The New Staple State: Political Economy and Public Policy Regimes in Canada’s Primary Industries



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Competitive State: A Reconsideration of the Staples State

Jessop (2002a 2002b) argues that since the early 1970s the post-war Keynesian welfare state has been destabilized by crisis and in decline. In its place has emerged the Schumpeterian (name after the Austrian political economist Joseph Shumpeter) competition state. The ‘generalized’ Shumpetearian competition state’s orientation is “the concern with innovation, competitiveness and entrepreneurship tied to long waves of growth and pressures for perpetual innovation” (Jessop 2002a). Such a state must facilitate one of the key features of nearly all capitalist economies, the transformation from an industrial to a knowledge-based economy.

Some of the key characteristics of the Schumpeterian competition state include, changing regulatory frameworks to facilitate market flexibility and moblility, the liberalization and deregulation of foreign exchange (that will facilitate the internationalization and acceleration of capital flows), modifying institutional frameworks for international trade (the harmonization of technological, economic, juridicopolitical, sociocultural and environmental issues), promoting national-level industries and their ‘global spread’, and engaging in place-based competition in an attempt to fix mobile capital within the state’s own economic spaces and thereby enhancing interurban, interregional, or international competitiveness (Jessop 2002a). Hutton (Chapter 2) also discusses the growing importance of transnational urbanism as the leading agency of economic growth and change and the movement away from a policy emphasis on resource development. While Jessop dedicates most of his discussion to the Schumpetarian competition state, he does highlight other forms of competition that may lead to other forms of political action. The competitive state directly linked to staples production is the Richardian competitive state.

The ‘Richardian’ (coined after the British Economist, David Richardo) competition state stresses the importance of a comparative advantage and/or relative prices (Jessop 2002). Such competitiveness depends on exploiting the most abundant and cheapest factors of production in a given economy and exchanging products embodying these factors for products from other spaces with different factor endowments. Richardian competitiveness depends on static or stable level of efficiency in the allocation of resources to minimize production cost with a given technical division of labour and on the assumption that current economic conditions will continue (Oser and Blanchfield 1975). The importance of natural resources to nearly all of Canada’s provinces (Table 2 above) means that some provincial states will continue to promote their natural resources (abundant factors of production) and will take on this Richardian state form.

A Richardian competitive state may lead to provincial states shifting their focus from the traditional economic concerns of the U.S. market to integration and involvement in a host of new ‘global’ conditions, namely, the global market place, transnational issues such a climate change, the challenge of international-based environmental movements, and international organizations such as the WTO. However, the importance of national states and regions should not be underestimated or overlooked in an era of new globalization pressure (Skogstad 2000). In order to ensure the continued functioning of capitalism, Jessop (2002) highlights new types of relationships between global, national, provincial, and local spatial scales that now face the competitive state. The political economy of ‘rescaling’ will have significant consequences for Richardian staples based states. Increasing globalization and new concepts of competition have led to a wide array of new spatial scales that are becoming increasingly complex tangled hierarchies rather than being simply nested one within one another” (Jessop 2002). This process, Jessop coins as the ‘eccentricity’ of spatial scales. Regional and local areas continue to retain their importance as spaces of competitiveness. The static features of natural resource production or extraction have different consequences for its comparative advantage than Schumpetarian states whose comparative advantage is centred on more dynamically based knowledge creation. The rescaling of the state, accumulation and regulations has lead to the reshaping of the hierarchy of regions on all spatial scales (Jessop 2002). The Richardian (staples) competitive state is a response to nature of staples production within an open market. As a result, Richardian staples states may become detached from national issues and respond to its role within newly rescaled areas such as such as emerging trading blocs.

This discussion of the Richardian and Schumpetarian competitive state raises further questions about the role of natural resources and the state. It must be noted that all Richardian states will attempt to pursue Schumpetarian competition strategies. Future research will be required to determine what mix of the two strategies result in defining what is Richardian (staples) state and what is a Schumpetarian state. Although the Richardian state will be responding to new spatial scales, the existing temporal path dependencies should not be overlooked. The institutional frameworks that have in some cases been fostered for over fifty years will also continue to influence the state’s strategies.

