The Creation of Regional Dependency 9781487577605

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THE CREATION OF REGIONAL DEPENDENCY

Ralph Matthews tackles the complex questions involved in the creation of regional dependency with a multi-faceted, highly original analysis. At a theoretical level he attempts to provide the first systematic set of concepts capable of analysing the distinctive regional character of any country. In particular, he distinguishes between the nature of regions, regionalism, regional disparity, and regional differences. Also, he discusses the subjective and objective indicators which can be used to assess the quality of economic and social life in any region. At another level, he answers the argument of those who see regional underdevelopment as the result of some lack or deficiency in the underdeveloped region itself. Matthews champions a dependency theory approach which sees underdevelopment as largely the product of external social and economic processes which operate to exploit such regions. However, he deviates from dependency theory in rejecting both economic determinism and structural determinism. Change and development, he argues, result from individual actions; and individuals, he demonstrates, are capable of acting in the general interest and not simply out of class interest. Moreover, he focuses on the way an analysis of modes of production within a region can be integrated with a dependency perspective to better understand regional change. Finally, Matthews offers a substantial discussion of the nature of social policy, of historical development in Canada resulting from certain policies which favoured the centre at the expense of the east and west, and provides a detailed analysis of Canadian regional development policy aimed at reducing the underdevelopment of certain regions. In particular, the book focuses on Atlantic Canada, examining the way in which the actions of key leaders contributed to the underdevelopment of that region, and showing how, in other instances, the federal government has operated to protect the fishery of the Atlantic region from exploitation by outside interests. Sociologists, geographers, economists, social workers, and planners will find this an intriguing, original, and ground-breaking study. RALPH MATTHEWS, a professor in the Department of Sociology at McMaster University, is co-author of Communities in Decline: An Examination of Household Resettlement in Newfoundland and author of 'There's No Better Place than Here': Social Change in Three Newfoundland Communities as well as numerous papers.

RALPH MATTHEWS

The Creation of Regional Dependency

UNIVERSITY OF TORONTO PRESS Toronto Buffalo London

© University of Toronto Press 1983 Toronto Buffalo London Printed in Canada Reprinted in 2018

ISBN 0-8020-5617-2 (cloth) ISBN 978-0-8020-6510-0 (paper)

TO MY FATHER AND STEPMOTHER RALPH AND EVELYN MATTHEWS

Canadian Cataloguing in Publication Data Matthews, David Ralph, 1943The creation of regional dependency Includes index. ISBN 0-8020-5617-2 (bound). - ISBN 0-8020-6510-4 (pbk.) I. Regionalism - Canada. 2. Regional planning Canada. 3. Canada - Social conditions. 4. Regional disparity - Canada.* I. Title. HC115.M37 338.971 C83-098149-7

Contents

ACKNOWLEDGMENTS ix

INTRODUCTION 3 PART ONE: REGIONAL DIFFERENCES AND REGIONAL DEPENDENCY 9

1 Regional Differences: Definition and Identification

12

Definition of Key Terms and Concepts 12 Region and Regionalism 13 Regional Disparities and Regional Differences 18 Identification of Regional Differences 21 Region and Regionalism 21 Regional Disparities and Regional Differences 27 Conclusion 36

2 Explanations of Regional Differences 37 Early Sociological Approaches to Regional Differences 38 Regional Imbalance from the Perspective of Economic Geography 42 'Orthodox' Economic Interpretations of Regional Development and Regional Difference 44 The Staples Approach 45

vi Contents The Development Approach 46 The Neo-Classical Approach 47 The Keynesian Approach 48 Marxist Analyses of Regional Differences 49 Recent Sociological Approaches to Regional Analysis in Canada and Elsewhere 51 Conclusion: Value Implications of Conflicting Interpretations 54

3 'Transfer Dependency' versus 'Dependency Theory' 56 Transfer Dependency 57 Dependency Theory 69 'Transfer Dependency' versus 'Dependency Theory' 75

4 The Significance of Regional Differences in a Distinctive Canadian Sociology 77 The Significance of Regional Divisions in Canadian Society 79 An Explanation of Regional Divisions 85 Towards a Canadian Sociology 88 PART TWO: REGIONAL DEVELOPMENT IN CANADA: POLICY AND THEORY 97

5 Federal Regional Development Policy 99 Origins of Regional Disparity 99 The Changing Value Orientation of Regional Development Policy 104 Alternative Proposals for a 'New' Canadian Regional Development Strategy 109 Regional Development Policy from a Dependency Theory Perspective 112 Prospects for Regional Development Policy 115

6 A Study in Regional Development and Collective Behaviour: The Newfoundland Resettlement Program 118 Structure of the Newfoundland Resettlement Program 120 Resettlement versus Migration 122

vii Contents Resettlement as Collective Behaviour 124 Resettlement and the Role of Planners 134

7 Ethical Issues in Regional Policy Research 137 Working with Government and with the People 137 The Resettlement Report: Goal and Policy Definition 139 Policy Research and Value Freedom 141

8 Three Key Dimensions in Regional Development: Economic Viability, Social Vitality, and Political Validity 148 Economic Viability, Social Vitality, and Political Validity in 'Small Harbour' 150 A Model for Community and Regional Analysis 154 Formal and Informal Economic Viability 155 Formal and Informal Social Vitality 157 Formal and Informal Political Validity 159 The Basis of Community and Regional Integration 161 Evaluating the Social Impact of Public Policies 164 PART THREE: THE STATE AND REGIONAL DEVELOPMENT IN ATLANTIC CANADA 167

9 The Smallwood Legacy: The Development of Underdevelopment in Newfoundland 169 Obstacles to Newfoundland Social and Economic Development 170 Basic Development Tactics 176 Social Development Policy 179 Economic Development Policy: The Staples 183 Economic Development Policy: Industrial Development 187 An Assessment of Smallwood's Development Policy 189

10 Class Interests and the Role of the State in Canada's East Coast Fishery 194 Classes, Interest Groups, and Modes of Production in Canada's East Coast Fishery 194

viii Contents Interest Group Conflict within the East Coast Fishery 198 The Role of the State 204 Conclusion 215

New Directions for Canadian Sociological Analysis and Regional Development Policy

CONCLUSION:

New Directions for Canadian Sociological Analysis 217 The 'Legitimation Crisis' in Canadian Regional Development Policy 219 REFERENCES 221 INDEX 235

217

Acknowledgments

This book owes much to Virgil Duff of the University of Toronto Press who encouraged me to expand some earlier papers on the nature of regional divisions in Canada. I thank him most sincerely for his interest and for his efforts on my behalf. I would also like to thank the two anonymous reviewers of an earlier draft. No one could have been better served by his reviewers than I was. They obviously spent many hours, not only in reading the manuscript but also in determining how it could be reorganized and developed more coherently. Their lengthy comments were invariably perceptive and helpful. I am very grateful to them. Over the past several years I have received research assistance from the Social Sciences and Humanities Research Council, the Ontario Arts Council, and the Arts Research Board of McMaster University. These grants covered some of the costs involved in the preparation of this book. My wife, Anne, a sociologist and researcher herself, has been a source of encouragement and comfort throughout the seemingly endless time which has been spent writing this book. I thank her once again for her continuing support. This book is dedicated to my father and stepmother. This is but a token recognition of my debt to them for all their years of care. It should be noted that this book is a continuation of my work on the nature of regions and regional differences in Canada. Consequently, some of the ideas found here have appeared in papers previously published elsewhere. In most cases these ideas have been developed much further here. Nevertheless, some acknowledgments are in order. Chapter 2 is a revised version of 'Regional Differences in Canada: Social versus Economic Interpretations,' Social Issues: Sociological Views on Canada, edited by D. Forcese

Introduction

Throughout much of the literature on regional underdevelopment and regional social and economic disparity in Canada there is a general assumption that the 'causes' of regional disparity lie within the underdeveloped regions. Frequently the poorer regions of the country are seen as lacking attributes necessary for development. They are said to lack resources, or at least those resources for which there is much demand, as well as the capital necessary to create and sustain economic development and to develop those resources they have. Other facilities (roads, schools, sewers, air and train systems, communications networks, and other 'infrastructural amenities') deemed necessary to attract industry are also said to be lacking. Sometimes their underdevelopment is attributed to lack of 'human' capital. The residents are considered to lack the training, education, and skills necessary to make a living in industry and to make their region attractive to industry. On a social and psychological level, residents of Canada's underdeveloped regions are often seen as possessing a cultural or psychological flaw which militates against the economic growth and development of their society. They are frequently described as warm, friendly, and open but lacking the necessary work ethic and sense of time and/or judgment to make them good factory workers. This argument is frequently extended to the economic elite as well. A number of highly regarded works attribute regional underdevelopment in Canada to a lack of entrepreneurial initiative and organizational ability among the manufacturers and merchants in the underdeveloped regions. Implicit in these works is a belief in the natural inferiority of certain regions and the natural superiority of others. Such a perspective is not adopted here. The basic assumption throughout this book is that regional underdevelopment, at least in Canada, is not natural but created. Even the poorest provinces and regions of Canada have

4 The Creation of Regional Dependency sufficient natural resources to sustain their populations at a reasonably high standard of living. In contrast, some of the richest areas of the country (southern Ontario, for instance) have few natural resources. If some areas remain consistently underdeveloped it is largely because economic and social processes have been organized to create and develop regional dependency and it is those processes which are examined here. In this context, the definition of underdevelopment takes on a distinctive meaning. Underdevelopment is a process as well as a condition. Most societies are not naturally underdeveloped; they are made underdeveloped largely through their contact with more developed ones. The same is true of underdeveloped regions within developed countries. Contacts with the more developed regions make them dependent and dependency leads almost invariably to underdevelopment. Perhaps some regions within the most underdeveloped countries in the world are still truly undeveloped, that is, without exploitative contact with developed countries. Our concern, however, is with those regions within the more developed countries, and particularly those within Canadian society, which are underdeveloped; with the nature of such regions themselves, how they can best be identified, and how the various types of regional divisions can be explained. In addition to the nature of regional divisions and regional underdevelopment, a second theme runs through this book. It deals with the nature of sociological explanation itself and more specifically with the nature of sociological explanation in Canada. A distinction is made between a 'sociology of Canada' and a 'Canadian sociology.' In examining the nature of regional divisions in Canadian society from a sociological perspective, I am attempting to contribute to a sociology of Canada. In examining how Canadian sociological concepts should be formulated to explain these regional divisions, I am attempting to contribute to the development of a distinctive Canadian sociology. To my mind, the development of a distinctive Canadian sociology is as important an aspect of the analysis as the discussion of regional divisions. In recent years the discipline of sociology in Canada has been in a state of turmoil and transformation and my analysis reflects some of the issues and tries to find solutions to the analytic problems involved in understanding the nature of Canadian society. In the past twenty years, the younger generation of Canadian sociologists began to attack the older generation for attempting to analyse Canadian society using frameworks of explanation developed in other countries, most notably the United States. The most coherent argued that applying such frameworks to Canada would demonstrate only how Canada resembled or differed from other countries on dimensions which both

5 Introduction had in common and would not identify or explain the nature of those attributes unique to Canadian society. This book attempts to contribute to this debate. As one who believes that the development of a distinctive Canadian sociology is necessary, I focus on those features of Canadian society which are both important and unique to its fundamental social organization. It is my opinion that we must deliberately seek out and examine the ways in which Canadian society differs from other societies or some of the significant features of our social structure and behaviour may be overlooked. This volume also reflects the dominant conceptual change which has taken place in Canadian sociology over the past decade: to wit, the incorporation of a 'political economy' perspective into sociological analysis. Canada's major contribution to the world of social knowledge has been its strong tradition of political economy. This tradition differs from the prevailing approach to social science which developed in other countries in its emphasis on interdisciplinary analysis. As Canada's traditional scholarly strengths within social science have been in economics and political science, the relationship between these two spheres has been emphasized, as has the relevance of the historical context in understanding current social events. Sociology in Canada grew rapidly during the 1950s and early 1960s. Most of the newcomers during this period were trained outside Canada and were not familiar with this particular tradition. However, by the late 1960s the growing interest in a distinctive Canadian sociology led to renewed interest in the earlier framework. At the same time, both in Canada and elsewhere, there was a growing interest among sociologists in marxist or neo-marxist approaches to social structure and social change. Like the Canadian tradition, the marxist paradigm emphasizes the importance of economic relation~ in determining social structures and advocates an historical perspective. Given this affinity, most recent works which attempt to develop a distinctive Canadian sociology have incorporated some integration of the Canadian tradition with neo-marxist analysis. The 'dependency theory' approach, which forms a significant part of the analysis found in this book, is part of the neo-marxist perspective. The particular advantages of dependency theory (see chapters 3 and 4) are that it incorporates a class perspective, emphasizes the importance of an historical perspective, and focuses on the significance of the state in social and economic development. It can also be intertwined with the Canadian tradition of political economy. It should be emphasized that I am not in full agreement with all recent efforts to develop a distinctive Canadian sociology. I am particularly uncom-

6 The Creation of Regional Dependency fortable with the strong economic determinism which seems to be the basis of many comprehensive analyses of Canadian society, and with the extreme structural determinism prevalent throughout Canadian writing on political economics. The danger I see in the economic determinism of the political economy approach within Canadian sociology is that those who subscribe to it have been so concerned (and I believe rightly so) with rejecting those frameworks used in other countries that they have also rejected consideration of the three traditional concerns of sociology: the nature of social organization in any society, the way in which human behaviour is shaped and modified by interaction with social organization, and the impact of culture on human behaviour. In rejecting what they perceive as 'imperialist American sociology' in favour of 'Canadian political economy,' many Canadian sociologists have abandoned these traditional concerns for new ones related to economic structure and state interest. In doing so they have ignored the broader social organization of Canadian society and concentrated on Canada's economic and political structure. This approach is frequently justified by the marxist proposition that the fundamental structures of a society are the economic forces of production and that any other social forms are infrastructural relations built on and determined by the basic economic interests. However, this proposition reduces the traditional interests of sociology to the point where sociology becomes simply a perspective within economic and political analysis. To argue that social organization is determined essentially by economic relations and class interests is in my opinion not only unfortunate but also wrong. Consequently much of the discussion in Parts Two and Three examines community and regional social organization from a noneconomic deterministic perspective. The economic determinism of much current political economic analysis in Canada and the structural determinism which it implies cannot be separated. A predominant concern with political and economic structures combined with an implicit belief in historical determinism often leads Canadian sociologists to leave people out of their sociological analyses. In much current Canadian sociology, coupled with an underlying assumption that change occurs primarily through certain inevitable historical sequences is a belief that people behave largely in terms of their class position. As a result, much of human behaviour is seen largely as the acting out of class interests. From such a perspective there is no need to analyse the actions of individuals, as they are assumed to respond in class-determined ways. Likewise, there is little need to analyse individual attitudes and values and how these shape actions, because consciousness is conceived to be largely the result of class

