Saturday, March 26, 2005

How Should the Right-Wing Centrally Plan the Economy?

I was recently discussing the economy of New Brunswick, Canada with someone who parks his donkey on the political right. Now I am of the opinion that the government at all levels should not be trying to plan, manage or otherwise "improve" the economy. Furthermore, I believe that this policy should not be waved just because some level of government has the opportunity to get something out of the deal, like the right to claim responsibility for 10 new jobs that they had nothing to do with in a city of over one hundred thousand or the opportunity to crow about helping to keep a company from fleeing the province by giving them lots of tax breaks while their competitor, who ask for no such favors and make no such threats can get stuffed.

This position of non governmental involvement in the economy is universally condemned by both the left and the right, though never at the same time. There reaction to the idea always depends on who is doing it.

Now for those of you outside the province, assuming the real world still exists, the term "economy of New Brunswick" is a euphemism for the Irving empire (with some of the McCain family empire hirelings and some governmental jobs thrown in for spice). Everything I will say about the Irvings in this post is a criticism of the governments dealings with them not with the Irvings themselves. No one can possibly blame them from taking what they can so easily take. If I had the ear of generations of gullible governments, I would probably give in to the temptation to make myself very powerful also. There is a certain responsibility of the government to not put its tail in the air every time the Irving forestry industry has some timber in its metaphorical pants. (I wonder if I would get arrested if I wore metaphorical pants?)

No one really knows how much of the province's economy belongs to the Irvings (with the remaining being just under their control). Some say that one in twelve people in New Brunswick are paid by the Irving "family" of companies and that everyone else owes their job to "spin-off" industries that would disappear if the Irvings were refused anything they ask for.

People who weep with joy at the marvels of the Irvings and all they have done for the province always seem to forget that there is not a single industry that they are involved in for which they do not have competitors. What keeps the Irvings as the apple of the provincial eye is that these competitors are not part of a larger empire and so are not visible. The Governments has, over the years, ignored the inconvenient fact of the existence of Irving competitors, giving the Irvings:

tax breaks (see above link for just one example),

low interest loans (because really, where would the Irvings be able to get a loan without the government? How can they be expected to compete with the smaller manufacturing plants who don't get such loans?)

and other sexual favors.

That last item about assisting the ship building industries - surely, you say, that is legitimate. Most ship building nations give sleazy subsidies to their ship building companies and there are, apparently, no Canadian competitors who would be affected by this. Two wrongs make a right when nationalism is concerned, right? I guess the taxpayers and small to medium businesses who provide the funds for the Irvings favorite creditors (the Canadian government) were not going to do anything productive with the cash anyway. Hundreds of (hinted at) jobs provided by the Irvings are certainly worth any amount of lost jobs due to the tax harvesting industry; the only industry that the Irvings have taken great pains to avoid though they seem to support it for everyone else. We can never know what the number of jobs is which do not exist today because the governments of the day have repeatedly picked the Irvings as the horse to bet on. It is easy to count people hired by the Irvings and use them as propaganda. It is not possible for critics of the Irvings to round up people who would have benefited from a free-market economy. Most of them have left the province anyway.

Certainly, the Irving lovers say, no other company would have kept their companies in the province all this time. That is probably because the governments would not have given in to their insane demands. "Cut my taxes and give me low interest loans or I will go to another province or country. And make sure my competitors don't get equal treatment!" I will grant that if our province had responded to this as they should have every time the Irvings said it, we would not have as many people working for the Irvings. Of course, we might have a functional economy.

My "right-wing friend never was convinced that a free-market system would have been better for the province. I guess I am just naive.

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