Where hope is lost, so is the claim
With authentic Canadian humility (for which, I should add, we are excessively proud), I offer this sincere apology to my many friends south of the border… again. A friend in Florida once admonished me, declaring that I have no right to comment on gun issues in the United States because I don’t live there. Well, he’s right that I don’t live in the United States but the United States lives in me. At that time, ten years ago, 70% of gun crime in Toronto involved weapons smuggled in from the United States. The truth of the matter is that nothing happens in the States that we don’t see, hear, or feel. When you’re a mouse sleeping next to an elephant… you have no choice but to pay attention.
The United States is the Great Experiment, admired world-wide for having been the shining city on a hill – the beacon of democracy. Like it or not, where Americans go, Canadians follow (well, we didn’t go to Iraq, but that was an exception). If we see the American experience going through a Jack and Jill head-over-heels downhill tumble, we have to know that we’re not far behind. We Canadians, and quite frankly, all of us in western society, are participants in this great experiment. If it goes down in the United States, we all go down. On this basis alone, I reserve the right to weigh in. If you see something, say something!
I look to the United States as having truly once been the greatest nation in the world, by virtue of the hope it offered to the tired, poor, and huddled masses. I’m hearkened, however, to Aaron Sorkin’s 2012 first scene of episode 1 of The Newsroom. When we look into our back alleys and under bridges and find tired, poor, and huddled masses, something’s gone terribly wrong.
So… as the beacon’s light dims, please see this as my rather simplistic take on the decline of western civilization, as we have been encouraged to know it. I keep asking myself, “why?” Why is the beacon flickering? Why is the great experiment faltering? Was it flawed in its creation? Probably, but that’s true of every human endeavour. Was it corrupted mid-stream? For sure, but is there more? Can we point to pivotal events or activities that have led us to the precipice of collapse?
Where hope is lost, so is the claim.
So… my questions centre on understanding this lost hope. Where did it go? What happened? I won’t venture far into Jared Diamond’s wonderful exposé, Collapse, how societies choose to fail or succeed, other than to say that he nailed it in his discussion on conflicts of interest, failure to anticipate, and psychological denial. I would intertwine with this short list a failure to see relevant horizons, a failure to adapt, and a failure to see the big and little pictures simultaneously.
Hope and trust in society are inseparable. I want to understand how and why hope and trust, together, have taken such a blow in recent years. My exploration today is an effort to connect-the-dots between these six foundational failures and our current precarious state. Without this connection of the dots, in my view, there can be no recovery of hope and trust.
To use Tom Friedman’s phrase, the world is flat. People and goods and services (and viruses) move around the world with unprecedented speed. Notwithstanding the efforts of many countries to retrench into a nationalistic stance of protectionism, this shrinking of the world will not be reversed. Globalization is here to stay. Governments and borders will continue to play lesser roles as commerce and industry progressively take over. Commerce and industry have undeniably hastened our journey toward collapse. In all matters of international conflict and societal collapse, first follow the money, second follow the money, and last follow the money. Ironically, the interdependence of business across borders may ultimately protect us from pushing the button that leads to mutually assured destruction.
This globalization has seen massive unintended consequences which, viewed in the rear-view mirror, should make us ask, “what on Earth were they thinking?” I look to American-Chinese relations as just one case in point. From a place of almost no trade between the two countries, the 1979 bilateral agreement set in motion a dynamic that will have generational negative consequences for the United States. I’m not going to speak to the moral imperative of helping to raise up your neighbour. That’s another discussion altogether. I’m looking at this from a purely strategic angle, and trying to imagine what decision makers in Washington were thinking in 1979. It’s certain that businesses at the time were looking for new markets. China had (and has) the largest population in the world, so that seemed a logical place to go.
As it turns out, those with influence in Washington had interests that may not have been quite so aligned with the interests of the United States on the whole. By 2021, U.S. exports to China were $151.1 billion. U.S. imports from China, on the other hand, were $506.4 billion. My abacus calls that an annual trade deficit of $355 billion. This represents more than one-third of the total U.S. trade deficit.
It doesn’t take an MBA to understand that this position is unsustainable. My question remains, how was it allowed to happen? Who was really at the helm? What are the root causes of this colossal failure in negotiation?
