A rear wheel squeak whipped up worry as we drove through the boreal Forest wilderness of western Ontario. Pulling a 2500 pound trailer puts a strain on an old truck so the noise could be a small thing or huge thing. It turned out to be nothing. But we had to learn that, to find out our rear brakes were dangerously thin. We prudently had them fixed in Cardone Bros shop located on the north side of Thunder Bay, Ontario.
So we spent the day in this city of 106,000 people located squarely in the center of vast forest of northern Minnesota and western Ontario.. The city stands tall in this low country – literally. As you drive into this gritty but welcoming working class community, old giant grain elevators tower forlornly over the less than prosperous downtown. Not all still operate, another sad testament of the most recent recession. Grain from the Canadian heartland has found other ways to market, leaving Thunder Bay another reminder of a more prosperous past.
This was according to our mechanic and a prominent town entrepreneur, Todd Cordone. With his brother Ted, they own a car repair shop, used car lot and the cab concession for the city, which employs over a hundred cabbies. Although the town looks a bit worn, their businesses thrive and the future promise more. This is so because as Todd described “ New mines will be opening soon. They call them the ring of fire, four new chromium mines in one area a few hundred km north of the city. Their are others, one just north is making palladium” . He answered the dumb look I gave him in response “ its used in making catalytic converters”. He said that along with the reopening of the currently defunct skyscraper-sized grain elevator, the town should become prosperous once again.
I am skeptical. In 35 years of wildlife conservation conducted across the western hemisphere I have seen few communities come up on the winning end of industrial development of natural or mineral resources. Perhaps it was different in the past when unions were strong and protected workers from the abuses of industrial power. Perhaps it is that way now in Canada because it does not suffer the onslaught of Ayn Rand take-no-prisoner capitalism that sweeps my own country. But in the US, now, rural communities surrounded by agricultural, forest or mineral wealth often look like someone pulled the plug on their economy and its just a matter of time until the last person leaves and shuts off the lights for good. Ask the rural town people in the heart of the oil boom in North Dakota –the latest in the boom town America — has life gotten better?
The rub here is that towns like Thunder Bay should be wealthy now. Its home base for millions of acres of forest land, mostly managed for timber. Millions of trees come to the town every year to be processed for industrial use. The industry brings in about $3 billion annually and employs 15,000 workers. Unfortunately for Thunder Bay, most of that comes from pulp wood forestry to supply the town’s paper plants. Forests managed for pulp wood are the forestry equivalent of managing farms for feed corn or managing fisheries for omega 3 oils. It is a low profit, high volume resource use, that employs machinery to fullest extent in order to cut jobs to a few as possible while paying the smallest wages possible.
Take Georgia Pacific, one of the largest companies operating in Thunder Bay and owned by the infamous Koch Brothers. The CEO makes over $400 million each year and although the CEO/employee pay ratio are unavailable, because it is a privately held company, the industry averages about 300 to 1. Most Americans think CEO’S make a fraction of that ( about 30 to 1). The CEO makes , what many economist believe this outrageous fortune, because he does not serve the employees of Georgia Pacific nor the citizens of Thunder Bay Ontario. He earns it because he serves the financial industry and the Koch Brothers whose ploughs the enormous profits generated by exploiting rural people and natural resources into thier own interests including dominating the right’s political machine. The Koch brothers essentially bought the state government of Kansas and plays a huge role in the petroleum free-for-all taken place in North Dakota. They fight unions, environmental regulations, health care and progressive tax codes. Go to the Georgia Pacific website and you will walk away thinking they stand for good paying jobs built on a sustainable use of the forest. But that only for public relations and it’s not a serious part of the business model. Thus we have impoverished rural communities in the midst of vast natural wealth.
Conservationists rarely deal in economic theory but to understand the destruction of natural resources one must. The plunder of the boreal forest is just one other expression of the problem of productivity described by Thomas Picketty in his now famous 2014 book Capital in the 21st Century. Paul Krugman, the nobel prize winning Princton economist and NY times columnist described Capital in the 21st Century as a “magnificent, sweeping meditation on inequality ” and goes on to say “This is a book that will change both the way we think about society and the way we do economics.”.
