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Could our environmental crises be the result of problems in the human brain?

7/27/2021

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​I used to think that capitalistic greed explained most of the world's problems.  But what if it's not as simple as that? 




Have you ever stumbled across an article that somehow managed to explain the increasing insanity of the world to you? That’s how I felt after reading “Could Modern Crises Stem from problems in the Human Brain?” by Lynn Parremore.

The insanity I’m referring to is our collective inability to address our multiple climate and environmental crises. Think of the recent flooding in Asia and Europe, the massive heat waves in Northern Canada, wildfires and drought across the planet, soil and ocean pollution, biodiversity loss. The list could go on and on.

There is clear, mounting evidence that our consumption patterns have both wounded and destabilized the planet.  Yet, it is also clear that our attempts to address the multiple crises we now face are token. We naively think that we can perform some quick fixes, mostly technological, that will somehow put things right.  Why is that? Could it be because of the way our brains have been rewired over the last 150 years?

Our Divided Brain
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Iain McGilchrist, author of “The Master and His Emissary: The Divided Brain and the Making of the Western World”, has put forth the idea that humans have come to rely too much on the left hemisphere of the brain. This is the side of the brain that thrives on learning facts. The left brain lets us categorize and be precise. These are the attributes of a good engineer or bureaucrat. 

Unfortunately, this organized focus also encourages us to shut off or ignore any data that doesn’t correspond with what we’ve learned or built ourselves. To make sure that the left brain acknowledges and addresses “externalities”, especially large ones like the flow of the natural world, we need the right hemisphere of the brain. This is the intuitive part of the brain – the part that wants to understand how our ideas and constructs fit into broader systems. It’s the part of the brain that keeps us grounded to the real world.

Lynn Parremore, in her analysis of McGilchrist’s work, goes on to explain why and how the left brain, with its emphasis on mastering discrete parts, come to dominate first science and technology, and then economics and finance.

Shifting to Left Brain Analysis

The 19th century Industrial Revolution profoundly changed the way we interacted with the world in that scientists and engineers were encouraged to pay limited attention to the impact of their inventions on the environment. Pollution belching from factories, for example, was an externality to be ignored.

That narrow focus has continued to dominate in many industries, with oil and gas a major culprit. There, it’s not just air pollution. Think of the 170,000 orphaned and abandoned wells in Alberta that our left-brained oil executives are seemingly blind to. To them it doesn’t matter if these wells are leaching toxins. They see their responsibility as simply extracting and delivering oil efficiently enough to satisfy market demands and make a good profit for their shareholders.

The neoliberal economic paradigm that we have followed for the last 40 years has reinforced this blinkered view of the world. For far too many economists there is no place in their fancy mathematical equations for the environment. As for the finance sector, they have created their own casino style bubble world which increasingly has little to do with the main street economy, let alone the environment. Why bother with the real world when you can make oodles of money buying and selling shares, derivatives and other pieces of paper?

Capitalism’s Siloed View of Reality

Both production and finance fit smoothly into the larger capitalist paradigm – a paradigm which those who are still predominantly right-brained will tell you is profoundly short-sighted. Why? Because capitalism deliberately ignores the fundamental limitations of our planet.

Capitalism’s most basic tenet is continual growth. It’s bad enough that this growth has nothing to do with making useful things and everything to do with making money, increasingly for a very small group of people. But the real absurdity of capitalism is that it demands continual growth while at the same time depleting or destroying the resources of our planet.

This shrinkage of the natural world is not even gradual. With a global economy compelled to grow each year in order for capitalism to survive, the biodiversity loss, the depletion of resources, and the pollution that goes along with that, are constantly accelerating.  Yet our capitalist financiers and industrialists, ensconced in their comfortable silos, will fiercely resist any attempt to regulate production or slow it down. That’s that left-brain dominance at work.

As for our political leaders, it's not hard to understand why the majority feel compelled to accept the capitalist version of reality with its notion of growth. How else, they ask themselves, can jobs be created or maintained?  In our province, burdened as we are by crippling debt and high unemployment, that has meant continuing subsidies to the oil companies in an effort to keep them here. One also has to wonder what subsidies have been attached to the purchase this week of the Come By Chance refinery by private equity firm, Cresta Fund Management. Come By Chance is going to become a biofuel facility!

It’s no different elsewhere. Alberta, our richest province, doesn’t have our debt load and has notoriously dirty oil. Nevertheless, they too are passionate about keeping the oil flowing. Norway is the richest country in the world with average incomes twenty percent higher than in the US.  Yet Norway is planning a major expansion of oil exploration in the Arctic.

What's noteworthy in all three cases, although less so in the case of Alberta, is that the effects of climate change have not yet hit these locations hard.    This  suggests that if the silo we are in is still comfortable our left-brains simply don't want to shift paradigms, no matter what the forecasts. 

Why is "degrowth" never talked about?

