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Andrew Jackson

Articles by Andrew Jackson

The Fiscal Deficit, Modern Monetary Theory and Progressive Economic Policy

July 14, 2020

Modern Monetary Theory or MMT has crept in from the academic margins to become an influential doctrine in progressive policy circles in the United States. Both Elizabeth Warren and Bernie Sanders drew on the ideas of MMT to shape their ambitious public spending platforms. MMT has been cited as one way to fund a Green New Deal, in combination with progressive tax reform.

It is safe to say that most Canadian progressives are not debating the finer points of monetary and fiscal policy. But it is useful to critically consider some of the most important pros and cons of MMT based on the new book by a leading US advocate, Stephanie Kelton. (The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. Public Affairs. New York. 2020.) In a nutshell, MMT

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Mel Watkins

April 3, 2020

[unable to retrieve full-text content]Canada’s most prominent progressive economist has passed. He will be sorely missed.

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Why Keynes was a socialist

February 28, 2020

In an important new book Keynes
Against Capitalism: His Economic Case for Liberal Socialism
(Routledge, 2019) James Crotty argues that Keynes was a socialist who
advocated a much more radical economic agenda than most mainstream
economists and political analysts realize. Based on a very close
reading of Keynes’ work, Crotty argues that core Keynesian economic
ideas should inform democratic socialism today.

The conventional wisdom assimilated into mainstream perspectives is that Keynes remedied some serious deficiencies in neo classical liberal economics, most importantly the view that capitalist economies tend towards a full employment equilibrium. The mainstream adopted his insight that full employment required occasional policy intervention by the state to fine tune aggregate

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Taxing Wealth to Create a More Equal Canada

September 18, 2019

This is a longer, wonkier version of a piece I wrote for National Newswatch.

As part of a broader fair tax agenda,
Jagmeet Singh and the federal New Democratic Party have proposed a
wealth tax. This is intended to fight obscene and rising levels of
economic inequality by limiting the concentration of wealth in the
hands of the very rich, who can well afford to pay more, and by
generating new fiscal resources to be invested in equality-promoting
programs such as expanded public health care and student debt

A report released by the Parliamentary
Budget Office (PBO) released on September 10, just as the federal
election got underway, confirmed that the wealth tax would raise $70
billion over ten years. Very significant new federal revenues of $6
billion rising to over $7

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Plausible Socialism

June 8, 2019

the fall of the Berlin Wall, there was a widespread sense that
liberal capitalism had triumphed in the battle of ideas, and that
socialism as a plausible alternative was pretty much dead. But the
many crises of contemporary capitalism – obscene levels of economic
inequality, looming ecological disaster, the rise of the racist and
anti democratic populist right, the new threats of surveillance
capitalism and the surveillance state – threaten dystopia, an
unbearable future. In response, the idea of socialism has been
re-discovered by a layer of activists struggling for radical change,
especially young people.

But what is socialism? If we are against capitalism, what are we for? Is the socialism we have in mind a more robust version of social democracy, despite its past

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Socialism For Realists

January 11, 2019

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

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Crashed: How a Decade of Financial Crises Changed the World

November 2, 2018

Book Review
Adam Tooze. Crashed: How a Decade of Financial Crises Changed the World. Viking. New York. 2018
The global economic crisis is now more than a decade old, and is far from definitively behind us. Indeed, many fear, with good reason, that the recent, uneven and lethargic global recovery may soon come to an end, and that the next crisis of global capitalism could be even worse than that of 2008.
The financial crisis and resulting crisis of the real global economy triggered by the collapse of Lehman Brothers and other major Wall Street banks has already prompted the release of a small library of books. ( The best, to my mind, is Martin Wolf’s, The Shifts and the Shocks.) But Adam Tooze provides us with the first truly comprehensive account. It is the work of a contemporary

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Value Creation vs Value Extraction in Today’s Economy

July 31, 2018

Book Review
Mariana Mazzucato. The Value of Everything: Making and Taking in the Global Economy. Allen Lane. 2018.
The playwright Oscar Wilde quipped that a cynic is a person who “knows the price of everything and the value of nothing.” As Mariana Mazzucato argues in her important and stimulating new book, “The Value of Everything,” that adage could be applied to the vast majority of mainstream, neo-classical economists.
Mazzucato is the author of the previous bestseller, The Entrepreneurial State, which argued that governments have been absolutely pivotal to the innovation process in successful advanced industrial economies, often taking on big risks and opening the way for later private sector investment. Her new book broadens the argument, claiming that mainstream economics is

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How to Measure and Monitor Poverty? LIM vs LICO vs MBM.

