmental NGOs and Transnational Networks,” “Environmentalism (developing countries),” “Environmentalism (overviews) and “Voluntary Simplicity, Localization, and Eco-Villages.” (p. 154-5)

Dauvergne, Peter. Environmentalism of the Rich. MIT Press; Cambridge. 2016.

Laval divesting from fossil fuels

Yesterday, Quebec’s Université Laval announced that it will become Canada’s first university to fully divest from fossil fuels:

“Today, Université Laval commits to taking responsible action to switch its endowment fund investments in fossil energy to other types of investments, such as renewable energy,” announced Éric Bauce, Executive Vice Rector in charge of sustainable development, while confirming that Université Laval is the first university in Canada to do so. To do this, Université Laval will form a responsible investment advisory committee, including student representatives, who will be tasked with recommending methods, practices, and actions. Furthermore, an annual progress report on the investment transition will be released.”

The story was covered by Le Devoir, Ricochet, and le Soleil.

The student group which successfully campaigned for divestment — ULaval sans fossiles — has been organizing since November.