The Political Economy of The Sharing Economy

Introduction

Today, getting a lift to the store is as easy as loading an application on a digital device and summoning a roving car to one’s door. It is fast, cheap and, many argue, less onerous than ownership. The so-called sharing economy is on the radar of interests representing business, various governments in Canada and, to a seemingly lesser extent, academics and critics. I contend that the largely unregulated sharing economy in Ontario is already exacerbating unstable forms of employment in the province. I further contend that even with government regulation, which arguably serves to normalize the sector, the sharing economy shifts economic risk from capital, which can more easily absorb it as a cost of doing business, to individuals who cannot.

To explore these contentions, the first section of this paper will theoretically examine the role of the state vis-à-vis capital and the role technology plays in determining how social relations manifest into power, through a Marxian lens. The second section will attempt to locate the sharing economy in the appropriate political and economic context: that is, that the sharing economy appears during the current neoliberal political policy-making paradigm which is contemporaneous with a post-Fordist economy that features increasingly prevalent non-standard employment relationships and precarious work. The third section will discuss the size and impact of the sharing economy, closely examining general trends in North America with a special focus on Ontario — specifically, that province’s capital city, Toronto. In the fourth section, I will assess several arguments in favour of the sharing economy and how that sector is being positioned as healthy for the economy, the environment and the progressive ethos generally. The fifth section will look at views in opposition to the sharing economy, which predominantly focus on the sector’s record on safety, its tendency to shift risk to the individual from the firm and its role in a more general intensification of a race to the bottom characterized by downward pressure on wages and precarity. The sixth section will investigate tactics by subnational and municipal governments to deal with the sharing economy, be it regulation and/or prohibition. Finally, in the seventh section, I will analyze these socio-political and economic trends and the arguments for and against the sharing economy.

I. Theoretical Framework

The role of governing authority vis-à-vis economic activity is a major issue taken up in the study of political economy. This investigation concentrates on the institutions through which modern governance is exercised such as municipal councils, sub-national authorities including Canadian provinces/territories and states of the United States, and also national governments. Various political economy analyses locate the governing authority differently in relation to the economy and establish ideal roles and/or limits for that authority. These roles can range from one extreme of government merely ensuring a fertile environment for unchecked economic activity to flourish all the way to direct ownership and/or control of the entire economic apparatus, with many variations in between.

The Marxian view of the government during a capitalist economy is that it is a by-product of warfare between classes and that it is controlled by the most economically dominant group. In the case of a government operating during a capitalist mode of production, Karl Marx and Friedrich Engels point to those who own the non-human implements by which economic production is realized (the bourgeoisie) as the group sitting atop the socio-economic hierarchy. “The executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie,” they tell us in a particularly polemical passage.[1] While this notion of class tension helpfully guides any Marxian analysis, whether Marx and Engels intended such an apparently reductionist position regarding state-capital relations to be their legacy is muddied by later writings. In Capital: Volume Three, Bob Jessop notes that Marx writes:

The specific economic form, in which unpaid surplus-labour is pumped out of direct  producers, determines the relationship of rulers and ruled, as it grows directly out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers — a relation always naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity — which reveals the innermost secret, the hidden basis of the entire social structure and with it the    political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state.[2]

Here, Jessop provides us a warning to read Marx’s words closely and carefully. Marx does not claim that a clear line can be drawn between individual policies enacted by the government and the prevailing economic indicators, he notes. Instead, “Marx argues that the ‘form of political organization’ corresponds to the ‘form of economic organization’.”[3] That is, where the economy is organized to privilege private property, waged labour and profit-driven exchange it will easily mesh with a politics that places importance on “the rule of law, equality before the law and a unified sovereign state.”[4]

It is arguably important to note that it is not only the Marxians who insist that when capital and the state are considered, they must be considered simultaneously. This ideological current has found a home in other heterodox analyses, such as those proposed by some Institutionalists. It is the degree to which the state and capital are enmeshed and/or operating in different silos that is helpful in differentiating among the various heterodox schools.  For example, Jonathan Nitzan and Shimshon Bichler assert that neither capital nor the state can be considered either as antagonistic towards one another or, alternatively, working in harmony. They argue that the limiting concepts between the two structures, the borders that separate capital and the state, have wholly collapsed and birthed a new power. “[W]e argue that capital and state do not stand against or function together with each other. They do not complement or undermine one another. They neither interact nor interplay. And the reason is simple: they are no longer separate. Capital itself has become an emergent form of state: the state of capital.”[5] Regardless, the place of government in relation to business is particularly important in the current socio-political-economic climate (which will be discussed further in the next section); in which government often functions to alleviate regulatory and confiscatory burdens on the flow of capital and the operation of the business sector in general.

The state, however, is not the only structure relevant to an adequate theoretical discussion underpinning an interrogation of the technology-driven sharing economy in late capitalism. The role of technology as an organizing force has long dominated Marxian analyses. In a footnote to Capital: Volume One, Marx remarks on the need for an extensive history of technology as he viewed its forces to be potentially correlated with social organization. “Technology discloses man’s mode of dealing with Nature, the process of production by which he sustains his life, and thereby also lays bare the mode of formation of social relations, and of the mental conceptions that flow from them,” he writes.[6] Some Marxian theorists argue a system of technology within a society develops into an organizational structure. For example, Nikolai Bukharin states:

In speaking of the social technology, we of course meant not a certain tool, or the aggregate of different tools, but the whole system of these tools in society. We must imagine that in a given society, in various places, but in a certain order, there are distributed looms and motors, instruments and apparatus, simple and complicated tools. In some places they are crowded close together (for instance, in the great industrial centers), in other places, other tools are scattered. But at any given moment, if people are connected by a labour relation, if we have a society, all these instruments of production-tools and machines, large and small, simple and complicated, manual or power-driven-are united into a single system.[7]

In turn, Bukharin suggests to us that the division of labour ─ that which separates the worker from the owner ─ flows from the individual’s relationship to the social technology structure. “The modern division of labor is determined by the modern instruments of labour, by the character, description, and combination of machines and tools, i.e., by the technical apparatus of capitalist society,” he notes.[8] Taken to a highly literal conclusion, this division of labour based on a relationship to social technology offers one theory for why individuals find themselves located where they do vis-à-vis the economically dominant class (either workers or those in ownership/control of the means of production). This is, admittedly, a technologically deterministic reading of Bukharin’s writing. The influence of the social technology structure in regards to the sharing economy is particularly relevant given the inherent risk associated to economic activity ─ a subject which will be investigated further in Section V.

II. Context

Following a period of economic growth, driven by mass production, and increased government spending on social programs after the Second World War, capitalism faced one of its first major crises since the Great Depression of the 1930s. Stagnant economic growth combined with high inflation (dubbed “stagflation”) in the 1970s confounded economic analysts.[9] The crisis gave increased credibility in many eyes to emerging proponents of market-based solutions who were clearly inspired by classical political economy theories that emphasized economic liberalism. Theorists affiliated with these approaches can be described as neoclassical and the associated socio-political-economic paradigm as neoliberal. “Economic neoliberals attributed the crises to the distortion of the market mechanism brought about by powerful trade union monopolists and unsustainable and irresponsible demands on the economic system by governments, transmitted through the competitive system in representative democracy,” Geoffrey Ingham tells us.[10] The stagnated economy could be corrected by a reduction in government expenditures, which would in turn lead to increased savings and revived encouragement “for both capitalists and workers to work harder and longer without having their rewards confiscated by profligate governments,” the neoliberal economists argued.[11] This neoliberal approach, which arguably became structural by the early 1980s, and can be additionally characterized by the privatization of state-owned economic assets, liberalized trade regimes and the deregulation of industry and labour markets, has been a dominant socio-economic paradigm in advanced capitalist nations such as Canada and the United States for more than 30 years. “Neoliberalism should be understood as a particular form of class rule and state power that intensifies competitive imperatives for both firms and workers, increases dependence on the market in daily life and reinforces the dominant hierarchies of the world market with the U.S. at its apex,” Greg Albo, Sam Gindin and Leo Panitch tell us.[12]

