- Mariana Mazzucato writes about the need for governments to shape markets through their own investments, rather than acting only to serve existing business interests:
The idea that at best the public sector can fix "market failures" and "de-risk" business, means that when the banks become too active in an area, they are accused of "crowding out" the private sector. That is, of taking up too big of a share of total investments (all of which in the end must be financed from savings). While some Keynesians defend such investments by arguing they actually "crowd in" – ie, government investments increase the total pie through the spending multiplier – this defence only captures half the story. Even in the boom there are plenty of areas that private finance does not dare tread. The internet was funded by public money in boom times, as were biotech and nanotech. And even if we were in a boom today, there would still be little private finance in those capital-intensive high-risk areas of clean tech.- David Atkins calls out business groups for threatening to discard employees who dare to ask for a living wage, while highlighting how that campaign only shows that we shouldn't make a reasonable standard of living contingent on serving a corporate master at all:
There is a more interesting argument to justify such banks. What public spending/investment is needed for is not to fix markets but to actively shape and create them. As Keynes argued in 1926: "The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all."
Rather than judge public investments as if they are acting upon existing markets, we must admit that this is their role: to create and shape markets. This should lead to indicators of performance for such public investments that capture their "mission-oriented" role.
Today's challenge is thus not only to activate the public sector, but rethink its role. I have organised practitioners from public R&D agencies and public financial institutions from all over the world to meet this week to discuss this challenge in the Commons, hosted by Vince Cable. Hopefully, it will help change the conversation. The problem is not about "fixing finance" while leaving the real economy sick, but how to change the framework to one in which socio-economic challenges can be addressed, by public and private actors alike. And key to all is admitting that the public side can be transformational. But only once it is released from the shackles of defunct thinking.
The fact remains that within one year a bunch of server jobs will be gone because restaurants will replace order-taking with tablets. Within a decade or two we won't need truck or cab drivers anymore. IBM can already diagnose cancer five times better than doctors. The flattening of the teaching profession will continue apace as the technology and techniques behind MOOCs continue to improve. 3D printing will render much of what manufacturing remains obsolete. Anything requiring mid-level management or analysis will be done better by computer within two decades at the max, and probably sooner.- Meanwhile, Lauren Sandler discusses the U.S.' (damaging) fall to the bottom of the developed world in the availability of paid parental leave - even as evidence accumulates that such leave is ultimately a valuable investment.
Pushing for a higher minimum wage is important. But ultimately we're going to have to decouple human dignity from "having a job." There just won't be enough jobs to go around, and tweaking the tax rates of super-wealthy just won't cut it at a certain point.
- CBC reports that the City of Regina's consistent neglect of its pension obligations might result in retirees having their livelihood pulled out from under them. And Michael Smyth points out that while B.C. imposes wage limits on the vast majority of public-sector workers, it has no trouble finding money to fund under-the-table giveaways to top executives.
- Finally, Dean Beeby reports on the continued disconnect between the Cons' austerity agenda and the views of Canadians - including the ones specifically asked for their input into the federal budget, whose desire to prioritize health care and education over pipeline cheerleading was once again ignored.