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Help please!

Wed, 2019-03-20 03:40

Can anyone out there help me? Just saw a headline on CNN saying that, in spite of Brexit chaos, unemployment was at an historic low. Likewise in US where in spite of Trump — could it really be because of? — unemployment is also at an historic low. Reminds me that back in the late 1970s there was a G-7 summit in London England. There were pictures in the press of the leaders, beginning with Thatcher. For Italy the joke was that politics was so volatile that no one could remember who was its leader. But guess which country had the best performing economy? Answer: Italy.

All of which raises the question: does it really not matter to the economy what is the state of the polity?

Categories: News for progressives

Income Inequality and Redistribution in Venezuela

Mon, 2019-02-18 05:10

I had been waiting for last month’s publication of the book “Confronting Inequality” before preparing my annual update on income inequality and redistribution in Canada. I am glad I did because the book presents new and exciting empirical findings that shed light on the age-old equity/growth debate (more on that below), but also introduced me to the Standardized World Income Inequality Database (SWIID). Data comparability and granularity has been a challenge for inequality researchers looking at countries outside the OECD and EU. Specifically, the lack of inequality data for market income did not allow researchers to measure and analyze the redistributive effect of Government policy. In contrast, the most recent version of SWIID provides historical estimates of Gini coefficients for disposable and market income for 192 countries generally to 2016. Keen to make use of this new database, I’ve decided to turn my attention south to my birth continent of Latin America and focus on Venezuela.

There is of course much to be analyzed (and debated) about and in Venezuela from a foreign policy/intervention, constitutional legitimacy, humanitarian, political and economic perspective. My objective here is narrow: to present evidence-based analysis of Venezuela’s income inequality performance, from a historical (1990 to 2015) and comparative (other Latin American countries) perspective. I use the same framework of analysis as in previous posts and encourage interested readers to refer to these for further conceptual and technical background. The most recent SWIID data for Venezuela is 2015 and therefore my analysis does not cover the current period of deep economic contraction or hyperinflation, although in the Epilogue I do hypothesize how these severe macro-economic shocks have likely impacted income inequality.

Market Income Inequality

Figure 1 presents market income Gini coefficients for Venezuela, four other selected countries in Latin America and two group averages: the “LatAm-17” group – Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela – and the “OECD-14” group – Australia, Canada, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, New Zealand, Norway, Sweden, UK and USA.

The data for the OECD-14 is from the OECD’s Income Distribution Database and generally available to 2015 or 2016 and is reasonably comparable to the SWIID data methodology used for the LatAm-17 group. The Gini coefficient varies from 0 to 1.00, with higher values representing higher inequality. Market income Gini coefficients measure the distribution of market income (from employment and investments), before any taxes or Government cash benefits.

Starting the analysis at the group averages, Figure 1 shows that market inequality was significantly higher (0.07 Gini points) in Latin America than in the OECD at the beginning of the study period. Inequality in both groups increased over the 1990’s until the early-2000’s, at which point the groups started to diverge. Latin America, which has traditionally been the must unequal region in the world, suddenly bucked the global trend of increasing inequality and started to see sustained decreases in inequality, so much so that by 2014/15 it had about the same average income inequality as the OECD. This continental decrease in market income inequality is still the subject of ongoing analysis, but is likely due to a “winding down” of past inequality-increasing shocks, together with conducive macro-economic conditions and activist Government policies of social investment.

In addition to the group averages, Figure 1 also shows Venezuela and four other LatAm countries, Brazil, Mexico, Colombia and Uruguay. I wanted to include other countries to provide national context. I chose Brazil, Mexico, Colombia because these are the three most populous countries in the region (Venezuela is sixth). Colombia and Brazil are also neighbouring countries with Venezuela. Mexico is the northern-most country in the region. I chose Uruguay because it one of the Southern Cone countries.

Figure 1 shows that over the study period Venezuela always had lower income inequality than the LatAm-17 average. Indeed, it had the lowest average market inequality in the region, with Costa Rica (not shown) a close second. Venezuela had the same inequality trajectory as the regional trend, with inequality increasing in the 1990’s then stabilizing until the mid-2000’s, before decreasing until 2015.

Market income inequality is driven by a complex combination of trends and policies, both international and national. One of the reasons I am writing this blog is to understand what effect, if any, did the self-styled “Bolivarian Revolution” (“BR”) that began in 1999 with the administration of President Chavez that lasted until his death in March, 2013 (“BR-I”), have on Venezuela’s economic inequality? And how about under the administration of President Maduro for the three year period 2013-2015 (“BR-II)?

Looking only at Venezuela one concludes that both BR-I and BR-II lowered market income inequality in Venezuela. But that conclusion is unsatisfactory because it allocates all changes in inequality to national conditions and specifically to Government policies. A more nuanced analysis would try to differentiate between the international and national effects and allocate changes to each. There are a number of methodologies for such a task (including component analysis, etc.). In this blog I use a simple comparison-to-the-mean analysis.

