Canada's CPP must be state owned in kind based
Canada Pension Plan must develop in kind base and as key body of state-owned economy
--- Canada’s farmland must be used to make profit for all Canadians rather than for individual.
已有 2875 次阅读2015-10-2 13:16 |个人分类:Frank's Writings
Frank June 3 – Aug 16, 2015, in Waterloo, Ontario, Canada Updated in Sep. 04, 2016, Oct. 11, 2018, April 1, 2，2025
http://www.kwcg.ca/bbs/home.php?mod=space&uid=61910&do=blog&quickforward=1&id=3715
People hate social inequality and unfair with arguing that the Rich is too rich and the Poor is too poor. But, there few people are aware that:
The biggest social inequality is that rich individual with poor government.
The biggest social unfair is that a society is in favor of individual rich while government poor.
The saddest tragedy is that government of a nation is too poor to provide basic life-support for their national.
Please look at the tragedy, in 2012, Greeks were brunt of economic crisis; in April 4, a Greek pensioner shot and killed himself outside parliament in Athens saying he refused to scrounge for food in rubbish.
Please imagine that how desperate a person must be to reach this point. Every time when I read this article to the sadness, I can't help, but have to be tearful for the tragedy from the improper social governance.
Since far ancient, the Greeks have been the most hardworking and intelligent people in Europe. In modern times, they have also created a wealthy life. Why do retired elderly people who have worked hard all their lives commit suicide in despair? Obviously, it is that the greedy capitalism made the tragedy.
In the 19th century, when Karl Marx initiated the communist movement, capitalist countries also carried out nationalization, which almost eliminated capitalism.
The way out for a livable society is to return socialism state-owned economy.
The convincing example for the significant of the state-owned economy is Dubai city; the United Arab Emirates. It is known for luxury shopping, ultramodern architecture and a lively nightlife scene. However, the tax rate is very low, so where does the money for these super luxury buildings come from?
It comes from the profit of the state-owned enterprises. In Dubai, the enterprises are state-owned, so that government does not make money through taxes, but try to help state-owned enterprises make more profits.
The economic miracle of Dubai proved that the failure of the state-owned economy is not in the direction, but in the improper management.
In Dubai, the workers who work at the state-owned enterprises are mainly from immigrants, the locals work as supervisors, the immigrants’ workers work diligently under the threat enforcement of deportation.
Also it is a little-known the fact that Dubai is a tax haven that is far surpassing Sweden, the most well-known tax haven. Dubai welcomes the inflow of all money and never asks about the source.
Actually that income from state-owned enterprises and tax haven are only a little part of total incomes, there are much smart way make money. Attract wealthy people and foreign investment to register, attract tourism, etc., a lot. Money is a good thing; and Dubai welcomes with open arms.
In Dubai, all the income generated by all of these commercial activities goes into the national treasury. In other countries, the government gets a little bit by business tax from the commercial activities.
In addition, only in Dubai, the coercion of religion on believers’ behaviors has played a positive role in social governance, to have created great social stability and fewer crimes.
Only when the government is rational without ideological plays; all unfavorable factors become favorable ones, with the world's most unfavorable natural resource environment; it actually developed into an economic pearl on world with a stable society and luxurious affluent lives for people.
Now, please think about the result that will be an unlivable place, if Dubai is governed like the plunder rich-ed democracies in the West, where takes proud of playing with the over humanized smart social system.
The politics in the democracies of the west, exactly say it is capitalism democracy; which is that it takes proud of individualistic values & human rights; takes proud of multiparty mutually ideological attacking paralyzes the government; and takes proud of the enterprises in private owned for individual gains.
That is not enough, the individualistic values and human rights acting as tools for political correctness coerces government legally advocating union culture, regarding strikes for more by doing less, unearned gains is in line with social justice & human rights. Otherwise, it is slave labor, violating social justice & human rights, by which corrupted the quality of workers and labor productivity, made manufacturing companies go bankrupt, and losing the ability to produce life necessaries. Now, without Made in China, people all over the world cannot live well.
Terribly, there is a smarter childish way by playing sovereign bond ensured destroys the economy.
During the Hundred Years' War between England and France, Edward III of England, who had no power and no ability to issue currency, borrowed money from bankers, which was called sovereign bonds.
Then the over smart manner happened, the governments of countries that had the ability to issue currency still foolishly turned the issued currency into sovereign bonds. Then, they have to repay the principal and pay the interest. With such accumulation, the tax revenue was not enough to pay the interest.
To make matters worse, the government has been constantly reducing or exempting taxes for enterprises in order to attract manufacturing, further reducing tax revenue, which suffocated the economy. All countries in the world were ruined by such a smart plays. The beacon of democracy is in such a death throes.
Dec. 29, 2024，in article The creation for humans live a life as human, I indicate that the quality of human is too complex to govern. Computer program AlphaGo beats human Go player revealed that human intelligence acts as robot; the acquired knowledge acts as software driver; killing software kills people, and service software serves people. Without related knowledge in brain, people cannot reason related issue. The brain defect & ideology brainwash led too many people inhuman quality.
This is the reason that some people addicted wrong as right and promote inhuman for human in confidently believe doing right business. Human society is composed of people; the governance is also in people govern people. So that when considers social governance; we must consider the quality of people.
2014, in Management is the Art of Playing Human Nature, I indicate that: “Human behaviors determined by dual natures: The cultural nature of the acquired altruistic quality, and natural (animal) nature of the inborn selfish instinct. The Management is to finish purposeful tasks with culture nature driven by meeting animal nature with payment under enforcement of regulation. Therefore, the Management is the Art of playing human natures.”
“The failure of the Socialist-Bloc is due to it over relied on cultural nature by suppressing animal nature, while the failure of the Capitalist-Bloc is due to it over relied on animal nature; China is good at the best use of both.”
The success of China lies in the continuation of the rational practice of history; which is that rational people and thoughts can always play a leading role and correct the course of history at the critical juncture.
In the west, it also has a lot of rational people and outstanding thoughts; but they can never play a role. The role of their outstanding thoughts is just for people to chew, stomach bloat, burp, fart, and moan without ill.
This was the reason that the west ruined the life of their own people and world people; and has been pushing human civilization towards the vast graveyard of the suicided civilizations in the Milky Way Galaxy.
Canada must authorize a nonpartisan Super Leadership of professional experts to govern Canada Pension Plan based state-owned economy with the managing-way of those successful world class companies, by which to avoid the harm of populist-coerced democracy.
--- Frank Aug. 16, 2015, updated April 1, 2，2025, in Waterloo, On, Ca.
Contents
1.. Greek Pensioner shoots himself warns Canadian
2.. Canada Pension Plan - CPP is facing threats
2.1.. Inflation and over developed financial economy is looting our hard earnings
2.1.1.. One people created material wealth to be plundered by ten people
2.1.2.. CPP will be inevitably negatively impacted by TPP
2.1.3.. No one's been standing on guard for Canada for a long time
2.2.. The base of Canada pension plan is collapsing with firms decline
2.2.1.. The funds data and investment portfolio of Canada Pension Plan in 2014
2.2.2.. The CPP-Sponsors are disappearing with the Firms’ Declining
2.2.3.. Mexico is quickly and permanently replacing Canada in manufacturing
2.3.. Greece's economic woes warns Canada
2.3.1.. It is disaster that Capitalism Riches individual by Pooring government
2.3.2.. Canada has same Populism Democracy as that of destroying Greece
2.4.. The plight of Netherlands pension management warns Canada
2.4.1.. Admirable Dutch pension system has went into difficulty
2.4.2.. Dutch people debates how to well maintain their pension system
2.5.. The Warns from Swiss National Bank Lost $51,8 Billion In Stocks
3.. The plight of Canadian retirement care
3.1.. Canadian Seniors living in poverty and bankrupt is on the rise
3.2.. It is better prepared for death than for life when facing retirement
4.. Canada Pension Plan must develop as in-kind base
4.1.. Farmland is biggest in-kind resource for CPP in Canada
4.1.1..Historical development trend is in favor of CPP
4.2.. Greedy speculators are killing agriculture of Canada
4.2.1.. Speculators are soaring up prices of farmland of Canada
4.2.2.. Speculators are destroying the foundation of Canadians survival
5.. The significance of CPP control farmland
5.1..Avoid farmland is used for speculation
5.1.1..The Speculation will degenerate the quality of people
5.2. In favor of public projects by avoiding high land prices
5.2.1.. The lesson from Japan’s Bubble Economy 1980s
5.2.1.1..It was that government of Japan punctured economic bubble
5.2.1.2..Speculation on real estate killed real economy of Japan
5.2.1.3..It deviated from basic national policy that coined after WWII
5.2.1.4..Mis-reports on Japan's bubble economy mislead policy making
5.3..Avoiding the profit foreign outflow as that of oil resources
5.4..Conducive to large-scale intensive agricultural production
5.5..CPP has launched its agriculture investment program in 2012
5.6..The profit can only be enjoyed by Canadians
6..The barriers for CPP running farmland
6.1.. The doubt of successful operation of state-owned economy
6.2.. Misundstanding the public-benefit nature of CPP
6.3.. Government must legislate for CPP taking over all available farmland
7.. CPP must develop as strategic pillar in develop Canadian economy
7.1..The unique economic and politic potential of CPP
7.2..CPP must develop as the basis of Super Leadership
7.3..To deal with issues that democratic palyers dare not touch
8..The management of state-owned businesses of CPP
8.1..Management is the Art of Playing Human Nature
8.2..The inspiration of 3M Canada saves Energy 30% by ISO50001
8.3..Amoeba succeeds by costing on forehead of individual
9.. Broad space for diversified development
10..The botanicals plant and deep process
10.1..The prices of the botanicals are soaring up
10.2..The governments and drug makers are turning eyes on Chinese herbal medicine
10.3..It is that Philosophy caused Western medicine into dead end
10.4..The philosophy of WM is developing toward that of TCM
10.5..Traditional Chinese medicine is a promising therapeutic approach
1. Some email exchanges with former minister of Agriculture and Railway of Saskatchewan
Months ago, around June, 2015, I once have a phone chat with an entrepreneur Zhu Xiaoming who is living in Vancouver from China. She has been running businesses in both of China and Canada.
As a farm owner in Canada, she was invited to discuss farmland ownership issue by the government of Saskatchewan. She was deeply disappointed by the decision that Saskatchewan stops pension funds from buying farmland.
She said that CPP is the best buyer for farmland with enough ability to run well intensive large scale agriculture, which is the only way that can well develop the agro-industry of Canada.
I told her that I will write an article to help her realizing the idea.
I thought that I would finish the article in days, but, unexpectedly it cost me with months.
In viewing that Japan’s Pension Fund Loses $52 Billion as Stocks Slump in April-June 2016, Canada pension Plan must retarget investment towards real economy of Canada to be developed in kind base from risky gambling luck in the market of stock, bonds or foreign projects, which, in fact, were in financing the economy of other countries.
In contrust that Norway's Government Pension Fund in Oil Makes Every Norwegian a Millionaire lessons us that Canada must avoid the mistake that allows oil wealth to be ripped by so called Free Market, Canada Pension Plan – CPP must take over all available wealth, especially, the farmland to develop in kind base and as key body of state-owned economy to make profit for all Canadians at the juncture of baby boomer generation farmers retiring.
Thereby stop the speculation that is taking farmland as gambling chips by the greedy speculators. Such speculation has been pushing farmland prices up unreasonable high, it will ruin the agro-industry by destroying competitiveness of agro-products and the future of Canadians.