7 Introduction position. It is on these points that my analysis departs most markedly from much current Canadian political economic analysis. My position is much more voluntaristic, in that it recognizes the power of the individual to affect not only his own social world but the process of social change as well. This is not to say that I do not recognize the power of social structure or that I do not believe that people act frequently in class terms and to protect their own class interests. I accept the coercive power of social structures to affect all our actions but I refuse to accept that social structures operate beyond the power of individuals to control them or that individuals invariably act in terms of class interests. Social structures cannot be ignored but the object of analysis is to focus on how the individual acts within social structures, how social structures affect his actions, and how at least occasionally the individual acts in ways not determined solely in terms of class interest or economic motivation. Lest this perspective appear simply to replace economic determinism with individualistic reductionism, I would point out that my position is similar to that of Anthony Giddens, who argues that there is a basic dialectical relationship between action and structure in that they 'presuppose' and are dependent on one another (1979, 53). Giddens argues further that it would be a mistake to suppose that action can be understood outside the context of 'historically located modes of activity' (ibid. 56). Although most of this book was written before I read Giddens' book, my analysis reflects his position. I am concerned with the nature of human action viewed historically and in dialectical relationship with structure. From such a framework the individual is seen as both responding to the social world which surrounds him and acting in various ways to affect the process of social change. It should be emphasized that this includes individuals in power positions in the social structure as well as those subject to manipulation by social events. I disagree with analyses implying that individuals are powerless to fight social forces which may adversely affect them. I also disagree with those which accept that the forces of society operate regardless of the actions of specific individuals in positions of power. Giddens' analysis of the relationship between structure and action is useful in making explicit the relationship between individuals and social structures. Giddens argues that those who treat individuals as manipulated by social forces essentially treat them as 'cultural dopes': 'It implies a derogation of the lay actor. If actors are regarded as cultural dopes or mere "bearers of a mode of production," with no worthwhile understanding of their surroundings or the circumstances of their action, the way is immediately laid open for the supposition that their own views can be disre-

8 The Creation of Regional Dependency garded in any practical programs that might be inaugurated' (ibid. 71-2). The argument of Parts Two and Three of this book is that people act and their actions are not necessarily structurally determined. In Part Two considerable evidence is presented that people who are the 'objects' of social policy frequently define the situation in ways not structurally prescribed and act accordingly. In Part Three the focus is on those responsible for social policy and how their actions directly influence social change in ways not necessarily predetermined either by history or by class interests. To consider individuals as actors in dialectical relationship to the surrounding social structures requires the use of concepts not ordinarily found in a political economic analysis. They include such cultural concepts as values and norms as well as the more psychological ones of identity and commitment. Some may regard this as such a major departure from sociology as they understand it that they will refuse to accept the validity of the analysis found in this book. Those willing to consider the framework developed here as valid will neither be in fundamental opposition to the voluntaristic approach nor prejudiced towards the neo-marxist dependency perspective, as both are fundamental to this analysis. It is my hope that the analysis presented here will contribute to an understanding of the nature of regional divisions and regional dependency in Canadian society.

PART ONE

Regional Differences and Regional Dependency

The four chapters in this part deal with the general problems and issues associated with the study of regional divisions in any country. At the same time they deal more specifically with the issues involved in the study of regional divisions in Canada. The purpose here is to lay the basis not only for a distinctive regional sociology but also for a distinctive sociology of Canada which focuses on the regional divisions in this country. In dealing primarily with the theoretical and methodological issues involved in the explanation of regional differences, these chapters provide a broader perspective than those in Parts Two and Three which deal more specifically with regional development and regional underdevelopment. These four chapters in effect develop a general framework and approach for analysing regional differences which is then applied in the more specific studies in the remainder of the book. There is a broad interdisciplinary literature dealing with regions and regional differences both in Canada and elsewhere. In comparison with economists and geographers, however, sociologists have shown relatively little interest in the subject. It is hoped, then, that the analysis in this section will be of interest and use to them and to a wide range of social scientists and social planners as well. The four chapters are all related. The first deals with the basic conceptual and methodological issues involved in defining and identifying regional differences, particularly the relationship among the concepts of 'region,' 'regionalism,' 'regional _disparity,' and 'regional differences,' and emphasizes the importance of keeping these dimensions analytically separate when trying to understand the nature of regional divisions in any society. This chapter also examines the basic problems in developing indicators of each of these four dimensions, the difficulties created by the value judgment inhe-

IO The Creation of Regional Dependency rent in declaring that any region suffers from regional disparity, and the relationship between objective and subjective indicators or regionalism and regional disparity. In the process of this analysis Canadian empirical work on the nature of regional differences and regional identity is compared with that done in other countries. Chapter 2 deals with the explanation of regional differences in Canada and elsewhere. This chapter confronts and examines the wide variety of paradigms developed over the past seventy-five years by economists, sociologists, and geographers in their efforts to understand and explain the nature of regional differences and regional disparities. Each paradigm is examined in terms of the fundamental assumptions it makes about regional differences and the value orientations and biases contained in those assumptions. Where elimination of regional differences and/or disparities is advocated, the value orientation involved is examined. Throughout this analysis particular attention is paid to the way in which each approach handles the relationship between economic and social factors in regional analysis and regional development. The first two chapters provide a comprehensive methodological and theoretical introduction to the field for those not familiar with its conceptual and methodological complexities. They should also benefit scholars from a variety of fields already working on the subject of regional analysis as well as planners faced with the responsibility of dealing with the regional divisions now so apparent in Canadian society. Among the many frameworks used to explain regional divisions outlined in chapter 2 are the neo-classical paradigm used by many economists and dependency theory which is becoming increasingly popular among sociologists. Chapter 3 expands on this discussion with particular reference to Canada and gives specific attention to the work of Canadian economist Thomas Courchene. Courchene develops the basic assumption of the neo-classical position into a proposal for the elimination of regional disparities in Canada. His approach is labelled here as 'transfer dependency' and this chapter provides a detailed comparison of his work and that of many sociologists who favour dependency theory. It shows that, although both approaches use dependency as a fundamental concept, they differ markedly in what they mean by dependency. Indeed, in assumptions and in solutions recommended for regional disparity, transfer dependency and dependency theory are virtually in opposition to one another. Chapter 4 relates some of the discussion in the preceding three chapters to general work dealing with the nature and development of Canadian society. This chapter suggests that Canadian sociologists have spent far too long trying to build a comprehensive analysis of Canada around those things which

11 Regional Differences Canadians have in common. The argument here is that the most distinctive features of Canadian society are its divisions and the way in which we have woven our unique web of social structure to deal with them. Although Canadian sociologists have given some attention to ethnic and social class divisions, they have given insufficient thought to the nature and explanation of regional divisions in Canadian society. This chapter also demonstrates that dependency theory offers considerable potential as a framework to explain regional divisions in Canadian society and to relate them to the other major divisions of class and ethnicity. Finally, it is suggested that dependency theory can form the basis of a distinctive Canadian sociology capable of identifying and analysing the unique features of Canadian society.

1

Regional Differences: Definition and Identification

For most Canadians and even for most Canadian social scientists the definition and identification of regional differences in Canada do not appear problematic. Most textbooks and treatises on Canadian society present a large body of economic, social, and political data documenting that regional differences do in fact exist. Similarly the news media and politicians' speeches frequently refer to the regional differences and divisions in Canada. Such documentation of regional differences is important and certainly not to be disparaged. However, comparatively little thought has been given to determining the most important dimensions of Canada's regional differences and how they might best be identified and measured. Consequently, this chapter will discuss the issues which underlie the definition and identification of regional differences, focusing on two related topics: the definition and use of key terms and concepts frequently employed in discussions about regional differences and the choice of measures used to identify and prove the existence of regional differences. DEFINITION OF KEY TERMS AND CONCEPTS

In almost all of the literature on 'region' four key terms are widely used: region, regionalism, regional disparities, and regional differences. Frequently they are used interchangeably. Thus regionalism is often used to mean anything to do with regions, regional disparities, or regional differences. Sometimes regions are identified solely in terms of regional disparities. Most frequently, however, the four terms are paired into two groupings. Region and regionalism are used synonymously, and regional disparities is used to describe all regional differences. The result is considerable confusion.

13 Definition and Identification Instead of attempting to deal with that confusion, many recent works on regions and regionalism have simply ignored it. Generally, the authors use 'regionalism' to describe everything that has to do with regions, ignoring the analytic complications thus raised. For example, Bell and Tepperman (1979) devote two chapters to regionalism without defining the term. Political scientist Richard Simeon opens his paper on regionalism and Canadian political institutions by stating that 'Region, regional, and regionalism are three of the most common terms in Canadian political discourse, whether academic, governmental, or journalistic' (1979, 293), but makes no effort to distinguish among them. Wallace Clement, in 'A Political Economy of Regionalism in Canada' (1978, 89-110), also fails to define the term but uses it to describe all forms of regional differences. The same is true of Cuneo (1978, 132-56), andofMarsdenandHarvey'streatmentofregionalism (1979, 127-9, 147-56) . Many other works on regionalism use the term simply to head a long list of characteristics whereby regions differ, a device particularly common in works identifying the nature of regional disparities. No mature analysis can be made in any discipline or subdiscipline (regional sociology, for example) as long as its key terms remain undefined and are used interchangeably. Indeed much of the confusion now existing about the nature and causes of regional differences and regional disparities in Canadian society stems from a lack of precision in using fundamental terminology. If a field of regional sociology (or a truly interdisciplinary field of regional studies) is ever to develop, it is necessary to define precisely the major terms and concepts and to examine the implications of the definitions and the relationships among the terms.

Region and Regionalism Any discussion of regionalism, regional disparities, and/or regional differences must rest on the assumption that regions do exist and can be clearly defined and identified. 'Region' is the most fundamental concept in any attempt at regional analysis. It is, therefore, somewhat surprising to discover that there has been little sustained effort by sociologists, political scientists, or economists to delineate Canada's social, economic, and political regions and to examine the interaction among social, economic, and political forces in shaping regional identity. Many studies of Canada's regions note that they are not necessarily defined in terms of provincial boundaries. They identify cultural and economic regions which cross provincial borders, such as the region which embraces northern New Brunswick and the Gaspe peninsula of Quebec. Moreover, it is frequently emphasized that major regional dif-

14 The Creation of Regional Dependency ferences exist within each province. For example, in the northern half of most provinces the way of life is very different from that in the industrial urban south. However, once it has been noted that regions are social, cultural, and economic entities rather than simply political ones, most writers use provinces or groups of provinces as the basis of identifying regional differences, largely because almost all statistical data in Canada are reported on a provincial basis and thus it is frequently impossible to do otherwise. However, if regions are social, cultural, and economic entities which do indeed overlap provincial boundaries, the use of such data will not fully represent either the extent of regional divisions in Canada or their effect on other aspects of social life. How then are regions to be defined and identified? Some recognition obviously must be given to the fact that a region is a territorially based unit. It is probably because of this that geographers have been the academic group most interested in regional analysis and 'regional science.' Sociologists are apt to cringe at any definition of a social unit which begins with a consideration of territory. Such an approach has frequently led to some form of environmental determinism in which environmental and geographic conditions were seen as the 'cause' of distinctive types of social forms or behaviours. Such an approach was open to stereotypical analysis or even racism. Yet sociologists have examined such other types of territorially based units as communities, neighbourhoods, cities, and nation-states. A region can be examined sociologically in the same way, with reference to its size in relation to other territorial units. Thus a region is, by definition, bigger than a neighbourhood, community, or city, but smaller than a nation-state. It is important to note that identifying a region (or for that matter a neighbourhood, community, city, or nation-state) only in territorial terms or by physical characteristics is not enough to identify it in a sociological sense as a distinctive social unit. From a sociological perspective the defining mark of a region is not territory or any physical characteristic but a combination of social organization, culture, common behaviour, and identity. These are the major dimensions of social life and the basis of all sociological analysis. From a sociological perspective a region is thus a distinctive type of social unit which can be located in territorial terms and which incorporates within it such smaller social units as communities, neighbourhoods, and cities. However, such a definition still does not identify what is the distinctive social character of a region. A useful approach to examining the sociological nature of regions is to re-examine early sociological approaches to the community. Significantly this approach has some precedent in that the earliest interest in regional

15 Definition and Identification divisions in the United States grew out of an awareness that community customs and cultures in some regions of that country were markedly different from those found in other regions (Odum 1945, 245-59). In the first half of this century sociologists described the community as a 'social container' for most of its inhabitants, identifying it as the smallest territorial unit in which one might live one's whole life (Maciver 1961, 9). This definition of community now has little validity. The self-contained community of the past has been besieged by chain-stores, multinational corporations, and national service clubs so that all communities are now vertically integrated into a much larger social unit. Thanks to modern communication and transportation residents of even the most remote communities are exposed to influences from all over the world and routinely travel considerable distances. If many studies have demonstrated the 'eclipse' of community, they have also demonstrated the increasing importance of the region as that territorial and social unit in which most people carry out the majority of their daily activities and in which it is at least theoretically possible to live one's whole life. It is, of course, also possible to demonstrate that, like communities, regions are bound to the larger social world and are as dependent on national and international social and economic forces as the communities and cities within them. The point being made here, however, is that the region has replaced the community as the fundamental territorial-social unit and has taken on many of the social functions formerly performed by communities. Indeed, in many cases regions have probably replaced communities as the territorially based unit of group affiliation which arouses in their residents a 'consciousness of kind' and which they regard simply as 'home.' While the preceding discussion has provided justification for a close sociological investigation of the nature and function of regions as communities, such an approach makes little mention of the nature and types of social structures involved. If a region is to be identified as a distinctive social entity then at least some of its most important social, economic, and political structures must be identifiably different from those of adjoining territorial areas. It is easy to equate province with region, for provincial political social structures are by law and definition different from those of nearby areas, but any delineation of regional social structure must go beyond simple geo-political boundaries to determine the fundamental differences in family life, economic behaviour, religion, recreation, and the other organizations and behaviours which comprise social life. Indeed, unless fundamental differences in social organization can be demonstrated to exist, there is little basis for declaring any territorial area to be a region distinct from adjoining territories.

