The Post-Staples State: The Political Economy of Canada’s Primary Industries

Chapter XV - The Dynamic (Post) Staples State: Responding to Challenges—Old and new - Adam Wellstead

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Chapter XV - The Dynamic (Post) Staples State: Responding to Challenges—Old and new - Adam Wellstead


Canada’s relatively abundant natural resources continue to an important thread of its cultural, economic, political, and social fabrics. Typically, traditional staples such as agriculture (Skogstad in Chapter 2), fisheries (Hoogensen in Chapter 4), forestry (Thorpe and Sandberg in Chapter 6) mining, electrical energy, and oil and gas production defined the Canadian image to the world as “hewers of wood and drawers of water.” Over the past twenty years, resources such as offshore petroleum (Clancy in Chapter 11) and aquaculture (Rayner and Howlett in Chapter 5) have emerged as new staples whereas the issue of bulk water exports to the United States, as highlighted by McDougall (Chapter 12), has become a controversial subject of much debate. Since resource exploitation began in the mid 17th century with fishing in the Gulf of St. Lawrence and the New France fur trade, trade issues have dominated throughout the entire resource sector. Trade related issues such the restriction of live beef exports, the softwood lumber dispute, and the sale of electricity remain at the forefront of contemporary governmental agendas. New issues, in particular climate change and genetically modified foods, have emerged, resulting in potentially negative impacts on their respective sectors (Moore – Chapter 3) (Brownsley – Chapter 10). A number of notable influences have been identified as common threads within all natural resource sectors: new forms of state engagement, transnational organizations, globalization and subsequent trade liberalization, environmental group pressures, First Nation’s land claims, and the threat of domestic resource depletion. Related to these influences is the growing degree of complexity involved in understanding each of these sectors. Complexity within resource sectors can be explained in part by the overlapping of the above issues and sectors, the increased number of non-state actors vying for influence combined with the willingness of state officials to share power with them, and the evolutionary impacts of federalism upon resource sectors (Lindquist and Wellstead 2001). Despite these changes, state involvement remains a cornerstone of Canada’s natural resource sector. This chapter examines the evolution of the contemporary staples state.

This chapter has two interrelated goals. First, it seeks to examine the emergence of a new form of staples state resulting from regional and global asymmetries. In the previous chapter Thomas Hutton chronicled the importance of the post-staples economy as the driving force behind new political and social identities. Hutton succinctly argues that the “rapid growth and hegemony of metropolitan cities, new rounds of industrial restructuring and attendant opportunities and destabilizing tendencies, processes of globalisation and transnationalism, the environmental movement and its nascent political affiliates, and redefining shifts in the nature of political discourse and policy practices” are strategic to the restructuring of 21st century Canada’s “social identity and political economy” (2005). Hutton’s argument is based on empirical examples that are either from a national or a British Columbian perspective. He also acknowledges his research is nascent and that further investigation is required. After reviewing the chapters in this volume Hutton’s post-staples state thesis is amended by adopting the unique position that the staples state still remains important within Canadian political economy research. While the contemporary staples state is faced with the same influences as the post-staples state, this staples variant continues to be dominated by path dependent properties that are different from those trends that direct the country and British Columbia. Predominately staples dependent regions, most notably Atlantic Canada and the Prairies, require a conception of the state that reconciles the contemporary with its past. To do so, Bob Jessop’s discussion of the competitive state’s ascendancy is examined in its relationship to both staples and “post-staples” states. There are two forms of competitive states that are relevant to a discussion of the Canadian (post) staples state: the Schumpeterian and Richardian competitive states. The main characteristics of the Schumpetarian competitive state as well as its development closely correspond to Hutton’s discussion of a post-staples state. The importance of the Schumpetarian competitive state is the focus of The Future of the Capitalist State. The Richardian competitive state receives only a passing reference (one paragraph). However, its characteristics leads to the argument that it in fact describes the contemporary staple’s state that continues to flourish throughout many parts of Canada. Below, we describe these two images of the competitive state and its relation to the Canadian staples context.

The second goal of this chapter is to make clear linkages between macro-level analyses of the competitive state with meso-level policy frameworks—more specifically the policy-making process. Nearly all the chapters in this volume touch upon both the role of the state and public policy implications. A simultaneous understanding of both is critical because policy decisions are precipitated by larger state factors. For example, Netherton (Chapter 8) describes the closed hydro-electric policy regime characterized by path dependencies within the context of trade liberalism. In this chapter, a neo-pluralist theory of the state permits political scientists the opportunity to engage at both levels of analysis while preserving theoretical rigor but permitting mid-level theoretical empirical examination.

