Member Publications

Review: Thomas Piketty, “Capital in the Twenty-First Century”

French economist Thomas Piketty’s bestseller presents a massive empirical analysis of the dynamics and structure of wealth and income in countries with capitalist economies since the late 18th century. His book relies primarily on the historical experience of the rich countries of France, Great Britain, the United States, Japan, and Germany. The result is a discovery of an empirical law that produces an ever-increasing growth in wealth relative to national income in these countries. Ever increasing wealth  leads to extreme concentrations of wealth in the hands of the wealthiest 10% and income earned by the highest 10% of income earners in the population. The concentration of wealth is so great that much of it is passed on to the next generation in inheritances so that eventually economies tend to be dominated by a high proportion of inherited wealth. This outcome violates the “meritoric” value of democracy — that the inequality of income and wealth are just only if they are the result of hard work and skill. Inherited wealth is not the result of hard work and skill of the recipients.

Piketty’s analysis begins with the relationship between wealth and income. Note that wealth and capital are terms that mean the same thing and that they are used interchangeably throughout the book. Capital represents the market value of assets of real estate, stocks and interest bearing assets such as bonds, GICs and savings accounts in banks. These capital assets generate annual incomes in the form of rents, profits, stock dividends, capital gains, royalties and interest  all of which are “income from capital”. Income from capital is then added to “income from labour” (in the form of wages, salaries and self employment income) to produce income. So when Piketty refers to income he means the sum of income from capital and income from labour. The distinction between these two types of income is significant because they are distributed in very different ways among the three broad classes in society: the rich, the middle class and the poor. Income from capital amounts to around 30% of national income in Britain and France and 20% in the United States and Canada.

Increasing inequality is most dramatic in the US where the share of total income earned by the top decile of income earners rose from 33% in 1970 to almost 50% in 2010. Approximately 70% of this increase reflects the share of income earned by the top 1% of income earners which rose from 8% in 1970 to 20% in 2010. The latter set of figures has led to the unrest in the US that was manifested in the Occupy Wall Street movement in 2011. Whether or not this unrest will be destabilizing depends on the future organization and strength of the Occupy movement relative to the effectiveness of other organizations that are engaged in justifying the inequality. Since the 1980s neoconservative groups in the US have aggressively asserted justifications for these inequalities. These include the arguments that inequalities are justified because the increase in wealth represents a reward for hard work, ingenuity, and entrepreneurship or because higher tax rates on high income earners to correct the inequality would reduce incentives to work hard or, alternatively, act as incentives for them to move production activities out of the country to the detriment of all citizens.

Continue reading (PDF download, 13pp): Review: Capital in the Twenty-First Century

Trudeau Liberals ditch their party’s moral high ground on nuclear disarmament

The Hill Times, October 10 | Page 16

There I was, at the microphone reading the official policy of the Liberal majority government of Canada on nuclear disarmament to a rather perplexed seminar audience. Why was Doug Roche, a severe critic of this policy, pronouncing it from the podium? The answer is: not one Liberal Member of Parliament would come forward to speak on their own party’s policies on a paramount issue that affects the safety of every Canadian.

The Liberal Party is running away from one of the great issues of our time. It hasn’t always been like this. Thirty-five years ago, the Liberal prime minister at the time, Pierre Trudeau, stuck his neck out by journeying to the capitals of the major nuclear-weapons states to plead with them to come down from their nuclear mountains. Two decades ago, the Liberal foreign minister, Lloyd Axworthy, pushed NATO to change its nuclear policies and align them with the goals of the Non-Proliferation Treaty.

So why the reticence today?

The empty Liberal chair last week was at a seminar sponsored by the Canadian Network to Abolish Nuclear Weapons, which embraces 16 civil society organizations across Canada, and Canadians for a Nuclear Weapons Convention, a nongovernmental organization that signed up more than 1,000 members of the Order of Canada calling on the government to take major diplomatic action for nuclear disarmament.

