The enlightement

Posted on June 21, 1999 by urbanrenaissanceinst

The Next City
June 21, 1999

 

1980

The reign of Shylocks ends

PARLIAMENT REPEALS THE SMALL LOANS ACT. PRIOR TO 1980, money lenders anyone other than a chartered bank who lends money could legally charge no more than 2 per cent per month for a loan of $300 or less, 1 per cent per month for loans between $300 and $1,000, and just 0.5 per cent or 6 per cent per year for loans greater than $1,000. The government’s tight control on interest rates discouraged competition and drove needy borrowers to illegal lenders who charged inflated rates. Some threatened violence in case of default not unlike a certain Venetian money lender’s demand for a pound of flesh.

A 1967 revision to the Bank Act had already freed banks to charge market-dictated interest rates, rather than the maximum 6 per cent per annum.

Today

Anti-usury laws still shackle financial transactions

CONSUMERS NOW HAVE A MUCH WIDER, AND SAFER, RANGE OF borrowing options. Borrowers with good credit ratings can get a comparatively low interest rate while those with a less established credit history have access to lending institutions offering loans at a range of interest rates, reflecting the associated risks.

Yet the federal government still maintains a usury law. When it repealed the Small Loans Act, Parliament made it a criminal offence for anyone, including banks, to charge more than 60 per cent in interest, fees, or fines. This high maximum ?chosen because it seemed high enough to penalize loan sharks without disrupting normal contractual agreements ?nevertheless can affect everyday financial transactions. In 1983, the Department of Justice wrote to the Canadian Bankers Association to alert its members of the new law’s potential application to credit card fees. Regardless of consumers’ willingness to pay fees, a credit card company charging, say, an annual fee of $30 to someone who doesn’t use his card much could run afoul of the law.

Since the law was passed, courts have heard a number of cases evoking the criminal interest rate. In Pacific National Developments Ltd. v. Standard Trust Co. (1991) for example, the Supreme Court voided a bonus provision on a corporate loan, finding that it exceeded the criminal rate but declaring the rest of the contract enforceable.

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False prophets

Posted on June 21, 1999 by urbanrenaissanceinst

Paul Kennedy
The Next City
June 21, 1999

 

Professor of the past gets Asia’s future wrong

Yale professor of history Paul Kennedy has often made predictions about the world’s future. In 1987, he foretells the United States’ decline and Japan’s continued ascension and eventual domination, which struck a chord with Americans insecure about their ability to compete with Japan.

“Just how powerful, economically, will Japan be in the early twenty-first century? Barring large-scale war, or ecological disaster, or a return to a 1930s-style world slump and protectionism, the consensus answer seems to be: much more powerful. In computers, robotics, telecommunications, automobiles, trucks, and ships, and possibly also in biotechnology and even in aerospace, Japan will be either the leading or the second nation. In finance, it may by then be in a class of its own.”

“The Japanese economy is still likely to expand about 1.5 to 2 percent a year faster than the other large economies (except, of course, China) over the next several decades.”

“For the foreseeable future, . . . Japan’s trajectory continues to rise upward.”

From The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000, Paul Kennedy, 1987
and now

Despite the lack of a large-scale war, ecological disaster, or a repeat of the Great Depression, Japan ?alone among G7 nations ?has suffered a deep decline. In more recent work, Kennedy continues to gaze into his crystal ball, making equally prescient proclamations for Indonesia.

“Indonesia’s authoritarian regime has engineered dramatic economic growth, now expected to be about 7 percent annually for the rest of the decade.”

“A reasonable scenario for Indonesia would be the election of a government that shares power more broadly, with greater respect for human rights and press freedoms.”

From “Pivotal States and U.S. Strategy,” by Robert Chase, Emily Hill, and Paul Kennedy, Foreign Affairs, January/February 1996

“Chaos in a pivotal state such as Indonesia would generate transboundary mayhem in the form of severed trade links, increased migration, communal violence, pollution, disease, and so on.”

