PREFACE







	At a PR lunch in the States I sat  across from an American editor who told me how much she liked 
my work.
	The conversation turned to racial and national stereotypes and I said there was a reason for the 
Canadian myth that Newfoundlanders are stupid.
	I was going to tell her about traditional Newfoundland humor in which the person who tells the 
joke is always the butt. In most North American humor the joker tries to make someone else look stupid but 
in Newfoundland -- in the old days, at least -- that would be considered bad manners. In Newfoundland 
humor, the humorist pretends to be stupid.
	I saw one classic exchange of wit in a mining camp in northern Newfoundland, while I was helping 
a friend change a flat tire. A couple of local fishermen stopped to watch.
	One said we didn't have to change the tire. Couldn't we see that it was only flat on the bottom? 
Instead of changing it we could just turn it half way round, and ride on the part that was not flat.
	The other said that wouldn't work because the tire would just roll down to the flat side again. 
Besides turning the tire, he said, we would have to jam the wheel so it couldn't turn while we drove on it. He 
said we should drive wedges between the brake and the brake drum to stop the wheel from turning.
	The first fisherman didn't think that would be enough. If you want to stop a wheel from turning, he 
said, the best way is to drive nails through the brake drum and into the brakes.
	My friend joined in with the joke, asking the fishermen's advice on what size nails to use and so 
forth. It was a hilarious exchange of outrageously stupid ideas, all offered completely dead-pan and 
accepted as though they were serious.
	I knew my friend was bright and a couple of weeks earlier I had watched one of the fishermen pull 
the engine of his boat apart and pour new bearings in place -- a long forgotten art and a very high level skill 
indeed -- but if I had not known they were joking I would have guessed that the three Newfoundlanders 
between them had a combined IQ of about 2.5.
	I was going to tell the American editor about this and suggest that other national stereotypes might 
also be based on misconceptions, but I didn't get the chance. When I suggested that there might be a reason 
why Newfoundlanders are considered stupid she left the table. She hasn't talked to me since and she froze 
me out of the magazine she worked for then, and another that she moved to later.
	As I spoke she was listening ahead and guessing what I was going to say. When her guess about 
what I was going to say conflicted with her fine-honed sense of  what is politically correct she walked out 
and she never did find out what I was talking about.
	Another time an Ottawa businessman was reacting to a book I had written, and that he said he had 
read.
	"I can see where you're coming from," he said. "You're a socialist."
	The book included several examples of mistakes and double crosses by government and it advised 
small businessmen not to accept either advice or help from government. In fact my position was far to the 
right of the businessman but, because it was not his position and he was not a socialist, he assumed that I 
had to be a socialist. Because he assumed that I was a socialist he thought my book -- which was about as 
far from socialism as you can get -- was a socialist tract.
	As John Stuart Mill said in {A System of Logic}, "the greatest of all causes of non-observation is a 
preconceived opinion."
	This book contains some different ideas but they are neither right, left or center. If I thought any 
established view of economics was valid I would not have bothered to write mine. If you have an argument 
against my ideas I'd like to hear it, but please try to understand my ideas before you decide why they are 
wrong.
	Several people helped with criticism and arguments for and against the ideas outlined in this book 
but, because the finished product may be contentious, most of them would prefer to remain anonymous. I 
offer my apologies to my friends and former friends who have been dragged into arguments they would 
rather have avoided.
	







OUR PROBLEM







	We like to think that Canada is a rich country, and it should be. We have lots of land and plenty of 
resources, we have enough capital to develop and maintain modern industry, we have plenty of schools and 
we like to think that our people are as well educated as any in the world.
	And we have done well, in some ways. We have developed one of the most livable countries and 
some of the most livable cities in the world. Most Canadians live in reasonable comfort with public 
medicine, reasonable levels of serious crime and comfortable housing.
	But somehow all our advantages don't add up to a stable economy or even a decent living for all 
Canadians. As a nation we're in debt up to our ears, our average take-home income has been dropping 
steadily for about 20 years and, even in winter, beggars sleep in the streets of our cities. Official figures 
released in the spring of 1998 show that about 10% of all Canadians are on welfare.
	Thirty years ago about 1,900 Canadians declared personal bankruptcy each year. Now we have 
about 84,000 bankruptcies a year and the number seems to be increasing.
	In May of 1998 Stats Canada announced that from 1990 to 1995 the average income of Canadians 
fell every year for five years in a row. In those five years all Canadians lost an average of 6% of their real 
income, families in Toronto lost an average of 10% and  the number of Canadian families who live in 
poverty increased by 32%, to 1.267 million families. This was the first time since the 1930's that we posted 
five years of consecutive losses.
	Social agencies estimate that about 20,000 homeless people live in Toronto. Squatters live in vacant 
buildings and in parks. Teen-agers clean windshields at intersections to make a living, and sidewalks in 
downtown Toronto are littered with the glass of cars that have been broken into.
	Some people refuse to see the rise in divorce and broken homes as a problem, but it's hard to see 
any benefit in the skyrocketing rate of teen-age suicides.
	In 1951 we averaged about 1.8 suicides per 100,000 in the 15 to 19 year old age group, but  in 1995 
the official number was over 13. Apologists for the modern age like to pretend that the difference is honesty 
-- that more suicides are now recognized as suicides -- but that's a cop-out. We know that many suicides 
were disguised as accidents in the past but we also know that today's numbers represent only a fraction of 
the real total. The problem is so serious that the University of Toronto now has a chair in Suicide Studies, to 
study it.
	The city of Winnipeg with about 800,000 people had 220 public food banks in the winter of 1996-
97.  Twenty per-cent  of the people who used them had jobs, but did not earn enough money to buy the 
food they needed.
	Official unemployment rates hover about 10% but the official numbers give a false impression 
because unemployment figures count only people who "participate" in the labor market. Students who can't 
find jobs after they finish school are never employed, therefore they can never be unemployed. People who 
run out of unemployment benefits are dropped from the rolls, as though they had somehow become 
employed.
	The official unemployment rate in December of 1995 was 8.2 percent but only 68.1 percent of 
adult men had jobs. That means nearly 32% did not have jobs. Some of the others were retired, but the real 
life unemployment rate for adult Canadian men that month was probably 15 or 20%.
	In the "great depression" of the 1930's unemployment hit 17.6% in 1932, peaked at 19.3% in 1933 
and dropped to 9.1% in 1937. Unemployment of adult men seldom hit the levels we now consider normal, 
and for all but two years of the depression there was less overall unemployment than we have now.
	We have more people working now than we had in the depression but real wages have been 
dropping for more than 20 years, and are now so low that most members of many families have to work. 
Back in the 1930's most Canadians owned their own homes, most women did not have to work outside the 
home and kids did not have to work their way through school.
	Among people who work we find a grotesque range of incomes. Some Canadians make little more 
than 10 per-cent of the national average and others make up to 1000 times as much.
	That's dangerous. Society can be stable when everybody is poor or when everybody is rich, but a 
society in which some people have 100 or 1,000 times as much as others is just waiting for some kind of 
explosion. In the United States -- the economy on which our is modelled -- about 1% of the households 
own nearly 40% of the national wealth and the richest 20% own more than 80% of the country.
	And the situation is getting worse. In the years from 1989 to 1995 average income for all Canadians 
dropped more than 5%, to $16,726 a year, but executive salaries increased by an average of 14%. Average 
disposable income dropped more than 8% from $13,845 in 1989 to $12,633 in 1997.
	Conditions are so bad that even governments worry. The Ontario government has closed schools 
and hospitals that we can no longer afford to operate, Canada Post no longer delivers mail to the door in 
many areas and -- even though we know that garbage collection is vital to public health -- cities across 
Canada have reduced the frequency of their garbage collection. In a desperate attempt to raise money 
federal and provincial governments began running lotteries more than 15 years ago, and now run full-scale 
gambling casinos.
	And this is not a temporary "adjustment" to world market conditions. It's a change in our status, 
from one of the leaders of the first world to one of the mass of the third.
	We're going down the tube -- but why? What happened to the country that was supposed to lead 
the world into the 21st century?
	Some pundits say that much of our unemployment is caused by "new technology". People have 
no work, they say, because factories are automated and machines make most of our goods.
	Not so. If that were the case we would not need to import manufactured goods from low-wage 
countries.
	Some factories are automated and machines make some goods but we use and consume so much 
more than our ancestors that there should still be lots of work to go around.
	Modern car factories employ many robots, for example, but today's cars are so much more 
complex than the cars of earlier years that there are probably more man-hours of work in a modern car than 
in an old-fashioned one. Besides, we have more cars than our parents did and we replace them more often.
	A robot explored Mars but it did not replace a human worker. Most of the jobs robots do are new, 
and they should make no difference to employment in a modern culture.
	We have so many material goods in the modern world that the fact that robots make some of them 
is irrelevant. There is still about as much hand work to be done as there ever was, but it's not Canadians who 
do it.
	The real problem is a series of fallacies in "conventional" economics which distort the 
mathematical "model" economists and politicians use to represent the world. Any one of these fallacies 
could do serious harm to an economy or a social system, and together they make a real mess of everything.
	If the premises are wrong, any system based on them will be wrong.
	That's not a new idea. In his preface to the {General Theory of Economics} economist John 
Maynard Keynes says ---

	"-- if orthodox economics is at fault, the error is to be found not in the superstructure, which has 
been erected with great care for logical consistency, but in a lock of clearness and generality in the 
premises."

	If there is a fault in the premises some people might expect a professional or at least a trained 
economist to find it, but they would wait in vain. As Robert A Charpie, then president of Bell and Howell, 
observed in a speech at a symposium in New York, change seldom comes from within any science, 
discipline or organization.
	Charpie analyzed 108 major technical innovations that appeared in the first 60 years of this century 
and found that only 20% of them came from the industries they changed. The photo industry did not invent 
instant photos, the textile industry did not invent synthetic textiles and the machine tool industry did not 
invent tungsten carbide.
	About the time Charpie made that speech several billion-dollar companies were developing and 
building giant computers, but the home computer that changed the world was developed and manufactured 
by amateurs. Hollywood did not invent television and the photo industry did not invent digital 
photography.
	I'm not part of the economics establishment but in 40 years as a reporter I've seen politicians and 
professional economists make fools of themselves time after time. Now it's my turn. If I'm a fool, at least I 
have a better excuse than they have.
	I'm going to deal with the fallacies I see in our economic system one at a time, but please 
remember as you read about each one that there are many fallacies, and in many cases they reinforce each 
other so the effect is compounded.
	As far as possible I make no value judgments in this book. When I say that this or that action 
produces this or that effect, I make a statement of fact. 
	I think that's important because many of the statements I make will disturb a lot of people. The 
value implications of these statements disturb me too -- that's why I'm writing the book -- but I am writing 
about causes and effects, not about values.
	And I write in plain language, because I believe the credo I call "Rutherford's dictum" named for 
Baron Ernest Rutherford, the English chemist who discovered and was the first to split the atomic nucleus 
and who won the Nobel prize for chemistry in 1908.

	"If you can't explain what you are doing to the woman who cleans your laboratory", he used to tell 
his students, 'the chances are that you don't understand it yourselves."

	If Rutherford was right I have to assume that some established and famous economists really do 
not understand economics. I'm sure that many people who read this book will decide that I don't know 
much, but that's life. All I ask is that you keep an open mind, and that you think through the arguments 
rather than compare them with established dogma.

~~~






MARSHALL'S FALLACY







	One of our problems is that a lot of people don't think we have a problem. It's true that we have 
some unemployment, they say, but the GNP is going up so the economy is doing all right. Most people 
think one dollar is as good as another, and if we have enough dollars we're doing okay. That's the mistake I 
call Marshall's Fallacy.
	Alfred Marshall was professor of economics at Cambridge university about 100 years ago, and he 
is considered by some to be "the father of neoclassical economics". He helped develop a radical new 
concept of wealth first proposed in the 1760's by Francois Quesnay, a physician at the court of Louis XV.
	In a day when most people thought wealth could be measured only in silver and gold Quesnay 
said it was the result of production. In his view the only true "production" was agricultural and craftsmen 
and artisans only modify goods that have already been produced. We think differently now, but Quesnay's 
insight was radical for its time.
	Adam Smith took the next step in his classic book "The Wealth of Nations" published in 1776. He 
said the source of wealth is labor, and that the wealth of a nation is the material goods that everyone, rich or 
poor, uses or consumes in his or her daily life.
	Unlike Quesnay, Smith included the work of craftsmen and artisans in his definition of wealth but 
he did not include intangible goods -- such as a singer's song or a lawyer's brief, for example.