The consequences of the neoliberal era, which continues today in Canada and the United States, are significant. Economically, the neoliberal/neoclassical era is correlated with a preference by employers for non-standard employment relationships marked by part-time, contingent and other types of self-employment,[13] as well as “precariousness in job tenure,”[14] according to Mark P. Thomas. Meanwhile, Rosemary Hennessy tells us that “less government’, ‘privatization’ and ‘free trade’ have meant tax breaks and more profits for businesses at the expense of those most in need,” and draws specific attention to  “[c]uts in food, health and education programs that most affect the poor, the disabled, and the elderly”[15]

Rosemary Hennessy

Rosemary Hennessy

as characteristically neoliberal. Concurrently, global free trade accords, such as the North American Free Trade Agreement, have amplified Western capital’s search for regions in which it can lower labour costs produce goods and “massive layoffs have occurred at almost every major corporation since the early nineties.”[16] One of the arguably higher-profile characteristics correlated with the recent neoliberal age is widening income inequality. In Canada, almost half (46.9 percent) of the total household wealth in the country was held by the top 20 percent of income earners in 2012, according to Statistics Canada. That concentration has increased from 45 percent in 1999. On the other hand, the 20 percent of Canadians earning the least held only 3.9 percent of the country’s total wealth in 2012 ─ even less than the 5 percent they held in 1999.[17]

III. The Sharing Economy

To assess the so-called sharing economy, it is helpful to begin with a definition. This analysis proceeds from the idea that the sharing economy can be defined as the provision of one individual’s/group’s private property to another individual/group (also known as Peer-to-Peer) who wish access to that property but do not wish to own it. This analysis assumes this provision is monetized, given that the sharing economy is a sub-section of the larger capitalist economy. Sharing economy sectors often included in various analyses typically include: transportation (such as ride-sharing), lodging (such as home-sharing), retail, labour and services (such as running errands) and finance. Ride-sharing, home-sharing and errand-running will be the focus of this assessment because those services often involve privately-owned property and labour in Ontario. Often, sharing economy transactions are facilitated online through smart device apps or websites, which in many cases are operated by multinational companies.

Knowing the exact size of the sharing economy is less a science than an art at this stage. A 2015 report PricewaterhouseCoopers estimates that global revenues from the sharing economy are currently approximately $15 billion.[18] That firm expects global revenues from the sharing economy will hover around $335 billion by 2025[19] ─ an increase of about 2133 percent. In Ontario, the size of the sharing economy is even less defined. A 2015 report by the Ontario Chamber of Commerce describes the sharing economy as being “in its nascent stages in Canada and Ontario,” and there being “a lack of concrete data on the economic impact of this new and burgeoning sector.”[20] While the 2015 Ontario budget indicates its intention to “support” the sharing economy and acknowledges the impact businesses involved in that section are having on labour markets, it provides no assessment of the size of the sector, either.[21] Despite this ambiguity, the Ontario Chamber of Commerce estimates that the average Ontarian who shares a home through Airbnb, a multinational company in the lodging subsector of the sharing economy, can earn an average of $450 per month.[22] That report also estimates that more than 400,000 people in Toronto have engaged in ride-sharing through Uber, a multinational company involved in the transportation economic subsector. Twenty percent of residents in the Greater Toronto Area, the urban agglomeration surrounding the City of Toronto, have used Uber’s services, the chamber’s report states.[23]

IV: Pros

Proponents of the sharing economy often coalesce around an ethos that privileges access over ownership, Juliet B. Schor, et al tell us.[24] Drilling down further, some advocates view the sharing economy as a more sustainable model of use than ownership, according to PricewaterhouseCoopers. More than 75 percent of people surveyed by the company during one 2014 study said they believe the sharing economy to be “better for the environment.”[25] Nearly 80 percent of respondents in that same survey said they believe the sharing economy is “good for society overall.”[26] A 2015 survey by polling firm Leger found Ontarians are largely hopeful that the sharing economy will be a boon for economic development in the province. Eighty-five percent of people who live in the Greater Toronto Area that were part of the Leger survey believe the growth of sharing economy companies to be positive.[27] “Sharing companies bring significant economic, environmental, and community benefits, including better use of existing resources,” the Ontario Chamber of Commerce tells us.[28]

V. Cons

Given that this is an era that bears witness to an increasing shift toward non-standard employment relationships and precarious employment, detractors of the sharing economy have pointed to that sector’s potential to exacerbate an already perilous situation for labour markets. Some point to companies offering errand-running as an example of how low-waged work on an unreliable schedule ─ especially when those so-called errands are done for companies ─ is creeping in under the banner of the sharing economy. Those companies are, in essence, functioning as temp agencies offering services that “{slide} rapidly from [neighbourliness] to the most precarious of casual labour.”[29] Any intensification of precarity is arguably a cause for alarm, given its disproportionate prevalence among “women, racialized groups, immigrants and people with low incomes.”[30]

A second trend to which detractors regularly point is the shifting of economic risk from the firm to the individual involved in sharing economy activities. This trend is particularly relevant in the transportation and lodging subsectors. For example, Uber, which provides ride-sharing services via a smart device app, offers a low-cost service (UberX) in which drivers of privately-owned vehicles can connect with individuals willing to pay for a lift somewhere. In return, Uber takes a cut of the cost of the ride, a cost which can wildly fluctuate in an unregulated market. Uber’s drivers are expected to handle overhead costs such as the vehicle itself, personal driving insurance and fuel[31]. By contrast, traditional taxi and limousine companies pay licencing fees to local authorities to operate within the borders of a municipality and drivers are expected to be appropriately insured for the potentially expensive costs associated with professional transportation services. The shift toward the personal assumption of risk linked with the sharing economy exploded into plain view in April 2015 when a couple in Calgary, Alberta listed their home for rent on Airbnb and returned to find tens of thousands of dollars in damage and “biohazardous material” left in the house by the renters.[32] This risk-shift is a part of a larger trend in late neoliberal capitalism, Jacob S. Hacker tells us. “The Great Risk Shift is the story of how a myriad of risks that were once managed and pooled by government and private corporations have been shifted onto workers and their families ─ and how this has created both real hardship for millions and growing anxiety for millions more.”[33]

VI: Government Responses

Response to the disruption of traditional economic and labour models caused by the sharing economy has widely varied on a jurisdiction-by-jurisdiction basis. Some communities, such as Eugene, Oregon[34] and Calgary[35] have ordered Uber to cease operations under the penalty of fines until municipal bylaws can be updated. In Calgary, Uber allegedly told drivers that their personal driving insurance is primarily what protects them but they are also covered by the company’s “contingent” coverage up to $5 million for injury and damage.[36] The city’s position is that “a driver’s personal insurance is nullified when riders in private, unlicensed vehicles are injured.”[37] Elsewhere, in March 2015, a German court banned Uber from operating its ride-sharing service anywhere in that country.[38]

The City of Toronto is also grappling with how to deal with the sharing economy. Attempts to halt Uber, for example, in the city have been unsuccessful as of this writing. In the summer of 2015, an Ontario court found that despite Toronto’s protestations to the contrary, Uber does not function as a taxi company and therefore is not required to follow the rules set out for those companies.[39] The city’s mayor has also rejected pursuing an injunction against the company similar to that in place in Calgary,[40] against the wishes of the city’s taxi drivers.[41] Toronto’s ultimate aim is to regulate ride-sharing services.[42] Provincially, the government’s 2015 budget indicates a willingness to regulate ─ not crush ─ the sharing economy. “To help vibrant, emerging sectors thrive, the government commits to working with firms and industries to help them comply with existing obligations and to consulting on an ongoing basis to ensure those obligations reflect a changing economy,” the budget’s text states. In October 2015, a private member’s bill designed to, among other things, regulate ride-sharing companies, ride-sharing drivers and those who wish to share their homes, was tabled in the Ontario Legislature.[43]

VII. Analysis

The sharing economy is unquestionably a disruptive force. It is disrupting labour markets and economic models. It is however, doing little to alter the current social relations that flow from a late capitalist economy. This analysis does not assume a social/cultural determinism based on technology. There are, undoubtedly, other forces that influence ─ perhaps more greatly ─ general social relations in human society. That said, it is arguably fair that an individual’s proximity to control over social technology does at least play some role in the status they find themselves in as late capitalism continues to metamorphose. What is upending traditional analyses is that the system of social technology has changed in that some machines and tools can be owned by workers, such as an automobile or home, and those workers can still find themselves at the mercy of more powerful capitalistic forces, such as those companies involved in the development of sharing economy facilitation apps. In other words, the workers find themselves owning means of production ─ but not those means from which they escape their traditional underclass role.

