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The Value of Forestry Workers

By Peter Ewart & Dawn Hemingway

Monday, June 08, 2009 03:45 AM

By Peter Ewart & Dawn Hemingway
 
It is part of popular mythology that the captains of industry and finance like Donald Trump and David Rockefeller are the true creators of value and wealth in our society. Some even suggest that, from their genius, all the material benefits of society flow, and, as a result, they are often treated in the media and by politicians as virtual gods.
 
Even when the financiers of Wall Street swindle, loot, and steal, and bring down a calamity on the world economy, as was done with the recent sub-prime mortgage crisis, the politicians in the U.S. Congress reverently kneel down and kiss their rings, and open up the public treasury to them. After all, as one Congressman recently put it, “the banks own Congress.”
 
On the other hand, manufacturing workers, whether in steel, auto, forestry or other sectors, get no such treatment. Far from it, they are often portrayed as the “villains” of the piece, like the auto workers were in the recent auto industry crisis. 
 
With their wages, benefits and pensions, manufacturing workers are presented as a troublesome and expensive “cost of production” that these wonderful financiers and captains of industry must put up with, along with other “costs of production” such as fuel, machinery, taxes, and interest payments. 
 
To create wealth, to save the company, to save the world, these workers must agree to major concessions by having their wages slashed, benefits and pensions eliminated, and jobs lost in massive layoffs and shutdowns. If they resist, they are labeled obstacles to progress and the “greater good,” as represented, of course, by the captains of industry and the titans of Wall Street.
 
The forest industry in Canada is no different. Today, this industry is highly concentrated and monopolized with the bulk of production in the hands of a few giant monopolies and multinationals. 
 
These days, more often than not, the major investors in these mega-companies do not even have a forest industry background, but rather are financiers of one kind or another. Jim Pattison, who is CEO of the Jim Pattison Group, and is the biggest shareholder in Canfor Corporation, is one example.   Marty Whitman’s New York based Third Avenue Management, which is a hedge fund, is another, being the biggest shareholder in Catalyst Paper, the province’s largest pulp and paper company, as well as a major shareholder in Canfor. 
 
These financiers do not run the operations of these companies. Instead, they have “hired hands” to carry out those functions.
 
Strangely enough, for these financiers, who often have vast pools of capital to draw upon, the current severe economic downturn is a time of “opportunity” when they can increase their domination of the industry; then use their monopoly power to extract major concessions from workers, contractors, suppliers and government, shut down capacity, as well as eliminate smaller competitors. Thus, the economic crisis itself becomes a useful weapon to be used against all and sundry. But are these financiers really creators of wealth or are they destroyers?
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To answer that question, we need to examine how economic “value” and “wealth” itself is created.
 
How does a piece of lumber or plywood or any other product acquire “value”? The establishment economists and media pundits rarely, if ever, talk about this issue.
 
However, if we look at the classical economists who first examined this question, whether they were capitalists, such as Adam Smith or Ricardo, or communists, such as Karl Marx and Freidrich Engels, there is a broad agreement. Labour acting on nature, i.e., raw materials, is the creator of value, is the source of wealth creation in the production process. That logger harvesting the tree, that equipment operator transporting the logs, that mill worker processing the lumber, that woodworker fashioning the cabinet, and so on down the line – these are the people who, through the magic of the labour process, create the value of the commodity.
 
From this value created by workers, wealth is extracted and siphoned off, whether it be company profits, revenue for reinvestment in machinery and equipment, government taxes, interest and so on. Indeed, this wealth creates much of the foundation for our forestry-based communities, as well as society itself. That being said, to the extent that each participates in the production process, owner operators, contractors, and small business people also contribute to the creation of this value.
 
So where does that leave financiers like Jim Pattison and Martin Whitman? The fact is that they may own the company but they don’t create value. Indeed, they are the ones who are incidental and non-essential. If they disappeared from the equation, and there was some other form of ownership, be it public, cooperative, non-profit, etc., workers would still be creating value. The captains of industry may come and go, but the one constant for value creation is labour.
 
Workers in the forest industry in British Columbia are among the most highly productive in the world. They have a wealth of skill, experience and knowledge that they bring to the production process. Given all of this, one should expect that they would be seen by the financiers and government as key players to be preserved, nurtured and maintained as invaluable assets and fountains of wealth creation. But that is not the case. The financiers who dominate the global economy today view workers as if they were no more important than a piece of Kleenex to be tossed out a boardroom window.
 
