№ 801. Rupture in the World Order: PM Carney's Speech

Thank you very much, Larry. I'm going to start in French, and then I'll switch back to English.


[The following is translated from French]


Thank you, Larry. It is both a pleasure, and a duty, to be with you tonight in this pivotal moment that Canada and the world going through.


Today I will talk about a rupture in the world order, the end of a pleasant fiction and the beginning of a harsh reality, where geopolitics, where the large, main power, geopolitics, is submitted to no limits, no constraints.


On the other hand, I would like to tell you that the other countries, especially intermediate powers like Canada, are not powerless. They have the capacity to build a new order that encompasses our values, such as respect for human rights, sustainable development, solidarity, sovereignty and territorial integrity of the various states.


The power of the less power starts with honesty.


[Carney returns to speaking in English]


It seems that every day we're reminded that we live in an era of great power rivalry, that the rules based order is fading, that the strong can do what they can, and the weak must suffer what they must.


And this aphorism of Thucydides is presented as inevitable, as the natural logic of international relations reasserting itself.


And faced with this logic, there is a strong tendency for countries to go along to get along, to accommodate, to avoid trouble, to hope that compliance will buy safety.


Well, it won't.


So, what are our options?


In 1978, the Czech dissident Václav Havel, later president, wrote an essay called The Power of the Powerless, and in it, he asked a simple question: how did the communist system sustain itself?


And his answer began with a greengrocer.


Every morning, this shopkeeper places a sign in his window: ‘Workers of the world unite’. He doesn't believe it, no-one does, but he places a sign anyway to avoid trouble, to signal compliance, to get along. And because every shopkeeper on every street does the same, the system persist – not through violence alone, but through the participation of ordinary people in rituals they privately know to be false.


Havel called this “living within a lie”.


The system's power comes not from its truth, but from everyone's willingness to perform as if it were true, and its fragility comes from the same source. When even one person stops performing, when the greengrocer removes his sign, the illusion begins to crack. Friends, it is time for companies and countries to take their signs down.



For decades, countries like Canada prospered under what we called the rules-based international order. We joined its institutions, we praised its principles, we benefited from its predictability. And because of that, we could pursue values-based foreign policies under its protection.


We knew the story of the international rules-based order was partially false that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically. And we knew that international law applied with varying rigour depending on the identity of the accused or the victim.


This fiction was useful, and American hegemony, in particular, helped provide public goods, open sea lanes, a stable financial system, collective security and support for frameworks for resolving disputes.


So, we placed the sign in the window. We participated in the rituals, and we largely avoided calling out the gaps between rhetoric and reality.


This bargain no longer works. Let me be direct. We are in the midst of a rupture, not a transition.


Over the past two decades, a series of crises in finance, health, energy and geopolitics have laid bare the risks of extreme global integration. But more recently, great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited.


You cannot live within the lie of mutual benefit through integration, when integration becomes the source of your subordination.


The multilateral institutions on which the middle powers have relied – the WTO, the UN, the COP – the architecture, the very architecture of collective problem solving are under threat. And as a result, many countries are drawing the same conclusions that they must develop greater strategic autonomy, in energy, food, critical minerals, in finance and supply chains.


And this impulse is understandable. A country that can't feed itself, fuel itself or defend itself, has few options. When the rules no longer protect you, you must protect yourself.


But let's be clear eyed about where this leads.


A world of fortresses will be poorer, more fragile and less sustainable. And there is another truth. If great powers abandon even the pretense of rules and values for the unhindered pursuit of their power and interests, the gains from transactionalism will become harder to replicate.


Hegemons cannot continually monetize their relationships.


Allies will diversify to hedge against uncertainty.


They'll buy insurance, increase options in order to rebuild sovereignty – sovereignty that was once grounded in rules, but will increasingly be anchored in the ability to withstand pressure.


This room knows this is classic risk management. Risk management comes at a price, but that cost of strategic autonomy, of sovereignty can also be shared.

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Collective investments in resilience are cheaper than everyone building their own fortresses. Shared standards reduce fragmentations. Complementarities are positive sum. And the question for middle powers like Canada is not whether to adapt to the new reality – we must. The question is whether we adapt by simply building higher walls, or whether we can do something more ambitious.