16 The Creation of Regional Dependency However, the existence of fundamentally different forms of social organization and behaviour, though necessary conditions for the delineation of a territorial area as a region, are still not sufficient conditions for calling an area a region. Another necessary condition is some recognition by the people of a region that they, collectively, are different from other people by virtue of the distinctive social, cultural, and psychological characteristics of their place of residence. Much the same point was made by early sociologists about the nature of a community. Maciver declared that: 'The bases of community are locality and community sentiment' (ibid.), while Weber contended that communal ties exist only when social action is oriented by community sentiment: 'A social relationship will be called communal if and so far as the orientation of social action ... is based upon the subjective feelings of the parties, whether affectual or traditional, that they belong together' (1966, 136). Similarly, one of the key defining characteristics of a region is this sense of 'belonging together.' Thus, though it may be possible to identify numerous ways in which regions empirically differ in social organization, social behaviour, and culture, a distinctive region cannot be said to exist unless the residents of a region identify themselves as belonging to such a territory, and consequently modify their actions. One of the defining and necessary characteristics of any region is that its residents have a sense of regionalism . In most of the early American work on sociology (Riemer 1943; Vance 1951; Carstensen 1951; Wirth 1951) 'regionalism' is used as a noun to describe the discipline of regional studies or as a label to describe the nature of regional differences. Thus, Odum and Moore define regionalism as 'the science of the region or the cultural economy of which the region is a basic unit' (1938, 14). Still, there are a number of authors who have given careful consideration to the definition and use of the term and have even attempted to distinguish between region and regionalism. For example, Hertzler argues that the distinctive economic structure, population characteristics, historical experience, and combination of cultures in each region gives rise to a distinctive culture leading to an 'environmentally mediated pattern of interaction.' This, in turn gives rise to a distinctive pattern of sentiments, wishes, interests, loyalties, common attitudes, thought patterns, habit systems, and public opinion which he argues is reinforced by a distinctive regional hierarchy of class and privilege to produce a distinctive regional level of consciousness (1940, 331-5). Most early authors on the development of regionalism were content to accept that regional differences were largely the result of different environmental and resource bases. Hertzler avoided such simplistic determinism and anticipated recent work in political economy by incorporating a

17 Definition and Identification wide variety of historic and social factors including class structure. More importantly, he identified a relation between regional social structure and regional consciousness and outlined such characteristics of regional consciousness as distinctive attitudes, sentiments, and values. It is this consciousness, rising out of regional social, economic, and cultural differences, which constitutes 'regionalism.' Twenty years later Rupert Vance distinguished between 'region' and 'regionalism, ' and enlarged on the relation between them: 'A region is a homogenous area with physical and cultural characteristics distinct from those of neighbouring areas. As part of a national domain a region is sufficiently unified to have a consciousness of its customs and ideals, and thus possesses a sense of identity distinct from the rest of the country. The term "regionalism" properly represents the regional idea in action as an ideology, as a social movement, or as the theoretical basis for regional planning' (1962, 377-8). For Vance, it is clear that regionalism is the ideology or sense of identity which the residents of a region have in common. The most comprehensive Canadian study of 'regional persistence' is by Mildred Schwartz (1974). In her conclusion she defines ' regionalism' in terms of three principal components: One set of components relates to the characteristics and conditions that separate territorial units. These are economic, political, and demographic facts, and the resultant life styles that emerge from their operation. The second component consists of states of mind, ways of viewing reality through regional frameworks. Of critical significance is the emergence of group consciousness, whereby residents express a regional identity, recognizing their distinctiveness and their special interests ... Thirdly, regionalism is a product of behaviour. Such actions may be the result of conscious decisions to further interests of one or more regions, and are generally part of the behaviour pattern of political leaders. But regional behaviour may be the result of even unanticipated and unrecognized effects stemming from the experience of regionally defined conditions. (1974, 309-10)

Thus Schwartz subsumes under the label regionalism, the characteristics of a region, the cultural identity .and regional consciousness of its residents, and their distinctive behaviour in support of its goals. Consistent with Hertzler's, Vance's, and Schwartz's use of the term, regionalism is used here to refer specifically to regional differences involving a psychological, cultural, or perhaps ideological, component. Regionalism here refers to a sense of 'identification' or 'consciousness of kind' which the inhabitants of a particular regional area feel for that region and/or for their

18 The Creation of Regional Dependency fellow inhabitants of that region. This usage is also consistent with the general tendency within the English language to use the suffix '-ism' to denote a particular ideological stance or commitment to a value-based perspective (for example, socialism, capitalism, racism, facism, feminism) . A distinction between region and regionalism helps considerably in understanding regional diversity. Although economic and social differences may exist among the regions of Canada, it does not necessarily follow that they influence individual or collective consciousness or ideology. Conversely, people may believe that regional differences exist and that they and their neighbours differ from residents of other regions, when in fact there is little objective social or economic evidence to justify such a belief. Once region and regionalism have been so defined the identification of regional differences in Canada appears less straightforward than might previously have been thought. Region and regionalism refer to the objective and subjective aspects of the same phenomenon. The distinction is critical. In attempting to explain the nature of Canadian society, analysts have pointed to objective regional differences of an economic or social nature, differences in economic or social well-being, in cultures, social organization, behaviour, and so on, and have asserted that these are the fundamental bases of regional distinction in Canada. Such an approach is inadequate not only because objective conditions are assumed to be the only important distinctions among regions but also because subjective definitions of well-being or regional identity are assumed to reflect objective conditions. But, in defining and identifying regions in Canada, it is necessary to make an analytical and empirical distinction among the objective social, economic, political, and other differences of regions and the subjective perceptions of regional difference and community shared by their residents.

Regional Disparities and Regional Differences The definition of region and regionalism cannot easily be separated from the distinction between regional disparities and regional differences. The regions of Canada are almost invariably located in terms of regional disparities. It is, therefore, important to distinguish between regional disparity and all forms of regional difference. Such a distinction is not easy, however, requiring not only a distinction between objective and subjective dimensions but also a distinction between economic and social dimensions. When most Canadians think of regional differences in Canada it is in terms of regional disparities, the uneven distribution of goods, resources, incomes and services throughout the country. Indeed, most professional and scholarly analysis of regional differences is made by economists who also

19 Definition and Identification think of regional differences primarily in these terms. Perhaps for this reason the term is not defined even in major works on the subject undertaken by the Economic Council of Canada, such as Living Together: A Study of Regional Disparities (1977), or in the council's earlier analysis, 'Regional Growth and Disparities' (1965), or even in Phillips' Regional Disparities (1978). It is clear, however, that in these works the term is used primarily to describe economic inequalities. One of the aims of such works is to demonstrate that certain regions are economically worse off than other regions. Regions of disparity are variously depicted as lacking some or all of resources, capital, entrepreneurship, jobs, productivity, and infrastructural services. These same regions are shown to rank highest in terms of unemployment, cost of living, and poverty. A major problem in such an approach stems from the value judgment (and potential value bias) inherent in declaring that any region is in 'disparity' when compared to other regions. Such a statement is not merely a declaration that certain 'differences' exist among the regions but a judgment about the meaning and implications of such differences. However, the danger here is that the delineation of regional disparities implies that some regions are unequal or inferior in comparison with other regions using the criteria in question. There is a considerable distinction between saying that certain differences objectively exist among regions and declaring that these differences constitute evidence of regional disparities. In short, the declara-

tion that a region is suffering from regional disparity is always a subjective value judgment.

This is not an argument for objective or value-free analysis. Though many social scientists have argued that sociological analysis must remain value free, some of the difficulties involved are apparent here. To attempt valuefree analysis in this case would be to limit oneself only to identifying existing regional differences while avoiding any comment on the implications and meanings of these differences. The issue is not whether analysis of regional differences in Canada should remain value free, but whose values and what values underlie the statement that one region suffers from regional disparity in comparison with another. All too frequently such values are those held by planners who live outside the region and they bear little relation to those used by residents of the region. The residents frequently use very different criteria, and often reach different conclusions about the viability and vitality of their region. In addition to objectivity versus subjectivity, the delineation of regional disparities and regional differences involves a distinction between economic and social dimensions. Most assessments of regional disparities and many

20 The Creation of Regional Dependency analyses of regional differences involve only economic considerations. Some social scientists appear to believe that defining and delineating regional disparities in economic terms overcomes the problems of subjectivity versus objectivity. Such clearly defined indicators as income per capita, minimum wage rates, investment per workplace, and productivity can be expressed in monetary terms and are easy to 'agglomerate' into one comprehensive index of regional economic well-being. However, even these supposedly objective indicators involve subjective judgments such as the choice and delineation of which economic dimensions to consider and measure. To focus solely on the economic basis of regional disparities in no way avoids the problem of subjective value judgments creeping into the analysis. All considerations of regional disparities and regional differences are not couched in economic terms, however. As a result of the growing influence of the social indicators movement (Bauer 1966; Economic Council of Canada 1974; Henderson 1974) there has been growing interest among sociologists, economists, and geographers in demonstrating that regional social disparities also exist. In such studies it is frequently assumed that, as long as a measure of social structure is present and no attempt is made to deal with the attitudes of local residents, the indicator is objective. One study states that ' quantitative indicators do not themselves possess an intrinsic normative character' and then procedes to develop social indicators in areas where 'normative judgements ... appear relatively uncontroversial' (Economic Council of Canada 1974, 13). In that study such diverse measures as housing size, number of health care professionals per capita, divorce rate, family size, and suicide rate were all taken to be objective social indicators of regional disparity. There are two fundamental problems with this approach. First, the value bias inherent in the choice of indicators of regional disparity remains the same whether they are economic or social. Indeed, the problems of subjectivity and value bias seem even greater in selecting social indicators, largely because many researchers take pains to avoid any consideration of local attitudes and values lest their supposedly objective measures be affected. In addition, many have no training or experience in evaluating social structure and culture. Consequently there is likely to be a greater subjective bias in the selection of indicators of regional social disparity than with the selection of indicators of regional economic disparity. A second problem is that many studies seem to assume a causal link between economic and social disparity, implying that the so-called social disparities are caused by regional economic disparities and will be eliminated only when regional economic equality has been established. There is little evidence to support these assumptions. Communities and regions often can

21 Definition and Identification be shown to have a vital social life when their economic viability is in doubt while many of the programs and policies aimed at increasing economic viability actually threaten and undermine the vitality of social life. The problems can be solved if both terms, 'regional disparities' and 'regional differences,' are used, the former to identify a normative judgment that one region is in some way unequal (and perhaps even inferior) in comparison with another, the latter describing in a non-normative, non-evaluative way the social, economic, and cultural differences which exist among regions, regardless of who chooses the dimensions by which they are compared or what values are involved in that choice. The term 'regional disparities' is thus reserved for a normative assessment that regional differences constitute inequalities. Canada's regions are discussed here generally in terms of regional differences or diversity in an effort to avoid the value biases inherent in prematurely labelling regional differences as regional disparities. This distinction is not always easy to maintain, however. For example, most of Canada's regional development policies are declared to be ways of alleviating regional disparities. To refer to them as policies and programs to deal with regional differences would be confusing and thus for convenience they will be referred to in terms of disparities at some points. One other term, 'regional divisions,' is used in this work to indicate that the regional differences and disparities among the regions in question are so pronounced that a basic conflict of interest exists among them. IDENTIFICATION OF REGIONAL DIFFERENCES

Discussion of the problems of 'defining' regional differences has focused on the distinction between the subjective and objective dimensions of regional analysis and that between the economic and social dimensions of regional differences. The implications of both for the 'identification' of regional differences will now be examined to see how the various dimensions of regional analysis can be operationalized for empirical analysis. As before, the relationship between region and regionalism will be examined, followed by an analysis of the issues connected with the identification of regional disparity and regional differences.

Region and Regionalism

It was previously noted that there is more involved in the definition and identification of regions than simply categorizing regions in terms of the presence or absence of certain characteristic features. People may define

22 The Creation of Regional Dependency themselves and others as belonging to a particular region when objective economic and social characteristics suggest that they are in fact divided by extreme differences in economic well-being or social features. Thus, a sense of •regionalism' should be considered one of the necessary defining characteristics of any region. As regionalism is essentially the social-psychological component of regional analysis, it can be analysed using theories and concepts of social psychology which deal with how people come to define their situation to identify themselves as belonging to a particular region and develop an identification with the majority of other r.esittents in it. It is important to delineate some of the concepts and variables associated with these processes if we are to have an adequate understanding of what is involved in the identification of regionalism. Moreover, because regionalism is an important part of all forms of regional delineation, an understanding of some of its basic components is essential to a full understanding of regional differences. Finally, some further consideration of the nature of regionalism and its social-psychological components is essential if only to demonstrate some of the misconceptions about the nature of regionalism. From a social-psychological (and basically symbolic interactionist) perspective, three fundamental dimensions of regionalism must be analysed: the processes involved in the formation of an individual's identity, and particularly the significance of region within the individual's identity structure, the process whereby a person develops a sense of identification of and with a particular region, and, finally, the nature and level of commitment of the residents of each region, as well as the reasons for that commitment and the way in which it is related to their definition of the region as a favourable or unfavourable place to live in comparison with other regions. One's identity is who one is as a social person. It is a social construct or, in Berger and Luckman's words: 'Identity is a key element of subjective reality, and like all subjective reality, stands in a dialectical relationship with society. Identity is formed by social process' (1967, 173) . Perhaps the most comprehensive analysis of the nature of identity is to be found in McCall and Simmons who argue that, as one's identity is formed in a social context, it is possible to think of it as a conglomerate or set of 'role identities' related to the various social roles played by an individual in society (1966, 67-75). It is then relevant to consider the salience of the various role identities of each person in a 'hierarchy of prominence' (ibid. 77-89). McCall and Simmons argue that there are five factors which govern the organization of this hierarchy and which determine the salience of any particular identity: the prominence of a particular role, the person's need for support in that role, the intrinsic value received from presenting a particular role identity, the extrin-

23 Definition and Identification sic gratification received from such a presentation or performance, and the perceived opportunities which exist for the presentation of such a role identity (ibid. 84-5) . Regionalism as here defined can be studied using this or a similar framework. What must be determined is the extent to which a person's regional role identity forms a major part of his or her total identity, and if it varies in each of the regions of Canada. It is also necessary to examine the social factors affecting regionalism and particularly how they may operate differently in each region. Finally, the implications of the relation between regional identity and social behaviour must be pursued. For example, do certain types of behaviour reinforce regional identity while others do not? Is regional identity stronger in rural areas where behaviour patterns may differ from those in urban centres? Is regional identity influenced by such other role identities as occupation, religion, and ethnicity? Finally, is the strength of regional identity influenced by migration and, if so, how? For example, migrants from certain eastern regions of Canada can and do maintain their regional identity even when living outside those regions, those 'back home' regarding them as retaining their regional identity. On the other hand, migrants from other regions into eastern Canada are rarely accepted as having a local regional identity, despite their strongest efforts to adapt socially. The concept of identification is closely related to that of identity. Identification is the process whereby a person acquires a social identity and in this sense it is related to the concepts of salience and hierarchy just described. There are, however, subtle differences. First, it should be noted that identification involves both the identification of a particular area or social collectivity as unique as well as the processes involved in identification with that area. Thus, a study of regional identification should be concerned not only with the place regionalism plays in an individual resident's personal identity but also with the factors taken into account by residents in identifying one region as different from another and in identifying themselves as belonging to a particular region. Thus the focus for studies of regional identification is on the nature of perceived similarities and perceived differences among regions, and how residents of each area relate to these similarities and differences. Another dimension of regionalism is commitment. Commitment may be considered as the degree to which an individual identifies with a particular region although commitment may well vary independent of identification. A person might identify with a region because of place of birth, childhood experience, language, or accent, but not necessarily be committed to living in that region. Commitment is a measure of the extent to which a person is willing to work for the well-being (subjectively defined) of a particular region

24 The Creation of Regional Dependency and is willing to remain living there. There is a variety of factors which may potentially affect the extent or level of commitment, including family ties, sentiment, economic conditions, quality of life, resistance to change, or resignation that one is too old to move or that conditions are not likely to be better elsewhere. Commitment may involve a reverse dimension, such as a dislike of other regions because of their perceived negative attributes. It should be emphasized, however, that simply measuring various factors of commitment singly or together will not necessarily produce an index of regional commitment. One can understand commitment only by understanding the meaning which these factors have for individual residents of each region and by ascertaining their effect on individual identity. The preceding analysis of the identity and commitment components of regionalism has laid the groundwork necessary to demonstrate some misconceptions about the nature of regionalism in Canada found in the literature on the subject, particularly with respect to the relationship between attitudes and identity, and the way in which personal and cultural values influence and mediate both. Most studies of identity in Canada have attempted to demonstrate that there is a distinctive Canadian identity and/or that there are significant differences in regional identity throughout the country. Such studies have emphasized attitudinal differences among the residents of different regions, usually by asking a battery of questions about attitudes on a variety of subjects and analysing the responses to determine if significant regional differences can be found. If significant differences are found, the authors usually conclude that regionalism is a salient variable in Canada and vice versa. However, there is no necessary link between attitudes on different subjects and regional identity, although both are directly influenced by cultural values. It may be possible, for instance, to demonstrate that there are no significant differences between the residents of Atlantic Canada and those of Ontario in their attitudes towards the effectiveness of their provincial governments, the power of the federal government, or even on such subjects as the quality oflife in their communities. However, such findings do not mean that the residents of each region have no commitment to their region or that regionalism is unimportant as a component of their personal identity. Such attitudinal studies reveal little about the nature and strength of regionalism, because they do not deal with attitudes directly related to regional identity, regional identification, or regional commitment. Studies of differences in general attitudes tell us little about the nature and strength of regionalism and regional identity unless they deal directly with them.

