On Crowley and Vroom Vroom Economic Development

Right off the top, I am not talking about old Jean ‘Vroom Vroom’ Gauvin. Rather I am musing aloud (or in the blogsphere) about how AIMS’ Brian Lee Crowley reacts when he sees yet another auto plant incented with public funds to set up in Ontario. The latest is Honda which will announce this morning.

Ontario Economic Development and Industry Minister Joe and Premier Dalton McGuinty have courted numerous auto makers, including Honda, in the last few years with government aid packages to secure almost $7 billion (Cdn) in auto investments.

Honda, Toyota, Linamar, Ford, GM, DaimlerChrysler – all expanding in Ontario – with upwards of $ 1 billion in government incentives – generating $7 billion in community investments.

Do you think that Crowley winces every time he reads about another major business investment in Ontario? Do you think he finds some assurance in the fact that Atlantic Canada doesn’t seem willing to play in this game (except of course if you are a pulp mill about to go out of business in Atl. Canada – then you can write your own cheque for public funds)?

Or do you think he secretly has second thoughts? Do you think he secretly desires to abandon all this talk of letting the ‘market have its way’ in Atlantic Canada?

What a liberating thing it would be for BLC to just admit (as most economic development historians have) that many of the strongest economic development programs – rightly or wrongly – have relied heavily on government support through massive targeted tax breaks, grants, infrastructure development, or just plain great community marketing and promotion?

There is no magic when it comes to economic development. The communities and provinces that work the hardest, make the right investments and then sell the hoo hoo out of their community/province can attract industry. That’s a fact.

In a test tube environment, Brian L. Crowley may be right. Maybe governments should have no real role in local economic development. Maybe all provinces, states and communities should just agree to stop every incentive program, every marketing effort, every infrastructure development project. Let the ‘market’ decide.

But we live in the real world and Ontario is kicking our proverbial arse. Just as they did in the 1990s, 1980s, 1970s, 1960s right back to the early 1800s.

You would think that after 200 years, we would learn our lesson.

Join us, BLC. You may have to quit AIMS. You may have to burn your library of Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser, Ludwig von Mises, Friedrich Hayek, Murray Rothbard, Israel Kirzner and Hans-Hermann Hoppe. But then you may be able to add more relevancy to the debate in Atlantic Canada.