We Need More (not less) Wood Manufacturing in BC
By Peter Ewart
Thursday, March 25, 2010 03:45 AM
Part 1 - by Peter Ewart
It is often said that ideas are powerful things. That is true in the positive sense, but it is also true in the negative. Such is the case with the idea propounded by Alan Greenspan, former Chairman of the U.S. Federal Reserve Bank and other establishment economists over the last several decades, that our future lies in a “post-industrial” economy.
According to their logic, there is no difference - in terms of effect on the economy - between manufacturing jobs, such as in forestry, auto or steel, and those in the service sector, such as tourism or financial services. Thus they raised no alarm when, over the last several decades, literally millions of manufacturing jobs were outsourced by multinational corporations to China, India, South America and elsewhere. In any case, employment in financial services was ballooning, and there were all those Starbuck outlets opening up across the continent. Just look at British Columbia and the avalanche of jobs the Olympics were poised to bring.
Governments were complicit in all of this, none more slavishly than in Canada and British Columbia where hundreds of thousands of manufacturing jobs have been eviscerated from the economy. In the forestry sector in Canada, literally hundreds of mills and logging operations have been shut down, many permanently. Over the last few years particularly, both corporate re-investment in operations, as well as funding for research and development dried up, while diversification of both products and markets stagnated or turned negative.
Some will argue that the decline is because of the collapse of the American housing market or, in British Columbia, because of the pine beetle infestation. However, while these things have aggravated the problem greatly, it is also a fact that the decline started long before these events and involved additional factors.
When workers, contractors and others raised the alarm about the de-industrialization in forestry and other sectors of the economy, government officials looked sideways at them and said coyly that “it was market forces at work” and nothing should be done to interfere. After all, we live in the era of “globalization” and “de-regulation”, and the monopolies and multinationals should have free rein to do whatever they choose.
The people of the world have experienced the bitter fruits of this ideology over the last couple of years, with the collapse and subsequent massive bailout of the financial services sector, and the pall of the “great recession” descending over all sectors of the economy.
In terms of British Columbia, the International Wood Markets Group has just released a report on the state of the forest industry in the Interior of British Columbia. The report suggests that, as a result of the pine beetle infestation, timber harvest and lumber production in the Interior of the province could be reduced by as much as 50% from its peak in 2005. This, in turn, could well result in the “permanent closure of about 16 large primary sawmills and/or plywood production facilities … by 2018 (with more to follow).”
Now some of the conclusions of this report are being disputed by the BC government because, according to its officials, the report doesn’t take into account current bio-energy initiatives, the growing Chinese market, and so on. However, the fact remains that a number of large mills are likely to close in the next few years, leaving a “brave new world” of two or three forestry multinationals monopolizing the industry and controlling the timber supply even more than before.
Despite all of this, various government officials and economists are still trying to paint a rosy picture of the BC economy. But many workers and others in the Interior are hearing a loud hissing sound. Taking wood manufacturing out the province’s economy will have the same effect as air leaking out of a balloon. It may take a while, but in the end all we could be left with is a flabby piece of rubber in one hand and a cup of lukewarm Starbucks coffee in the other.
Why is this the case? Why can’t we simply restock the BC economy with tourism, financial services, “green” and “knowledge” occupations, and other kinds of non-manufacturing jobs? After all, lots of people in the world know about the province now because of the Olympics, and surely some of them will come again for a skiing vacation or a trip up North? Or maybe an Asian bank or two will set up a branch in Vancouver?
And so it is that we are still being hit with the same discredited ideas that have been flogged again and again over the last several decades. Alan Greenspan’s ghost still walks among us.
The next installment of this series will look at how manufacturing industries differ from service sector industries in terms of the creation of added value. Furthermore, it will examine how both manufacturing and service sector are crucial for the functioning of a modern economy, but that one cannot be substituted for the other - as some have proposed - without serious repercussions.
Peter Ewart is a writer and community activist based in Prince George, British Columbia. He can be reached at: peter.ewart@shaw.ca
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Posted by: John Grogan on March 25 2010 5:35 PM
PS - I heard that Alberta manufactures more furnature than BC does. Could that be true and if so that is a shame.