This means that action by government is as crucial as ever. Governments at both the municipal level in Toronto and provincial level in Ontario appear to be set to regulate the sharing economy. While this action is not out of step with several other North American jurisdictions and developed economies throughout the world, it is a conscious, interventionist choice. Regulation of the sharing economy arguably normalizes an economic sector that does nothing to ameliorate current late capitalist trends toward increased non-standard employment relationships and precarious employment. That is concerning. If precarious employment gains an even stronger foothold, and intensifies pressure on labour markets already highly stratified along racial and gender lines, that is an unjust consequence. Trends in that direction should be stopped.

The arguments for the expansion of the sharing economy under its current incarnation are hollow. Lower consumption and a more environmentally sustainable economy are both admirable goals but does making it easier for drivers to deploy their underused fossil-fuel burning automobile for a quick cash infusion really square with sound environmental policy? It is hard to argue that such an approach is, at its core, truly environmentally friendly. As for the alleged economic benefits of the sharing economy, those seemingly cannot even be measured in Ontario at this time. Indeed, there is the potential that the sharing economy will create jobs but of what value will those be? Will families be able to subsist, let alone thrive, on the value extracted from underused assets? How much capital will individuals have to outlay and how much risk will they have to assume in order to make a decent living, given that solid employment opportunities are becoming increasingly infrequent? The answer appears to be, a lot.

Arguments against the so-called sharing economy appear more grounded. Errand-running companies should not be permitted to function as low-wage temporary employment firms. There is a significant difference between doing an odd job for someone for a few dollars and running “errands” for companies that can afford to hire employees. Criticism of the shifting of risk from firms to the individual is also valid. Individuals do not have the ability to pool risk the way governments and corporations do. And when they are interacting with mammoth multinational corporations, individuals should not have to take on the risk traditionally assumed by those who can more easily absorb it.

Conclusions

The potential consequences of the status quo in regards to the sharing economy in Ontario are concerning and unsustainable. This economic sector is doing little to nothing to disrupt the trends toward unstable forms of employment in the province. Regulation, which will normalize the sector, may intensify the shifting of economic risk from capital to individuals who cannot easily absorb it. Ultimately, the sharing economy is here and governmental authorities appear to be welcoming it. The long-term effects of the sector on the economy will determine whether or not that choice was correct.


 

[1] Karl Marx and Friedrich Engels, “The Communist Manifesto,” Karl Marx: Selected Writings, ed. Lawrence H. Simon (1848; Indianapolis/Cambridge: Hackett Publishing Company, Inc., 1994): 161.

[2] Bob Jessop, “The state,” The Elgar Companion to Marxist Economics,” eds. Ben Fine and Alfredo Saad-Filho, (Cheltenham, UK; Northampton, MA: Edward Elgar Publishing, 2012), 334.

[3] Ibid.

[4] Ibid.

[5] Jonathan Nitzan and Shimshon Bichler, Capital as Power: A study of order and creorder, (New York: Routledge, 2009), 278.

[6] Karl Marx, Capital: Volume One, A Critique of Political Economy, ed. Friedrich Engels, translated by Samuel Moore and Edward Aveling (1906; Minola, New York: Dover Publications, Inc., 2011), 406.

[7] Nikolai Bukharin, Historical Materialism, (1921; New York: International Publishers, 1925), 135.

[8] Ibid., 141.

[9] Geoffrey Ingham, Capitalism, (Cambridge: Polity Press, 2011), 196.

[10] Ibid., 196-197

[11] Ibid., 197

[12] Greg Albo, Sam Gindin and Leo Panitch, In and Out of Crisis: The Global Financial Meltdown and Left Alternatives, (Oakland: PM Press, 2010), 28.

[13] Mark P. Thomas, Regulating Flexibility: The Political Economy of Employment Standards, (Montreal/Kingston: McGill-Queen’s University Press, 2009), 22.

[14] Ibid., 3.

[15] Rosemary Hennessy, Profit and Pleasure: Sexual Identities in Late Capitalism, (New York: Routledge, 2000), 75.

[16] Ibid.

[17] Statistics Canada, “Share of wealth (or net worth) held by each income quintile, 1999 and 2012, %,” http://www.statcan.gc.ca/daily-quotidien/150603/cg-b001-eng.htm (accessed December 15, 2015).

[18] PricewaterhouseCoopers, “The Sharing Economy,” 2015, http://www.pwc.com/us/en/industry/entertainment-media/publications/consumer-intelligence-series/sharing-economy.html (accessed November 1, 2015), 14.

[19] Ibid.

[20] Andrea Holmes and Liam McGuinty, “Harnessing the Power of the Sharing Economy: Next Steps for Ontario,” Ontario Chamber of Commerce, 2015, http://www.occ.ca/wp-content/uploads/2013/05/Harnessing-the-Power-of-the-Sharing-Economy.pdf (accessed on September 26, 2015), 4.

[21] Province of Ontario, Building Ontario Up: Ontario Budget 2015, http://www.fin.gov.on.ca/en/budget/ontariobudgets/2015/papers_all.pdf (accessed November 1, 2015), 103.

[22] Holmes and McGuinty, “Harnessing the Power of the Sharing Economy: Next Steps for Ontario,” 4.

[23] Ibid.

[24] Juliet B. Schor, et al, “On the sharing economy,” Contexts, 14, no. 1, (Winter 2015): 13.

[25] PricewaterhouseCoopers, “The Sharing Economy,” 22.

[26] Ibid.

[27] Holmes and McGuinty, “Harnessing the Power of the Sharing Economy: Next Steps for Ontario,” 2.

[28] Ibid., 1.

[29] Tom Slee, “Sharing and Caring,” Jacobin, January 24, 2014, https://www.jacobinmag.com/2014/01/sharing-and-caring/ (accessed September 26, 2015).

[30] Luin Goldring and Marie-Pier Joly, “Immigration, Citizenship and Racialization at Work: Unpacking Employment Precarity in Southwestern Ontario,” Just Labour: A Canadian Journal of Work and Society, 22 (Autumn 2014): 97.

[31] Avi Asher-Schapiro, “Against Sharing,” Jacobin, September 19, 2014, https://www.jacobinmag.com/2014/09/against-sharing/ (accessed September 26, 2015).

[32] Danielle Nerman, “Airbnb renters who trashed Calgary home left biohazards,” CBC News, May 1, 2015, http://www.cbc.ca/news/canada/calgary/airbnb-renters-who-trashed-calgary-home-left-biohazards-1.3057288 (accessed December 1, 2015).

[33] Jacob S. Hacker, The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream, (Oxford/New York: Oxford University Press, 2006), 21.

[34] The Associated Press, “Uber ordered to quit business in Eugene or face fines,” The Oregonian, October 30, 2014, http://www.oregonlive.com/pacific-northwest-news/index.ssf/2014/10/uber_ordered_to_quit_business.html (accessed December 1, 2015).

[35] CBC News, “Uber to suspend Calgary operations to comply with temporary injunction,” November 20, 2015, http://www.cbc.ca/news/canada/calgary/uber-court-injunction-calgary-drivers-1.3327734 (accessed December 1, 2015).

[36] Ibid.

[37] Ibid.

[38] The Associated Press, “German court bans Uber’s ride service,” The Register-Guard, March 18, 2015,

http://registerguard.com/rg/news/32885577-76/german-court-bans-ubers-ride-service.html.csp (accessed December 1, 2015).