The seminar, titled Canadian Leadership on Nuclear Disarmament, featured Joe Cirincione, a renowned American nuclear security expert; a panel on NATO with Ernie Regehr, Peggy Mason, and Tom Sauer, all of them distinguished experts on nuclear disarmament issues; and it tried to have a panel of representatives from all the major political parties to give their parties’ policies. The process of lining up speakers started last June. We were sent from one Liberal official to another, and finally were told that Andrew Leslie, parliamentary secretary to the foreign minister, could not leave the Parliamentary Precinct on a Monday (the day of our seminar). I wondered: could he not go eight blocks for a 20-minute presentation at the Cartier Place Suite Hotel?

We thought the government’s policy on nuclear disarmament should at least be read into the record of our meeting (the result of which will be an informed letter to Prime Minister Justin Trudeau on policy proposals). So I read Foreign Minister Chrystia Freeland’s statement filed in the House of Commons Sept. 17.

It said Canada “does not intend to sign” the new Treaty on the Prohibition of Nuclear Weapons, adopted at the United Nations in 2017 by 122 states, because the major nuclear-weapons states oppose it and, “without the participation of nuclear-weapons states it will not result in the elimination of a single nuclear weapon.” Rather, Canada wants more work done to build a treaty that would end the production of fissile materials for nuclear weapons.

NDP MP Alistair MacGregor personally contributed his party’s position and the Green Party sent a statement. The Conservative Party, like the Liberals, was nowhere to be found. It had also sent us on a merry-go-round chase to find a speaker. It was the absence of the Liberals—the government—that was most revealing of the dire situation Canada has descended to from the days of Axworthy and Pierre Trudeau.

In 2016, during the run-up to the negotiations at the United Nations that produced the Nuclear Weapons Prohibition Treaty, the United States government sent a letter to all its NATO partners demanding that they oppose such negotiations. The U.S. feared the stigmatization of nuclear weapons and a legal challenge to the military doctrine of nuclear deterrence—which is precisely what the framers of the prohibition treaty want. The treaty, when it arrived a year later, prohibited the possession of nuclear weapons. This went further than the Non-Proliferation Treaty, which enjoins state parties to negotiate “in good faith” the elimination of nuclear weapons.

Blustering, Washington (along with London and Paris) said it would never sign. Prime Minister Trudeau got some very bad advice and, in the House of Commons, called the negotiations “useless.” That is not what UN secretary general Antonio Guterres thinks: he has called the treaty “historic.” Pope Francis went public in “firmly condemning” the “very possession” of nuclear weapons, and the Holy See was one of the first to sign and ratify the treaty. Now, nearly 70 states have signed and close to 20 have ratified. When the number of ratifications reaches 50, it will enter into force. What will Canada do then?

Canada’s Liberal government is pretending that this historical shift to the moral and legal stigmatization of nuclear weapons isn’t happening. But it is. Maybe the big powers will hold onto their modernized nuclear weapons for a long time to come, but they will do that without a shred of moral or legal standing.

Nobody thinks we can get to a nuclear-weapons-free world overnight. But shouldn’t Canada keep standing up for the principles involved? Is there not one Liberal MP who will do so?

When I read the government’s policies at the seminar, I did so without comment. My job, at that moment, was to be a bland spokesperson.

But now I am back to my regular life, dissenting and stating as clearly as I can that the present Canadian Liberal government has abandoned the valued moral and legal policies of the past, which were aimed at saving Canadians from the spectre of nuclear warfare.

Douglas Roche, a former Independent Senator, Progressive Conservative MP, and former ambassador for disarmament, is author of Hope Not Fear: Building Peace in a Fractured World.

NATO: Canada in or out?