For example, inequality increased during the 1990’s for LatAm-17 and OECD-14 and all countries in Figure 1 except Brazil. Regional inequality was going up but Brazil was bucking the trend; national developments were more than countering international trends. In this instance, I say that during the 1990’s Brazil was an “above-average” performer in reducing market income inequality. Further much more detailed analysis would be required to try to allocate this above-average performance between national trends and Government policies. Along these lines, I also say that since the mid-2000’s Mexico has been a “below-average” performer because inequality increased there while it was falling everywhere else in the region. All the rest of the countries (Venezuela, Colombia and Uruguay), however, are all “average” performers with upside-down “U” trajectories and lower inequality in the mid-2010’s than the early 1990’s. In this broader context, therefore, Venezuela’s inequality performance, including during the BR period, was average for the region.


Disposable income is defined as market income after payment of direct taxes and receipt of Government cash benefits (e.g. unemployment, govt. pensions, social assistance, etc.). Disposable income does not cover “in kind” Government expenditures such as free education, free school lunches, subsidized housing, etc. Inequality of disposable income is measured by the “Net” Gini coefficient. The difference between the Market Gini and the Net Gini is referred to as “fiscal redistribution” or more generally “Redistribution” and reflects the extent to which Governments, either as a deliberate effort or as a consequence of other policies, reduce market income inequality by direct taxes and cash benefits.

Figure 2 shows that the OECD-14 has more than five times the amount of Redistribution as LatAm-17 (0.16 versus 0.03 Gini points). This difference reflects a number of political economy and administrative factors. That the amount of redistribution is pretty constant in all the countries shows how politically and, in Latin America, administratively challenging it is significantly change the amount of redistribution.

Uruguay and Brazil are all above the LatAm average, while Mexico and Colombia well below it. Venezuela’s redistribution, at about 0.03 Gini points, was relatively steady and slightly below the LatAm average. In this respect, Venezuela was a comparatively “average” performer. Nor did the level of redistribution increase during the BR, a surprising result given its reformist narrative. There are a number of possible explanations for this. One is that the SWIID Gini coefficients mis-measure redistribution for Venezuela. While SWIID does include standard errors, that of Venezuela (0.025 Gini points) is only slightly higher than that for the LatAm-17 average (0.021 Gini points).

A more likely reason is the level and composition taxes and expenditures in Venezuela were not conducive to high levels of redistribution. As many other large oil-producing states, Venezuela has traditionally had relatively low levels of taxation revenues, averaging around 15% of GDP over the 2010-2015 period. Oil royalties made up another 10% of GDP. In comparison, taxation revenues average about 25% for LatAm and 35% for the OECD. (All tax-related data from the OECD’s Revenue Statistics in Latin America and the Caribbean). Neither was the composition of taxation revenues in Venezuela progressive, with the large majority (10% of GDP) coming from value-added-tax (VAT). Thus personal and corporate income taxes (PIT, CIT) accounted for only 4% of GDP in Venezuela (compared to about 13% in the OECD). Given this relatively small CIT/PIT, it is likely that the taxes had no redistributed impact in Venezuela. Further, “disposable income” and the Net Gini coefficient are before the payment of indirect taxes such as a VAT (that requires a another level of granularity of data) and so therefore, “post-tax inequality” (that would include direct and indirect taxes) would be proportionally higher in Venezuela than in other LatAm countries because of its relatively high VAT.

The BR did not change this relatively regressive taxation composition in Venezuela. Indeed, Venezuela was one of the countries in the region that in the late 1980’s started to implement tax reforms that shifted the tax burden from the CIT/PIT to the VAT. In 1990 VAT only accounted for about one tenth of tax revenues, after which it grew steadily to about two-thirds by 2000. The BR maintained and increased this reliance on the VAT, did not increase PIT/CIT and did not implement any sizeable wealth or property tax.

Net Income Inequality

Even though market inequality in the OECD and LatAm where similar in the mid-2010’s, Figure 3 shows how the larger redistribution in the OECD lowers net inequality well below that of LatAm over the same period. Figure 3 shows that over the study period Venezuela had 0.06 Gini points lower net inequality than the LatAm-17 average. Over that period it had the lowest average net inequality in the region, after Uruguay. However, from a comparative perspective, Venezuela was an “average” performer.


Social Spending

So from a comparative perspective I conclude that with respect to income inequality and redistribution Venezuela was an “average” performer in the region. This assessment includes the period of the BR adminstrations. But how about social spending?

Figure 4 shows Government social expenditures (education, health, housing, social assistance, etc., including in-kind and cash transfers) as a percent of GDP (figures from the UN’s Economic Commission for Latin America and the Caribbean (CEPAL for its acronym in Spanish) Social Investment Portal). Starting at the averages, LatAm countries spent about half that of OECD countries. Figure 4 shows Venezuela’s relatively large social spending relative to LatAm countries (tied for second place with Uruguay and Brazil, with Chile in first over the whole study period). We can see the BR in Figure 4, showing an uptick in 2001 for BR-I and then a very significant increase in 2013 and 2014 for BR-II.