One day the oil will run out, but the farmland will continue to benefit Canadians generation to generation.
To invest in risk controllable and return predictable real economy, Canada Pension Plan will be controllable and predictable in income generating and value hedging. At the same time, the government will get huge amount of financial resource for developing real economy, rather than just simply considering budget deficit.
People hate social inequality and unfair with arguing that the Rich is too rich and the Poor is too poor. But, that is not biggest social inequality and unfair at all, the tragedy that Greek Pensioner shoots himself to refuse to search for food in garbage has redefined them again.
Note, today, when I revised the article to here, I cannot help but tear again.--- Frank Li, April 1, 2025
Greece, the one of cradles for human civilization, once produced pioneering ideas and valuable practices of social governance in earliest.
In ancient time, around the fifth century BC, Greek develops Athenian democracy and is often described as the first known democracy in the world.
In modern time, from 1950 to 1973, Greek made a economic miracle with sustained economic growth by an average of 7.7%, second in the world only to Japan.
However, in recent years, as industriously created modern rich country, Greece actually declined as a beggar of the Europe.
May 01, 2010, EU, IMF agree $147 billion bailout for Greece.
Jun. 17, 2011, Greece’s 2010 bailout falls flat, puts nation back on brink of default a year later.
Mar. 10, 2012, Shock in Athens: People Find Food in Garbage Bins.
Apr. 04, 2012, Greek retiree refuses to eat from the garbage, publicly commits suicide.
The sadder was that, when the indebted government of Greece hardly begging foreign money in; there was large number of flowing private money out; the facts show that in Greece was not no-money at all, but, being put into wrong place.
The shocking tragedy lessons us with what is biggest social inequality, biggest unfair and saddest tragedy:
The biggest social inequality is that rich individual with poor government.
The biggest social unfair is that a society is in favor of individual rich while government poor.
The saddest tragedy is that government of a country is too poor to provide basic life-support for their citizen.
The way out for avoiding above sadness with a livable society is to maximize the share of social and natural resources to be public owned and operated, by which, it is not only tax, but profit also to be fully used for social governing and pension funding, so that we can get enough revenue for avoiding the Tragedy of Greek happening in Canada. For this sacred purpose, the public-owned economy is the best way.
Follow were the photos reprinted from my article How to save Canada's manufacturing from disappearing.
Greek citizens dumpster dive for food in 2015.
Greek citizens look for used clothes in 2015.
The failure of the public-owned economy in both of socialist countries and capitalist countries is not in the model of the ownership, but in the wrongful governance that was over-relied on human culture nature (acquired altruistic culture qualities) while excessively repressed on human animal nature (inborn selfish greedy instincts), especially, uncontrollable systemic corruption.
However, it was not that all public-owned economy failed, the Statoil is state owned in playing the role of main pillar of revenue of the Government of Norway. The institutional support avoided corruption; it runs in integrity and transparency.
Statoil is a Norwegian multinational oil and gas company headquartered in Stavanger, Norway, with about 23,000 employees. As of 2013, the Government of Norway is the largest shareholder in Statoil with 67% of the shares, while the rest is public stock. The ownership interest is managed by the Norwegian Ministry of Petroleum and Energy.
Statoil is a fully integrated petroleum company with operations in thirty-six countries, including Canada. By revenue, Statoil is ranked by Forbes Magazine (2013) as the world's eleventh largest oil and Gas Company, and by profit in the world regardless of industry, it is twenty-sixth largest company.
An article in Mandarin said that: Norwegian is aware that the Norwegian oil and gas belongs to the state, everyone has a share. Each year, Statoil announces operation details with gained profit, Norwegian can calculate out own share from the profit.
Norwegian is clear that is government in operating on behalf of them.
Statoil is Norway's largest taxpayers.
One thing that must be specifically mention, which was in 1990, the government of Norway established Government Pension Fund Global to save income from oil for future generations. The Ministry of Finance made the first capital transfer to the Fund in 1996. Since then, the government’s net cash flow from petroleum activities has been transferred to the Fund each year.
On the website of Norway’s Government Pension Fund Global said that “one day the oil will run out, but the return on the fund will continue to benefit the Norwegian population.” “Oil revenues make it possible for Norway to maintain its welfare system despite the number of pensioners in relation to workers has increased more than estimated.”
Now, the far-sighted rational decision has borne sweet fruit for the people of Norway.
Jan 15, 2014, OilPrice.com - Norway's Oil Fund Makes Every Norwegian a Kroner Millionaire in oil saving landmark.
The rational practice of Norwegian also caused a reflection of Canada's social elite.
In Aug. 23, 2014, Dr. John C.K. Daly，the chief analyst for Oilprice.com who published article on the Toronto Star - Norway has a nest egg. Should we? Is Norway's nest egg a lesson for Canada?
In Nov. 01, 2014, Daniel Tencer, the Business editor of The Huffington Post Canada, who wrote article - Norway's Oil Fund Heads For $1 Trillion; So Where Is Alberta's Pot Of Gold?
Now, we may understand that why the Human Development Index in Norway has been on top of world consecutively for many years.
In comparison with the smart way of the government of Norway, the oil resource rich Canada has been going on a disappointed way.
The huge profits of oil resources have been out-flowing into the wallets of foreign investors, but, as original owner, Canadians are enjoying from environmental pollution, and oil prices dragged economy.
With the rich natural resources, the Governments of Canada in all levels are all lack of financial resources for construction of social infrastructure and public services, especially for health care, the long waits for treatment are becoming a life threat.
It is the sadness of wrongful social governance.
Now, in order to avoid the replay of the sadness in oil resource, that CPP must take over all available farmland to develop as high-quality foods supplier from farming to processing to ensure the steady growth of our pension funds forever, as well to create revenue for government.
The profit from oil resource is limited, from farmland is unlimited.
It is not only the tax revenue but the profit must be used for all Canadians.
Canada must authorize a non-partisan Super Leadership with the right for independently developing management policies geographically and economically to govern Canada Pension Plan - CPP based public economic entities to make CPP in kind base with self-hematopoietic function, with the managing-way of those successful world class companies, which is to motivate human acquired culture qualities by meeting human inborn animal instincts, by which to avoid the harm of populist-kidnapped democracy.
The non-partisan Super Leadership is to turn the responsibilities of enterprise management from individual entrepreneurs into as the responsibility of the government with the power of the State Apparatus to manage the wealth of all Canadians.
Facing with increasingly difficult economic situation, please forget that how noble you are as a government official, please abandon self-proclaimed unrealistic values, and please only remember that you are a Mom or Dad, a Grandma or Grandpa with a rational mind to create a better life for our beloved children.
The federal government must act to improve competitiveness by entirely reversing poor productivity with the power of State Apparatus to strengthen enterprise management.
Greedy speculators pushing up the prices of house and land will not only ruin the normal life of Canadians, but also will completely destroy the survival basis of the real economy.
Canada's economy cannot be built on speculation, but rather, it must be based on material wealth creation.
Canada must build into a fairyland of material wealth creators, rather than a paradise of greedy unearned speculators.
French economist and the founders of French classical political economy Pierre Boisguillebert (1646 - 1714) who once said that agriculture and animal husbandry is two nipples of a nation, the agricultural prosperity is the foundation of prosperity of all other sectors.
In today, the agriculture and animal husbandry are still the two nipples of Canada.
There is no any reason for any person to let the wealth of farmland as gambling chip to be free speculated and to give up as public owned.
In this regard, some policymakers must have a sober mind to avoid playing as a historical sinner.
--- Frank Aug. 16, 2015, Updated in Oct. 11, 2018 in Waterloo, Ontario, Canada
Here, I need to make a special statement.
In nature, that whether public owned economy of Socialism or private owned economy of Capitalism is merely the forms of organization of socialized production, they can be independent of political model. We should not irrationally discard any one due to the ideological prejudice, instead, to carefully extract and use their favorable part.
The Invisible hand of Adam Smith has promoted the prosperity of material wealth by free playing the greed and selfishness of human inborn instincts in private owned economy. However, that out of control of the human greed drives more and more people keen on unearned speculation with contempt on material wealth creation is in destroying human society also.
This article is trying to make some improvement on the shortage of the Invisible Hand of Adam Smith, in view of that speculators are pushing up the prices in both housing and farmland, it is not only destroying the life of Canadians, but also, it is destroying the real economy of Canada, due to that is destroying the foundation for real economy – businesses operation.
In nature, the most of speculation on natural resources or other properties are plundering the wealth of the locals, which produce a large negative effect, a small positive effect in the development of real economy.
For this concern, in this topic, I spent more time to introduce the lessons of Japan’s Bubble Economy 1980s, with the hope that the government of Canada can take rational action to stop the speculation.
The tragedy that Greek Pensioner shoots himself to refuse to search for food in garbage made warning for social governance: it is a disaster that a national economy is in favor of few individual Rich while government Poor.
The government must be able to provide hope and basic life-support for their national.
Canada must redesign economic model, so that can create adequate funding for Canada Pension Plan – CPP and adequate revenue for government.
For years, the CPP has been facing big threats, which may lead Canadian to suffer the sufferings as that of Greeks.
The first threat is that foundation of CPP is collapsing.
In 2014, there 96% of funds for CPP is from the defined benefit pension plan - the employer-sponsored retirement plan. However, the employers are disappearing with business closure and moving out of Canada.
The second threat is the improper funds hedging.
The CPP funds hedging is mainly relied on investment that is mainly by speculation in gambling luck, even if we are lucky enough to pile up money in figures, but, no one can sure keep it in value.
The value of the money is from trust, and the trust is from real support of the material wealth that human needs for survival. If the money lost the real support, it would be valueless. For this regard, that German Hyperinflation Crisis was the shocking lesson.
In order to repay its huge war debts after WWI, German took a quick way of printing money in large amount, which caused the Hyperinflation Crisis and “people even burned Papiermark notes in their stoves because it was then more economical than using them to buy firewood.”
For avoiding such sadness, CPP must develop as in kind base with self-revenue-generating capabilities through operating industries.
In current Canada, the biggest in-kind resource is the farmland, and over 50% of them will transfer of ownership in coming years with the baby boomer owners’ retiring. Now, the foreign and domestic speculators are struggling in the ownership of farmland to have pushed land prices soaring up.
Farmland is the basis of agro-related industry, and it is a major part of the economy of Canada. Therefore, it related to the immediate and long-term survival fate of all Canadians.
The holy survival fate should not allow to be free played as a gambling chip by those greedy, mindless unearned speculators.
We must learn the lesson and avoid the absurdness as that of huge profits of oil resources have been out-flowing into the wallets of foreign investors, but, as original owner, Canadians are enjoying from environmental pollution, and oil prices dragged economy.
各级政府没钱
The management team of CPP has been struggling for keep and increment of our pension funds, to ensure our decent retirement life. It should be the best candidate for acquiring the farmland, but, now it is facing objection.
The government of Canada must immediately legislate for CPP taking over all available farmland, so that CPP can further develop into integrated supplier in high quality foods and natural supplements, thus to make revenue for local governments and profit for our pension funds.
More significantly, as a government agency that is seeking benefit for all Canadians, CPP is inborn with unique advantage that can play a key role for well developing economy of Canada with more supports and less objections socially.
For long term development concern, Canada should take CPP as main body to enlarge the share of state-owned economy, so that can make enough revenue for improving the infrastructure of social services by avoiding social wealth to be grasped by some greedy individual.
