Inception

I had a 1,000+ word blog all penned around the theme of trying to understand why New Brunswickers have a primarily hostile perception of business – particularly ‘big’ or ‘international’ business.  I had taken a look at all five political party websites and found populist, anti-business rhetoric on four of them – including the new People’s Alliance scorning  foreign investment and calling New Brunswickers ‘peons’ well – here’s the quote:

“We will be wandering around once more, hat in hand, looking for a new knight on a white charger who will come to rescue us poor NB peons in exchange for exploiting our resources”!

What resources AREVA will be exploiting is beyond the point.  Why ruin a good piece of populist rhetoric with little old facts?

Then the transition to the fact that 3/4ths of the residents in the Gulf region of the U.S.are against the ban on offshore drilling even after the horrific realities of the BP spill.    Person after person interviewed on the TV program talking about how important companies like BP and the oil industry are to the quality of life and standard of living in the Gulf region.  Even the normally jaded journalist seemed surprised by this.

But in New Brunswick attracting a BP or an AREVA or whomever – even without a tragedy like that oil spill – makes us peons.

Then I watched that movie Inception – another movie where corporations are portrayed as doing anything to steal secrets from their competitors.  

We are bombarded with messages – politicians, media, movies, documentaries, etc. that portray the for profit enterprise segment of our society as inherently malevolent (saving for some positive rhetoric for the small business) and that the role of government is to protect us from business.

This is not a New Brunswick issue but it sure is firmly entrenched here.

But like the movie Inception, in the end it is about ideas.  We organize ourselves and our societies around a few main themes and everything we do pivots off those themes.

My idea is that New Brunswick needs more business investment and more industry to broaden our tax base and keep our population modestly rising.  We need to have more balance between the public services we want and the tax revenues our economy can generate. 

And that means orienting our public policy and our community efforts towards attracting that investment and industry. 

What the Peoples’ Alliance and all the other parties won’t tell you is how they would address our economic development challenges.  They talk in vague generalities but if they ever got into power we would end up with more variations on the same theme.

 

 

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8 Responses to Inception

  1. In 2006, McKinsey stated that the role and behavior of big business would come under increasingly greater pressure. With the globalization of many larger firms, and with the intensification of environmental demands, the level of societal suspicion is likely to increase. The tenets of current global business ideology, including shareholder value, economic liberalization, intellectual property rights and profit repatriation, are not well understood, much less accepted, in many parts of the world, or even among all Canadians. The financial crisis or the Gulf of Mexico environmental disaster, and the seemingly inevitable denials of culpability have fueled the public’s resentment and supported the conditions for a political and regulatory backlash.

    This has not simply been a trend of the last 5 years, but of the past 300 years. The accelerated pace and scale of economic globalization and the emergence of quasi-sovereign global corporate giants increases the likelihood that pressures will continue to mount, especially as competition stiffens and the regulatory unknowns of a multi-polar economic world begins to take form.

    Business will continue to come under sharp scrutiny. It is incumbent upon business to come to grips with the hard fact that the economic nationalism that provided the ideological foundation of economic activity has been superseded by a new global model for which a new social contract will be necessary. In the interim, business leaders and spokespeople will need to develop communications conduits to argue for the net benefits of business and the contributions that business makes to social welfare. They will need to rediscover the importance of trust and its elusiveness. This may require adjustments to earnings expectations, but historically this does not set a precedent. In the U.S., similar adjustments were necessary in the mid 19th century in the aftermath of the American civil war, in the 1930s, during the Great Depression, and again in the 1960s during the civil rights period. There are similar timeframes in Canadian terms.

    On the other end of the scale, the public is now much more informed, albeit incompletely, about the economy, politics and business activity. But one of the profound arguments posed to elites is that their knowledge is similarly incomplete. A new economic universe is unfolding, the likes of which we have never seen.

  2. Peter, context matters and I appreciate you taking the time to flesh this out a bit. I agree with your chronology and conclusions.

  3. People don’t have an anti-business attitude because the media is anti-business.

    People are anti-business because business routinely gives them reasons to be anti-business. I won’t fill your comments with examples like Enron and BP – suffice to say I could.

    And it’s fallacious to say there are no alternative ideas. I have discussed some of those ideas in these comments, and also on my own website.

    There’s a lot we could do that does not involve lowering taxes and cutting social services (which is how I read what you propose here). Things that actually invest in people, rather than those already wealthy enough to buy politicians.

    From where I sit, it seems that New Brunswick has been trying the pro-business approach for decades. It has some of the worst public services and the lowest wages in the country. Businesses meanwhile operate almost tax-free and receive wheelbarrows full of subsidies. At some point you have to ask, how is it working out? How’s the pro-business economy doing?