	More than 100 years later Marshall decided that anything that can be exchanged for money counts 
as wealth. He summed his idea up with the statement that "a lawyer's brief is just as real as a sack of 
potatoes".
	The statement is true, but the fact that two things are both real does not make them 
interchangeable, or even comparable. We can see the difference between a lawyers brief and a sack of 
potatoes if we consider the possibility that in some years either the farmer or the lawyer will produce more 
than usual. If the farmer has a bumper crop of potatoes our cost of living will go down. If the lawyer 
produces more briefs than usual, our cost of living will go up.
	The differences between a lawyer's brief and a sack of potatoes are far more important than the 
similarities, but Marshall's idea sounded good. If all goods can be measured by cost value then the state of 
the economy adds up to one number, which is the sum of the cost value of all the goods produced in a year. 
We call it the "gross national product" or "GNP".
	It's convenient and easy to quote but it does not tell us much about the state of the economy. 
Simon Kuznets, the US Department of Commerce economist who set the format for the US GNP, told the 
US Congress in 1934 that it could not be taken as a valid indicator of the welfare of the nation. In 1962 he 
argued, in an article in the New Republic magazine, that national accounting in the US needs to be re-
thought. He won the Nobel prize for economics in 1971, but most economists still ignore his concerns.
	The most obvious problem with the GNP is that it counts all transactions as positive factors, even if 
they are obviously negative. The ice storm that hit southern Quebec and eastern Ontario in January of 1998 
added billions of dollars to Canada's gross national product.
	In 1993 the bombing of the World Trade Center in New York added more than a billion dollars to 
the GNP of the U.S.A. In 1995 the bombing of the Murrah Federal Building in Oklahoma City added even 
more that year and sparked a long-term increase of at least $300 million a year for extra security at US 
federal buildings.
	In Canada Paul Bernardo who raped at least 14 women in the Toronto suburb of Scarborough and 
who kidnapped, tortured, raped and killed two teen-age girls in St. Catherines added tens of millions of 
dollars to the GNP. His contribution includes the cost of the police investigation of the rapes and kidnaps, 
medical and psychiatric treatment for the victims who survived his attention and, after he was caught, his 
trial and the media frenzy that accompanied it.
	If he spends the rest of his life in jail he will continue to contribute to the GNP because the average 
prisoner costs at least $50,000 a year to maintain and a "special" prisoner like Bernardo, who needs 
protection from other prisoners, probably costs more. If you believe in numbers, Paul Bernardo was and is a 
productive member of society.
	My examples are grotesque but they are real, and they prove the point. Any system that counts 
natural disasters, terrorist bombers and sadistic psychopaths as positive economic factors is worse than 
useless.
	And by counting only cash values Marshall's fallacy and the GNP ignore, even deny, the 
distinction between what educator/philosopher Ivan Illich describes as "cost value" and "use value". In real 
life something that has limited use may be expensive and something that is useful may be cheap.
	Consider the relative values of an emerald ring and a glass of water. The ring has great cost value 
and the water very little, but the ring has no practical value and the water is a necessity of life.
	Use value is vital, but in a world that accepts Marshall's fallacy it is not considered. That attitude 
creates a series of problems.
	One is that if money is the only measure, then money is the only thing that counts. All other 
measures -- including truth, honor, beauty, honesty and so forth -- are swept away.
	A man's social position is no longer based on his worth to society, but only on the money he can 
take out of it. A drug dealer can be a folk hero, and a professional boxer or hockey player may be 
considered more important than a poet, a philosopher, or a scientist who develops a new vaccine or a new 
crop that feeds millions.
	And if air and water are worthless they are not worth protecting. Through the early years of this 
century industrialists and government alike ignored the use value of clean air and clean water, and assumed 
that pollution was progress. They also assumed that a tree had more value after it was run through a sawmill 
than when it stood in the forest.
	The use-value costs of pollution and deforestation now get lip-service recognition if not real 
concern, but the other economic problems created by Marshall's fallacy are generally ignored.
	One is that goods with high use value often have low cost value, and vice versa. In a society that 
ignores use value, the government and the economy will favor cost value over use value.
	A millionaire who wants to build a baseball stadium can get help from the government and support 
from private business. A farmer who wants to develop a new crop cannot.
	Marshall's fallacy suggests that we can measure everything by cost value, and forget about use 
value. Thanks to Marshall, and to the people who believe that cost value is the only measure of worth, the 
truth about our economy is hidden in a blizzard of meaningless numbers. People who believe in numbers 
can ignore the beggars on our streets, the families that eat out of food banks, the personal bankruptcies and 
other miseries of a dying economy.
	







MIDAS' MISTAKE







	Most people assume that money has real value. That's the fallacy I call "Midas' Mistake".
	There was a real king named Midas but the name usually refers to a mythical character in Greek 
legend. The mythical Midas wished that everything he touched would turn to gold, and his wish was 
granted. Everything turned to gold -- including his wife and daughter, and the food he tried to eat.
	Midas forgot that money -- even gold -- has no value of its own. It's only a token we use to count 
the production and consumption of goods and services, and it has value only when it represents the 
production of goods and services.
	In the simplest form of economy goods are traded directly -- half of my fish for half of your 
berries, or whatever. The rate of exchange depends on how many fish I have and how many berries you 
have, and how much you want fish and I want berries.
	But as economies developed some goods were accepted as a standard of value, to the point where 
they were used as money. At one time Roman soldiers were paid in salt, Maya Indians of Central America 
used cocoa beans as currency, and Chinese traders pressed tea leaves into cakes that were used as money in 
central Asia.
	The first forms of money had real value. Roman soldiers used salt, the Maya used some of their 
own cocoa beans and Chinese traders drank some of their own tea. After the concept was established, 
people accepted money that had only symbolic value. Natives on the island of Truk, in the South Pacific, 
used huge stones as money and many Indians of central North America used wampum made of seashells.
	Symbolic money is the standard today but some standards are so well established that we forget 
they are only symbolic. Even gold and silver are symbolic money, because for practical purposes they have 
very little real value. Unless I make computers or other high-tech electronic gear and need gold to plate 
electrical contacts, I have no more real use for a pound of gold than I have for a pound of printed paper.
	Money is useful because it's widely accepted, because it's easy to store and because it keeps 
indefinitely.
	If I catch a fish I must eat or trade it before it spoils. To trade it I must find someone who has 
something I want, and who wants a fish.
	But anybody with money can buy my fish, and anybody who has anything I want will accept 
money. If I don't want anything right now, I can keep the money until I need it.
	At one time I might have kept gold in a strongbox but now we keep money in countless forms. I 
may keep it as art or gold or jewels, as paper in my pocket, as an account in a bank or in deeds that 
represent ownership of property.
	Conceptually, they are all the same. Once we accept the concept of symbolic money, we also 
accept all the symbolic forms we can agree on.
	But whatever its form, symbolic money has no value other than our agreement to accept it. It's just 
a token and the real wealth is the fish or the berries or the shoes or the helicopter or whatever. As Quesnay 
and Smith argued, real wealth is the goods we use and it is created as the goods are produced.
	If money is a token that represents goods, then all the money in an economy should be just 
enough to buy all the goods in that economy. The balance is never exact but the idea is acknowledged in the 
principle of "supply and demand".
	When goods and money are in balance, prices are normal. When goods are plentiful or money is 
scarce, prices drop. When money is plentiful or goods are scarce, prices rise.
	The balance is maintained because goods are always being produced and consumed. As we eat 
one farmer's potatoes, another farmer is producing another crop. As my shoes wear out, a shoemaker is 
making a new pair. The economy is big, and most consumption and production balances out.
	In actual fact the money remains while the goods come and go but for conceptual purposes we can 
say that money is created as goods are created and that it decays as the goods are consumed. As Quesnay 
and Smith argued, the man who creates the goods creates the wealth.
	But not all goods are wealth. The potatoes that Marshall spoke of are wealth because they offer an 
unqualified benefit to many people. The lawyer's brief will benefit some people at the expense of others and 
it may have value to those who benefit, but it is not wealth.
	I may be able to exchange it for money but it has no practical value outside its context. I can't eat 
it, I can't wear it and I can't live in it. It may be as desirable as a winning lottery ticket, but it does not 
increase the store of wealth shared by the community.
	Obviously the farmer's potatoes and the lawyer's brief are two distinct kinds of "goods" and we 
have to distinguish between them. Goods such as potatoes --- and computers and automobiles and canned 
peas -- produce an economic benefit to the community. Other goods, such as lawyers' briefs and recorded 
music and the services of the policeman who walks the beat, may produce social or other benefits but they 
are an economic cost. Let's describe the two types of goods as "{benefit} goods" and "{cost} goods".
	As a general rule we could say that if an increase in the supply of a good or service would reduce 
the overall cost of living, that good or service is a {benefit}. If an increase in the supply of a good or service 
would increase the cost of living, that good or service is a {cost].
	{Benefit} goods are wealth. {Cost} goods may have cash value, but they are not wealth.
	An economy that produced only {benefit} goods would be boring but it could survive. One that 
produced only {cost} goods would be interesting but the inhabitants would have no food, clothing or 
shelter. We need a combination of {benefit} and {cost} goods, and the ratio of one to the other is crucial.
	A surplus of {benefit} goods is no problem but it is a waste. Many {cost} goods serve a valuable 
function, and we might as well have all of them we can afford.
	But too many {cost} goods is an economic disaster. When we look at numbers in the GNP {cost} 
goods look the same as {benefit} goods, but in real life they are a cost and if we produce too many of them 
we will go broke.
	Most material goods are {benefits}. Even if we can't use a surplus ourselves, the goods can be used 
somewhere and we can sell them.
	Some intellectual goods like designs for new machinery, some computer programs and books on 
farming may be {benefits} but other intellectual goods -- like most of the services of lawyers and 
governments -- are {costs}.
	Some goods may bridge the gap. While most government services are a {cost}, others may be a 
{benefit}. While high-end medicine like heart transplants is a {cost}, low end medicine like general 
sanitation and flu vaccines are a {benefit}
	But while we categorize goods and services as {cost} and {benefit} we have to remember that just 
because something is an economic {cost} rather than a {benefit} does not mean we don't want it. In 
economic terms I have to consider a heart transplant a {cost}, but if I need one myself I would certainly 
consider it a {benefit}.
	{Cost} goods are not wealth but the people who produce them consume wealth. If they do not 
produce wealth themselves then the wealth they consume must have been produced by others. Much of our 
wealth is shared through the process I call the {cascade}. This is often confused with the process known as 
the {multiplier} but is in fact quite different from it.
	The concept of the {multiplier} has been attributed to English economist John Maynard Keynes 
but Keynes himself attributes it to economist R. F. Kahn, writing in the {Economic Journal} which Keynes 
edited. The idea has also been attributed to English/American economist Sir Ralph Hawtry.
	The {multiplier} exists because one person's expense is another person's income, and because 
most of us spend most of the money we earn.
	A farmer who grows potatoes, for example, has to buy a tractor and fuel and seed and fertilizer and 
other equipment and supplies to work with, and he must feed, clothe and house himself and his family.
	The people who make the tractor and supply the fuel have expenses and families too, and so do 
the people who supply the fertilizer and the seed, and those who build the farmer's house and make his 
clothes and raise the beef he eats with his potatoes.
	If the farmer spends 90% of his income on business and living expenses then he will pass on 90 
cents of each dollar he earns to others. If they all spend 90% of their income each will pass on 81 cents of 
the farmer's original dollar to others, and so forth. If everybody spends 90%, then each dollar the farmer is 
paid for his potatoes will produce $10 in new business in the economy.
	But the {multiplier} applies only to the money the farmer is paid for his potatoes, and that is just a 
fraction of the amount the consumers will pay for them in stores. The difference between what the farmer 
earns and what the consumer pays is the result of the {cascade}.
	This starts when the farmer brings potatoes in from the field and someone is paid to inspect and 
grade them. Someone else trucks them to a processing plant, where other people wash them and package 
them in five and ten-pound bags. Someone else hauls the bags to a store, where clerks put them on display 
and cashiers check them out.
	Each operation adds value to the potatoes, because it's easier for a consumer to buy washed and 
packaged potatoes at a corner store than to buy them from the farmer's field. Each operation also adds cost, 
because all the people who process the potatoes have to be paid.
	But while we have more people working and earning money, the {cascade} produces no more 
potatoes and no new wealth has been created.
	That's the important distinction between the {multiplier} and the {cascade} because most of the 
money in the {multiplier} is spent for {benefit} goods, which in turn create their own {multipliers} and 
{cascades}.