25 Definition and Identification A somewhat different problem is found in those studies which deal with attitudes towards region and with regional identity. Although such studies correctly focus on a 'sense of place' and its personal significance to the residents of each region, there is a tendency to accept the same level of regional commitment in different regions as evidence that regionalism is not a significant variable in Canadian life. This may not be the case. If the residents of Alberta and those of Newfoundland show equally strong regional commitment, regionalism is a significant variable in Canadian society. Probably the earliest example of a major study of Canadian identity which included regional considerations was Schwartz's analysis of Canadian attitudes as expressed in public opinion polls (1967) . Her analysis tells a great deal about changing Canadian attitudes to what she labelled Canada's internal, external, and symbolic problems. These attitudes may reveal much about Canadian values but it is incorrect to assume that they automatically reflect Canadian identity. That is revealed only by questions dealing directly with the way ~n which individuals personally regard Canada and by examining the basis on which individuals develop an identification of and with Canada and become committed to it. In another study, Ornstein et al. (1980) examine the nature of political attitudes in Canada with particular emphasis on the relationship between region and social class, demonstrating that regional differences in political attitudes are not independent of social class. Class seems to be more important than region in shaping political ideology and attitudes towards political efficacy while attitudes towards established political institutions seem to be shaped more by region than by class or status. This is not, of course, to say that regional identity is less significant than class identity in Canada nor do the authors make any such claim. A related study by Blishen and Atkinson (1981) does make such a claim, however. These authors examine the relationship between regional and class differences in Canada on the basis of attitudes towards such personal values or 'life goals' as prosperity, friendship, achievement, economic stability, selfdevelopment, and family security, and report that ' relative ranking of values is almost identical in every region' (ibid. 13). Based on this they declare: 'This suggests that while Canadians may value different goals, these differences have no regional significance. These data appear to contradict the findings of Matthews (1980), Schwartz (1967), and Simeon and Elkin (1979) that regional differences in values and identity do exist in Canada' (ibid. 18). Although they may be justified in questioning previous work suggesting significant differences in values among the various regions of the

26 The Creation of Regional Dependency country, Blishen and Atkinson do not present data which can adequately determine that there are no significant differences in regional identity in Canada. There is no examination of the attitudes of the residents of each region about their region or about other regions or of the ways in which people come to identify with a region, the extent of such identification, or the nature and extent of their commitment to a region. In sum, a similarity in some attitudes and values among regions does not imply a similarity in the intensity of attitudes towards a region or in the nature of regional identity. It is clear that in order to investigate the nature of Canadian regionalism it is necessary to focus on the nature of Canadian regional identity and examine the link between identity and value orientations in other areas. A variety of studies has attempted to probe different dimensions of Canadian attitudes and values but little Canadian research has attempted to deal directly with the nature of Canadian regional identity. A comprehensive British study (Townsend and Taylor 1975), which deals with the nature of regional culture and identity in industrialized societies, based on data on communities in north-east England, illustrates the type of work needed here. Unlike Canadian work on regional attitudes, Townsend and Taylor are directly concerned with examining 'the individual's regional consciousness and on what basis it is created' (ibid. 381). They investigate 'what elements of social life foster spacial identification beyond the very local level' and examine data on individual 'experience of place' and how it shapes a 'sense of space.' Their research is predicated on the hypothesis that in stable regions of industrial countries there is a central core of residents whose past and present economic and social circumstances facilitate the development of a common regional culture and that 'regional identity is associated with individual experiences of life styles within the region' (ibid. 388). In their research they asked residents of different communities questions designed to elicit their perceptions of the regional boundaries where they lived and the significance these had for them. Respondents were also questioned about their perceptions of the region as a place to live and how they felt the quality of life in that region was judged by outsiders. They were asked questions about the way in which they identified with and related to other people from their region. Townsend and Taylor also examined which attitudes, life styles, and patterns of experience were likely to be associated with a strong sense of regional identity and concluded that, 'Regional identification is thus rooted in the local experiences of the overall way of life of the immediate areas or nodes of personal significance for the individual. The strength of the kinship and friendship network, the feeling of belonging to a social group which encompasses the individual's own life style, provides the basis for his attach-

27 Definition and Identification ment to the region, its image and social attributes' (ibid. 390). Obviously Townsend and Taylor's work is relevant to the study of regionalism and regional identity in Canada. It provides a useful example of how regional identity might be investigated in Canada as well as comparative evidence that regional identity does exist and does influence patterns of behaviour in at least one modern industrialized society.

Regional Disparities and Regional Differences Earlier this chapter examined the problem of the value bias involved in a declaration that a region is experiencing eithe~ economic disparity or socalled social disparity. The analysis in this section is concerned with ways in which regional disparities and regional differences can be identified and measured primarily by the selection of economic and social indicators. As Bunge notes, 'an indicator is a token or symptom of some condition ... More precisely, an indicator is an observable trait of a thing (physical, biological, social, or other) that is rightly or wrongly assumed to point to the value of some other trait' (1975, 66). All scientific and social scientific investigation rests on the selection of indicators. It should, however, be emphasized that the incorporation of indicators does not necessarily make a work either more scientific or more accurate. There is no assurance that any single factor selected is in and of itself an accurate measure of the trait it is held to represent. For example, the income per capita in any region is frequently chosen as an indicator of regional disparity. This may be a legitimate indicator or it may not. A more appropriate indicator may be income per family, or extent of family savings, or even the fixed assets of any individual or family in each region. It should also be noted that increasing the number of indicators does not necessarily increase accuracy. For example, the four indicators above are all measures of family and individual income and assets in any region. If income is not a key factor in regional disparity, the addition of indicators which deal only with income will not add much to our knowledge of the subject. What legitimates an indicator as a valid representation of some other trait is the theory linking it to the phenomenon it is declared to represent. Thus, indicators of regional disparity and regional differences selected in some ad hoc fashion have no demonstrated validity unless they clearly relate to a theoretical perspective. To anchor indicators in theory is the way of overcoming the value biases which otherwise affect their selection. A concern with objective versus subjective indicators of regional disparity underlies all work on the subject. One attempt at avoiding subjectivity has emphasized what is referred to as 'level of living.' Level of living studies

28 The Creation of Regional Dependency present an inventory of the physical, material, and cultural possessions of the country or region in question. As Knox defines it, 'The level of living of persons resident within a geographic area is constituted by the overall composition of housing, health, education, social status, employment, affluence, leisure, social security and social stability displayed throughout that area, together with those aspects of demographic structure, general physical environment, and social institutions which may determine the extent to which needs and desires relating to the foregoing constituents of level of living can be, or are met' (1974, 14). These studies focus on what their authors like to call 'the actual conditions of life among the people in question' (ibid. 13), and do not consider the perceptions or aspirations of those people. Knox advocates level of living studies of 'regional well-being' as a way of overcoming subjective assessments. He perceives level of living studies being compilations of the physical and cultural resources in any area. His approach is close to advocating a compilation of what were termed 'regional differences' without assessing if they are 'regional disparities.' But there are two major problems with such an approach. Any assessment of regional differences which ignores the perceptions of local residents is unlikely to provide much information about regional divisions. Moreover, as Bunge notes, the simple compilation of indicators of regional differences without reference to any theory is apt to increase the subjectivity involved in the selection of indicators and thus Knox's approach is likely to create the very problems which he hoped to overcome. However, most works which attempt to measure regional disparities and differences by using indicators do not deal with levels of living but rather with what is referred to as 'quality of life.' Kuz notes that, 'Regional and international disparities in life quality exist and to researchers, planning agencies and governments it is of paramount importance to be able to define through the use of more appropriate indicators those areas experiencing relatively lower living conditions with the ultimate goal of rectifying such inequalities' (1978, 409). Despite this, the precise meaning of 'quality oflife' remains vague and there are few clear prescriptions of what is involved in any assessment of it. Most attempts to assess regional quality of life have emphasized economic considerations but some have attempted to add a social dimension through the use of what are termed 'social indicators' as well. This has led to considerable confusion between objective and subjective indicators of economic and social quality of life. Some measure of the confusion can be gleaned from Kuz who defines objective indicators as those which provide 'counts of various phenomena,' and subjective indicators as those 'measures based on people's perceptions

29 Definition and Identification and feelings' (ibid. 409). He applies these criteria so strictly that he records any data obtained directly through the use of questionnaires as subjective indicators, considering the answers to reflect individual perceptions and feelings. Thus, such 'factual' data as belonging to an organization or attendance at a meeting would be considered by Kuz subjective if the information was obtained through interviews. Again, the most accurate information on personal income presumably is obtained directly from individuals, and yet Kuz would appear to consider this inferior because it would rely on 'subjective' interviews. Kuz appears to place more faith in secondary sources which he regards as 'objective.' The works just discussed indicate the importance which certain social scientists interested in regional analysis place on obtaining 'objective' indicators, and the extent to which they go in trying to eliminate what they perceive as unwanted 'subjective' elements. It would be wrong to leave the impression that all research on regional differences and disparities attempts to eliminate subjective elements, however. In the past few years a growing number of social scientific researchers has deliberately attempted to incorporate a subjective dimension, emphasizing the importance which individual perceptions play in determining quality of life. Rogers and Converse note that: 'The basic rationale for this type of research is that the term "quality of life" refers at least in part to the way in which individuals perceive and evaluate their own lives. One implication of this reasoning is that for any measure to be considered a true indicator of the quality of life, there must be clear linkage between the measure and the feelings of the people to whom it is relevant' (1975, 126). To this Dale adds that an emphasis on individual perception is an important 'corrective' to the values of planners who have stressed objective indicators: 'The growing awareness of the problem associated with the use of objective measures has led to increased use of subjective indicators. Among the advantages most often set forth is the assumption that subjective data can give information about life-domains that are more or less impossible to measure 'objectively.' Moreover, knowledge about people's evaluations, aspirations and priorities can act as an important corrective to decisions made by planners and other paternalistic agents' (1980, 504). A common response to this new call has been to distinguish between what Dale has termed the 'hard actual conditions' and material resources of a region and what is perceived as the 'soft social and environmental aspects' of quality of life (ibid. 505) . Economic (material) considerations then become associated with quantitative measures and indicators while social and psychological ones become associated with the qualitative measures of individual perceptions.

30 The Creation of Regional Dependency However, another body of work makes a somewhat different distinction between objective and subjective indicators. Lee and Marans define objective indicators as dealing with 'the environments in which people live and work,' and subjective indicators as involving 'the ways people perceive and ~valuate conditions existing around them' (1980, 48) . This distinction between objective and subjective indicators is not equated with a distinction between economic and social indicators. Rather the distinction is made between objective reality and subjective perceptions of that reality. Combining this approach to subjective and objective indicators with the distinction between economic and social indicators provides a fourfold set of categories for which indicators can be developed: indicators of objective economic conditions and well-being in any region, indicators of objective social conditions and well-being in any region, indicators of the subjective perceptions of economic and material well-being in any region, and indicators of the subjective perceptions of social and cultural well-being in any region. The last two categories can be further subdivided to distinguish between the subjective perceptions of regional differences by outside planners and researchers and subjective perceptions of regional differences by local residents. Despite the analytic utility of these distinctions, it is frequently impossible to maintain a distinction between objective and subjective indicators in any practical sense. No list of objective characteristics of a region has any significance unless it is interpreted and any interpretation requires subjective evaluation of the meanings and implications of the variables. Knox was criticized for attempting to reduce all measures of regional differences to objective measures and the opposite criticism might be made that here all objective measures are being reduced to subjective ones. However, in keeping with the distinction made previously between regional differences and regional disparities, the position taken here is that the assessment of regional disparities involves a normative evaluation of objective social and economic differences among regions. This implies that any analysis of objective social and economic indicators must involve some level of subjective assessment. Kennedy et al. (1978) approach the issue of the relationship between subjective and objective indicators slightly differently but come to much the same conclusion, noting that for most social concepts the same phenomenon may be measured either objectively or subjectively. Social class may thus be measured objectively in terms of income or subjectively in terms of either perceived adequacy of income or individual perceptions of social class. In recent years the relationship between objective and subjective indicators has been widely discussed because it is central to any analysis of regional differences and disparity. As the use of both objective and subjective

31 Definition and Identification indicators became popular, it became obvious that supposedly objective evaluations of the quality of life in any area bore little relation to the subjective perceptions of that quality of life by the residents. Knox and MacLaran (1978, 226) cite a study by Abrams which found that 'objective prosperity may sometimes be linked with dissatisfaction whereas people living in poverty may declare themselves to be contented.' Dale (1980, 506) refers to work by Allart in which there was a low correlation between real income and subjective satisfaction with it. Kuz, in dealing with quality of life and satisfaction in seventy-seven urban centres in Manitoba, concluded that 'objective and subjective variables ... form distinct and uncorrelated patterns' (1978, 413). In a comprehensive study of the quality of life in fifteen American cities Schneider found that 'across these cities there is very little correlation between objective conditions and subjective feelings of life satisfaction' (1974, 501) . Kennedy et al., in a study of objective and subjective satisfaction in Edmonton, likewise discovered 'very few significant relationships between general satisfaction levels and various demographic and objective measures' (1978, 468). Similar findings in other studies are legion. The presumption of a relationship between objective reality and subjective perception of that reality has, therefore, been questioned. Most studies have dealt with this as a general problem but their findings are relevant to analysis of regional differences in quality of life and well-being. A few studies have dealt specifically with the interaction between objective and subjective indicators of regional well-being. At the general level, Lee and Marans outline a variety of reasons for a discrepancy between objective reality and subjective perception: differences in individual experience, in individual levels of aspiration, in individual standards of comparison, and in social and cultural attitudes and values within and among communities (1980, 50-0. Other studies attempt to deal with the measurement issues involved. One of the most significant is by Kennedy et al. who argue that the difficulty in correlating objective and subjective indicators has much to do with the level of specificity of the indicators used. They suggest that 'at the level of specifics people tend to be critical and evaluative, at the general level people tend to respond positively' (1978, 460) . They argue that indicators should be developed for three levels of phenomena: specific, domain specific, and global. They indicate that 'the quest for a simple set of global social well-being indicators may perhaps be futile; social well-being assessment can be effective only if one is willing to recognize and deal with the complexity of social reality' (ibid. 461). In their own research in Edmonton they found few significant relationships between general levels of satisfaction and objective

