The Austrian economist Joseph Schumpeter wrote that capitalism encouraged "creative destruction." Tom Walkom writes that The Great Recession has been all about destruction:
In Canada, we are said to be doing well. The official unemployment statistics show Canadian joblessness at a high but tolerable level of roughly 7 per cent.
But those official statistics disguise the profound changes in work that are taking place — the move from full to part-time employment, the erosion of job security, the growing wage gap between those fortunate enough to be near the top and everyone else.
The powers that be continue to encourage that destruction:
Europe’s effort to integrate diverse countries through a common currency has bankrupted Greece, savaged Cyprus and destroyed job prospects for an entire generation in Spain, Italy and Portugal.
France is in trouble, Britain is fraying around the edges. Even the success stories of globalization — such as Brazil and Turkey — are facing political pushback.
In Turkey, a small dispute over a park led to widespread and violent riots. In Brazil, the trigger for mass protests was an increase in bus fares.
None of this should come as a surprise. Those making economic policy from afar may admire creative destruction. Those being destroyed rarely do.
In Canada that destruction is best illustrated by the evisceration of the Employment Insurance System:
Employment insurance has become particularly irrelevant. A new study by the Canadian Labour Congress calculates that only 35 per cent of the jobless now qualify for EI. In Ontario, the percentage is 25; in Toronto 20.
As CLC senior economist Angella MacEwen explains, this has occurred in part because of government attempts to narrow EI’s scope.
But the other reason is that the slump has gone on so long. Many of the unemployed who at one point did qualify for EI benefits have simply used them up.
There's not much creativity anywhere. Perhaps the powers that be are simply stupid.