Wednesday, 26 November 2014

Domesticated Animals

The Agricultural Revolution also created a revolution in the production of meat for human consumption. According to recent estimates, the world can now boast of more than a billion cattle, about a billion pigs and sheep, and around 25 billion chickens. This past summer I was given the opportunity of watching some of these animals domesticated by us Homo sapiens.

In late September I was walking through a pasture about a mile east of our place, land owned by our neighbour Marianne. There were about 40 cattle on this quarter. There had been lots of rain and snow in our area over the past four years, and the grasses are high and the sloughs are overflowing. The animals had not seen a human being since they were dropped off there in April. They stood in a group and all stared at us. Who were these intruders? I was a bit edgy, but there were no bulls around and Marianne had run cattle for many years. This must be much like it was before humans took control of the world.

As I drive into Bulyea to check the mail and go to the co-op, I pass a pasture where there are six cows and one horse, always very close together. I used to wonder of the horse now thought he was a cow.

On the Saturday drive into Regina, I pass a farm where two miniature burros always hang out in a field with six cows. They are the best of friends, never separated. After the wheat was harvested this year, the farmer put the cows in the adjoining field to clean up but left the burros in the pasture. The burros and the cows stayed right next to each other on each side of the barbed wire fence.

Marianne, who has been running the farm since her husband died about fifteen years ago, raises goats and sheep. Out in the middle of one pasture there is a fox den. Early in the summer this year’s small foxes emerged. They soon began to play with the new born sheep and goats, chasing each other around. Being of the older generation, we did not have our I-phones to record this event.

Among the goats and sheep is one black steer. He is distressed when put in a different pasture by himself. One day I drove by the farm and saw the steer in the small pasture next to the barn. The only other animals with him were the chickens and ducks. He was running back and forth along a barbed wire fence, doing his best to try to keep a fox from coming into the farm yard.

A pair of domestic geese had been living on my neighbour’s farm for a few years, hanging out around the dugout and the farm yard. One of them disappeared this summer, most likely a victim of a coyote or a fox. The remaining goose now waddles out every morning with the sheep and the goats and spends the day with them in the pasture.

Norm, who has the farm behind us, runs cattle on the adjoining quarter. He also has four horses there, as he and his daughter ride. The four horses are rarely seen except standing together, no more than two or three feet apart. They ignore the cattle.

A short way down the grid road I had a very productive garden on Dale’s farmstead. It is surrounded with barbed wire fence as the neighbour would run some of his cattle there before and after harvest. One day I drove into the yard and there were around a dozen cows next to the fence as well as three cows on our side of the fence, in the garden. I walked towards the animals as I was going to open the back gate and let them out into the field. They freaked, as they did not know me and feared the worst. An older Holstein milking cow and one of the calves ran and jumped over the fence. The heifer ran and scooted under the barbed wire fence.

I am currently reading Yuval Noah Harari’ Sapiens: A Brief History of Humankind. He argues  that “domesticated chickens and cattle may well be an evolutionary success story, but they are also among the most miserable creatures that ever lived.”


Wednesday, 8 January 2014

Will We See the End of Economic Stagnation in 2014?

NOTE: It is quite evident that I have been neglecting my blog. There have been few postings in the past six months. The problem is that I am working full time on a new book. It will take a couple of years to research and write. The subject is the rise of agriculture and the development of class society. My approach is that of political economy and sociology. My extensive reading over the past six months has only made me more pessimistic; the steady advance of capitalism seems to have made it unlikely that there will be a shift back to a more democratic and egalitarian social system. As one looks at the rapid onset of climate change, and the unwillingness of any governments to take this crisis seriously, we seem most likely to be headed to some sort of catastrophe. Happy New Year!

This is the time when once again economists and their pretenders make their annual predictions of what we can expect in the coming year. I did not do badly last year; these were my predictions:

(1) The U. S. economic recovery would be weak.
(2) The European Union would experience a double dip recession.
(3) In spite of the pledges of the new Japanese government, deflation would continue.
(4) There would be only weak economic growth in Canada, due to a large extent to the all time high level of household debt to income (165%).
(5) The Canadian housing bubble would begin to deflate.