After decades of ignoring or denying climate change, the finance and business sectors finally are beginning to acknowledge that the multiple environmental crises around the globe might be connected to irresponsible human activity.  Unfortunately, their solutions are, not surprisingly, left-brained. Very much in the news is carbon trading – a practice that essentially allows an entity to pay another to avoid meeting its ethical obligation to reduce emissions. This coupled with green technology, not just wind and solar energy, but also more dubious “solutions” like nuclear energy, electric cars and biofuels is supposed to reverse the trend.  

What’s never mentioned as a way forward, but should be, is "degrowth". Apparently, it’s unimaginable to our left-brained experts that we reduce production and consumption. How would capitalism survive? Think of the loss of profits that would cause. Think of the loss of jobs.

Loss of profits, yes. Loss of jobs, not necessarily – or at least not if the economy were to be reoriented towards services that respond to community and environmental needs. There are historical precedents for that, most notably the 1930s New Deal in the US. Here in Canada, innovative Bank of Canada policies financed the infrastructure development that put unemployed Canadians back to work.

Of course, both of these initiatives were government led and controlled, which is probably why our finance and business leaders ignore the precedents. They don’t fit the prevailing neoliberal paradigm with its view that only the private sector knows what is good for the economy. No hints of socialism are apparently to be tolerated, even in times of crisis. That would mean shifting the frame, something which the over-confident left-brains of our corporate leaders don't like doing.

Instead we will probably continue to behave "as if" things are not as they are.

The absurdity of our "as if" philosophy of the world

The accelerating pace of disasters worldwide suggests we are already in deep trouble. Yet o​ur interventions progress at a snail's pace, are done half-heartedly,  and often get sidetracked or sabotaged.  Iain McGilchrist would probably say this is inevitable when you let left-brained expertise trump right-brained wisdom. 

​If his analysis is right we will continue to behave "as if"  things are not as they are, simply because it's inconvenient to do otherwise.   For a good rant on the absurdity of this myopic view of the world, check out Phil Leeke's recent article "The Philosophy of As If".

So how do we move forward?  If we are going to meaningfully address the existential crises we now face, we need to take our heads out of the sand, acknowledge that what is convenient may not be balanced, rethink our consumeristic priorities and choose leaders with  courage and vision.

​And we need to start thinking about how we think!

Marilyn Reid

If you want to learn more about the degrowth movement, check out Jason Hinkels’ book, How Degrowth will Save the World , or Timothée Parrique’s   Ph.D thesis, The Political Economy of Degrowth.
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An Argument for Increasing Personal Income Tax

7/12/2021

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Newfoundland and Labrador has substanatially lower income tax rates than the four other eastern provinces.  Yet, even though we are encumbered by huge debts, government is reluctant to raise taxes.  Why is that?

Is it  because our political leaders think tax increases will cost them votes in the next election?  Or is government simply predisposed towards the alternative approach - downsizing public institutions through privatization of public assets, more public-private partnerships and more contractual labour?  

We believe that privatization, in all its different forms, is not a "solution" we should impose on future generations, especially since that future is looking increasingly precarious. We also believe  Newfoundlanders and Labradorians would be willing to pay higher taxes for a limited period of time to get us out of the mess we are in.   

Below is our letter to government expressing these points of view.  

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To Premier Furey, Minister Coady and the EngageNL Team

                                  An argument for increasing taxation across all tax brackets

There are three approaches government can take to digging our way out of the financial mess we are in. The quick fix is the privatization of government services, more P3s and increased contractual work. This is the preference of the business sector.  The second approach, favoured by community action groups, is revenue generation through strengthening local industries and transitioning to a green economy. The problem there is that many of the initiatives suggested require substantial investments from government at a time when government is painfully short of money.

The third route is revenue collection through increased taxation. This letter argues that government should give more thought to this direction. Here are some points to consider.
 
1.  Newfoundlanders and Labradorians are currently paying provincial income tax at lower rates          than in the other Atlantic provinces and Quebec.

The following 2020 statistics are based on calculations done through Intuit Turbotax. 

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Note that, in all but the lowest income category, residents of our province are paying less provincial tax than in other eastern provinces.

Assessment: Given our current fiscal crisis, it is appropriate to raise our personal income tax contributions  to rates comparable with those of other Atlantic Canadian provinces.  

2.  Most of the top 10% of tax payers in this province will continue to pay significantly less tax               than in the other four eastern provinces.

The 2021 budget speech “committed to protecting lower income and more vulnerable citizens from shouldering the burden of our financial challenges.” The issue is what tax bracket the government considers to be “lower income”.  Here is what government proposed in the 2021 budget speech. ​
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​Note that while there will be tax hikes they only start when incomes reach $135,973 and then by a mere 0.5%. It is not just our vulnerable citizens that will be protected from tax hikes. It’s 95% of the tax filing population.

Note also our lower tax rates for the top 5%. New Brunswickers pay 20.3% on amounts over $160,776. Nova Scotians pay 21% on amounts over $150,000, and Quebeckers a whopping 25.75% rate on any amount over $108,390. Consider also that those provinces are not in crisis.

