Here is the first draft input from Robert McGarvey’s thinking on a New Capital perspective towards helping to define what is means to be a Progressive in a 21st century Alberta. Looking forward to your comments and feedback on this contribution too.
Theme Area: New Capital
In our discussions the other day we brain stormed the subject of what it means to be a ‘progressive’ in the economic sphere. The key values that emerged from that discussion are:
- Responsible
- Knowledge Economy
- Pragmatic
- Innovation
- Open minded
- Tax structure
- Education
- Understand the triple bottom line
- Work with Nature, not against it
Alberta is on the Move
The political landscape in Alberta is starting to move; if you believe the polls it is moving at an unprecedented pace. The impetus for movement is deep-seated and not unique to Alberta; the economy of the world is undergoing significant changes, changes on the order of the industrial revolution. The economy’s engine of growth is experiencing an historic translation from the mechanical workhorse of the industrial age to the more agile and faster moving mental powerhouse of the new age, as knowledge and the ability to master knowledge becomes ever more valuable. This economic revolution has created in its wake a host of new knowledge based assets driving new kinds of products and services, which are distributed in new ways to new global markets, but it is also impacting older traditional industries like the oil industry. For example, over the past three decades more petroleum reserves have been ‘discovered’ by advances in technology, than by traditional exploration.
To meet the challenges of this scale of change requires the spirit of innovation and positivism that progressives bring to the table. Many of the concepts we discussed last week (and in Red Deer) particularly the values of being responsible, pragmatic, the value and role of education and working with nature (the land), will be important in realizing the full potential of this new economic order. Importantly these values have – potentially – deep resonance with Albertans.
The challenge progressives’ face is formidable; for now-a-days Albertans are not thought of, nor do they particularly identify with ‘progressive’ agendas. If anything Albertans are rather proud of the fact that the rest of the country considers them different, outsiders, conservatives. Although a great portion of the Alberta narrative may well be myth or wishful thinking Albertan’s believe themselves guardians of a proud tradition: we describe ourselves as ‘self made’ individualists, ‘can do’ entrepreneurial types who have created a wealthy and powerful prairie homeland. Albertans are aware that others covet our good fortune and, as a result, have adopted a somewhat defensive, belligerent persona: we’re mavericks and proud of it. This in-your-face persona is conspicuous, particularly in respect to the rest of the country. It is a powerful motivating force for Albertan’s which I believe a re-born progressive movement must align with and advance, not ignore or deny.
The Idea of ‘Progress’ is hardwired into the Pioneer Culture of Alberta
The older foundational myth of Alberta, our prairie homesteading story, has roots that are deeply progressive, imbued with a strong community spirit. Many historical Albertans and most modern urban Albertans have some knowledge of, or direct family connections to, a homesteading past. The stories are all of hardworking grandparents or great grandparents, who braved the trials and hardships of prairie life to create a new and better world for themselves and their children. It’s a powerfully collective narrative, which unites the many different groups and nationalities which came to this country and whose sacrifices and joy’s are our common heritage, whatever our particular background or connection to pioneering.
Although Albertan’s think they did this all on their own, homesteading was in fact an extraordinary act of social generosity – more importantly it was a progressive initiative from the (now much distrusted) Government of Canada. The entire Federal Homesteading program was rooted in a positivist belief system that ignored the advice of powerful vested interests and literally handed Alberta over to newcomers and immigrants, 160 acres at a time.
The possession of a homestead engendered a great pride of ownership, particularly amongst new immigrants, but homesteading success was due in large part to its ability to leverage the labour pioneer Albertans applied to building buildings, clearing land and otherwise improving the value of the homestead. From an economist’s point of view, ownership of a homestead gave the family multiple sources of value. One, the homestead itself was an accruing asset that was essentially storing their labour in its escalating value; secondly the homestead was leveraging their labour to create a source of income from the production and sale of grain, cattle and other agricultural products, and thirdly the homestead provided a built-in subsistence for their families. As a consequence there was little doubt as to the appeal of homesteading; asset ownership essentially compounded the utility value of labour and stored it for the family; which goes some way to explaining why Albertans cherish the concept of property ‘ownership’ and why pioneers were so highly motivated and hard working.
More importantly the subtleties of homesteading were deliberately designed to develop strong communities; to encourage cooperation between and amongst the various groups who came to Alberta. Ownership of a homestead was conditional, with full title passing only upon the achievement of various milestones; a minimum (usually five-year) tenure, the clearing of a specified amount of land, the planting of various crops etc. Now many of the milestones in homesteading could be met by the family themselves, but building a barn generally required the neighbours’ help. As a consequence a cooperative ‘Barn Raising’ tradition spontaneously emerged amongst homesteaders in the prairie west, as a direct result of the need to meet this obligation both individually and collectively. This created a sense of community spirit and cooperation that survives to this day, particularly in rural Alberta.
