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Book Review: Ethical Entrepreneurship by Larry O’Brien

Larry O’Brien has an impressive resume. In 1982, he founded Calian Technologies Ltd., which had revenues of $232 million last year. He was named the Business Person of the Year by the Ottawa Carleton Board of Trade in 1996, and won the Premier’s Award for Technology in 1997. In addition to his incredible accomplishments in the business world, O’Brien was also mayor of Ottawa between 2006 and 2010. Recently, O’Brien became a bestselling author when his book Ethical Entrepreneurship sold over 5000 copies. The great thing about O’Brien’s book is that it is autobiographical as well as educational. His first entrepreneurial venture, Insta-Call, is a great example of how not to start a business. O’Brien founded Insta-Call in 1979. His plan was to rent pagers at airports, train stations, and bus stations across Canada to traveling businessmen for $4.50 a day. He invested in pagers and installed a kiosk at Ottawa International Airport, determined to build a nationwide paging company. He sat at the kiosk in the airport every day, but failed to rent a single pager for almost six months. Finally, a businessman approached him to rent a pager. O’Brien was delighted that he had finally made his first sale. The next day, O’Brien wondered where the $300 pager had gone, before realizing that it had been stolen by his first and only customer. O’Brien’s self-esteem was crushed. All of his money gone, O'Brien declared bankruptcy, lost his car and his apartment, and suffered a heart attack as a result of the overwhelming stress. In the process, he obtained what he calls a “street MBA” – an education through failure. In fact, the title of chapter two in Ethical Entrepreneurship is “Failure is the Best Teacher You Will Ever Have.” After this early failure, O’Brien’s career became one that business professionals can learn from. His… Read More

Quebec and its Economy: the View from the West

The future of Canada’s most enigmatic province is once again in question, and once more the rest of Canada watches in confusion. Many Anglophone Canadians, perhaps especially in the West, have only a vague understanding of the passionate nationalism that motivates the agitators for un Québec souverain. The confusion follows a divergence in visions. The Albertan vision of independence, for example, whenever it has resurged at the edges of the political mainstream in that province, has always been the inverse image of Quebec’s. Whereas Quebec would seek sovereignty for nationalism’s sake, in spite of economic concerns, Alberta would ostensibly pursue independence for economic benefit, in spite of the loss of national identity. Albertans and others in the West wonder: Why would Quebec give up on a country from which it receives more money than it gives? As a lifelong Albertan, I confess my blindness to the vision that unites the Québécois separatist movement. I respect but do not understand that kind of nationalism. But despite my ignorance, I find myself justified in my concern over the economy of a sovereign Quebec. The raw numbers give important context. The gross domestic product (GDP) per capita in Canada in 2013 was just over $52,000. In Quebec, the figure was around $44,000, the lowest in Canada except for three provinces (all of them Atlantic). Economic growth there has also lagged the rest of the country, and a result Quebec forms an annually shrinking share of the Canadian economy. Even in Montreal, where there is perhaps the brightest culture of prosperity in Quebec, competitiveness has dimmed. Montreal was once the undisputed second place (to Toronto) in the number of wealthy companies that make their headquarters in Canadian cities. Now it lags Calgary and barely leads Vancouver, as the number of corporate headquarters there has… Read More

Is it time for basic income guarantee?

That old idea of a basic income guarantee (BIG) is in the news again. It’s the idea that every citizen would receive an annual income directly and unconditionally from the central government. What’s curious is the support it garners from the right. Conservative Senator Hugh Segal has repeatedly offered support for a BIG, and associate professor Matt Zwolinski of the University of San Diego has generated substantial debate as to whether or not such a policy could be justified by libertarian principles. William Watson of the National Post is convinced that a BIG would perpetuate poverty by incentivizing low-income earners to stop working. He correctly points out that the BIG is appealing for conservatives and libertarians because it would mean the scaling back of the bureaucracy. In replacing welfare and employment insurance, a BIG would be less paternalistic than existing state programs to aid the poor. Hugh Segal puts it best when he writes, “[The poor] would not have to apply through Plexiglas for enough money to feed their kids. They would not be trapped in the rules and constraints of welfare and the excessive state involvement in their lives…” Yet in his own op-ed, Watson conspicuously neglects to mention the substantial body of literature that examines how direct transfers to individuals and households can, in fact, alleviate poverty. Maybe a BIG would work in Canada; maybe it would not. Reasonable individuals will object to the use of their tax dollars to pay other individuals not to work (it’s conceivable that some who receive a lump sum from the state would choose not to work). But it is an idea worthy of serious consideration. A number of studies suggest that when low-income households are given a direct transfer they don’t necessarily opt to work less. Givedirectly.org initiated a pilot project involving direct cash transfers to some 1500 poor village households in Kenya. Direct transfers were found to have no effect on spending on alcohol or tobacco; the transfers also had positive effects on mental health, reduced hunger, and increased investment in assets (livestock) and non-agricultural businesses. Similar results on hours worked and investment in assets have been found in other studies. In the 1970s, a pilot project was launched in Dauphin, Manitoba in which each of the 10,000 residents were guaranteed an… Read More