Now Canada was amongst the first to hear the wake-up call, leading us to fundamentally shift our strategic posture.


Canadians know that our old comfortable assumptions that our geography and alliance memberships automatically conferred prosperity and security – that assumption is no longer valid. And our new approach rests on what Alexander Stubb, the President of Finland, has termed “value-based realism”.


Or, to put another way, we aim to be both principled and pragmatic – principled in our commitment to fundamental values, sovereignty, territorial integrity, the prohibition of the use of force, except when consistent with the UN Charter, and respect for human rights, and pragmatic and recognizing that progress is often incremental, that interests diverge, that not every partner will share all of our values.


So, we're engaging broadly, strategically with open eyes. We actively take on the world as it is, not wait around for a world we wish to be.


We are calibrating our relationships, so their depth reflects our values, and we're prioritizing broad engagement to maximize our influence, given and given the fluidity of the world at the moment, the risks that this poses and the stakes for what comes next.


And we are no longer just relying on the strength of our values, but also the value of our strength.


We are building that strength at home.


Since my government took office, we have cut taxes on incomes, on capital gains and business investment. We have removed all federal barriers to interprovincial trade. We are fast tracking a trillion dollars of investments in energy, AI, critical minerals, new trade corridors and beyond. We're doubling our defence spending by the end of this decade, and we're doing so in ways that build our domestic industries.


And we are rapidly diversifying abroad. We have agreed a comprehensive strategic partnership with the EU, including joining SAFE, the European defence procurement arrangements. We have signed 12 other trade and security deals on four continents in six months. The past few days, we've concluded new strategic partnerships with China and Qatar. We're negotiating free trade pacts with India, ASEAN, Thailand, Philippines and Mercosur.


We're doing something else. To help solve global problems, we're pursuing variable geometry, in other words, different coalitions for different issues based on common values and interests. So, on Ukraine, we're a core member of the Coalition of the Willing and one of the largest per capita contributors to its defence and security.


On Arctic sovereignty, we stand firmly with Greenland and Denmark, and fully support their unique right to determine Greenland's future.


Our commitment to NATO's Article 5 is unwavering, so we're working with our NATO allies, including the Nordic Baltic Gate, to further secure the alliance's northern and western flanks, including through Canada's unprecedented investments in over-the-horizon radar, in submarines, in aircraft and boots on the ground, boots on the ice.


Canada strongly opposes tariffs over Greenland and calls for focused talks to achieve our shared objectives of security and prosperity in the Arctic.


On plurilateral trade, we're championing efforts to build a bridge between the Trans Pacific Partnership and the European Union, which would create a new trading bloc of 1.5 billion people. On critical minerals, we're forming buyers’ clubs anchored in the G7 so the world can diversify away from concentrated supply. And on AI, we're cooperating with like-minded democracies to ensure that we won't ultimately be forced to choose between hegemons and hyper-scalers.


This is not naive multilateralism, nor is it relying on their institutions. It's building coalitions that work – issues by issue, with partners who share enough common ground to act together.


In some cases, this will be the vast majority of nations.


What it's doing is creating a dense web of connections across trade, investment, culture, on which we can draw for future challenges and opportunities.


Argue, the middle powers must act together, because if we're not at the table, we're on the menu.


But I'd also say that great powers, great powers can afford for now to go it alone. They have the market size, the military capacity and the leverage to dictate terms. Middle powers do not.


But when we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what's offered. We compete with each other to be the most accommodating.


This is not sovereignty. It's the performance of sovereignty while accepting subordination. In a world of great power rivalry, the countries in between have a choice – compete with each other for favour, or to combine to create a third path with impact.


We shouldn't allow the rise of hard power to blind us to the fact that the power of legitimacy, integrity and rules will remain strong, if we choose to wield them together – which brings me back to Havel.


What does it mean for middle powers to live the truth?


First, it means naming reality. Stop invoking rules-based international order as though it still functions as advertised. Call it what it is – a system of intensifying great power rivalry, where the most powerful pursue their interests, using economic integration as coercion.


It means acting consistently, applying the same standards to allies and rivals. When middle powers criticize economic intimidation from one direction, but stay silent when it comes from another, we are keeping the sign in the window.


