Intuition

 The war in Ukraine seems to have reached a stalemate phase with - diplomatically -

no possible solution. Ukraine will not abandon  an iota of territory and still wants

to 'join the West' like its Eastern European neighbors. Russia will not hear of it.

Loosing Ukraine would be the last straw, and potentially endanger the Russian

Federation itself. Any compromise extracted from either side would not be stable

in the long run. So what on Earth can be done here...

Things do get solved, sometimes. The Second world War was settled at the price

of a terrible competition between East and West, but it did yield unprecedented

advancements in science and technology. No very restful during the Cold War, but

we powered through it. And the great wonder of it all was Germany: defeated and 

devasted after much combat, it is today everybody's good neighbor, beautifully rebuilt

and prosperous. 

So here is my intuition on all this. Maybe we should consider Ukraine the deliquent

in the current battle, and occupy it until it is cleared of rubble, ecologically re-balanced

and re-built. Until it is ready to govern itself, no corruption, with stable institutions. Then

everybody can leave. I like it.

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The Economist UK is currently running a piece by Michael Ignatieff, a well-known

Canadian economist. Below, a summary and discussion by Perplexity Ai:

                                                                      

What are the main productivity issues Canada faces according to Michael Ignatieff?

Answer

According to Michael Ignatieff, Canada’s main productivity issues include:

Declining Productivity Growth: Canada’s GDP per capita has been shrinking by 0.4% annually since 2020, which is the worst performance among the 50 most developed economies. This indicates a persistent and deepening productivity crisis.

Fragmented Labor and Capital Markets: Ignatieff points to the fragmentation of Canada’s labor and capital markets as a structural weakness that hampers productivity. This fragmentation makes it harder for businesses to scale and for workers to move efficiently between opportunities.

Lack of Government Direction: He criticizes the absence of clear government strategy and direction to address these productivity challenges. Without coordinated policy action, the underlying issues remain unresolved.

Overdependence on the US Market: Canada’s heavy reliance on the US as its primary trading partner, especially in key sectors like energy and automotive, limits its economic resilience and bargaining power. This dependence makes Canada particularly vulnerable to external shocks, such as tariffs or changes in US policy.

Inability to Meaningfully Retaliate: Due to the structure of its economy, Canada lacks the leverage to effectively retaliate against US economic measures without causing self-harm, highlighting a lack of economic diversification and robustness.

In summary, Ignatieff argues that these intertwined issues—declining productivity, fragmented markets, weak policy direction, and overreliance on the US—are at the core of Canada’s productivity problem and threaten its economic sovereignty.

How does Michael Ignatieff's perspective on productivity differ from other experts?

Answer

Sources

31

Michael Ignatieff’s perspective on Canada’s productivity issues stands out from other experts in several ways:

Ignatieff’s Perspective

Political and Geopolitical Framing: Ignatieff frames Canada’s productivity crisis not just as an economic issue but as a central vulnerability in the nation’s ability to withstand external political and economic pressure, particularly from a potential second Trump presidency. He links productivity directly to national sovereignty and bargaining power, arguing that Canada’s economic weakness leaves it exposed to American leverage, especially in the context of tariffs and defense demands.

Focus on Fragmented Markets and Lack of Direction: Ignatieff emphasizes the fragmentation of Canada’s labor and capital markets and criticizes the lack of clear government direction as core structural problems. He suggests that without coordinated action, these issues will persist and worsen Canada’s position.

Overdependence on the US: He highlights Canada’s heavy reliance on the US for trade as a key productivity problem, making the country particularly vulnerable to US policy shifts and economic coercion.

Other Experts’ Perspectives

Emphasis on Investment, Innovation, and Technology: Other experts, such as those cited by BDO and the Wilson Center, focus more on insufficient investment in capital, low adoption of technology, and limited innovation as primary causes of Canada’s productivity lag. They highlight the need for increased R&D, technology adoption, and leveraging Canada’s skilled workforce and natural resources.

Structural and Sectoral Analysis: Reports like the one from the University of Calgary’s School of Public Policy analyze productivity by sector, pointing to declines in manufacturing, transportation, and construction, and note the impact of low capital intensity and underinvestment in machinery and equipment. They also discuss regional disparities and the effects of the COVID-19 pandemic.

Policy Recommendations: Many economists advocate for removing interprovincial trade barriers, streamlining regulations, and implementing tax reforms to incentivize investment and innovation. They often look to international models, such as Australia’s productivity commission, for policy frameworks.

Cultural and Business Practices: Some experts mention cultural barriers to innovation and the need for Canadian businesses to take more initiative in improving productivity through operational efficiency and workforce development.