This chapter first outlines the economic importance of contemporary staples production at both the national and provincial level. The next section chronologically defines the staple’s state in relationship with popular characterizations of from its pre-20th century form to the present competitive state. The competitive state is examined in greater detail, in particular, the Schumpetarian and Richardian variants. The third section discusses the importance of governance and the forms of coordination within competitive states. An overview of neo-pluralism and the anthropological aspects of the state follow this macro-level discussion of the state. From these two sections, an analysis of staples policy communities is examined.

Contemporary Staples Economies

Originally, the staples thesis, an export led model of economic growth attempted to how regional natural resource endowments led to the autonomous demands for and dependence upon exports, their spreading effects (linkages) to the rest of the economy, and to technological changes. From the 1920s through to the 1940s, economic historians, in particular, W.A. Mackintosh and Harold Innis applied the staples thesis in order to explain Canada’s early economic development. Although the staples thesis no longer explains current economic growth, some Canadian scholars have employed the staples thesis in their research. This is particularly the case of regionally based studies examining resource development and underdevelopment. For example, Marchak’s (1983) analysis of British Columbia’s declining forest economy and its impact upon labour and forest dependent communities in Green Gold relied heavily upon the staples thesis.

The prevailing view of Canada’s economy, as well as some provincial economies, is a shift from dependence on staples production beginning in the 1960s to emergence of “post-staple” based economy and with it, new forms of governance. Hutton’s (1994) (Chapter 3) analysis of British Columbia’s economy indicated a departure from staples production. These changes were the result of substantial natural resource depletion, increasingly capital and technological intensive resource extraction from lower-cost staple regions, and the transformation from pure extraction to increased refining and secondary processing of resource commodities. These changes it is argued will lead to a sectoral shift from natural resources to the service sector as the focus of economic growth. Similar observations have been made about the post staples evolution of British Columbia’s forest economy (Barnes and Hayter 1997), (Hayter 2000). Hutton (Chapter 3) also highlights the importance of the city-region driving the subordination of resource extraction over the past several decades.

Table 1. Economic indicators for Canada’s natural resource sectors

Year (2002)






Gross Domestic Product
($ billions)





$1 050.9

Direct employment
(thousands of people)





15 411

New capital investments
($ billions)






Trade ($ billions)

  • Domestic Exports
    (excluding re-exports)






  • Imports






  • Balance of trade
    (including re-exports)






Source: Natural Resources Canada (2003)

Table 1 above supports argument that Canada’s resources are declining in their overall national economic importance. Less than 7% of Canada’s workforce is employed in natural resource sectors and they contribute to less than 13% of national GDP despite the fact that Canadian exports of resources more than doubled between 1990-2001, growing from $72.0 billion to $167.5 billion or annual rate of growth of just under 8.0 per cent for the period (Department of Foreign Affairs and International Trade 2003). However, this resource-based growth rate was less than the 10.7% average annual rate recorded by non-resource exports, which increased from $76.9 billion to $234.8 billion (Department of Foreign Affairs and International Trade 2003).

Table 2. The role of resources in provincial exports: 1997-2001 averages

Revealed comparative advantage

Export dependency

British Columbia


















New Brunswick



Nova Scotia



Prince Edward Island



Newfoundland & Labrador






Northwest Territories






Source: Department of Foreign Affairs and International Trade 2003
A provincial consideration of natural resource related trade—the heart of staples based research-- reveals a greater dependence on the natural resources sector. The role of resources in the various provinces is best demonstrated by two sets of statistics in Table 2. The first, revealed comparative advantage, shows the ratio of the provincial share in resources trade to the national share of resources in total trade. If this statistic is greater than one, then the province trades relatively more in natural resources than it does for all other commodities. Conversely, if the ratio is less than one, resources are less important for their overall scheme of provincial trade. The second set of statistics is a dependency ratio that shows the share of natural resources in total provincial trade. This statistic indicates that trade in resources accounts for a certain percentage of total provincial trade. Both Ontario and Quebec had revealed comparative advantage scores less than one (0.46 and 0.99 respectively) and an export dependency less than 40% (18.6% and 39.99% respectively). High revealed comparative advantage and export dependencies were evident in nearly all provinces and territories. In the case of the Prairie provinces, both Alberta and Saskatchewan are highly dependent upon natural resource sectors. Their sources of dependency are highly differentiated. The oil and gas dominates Alberta’s natural resource sector while agriculture is the leading sector in Saskatchewan. Manitoba, on the other hand, has a comparatively diversified economy and diversified natural resource sector. While Manitoba is still dependent on natural resources, their economy includes strengths in agriculture, forestry, mining, and hydropower. Furthermore, Manitoba is a crucial transportation hub. As a consequence, transportation, an indirect but important staple related service sector plays an important role in Manitoba’s economy (4.7% of GDP and 20% of foreign based commodity exports) (Manitoba 2004). The variety of economic compositions and natural resource endowments in the three Prairie provinces suggests that state responses will also differ. The most surprising statistic was the results for British Columbia that revealed high comparative advantage (1.87) and (75.87) export dependency scores. However, as argued earlier, the province’s transformation to a post-staples economy should suggest lower scores. Recently, The Economist reported that the natural resource “sunset” had “given way to a new dawn” and driving a revival in the Province’s economy (2005). These cases suggest that a theory of the state related to staples development be developed in order to fully understand the differences between the staples state and the post-staples state.