Indeed, it one of the strangest paradoxes of our time that those sectors of society which create the most actual value, have the least economic and political power. While those who create the least, have the most.  
 
At a time when major concessions are being demanded of workers, when the direst catastrophes are being threatened unless they submit, it is useful for us all to keep in mind that it is these workers who are the source of wealth, it is they who are the creators of value, it is they who are the very salt of the earth.
 
Peter Ewart is a college instructor and writer whose email is: peter.ewart@shaw.ca . Dawn Hemingway is a university professor and writer whose email is: hemingwa@unbc.ca. Both are based in Prince George, British Columbia.

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Comments

Well Said Peter,Dawn...To bad you's weren't in as owners of these companies.. perhaps they would have a new way of looking at the big picture...
Well Put

You have covered off the thought process of the many out there who have been tossed out the boardroom windows or flushed down the toilet like human excrement.
I also strongly believe that "the creators of value" (as you put it) are being taken advantage of during the hard times we are experiencing right now.
As I have said before, I believe that companies like Canfor, West Fraser, Tolko and Interfor have been, and still are, using the depression we are now experiencing as the "convenient truth" to accomplish their goal of people selection, and cost reduction allowing greater profits, not for the betterment of the industry, but for the personal gain of the Jimmy's and Hank's of the world.
The Province has been and still is being inundated with the prophetic devastation and destruction dreamed up by these types of corporate leaders. This will continue to occur because this appears to be the dream that all Canadians envision as being what they view success to look like. It's just to bad that the big dogs or "pack leaders" do not view the remainder of the pack as being worth anything other than the rotten scraps left behind after the big dogs have had their fill.
I have said this before, and I will say it again, "the Jimmy's and the Hank's" of the world do not care about the devastation they have created, nor do they care about the persons who have literally lost everything because of the very poor thought out decisions made by the likes of the Jimmy's and the Hank's. As long as these types of people are allowed to run our province (Gordo is just a puppet) we can and should expect the same result, nothing has changed to indicate any form of a change in vision.
I believe that our whole industry structure needs to be re-set and I think the only way to facilitate this type of change is for the province and its industries to be shut down, or "indefinitely idled" as the corporate leaders of our province so eloquently put it. Maybe this will allow for the pain we all are experiencing to be also felt in the corporate board rooms of the province and the world.
We do have the ability to make this type of change happen. I guess the question is, will this make any difference and do we care enough to want to see this happen? Money can not buy the souls of people unless we as individuals allow it to do so....please do not sell yourself, but if you have buy yourself back by holding onto what really matters.

I guess we have to look at it from the perspective of the persons who have lost everything, including their families....they have absolutely nothing to lose and everything to gain.
Exactly, I agree 100%.
I talked about the solution on the tax freedom day thread earlier before reading this.

IMO we need to have employees on the balance sheet and income statement. It can easily be done through amortization tax accounting laws that recognize an employees value to the firm in training and experience and associate the true cost to the firm when 'captains of industry' make the numbers look good for their own financial agenda. Laying off people should be reflected in the financial statement in a clear and transparent as possible way that is accounted for as per a national standard based on industry types.

It could be done and it would hold operations managers accountable for their true bottom line. One has to ask why government hasn't already done this, and who really does our government represent when they turn a blind eye to this glaring inconsistency with accounting ethics as it relates to the citizens and workers of our country?

Canada has no leadership IMO and our political parties are all globalist occupied.
"How does a piece of lumber or plywood or any other product acquire “value”?"

Other than in one short paragraph, that topic is not discussed in the above. It is, in fact, a very complex topic when the investment of time and money by hundreds and thousands of people is considered. Instead, the article deals only with those who provide the capacity to invest versus those who provide the capacity to apply mainly physical labour based on the article’s description as opposed to the labour of applying idea generation.

First of all, let us remember that without a purchaser of a product, the product has no value whatsoever. One can invest, create, produce for months and years. There is no value unless, by definition of the word, there is a desirability for that product.

The “cost” of creating something is not necessarily the value of that product. The value can be higher or lower. In fact, it normally is. That is why there are “sales” of products that have been overpriced, over-stocked and/or even over-produced

When a wood carver walks through a forest and selects raw materials, comes back to his or her studio and begins to carve bowls, plates, vases, tumblers, mobiles, wall decorations, masks, picture frames, etc., a price is put on the products. Those prices are normally based on an expected monetary return on the work put into creating the product as well as the cost of the investment of tools, workspace, travelling by vehicle to pick up the raw materials, etc. etc. Sometimes it even includes the cost of borrowing money to continue to live while working, or, at the least, the cost of investing a saving and tying it up in the “business”.