Comparing Figures 4 and 2 allows us to analyze the effectiveness of social expenditures in reducing income inequality. For example, Uruguay and Brazil’s relatively high social expenditures result in relatively high redistribution. In effect, the social spending/redistribution “multiplier” was about 0.8 for these two countries, meaning that they for each GDP percentage point of social spending resulted in an increase in redistribution of about 0.8 Gini points. In contrast to these “efficient” redistributive countries, Venezuela, Mexico and Colombia had multipliers of only 0.2. Means that a percentage point of GDP in social spending resulted in only 0.2 Gini points of redistribution. Such differential performance is likely due differences in the composition of spending (in-kind vs. cash transfers) or more likely the progressivity of that social spending. For political and/or administrative reasons Uruguay and Argentina are able to target their social cash benefits to the lower income households. The social spending/redistribution “multiplier” in Venezuela was relatively constant during BR-I but declined during BR-II.


The Venezuelan economy contracted moderately in 2014 and in 2015 before contracting by more than 10% each year over the 2016-2018 period and likely another 10% in 2019, resulting in a cumulative GDP decrease of over 50% since 2014. Venezuela would have dropped from having the second-highest GDP per capita in the region in 2014-2015, to the middle of the pack by 2018-2019. Venezuela’s relatively high inflation increased dramatically in 2016 and spiked into hyperinflation in 2017, which continues into early 2019.

There are a number of inequality-related issues in this economic crisis scenario. One relates to the relationship between inequality and economic growth and the other is how the crisis has affected inequality.

On the first point, it is first worth summarizing some of the new findings from the “Confronting Inequality” book published last month. One is that across time and across countries, lower income inequality tends to increase the duration of economic growth spells. The other is that redistribution (as defined here) tends to (slightly) increase economic growth, with the possible exception of very high redistribution. Venezuela was a low inequality country so the first finding suggests that statistically, inequality was not likely to have been a contributing factor to the current economic contraction. And the second finding leads to a similar statistical conclusion with respect to Venezuela’s low redistribution. There are other contributing factors to the current economic crisis in Venezuela.

On the second point, the impact on economic inequality of such severe macro-economic shocks is not well understood or easy to measure. Venezuela is this century’s first country that has endured hyperinflation (compared to perhaps 25 over the 1970-2000 period), so there is not much recent evidence on the subject. Earlier econometric analysis suggests that income inequality spikes during hyperinflation. Inequality also tends to increase during economic contractions. A reduced labour share, increasing unemployment, differential wage inflation-protection, insufficient indexing of cash benefits, differential access to USA-dollar denominated assets and remittances would appear to be some of the drivers of what is likely drastically increased income inequality right now in Venezuela.

Categories: News for progressives

Technology and Democracy (continued)

Sun, 2019-02-03 06:55

Post the Second World War, the US became dominant in the world economy and a shift from coal to oil was deliberately taken by the state to weaken the power of coal-centred industrialization and tie the Middle East into American and European control. Transport of oil by pipeline and tanker created a fluidity that tended to eliminate nodal points where workers could exercise power.

Categories: News for progressives

The Stamp of Oil

Sat, 2019-02-02 03:58

The opening sentence of the 2011 book, Carbon Democracy: Political Power in the Age of Oil by the historian Timothy Mitchell, reads “Fossil fuels helped create both the possibility of modern democracy and its limits.” Carbon democracy is “a certain kind of democratic politics.” He observes: “Countries that depend upon petroleum resources for a large part of their earnings from exports tend to be less democratic.” Mitchell wants to moor that democracy in the materiality of coal and oil, which Innis called “dirt economics.” He wants to keep his eye not simply on oil revenues, as most scholars have, but on oil itself.

Coal was the first fossil fuel. Economically, it enabled the Industrial Revolution of sustained exponential economic growth, and politically, mass politics and liberal democracy. The transportation of coal necessitated the development of canals and railways with further powerful spread effects. (You get a sense of the command of history, and particularly economic history, that Mitchell has.) The demand for other goods from distant places led to colonization and imperialism which undermined democratic development at home and abroad. At the same time, however, the concentration of people in cities and factories facilitated the development of new forms of collective democratic action including, for example, trade unions, and notably coal miners with considerable autonomy working underground.

Categories: News for progressives

Wilbur Schramm and Noam Chomsky Meet Harold Innis

Fri, 2019-01-18 02:45

That’s the actual title of a recent book (2015) by Robert E. Babe, who has a doctorate in economics and is professor of Information and Media Studies at the University of Western Ontario. The sub-title is Media, Power, and Democracy.

Harold Innis you know. If you don’t, get with the required reading. Noam Chomsky everybody knows. So who is Wilbur Schramm?