32 The Creation of Regional Dependency measures. However, once controls were added on satisfaction in specific domain areas, significant relationships were discovered among a number of variables (ibid. 461). Their findings are supported by a number of other studies. Buttel et al. ( 1977) found empirical evidence that general measures of satisfaction are more closely related to ideological outlook than to personal satisfaction. They found a high correlation between respondents' assessments of well-being and political ideology and concluded that positive responses are frequently given to question about general satisfaction because to reply otherwise would question the American way of life. Closely related to this issue of specificity is the issue of the size of the unit taken as a frame of reference. Lee and Marans found minimal correlation between objective levels of crime in the Detroit area and subjective feelings of safety (1980, 51) . However, they found that feelings of safety varied in terms of respondents' definitions of their area of residence. Those who regarded the city as a whole as their area of residence were fearful because all crime in the city was of concern to them. Conversely, those who regarded their neighbourhood as their area of residence had the greatest feeling of safety, regarding high levels of crime in other areas as irrelevant (ibid. 53). Wasserman and Chua, in a recent replication (1980) of Schneider's work on satisfaction in American cities (1974) also found low correlations between objective and subjective satisfaction in all cities although they did find that satisfaction levels were significantly higher in smaller cities than in larger ones. These studies of the general relationship between objective and subjective indicators of satisfaction with the quality of life emphasize the importance of specificity and the size of the social unit considered in developing social indicators. Much the same conclusion is reached in a series of British and Norwegian studies dealing specifically with regional satisfaction. In a study based on research in an isolated region of Scotland, Knox uses an innovative research design to measure residents' present general satisfaction in comparison with their perception of past and probable future general satisfaction. He found an upward trend in perceived satisfaction from past to present to future (1976, 426-7). Knox also measured levels of satisfaction as perceived over time in several domain areas and discovered major differences, some domains being perceived as improving while others were perceived as deteriorating. He also discovered major differences between respondents' evaluations of the regional situation and their evaluation of their personal situations. For example, many felt that there were more opportunities for employment although they did not perceive any increase in satisfaction with their own employment. Knox correlated levels of domain satisfaction in vari-

33 Definition and Identification ous spheres of life with general satisfaction and was able to account for approximately 70 per cent of the variance. This suggests a relationship between domain satisfaction and satisfaction with life in general, though further empirical investigation is still necessary. Perhaps the most important study of objective versus subjective satisfaction at the regional level is that reported by Dale and based on research carried out on a large number of regions in Norway (1980) . Respondents were questioned about their satisfaction with such domain specifics as housing, working conditions, social security, and environmental quality (ibid. 509). There was a high level of correspondence between subjective and objective findings within the specific domains. Other findings from this study are relevant to regional analysis in Canada. One was that there were strong urban versus rural differences in levels of objective versus subjective wellbeing. Dale's explanation is that objective measures of well-being and quality of life have a built-in urban bias in that they measure such factors as education, income, housing conditions, health standards, and the accessibility of public and private services, all of which are higher or more abundant in urban than rural areas. In contrast, subjective measures of well-being favour rural regions and communities because they emphasize those aspects of physical and social environment frequently given as reasons for preferring to live in rural areas (ibid. 508). Another finding was that these urban versus rural differences in satisfaction were complemented by differences in social class. The higher the socio-economic status of an area, the higher the scores obtained on almost every subjective indicator. This pattern was particularly pronounced in urban areas. Dale hypothesizes that in cities environmental resources are few and have to be bought at considerable expense. Only those with high incomes can afford to live in good housing in attractive neighbourhoods and these are the people most satisfied with urban life. In contrast, many environmental resources are available to the majority of rural residents at little or no cost (ibid. 510-11) . Dale notes that this class difference is generally overlooked by large studies which focus only on overall quality of life throughout a region (ibid. 512) . The preceding discussion has highlighted the importance of taking into account the subjective perceptions of local residents in any assessment of quality of life. These studies from other countries provide guidelines by which to judge work on regional differences and regional disparities in Canada. The key work is the Economic Council study, Living Together: A Study of Regional Disparities (1977), a study which focused almost exclusively on 'indicators of individual well-being' to determine if regional disparity exists in Canada. The rationale was that 'A wide variety of facts suggest that indi-

34 The Creation of Regional Dependency vi dual well-being does indeed differ from one region to another' (ibid. 31). It implies that some attention would be paid to subjective perceptions of wellbeing and quality of life. There is, however, absolutely no consideration of subjective assessments of well-being in the report. Most of the work deals with 'demographic differences' and economic indicators of 'material wellbeing.' The former consist of regional differences in population growth, community and family size, fertility rates, migration, and similar factors (ibid. 32-54); the latter include per capita income, rates of unemployment, and labour force participation rates. The demographic and economic indicators used are all objective in that no attempt was made to obtain subjective evaluations of these factors by the residents of each region. In addition to these factors the report contains a brief section on what are termed 'Social Indicators and Other Social Measures' which present data on regional differences in housing, education, and health, as well as 'warning statistics' on divorce, suicide, and crime rates (ibid. 56-9). Presumably these were intended to demonstrate the council's awareness that regional disparity is a social as well as an economic phenomenon. In the ensuing analysis housing is measured by a crowding index based on the number of persons per room in each house, health by per-capita expenditure on medical services and the number of physicians per person in each region, and education by expenditure on education and individual level of education in each region. All of these social statistics are objective rather than subjective measures of the environment in which people live and work rather than indicators of the way in which people perceive and evaluate their environment. As such they display the problems associated with purely objective measures of social life, particularly the consistent value bias of an outside evaluator. For example, the council's researchers chose crowding a~ the most important indicator of housing, establishing beyond a shadow of doubt that people in Atlantic Canada were suffering from 'social disparity' on this dimension. Yet crowding is probably not an important criterion used by many people in that region to judge their housing. They are likely more concerned about whether they will be able to keep their home if they are suddenly out of work than about the number of persons per room. As seasonal employment is erratic in the Atlantic provinces, this is a particular concern. Often residents in the Atlantic region can own their home only if it is small and they have built it themselves. Significantly, far more residents own their homes there than in any other region of the country. Ironically, if home ownership had been the chosen criterion for housing, Newfoundland would have led the country, the residents of Ontario in comparison living in a pitiful condition of social disparity. By focusing on objective indicators in general, and home ownership in

35 Definition and Identification particular, the Economic Council seems to have missed the most important aspect of housing in the Atlantic region according to the perception of its inhabitants. Unfortunately, throughout the section on social indicators, questionable criteria for measuring social disparity were chosen by the council in almost every case. For example, well-being with regard to health was measured by physicians per capita and supposedly demonstrated the inferiority of medical well-being in the Atlantic region. Yet life expectancy is higher there than elsewhere in Canada despite the lack of physicians. Other statistics demonstrate that there is a lower per-capita level of education in the Atlantic region. Two important factors are overlooked, however. First, over the past two decades, the residents of the Atlantic region have been upgrading their educational level at a rate much higher than the national average and it is the low educational levels among the older generation that account for much of the regional difference. Second, if the majority of residents had higher levels of education they would be over-qualified for available local jobs and might perhaps also expect incomes higher than local industry could provide. In that event, they might be unemployed and even forced to move out of the region in order to get work. From the residents' subjective perspective, then, little would be gained from more education and perhaps much would be lost. Such observations emphasize that it is critically important to obtain subjective perceptions of local residents in any assessment of regional social wellbeing or social disparity. However, there is another issue concerning the Economic Council's treatment of social indicators or regional disparity. When one examines the social indicators used by the Economic Council it is clear that there is nothing social about them. The social sphere of any society consists of its social organization and structure, the social behaviour and activities of its residents, and the culture, attitudes, values, and identities of its residents. Except in the most vague and tangential terms, the social indicators used by the council give no information about any of these components or about how they are perceived by the residents of each region. In short, the social indicators chosen by the council are devoid of social meaning. The same is true of the indicators of economic well-being used by the council. Once again only objective measures were chosen and once again the perceptions of the residents were excluded. Economic well-being is not necessarily perceived by residents of a region in the monetary terms favoured by the Economic Council. For example, it is possible that the presence of kin and close community ties are perceived to have economic advantages offsetting higher wages to be made elsewhere. Such ties are particularly impor-

36 The Creation of Regional Dependency tant in carrying one through the long winter seasons of unemployment as well as through the latter years of adult life when employment requiring physical effort may no longer be possible. It is essential that an assessment of the economic quality of life in a region, like that of the social quality of life, should incorporate the subjective perceptions of local residents. CONCLUSION

This chapter has introduced the reader to the basic concepts of regional analysis, made a clear delineation of the meaning of these key concepts, and examined with some care the ways in which these concepts can be operationalized and empirical indicators obtained. It has shown that a region can be seen as taking on many of the social functions which communities used to perform, and has emphasized the importance of incorporating social psychological considerations into any analysis of regionalism. This chapter has drawn a distinction between regional disparity and regional differences to emphasize that any assessment of regional disparity inevitably involves a value judgment and that it is inaccurate to consider economic indicators to be generally objective and social indicators to be generally subjective. Thus, this analysis has demonstrated the necessity of incorporating the subjective perceptions of local residents in any analysis of regional social and economic disparity. Throughout this analysis the works of Canadian social scientists were contrasted with work on regionalism, regional identity, and regional disparity in other countries. It is unfortunate that, in comparison with work done elsewhere, Canadian studies of regionalism and regional differences are often inadequate primarily because none focus directly on the nature of regional identification and commitment and its relation to personal identity. There are no major national (or regional) studies in Canada investigating the subjective perceptions of regional differences and relating them to objective definitions of regional disparity. A full-scale social scientific study of the nature of regionalism and regional diversity in Canada is long overdue.

2 Explanations of Regional Differences

Now what I want is Facts. Teach these boys and girls nothing but Facts. Facts alone are wanted in life. Plant nothing else, and root out everything else. You can only form the minds of reasoning animals upon Facts: nothing else will ever be of any service to them. (Charles Dickens, Hard Times)

Our culture, perhaps more than any other in history, is devoted to facts. Detectives on television declare,' All I want are the facts ma'am,' convinced that once the facts are known they will be able to solve any mystery. Advertisements assure us that ' the facts speak for themselves.' Yet that is exactly what facts do not do! By themselves facts have no meaning. It is our interpretation of facts that gives them significance and meaning. The process of interpretation, however, is highly subjective. Facts can be viewed from a variety of perspectives and interpreted in a variety of ways. Indeed, each framework of interpretation may combine the available facts in such a way that they seem to become different facts, for they take on different meanings. It is impossible to obtain 'pure' facts about regional differences in Canada. What is sought and what is accepted as the facts of any situation depend on individual perspective or frame of reference. Therefore, to talk about the identification of regional differences in Canada as if this process takes place in a theoretical vacuum makes no sense in either theoretical or practical terms. Regional differences are always identified within a framework of concepts which governs not only the selection of facts but also their interpretation. If the identification of regional differences has no meaning except in the context of an overriding perspective, one might question the legitimacy of any social and economic indicators. It might be argued that all social indicators are value-biased in that they are derivative of some social theory and

38 The Creation of Regional Dependency will be interpreted from the value orientation of that perspective. However, there are qualitative differences in the types of 'bias' which can enter sociological analysis. There is a considerable difference between personal assumptions based on stereotype which use values largely external to a way of life, and a well articulated framework of concepts and assumptions about the nature of social structure and social change. Such a framework makes it possible to examine how empirical indicators are influenced by a particular theoretical perspective. It is obviously important to understand the ways in which regional differences are generally interpreted and to set out and analyse the frameworks of assumptions inherent in the various paradigms used to explain regional differences. This chapter examines in some detail a variety of such perspectives. Though there are undoubtedly a number of ways of classifying the various approaches, they will be considered here under five categories: early sociological attempts to explain regional differences, the analysis of regional imbalance from the perspective of economic geography, 'orthodox' economic interpretations of regional development and regional disparities, marxist analyses of regional disparities, and recent sociological approaches to regional analysis. EARLY SOCIOLOGICAL APPROACHES TO REGIONAL DIFFERENCES

Although most sociologists have given relatively little consideration to regions as units of sociological analysis, there are noteworthy exceptions. In 1926 Radharamel Makerjee published what was billed as 'the first textbook ever to appear on regional sociology' which integrated two theories then in vogue. One argued that a person's behavioural orientation could be determined from a close inspection of his physiognomy, with particular emphasis on the shape of his head, the other that social and cultural differences were largely the result of environmental and climatic factors. Makerjee suggested that regional differences were the result of the effect of the climate on the biological characteristics of the residents of different regions. Like many theorists of his day, he incorporated considerable racial bias into his analysis and in so doing probably set regional sociology back fifty years for there were few who wished to follow in his footsteps. His work is valuable today only as an example of how far sociological reasoning has progressed since. From the 1930s to the 1950s, however, a small group of American sociologists systematically attempted to analyse the significance of regional differences in American society. Most members of the group were southern American sociologists engaged in descriptive analyses of the way of life in

39 Explanations of Regional Differences communities throughout the southern United States. Their primary concern was to trace the development of folk culture and its transformation in the face of urbanization and industrialization. In the course of their research they became keenly aware of the cultural differences between the south and north in the United States. They discovered that the prevailing values throughout the south were in many ways different from those assumed to be the dominant American ones. There also appeared to be significant differences in family organization, life styles, and work organization. Understandably, these sociologists were concerned with explaining the nature and causes of these regional differences and they published a series of analyses on what they termed 'regional sociology.' The majority appeared in Social Forces, a journal published by the University of North Carolina and at that time more devoted to southern studies than it is today. The earliest of these articles was written by Rupert B. Vance, who argued that regional differences in custom, laws, and language were affected by a variety of physical factors such as resources, climate, and vegetation (Vance 1929). Unlike Makerjee, however, he emphasized the flexibility of human culture in adapting to these factors. He also predated much of the 'eclipse of community' analysis common in the 1950s by noting that metropolitan regions were appearing as a dominant force in American society: 'Scattered towns with their small hinterlands have coalesced into large areas each finding its nucleus in a great metropolis. America has ten or twelve great metropolitan regions either developed or developing' (ibid. 217). In Vance's wake, some of the leading sociologists of the day devoted their attention to regionalism and the relationship between a region and the cities within it. Ogburn used census data to refute the view that cities resemble one another more than they resemble the regions in which they are located. He demonstrated that cities were composed of people from the surrounding region and reflected the region rather than some general urban characteristics (1936, 10-10. Hertzler examined the sociological aspects of American regionalism in terms of the effect of culture on behaviour, and discussed how people must alter their behaviour when they migrate to a different region (1939) . Lindeman followed the consideration of the psychological aspects of regionalism begun by Hertzler (1940, see chapter I), by arguing that regionalism was man's attempt to overcome the magnitude of mass society, and was thus 'a positive response to the dangers of bigness' (1941, 304) . Riemer argued that the region rather than the state was the optimum unit for social and economic planning (1943, 276). Heberle noted that a regional approach contrasted with prevailing academic tradition emphasizing specialization along the lines of problem complexes (1943, 281) but, like

40 The Creation of Regional Dependency Riemer, stressed the significance of the region as an appropriate unit for planning. Otis Dudley Duncan (1948) developed statistical techniques for comparing regions while holding urbanization constant. By 1952 Bertrand was advocating a special discipline of regional sociology emphasizing the unique socio-cultural character of regions. Undoubtedly the most comprehensive analysis of regions and regionalism produced in this period was that by Odum and Moore. Their work can only be understood as a reaction to the work of Frederick Jackson Turner and its influence on American social history during the early decades of this century. Turner's work applied a mixture of the climatic, geographic, and biological determinism common in his day to the unique process of development in the American west and south. According to Turner, development in the United States occurred in stages. As the frontier moved westward, it left behind a series of distinct regional societies which he called sections. 'The frontier and the section are two of the most fundamental factors in American history ... The frontier is a moving section, or rather a form of society, determined by the reactions between the wilderness and the edge of expanding settlement~ the section is the outcome of the deeper-seated geographic conditions interacting with the stock which settled the region' (quoted in Odum and Moore 1938, 25-6). Odum and Moore opposed Turner not because of his environmental determinism but because of the implications of his concept of section as an interpretation of American society. They felt that his concept of section over-emphasized population movement and geography at the expense of more 'functional' factors related to the economy and social structure (ibid. 21) and that sectionalism signified isolation and selfsufficiency of the dominant parts of American society (ibid. 27). They believed that the analytic emphasis should be on the functional unity of the society. Odum first distinguished between regionalism and sectionalism in a paper published in 1934. In 1938 he and Moore together published their comprehensive analysis of American regionalism, which was explicitly declared to be a counter to sectionalism with its emphasis on the importance of maintaining independent and autonomous sub-units within the country. The thesis of this volume is that the promise and prospect of the nation in the future is, in another sense, to be found in the substitution of a realistic and comprehensive regionalism for the older historical sectionalism. (ibid. 35) Herein lies the essential quality of sectionalism; inherent in it is the idea of separatism and isolation; of separate units with separate interests. It must be clear that the very definition of regionalism implies a unifying function, it must be different from sectionalism as everywhere defined by the historians. (ibid. 39)