The biggest resistance for CPP running state-owned economy may come from the doubt of successful operation. Due to the historical experience have shown that, whether socialist or capitalist, both cannot run the state-owned economy effectively and it was doomed to fail.
As my view that state-owned economy is not doomed to fail at all, but it depends on that how to manage, especially how to deal with the special production means – human beings that are with dual nature of culture and animal for nay individual.
The culture nature is those acquired qualities and the animal nature is those inborn instincts. Management is the Art of Playing Human Nature to finish purposeful tasks with the culture nature driven by meeting the animal nature under the enforcement of regulations.
The practice of successful private companies is mainly good at motivating employees’ culture nature by meeting the animal nature with work-performance linked incentives and defined accountability with the enforcement of strict regulations.
I believed that there is no big difference in the management between state-owned business and private-owned one. The management methods of successful private companies can also run well state-owned companies.
CPP take over farmland, also will be in favor of the development of public projects by avoiding high land prices, and also CPP may invest some projects with the concern of long term interest.
Avoiding the weakness of democratic government, CPP may establish a federal government authorized independent super leadership with unique power to make some rational policies.
1.. Greek Pensioner shoots himself warns Canadian
As one of the cradles of human civilization, the Rich Greece, their people are suffering difficult life caused by Sovereign Debt Crisis.
Under the crisis, the most tragic is the elderly who have lost their ability to make livings and have to depending on the pensions.
There are reports that Greek People Find Food in Garbage Bins and Greek Pensioner shoots himself to refuse to search for food in garbage.
The tragedy of Greeks provides a warning for Canadians.
Canada and Greece have similar political and economic model, the Greek crisis may also occur in Canada. As Canadian, we must consider that how to avoid such tragedy happening, especially that how to guarantee a decent life of our retirement.
Unfortunately, the sadness of Greeks has been developing in Canada.
It said that retirement - the years following the end of work is the second spring of life, since that we do not have to busy for making a living, and with plenty of free time for enjoying life.
However, in Canada, the second spring of life seems only a beautiful fantasy. “‘They are better prepared for death than for life in the years following the end of work.’”
The comment was not a joking nonsense, due to it was derived from the great many realities by one financial planner of Alberta couple who are well insight into the sad life situation of retired Canadians from their work experiences.
The comment may be for specific group those who faced financial difficulties rather than for all Canadians, but it is still shocking enough.
In current Canada, I think, there are few people would believe that is true.
Talk to here, people may easily think of Canada Pension Plan, it holds the responsibility of pension funds and the investment for profit. Canadian citizen over 18 years of age, the part of working income is stored here for the life of retirement when our aged cannot make livings any more.
In Canada, the pension system has been running well, with a universal health care system, so that there few people worry about the retirement life. However, the situation is not well as that of people expected.
The sadness is that the concern is not just limited in retirement life of aged Canadian, but also, the lives of the people who are in the prime age are also in decline, due to that for years, in Canada, the businesses are closing, the jobs ate losing, the Canadian dollar is depreciating, the prices of daily necessities are rising.....
That what Greek people are suffering in Greece may disrupt the peaceful mood of most of Canadians.
2.. Canada Pension Plan - CPP is facing threats
2.1.. Inflation and over developed financial economy is looting our hard earnings
The inflation, financial crises, and over money supply under monetary easing policy are constantly plundering our hard earned money to make it lost value.
The potential threat is that over developed financial economy more and more deviated from the promotion of material wealth production, that ever-changing forms of financial derivatives for money-raking are crazily looting real economy in border-less, which squeezing the profit of the real economy too narrow the margins to survive.
2.1.1.. One people created material wealth to be plundered by ten people
For the overdeveloped financial economy, the professor of History of Harvard University, Niall Ferguson who has made a well introduction.
In the start of the documentary The Ascent of Money: A Financial History of The World that written and presented by the professor introduces with that: "In our time, we've witnessed the zenith of global finance. 2006，the world total economic output was worth around $47 trillion, that's 47 followed by 12 zeroes, the total value of stock and bond markets was roughly $110 trillion, more than twice the size. And the amount outstanding of the strange new financial life form known as derivatives was $473 trillion, 10 times larger."
It was clear that was financial derivatives to have triggered Financial Crisis 2008.
We can intuitively understand that, in 2006 world, each people created material wealth to be plundered by more than 10 people.
The root for such an irrational is from the irrational of politics. Enjoying privilege-driven democracy has been leading to irrational people and even metal defectives dominating our world, the governance of human society is increasingly in favor of the extreme exerting of mental defectives, and the free play of unscrupulous plunder, in lesser conducive to the efforts of rational people, and the creation of material wealth.
2.1.2.. CPP will be negatively impacted by TPP
April 17 2015, I wrote article Trans-Pacific Partnership free trade negotiation is doomed to Fail, in which I cited some reports regarding the progress of TPP negotiation. I excerpt some as follow.
April 01, 2015 article New TPP leak reveals how we're trading our sovereignty for cheap tariffs: “WikiLeaks founder Julian Assange issued a dire warning about the agreement: 'The TPP has developed in secret an unaccountable supranational court for multinationals to sue states. This system is a challenge to parliamentary and judicial sovereignty.”
Feb 25, 2014 article The Plan Behind the TransPacific Partnership to Destroy National Sovereignty: "The historical record is clear: what are misleadingly called "free trade agreements" were never really about trade. Their goal is to render independent nation states null and void, and hand power over to unaccountable, transnational corporatist authorities."
The article provides the excerpts of the Congressional Record from 1967 hearing - The Future of U.S. Foreign Trade Policy: "The widespread development of the multinational corporation is one of our major accomplishments in the years since the war, though its meaning and importance have not been generally understood. For the first time in history man has at his command an instrument that enables him to employ resource flexibility to meet the needs of peoples all over the world", for "fulfill its full potential, the multinational corporation must be able to operate with little regard for national boundaries - or, in other words, for restrictions imposed by individual national governments."
“Now, Americans further improved the idea in free trade deal TPP to make multinationals easily operation and thus will certainly easily control the economy of a country, and thus, may easily cause social unrest, even to overthrow the governments of stable governed countries.”
As a member country of TPP, the economy of Canada will inevitably be the victim of U.S. multinationals. As an indirect result, Canada Pension Plan – CPP will be negatively impacted.
2.1.3.. No one's been standing on guard for Canada for a long time
Jul 2, 2015, a comment followed article Justin Trudeau says Canada needs a manufacturing indicated the key point of free trade: “So called free trade agreements are more about the free flow of capital than the free flow of goods. Canada need to re-establish a strong manufacturing base before all we are is a seller of raw materials at third world prices.”
July 16, 2015, a comment that follows the article Canadian Economy Heading For Recession: Banks shocked me very much.
William Wallace Sam 14 days ago
“Are you kidding? Every Canadian business has been sold off to foreign multinational corporations. Our money is being created and controlled by private bankers. Can't you hear, as Ross Perot would say, that ‘giant sucking sound’"?
"That's the sound of Canada's wealth and your children's future being sucked up by the people who have rigged the system to make sure every possible dollar is plucked out of your hands and placed into theirs."
"No one's been standing on guard for Canada for a long, long time."
2.2.. The base of Canada pension plan is collapsing with the firms declining
2.2.1.. The funds data and investment portfolio of Canada Pension Plan in 2014
Following data is from the 2014 Report on the Funding of Defined Benefit Pension Plans in Ontario - 11th Annual Report.
Follow information was Googled from the Internet; it may be not accurate, only for a general reference.
Canada pension plan 2014:
Total Assets in USD billion was 1,526, and the % GDP in USD billion was 85.1%.
Defined benefit pension plan 96%
Defined contribution pension plan 4%
Equity is 41%, Bonds 35%; other 22%; and Cash 2%.
In general, there 96% of our pension is from the defined benefit pension plan - the employer-sponsored retirement plan. It shows that business is the base of Canada Pension Plan.
If the businesses are closed, the employers who are funding our pension will also disappear, the base of Canada Pension Plan will be is collapsed, and this is just the reality that is in happening.
2.2.2… The CPP-Sponsors are disappearing with the Firms’ Declining
Feb 13, 2013, Canada’s business development bank published survey report that Canada's Mid-Sized Firms in Decline: Canada’s mid-sized companies have declined by 17% – 9,370 to 7,814 – from 2006 to 2010, the manufacturing sector as the hardest hit. More than half (from 2,807 to 1,381) of its mid-sized firms vanished between 2001 and 2010.
Feb 16, 2015, CBC News Economics Reporter Peter Armstrong who revealed disappointing reality of the manufacturing of Canada by article Why southwestern Ontario's manufacturing rebound is missing.
Southwestern Ontario's past is well known. The region was the industrial heartland of Canada. It was here they made everything from cars to ketchup. For a long time, this manufacturing model worked. It served people in the region remarkably well.
With the price of oil dramatically reduced and the Canadian dollar heading lower, the manufacturing should grow up as usual, but, this time, for the most part, that growth hasn't emerged. Even as the dollar hit 78 cents, Canada's manufacturing industry continued to struggle. The usual manufacturing model has been showing cracks for years now.
Jan. 13, 2015, the article Canada Pension Funding Declined in 2014 report that: The collective funding ratio of Canada's defined-benefit pension plans declined by 2.7 percentage points in 2014.
2.2.3.. Mexico is quickly and permanently replacing Canada in manufacturing
Feb 10, 2015, the article Canada falls to Mexico in share of North American auto output reported that: Canada’s share of North American production of cars and light trucks has fallen to 14.1 per cent in 2014 from more than 17 per cent in 2009. Mexico, with 18.9 per cent of production, has overtaken Canada, formerly a powerhouse in the industry. The falling investment by the automakers in Canada means it is losing its share of production to both the U.S. and Mexico.
Canadian auto investment almost stagnant but, automakers have made big investments in Mexico, where wages are in the $8 an hour range, compared with close to $40 in Canada.
Mexico is an attractive place for production and has been since NAFTA began.
The outlook for Canadian auto production is “clouded,” despite a falling dollar which will make production cheaper.
Canada's traditional manufacturing is permanently losing.
This trend can only be more and more intense, because the undeveloped countries will continue to improve their policies and related facilities for more conducive to the development of foreign manufacturers. And also, after working from foreign manufacturers, their nationals will be trained as skilled industrial army from unskilled peasants, and their local manufacturers will quickly grow up to form new competitive forces.
In overall, the Canadian economy is mainly composed of manufacturing industry and service industry, and manufacturing is the basis of the service sector.
So that is not only the Canada Pension Plan, even the economy of Canada is facing the key point of Life or Death.
2.3.. Greece's economic woes warns Canada
It said that Greece is a developed country with high standards of living and high Human Development Index, the diligent and wise Greeks once created economic miracle in the period of 1950 to 1973, the economy grew by an average of 7.7%, second in the world only to Japan.
No one would be expected that such a wealthy country, Greece actually took place the sovereign debt crisis.
2.3.1.. It is disaster that Capitalism Riches individual by Pooring government
In view of reported number of the Greek Capital flight in recent years under the pressure of the sovereign debt crisis, in Greece, it is not short in money at all; it is enough to help Greeks to go through the difficult time. However, the money belongs to some individual, rather than the government.
The sad fact shows that, no matter how wealthy of some nationals are, it does not help the government of the nation; the government will still be in poor with no dignity, the vast majority of the nationals will live in hardship.
Only the government of the nation is in rich, their nationals can enjoy a dignified life.