He’s the founder of Communication Studies in the U.S., which is your ordinary flourishing discipline, behavioral, quantitative, instant conventional wisdom, wholly helpful to power. In contrast is Innis as founder, with Marshall McLuhan, in Canada, of media studies,  with tell-all titles like Empire and Communications, Bias of Communication, Changing Concepts of Time, and during his transition from studies of Canadian staples to media studies, Political Economy of the Modern State. Not behavioral. Not quantitative. Created paradigm of Canadian Political Economy — which eventually morphed into the New Canadian Political Economy. Dissenting wisdom, as it became increasingly critical of power, and dismissed and ignored by established power.

As for Chomsky, he and Innis are of a kind. That is the convincing case made by Babe in this book. You’ll learn more than you did about each of them and just might decide to emulate them more as activist scholars, particularly if university-based.

Chomsky, immortal, speaks truth to power endlessly. He’s co-author of Manufacturing Consent, of how the mass media can create consensus to do very wrong things. Chomsky, while maintaining his reputation for innovation in linguistic studies, has been extraordinarily active politically, demonstrating and speaking publicly from his opposition to the War in Vietnam, to civil rights in America, to the Iraq war, to today, where he is still speaking out and writing at 89.

Both Innis and Chomsky are motivated by circumstances. Neither was inclined to seek the quiet comfort of the ivory tower. Innis was affected by and responding to the First World War (in which he participated), the Great Depression of the 1930s, the Second World War, the atomic bomb, the beginning of the Cold War, the Korean war, and, throughout to Canada’s willing shift from the British to the American empire, the militarism of which Innis deplored. He was, however, not politically active outside the university and attacked those who were, notably CCFers, while insisting on their freedom of speech. All and all, a persistent intellectual radicalism

Chomsky, in his condemnation of American militarism and imperialism, has likewise strongly condemned those intellectuals who served power.

Babe thinks that Innis and Chomsky have in common a mistrust of elites and of power. We know from today’s populist politics how important that sentiment is. Both attacked power from the protection of a university base — which few academics do. Both were critical of what Galbraith, the Canadian-American professor, called the conventional wisdom. In my view that is the surest sign of their greatness as public intellectuals.

Categories: News for progressives

Statistics Canada’s Ongoing Consultation about the Market Basket Measure Needs Recalibration

Thu, 2019-01-17 21:34

Things are moving quite fast, even too fast, since the federal government’s first poverty reduction strategy was published in August, at least for the aspects of this strategy which are problematic. The unilateral decision to consider the Market Basket Measure (MBM) as “Canada’s Official Poverty Line” is one of those. It ignores some useful expertise developed about the MBM over the years, notably by the Centre d’étude sur la pauvreté et l’exclusion (CÉPE), the institution meant to provide dependable and objective information on matters concerning the application of Québec’s Act to combat poverty and social exclusion[1], as well as current discussions about the type of living standard effectively assessed by this measure.

In 2009, the CÉPE carefully recommended the use of the MBM “as the baseline measure to monitor situations of poverty from the perspective of coverage of basic needs” (CÉPE’s advice, page 34), stating explicitly that “while the market basket measure makes it possible to monitor the evolution of poverty and the progress achieved, it fails to measure exit from poverty, as based on the definition contained in the Act” (Ibid.)[2]. Yet the definition of poverty given in the federal strategy is quite close to the Québec one[3].

Moreover, the federal decision was announced without waiting for the results of the periodic revision of the MBM (rebasing process) by Statistics Canada, which is still taking place. This decision is now on its way to be legislated through Bill C-87, which was launched on November 6 (and incidentally, does not mention the strategy’s definition of poverty). Meanwhile, Statistics Canada has launched an online consultation asking people’s advice on the MBM… with ill-calibrated data.

Let’s start with this point, since the consultation is ongoing and invitations to respond are circulating within different organizations.

What’s wrong with Statistics Canada’s online MBM consultation

In this survey, held from October 15, 2018 to January 31, 2019, Statistics Canada “is conducting a consultation to gather input from Canadians to help validate how we are measuring poverty”. The ambiguity between the federal government’s haste to set the MBM as the official poverty line and the periodic rebasing process of the MBM by Statistics Canada is ubiquitous in the survey’s presentation, whose stated purpose is “to help validate the methodology of the MBM”:

“Recently, the Government of Canada announced that the Market Basket Measure (MBM) will be used as Canada’s Official Poverty Line. Statistics Canada is currently conducting a comprehensive review of the MBM.

The MBM is a measure of low income which is based on the cost of a basket of goods and services that individuals and families require to meet their basic needs and achieve a modest standard of living. Wherever individuals and families are living across the country, if they cannot afford the cost of this basket of goods and services in their particular community, they will be considered to be living below Canada’s Official Poverty Line.

By participating in this consultation, you will be supporting Statistics Canada’s ability to accurately measure low income and poverty.”

In other words, the frontier of poverty is officially tied to the MBM threshold and then the public is consulted to assess whether it’s indeed the case!?