41 Explanations of Regional Differences Where sectionalism features separateness, regionalism connotes component and constituent parts of the larger national culture. (ibid. 42-3) Regionalism is organic, basic to the evolution of all culture. Sectionalism is mechanical and is basic to specialized and temporary ends. (ibid. 43)

This last quotation in particular identifies the origins and thrust of Odum and Moore's argument. In his analysis of western industrial society, Durkheim (1947) took exception to the view that the industrial revolution had alienated and isolated modern man. Durkheim contended that in pre-industrial societies men acted 'mechanically' in traditional patterns, but that in modern society the great division of labour made men more dependent on one another and thus integrated them 'organically' into society. Though Odum and Moore never refer to Durkheim, here is to be found the basis of their dispute with Turner. While Turner's 'sectionalism' emphasized the importance of maintaining independent and autonomous regional sub-units within the country, they argued that the strength of American society could be maintained only if the regional sub-units remained dependent on one another. Regional division of labour was, for them, the guarantee of societal strength and functional integration. In later works Odum developed a 'syllabus' for the study of American regionalism (1942) and demonstrated the link which could be made between community studies and regional analysis ( 1945). However, his work failed to capture the interest of a new generation of American sociologists. While there were notable attempts to build on the framework developed by Odum and Moore (Odum and Jocher 1945; Jensen 1951; Simpson 1955) they do not seem to have affected the direction of sociological analysis in the United States. Indeed, since the mid- l 950s no sociological writing has dealt directly with the nature of regional differences in America. None the less, these early sociological approaches to regionalism do illustrate how a regional sociology might be constructed, particularly in relation to those branches of sociology dealing with culture, community, and urban structure. Odum and Moore's work in particular exemplifies the application of general sociological theory, albeit structural-functionalist analysis, to regionalism and raises some questions about the most appropriate regional development strategy for Canada. A great deal of Canadian regional development policy has been directed towards eliminating those economic disparities perceived to exist in Canada. Implicit in that effort is the assumption that Canada can be strengthened only if regions are made as economically self-sufficient as possible. Odum and Moore, however, imply that functionally self-sufficient and autonomous regions will always be tempted to 'go it alone.' They see national solidarity being maintained only when each region is developed in a specialized way,

42 The Creation of Regional Dependency remaining dependent on other regions to satisfy its other needs. Recent Canadian developments would suggest that there is some truth in the theory. Historically, Canada's social and economic organization has rested on the functional specialization of each region. Each produced different products and had its own ethnic and social structure. There was little talk of separation under these conditions, as that was not a viable alternative for most regions. In contrast, it would now appear that separatism in Quebec and western Canada has been motivated by growing awareness in both regions of a potential for autonomous economic development. A great deal has been said about Quebec's ability to survive as an autonomous economical and social entity even after political separation. Petroleum resources make the west one of the world's richest areas and potentially independent of the Canadian economy. From Odum and Moore's perspective, future regional development policy in Canada should not aim to establish autonomous economic regions but should be directed towards regional specialization and interdependence. However, any federal government which argued for such a strategy would be committing political suicide, as it would probably require the removal of resource development from provincial to federal control. REGIONAL IMBALANCE FROM THE PERSPECTIVE OF ECONOMIC GEOGRAPHY

It has been noted that one of the basic tensions in the analysis and explanation of regions is between those who emphasize socio-historic factors and those who emphasize territorial-geographic factors as determining the course of regional formation and development. Regions as territorially based social units are obviously of particular interest to geographers, and indeed the whole field of regional science and regional planning has developed in great part out of that interest. Geographic explanations of regional differences can be divided into those which emphasize the self-regulating character of regions and those which deal specifically with the nature of regional imbalance (Holland 1976, 1-60). The focus here is on the latter, partly because theories of regional balance overlap other economic approaches, partly because theories of imbalance directly address the issue of the nature and causes of regional differences, which is the main interest here, and partly because the theories of regional imbalance described here have been the basis of a great deal of Canadian regional development planning. The geographic approach to regional imbalance emphasizes the geographic distribution of economic production. Franfois Perroux, the founder of the position, sums up its dominant concern: 'The bitter truth is this: growth does

43 Explanations of Regional Differences not appear everywhere at the same time; it becomes manifest at points or poles of growth, with variable intensity; it spreads through different channels, with variable terminal effects on the whole of the economy' ( 1970, 94). Perroux argues that regional economic differences can be altered through government action to create new 'growth poles' in regions. He contends that the requirements for development of such poles is a large master industry whose very size will provide the economies of scale necessary to compete with industries elsewhere (ibid. 95-9). Such an industry can also alter the economic forces in the region in which it is located by attracting into the area new 'clusters of industry' which either supply materials or use its product. The result is 'territorial agglomeration' as economic activity throughout the region is intensified (ibid. 10 I). Perroux is predominantly concerned with the economic rather than social transformation of economically backward regions. That transformation will undoubtedly have social and cultural repercussions, however. Large master industries usually require a large labour force to construct them and a somewhat smaller labour force to operate them. Should they engender the cluster of smaller industries forecast by Perroux, they will have even greater social and cultural repercussions. In short, growth-pole theory implies the formation of growth centres, large urban areas capable of providing the labour force and the infrastructural services that such massive industrial developments require. This in turn implies a transformation of the traditional society, primarily by the migration of excess labour to the new centres and by the cultural effect of an urban and industrialized centre on the region as a whole (Chorney 1977, 113-14). The growth-pole / growth-centre approach is obviously not an abstract analysis of regional differences but a strategy for the elimination of regional economic disparities and is open to criticism as such. The model of economic structure in the growth-pole approach is an over-simplification. Free market conditions of supply and demand are assumed to exist and, theoretically, once transportation costs are offset by the economies of scale of a large industrial development, even the most isolated region can become economically developed. No consideration is given to the power of multinational corporations or national monopolies to affect market conditions in their own interest and thus influence the success of new independent ventures in remote areas (Holland 1976, 127-45). Moreover, the strategy is frequently inappropriate to the problems of most underdeveloped regions, most of which have acute unemployment and underemployment problems. What they need most are labour-intensive industries providing employment for the surplus labour force. The large master industries envisaged in the

44 The Creation of Regional Dependency growth-pole strategy do the opposite. They are efficient because they are highly mechanized and employ a small number of highly skilled workers. They do little to solve the problems of the unemployed workers in most underdeveloped regions, most of whom would find work only if the master industry were successful in attracting other industries into the region. As examined in Parts Two and Three of this book, Canadian experience indicates that this is unlikely. Even if it did occur, such workers would probably need considerable retraining in industrially marketable skills. The growth-pole approach gives primacy to economic rather than social considerations. Regions are defined in economic terms and the strategies required for the elimination of regional differences are essentially economic ones. No consideration is given to the disruptive effect of the supposed growth-pole on the social and cultural fabric of the region or to the possibility that the residents might not wish to experience such changes. This approach supports those who assume that material well-being will automatically bring social and cultural well-being and that this end justifies any socially disruptive means employed. Again there is an implicit assumption that people are motivated primarily by economic factors. They are expected to migrate to growth centres as soon as jobs become available there and not to resist the changes planned in the established patterns of their social lives. The growthpole approach does not merely ignore social factors in favour of economic ones but in effect undermines existing social structures in an effort to create an urban industrial pattern of life in all regions of the country. Much of Canada's regional development policy throughout the 1960s and 1970s was based on this strategy (see chapter 5) and it had serious repercussions for regional culture and regional social organization. 'ORTHODOX' ECONOMIC INTERPRETATIONS OF REGIONAL DEVELOPMENT AND REGIONAL DIFFERENCES

In its study of regional disparities in Canada, the Economic Council gave little attention to theories of regional differences. Only eight pages are devoted to theory and explanation and only economic theories of regional disparities are discussed (1977, 23-30). No consideration is given either to frameworks of explanation outside economics or to the broader issues of regional differences. In those eight pages, five economic theories of regional disparity are identified: the staples approach, the development approach, the neo-classical approach, the Keynesian approach, and the regional science approach. The latter has just been examined separately because its origins are in the field of geography rather than economics. The other four frameworks

45 Explanations of Regional Differences deal specifically with the nature of regional economic disparities and are examined below. But, as will be seen later, the five theories identified by the council by no means exhaust all the economic explanations for the existence of regional differences. They are, however, approaches acceptable to the 'establishment' among Canadian economists and for this reason have here been labelled 'orthodox' economic interpretations.

The Staples Approach According to the Economic Council, the staples approach attributes the differences among regions to 'the varying availability and marketability of natural resources' (1977, 23) . The economists who espouse this framework are like many Canadians who see economic prosperity as the result of our abundant natural resources and consider that societies not economically well off must lack such plentiful resources. Those who argue in this manner may be misled by the uniqueness of the Canadian economy, in which so much wealth is derived from the extraction and sale of resources. A cursory look at other societies demonstrates that some of the world's most advanced economies are not based on local resources (Japan and Great Britain, for instance) while countries with enormous resources have been unable to benefit from them. Much the same is true of the differences among the regions in Canada. The traditional wealth of southern Ontario is certainly not based on local resources as there are few resources within the area. Conversely, the Atlantic provinces have always been rich in iron ore, coal, gold, forests, fish, and hydro-electric power but have remained poor, Western Canada is becoming rich because of its oil resources but a critical factor has been the limitation of the supply of oil from other countries. As the Economic Council itself concludes, 'resources are only one of many factors determining the productivity of a region or nation' (ibid. 24). However, the staples approach is not as simplistic as it is made out to be in the Economic Council report. In recent years there has been a focus on the question of who benefits from the development (or non-development) of available resources (Watkins 1973, 1975, 1977). Such a perspective has a number of significant advantages. First, it focuses attention on the power and class structure in a society and how those who dominate the structure influence and benefit from resource exploitation. Further, it permits analysis of the ways in which class structures of different regions may compete for benefit from a single resource. The staples approach has been transformed from a purely economic theory of the nature of resource development to a framework encompassing the social and structural conditions affecting how and where resources are developed. In this revised form, the staples approach

46 The Creation of Regional Dependency becomes a much more powerful tool for analysing the causes of regional differences than was previously the case.

The Development Approach Staple resources are not, of course, the only factors singled out by both economists and sociologists as instrumental in the development or underdevelopment of any country or region. The Economic Council study notes that, 'Attention has been directed to many other factors including capital accumulation, infrastructure, education and human capital, the level of technology, agricultural modernization, social structure, and attitudes' (1977, 25). Explanations of regional differences and regional disparities which attribute these differences to some lack of social, economic, political, or cultural factors in an underdeveloped region are labelled 'development approach' by the Council which does not dwell to any great extent on any particular factor. Yet one has been so commonly singled out in Canadian regional development analysis that it deserves special attention. The approach in question attempts to explain regional differences and regional disparities in terms of the presence or absence of what is labelled 'entrepreneurship.' Economically poor regions are said to lack entrepreneurship in comparison with more developed ones. This is, for example, the conclusion Roy George reaches in a comparison of business enterprise in Ontario, Quebec, and Nova Scotia (1970). Whereas Ontario leads in manufacturing, Nova Scotia lags by comparison. George attempts to account for all the economic costs of manufacturing in each province and on balance finds no real difference. His conclusion is that the difference must be explainable in terms of the different quality of entrepreneurship in each province (ibid. 105) . George's work is closely allied to the more general analysis of economic underdevelopment by David McClelland who attributes underdevelopment to a lack of 'achievement motivation' in the economic leaders of economically depressed areas (McClelland 1961, 1969, 1971). He argues that most successful entrepreneurs have within them a 'need for achievement' and are not motivated simply by economic greed (1971, 110). Underdevelopment at either a national or regional level is therefore seen as a consequence of poor socialization in need achievement. The works of such analysts as George and McClelland have certain advantages over some other economic interpretations of regional disparities. For example, they avoid explaining all development in terms of purely economic motivation. They also have major shortcomings, however, in that they frequently commit a basic error in logic. This is apparent in George's work as he makes little effort to establish if there are indeed major differences in entre-

47 Explanations of Regional Differences preneurship between Ontario and Nova Scotia but simply eliminates a variety of other explanations for the economic differences between the two provinces. The explanation of the difference may well be some other factor which he does not consider or even a combination of factors which he has considered individually and then ruled out. The strongest objection to such 'psycho-economic' interpretations of regional differences is their neglect of some of the social-organizational influences affecting entrepreneurial success. To suggest that residents of a particular region or country lack a particular psychological trait is a form of stereotyping roughly equivalent to suggesting that all poor people are lazy or that Catholics are lacking in Protestant ethic. If underdeveloped regions do not produce entrepreneurs it may be because there is little opportunity for success under existing conditions. For example, if the national and international corporations which control the major Can~dian markets find that there are advantages in settling in Ontario to be near their American suppliers, there is little that a Nova Scotian businessman can do about it. Moreover, he is probably unable to compete successfully with such major corporations no matter how much achievement motivation he has. (For further discussion on this point see Matthews 1981, 84-105.) Furthermore, as Baran notes, in most underdeveloped societies factors inherent in the local social system militate against successful entrepreneurship. Those who have the necessary capital to invest in entrepreneurial activity hold positions which require spending it to maintain 'the style of life appropriate to their status in society' (Baran 1957, 167) . Those who might become entrepreneurs usually lack the necessary capital to do so and cannot be blamed for lacking entrepreneurial drive or achievement motivation.

The Neo-Classica/ Approach From a neo-classical economic perspective 'the immediate cause of regional problems is commonly diagnosed as market failure' according to the Economic Council (1977, 26). The fundamental premise of the neo-classical perspective is the classical economic belief in the necessity of a freely fluctuating market economy; free , that is, from any form of government interference. Neo-classical economists tend to believe that, wherever market conditions are allowed to function freely, there will be development and if any region fails to develop economically it is usually because there is some interference with the free functioning of the market in that region. Ironically, neo-classical economists usually identify as interference those government policies designed to increase the economic and social well-being of underdeveloped regions. In Canada they have been particularly critical of those government policies establishing minimum wage rates and those policies

48 The Creation of Regional Dependency which transfer capital from developed to underdeveloped regions to decrease the differences in material well-being among the regions (Courchene 1976, 1978a). According to the neo-classicists, the high levels of unemployment in the poorer regions of Canada result from government minimum wage legislation which keeps wages artificially high and makes the region unattractive to industrialists who would establish there if only the wage rates were lower. Transfer payments to poor provinces are seen to have similarly negative effects in that they introduce money which was not rightfully earned in the region, thereby perpetuating high wage rates which otherwise could not be maintained. This allows people in the region to live better than would otherwise be possible. Though perhaps desirable on humanitarian and social grounds, neo-classicists consider it undesirable on economic grounds, contending that transfer payments artificially improve living conditions in poor regions and encourage people to live there who otherwise would migrate elsewhere. If government assistance keeps incomes high, neither the unemployed, the seasonally employed, nor those who are employed but who might find higher paying jobs elsewhere will have much incentive to move. In sum, the neo-classical position is paradoxical. Regional unemployment is believed to be caused in part by high wage rates; regional underdevelopment is seen to be caused in part by too much government assistance aimed at reducing unemployment. It would appear that from this perspective no government program of regional assistance could ever succeed because it deals with the effects rather than the causes of regional economic differences. From this point of view, Canada's regional economic disparities will be eliminated only when the federal government stops such aid to Canada's underdeveloped regions and when provincial governments are forced to eliminate minimum wage legislation. Only then will the unemployed be driven from those regions and wage rates drop low enough to attract outside investors. A detailed and critical analysis of the neo-classical position is given in the following chapter. It is sufficient to note here that the neo-classical position has major social implications for job security, population mobility, and even community and regional social structure, despite its claim to deal only in matters of supply and demand.