The biggest problem of Capitalism is that people inborn instinct driven free market economy promotes some individual Rich while the Government is too Poor to fulfill some functions as Government should be.
2.3.2.. Canada has same Populism Democracy as that of destroying Greece
June 28, 2015, morning, I read a report that Greece debt crisis: Tsipras announces bailout referendum, it said that Greece's prime minister has called a referendum on 5 July for voters to decide whether to accept a bailout deal offered by international creditors.
The report attached a photo of Greece's Prime Minister Alexi Tsipras, his haggard and worried eyes made me a sense of sadness.
The Government is the reliance and the hope of their citizen. However, that almost bankrupted government of Greece has no ability to fulfill its holy obligations to meet the reliance and hope of their citizen.
Why, once a cradle of human civilization, the great Greek, a rich country, has descended into national beggar in begging for help.
It said that the populist politics destroyed Greece.
Speaking to here, I think of my long question regarding democracy, it is in general, rather than for Greece.
As earlier as 507 B.C., the Athenian leader Cleisthenes introduced a political system of democracy, today it has been much admired world widely.
However, there are rare people question that those who eagerly consume too much time and effort to have obtained the favor of voters, whether have time and interest in depth study of difficult social and economic problems. The Government composed of such people, whether is able to rationally formulate right policies in favor of national Destiny.
The trouble is that there few voters have the ability to consider the long-term development of the country, that pursuit of long-term national benefits, in most cases, is at the expense of short-term interests of some people.
The vast majority of the people can only share with the fruits, but, lack of vision for sharing to explore that how to achieve it.
As a pride of democracy that people who are eligibility to vote all can run campaign for a political position to rule a country without basic prerequisites in ensuring the quality of the candidates. Such an irrational rule let those who have the high quality for governing society to stay at arm's length.
Please check the background of the elected councilors of the government in all levels world widely, there are few of them in economy and industry, which is essential for making a rational decision for well developing economy, but more of them are keen in charity, which is better fitting the wishes of the populist voters.
Once such people gain the power of State Apparatus, the all thought of them will be that how to keep and enjoy the political privileges. They would endlessly spend taxpayers' money to get voters favor, at the expense of the long-term interests of the country.
They will never have a sense for how to well develop economy and never care the decline of the economy.
The biggest problem of Democracy is that irrational commitment-driven elected populist government has lost the function as the State Apparatus in favor of enforcing the society toward rational long-term development path for the sake of vast majority, due to in this process; it would inevitably hurt the interest of a minority, which may cause the loss of voters.
Those were the root reasons that Greece went into today.
Despite that Greece's plight is caused due to the sovereign debt crisis that seem mainly in some European countries, however, the factors that caused the crisis are also existing in Canada, only in more or less, due to the similar inborn defects in political and economic structures.
The tragedy what is taking place in Greece is a mirror for Canadians. We must try to mitigate or eliminate the bad influence of those adverse factors.
2.4.. The plight of Netherlands pension management warns Canada
For a long time, the pension system of the Netherlands is an envy world widely.
Feb. 10, 2014, a Mandarin article Dutch experience, occupational pension said that, Dutch pension system is known as one of the best in the world. The system, built on the basis of the pre-payment of occupational pensions with a long good tradition, which combines pension commitments, high expectations, solid financial support, and efficient operations. However, such a system, recently, there have been some problems.
2.4.1.. Admirable Dutch pension system has went into difficulty
Nov. 2009, the report Dutch Pension Funds In Underfunding: Solving Generational Dilemmas said that: the pension funding ratio fell in a dramatic way from a high on average of 150% mid-2007 to less than 90% in the first quarter of 2009. This fall was the combined effect of the worldwide fall in stock prices and the fall in nominal interest rates driving up the (market) value of nominal liabilities. In particular in the fall of 2008, the economic conditions deteriorated.
June 23, 2014, the article Average funding ratio of Dutch pension funds hits highest reported that: The average funding ratio of Dutch pension funds increased to 112 per cent in May 2014, the highest level since April 2011.
Feb. 12, 2015, Dutch Pension Funding Ratios Drop By 5 Percent in January reported that: The funding ratios of Dutch pension funds have fallen on average by 5 percentage points in January on the back of low interest rates.
The Mandarin article Dutch experience, occupational pension also said that:
Since 2009, the Dutch pension financing rate has been hovering around 100% in the critical level. The concerns about pension cuts cause uneasiness of pensioners and lead that the young and the elderly launched political debate about who will pay for the losses on pension wealth, more fundamentally, the advantages of the collective pension system, and other issues.
The decline of the Pension Funding Rate was mainly due to the decline of the stock prices. Also, there is an equally important factor; it is the liabilities on the balance sheet. Because the European Central Bank lowered interest rates during the European debt crisis , the pension liabilities increased substantially. The average interest rate will drop by two percentage points every 15 to 20 years; it is very easy to explain why that pension liabilities increased 30-40%, resulting in a similar decline in financing rates magnitude.
2.4.2.. Dutch people debates how to well maintain their pension system
In this case, the policy-makers and pension fund management is both painfully aware that, when the financial market volatility, to maintain a fixed pension commitments is unsustainable. Potential concern is the aging population, so the pension funds are more and more difficult to fulfill the pension commitments.
With the growing elderly population, the proportion of the pension debt burden in total wages will also rise. Therefore, that increased or decreased the contribution rates will not compensate for the changes in the thorny status of the pension fund.
From 2000 to 2030, the ratio of total salaries and pension assets is expected to increase from 200% to 400%. This means a substantial increase in leverage mismatch risk.
In addition, people gradually realized that takes the contribution rate as a risk diversification tool will increase the overall cyclical economic fluctuations. In the Netherlands, the social partners (employers' organizations and trade unions) agreed that, from now on, take a fixed contribution rate. Obviously, the more risk of the pension fund should transfer to pensioners, thereby to reduce the shared risk of young people.
Dutch has established a floating pension expectation to replace the fixed pension commitment.
The Netherlands has taken many initiatives to improve the operation of pension funds.
The first is that in 2025 the retirement age has increased from 65to 67, and to be linked to changes in the retirement age and life expectancy. This primarily affects the first pillar of the public pension, but it also helps the second pillar by curbing the contribution rate of occupational pension.
The second is that the Dutch government introduced a plan to alleviate that low interest rates affect the value of liabilities, which, considering the interest rate in smoothing operation and in fact to extend the recovery period. The initiatives have contributed to the stable of pension funding rate in the short term. In the long run, the Government considers expanding more fundamental debate on pension system. The practice that guarantees a fixed pension is not sustainable; the Netherlands has to find a solution.
The third is that Dutch pension system has a tradition of collective share of pension. The feature in mandatory pension is sure to create a system that shares the total of risks by the generations in the reasonable cost of operation. It also avoids the disaster that may cause by lacking of personal savings and investment mistakes.
Pensions is not only to provide the necessary source of life for the elderly, but also, at the same time, the pension system can share macroeconomic risk, when people debate policies, are tend to underestimate the second meaning – the pension system should and must be able to help disperse macroeconomic and social risks.
The best risk-sharing mechanisms of international and intergenerational will have a huge welfare gains; it reduces the costs of the risks, thus to contribute to the promotion of economic growth.
2.5.. The Warns from Swiss National Bank Lost $51.8 billion In Stocks
July 31, 2015, the article The Swiss National Bank Is Long $94 Billion In Stocks, Reports Record Loss Equal To 7% Of Swiss GDP reported that: Earlier today, Swiss National BanK (SNB) released its results for the second quarter (and first half) of 2015 with the loss of amounting to €50.1 billion ($51.8 billion) of which €47.2 billion on currency positions - a whopping 7% of Swiss GDP.
The SNB’s financial result depends largely on developments in the gold, foreign exchange and capital markets.
The hedging investment of Canadian pension plan may possibly be similar as that of Swiss National Bank's, which means with similar potential risks.
3.. The plight of Canadian retirement care
3.1.. Canadian Seniors living in poverty and bankrupt is on the rise
Seniors going bankrupt in soaring numbers
Seniors piling on debt faster than other groups
Seniors living in poverty on the rise in Canada, OECD says
Seniors in Ontario make up 30% of bankruptcies: report
3.2.. It is better prepared for death than for life when facing retirement
May 24, 2014, in the report The unexpected costs of caring for your elderly parents Melissa Leong who provides us sad information that: “ ‘They are better prepared for death than for life in the years following the end of work.’”
Above said comment is from one financial planner of Alberta couple who are well insight into the sad situation of Canadian retirement care from their work experiences.
I excerpt some sad facts as follow.
People think the government will pay for home care and nursing homes which they will, but that help is really limited,” says Peter Silin, geriatric care manager at Diamond Geriatrics in Vancouver.
To fill in the gaps left by a strained public system, Canadians today are finding themselves spending their own savings to care for their elderly loved ones.
In 2007, most eldercare (75%) was provided by those between 45 and 64 years of age, according to Statistics Canada; dubbed the “sandwich generation,” they are caught between having to supplement care for their parents and giving money to their kids to attend university — while trying to save for themselves.
Families are not prepared for just how much things will cost — a good wheelchair really does cost $4,000 to $5,000. A new walker can cost $400 to $500.
The equipment costs to make a home comfortable and safe can exceed $10,000, Mr. Silin says. He cites: electric hospital beds ($3,000 to $5,000), scooters ($2,400 to $5,000), walkers ($100 to $450), bath lift ($1,200), ramps ($200 to $8,000) and medication dispensing machines with monitoring ($800). For short-term equipment needs, call the Red Cross in your area to see if they have a loan program or look online for second-hand finds, Mr. Silin suggests.
Private retirement homes, which often offer a continuum of care from independent living with prepared meals and housekeeping to assisted living for seniors who need more help with bathing and changing, can cost between $1,500 to $5,000 a month.
Hiring a personal care worker through an agency or privately can cost $20 to $30 per hour. Some agencies will offer cheaper rates with more hours. Registered nurses cost $40 to $69 an hour. A full-time, live-in caregiver can cost $1,900 to $3,500 a month, plus room and board.
Long-term care homes vary in cost depending on the provider whether public, private, not-for-profit or religious-based organizations. Provinces will share the cost with you at the facilities they support. In Ontario, basic accommodations are $1,708 a month, semi-private rooms are $2,012 and private rooms are $2,362.
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Here is an article that is worth to read, Is your pension safe? - MoneySense.
4.. Canada Pension Plan must develop as in-kind base
The value of the money is from trust, and the trust is from real support of the material wealth that human needs for survival. If the money lost the real support, it would be valueless.
The German Hyperinflation Crisis after WWI was brutal proof, at that time. German people "even burned Papiermark notes in their stoves because it was then more economical than using them to buy firewood."
Historical experiences have made it clear, if the value hedging for our pension is mainly relied on so called investment that is mainly in speculation of gambling luck, it is not reliable. Though, it can pile up money in figures, but, it is to put our future in jeopardy due to that no one can sure keep it in value.
We can imagine that, if the pension of Greeks is based on in-kind base or supported by self-hematopoietic entities, then, at least, that the part of people who are enjoying the pension would have basic life guarantee, they do not have to look for food in garbage, moreover, there will be no one suicide.
In the world, that what has happened cannot be undone, and also there is no medicine for healing regret.
The tragedies of the Greeks suffering today might be the realities of our tomorrow. We must make our pension fund as in-kind base, as sustained creation of material wealth.
Canadian must take every effort to avoid the sadness of Greek in suffering to happen in Canada.
