Sunday Morning Links

This and that for your Sunday reading.

- Mariana Mazzucato discusses the dangers of confusing market prices with intrinsic values:

Value has gone from being a category at the core of economic theory, tied to the dynamics of production (the division of labour, changing costs of production), to a subjective category tied to the ‘preferences’ of economic agents. Many ills, such as stagnant real wages, are interpreted in terms of the ‘choices’ that particular agents in the system make, for example unemployment is seen as related to the choice that workers make between working and leisure. And entrepreneurship – the praised motor of capitalism – is seen as a result of such individualized choices rather than of the productive system surrounding entrepreneurs – or, to put it another way, the fruit of a collective effort. At the same time, price has become the indicator of value: as long as a good is bought and sold in the market, it must have value. So rather than a theory of value determining price, it is the theory of price that determines value.

Along with this fundamental shift in the idea of value, a different narrative has taken hold. Focused on wealth creators, risk taking and entrepreneurship, this narrative has seeped into political and public discourse. It is now so rampant that even ‘progressives’ critiquing the system sometimes unintentionally espouse it.
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Such assumptions about the generation of wealth have become entrenched, and have gone unchallenged. As a result, those who claim to be wealth creators have monopolised the attention of governments with the now well-worn mantra of: give us less tax, less regulation, less state and more market. By losing our ability to recognize the difference between value creation and value extraction, we have made it easier for some to call themselves value creators and in the process extract value. Understanding how the stories about value creation are around us everywhere – even though the category itself is not – is essential for the future viability of capitalism.

To offer real change we must go beyond fixing isolated problems, and develop a framework that allows us to shape a new type of economy: one that will work for the common good. The change has to be profound. It is not enough to redefine GDP to encompass quality-of-life indicators, including measures of happiness, the imputed value of unpaid ‘caring’ labour and free information, education and communication via the Internet. It is also not enough to tax wealth. While such measures are important in themselves, they do not address the greatest challenge: defining and measuring the collective contribution to wealth creation, so that value extraction is less able to pass for value creation.

- Ben Parfitt notes that British Columbia is being severely shortchanged when it comes to deriving public revenue from natural resources. And Simon Enoch and Emily Eaton examine how an oil boom tends to offer little benefit to public coffers and services even in the areas which are supposed to be prospering.

- Meanwhile, Bruce Livesey wonders whether the Libs' Trans Mountain bailout is based on a perception that Canada has signed away any ability to limit the prospect of an oil pipeline to serve Chinese investors. Michael Harris weighs on on the foolishness of paying far above market price for a project which creates massive public risks, while David Climenhaga wonders whether Trudeau plans to be bound by Kinder Morgan's side deal with the anti-worker CLAC. And Mike De Souza reports that two Kinder Morgan executives are being rewarded with $1.5 million bonuses for extracting the deal the company was able to wring out of the federal government.

- Finally, Denise Balkissoon rightly argues that Canada needs to take responsibility for the continued pattern of children being removed from their families - particularly in Indigenous and minority communities.