Monday, October 10, 2016

The Malaise of Modern Pensions?

Jennifer Schuessler of the New York Times reports, Canadian Philosopher Wins $1 Million Prize:
The Canadian philosopher Charles Taylor has been named the winner of the first Berggruen Prize, which is to be awarded annually for “a thinker whose ideas are of broad significance for shaping human self-understanding and the advancement of humanity.”

The prize, which carries a cash award of $1 million, will be given in a ceremony in New York City on Dec. 1. It is sponsored by the Berggruen Institute, a research organization based in Los Angeles and dedicated to improving governance and mutual understanding across different cultures, with particular emphasis on intellectual exchange between the West and Asia.

Mr. Taylor, 84, is widely regarded as one of the world’s leading philosophers, and a thinker whose ideas have been influential in the humanities, social sciences and public affairs. His many books include “Sources of the Self,” an exploration of how different ideas of selfhood helped define Western civilization, and “A Secular Age,” a study of the coexistence of religious and nonreligious people in an era dominated by secular ideas.

He was chosen for the prize by an independent nine-member jury, headed by the philosopher Kwame Anthony Appiah. The jury cited Mr. Taylor’s support for “political unity that respects cultural diversity,” and the influence of his work in “demonstrating that Western civilization is not simply unitary, but like all civilizations the product of diverse influences.”

Mr. Taylor’s previous honors include the 2015 John W. Kluge Prize for the Achievement in the Study of Humanity (shared with Jürgen Habermas), the 2007 Templeton Prize for achievement in the advancement in spiritual matters and the 2008 Kyoto Prize, regarded as Japan’s highest private honor. Both the Templeton and Kluge prizes also carry cash awards of more than $1 million.
It's Canadian Thanksgiving, the US stock market is open (bond market is closed for Columbus Day) but I didn't want to blog on markets. I beefed up my last comment on bracing for a violent shift in markets for you to read my thoughts on what is going on in the global economy and financial markets.

Instead, I want to take the time and reflect on what I am thankful for, my family, girlfriend, friends, all of whom I love deeply; my health which is remarkably stable after being diagnosed with multiple sclerosis (MS) back in June 1997; my neurologist, Dr. Yves Lapierre and the wonderful nurses and staff at the Montreal Neurological Institute (MNI); my contacts in the pension world and other experts who help me write insightful comments on pensions and investments; and last but not least, all of the institutional and retail investors who support my blog through their generous financial contributions via PayPal on the right-hand side.

But allow me to take a small detour to discuss with you my intellectual mentors, those who helped shape the way I view the world and why pensions are critically important to our society and economy. I was a late bloomer, intellectually speaking, and it wasn't until I arrived at McGill University back in 1992 when I started really delving deeply into the history of economic, social and political thought where I learned from some great professors about the power of ideas and how to critically examine the world we live in.

At McGill, I was majoring in economics and minoring in mathematics and then went on to obtain a Masters in Economics where I submitted my thesis, a critical review of macroeconomic growth theory (see an older comment of mine on Galton's Fallacy and the Myth of Decoupling which remains very pertinent today).

Even though I was proud of getting an "A" on my Masters thesis, which I completed in the midst of my diagnosis of MS (the toughest period of my life), I wasn't an "A" student by any means. My academic GPA was 3.3 (B+) and I found all my courses at McGill very challenging.

It didn't help that I was flirting with the idea of becoming a doctor like my father and took all these difficult pre-med courses (organic chemistry, biochemistry and physiology) as electives which was no picnic (I'm terrible at rogue memorization). Moreover, some of the upper level mathematics courses that I needed to complete my minor in mathematics were brutal (it was me and six foreign students who ate, spoke and breathed mathematics all day long, and I was petrified and very intimidated but managed to pass these courses with decent grades).

But my favorite courses by far were always courses which made me think and these included courses like underground economics by Tom Naylor, the combative economist and one of my mentors at McGill, comparative economic systems by Allen Fenichel, and history of economic thought by Robin Rowley who also taught us about the pros and  "con" of econometrics (he and Sir David Hendry, one of the world's foremost experts of econometrics, were the only two who obtained a PhD in Econometrics with Distinction from LSE back in 1969).

While I enjoyed all these courses immensely, nothing compared to my electives in political theory. It was there where I was taught by some brilliant professors like the late Sam Noumoff, John Shingler, James Tully who now teaches at the University of Victoria, and of course, Charles ("Chuck") Taylor. They taught us about the main ideas in political thought, from Aristotle, to Hobbes, Locke, Tocqueville, Machiavelli, Marx and many more great philosophers.

One of the things I still remember till this day is when at the end of the introduction to political theory course which they all taught together, they stood in front of a packed auditorium and asked the students to give their feedback. One student rose his hand and asked Chuck Taylor if he thought the course focused "too much on Aristotle."