At lot of assumptions are made here through the association between what is meant by basic needs coverage, a modest standard of living (not defined by Statistics Canada[4]) and an official poverty line. What about the respective position of these concepts “within a field of possible thresholds” (CÉPE’s 2009 advice, page 34) in the continuum between poverty and non-poverty? More confusion is added in the questionnaire, where the MBM basket is presented as follows:

“The basket includes items such as healthy food, appropriate shelter and home maintenance, and clothing and transportation.

The items in the basket reflect prices in communities across Canada. […]

By selecting your province, city and family size, you can find out how much your family would need to stay out of poverty. Please tell us if you think these amounts are too high, too low or “about right”.”

Then people are asked to evaluate specific amounts for the basket’s various components.

This seems like a departure from the usual rigour of Statistics Canada, which is not known to have ever broken down the MBM thresholds into specific amounts for the basket’s components for other households’ sizes than the two adults and two children reference family. And there is good reason for this.

In a 2010 empirical study, the CÉPE showed that although it seemed to work for the total content of the basket (i.e., the total MBM threshold), the equivalence scale used to establish corresponding thresholds for other family sizes (the square root of households size) did not accurately represent the breakdown of expenditures for the specific sections of the basket (food, clothing, shelter, transportation, other necessities), at least for one-person households.

For example, the equivalence scale implies that to establish the cost of a basic standard for a single person, one must divide the cost of the basket for a household of four persons by two (the square root of four). However, in practice, the comparable cost of food or housing for a single-person household will not be half of what it is for a family of four. Most likely, it will amount to less than that for food and more, even much more, for housing.

Yet the online consultation (as well as the federal strategy, on pages 69-70) simply uses the equivalence scale ratios to establish the cost of the basket components proposed for evaluation to respondents of various household sizes. The result is that the amounts are broken down in ways that don’t make sense, as shown in the inset.

Unrealistic apportioning of the MBM components in the online consultation
The first part of the table below presents amounts found in Statistics Canada’s online consultation for households of different sizes in Montréal, and calculates their monthly and annuals totals, which are not mentioned in the consultation.

The second part of the table shows that the amounts provided in the online consultation for each component of the basket closely match those obtained with the usual equivalence scale.

The third part of the table uses the coefficients observed by the CÉPE in its 2010 empirical estimation of equivalent expenditure levels between a household of two adults and two children and a single person household. It also adjusts the results to the annual MBM threshold that can be inferred from the consultation for this household. Even though the CÉPE’s coefficients are somewhat dated, they reflect the distribution of expenses as it was actually observed in Québec at the time, which is useful for illustrative purposes (and calls for further research and updated observations for various household sizes).

Indeed, it seems reasonable to suppose that where a Montreal family of four will spend $950 monthly for food, a person living alone is likely to spend closer to three times less (around $307 to $341, which is in line with a $315 recent estimate from Montreal Diet Dispensary), than two times less (480 $) as indicated in the consultation. Likewise, where this family of four will spend $750 for housing, an amount of $595 to $660 will not appear excessive for a person living alone. This time, the amount of $380 indicated in the online consultation is much too low.

What kind of results can be expected from such a consultation if the indicated amounts for the key items in the basket are misleading?

A few pathways forward regardless

Slow and steady wins the race, says the fable. While the political will to reduce poverty is much needed and welcome in Canada, it would be regrettable to lose its potential due to a lack of reliable and credible foundations of its chosen poverty measure.

The MBM is a useful cost-based measure of basic living standards, but it needs proper care and assessment as an indicator within the broader concept of poverty. Choosing it as the official poverty line in Canada without such nuances compromises this proper use.

While consultations about the contents of the MBM are advisable, as we can expect that standards of living change over time, these consultations must be done in a manner that’s orderly and pays attention to the current state of knowledge without skipping a step between what is known and what has to be assessed.

What can be done in the meantime, if the federal government’s intent to reduce poverty is serious?

Here are some suggestions.

