So it looks like we're rushing headlong into an e-society sometimes called a digital society. That sounds good eh what? Progress! Future is now! Power to the People via the Internet! Convenience! Cellphone banking! Cellphone parking pass! Cellphone restaurant reservations! Music and movie purchasing on your portable device! Vid-conferencing overseas! Digital communications in developing economies without reliance on expensive land-based infrastructure! Texting! Twittering! Global socializing! Googling! Global positioning! Mass grassroots movements in culture, religion and politics!
Instant world, quite literally at our fingertips.
Who would not want to celebrate the move to the digital world?
Have you ever taken the time to read the terms and conditions of use and privacy policies of Internet service providers, e-tailers, government offices, pretty much all websites of large corporate bodies be they commercial or social enterprises for profit or not-for-profit?
Some versions, when printed on 8.5 X 11 paper run into twenty pages and more, often in language not used in everyday conversation, perhaps even in "legalese".
In a casual chat some years ago with a lawyer with a specialty in e-commerce suits mentioned that the smallest claim represented by one of the cases in a stack of files on his desk was $660,000 CAN.
I thought about that and within the context of the terms and conditions of use and privacy policy statements on websites and after having a conversation with the RCMP Commercial Crime unit, electronic fraud, I asked if that meant that the threshold for economic viability of a lawsuit for e-commerce was then in his experience, $660,000. That meant that if a claim was less than $660,000 it probably wasn't worth the legal effort to pursue as the cost of legal action was too great to warrant pursuing.
I then wondered what the average cost of legal counsel must be to prepare those Terms and Conditions of Use and Privacy Policy legal documents. I really don't know but I assume the cost would be higher than the cost of buying a popular novel on chapters.indigo.ca, for example.
I was pretty sure it really was not worth it for me to hire a legal counsel team to assure that the democratic principle of equality before the law was not simply an empty statement but an actual fact in practice. I mean, for argument's sake, I suspect that all legal advice being an equal commodity irrespective of which lawyers I use, which I am pretty sure is not the case, I could expect to have to spend approximately the same as the organization whose website I am transacting business with.
Transacting business, by the way, includes any communication between the owner of that website and myself, even one-way communication, as much as actually purchasing something.
I view the move to an e-society to be as significant as the move to recording events on whatever medium - clay, stone, wood, papyrus, cave walls - from recording them only orally.
As it stands, I see our basic democratic principles under threat either from direct and purposeful attack or carelessness. We make many assumptions every day about the success of our transactions. We buy a pair of socks at the Bay. There is someone wearing a Bay-labelled name tag, standing behind a cash register in the Bay's store. We assume that person is a Bay employee authorized to consummate the transaction. We have no direct knowledge that is the case. Experience, our ability to communicate verbally and non-verbally combine to tell us this is a legitimate transaction.
Imagine doing that on the Internet. "Bernie? Bernie? Bernie Madoff, is that you on the other end of this communication? I'm trying to but a car here and I would like to be sure that after I transfer my cash to you via Pay Pal I will receive my car."
"Now come on, don't you recognize me? I'm not Bernie whathisname. I'm Alan Mulally, President and CEO of Ford Motor Company just like I said I am. As soon as I get confirmation from my bank that your Pay Pal payment has been cleared, your new Lincoln will be on its way! Congratulations on owning your new Lincoln."
I have to say that I am pretty sure Bernie Madoff never even attempted to sell Ford cars on the Internet or pretended to be Alan Mulally. I'm also pretty sure that Alan Mulally would never actually be the person to respond to an Internet purchase order even if Ford did retail its cars directly to consumers via an Internet link.
But I hope my point is clear.
I suggest that we need some form of neutral transaction control facility or infrastructure to enable a "meeting of the minds" in a digital world, putting the principal of equality before the law into practice, thereby living democratically in daily activities.
But all this development to date has been done in the presence of ballot boxes, so of course we live democratically in daily activities! Or do we?
Mike
Monday, April 19, 2010
Saturday, April 17, 2010
And there were ballot boxes - Power of Royalties
Alberta experienced a power struggle between the petroleum industry producing Alberta petroleum and the Government of Alberta otherwise known as the People of Alberta.
Royalties were raised and then royalties were lowered. The adversarial approach at play included threats and actions of economic punishment of Albertans and petroleum companies.
Albertans were punished by falling production mixed with falling gas prices and therefore falling net royalty revenues to their government and and a lowering of the overall return to the resource owners.
Petroleum companies were punished by threats of reduced net return per unit of production – barrels of oil or cubic feet of gas - as more of the final price received was supposed to go to Albertans.
Some argue that the final result of all this was reduced employment, fewer Alberta taxpayers, lower royalty income, lower producer profits, lower producer investment, increased production from competing petroleum producing jurisdictions, in other words, not one positive outcome.
I must say that none of these perceptions is as clear cut as the adversaries expressed them or as I have presented them.
However, aside from those arguments, do near-zero or even negative royalties, should they ever come to pass, be good for the petroleum industry?
As it stands, the petroleum industry clearly demonstrated dominating economic power turned into dominating political power.
At the same time, Albertans have committed their Government to providing some minimum level of service to serve the common good. Reduced royalties rolled into general government revenue threaten to reduce the resources available to provide those services. Yet all these services provide infrastructural support to Albertans as they strive to achieve their quality of life expectations and are the single most important purpose of government, with the need remaining pretty much constant over time on a per person basis.
