Category Archives: Politics

Macron on Macron – Understanding the French President’s Perspective

Environmental Policy | New Economics

The idea that the economy and environmentalism are a zero sum game is false. Macron argues that the example of fighting macro-trends in Europe as jobs eroded during the manufacturing sector is similar to climate change policy. You have to protect people NOT jobs. You help people re-train in order to change jobs. Both the private and public sector have a responsibility to drive human capital by committing to increase the financing for career support. He also sees that the US president understands the issue at a sophisticated level but had to follow his commitment to his voters. Macron argues there will be billions of victims of climate change unless commitments to curb CO2 production are taken now. There over 150 countries that negotiated the Paris Accord so there is no re-negotiating possible.

Jerusalem Policy |

Transferring the US services to Jerusalem does not comply with international rules according to Macron. Trump wants to create a strong reaction with the aim of triggering a revision of the peace process. Macron believes this is the wrong item to push in order to spur change. Pretty on point whether you agree with that or not…………………………[more later]

The Misguided Conservative Ideal: R.B. Bennett and the Western Canadian Reaction between 1930-1935.

The Misguided Conservative Ideal: R.B. Bennett and the Western Canadian Reaction between 1930-1935.

A fair amount of a party’s political success relies on good fortune. Steve Martin the comedian famously that ti……ming….is everything. If this is the case, R.B. Bennett was the most unfortunate Prime Minister in Canadian history. This essay will re-evaluate the Conservative party’s response to the Great Depression in Western Canada, accomplishing four objectives in order to defend Bennett[1]. First, it will outline R.B. Bennett’s adherence to Liberal capitalist order. Second, this essay will assess the Conservative party’s response to the agricultural crisis in the Canadian West. Thirdly, it will analyze their misfortunes in the West and the public response to the Conservative efforts. Finally, it will conclude that international economic stagnation, Western agricultural failure, philosophical discord inevitably led to Bennett becoming a victim of political circumstance. Hence politics is high risk, so one should try to start a term in leadership when the economy is expected to grow.

The tragedy of Richard Bedford Bennett is rooted in a political philosophy that was no longer sustainable in the 1930s: the Liberal capitalist order. According to Ian Mackay, the classical liberal model was “hegemonic in Canada from the mid-nineteenth century to the 1940s”[2]. Unfetter laissez-capitalism was prominent internationally and its philosophy of individualism had a significant influence in the Conservative party of Canada and on its 8th leader. Bennett advocated small-government principles in an era were these ideals were most acceptable to the Canadian public, particularly in Western Canada. The child of a staunch Methodist mother, Bennett developed a strong Protestant work ethic [3] and through the help friend Max Aitken, Bennett became a Western millionaire lawyer espousing the virtues of liberal capitalist order. As a Conservative House of Commons representative for Calgary, Alberta, R.B. Bennett “thought of himself as Calgarian. It was his home; it was where he had made his way in the world”[4]. Eventually, being a convenient candidate, the Conservative party found both his ideology and his allegiance to the West strategically appealing choosing Bennett as their leader at the 1927 Convention[5].

The Great Depression of the 1930s transformed unemployment into the single most challenging threat to the liberal order. Throughout the 1920s, the urbanization process continued across Canada while in the Prairie West, agricultural expansion continued unabated. According to Struthers, “until the development of the Canadian West as a major wheat-producing region between 1896 and 1930, few economic links existed to bind the diverse regions of Canada together”[6]. The Palliser Triangle represented potential prosperity for the impoverished European family and despite the economic imperialism of the east and several minor depressions, their desire for self-sustaining autonomy had been realized. Unfortunately, the Great Depression hit Western Canada the hardest.

An unprecedented catastrophe occurred as two events crippled Western Canadian prosperity. The first event was the global phenomenon triggered by the US stock market crash of October 29th, 1929. The result locally was that the price of wheat fell 40 per cent on the price index while overproduction of wheat exacerbated the crisis[7]. The second event was environmental crisis that curbed agriculture further. Drought caused by change in wind interactions between the Gulf of Mexico and Pacific streams, and imprudent cultivation practices, localized in Western Canada, meant that the soil could literally blow away (Seager, Watkins, Struthers). Compared to other constituents, “the plight of farmer in western Canada was rather worse. Canada’s backbone, the prairies, was broken, not by the depression alone, but by depression and drought”[8].

Enter the new Western Conservative leader R.B. Bennett in the 1930 federal election. Unemployment proved to be decisive in the election campaign, most of which was confined to the drought stricken western provinces. Liberal leader Mackenzie King’s electoral strategy was to deflect responsibility onto western provincial jurisdictions under section 92 of the BNA Act making him seem “quite removed from the economic calamity that was beginning to preoccupy Canadians”[9]. Conversely, R.B. Bennett’s Western campaign promised to “initiate whatever action is necessary…or perish in the attempt”[10] and to use grain tariffs “to blast a way into the markets that have been closed to you”[11]. The Conservative party gained a sound majority government.

R.B. Bennett’s new 1930 mandate hinged on his solution to the unemployment crisis which was looming over Western Canada and expectations were high. Unfortunately, the drought proved to be a serious liability for Bennett’s economic recovery plans. His pro-business, anti-interventionist inclinations provided little assurance to the millions of unemployed who were becoming increasingly desperate and agitating for change. According to Struthers, “the Tory leader was convinced that the present depression was a passing, mostly seasonal phenomenon”[12]. He was patently wrong. To be fair, many other countries adhering to liberal capitalist order did not believe the crisis would last for long either[13]. As a consequence of this trust in past precedent, the Conservative solution was based in short-term policy implementation rather than long term initiatives that would conflict with the notion of balanced budgets and laissez-faire.