The Keynesian Approach

Keynesian economics is based on the understanding that the market alone does not guarantee full employment and that the capitalist system fluctuates between growth and depression (Economic Council of Canada 1977, 27-8). Keynes argued that government action could reduce the pattern of boom or bust inherent in capitalism, and in this his approach stands in marked contrast to that of the neo-classicists. Regional economic differences and dispari-

49 Explanations of Regional Differences ties are also seen as fluctuations in the capitalist system that can be reduced by government action. Keynesians frequently argue that business will not rush into an area in which there has been a pattern of economic failure (Economic Council of Canada 1977, 28). Regional economic disparity thus becomes self-perpetuating and Keynesians argue that government action is necessary. Keynesian theory, in conjunction with the growth-pole approach, has provided the justification for much of Canada's regional development policy aimed at industrial and urban development. Government has offered such economic incentives as outright grants of money, tax concessions, and cheap access to available resources in an attempt to lure manufacturing interests into regions where they are unwilling to go. The nature and consequences of the Keynesian approach to regional development are examined in considerable detail later in this volume. It is sufficient here to indicate that a strategy for eliminating poverty based on giving money to the rich and an effort to eliminate regional poverty by giving money to powerful industries based in rich areas seems questionable. Furthermore, as the marxists argue, it is possible that business itself may cause regional disparity because it may be in its interest to maintain areas of the country where unemployment is high and resources cheap. If that argument is true, government programs which provide incentives to industry to locate in underdeveloped regions are giving money to those interests which create and benefit most from existing conditions. It is also important to note that, like other economic approaches, the Keynesian approach generally neglects social considerations. MARXIST ANALYSES OF REGIONAL DIFFERENCES

The Economic Council's categorization of economic theories of regional disparity omitted any reference to the marxist framework of explanation. Yet that framework provides not only one of the most comprehensive and systematic analyses of the nature and causes of regional differences available in the economic literature but also the basis for most recent sociological work on regional disparities. The discussion below will be confined to outlining briefly the principles of what might be termed 'classical marxist theory' relevant to the analysis of regional differences and the causes of regional disparity. It examines some Canadian uses of this framework in analysing regional divisions in Canada. From a marxist perspective, regional disparity is a natural and endemic characteristic of capitalism and is directly related to its goal. The goal of capitalism is not the equitable distribution of wealth, but the accumulation of

50 The Creation of Regional Dependency wealth. Though Marx devoted most of his attention to the uneven distribution of wealth among classes, his analysis has regional implications. Unequal accumulation of capital frequently means that certain regions of the country are wealthier than others. Mandel (1973, 2) argues that this uneven regional distribution is an inevitable consequence of the capitalist system because it is functional to capitalism. The 'absolute general law of capitalist accumulation' is that 'capitalism overworks part of the labouring population and keeps the other part as a reserve army, half or entirely pauperized' (Anderson 1974, 12) . Marxists argue that capitalism, by its nature, needs a flexible labour force and a large 'surplus army of the unemployed' (Holland 1976, 41-3) whose members can be hired or dismissed as market conditions fluctuate through the boom and bust cycles that Keynes identified. According to the marxists, the principal role of the underdeveloped regions is to furnish these labour reserves. The poorer regions contain large numbers of unemployed and marginally employed workers who flock to industrialized areas when times are good and return home when times get bad. Such workers provide an added advantage in that they are not a direct drain on the central industrial economy but on that of the poorer regions to which they return and industry thus never has to pay the full cost of supporting its surplus labour force. Marxists argue that underdeveloped regions are also major sources of resources and capital which pour out of underdeveloped into developed regions in a number of ways. Raw materials from the underdeveloped regions are exported to the more developed ones for processing. Capital is drained out through taxes, national banking policies and procedures, and public and private expenditure. According to marxist theory, one of the aims of industrial capitalism is to convince people that they 'need' manufactured products. Thus money which might be saved is used by people in underdeveloped regions to buy goods produced elsewhere. In the same way, regional governments are convinced that they must provide the latest medical, educational, and transportation facilities and equipment, all of which drains from the underdeveloped region capital which might have been used for its own economic development, thus ensuring its continued underdevelopment and dependence. Thus much of the industry in developed regions is financed partially by capital from poorer ones. Underdeveloped regions provide not only capital but, according to marxists, they also provide enormous markets for the products of more developed regions. Most marxists contend that capitalism contains a fatal weakness. Because capitalists take some of the surplus value out of the system, there is simply not enough money to purchase all the goods produced. Consequently

51 Explanations of Regional Differences new markets must be found . Underdeveloped regions serve this function admirably. It should be emphasized that marxist theory has one advantage over most of the 'orthodox' economic frameworks. Most capitalist economists view the economy as a distinctive and independent system operating independently of the general social system but the marxist framework integrates economic considerations with social ones. Marx interpreted the accumulation of wealth (that is, capital), seemingly the most purely economic aspect of capitalism, as part of a social process involving a distinctive pattern of ownership and labour. Whereas modern capitalist economists usually view the economic realm in instrumental economic terms, marxist economists emphasize the social system that shapes the economy in terms of class structure. For marxists all economic activity is class activity and the forces of production cannot be adequately explained without reference to the class relations which grow out of them. Social class, moreover, is an integrated part of the marxist explanation of regional differences. Regional disparity is seen as the regional manifestation of the general pattern of class exploitation in capitalist society. The dominant class interests are those of the capitalist class within the developed regions and they are best served by regional exploitation of resources, capital, and labour. In short, from a marxist perspective, regional divisions and disparities are inseparable from the class divisions within a society and are explicable in class terms. Marxist explanations of regional differences and disparities also differ from more ~orthodox' economic interpretations in that, for marxists, regional disparity is not caused by some lack in the underdeveloped region but is the result of the power of the developed regions within capitalist society. The key concept here is power. Regional disparity is the result of the power of a developed region to enforce its will on a poorer one, of the power of a dominant class based primarily in the developed region to manipulate the situation in the underdeveloped region for its own ends. Thus, from a marxist perspective, regional differences and regional disparities are the products of social processes as much as economic ones. RECENT SOCIOLOGICAL APPROACHES TO REGIONAL ANALYSIS IN CANADA AND ELSEWHERE

Recent sociological work on the nature of regional differences has ignored the early sociological approaches which emphasized structural-functional analysis and the importance of maintaining regional differences in order to

52 The Creation of Regional Dependency maintain societal equilibrium. Instead, it has been grounded in the marxist framework. A growing movement towards marxist analysis within many branches of sociology has been taken as a sign of its inherent or increased radicalism. This is not necessarily the case. It is more accurately portrayed as a result of an increased awareness among sociologists of the relationship between social and economic processes in society. However, in searching for a framework of explanation for that relationship, sociologists have quickly discovered that most recent 'capitalist' theories of economic development are of little use. Most such frameworks give little credence or consideration to non-economic processes and the economic system is assumed to operate largely independently of the surrounding social and cultural system in which it is immersed. The marxist framework, on the other hand, emphasizes social considerations and interrelates social and economic variables. It has, therefore, provided a rich and fertile ground for sociologists examining the nature of regional differences in Canada and elsewhere. The works of three Canadian sociologists in particular demonstrate how general marxist principles about the relation between economic and social structure can be used to explain certain aspects of Canada's regional differences. Clement's analysis (1978) attempts to apply marxist theory about the relationship between social class and regionalism to Canadian society. Clement argues that it is not Ontario which dominates the underdeveloped regions of Canada but, rather, that the domination of these regions is directed by capitalists, most of whom happen to live in southern Ontario, though some live in Montreal and Vancouver as well. Clement argues that they are helped to exploit underdeveloped regions by the economic elite of those regions who have been co-opted by outside interests. He labels them 'compradors' and argues that, as agents of outside interests, theirs is a pivotal role in the developing dependency of any region. His theory can be contrasted with that of Roy George who also focused on the role of the local elite in regional underdevelopment. Unlike George (1970), who attributed regional underdevelopment to a lack of entrepreneurship in the local economic elites, Clement attributes it to the elite becoming the agents of outside interests. Cuneo (1978) takes a more formal marxist position, arguing that the class structure in Canada creates regional disparities in wealth and movement of population. He goes to considerable lengths to document the extent to which each region of Canada has a different class structure. In some regions industrial workers are over-represented; in others primary commodity producers are predominant. He explains these differences in terms of the different modes of production found in each of Canada's regions.

53 Explanations of Regional Differences Veltmeyer demonstrates the usefulness of marxist analysis in a study of the historical transformation of the working class in Halifax (1979). He establishes the legitimacy of the marxist contention that underdeveloped regions function as suppliers of industrial labour reserves within a capitalist economy (1978), documenting in considerable detail the changing categories of 'surplus labourers' in the 'reserve army' of the unemployed and underemployed in Atlantic Canada. In addition to the work of Clement, Cuneo, and Veltmeyer just described, there has been a growing interest among a wide range of Canadian sociologists in a perspective which has come to be known as 'dependency theory.' Dependency theory is an offshoot of marxist and other theories dealing with the nature of capitalism and imperialism. It was first developed by sociologists in Latin America to explain why their countries remain underdeveloped and why there continues to be wide regional variation within them. Dependency theory is particularly useful in explaining the nature and significance of regional divisions in Canada. The next two chapters will provide a detailed analysis of its principal tenets, and will adapt it for Canadian use. Given this, nothing more will be said about it at this point. It should be noted that one of the strengths of virtually all marxist attempts to explain regional disparity and underdevelopment is the demonstration that such regional differences are not necessarily the consequence of cultural backwardness or a lack of entrepreneurial ability at the regional level. Using marxist analysis much of the underdevelopment of the Atlantic region, the west, and the north can be explained in terms of the relationship of these regions to the more developed regions of the country, paying attention to the way in which the developed regions have extracted the resources, capital, and trained people from them. To be sure, the marxist framework is not without its own weaknesses. As was noted in the Introduction to this book, the framework does tend towards economic determinism. While it does indeed incorporate social considerations, economic ones undoubtedly take precedence. Most marxist analyses of regional disparity begin with modes of production from which social relations are seen to derive. Emphasizing the role of state power in legitimating economic structures does little to modify this. But perhaps its greatest weaknesses are its lack of a theory of human action and the tendency of many marxist theorists to disregard cultural considerations. Marxist theory replaces the 'economic' man of capitalist economics, who seems motivated almost entirely by avarice and greed, with a man motivated largely by the structural constraints placed upon him by the class in which he is located. Both approaches need to readjust such simplistic conceptions of the nature of

54 The Creation of Regional Dependency human motivation and human action, and recognize that people are motivated neither solely by a propensity for accumulation nor by class considerations. Rather, they have a variety of mixed motives which are frequently influenced by changing circumstances and the various situations in which each person finds himself. CONCLUSION : VALUE IMPLICATIONS OF CONFLICTING INTERPRETATIONS

Any policy, no matter what it deals with, is a goal-value system. That is, it is an attempt to achieve a goal which is judged from some value perspective as desirable and legitimate. Moreover, values not only legitimate policy goals, but they also justify the means deemed appropriate to attaining these goals. Thus, any policy is a means-ends schema in which the policy is essentially a value orientation legitimating the means and ends of action. If all policies rest on sets of values, then each of the perspectives outlined in this chapter can be regarded not as abstract and objective, but as incorporating a set of values which defines the desirable regional balance in Canada and identifies the appropriate means and mechanisms for attaining the goals that each deems desirable. There is another dimension to the value orientation of regional policy. The preceding discussion has emphasized a growing separation between economic and social theory with regard to regional planning. This separation has become particularly pronounced in what has been termed the 'orthodox' economic approaches. Such a separation may have originated in an attempt by economists to achieve objectivity, free from the subjective value biases that they perceived were involved in taking into account social considerations. If this is the case, such a perspective fails to recognize that any policy, even economic policy based only on considerations of supply and demand, still incorporates a value perspective. The danger inherent in the orthodox approach is that people and cultures may be treated as instrumental and largely irrelevant, while the maximization of economic gain comes to be regarded as the only legitimate goal. In a theoretical sense economics may be purely instrumental but economic policy is not. By definition, economic policy involves judgments about what is desirable and good for a society and such judgments cannot be made on economic grounds alone. A just economic policy must be formulated within the larger context of the social structure and cultural value system. If economic decisions are made in isolation, economic policy becomes an instrument of oppression, victimizing the very people it was intended to serve.

55 Explanations of Regional Differences It is no longer acceptable for those responsible for planning to cling, as they have in the past, to orthodox models of regional development that cannot fully explain the nature and causes of regional differences and regional disparities in Canada or elsewhere. This is not to suggest that planners should now embrace only sociological models or 'convert' to marxist interpretations and approaches. What is necessary is an awareness of the biases and limitations of those models now in general use, an awareness of the importance of social considerations in regional planning, and an awareness of the relevance of those explanations of regional disparities and regional differences which incorporate social considerations.