Eating the rich won’t feed the poor

Burdened by a botched healthcare rollout, the narrow aversion of war with Syria and a stagnant congress, President Obama referred to the good old leftist-populist handbook in his sixth State of the Union address, proclaiming income inequality to be the new issue facing America and the western world. Not poverty, over taxation, or unemployment, mind you — but income inequality. That complaint rings a bell up here in our northern welfare state, and has gained traction in recent years since the Great Recession’s initial phases. Sadly, the problem (or non-problem) may get the Democrats, Liberals and socialists fired up, but by selectively punishing success, domestic economic woes won’t be remedied. It’s not going to be so simple for the imperial president, a millionaire himself, to extricate his nation from decline, and it shouldn’t be so easy for the Canadian Left to consolidate power by bashing big business. “Those at the top have never done better”, the President declared on January 28th, alluding to the top income brackets’ possession of the greatest portion of the economic pie. What he failed to note was how much the pie itself has grown; North America’s GDP has increased 30-35 fold since WWII. Poverty is at an all-time low, and unemployment is stellar when compared to Europe. Yes, the top 10% of earners take home 50% of continental income, but the top 5% of Canadian and American workers provide nearly 60% of all tax revenue in their respective nations. With maximum rates reaching 50% in most states and provinces, national coffers should theoretically be flush with cash, but with overspending now an inherent part of our political culture, tax collection has become an addiction rather than a sacred duty. The idea of western apathy has some merit when examining socio-economic themes. Since the late 1980s,… Read More

The people’s new opium

Have you noticed? A lot of ink has been recently spilt on the subject of inequality in Canada. The Globe and Mail has been plastering such discussion all over its pages as of late, while the NDP has been doubling its efforts to bring such discussion to the forefront of the public’s discourse. Even the Liberals have been decrying the hollowing out of the Canadian middle class. All in all, much talk has been drivelled on the fact that decades of National Income growth have been accruing to privileged “one-percenters” and their ilk as opposed to ordinary Canadians. At this juncture I feel obliged to respond. The whole discussion is a sophism, largely based on modern elitist guilt. A few arguments are in order. It can’t be denied that Canada’s Gini coefficient is at or near its 50 year high. It also can’t be denied that growth has overwhelmingly benefited the richest Canadians. Statistics Canada numbers show that the upper class has seen its share of after-tax income in constant 2011 dollars increase by 5.6% from 1981 to 2011. That roughly works out to a whopping $24,000 in real terms. The rich are getting richer. Enough to put a down payment on an average house every three years! These factoids are regularly cited in the screeching cries against economic inequality. The rich are eating the nation’s cake! Such assertions, however, belittle some important truths about the incomes of other Canadians. The lowest quintile has seen its share of after-tax income grow by 23.36% since 1981. Much of that growth actually happened recently, between 1997 and 2011 where income rose by a whopping 33 per cent. As it happens, individuals in all income groups have seen their incomes grow in real terms by at least 20 per cent over 30 odd… Read More

New deal a success for NHL

Last week, the NHL announced the details of its groundbreaking 5.2 billion dollar partnership with Rogers Communications (TSX: RCI). The two sides came together on one of the biggest media partnerships in Canadian history, and the biggest hockey partnership ever. The agreement is a resounding win for fans and a business success for the NHL. Fans have every reason to be excited for the future, notwithstanding the memories of the NHL crying poor during last year’s lockout. The essence of the deal, as NHL commissioner Gary Bettman put it last week, is to allow more fans to see more NHL content on a more regular basis. This is in contrast to the current model, which provides exclusivity on the TV side and is underdeveloped on the digital side. Rogers has stated it will invest in production, talent, and product innovation to bring something completely new to hockey fans. With the investment come questions about the level of return for Rogers and its shareholders. Rogers is an enormously profitable company and a great success story in Canadian business. From a dollars-and-cents perspective, its foray into sports has been successful so far. Investment and returns on the Toronto Blue Jays, Rogers Center, and its sports broadcasting arm, Sportsnet, have all been lucrative. However, this new deal is uncharted territory. The company has made a large speculative bet on the upside of the NHL (and its digital rights) in Canada. Over the life of the deal, Rogers will pay between 300 and 500 million dollars per year for NHL hockey. This is a massive increase from the approximately 100 million dollars CBC was paying previously. The upside of the deal lies within the digital rights, so Rogers will be challenged to innovate and bring things to fans not previously seen before. The product… Read More
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