Assessment: Government’s very modest tax hikes suggest that revenue collection is not a priority in addressing our fiscal crisis. Should that be reconsidered?

3. A flat tax across income brackets, as recommended in the PERT report, is inappropriate.

Government chose correctly not to act on the PERT report’s recommendation that all income tax brackets be increased by a flat rate of one percent. The following example illustrates why this would have been unfair.
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After deducting federal and provincial taxes as well as basic cost of living and rent of a one bedroom apartment, a single person (under 60 years of age) living in St John’s and making $30,000 a year would have $81 left over each month for discretionary spending. A one percent tax increase would eat up approximately 16.7% of that amount. By contrast someone making $100,000 would be left with $4,117 to spend monthly, based on the same criteria. A one percent tax increase would represent just 1.8% of a discretionary income 50 times as large.

These differences obviously diminish as one proceeds up the income scale, but they are still there. Increasing tax credits for low-income earners, while a good idea, doesn’t fundamentally alter the biases of a flat tax.

Assessment:  We need to think carefully about how to fairly distribute tax increases.

3. What might an incremental increase in taxation look like?

It is important that all of us in this province feel as though we are contributing towards resolving our fiscal crisis. We are in this together. That means introducing a tax increase across all income brackets. However, for low-income earners that can be mitigated by introducing an income tax reduction of $250 on incomes of $30,000 and under, with partial reductions thereafter.
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As a base for discussion here is what those tax increases could look like. 
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To view how these tax increases would compare with taxation in the other eastern provinces see the appendix.

For those who believe these tax rates are unfairly high for high income brackets, it is worth pointing out that those who invest in the stock market or in property are already being given very generous capital gains deductions. Is this really justifiable given that the evidence shows that these investments are now increasingly being used, not to invest in the real economy, but rather for speculative activities?

Assessment: Government should not be timid about taxing those of us who can afford to contribute more.    
 
4. Does the PERT report suggest a governmental bias towards privatization and/or private sector        management of public infrastructure?  

Government chose to appoint Dame Moya Greene, with her background in privatization, deregulation and public-private partnerships to lead the Premier’s Economic Recovery Team. This raises the question of whether government was predisposed from the start of the process to give the private sector more ownership or control of assets traditionally in government domain.

The shift in that direction began in 2017 when Government announced plans for the first five public-private partnerships in our province. This was done on the advice of what many consider to be a seriously flawed analysis of their benefits by consulting firm, Ernst and Young. Ernst and Young’s bias was hardly surprising. Private sector advisors simply don’t want to talk about the disadvantages of P3s.

One advantage of tax increases is that they can always be easily and quickly reversed. Privatization and P3s cannot, due to, among other things, restrictive clauses in treaties like CETA. Moreover, while privatization gives government one large bulk payment, probably at fire sale prices, tax hikes continue to provide revenues every year.

Assessment: Tax increases should only be introduced as an alternative to privatization or P3s, not as an add-on to them.
 
5. The Provincial government should increase the corporate income tax rate by two percentage           points for large corporations.

The PERT’s recommendation of an increase of two percentage points is appropriate for large corporations. That includes oil and gas, mining, banking and real estate/leasing, Not only are these corporations highly profitable, but to a large extent their profits leave the province. That is not true of home-grown businesses.

Assessment: Small businesses with incomes up to $500,000 should be exempt from this tax increase.
 
Conclusions

The legacy of the Conservative government that preceded the election of the Liberals is Muskrat Falls. It is a project that should have been halted in its infancy but wasn’t because government was unable to admit they had made a mistake. Might the legacy of the current government be another long-lasting misjudgment in the form of privatization and more P3s?

 Elsewhere governments, have become disappointed with their privatization and P3 experiences and are pulling back. For example, in 2018 the UK government decided  to abandon the P3 model altogether, after hearing this conclusion made by the parliamentary committee commissioned to evaluate it.  “It is unacceptable that almost 30 years since the first PFI (P3) projects were initiated, the Treasury cannot produce evidence to support its claims that PFI is worthwhile for any reason, apart from the fact that it takes debt off the balance sheet.”

Taking debt off the balance sheet may favour governments seeking re-election, but is it in the long-term public interest? Here in Canada five auditors-general have already made the point that costs under P3s are ultimately often much higher than had the work been contracted out.  Should we not take heed in this province and proceed with caution, especially since there are alternative directions we could take?

Taxation is one such direction – a direction that makes sense for another reason. We live in a world of unprecedented and rapid change. Where that change is going to take us is by no means clear.  However, it is certainly arguable that government needs more time to assess, adjust and plan for the future. Tax increases are not a “solution” to our problems. But they can be an effective respite measure that will give us the space to think through how we can build a stronger Newfoundland and Labrador.  

I’m grateful for the opportunity to put that perspective forward and hope that you will consider it.

Marilyn Reid
Member of Democracy Alert and the Avalon chapter of the Council of Canadians

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