4.1.. Farmland is biggest in-kind resource for CPP in Canada
Compared with other resources, the vast arable land is one of valuable resources that can serve Canadians unlimitedly. It is the best and the biggest in-kind resource for CPP in Canada; we must take over to be used for supporting our pension plan.
4.1.1..Historical development trend is in favor of CPP
Historically, in general, for the progress of social advancement, the subjective factors of human efforts play an auxiliary role, while the objective factors of social development trends play the leading role. In this process, the success of human efforts depends on that how to timely seize and properly use the natural force of the development trend.
In Canada, faced with current economic difficulties, there is no doubt, either politicians or the general public, rational people would eagerly hope to change the status quo.
Now, a unique favorable social development trend comes, which may help us to make a change with lesser social unrest and lesser social resistance.
It is that the generation of post-war baby boomer is at their ages for retiring in Canada, this is an unique opportunity for the improvement of social governance, in particular, the ownership of social resources restructuring from benefit some individual to benefit majority of Canadians.
There report that average age of farmers is 60 years old across Canada and 75% of retiring farmers don't have successors, so that there about 50% of our land assets will be transferred in the next five years. This provides an opportunity for land ownership easily reintegrating as state-owned.
We must take the rare opportunity to reverse the situation of our nature resources to be privately owned by foreigners, or domestic private organizations or individuals to avoid the sadness as that of the oil resources.
Canada's natural resources of arable land must be reverted to the hand of state, or we may say that all land resources must be owned by all Canadians, so that we can avoid the repeat of the money - huge profit from oil - the main natural resources that originally belongs to all Canadians to be out-flowing into the private wallet of foreign investors.
We must make sure that the profit of land-related businesses can be shared by all Canadians and can be used to improve the living related public utilities. Such as, to be used for Canada Pension Plan to ensure that every Canadian has an ideal retirement to be able to enjoy a worry-free old age, to be used for improving public health care system, especially to shorten the long waiting times for medical treatment, as well as other social infrastructure.
4.2.. Greedy speculators are killing agriculture of Canada
4.2.1.. Greedy speculators are soaring up prices of farmland of Canada
Nov 11, 2013, the article Soaring farmland prices a crisis in the making said that: If you knew there was a very safe Canadian investment that skyrocketed by 20 per cent last year, you'd probably say that was a good thing. But when the thing that's going up in value is farmland, it's a crisis in the making.
The president of Toronto-based Bonnefield, Tom Eisenhaur, says farmland has been one of the most lucrative and secure investments especially when markets are volatile, and "a better hedge against inflation than gold."
The latest survey by Farm Credit Canada shows the price of farmland in Quebec rose by a staggering 19.4 per cent last year. Nationally, Canadian farmland from coast to coast has risen by an average of 12 per cent a year since 2008. That's more than five times the rate of inflation.
The average age of farmers is 60 years old across Canada, about 50 per cent of our land assets will be transferred in the next five years. And of the retiring farmers, 75 per cent of them don't have successors. It's a transition we've never seen before in agriculture. And it’s one we are wholly and completely unprepared for.
FarmStart has two incubator farms in southern Ontario to bring new farmers into the business, but at current prices, Young says there is no way those starting out could earn enough from their farms to make a living and pay their mortgage.
It is a problem that Rejean Girard, who farms southwest of Montreal, understands. He bought his small plot of land near Saint-Cesaire 20 years ago. But Girard says the return he gets from the sheep he raises would never pay for that land today. By that measure, he says, the land is overpriced by about three-quarters.
May 22, 2015, the article Critics concerned over corporate, foreign buyers of Sask. Farmland reported that foreign investors are already expressing greater interest in Saskatchewan farmland than the rule allows.
4.2.2.. Speculators are destroying the foundation of Canadians survival
In June 14, 2014, article The speculators are destroying the foundation of Canadians survival, I once said with that:
“Currently, for the world economic downturn, people have ignored an important reason that is the over developed financial economy over looting the real economy by almost all-pervasive, to have greatly reduced the profit margins of the real economy, thereby badly harmed real economy and made people's lives increasingly difficult. This is the main reason for various social conflicts."
“As same as that of issuing money, foreign investments can also trigger inflation. The greedy-driven international hot money is passing inflation world widely.”
“If we allow foreign speculators to buy our properties and natural resources, it will not only make us suffer inflation, but, more deadly is that make us lose the foundation for survival.”
“The domestic profit-driven speculators speculate on properties and natural resources are playing similar role of destroying the foundation of Canadians survival.”
“The foundation for survival is not just the material wealth that meets survival, but the appropriate environment for the development of real economy.”
“For example, high housing prices in Vancouver are squeezing real economy - business and labor out. Greedy speculators are destroying the foundation of the survival of Vancouver.”
“A country's economy can not rely on the support of speculation.”
Now the farmland of Canada is becoming an object for speculating.
Greedy speculators are killing agriculture of Canada.
CPP take over farmland has many advantages.
5.. The significance of CPP control farmland
5.1.. Avoid farmland is used for speculation
The tragedy that Greek Pensioner shoots himself to refuse to search for food in garbage has proven that it is a disaster that a national economy is in favor of Rich little individual by Poor government.
The tragedy of Greek suffering has proven that biggest social unfair is that rich individual by poor government.
We have enough reason to question the human nature of those who are appealing fairness for acquiring farmland for private interest.
The process of CPP taking over farmland should not be as that of so called fair bidding; but, Government must legislate to ban any buyer besides CPP because the free bidding will push up the prices further.
5.1.1.. Speculation will degenerate the quality of people
When talking about the main cause of Japan’s declining from the economic powerhouse? Most people would blame the Plaza Accord that forced appreciation of the Yen to cause Japanese products losing competitiveness and the Bubble Economy.
For such argument, in the Aug. 24, 2014 article Over-heated real estate market is ruining Canadian economy from Japan mirroring Canada, I once indicate that, the Bubble Economy has degenerated the quality of Japanese.
Why the all of the fiscal and economic stimulus measures has been used, but have gained nothing to revive the economy of Japan?
The reason, as my view, all of those stimulus measures are from the macro elements of the economy, with ignoring the most basic micro elements - the quality of the people, the work-ethic of the labor, the efficiency of the production and the capacity of the innovation.
The Bubble Economy has rewritten the code of the DNA of the quality of Japanese people, from enthusiastic in hard working into enamoring in greedy speculating, thus, further affected the social moral and national’s spiritual, thereby cause the decay of whole society of Japan.
Unearned speculation can completely distort the life-philosophy of people, to lure people addicting in opportunistic, addicting in pride of the luxury life. The worse, of those unearned Riches despise hard work for social wealth creation, and despise those who are hard working for social wealth creation.
The easy gaining excessive profit from speculative activities have fueled Japanese speculative mentality with unearned ideological. It entices people keen to make living by speculating instead of hard working and less concerning on the interest of own company and most of Japanese people have lost the entrepreneurial spirit, hard-working spirit, and the rational sense of social responsibility and enterprises have deteriorated as lack of enterprising spirit and innovation dynamic, such negative impact is more terrible, even fatal.
Nowadays, the decline of the economy of Japan, especially the decline of those enviable famous enterprises that once swept the world with their creative products, is not due to the improper policies that have crashed down the over-heated real estate market, and is not due to the wrongful business strategies, but, it is due to the degradation of the quality the most of Japanese people.
In essence, the national is the decisive factor for a nation’s economic development; a nation's economic decline is the decline of the quality of its national.
Whether it is a business or a country, if its member is full of concerning for the self interest, without or lack of concerning for the public interest, it will doom to be extinction.
So, I firmly believed that the impact of the Bubble Economy on the economy is just a curable social flu, but, the impact on the national’s spiritual is incurable social cancer.
The fact of the Japanese companies loses competitiveness and falling into declining are the vivid proof. The shortsightedness and lack of entrepreneurial spirit of the management team, the lack of work enthusiasm of the employees is the main reason, and also it caused Japan's economy can not recover as expected.
The improper economic policies will provide a favorable environment for those speculators to push the real economy into rot.
The soaring rise in the cost of living pushed by real estate speculators is squeezing the real economy out of Vancouver.
The economic plight in Vancouver shows that Canada is facing a vital historical moment for economic strategy adjusting.
In dealing with the oil resources and real estate market, Canada has been doing irrationally, in the farmland resources, we must wise up to avoid silly again.
5.2.. In favor of real economy and public projects by avoiding high land prices
CPP controlling farmland also will be in favor of the development of public projects by avoiding high land prices, and also CPP may invest some project with long term interest concern.
Such as, the infrastructure in transportation, though it can not get direct profit in short period, but, CPP can get return from the development of economy in long future.
5.2.1.. The lesson from Japan’s Bubble Economy 1980s.
5.2.1.1..It was that government of Japan punctured economic bubble
Aug. 24, 2014, in the article Over-heated real estate is ruining Canadian economy from Japan mirroring Canada, I have indicated that it was that Japan-Gov punctured the Bubble Economy 1980s purposefully.
When the economic booming and most Japanese were madly speculation in real estate market and with easily made unearned money to enjoy the prosperous with the life of luxury, in March 27, 1990, the Bank of Japan issued Notice of Controlling the Total Financing Amount of Real Estate. Later the Notice was known as the ignition point of the collapse of Japan's bubble economy.
Then, the house prices and stock prices were both fell down. Further more, in the August 1990; the Bank of Japan increased short-term lending rate to 6%.
But, those were not enough; in 1992, the Finance Ministry of Japan has introduced a land value tax to further push down the overheated real estate market. For the High-end retailing businesses, because, the shop is located in the city's most prosperous area, every year, the 0.3% land tax even valued 20% of commodity profits. The land tax resulted in a strong inhibition on the prices of the real estate.
Thus, the bubble of Real Estate was quickly deflating down in Japan. The golden age of Japanese was disappearing.
The restraining force of the land value tax on the real estate market was significant.
Why Japanese Government issued the policy of limiting the Financing Amount of Real Estate? Even. faced that the property market and the stock market has both started to crash down, in 1992, the Ministry of Finance still introduced the land value tax, to further crash down the market of real estate?
Many people deemed that, it was that, after 1990, a series of improper restricting policies on the real estate market have pushed the Japanese economy into the quagmire.
Well, whether the government of Japan was wrong?
5.2.1.2.. Speculation on real estate killed real economy of Japan
Why the Japanese Gov. did puncture the economic bubble
In fact, the cause of the economic recession was not that of the policies issued after 1990, but, the policies for fully opening the real estate market in 1985 with the hope of maintaining the economy in high-speed development with the development of the real estate.
As earlier as the period of real estate market hot developing 1985 – 1989, Japanese government has realized the severity of the mistake of wrongly opening real estate market. Those policies after 1990 were for the emergent corrections rationally.
In 1985, the Plaza Accord further deepened the long worry of Japanese people for the depreciation of the yen; they found that the real estate was the best way to hedge against inflation, with the fueling of the incentive policies of the government, the large sums of money invested in the real estate market.
In the eyes of the vast majority of Japanese people; the land has become the most worthy assets for maintaining the value of their hard-earnings. Since then, the nature of the real estate began to change, from the need of living to be developed as the tools of the speculators for profit.
Faced with such a large market demand, major Japanese banks launched fierce competing on loans for land. Typically, banks’ mortgage financing for land was about 70% of the evaluated value of the land, but, the loan of the Hokkaido Takushoku Bank even reached 120% of the land value.