	The money the farmer spends for his tractor, for example, is part of the {multiplier} and, because 
the tractor itself is {benefit} goods, it produces its own {multiplier}.
	Before the tractor can be manufactured people have to make the parts for it and before they can do 
that someone has to make the steel. Before that other people have to mine the coal and the iron ore, and 
before they can do that someone has to make the mining machines, and so-on. The {multiplier} goes back 
as far as you care to track it, and it creates {benefit} goods at every step.
	And the tractor also produces a {cascade} which pays the trucker who hauls it to the dealership 
and the salesman who sells it and so forth. 
	The {cascade} is a vital part of the economy but it does not produce new wealth. The cashier in the 
supermarket will pass on some of her income to her hair dresser and others but, because the money she 
receives as salary is part of the {cascade} created by the farmer's potatoes, the money she spends is a 
continuation of the same {cascade}. Conceptually, the money she spends represents a share of te farmer's 
potatoes.
	The dollars the cashier pays her hairdresser look like the dollars the farmer is paid for his potatoes, 
but in fact they are quite different. That may sound strange but in fact the idea that some dollars can be 
different from others is not new.
	American bankers, for example, call the money they keep on deposit at the Federal Reserve "{high 
powered} money", because for every $1 they keep in the Fed they can lend $10 to their customers.
	Money created by the production of goods can itself create more money, through the {multiplier} 
and the {cascade}, and because of that it must be considered different from the money created by the 
{cascade}. Let's call the money generated by the production of wealth "{root}" dollars, and the money 
created by the {cascade} "{derived}" dollars.
	The dollars the farmer is paid for his potatoes are {root} dollars because they start the process. The 
dollars the hairdresser gets from the cashier who rings the potatoes out of the supermarket are {derived}. 
They have the same exchange value in the store but, because they are the product of the {cascade}, they are 
not as important to the economy as the {root} dollars that begin the {cascade}.
	Figures from the United States illustrate that point. Only about 3% of the population of the United 
States lives on farms, but the food and fiber industries, which depend on farm crops, employ 22% of the 
work force and make up 20% of the US GNP. Obviously, the money earned by the 3% is a crucial part of 
the economy.
	Producers of {benefit} goods create wealth, and producers of {cost} goods take a share of it. If we 
don't have enough producers of {benefit} goods we won't have enough wealth to distribute, but here again 
Midas' mistake can lead us astray.
	We need {benefit} goods more than we need {cost} goods but as a general rule the people who 
produce {cost} goods earn more money than the people who produce {benefit} goods. A lawyer is paid 
more than a farmer, a politician is paid more than a factory worker and a professional athlete is paid more 
than a skilled craftsman.
	It's no surprise, in a culture where money is the only counter we respect, that so many people 
choose to produce {cost} goods rather than {benefit} goods. For more than 20 years the brightest young 
Canadians have turned away from useful work toward the big money jobs that are an economic cost to the 
community, rather than an economic {benefit}.
	We still need food, clothing, cars and other manufactured goods but, because producers of {cost} 
goods earn lots of {derived} dollars, we think we can afford to import them.
	That sounds like a good idea because the people who actually produce goods are not well paid. 
When you pay $100 for something in a store the store takes about $50 of the total to pay for wages, rent, 
promotion and profit. The wholesaler and the distributor take about $25 for their expenses and profit, and 
the manufacturer and his suppliers get less than $25.
	Since most of the money we spend for consumer goods goes to the people in the {cascade} rather 
than those who make the goods, it sounds like a good idea to import most of the goods we use. If 
middlemen make more profits than producers, why not let foreigners produce the goods and Canadians 
work as middle men?
	But the dollars in the {cascade} are created by the producers, and the producers of imported goods 
live in other countries. When goods are imported there is no wealth created in Canada, and all imported 
goods and the jobs they create must be considered {costs} rather than {benefits}.
	Within reasonable limits the cost of imports is acceptable but there is an additional problem 
because imports also displace the production that actually creates wealth within Canada. Imports begin a 
{cascade} that increases costs, but they do not create the {multiplier} that would produce more {root} 
dollars.  If we don't produce real wealth ourselves, we have no real wealth to share among us and the wealth 
we share must be borrowed. More about that later.
	Some importers say this is natural selection -- that foreign producers are taking over because they 
are more fit to survive -- but that argument ignores the facts of natural selection.
	In an earlier time adult tigers were more fit to survive than human babies. Babies never learned to 
defend themselves against tigers but humanity survived the evolutionary mill because adult men hunted and 
killed any animal that attacked a human.
	We do not protect the producers who create our wealth and Canadians now import about 60% of 
all the consumer goods we buy.
	When we import goods we export money. Even if most of the money we spend at the retail level 
stays in Canada, at least 15% of all our consumer dollars leave the country. Consumer spending accounts 
for two thirds of our GNP, so in total we export more than 10% of all the cash we earn every year.
	If it were just 10% of the total that would not be too bad, but this is no ordinary 10%. This is the 
"{root}" money that is created by the production of wealth, and from which other money is {derived}. 
	Because the money that we send overseas is a small percentage of the apparent total of money in 
the system, Canadian governments thought they could borrow to make up the difference. With an economy 
that turns over nearly $600 billion a year it should be no problem to borrow $10 or $20 billion at a time.
	And it would not, if Canada produced enough {benefit} goods to sustain itself. But again 
remember that consumer goods make up about 60% of our whole economy and we import about 60% of 
consumer goods. We actually produce very little real wealth.
	Governments make no distinction between {benefit} goods and {cost} goods, and they think 
money earned by the production of {cost} goods is wealth. It is partly because of this that they find it easy 
to justify waste.
	What does it matter that the government wastes money, if the waste produces a {multiplier} effect 
that creates wealth for the whole economy? If that were true, government waste would be a positive virtue!
	Governments now pretend to know that we can't afford endless waste but they have not learned 
the most important lesson, that dollars are not wealth. It it were, we could print a few million of them for 
every Canadian and we could all retire.
	But money looks like wealth and several provincial governments hope that lotteries, casinos and 
slot machines will produce wealth and bring the government revenue that taxes can no longer produce.
	Even some local governments once believed the theory that casinos would be an "economic 
engine" to produce wealth in their community but it didn't happen. In fact the casinos drain money away 
from legitimate business, and create economic hardship in the towns where they are located.
	The Province of Ontario hopes to gain $1.3 billion next year in revenue from Casino Rama near 
Orillia and others at Niagara Falls and Windsor. If that were {root} money it would be good news, but 
casino profits are not {root} money. Because casinos produce no real wealth, the dollars governments 
collect from them are {derived}. Casinos redistribute wealth, but they add nothing to the economy.
	Midas thought gold itself would have value, but he was wrong. Governments and others are wrong 
to think that any dollars, from any source, have real value.
	Money has value only if it represents real wealth, and the closer it is to the production of that 
wealth the more value it has. Real wealth is represented by the {root} dollars that are earned by the 
production of real goods. We need {derived} dollars too but, like the relationship between {cost} and 
{benefit} goods, the relationship between {root} and {derived} dollars is vital.
	The {root} dollars are the wealth, the {derived} dollars distribute it. The higher the ratio of {root} 
to {derived} dollars the more real wealth we have for each Canadian to share. When we generate more 
{derived} dollars we have more money in circulation but, because we have no more wealth to share, all our 
money loses value.
	And we have a third type of money which I call {imagined} money. This is legal money but it is 
literally created by imagination.
	When you borrow money from a bank the bank does not actually have the money to lend you. 
Banks in the U.S. have to keep $1 on deposit in the Federal Reserve for every $10 they lend to customers 
but Canada runs on a "zero reserve" basis, and Canadian banks just have to keep an average balance of zero 
in the bank of Canada.
	When you borrow money the bank writes you a cheque or whatever, and the money is created at 
that point. The bank does not actually have the money, but it is betting that enough money will come in 
from deposits and repayment of other loans to cover the cheque.
	Like {derived} money, {imagined} money is not created by the production of goods. Unlike 
{derived} money, {imagined} money can start a {cascade}.
	{Derived} money can't start a {cascade} because it's already part of one, and when {derived} 
money is passed from hand to hand the movement is a continuation of a {cascade} that started with {root} 
money. {Imagined} money is new to the system and, because it is not part of an established {cascade}, it 
starts a new one of its own.
	That creates a serious danger because {imagined} money does not represent real wealth, and 
money {derived} from {imagined} money does not represent real wealth.
	That means {imagined} money may upset the balance of goods and money that keeps prices 
stable. Orthodox economists think that bank loans and credit sales make no difference to the economy 
because loans are balanced by debts and because in theory they will eventually be paid off in real money. 
There is obviously no problem if I buy a car or a TV set on credit, but what if I borrow a billion dollars?
	The money is new, and even if I will repay it some day it's here now and it upsets the balance. The 
long-term effect of a big loan will depend on what I do with the money.
	If I use a billion dollars of {imagined} money to build a factory or a block of apartment houses or a 
fleet of fishing boats it will be good for the economy, because I will spend the money to hire workers and 
buy components and raw materials.
	The loan will increase the total of money in the economy, but if I use the new money to build 
something useful I create new real wealth and the balance between money and material wealth is 
maintained.
	In this case the {imagined} money acts like {root} money and in effect the loan just shifts the 
sequence slightly to create the money before, rather than as, the goods are produced.
	But what if I use the billion {imagined} dollars to buy goods that already exist? Suppose I borrow 
the billion to buy apartment houses or a factory or a fleet of fishing boats that someone else built ten years 
ago? Now we have an extra billion dollars in cash added to the economy, and no new wealth has been 
produced.
	Further, because this billion dollars is new to the economy it creates a {cascade} which, in effect, 
multiplies its value. Now we have perhaps $10 billion new dollars in the economy, but no real wealth has 
been created.
	The balance between wealth and money has changed and in the long run all money will lose 
enough value, through inflation, to restore the balance.
	Even a billion dollar loan would not make much difference to Canada's national economy, but we 
are not dealing with a single billion dollar loan. As wheeler-dealers buy, take over and merge companies 
Canadian banks may issue dozens of multi-billion dollar loans in a year. Because {imagined} money creates 
a {cascade}, the total effect will be tens or hundreds of billions of dollars.
	The flood of money creates inflation, which gives the borrower a bonus which makes it easy to pay 
the loan off. Because the borrower profits from inflation he can pay off the first loan and borrow another 
billion, to buy another established business and start another round of inflation.
	When I borrow to build something new the bank advances money on my production and the 
ultimate result will be more wealth to be shared by all. When I borrow to buy existing property the bank 
agrees to share everybody else's production with me. That's not valid, because they don't own the 
production they offer to share.
	Governments know that unlimited loans by banks could upset the economy and they try to control 
the creation of money through the interest rates set by central banks. The idea sounds good but it assumes 
that the problem is a surplus of money. In fact it may be a shortage of locally-produced goods, and a high 
interest rate may exacerbate the problem because it pushes entrepreneurs away from long-term projects and 
into fields that will produce a faster return.
	If I want to sell gibblgooks, for example, it might take me a year or so to build a factory to produce 
them, to design the product and to train the workers to make them. Imported gibblgooks may cost more in 
the long run, but if I choose to import them I don't have to design them or build the factory or train the 
workers and I can get a faster return on my money.
	When interest rates are high a fast return is more important than a high return, so I will go for the 
imports.
	That's counter-productive because the problem is that we have too much money in circulation 
already, and not enough real wealth. The high interest rates that are supposed to reduce inflation almost 
certainly have a negative effect on employment, but if they drive entrepreneurs into high profit business 
they may not stop inflation.
	We all handle money every day but few of us really understand it. We don't have to, in our daily 
life.
	But when we look at the economy we have to remember that money is not wealth. It's just a token, 
and the real wealth is the food we raise and the goods we manufacture. When we value money, rather than 
the wealth that it represents, we lose sight of reality. When we give up our farms and factories to go into 
business that produces only {cost} goods, we give up the source of our wealth and we condemn most 
Canadians to poverty.
	







THE PREDATORS AMONG US







	Part of our problem is that we don't control economic predators.
	At the most primitive level of economics, families and small groups are co-operative and self 
sufficient. Men and women cooperate in a family because they need each other, men cooperate in hunting 
groups to kill big game and women cooperate in food gathering because a group is safe from predators.
	In other economies women may tend gardens and men tend herds, but they still cooperate.
	As they learn to make tools and implements the men and women who make the best products may 
make them for others. In the first stages of specialization their reward is prestige and they still hunt and 
gather their own food.