The interests of the land and the people who in rural communities rarely break the surface of scholarly economics, and Dr. Picketty, a professor at the Paris School of Economics, does no different. But in his sweeping assessment of modern economic theory he nevertheless describes all that is going on in Thunder Bay. The CEO’s of the companies that drain the wealth from the surrounding landscape feel little for the impact on the town or the land, their only concern is to generate profit for the company and the people that own the company. And they care only for the accumulation of great wealth. It leaves most people meager livelihoods that is arguably higher in Canada than in the US, but still Canada’s poverty rate is high and in Ontario growing. I’m sure everyone in Thunder Bay with a resource related job is thankful but knows it depends not only on hard work and intelligence but on the whims of Wall Street and barons of industry.
Picketty describes these barons as creating a Belle Epoch, a second gilded age. The first was the sad period in US history when the Robber Barons, like JP Morgan and Andrew Carnegie, ruled the economic world unleashing unpardonable excesses: child labor, 16 hour work days, 7 day work weeks, unsafe work conditions that maimed and killed leaving families bereft and penniless. They destroyed America’s resources as though they were the hand of God and the land and wildlife were necessary victims of their holy march to wealth the world had never known. It spurred one of America’s great class battles that was waged first by President Teddy ( the trust buster) and finally by Franklin Roosevelt. Together they tamed the barons which led to ever rising income for the middle class and the start modern conservation.
Belle Epoch began in the 1980′s when the hand of government began tipping the balance to serve the people of great wealth under both Republican and Democratic Presidents and Legislatures. The middle class’s share of our national productivity shrunk as most of the wealth from increased productivity went to the upper 1% of Americans. Capital in the 21st Century goes against existing economic theory and predicts that as wealth concentrates it becomes less productive, people benefit less and our economic capacity declines. Dr Picketty’s historical analysis shows trickle down economics is a farce, once wealth concentrates in the elite it moves on to its descendants. Plutocracies emerge, economies fail.
The pulp industries of Thunder Bay are just one tentacle of this giant industrial beast that Matt Taibbi of Rolling Stone once described, as “a giant vampire squid that sucks the blood from anything that makes money”. Sucking the blood from forests by companies like Georgia Pacific means cutting waste and increasing efficiency. In this case it means avoid paying decent salaries and leave nothing for wildlife. GP specializes in short rotation forests, essentially converting them into crops that can be harvested in 20 years instead of 100. Old forests create better and more diversified wildlife habitat but the welfare of wildlife is worthless to this industry. Old forest help communities by creating diversified wood products economies, but the welfare of the human community is also worthless to the industry. Mechanization reduces the need for people and the competition for fewer jobs drives down wages to as low as compliant governments allow. Decent wages are worthless to industry. All that matters is profit and shareholders return. Forests around Thunder Bay are like the people in a company town – indentured to the industry that supports them.
Ultimately the new barons of industry that are chewing up the Boreal Forest are like the selfish child who comes to the dinner table to eat all the goodies before everyone else arrives. While the forest industry cashes in the forest value, all other values are sublimated. . For example scientists are concerned that the plunder of the Boreal Forest will destroy one of the worlds most important carbon sinks – carbon stored in trees and peat instead of becoming more greenhouse gases in our carbon soaked atmosphere. This is of enormous value to the world yet it will be lost before it is properly valued and appropriately saved.
This blog regrets the loss to the people of Thunder Bay. Enormous natural wealth is being taken from them with a political slight of hand – give us all we want despite the communal and environmental costs or you will not work at all. This is happening throughout our land. Every year there are fewer farmers, fishermen, foresters, the people who support themselves and their families from natural wealth, and a correspondingly greater proportion of natural wealth ends up in the hands of fewer more powerful and politically connected people.
All this ran through my mind as Todd Cordone waxed rhapsodic about a post Ring of Fire Thunder Bay. He probably didn’t know that after threats of withdrawal from the project, the Ring of Fire mining interests extracted a billion dollar give away from the Ontario Provincial Government who demanded the Federal Government follow suit. Implied in the financial support was political support for a controversial road that at least one conservation group described as an environmental disaster and a crushing blow for First Nation people who have their own ideas of how to manage thier land. The First Nation people see it exactly for what it is. Chief Peter Moonias of the Neskantaga People says ” This is about the First Nation in Northern Ontario standing up against an American mining bully, hell bent on making a road and a mine no matter what First Nations say”. In other words a province with growing inequality and poverty is going to foot the bill for an environmentally destructive project with questionable value to the people who live there, and will ultimately enrich the great industrial machine of Belle Epoch. And so the cycle begins anew.