The capitalist philosophical crisis haunted Bennett. There was philosophical discord in Bennett’s party between Liberal capitalism and extensive government interventionism, so R.B. Bennett “who was [posturing] a radical change in government policy to ensure prosperity”[14] but merely implemented minor relief plans that did not engage the federal government substantially in provincial jurisdiction. The Conservatives established the 1930 Relief Act, which relied on municipal and provincial funding for implementation with a federal expenditure of 28 million[15]. It was doomed to failure. Unfortunately, “Bennett had no way of ensuring that the money was fairly and wisely spent”[16] and there was a general lack of finances on the other levels of government regardless. By 1931, Bennett governed under the Statute of Westminster but such monumental achievements[17] were overshadowed by the economic situation, which was still gradually deteriorating most significantly due to the devastation of the prairie wheat crisis shared only by the American west[18]. “The price collapse of 1930 had beggared many wheat farmers, and a spring drought meant that there would be no 1931 crop at all in some areas”[19]. With the wheat economy bust, 54 per cent of the nation’s population worked in towns and cities, and urban issues like old-age pensions were the most pressing of the day[20].

After the collapse of Bennett’s unemployment relief efforts in the spring of 1932, he commissioned social worker Charlotte Whitton to write a two-hundred-page report on the Western crisis that was the growing liability on his government. As the director of the Canadian Council on Child Welfare, Whitton’s the most astonishing revelation was the argument that almost “40 percent of those then receiving relief in the West did not really need it…” adding that “…the plight of the people was pitiful but it was ‘not one deriving from the present emergency’ and therefore should not be supported by federal relief”[21]. The 100,000 transients in the West, she warned Bennett, were “getting out of hand” [22] and called for more social workers like her for the relief effort. This is exactly what Bennett wanted to hear since he maintained the liberal order “attribut[ing] the social turmoil not to hard times, but to foreign agitators and communist sympathizers.”[23] Whitton served to confirm, in Bennett’s mind, that the distinction between lethargic and desperate unemployed was distorted and that there was widespread abuse in the relief system. Having ignored the finer points of Whitton’s solution, Bennett established a direct relief method for the transients beyond the creation of paved roads that characterized his previous Relief Act.

As Conservative party strategy, transients could provide the focal point for the Western crisis. Bennett’s ideology suggested that the urbanization of transients was pejorative, he feared that “peace, order, and government would be disrupted by a Soviet-style revolution”[24]. Knowing the rural life well, Bennett believed that the people should be forced ‘back to the land’[25]. As a solution, Army General Andrew McNaughton’s proposed a scheme called PC 2248. He argued that “by taking the men out of the conditions of misery in the cities and giving them a reasonable standard of living and comfort,” McNaughton explained persuasively, “…the government would be ‘removing the active elements on which ‘Red’ agitator could play’[26]. Removing transients from urban centres would mean the crisis could be over or at least less visible.

By late 1932, relief camps for single, unemployed males administered by the Department of National Defense were being established to extract transients from urban centres where political turmoil could ensue[27]. Even in a public speech, Bennett asked “every man and woman to put the iron heel of ruthlessness against”[28] emerging political challenges to the Liberal order. With the plan underway, the RCMP began removing transients from the trains in Western Canada and relocating them in work camps outside of urban centres. Bennett’s obsession with balanced budget, social order from civil unrest particularly Western Canada’s third party challenges was Bennett’s pre-occupation from 1931 to 1933[29]. The bulk of the Conservative election platform has been converted into policy by the summer of 1932”[30]. Imperial economic conference of 1932 failed to solve the problem of Great Depression highlighting the unavoidable impact of global economic collapse[31]. The ‘Bennett Buggies’ having been entrenched as a sarcastic criticism of the state of affairs.

In January 1933, Bennett added to his administrative blunders when the Western provincial leaders asked that the federal government to be entirely financially responsible for direct relief[32]. Bennett’s frustrated response failed to mitigate deep resentment from western premiers, like Pattulo of BC and Gardiner of Saskatchewan, when he attacked them for fiscal ‘extravagance’ and suggested that “the Prairie Provinces give up old age pensions, telephones, and electrical service to ‘maintain the financial integrity of the nation’”[33]. Fiscal concerns of Bennett were calling for the burdensome western provinces to deliver balanced budgets. Ultimately, Bennett had to pick up the slack of their supposed incompetence. Bennett was not interested in spending money Canada’s government didn’t have. “It was no wonder that a discouraged R.B. Bennett talked openly of retirement in the fall of 1933”[34]. He and his Conservative party rejected full-scale state intervention as long as feasibly possible. Reform was now crucial.

By 1935, there were more than two hundred camps in the system serving mostly Western Canada. Regardless of the historian’s political leanings, their description and analysis of these camps is resoundingly negative. According to Wilbury’s account, those on relief were “inmates of the government labor camps”[35] casting a grim light on Bennett’s failed solution which may have exacerbated the problem. According to Struthers, “the Department of National Defence relief camps represent one of the most tragic and puzzling episodes of the Depression in Canada”[36] and would be Bennett’s greatest blunder. “The camps soon became a liability, though, disliked by the unemployed, labour unions and the general public”[37]. Unfortunately for Bennett, the military styled DND camps would be referred to as ‘slave camps’ that “symbolized everything wrong with Bennett’s approach to the depression and eventually provoked the most violent episode of the decade”[38]. Struthers is referring to the scathing actions of Bennett in regard to the Regina Riot.

The Conservative government’s strong-arm tactics using Bennett’s “iron heel of ruthlessness”[39] had a devastating effect on Western Canadian support. The On-to-Ottawa Trek was a protest from BC headed to Ottawa and had been “violently broken up two thousand miles from its goal”[40]. 120 people were arrested at the July 1st, 1935 Regina Riot which ended a police officer’s life. Some confusion between historians exists over whether Bennett took control of the RCMP in Saskatchewan in order to hold them in Regina with Section 98 of the Criminal Code[41]. Other than the Winnipeg General Strike of 1919, the Regina Riot of July 1, 1935, is probably one of the larger civil disturbance in Canada history. Highly critical of Bennett’s ineffectual leadership, Struthers adds that the riot was a “fitting conclusion to Bennett’s five years in office for it symbolized the failure of the unemployment polices pursued by his administration”[42].