	As society becomes more complex people who make one kind of goods trade with people who 
make another kind -- tools for clothing, for example -- but in a tribal society most of them will still hunt or 
gather their own food. Even if they could trade for food, hunting and gathering are social occasions and 
they would not want to be left out.
	Author Jane Jacobs speculates on the next step in her book {The Economy of Cities} (Random 
House, Vintage Books, 1970). In a very credible scenario she describes how specialized artisans might settle 
at a convenient point -- near the source of their materials and often near a ford in a river through which most 
travelers have to pass -- and trade their wares to passing hunters for food, hides and other goods.
	As more artisans settle at the same point they form a village with its own social life, no longer 
based on hunting and food gathering. Hunters and gatherers bring their produce to the village to trade for 
tools, pots or other made goods and the artisans give up hunting and gathering for their own use.
	This begins the specialization that makes human culture so productive. For the first time we have 
one group of workers who don't have to find their own food, and another who don't have to make their own 
tools.
	This stage of development also brings a quantum leap in technology because a specialist in a 
village can usually make better tools than a hunter in the hills. The critical point in the development of 
human technology may have been the invention of the polished stone axe, about 8,000 BC in Europe and 
earlier or later in other areas. The axe was so good that it has become the accepted marker of the "neolithic" 
or new stone age, as opposed to the "paleolithic" or old stone age.
	The neolithic axe was man's first really good tool -- easily capable of cutting down trees to clear 
farmland or to build big buildings.
	But while an average workman can make a chipped stone axe out of local stone it takes a very rare 
type of stone and a high degree of skill to make a good neolithic axe. Because of that most people had to get 
neolithic axes by trade. By the end of the neolithic age axes made of augite-granophyre stone from a 
mountain in North Wales were used throughout the lands that are now Belgium and Holland, axes made of 
obsidian from northern Hungary were used throughout most of Europe and axes made of a type of jade 
found on one mountain in the French Alps were used throughout southern France and most of Spain.
	The neolithic axe created trade, trade created travel and travel created civilization.
	There were no tourists in the days before trade, because there were no valid reasons to travel. 
Borders between territories were not marked but they were recognized and enforced.
	A stranger found in another tribe's territory without good reason was assumed to be either an 
invader or a poacher, and dealt with accordingly.
	Tribes did inter-marry and party together but people travelled only to weddings and other parties 
with a neighboring tribe. Most of the time people stayed in their own territory and minded their own 
business.
	But when people don't travel, ideas don't travel. If a member of one tribe finds a new way to thatch 
his hut or to light a fire or trap an animal other members of his tribe will learn about it, but from there the 
idea will spread very slowly.
	If members of another tribe visit to party once a year the idea can move to one other tribe in one 
year -- but it may well take another year to move to a third tribe.
	Trade and travel change all that. Traders are allowed to travel because they have an obvious reason 
to travel, and most tribesmen will allow traders to pass because they know the traders, and because they 
themselves want the goods the traders carry.
	In the few cases where traders were not allowed to pass it was because one tribe claimed the trade 
for itself, and would buy all the traders' goods and take them farther itself. Either way, the goods travelled.
	And ideas travelled with them. An idea that travels from tribe to tribe at party time will move only 
a few miles a year, but an idea that moves with traders may move hundreds of miles a year. Only a few 
ideas are actually contained in the goods, of course, but traders carry the rest. Above all else traders are 
salesmen, and most salesmen talk to everyone they meet.
	Probably because of the axes, trade and travel exploded in neolithic times. Archaeologists find 
amber from around the Baltic Sea in neolithic cave dwellings in Crete. Ornaments made from the shells of 
one particular type of mussel that is found only in the Black and Aegean seas were traded as far north as 
Poland.
	Some of the best metal workers of the European bronze age lived in what is now Denmark, where 
they had to import both copper and tin. Metalsmiths in the first bronze age of ancient Greece imported tin 
from Turkey and later Greeks and Romans brought it from Cornwall.
	In the Americas neolithic Indians in the city of Cahokia near the present site of St. Louis traded 
with both coasts of the U.S.A., with tribes in Canada and with the Aztec who lived in Tenochtitlan, now 
Mexico City.
	The traders are a new economic group, of people who do not make anything themselves and who 
do not find or produce their own food. They perform a useful function but they live on the products of 
others and they can survive as an economic group only if others produce the goods they need to live, and to 
trade.
	And trade also produced predatory economics. Primitive men may have fought over territory or 
food -- as monkeys and apes sometimes fight today -- but where there are no concentrations of wealth there 
is no strong motive for robbery.
	Trade creates concentrations of wealth, and the goods carried by even a small trading caravan were 
worth a small fortune. The cargo carried by a single modern tractor-trailer truck may be worth millions of 
dollars, and truckers around the world have to keep a watch out for hijackers.
	The first organized robbers were probably highwaymen who waylaid caravans and took the goods. 
In the early days it was probably not considered a crime to rob strangers but even if their tribes approved 
their raids, robbers would have worked outside their tribal territory.
	Caravans will avoid routes and territory where caravans are robbed, so robbers must move around. 
That means they will have to work at least part of the time on other tribes' territory, where they will be seen 
as unwelcome poachers.
	But there is another way. Robbers who take only a portion of the goods can call it a "toll" or "duty" 
or "protection". If one route is haunted by robbers and another is held by a robber baron who takes only 
some of their goods, traders will travel the route held by the robber baron. In fact the robbers who waylay 
caravans on one route may be the soldiers who guard them on the other, but that is not relevant. The 
soldiers are not allowed to rob people who have paid the toll and who remain within the protected area.
	A robber baron lives better than a highwayman because the baron can build a fortress and hold 
land. Many of the castles along the Rhine river in Germany were built to enforce a local aristocrat's claim to 
a toll on goods passing through "his" lands.
	As the robber barons gained power they attracted sycophants and other hangers-on who were not 
strong enough to be predators themselves, but who were willing to serve the predators in return for a share 
of the take. Together the robbers, robber barons, soldiers and hangers-on form a new economic group 
which is significantly different from the others. They are predators, and the people they rob are their prey.
	Even the ones who pretend to be defenders are predators. An aristocrat may speak of "his" people 
and he may claim to protect them, but he also claims to own the deer in the forest and he will protect them 
from poachers. Robber barons and soldiers may protect their victims from other predators but their role is 
still predatory.
	And by necessity, predators have different moral standards from others. Producers and traders 
depend on voluntary co-operation and repeat business, and if they are not trusted they can't stay in 
business. A predator's business depends on either deception or coercion, or both, and success is the only 
standard he can afford to recognize.
	A lion does not give an antelope a sporting chance, and we don't expect robbers to play fair.
	Like traders, robbers and soldiers do not make their own tools or provide their own food but there 
is another difference. When producers can't produce -- perhaps because of crop failures or other problems -- 
they don't have to deal with traders, and when their customers have no money traders can't sell their goods. 
In hard times the voluntary economy may slow down.
	But robbers and robber barons take what they want whether their victims can afford to pay or not. 
If times are very hard the predators may suffer too, but as a general rule they will be well paid even when 
the producers and the traders are not. Because of this hard times encourage people to become predators, 
and predators make hard times harder for the producers and traders.
	At this point we have three distinct economic groups.
	The first are the people who produce the goods. They include the hunters and the gatherers and the 
artisans who make axes and other tools, and in more developed cultures they will include the herdsmen and 
the farmers and the man who makes the micro-chip for your computer.
	They are the foundation of the economy and their products are the wealth we all share. If they 
don't produce, we have no wealth to share.
	The second group are the traders and they perform a valuable function but they do not produce 
their own food, clothing, shelter or other goods. Because they do not produce goods themselves they are 
totally dependent on the producers, and they could not live without them. On the other hand the service 
some traders perform is vital, and producers without traders would live a primitive and restricted life. Even 
though the trader does not produce anything himself his service adds more to the quality of life in his 
community than it costs to maintain him.
	The third group are the predators, both the robbers and the mercenaries who protect us from them. 
Like the traders they do not produce the goods they need, and they are totally dependent on the producers 
and the traders. They may also perform a service but, no matter how useful the service, predators are always 
an economic cost to the community they live in.
	The soldier who defends a town earns his pay, but he is still a cost the town would not have to bear 
if there were no soldiers or robbers.
	Within all three economic groups we have several classes of people. Among producers, for 
example, we would have to include Henry Ford and the village blacksmith and the semi-retired pensioner 
who sweeps a Ford factory. They all play a part in the production of goods, and they must all be classed as 
producers.
	Timothy Eaton was a trader but so is the clerk who works in an Eaton store, and the man who sells 
peanuts or popcorn on the sidewalk outside the Eaton Center in Toronto. The scale is different, but the 
function is the same.
	A robber baron is a predator, and so is a mugger who works in a back alley. Some members of the 
robber baron's household, like the clerk who keeps his records or the steward who manages his house, may 
not work directly as predators but -- like the pensioner who sweeps a Ford machine shop -- they must be 
considered part of the organization they serve.
	And the same person may move from group to group or be a member of two or even all three 
groups at once. A soldier can own a farm or a farmer serve as a soldier, and either way he could sell his own 
produce -- but we're not talking about individuals here. We are talking about social/economic functions, and 
the soldier who owns his own farm and sells his own produce just happens to fill three roles.
	When a robber baron hits the big time he may become an emperor, and rob and plunder whole 
countries. Imperial centers were the first large economies which were not self-sustaining, and in some cases 
they may have had to conquer other people because they were not self sustaining.
	Empires try to control predation within their own boundaries but they may sponsor predation 
against outsiders. As a "privateer", or licensed pirate, Henry Morgan had the approval of the British crown 
when he sacked towns along the coasts of Venezuela and Panama in 1668 and '69.
	England happened to be at peace with Spain when Morgan sacked and burned Panama City in 
1670 and he was arrested for the crime, but the arrest was a diplomatic sham. After his trial in London 
Morgan was knighted by Charles II and appointed governor of Jamaica.
	Piracy is illegal now but other forms of "predatory" economics, in which the actor takes profit for 
himself at the cost of others, continue. The techniques are different but the similarity is recognized in the 
popular terminology that sometimes describes a speculator or a corporate raider as a "pirate".
	The main difference between old-time piracy and modern financial manipulation is that piracy 
used to be sanctioned by a king or a government only if it was practiced against citizens of another country. 
Pirates were not allowed to prey on their own countrymen, and many of them worked for the welfare of 
their own nations. That's why Sir Henry Morgan and other pirates were knighted.
	But most speculators and other financial manipulators prey on their own countrymen, and they are 
in fact enemies of their own people. Governments don't interfere partly because governments are 
themselves predatory, and financial predators are supported by banks and other financial institutions which 
make a profit by their operations. By extension the banks and other financial institutions thus become the 
enemies of most of the people they pretend to serve.
	Legitimate trade is a win-win transaction because both sides gain from it. Like other forms of 
predation, speculation and financial manipulation are win-lose transactions. When a speculator wins, 
somebody has to lose.
	More than 20 years ago a new copper mine was opened near Kamloops, BC, then a city of about 
50,000 people. While the mine was being developed a friend of mine sold his house in Kamloops for about 
$15,000. Before he moved it had already been re-sold for a profit of nearly $10,000.
	A speculator from Calgary had come to town and put down payments on nearly every house that 
was for sale -- including my friend's.
	With the mine opening people needed houses, and the speculator ran the prices up to suit himself. 
He made about $100,000 profit -- ten years' income for a middle-class man, in those days -- for an 
investment of less than $100,000 for about a month.
	The speculation was legal but it was a crime against the economy because the $100,000 did not 
represent production. In fact the speculator may do more harm than -- for example -- a burglar because if a 
burglar steals your property you will work to replace it, and the money still represents material goods.
	The $100,000 this speculator got represents nothing, but the money had to come from somewhere. 
Because there were no goods produced it had to come either from the savings of others or from a overall 
devaluation of the whole country's money supply.
	In fact it came from both. People who bought houses had to pay more for them, and because 
prices rose the value of all our money dropped.
	But in spite of that, we act as though speculators are respectable members of society. Economist 
John Maynard Keynes himself made a fortune by speculation in the futures market, but he either didn't 
know or didn't care about what it did to the economy.
	The stock market is essentially neutral but it encourages predatory activity. Governments and 
media seem to think the stock market is a real part of the economy -- the media devotes more ink and air 
time to the doings of the stock market than to real business -- but in fact the market probably does more 
harm than good.
	First the obvious. Companies need money to go into business and they may need more money to 
expand. People want to invest their money, and the stock market gives them a place to do it.
	Then something that should be just as obvious. The stock market does not help start-ups or small 
companies. People who actually start companies get their money from savings, or by borrowing. When a 
company is doing very well it may "go public" on the stock market to raise money for expansion, but 
honest development of that type represents a very small share of the stock market's business.