“Americans should remain equally wary that movement away from an authoritarian yet stable and prosperous regime toward a democratic model may not necessarily enhance U.S. interests, even for the long term. As [John] Bresnan points out with respect to Indonesia, the former Suharto regime, with all its limitations, 慼as acted in ways that are consistent with U.S. interests across a wide range of regional and global issues prior to the recent economic crisis. It is not clear that a more pluralist or populist government in Indonesia would be certain or even likely to improve on this performance.'”

From The Pivotal States: A New Framework for U.S. Policy in the Developing World, Robert Chase, Emily Hill, and Paul Kennedy, editors, 1999

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The end of a nation-state

Posted on June 1, 1999 by Other News Sources

Lawrence Solomon
The Next City
June 1, 1999

Kosovo calls forth images of ethnic cleansing, mass refugee movements, and Balkan barbarism, but history will pay scant attention to these staples of this year’s nightly newscasts, unsettling though they are. Kosovo is a milestone in the decline of the nation-state, an institution but a few hundred years old and already obsolete.

The 19 NATO nations, under pressure from their wealthy, democratically inclined citizenry, have abandoned the once inviolable principle of the sovereignty of nations. Yugoslavia invaded no country, claimed not an inch of foreign territory. Its ruthless suppression of the Kosovars occurred entirely within its own borders, letting it legitimately claim, under the diplomatic rules that nations have observed for centuries, that its conduct toward its minority population was an “internal matter” and no one else’s business.

Cruise missiles and soft bombs from the world’s most advanced democracies have blown up the fiction that national governments can act with impunity within their political borders. “Internal matters” no longer exist because national boundaries — breached by information technologies — are no longer impervious. Demands from sovereign countries that they be left alone have also lost their authority because nation-states — though they may be the last to know it — are no longer relevant in the global economy. National sovereignty is a spent force; while national governments retain the trappings of power, true decision making powers rest elsewhere.

Where previously most cross-border funds flowed between governments, or between government and multilateral government agencies such as the World Bank or the International Monetary Fund, in the 1990s most flows are business to business. Where governments once directed or facilitated global trade by subsidizing favored industries, today governments operate on the fringes of the global economy, primarily making their presence felt in outdated sectors unworthy of legitimate trade, such as nuclear plants and hydroelectric megadams, and in Third World countries, where strongmen with outstretched palms still direct business. Corporations still accept government inducements, but the inducements rarely sway fundamental decisions by multinationals as to where to invest; industry now bases its decisions on the real economy: It wants to locate where it can best serve its customers and where it can best be served by suppliers.

The coin of the realm has also been clipped. The world’s currencies are subject to the discipline of the capital markets, which have the power to overwhelm the central banks of virtually all national governments. In Russia, Argentina, and other major countries, corporations and the public routinely conduct business in the U.S. dollar, the only currency in the world managed to follow gold and other commodities and to be independent of any national economy, including that of the United States. Even the European countries have abandoned their national currencies — next to their flags, the most potent symbol of nationalism — and elites in Canada, Mexico, and other nations are debating the merits of following suit.

Legitimate business no longer needs government trade missions or embassies to open doors abroad — it already operates in a borderless world through multinational corporations and far-flung networks of suppliers and customers, obtained without the aid of national governments. Team Canada’s missions — none of them in developed countries — are little more than cynical public relations efforts: The deals signed with much fanfare had often been negotiated without government help, the government’s role being to show up for the signing ceremony. At best, national governments have become middlemen with little to offer, middlemen who mostly impede business through red tape, which arbitrarily changes with political jurisdiction.

Globalization has slain the nation-state by thwarting the ability of national governments to maintain the monopolies needed to dispense patronage and redistribute wealth, typically from the citizenry at large to preferred beneficiaries. Globalization has also taken much of the fun out of running a country by making the efficacy of central planning — in any event illusory — demonstrably futile. When economies operated closer to home and with fewer apparent complexities, national economic planners at the helm of economic models could hope to manipulate the national economy, say, by lowering interest rates to stimulate demand and so create jobs, or by raising them to slow down an overheated economy. Today, with capital so mobile and manufacturing so adaptable, many planners have lost confidence that economies can be predictably tweaked. Instead of stimulating jobs, lower interest rates could cause capital to flee to countries offering a better return, costing jobs. Or the lower interest rates could disproportionately stimulate a desire for products or services produced elsewhere, lowering the unemployment rate in a foreign country.