  • Consider the MBM as a good indicator among a larger set of reliable low income lines and characterize the existing or considered lines in this set in relation to what they specifically reveal about diverse experiences of income poverty across Canada.
  • Modify Bill C-87 accordingly and characterize the MBM differently than as the official poverty line in Canada, e.g. as an official line to follow the experience of poverty from the angle of basic needs coverage, as is done in Québec.
  • Maintain the announced targets for the reduction of low income rates in reference to the MBM for what it is, without linking this line to the difference between being poor or not, and consider alternative measures and targets that could be used to assess and reduce the number of people living in poverty.
  • Implement the announced National Advisory Council on Poverty, with a guaranteed independence in its mandate and entitlements, and a sound representation of rights-based advocacy groups and networks, including persons with a lived experience of poverty.
  • Work closely with this Council in order to develop a plan with concrete policy measures, which are lacking in the strategy, so that these targets can be achieved.
  • Maintain a distinction between having the resources to cover one’s basic needs, as monitored by the MBM, and being free from poverty as broadly defined in the national strategy to include the resources, means, choices and power necessary to acquire and maintain a basic level of living standards and to facilitate integration and participation in society.
  • Expand the definition of poverty and its interpretation in reference to the rights mentioned in the definition of poverty given by the UN Committee on Economic, Social and Cultural Rights.
  • Request Statistics Canada, in reference to the statement published in 1997 by its chief statistician of the time, Ivan P. Fellegi, to investigate what type of income indicator could correspond more fully to a poverty line along this broader definition, with respect notably to what has been published in Canada around the concepts of living wage and living income.
  • Continue the ongoing revision of the MBM by Statistics Canada and ensure a sound maintenance of the surveys needed for its calculation.
  • Temporarily put on hold the items of the online consultation about the MBM which are related to the cost of its various components for household sizes other than the 4 persons reference household, undertake the studies needed to establish realistic coefficients for breaking down expenditures in the sections of the basket of goods and services according to the size of households (in line with the 2010 CÉPE study), and start over with this aspect of the consultation.
  • Observe where all households are situated, below and above the MBM threshold, or any other line used to characterize the experiences of poverty, so that envisioned actions for poverty reduction can be linked to the continuum of existing inequalities in living standards and incomes and to the changes needed more broadly in social, fiscal and economic policy to reduce these inequalities.
  • Acknowledge that this also requires the elimination of structural and systemic barriers, including discrimination, and calls for a variety of income and non-income inequality indicators in the strategy’s dashboard.

There is still time to address these concerns and move the process in the direction needed to produce lasting and desirable results for all Canadians. Let’s hope the federal government listens and understands what is at stake, and then makes the necessary adjustments to get this right. It will be well worth the trouble for what comes next.

[1] An English version of the adopted act, without the enforcement notifications, can be found here.

[2] “For the purposes of this Act, “poverty” means the condition of a human being who is deprived of the resources, means, choices and power necessary to acquire and maintain economic self-sufficiency or to facilitate integration and participation in society” (Québec Act, article 2, French formulation here).

[3] “Poverty is: The condition of a person who is deprived of the resources, means, choices and power necessary to acquire and maintain a basic level of living standards and to facilitate integration and participation in society.” (Opportunity for all, page 7, French formulation here, same page).

[4] Other Statistics Canada’s publications present the MBM basket as “representing a modest, basic standard of living” in English, and  “correspondant à un niveau de vie de base” in French.

Vivian Labrie is an independent researcher, associated to the Institut de recherche et d’informations socioéconomiques (IRIS). She has been involved in various ways since 1997 in the actions that led to the adoption in 2002 of the Act to Combat Poverty and Social Exclusion by the Québec National Assembly, and in the follow up of its implementation afterwards.

This article is a slightly updated English version of the blog post “
Une consultation en ligne sur la MPC à recalibrer”, which was originally published on the IRIS website on October 17, 2018.

Categories: News for progressives

2019 PEF Student Essay Contest is Open

Mon, 2019-01-14 06:37

The 2019 PEF Student Essay Contest is now open!

Calling all Canadian students anywhere in the world and all post-secondary students in Canada who are working on papers taking a critical approach to the functioning, efficiency, social, and environmental consequences of unconstrained markets. The winning essays will receive a cash prize of $1,000 for the graduate student category and $500 for the undergraduate student category.

You can download a poster in English or Français. Please help us spread the word and post one in your department.

Essay submissions should be made to and must be accompanied by a signed scanned file of the completed PEF Essay Contest Submission Form or fiche d’inscription pour le concours de textes du PEF. The deadline for submitting an essay for the contest is April 29, 2019.




  • Open to all Canadian students, studying in Canada and abroad, as well as international students presently studying in Canada. All entrants receive a complimentary 1-year membership in the Progressive Economics Forum.
  • The definition of “student” encompasses full time as well as part time students.
  • Students eligible for the 2019 competition must have been/be enrolled in a post-secondary educational institution at some point during the period of May 2018 – May 2019.


There are two levels of competition:

  • One for undergraduate students;
  • One for graduate students*.

*Note: Those who have previously completed an undergraduate degree or a graduate degree, and are returning to do a second undergraduate degree will only be considered for the graduate student competition. The same holds for students who spend part of the academic year in a graduate program.


Entries may be on any subject related to political economy, economic theory or an economic policy issue, which best reflects a critical approach to the functioning, efficiency, social and environmental consequences of unconstrained markets.


Eligible entries will be:

  • sent by email at the latest on April 29, 2019, to:
  • the only submission by the author(s) (i.e., one submission per person);
  • between 20-40 pages in length, and typed in 12-point font, double spaced;
  • referenced to academic standards (including any data);
  • written in either English or French;
  • original, single-authored essays that do not infringe upon the rights of any third parties;
  • accepted on re-submission once;
  • accompanied by a signed scanned file of the completed PEF Essay Contest Submission Form.

Entrants consent to having the Progressive Economics Forum publish essays from winners and those receiving honourable mention. Each applicant will submit a valid email and postal address for correspondence.