	Almost all of the action on the stock market is the buying and selling of established stocks, for 
profit or loss. People who play the stock market may be gamblers or they may have inside knowledge or 
they may be manipulators, actually making the value of stocks rise and fall. Either way, they harm the 
economy in several ways.
	One problem is that the stock market helps only big companies. There is an obvious need for a 
mechanism that would help inventors and small businessmen raise money to develop new ideas, but the 
stock market won't help them. Instead it helps promoters who raise money to buy and destroy small 
business, and large manufacturers who need cash to automate and get rid of their employees.
	That's bad because in most cases the small company or the start-up is the better investment. There 
is more risk but the fact is that a small company may double its value in a couple of years, and a big one will 
probably not.
	It's easy to double $1,000, and not very hard to double $1 million. It's hard to double $1 billion, and 
virtually impossible to double $1 trillion in a short time.
	Studies show that small companies make more jobs per dollar of investment than big companies, 
they make more technical progress, and they are more likely to be open to innovative ideas. 
	But one thing they can't do is get help through the stock market. In fact the stock market makes it 
harder for small business to get started.
	Because the stock market exists and because it's the accepted vehicle for investment, most 
investors put their money into it. Because most investors put their money into the stock market, small 
companies and start-ups find it harder to raise capital.
	"Venture capitalists" and banks may offer to back small business but the offer is often a hollow 
one. The managers who run these companies will bet only on a sure thing, and it may be sure because it 
contains no new ideas. Any half-decent businessman who can raise a small down payment and get a 
franchise for a big-name hamburger stand can get backing from a bank, but the genius with the new idea 
will not
	I remember the news about the arrival of one of the major hamburger chains in Canada, about 20 
years ago. A company that was already big got a $500 million line of credit to open a chain of restaurants 
based on an American franchise. The newspapers thought that was good news, but I had questions.
	One was the thought that if I had $500 million to work with -- worth more than $1 billion today -- I 
think I might be able to develop my own recipe for a hamburger. One advantage would be that if the recipe 
was Canadian, the profits could stay in Canada. Because the big company chose to buy an American 
franchise, they have to send a share of their profits to the States.
	The other problem with that deal is that it establishes another chain of me-too American spin-offs 
in Canada, and makes it harder for any Canadian who wants to open a Canadian restaurant. The big 
company that bought the franchise and the bank that backed it made a profit, but the Canadian economy 
lost.
	Another problem with the investment economy is that many investors look for short-term profits, 
and they encourage management to work for short-term profits rather than long-term value. It's not 
impossible to get both but it is unlikely, and hot-shot "turn-around experts who move from company to 
company know they can produce better short-term profits if they skimp on long-term plans.
	The easy way to produce fast profits is to gut the company and destroy its long-term viability. If 
you shut down research and development, cut back on customer service and use cheaper materials the 
profits go up for a while. The company itself will go down in a few years but that's no problem to a 
corporate rapist who plans to move on to another company before the results of his work show.
	In a world in which speculators and profiteers are seen as respectable citizens, rapacity is seen as 
good business practice.
	Investors don't mind because money is mobile. When a corporate rape-artist moves in the profits 
go up, for a while, and the price of the stock goes up with them. When the rape-artist moves on the 
investors know it's time to sell, and leave the suckers holding the empty shell of what was once a solid and 
profitable company.
	The stock market also financed and made possible the binge of take-overs and conglomerate 
formation that debased much of the Canadian business establishment in the 1970's. The theory then was 
that some kind of "synergy" would make a combination of companies more profitable than the same 
companies run as separate operations. 
	But in many cases it created monsters that exist only to make money. If you believe in Marshall's 
economics making money is itself a noble function, but in a working economy it should be only a side 
issue. A company has to make money to keep working but the money should be a means to an end, and not 
the end itself.
	Let's consider the case of the West Wombat Widget Works, established in 1886 by William 
Wigglewoggle and controlled by his family until a few years ago.
	Wigglewoggle had two passions in life -- his love of widgets and his love of the town of West 
Wombat -- and he passed them both on to his sons. West Wombat Widget Works was not the most 
profitable company in Canada but it was healthy, it made the best quality widgets in the world, it paid good 
wages to its employees and it was a good corporate citizen of the town, the county and the province.
	Wigglewoggle owned the whole company, when he set it up but later he gave a ten per-cent 
interest to the employees pension fund. Over the years employees and their pension fund were allowed to 
buy more shares and when Wigglewoggle died he left one third of his holding to each of his two sons, and 
one third to the pension fund.
	About the time that Wigglewoggle began making widgets Seymour Scrimp began work for his 
father's grocery store. He helped turn the Scrimp and Save Mart into a major regional grocery chain and his 
son Sebastian took the company public and built it into the conglomerate we know as Brontosaurus Corp.
	Sebastian Scrimp knows that WWWW stock is under-valued, partly because the company devotes 
a large share of the profits to civic projects. With backing from the bank that William Wigglewoggle helped 
establish Scrimp offers the management company that runs the WWWW employees pension plan a high 
price for the plan's shares in the company, and leverages his edge into a hostile takeover.
	Scrimp knows that West Wombat is a fine place to live and that the Widget Works is a great place 
to work and he would like to maintain both, but he also knows that he doesn't really run Brontosaurus Corp. 
It runs him, and sometimes he doesn't like the direction it takes him.
	As chairman of Brontosaurus Scrimp is responsible for billions of dollars invested by millions of 
private citizens and thousands of pension funds, mutual funds and other money managers. It's his job to 
make money for them -- either by making so much profit that Brontosaurus can pay good dividends, or by 
increasing the value of the stock.
	In Wigglewoggle's day the WWWW was a family company and the family could make decisions 
on a human level. If it had some property it was not using and the town needed a park, the company could 
give the land away. If a new technology could replace a dozen employees but they were people 
Wigglewoggle had known all his life, he could delay the change-over until after his old scoutmaster had 
retired and he could find work for the others.
	But Scrimp has no choice. He is responsible to his stock-holders, not to the citizens of West 
Wombat or the employees of the Widget Works, and his stockholders are interested only in profits. Most of 
them don't even know that West Wombat exists.
	But they do know that wages are lower in the third-word country of Bingabang, and that people 
there can make Widgets too. Three years after Brontosaurus takes over WWWW the plant in West Wombat 
is shut down and the WWWW trademark shows up on a new line of widgets imported from Bingabang.
	Everybody should be happy because WWWW now shows a higher profit and pays higher 
dividends than ever before, but somehow the former employees and the people of West Wombat don't 
share the joy.
	That's an extreme case, of course, but it's not an outlandish one. The companies most liable to 
takeover are those with the best names -- earned by quality goods -- and low profits which may be the result 
of high wages in the plant, low prices in the market or good works for the town. In other words the 
companies most vulnerable to takeover are the companies that are now doing the most they can for their 
customers, their employees and their towns.
	Even if a conglomerate has good intentions, the chances are that it cannot run the small company 
as efficiently as local management can.
	A small widget company is liable to be run by people who know how to make and sell widgets, 
and who devote their whole attention to the job of making and selling widgets. That's all they do now and 
all they plan to do in the future. If manufacturing methods or the market is about to change, the local 
management will probably foresee the change and they will react to it if they can.
	The management of a conglomerate just wants to get the most profit possible out of their new 
company and they may not know or care how to make or sell widgets. If manufacturing methods or the 
market are about the change, management of the conglomerate may not see it coming. If they do see it 
coming they will choose an option that will maximize profits for the conglomerate, which could mean 
running the widget company into the ground and selling it just before it collapses completely.
	That might make the most possible gains for the stockholders but the widget company and its 
employees, the residents of the town and the Canadian economy as a whole will lose.
	Conglomerates are no longer as fashionable as they once were but for the past few years we've had 
a big rush on mutual funds, as people realize that they will have to provide for their own retirement.
	On the surface a mutual fund sounds like a good idea, but in fact it may be the final death blow to 
a dying economy.
	The idea sounds good because investors who also work for a living have no time to watch the 
market carefully, or to develop the expertise it would take to choose the right investments. It makes good 
sense for a group of investors to band together and hire a manager to watch the markets for them.
	But modern mutual funds are highly competitive multi-billion dollar businesses, and the only 
standard they have for success is to get the highest possible return on their money. Because money is 
mobile, they are interested only in the short term.
	Because they control huge amounts of money the mutual funds have enormous economic power, 
and because the funds have no standard other than money they are tempted to abuse that power.
	The manager of a mutual fund is judged by how well his fund performs. That means he must buy 
stocks that will rise but, since he can also sell those stocks, he has no stake in the long-term health of the 
companies he buys into.
	The perfect scenario for the mutual fund manager is to buy into a company just before a corporate 
rape-artist takes over, and sell just before he leaves. If he serves his own and his clients' best interest, the 
mutual fund manager is a predator preying on the economy and an enemy of society.
	Another problem with the stock market is that most of the money gained or lost on stocks does not 
represent real wealth. When stocks go up the dollar value of the paper increases but there is no increase in 
real wealth, and the increased price does not represent real value.
	Stock market profits are a form of {imagined} money. {Imagined} money is valid if it is used to 
produce new capital goods but if used in any other way it will cause inflation. Most of the people who make 
their living in the stock market do not use their profits to create new capital goods.
	Even if the stock market did no real harm it would be a problem because the big profits it offers 
lure thousands of capable men and women into useless work. People who could do something useful trade 
stocks instead, and why not? The market offers more money for less work than any useful occupation, and 
as long as the market is considered respectable we can't blame people for working in it.
	In a more rational world the stock market would exist only as a vehicle to serve honest investors. 
Speculation would not be illegal but a speculator would not be considered a respectable citizen and his 
profits would be subject to heavy taxation.
	Among the most numerous modern predators are lawyers. Like the robber barons of old some of 
them set up shop on the highways of commerce and collect tribute from all who do business. As in earlier 
times if you refuse tribute you risk attack and robbery by another lawyer, or by your own lawyer now 
working for someone else.
	Other lawyers operate like highwaymen, using the courts as weapons of robbery. When a friend of 
mine rear-ended another car on the Don Valley Parkway a few years ago there was no damage to either car, 
and no-one was hurt. My friend and the other driver agreed that nothing had happened.
	But it seems the other driver had second thoughts because my friend later learned that her 
insurance company paid more than $40,000 in damages for that accident. Her agent explained that even 
though there may have been no actual damages the plaintiffs were represented by a lawyer who specializes 
in suing insurance companies. The insurance industry has learned from sad experience that it's cheaper to 
pay off even an obviously fabricated lawsuit than to fight it.
	It's even possible that the people who collected "damages" from my friends' "accident" were not 
involved. The New York Transit Authority often finds that when a bus is involved in an accident the claims 
may out-number the seating capacity of the bus.
	People who see or hear about the accident may say they were on the bus and register claims. In 
one famous case 32 people registered claims after one accident in which the bus involved was on its way to 
the barn and carried no passengers.
	So-called "honest" lawyers may deplore frauds but they profit too, because honest people have to 
hire a defense against frauds. As in the old days, the man who defends you against a robber may in fact be 
the robber in a different guise.
	Predatory lawyers and phony lawsuits can even destroy big companies. In the spring of 1995 
American lawyers forced the multi-billion-dollar Dow Corning company into bankruptcy. About one 
percent of Dow Corning's total business was the production of about 750,000 jelly-like breast implants for 
women who had lost a breast to disease or who just wanted to look better.
	But in January of 1992 the U.S. Food and Drug Administration imposed a moratorium on the use 
of the implants. Lawyers across the country smelled blood, and some advertised in local newspapers to find 
women who had implants and who might be persuaded to file claims against Dow Corning.
	The company was not worried because it carried more than $250 million insurance, but hundreds 
of thousands of women filed claims saying the silicone breast implants caused illnesses such as rheumatoid 
arthritis and auto immune disease.
	In fact tests by the Mayo Clinic and other reliable medical facilities found that women with breast 
implants have the same incidence of diseases as women without implants. With 750,000 implants in use that 
means a lot of women with implants have a variety of diseases, and lawyers encouraged any woman with 
an implant and a disease to blame the disease on the implant.
	And the truth is no defense against lawyers. It would have been so expensive to fight the cases that 
Dow Corning offered a "global" settlement of $105,000 to $1.4 million to each claimant, depending on her 
health and age.
	That would have cost the company more than $4 billion but it would have limited the lawyers' take 
and many of them urged women to continue their lawsuits. One Houston lawyer pursued more than 1,000 
settlements outside the global settlement.