It would be easy to say that the Americans failed to anticipate the full impact of opening the world market to China, and the role of its huge population in lurching forward into a dominant role. But why did they fail to anticipate these things? Or did they? Was there really no one at the table challenging the wisdom of such a deal?
Clearly, there were conflicts of interest at play. Somebody got rich by selling out the American middle class to China. Claims of a million new American jobs have been dwarfed by the offsetting losses. Pictures of a new knowledge economy replacing the rust belt economy looked good at first glance, but then you’ve got to wonder. Why can’t China have both the new knowledge economy and our transplanted industrial economy? Something’s not quite right here. Watch for the Washington lobby lurking in the shadows.
But we’re the greatest country in the world and always will be! It couldn’t happen to us! Psychological denial, seen in past societal collapses, and guaranteed to be witnessed again. Jared Diamond’s description of the high dam risk scenario offers an excellent example. Those living below and closest to the dam feared its failure the least, though they were the ones most at risk. They just couldn’t function in the presence of such overwhelming risk unless they denied its existence. Déjà vu.
Failure to see the big picture and the little picture at the same time. Okay, I’m going to pursue a strategy without first considering what else might happen as a consequence. I’m going to do so without attempting to understand the full landscape and the strengths and weaknesses of all players at the table. What’s more, I’m going to do this without first asking if I might be cutting off the branch I’m standing on.
Here’s the big one, I think. Failure to consider relevant horizons. Structurally, the United States is locked into four-year horizons. Those tasked with making decisions that last lifetimes are inordinately focused on a very short timeline. 250 years ago, four years was an eternity. The Framers could not have foreseen the speed of change in our world and the ability and willingness of some to exploit this limiting four-year horizon. It’s really simple when you think about it. Someone identified a structural flaw, adapted, created an opening of it, and took advantage. How so, you ask? It’s very simple. Buy short-term influence through political donations and serve your own interests over those of the nation. The Chinese, on the other hand, are not restricted to four-year horizons. I’m sure they have their own issues of corruption, but they operate with centuries in mind, not four-year cycles. Therein lies the failure of western civilization. We’ve created a decision making system that, structurally, cannot consider the long term. Too many decisions are made based on quarterly profits, not the well-being of our children’s children. Don’t get me wrong. I’m no proponent of Chinese governance, but we’ve got to ask and answer the question, “can we do better?” Can we conceive and create a system of governance that takes the long view properly into account?
I’m not in possession of a solution to this structural flaw. As always, I’m just asking questions. Is it the banning of the Washington lobby? Perhaps, but that alone will not be enough. Like illicit drugs, where there’s a user, there’s a supplier. Is the four-year term the flaw? Is there a need for term limits? Would the system become more efficient and have greater integrity with five-week election campaigns like we have in Canada, rather than what seem to be four-year campaigns in the United States? Whatever the solution, our eyes must focus on the elimination of influence peddling and myopic, short-term governance. This prostitution of political power must be stopped before hope and trust can begin to be restored. Politicians talk circles around hope and trust, but that narrative is no more than a band-aid that treats symptoms and fails to address the source of the problem. As long as people view Washington as “the best Congress money can buy,” there can be no recovery of hope and trust.
Universal health care. Now, there’s a hot button in political discourse. Socialism! Communism! Bankruptcy is sure to follow! To this, I unreservedly say, “nonsense”. The United States is the only major industrialized nation in the world without universal health care. With twice the per capita health care expenditure of other major countries, all with universal access, the United States still has a significantly higher infant mortality rate, and a lower life expectancy. This surplus in expenditure is lost to profits for insurance companies and big pharma. No disputing that. The shortfall in health outcomes is a direct function of the large proportion of uninsured and underinsured citizens. It also stems from a “supersize me” obesity epidemic – also tied, not coincidentally, to special interests… but that’s a story for another day.
So… what are the structural flaws? Are there simple solutions? Along with the Washington lobby (it seems always to play a role, doesn’t it?), there is at least one basic flaw in the provision of health care insurance. Why is health care insurance so often tied to employment? With handcuffs on the worker, if a business fails or that worker is laid off, why is their access to health care diminished or lost?
Here’s another unanticipated change. Estimates have more than 15% of the workforce now operating as independent contractors (I’ve been doing so for more than 30 years). This estimate has doubled in recent decades, and shows no signs of reversal. With big companies increasingly downsizing their benefits costs through outsourcing, employment is being refigured and redefined. Times change. How will the provision of health care coverage adapt to accommodate these changes?
