A bit on populism

I see the Tories have adopted the slogan of putting New Brunswickers first.  The Peoples’ Alliance Party is also using populism as its core thrust.

I realize this is a great tool for rallying votes but I struggle to find broader value from pitting people against industry, small business against big business, demonizing foreign companies and the other ways that populist rhetoric is used to stir up fear or frustration or anger between groups in our society.

The government has a fundamental role of protection.  Protection of the rule of law, protection of property rights, protection of the people against those (people or companies or governments) that would seek to do harm against others in society.  And you will find examples of criminal behaviour by individuals and by companies.

But I think we need to eschew the temptation to stir up populism for political gain. 

Take the issue of economic development.  There are those who would pretend (and are doing a good job of convincing many people in New Brunswick) that the economic development efforts in New Brunswick are all focused on either big foreign national companies or a few large NB companies.  

Never let facts get in the way of good populist rhetoric.

As I have said before there are around 600 economic developers in New Brunswick – in organizations such as BNB, ACOA, Industry Canada, Enterprise Agencies, NRC, etc.  and a rough estimate would set the number directly involved in attractin companies to New Brunswick at around 15 – out of 600.  

BNB has a small team – I don’t know the numbers now but it used to be around 10 – that were dedicated to attracting companies and investment.  ACOA has none.  There is a team at the head office that have some joint trade/investment functions but on an FTE basis – it might be one person (I don’t know).

The Enterprise Agencies all have someone that workers with companies looking to set up in the province but I dont’ know of any have a dedicated Investment Attraction person (maybe one or two?)

So, conservatively, on an FTE basis, there may be 15 or 2.5% of the people involved in economic development are working on attracting investment.  But you will hear (at least I do) that we are too focused on attracting – as the the People’s Alliance calls them – white knights from outside New Brunswick.

The populist theme is that “we don’t need these companies coming here and exploiting our people” and the like.  Again, for some reason, this type of rhetoric will find an audience in New Brunswick.

I don’t have time to go through them all but one more population thread is pitting people against big business.  This one is widely used in New Brunswick.  I have heard Chamber of Commerce leaders railing against the evils of big business.

Again, fact checking isn’t the point of populism.  The overwhelming percentage of effort undertaken by those 600 economic developers is focused on the SME sector of the economy.  Sure, there are efforts to support the larger companies – but if you look closely at the efforts of all of these agencies you will see that the majority of projects are with mostly small firms.

ACOA, for example, has a maximum loan level of $500k.   That, by definition, is focus on small business. 

Go through the workplan of any Enterprise Agency and see how much of the work is directly with the large businesses in their community.  It is usually almost none.

By the way, I am not complaining about this – I am just stating a fact.  The prevailing economic development wisdom in New Brunswick for the past 30 years has been that we need to forget about attracting industry and focus on fostering entrepreneurship.    It’s as engrained in our collective thinking as just about anything.

In the end, populism isn’t helpful.  It’s not about building anything. It’s about exploiting fear, anger and frustration.  It pits people against people, communities against communities, businesses against people and the end result is that this feeds our weak economic growth over the decades and our stagnant population growth.

If I could meet every single New Brunswicker, I would try my best to convince people that business is not the enemy and that national and international firms are not necessarily out to exploit people.   I would assure them that government will protect the public interest but that there is no value in demonizing the economic activity we need to sustain our quality of life.

7 thoughts on “A bit on populism

  1. Remember Howard Beale in the film Network?

    “I’m as mad as hell, and I’m not going to take this anymore!”

    The Graham government can take a whole bunch of credit for the rise in populism in NB. Just the combined effect of the proposed NB Power sale giving Big Business the 30% rate decrease, immediately followed by the Atcon failure defined an “us vs them” scenario that’s going to be hard to shake. Other information that has come out because of these events add fuel to the fire – how many millions in government loans to big business aren’t paid back? How many are years behind on their taxes?

    Would the average NBer get away with this? No way. Do we pick up “their” tab? Absolutely.

    I’ve learned a lot about ED following this blog over the past nine months and I understand the need to attract and support business with the proper incentives. Admittedly, I don’t know much about the “best” way to go about it. Neither does government apparently.

    We know the current FPTP electoral system isn’t working anymore. It shouldn’t be a surprise that New Brunswickers are looking for an alternative. Proportional Representation would be a good first step.

  2. From my own experience:

    – I think I can say pretty confidently that there are more than 15 people involved in economic development are working on attracting investment.