  • A panel of judges selected and approved by the Progressive Economics Forum will judge entries.
  • Entries will be judged according to the following criteria: substance and originality, writing style, composition, and organization.
  • The Progressive Economics Forum reserves the right not to award a prize or any prizes where submissions do not meet contest standards or criteria.


  • The winning essays will be announced at the Annual General Meeting of the PEF at the Canadian Economics Association Conference in Banff, AB.
  • A cash prize of $1,000 will be awarded the winner of the graduate competition; and $500 will be awarded to the winner of the undergraduate competition.
  • The winning essays will be published on the PEF website.
  • Judges’ decisions are final.


Concours de textes étudiants – édition 2019

Qui peut participer?

  • Ouvert à tous les étudiants canadiens, qui étudient au Canada ou à l’étranger, ainsi qu’aux étudiants étrangers étudiant au Canada. Tous les participants deviennent gratuitement membres du Progressive Economics Forum pour un an.
  • Le terme « étudiant » couvre les étudiants à temps plein et les étudiants à temps partiel.
  • Pour être éligible à l’édition 2019 du concours, un étudiant doit avoir été ou être inscrit dans une institution post-secondaire à un moment donné pendant la période allant de mai 2018 à mai 2019.

Niveaux de compétition

Il y a deux niveaux de compétition:

  • Un pour les étudiants prégradués;
  • Un pour les étudiants gradués*.

*NB: Ceux qui ont déjà complété un programme prégradué ou un programme gradué et qui retournent faire un deuxième programme prégradué ne peuvent participer au concours qu’au niveau gradué. C’est la même chose pour tout étudiant ayant passé une partie de l’année dans un programme gradué.

Contenu du texte

Les textes peuvent porter sur tout sujet relié à l’économie politique, la théorie économique ou une problématique en lien avec des politiques économiques, qui reflète une approche critique sur le fonctionnement, l’efficience, et les conséquences sociales et environnementales des marchés libéralisés.

Pour être accepté, un texte doit:

  • être envoyé par courriel, au plus tard le 29 avril 2019, à l’adresse suivante:;
  • être le seul texte envoyé par le(s) auteur(s) (un texte par personne);
  • avoir entre 20 et 40 pages, tapé dans une police de taille 12 points, à interligne double;
  • avoir des références écrites selon les standards académiques (incluant les données);
  • être écrit en anglais ou en français;
  • être un texte original, avec un seul auteur, qui n’enfreint pas les droits d’auteurs d’une tierce-partie;
  • n’avoir été soumis au maximum qu’une fois auparavant (donc un texte peut être soumis un maximum de deux fois);
  •  être accompagné par une fiche d’inscription pour le concours de textes du PEF complétée, signée et numérisée.

Les participants acceptent que le Progressive Economics Forum publie les textes des gagnants et de tout autre participant recevant une mention d’honneur. Tout participant devra soumettre une adresse courriel qui fonctionne, ainsi qu’une adresse postale pour fins de correspondance.


  • Un panel de juges choisis et approuvés par le Progressive Economics Forum va juger les textes soumis.
  • Les textes seront évalués selon les critères suivants : substance, originalité, style, ainsi que l’organisation et la cohérence de l’ensemble.
  • Le Progressive Economics Forum se réserve le droit de ne pas décerner un prix, ou quelque prix que ce soit, si aucun texte ne remplit les critères ou n’atteint les standards.

Textes gagnants

  • Les gagnants seront annoncés à l’Assemblée générale annuelle du PEF.
  • Un prix de $1,000 sera attribué au gagnant du concours pour les étudiants gradués et $500 sera attribué au gagnant du concours pour les étudiants prégradués.
  • Les textes gagnants seront publiés sur le site internet du PEF.
  • Les décisions des juges sont sans appel.
Categories: News for progressives

An update on Canada’s National Housing Strategy

Sun, 2019-01-13 03:20
Steve Pomeroy, arguably Canada’s top affordable housing policy expert, has written a status update on Canada’s National Housing Strategy (NHS). His overview includes some great background material on Canadian housing policy generally. Points raised in his analysis include the following: -The Trudeau government’s much-anticipated NHS was unveiled in November 2017. -In most provinces and territories, federal funding accounts for less than 10% of homelessness funding. Provincial, territorial and municipal orders of government fund most of the rest. Yet, just 5% of new funding under the NHS has been earmarked towards the Trudeau government’s goal of reducing chronic homelessness by half. -Our federal government is good at funding/financing affordable housing; provincial/territorial governments, by contrast, are good at housing program design and implementation. Each should stick to what it’s good at (ergo: the federal government should let provincial and territorial governments lead when it comes to program design/implementation). Sadly, history suggests that federal officials will be reluctant to treat provincial/territorial governments as equal partners during the implementation of the NHS. -Canada’s federal government does a very poor job of enumerating new social (i.e., non-profit) housing builds. -Steve thinks it’s a mistake for the federal government to require provincial/territorial cost-matching for the Canada Housing Benefit (which is an important component of the NHS); though he’s not suggesting provincial and territorial governments get a ‘free ride’ on it either. -Non-profit housing providers across Canada have been having trouble accessing funding currently available under the NHS. Steve’s full analysis can be found here: An overview of the NHS itself can be found here:
Categories: News for progressives

Socialism For Realists

Fri, 2019-01-11 20:09

I recommend reading Sam Gindin’s paper “Socialism for Realists” to be found in the current issue of the relatively new socialist journal, Catalyst. Sam spent most of his working life as a union economist and assistant to the President of the CAW, and writes often with Leo Panitch, most notably as co-authors of The Making of Global Capitalism.