When one buys one of the articles produced, the price applied to the product confirms to the maker of the product, that the monetary value given by the purchaser was at least equal or better than the price put on the product by the producer.

If the products sell very quickly at the marked prices, the producer, may increase the price since he or she has not read the market right and has not understood the value of the product put on it by the public. On the other hand, the reverse may be true and the price will have to be reduced.

In the end, the hourly monetary pay for the product creator is determined on a very simple calculation. Dollars paid by the customer minus cost of facility, tools etc. divided by time input into the entire process. So, the return may be $5/hour to $50 per hour to $500/hour, depending on the demand for the products - the value placed on the product by the public.

The relationship stays simple. The investor of time, space, production equipment, creative ideas, production skills and marketing acumen is embodied in one individual. While that individual might fight within him or herself on occasion as to which expertise is the weakest or the strongest and adds the most “value” to the product, it is really moot unless he or she is prepared to consider adding another partner to strengthen the weakest link.

Along come Peter and Dawn suggesting that the real value of the artisan is not the component of the artisan that has the daring get-up-and-go attitude, the part of the artisan that is the risk taker, nor the part of the artisan that determines the price structure, nor the part that determines where to market the product, but the part of the artisan that actually takes tools in hand and shapes the bowl from the burl.

That, to me, shows that neither Peter nor Dawn have any real understanding of what has become, in today’s society, a very complex integrated and interdependent process.
I got thinking about this. Maybe someone can point out the faults in this logic.

IMO the globalists are committing an econocide on the American middle class, and soon to be a two for one with Canada suffering too, but not how most people would think.

In America most would agree by now that it was the unregulated derivative trading on home mortgages that was the source of the so called 'credit crisis'. This unregulated derivative trading was an engineered policy advocated and run by the globalists and was a tool used on America by the bankster financiers to manipulate American markets.

In Canada however they had a far easier approach. They had Brian (globalist cash bags) Mulroney and NAFTA. With NAFTA they got all that they needed to destroy Canada at a future date. With NAFTA they got Canada to guarantee Canada's natural resources at 'world spot market prices'... these are the prices that are controlled by the globalist banksters through their unregulated derivative markets estimated today at $600 Trillion in contracts of paper money bet/hedging (more like manipulating) world markets. Those banksters own the US Congress and they are protected by the US Federal Reserve from any loses they incure in their casino gambling with their private contract printing press dollars.

The key for Canada is that now that the Americans are about to embark on a policy (bankster financed policy) of quantitative easing of $2 Trillion dollars a year in paper money being introduced into the system... foreigners are already running to gold, soon global resources will cost Americans more as the American dollar become diluted and loses its value.. Canada will try to quantitative ease at pace with the Americans devaluing the Canadian standard of living, but the world spot prices for which Canada is bound by NAFTA will ensure that Canada's resources will drive the Canadian dollar up and manufacturing in Canada out. The winners will be the financiers that own the oil companies, pipelines, gas, and other multinational monopoly resource based industry, but the losers will be the majority of the middle class who worked in manufacturing and its spin of industries.

Officially it will be the Canadian dollar that killed Canadian manufacturing, but in reality it will be our treaty bound to global spot prices for our natural resources... a spot price controlled and manipulated by an unregulated and unaccountable derivative market owned and operated by only a handful of industry captains all operating in the shadows. They IMO have Canada and the vast majority of Canada's middle class at their mercy. NAFTA was our surrender document.

Canada's only hope is that the globalist ponzi scheme goes broke in spectacular fashion quick and clean where a further bailout is simply impossible and a new system of government issued credit replaces the current private central bankers... in the meantime NAFTA is not going to be to Canada's advantage when we have this financial gun to our head.

IMO the globalists are committing econocide on the Americans and we are going to be the wholly owned collateral damage.
Gus, I think you are talking a point that is taken as a known. I didn't see Peter or Dawn exclude those people adding value to the value chain... only alluding to some actors that insert themselves in the value chain when they in fact are not important or are putting to much value on their own participation out of disproportion to their real value. Which raises the question of your value in the value chain... do you have insecurities about that, because IMO consultants should when it comes to benefit/cost analysis....
"only alluding to some actors that insert themselves in the value chain"

The artisan already has that actor inserted into the value chain. That "actor" is a component of the single artisan in my description.

In comes the division of labour and all those things that the artisan does gets divided into elements which are integral to the whole. When those elements are distributed among others, those people and organizations can dela with their specialty. If each is good at what they do, the whole survives. The weakest links in the chain will cause the system to eventually fall apart.