Out of desperation, R.B. Bennett turned to CBC public radio announcements in early 1935. Bennett’s New Deal echoed the interventionism of Roosevelt’s response to the Great Depression in 1933[43]. Developed by Bennett’s brother-in-law, Herridge’s New Deal attempted to placate the emergence of third party challenges in Western Canada. With projects to strengthen the Farm Loan Board etc, Diefenbaker claimed the broadcasts were enthusiastically received in Saskatchewan[44]. The obvious criticism that it took far too long in the term for the Western electorate who were mobilizing around new parties. The ‘Bennett Buggies’ had already been entrenched as a sarcastic criticism of the state of affairs. For Bennett it was too little too late and as Herridge ploy backfired[45]. King played the strategy of supporting the New Deal based on the merits of the proposal instead of allowing Bennett to use the bill as an election promise squandered by Liberal opportunism. King made no promises during the election campaign and won, the Regina Riots and the ‘slave camps’ ruined Bennett’s chances in Western where Social Credit and CCF were poised to split the vote. Other successes like providing for an eight-hour day, a six-day work week, and a federal minimum wage[46] are hardly observed in historical recollections or are deeply undervalued. While Bennett was, and is still, often criticized for lack of compassion for the impoverished masses, documents show that he stayed up through many nights reading and responding to personal letters from ordinary citizens asking for his help and often dipped into his personal fortune to send a five dollar bill to a starving family[47].

With the unavoidable crisis in Western Canada, the resignation of the popular H.H. Stevens in 1934, the “most talked of with regard to Reform in the West”[48], the formation of the Reconstruction Party (a renegade faction of Bennett’s party driven by a distrust of Bennett’s attachment to large corporations)[49] and the emergence of the Social Credit and Co-operative Commonwealth Federation, the Conservative party’s electoral revitalization for the 1935 election was doomed. It did not help that the organizing party machine put together by A.D McRae had died out in depression years[50]. Ultimately, the Conservative party could not solve the international problem of the depression. The result of Bennett’s failure was that the Western electorate rejected ordinary political parties for alternative expressions of protest. The public discontent in the West translated into electoral collapse losing half of all popular support in the four Western[51]. “Furthermore, despite the prevalence of hardship in western Canada, the depression would not bring immediate victory to the new party in the 1935 election”[52]. This position is expanded by Dough Owram, who points of that “the world was forced to operate in ruthless competition which creates maldistribution of wealth and ‘gives rise to the violent fluctuations in the purchasing power of consumers”[53].

Unable to overcome the Depression, Bennett lost the 1935 election to his Liberal opponent, Mackenzie King. New leaders gained support by promising to help struggling constituents and to stand up to Ottawa. Electoral math problem SMD screwed him 18.7% drop in the support in 1935 election from 1930 47.5%(site) wikipedia). His larger failings were in the dealing of specifics in Great Depression, particularly federal-provincial relations with the four western provinces, the DND camps and the Regina Riot. The massive majority gained by King is more telling of the single member district electoral system than Bennett’s failures. King actually didn’t need the west to make a massive majority. Stevens Reconstruction party took 8.7% directly out of the Conservative party caucus** How much of the depression is truly Bennett’s fault is impossible to gage and historians seem to debate over the depth of his ineptitude rather than the successes he achieved. The 1935 election sealed Bennett’s fate as a failed leader, but this is only one side of a complex diverging understanding of Bennett and his accomplishments under the most dire of circumstances. While various writers describe to a degree the details of R.B. Bennett’s political strategy during the depression, they vary on the emphasis of his success or failure. Stevens and Tim Buck came back to haunt him electorally speaking.

At once a man of decidedly ill repute and a statesman often-misunderstood, R.B. Bennett did the best he knew how. Bennett receives a negative historical analysis because Canadian historians forget the philosophical mindset of the era. Unfortunately, Bennett is the antithesis of the welfare state; few can argue that Bennett was successful in his laissez faire policies. Had Bennett been re-elected, in a counter-factual analysis, his perceived ineptitude during the depression might have evaporated as World War II would have hailed him with the political capital and economic upturn needed. King and the Liberal Party were the beneficiaries of Bennett’s failure. In that sense, Bennett was Canadians history’s most sacrificial prime minister.

The success of the New Deal is in debate in the United States. 1937 there was another recession in the US. WWII was the ultimate solution.

Disclaimer: I don’t stand by any assertions in this paper; it was written 10 years ago and am not responsible for it’s content. So there!


Work Cited

Berton, Pierre. The Great Depression 1929-1939. Toronto: McClelland and Steward Inc, 1990.

Morton, Desmond. A Short History of Canada: Fifth Edition. Toronto: McClelland & Stewart Ltd, 2001.

Orwam, Doug. The Government Generation: Canadian Intellectuals and the State: 1990-1945. Toronto: University of Toronto, 1986.

Seager, Allan and Thompson, Herd John. Canada 1922-1939: Decades of Discord, the Canadian Centenary Series. Toronto: McClelland & Steward Ltd, 1985.

Struthers, James. No Fault of Their Own: Unemployment and Canadian Welfare State: 1914-1941. Toronto: University of Toronto Press, 1983.

Maclean, D. Andrew. R.B. Bennett: The Prime Minister of Canada. Toronto: Excelsior Publishing Company, Ltd, 1934.

Waite, P.B. The Loner: Three Sketched of the Personal Life and Ideas of R.B. Bennett 1870-1947. Toronto: University of Toronto Press, 1992.

Watkins, Ernest. R.B. Bennett: A Biography. London: Secker & Warburg, 1963.

Wilbur, Richard. The Bennett Administration: 1930-1935. Ottawa: The Canadian Historical Association Booklets, No. 24, 1969.

Walter D. Young. Democracy and Discontent: Progressive, Socialism and Social Credit in the Canadian West, Chapters 1-3: 1-56


Wikipedia, Canadian Federal Election, 1935.