Who needs national governments? Not business, and not consumers, who are also learning how to bypass the government middleman. Operating on their own, consumers now buy plane tickets from non-national carriers and make long-distance telephone calls without the protection of federal regulators. In the United Kingdom, consumers need no longer fly from government-owned airports, no longer drink government-delivered water, no longer run their toasters with government-generated electricity. Not only did costs drop and service levels soar in all cases, but environmental standards rose. The airports joined local residents in opposing unneeded additional runways; the water utilities raised water quality standards dramatically after they invested billions in upgrades the previous state owners never seemed able to afford; the competitive electric power system that replaced the old central government monopoly discovered — as environmentalists had always claimed — that its polluting coal and nuclear plants could not compete with cogeneration and other modern gas technologies.

Thanks to the Internet and other low-cost information technologies, news of a success in one part of the world soon reaches all others. Canada, the U.S., Australia, and New Zealand, as well as countries in Latin America and the former East Bloc, are all importing U.K.-style reforms. With these technologies, the peoples of the world have the tools to seek out the products and services they need, from the worldwide array now on offer, and the tools to demand their commercial rights. They also have an unprecedented wherewithal to extend their moral and spiritual reach, for example through real-time images of the plight of the refugees and videotapes of atrocities that took place inside Kosovo, complete with satellite corroboration. Large segments of the citizenry inside Serbia also have such tools, despite the Serbian government’s efforts to control information, and the information in their hands may one day help resolve such conflicts, or help contract them. Certainly, there is no better hope for the end of oppression than an enlightened, empowered citizenry.

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Winnipeg’s Renaissance man

Posted on March 21, 1999 by urbanrenaissanceinst

Peter Holle
The Next City
March 21, 1999

Tom Dixon brings life to downtown’s dying buildings

OUTSIDE THE WINDOW, A GREY PALL HANGS OVER DOWNTOWN WINNIPEG. Seated behind his desk on the sixth floor of the 97-year-old Hammond Building at the corner of Portage and Main is Tom Dixon, an award-winning preservationist, who in the last 18 years has saved several of Winnipeg’s historic buildings from the wrecking ball and transformed them into vibrant, living spaces.

Manitoba’s capital was once grandly described as a future “Chicago of the North,” but time, shifting trade patterns, and poor public policy have eroded its stature. Formerly Canada’s third largest city, and the dominant commercial centre in the rapidly expanding west, Winnipeg now ranks as Western Canada’s fourth largest city, trailing Vancouver, Edmonton, and Calgary. Its population is aging and stagnant. Its residents express a rising concern about the large influx of native “refugees” from the reserves, cast adrift in their strange new environment.

Winnipeg has excellent firms in the aerospace sector, in financial services, and in broadcasting. It remains a centre for light manufacturing, distribution, and government, but even some of the old core industries, particularly transportation and grain trading, are quietly shifting west. Corporate headquarters that lined its once thriving downtown streets have steadily transferred to a more competitive Calgary. With the second highest property taxes in Canada, housing construction has migrated steadily outside the perimeter. Suburban shopping malls, fear of crime, changing work patterns, and technological innovation have hit the traditional downtown area hard.

“But Winnipeg is still my Nirvana,” emphasizes Dixon, a worldly-wise over-60-year-old consultant of Icelandic origin, who has designed plants and equipment and provided management and marketing consulting to dozens of industries. During his travels in nine or 10 countries, he learned what different cities have to offer. San Francisco and Minneapolis rank among his favorites, but he still prefers the grand old dame of Western Canada.

THE DOWNTOWN EXCHANGE DISTRICT’S HEYDAY WAS IN THE EARLY 1900S. This was the city’s distribution and immigration hub — the gateway to the west. Massive Greek columns project substance and security from the imposing bank buildings lining Main Street. Here were the financial industry, the world’s busiest grain exchange, and a thriving print media, plus thousands of warehouse and manufacturing enterprises. They fuelled a robust downtown economy that supported buildings with elaborate façades, gargoyles, and terra cotta facings.