Governance


In light of such rescaling processes, another important aspect of the competitive state is a reconsideration of its governance. The remaining sections of this chapter delves into the policy related aspects of the staples state. Three distinct modes of coordination – markets, hierarchies, and heterarchies – through their respective mechanisms (exchange, command, and dialogue) (Table 3) define governance within the competitive state. Heterarchy, refers to the emerging “horizontal self-organization among mutually interdependent actors” (Jessop 2002a). It is an important feature of the competitive state because of the attempt to reconcile and transcend the twin tendencies of market and state failure -- predominant features of modern capitalist economies.

Table 4. Modes of Coordination within Competitive Capitalist States




Exchange (market)

Command (hierarchy)

Dialogue (heterarchy)

Rationality

Formal and procedural

Substantive and goal oriented

Reflexive and procedural

Criterion of success

Efficient allocation of resources

Effective Goal attainment

Negoitated consen

Typical Example

Market

State

Network

Stylized mode of calculation

Homo Economicus

Homo Hierachicus

Homo

Politicus



Spatio-temporal Horizon

World market, reversible time

National Territory, Planning Horizons

Re-scaling and path shaping

Primary criterion of failure

Economic inefficiency

Ineffectiveness

‘Noise’

‘Talking Shop’



(Adapted from Jessop 1999a)

Heterarchic arrangements seek to overcome the complexities associated with “a world that is characterized by increasingly dense, extended, and rapidly changing patterns of reciprocal interdependence, and by increasingly frequent but ephemeral interactions across all types of pre-established boundaries, inta-and interorganizational, intra and intersectoral, intra-and international” (Scharpf in Jessop 1999b). This contrasts with the traditional hierarchical territorial modes of coordination. It implies that major problems have emerged “that cannot be managed by top-down state planning or market-meditated anarchy” (Jessop 2002b). Heterarchies can be illustrated in public-private partnerships and multi-level governance arrangements that have been well documented in policy literature (See Rhodes (1997) for a broad overview). Jessop argues that governments also tend to play a significant role in coordinating all three forms of governance in the context of ‘negotiated decision-making’ within what he labels as ‘metagovernance’ (Jessop 2002a). Governments play an important role in terms of the ground rules but are no longer the sovereignty power but are another participant. Furthermore, Hajer (2003) states that politics and policy making are conducted in an institutional void where such institutions such as political parties and bureaucracies based upon “territorial synchrony” are being challenged by a network society centred on policy deliberation. Furthermore, the classical-modernist politics (codified arrangements) do not tell us about the “new rules of the game” (Hajer 2003). Heterarchy is an important feature to consider when examining new policy directions within the Richardian (staples) state. For example Cashore et al (Chapter 14) discuss the influence of non-state actors in determining the forest management practices.


Anthropology of the state and neo-pluralism

Related to the different modes of coordination are its policy-making features. To do so, an anthropologic metaphor of the state and a neo-pluralist theory of the state are highlighted. Both concepts permit political economists a bridge between macro-level and meso-level (policy related) investigation. Migdal (2001) argues that by “presenting states or civil societies as holistic, some scholars have given the misleading impression that at key junctures in their histories states or societies have pulled in single directions” (p.98). Struggles within society are often obscured when the state given “ontological status” and thereby treated an organic entity. Migdal (2001) draws attention to the state’s engagement with social forces and considers its multiple levels. “Social scientists” he states “must develop a new anthropology of the state.” The state is simply not a reflection of the will of its leaders but an arena where social forces and groups interact. Within the state, the “calculus of societal pressures” differs markedly. Such pressures affect four levels of state organization: the trenches (similar to Lipsky’s (1980) street level bureaucrats), dispersed field offices, the agency’s central offices, and the commanding heights (the executive leadership). Political scientists have focused their attention on this last component of the state while taking the other layers of the state for granted. Unfortunately, how the state interacts with societies rarely reflects the policies developed by state leaders or state agencies. Similarly, Heclo (1978) states that government direction is often influenced by those in the middle echelons of the bureaucracy: "while not the most powerful participants, these agents of change have usually had access to information, ideas, and position outside the normal run of organizational actors.” Block’s (1977) reminds us that state managers also play an integral role within the state apparatus and the maintenance of the capitalist system. A neo-pluralist theory of the state is able accommodate the associated challenges of a disaggregated state concept.