[1] Given the context, his paradoxical compassionate letters to the poor while rejecting government intervention demonstrates that a philosophical discord within his Conservative ideology was a barrier to full scale government intervention. Intervention wouldn’t have amounted to much though BECAUSE I conclude, ultimately, that Bennett was screwed by forces beyond his or any Western nation. Only a war would help King in re-election.

[2] McKay, Ian. “The Liberal Order Framework: A Prospectus for a Reconnaissance of Canadian History”. Canadian Historical Review (2000), pp. 625.

[3] Waite, P.B. The Loner: Three Sketched of the Personal Life and Ideas of R.B. Bennett 1870-1947. Toronto: University of Toronto Press, 1992, pp. 24.

[4] Waite, P.B, 54.

[5] Glasford, Larry A. Reaction and Reform: The Politics of the Conservative Party under R.B. Bennett, 1927-1938. University of Toronto Press, 1992, pp. 26.


[6] Struthers, James. No Fault of Their Own: Unemployment and Canadian Welfare State: 1914-1941. Toronto: University of Toronto Press, 1983, pp. 5.

[7] Young, Walter D. Democracy and Discontent: Progressivism, Socialism and Social Credit in the Canadian West: McGraw-Hill Ryerson Ltd., 1969, pp. 43.

[8] Watkins, Ernest. R.B. Bennett: A Biography. London: Secker & Warburg, 1963, pp. 181.

[9] (Morton, 211)

[10] Election speech, R.B. Bennett, June 9, 1930.

[11] Glasford, 96.

[12] Struthers, 48.

[13] Thompson and Seager in Canada 1922-1939: Decades of Discord,

[14] Berton, Pierre. The Great Depression 1929-1939. Toronto: McClelland and Steward Inc, 1990, pp 141.

[15] Glasford, 114.

[16] Struthers, 50.

[17] Part of Bennett’s legacy being the independent of the dominions within a new British Commonwealth.

[18] Wilbur, Richard. The Bennett Administration: 1930-1935. Ottawa: The Canadian Historical Association Booklets, No. 24, 1969, pp. 7.

[19] Seager, Allan and Thompson, Herd John. Canada 1922-1939: Decades of Discord, the Canadian Centenary Series. Toronto: McClelland & Steward Ltd, 1985, pp. 213.

[20] Struthers, 47.

[21] Ibid, 77.

[22] Berton, 136.

[23] Glasford, 121.

[24] Berton, 141.

[25] Struthers, 92.

[26] Seager, 268.

[27] Glasford, 122.

[28] Ibid, 121.

[29] Ibid, 123.

[30] Ibid, 117.

[31] Ibid, 116.

[32] Struthers, 145.

[33] Seager, 254.

[34] Glasford, 134.

[35] Wilbury, 17.

[36] Struthers, 95.

[37] Ibid, 122.

[38] Struthers, 96.

[39] Glasford, 121.

[40] Seager, 272.

[41] Berton, 323.

[42] Struthers, 136.

[43] Seager, 263.

[44] Glasford, 155.

[45] Glasford, 159.

[46] Seager, 264.

[47] Seager, 212.

[48] Glasford, 168.

[49] Ibid, 138.

[50] Ibid, 100.

[51] Conservative Popular Vote change 1930-1935: 49.3% – 24.9% BC, 35.0%-17.5% AB, 33.6%-18.0% SK, 44.1%-27.9% MB.

[52] Young, 55.

[53] Orwam, Doug. The Government Generation: Canadian Intellectuals and the State: 1990-1945. Toronto: University of Toronto, 1986, pp. 219.


Lessons from a Masters In Business Administration: Accounting Is About Perception

Accounting Is About Perception: example, MLB calculation of profits and limiting tax liabilities. In this case study, a baseball team, the Montreal Expos has a dispute between players, and the owner about how profitable the club is in actual terms.

The argument for the players is that the owners are using accounting tricks to reduce their profit and then using those numbers to justify not paying the players as much as they are worth. The trick is that players are depreciated under the tax laws in Canada, and the US. When you buy a team, you can capitalize the value of your players ie you treat your players as assets on your balance sheet, rather than an expense, which is on the income statement. Therefore, if you buy a team for 100 million, and capitalize the value of players at 50 million, you can then charge a depreciation expense over six years. With salaries, this expense means you get a double expense. The problem is that the depreciation expense doesn’t make any sense since the team might have young talent that only improves over time, players don’t depreciate. So the players argue that the real expense is salary and that the owners are abusing the depreciation allowance to minimize their profits to then justify lower salaries.

ACCOUNTING is useless to some because it appears to be the art of manipulating numbers to fit whatever goal you had in mind. It is confusing and deceptive, and describes events long after they had happened. There were far more effective ways of examining a company’s health. Others believe that account is useful because it is a standard measure that allows us to compare companies with different performances. You will need to gain a critical eye in accounting to be successful in an MBA.

There are two major mantras of accounting. The foundation is the following:

Assets = Liabilities + Equity


Accounting = Economic Truth + Measurement error + Bias

Discovering economic truth is very difficult to do. The rules are the messy by-product of corporate and technological change, lawyers, lobbyists, politicians, and companies all scrapping for some advantage. If accounting ceases to reflect what is going on but instead becomes a game, it becomes worthless and destructive on a macro-level as demonstrated by the 2008-2011 Western Country Recessions.

[This is a synopsis of several books on the MBA experience including What They Teach You At Harvard Business School by P.D. Broughton]

Lessons from a Masters In Business Administration: About Management Consulting

About Management Consulting: conventional wisdom states that if you start working at a consulting firm as a single person, you will stay single, if you arrived married you will risk ending-up getting divorced. People with families get fired first at a consulting firm. Other consultants talk about the unending meetings, the way bosses might mislead clients by offering less-than-useful advice accompanied by fancy presentations. Consultancies are full of intellectuals but cutthroat ones. You might encounter a formula as follows: Change = f(D x M x P)+E. In other words, change is caused by the level of (D) dissatisfaction, the new (M) model to resolve it, (P) the process for that change, and plus E is error. This is a classic over-complication of an obvious reality that change is caused by dissatisfaction, and requires a solution that is planned. This kind of equation, although novel is an example of what a consultancy might sell to a client as part of their services.