[39] Jennifer Pagliaro, “John Tory says Uber injunction not on the table,” Toronto Star, December 4, 2015, http://www.thestar.com/news/city_hall/2015/12/04/john-tory-says-uber-injunction-not-on-the-table.html (accessed December 10, 2015).

[40] Ibid.

[41] Shawn Jeffords, “T.O. cabbies want Uber injunction like in Calgary,” Toronto Sun, November 21, 2015, http://www.torontosun.com/2015/11/21/to-cabbies-want-uber-injunction-like-in-calgary (accessed December 1, 2015).

[42] Jennifer Pagliaro and Betsy Powell, “Toronto council votes to regulate Uber,” Toronto Star, September 30, 2015, http://www.thestar.com/news/city_hall/2015/09/30/toronto-council-debates-uber-role-in-taxi-industry.html (accessed September 30, 2015).

[43] Legislative Assembly of Ontario, “Bill 131, 2015: An Act to enact two new Acts and to amend other Acts to regulate transportation network vehicles, to provide freedom for individual residential property owners to share their property for consideration with others and to deal with the expenses of public sector employees and contractors in that connection,” http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=3534&detailPage=bills_detail_the_bill (accessed November 21, 2015).

 

From Participatory Budgeting to Co-operative Tenant Control: An Alternative Policy Recommendation For Toronto Community Housing

Annual budget discussions are underway at Toronto City Hall.

The board of directors in charge of Toronto Community Housing (TCH) approved a $1.3 billion budget for 2016, inclusive of capital and operating expenses, on December 3, 2015.

Details of the budget (“a line-by-line breakdown”) are typically revealed behind closed doors and that has raised questions about the accountability of the board and the ability of tenants to play a meaningful role in the crafting of a relevant budget.

This post, which incorporates an abridged version of a policy paper I wrote on TCH’s participatory budgeting process, proposes transformational change in the Toronto Community Housing budgeting process.

Specifically, I contend that 100 percent of the control over Toronto Community Housing’s budget process must be handed over to TCH tenants via co-operative and deliberative budgeting.


 

Toronto Community Housing  is a huge organization with a crucial mandate. Located in Canada’s most-populous city and the capital of the Province of Ontario, TCH provides housing for 164,000 low and moderate-income people in 58,500 homes. The agency, created by the City of Toronto in 2002[1], is the largest public housing provider in Canada and the second-largest in North America. Among the communities TCH serves are refugees, recent immigrants, seniors, people with special needs, families and single people.[2]

Toronto Community Housing buildings in Moss Park. (photo/SimonP/Wikimedia Commons)

Toronto Community Housing buildings in Moss Park. (photo/SimonP/Wikimedia Commons)

The Tenant Participation System

Toronto Community Housing’s Tenant Participation System is described by Leighninger and Lalic as an overarching initiative designed to “integrate people, allocate resources in ways that reflect” the needs of residents, “solve problems and find solutions for…complex problems.”[3] Their case study, entitled Toronto Community Housing’s Tenant Participation System, examines how the system involves TCH residents in developing a Community Management Plan and Participatory Budgeting. Since 2002, TCH residents have been involved in a participatory budgeting process to funnel resources from the agency’s budget into several identified priorities.[4] The priorities identified during the TCH Participatory Budgeting process have included: “upgrading exteriors, grounds, recreation rooms, lobbies, hallways, playgrounds and other green spaces.”[5] As of this writing, Toronto Community Housing’s Tenant Participation System is an ongoing initiative.[6]

This analysis explores the study conducted by Leighninger and Lalic on the Tenant Participation System as it operated in 2009. Two specific processes are expounded upon: the community meetings held during the development of a Community Management Plan and the agency’s annual Participatory Budgeting initiative. Approximately 6,000 people participated in the process in 2009.[7] The authors tell us that the enlistment of participants was open to all and involved “targeted recruitment.”[8] Professional facilitators were involved in the face-to-face discussions.[9] Those impacted by the Tenant Participation System included Toronto Community Housing tenants as well as the agency’s board of directors and its executive leadership ─ in total, about 164,000 people.[10] The goal of the process was to “[empower] large numbers of low- and moderate-income people to take part in the [decisions] about their living situation and conditions,” Leighninger and Lalic tell us.[11] It “helps to integrate people, to allocate [resources] in ways that reflect peoples’ needs, to solve problems and find solutions for the complex challenges.”[12] Leighninger and Lalic do not tell us if the participants required any specialized knowledge before engaging in the process.

Toronto Community Housing hosted 10 meetings over the course of four days in October and November 2009 as part of its public consultation process on the Community Management Plan, the authors tell us.[13] The participants were asked to identify solutions for the future to the issues TCH faces and to identify two priorities on which TCH should focus.[14] Ideas from those meetings were then used to develop the Community Management Plan.[15] The plan was a three-year guide (2010, 2011 and 2012) that identified three priorities on which the agency was to focus.[16] The first priority, “Strengthening People”, emphasized the creation of an environment in which Toronto Community Housing tenants can succeed by connecting them with services and employment opportunities as well as providing opportunities for residents to communicate “issues of concern.”[17] The second identified priority, “Strengthening Places”, highlighted the agency’s responsibility to provide “clean, well-maintained buildings”, public spaces, a safe environment for tenants and investments in its building stock.[18] Some underperforming buildings were to be removed from the agency’s portfolio.[19] The final priority, dubbed “Strengthening Our Foundation”, described an aim to improve customer service, work toward a healthy workplace, keep an eye on agency expenses, reduce risk by identifying responsibility and holding employees accountable and improve communication with “tenants, staff, partners and stakeholders.”[20]

On the subject of its Participatory Budgeting process, Toronto Community Housing employs community workshops to assist with gauging priorities for the money the agency sets aside for this initiative.[21] In 2009, TCH allocated $9 million in capital funds for Participatory Budgeting, Leighninger and Lalic note. The agency spent a total of $218.4 million in capital funds in 2009.[22] Of that total, $174.4 million, or 79.9 percent, was spent on capital repairs.[23] Toronto Community Housing allocated 60 percent of the $9 million it set aside in 2009 for Participatory Budgeting to “Operating Units, depending on their size.”[24] An Operating Unit is internal language used by TCH to describe how the agency groups its buildings together.[25] Another 20 percent of the $9 million was distributed “equally across” the units.[26] The final 20 percent of the $9 million was allocated by residents based on what the operating units were perceived to have needed, such as the “upgrading [of] exteriors, grounds, recreation rooms, lobbies, hallways, playgrounds and other green spaces.”[27]

Policy Recommendation

Resident engagement has the potential to create a transformative environment at Toronto Community Housing. Done well, tenant participation in the operation of Canada’s largest public housing authority may help create social linkages instrumental in empowering tenants to take greater ─ and ultimately full ─ control over the authority, which should be the final goal of the Tenant Participation System: a move toward tenant co-operative control.

To implement this substantial policy shift, several structures are recommended as needed to be implemented. Firstly, the agency’s board of directors must be tenants executing decisions approved by the wider general body of tenants. These internal decisions, ideally, must be the product of deliberative tenant assemblies during which the decision are approved via a voting system of direct democracy or alternatively, a smaller group of tenants representing TCH constituencies. The structure proposed here is similar to that of a government executive acting on the decisions of a legislature (one composed of a large body of people voting individually or a smaller group of representatives). Secondly, tenant control of the capital budget must increase every year. In 2009, $9 million of the total TCH capital expenditure of $218.4 million ─ or about 4 percent ─ was allocated to tenant control via Participatory Budgeting. That percentage must increase per annum until 100 percent of the capital budget is controlled by tenants. Municipal employees with specialized knowledge, acting as facilitators, may continue to guide the budgeting process until such time as they are no longer needed by the tenants. Finally, the TCH tenant budget should be subject to discussion at City Hall, as it is currently. These policy recommendations arguably serve significant functions: improved, authentic participation by Toronto Community Housing tenants, transparency of the budget process, respect for tenants in the allocating of TCH resources and the development of empowering social linkages for a traditionally marginalized population in Toronto.


[1] Toronto Community Housing, “About Us,” http://www.torontohousing.ca/about (accessed November 29, 2015).