    Having said all of that, I still think there’s plenty of room to support business in New Brunswick. Such support will have to depend on their being good corporate citizens. There should be a bottom-line implication to anti-social acts, because this is the only language business understands.

    Businesses that obey the law, are environmentally friendly, have employment equity and human rights policies in place and enforced, are safe places to work, that operate openly and transparently, that pay executives reasonably but not excessively, that contribute to the community through public works and support – these are the businesses deserving of support and assistance.

    And it should be understood that this support is contingent on there being an ample degree of support for individuals, not only for their social infrastructure needs such as housing, health care and education, but also their aspirations and ambitions. We should be diligent about supporting new enterprise – even though they may not have influential friends and cannot write funding applications very well.

    Because, generally, economies don’t develop by luring investment from abroad. Generally, economies develop from within – the right factors are in place for people to be able to grow new companies and to want to stay. Look at the major industries around here – the Irvings and McCains, for example. They developed here!

    I could say more (and usually do) but that’s the main point.

  4. mikel says:

    To be fair, I don’t remember David ever saying NB needs to lower taxes and decrease social services. He may have said social services correlate to government revenues, and those may be in for hard times in the future.

    Populist rhetoric is exactly that, and it has no bearing on actual policy. The liberals used it, the tories use it, and immediately after elections they both start sucking up to banks, Irvings, McCains, etc. And except in rare cases NBers rarely make a fuss about that. I’d argue the opposite, virtually EVERY policy is rated along the lines of economy and jobs.

    Just try to get a protest going on an environmental issue. In Fredericton they are endangering their water supply simply for the construction of one plaza. They are even breaking provincial law to do it, yet there is barely a handful of people who even care.

    Political parties know that businesses don’t vote. Thats why the populist rhetoric-however, businesses DO donate, and just look at the liberal war chest to know just how ‘anti business’ they are ever going to be.

    In NB though, as mentioned, the province has very clearly been run by a few multinationals. Mr. Downes AND Mr. Campbell both make good points, but the reality is that economic development MAY come from anywhere-there is simply no knowing. It may grow from within, but it can also gain by new companies moving in. If there were a set recipe, then every place would be doing it.

    And we’ve even seen Mr. Campbell argue fairly often for investment in education and all the things APART from taxation that may bring in new investment. So none of these ideologies are set in stone. It does come to policy, and that can’t be judged by populist rhetoric. I agree that parties should be challenged more, however, the reality is that very few NBers actually bother to challenge the parties AT ALL. Any party once elected will quickly find out that an unemployed populace will quickly tear the province apart, THAT is the reality. So rhetoric is just that. If you want to challenge them, NOW is the time to do it.

  5. richard says:

    “Because, generally, economies don’t develop by luring investment from abroad. ”

    I’m not sure that is correct. At least it does not seem to be correct for formerly weak economies that now have average or above-average rates of growth. Established robust economies attract outside investors and businesses that see growth advantages to investments there, without having to offer much in the way of incentives.

    The concept that you can simply attract large numbers of the ‘right’ people in the absence of economic opportunities to pull them here makes no sense to me. Most of the opportunities in NB right now are in the local service sector; what we need are more opportunities for people that are in high-wage export sectors. Attracting anchor-type industries that can mesh with universities and local companies would provide opportunities for high-wage seekers as well as entrepeneurs. Further, it would attract capital for those small entrepeneurs. We’ve seen examples of technology clusters in PEI; we need more of that here.

  6. @mikel – to be fair, I interpreted this – “My idea is that New Brunswick needs more business investment and more industry to broaden our tax base and keep our population modestly rising. We need to have more balance between the public services we want and the tax revenues our economy can generate” as “NB needs to lower taxes and decrease social services.”

    The first half is a bit of an inference, and as for the second half, I have never heard “more balance” used to describe an *increase* in social services.

  7. For what it is worth I was tying more tax base to the concept of balance. In this instance I was not referring to cutting services.

  8. mikel says:

    “we need to have more balance between the public services we want and the tax revenues our economy can generate”

    Thats the key sentence and where the interpretation is wrong. I’ve been reading this blog practically since day one and while Mr. Campbell (it’s ‘David’ when I disagree with him and ‘Mr. Campbell’ when I don’t) is no Chavez, the hard right line isn’t one I’ve seen him cross except in warning.

    There’s no doubt that NB’s social spending has increased-but thats been thanks to federal money. To ‘balance’ those figures the province, in his opinion, needs more tax money from corporate dollars. Thats why his main theme is getting more international investment to the province. If you get more corporate tax, you get more money to spend on social services, simple as that.

    I’ve never seen him look at the current budget and say “lets stop spending money on hospitals and put it into ED spending on X”. If he DID then your ‘assumption’ would be correct, but he doesn’t, so its not. But of course remember what they say happens when you ‘assume’ anything.

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