March 9, 2018

The federal government has promised to launch a Canadian Poverty Reduction Strategy in the coming weeks or months on the basis of now completed consultations with Canadians and the still ongoing deliberations of an advisory committee. As part of this process, there has been discussion about which poverty or low income measure or measures should be used for the purpose of monitoring levels and trends in the incidence of poverty and gauging the impact of poverty reduction policies. At various times, there have been calls for an official Canadian poverty line, as exists in the United States and some other countries, and some have called for poverty reduction targets which would require the specification of a poverty line or lines. (See

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Budget Fails to Crack Down on Private Corp Tax Shelter

March 6, 2018

2018 Federal Budget Analysis February 14, 2018Watch this space for response and analysis of the federal budget from CCPA staff and our Alternative Federal Budget partners. More information will be added as it is available. Commentary and Analysis Some baby steps for dad and big steps forward for women, by Kate McInturff (CCPA) An ambition constrained budget, by David Macdonald (CCPA) Five things […] Canadian Centre for Policy AlternativesCED in Manitoba – The Video January 29, 2018Community Economic Development in Manitoba – nudging capitalism out of the way? Canadian Centre for Policy AlternativesWith regional management BC’s iconic forest industry can benefit British Columbians rather than multinational corporations January 17, 2018Forests are one of the iconic symbols of British

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The Stock Market Jitters

February 28, 2018

[unable to retrieve full-text content]The real problem is the absence of a sustainable growth model. My latest Globe ROB column.

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The Working Poor and the Working Income Tax Benefit

February 22, 2018

Here is a short research paper I wrote for the Broadbent Institute.’s_Working_poor_and_the_Working_Tax_Benefit_-_Report.pdf?1519312305
And here is a short summary:
The Liberal government have promised to make progressive changes to the Working Income Tax Benefit (WITB) in next week’s budget.
Let’s hope that they deliver. The increased insecurity of work and low hourly wages for many workers mean that many Canadians live in poverty even though they have a significant attachment to the paid work force.
The WITB is directed to the working poor, that is, individuals and families who have significant earnings, and sometimes even work full-time for a full year, but still live in poverty. About one

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Smooth Sailing Ahead For the Global and Canadian Economy?

December 20, 2017

The consensus forecast of just about everybody – the IMF, the OECD, the Bank of Canada, the Canadian banks – is that Canada will share in a global recovery from the stagnation which followed the financial crisis of a decade ago. All of the major economies – the US, the EU, China, Japan – are growing; business investment is finally on the upswing from depressed levels; world trade is on the rise again; and fiscal austerity has more or less run its course. Central bankers, we are told, can be counted on to only gradually increase ultra low interest rates even as growth returns to near normal levels and employment recovers.
The world economy is forecast to grow about 3.7% in 2018, and Canada is forecast to grow at a respectable 2.5%, a bit below the rate in 2017.
This relatively optimistic

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Extreme Wealth Inequality Persists

December 10, 2017

There was little or no media coverage of the release of data on the distribution of the wealth of Canadians in 2016 last week, perhaps because there has been little or no change since the last Survey of Financial Security in 2012.
The top 20% of Canadians own 67.3% of all net worth (assets of all kinds minus liabilities), almost exactly the same as in 2012.
The bottom 20% have no net worth, and the bottom 40% collectively own just 2.3% of all net worth.
The top 20% also own 74.6% of all financial assets (stocks, bonds, bank deposits etc) held outside of RRSPs and registered pension plans, while the bottom 40% collectively own just 3.5% of such assets. Financial assets outside of pensions total $1.4 trillion.
Unfortunately, the new data does not detail the breakdown within the top 20%.

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The Private Corporation Tax Loophole and the Ultra Rich

October 25, 2017

The 2017 Economic and Fiscal Update provides some detailed data (see pp. 51-53) on who will be impacted by the government’s plan to limit how much passive investment income can be earned in a private corporation.
Income from investments held in a private corporation is taxed at a lower rate than investments held by a person in a non registered account such as an RRSP or TFSA. For most small businesses, there is no incentive to save in a private corporation rather than an RRSP of TFSA.
Responding to anguished cries from small business, the vast majority of which are not impacted at all, Minister Morneau will allow $50,000 of income to be earned within a private corporation. This is equivalent to assets of more than $1 million.
The government estimates that putting a cap on private

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Unwarranted Gloom and Doom: The IMF on Canada and NAFTA