I swear to you, you could hear a pin drop as a deep hush fell over the auditorium as all the students eagerly anticipated professor Taylor's response. He didn't attack or denigrate the student in any way (he was too kind and classy to do this). Instead, he paused, reflected and then smacked his forehead and blurted: "Too much Aristotle, how is this even possible?!?". He took an awkward moment and made us all laugh out loud, it was priceless and vintage Chuck Taylor.

[Note: My older sister shared another funny story from her days at McGill when Taylor saw her and a friend on campus and stopped them to ask: "You, you both take my course, can you direct me as to where it is?"].

In fact, those who know him best are in awe of his sheer brilliance (he could recite passages of major works off the top of his head) but also his humility, empathy and wonderful sense of humor. Charles Taylor is brilliant but he's also extremely humble (part of his deep Catholic faith), socially engaged and represents the very best of McGill and what truly outstanding professors are all about.

After that initial course in political theory, I was hooked and started auditing some of his other courses in political theory, adding to my already charged academic curriculum. I was obsessed with reading all his books but two of them really struck a chord with me, CBC Massey lecture series, The Malaise of Modernity and his seminal book, Sources of the Self, which remains his Magnum Opus.

It was Charles Taylor who opened my eyes to liberalism and its critics where I delved into the works of Isaiah Berlin, Taylor's thesis supervisor at Oxford University, as well as many other great political thinkers like John Rawls, Robert Nozick, Ronald Dworkin, Thomas Nagel, Michael Walzer, Richard Rorty, Alasdair MacIntyre, Michael Sandel, Will Kymlicka, Susan Moller Okin and Martha Nussbaum, another brilliant lady and prolific author.

[Note: During my long breaks, I used to go to the McGill bookstore on the corner of Metcalfe and  Sherbrooke and just hang around the second floor reading all their books, many of which I bought and still own.]

Why am I sharing all this with you? What do political philosophers and great thinkers have to do with pensions and investments? Well, quite a bit actually. When I discuss the benefits of defined-benefit pensions or enhancing the CPP for all Canadians, my thinking is deeply shaped by Taylor's communitarianism (not to be confused with communism) and while it's important to respect individual freedom and diversity, we also need to promote the collective good of our society.

Quite simply, in a ZIRP & NIRP world where ultra low rates and the new negative normal are here to stay, the pension Titanic will keep sinking but some pensions, defined-contribution (DC) plans in particular, will sink much further and leave millions struggling with pension poverty while others, like large well-governed defined-benefit (DB) plans, will offer workers the ability to retire in dignity and security.

So, when I expose the brutal truth on defined-contribution plans and explain why Canadians are getting a great bang for their CPP buck, somewhere behind that message lies the influence of Chuck Taylor and a more just society.

And for that, I am very thankful I had the privilege to learn from this brilliant and generous man who in many ways reminds me of my father in terms of their deep faith, insatiable appetite to read about everything and generosity (they are also the same age).

I actually bought my father Taylor's book, A Secular Age, and he enjoyed reading it but told me it is deeply rooted in Western thought where there is an equally important Eastern Orthodox thought of religion which is ignored (you need to read the works of my father's friend, Christos Yannaras, a Greek theologian and leading intellectual to understand these nuances).

You will recall, I last spoke about Charles Taylor in my comment, One Up On Soros, where I thanked him publicly for signing a copy of his Philosophical Arguments which he graciously sent to me and my sister via my mother and stepfather when he gave a lecture on Democracy, Diversity, Religion at LSE, Soros's alma mater (see below).

I leave you once again with Charles Taylor's lecture on Democracy, Diversity, Religion at LSE given in December 2015. I also embedded an older (2009) lecture Taylor gave at The New School For Social Research on The Religious-Secular Divide: The US Case (now more relevant than ever).

Lastly, take the time to listen to all five parts of the 1991 CBC Massey Lectures, "The Malaise of Modernity" (Part 1 is embedded below). If I can only recommend two philosophical books that have greatly shaped my intellectual foundations, they would be Taylor's Sources of the Self and Isaiah Berlin's Against the Current: Essays in the History of Ideas (Berlin is best known for his Two Concepts of Liberty but his essay on The Originality of Machiavelli is a true masterpiece).

[Another brilliant book that shaped my thoughts on pensions is Michael Walzer's Spheres of Justice: A Defense of Pluralism and Equality.]

I said it before and I will say it again, Charles Taylor is Canada's greatest treasure and along with a handful of other truly brilliant people, one of the most important thinkers of our time.

And for that, I am thankful he taught me and many others at McGill and other universities and continues to educate all of us on so many critically important social and cultural issues.

Have a Happy Canadian Thanksgiving!



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