Neo-pluralism is a well developed literature that situates the state within advanced modern industrial society. Problems of modernity, in particular the failure of the KWS, neo-pluralists argue, have led to increasing differentiation in the systems of society and the state. The neo-pluralist response dwells on the problems of modernity and state crisis. Their goal is to avoid analyzing social and political problems with crude, anachronistic or ideological theories or frameworks. Instead they suggest a sophisticated liberal analysis centering on the operations of large corporations and the modern extended state. They urge the necessity for updating intellectual toolkits to cope with the inherent complexity of modern social systems (Dunleavy and O’Leary 1987).

Neo-pluralism’s intellectual roots are eclectic, ranging from political scientists such as Lindblom’s (1977) seminal piece, Politics and the Markets, unorthodox economists Gailbraith (1962) (1969) (1974), Williamson (1975), or Myrdal (1975) as well as organizational theorists (Etzioni 1968; Laumann and Knoke 1987), and cultural theorists (Habermas 1971; Bell 1973). Neo-pluralism is a critique of pluralism’s basic assumption that the state is a purely neutral mediator. They point to pluralism to a lack of consideration given to oligarchical attributes that control the state (Knuttila 1987; McFarland 2004). From a neo-pluralist’s perspective, the state is neither a structure for capitalist class rule nor a neutral umpire adjudicating between competing claims of social groups. Rather, the “state is an autonomous social formation whose strategies emerge from the basic organizational imperatives of competing with environmental uncertainties, resource scarcities, and socio-legal constraints” (Laumann and Knoke 1987).

Neo-pluralists highlight the structural differentiation within the state, increased control over societal resources, and expanded intervention into the economy and society. This they argue is also accomplished by a parallel transformation of social segments into organized interest groups Dunleavy and O’Leary (1987). Williamson (1975) points to the influence of social values and institutional arrangements on economic arrangements, namely the importance of the large corporations and the extended state. Neo-pluralists argue that government intervention in sustaining corporations. The boundaries between the public sector and private interest groups become blurred in the policy making process leading to a state organization that stresses the fragmentation of government and the resulting professionalization and a professionalized public administration (Richardson et al 1982). The growth and engagement of new societal policy actors has lead to a “hollowing out” of the state (Rhodes 1994) (Milward and Provan 2000) or a “hollow core” (Heinz et al 1993). Responding to the changes in the British government, Rhodes (1994), argued that ‘hollowing out the state’ is about redesigning government to cope with scarcity and devising complex solutions to problems which defeat the simple-minded nostrums of both free markets and national plans” (p.151). This involves devolving power to private or semi-autonomous governance structures or other levels of government and the provision of alternative service delivery mechanisms.

Policy Communities and Networks: Drivers of Richardian (Staples) Competitive States

The various modes of governance (markets, hierarchy, heterarchy), an anthropological view of the state, and neo-pluralism theory of the state helps to provide a link with a bourgeoning policy process literature that focuses on the interactions between policy actors (organizations) within sectoral specific “policy communities”—that is the configuration of governmental and societal organizations within a policy sector (Wilks and Wright 1987). The overall importance of the aggregated staples based policy communities (in relation to other economic sectors) has significant influence on the competitive state typology (Figure 1). As potential drivers of a staples state, an understanding of the policy process is critical. The policy process literature examining Canadian natural resource sectors (forestry in particular) is extensive (Pross 1986) (Grant 1992) (Howlett and Rayner 1995) (Cashore et al 2000) (Howlett 2001) (Lindquist and Wellstead 2001) (Monpetit 2002) (Wellstead et al 2004). All of the chapters in this volume have a public policy focus and implicitly discuss policy communities and policy networks (the relationship between governmental and societal actors) within each of their respective sectors. Most use policy process terms and its lexicon such as policy communities, policy networks, or policy regime. The policy process literature also captures the modes of coordination (market, hierarchy, and heterarchy) that defines contemporary governance within competitive state. For example, Cashore (Chapter 14) details the impact of forest certification as a market driven governance system; Fitzpatrick examines hierarchical relationship between environmental NGOs, business and industry associations and the Northwest Territorial government in the northern policy community (Chapter 12); and Thorpe and Sandberg (Chapter 13) describe nascent heterarchic coordination initiated by social movement demand initiated by First Nations and environmentalist groups, and increased public interest “in preserving rather than extracting forests.”