With the rapid rise of the prices of the real estate, throughout of the Japan, the funds of investing in the real estate were more and more, the developing projects on real estate were more and more, and bigger and bigger.
In 1988, many years’ high profit of the real estate industry even attracted the leaders of the Japanese real economy also to invest in the real estate, such as, the Toyota, Fuji Heavy Industries, Hitachi motors, etc..
On the other hand, because of over-heated real estate speculation pushing high the price of the land, the second Tomei Expressway that was under construction difficult to continue, the operating conditions of the Japan Highway Public Corporation was worsening. Also, there various local public investment and construction were encountered difficulties.
5.2.1.3.. It deviated from the basic national policy that coined after WWII
The wild development of the real estate has seriously impacted on the normal development of the economy. Thus, the debating about how to develop of Japan was more and more intensive. In general review, these arguments were primarily around three aspects:
1. Whether the promotion of the development of real estate industry was in line with the basic national policy?
2. Whether the development of real estate industry was able to maintain the prosperity of the Japanese economy?
3. If the answer to both questions were "NO", then, what kind of economic model was suitable for Japan?
From the appearance, the collapse of Japan's bubble economy was caused by the series of suppression policies of the government of Japan; however, the essence of those policies was the clear answer of the government for the hot debating:
1. The promotion of the development of real estate industry did not comply with the basic national policy.
2. The development of the real estate industry could not sustain the prosperity of the Japanese economy?.
After World War II, Japan coined two basic national policies that were the basic farmland system and the revitalizing strategy by the development of the industry and technology.
So called the basic farmland system was that Japan must maintain the amount of Japan's basic farmland to meet Japan's need for food self-sufficient. The over-heated development of the real estate was direct threatened to the amount of the basic farmland tenure.
The revitalizing strategy by the development of the industry and technology was that, after World War II, faced scorched motherland, the Japanese government made a long argument on what develop-direction should be taken?. Once, considered to emulate the Netherlands as the trade hub between Asia, Europe and America, but, after the comparison between Japan and the Netherlands, either the number of the population and the external environment was far difference, so, the idea of the trade center was completely negated finally, and then, decided to take the development of the industry and technology as the developing policy.
Japan is a country that resources heavily depend on the imports. For obtaining needed resources, Japan must exchange by the goods that other country needed.
If, there more and more funds were invested in the real estate, the entire industrial structure and employment structure would tilt to the real estate industry, then, the manufacturing industries for earnings from export would decline continuously, and thus the needed resources that exchanged from other countries would be less and less.
More worse was that, in the 10 years, 20 years later, with the rise of the developing countries, Japan, a country with no advantage of the price in products, even, the advantage in technology would be lost, too. Since there no goods can be used for exchanging resources with other countries. So, essentially, the competition of Japanese people on real estate was just as that of the poor villagers who were fighting for the adobe thatched cottages with no electricity, no heating, no gas and no oil, which was mindlessly struggling toward more poor.
Although, the businesses and the people are both inseparable from the land, however, how much the value of the land should account for the corporate profits? And how much should account for the personal income? In this world, for such question, there was no clear standard.
For the Japan, however, due to lack of natural resources, must use high-tech products to exchange, which was a firm common consensus in Japanese society.
It was obvious that drove economy by developing real estate, was already departed from the unchangeable policy of revitalizing strategy by the development of the industrial and technology.
Luckily, the housing price of Japan has been led by Government since the establishment of Japan Housing Corporation (JHC) in 1955 until 1985. So, there were enough social bases for Japanese government piercing the economic bubble.
5.2.1.4.. Mis-reports on Japan's bubble economy mislead the policy making
The Lost Decade that describes the downturn of Japan's economy after the bubble burst, in fact, it is to return the normal that should have been.
The rise of Japan's postwar economy, it was the contribution of many objective factors, but not entirely the result of their own efforts. Such as, during the Korean War, a large number of arms purchases of the United States from Japan's manufacturing has largely promoted Japan's economy.
The unrealistic reports about Japan's bubble economy1980s have misled the policy making of most countries, to let the free development of the real estate market, it is not only worsening the lives of local people, but also cause an increased operating costs of the real economy, resulting in the closure or relocation of the companies.
It is a big mistake that for getting insight of employment and tax revenue from the real estate market, to lose the foundation for long-term economic development.
5.3.. Avoiding the profit foreign outflow as that of oil resources
The huge profits of oil resources have been out-flowing into the wallets of foreign investors, but, as original owner, Canadians are enjoying from environmental pollution, and oil prices dragged economy.
With the rich natural resources, the Governments of Canada in all levels are all lack of financial resources for construction of social infrastructure and public services, especially for health care, the long waiting times for treatment are becoming a life threatening.
It is the sadness of wrongful social governance.
CPP must take over the farmland and to develop as high-quality foods supplier from farming to processing to ensure the steady growth of our pension forever, as well to create revenue for government.
It is not only the tax revenue but the profit must be used for all Canadians.
5.4.. Conducive to large-scale intensive agricultural production
Extensive farming - Wikipedia indicates that extensive farming has a number of advantages:
1. Less labour per unit areas is required to farm large areas, especially since expensive alterations to land (like terracing) are completely absent.
2. Mechanisation can be used more effectively over large, flat areas.
3. Greater efficiency of labour means generally lower product prices.
4. Animal welfare is generally improved because animals are not kept in stifling conditions.
5. Lower requirements of inputs such as fertilizers.
6. If animals are grazed on pastures native to the locality, there is less likely to be problems with exotic species.
7. Local environment and soil are not damaged by overuse of chemicals.
8. The use of machinery and scientific methods of farming produce a large quantity of crops.
As my view, in current Canada, besides foreign and domestic group investors for speculation, there are few farmers can buy farmland in large amount for intensive agricultural production.
CPP is the best buyer.
5.5.. CPP has launched its agriculture investment program in 2012
Canada Pension Plan Investment Board (CPPIB) launched its agriculture investment program in 2012 with an initial focus on farmland opportunities in Canada, the U.S., Australia, New Zealand and Brazil
Farmland is appealing to CPPIB because it has historically provided stable returns and will be a new source of diversification for the CPP Fund. CPPIB believes that rising populations and incomes in some developing economies will increase demand for agricultural products
CPPIB studied the Saskatchewan market carefully and ensured that it was abiding by all of the rules before entering. It notified the province’s Farm Land Security Board of its intention to buy Assiniboia and no objections were raised.
The Saskatchewan Farm Security Act was amended in 2002 to allow Canadians to own farmland in Saskatchewan. This includes both permanent residents and citizens of Canada, as well as entities that are 100 per cent Canadian owned. The Act prohibits foreigners and publicly-traded entities (because those entities could be acquired or controlled by non-resident persons) from owning more than 10 acres of land
CPPIB announced on December 12, 2013 that it had signed an agreement to acquire the assets of Assiniboia Farmland LP (Assiniboia), a fund that owned and managed a portfolio of farmland in Saskatchewan. CPPIB’s initial equity investment was about $120-million
Assiniboia was created in 2005 and built a diversified portfolio of approximately 115,000 acres of farmland. The portfolio is comprised of pockets of land across the province, and the individual farms are rented out to local farmers who farm the land. The original Assiniboia management team continues to manage the portfolio from Regina
CPPIB’s ownership of Assiniboia is providing financial opportunities that support the family farm structure in what has become an extremely capital intensive business. It allows young farmers who don’t have much capital to get into the business; farmers to expand their operations and maximize economies of scale without taking on too much debt; provides opportunities for farming families to monetize part or all of their investment while continuing to operate the farmland if they wish; and creates buyout opportunities for farmers who may have difficulty finding a buyer for their land when they wish to retire
CPPIB is a responsible long-term investor that will provide patient capital to facilitate the improvement of the farmland (through drainage projects, on-farm irrigation infrastructure, etc.), boost production output, and enhance the livelihoods of those working in the sector..
CPPIB intends to own the farmland for generations. It might sell the odd tract here or there to optimize the portfolio, but has every intention of being a long-term investor
According to a recent poll commissioned by CPPIB, a majority of Saskatchewan residents believe pension plans should be allowed to purchase Saskatchewan farmland: Among types of potential buyers, pension plans receive over two-third support (69%), second to Canadian individuals (74%).
The survey was conducted by Innovative Research Group Inc. Between March 27th and 29th, 2015, with a representative sample of 500 Saskatchewan residents 18 years or older. A random probability sample of this size has an estimated margin of sampling error of +/- 4.4 percentage points, 19 times out of 20.
CPPIB Statement About the Saskatchewan Government's Farmland Decision.
5.6..The profit can only be enjoyed by Canadians
Here, I would like to specially point out that with plenty of availability in both of funds and technologies, CPP possesses broader potential for public profit by diversified development as the base of value-added projects of huge potential in market and profit with the nature of state owned, but it is definitely different with that of state owned in a broad sense, due to it can only enjoyed by all Canadians for retirement, but it can not touched by politicians with other purpose, especially to be used as promise spending for populist-driving election.
6.. The barriers for CPP running farmland
6.1.. The doubt of successful operation of state-owned economy
The biggest resistance for CPP developing as the main body in state-owned economy may come from the doubt of successful operation. Due to the historical experience have shown that, whether socialist or capitalist, both cannot run the state-owned economy effectively and it was doomed to fail.
The socialist practice under state-owned economy, which involved the countries nearly half of the world, has failed.
The facts showed that state-owned economy could not work in the Socialism.
Britain, as a veteran of the capitalism, the home county of Adam Smith and Keynes has suffered the processes from original private ownership to be nationalized, and then from state-owned ownership to be privatized again.
In this regard, there many other countries, includes the United States, were also experienced similar processes as that of Britain.
The facts showed that state-owned economy could not work in the Capitalism.
However, the fact that there were so many countries selected to practice the state-owned economy also shows it’s rational.
As my view, the failure of the state-owned economy is not in the direction, but in the management.
State-owned economy is not doomed to fail at all, but it depends on that how to manage, especially how to deal with the special production means – human beings.
In The Commanding Heights: The Battle for the World Economy, the writer Daniel Yergin and Joseph Stanislaw indicated the reason of the failure of former Socialist countries. It was that low productivity caused by egalitarian wage system, which was lack of incentives due to that payment was same regardless contributing more or less.
Feb, 9, 2014, I once wrote an article that Management is the Art of Playing Human Nature, in which I indicate that human behaviors are determined by dual natures - the culture nature of those acquired qualities and the animal nature of those inborn instincts. The management is to finish purposeful tasks with human culture nature driven by meeting human animal nature under the enforcement of regulations.
The failure of state-owned economy in former Socialist countries was due to that wrongful management in over relied on human culture nature of conscientious and self-esteem by ignoring and suppressing human instinct animal nature of greedy and selfness.
The low productivity and the oil prices dragged economy indicate that private owned economy is not a panacea for Canada. 3M Canada saves Energy 30% by ISO50001 shows that the cure-all for improving productivity is defined accountability, that is, frankly say, to put the tags of specific responsibility on the forehead of specific individual to accurate reward or punishment to force every one to do qualified work.
The practice of successful private companies is mainly good at motivating employees’ culture nature by meeting the greedy nature with work-performance linked incentives and defined accountability with the enforcement of strict regulations.
I believed that there is no big difference in the management between state-owned business and private-owned one. The management methods of successful private companies can also be used to run well state-owned companies.