July 14, 2017

To read the media today, one would think that NAFTA is a keystone of Canadian prosperity and that renegotiation could lead to a national economic disaster.
That view has already been rebutted in a report by Scott Sinclair for the Canadian Centre for Policy Alternatives. He finds that a reversion to WTO tariffs and trade rules would have only a modest impact, albeit that some auto and agricultural exports would suffer. The key take-away is that we can afford to walk away from a bad deal if necessary.
The International Monetary Fund also do not see an economic disaster in the making in their latest country report on Canada.
In the first place, NAFTA has ultimately been quite disappointing in terms of the performance of the all important manufacturing export sector.
“Staff research has

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The NDP and Old Age Security

June 28, 2017

NDP leadership candidate Jagmeet Singh has proposed (with few details) to reform the current Old Age Security system by integrating Old Age Security (OAS) and the Guaranteed Income Supplement (GIS.)
“A Jagmeet Singh-led government will implement the Canada Seniors Guarantee to ensure that no Canadian senior has to live in poverty. The Canada Seniors Guarantee will combine a number of existing seniors’ benefits into a single, income-tested benefit. This includes Old Age Security (OAS), the Guaranteed Income Supplement (GIS), the Age Credit, and the Pension Income Credit. By adding the Age Credit and the Pension Income Credit, an additional $4 billion will be added to the core benefits provided by OAS-GIS.”
Here I offer a mildly critical analysis. Just to be clear, I think Singh is an

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Canada Lags in Job Quality

June 27, 2017

The 2017 OECD Employment Outlook provides an assessment of member country performance in terms of the quantity and quality of employment as judged by a new set of key indicators.
Overall, we do well in terms of job quantity. The employment rate (the proportion of the working age population with jobs) stands at 72.5% compared to an OECD average of 66.4%. However, the Scandinavian countries rank higher for this indicator (eg Sweden, 75.5%.)
It is interesting to note that the employment rate in the United States is, at 68.7%, just a bit above the OECD average. Poor job quality does not provide an obvious boost to jobs.
The gap between the employment rate of prime age men and disadvantaged groups (each of youth, older workers, young mothers, persons with disabilities) is slightly below

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The Wage Structure, Rents and Urban Inequality in Canada

June 20, 2017

Richard Florida’s new book, The New Urban Crisis (Basic Books, 2017) takes a careful look at rising inequality in big cities in the United States. He details the fact that many of the winners of today’s economy, the top 1% and top 10%, are located in a small number of “superstar” cities such as New York, Los Angeles, the Bay area, Washington and Boston where well paid jobs in higher education, finance, tech, higher education and entertainment are highly concentrated.
These cities are increasingly polarized between very rich and poor neighbourhoods as the affluent and young professionals return to the city while soaring rents and house prices force the middle-class and many of the poor out to the deteriorating older suburbs.
Similar but less extreme patterns have been found in Canada by

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Income Inequality Surged Under Harper

May 27, 2017

Just as Conservatives gathered to elect a new leader, Statistics Canada released income data for 2015. These allow us to look at trends under the full term of the Harper Government from 2006 to 2015.
Average after tax income of economic families rose over this period – from $68,200 to $76,900 in inflation-adjusted dollars. But the gains were very unfairly distributed.
The after tax income share of the top 10% of families and persons rose from 27.2% to 27.7% and that of the next 10% rose from 16.7% to 17.0%. Thus the share of income of the top 20% rose by almost one full percentage point from 43.9% to 44.7%. The share of the all income groups in the bottom 80% fell under Harper.
The poverty rate (low income measure after tax) under Harper rose from 13.4% to 14.2%, mainly because of a big

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The 2017 Federal Budget

March 24, 2017

How to make NAFTA sustainable, equitable July 19, 2017Global Affairs Canada is consulting Canadians on their priorities for, and concerns about, the planned renegotiation of the North American Free Trade Agreement (NAFTA). In CCPA’s submission to this process, Scott Sinclair, Stuart Trew and Hadrian Mertins-Kirkwood point out how NAFTA has failed to live up to its promise with respect to job and productivity […] Canadian Centre for Policy AlternativesWhat’s next for BC? July 4, 2017Five weeks ago the CCPA-BC began a letter to our supporters with this statement: “What an interesting and exciting moment in BC politics! For a bunch of policy nerds like us at the CCPA, it doesn’t get much better than this.” At the time, we were writing about the just-announced agreement between the BC NDP […]

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Reflections on the Social Democratic Tradition

March 24, 2017

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