To say that one can survive without the other is ludicrous.
I was fortunate enough to catch Corky Evans speaking in Prince George last week. For many of us Corky Evans optimized the grassroots here in BC, a “down home” sensibility that understood where we are coming from. His retirement is a sad loss.

Corky noted, more or less, during his speech that the NDP has lost its way and I have to agree with him. The NDP just doesn’t represent our communities any more – at least not the way Corky did.

He was also right when he stated the fight is no longer in the domain of one party against the other. The fight today is in our communities against the corporations, but I would add – against ourselves – our own hungry consumerism feeds these corporate beasts. Marx, Engels and even Smith all can inform us, however, there is a new order we must organize against and if we are to win against it we must recognize we are a part the problem we seek to struggle against.
"we must recognize we are a part the problem we seek to struggle against."

Amen to that!!!

"do you have insecurities about that, because IMO consultants should when it comes to benefit/cost analysis."

That is your opinion.

Your definition of a consultant and mine is likely quite different.

An artisan is to a consultant as a creater of things is to a creator of thoughts and processes.

The insecurities come when one's creations, be they products or services are not being bought to the level that will sustain a desired lifestyle.

Those insecurites are not much different for the creator of products or services who produces them for an employment contract paid through a salary or wage, or through a direct contract with a client or purchaser.

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With respect to cost/benefit analysis, that is quite simple.

As a business owner, or as an organization such as a City, I have the need to do A and B and C during an average year. I have a choice to hire someone full time or part time, provide all direct and indirect costs for salary and benefits, support services such as office space, receptionist time, etc. etc. or have a choice of several contractors who can do those things, even to the point of hiring a specialist for A, one for B and one for C all working parallel to each other.

Each scenario has different advantages and disadvantages. Each has different costs and committments. So, that becomes benefit/and costs along with associated risks.

Insecurities? I think all the parties to the process would have some insecurites. Those insecurities are the risks once takes as an owner, a contractor, or an employee. No one is removed from risk. Life is a risk.

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So tell me, eagleone, do you think that tourist guides and others working on their own as a proprietor of a tourist service would not have insecruties with respect to a cost/benefits analysis of their services?
"The fight today is in our communities against the corporations, but I would add – against ourselves – our own hungry consumerism feeds these corporate beasts"

This is very true nechakogal. Most people, however, would not want to admit that they may be part of the problem. Many of these folks are the ones who borrow the maximum amount that the banks would lend them for a house, have two brand new vehicles in the driveway, go to Mexico every year, have maxed out their lines of credit and credit cards, etc.

They fail to see the link between their own behaviour and the larger issues taking place in the economy. Heck, even our governments feed into this by suggesting that everyone should be able to afford a house, so they allow 30 and 40 year mortgages which let people get into houses allright, but it lets them get into houses that they really can't afford. Everyone wants to spend money like they make $250K a year, but unfortunately, most families make well under a third of that.

Indeed there is lots of blame to go around and there is no doubt that some of the groups discussed in this thread share in the blame in a pretty major way. That being said, so does joe average. Sometimes it's easier to blame others though. Blame the bank for giving someone a mortgage instead of the guy who should've known that he couldn't pay it back. Blame the credit card companies for having outrageous rates instead of the guy who racked them up for crap he didn't need.

It's easier to blame a shadow figure because you can't see them and you don't know who they are. It's tougher to cast blame when you can see the person in the mirror every morning.
Let me grab another little gem from the above article.

"Workers in the forest industry in British Columbia are among the most highly productive in the world. They have a wealth of skill, experience and knowledge that they bring to the production process".

Who are those "workers"? What makes them productive? Did they make themselves more productive by working harder or were they given tools and taught how to use them to make them productive?

I suggest that when comparing forestry workers from one country to another, have a look first at the technology that has been handed to them, which actually reduces the number of "workers" required to produce 1,000 cubic metres of product "A" versus the number of "workers" required in a less technologically outfitted company or country.

The operator running the feller buncher, is that operator any more skilled than the person operating excavation equipment on a construction site?

Are we forgetting about the designers of the machines? The designers of the processes used?

These days those are often from another country or another province. The machinery, whether woodland based equipment or manufacturing lines for sawmills, sheet products, composite wood structural members, pulp, paper, pellets, syngas, etc., is the key to reducing the number of person-hours per unit of product and thus provides the increase in productivity measure.