The pioneer narrative in Alberta is a progressive success story. A program designed by progressives, appealing to the ‘good angel’ in us all that reinforced the communal values of generosity, inclusiveness and responsibility. This Alberta narrative is deeply rooted; it solidly established in pioneers a sense of place, a love of the land and its people that makes Alberta one of the most populist democracies in the world. It also made the strongest possible connection between the growth in community values and individual gain – in Alberta there is not the contradiction between these as there are in many other places in the world.
The Oil Country Narrative and the Culture of Alberta
Alberta’s newer myth, the Oil Country myth, built on the original pioneer experience, but has overridden many of its progressive narratives, replacing them with a more conventional Corporate narrative. Whereas the pioneer outlook was expansive and welcoming to newcomers, the Oil Country narrative is materialistic and defensive to the point that today many Albertans’ are suspicious of outsiders and believe that ‘progressive’ agendas of any kind are simply Eastern plots to steal ‘our’ resource wealth.
The influence of the oil industry in Alberta has been profound. The Oilmen arrived at the end of the homesteading era, at a time when the fortunes of our province were at a cross roads. The oil industry (largely American) didn’t have to be convinced about the virtues of Alberta (like many Eastern Canadians), they believed in the future of Alberta’s oil potential, invested considerable sums in Alberta when many others would or could not. As such the industry has earned a special place in the hearts of Albertans.
The character of the oil industry, however, particularly in the ‘wild cat’ days was quite different from the pioneer experience. Oilmen, unlike farmers, are not stewards of the land, they were (and remain) very opportunistic and exploitative. Indeed in Turner Valley, Alberta’s original oil field, the oil industry flared (burned off) gas from its producing wells for decades. The flames were visible for hundreds of miles; ironically the area where the gas flare burned became a tourist destination known as Hell’s Half Acre – it is to this day an Alberta legend (and National Historic Site). As oil wealth began to flow in Alberta these values soon took on a life of their own, and today are manifest in the much larger Hell’s Acreage compounding hourly near Fort McMurray.
Despite many inherent contradictions the oil business in Alberta has strongly reinforced the connection between the Alberta community and the financial health of the industry. After oil was discovered early in the 20th century Albertans’ adopted a novel Texan royalty tax scheme which essentially aligned the prosperity of all Albertans to the success and advancement of the oil industry. For many Albertans today the best interests of the oil industry and the public good here in Oil Country are one and the same.
The Challenge for Progressives
Political movements that align with or co-opt these narratives have dominated Alberta for decades. Basically (simplistically) the United Farmers and Social Credit Party aligned with the older pioneer myth and the Progressive Conservative Party with the Oil Country myth. The PC’s have, over several decades, transformed their own political culture (becoming less P and more C) as the progressive myths and values of old have been systematically replaced by Oil Country values. The other established parties, the NP’s and the Liberals, for a variety of reasons, have never really connected with the Alberta narrative in a meaningful way.
New Capital and the Alberta Economy
The Oil Country myth has been compelling for Albertans largely because it has been a success financially, for the industry, for the province of Alberta and for many businesses and wage earners. However tying our anchor to the Oil Industry as tightly as it is now is very unlikely to deliver the goods in future. The changes that are coming economically will challenge the present ‘exploitation’ business culture, which will need to migrate and eventually be replaced by a more sustainable ‘generative’ commercial culture.
The building of this new Alberta economy will involve the development and incorporation of new (non-traditional) forms of capital, but also bring with it a suite of new capitalist values that will need to be adopted as we move into the next phase in our history. The values that will underpin this new order will be more like the older pioneer values, being more innovative, open-minded and broadly based (more triple bottom line than simply financial metrics). The oil industry still has a major role to play in the Alberta future. Indeed the industry will be a major driver of this new economy but will need a new mind-set, where instead of simply exploiting resources, the industry is actively working with nature, not opposed to it. Perhaps there will be a return to older concepts of place and stewardship of the land, within a new commercial culture that is both responsible and pragmatic.
A knowledge economy will undoubtedly need a sophisticated and knowledgeable population, and government will be expected to provide the educational infrastructure to support this need. However what could emerge from this historic transformation is a new role (and possibly new revenue sources) for government. This new role could include, providing not only an educated population and relatively low taxes, but the new infrastructure for the post industrial economy. We will need to rethink and support new systems of management training, accounting, finance and taxation – deliberately targeting and removing roadblocks that are inhibiting the commercialization pathway, whether they be overly conservative capital markets, lack of expertise, blocked channel (sales and communications) access or expertise in brand, marketing and sales in key global markets. If we’re clever about it we could also learn from the oil experience and design new (royalty) sources of government revenue in industries outside the oil industry, by coordinating the construction of the launch pads for entire new knowledge based industries.
Economic changes on this scale could radically alter the political dialogue. For instance, an economy where human ‘capital’ becomes THE source of value and competitive advantage will shift the commercial balance of power. This could allow us to finally move beyond the tired industrial age conflicts between management and workers, between left and right. Importantly in adapting to this new world we’ll open new ‘frontiers’ of commercial opportunity and have the unique opportunity to populate these new frontiers in a progressive ‘neo-homesteading’ way, building on the successes of the past to unleash the energy of new generations.