I will not attempt a summary here, except to say that Sam tries to sketch a plausible framework for what a socialist economy might actually look like. By “socialist” he means that the economy would be mainly based on public ownership of the means of production (with a role for small enterprises and for different forms of public ownership), plus meaningful worker control at the workplace. His main focus is on how to strike the needed balance between state economic planning, and decentralization of decision-making to workers and their enterprises.

He stresses that any conceivable socialism will not exist in a post scarcity world and that serious collective decisions will have to be made on what to produce, how to divide output between public and private consumption, and how to divide productivity gains between rising consumption and shorter working time. A strong state will clearly be needed, albeit that the state can become much more democratic and some important decisions can be left to local authorities.

Markets will play a role within a feasible socialism, though as an element in overall planning. A labour market and wage differentials will continue to exist in a context of much greater income equality, some form of guaranteed income or employment, and a high social wage in the form of collective goods and services.

Perhaps the most original part of the paper is a reflection on how sector councils and linkages between them might build a bridge between worker controlled enterprises and central planning.

Hopefully, the paper will be widely read and debated. It challenges even democratic socialists to be much more ambitious, and will resonate with those who agree with Sam that being anti-capitalist is not enough, and that we need some kind of model of a possible future in mind to inspire a strong political movement for radical change.

One quibble — as acknowledged by the author, there is no discussion of how a planned economy would fit into global capitalism, or for that matter, of the feasibility of global socialism. I suspect the framework is only relevant if an economy has a high degree of internal coherence and self-sufficiency, as in the immediate post War period, which will in and of itself be very difficult to achieve.


Categories: News for progressives

Supportive housing for persons with serious mental health challenges

Mon, 2018-12-24 03:00

I’ve recently written a ‘top 10’ review of a new book on supportive housing—i.e., subsidized housing with social work support—for persons with serious mental health challenges. The book’s an anthology that was edited by three Ontario-based researchers.

A key questions that emerges in the book is: Should such housing be owned and operated by for-profit providers, or by non-profit providers? An advantage of non-profit ownership, in my opinion, is that a non-profit entity eventually owns the asset.

My full review can be found here.

Categories: News for progressives

Rent Control in Ontario

Tue, 2018-12-11 06:19

I’ve just published my new analysis of Ontario’s proposed rent controls and develop an evidence-based comprehensive alternative proposal at the CCPA’s “Behind the Numbers” blog.



Categories: News for progressives

Ten considerations for the next Alberta budget

Sat, 2018-12-08 20:30

Over at the Behind The Numbers website, I’ve written a blog post titled “Ten considerations for the next Alberta budget.” The blog post is a summary of a recent workshop organized by the Alberta Alternative Budget Working Group.

The link to the blog post is here.

Categories: News for progressives

The Anthropocene and the New World

Sun, 2018-12-02 07:12

In recent decades all but the wilfully ignorant have had to face two facts: that climate change is taking place and that it is the result of what we humans are doing. The term Anthropocene was coined in 2000 in recognition of that latter hugely important fact. When had this new era began – and with it the end of the Holocene epoch that had been around for some 11,000 years of climate stability, a transition out of the Ice Ages, that then facilitated the spread of farming and permanent settlements. Some said it was the Industrial Revolution beginning ca 1750 and the enormous increase in the burning of coal and of carbon emissions. Then at a global gathering in 2016, geologists who decide this matter by examination of the earth’s strata ruled by majority vote that this new epoch of the Anthropocene had not actually begun until 1945. Two things were said to be causal. The first was the testing of the first atomic bomb in 1945 and its immediate use and then further testing which left radioactive evidence in the planet’s atmosphere. The second was what has come to be called the Great Acceleration, the leap in global economic growth and in world population post the Second World War facilitated by new global arrangements, and the even more rapid growth of carbon emissions.

At the same time that a consensus was forming on this, it became evident that  human effect on the atmosphere had first happened some five centuries ago with the impact of the Old World of Europe on the New World of the Americas. European disease to which the new world had no immunity was utterly devastating. Fifty to sixty million people died, ninety percent of the population. In consequence, the way of life was pervasively disrupted and destroyed and with that withering of farming and settlement carbon emissions declined drastically. The result was not today’s global warming but global cooling. It was a one-shot event, sharp but short-run , but that it effected climate change in its time tells us how the ‘discovery’ of the New World was the destruction of its population.

Categories: News for progressives


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