Prepared for the Canadian Pugwash Group 2018 Research Roundtable

Canada was an early advocate for NATO and a founding member of the Alliance in 1949. The military organization was perceived as an “all for one, one for all” solidarity pact (NATO’s core collective defence principle in Article 5 of the Washington Treaty), to (in the famous quip) “keep the Soviet Union out, the Americans in and the Germans down”. Canada pressed for inclusion of democratic and economic goals within NATO although these were secondary to defence and military security priorities. At the end of the Cold War, many saw the Alliance raison d’être as having expired along with the dissolution of the Warsaw Pact.

Whether seen as legitimate or problematic at its founding, some now believe NATO encourages an arms race, empowers the “Military Industrial Complex” and enables solo US global dominance, while marginalizing the United Nations. NATO nuclear weapon advocacy within its strategic concept is problematic. The USA or USA/UK appear to dominate the alliance. They push for interoperability (therefore also escalation, perpetual weapons modernization, forces integration, higher military spending). Contrary to promises made, NATO expanded into Eastern Europe after the fall of the Berlin Wall. NATO also widened its purview outside the North Atlantic and has directed the controversial (“illegal but legitimate”) Kosovo campaign and unrestrained R2P intervention into Libya. And yet NATO survives, despite the criticism. Canada seems to go along.

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Gandhi and the Right to Peace

Address to the Mahatma Gandhi Peace Council Charity Dinner | Ottawa, October 2, 2018

Today, we enter the 150th anniversary year of the birth of Mahatma Gandhi, the father of nonviolence, a man who will be remembered for a thousand years, a leader who never commanded an army but was more powerful than any maharajah or Viceroy. Gandhi inspired today’s human rights movement, and wherever peace is found in our troubled world, its roots can be traced to that ascetic man, staff in hand, who challenged the British Empire with conscience his only weapon. After Gandhi’s assassination in 1948, Albert Einstein wrote movingly: “Generations to come, it may be, will scarce believe that such a one as this ever in flesh and blood walked upon this earth.”

I am a Gandhian, though I am personally not worthy to walk in his footsteps. The Mahatma has taught me about the power of nonviolent protest against injustices. All my political career, I have dissented from the anti-humanitarian policies of waging war in the name of peace. On the eve of my 90th birthday, I am not stopping, and I have come here tonight to urge us, in Gandhi’s name, to re-kindle the flame of hope for peace with justice and never let it be extinguished no matter the bizarre conduct of modern-day politics.

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Talks to ban nuclear materials need a fresh start

Bulletin of the Atomic Scientists

If grades in disarmament diplomacy were given out for perseverance, then Canada would surely merit an “A” for its efforts on behalf of the Fissile Material Cut-off Treaty, or FMCT. Forging this treaty, which would ban the production of fissile material for nuclear weapons, has been a supposed goal of the international community for over half a century. In that time, though, negotiations to bring the treaty about never even started, suggesting that the FMCT is one of those worthy goals that are periodically affirmed without any serious effort to realize them. And though Canada has traditionally led efforts to move forward on the treaty, the Canadian-led group most recently charged with supporting future negotiations has submitted a report that deserves a failing grade.

This is unfortunate, because the FMCT, if it ever happens, could have a major impact on reducing nuclear proliferation. The problem is that the 25-member preparatory group asked to facilitate the task of future negotiators has recommended that “the negotiation of a treaty … begin without delay in the Conference on Disarmament.” This is not a realistic solution, as anyone familiar with the Conference on Disarmament knows it does not act “without delay” on anything. It simply does not get things done. To initiate work on the FMCT will require its liberation from this diplomatic dungeon.

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The Koreas are getting along – but denuclearization questions remain

The Globe and Mail | 20 September 2018

South Korea’s President Moon Jae-in is a man in a hurry; North Korea’s leader Kim Jong-un is a man on a roll.

Prior to Mr. Kim’s 2018 New Year’s speech, the world watched North Korea relentlessly improve its nuclear weapon and missile capabilities to the point where it could threaten not only the immediate region but also North America, despite tightening UN sanctions, U.S. threats of “fire and fury” and China’s measured disapproval.

