Is the Western world history?

Posted on December 18, 2011 in Equality Policy Context

Source: — Authors: – news/editorial
December 16, 2011.   By Michael Warren

When you lift the lid on this “season of discontent,” it’s clear the Western world is going through a dangerously confusing time.

Even in a country as affluent as Canada, people at all points on the social and economic spectrum seem increasingly disillusioned. We feel a collective unease.

The one per cent we hear so much about these days (who make 10% of all the income in Canada, and pay about 25% of all income taxes) don’t seem particularly pleased. Their wealth is being diminished by falling markets and global uncertainty. They are being simplistically blamed for all our economic ills by the Occupy Bay Street protestors carrying “Tax the Rich” placards.

The middle class is shrinking and they know it. They are struggling and losing the battle to maintain their slice of a stagnant economic pie. And they feel that no one cares about their plight.

The working class also feel under siege. They are having trouble covering the cost of day-to- day living. One in ten Canadians cannot withstand an unexpected expense of only $500.

Unions fear that the Harper government is using our “fragile economy” as an excuse to dilute their hard-earned right to strike, and to a fair arbitration process.

And, all the political assurances that Canada is in better shape than other G8 countries are cold comfort for the millions who are either unemployed or underemployed. They feel powerless and share a growing sense of alienation.

Recurring global economic crises are highlighting the inherent conflicts between the values of the market economy and those of democracy. We are failing to keep these largely contradictory influences in balance. The dictates of the marketplace are overshadowing the values inherent in our Western democracies.

Economist Jacques Attali, in a 1997 article in Foreign Policy, warned about this imbalance. “It seems obvious that, all over the world, the market economy today is more dynamic than democracy,” he wrote. He predicted the rise of “market dictatorships” if stronger and more flexible democracies aren’t developed.

Many of the conflicts that he saw then, between these “twin pillars of Western civilization,” have become even more pronounced today.

In a market economy the individual is often treated as a commodity, whose value depends on their unit cost, education, age, and even gender and race. But in a democratic society, the promotion of the individual is supposed to be paramount.

Capitalism, by its very nature, accepts and encourages inequalities between people, corporations and even economies. It thrives on competition, market domination and collective ownership of industry.

Democracy is based on the ideal of equal rights for all citizens. But equal rights do not mean equal access for all to the fruits of a free market economy.

Winston Churchill said: “The inherent vice of capitalism is the uneven division of blessings; while the inherent virtue of socialism is the equal division of misery.”

The social safety nets that have been erected to curb some of these vices now seem to be financially unsustainable. The post-war social compact that has defined life in the West is on a collision course with fiscal austerity in democracies awash in sovereign debt.

The idea that accumulated selfishness produces the best result for the group is another hallmark of the market economy.

Democracies begin with the assumption that the interests of the minority are best served by the wishes of the majority. But modern democracies have become increasingly vulnerable to powerful minorities who can distort tax systems, circumvent regulation and exploit resources.

The market economy thrives on the free movement of capital, people, goods and ideas.

But this globalization is breaking down national borders faster than democracies can forge effective means to act collectively in the interests of their electorates.

There is a wide spectrum of thought about how to address this growing imbalance of forces.

At one end are the optimists like Ed Clark, the chief executive of TD Bank. He is calling on Canadians to “lift the cone of silence” and encourage our politicians to lead us in a national dialogue that seeks fair and equitable solutions to our economic and social disparities. “We must help our politicians make the shift to a world of constrained government resources.”

Others are more fatalistic. Alexander Tyler, the 19th-century Scottish history professor, believed that when voters discover they can vote themselves generous gifts from the public treasury, they will always vote for the candidate that promises the most benefits.

“Every democracy will finally collapse over loose fiscal policy.” Tyler maintained that all democracies go through these same stages:

“From bondage to spiritual faith;

From spiritual faith to great courage; From courage to liberty;

From liberty to abundance; From abundance to

complacency; From complacency to apathy; From apathy to dependence; From dependence back into bondage.”

If we judge where we are on Tyler’s descending scale by the extent of our voting participation in Canadian elections, we are probably in the complacency stage. But if we consider our growing tendency to look to government for our every need, “apathy to dependence” may be closer to the truth.

In the words of the great American philosopher, Pogo, “We saw the enemy and they were us.”

R. Michael Warren is the CEO of The Warren Group Inc. He is a former corporate director, Ontario deputy minister, TTC chief general manager and Canada Post CEO.

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