It means building what we claim to believe in, rather than waiting for the old order to be restored. It means creating institutions and agreements that function as described. And it means reducing the leverage that enables coercion – that's building a strong domestic economy. It should be every government's immediate priority.


And diversification internationally is not just economic prudence, it's a material foundation for honest foreign policy, because countries earn the right to principled stands by reducing their vulnerability to retaliation.

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So Canada. Canada has what the world wants. We are an energy superpower. We hold vast reserves of critical minerals. We have the most educated population in the world. Our pension funds are amongst the world's largest and most sophisticated investors. In other words, we have capital, talent… we also have a government with immense fiscal capacity to act decisively. And we have the values to which many others aspire.


Canada is a pluralistic society that works. Our public square is loud, diverse and free. Canadians remain committed to sustainability. We are a stable and reliable partner in a world that is anything but.. A partner that builds and values relationships for the long term.


And we have something else. We have a recognition of what's happening and a determination to act accordingly. We understand that this rupture calls for more than adaptation. It calls for honesty about the world as it is.


We are taking the sign out of the window. We know the old order is not coming back. We shouldn't mourn it. Nostalgia is not a strategy, but we believe that from the fracture, we can build something bigger, better, stronger, more just. This is the task of the middle powers, the countries that have the most to lose from a world of fortresses and most to gain from genuine cooperation.


The powerful have their power.


But we have something too – the capacity to stop pretending, to name reality, to build our strength at home and to act together.


That is Canada's path. We choose it openly and confidently, and it is a path wide open to any country willing to take it with us. Thank you very much.

№ 765. Dilbert's Business Intelligence

 

№ 764. Serenity Prayer 2025-2029

 

№ 763. The World in 2050

 

№ 635. Inflation

Hedgeye

 

What Is Inflation?

Inflation is the decline of purchasing power of a given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of a basket of selected goods and services in an economy over some period of time. The rise in prices, which is often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods. Inflation can be contrasted with deflation, which occurs when the purchasing power of money increases and prices decline. 

 

Statista

№ 597. Sunrise and Sunset Jobs

The employment landscape is constantly shifting. While agricultural jobs played a big role in the 19th century, a large portion of U.S. jobs today are in administration, sales, or transportation. So how can job seekers identify the fastest growing jobs of the future?

The U.S. Bureau of Labor Statistics (BLS) projects there will be 11.9 million new jobs created from 2020 to 2030, an overall growth rate of 7.7%. However, some jobs have a growth rate that far exceeds this level. In this graphic, we use BLS data to show the fastest growing jobs—and fastest declining jobs—and how much they each pay.

The Top 20 Fastest Growing Jobs

We used the dataset that excludes occupations with above average cyclical recovery from the COVID-19 pandemic. For example, jobs such as motion picture projectionists, ticket takers, and restaurant cooks were removed. Once these exclusions were made, the resulting list reflects long-term structural growth.

Here are the fastest growing jobs from 2020 to 2030, along with the number of jobs that will be created and the median pay for the position.

 

№ 589. Philippine GDP Growth Rates from 1961-2020

Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health. 

World Bank

 

№ 569. Artificial Intelligence & Capitalism

Student News Daily

 

TED CHIANG: I tend to think that most fears about A.I. are best understood as fears about capitalism. And I think that this is actually true of most fears of technology, too. Most of our fears or anxieties about technology are best understood as fears or anxiety about how capitalism will use technology against us. And technology and capitalism have been so closely intertwined that it’s hard to distinguish the two.

Let’s think about it this way. How much would we fear any technology, whether A.I. or some other technology, how much would you fear it if we lived in a world that was a lot like Denmark or if the entire world was run sort of on the principles of one of the Scandinavian countries? There’s universal health care. Everyone has child care, free college maybe. And maybe there’s some version of universal basic income there.

Now if the entire world operates according to — is run on those principles, how much do you worry about a new technology then? I think much, much less than we do now. Most of the things that we worry about under the mode of capitalism that the U.S practices, that is going to put people out of work, that is going to make people’s lives harder, because corporations will see it as a way to increase their profits and reduce their costs. It’s not intrinsic to that technology. It’s not that technology fundamentally is about putting people out of work.