    – And I am also positive that ACOA funds amounts larger than $500K.

    So there’s a bit of overstating of the case in this post.

    Also, even if it were true that there are only 15 people in the province focused on attracting investment from outside the province, it doesn’t follow that it is false that “the economic development efforts in New Brunswick are all focused on either big foreign national companies or a few large NB companies.”

    So there’s a bit of loose logic in this post.

    That doesn’t mean I disagree with the main thrust of the post. I agree that the populism isn’t helpful. But the argument that got you there misleads.

    People are not opposed to supporting business *if* a good case can be made. But if it’s *just* a matter of giving them the money or giving us the money, with no difference in economic development, why not give us the money?

    It needs to be shown not only that business isn’t the enemy (which is in fact a pretty irrelevant red herring) it needs to be shown that *particular* businesses that we choose to support are (a) honest, (b) not going to rip us off and exploit New Brunswickers, and (c) a *better* investment than spending on education, health care, roads or energy.

    There are reasons why people rail against big business. There are (especially) reasons why people rail against local big business. To address economic development, we have to address those reasons.

    Posting a column with factual errors and questionable logic isn’t doing it.

  3. “The Graham government can take a whole bunch of credit for the rise in populism in NB”

    Has there actually been a rise in populism in recent years? Remember Charles Van Horne? I think there has been a strong populist vein in NB politics for many years. Issues like NB Power may bring it to the fore, certainly, but its always been there, bubbling below the surface, ready for exploitation by the political class.

    I wonder if there is a correlation between strong populist feelings in a region and poor historical economic growth in that region? Along the same vein, I wonder if there is a correlation between poor historical levels economic growth in a region and the use of economic development funds in that region to buy votes with short-term low-wage projects, as opposed to using those funds to develop high-wage stable jobs? If you examine development spending in NB, a great deal of it is being used to support low-wage jobs.

    In closing, I find it quite amusing that the PCs are trying to play the populist card wrt NB Power. It was the PCs who gave the Lepreau refit contracts to AECL without opening up the bidding process; it was the PCs who negotiated a replacement power contract that made NB responsible for purchasing most of the replacement power (not AECL); it was the PCs who then proceeded to hide the resulting mess from public view by breaking up NB Power into a series of corps, thereby hiding the Lepreau deferral acct from the public and keeping the PUB at bay. In short, they did everything to help big outfits ‘from away’ and hide the facts from the public. And these guys are now claiming to be populists? Sheesh.

  4. I am not an expert on much other than my own common sense, and what my common sense tells me is that if you are business looking to expand or relocate, or even start up with big aspirations, you will go where there either the resources you want (mining, forestry, money) or the right people you need to operate your business. If the people that you need require the skills that come with high wage stable jobs, they need to be educated.

    The people available for work in Northern New Brunswick, where I am, are service type employees with low levels of education. The skilled workers (and the hard workers) are all working, either here in good jobs (I think people would be amazed at the amount of small manufacturing that takes place up here) or in the far North and West.

    If you are trying to attract skilled people to work here, an important factor in their decision is the education their children will receive. When your education system has a less than stellar performance history, then your ability to attract or even retain a labour force that is in demand becomes more difficult.

    If I were Premier I would cut all direct investment in business, and move to a regime of tax credits. Reevaluate how we educate our children, and invite hi tech companies come and participate, and lay the groundwork for the next generation to be more successful than we have been.

    As for populism, it is hardly a NB phenomenon. Populism drives American Politics. Political parties, and special interest groups have always and will always use it to gain a political advantage. That’ll never change. It’s part of democracy.

    To understand why their is a populist anti big business feeling in New Brunswick, simply read the social history of New Brunswick. Business did a pretty good job of exploiting people, and that is only a generation or so ago.

    Once bitten twice shy. That’s common sense from that era.

  5. You make a good point about populist rhetoric against big business being pointless. There’s also a strain of dismissal amongst the population against very small scale business in the province; people trying to attempt something new often have roadblocks set up against them via NIMBYism. Someone trying to set up wind turbines to power their farm may have neighbours complain. A local restaurant in my town (Sackville, NB, a university town) wants to sell hot dogs outside of a local bar during the evening, and is encountering resistance because of nebulous concerns over ‘opening up a can of worms’. The anti-business strain runs big and small here. If I have a bias towards small businesses, it’s hardly to the exclusion of large foreign investment. I simply see hot dog stands as less invasive and potentially harmful than natural gas development.

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