About Finance Jobs: finance jobs are built around squeezing as much out of employees as possible. You might be expected to leave at 4am, then sleep in a car, then drive home to take a shower, and do it all over again. Did anyone mention the salary, though? You should read Roger Lowenstein’s Warren Buffett, The Making of an American Capitalist.

Summer Jobs: everyone will be applying for summer jobs early on. Being in an MBA program makes you highly sought after. You might be asked in an interview for an investment banker job: “What makes a stock-price move?” You should not say that; fundamentally, it’s a change in expected future earnings, but what influences those changes is a mystery. Some believe it is all rational, based on forecasts, others say there is a herd mentality….the competition will be insane for these positions, and those who naturally fit within a given organization will succeed.

Research is Paramount: understanding a business model will make you an effective investor. You only hear about the success stories, and you never hear about the failures.

[This is a synopsis of several books on the MBA experience including What They Teach You At Harvard Business School by P.D. Broughton]

Lessons from a Masters In Business Administration: Risk/Reward & Predicting Cash-Flow

Risk and Reward/Predicting Cash-Flow: Investors think as much about risk as they do reward. Most people tie their investments to resources, expecting them to grow, and with it, their own rewards. Where rewards are expressed in percentage growth, risks are harder to characterize. Guessing a company’s future cash-flow involves looking at past revenue, you then make reasonable assumptions based on how the new product will fair or how their rivals will be purchased. A dollar today is worth more than a dollar in a year’s time so if I buy a one-year bill that promises 5% interest, you will have $1.05 next year. Whereas a dollar next year is just a dollar. If I want a dollar next year, I could buy 95.2% worth and have the 4.8% to spend. This works with the federal government but a company or angel investor can expect to demand a higher return to compensate for the risk of their capital. The next step is to determine what the return on investment would be for these investors. Opportunity costs; it’s better to invest in an apartment than a stock. Apartments are illiquid, and it is much easier to trade in and out of other investments. Savings have low returns because they are highly liquid. If you tied up your money for a long period, it would bring about higher returns. Imagine a house party where you are going to meet the person of your life. If you didn’t go to that house party, then you would have missed out and the risk is enormous. Risk is actually not just the possibility of a bad thing happening, but of something good not happening.

[This is a synopsis of several books on the MBA experience including What They Teach You At Harvard Business School by P.D. Broughton]

Lessons from a Masters In Business Administration: Beta Measures

Beta Measures: describes the risk of a stock. A beta of 1 implies that the stock, on average, tracks the market perfectly. If the market goes up 5% so does the stock. Beta 1.5 would mean the stock goes up 7.5% or if the market goes down, the stock goes down by -7.5%. Therefore, a low beta stock is less volatile than the market. So starting your own company is high-beta, and working in a consultancy is low-beta.

Note however that there are skeptics like Warren Buffett because a perfectly good company with strong revenues, low costs, and a sustainable competitive advantage might one day have the CEO kill herself. Suddenly it is a high beta stock. So beta is not a good way of measuring a business’ value. Alpha is a better measure. Warren Buffett is good at what he does, he found his alpha. It is basically the value add that one person gets over another person that does the exact same thing. Picking the right investments, and bundling them together is all about finding companies that have that alpha.

To gauge if a company is worth investing in, you should ask: do they work hard? Are they honest? Likable? Creative? Entrepreneurial? Do they spend more than they earn? Are they mortgaged to the hilt? What if they lost their job tomorrow? Would they find another one quickly? Look at how they prioritize their spending, and you will see how they prioritize their life.

How To Think In Consultancies: you need to reach big conclusions from a handful of numbers. You have tylenol sales from one store, and the number of people who use the store, then the number of (as a percentage) people who live in the area, then apply it nationally. And you gross the sales at that original store to get a national estimate of Tylenol sales. That’s how you have to think in a consultancy.

[This is a synopsis of several books on the MBA experience including What They Teach You At Harvard Business School by P.D. Broughton]

Lessons from a Masters In Business Administration: Leadership and Corporate Accountability Class

Leadership and Corporate Accountability Class: Leadership & Corporate Accountability Classes teach MBAs to avoid chasing money down sewers. Ethical moments do not come with labels. M x F = D which means that a court decision (D) is the product of a legal model (M) and the facts (F). Is bluffing true ethics? Business seems to be about playing with a set of rules, and not seeking the higher ground. If you found out that hackers had broken into your credit card system you are obligated to tell your customer immediately. If you are bluffing your business with people’s lives in the balance, you are breaking an ethical code in many peoples opinion…think Jeff Skilling at ENRON. HBS shoulders a lot of blame over the years in business, so they have tried to quantify ethics, and leadership to counter-act this problem. People are taught accounting on the condition that they do not then manipulate their company’s earnings or minimize taxes to such an extent that it amounts to crime or ethical problems.

Lavish Executive Compensation: mediocre CEOs in the US and Europe are habitually paying themselves as if they are entrepreneurs or athletes. Is this wrong? Friedman hated the idea of companies donating to museums or sending employees to work in homeless shelters. That is robbing shareholders. Companies have a moral and economist purpose. The best employees want to work for good companies with good cultures, not just maximizing ones.

[This is a synopsis of several books on the MBA experience including What They Teach You At Harvard Business School by P.D. Broughton]

Music Industry as an Analogy for Public Policy development

What Frank Zappa said about music resonates in other verticals:
Imagine public policy is set in a similar manner to musical tastes in the 1960s. The artist in this case is the sponsor/formulator of the policy and the music executive is the facilitator who oversees the process of implementing, distributing the policy to a jurisdiction. Then they observe objectively the performance of the policy and say, hm, this is working or this is not working. Tons of caveats which I can address when I have more time around (objective accounting for policy performance) but the music industry analogy seem like a worthy one.