	In May of 1995, after a federal judge said the $4.2 billion that Dow Corning had committed to 
settle the claims would not be enough, the company filed for voluntary bankruptcy.
	The breast implants were a tiny part of the business and the company offered them only as a 
public service. Nobody ever proved that any of the implants harmed anyone but a business worth billions of 
dollars was destroyed. The lawyers who did the damage made millions, and their gains are recorded as a 
contribution to the U.S. gross national product.
	In 1997 some lawyers attacked the multi-billion dollar Dow Chemical Corp., on the grounds that it 
owned part of Dow Corning. It's hard to imagine that they could do serious harm to Dow Chemical but it 
was hard to imagine that they could ever hurt Dow Corning. All we know for sure is that they can do 
millions or billions of dollars damage to the American economy, they will probably make millions for 
themselves, and that their work will show as a gain to the gross national product of the United States.
	Some lawyers pretend to be white knights who protect the defenseless, but many court cases work 
out better for the lawyers than for the people they pretend to represent.
	In January of 1993 ABC Television's 20/20 public affairs show tracked some of the lawsuits that 
destroyed the multi billion dollar Johns Manville Corp. and six other companies that produced asbestos or 
products that included asbestos.
	The case is not a parallel to the Dow case because there is solid evidence that asbestos does cause 
health problems, and evidence that some companies continued to use asbestos after they knew of the 
problems.
	The asbestos companies paid millions for their mistake but most of the money was collected by 
lawyers. Most of the 500,000 people who sued for damages got only a few thousand dollars each, but the 
lawyers who orchestrated the lawsuits got millions.
	And some innocent companies were destroyed. Keene Corp has more than 4,000 employees 
making hundreds of assorted products but it made the mistake of buying a small company that had once 
made asbestos ceiling tiles.
	The company cost $8 million to buy and the litigation over a product it did not even make when 
Keene bought the company cost more than $530 million. Plaintiffs got about $210 million of the settlement, 
and lawyers collected about $350 million.
	Lawyers do well out of lawsuits but the rest of us pay. In an ABC news special "The Trouble With 
Lawyers" first broadcast Jan 2 of 1996, reporter John Stossel says that several American lawyers make more 
than $10 million a year and the best-paid lawyer in the US received more than $90 million in fees in 1996.
	That's good business for the lawyers but it's hard on their victims and -- one way or another -- we 
are all their victims. Lawsuits for "slip and fall" accidents cost the city of New York about $200 million a 
year, and Stossel says the cost of lawsuits and insurance add $100 to the price of the average football 
helmet, $500 to the price of a car and about $3,000 to the price of heart pacemaker.
	Every economy has some predators and some are useful. A healthy economy can afford the useful 
predators and even a few that are not, but every economy has a limit because predators live on their prey. 
When there are too many predators the prey will be wiped out and the predators will starve.
	Over the past 40 years we have seen a rapid growth in the number of predators in the Canadian 
economy, and a decrease in the number of the producers who support us all.
	We have survived the increase in predators because we started with a rich country, but the balance 
has been destroyed. Our economy is failing now, and unless the balance between predators and prey can be 
re-established, there is no hope for it.
	We control physical predators. If a mugger robs someone in a back alley, if a burglar robs a house 
or a gunman holds up a bank, we demand that the police hunt him down.
	Unfortunately we don't even try to control financial predators. We have some laws to protect one 
speculator from another but no laws to protect a victim from a speculator. The general public has very little 
protection from predatory lawyers, and our laws make virtually no attempt to protect our economy from the 
stock market gamblers who can destroy it. Such laws would be difficult to write and to enforce, but survival 
demands that we try.
	







ARISTOTLE'S AUTHORITY







	Most of this is obvious, when you stop to think about it, so why doesn't everybody recognize it?
	Probably because most of us don't think about most things. Instead we "study" them in school and 
learn attitudes which we accept without question for the rest of our lives.
	John Maynard Keynes knew that most people accept one set of ideas when they are young, and 
that they often refuse to consider new points of view in later life. In his {General Theory of Employment, 
Interest and Money} he wrote ---

	"There are not many who are influenced by new ideas or theories after they are twenty five or 
thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current 
events are not likely to be the newest."

	American economist John Kenneth Galbraith also recognized the problem. In the forward to the 
third edition of his famous {The New Industrial State} he refers to ---

	"a sizable group of economists who unhesitatingly associate whatever they have been told to 
believe in their youth with absolute scholarship.Anything alien to such installed belief is deficient."

	I call this problem "Aristotle's Authority". Born nearly 400 years before Christ Aristotle was a star 
student in Plato's Academy who later founded his own Lyceum. Among other things he taught that the 
planets and stars are supported on concentric crystal spheres that surround the earth.
	Most of Aristotle's ideas were pure guesswork but because he was the "authority" they were 
accepted as fact for more than 1,000 years. In the early 1500's Polish astronomer Copernicus studied the 
movements of the planets and proved that the Earth and other planets must orbit around the sun.
	Mathematicians and astronomers accepted Copernicus' view because it made astronomical 
calculations work out right, but the Roman Catholic church still liked Aristotle's "crystal spheres". Nearly 
100 years after Copernicus's death the Italian scientist Galileo was arrested because he publicly disagreed 
with Aristotle.
	Over the years most of Aristotle's misconceptions have been corrected but most established 
authority still resists new ideas. As a general rule, most of the attitudes and ideals of the power elite in any 
given organization are at least a generation behind the norm.
	That's partly because it takes so long for an individual to join the elite. To start with a future leader 
gets his or her initial preparation in school, where students absorb the ideas of teachers. In most cases the 
teachers are people who themselves did well enough in school to get paper qualifications, but who were not 
good enough in the real world to join the elite.
	After students have been programmed in school they go into the real world where, if they have 
absorbed the views of the current power elite, they may be accepted as "management trainees". If they can 
go 20 or 30 years without challenging the views of the elite they may themselves join the group, but by then 
their ideas will be hopelessly stuck in the past.
	And they may never change, because they think they are right. Before they can change they must 
be willing to admit that most of their lives have been based on a mistake, and that most of their past 
decisions were wrong. By Galileo's day no sane man could seriously believe that the stars were points of 
light on huge glass spheres that surrounded the earth, but church prelates who had publicly accepted 
Aristotle's ideas without thinking about them could not afford to admit how stupid they had been.
	Authoritarian thinking also maintains the superiority of the printed word over personal experience -
- even the experience of experts. Monks who copied manuscripts in the middle ages copied the mistakes 
too, because they were trained not to question the written word.
	In the modern world a scientist who tested cold weather clothing for the Canadian Armed Forces 
told me his wife would take the advice of a women's magazine over his laboratory results when she bought 
winter clothing for their children. The magazine's advice was based on advertisers' claims but, because it 
was in print, the woman thought it was more credible than her husband's research.
	The same kind of attitude values "education" over real-life experience, and defines "education" as a 
collection of abstract ideas rather than practical knowledge. We say a student who spends three years at 
university is "educated", but one who takes four years of classes and apprenticeship to become a mechanic 
is not.
	A student who can spell Aristotle's name in Greek is "educated", but a technician who understands 
how computers work is not. A man who reads books about nature is "educated" but one who knows nature 
at first hand is not.
	I find it amusing to compare the education of a 21-year old English-speaking white Canadian girl 
with the training of an 18-year old Indian girl from several hundred years ago. We'll assume the white girl is 
an upper middle class WASP, and the Indian is a typical member of almost any North American tribe.
	The white girl can read and write and she may have a university education but unless she has a 
master's degree or better, the Indian girl is better educated.
	Consider her accomplishments. North American Indians used at least 1,500 different plants for 
food and hundreds more for other purposes. Not all tribes knew all plants, of course, but by the time a girl 
was considered fit to marry she would know how to identify several hundred plants, where to find or how 
to grow them, and how to use all the different parts.
	That itself is a lot of learning because most tribes had multiple uses for each plant. Consider the 
common bulrush. In spring you can eat the stalk, raw, or the head raw or cooked in batter. In fall you can 
grind the head into a kind of flour, which can be baked into cakes, and at any time of year you can dry the 
roots, grind them up and use the powder to make a drink something like coffee.
	In addition to the plants an Indian girl would be expected to know almost all the animals that live 
in her area. She would know where and how they live, how they can be hunted or trapped, and their 
anatomy in detail. Given a dead animal she could skin it and tan the hide, butcher the animal and preserve 
or cook the meat, make thread or string from the tendons, household tools from the bones and so forth.
	She would also know how to make all the clothes she, her husband and their children would 
require, how to make several different types of shelter, how to braid ropes, bowstrings and other fiber 
products, how to weave baskets and perhaps blankets, and how to make most of the tools, weapons and 
implements people need to live in comfort.
	Most of the white girl's knowledge, on the other hand, is superficial. She knows of modern 
machines but she probably does not know how to use many of them, or how any of them work. She may 
know the names of some dead kings and Greek philosophers, but the Indian girl is just as likely to know the 
legends of her tribe.
	The white girl may speak a second language but the Indian girl may also speak a second language. 
The white girl may know how to use or even to program a computer, but she probably does not know how 
to find or prepare her own food, clothing or shelter.
	The Indian girl's knowledge is different from the white girl's, but is more useful and more 
extensive.
	The ultimate test is the ease of conversion from one culture to another and primitive men and 
women around the world have proved that they can easily absorb the knowledge required to live in our 
culture. When they do have problems it is usually with social or emotional issues. Few people from our 
culture, on the other hand, can learn to take care of themselves without the help of civilization.
	I also find it amusing to compare the training, responsibilities, pay and prestige of different groups 
of workers within our culture. Consider, for example, the difference between a medical doctor and an 
automobile mechanic. The doctor spends a long time in school but the mechanic's training is more practical 
than the medical doctor's, and it takes almost as long.
	The biggest difference is that doctors work with two basic models that have not changed for tens of 
thousands of years, that can tell you where they hurt and that will repair themselves if given half a chance. 
Mechanics work with dozens of models that change every year, that can't tell you what's wrong and that will 
not repair themselves.
	Some modern doctors accomplish miracles but through much of European history most medical 
practitioners did more harm than good and in modern times we know that some totally un-trained people 
have been able to masquerade as qualified doctors and get away with it. Some mechanics probably fake 
qualifications too, but it's easier for a doctor than for a mechanic to fake success.
	If a doctor gives you something that makes you feel worse for a while you will feel better as the 
effects wear off and you may think you are cured. We find it hard to tell because humans are almost 
infinitely adaptable, and we can get used to discomfort.
	But it's hard for a mechanic to fake anything because our cars either work or they don't. A 
mechanic may pad the bill but if my car does not start I will know it, if it burns too much gas I will know it, 
and so-forth. A lot of people take better care of their cars than they do of their bodies, possibly because we 
watch our cars from the outside and we are more aware of their performance.
	I don't say that a mechanic deserves more respect and more pay than a doctor but I do suggest that 
our attitudes toward both of them could use some adjustment.
	If you really want to know what jobs are worth, consider what happens when people don't do 
them.
	Politicians go on vacation for months every year, and nobody notices. When Ontario civil servants 
went on strike for several weeks in the spring of 1996, nobody noticed.
	When doctors go on strike people postpone cosmetic surgery and worry about what would happen 
if they had an emergency, but when garbage collectors go on strike we all have a serious health problem. If 
airline pilots strike tourists' vacations are interrupted, but if truck drivers strike our cities run out of food.
	We depend on people with practical training to make our world work, but theoretical learning is 
still considered better than practical knowledge and it has been since before the dawn of civilization.
	Some time in pre-history men and women who developed special skills in the technology of the 
day -- arrow making or flint knapping or basket weaving or whatever -- were able to drop out of the daily 
grind and specialize in the work they did best. Most of them taught their trade to their children as they 
worked, and sometimes to other children who were interested.
	Possibly about the same time other people began talking about gods. The artisans obviously 
contributed more to society than the priests, but the priests had more prestige because they interpreted the 
will of the gods. In most cultures it seems that what the gods wanted most was for the people to support the 
priests in luxury.
	The best hunters and warriors became soldiers and they held most of the real power, but priests 
had power too. In many cultures they studied the stars and developed a calendar to tell farmers when to 
plant their crops. In Egypt, Peru and other areas they developed surveying techniques and mathematics so 
they could supervise the construction of canals for irrigation. Priests told fortunes, learned to read and write, 
treated sick people and interpreted laws.
	And they taught students -- originally priests-in-training and later the sons of the wealthy. Some of 
the illegitimate sons of nobles were taught enough to serve the priests as lay brothers or scribes.
	But all of them were privileged, and through most of history students were an exclusive group. 