Dixon remembers the Exchange District’s vitality when he was a kid. One of his first jobs was delivering linens off the back of a truck to businesses in street fronts and back alleys and to great post-and-beam brick warehouses. This was Jane Jacobs’s self-generating downtown economy at its finest, with microbusinesses springing up constantly to substitute local products for expensive eastern imports. During his deliveries, Dixon, who was artistically inclined, studied the structures’ Old World construction techniques and craftsmanship.

That fascination eventually drew Dixon into rejuvenating Exchange District buildings, which he now calls his expensive hobby. He realized that in a world of characterless prefab office towers, traditional quality is simply no longer available, so he embarked on a string of small-scale redevelopment projects between his various consulting assignments. His aim: to play a meaningful part in saving downtown Winnipeg’s artistic and architectural heritage, which may be a key to the city’s elusive but realizable renaissance.

Dixon’s record is impressive. Since 1971, he has spearheaded Winnipeg’s first warehouse conversion, creating new office and retail space in the Donald Bain Building on venerable Bannatyne Street. History’s ghosts hover quietly in another of his properties, the Salvation Army Citadel — a fortress-like building built during the 1920s. Located on the edge of Winnipeg’s skid row, it once served as barracks for Salvation Army officers, who aided the immigrants who poured through the nearby river port and railway station. Adjacent to it, and on the same Dixon property, stands Winnipeg’s original Jewish bathhouse, boarded up and silent. Dixon purchased both buildings, anticipating future renovation.

In 1984, Dixon built his first addition to a heritage structure — a $400,000 penthouse conference facility on the Hammond Building, where he operates out of an eccentric, paper-strewn office. He mildly regrets this expenditure but comforts himself by remembering his main goal: to ensure that these buildings survive because “they will not be duplicated, . . . the nature of past construction makes it uneconomic.”

A tour of the Hammond Building reveals a diverse tenant list. Here, in the heart of what many believe is the hollowed out city, we find a high-tech DNA lab, Winnipeg’s weekly gay newspaper, a local entertainment weekly, and a gaggle of heritage and environmental organizations. They are attracted, no doubt, by the modest rents, free tenant access to the glass-walled rooftop meeting room, continuous upgrading, and Dixon’s obvious devotion to customer service. Other amenities include permanent staff, a journeyman who looks after repairs and renovations, a full-time custodian, and a receptionist who greets all visitors. When Dixon bought the dilapidated Hammond Building, it had nine tenants. Today, it has over 30. The Exchange District has seen small, steady gains that enlarge the local tax base; however, the turnaround has been an ongoing battle against apathy, false perceptions, and bureaucratic inflexibility.

IN THE EARLY 1990S, A FACELESS TRAFFIC PLANNER, CITING HEAVY TRAFFIC, flow decreed that Albert Street, where the Hammond Building is located, become one-way. Winnipeg’s downtown is beset by turning restrictions, one-way streets, and rush-hour parking bans — all part of a generally counterproductive planning bias toward expediting traffic flow into, and out of, the core. The effect was dramatic. Albert Street quickly became deserted because drivers found getting there too complicated. “You could have shot a cannon down the street,” Dixon says.

The incident pushed the community to petition for the return of two-way traffic. After elected officials had a tour of the quieted street, they promptly overturned the one-way edict. Dixon, an original director of the Exchange BIZ (Business Improvement Zone), which represents local businesses, points to this as one of a string of small victories.

Dixon has much to say about parking rules, zoning requirements, and the time and effort consumed in alleviating their effects. During one renovation period at the Hammond Building, he recalls getting a permit to block a side lane for building activity. On occasion, construction workers would park in the strip, only to find their vehicles improperly ticketed by parking commissionaires. Patiently, Dixon would gather up the tickets, bring them to city hall and have them cancelled. It was only after he threatened to take the tickets to the mayor that the ritual ended.

Building codes are another story. The quest for fire safety can lead to expensive inflexibility with ruinous impact on the economics of rehabilitating heritage treasures. Winnipeg’s historic multistorey warehouses were built to store heavy commodities and to support heavy machinery — hence the practical, yet attractive, post-and-beam construction that combines brick and massive wood timbers.