Mr. Kim’s initial opening to have North Korea participate in the Winter Olympics and Mr. Moon’s quick positive response to field a combined North-South Olympic team led to a frenzy of summit meetings that has not abated. The first Kim-Moon summit in April in Panmunjom reiterated the main themes of two earlier high-level attempts to ease North-South tensions and perhaps move toward eventual denuclearization of the Korean Peninsula. The third summit, which concluded Wednesday, has further moved the yardsticks forward in creating Mr. Moon’s vision of peace and co-prosperity for both Koreas. Mr. Kim, however, has yet to demonstrate his commitment to dismantle his nuclear weapons, linchpins for his regime’s survival.

And therein lies the rub. Since the New Year, Mr. Kim has repaired North Korea’s badly frayed relations with China by meeting with President Xi Jinping three times. Perhaps more importantly, the Panmunjom Summit led to Mr. Kim’s unprecedented meeting in Singapore last June with U.S. President Donald Trump. Their joint statement was short on specifics: establishment of new U.S.-North Korea relations, efforts to build a lasting peace regime, a North Korean commitment to work toward complete denuclearization of the Korean Peninsula, and recovery of U.S. missing-in-action soldiers from the Korean War. What remains worrisome is that the two leaders mostly talked in private, with only interpreters present, and no one really knows what else they agreed to except to seemingly be new best friends.

At issue is what denuclearization really means. North Korea complained of US. gangster tactics when Secretary of State Mike Pompeo tried to establish a road map forward that would include complete, verifiable and irreversible denuclearization. Even Mr. Trump admitted that there has been no progress on denuclearization. Through South Korean officials, however, Mr. Kim recently proclaimed his “unwavering faith” in Mr. Trump and asked for a second meeting with him, perhaps as a way around any objections by more cautious and skeptical U.S. officials. Preparations for the second Trump-Kim meeting are under way.

Mr. Moon has now upped his courtship of Mr. Kim both in scope and urgency. With this week’s Pyongyang Joint Declaration, Mr. Moon and Mr. Kim agreed to implement a series of military confidence-building measures to prevent accidental military clashes. Mr. Moon promised Mr. Kim visions of prosperity by reopening North-South rail and road connections and eventually establishing special economic zones. The South Korean leader’s delegation of 200 people included heads of South Korea’s key chaebols, the huge industrial enterprises like Samsung and Hyundai. In addition, Mr. Moon promised to strengthen humanitarian co-operation. Mr. Kim should find these promises enticing. They agreed to participate together in the 2020 Summer Olympics and bid to host the 2032 Summer Olympics.

Finally, both leaders agreed “to co-operate closely in the process of pursuing complete denuclearization of the Korean Peninsula.” Mr. Kim promised to dismantle a missile engine test site and launch platform, as he had already agreed, but this time under observation by experts “from relevant countries” (presumably including the U.S.) and to dismantle a nuclear facility, as North Korea had in the 1990s only to renege later. Mr. Kim also agreed to visit Seoul at an early date, a first for a North Korean leader.

As the North-South romance continues at a whirlwind pace, many questions remain, especially around denuclearization. North Korea, claiming that it has already taken concrete measures by stopping nuclear weapon and missile tests, has insisted that the U.S. take commensurate measures beyond cancellation of combined military exercises with the South. Promised U.S. security assurances to the North remain undetermined.

The North has not revealed numbers and locations of its nuclear weapons, missile systems or nuclear production facilities. Questions around verification have not been addressed. Indeed, it is not evident that any serious discussions, let alone negotiations, are taking place. Mr. Kim and Mr. Moon seem eager to declare the official end of the Korean War and eventually to sign a peace treaty. Both possibilities raise serious U.S. security concerns.

Previous North-South courtships ended in bitter disappointment and even military clashes. Maybe this time will be different.

Marius Grinius is the former Canadian ambassador to South Korea (2004-07) and concurrently to North Korea (2005-07). He is a fellow at the Canadian Global Affairs Institute, and an associate member of Canadian Pugwash Group.