6.2.. Misunderstanding the public-benefit nature of CPP
Apr. 13, 2015, the article Saskatchewan stops pension funds from buying farmland as prices rise reported that: “Saskatchewan is clamping down on the sale of the province’s farmland to Canadian pension funds and other large institutional investors, restricting deep-pocketed groups at a time when land prices are climbing.”
“Agriculture Minister Lyle Stewart said that: ‘Our goal is not to limit investment, but to ensure the long-term success of Saskatchewan’s agriculture industry and economy.’”
The concern of the policy makers of Saskatchewan is rational. But, the they seems did not see through the nature of the issue, CPP is definitely different with all of other investors in nature, which is that CPP is seeking for the interest of all Canadians and that is including the policy maker themselves, their families, and their next generations.
All Canadians must make up a sense that CPP is seeking benefit and struggling to make a better future for all of us.
CPP should take over all of the farmland as soon as possible.
The control of Saskatchewan for farmland ownership is rational. All other provinces should also set similar restrictions.
6.3..Government must legislate for CPP taking over all available farmland
Farmland is the basis of agro-related industry, and it is a major part of the economy of Canada. Therefore, it related to the immediate and long-term survival fate of all Canadians.
The holy survival fate should not allow to be free played as a gambling chip by those greedy, mindless unearned speculators.
We must learn the lesson and avoid the absurdness as that of huge profits of oil resources have been out-flowing into the wallets of foreign investors, but, as original owner, Canadians are enjoying from environmental pollution, and oil prices dragged economy.
The management team of Canada Pension Plan - CPP has been struggling for keep and increment of our pension funds, to ensure our decent retirement life. It should be the best candidate for acquiring the farmland, but, now it is facing objection.
The government of Canada must immediately legislate for CPP taking over all available farmland, so that CPP can further develop into integrated supplier in high quality foods and natural supplements, thus to make revenue for local governments and profit for pension funds.
The legislation will avoid land prices to be further pushed up by free bidding, which was also the concern of law makers of Saskatchewan for rejecting pension funds from buying farmland.
We do not have too high demands, when our pension funds loses all the value, our pension plan has still reserved enough land to produce enough food for us to feed our families, so that our families will not like that of some Greeks today troubled to search food in trash heap or even suicide.
7.. CPP must develop as strategic pillar in develop Canadian economy
7.1..The unique economic and politic potential of CPP
Usually, people view CPP as the management of the necessary source of life for the elderly and hedging the funds value by investment for creating profit, but, people seem have ignored its significant advantage for helping disperse macroeconomic and social risks and the strategic potential for promoting economic development.
As a government agency with the holy mission of seeking benefit and forging a better future for all Canadians, CPP is inborn with unique advantages and ability in motivating, organizing, governing and funding public-benefit projects, due to that any action of CPP may less encounter opposition.
Even if, it is inevitably there would be some irrational noises of oppositions, but, that will easily be suppressed by the rational public opinion.
7.2.. CPP must develop as the basis of Super Leadership
Look at the economy of nature resource scarce Singapore and Germany, the economy of nature resource rich Canada is nothing worth for proud of.
The governments of Canada at all levels have been hard struggling for developing the economy; however, the results are not satisfied. The main reason, as my view, is that there too much constraints are trapping the exertion of the governing functions under the holy democracy.
The facts are clear, with similar political and economical model as that of national beggar Greece, Canada is following the dust of Greek failed road in both economic development and politicians play.
The current problems of Canada are clear, but it is not easy to make any improvement under current democratic governance, since that any rational idea that is good for economy, would inevitably hurt the interests of some people, and thus would suffer fierce opposition, and any opposition would be able to play its role effectively under the great democracy of great universal value.
Such social governance can easily lead the promising Canada into a despair road than that of a hope road.
The only way out for Canadian people, is to avoid the dead harm of populist democracy, which has been leading Greece into a beggar nation.
Canada needs an innovation in social governance to reduce the side effect of democracy.
With the unique economic and politic potential, CPP should be and surely can be developed as an independent special organization that can get rid of the sorrow of democratic ballot oriented government to play a leading role in developing the economy of Canada.
For this end, CPP may establish a federal government authorized independent team as Super Leadership with unique power in some key industries and areas, to enjoy an independent right in making policies or regulations with the power as same as that of State Apparatus to supervise or enforce the implementation successfully.
7.3..To deal with issues that democratic players dare not touch
Aug. 12, 2015, in the article Housing speculators are pushing Canada's builders into hell, I indicate that, Canadians hard constructed homeland finally makes themselves jobless and homeless, because of the greedy property speculators are destroying the survival condition for job providers - businesses, and housing prices are too high to afford for living.
Real estate speculation is economic heroin, it will excite the economy in short-term and destroy the economy in long-term.
April. 4, 2015, House prices continue to soar in Vancouver to $1.27 million average price: The average price for detached bungalows and two-storey houses across Vancouver, North Vancouver and West Vancouver have jumped by 10.6 per cent and 10.3 per cent in the last year.
June 18, 2015, 40% of Vancouverites feel priced out of town: The Angus Reid Institute polled 821 Metro residents this month to find out how they felt about their housing and transportation situation. About two in five respondents said they were "seriously thinking of leaving Metro Vancouver because of the cost of owning a home here." That is not a detached house with a yard in Vancouver either - that's any old condo, townhouse or detached home in Metro Vancouver, suburbs and all.
May 5, 2015, Housing costs, low salaries predict looming labour crisis: The rapidly increasing cost of housing in Metro Vancouver could have dire consequences for B.C.’s labour market. Masses of millennials could be making a great exodus out of Vancouver in the near future if housing costs and wages stay on their projected trajectories, causing B.C. to face a potential labour crisis. This ‘brain drain’ is researched in Vancity’s May 2015 study Help Wanted: Salaries, Affordability and the Exodus of Labour from Metro Vancouver, which warns individiuals, businesses and governments that high quality labour is threatened by the increase in the cost of living and unaffordable housing prices.
Aug. 14, 2015, Foreign buyers snatch Vancouver land with no immediate plan to develop, Wealthy buyers who are treating the Lower Mainland real estate market like one giant casino are proving to be a major obstacle for local developers trying to fulfill the city’s goal of providing more housing at an affordable price. There’s a lot more money coming from overseas. Foreign developer groups are getting especially aggressive on land purchase prices, and then they are just holding the land as capital preservation. That can be seen all over Vancouver.
It is the most ignorance of the government of Canada lets speculators freely destroying the real economy and the life of their national by pushing up the prices on housing and land.
The Super Leadership may deal with the issues that democratic players dare not touch. Even to set policies to take back the wealth that has been plundered away.
8..The management of state-owned businesses of CPP
People will suspect the management of state-owned businesses of Canada Pension Plan, in fact, this is the result of one-sided consideration.
MRI,人的大脑，决定人的行为
8.1.. Management is the Art of Playing Human Nature
Dec. 4, 2014, in the article Why did Keynesian fail in saving Japan's economy?, I indicate that: "The great economists, and, as well as the entrepreneurs, philosophers are mostly profound insight into human nature. For example:
"Noted economist Adam Smith, his own favorite book was The Theory of Moral Sentiments, while the Keynes, his The end of laissez-faire, I think, was in the analysis of the impact of human nature to social progress. Noted entrepreneur, the steel magnate Andrew Carnegie who wrote the Human weakness. human nature and the advantages of communication arts. And the noted Scottish philosopher, David Hume wrote A Treatise of Human Nature, by which Hume strove to create a total naturalistic "science of man" that examined the psychological basis of human nature."
A well understanding of human nature is also significant for effectively improving corporate management.
Feb. 9, 2014, in the article Management is the Art of Playing Human Nature, I indicate that: “Generally view the results of many studies, human behaviors are determined by dual human natures: The natural (animal) nature of those inborn selfish instincts and the cultural nature of those acquired altruistic qualities.”
“The best example for understanding human natures is the process of taming animal actors, in which, the beastmaster tempts animals to learn cultural nature for serving human by meeting their greedy of animal nature with foods under the enforcement of whipping.”
“In consideration of human natures, we may say that, the Management is the Art of playing human natures, which is to finish purposeful tasks with human culture nature by meeting human greedy of animal nature with payment under the enforcement of regulations.”
“For the success of taming animal actors, the foods and the whips are equally important, both are indispensable. In the same way, for well playing the Art of the human natures, the payment and regulations are both indispensable.”
“The failure of the socialist practice was not fully due to the Autocracy Governance and the Planned Economy, but essentially was due to that it over relied on the human culture nature by madly suppressing the exertion of human animal nature under the enforcement of State Apparatus.”
“The success of the capitalist practice is not fully due to the Democracy Governance, but due to the Market Economy that benefits society by meeting the greedy of human animal nature through gaining profit according to the needs of the society in the marketplace.”
“There were a lot of researches on the economic success of China, and most of them attributed the success to the magic of the Invisible Hand. But, that was not fully true with ignored the essence - it was that China has broken the egalitarian wage system, that implemented for decades in the socialist period, to have largely increased the share of work performance-related payment.”
“In consideration of market competing, Adam Smith's Invisible Hand is mainly driven by human animal nature - selfish and greedy.”
“The driven force for German outstanding manufacturing mainly comes from their legislated management for rationalization proposals, which is to extract bonus from the profit gained in the application of the rationalization proposals to motivate all staff to pay their full talent into the business running since Mr. Krupp initiated it in 1872. That is 142 years ago.”
“The driven force for patent invention of 102 years old IBM has been counting on the top of those world-class corporate giants in the United States for 20 consecutive years is the patent-related bonus incentive system.”
“The payment of Canada with less work performance-related is following the dust of failed road of former Socialist Camp. It is the main reason that Canadian firms are less competitiveness or even vanished, and it provided significant potential and direction for saving our firms.”
“Whether the Corporate Culture or the Organizational Culture, should be composed by those measures that can motivate the maximum exertion of employee’s cultural nature with minimum play of employee’s animal nature to maximize the production efficiency.”
There is a good example to prove my idea that Management is the Art of Playing Human Nature.
It is that 3M Canada saves Energy 30% by ISO50001.
8.2..The inspiration of 3M Canada saves Energy 30% by ISO50001
Feb. 9, 2014, in the article Management is the Art of Playing Human Nature, I specially put a section: Reverse-thinking for 3M Canada Saves Energy 30% by ISO50001. Now, excerpt some as follow.
March 13, 2013, the Canadian Manufacturing Online published the report of Power play, said that 3M Canada saves Energy 30% by ISO50001.
The achievement was great, but the process was unexpected simple: “We try to treat the plant as we would our homes. If we leave a room, we turn off the lights and shut down equipment when it’s not being used. ”
There were reports taking the energy save 30% in 3M Canada as a proud achievement. However, I would like to question that, by the same group of people with the same equipments in the same place, why they could not effectively save the energy similarly before the implementation of ISO50001 standards?
Why they could not treat the plant as that of in own homes to turn off the lights and shut down the equipment when it’s not being used before the implementation of ISO50001 standards?
The achievement of energy saving is also reflecting the CHAOS in the management of 3M Canada. It is common in many Canadian enterprises, which is one of the reasons of the mid-sized firms is declining. It is not my surmising boast at all. It is the terrible facts of my personal observation and experience in the enterprises of Canada.
I think that the corporate management may be the most intricate and most grueling tasks, since it has to deal with the labors – human beings who are with the brain that can act of their own accord.
If there was no mandatory of the ISO50001 standard to strictly enforce the staff as that of the law enforcing social members, only relying on their management team and their own developed management rules, 3M Canada would never get such an achievement.
