Shared benefit

Yesterday the Toronto Star's Joe Fiorito wrote about the cost of poverty from the perspective of money manager Marc Hamel speaking "at a recent conference in Halton region, where changes to provincial welfare rates were up for discussion." Here are some of the quotes from Marc Hamel:

“If we could help this 20 per cent with skill training and higher education, the income gain for Ontario would be $3.2 billion a year.”

He puts the total cost of child poverty in Ontario at anywhere between $4.6 billion and $5.9 billion a year. And then he talked about lost opportunity.

“If we were able to increase the income and participation of the lowest quintile of income earners, and raise their incomes to the second quintile, the benefit to the Ontario economy would be over $16 billion a year.”

He also noted that, if we did so, there would be an increase in tax revenues of $4 billion.

But here’s the real money quote: “In total, poverty costs the residents of Ontario a staggering $32 billion to $38 billion a year — the equivalent of over 5 per cent of provincial GDP.”

I do believe that Marc Hamel's heart is in the right place and that he believes that these economic arguments will foster positive action towards poverty reduction and increasing income equality.

We in the literacy field know better. We have our literacy equals GDP champions in Craig Alexander and Frank McKenna at the TD Financial Group and Scott Murray et al at the Canadian Council on Learning and have been listening to the higher literacy rates equal higher GDP arguments for over a decade now. During that time have seen cuts to literacy programming and the reduction of diversity and accessibility in publicly funded adult learning. We have also seen the  National Literacy Secretariat and it's library of research replaced by the Office of Literacy and Essential Skills and a library of skills definitions, tools and assessments.

The problem with these shared benefit arguments for poverty reduction is that if I have a personal interest in someone else's income equality, I soon start to demand proof - for every investment in "skill training and higher education" I want to see a return. I start demanding standardization so I can understand and report outcomes - not just learning outcomes but economic ones - and in so doing I start to replace the notion of common good with that of total good.

Chris Priestley
The Independent
April 28, 1997

As John Milbank, in his article Thatcher's perverse victory and the prospect of an ethical economy, says:

A capitalist economy, as Stefano Zamagni explains, does not pursue the common good, but "the total good" - that is, the sum total of individual utilitarian happiness in the aggregate, people counted one by one, not in their real relationships. But an abstract sum means a sum of numbers, the total wealth of a community, which may accrue to some more than to others. Hence the British GDP is evidently not the common good of the British people.

David Cameron, the current Conservative Prime Minister of England agrees.

In David Cameron's early days as Conservative leader, when the GDP numbers still pointed to an impressive track record for Labour, he told a conference: "It's time we admitted that there's more to life than money, and it's time we focused not just on GDP, but on 'GWB' – general well-being." 

Bhutan has been considering Gross National Happiness a valid indicator of progress since 1972 and did their first survey in 2010.

The concept of GNH has often been explained by its four pillars: good governance, sustainable socio-economic development, cultural preservation, and environmental conservation. Lately the four pillars have been further classified into nine domains in order to create widespread understanding of GNH and to reflect the holistic range of GNH values. The nine domains are: psychological wellbeing, health, education, time use, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards. The domains represents each of the components of wellbeing of the Bhutanese people, and the term ‘wellbeing’ here refers to fulfilling conditions of a ‘good life’ as per the values and principles laid down by the concept of Gross National Happiness.

Income equality and other sorts of equality are probably not going to be found in neo-liberal shared benefit solutions but in redefining shared benefit in terms of common good rather than that of total good. I think that state redistribution mechanisms are necessary to ensure universality, accessibility and oversight and a legally-binding, mutual accountability contract for social benefit is long overdue.

And rather than relying primarily on state redistribution, we need to forge an economy that operates justly and fairly in the first place - both through the internal ethos of firms and professional associations, and through a new legal framework which demands that every business deliver social benefit as well as reasonable profit.