Dixon recalls a battle during the 1977 redevelopment of the Donald Bain Building. Although fully sprinklered, a municipal order required that he cover the wood ceilings with two layers of drywall. Although fire authorities could not think of any instances of an exposed wood beam catching fire (they actually only char slightly), they persisted in their push for drywall crawl spaces.

The authorities finally relented after Dixon provided a letter from Lloyd’s of London confirming that crawl spaces invite invisible smouldering and second and third alarm flare-ups. Nevertheless, the ordeal did not end there. The authorities insisted that Dixon cover the beams with a special fire-suppressing bituminous paint that cost a bundle and banished the rich natural wood color beneath a milky sheen.

Probably the last birdcage elevator in the core area is in the Bate Building, constructed in the early 1900s. Two years ago, the Department of Labour issued an upgrade order, the costs for which would have eliminated the lift. Heritage Winnipeg, a nonprofit organization dedicated to the preservation of Winnipeg’s historic architecture, enlisted Dixon, who is a director, and others to meet with the deputy minister of Labour and his top officials responsible for elevator regulation to defer this requirement. They contacted officials in Chicago and Toronto, who confirmed that converting these systems was unnecessary as long as they met their original safety standards. The drum-elevator, on birdcage, system was saved.

The regulatory rigidity that complicates the economics of recycling heritage buildings, particularly in a depressed market like Winnipeg’s, prompts a mild but cogent response from Dixon: “We need to encourage a more reasonable approach. Agencies need to have the authority to make exceptions without compromising safety.” Dixon, noting a recent change in attitude at city hall, adds, “many want to help, and the expertise has greatly improved.”

It is now fashionable at Winnipeg city hall to talk of downtown residential development — a stance 180 degrees removed from the urban planning prejudices that were standard as recently as a decade ago. Dixon remembers the head of the city planning department emphatically telling him in 1979 that the core area east of Main Street was “unsuitable” for residential living. Since then, there has been only limited development — a set of condominiums in the Exchange District, and their values have fallen.

Dixon believes the area needs apartments rather than condominiums. “Young people can’t afford the down payments, so they stay away.” He admits there is a catch-22 with apartments. Rent control, gone from much of Canada, is still enforced in Manitoba. It scares away investment, so buildings stay empty.

Excessive taxation also tears at Winnipeg’s heart. The city ranks at, or near, the top in national property tax comparisons, and historically those taxes have fallen more heavily on the commercial core. As business has shifted outward, the hefty tax bills have driven many owners into abandoning their properties — and have discouraged anyone else from picking them up. The result is a large inventory of heritage buildings held precariously by city hall. In January, arson destroyed one of these orphans, the 115-year-old Leland Hotel.

Dixon has no definitive answers, although he likes the idea of changing property taxes so that a flat rate is levied on land, not on buildings and improvements. He also favors a much wider use of user fees to illuminate the costs now randomly piled into property taxes. Another clue to the solution can be found in the area’s urban government pre-1972 — before 13 small cities in the region were amalgamated. St. Vital, the area Dixon has lived in most of his life, was well run before its absorption into Unicity. “There was a tight little management group that focused on the bottom line,” he recalls. “You could get answers quickly because the councillors were on top of it all. With Unicity, we lost track of the politicians, and there is too long a distance to the decision makers.”

Dixon refers to crises in old-style American cities like Cleveland. “At some point, the system collapses and goes back to the basics. There they now job out a lot of services to bring their costs down.” He is hopeful about discussions at city hall over the Indianapolis model, which has public employees competing against private vendors. Dixon believes, “municipal employees are an asset, but they need incentives to perform.” He is also optimistic about the new mayor, Glen Murray, and his open and forthright manner.

It is later in the morning and the sun seems set to break through the overcast sky. A workman ducks into a shrouded doorway. The 23-foot-wide, four-storey building is the former Criterion Hotel built in 1914 on McDermot Avenue. It probably has the most beautiful stone, terra cotta, and ceramic façade of all the derelict Exchange District buildings. It is a shell, the inside gutted by a fire during a failed reconstruction in 1987. New steel girders shimmer in the darkened hulk. Tom Dixon and Doug Young, a local realty developer, have levered a financial Heritage Assistance Grant from the city to save the structure. By fall, perhaps sooner, life will have returned to the offices the workers are building.