Assuming Albertans want any government at all, Albertans then have four choices.
They can reduce their expectations of what a minimum level of service should be and what that service mix should be – hospital beds per person, lane kilometres of road per person, police and fire officers per thousands of citizens and so on. Should there be hospital beds or schools, police or highways?
Albertans can sell off other assets to earn revenue to make up what's needed – highways sold and leased back, parks sold to residential and vacation property developers and so on.
Albertans can borrow money and hope to grow out of the deficit and debt financing required to pay for current expenses.
Albertans can raise personal and corporate income taxes.
Albertans have already lived through the first option. Albertans are toying with aspects of the second option.
Albertans have lived through the third option and are again using that option via provincial bonds after swearing off of deficit and debt financing as a viable or sustainable alternative to government financing.
The fourth option is a game changer. What if Albertans got used to paying for the minimum level of government services through personal and corporate income taxes?
The budget could be balanced with taxes. Funding for schools, roads, hospitals, emergency services, police and so on would be stabilized. Services and infrastructure would experience greatly reduced feast or famine financing which usually means human services going through famine (low service levels) when the economy is down and the need is greatest and feast (high service levels) when the economy is heated up and the costs are highest.
The government and people of Alberta would then not be as dependent on the petroleum industry for maintaining level of service and would not be captive of that industry's need for short-term quarterly profits.
As it stands now, about one in seven Albertans is directly employed in energy production while seven in seven Albertans have their level of government services expanded or reduced by that industry's commercial success alone.
It is high time the People of Alberta studied their options and stood up for themselves as independent and self-sufficient citizens. Paradoxically, near-zero royalties must accelerate that process, thereby reducing the economic and political power of the petroleum industry in Alberta. As Albertans become less dependent on the petroleum industry for their well-being, the industry will have ever-less ability to bring government to heel to do its bidding.
What might happen to royalties and costs of services to that industry then?
As the title to this series suggests, all this was done in what must be a democratic society because it happened in the presence of ballot boxes.
Future blog postings in this series will deal with some of these options and other issues of democracy in action.
Mike
Royalties were raised and then royalties were lowered. The adversarial approach at play included threats and actions of economic punishment of Albertans and petroleum companies.
Albertans were punished by falling production mixed with falling gas prices and therefore falling net royalty revenues to their government and and a lowering of the overall return to the resource owners.
Petroleum companies were punished by threats of reduced net return per unit of production – barrels of oil or cubic feet of gas - as more of the final price received was supposed to go to Albertans.
Some argue that the final result of all this was reduced employment, fewer Alberta taxpayers, lower royalty income, lower producer profits, lower producer investment, increased production from competing petroleum producing jurisdictions, in other words, not one positive outcome.
I must say that none of these perceptions is as clear cut as the adversaries expressed them or as I have presented them.
However, aside from those arguments, do near-zero or even negative royalties, should they ever come to pass, be good for the petroleum industry?
As it stands, the petroleum industry clearly demonstrated dominating economic power turned into dominating political power.
At the same time, Albertans have committed their Government to providing some minimum level of service to serve the common good. Reduced royalties rolled into general government revenue threaten to reduce the resources available to provide those services. Yet all these services provide infrastructural support to Albertans as they strive to achieve their quality of life expectations and are the single most important purpose of government, with the need remaining pretty much constant over time on a per person basis.
Assuming Albertans want any government at all, Albertans then have four choices.
They can reduce their expectations of what a minimum level of service should be and what that service mix should be – hospital beds per person, lane kilometres of road per person, police and fire officers per thousands of citizens and so on. Should there be hospital beds or schools, police or highways?
Albertans can sell off other assets to earn revenue to make up what's needed – highways sold and leased back, parks sold to residential and vacation property developers and so on.
Albertans can borrow money and hope to grow out of the deficit and debt financing required to pay for current expenses.
Albertans can raise personal and corporate income taxes.
Albertans have already lived through the first option. Albertans are toying with aspects of the second option.
Albertans have lived through the third option and are again using that option via provincial bonds after swearing off of deficit and debt financing as a viable or sustainable alternative to government financing.
The fourth option is a game changer. What if Albertans got used to paying for the minimum level of government services through personal and corporate income taxes?
The budget could be balanced with taxes. Funding for schools, roads, hospitals, emergency services, police and so on would be stabilized. Services and infrastructure would experience greatly reduced feast or famine financing which usually means human services going through famine (low service levels) when the economy is down and the need is greatest and feast (high service levels) when the economy is heated up and the costs are highest.
The government and people of Alberta would then not be as dependent on the petroleum industry for maintaining level of service and would not be captive of that industry's need for short-term quarterly profits.
As it stands now, about one in seven Albertans is directly employed in energy production while seven in seven Albertans have their level of government services expanded or reduced by that industry's commercial success alone.
It is high time the People of Alberta studied their options and stood up for themselves as independent and self-sufficient citizens. Paradoxically, near-zero royalties must accelerate that process, thereby reducing the economic and political power of the petroleum industry in Alberta. As Albertans become less dependent on the petroleum industry for their well-being, the industry will have ever-less ability to bring government to heel to do its bidding.
What might happen to royalties and costs of services to that industry then?
As the title to this series suggests, all this was done in what must be a democratic society because it happened in the presence of ballot boxes.
Future blog postings in this series will deal with some of these options and other issues of democracy in action.
Mike
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