For most of the world, universal access to health care is one of two very basic human rights (the other is education – see below). This is the crux of a very important argument. This is where those who object to universal health care declare the threat of socialism. Let the free market rule. Hogwash! This is not about the free market. This is about maximizing profits… and in truth, it’s a short-term strategy that does not serve long-term profits, neither to successful providers nor to society on the whole.
What political proponents of privatized health care fail to see is that society’s interests (and their own) will be better served by a healthy population. The sick and dying cannot make a meaningful contribution to society or to the economy. Hope and trust have been pushed to the sidelines in favour of very narrow and very short-term political gains. The long view is not a zero-sum game. It’s just not. The pie can and will get bigger if everyone is enabled to make a contribution. Perhaps current operators will suffer short-term losses. Perhaps they’ll adapt and thrive. My point? It’s their problem, not ours as a society. The political narrative should take the whole picture, big and small, into account, not just the viewpoint of those who fund election campaigns.
We’ve got it all backwards. Why? One simple answer is that health insurance and big pharma make money when we’re sick, not when we’re healthy. The tail is wagging the dog here, and we’re delivering a “sick care” program, not a “health care” program. Case in point: If efforts had been expended first on preventing obesity in North America, instead of enhancing obesity in the name of supersized profits, our Covid case mortality rates would have been cut at least by half.
And finally, to education. There are many flaws in our system of public education. I’ve written about them many times over the years. Today, I’ll touch only on one… funding. Universal access to education cannot be attained as long as funding is sourced in such high proportion by local property taxes. This is no different from employment-based health coverage. Live in a poor neighbourhood and live with underfunded schooling. That’s the stark reality of the matter. Universal access to education is as necessary to a healthy society as universal access to health care. An undereducated person cannot make optimal contribution to society. The undereducated cannot help but fall behind… and lose hope and trust in a system that serves the haves, not the have nots.
With lower rates of education come higher rates of poverty. With higher rates of poverty come higher rates of crime. Incarceration, recidivism, generational poverty… and I’m hearing Elvis singing “In the Ghetto” in the background. The costs to us all will only rise. Again, it’s not a zero-sum game. The pie can get bigger.
Warren Buffett declares that he won “the ovarian lottery,” having been born at the right time in the right place to the right parents. He’s right, of course, but our leaders persist on wearing blinders as they fail to respond to inequities in access to education. The funding of education through local property taxes was a practical structure when created… two centuries ago. At some point, though, we’ve got to ask the question, “is there a better way?” Should we adapt? Complacency and inertia are meaningful contributors to failure in all matters, no less in how we deliver education.
Change to this funding model is resisted by those who contend that it’s too big a system, not open to massive overhaul. This is simply not true! Three of Canada’s four largest provinces have recently made the change, and have done so with meaningful success. Ontario, our largest province, with just over 2 million public school students, is larger than all but five American states. In 1998, the province moved away from local funding of education. Now, it’s true that local property taxes remain a significant source of funds for education, but these funds are pooled and administered province-wide on a per-pupil basis. For Ontarians, this rather simple flip of a switch effectively eliminated significant disparity in access to (e)quality in education. So, size is not the impediment. It is my view that complacency and inertia pose the greatest challenge. In an era when our greatest charge in education should be to prepare our children to be adaptable in times of rapid change, we’re not setting a very good example.
In simple economics, our societal model needs to take both the wide view and the long view. In quantitative terms, naysayers may better understand the task through a lens of profit maximization. Disparity in participation through inequity in access to health care, education, and political influence are root causes of long-term lost opportunity, both for individual operators and for society in general. The sick, the uneducated, and the disenfranchised will not be net contributors to your bottom line.
With globalism here to stay, the credo, “survival of the fittest” should be amended to “survival of the fittest society”. The declaration, “I have my rights as an individual” is out-of-balance with, “I have a duty to other members of my community”. In the final days, this imbalance, and its consequential cost to hope and trust, will be the key factor in our ultimate downfall.
These are two sides of one coin, inseparable. One without the other is doomed. From Viktor Frankl (Man’s Search for Meaning, 1946), “Freedom is in danger of degenerating into mere arbitrariness unless it is lived in terms of responsibleness. That is why I recommend that the Statue of Liberty on the East Coast be supplemented by a Statue of Responsibility on the West Coast.”