Defining the Staples State

Conceptualizing the capitalist state’s evolution is a critical starting point to developing an understanding of a staples and post-staples state. The evolution of the state in Canada has always included staples. For political economists, it is a matter of linking staples production with a generalized state form. Four generalized forms are discussed in relation to staples production (Table 3): the minimalist state, the emergent state, the Keynesian welfare state, and the competitive state. There is a vast literature that describes each state typology. The point of this section is to capture the broad parameters of this evolution and illustrate the changing relationship between the state and staples production. Table 3 also highlights the importance the role organizations play in defining the state. Through its evolution, the state is defined by its organizational characteristics (Laumann and Knoke 1987). Moreover, the role organizations play also becomes important in the policy-making process.

Minimalist State

The pre-20th century period defined the minimal state period during which state involvement was sparse to non-existent in nearly all staples-based sectors. Conversely, staples defined Canada’s overall economic growth (Hessing and Howlett 1997). The state and its actions revolved around the facilitation or impacts on resource development for colonial or mercantilist interests. For example, the impact of a particular colonial policy decision, such the 1831 Colonial Trade Act or the 1854 Reciprocity Treaty defined the extent of state involvement. In The Fur Trade in Canada: An Introduction to Canadian Economic History, Innis (1930) stated that the administration of the early fur industry revolved around the interaction of two large mercantilist companies and their officials, namely the Northwest and the Hudson's Bay Companies, with the early traders. He notes that"[I]t was significant, however, that business organization was of vital importance [to the development of Canada's fur trade]" (Innis 1930 p.387). In the conclusion, Innis does acknowledge the staple related business linkages with early Canadian state: "The lords of the lakes and forests have passed away but their work will endure in the boundaries of the Dominion of Canada and in Canadian institutional life" (Innis 1930 p.393).

Similarly, in the forest sector, the Department of the Interior’s Dominion Forestry branch, the precursor of today's Canadian Forest Service was established in 1899. However, rapid commercial timber harvesting had been underway and proceeded unabated for nearly a century prior, particularly during the early 1800s.149 In eastern Canada, concern over the depletion of forested lands, precipitated calls for timber regulations (Ontario 1893). The Forestry branch was charged with the monumental task of the "protection of standing forests on Dominion lands" (Canada 1918). In western Canada, the Forestry branch reported that in 1918 it employed 562 members of which only 44 were "technically trained foresters" (Canada 1918). The Commission (1918) also highlighted the challenges of forest administration.

In the early stages, forest matters were dealt with by the officials of the Department of Lands. The work centred chiefly in Vancouver, at the office of the timbers inspectors. A forest ranger with a launch patrolled the 700 miles of coast-line between Vancouver and Prince Rupert. The forests of the interior country were administered by collectors, who paid occasional visits in quest of royalty due from operators who had cut Crown timber. In those days, even though logging operations were conducted on a small scale, this slender staff was unable to cope with the situation effectively (p115).
Prior to World War I, state involvement by either level of government in forest matters was very limited. A newly emerging cadre of forest professionals first seriously raised the concerns about the depletion of forests--at the 1906 Canadian Forest Convention in Montreal and the 1909 North America Conservation Conference (Burton 1972). State involvement within the natural resource sector was very limited. The state’s focus during the latter half of the 19th century was the expansion and settlement of Canada’s hinterland (e.g. construction of the CPR railway).