The "worker" of 100 years ago and 50 years ago and even 30 years ago has changed considerably. With that change has come the change in the location of the worker from the woodland to the small sawmills that were located all along the rail line outside of communities such as Prince George, to designers and controllers and a myriad of others sitting while doing their work.

The hand faller carrying a 48" bar chainsaw slung over his shoulder is becoming a person from a bygone era.
pure garbage. without financiers, there is no company, hence no jobs. If this is not true, then why don't all the unemployed forestry workers go out and form their own company - bigger and better than any other forestry company??? Because they can't. They are workers. they work until there is no more work, then they go somewhere else. Been happening since the dawn of time. Get used to it. All your meaningless communist babble is worthless. And to think this trash is spewing from professors who should know better.
Gus and gamblor both have good points. Gus talks about the change in the average worker in the forestry industry. He is quite right. I know that many like to think of our loggers and mill workers as men of Paul Bunyan's stature, but the reality is that with newer technology and more automation, they are becoming more and more like the information workers that they seem to express so much displeasure towards. Their value is more and more associated with the skills that their brain brings to the job, instead of their braun. Not exactly your classic "blue collar" worker. So when it comes to ascertaining who provides the most value to the organization, is it the guy who uses his brain to grade lumber, or the gal who uses her brain to develop markets for that lumber? One would be considered a direct cost, while the other overhead. One defended, one often scorned, both essential.

Gamblor has probably the most valid point. Without people willing to invest hundreds of millions of dollars (money that the "blue collar" workers could never accumulate, let alone be willing to risk), there would be NO jobs.

Of course, workers are indeed necessary and they should be valued like the important component that they are. Shareholders are also important because without them, the jobs don't exist. You can't have one without the other and it's important to balance the priorities and needs of both. You can't have a healthy company without that balance.
I would argue that today's monetary system devalues all of these workers and unjustly compensates a few. I think we must make fundamental reforms to what we use to measure value. This is also a notable concern for the unpaid labour that goes on within our communities and homes (see Marilyn Waring). I read an interesting paper the other day by Dr. Erhard Glötzl arguing the merits of interest free money. Here is an excerpt where he is describing a period in history when an 'interest free' monetary system operated:

"A study of Harvard University describes these times in the Middle Ages as some of the happiest and most prosperous for humanity. In the Germans peaking world hundreds of cities were founded, the Hanseatic cities flourished and for the first time there was public wealth for a wide number of citizens, which can be seen in a number of preserved cities like Dinkelsbühl, Rothenberg, Lübeck, etc. Never again has there been a comparable number of artists and craftsmen in history. Every joist on every building and every last stone on the top of churches and cathedrals was decorated artistically. Especially cathedrals give evidence for the enormous good fortune of those days. They were not built by forced labour like the pyramids, but by well-paid craftsmen and architects. And this widespread welfare was not the consequence of increasing productivity and economic growth in our known sense but only the result of a long economic period without harmful recessions and a money system which guaranteed circulation without exploitation. Mostly a five-day working week was usual, because the "blue Monday" was holiday for the guilds".

without labour there is no capital
Without capital there is no labour.
Without Oprah there is no "free" gift under the seat.

Without Hollywood there is no $6 popcorn.
Without MacDonalds, close to a billion head of cattle would not have lost their lives.
Without the earth, there would be no global warming.
Wait ... there is no global warming .... does that mean there is no earth?
What is the true meaning of life? Only Marx and Engels know.
42
the python knows
OK anyone describing medieval european life in those terms has got to be insane. Five day work week for whom? Cathedrals built by willing artisans, yes. With money tithed from people who were one bad crop away from starvation. Seriously, what is the point in trying to interpolate the cause of a period of prosperity hundreds of years ago other than to support an otherwise unsupportable point? Interest free money is an unrealistic dream. If you disagree, then lend me money at 0 percent instead of getting 4 percent on that GIC. No? why not? Answer that and you have the reason why interest free money isnt going to happen. opportunity cost is opportunity cost, regardless of what form it takes or who is charging it.
Brakteaten Money http://p2pfoundation.net/Brakteaten_Money

J.A.K. from Sweden - a fee for service to pay for their operations but no interest on the money. http://jak.aventus.nu/22.php

WIR from Switzerland http://www.youtube.com/watch?v=uQehEGGwy0Q

The world is a wonderful place. All sorts of systems are possible and may flourish.

The people using them have different values and will actually practice them. Soem may pronounce them insane. I think that they are better described as eccentric. In other words, they may not follow what others describe as the norm and others think how everyone must obviously act.