The Economics of Poverty

Art MacKay

It seems that New Brunswick is now economically depressed and many of our people are now "poverty stricken" … some even living in tents. It was not always so.

Today the definition of poverty is based almost exclusively on income and does not consider the background of the people and their way of life. Personally, I believe that relatively few people here would actually be “poverty stricken" if they could return to the lives we built in the past. Certainly, most of us come from enterprising stock - fishermen, lumbermen, and farmers who through their own

energy, imagination, and enterprise formed lives for themselves, their families, and communities. Many of you witnessed the end of this era. I can remember visiting Grand Manan when smoke curled from smoke houses everywhere on the Island. Boats came and went continually from the weirs to the fish buildings where men, women, and children co-operated in preparing the catch. Others carried the catch to prosperous canneries on the islands, at Lubec, Eastport and elsewhere.

The lobster fishery grew and enterprising local men set about the task of developing what is now a highly lucrative, worldwide business. Clam factories dotted the shore. In the inland areas, lumbering operations have waxed and waned since the settlement of the area. Sailboats delivered wood products throughout the world and our forests were an important source of income for thousands of individuals.

All these developments came about largely through the efforts of residents and most of those enterprises still exist … but in highly modified forms. We still have an important fishery and lumbering supports many people both in the woods and at local mills. But one important thing has taken place. As the value of these industries grew two things happened:

1. Greater demand resulted in new methods such as spraying our forests and crops, and

2. External big business interests have taken over local enterprises.

The net result was that the larger more successful local businesses were bought out by external groups with major financing and incorporated into larger organizations which, with government assistance in many cases, developed highly modern harvesting techniques and cultivated a worldwide market. In the case of the fishery, rumor has it that many smaller businesses were frozen out by the larger organizations which rapidly developed a variety of control techniques. In some cases, individuals turned to the promise of “steady" employment. In later years declining stocks required close affiliation with the larger groups. Throughout the same period large pulp and paper corporations gained control of vast tracts of forests. The net result is that most of us are now, directly or indirectly, controlled by external financial groups that measure things on the basis of their profit or loss. One may argue that the evolution of business in our area is good for the area or bad for the area depending on the viewpoint. In my mind there is one effect that is definitely detrimental. Overall, we appear to have lost the drive we inherited from our ancestors, or, at the very least, we are misdirecting that drive.

We must believe that we have the ability, intellect and promise that our area can provide us with an income equal to any other area. We must turn our energies away from attempts to attract external businesses which are not compatible with our way of life or environment and turn to analyzing our assets and building them again into viable locally controlled industries.

The governments of Maine and New Brunswick are vital to the success of most of these ventures and they must be convinced that local talent and imagination justify their attention. In fact, I believe that our provincial and state governments have fallen short in their management of our industrial developments.

I believe that local governments should consider the following points with regards to the development of small locally controlled businesses. Industrial development on the east coast is packed with examples of large businesses which have collapsed after the expenditure of millions of dollars by our governments. Because of the impressive numbers to be employed by a single large industry, a headlong dash takes place … complete with numerous concessions. Does it really matter whether 300 people are employed in a single large industry or 30 small ones? Relative to long term employment there may well be a significant difference.

We have apparently begun to believe that we are “poverty stricken" both intellectually and financially. Otherwise, why do we constantly have our hands out to federal assistance or look to external financial groups for our salvation? Our young people leave the area, and we moan and groan. But then again, why would they want to be associated with a group that has been tagged as “losers”? Consequently, they leave, and we provide the rest of the continent with many brilliant teachers, writers, scientists, inventors, businessmen and so on. They leave for areas where they believe they can fulfill their dreams and who can blame them. I believe that we must assess our position and regain control of our own destiny. I’m not suggesting that we ignore the rest of the country or turn down outside investment, but that we return ourselves to the driver's seat.

Externally controlled businesses certainly pay wages, but should there be profits (and if the business exists there probably is) they leave our communities for the pocketbooks of shareholders in other places or in high local places. If losses continue, the business will close without a backward glance leaving the unemployed behind. Had the fisherman, years ago, formed and organization to catch, produce, and market their own products, this area would now be extremely prosperous with earnings from their products returning directly to them and consequently, elevating the overall financial condition of the area.

To accomplish some worthwhile future for ourselves, we must develop a personal and regional philosophy for the following reasons: 1. Owners of small locally controlled businesses tend to have a personal commitment and interest in their business and will usually "weather" bad years to fulfill their dream. Profit and loss are relative factors. 2. They tend to have interests and background in common with their employees and consequently, a personal interest in them. 3. They usually understand the area, its people and customs and will contribute to the community. 4. Most of the earnings of the company will remain in the area. 5. Numerous small businesses which presently exist have growth potential. 6. Local industries are compatible with the history of the area and the environment.

 

The fishery in our area can be killed in many ways. Overfishing is certainly one method, but we cannot be certain that pollution has not already been a contributing factor. Is it possible that some chemical, as yet undetected, has not already been at work? Perhaps the developing young of our herring have been hit, or a percentage of lobster just can’t make it because of a chemical lodged in their system. Remember the abundance of salmon at the mouth of the St. Croix River? Perhaps, it's my imagination but it seems to me that they disappeared a year after a major industry change upriver and began dumping waste into the river. Try eating the clams at Oak Bay … best to forget about the thousands of coliform bacteria that have come from someone’s bowls! Or go for a dive at Waweig or Letang if you want a fisheye view of pollution.

But what's the difference? who needs fishing and such “pastoral pursuits” if we’ve got big industry? There will be lots of jobs. In the name of our unborn children, THINK! Oil is a non-renewable resource. That is, there is only so much oil on the earth, and it WILL run out! Fish and other creatures are RENEWABLE RESOURCES. If we manage these resources properly there will be new fish each year … year after year! Oil and related products are not essential for life. Food IS essential for life! It is highly possible that we can design a society using other than our present energy sources. But we cannot survive without food. In the future, we may well kill ourselves for a short-term gain today. But is it a given?

Historically, we Maritimers (and I use this term in the international sense) have been exploited by monied inlanders. We hold ourselves in low esteem and look to our learned friends from the west for all the answers to our economic problems! We've always got our hands out!! Gee! deep water ports and oil! All that money! All those jobs! Wow! GARBAGE!! These large industrial enterprises are designed so the “rich get richer” and the poor stay that way!! They will provide jobs but at slave wages which will keep people happy but not enough so that they can become enterprising.

The potential of this area for agriculture, fishing, and tourism is enormous. So, the businesses that we build are small, but this is a fact which our government planners overlook … 10 small businesses can employ as many people as one large corporate enterprise. And in small business, the operator has a personal stake. He will keep on trying even with a marginal profit. The large corporation will pull out when things go sour. Let’s use our “Down-East” imagination and start rebuilding our own destiny.

Let's support local industry which will allow us to keep our lifestyle by preserving our natural resources and environment. Let’s start determining our own destiny!! AGAIN!!

NOW IS THE TIME TO REBUILD OUR COMMUNITIES AND LOCAL BUSINESSES!