The danger is that some know-it-all comes in and guides which policies should be implemented and which should not be implemented. All on deducitve reasoning, ideologically frameworks rather than testing. Management retains their value by controlling the process of formulation more intrinsically. The current model has it set in this manner, the legal elite set the policy deductively and perhaps ideologically. “I know what the kids want these days.” And in the same sense, these know-it-alls have climbed the ranks as career politicians and know how they system works. Then pity those who don’t know how the system works as a power argument. Instead, the facilitators should let the free market of ideas flourish rather then control and horde power. I know, it’s a bit of stretch but Frank Zappa was on to something here.

The Worst Gun Debate Arguments

Preamble: laws work for the most part. The idea that a law shouldn’t be passed because a highly motivated criminal will break it anyway is totally the wrong way to think about laws. A law creates FRICTION, reducing the likelihood of certain behaviour. Laws are there to increase the barrier for activities we as a society believe are counter-productive. Owning a military weapon designed to kill people should be more strictly controlled then a hunting rifle or a handgun for self-protection. There is some flawed logic circulating around gun laws and so with the recent rise in shootings, I wanted to mention my favourite bad arguments in the gun debate to illustrate my point that laws work to make access more difficult… 

Even if we have more restrictive gun control, you will have mass shootings therefore no point in gun control: awful argument. It’s true that you cannot prevent a specific mass murderer but you can prevent them from having access to the most lethal force. Any law that reduces access to guns is going to have a reductive effect; again we are speaking correlative-ly here. Laws are friction for people who are on the fence of committing a crime; we want to keep them on the right side of that fence. Many people have no interest in guns and so restrictive access doesn’t effect them. Others have their careers in selling guns. Laws aren’t about keeping the most motivated away from gun use. People break the law all the time. Laws are about making the barrier to access higher. Making access much harder through tougher laws reduces the likelihood of events that would have otherwise happened. So states about “black markets emerge anyway” while true, doesn’t mean gun laws do not decrease the likelihood of shootings. Friction reduces likelihood of violence.

Examples where a barrier reduces crime: gated communities have lower crime rates even though they are only slightly more difficult to get into…..

Chicago has the toughest gun laws and yet the most shootings, therefore no point having gun control: terrible argument. Of course, you know the situation in Chicago is very unique and there is no comparable city; there is no A/B test either. There are so many variables at play in Chicago that would intervene in determining whether the gun law is effective or not. You would literally need a parallel universe to argue that the gun laws do not work because Chicago has the most shootings AND they have the most stringent laws. You could have correlative evidence to show the law is effective or not, but it’s so hard if not impossible to conduct the test to show a policy win between two Chicago-s, one with and one without the toughest gun laws in the US. Both sides can claim victory without realizing the above point: the pro-NRA stance would say; see gun control doesn’t work; and the anti-gun lobby would say: it would be much worse without the current laws…

Only full confiscation will solve the problem, only then can everyone be safe: weak argument. This argument is used to justify the current state of 350 million guns in the US, it’s an all-or-nothing argument. The goal is to get the listener to lift up their hands and say “nothing we can do about gun violence.” The argument basically lays out why you can’t have any significant gun control because confiscation effects only the law abiding citizens. The fact is that if you confiscated the deadliest tier of fire arms, which would entail forcing law abiding citizens to give up their guns, through an Australian style buy back scheme, you would likely have a reduction in gun crime. The threshold for a mass murder would be much higher because access would more difficult. Those caught with guns in their possession would be prosecuted: i.e. criminals with guns. We’re assuming police will continue to have firearms after all if by definition only those who illegally posses fire arms have fire arms then they would run around attacking society knowing a deduced deterrent was present. The logistics are expensive for a buy-back scheme. Obviously a buy back scheme would be extremely expensive.  But this argument that it’s either status quo or full confiscation and since full confiscation isn’t possible given the black market, the arguer is justifying the way things are now, and that’s a weak argument because reduced access will reduce incidents of violent crime.

It’s in the US constitution, therefore we need this right: also weak argument. The constitution is meant to be principals for US society, but there are amendments possible for the constitution. The reason behind this gun policy from the founding father’s was that they wanted to be able to have a militia to over throw a dictator president. Seems impacted by recency bias, i,e. the war of independence, but there is a case for factions to violently over throw the US government. Doesn’t seem too plausible, but on a wedge issue unknown to us now, there is a case for rising up against a central government.

So having better laws will reduce violent crime. What’s interesting is that having a precision based model would help reduce the angst around gun laws. If the government were to track your behaviour and give you a score, like a credit rating, then different people should have different thresholds for access. China appears to be trying to do that. 

Wolves in the Sheep’s Pen? Dow AgroScience & Agent Orange: War as Moral Hazard

Agent Orange: Dow AgroSciences as a Partner in the Vietnam War

Matt A. Uday A. Juliana C. Devon W. Leah. X

Part I: The Facts

vietnam-sprayThe spraying of Agent Orange (“AO”), code name Operation Ranch Hand, took place during the Vietnam War from 1962 to 1971. The aim of the spraying campaign, conducted by the US military, was to destroy the foliage that the North Vietnamese “Vietcong” guerrillas were using as cover. There were approximately 6,500 spraying missions that affected over five million acres of forestry and farmland, which made up approximately 20% of South Vietnam. The most-frequently used chemical during this 10-year span was called Agent Orange, which was designed as a common herbicide for defoliation. However, one of the chemicals in Agent Orange, dioxin, was highly toxic. The half-life of dioxin found in humans is 11-15 years and under certain conditions this half-life can increase to over 100 years.

When you search for “Vietnam victims of Agent Orange”, most of the images are too graphic to share here.horror-of-agent-orange

dow-agroscienceDow AgroSciences (“Dow”), which has since been acquired by Monsanto, was one of the biggest manufacturers of Agent Orange during the Vietnam War and made revenue of approximately $728 million (in terms of today’s dollar value). A key fact in this case is that Dow management knew that dioxin was toxic, but despite their warnings, the US military mixed the chemical to be between six and 25 times stronger than the recommended dosage. As a result, the four million US and Vietnamese soldiers and civilians exposed to this toxic herbicide suffered serious health issues, including skin cancer and loss of vision. Also, due to the long half-life, many decedents of those affected have been born with debilitating congenital diseases.

the-fog-of-warA key theme that will be explored throughout this article is that war creates a kind of ethical fog that works to obscure ethical considerations. War was also a shield for IG Farben, a powerful conglomerate of pharmaceutical and chemical companies, which profited from unethical decisions made during World War II. The fact that the production of Agent Orange took place during wartime provided Dow similar cover.