I was off on the last prediction. There are some indications in some markets that the peak of the bubble has been reached, but what is happening is not general. All the powers that be still insist that there is no bubble; they all have a very large stake in preventing it from happening, the politicians, the banks, the media, the realtors, etc. The Bank of Canada takes the position that we should see a slight decline in sales and prices, a “soft landing” of perhaps 10% over a few years.

The Housing Market Today
However, the fact remains that the average price of a house in Canada is twice that of the United States. Over history the price of an average house has ranged between two and three times household income. It is now still over five times household income, on a national basis. It is over ten times in Vancouver. This can’t continue.

Of course all commodity bubbles collapse, and housing is no different. It will come, sooner or later. The bubble has been created by the lowest mortgage interest costs in history, the role of Central Mortgage and Housing Corporation in guaranteeing lenders (not home owners), the willingness of banks to lend (guaranteed) money to poor risks, and the policies that have been taken by Stephen Harper’s Conservative government. [Remember CMHC guaranteed mortgages for 40 years with no money down?]

Incidently, the International Monetary Fund, Germany’s Deutsch Bank and the Organization of Economic Co-operation and Development (OECD) have recently argued that the housing bubble in Canada is the largest in the industrialized world. The OECD and Deutsch Bank argue that the price of housing is overinflated by 60%. They base this analysis on historic trends, the ratio of buying a house to renting, and the ratio of house prices to household income.

What Can We Expect in 2014?
Well of course all the smart people at the top are predicting an economic recovery in the USA which will benefit Canadian exporters and the Canadian economy. My view is that the rate of economic growth in the USA will be closer to 2% than the 3% - 3.5% anticipated by business economists.

In all the western countries, the central banks have set interest rates close to zero. The Fed in the United States is still printing money (Quantitative Easing) at a rate of $75 billion a month; this now totals over $4 trillion since 2008. One results has been a bubble in the U.S. stock market, as almost all this free money floats up to the top 1% of income earners.Corporations are hoarding cash as they do not see any profitable investments.

Unemployment and underemployment remain high. In Canada we have an official unemployment rate of 7%. But if you add in the workers who have dropped out of the labour market and those who are working involuntarily part time it rises to 17%. Then you have to add in the significant rise in the number of people in precarious work: part time, contract, temps, etc , who are paid much lower than regular workers and who have no benefits. This is a major trend in the labour market. Throughout the western world, youth unemployment has been steadily rising. A look at what new jobs are being created reveals the high concentration in the areas of food service, personal care aides, retail sales, waiter and waitresses, unskilled labourers, and office clerks. The wages for these jobs range between $9 and $11 per hour.

With the move to neoliberalism, we have seen a major shift away from progressive income taxes and taxes on wealth. As a result, over the past ten years most workers have experience no increase in real income. Wealth and income is being concentrated at the top. In 2013 in Canada the top 1% of income earners received $381,000 in income, this was ten times the Canadian average.

Problems in the World Economy
There are few signs that the economic stagnation that the Great Recession started in 2008 is about to end. The European Union is still trying to get out of its financial and economic funk, and few are predicting that the overall rate of economic growth will exceed 1% in 2014. The rate of inflation in Europe is now below 1%, and there are growing fears that this could tip into deflation. There are also a number of elections scheduled for this year, and commentators are worried about the rise of the new rightist parties. Great Britain is very close to falling again into recession; they have their own housing bubble crisis.

The Japanese economy remains in deflation. The BRICS – the more advanced developing countries – are no longer the successful capitalist economies; their domestic and international debt levels are forcing the introduction of austerity programs.

The big question mark is the state of the Chinese economy, now the second largest in the world. Over the last ten years the Chinese government has used credit to keep the economy growing at a rate above 7%. Between 2008 and 2013 government directed credit rose from $8 trillion to $24 trillion. Commentators warn of the extensive debt taken in by governments at the local level. How long can this be sustained?

World commodity prices are in decline. This is bad news for Saskatchewan, which has experienced a booming economy with the expansion of the oil and potash industries.

So overall, the picture of the world economy is not that great. Everyone seems to be placing all their hopes on a recovery in the USA. But our southern neighbours are not what they used to be. Corporations have moved their manufacturing overseas to low wage areas. The top 10% of income earners dominate the economy. But how much can they buy? How much debt can those on wages and salaries afford?

Yes, there is a difference between the economists and the political economists.