[2] Matt Leighninger and Jovana Lalic, “Toronto Community Housing’s Tenant Participation System,” Participedia, http://participedia.net/en/cases/toronto-community-housings-tenant-participation-system (accessed November 29, 2015).

[3] Ibid.

[4] Ibid.

[5] Ibid.

[6] Toronto Community Housing, “Tenant Participation,” http://www.torontohousing.ca/general-themes/tenant-participation (accessed November 29, 2015).

[7] Leighninger and Lalic, “Toronto Community Housing’s Tenant Participation System,” http://participedia.net/en/cases/toronto-community-housings-tenant-participation-system

[8] Ibid.

[9] Ibid.

[10] Ibid.

[11] Ibid.

[12] Ibid.

[13] Ibid.

[14] Ibid.

[15] Ibid.

[16] Toronto Community Housing, “Community Management Plan 2010-2012: Executive Summary,” http://www.torontohousing.ca/webfm_send/6456 (accessed November 29, 2015).

[17] Ibid.

[18] Ibid.

[19] Ibid.

[20] Ibid.

[21] Toronto Community Housing, “How Participatory Budgeting (PB) works,” http://www.torontohousing.ca/webfm_send/11816 (accessed December 7, 2015).

[22] Toronto Community Housing, “2009 Annual Review,” http://www.torontohousing.ca/webfm_send/6913/1?#: 5 (accessed December 7, 2015).

[23] Ibid.

[24] Leighninger and Lalic, “Toronto Community Housing’s Tenant Participation System,” http://participedia.net/en/cases/toronto-community-housings-tenant-participation-system.

[25] Toronto Community Housing, “Our Housing,” http://www.torontohousing.ca/our_housing (accessed November 29, 2015).

[26] Leighninger and Lalic, “Toronto Community Housing’s Tenant Participation System,” http://participedia.net/en/cases/toronto-community-housings-tenant-participation-system.

[27] Ibid.

Raise Corporate Taxes To Slay Ontario’s Infrastructure Deficit: An Alternative Policy Proposal

The province of Ontario currently faces a significant public infrastructure deficit which is harming its economic productivity and its quality of life. The government’s own numbers estimate that deficit at “tens of billions of dollars.”[1] Some media reports have pegged the number at times in excess of $100 billion.[2] I propose a new policy paradigm of increased and creative corporate taxation to help fund this infrastructure funding shortfall. To examine this policy recommendation, I will first place the issue in its historical and present-day context. I will then investigate several methods used to finance the curbing of infrastructure deficits. Finally, I will analyze each method and explain my policy recommendation.

Issue Background
This analysis adopts the provincial government’s definition of public infrastructure as that consisting of “highways, bridges, culverts, transit systems, schools, universities, hospitals, drinking water and wastewater systems, parks, and government buildings.”[3] Important implications flow from a lack of investment in crucial public infrastructure; among them are decreased economic productivity and heightened social ills. Firstly, emerging research is increasingly quantifying the toll Ontario’s public infrastructure deficit is taking on productivity. A 2013 briefing report by the Conference Board of Canada specifically connects the two issues: “[T]here is a high degree of interdependence between the quality and quantity of public infrastructure and the performance (productivity) of an economy’s business sector.”[4] Public infrastructure investments by the Ontario government between 2004 and 2014 were projected by the Conference Board’s report to lift “the province’s real productive capacity by 2.1 percent” and add “$1,044 (in constant 2012 dollars) to the average income per resident.”[5] In the Greater Toronto and Hamilton Area, the economic cost of the infrastructure deficit, vis-à-vis traffic congestion is estimated to be $6 billion each year.[6] That cost is currently expected to grow to $15 billion per year by 2031, according to projections by the City of Toronto.[7]

Secondly, increased traffic on overburdened roads has resulted in increased delays for people simply trying to get around the province. This, in turn, has had a cascade effect of further negative consequences for Ontarians, a 2014 Canadian Index of Wellbeing report tells us. The issue of intensified traffic gridlock “increases stress among commuters, reduces time available for other valued activities, and reduces business productivity,” the report notes. “It contributes to higher levels of pollution, especially in urban areas, and diminishes environmental quality, thereby jeopardising public health.”[8] This problem is particularly acute in the Greater Toronto Area, where the average commuting time is about an hour in length.[9]

Government investment into Ontario’s public infrastructure has come in ebbs and flows in the post-Second War era. At present, the province segments infrastructure investment into three eras: The “Era of Visionary Investment” (1955-1974), the “Era of Neglect” (1975-1999) and what it calls the “Era of Renewal” (2000-2009)[10] [see Chart 1].[11] The most recent figures public available show the province states that it has invested nearly $100 billion in public infrastructure since 2003.[12] The government claims this spending is significant stating, “the province has not seen this level of investment since the post-war era, when many of the foundations of our present-day infrastructure, including the 400-series highways and the Toronto subway, were first laid.”[13]

Province of Ontario, Building Together: Jobs & Prosperity for Ontarians (Toronto: Queen’s Printer for Ontario, 2011), iii.

However, the province expects that during the course of the next quarter century, it will “encounter diverse growth challenges”[14] which will ostensibly exacerbate the issues faced by the significant infrastructure deficit if it is not addressed before then.

Funding Schemes
Several mechanisms for funding infrastructure deficits have appeared in jurisdictions in Canada and abroad in recent years. Some have been highly controversial. Other projects have been widely discussed but remain primarily in the proposal stage. This section will investigate three such mechanisms: firstly, the privatization of public assets, secondly, various funding programs from the federal government to the provinces and finally, proposals to tax corporations at higher levels and/or more creatively.

A major plank of the current Liberal Party government of Ontario’s plan to fund infrastructure investment is the privatization of some public assets.[15] Among the planned privatizations is the eventual selling of 60 percent of Hydro One, a transmission and distribution utility.[16] The province expects to eventually “realize $9 billion in proceeds, $4 billion of which will be invested in infrastructure and $5 billion to reduce (provincial) debt”[17] (which is projected to be approximately $300 billion in 2015-2016).[18] The privatization, via the offering of shares of Hydro One on the Toronto Stock Exchange, began on November 5, 2015.[19] The Government of Ontario argues that this privatization scheme is good for the province because it will provide needed money and also introduce “private-sector discipline” which “(will) allow Hydro One to achieve operating efficiencies” while remaining under provincial regulation.[20] However, an October 2015 report by the Financial Accountability Office of Ontario flags the government’s plan as potentially counterproductive. While the initial privatization which began on November 5, 2015, and is estimated to involve 15 percent of the total Hydro One shares to be offered, is expected to “significantly reduce the Province’s deficit in 2015–16,”[21] by the time all 60 percent of Hydro One is privatized (estimated to be 2019-2020), “the Province (will) experience an ongoing negative impact on budget balance from foregone net income and payments-in-lieu of taxes from Hydro One.”[22] In other words, not only will tax revenues from a completely publicly-owned Hydro One not be available for reinvestment into projects such as infrastructure, the loss of that revenue may drag Ontario’s budget down. Whether this short-term gain versus long-term pain trend will be projected for all public assets the government may privatize is unknown at this time.

A second method of funding infrastructure used in Canada involves transfer funding from the federal government to the provinces. Several programs have been implemented since 2000 and a greater emphasis was placed on the role for the federal government in the funding of infrastructure, specifically municipal infrastructure, in the aftermath of a 2001 meeting in Winnipeg by mayors of the five largest cities in Canada. The mayors argued “for a ‘new deal for cities’ to ensure local communities could address pressing public concerns and ‘fundamental infrastructure needs’.”[23] The federal government currently states it plans to directly invest $11 billion in infrastructure funding in Ontario between 2014 and 2024.[24] The money will flow to Ontario, via Ottawa, after it is collected through two federal programs: the New Building Canada Fund and the Gas Tax Fund. Ontario is also projected by the federal government to potentially “benefit” from $4 billion worth of projects “of national significance”, $1.25 billion worth of funds for embarking on public-private partnerships and $10.4 billion in federal tax rebates.[25] Federal funding has the potential to be helpful to Ontario, to a certain degree, but the main drawback to the scheme is that various programs have not adequately offset the provincial infrastructure deficit to this point. In the future, any increases to such funding initiatives will also be contingent on political will on the part of the federal government of the day.