Part II: Identification of Ethical Issues

The Ethical IssueWe believe that Dow is socially responsible for the damage caused by Agent Orange, but not legally accountable. What we mean by this is that Dow is partially to blame because they should have better foreseen the consequences of selling AO, but ultimately the US military is the guilty active agent because they made the conscious choice to spray the harmful herbicide and totally disregard the dosage limits, leading to the terrible consequences that are seen today. However, one question we will aim to answer is: Should Dow have agreed to supply Agent Orange to the US military? We know Dow had a massive monetary incentive. We suspect that Dow likely estimated the number of casualties and potential legal costs (as was done in the Ford Pinto case), and compared this with the direct pay-offs. This process will be explored in greater detail below.

Part III: Analysis of Ethical Issues


We have chosen to evaluate Dow’s actions using various ethical frameworks in order to determine if there are ways of thinking about ethics that may lead to contrary conclusions. On the one hand, the fact that Agent Orange has done much more damage globally than any benefit that may have been derived suggests that Dow made the wrong decision.

A Rawlsian liberalist would surely argue that Dow management chose incorrectly as well. On the other hand, the fact that Dow was never found legally liable by a court of law makes it more difficult to say that what they did was outright “wrong”. In addition, from a consequentialist perspective, whether Dow had produced Agent Orange or not would not have had any impact on the final outcome – the US military had many other sources for the herbicide and would have sprayed it regardless. Ultimately, we believe that Dow should be held socially responsible for the damage caused by the spraying of Agent Orange during the Vietnam War. Having said that, we are also of the opinion that this responsibility should be partial, largely due to actions taken by the US military.

Dow Was Never Found Legally Responsible

vvalgStarting on the left-most side of the legal-social spectrum, Dow was never found legally responsible for their actions by a court of law. The Veterans Association of America took the company to court, but the suit concluded in an out-of-court settlement. The largest compensation a US veteran could receive was $12,000 spread over a 10-year span, and widows of deceased veterans received only $3,700 – paltry figures compared to the damage done. Dow was also taken to court by the Vietnam Association of Victims of Agent Orange. In this case, after many appeals, the courts “ultimately determined that the plaintiffs had failed to allege a violation of international law because Agent Orange was used to protect United States troops against ambush and not as a weapon of war against human populations.” In this decision, we use utilitarian reasoning, as it seems that the courts may have weighed the benefit of protecting US troops against the damage caused by Agent Orange. The courts are also relying on a tenet of consequentialism when they say that Agent Orange was never meant to be used as a weapon of war against humans. Consequentialism is a useful ethical framework that will be further analyzed below.

Dow’s Decision Had No Impact on the Final Consequences

dioxinFrom a consequentialist perspective, whether or not Dow had produced Agent Orange would have had no effect on whether or not the herbicide was sprayed by the US military. Although Dow was the largest supplier, there were eight other companies supplying the US military with Agent Orange; also, the US military is a powerful and highly influential entity. Had Dow not produced Agent Orange, it is undeniable that the military would still have sprayed the herbicide to achieve their militaristic goals. Therefore, Dow is only an active agent when it comes to production of the herbicide, not when it comes to the actual usage, which is ultimately what caused the harm. From a purely consequentialist perspective, Dow either receives $728 million or receives nothing – this is the only outcome that they had control over.


Domestic and Global Utilitarian Analyses

utilitarianUtilitarianism requires an active agent to engage in a rational calculation of the costs versus the benefits of their choices, asking: does my choice maximize the benefits for the most number of people? We have chosen to conduct two separate utilitarian analyses to more accurately model how Dow may have reached a decision. The first analysis will work with the assumption that Dow wished to maximize utility for itself and for US citizens; the second analysis will work to maximize global utility.

Dow benefited from their contract with the US military, receiving revenues totalling $728 million over the 1962-1971 period during which Agent Orange was used. From the perspective of the US military, Agent Orange reduced the thick foliage in the Vietnam jungles where communist guerrillas were thwarting US military offensives. Using this utilitarian logic, Dow could argue that it was doing its ethical duty by helping to save the lives of US soldiers.

skull-agent-orangeFrom a global utilitarian perspective, we surmise that the benefits need to be balanced against the harmful effects of exposure to Agent Orange in the US and Vietnam. Namely, the unintended long-term consequences of 150,000 Vietnamese birth defects and over one million people suffering from ailments linked to Agent Orange exposure. For US soldiers and Vietnamese alike, the genetic-level harm has been passed down generationally from those who were in direct contact with high concentrations of dioxin to future generations whose pain and debilitation continue to manifest 46 years after spraying ceased. Even the act of procreation has become a potentially horrifying game of chance in which deformities and other ailments await newborns who are far removed from the original spraying. The devastation is tragic, suggesting the social responsibility hangs over Dow AgroSciences.

Rawlsian Liberalism

john-rawlsAnother ethical model we employed is based on John Rawls’ “veil of ignorance”, which requires active agents to imagine living with the direct consequences of their choices. Specifically, if Dow management were randomly reborn with the possibility of being affected by the congenital diseases caused by dioxin exposure, it is unlikely they would have supplied Agent Orange to the US government. Dow management can reasonably be expected to have known that dioxin was toxic, seeing as they provided suggested maximum dosage limits. What they could not have known was the long-term effects on humans, yet speculation may have existed. From a Rawlsian perspective, protecting oneself as if you might be sprayed would have necessitated more testing, although testing would have meant more costly delays in production. There were other alternatives that Dow could have considered, for example, perhaps a means of reducing the toxicity of dioxin could have been discovered.

dioxinWhile Dow management breached their social responsibility and most certainly would not have allowed the same actions to be perpetrated against themselves, they do not have the benefit of over 55 years of hindsight. After all, the dire consequences of Agent Orange did not manifest themselves in the lifetime of decision makers involved in the initial 1962 contract. Once sold, the herbicide was no longer Dow’s responsibility. When a soldier uses a rifle, it is not the manufacturer that is held responsible for the shooting.