Partly because admission to school was restricted, education became a ticket to the elite. If a commoner 
could get an education he could probably get a soft job in the service of some noble. Because educated 
people shared exotic knowledge with other educated people they were entitled to soft and/or well paid 
positions in which they did not have to do much work.
	But beyond reading and writing, education did not have to include any practical information. Civic 
administrators in ancient China were chosen by an exam in which they were required to write a poem. Their 
work was judged on poetic quality and penmanship, neither of which is important to the job of 
administration but both of which are important to administrators who were themselves chosen for their 
poetry and penmanship.
	Educational qualifications also filtered senior administrators in the British Empire, but in Britain the 
standards were slightly different. In most cases an applicant would be hired for a good job if he came from 
an exclusive school, and for a lesser job if he came from a lesser school.
	The system made selection easy because relatively few people went to exclusive schools, and it 
worked because colonial rulers don't have to know or understand much. If actual knowledge is required, 
they have underlings to provide it.
	Some workmen were well educated too. The stonemasons who built the cathedrals of the middle 
ages were brilliant engineers, with an intimate understanding of mathematics and other sciences, but they 
learned their trade by apprenticeship rather than in school.
	Probably in a bid to gain prestige the masons developed arcane rituals. Some of them persist to this 
day in the fraternal order that grew out of the original guild, but they never achieved the power or prestige of 
either the nobility or the church.
	After the industrial/scientific revolution, practical knowledge had more meaning. A lord could tell a 
peasant what crops to plant and a priest could tell him when to plant them, but both had to bow to a 
working mechanic's knowledge of machines.
	That must have hurt the pride of churchmen and aristocrats -- especially since many of the early 
English technicians were religious dissenters who studied technology because they were forbidden to hold a 
post in local government, the civil service or a university.
	But the upper class still held the power and they set the standards. The lower classes might learn 
useful things and understand the world, but the people who owned the world did not feel any need to 
understand it. Many of them flaunted their ignorance of technical matters.
	In later years some students at the English universities of Oxford and Cambridge were allowed to 
study science, but it was understood that they would never put it to practical use.
	As a colony Canada was never meant to develop an independent economy and the Canadian 
school system was set up to educate the sons of colonial administrators and of the local elite. Because 
graduates were not expected to do useful work, they did not need useful skills.
	And the colonial administration did not want Canadians to learn useful skills. Canada was 
supposed to be a market for British manufacturers, not a competitor, and we were expected to learn enough 
technology to process raw materials for shipment to England but not enough to manufacture finished 
goods.
	In the last century we developed enough industry to help England through two world wars. We 
built a few technical schools but, with a steady supply of trained immigrants from Europe, we didn't need 
much technical training and we didn't get much.
	Then came the fall of 1957 and the first Russian Sputnik satellite. It proved that Russians were 
winning the space race, and frantic politicians decided it was because they had better schools. The U.S.A. 
set out to catch up and, as a junior partner in the cold war, Canada followed suit.
	But the education gap was in technical schools, and we opened liberal arts colleges. That's hard to 
justify, but not hard to understand.
	Technical schools need expensive technical equipment, and they are expensive to run because 
anyone qualified to teach in a technical school can take his choice of well-paid jobs outside the school 
system.
	Arts colleges need only classrooms and a library, and teachers are cheap because arts graduates are 
not qualified for much. Teaching is about the best most of them can hope for.
	And to a politician or an administrator one school may look as good as another. We could open 
arts colleges cheaper and faster than technical schools and we did -- nine new universities in Ontario alone, 
within a few years.
	As more and more Canadians received degrees, a degree became a basic requirement for more and 
more jobs. The change came about partly because many big companies hired personnel officers who held 
degrees.
	The new personnel officers were "specialists" who had been trained as personnel officers. Because 
they were specialized as personnel officers they didn't know much about the company they worked for or 
about the jobs they hired people for, so they could not test applicants for relevant skills. What they could do 
was look at paper qualifications and, by considering only candidates who held degrees, they could make 
their own jobs easier.
	It's illegal to discriminate by race or sex, even when these may make a difference on the job. It is 
not illegal to discriminate by degrees, even where the degree makes no difference.
	Like the ancient Chinese who hired administrators on the strength of their handwriting and poetry, 
big-company personnel officers chose employees on the qualifications they understood -- university 
degrees -- whether the degrees were relevant to the job or not.
	By the late 1960's the continued need for technical schools was obvious and the federal and 
provincial governments tried to correct it by opening "community colleges" to teach technology. That might 
have worked but the community colleges lost their chance in 1968, when educators agreed that a 
community college diploma was not equal to a university degree.
	That made the colleges second-rate -- for losers only -- and ever since they have been trying to 
break away from the technological role they were intended to fill. They are now called "Colleges of Applied 
Arts and Technology" and most of them are pushing arts courses.
	Most arts courses are useless but some teachers claim that they "teach you to think". Most 
students, on the other hand, know they can get good marks by showing how one can rationalize the 
teachers' conclusions from the teachers' premises, and that it is not wise to question either the premises or 
the conclusions.
	Even if students do not learn anything useful our tradition guarantees graduates well-paid soft jobs. 
Trudeau's and later governments filled the need by "creating" jobs with grants, and by expanding the federal 
and provincial governments.
	That was a political decision and many of the jobs were an up-scale form of workfare, planned to 
fit the training of the people who need jobs rather than the needs of the economy.
	We all know that we can no longer afford make-work jobs but politicians still promise "job 
creation" and young Canadians keep going to university for educations they hope will launch them into 
management, even though we have very little to manage.
	They keep coming to university because the teachers tell them they need school learning. 
Vocational guidance teachers are supposed to advise kids but most of them have no technical or practical 
skills themselves, and they are not qualified to advise anyone about the real world. Raised to respect 
university degrees they encourage students to plan for a university education, in the fond hope that civil 
service sinecures will again become available some time in the future.
	A couple of years ago I met a young English truck driver whose family owned a fleet of about 40 
big trucks and several warehouses. When he quit school to work as a truck driver his teacher tried to 
convince him to stay.
	The boy was starting a course of on-the-job training that was virtually guaranteed to land him in 
top management of a company worth quite a few million dollars, but all the teacher could see was that he 
was going to drive a truck.
	He could have finished his "education" and then gone to work for the family company, but he 
would not learn anything about trucking or warehousing, and he would waste time. By starting as a truck 
driver he began a course of training that will teach him the business from the ground up, and he is earning 
the respect of the men who now work for his father and grandfather, and who will someday work for him.
	With a pretense of facing reality some university students are switching from general arts to 
commerce and business administration courses -- but what will they administer? If there are no trained 
workers to run factories, there will be no factories to run.
	Now the big deal in education is computers, and we all hear about the lack of computer-trained 
craftsmen. That's a half truth.
	We hear there is a lack of machinists to run numerical-controlled machines, for example, and the 
promoters of "education" tell is we need more computer training. They miss the point that the need is for 
machinists, not for computer programmers.
	Modern machine tools can be run by computers but they are still machine tools and the man who 
will program the computer must know what the tools can do, and how they do it. He must, in other words, 
be capable of running the machine himself.
	If the programmer can't do the job himself he can't program a machine to do it. A man who can 
run the machine can learn to program it. Some industrial robots are programmed by "walking" them 
through the job they are to do. In a "walk through" a man who knows the job guides the robot, and the 
robot memorizes the moves. The man must know the job very well, but he doesn't have to know anything 
about programming.
	Industries are founded and built by people who can make things, not by administrators. Henry 
Ford, Louis Chevrolet, Walter Chrysler and other giants of the automotive history were all machinists and 
mechanics first, and businessmen second. The Wright brothers never finished high school but they learned 
to repair bicycles, and they hand-built the engine that powered their first airplane.
	Vic De Zen, founder of the billion-dollar Royal Plastics group that now spreads around the world 
is a tool and die maker. So is Frank Stronach, founder of Magna International with 24,000 employees and 
sales of more than $4.5 billion a year. Thomas Edison had only three months of schooling.
	None of these men had a classical education and if they had to lead a Greek army through Asia 
they would probably make the same mistakes Alexander the Great did. On the other hand, most modern 
students could learn more by studying the lives of Henry Ford and Walter Chrysler than they would by 
reading about kings and conquerors.
	My parents spent a small fortune to send me to a private boarding school, and I think the money 
was a total waste.
	When I left school I knew nothing much that was useful and I had a lot of dumb ideas that were 
worse than useless. Among the lessons I learned at school I think the most important, and the most 
harmful, was that I learned to procrastinate. The teachers called it "paying attention" but what they taught 
was that anything I considered interesting or important had to be put off, while I fiddled with the dreary 
trivia they liked.
	As it happens I survived anyway but even though I wound up working as a journalist I think I 
would have learned more if I had apprenticed for a trade than I did in school.
	Working as an education writer and dealing with people who study education I learned that the 
most important part of our education is the informal inter-action between peers, and the way we model on 
adults.
	If I had apprenticed for a trade my adult role models would have been men who dealt with the 
world on its own terms. As a student at a private boarding school my adult role models were teachers, some 
of whom had very good paper qualifications but most of whom had chosen a dead-end career as a teacher 
over active participation in the real world.
	We had a couple of teachers who stayed only a couple of years and moved on -- one to become a 
prominent politician -- but because they moved on they never  got much seniority. The most senior teachers 
and the most dominant role models were those who had chosen the dead end for themselves.
	Canada would be better off if we had more apprentices, farmers and craftsmen, and fewer 
"professionals" and students. We can all study fine arts or the humanities after we learn to do something 
useful, but if we don't learn to support ourselves we can't afford to study anything.
	And we could question the wisdom of trying to learn any practical subject in school.
	If we want to study ancient Greek literature we go to school because there is no practical use for a 
knowledge of ancient Greek literature, and scholars who know it best have no way to make a living but to 
teach school.
	But the study of -- for example -- marketing is quite different. Anyone who is good at marketing 
can make more money in private industry than he can as a school-teacher. Because of that, we have to 
assume that people who teach marketing in schools probably do it because they are not good enough to get 
a job in real-life marketing.
	Teachers are hired by administrators who check paper but may not themselves understand the 
subject to be taught, and are not qualified to judge the teacher's qualifications. At work, the teacher will 
teach students who are not qualified to judge his qualifications.
	Even if the teacher was once good enough to make it in a real world he is not in the mainstream of 
the business and I have to assume he is not current.
	It is also possible that a teacher knows marketing well, but that there are no jobs for marketing 
grads so he has to teach school. When we have a surplus of "experts", the people who can't get jobs may 
become teachers and turn out more "experts".
	Five years ago a friend of mine who already had a degree in computer science was "re-trained", at 
government expense, as an "instrument mechanic". There was a need for instrument mechanics but none of 
the 20 students in the class got jobs after graduation, my friend said, because the type of instruments they 
were trained to service were obsolete before the course began. Obviously, one technician who had not been 
able to keep up with the industry found a way to recycle his outmoded skill.
	If I want to learn marketing -- do I want to spend three years studying it under a teacher who may 
not be good enough at marketing to get a job in it himself?
	I would do better to start as a trainee in a good marketing firm or in the marketing department of a 
big company. If the company is willing to hire me I know they think there will be work for marketers after I 
graduate. Because I will see my teachers' success as marketers in the real world I will know how well they 
understand marketing.
	That's the ideal but when 20 people apply for one opening in a marketing firm and nineteen of 
them have degrees in marketing, the one that has no degree is not likely to get the job. That's a pity because 
he could have the best natural talent, and the 19 who have degrees may have learned nothing useful. In fact 
the school may have given them misconceptions and wrong ideas which could make them less useful than 
someone with no training at all.
	A former accountant tells me about the students she used to hire. In most cases she found that 
high school students were brighter, showed more initiative and learned faster than students who were part 
way through courses in accounting.
	Schools also create a new breed of trained-unemployed. In days gone by most newspaper and 
magazines trained their own reporters, on the job. There wasn't much unemployment among journalists in 
those days because newspapers trained only the reporters they could use, and the supply of trained 
reporters generally matched the jobs available.
	Now reporters are trained in schools of journalism. With government and tuition paying the bills 
the schools can and will train all the students they can lure into a course, and between them they graduate 
far more "trained" journalists than newspapers can hire.
	In a perfect world the schools would train only enough students to fill the need, but that's 
obviously impossible. As long as schools offer free choice of courses we have to expect students to sign up 
for the courses they think will lead to the top jobs.
	And even if we could limit the openings in school no-one in Canada knows exactly how many 
jobs and what kind of jobs are open now, let alone what will be open three or four years in the future.