Emergent State and New Industrialism: The Staples State’s Golden Era

The minimal state conception contrasts with emergent industrialized capitalist state (1900-1945) and the growth of a “new generation of staples,” particularly the expansion of prairie based agriculture development. However, the role of the state in relationship to staples productions across all provinces and all sectors was rapidly developed during this period that Nelles (1974) refers to the “new industrialism.” One of the driving factors behind economic growth was a booming population as a result of the Federal government’s immigration policy. Canada’s net migration increased in the 1901-11, 1911-21, and 1921-31 periods by 716,000, 232,000, and 229,000 respectively (Marr and Paterson 1980). The influx of immigrants is largely attributed to the Prairie wheat boom, which saw the increase of populations (Marr and Paterson 1980). That is, Manitoba’s population increased from 152,506 to 461,394 between 1891 to 1911; Saskatchewan’s grew from 91,279 to 492,432 between 1901 and 1911; and Alberta’s grew from 73,022 in 1901 to 374,295 in 1911 (Innis 1943). Attracted to free or inexpensive landholdings, the area of Prairie land in farm holdings grew from 5.9% in 1881 to 52.9% in 1911. By 1971, this rate was 78.7% and by 2001, 81.4% (Statistics Canada 1995).

Accompanying the demographic and economic expansion of the agriculture sector was increased political activity in the form of protest movements. This emergence was most profoundly shown by the formation of the agricultural cooperative movements as well as many of the Prairie agricultural organizations, such as the Manitoba Grain Growers' Association and the Alberta Farmers' Association, some of which continue be in operation today. Grace Skogstad’s (Chapter Three) discussion of the initial early 20th century struggles by farmers to form agriculture cooperatives underlies longstanding history of the political and policy interaction between farmer-based organizations and the state. From her chapter, the growth of organizational activity on the Prairies outlined the importance of organizations in developing early agricultural policies. The role of producer-based groups continues to dominate current agricultural policy making.

Whereas the issue of marketing and prices dominated the early 20th century agriculture sector, conservation came to the forefront of the burgeoning Canadian forest sector and was the reason for the rise in the “emerging state.” Forest related industrial, particularly after World War I, was spectacular. Between 1918 and 1922 pulpwood production quadrupled and there were over 300 pulp mills established throughout Canada. In response to this economic growth, the 1924 Royal Commission on Pulpwood found that many tracts of lands in the western provinces had been cut over (Howlett 2001). The push for conservation-oriented policies was a predominant concern among civil servants within the Dominion Forest Branch (Gillis and Roach 1986). This matter also resonated from within newly formed prairie Provincial departments of forests that were established as a result of the 1930 Natural Resources Transfer Agreement that transferred the ownership of resource rights from the Dominion government to the Provinces. The prominence of provincial forestry responsibilities and the concern over the long-term sustained timber yields signaled the beginning of extensive state involvement throughout the Canadian forest sector. Within the mining sector McAllister (Chapter 8) also highlights the how “scientific management, business, and liberalism heavily influenced the political culture of public and private organizations in the early 20th century.” The growth of the large-scale bureaucratic state was one of the lasting legacies of the Keynesian Welfare State (KWS) and its downfall.

A notable aspect of this period is the number institutional and structural outcomes and developments that continue to influence natural resources sectors today. The outcomes from such path dependencies over a period of time are not determined by any particular set of initial conditions. Rather, a system that exhibits path dependency is one “in which the outcomes are related stochastically to initial conditions, and the particular outcome that obtains in any give run of the system depends on the choice or outcomes of intermediate events between the initial event and the outcome” (Goldstone 1998 835). In forestry, for example, the initial event, namely the transfer of forested Crown lands to provincial governments eventually led to creation of large-scale industrial tenure arrangements. Regardless of the staple’s state current development, path dependencies exhibited across all natural sectors continue to shape the state’s response

KWS Legacy and Crisis: Wither the Staples State?

There is ample scholarly analysis and debate of the KWS and its subsequent crisis (See Crozier et al 1975; Gough 1979; Offe 1984; Esping-Andersen 1990 for extensive overviews of the welfare state). The 1946 to 1990 period marks a declining period of the Canadian staples economy. During the previous “emerging state” period staples were defined the classic staples core-periphery relationship. Innis and other staples theorists often focused on the mercantilist relationship between the core and subordinate periphery as the defining source of political struggle. This uneven relationship was built on the extraction of staples and their transportation to the centre for processing. Periphery based producers then purchased capital from the centre. This unequal relationship produced such seminal works such as CB McPherson ‘s 1953 Democracy in Alberta chronicled the rise of Prairie political protest movement in the early part of the 20th century. During the KWS period, the relationship between the core and periphery changed (Gilpin 1974). The periphery retained and attempted to foster industrial growth. Provincial states developed strategies and ambitions of their own (Gilpin 1974; Pratt 1977) (Cairns 1988). Conversely, economic activity was no longer linked to the domestic centres for financial and other service related sectors (Krugman 1991). Between 1940 and 1994, the percentage of Canadian exports to the U.S. increased from 41.1% to 81.4%. However, the growths in exports (both in total dollar value and a percentage of exports) were for manufactured goods. This period marked the debate regarding Canada’s branch plant relationship with the U.S (Levitt 1970) (Watkins 1970).