The complex intermingling of government and commercial active agents has allowed Dow AgroSciences to escape direct consequences for the sale of Agent Orange. Profit motivations are not in themselves unethical, of course, but profit without mitigating potential and reasonably anticipated harm is like allowing wolves into a sheep’s pen without supervision….okay, well wolves probably shouldn’t be allowed in a sheep’s pen to start with but you get the picture. Without direct legal consequences, the lessons that should have been learned from the usage of Agent Orange are not being heeded. There is limited available evidence that the lessons are being embedded in the corporate values of major chemical manufacturers, instead those lessons are rejected from a defensive posture designed to fend off criticism of business as usual. As further evidence, Monsanto continues to engage in spraying practices that cause harm to civilians and the environment.

Part IV: Examination of Other Cases – Plan Colombia

columbian-drug-warThe following case is relevant because it shows that Dow AgroSciences, which has since been acquired by Monsanto, continues to engage in practices consistent with those during the Vietnam War, except now in Colombia, a country which one of our group members comes home. Plan Colombia is the name given to a US military and diplomatic aid initiative aimed at combating Colombian drug cartels. One of the tactics used to wipe out drug production at its source is to destroy coca and poppy crops by aerially spraying a broad-spectrum herbicide product called Roundup Ultra. The Colombian Government has used similar tactics before, but the intensity of aerial spraying greatly increased after receiving $1.3 billion in aid from the US government. As a result, over 40,000 hectares of land have been sprayed in Colombia’s southern region of Putumayo since December 2000.

Monsanto manufactures Roundup Ultra. Almost 70,000 gallons of the herbicide were sprayed in Colombia in the first months of 2001, following roughly 145,750 gallons in 2000. With a retail price of $33 to $45 per gallon, this represents a price of around $4.8 to $6.6 million – paid to Monsanto by US taxpayers.

colombian-farmersThe US State Department and Colombian authorities claim that herbicide application is precision-targeted at coca crops using satellite imagery to guide the crop-dusting planes. However, according to the biologist and researcher Elsa Nivia, it is impossible for even experienced pilots to avoid spray drifting onto the communities living in these semi-jungle areas, and there have been cases of herbicide fall-out on homes, schools, and directly onto adults and children. This drift effect was also seen with the usage of Agent Orange during the Vietnam War, and is one reason for the wide-reaching effects of the herbicide. This shows that despite the best intentions of active agents spraying herbicide, there are sure to be unintended consequences. Local Colombian authorities reported 4,289 cases of skin or gastric disorders in the first two months of 2001, and the deaths of 178,377 livestock.

roundupOther findings suggest that another additive called Cosmo-Flux 411 F was being added to increase the toxicity of Roundup Ultra. The mixture can increase the herbicide’s biological action four-fold, producing relative exposure levels that are 104 times higher than the recommended doses for normal agricultural applications in the United States; doses that can intoxicate and even kill ruminants and that are five times more toxic in terms of oral exposure. Again, this disregard for the recommended dosage was seen in the Vietnam War, when the US military exceeded the recommended dosage of Agent Orange by 2500%; we believe this fact partially alleviates Dow’s responsibility for the damages.

plan-ColombiaOfficials from the US government have said that their relationship with Monsanto “is proprietary information between us and our supplier” and Monsanto has said they “don’t divulge information about who we sell our product to…I will not confirm that it is our product that is being used in Colombia.” This close collaboration and veil of secrecy is reminiscent of the relationship between Dow and the US military during the Vietnam War.

This is not the first time Monsanto (i.e. Dow) has been accused of ecological damage and harm to humans, and we think there is a similar ethical dilemma here as there is in the Agent Orange case: Is the company responsible for the harm done and should they compensate those affected? We agree that Monsanto is partially responsible for their products and therefore believe that because Monsanto was part of the problem, they should also be part of the solution. They should work to diminish the impact of the herbicide on the people and the environment in Colombia and Vietnam.

Part V: Decision

Dow AgroSciences’ actions in Vietnam were not illegal, but there is still a question of social responsibility. We believe that if a firm cannot reliably predict the long-term consequences of their products, they should be compelled to restrict sales and modify the product. We do not believe guilt alone will cause Monsanto to change their approach; legislation is required.

LEGISLATION: Be It Resolved….
bill-legislation-reguired-against-monsanto-and-bayerRegulation (while not always the answer) should be enacted in the following way. First, a health test committee comprised of independent scientists (under a non-disclosure agreement) should evaluate sales of dangerous substances to civilian or military customers. Second, the test committee should be triggered where reasons to suspect misuse of substance (dosage) and long-term consequences can be deduced. Third, should the substance be deemed dangerous at a dosage threshold that could be reasonably expected, DowAgorScience / Monsanto / Bayer, or the firm in question, must remove harmful compounds at cost and resubmit to the committee.

monsanto-and-bayerMonsanto has a history of involvement in war. If the right precedent is not set for such large organizations, then this poses a potential risk to the health and safety of society, especially in developing countries. The fact that Plan Colombia is in operation is clear evidence of what can happen when perpetrators are not penalised appropriately for Agent Orange. We should be worried that in future wars, similar sales will occur.




We as western democrats should take action to preempt ethical lapses committed by major conglomerates by imposing legal restrictions NOW before it is too late. We, as an increasingly interlinked global society, have let wolves into the sheep’s pen too frequently without regulations preventing unethical sales, and if we do not act through legislation, we can expect more horrors but in higher orders of magnitude.
futuristic-wars-supported by Monsanto-Bayer


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