Tom Dixon is a self-described dinosaur — just recently, he replaced his rotary dial phone, and he doesn’t bother himself with computers or e-mail. But he is an optimist. Twenty years from now, he envisions Winnipeg with a vibrant and exciting downtown, capitalizing on the personality of its people and on its heritage ambiance. Presumably, the public policy ills that have stunted a great city will be corrected. Visitors will find a unique architectural treasure, a city second only to Barcelona as a representative site of historic warehouses — thanks in part to Winnipeg’s modest renaissance man.

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What would happen if Canada abolished the monarchy?

Posted on March 21, 1999 by urbanrenaissanceinst

John Aimers,Charles Roach
The Next City
March 21, 1999

The Next City asked John Aimers, dominion chairman and founder of the Monarchist League of Canada, and Charles Roach, founder of the Alliance for the Canadian Republic, to comment.

 

Canada would become more Americanized. In rejecting our nation’s belief in the importance of individuals, mirrored by personal allegiance to another human being — the sovereign — and substituting America’s melting pot mentality, Canada would have one less reason for a separate existence in a continent where the natural lines of geography, trade, culture, and language already run north-south. Many provinces, their sovereignty within Confederation diminished by the ultimate Ottawa power grab, would feel tempted to seek union with the United States. Quebec would soon become a folkloric backwater, à la Louisiana, rather than a vibrant culture, its distinctiveness cherished within the inevitable tensions of Confederation.

Canadians would be less free. The political ruling elite would triumph, without a check on its absolute power. Elected presidents would campaign for office just like any other politician, thereby creating another level of divisiveness in national life. Instead of the monarch and her viceregal representatives acting as chief volunteers, exemplars of duty, bulwarks of stability, and guarantors of the rule of law, Canadians would have a surfeit of politicians pursuing career advancement, seeking the favor of voting blocs, and keeping an eye on the next election.

Canada would have less prestige. A queen and her representatives provide color, romance, and aspiration as opposed to the necessarily grey, grubby, and greedy world of partisanship. The “peace, order, and good government” afforded by our current system has led the United Nations to choose Canada as the world’s most desirable place to live. What conceivable advantage would result from abolishing the monarchy? One more chicken in every pot? One less pupil in an overcrowded classroom? One more loonie for a single mother? No — rather, one colossal loss of an established and dignified institution.

Canada would have a stronger national identity. In a republic, a Canadian president would be the head of state and would officiate at the opening of parliament, and other political and social events, rather than some minion of a foreign monarch. The monarchy is not an equal opportunity calling, but in a republic, every Canadian boy or girl could aspire to becoming Canada’s head of state — through democracy, rather than through the vagaries of birth. Canadians who fought for local democracy would be honored as national heroes. Louis-Joseph Papineau and Louis Riel would be treated as founding fathers. Samuel Lount and Peter Mathews, hanged publicly in Toronto by the decree of Queen Victoria in 1837, would be national patriots. Their images would appear on Canadian coins, not that of some distant monarch.

Canada would become more united. Those of us who are descendants of conquerors would reconcile our histories with the histories of those of us who are descendants of enslaved and colonized peoples. Formerly subjugated peoples — French Canadians, Native Canadians, immigrants from Africa, Asia, and the Caribbean — would no longer feel beholden to the Saxe-Coburg-Gotha clan known as the Windsors.

Canadians would have freedom of conscience. When Bloc Québécois members refused to take an oath of fealty to the English queen in 1993, they were forced to do so, since Parliament could not open without their presence as Her Majesty’s loyal opposition. In a republic, Canadians would be able to hold public office and become naturalized citizens without taking a personal loyalty oath to a foreign monarch and his heirs. Canadian politicians would also be able to speak their minds. Today, standing Order 18 prevents members of Parliament from uttering any words in the House or Senate that would either oppose the interests of the monarch or embarrass the monarchy.

Charles Roach

John Aimers

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