In the area of staples dependence, Provincial and Federal governments made concerned efforts to overcome a common problem, namely the “staples trap.” Staples dependence, it is argued, over a long period of time leads to well-established investment and market patterns (path dependencies) that are difficult to change (Marchak 1983). In some cases, regional decision-makers can become ‘addicted’ to resource extraction with little opportunity to escape (Freudenberg 1992). According to Marchak (1983), escape from the staple’s trap can take a number of different forms. National and Provincial governments during the KWS period pursued three notable strategies. The first strategy is to do nothing, which leads to resource exhaustion and permanent underdevelopment. Such a strategy was undertaken in Atlantic Canada leading to the exhaustion of its key resources such as the fisheries and coal, and the subsequent decline of its economy (OECD 2002). The second strategy was promoting a new or existing staples base. Macallister (Chapter 11) details the subsidization throughout the mining industry such as a national a flow-through share program that allows a company to flow a 100 % tax deduction for the cost of eligible exploration expenses. Urquhart and Pratt (1994) examine the Province of Alberta’s role in expanding its forest sector through the use of generous government land tenure arrangements and favourable loans to multinational forestry corporations. The third and most prevalent strategy during the KWS period was the strategy of diversification in resource dependent regions. This strategy has, for a number of decades, been an ongoing policy direction of both the federal and provincial governments. For example, Pearson government established the Department of Regional Economic Expansion (DREE) and the Department of Regional Industrial Expansion (DRIE). The Mulroney Conservative government began to gradually reduce the level of industrial incentives and began to promote a knowledge based industries (Doern and Phidd 1992). Federal agencies such as the Atlantic Canada Opportunities Agency (ACOA) and Western Economic Diversification (WED) remained in order to tap into “insufficiently exploited local competitive advantages” but were a shadow of previous attempts to enhance regional development (OECD 2002). The shift to a knowledge based economy marks the beginning of the competitive state.

Table 3 Evolution of the staples state


Minimal State

Emergent State

Keynsian Welfare State and Crisis

Competitive states

Time period

Pre-20th Century





Role of staples in relation to the state

Colonial and mercantilist expansion

Core-periphery relationships, staples traps, rise of protest movements

Key path dependencies

U.S. Branch economy, regional economic development policies, state expansion and then retreat

Globalization and re-scaling, environmental protest movements

Schumpeterian and Richardian states


Few – mainly companies

Rise in organizations

Organizational State

Organizational State






Dominant staples

Fur, Forestry (timber)

Agriculture, Forestry (pulp and paper), Mining

Oil and Gas


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.


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)


Formal and procedural

Substantive and goal oriented

Reflexive and procedural

Criterion of success

Efficient allocation of resources

Effective Goal attainment

Negoitated consen

Typical Example




Stylized mode of calculation

Homo Economicus

Homo Hierachicus



Spatio-temporal Horizon

World market, reversible time

National Territory, Planning Horizons

Re-scaling and path shaping

Primary criterion of failure

Economic inefficiency



‘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 9) 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 7); and Thorpe and Sandberg (Chapter 8) 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


Policy Process Concepts

2 - Skogstad


Trade, agrifood, consolidation


3 – Moore


Genetically Modified Foods


4 - Hoogensen


Trade disputes, fish supply


5 – Rayner and Howlett


National and Provincial

6 - McDougall




7 - Netherton



National and Provincial

8 - Brownsey

Oil and Gas

Climate Change


9 - Clancy

Oil and Gas

Offshore Petroleum

National and Provincial

10 -McAllister


Economic impacts


11 - Fitzpatrick

Diamond mining

Aboriginal rights


12 – Thorpe and Sandberg


Forest management


13 - Cashore


Forest Certification


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.


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



Strongly Richardian

Competitive (Staples) State






New Brunswick

Nova Scotia


British Columbia





Shumpetearian Competitive (Post-staples) State


Staples-based Policy




Policy Community








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