	For years we assumed that Manpower Canada tracked jobs as part of its function as the national 
employment agency, but that was an illusion. In fact Manpower Canada knew only about jobs that were 
hired through its own offices and most Canadian business refused to deal with it. Manpower Canada never 
listed more than about 25% of all the jobs in Canada, and at times the level dropped as low as 10%.
	Governments and government contractors had to hire through Manpower and that may have 
helped create the illusion that there were more jobs for people with academic training than for people with 
practical skills. Like the Chinese administrators who were hired on the basis of poetry and penmanship, 
Canadian civil servants are not chosen for either practical knowledge or useful skills.
	But even if the schools knew what jobs would be open when their students graduated, on-the-job 
training would still have the advantage that it would sort out mistakes faster. When I went to work on a 
newspaper I started as a reporter, and I discovered very quickly what the job was like. As it turned out I 
enjoyed it, and I did well enough that the newspaper I started with -- and later other newspapers -- were 
willing to keep me.
	Most journalism schools have their own make-believe newspapers but they are school papers, not 
the real thing. After three or four years of school journalism students have three or four years' experience as 
students, but none as journalists.
	That's an important difference because the students have invested three years of their lives in the 
training and they still don't know if they will like journalism or if they are suited for it. All they know is that 
they like school, and that they do well in it.
	But they are not trained journalists, and the quality of many modern papers proves it. One 
important difference is that students get through school by believing what they are told. A good journalist 
knows that many of the most "authoritative" sources will try to distort a story for their own ends.
	With cheap education almost any student can train for almost any job and most students like to 
think they will get the jobs they train for. That's a nice dream but the sad fact is that there are not enough 
soft and "interesting" jobs to go round, especially in an economy that is failing for lack of productive 
workers.
	Personally I would like to be president of General Motors. Dozens of schools offer training that 
might qualify me for the job, but unfortunately General Motors already has a president.
	Hundreds of Canadian companies need skilled workers but they're hard to find because the 
schools are all training people to be company presidents. If General Motors and other manufacturers did 
their own training things would be different, because students would face the hard reality of real life much 
earlier.
	In the present world you can spend three years and tens of thousands of dollars training to be 
president of GM before you find out they already have a president -- and by the time you face reality it's 
probably too late to retrain.
	In a world of apprenticeship training you could wait until they are ready to hire a trainee for the 
president's job, or you could start work tomorrow as an apprentice machinist.
	Schoolwork is always make-believe, and students don't have to be serious about either their 
projects or their choices. Most of what they learn in school may have no bearing on real life and they may 
be able to fake their way through exams. For some, at least, the habit of faking things persist. Apprentices 
work and learn in the real world, and the decisions they make in training are real. They have to face reality.
	And in a vital economy training as a machinist could lead to the president's office -- as it did for 
Henry Ford, the Dodge Brothers, Gaston Chevrolet and others. Sergio de Zen, son of Vic de Zen and now 
senior executive vice president and chief operating officer of the billion-dollar Royal Plastics empire, 
qualified as a tool and die maker then took a course at a commercial business school before he started as a 
management trainee.
	Management guru Peter Drucker reports that in the 1930's, 40's and 50's -- when General Motors 
was the world's leading car-maker -- most GM executives started as factory workers. The few who had 
university degrees did not talk about them.
	But in a world of formal schooling, practical training is a dead end. If university graduates control 
management they will make sure no non-graduate rises above his station.
	And we maintain the myth that we have unemployment because we don't have enough education. 
If everybody had a degree, school promoters say, we would not have unemployment.
	Maybe so, but in October of 1997 a survey of universities by {The Economist} newspaper said in 
1995 about 40% of Canadians went on to post secondary education compared with about 35% in the States, 
25% in France and 10% in Germany. From 1985 to 1994 the percentage of Canadians who get post 
secondary education rose from about 30% to nearly 40%, but in Sweden it kept steady at about 18% and in 
Germany it dropped.
	All the other countries on that list have more skilled workers, and more high-tech industry, than 
Canada. Their citizens are not as likely as Canadians to learn the joys of ancient Greek history, or to spend 
years analyzing the work of some obscure poet, but they are much more likely than Canadians to be 
employed in a stable and well-paid job.
	One result of the over-education and under-training of Canadians is the so-called brain drain to the 
United States. Because we have more educated people than jobs for them in Canada, and because  wages 
for educated people here are very low, we now have a flood of expensively-educated Canadians moving to 
jobs in the US. According to a story in the May 11/98 issue of {Time Magazine} Don Devoretz, an 
economist from Simon  Fraser University who has been hired by the C.D. Howe Institute to study the 
problem, over-education creates a "long-term competitive disadvantage" for Canadian industry.
	He says our situation is equivalent to "having one major university in the business of exclusively 
training students for the U.S."
	Meanwhile our universities moan about reduced funding and pretend that our problem is that we 
don't have enough education. The schools tell us that education is a good thing, but the evidence of the real 
world shows us that practical training is better.
	







THE WERTHER EFFECT







	Some of our misconceptions are formed in school but most of us see the world through television, 
movies, newspapers, magazines and books. That's a problem because of the phenomenon some 
psychiatrists call the "Werther Effect"
	Werther was the hero of a novel written by German poet Johann Wolfgang von Goethe more than 
two hundred years ago. The book winds up with a passage in which Werther dresses in boots, a blue coat 
and a yellow vest, sits at his desk with an open book, and shoots himself.
	In the next few years so many young men dressed themselves as Werther and sat at a desk with an 
open book to shoot themselves that the book was banned in several countries.
	In April of 1994 singer Kurt Cobain shot himself. For the rest of the year a surprising number of 
teen-age suicides played Cobain tapes as they killed themselves, and some left notes naming Cobain.
	In May of 1998 one fan killed herself and two others tried to at the funeral of Japanese rock star 
Hideto Matsumoto, a few days after Matsumoto hung himself with a towel.
	Psychiatrists know that one suicide in a mental hospital is liable to be followed by others, and more 
than 20 years ago American sociologist David Phillips found that the same pattern holds in the outside 
world.
	At the time the U.S. suicide rate averaged 1,200 to 1,700 every month, depending on the time of 
year and other factors. Phillips found an average increase of nearly 60 in the month after any suicide 
reported on the front page of either the New York Times or the New York Daily News.
	Some suicides have more impact than others. In 1962 the death of Marilyn Monroe apparently 
triggered nearly 200 suicides in the next month.
	Human beings are herd animals and we like to do the things our leaders do. That's one of the 
reasons advertisers pay small fortunes to sports celebrities, rock stars and other media-created "leaders" to 
"endorse" their products.
	I know that a hockey player is no better judge of hair shampoo than I, and that he may not even 
use the shampoo he recommends. Personally I can't imagine anyone buying shampoo on a hockey player's 
say-so, but I know that hard-headed people who measure their results pay big bucks for the hockey player's 
endorsement.
	I use that shampoo because it just happened to catch my eye at the drug store. It's pretty good.
	We learn by watching others and, sometimes, by imitating them. A baby watches its parents and as 
it develops the ability it imitates their movements, their speech patterns and ultimately their relationships.
	As we grow up we learn from our peers and authority figures, but the peers and the authority 
figures of millions of North Americans are the heroes and heroines of TV soap operas and sitcoms. Millions 
more identify with or take their cues from pop singers or fictional characters in books.
	And most of the models are deliberately abnormal. They have to be, to stand out in a competitive 
marketplace.
	Bing Crosby and Frank Sinatra sang about love and lived relatively normal public lives. Rock 
groups like Dismember, Pungent Stink and Verbal Abuse do not. Sherlock Holmes used his brain to solve 
cases in which something was stolen, and perhaps one person was killed or threatened. Today's fictional 
detectives are more likely to use machine guns to fight off baddies who plan wholesale slaughter.
	And it will get worse, because life imitates art. Movies set standards for real-life bad guys to aspire 
to, and when real life catches up with movie villains the movie villains become even more extreme to 
maintain the shock value of films.
	We all know that the films and the characters are fictional but one of the most common failings of 
memory is what psychologists call "source amnesia", when we remember something but are not quite sure 
where or how we learned it. One common example is the face that's familiar, but you don't know where you 
know it from.
	Psychologist Daniel Schacter of Harvard University says all our memories, whether we remember 
the source or not, are subject to what he calls "leakage". When we recall a scene or an event we may include 
details from a different scene or event.
	And we may remember some events that never happened at all. In her book {The Myth of 
Repressed Memory} psychologist Elizabeth Loftus proves that most of us can confuse fiction with fact.
	One who did was French psychologist Jean Piaget, a world leader in developmental psychology. 
As quoted by Loftus, Piaget recalls a clear memory of the time his nurse fought off a man who tried to 
kidnap him. Piaget was five years old at the time.
	When he was 15 the nurse admitted that the story had been a fabrication, made up to impress 
Piaget's parents. In fact Piaget remembered only the nurse telling his parents about the supposed incident, 
and his parents relating it as an anecdote, but for years he thought he remembered a real event.
	In several public speeches former U.S. president Ronald Reagan cited an act of heroism in which a 
U.S. Navy pilot won the Congressional Medal of Honor. The incident he referred to was part of a movie, but 
Reagan remembered it as real life.
	Loftus also cites the results of a an incident in February 24, 1984, in which a sniper shot at children 
in a school playground in Los Angeles. Later, when psychologists from UCLA interviewed the children, 
several of them had clear "memories" of things they could not possibly have seen.
	Some of the most detailed first-hand recollections of the event were among children who had not 
been at school that day. The children really did remember, but the memories were false.
	Loftus once challenged her students at the University of Washington to implant false memories in 
friends and relatives. About one-quarter of the implants were successful.
	Student Jim Coan convinced his 14-year old brother Chris that when Chris was five years old he 
had been lost in a shopping mall in Tacoma. It never happened, but with little effort Jim was able to give 
Chris a memory that Chris could not identify as false.
	Once the source of a memory is forgotten we find it hard to distinguish between our memory of an 
actual event and that of an event we have only heard about. We can even accept fictional events as real.
	Because of that millions of North Americans live in a world in which the warped beliefs, attitudes 
and behavior of the characters in fiction represent a slice of real life.
	Millions think human love is the kind of warped sadomasochistic circus portrayed by romance 
novels and millions more -- including some working policemen -- think "real" policemen behave like the 
psycho-neurotics of movies like {Lethal Weapon, Die Hard} and even, God help us, the {Police Academy} 
series.
	An un-armed man was shot by police in Toronto last year because the policemen who thought he 
was a drug dealer were play-acting roles as movie cops when they tried to arrest him.
	The man was unarmed and he made no attempt to escape or resist but during the arrest an 
undercover policeman chose to break his car window by hitting it with a pistol.
	Other policemen who were pumped up for a gunfight heard the glass break, thought the suspect 
was resisting, and riddled him with bullets.
	There was no need to break the car window but policemen in movies and TV break things, and the 
Toronto cop thought he should too. The other policemen were ready for a shootout because they have all 
seen it happen, many times, in movies and on TV.
	But the problem of entertainment goes beyond sex and violence. All fiction is suspect.
	Some school-teachers tell us that fiction teaches us about the real world. That's wrong. A fiction 
writer may pretend to model real life but in fact he makes his characters fit a pre-ordained plot. Even within 
the needs of the plot, writers have to make their characters and the world behave in ways that will please an 
audience already shaped by misconceptions and sated by excess.
	They must also cater to the preconceptions of their audience and the stereotypes of the day. In the 
American south in the 1920's or South Africa in the 1960's a story or play that portrayed even one Negro as 
noble or intelligent would not have been accepted by the general public.
	Today's fiction reflects different stereotypes but they are still stereotypes. That's a problem because 
modern TV, movies and even books portray the world with such clarity and simplicity that most fiction is 
more vivid than real life.
	Because of that many of us pay more attention to the antics of fictional characters on movies and 
TV screens than we do to real people in the real world, and the lessons we learn from fiction may carry 
more weight than the lessons we learn from real people.
	Thanks to the wonders of modern media, many of us have a distorted view of the world. If we 
grow up with movies and TV, we may also have trouble communicating with others.
	Psychologists tell us that about 70% of social communication is through body language, and most 
of the rest is through tone of voice. Words carry less than 10% of the message.
	We learn to read non-verbal cues from our peers but when we get a significant portion of our 
human inter-action from television, we learn wrong.
	When Joe Virile looks into Jane Fertile's eyes and tells her he loves her, he's lying. In fact he may 
hate her, and in any case he is following a script.
	But to millions of budding Jane Fertile's his love is real, and they watch every nuance of body 
language and facial expression. Joe is faking but he is setting the standard by which real-life lovers will be 
judged, and if they don't fake it they may not be believed.
	If Joe Viri