The final funding mechanism investigated here is various proposals to adjust corporate taxation to help offset the cost of the infrastructure deficit. A March 2015 report by the Canadian Centre for Policy Alternatives argues that Ontario has a significant “revenue problem”[26] and that in order to meet it its goals of infrastructure spending and debt reduction, it “must raise taxes.”[27] Among the taxes it advocates hiking is the joint provincial-federal corporate tax, which it states is “one of the lowest corporate income tax rates among developed and developing countries.”[28] Corporate taxes were slashed during the financial crisis which began in 2008-2009 in an attempt to encourage the private sector to spend. However, several reports indicate that attempted inducement was ineffective in achieving its desired goals. The result has been that huge pools of cash horded by Canadian companies are currently lying dormant. This total of this dormant cash, or “Dead Money”, as former Bank of Canada Governor Mark Carney called it[29], is now estimated by the Broadbent Institute to be approaching $700 billion.[30] Despite nearly a decade of an objectively favourable tax climate, companies in Ontario are among the least willing to spend in Canada and invest an average of only $7,000 per worker. That ranks Ontario companies second-lowest behind only Quebec which spends a mere $5,700 per worker.[31] Given all of this, the Canadian Centre for Policy Alternatives argues it is time for corporate rates to rise. “The failure of corporate tax cuts on their own to spur business investment, coupled with our competitive tax rates, means there is room to return the corporate income tax rate to 2009 levels,” the Centre notes.[32] Meanwhile, the United States government appears to be embarking on a unique program to seize untaxed income from American corporations. Some reports indicate that as much as $2 trillion worth of American corporate profits are sitting in foreign accounts. President Barack Obama proposes to tax that money at a rate of 14 percent to help pay for infrastructure upgrades.[33] The amount of Canadian corporate assets held overseas in “tax havens” is estimated by Canadians for Tax Fairness to be approximately $200 billion.[34] If the Canadian government attempted a similar initiative to that of the Obama administration, the tax revenue windfall could be substantial.

Conclusions/Policy Recommendation
Ontario’s infrastructure deficit poses a significant challenge. Given the potential counterproductive nature of privatizing public assets, as flagged by the Financial Accountability Officer of Ontario, the decision to go down that path by the current government is concerning. As well, the failure of past federal-provincial infrastructure funding schemes demands a change of the status quo. Put bluntly, those funding initiatives simply have not in the past and are not presently addressing Ontario’s infrastructure deficit in a meaningful way. That any increases to those federal-provincial programs are contingent on political will is also a drawback. New thinking is required to deal with Ontario’s infrastructure problem. I recommend that the federal government move to begin taxing Canadian overseas corporate assets currently held in tax shelters and share those confiscated revenues with the province of Ontario under the condition that the money be used exclusively for infrastructure spending. I also recommend that the joint provincial-federal rate of Ontario corporate taxation be increased to 2009 levels immediately. Further increases of the rate also need to be considered. Ultimately, a more aggressive tone is clearly needed by government with the Canadian corporate sector, which has demonstrably not fulfilled its end of the low tax bargain since the financial crisis began.


 

[1] Province of Ontario, Building Together: Jobs & Prosperity for Ontarians (Toronto: Queen’s Printer for Ontario, 2011), http://moi.gov.on.ca/pdf/en/BuildingTogether_En.pdf (accessed on October 26, 2015), iii.

[2] Robert Benzie and Richard J. Brennan, “Liberals to force provincial government to have long-term infrastructure plans,” Toronto Star, November 7, 2013, http://www.thestar.com/news/queenspark/2013/11/07/liberals_to_force_provincial_government_to_have_longterm_infrastructure_plans.html (accessed on October 26, 2015).

[3] Province of Ontario, Building Together: Jobs & Prosperity for Ontarians, 4.

[4] Conference Board of Canada, The Economic Impact of Ontario’s Infrastructure Investment Program, April 2013, http://www.conferenceboard.ca/e-library/abstract.aspx?did=5425 (free registration required) (accessed on November 1, 2015), 2.

[5] Ibid., 1.

[6] Benjamin Dachis, “Cars, Congestion and Costs: A New Approach to Evaluating Government Infrastructure Investment,” C.D. Howe Institute, July 2013. https://www.cdhowe.org/pdf/Commentary_385.pdf (accessed on October 30, 2015), 2.

[7] City of Toronto, Deputy Mayor’s Roundtable On Gridlock & Traffic Congestion, February 2014, http://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-72899.pdf (accessed on October 30, 2015), 2.

[8] Canadian Index of Wellbeing, How Are Ontarians Really Doing?, 2014, https://uwaterloo.ca/canadian-index-wellbeing/sites/ca.canadian-index-wellbeing/files/uploads/files/ontarioreport-accessible_0.pdf, (accessed on October 30, 2015), 42.

[9] Ibid., 40.

[10] Province of Ontario, Building Together: Jobs & Prosperity for Ontarians, 9.

[11] Ibid., iii.

[12] Province of Ontario, Results-based Plan Briefing Book 2014-15, (Toronto: Queen’s Printer for Ontario), http://www.moi.gov.on.ca/docs/en/MOI-2014-15RbPBriefingBook-PartI-English.pdf (accessed on October 31, 2015), 6.

[13] Province of Ontario, Building Together: Jobs & Prosperity for Ontarians, iii.

[14] Province of Ontario, Results-based Plan Briefing Book 2014-15, 7.

[15] Province of Ontario, Building Ontario Up: Ontario Budget 2015, http://www.fin.gov.on.ca/en/budget/ontariobudgets/2015/papers_all.pdf (accessed on November 1, 2015), 73.

[16] Ibid.

[17] Province of Ontario, Hydro One Initial Public Offering Closes, (Toronto: Queen’s Printer for Ontario, 2015), https://news.ontario.ca/mei/en/2015/11/hydro-one-initial-public-offering-closes.html (accessed on November 5, 2015).

[18] Ontario Financing Authority, Province’s Consolidated Debt Portfolio, http://www.ofina.on.ca/borrowing_debt/debt.htm (accessed on November 1, 2015).

[19] Province of Ontario, Hydro One Initial Public Offering Closes, https://news.ontario.ca/mei/en/2015/11/hydro-one-initial-public-offering-closes.html (accessed on November 5, 2015).

[20] Province of Ontario, Building Ontario Up: Ontario Budget 2015, 79.

[21] Financial Accountability Office of Ontario, An Assessment of the Financial Impact of the Partial Sale of Hydro One (Toronto: Queen’s Printer for Ontario, 2015), http://www.fao-on.org/web/default/files/publications/FAO%20Hydro%20One%20EN.pdf (accessed on October 29, 2015), 1.

[22] Ibid., 4.

[23] Joan Grace, “Building from the Ground Up: Funding the Infrastructure Deficit in Manitoba,” Manitoba Law Journal 37, no. 2 (2014): 408.

[24] Government of Canada, New Building Canada Plan: Ontario, http://www.infrastructure.gc.ca/regions/on/on-nbcp-npcc-eng.html (accessed on November 1, 2015).

[25] Ibid.

[26] Kaylie Tiessen, “Fixing Ontario’s Revenue Problem,” Canadian Centre for Policy Alternatives, https://www.policyalternatives.ca/sites/default/files/uploads/publications/Ontario%20Office/2015/03/CCPA%20ON%20Fixing%20Ontarios%20Revenue%20Problem.pdf, March 2015, (accessed on October 28, 2015), 5.

[27] Ibid., 12.

[28] Ibid., 10.

[29] The Economist, “Dead Money,” November 3, 2012, http://www.economist.com/news/finance-and-economics/21565621-cash-has-been-piling-up-companies%E2%80%99-balance-sheets-crisis-dead (accessed on November 1, 2015).

[30] Press Progress, “Corporate Canada is sitting on $680 billion, 85% of Canadians say raise corporate taxes,” Broadbent Institute, September 13, 2015, http://www.pressprogress.ca/corporate_canada_is_sitting_on_680_billion_85_canadians_say_raise_corporate_taxes (accessed on October 27, 2015).

