I came across an interesting article today concerning Canadian management statistics, and the oft-discussed (in Sudbury, and nationally I imagine) debate over foreign ownership. The article is written by economist Stephen Gordon, and is a response to an opinion piece written by Jeffrey Simpson in the Globe and Mail. To summarize the post, let me quote the Stephen’s initial reaction to reading Simpson’s article: “Oh god. Economic nationalism will be an issue. Spare us. #budget2010”
I've been reading Dr. Stephen Gordon's work for many months now, and his blog has always been informative and well-written. Stephen is an economics professor working at Laval University in Quebec City, Quebec, Canada. His thinking regarding the failings of economic nationalism would be widely unpopular in a mining town like Sudbury (yes, it is still a mining town, despite claims to the contrary). That being said, his thinking is not wrong on this issue.
In some of my history courses with Dr. Mark Kuhlberg regarding environmental history, and northern Ontario history, I was fortunate enough to learn some of the failings of the xenophobic policy that is economic nationalism. Many a time it was not the foreign companies raping and pillaging the landscape, but our own Canadian companies. It was the foreign companies who often invested capital into repairing damaged eco-systems and re-greening initiatives, especially in the pulp and paper industry. To be certain, Mark is an authority in the field of pulp and paper industry.
All that being said, I do see the local case studies regarding foreign ownership, primarily in the mining industry. Let's take two polarized examples; Xstrata, and Vale. When it came time to negotiate with workers in their Sudbury operations, Xstrata and the CAW agreed upon a new 3-year contract this year without a work stoppage. When it came time for Vale and the USW to negotiate a settlement, there was a long and bitter strike, which ended up lasting about a year. Cries of evil foreign ownership were rampant in the city, and still are, at least among many of the working class individuals in this city I've spoken with [Note: my father is a miner at Xstrata].
It's worth reading Stephen's posting about foreign ownership, for a few reasons. Pay close attention to the opinions of Canadian management regarding education, and their lower education than their American counter-parts. Also, look at the discussion of how foreign-controlled operations are run as compared to domestically-owned operations. There are many arguments on both sides of the coin, so don't just write off foreign-ownership as evil because it's a trendy view in the Nickel City.
Andy Veilleux 
The basic point that reality is more complicated than political ideology is impossible to disagree with, but to write off economic nationalism as “trendy” is unfair. Protectionism has been a long-held position with many proponents. Contrasting a PhD using charts and sarcastic tweets with the bitter emotions of ‘working-class individuals’ in a strike ravaged town seems ill-matched.
I won’t personally argue the position behind protectionism because, to me, economics is the modern version of theology. It has too many untested foundations and arcane principles, but the deepest similarity is that it is dictated more by the need to justify the powers-that-be than empirical reality. I’ll never forget the economics seminar I attended at Laurentian after the big crash of 2008 where the professors explained that the current economic system was predicated on bankers self-regulating their greed – which they failed to do. Many of us in the audience just looked at each other in disbelief.
Checking out some of Gordon’s articles, he positions himself as a centrist using ‘evidence-based’ theory (a misleading catch phrase popular in other social sciences like psychology) and his positions are in lock-step with the neo-liberal party line: pro-NAFTA, pro-foreign ownership, anti-corporate tax, anti-employment insurance. As a fellow academic I applaud Gordon’s stance on the census fiasco but if it walks like a duck, quacks like a duck and has roosts in the National Post and Maclean’s I suspect his other positions will just be more of the neo-liberal SNAFU. The centrist smiley face and academic credentials can only go so far. Plus ca change…
I might be over-sensitive to all this because it all smells a little like South Park tactics to me, dismissing any ‘trendy’ (i.e popular) leftist political issues for being too simple and then waiting for any wayward opinions to be sucked back toward the massive gravity of the dominate center.
To put it simply: economic protectionism is a popular issue with proponent & detractors, why shouldn’t it be a political issue?
PAX
I would love to see the Sudbury municipal candidates debate about foreign ownership, especially in light of Sudbury’s recent history. I wonder where there opinions would stand on the political spectrum. Thanks for all the insightful comments Hobb.
Thanks for the interesting blog post, Andy. Despite my misgivings, Gordon’s articles were thought-provoking. For example, he’s against raising corporate taxes because management will just gouge their weakest workers to make up the difference – a refreshingly blunt analysis. Unfortunately he ends right at this point:
“But a proper remedy must be based on a plausible theory of how high earners managed to acquire the bargaining power to extract such high salaries and to fend off tax increases. And we don’t have one yet.”
http://www.canadianbusiness.com/after_hours/opinions/article.jsp?content=20100719_10003_10003
Those concluding lines are way too close to ‘god moves in mysterious ways’ when it comes to the most vital question. His euphemistic use of ‘plausible’ to set the limits on orthodox economic discourse scares me.
Future debates on foreign ownership should incorporate Gordon’s work to avoid common pitfalls. But I would vigorously ignore his comment about where (and when) the debate should end.
Fair enough. I think the debate is still alive and well, and should always remain so. Looking back in Canadian political history, one sees this trend of protectionism coming and going repeatedly. It’s interesting how rarely it’s brought up lately (in my circles anyways). It’s still a vital subject to look into, maybe that’s what i will work on in terms of my MA? 😛 (unless I continue to want to discuss the failure of journalism on a massive scale, which is entirely likely)