Category: Economics

Matters of money

Business and job creation

Nick Hanauer on ‘job creation’:

“So when businesspeople like me take credit for creating jobs, it’s a little like squirrels taking credit for creating evolution. In fact, it’s the other way around. Anyone who’s ever run a business knows that hiring
more people is a capitalist’s course of last resort, something we do if and only if increasing customer demand requires it.

Further, that the goal of every business – profit – is largely a measure of our relative ability to not create jobs compared to our competitors. In this sense, calling ourselves job creators isn’t just inaccurate, it’s disingenuous.”

Related: Voting based on the economy is dumb

More on climate change and capitalism

My friend Stuart on climate change and capitalism: How to Change the Future — and Why We Need To!

Personally, I can see why the argument that capitalism and sustainability are incompatible is convincing to a lot of people. At the same time, I think we have enough of a project on our hands just in replacing the global energy system with a climate-friendly alternative. Replacing capitalism at the same time may well be impractical – and there is no way of being sure that any system with which we replace it will do any better. To me, the liberal economic solution of internalizing externalities through regulation and tools like carbon pricing seems like the most promising path for checking humanity’s more self-destructive impulses. Admittedly, success will require that governments and citizens take a longer-term view of their own interests and develop a greater ability to resist the influence of fossil fuel companies and the short-term temptations associated with excessive fossil fuel use.

Also, I think there is a critical role that capitalist finance will play in driving the global clean-energy transformation. Right now, the plan is to spend trillions of dollars during the next century extracting and processing the world’s remaining fossil fuels. If we are going to build things like country-sized renewable energy facilities (which we will need for everyone on the planet to develop or maintain lifestyles that will probably be acceptable to them), that massive investment will need to be re-directed and the capitalist mechanisms of innovation, deployment, and return-on-investment will likely be necessary.

There was a discussion about this here before: Climate change and capitalism

Divest McGill arguments rejected

A committee formed by the administration of McGill University has rejected the argument from Divest McGill that the school should sell its stock in “corporations involved with the production, refining, transport and sale of fossil fuels” and “financial institutions which have not adopted a policy of making no further loans to corporations that produce, refine, transport of sell fossil fuels”.

Rather startlingly, the committee concluded that: “Since the Committee is not satisfied that ‘social injury’ has occurred, no action was considered or is recommended.”

Given that climate change is the ‘greatest market failure the world has ever seen’ the case that fossil fuel companies are doing social harm is very strong. While the committee’s decision is disappointing, it is useful for Toronto350.org insofar as it shows what sort of things the committee that will eventually be formed here is likely to focus on. For instance, no discussion of science and a strong emphasis on law. Knowledge that we derive from this response will help us make our own brief stronger.

We are also calling for a different set of actions from the University of Toronto, which I think will make it easier to establish our case. Specifically:

  • Make an immediate statement of principle, expressing its intention to divest its holdings in fossil fuel companies within five years,
  • Immediately stop making new investments in the industry,
  • Instruct its investment managers to wind down the university’s existing holdings in the fossil fuel industry over five years, and
  • Divest from Royal Dutch Shell by the end of 2013.

This seems easier than asking a Canadian university to divest from all financial institutions which invest in fossil fuel companies, which probably includes all those in Canada.

The McGill committee never got to questions of practicality or financial impact on the university, since they rejected the basic claim that fossil fuel companies are doing social harm. If we are able to establish the second point to the satisfaction of the University of Toronto, we will still need to address concerns in the first two areas.

Our brief still requires a lot of work, so if you know anyone in Toronto who would be willing to help, please encourage them to get in touch with us. We could especially benefit from anyone with expertise in law or finance.

William James on war

“History is a bath of blood,” wrote William James, whose 1906 antiwar essay is arguably the best ever written on the subject. “Modern war is so expensive,” he continued, “that we feel trade to be a better avenue to plunder; but modern man inherits all the innate pugnacity and all the love of glory of his ancestors. Showing war’s irrationality and horror is of no effect on him. The horrors make the fascination. War is the strong life; it is life in extremis; war taxes are the only ones men never hesitate to pay, as the budgets of all nations show us.” (emphasis in original)

Wilson, E.O. The Social Conquest of Earth. (New York, Norton, 2012) (p.62 hardcover)

Toronto350.org bibliography party

One element of developing Toronto350.org has been learning how to do complex cooperative work using a devoted group of volunteers.

This afternoon, we are having a ‘bibliography party’ for our University of Toronto divestment brief.

We will be taking all the sources people have collected and putting them into biblatex format. It will then be easy to incorporate them into our LaTeX document and produce nicely formatted footnotes and a good bibliography.

Then it will just be a matter of finishing each section of the brief and sending it out to experts for comment. It will need to be run by some people who can comment on the science, others who can comment on the law, and others who are familiar with the U of T administration.

In the end, we should have an authoritative and meticulously cited document explaining why divestment makes ethical and financial sense, and why it is in keeping with the university’s existing divestment policy.

Replacing my second flash

Having been knocked over a few more times during the Winter Ball, my LumoPro LP120 flash is now definitively dead.

I very much need two flashes to do the kind of event photography I have been doing in recent years. I therefore need to decide how to replace it.

One option is to get a new LP160. It isn’t as powerful as my Canon 430EX flash, but it’s a lot cheaper (US$180 compared with about C$350 for a Canon Speedlite 430EX II). The LP flash also has the benefit of a built-in optical slave. The big downside is that the LP flashes are not especially tough.

Another option is to shell out $600 for a Canon 600EX. It would be significantly more powerful than my 430EX, and it would actually be able to drive the other Canon flash in a TTL mode, while sitting on my hotshoe.

If I got another flash without an optical slave, it would probably be a good idea to shell out another $300 for three PocketWizard Plus X transceivers. Then I will be able to reliably drive both flashes off-camera at considerable range.

Line 9 and the National Energy Board

If you want to get approval for a huge project with many risks and serious associated problems, one strategy is to get decision-makers to split up the question into tiny pieces. Forbid the people on one team from considering the issues another team is looking at. That way, you can prevent the consideration of interactions between effects and cumulative impacts.

This seems to be what Canada’s National Energy Board (NEB) does for pipelines. For instance, they have hearings upcoming in Toronto related to the Enbridge Line 9 pipeline. Currently, it carries conventional crude oil from east to west. The company wants to reverse the flow so it can carry diluted bitumen from the oil sands from west to east.

In these hearings, the NEB is only allowed to consider the direct effects and risks from the pipeline right here in Toronto. They are explicitly not going to consider the effects ‘upstream’ from oil sands extraction and processing. Likewise, the climate change damage ‘downstream’ cannot be considered.

The fact is, we need to be phasing out fossil fuels – not building infrastructure to facilitate their use into future decades. We’re past the point where building additional fossil fuel infrastructure makes sense, but the NEB isn’t allowed to consider the reasons for that.