 

[31] Benjamin Dachis, William B.P. Robson and Nicholas Chesterley “Capital Needed: Canada Needs More Robust Business Investment,” C.D. Howe Institute, July 2014, https://www.cdhowe.org/pdf/e-brief_179.pdf (accessed on November 3, 2015), 7.

[32] Kaylie Tiessen, “Fixing Ontario’s Revenue Problem,” 10.

[33] Jeff Mason and Kevin Drawbaugh, “Obama targets foreign profits with tax proposal, Republicans skeptical,” Reuters, February 1, 2015, http://www.reuters.com/article/2015/02/01/us-usa-budget-tax-idUSKBN0L51IX20150201 (accessed on October 29, 2015).

[34] Canadians for Tax Fairness, Canadian $$ in Tax Havens Reach $199 Billion,

http://www.taxfairness.ca/en/news/canadian-tax-havens-reach-199-billion (accessed on October 31, 2015).

GOOD READING: @camilacore on the political economy of Uber in Toronto

Today, taxi drivers are demonstrating in Toronto over the city dragging its heels on regulating Uber. Cabbies have also let the politicians at Queen’s Park know how they feel. Ontario also has not moved to regulate Uber.

The following post has been re-posted from @camilacore‘s Facebook page with her permission.


 

“The cabbies are doing themselves no favour with this strike. They need to improve their image.”

This is the same line we repeatedly about unionized workers who exercise their right to collectively bargain, strike, and march on picket lines – year after year.

Don’t celebrate your supposed adaptation to neoliberalism.. it’s nothing to be proud of. The fact that you—as a worker—have no backbone and have conceded the very last of our rights, quality jobs and quality public services to a market that redistributes wealth from the bottom tiers to the wealthiest companies and individuals is nothing to brag about. That’s not progress or ‘progressiveness’, that’s not technological advancement, and it’s only forward-thinking in that you help accelerate a race to the bottom.

It’s mega bizarre that right-wing free market groupies (consumers who drink the kool-aid and are now pouring it down your throat) can have so much influence over us that they’re able to convince us that new shit is always better shit—even when new shit amounts to concessions on democratic accountability, standard employment, health and safety, decent living wages, etc and shifts risk from corporations to workers now operating under weakened labour protections. Some people get off on precarious non-standard employment relationships that don’t include benefits, I hella don’t.

These are not simple choices we’re dealing with, quite the opposite. Capitalism forces us to make the hardest decisions and constantly pits workers against other workers, and it’s currently forcing poor residents living in the suburbs and other areas of the GTA, which are underserved by public transit, to make a decision on whether or not to use seemingly inexpensive and attractive Uber services in a time when our cost of living is rising and our employment is the most precarious.

I can’t sit here from my most-privileged vantage point and tell my associates where to put their money or how to survive off our meager salaries, but I am telling you that our decision to welcome Uber into our city, as is, will have a profound impact on our city’s economy and hundreds of jobs currently occupied by brown and black men, many of whom are immigrant men, many of whom belong to religious minority groups, and many of whom are on multiple fronts discriminated against in the Canadian economy and who are vastly over qualified for their line of work. Drivers whose education, experience, and credentials have been denied by the Canadian state and who often work multiple jobs, or whose racialized wives have picked up the slack since immigrating to Canada. That’s just the tip of the iceberg for what’s at stake here. All of these issues must be addressed, though it’s not single-handedly the fault of Uber (a mere player among many that gets to stroll in and shit on Canadian workers) that we’re placed in this predicament, but I do ask that we be more critical when discussing the impacts of this general shift and make an effort to understand the issues placed before us from a labour standpoint.

A Brief Note On #Elxn42 And Moving Toward A New Left

This much is clear: with the NDP’s federal collapse last night, the neoliberal Third Way experiment can clearly be declared a failure. But now what? Now, to build ─ not rebuild on a broken foundation.

But also this: pillory me as a post-structuralist if you must, but I’m not here for the construction of any next Left that doesn’t weigh the fight against social oppression equally with that of economic oppression. The suture for a new Left in Canada must be oppression, period. Class analysis, arguably, can be taken in exciting new directions if it is a collaborator in the fight against other oppressions and not the centre to which other battles are stitched for the ride to liberation.[1] One obvious conclusion here is efforts must be made that this type of transformative Left not be led by the archetypal able-bodied cisgender heterosexual white male. It is time to adjust ourselves accordingly. It is time to do better.


[1] Ernesto Laclau and Chantal Mouffe, Hegemony and Socialist Strategy: Towards a Radical Democratic Politics, 2nd ed.(London/New York: Verso, 2001).

Ontario’s Common Sense Revolution at 20: A Look Back

Today marks 20 years since the Progressive Conservative Party foisted its so-called “Common Sense Revolution” on Ontario.

Former PC Ontario leader Tim Hudak took to Twitter this morning to extol the virtues of this full-throated neoliberal experiment, declaring it “the most effective, courageous gov[ernment]” in his lifetime.

Some remember those days differently. Here are a few highlights of the “Common Sense Revolution” (1995-99) and the subsequent “Blue Print” era (1999-2003).

Many Ontarians are still dealing with the aftermath of heartless program cuts initiated by the PC regime and the general neoliberal political culture that continues today at the provincial, federal and municipal (in Toronto) levels of government.

This is not a day to celebrate.

Marilyn’s Vitamins – October Monday (from Politics on the Dancefloor, 1998)

Lyrics:

An illegal strike but they’re still gonna fight
And who gives a fuck what the papers say
One October Monday

And a bastard in a 500 dollar suit
Is calling you a special interest group
One October Monday

Lies poured in at the final hour
The whole thing’s still just a matter of power
And the goddamn bill was still the same
Even though the minister’s face might have changed

So no matter how vilified
They’re out standing on the picket line
Tell me which is a more unlawful act
The abuse of power or trying to take it back

So many without a choice
Counting the days till they’re unemployed
But the jobs at the bottom don’t have to be lost
If everyone on the ladder took a tiny loss

And I’d rather have rape crisis centers
Than 10,000 dollar Tory dinners
A system set up that only caters to some
And the broken ladder’s blamed on the bottom rung

Reflections on McChesney: Problematics of Media Self-Regulation

FULL DISCLOSURE: I worked as a mainstream news reporter between 2003 and 2012.

News media goes where many cannot or will not. It infiltrates the halls of power, the courtrooms, protest sites, war zones and scenes of tragedy. It is, unquestionably, the source of much of the information used to inform and shape society. Its role is crucial. However, I contend that codes of professional journalism ethics, which purport to produce a balanced, non-biased mirroring of the facts, fail both as an adequate industry regulator and as a check on the powerful.  To explore this, I will first attempt to locate contemporary news media in its proper context. I will then examine and analyze structural biases inherent in professional newsgathering, which render the concept of self-regulation ineffective and violent for marginalized people. Finally, I will offer both reformist and alternative paths forward to address the problematics of self-regulation and make news media more accountable to the public it is supposed to serve.

Context

Robert McChesney tells us “democratic theory posits society needs journalism” to serve as a watchdog of the powerful and those who chase power, to separate truth from lies and to present a wide range of informed positions on key issues.[1] The idea of neutrality in news media, meanwhile, is a relatively recent phenomenon, having replaced overtly partisan journalism in the 20th Century.[2] As press power consolidated into the hands of fewer chains by the Progressive Era (roughly the early 1900s to the end of the First World War) and advertising drove up the profit margins of newspapers, much of the socialist and populist press folded because it could not/would not pursue ad dollars.[3] So-called “yellow journalism”, or stories focused on sex, scandal, crime and celebrity that frequently involved fabrication became a low-cost way for newspapers to drive circulation numbers and, subsequently, advertising (dollars).[4] By the 1910s, media, suffering a crisis of trust, was being roundly criticized for a one-track capitalistic focus.[5] Professionalism emerged as an attempt by the industry to regulate itself and dampen the critical onslaught.[6] “The argument went that trained editors and reporters were granted autonomy by the owners to make editorial decisions, and these decisions were based on their professional judgment, not the politics of the owners and the advertisers or their commercial interests. As trained professionals, journalists would learn to sublimate their own values as well. Readers could trust what they read and not worry about who owned or worked on the newspaper,” McChesney notes.[7] It is very difficult to suggest that this change within the news industry did anything else except shield it from more external regulation.