                                                                        

Summary

Ignatieff’s analysis is distinct in its geopolitical urgency and focus on sovereignty, while most other experts concentrate on economic fundamentals like investment, innovation, and regulatory reform. Ignatieff sees productivity as a linchpin for Canada’s independence and resilience in the face of US pressure, whereas others view it as essential for long-term economic prosperity and competitiveness.

How does Michael Ignatieff's perspective on productivity compare to that of the OECD?

Answer

Sources

8

Michael Ignatieff’s perspective on Canada’s productivity challenges shares some common ground with OECD analyses but differs in emphasis and framing:

Common Ground

Structural Barriers: Both Ignatieff and the OECD identify fragmented markets (e.g., interprovincial trade barriers) and underinvestment in infrastructure as key impediments to productivity. The OECD has historically criticized Canada’s regulatory fragmentation and lack of capital mobility, aligning with Ignatieff’s call for a unified national economic strategy.

Education and Skills: Ignatieff emphasizes addressing Canada’s “education deficit,” particularly literacy and post-secondary access, which aligns with OECD recommendations to improve human capital and workforce adaptability.

Innovation Gap: Both highlight Canada’s lagging innovation and technology adoption compared to peers, though the OECD typically provides more detailed sectoral analyses (e.g., manufacturing and tech investment).                               

Specific OECD Insights Not Emphasized by Ignatieff

Tax Policy: The OECD frequently critiques Canada’s tax structure (e.g., high taxes on investment), which Ignatieff does not prioritize. The Fraser Institute notes Ignatieff’s past skepticism of corporate tax cuts, diverging from OECD pro-market recommendations.

Sectoral Analysis: OECD reports often break down productivity by industry (e.g., manufacturing vs. services), while Ignatieff focuses on broad national strategies.

Global Benchmarks: The OECD compares Canada’s productivity to a wider range of countries (e.g., Australia’s reforms), whereas Ignatieff’s analysis is more US-centric.

Summary

Ignatieff’s perspective is distinct in its geopolitical urgency and focus on national sovereignty, while the OECD emphasizes technical policy reforms and global competitiveness. Both agree on core structural challenges but differ in framing and proposed solutions: Ignatieff advocates top-down federal coordination to counter US pressure, whereas the OECD promotes market-driven adjustments and tax incentives.

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And what does doxa-louise recommend to turbo-charge the Canadian economy:

I think the CBC/Radio-Canada should use some of that recent money they got to

develop an Innovator internet page that runs not local news in segments but

nationally. It's part of the problem, we are all spead out. Show us interesting people

doing neat things!! We already know the place looks good...

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COPILOT:

In the context of Economics, what is productivity. Is it always with respect to one worker?

In Economics, productivity refers to how efficiently goods or services are produced. It's typically measured as the ratio of outputs (goods/services produced) to inputs (resources such as labor, capital, or raw materials). The aim is to gauge how effectively resources are being utilized.

Productivity doesn't have to be restricted to one worker—it can be applied at multiple levels:

Individual Productivity: Measures output per worker or per hour worked.

Team or Organizational Productivity: Analyzes how efficiently a group or a company produces goods/services.

National Productivity: Captures the economic efficiency of a country, often assessed through metrics like GDP per hour worked.

In short, productivity can be viewed from micro (individual worker) to macro (entire economy) levels. Let me know if you'd like examples or further insights into productivity!

So what is the productivity of labour?

Labor productivity refers to the amount of goods and services produced by a worker or group of workers in a given time period. It is commonly expressed as output per labor hour or per worker. This metric is essential for understanding the efficiency of labor in contributing to economic growth.

Labor productivity can be influenced by several factors:

Technology: Advanced tools and machinery make workers more efficient.

Skills and Education: A well-trained workforce is likely to be more productive.

Work Environment: Supportive infrastructure and management practices can boost productivity.

Capital: Availability of resources like equipment or funding impacts efficiency.

For example, if workers in a factory produce 100 units of a product in 10 hours, their labor productivity is 10 units per hour. Improvements in any of the factors mentioned above can raise this figure. Let me know if you'd like to explore labor productivity in any specific industry or region!

If I am measuring productivity to compare between countries, what is the metric used?

When comparing productivity between countries, labor productivity is often the key metric used. It is typically expressed as GDP per hour worked or GDP per worker. This allows for a standardized measure of output relative to labor input, enabling meaningful comparisons across countries.

For instance:

GDP per hour worked focuses on the efficiency of labor, accounting for how much economic output is generated per hour worked.

GDP per worker measures the average output produced by each worker, which can give insights into overall workforce efficiency.

These metrics are adjusted for purchasing power parity (PPP) to account for differences in price levels and living standards, ensuring a fair comparison.

Let me know if you'd like more details about these metrics or examples for specific countries!