Table 5. Policy Process Focus of the Volume’s Chapters

Chapter and Author(s)

Policy Community

Policy issue Networks

Focus

Policy Process Concepts

3 - Skogstad

Agriculture

Trade, agrifood, consolidation

National



4 – Moore

Agriculture

Genetically Modified Foods

National



5 - Hoogensen

Fisheries

Trade disputes, fish supply

National




6 – Rayner and Howlett

Aquaculture




National and Provincial



7 - McDougall

Water

Trade

National



8 - Netherton

Hydro-electric

Restructuring-Trade

National and Provincial



9 - Brownsey

Oil and Gas

Climate Change

National




10 - Clancy

Oil and Gas

Offshore Petroleum

National and Provincial



11 -McAllister

Minerals

Economic impacts

National



12 - Fitzpatrick

Diamond mining

Aboriginal rights

Territorial



13 – Thorpe and Sandberg

Forestry

Forest management

Forestry



14 - Cashore

Forestry

Forest Certification

Provincial


Absent were discussion of the role of agenda setting (Kingdon 1984) and punctuated equilibrium (Baumgartner and Jones 1993) within the policy process. This literature is particularly timely when determining the comparative importance of natural resource issues to the staples state. Thus, compared to Ontario, agriculture issues will be high on the Saskatchewan government’s overall agenda. The widespread destruction of policy monopolies as a result of punctuated equilibrium within policy communities may signal the shift in the overall direction of the state from staples to a post-staples state. Similarly, the a shift in policy core beliefs within policy communities may also be indicative of such changes within the state.


Conclusion


This chapter sought to reconsider the recent trend of a shift from the staples state to a “post” staples state. This shift has many valid merits. As Hutton (Chapter 2) revealed natural resources within some provinces face widespread resource depletion, the competition from lower cost staple regions, regional market (ie Pacific Rim) integration, and growth of city-regions. This may be the case for Canada as a whole and in provinces such as British Columbia, Ontario and Quebec. However, many provincial and territories continue to remain staples dependent.

Throughout Canada’s history, the match between the staples state and a generalized state type has been uneven. Until the dawn of the 20th century state involvement was minimal. However, the emergent state represented the golden age of the staples state. During this period, Canada’s economy centred on natural resource exploitation and the state facilitated it. This contrasts with the shift in the Keynesian welfare state’s (KWS) strategy of increasing industrial capacity. With its crisis, the competitive has emerged. The competitive state captures the trend towards new post-staples economies and as well as acknowledging that there are regions that remain steadfast in the staples dependent trajectory. Whereas Schumpetarian states stress the importance of knowledge and innovation, Richardian states rely on exploiting resources based upon their comparative advantage. The competitive state literature also presents a reconsideration of governance that includes reflexive modes of coordination such as heterarchy along with market and hierarchal modes. The second half of this chapter delved within the competitive state and considered the anthropological features of the state that many political economists overlook. A growing complexity and its organizational, led to a neo-pluralist conception of the state. These concepts represent a bridge between a macro-level political economy understanding and meso-level policy concerns that the chapters in this volume capture.



Figure 1. The (post) Staples State

{

Macro-level

Strongly Richardian

Competitive (Staples) State



Hybrid

Competitive

State

Alberta

Saskatchewan

New Brunswick

Nova Scotia

Manitoba


British Columbia

Ontario

Quebec


Canada

Strongly

Shumpetearian Competitive (Post-staples) State



Meso-level

Staples-based Policy

Communities

{

Agriculture

Policy Community


Forestry


Policy

Community



Energy

Policy


Community


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