Problematics of News Media “Self-Regulation”

However, there are serious problems with the proposition that professional journalism is an objective, neutral recitation of the facts as they occur. Scholars, specifically, The Media Monopoly author Ben Bagdikian, have identified three structural biases in professional journalism ethics codes, McChesney tells us. Firstly, with the aim of exorcizing criticism of the story idea process, “professional journalism regards anything done by official sources — for example, government officials and prominent public figures — as the basis for legitimate news.”[8] Secondly, professional journalism tends to avoid contextualization of the news it covers.[9] And finally, there is a clear pro-business bent to professional journalism, which serves the aims of its corporate masters and advertisers.[10]

A reliance on official sources may be a cheap and cheerful way to gather news[11] but simply getting in close proximity to the powerful lends itself to the potential to merely reproduce officially sanctioned narratives as ‘more true’ than opinions offered elsewhere — specifically, those offered by individuals standing in opposition to the powerful. “Those in political office (and to a lesser extent, business) wield considerable power to set the news agenda by what they speak about and, just as important, what they keep quiet about,” McChesney notes.[12] And, available evidence points to news media’s active complicity in this process of dominant narrative reproduction. A 2001 study by Ina Howard revealed the majority of sources utilized by the nightly newscasts of American networks ABC, CBS and NBC were “white, male and Republican” ─ Republican being the party of the President at the time.[13]  Coercion is also employed to encourage the reproduction of official narratives: journalists who chase stories that no official sources are discussing are sometimes tarred as “unprofessional” and “attempting to introduce bias into the news.”[14] Faced with a reporter undaunted by the accusations of unprofessionalism, official sources may resort to cutting off the journalist[15] — or even the media outlet that employs the journalist.

Tangentially related to the reliance on official sources, contextualization was a casualty of professional journalism because partisan journalism attempted to locate news within a larger ideological framework in order to provide some understanding of it.[16] This does not work for professional journalism because it forces the reporter into a “definite position,”[17] and ostensibly damages her/his supposed neutrality. “To assure that news selection does not appear ideologically driven, reporters and editors grab a news hook to justify a news story.  If something happens, it is news.” This has implications for public discussions about societal ills, McChesney adds. “This means that social issues such as racism and environmental degradation vanish from the headlines unless an event, such as a protest demonstration or the release of an official report, can justify coverage — or unless official sources choose to make it a story.”[18]

Additionally, the pro-corporate bias of professional journalism, while “more subtle”, [19] is real and pervades the whole nature of the craft. Via this bias, professional media plays a significant role in the dissemination of neoliberal values generally and, especially in the aftermath of 9/11, the deployment of the security apparatus that assists in safeguarding the neoliberal and capitalist agenda, specifically. “The affairs of government are therefore more closely scrutinized than are the affairs of big business,” McChesney tells us. “And, of government activities, those that serve the poor (such as welfare) get much more critical attention than those that serve primarily the interests of the wealthy (such as tax dodges or the role of the CIA and other institutions of national security), which are more or less off-limits.”[20] The environment this creates is that which makes it more difficult for government to “regulate in the public interest” and emboldens those who seek to advance the interests of corporations.[21]

Analysis

The over-reliance on official narratives is the praxis of power politics in the public realm. It is not objectivity. It is the violent amplification and further elevation of structural power and works to politically crush the marginalized. It regulates nothing except the perpetuation of traditional power. Examples are myriad. It is seen in the publishing by reporters of law enforcement sources detailing the non-relevant police interactions of a Black man shot dead by a white officer. It manifests in the character assassination of sexual assault survivors by columnists quoting out of context official statistics and then twisting them to suit their agenda. It displays itself in the drowning out of the voices of those standing in opposition to neoliberal principles under a cascade of speeches at news conferences repeating disprovable ideology about corporate tax reduction, service cuts and so-called labour market flexibility.

The reporter’s fear of being cut off is admittedly legitimate. But it is not the end of newsgathering. New, perhaps untested, methods for pursuing stories will need to be attempted. This may mean that different, less structurally powerful voices become magnified in the journalist’s work. This reportage is not necessarily ‘professional’, ‘objective’ newsgathering. Instead, it provides space to voices traditionally suppressed. It is equity of opportunity and, arguably, socially just.

The lack of context in professional news reportage, meanwhile, is a knowledge killer. It plays into the hands of those who would claim that the death and disappearance of approximately 1,200 First Nations women in Canada is a series of unconnected, individual incidents and not a sociological phenomenon. It tells the public nothing about why the news is happening, if it happened before and its implications. It extracts and abstracts significant events from the very aether that often makes them significant.

The pro-corporate bias of professional news, bluntly put, is an implement of status quo capitalism and works to exacerbate social inequality. The markedly unquestioned publishing of reports deriding government spending, public salaries and social programs serves to undermine public confidence in the public realm and diminish citizen interactions with state resources ─ except those which hammer opponents of the racist, heteronormative, patriarchal, neoliberal capitalist hegemony such as police and other security agencies. Add to this the staggering failure by professional media to question the structural foundations of the so-called free market and the state’s relationship with it and the pro-corporate bias reveals itself writ large.

Toward A Better Media

Change is not impossible. Professional journalism can be reformed and media can serve the public. McChesney states journalists have never been “professionals” in the same way doctors and lawyers are, since journalists are employees who don’t own their own businesses and that journalism lacks a “unified scientific code.”[22] McChesney appears to be arguing that because of these issues, journalism cannot or should not be regulated by a college. This line of reasoning fails. Ownership of the means of production is not a pre-requisite for professional regulation in the fields of social work, nursing, respiratory therapy, occupational therapy and teaching. Colleges of Journalism would admittedly be another layer of self-regulation; however, participation would be mandatory — not voluntary like in the case of press councils such as the Ontario Press Council. There would be hearings with consequences for bad, damaging journalism. If a particular College wished not to be inundated with complaints about official source-driven coverage that provides no context and pushes a pro-capital agenda, it could work to implement a unified code of ethics that requires a different approach to the news.

An alternative approach would be to seize a portion of profit from professional journalism agencies and redistribute it to independents. Those independent, non-professional agencies would be required by public, elected committees to provide context, amplify the voices of the structurally marginalized, create news teams that actually reflect the diversity of the subject matter being interrogated and publish coverage that does not smuggle a pro-corporate bias. The state already has the taxation and redistribution powers to implement such an approach. This idea is no more revolutionary than allowing corporate “professional” media agencies to shield themselves behind free press sections of national constitutions while reproducing the worldviews of the ruling elites and gradually converging into a handful (or smaller number) of news economy leviathans.

Conclusions

Professional journalism ethics standards are an abject failure, both as an industry regulator and as a check on the powerful. The inherent biases built into professional journalism intensify structural inequalities and power imbalances. But, change is possible and, indeed, necessary. The boosting and normalization of voices critical of and marginalized by structural power may serve as important barrages in the many battles for social and economic liberation. These are battles in pursuit of truth. They are battles for justice. And the waging of those battles is the role of news media.


[1] Robert W. McChesney, The Problem of the Media: U.S. Communication Politics in the Twenty-First Century, (New York: Monthly Review Press, 2004), 57.

[2] Ibid., 58.

[3] Ibid., 60.

[4] Ibid., 61.

[5] Ibid., 62.

[6] Ibid., 64.

[7] Ibid.

[8] Ibid., 68.

[9] Ibid., 71.

[10] Ibid., 72-73.

[11] Ibid., 69.

[12] Ibid.

[13] Ibid., 70.

[14] Ibid., 69.

[15] Ibid.

[16] Ibid., 71.

[17] Ibid.

[18] Ibid.

[19] Ibid., 72.

[20] Ibid., 73.

[21] Ibid.

[22] Ibid., 67-68.