The experience of 3M Canada in energy saving has a significant role of providing us a direction for reversing the state of CHAOS, which is to copy the model of ISO50001 standard to optimize our firms’ management.
We are clear that, in the business running, there are many management aspects besides energy saving with the plenty of room for cost-saving improvement. We can imagine that, if 3M Canada improves efficiency by 30% in all of their management aspects, then, see, what will happen? If we all firms in Canada are able to improve the efficiency by 30%, and then, see, what it will happen?
The CHAOS in the management of 3M Canada before the implementation of ISO50001 standards was also caused by the bad effect of the Crowd Psychology.
It also proves the correctness of my idea of the Corporate Management is the Art that plays human natures, which is to finish purposeful tasks with human culture nature by meeting human greedy of animal nature with payment under the enforcement of regulations. for well playing the Art of the management, the payment and the regulation is both indispensable.
Now, we may understood that:
With defined accountability, to make every specific work can be clearly accountable, especially the input and output accounting can be traced to individual personally. The state-owned businesses have more advantages than that of private owned one, such as, the formulation of favorable policies, funding sources, technical support, social resources availability, and so on.
Canada Pension Plan will certainly play a significant role in the agriculture of Canada.
8.3.. Amoeba succeeds by costing on forehead of individual
The success of ISO standards in the practice of corporate management is from the defined accountability, which is to identify all aspects in the management and then to take the specific aspect as responsible tag to put on the forehead of specific individual, thus, to make clear that who is the contributor and who is the trouble maker.
But, the shortcoming of the ISO standards is that it is rare touching the key issue in the management – how to lower down the cost.
For this concern, that Amoeba Management is much better.
The founder of Amoeba Management is Kazuo Inamori who is one of Japan’s legendary serial entrepreneurs, the founder of Kyocera and DDI (KDDI). He rebuilds Japan Airlines (JAL) from bankruptcy by using Amoeba method.
The management of large-scale enterprises is a thorny issue world widely.
Japan Airlines went bankrupt on January 19, 2010, Kazuo Inamori turned it around to public again on Tokyo Stock Exchange on September 19, 2012.
The Amoeba Management, essentially, means divisional accounting.
In JAL, Kazuo Inamori installed a real time system, to determine the profit of each route and each single flight in real time, while in the past profits (or losses) at Japan Airlines, were calculated months after the fact.
Kazuo Inamori views leadership: “the leader must have a vision and burning determination to carry out the vision whatever the obstacles”, and must communicate aims and targets to everyone in the company.
Nov. 29, 2013, the artcle Bible of Business Winning Amoeba Management of Kazuo Inamori introduced that:
Amoeba Management is to “Leave enough corporate profits , gains and losses are the property of their own."
Amoeba "model is essentially " division system "(SBU quantify decentralization ) in the enterprise to further deepen the implementation of a more refined Min-SBU quantify decentralization . SBU is Strategical Business Unit acronym , namely strategic business units , everyone becomes a boss , everyone becomes a company, everyone becomes an operator , everyone has entrepreneurial and innovative spirit . the only way to implement the company's strategy to each employee , and each strategic Innovation staff will ensure the realization of the company's strategy , the company can be endless , invincible and target management , lower to higher levels are responsible for different :.. SBU advocated by everyone on the staff to be responsible for market said , SBU means becoming the main innovation , through the process of creating value for customers realize their value , is self -employed .
"SBU" must be made up of four factors : the first , clear objectives ; Second, the platform and the resources provided by the enterprise ; Third , workflow ; fourth , distribution relationships , that is, each person's income and its outcomes linked to each personal achievement and service to the outcome of the enterprise.
9.. CPP possesses broad potential for diversified development
With plenty of availability in both of funds and technologies, CPP possesses broader potential for profit by diversified development.
Besides the cultivation and processing of traditional crops, we should develop value-added projects with huge potential in market and profit, such as, the botanicals plant and deep process.
10..The botanicals plant and deep process
10.1..The prices of the botanicals are soaring up
February 2011, the artcle Global Prices of Traditional Chinese Herbs Rising reports that: The global Traditional Chinese Medicine (TCM) industry has naturally felt the impact of inflation throughout past years; in 2010, however, herbs used widely in TCM experienced much higher price increases than usual. The rate of inflation in China is now at its highest level in over 2 years,1 and the country’s various enterprises, including its MARKET for herbs, are feeling the brunt of this situation. For example, TCM products sold in 2010 in China—especially in Northern and Eastern Chinese cities, such as Anguo and Shanghai—most of which were medicinal herbs, doubled in price (on average).1-3 Prices of certain ingredients and particularly popular herbs have risen considerably higher.
Many factors are being blamed for the elevated prices, including cogent MARKET demand, the Yuan’s increasing strength, weather/climate changes, herbs being cultivated more than wild collected, general economic proceedings, recent public health crises, and herbal supply shortages.1-7 Approximately 85% of the total amount of Chinese traditional medicines in the MARKET are said to have seen surges in price, according to various online reports referencing a recent pronouncement by the China Association of Traditional Chinese Medicine (CATCM).3,4 Other reports by CATCM found that the cost of over 25% of herbal medicines at least doubled in the second half of 2010,2 and that some raw herbal materials and finished herbal medicine products have supposedly seen price spikes as steep as 700% over the past year.3
The increase in prices is also spreading around the world. In the Southeast Asian country of Singapore, for example, the cost of many herbs used in TCM rose by approximately 30% last year.6,7 According to Subhuti Dharmananda, PhD, director of the Institute for Traditional Medicine in Portland, Oregon, herb suppliers in the United States have also experienced increased prices across the board, with the increase in prices up to 30% in the past 3 years (e-mail, January 7-8, 2011). “This last year (2010) was possibly the highest percentage increase,” he said. “The prices of certain bulk raw materials (such as dried leaves, flowers, roots, and barks) have increased by as much as a factor of 3 within a single year.”
10.2..The governments and drug makers are turning eyes on Chinese herbal medicine
David Picard, CEO and the co-founder of Moleac, a biopharmaceutical company based in Singapore, in his article THE RISE of Traditional Chinese Medicine, said that “Western pharmaceutical companies now spend over US$800 million on average to get a new drug approved.”
“This cost includes the lengthy and complex clinical development process which sees many potential drugs fall by the wayside, either because they do not work or because they cause unacceptable side effects.”
“Only around one in 17 candidate drugs identified make it to market.”
“If the drug being researched fails in the development process the losses can be considerable.”
“Pfizer, for example, recently wrote off around US$1 billion and 15 years of research and development after its experimental cholesterol drug failed to make the cut.”
“The industry is under increased pressure to develop new blockbuster drugs as patents expire, and to cut innovation costs.”
David Picard also said that, “Increasingly, companies are looking to TCM as a source of innovation. The economic incentives are clear.”
November 06, 2006, reported that Swiss Novartis AG announced plans for a US$100 million integrated research and development center in Shanghai. “The company already has a partnership with a local research institute, the Shanghai Institute of Materia Medica, and collaborates with a local drug manufacturer,Wuxi PharmaTech Co.”
In the western countries, governments took strict regulations to control the medicine market. One of them dictates that every constituent and its therapeutic effect must be clear for the compound medicine. This is a big barrier for the Chinese drug since that of even a single herb is a compound too, and the constituents were varied from different producing area and even reaping season. So it is not easy to make clear every constituent and their therapeutic effect exactly.
Due to the above problems, World Health Organization (WHO), European Community (UC), United States (US), Canada and many other countries have issued some Guidance or policies for promoting the use of traditional medicine. They suggested that although the constituents and therapeutic mechanism are not very clear in some traditional medicine, since it has exact therapeutic effect and safe, which has been proven by long time use clinically. These policies allow it to enter medicine market.
FDA accepted the idea of traditional Chinese medicine idea
WHO -- Strategy for Traditional Medicine 2002-2005.
E.C.----- DIRECTIVE 2004/24/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending, as regards traditional herbal medicinal products, Directive 2001/83/EC on the Community code relating to medicinal products for human use.
U.S. ----- Guidance for Industry Botanical Drug Products.
Canada - About Natural Health Product Regulation
10.3..It is that Philosophy caused Western medicine into dead end
In current Canada, Western medicine - WM is the mainstream medicine.
WM has been taking Reductionism as philosophical guidance, it looks human body as an assembly of parts, and tries to study, diagnose and treatment of the diseases through the isolated part by reducing human body as micro as protein, gene and even peptides. Today we even can make life by genetic technology in a tube. So public have been convinced that modern WM is most advanced, most scientific and most reliable.
However, because human body is a complex system that various organs are closely interconnected with interdependent and interacting, there may be many unpredictable factors in affecting the development of diseases, especially the psychological factors. Many objective facts have proven that the medical route under the guidance of Reductionism is not sustainable feasibly, for instance:
Nine years ago, we once cheered for the completion of Human Genome Project with the happy of getting a new powerful therapeutic approach. Many of us thought that we could uproot all human diseases since then.
However, until now, it seems to have no genetic therapies been applied in clinic safely and stably, because there may be dozens even hundreds different gene-fragments in affecting the development of one diseases. Therefore, those believed as most advanced, most scientific, most reliable genetic therapies are only hopeful flowers that may need long time, and more study to bear enjoyable fruits. I believed that, this fruit can not mature forever, because it can not uproot the stress or psychological pressure – the main inducement of the diseases.
On the other hand, there are no suitable synthetic drugs for some diseases, such as, super bugs. Even those existing drugs are not all safe; the side effects of some of them are becoming new life-threats. More terrible is that the cost of medications is soaring up; even some people take the medical activities as the tools to loot money in contempt of life. It is just like the earthquake in Japan, coupled with the Tsunami, which was not enough, followed by nuclear radiation.
Non-communicable diseases: Also became increasingly severe due to have no ideal drugs. Such as mental disorder, cancer, hypertension, obesity, diabetes, cardiovascular disease, chronic fatigue syndrome, and so on.
As a way in no way, in Sep. 13, 2007, Canadian Cancer Society and the National Cancer Institute of Canada has launched a large, multi-year international study to try to find a way to help the hundreds of thousands of men diagnosed with prostate cancer every year, decide whether to opt for potentially life-altering treatments or choose awatch-and-wait approach.They hoped that Surveillance Therapy against radical treatment would resolve one of the thorniest dilemmas in prostate cancer care. Because of current therapy of chemo and radiation will cause the cancer degenerated faster.
It is very disappointed but is a corollary under the misleading of Reductionism.
10.4..The philosophy of WM is developing toward that of TCM
TCM has been developing under the guidance of Daoism - an ancient philosophy of China.
10.5..Traditional Chinese medicine is a promising therapeutic approach
Dec. 21 2011, in the article Chinese Medicine – A Promising Therapeutic Approach,
I discussed Traditional Chinese Medicine, now excerpt some as follow:
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Canada's economy is faced at vital crossroads.
1.. PRESIDENT'S MESSAGE for CPP FISCAL 2015
2..Some email exchanges with former minister of Agriculture and Railway of Saskatchewan
1.. PRESIDENT'S MESSAGE for CPP FISCAL 2015
PRESIDENT'S MESSAGE FOR CPP FISCAL 2015
Dear fellow contributors to and beneficiaries of the Canada Pension Plan,
So how did we achieve these returns?
3. Building a winning global organization
I am looking forward to updating you on our progress on this next year.
Mark D. Wiseman, President & CEO
2. Some email exchanges with former minister of Agriculture and Railway of Saskatchewan