We pay a high economic price for a society of exclusion

theglobeandmail.com
April 8, 2016
By Todd Hirsch

Economists love offering policy solutions. A tax cut here, an infrastructure program there – all well intended and mostly intelligent advice to politicians who are desperate to boost the real GDP. But it’s all built on a very shaky foundation. If citizens are excluded from meaningful involvement in their economic systems, none of it matters.

Donald Trump has tapped into a vein of discontent that isn’t going away, whether he wins the White House or not. Those disenfranchised from mainstream politics are connecting with Mr. Trump’s childish messages. They are hearing, possibly for the first time, a powerful person say things that resonate with them. And they are resonating not because they are terrible people, but rather because they’ve been left behind in America’s 21st-century economy.

Similarly, the Occupy Wall Street movement of 2011 struck a chord with another group of outsiders who felt the system was stacked against them. Because it lacked focus and organization, the protest has mostly petered out. But the discontent hasn’t. In 2016, some of those disenfranchised 99 per cent are finding their message in Bernie Sanders.

On this side of the border, the Idle No More movement of a few years ago attempted to bring aboriginal discontent to the forefront. While it did have flashes of effectiveness, it too lost momentum. But aboriginal Canadians remain largely marginalized and forgotten. Recent steps by Ottawa - mostly in reaction to the tragedies in La Loche, Sask., and the Pikangikum First Nation - are politically expedient responses. But anyone who is close to the challenges knows that simply throwing money at the problem isn’t going to solve it.

The issues are complex, but at their root is a common thread: people are excluded from the mainstream economic and political systems that run the country. Finding ways to more fully engage marginalized people is more than just doing the morally correct thing. If extending kindness and love is not reason enough, there is a compelling economic reason for greater inclusion of those who’ve been pushed to the edges of the system.

Social and political stability are the basic building blocks on which a successful economy is built. This is a lesson that troubled nations like Venezuela and Brazil are currently learning. If people lose faith in governments, if they become so hopeless about finding a way to achieve and succeed in the system, the system itself will start to collapse.

And following that will be an outflow of capital investment, entrepreneurial energy and intellectual might. Money, businesses and educated people - if they start pouring out, the economy doesn’t stand a chance.

While Canadians have just elected a Prime Minister who shares virtually nothing with Mr. Trump, we cannot be smug. We face challenges of exclusion as well. Aboriginals are the most obvious, but they are not the only ones. Canadians ensnared in poverty and homelessness also struggle within a system that, at times, makes no sense. How can they get a job or a bank account or a cellphone - things most of us take for granted - if they have no physical address?

The economics of inclusion is complicated. It’s glib to suggest that, if we are all just a bit nicer to each other, all will be well. The reasons for political and economic exclusion are sometimes generations old, and they won’t be solved overnight. Nor is it possible to offer practical solutions in the confines of this column.

Regardless of who wins the White House, the United States ignores at its peril the festering rage of those who’ve been pushed aside and trampled by The American Dream. A loss for Donald Trump won’t make the rage go away (in fact, it could make it worse). And in Canada, throwing cash at the plight of our own discouraged and excluded citizens does nothing to get at the root of the problems.

Making our education, social and economic systems more inclusive is not easy work. And it’s more than about being big, kind-hearted Canadians. It’s an economic imperative. Our American friends are in some trouble - now, more than ever, Canada needs to show leadership in how it’s done.