It’s capitalism that wants to reduce costs and reduce costs by laying people off. It’s not that like all technology suddenly becomes benign in this world. But it’s like, in a world where we have really strong social safety nets, then you could maybe actually evaluate sort of the pros and cons of technology as a technology, as opposed to seeing it through how capitalism is going to use it against us. How are giant corporations going to use this to increase their profits at our expense?

And so, I feel like that is kind of the unexamined assumption in a lot of discussions about the inevitability of technological change and technologically-induced unemployment. Those are fundamentally about capitalism and the fact that we are sort of unable to question capitalism. We take it as an assumption that it will always exist and that we will never escape it. And that’s sort of the background radiation that we are all having to live with. But yeah, I’d like us to be able to separate an evaluation of the merits and drawbacks of technology from the framework of capitalism.

№ 515. Philippines 2050

The Philippines has an abundance of skilled and unskilled labor, some say oversupply. 

I really hope we can scale up and harness this human capital more to leapfrog our country into the top 20 economies of the world. China was able to do this in about 30 years, beginning in the 1980s. HSBC predicts that by 2050 we will become one of the world's top 30 economies. Now na. 

I cannot wait for 2050. 

Add caption

№ 506. Economic Recovery During & After the Pandemic: Subways

Wikipedia says, "the London Underground (also known simply as the Underground, or by its nickname the Tube) is a rapid transit system serving Greater London and some parts of the adjacent counties of Buckinghamshire, Essex and Hertfordshire in the United Kingdom.

The Underground has its origins in the Metropolitan Railway, the world's first underground passenger railway. Opened in January 1863, it is now part of the Circle, Hammersmith & City and Metropolitan lines; the first line to operate underground electric traction trains, the City & South London Railway in 1890, is now part of the Northern line. The network has expanded to 11 lines, and in 2017/18 carried 1.357 billion passengers, making it the world's 12th busiest metro system. The 11 lines collectively handle up to 5 million passengers a day."

The first subway opened in 1863 London. 

It's now 2020. That's 157 years since that landmark urban infrastructure was built. Subway is an essential feature of all modern cities. Metro Manila's first subway system is still a work in progress. I hope they finish it quickly and build more connected networks underground.

Transportation officials are one step closer to constructing the 17-station Metro Manila Subway Project, as the first of the six Japan-made tunnel boring machines (TBMs) will be shipped to the country in January 2021.

Measuring 6.99 meters in diameter and 95 meters in length, the 700-ton TBMs will be used to dig underground and lay the tunnels for the 34-kilometer project, spanning Barangay Ugong in Valenzuela City and Ninoy Aquino International Airport in Pasay City.

The first-ever subway in the country is expected to partially operate in 2022 and serve 370,000 passengers daily in its first year.

The Department of Transportation (DOTr) hopes all stations will be fully operational by 2026, with a design capacity of 1.5 million passengers per day.

The Metro Manila Subway is designed to connect with other urban rail transit services in the region. Riders may transfer to LRT Line 1, MRT Line 3, and MRT Line 7 at the North Avenue Common station, which is also currently under construction. Other connections include the existing LRT Line 2 and PNR Metro Commuter Line, as well as the planned Makati Intra-city Subway and MRT Line 8. 

 

Please build more. Then connect them into a logical, convenient network of transportation.

№ 500. Covid Response: Government Spending and Balanced Economy

№ 480. Pigovian Tax

A Pigovian tax (also spelled Pigouvian tax) is a tax on any market activity that generates negative externalities (costs not included in the market price). The tax is intended to correct an undesirable or inefficient market outcome (a market failure), and does so by being set equal to the external marginal cost of the negative externalities. Social cost include private cost and external cost.

Pigovian Taxes

№ 434. 21st Century World Order

The first wave of globalization, although it wasn’t called as such, happened in the late 19th and early 20th century. At that time, technological advances in transportation via steamships and railways made it so much easier to move people and commodities across the continents, leading to a surge in cross-border trade.

The share of world trade in global GDP rose from 6 percent in 1800 to 14 percent in 1914. Foreign direct investments accounted for a full half of total investments in Britain in the early 1900s, whereas the same ratio was only 6 percent for the United States, Germany and Japan in the early 2000s.

By this measure, these economies were much less globalized than Britain was a century before. Two world wars ended that first wave, and led to economic stagnation.