3 'Transfer Dependency' versus 'Dependency Theory'

Much of the discussion of regional differences has been concerned with the elimination of what are perceived to be regional disparities. Indeed, almost all aspects of regional difference are defined in terms of disparities. This chapter will examine closely one of the major frameworks of explanation currently used by orthodox economists to explain regional disparities and one which underlies much of Canada's regional development plans. It will be contrasted with the framework for explaining regional disparities currently in vogue among Canadian sociologists. Events of the past few years in Canada have made regional disparity the subject of increased concern. The desire of Quebec politicians to renegotiate the relationship between that province and the rest of Canada and the increased economic and political power of western Canada mean that regional disparities will continue to be of great concern. If the causes of regional disparities were easy to understand, or if the means to eliminate them were obvious, they would probably have disappeared years ago. There is no clearcut formula to eliminate regional economic differences. Nor is there any single theory which adequately explains their nature and causes. Instead, within economics, sociology, and several other disciplines, there is a plethora of disparate and frequently contradictory approaches. Unfortunately, complications and misunderstandings arise because different theories use the same technical terms in different ways and with different meanings. This is true especially in the use of the term 'dependency.' The concept of dependency is basic to both economic and sociological interpretations of the nature of regional disparities. However, economists and sociologists often explain the nature of regional dependency in such different theoretical contexts that the term frequently means different things in each discipline. Moreover, sociological solutions to regional dependency are fre-

57 Transfer Dependency vs Dependency Theory quently contrary to those expounded by leading economists and vice versa. Because economists and sociologists who write about regional dependency rarely read work on the subject outside their own disciplines, there exist two separate and often contradictory bodies of thought about regional dependency. Given the increased interest in regional disparity it is important that this situation not continue. Although it is unlikely that 'dependency economists' and 'dependency sociologists' will be able to develop a unified theory of regional disparity, they should at least be familiar with the fundamental assumptions and structures of alternative approaches. In this chapter two theories of regional dependency currently popular within Canadian economic and sociological circles are compared. The economic approach will be referred to as the theory of transfer dependency, while the sociological approach will be referred to as dependency theory, the title by which it is commonly known in that field. It should be made clear at the outset that this will not be an abstract and analytic exercise in which no side is taken. It will be argued here that the transfer dependency approach fails to distinguish clearly between economic and social welfare, and frequently advocates regional economic policies which would have deleterious social consequences for those who live in Canada's underdeveloped regions. The strengths of the dependency theory position lie in its recognition of the link between economic and social aspects of regional dependency, and in the emphasis it places on the role of external social structural factors in creating and sustaining regional dependency. TRANSFER DEPENDENCY

The regional economic theory here labelled transfer dependency is a variation on neo-classical economic analysis and maintains that market forces alone are sufficient to overcome regional economic disparity. Government regulatory programs and social assistance policies intended to ameliorate the consequences of regional poverty are frequently declared prime 'causes' of continued regional disparity. The Economic Council of Canada summarized the neo-classical position as follows:

It emphasizes the importance of flexibility in price and wages, the mobility of labour and capital, and the capacity of the market forces to solve regional problems when they are allowed to work unhindered. The immediate cause of regional problems is commonly diagnosed as market failure, brought on sometimes by circumstances and sometimes by the actions of policy makers. The advocated cure is to create a situation

58 The Creation of Regional Dependency in which markets can work better, or to leave well enough alone and let market forces bring about a solution. (1977, 216)

Assumptions based on the neo-classical perspective can be found in the works on regional disparity of many Canadian economists. Though it would be interesting to examine how pervasive these assumptions are in Canadian economic writing, that is not the purpose of this analysis. The purpose here is to demonstrate how these assumptions can be used to explain regional dependency, and to examine the implications of such explanations. Thus, rather than reviewing the Canadian economic literature, the analysis here will centre on the work of Canadian economist Thomas Courchene, whose work on regional disparity reflects the neo-classical assumptions (1970, 1973, 1974a, 1974b, 1976, 1978a, 1978b, 1980). His analysis of government transfer payments and their relation to regional disparity is well known in Canadian economic circles and among federal and provincial planners responsible for developing Canadian regional development policies, although surprisingly few analyses or critiques of it have been published. Courchene contends that transfer payments do little to alleviate the problems of underdeveloped regions, but serve instead to increase their dependency. The analysis here will use the term 'transfer dependency' to describe his approach. That approach has four major thrusts. First is his argument that transfer payments from the federal government may actually make poor provinces more dependent on federal assistance and less inclined to alter those conditions contributing to underdevelopment. Courchene argues that one of the unanticipated consequences of cost-sharing agreements between the federal and provincial governments is that poorer provinces are enticed into expensive programs, which may not be in their best interests, simply because this is the only way they can get federal assistance (Courchene 1978a, 146). He laments that 'some of the provinces find themselves in such dire straits that they are literally forced into resorting to such measures' (ibid. 163). In Courchene's view, provincial governments maximize their welfare receipts rather than search for ways to reduce their dependency. On this point, there are certain parallels between Courchene's argument and that of the widely known 'culture of poverty perspective' used by some anthropologists, sociologists, and psychologists. That perspective contends that one of the dominant reasons for the persistence of poverty is the way in which poor people have adapted to the conditions of being poor. Oscar Lewis, the originator of this perspective, claims that many poor people develop an outlook characterized by 'present-time orientation ... strong feelings of fatalism, helplessness, dependency and inferiority' (1971, 226, empha-

59 Transfer Dependency vs Dependency Theory sis added). A study by Spencer that employs this perspective gives a clear description of the way in which dependency is viewed: 'Dependency becomes a social problem when individuals or social systems do not perform those functions normatively ascribed to them, and some other individuals or systems perform those functions for them' (1970, 12-13). Thus the culture of poverty perspective argues that some people psychologically adapt to poverty and that welfare assistance can and frequently does create a change in role behaviour and social structure as many recipients exhaust their energies attempting to maximize their welfare receipts rather than searching for ways to alleviate their dependent conditions. Although Courchene does not delve into the psychological dimension of dependency, his use of the term does denote a psychological condition. At the structural and behavioural levels, moreover, Courchene is claiming that the governments of provinces receiving transfer assistance often no longer perform the functions normatively ascribed to them. He implies that these provincial governments are so rooted in the present that they search for easy and temporary solutions instead of long-term solutions that might end their dependency. His argument implies that some provincial governments have become clients of the federal government in much the same way that certain poor persons have become long-term clients of the welfare system. This parallel is striking enough to consider if Courchene's work is open to the same criticisms as have been levelled at the culture of poverty perspective. One criticism is that the culture of poverty approach misrepresents the outlook and motivations of the poor. Most empirical studies show that the poor are not the demoralized present-time oriented automatons depicted by Lewis (1971) . Instead, most poor people and poor cultures display ingenuity and forethought in their efforts to survive under conditions of extreme hardship (Valentine 1968). Another criticism is that the culture of poverty perspective blames the victim for his own misfortune. As Ryan notes: 'The logical outcome of analyzing social problems in terms of the deficiencies of the victim is the development of programs aimed at correcting these deficiencies. The formula for action becomes extraordinarily simple: change the victim' (Ryan 1971 , 8). It is possible to argue that Courchene's work does not display the same weaknesses as the culture of poverty perspective theory because the differences between them outweigh the similarities. Courchene deals only indirectly with the psychological outlook associated with dependency which is the major focus of the culture of poverty. It should be noted too that Courchene does not depict the dependent provinces as demoralized welfare ghettos. On the other hand, there are some strong similarities between Cour-

60 The Creation of Regional Dependency chene's proposed solutions to regional poverty and those advocated by proponents of the culture of poverty perspective, and it is those solutions which open Courchene's work to some of the same criticism. It is Courchene's contention that the problem of regional disparity in Canada can be overcome only when transfer payments to poor provinces are severely reduced or when the monies currently paid through transfer payments are turned over to the provinces to be spent as they wish (1978a, 161) . He argues that either strategy would lead to lower real wage rates in such regions. He further foresees that these changes, in combination, will likely lead to the migration of excess population from the region. If such changes did reduce real wage rates and encourage migration there would be a significant change in both the economic and the social structures of the dependent regions of Canada. In this sense, Courchene's proposals can certainly be seen as aimed at 'changing the victim.' If the 'victims,' in this case the governments and people of Canada's poorest provinces, are indeed the authors of their own misfortunes, that criticism might be valid, although it is not certain if the measures Courchene proposes would bring about the effects he desires. If, on the other hand, the poorest provinces, their governments, and their residents are instead victims of national and international forces over which they have no control, an attempt to rectify the situation through changing local conditions may simply create unnecessary hardship. Significantly, dependency theory argues that much of the responsibility for regional disparities rests with forces and processes external to poor regions. These forces are unlikely to be affected by the more localized changes Courchene advocates. Courchene has managed to build his framework on a well-established tradition of economic analysis. The belief that the economic system is 'natural' and should be left to function free from interference is a fundamental tenet of classical laissez-faire economics. Courchene incorporates this neo-classical perspective in his analysis of regional disparity with his argument that market forces should be left alone to bring about a solution to regional inequality. His innovation comes in the second thrust of his argument with his contention that government interference through transfer payments upsets what he terms 'natural adjustment mechanisms.' He argues that the transfer system permits residents of what he calls the 'have not' provinces 'to maintain a higher level of consumption than would otherwise be the case' (1978a, 152). Furthermore, he argues that the present system of transfer payments perpetuates an imbalance in trade and population between the 'have' and 'havenot' regions of Canada. He contends that the drain of transfer capital out of the developed regions reduces their ability to stimulate their own economic growth. In addition, he argues that such transfer payments allow the 'have-

61 Transfer Dependency vs Dependency Theory not' provinces to maintain higher real wages than would be natural and have lower levels of emigration than would naturally occur. The result, as Courchene sees it, is that transfer payments actually exacerbate regional economic differences. He states: It is critical to recognize the interdependency among these various factors in jamming up the adjustment mechanism. If wages are inflexible downward, the current transfer system is such that more federal funds will be forthcoming for a region incurring a balance-of-payment deficit. (ibid. 156) It is highly likely that the sheer magnitude of the flow of federal transfers toward less-developed provinces and regions, as well as the duration of these transfers has entrenched and perhaps even exacerbated regional economic disparities within Canada. (ibid. 157)

Courchene's contention that transfer payments upset the adjustments among regional wage rates, migration, prices, and trade is closely allied to the third major thrust of his argument, that we must facilitate a return to a system of 'natural adjustments' if regional disparity is to be overcome (ibid. 157, 159) . Many regional planners in Canada are trained in economics and are likely to find that proposal attractive. Many may already be predisposed to consider that the economic system contains a natural equilibrium and functions best when left to operate independently. There is, moreover, something rather comforting about a 'natural' state of affairs (presumably in contrast to an unnatural one) . Even the term 'adjustment,' commonly used by economists, suggests that there will be no major disruption of the situation and that equilibrium is simply being re-established. It is imperative to consider just what Courchene's 'natural adjustments' would entail, however. If transfer payments are at the root of the problem, one possible and seemingly obvious solution would be the immediate reduction or elimination of transfer payments. Wisely, Courchene rejects this alternative: 'To continue with the level of transfers is likely to perpetuate and worsen still further the existing problem; to terminate them is unthinkable at the present time, given both the political and economic implications of such action' (ibid. 157). He proposes instead slowly to phase out many of the unconditional transfer programs and shift to the provinces the responsibility of administering other programs now cost-shared between federal and provincial levels of government. He suggests giving the provinces lump-sum payments equivalent to what they now receive indirectly through cost-sharing arrangements for particular services.

62 The Creation of Regional Dependency For example, suppose that the present formula for financing welfare was converted from a 50 percent federal-provincial cost-sharing format to a system of unconditional grants to the provinces. Under this system, the provinces would have a pool of money that could be spent as they wish. They would think twice about raising minimum wages to levels that generated considerable unemployment and forced people on to welfare because now they would bear the full cost of these welfare payments funds expended on welfare would imply fewer dollars that could be allocated to other provincial expenditures. (ibid. 161)

Courchene contends that such 'adjustments' would lead to a lowering of both the real and minimum wage rates in the dependent provinces of Canada, increased migration both within and out of such provinces, and an increase in demand for labour if new industry were attracted to the region by the prospects of cheap labour. Consequently, it is important to examine Courchene's proposals to determine if they are likely to have the effects he anticipates, if such changes would indeed be as desirable as he thinks, and what some of the unforeseen consequences of his proposals might be. Courchene emphasizes a link between transfer payments, minimum wage rates, and unemployment. He argues that one reason why real wage rates remain high in poor provinces is that transfer payments permit poor provinces to keep their minimum wage rates high without bearing the full costs. He contends that 'there is no economic rationale, at least none that I am aware of' for high minimum wage rates in poor provinces and he contends that such high minimum wage rates are inspired by political considerations. In his words, 'The political rationale for these high minimum wages ... must be that it guarantees all workers some minimum level of incoJJle.' He declares that such reasoning fails to consider that high minimum wage rates are 'a major contributor to unemployment' in such regions: and create what he refers to as 'a minimum wage boomerang' (ibid. 160). He concludes that an appropriate set of incentives to reduce transfer payments must be introduced to convince the provinces 'to enact more realistic minimum wages [minimum wage rates] ' (ibid. 161). Courchene's attack on high minimum wage rates in poor regions and his assertion that such rates lead to unemployment are grounded in neo-classical economics. Within this framework it is assumed that if employers in any region are required to pay labour more than would be the case elsewhere, they will try to minimize the number of persons they employ. Furthermore, it is argued that minimum wage rates are a poor tool for social policy because they lead to a lower level of output, in part because of the increased unemployment they create. Economists sympathetic with this view argue that

63 Transfer Dependency vs Dependency Theory although minimum wage legislation may protect the lower levels of the employed, it discriminates against the unemployed because it deters new industries from coming into the area. Conversely, a reduction in minimum wage rates is seen as encouraging new industries to come into the area and thus function to reduce unemployment levels. Unemployment rates will also be reduced if minimum rates encourage some of those employed at or near that level to move elsewhere for better-payingjobs, thus creating opportunities for those previously unemployed. There is incontrovertible evidence that low real wages attract industry. Numerous Canadian resource industries have moved to third-world countries largely because of the lower wage levels and relative absence of union organization there. That does not seem to be sufficient justification for lowering minimum wage rates in Canada's dependent provinces, however. Minimum wage rates were introduced to protect those who must sell their labour from exploitation by those who buy it. Without minimum wage legislation workers could be paid such low incomes that they would have difficulty surviving. This is an economic as well as a social rationale for minimum wage legislation and it is incorrect to think of minimum wage legislation simply as political expediency. In regions where unemployment is high and the level of unionization low, such as in the dependent regions of Canada, minimum wage legislation is particularly important. Otherwise, workers might have to compete for work at disproportionately low wages simply to have a job and some earned income. There is, then, justification for the retention of minimum wage legislation in the dependent regions of Canada, but not for the fact that these rates are occasionally as high or higher than those in richer regions. Yet it is difficult to accept that the minimum wage rates are too high in poor regions when they are still so low that the real wages of many full-time workers are insufficient to raise them above the poverty line. Most studies show that approximately half of those who live below the poverty line in Canada are employed (Caskie 1979, 40). Some of these are in agriculture or other primary resource occupations not subject to minimum wage legislation. A large number do have jobs which come under this legislation, however, and would likely receive less income if employers were permitted to pay less. Lowering minimum wage rates could thus bring even greater poverty to many of those least able to bear the burden. Considerations of economic and social welfare therefore suggest that lowering minimum wage rates, unless accompanied by farreaching changes in other aspects of the social and economic structure, is simply not feasible. This is an economic rationale for the retention of minimum wage legislation at existing levels.

64 The Creation of Regional Dependency There is a further economic rationale for maintaining existing minimum wage rates in the dependent provinces. Those industries attracted by low minimum wage rates are likely to be those whose survival depends on their ability to pay lower wages than those paid for the same work in other regions. Such industries do not eliminate regional disparity but, rather, institutionalize it. A clustering of low-paying industries in one region helps only to create a dual economy and a further polarization of the society into advanced and underdeveloped regions, making it impossible to close the wage gap between rich and poor areas of the country. Lowering the minimum wage rates might encourage some 'low wage' industries to move into Canada's more dependent regions, but the longrange consequences may not be those Courchene anticipates. Within a short time, workers in such enterprises would probably attempt to unionize (like the Michelin workers in Nova Scotia) , not only to protect themselves from arbitrary dismissal and replacement from the large pool of unemployed workers seeking their jobs, but also to demand equal pay for work equal to that done by their counterparts elsewhere in Canada. Past experience indicates that low wage-paying firms then approach the provincial government requesting additional operating incentives and threatening closure. The government, which frequently has made political gain from enticing such firms into the area, often sees no choice but to submit to economic blackmail and provide further assistance, often in the form of tax concessions, purchasing contracts, and subsidized energy. The people of the region usually bear the brunt of these costs, and are thus further victimized. Not only do they have lower wages than elsewhere, but they must also carry the costs of these concessions to corporate concerns. Finally, lowering minimum wage rates may have yet another deleterious consequence. Workers paid at a level of remuneration below the poverty line will have little personal investment in their jobs. The result is likely to be high absenteeism and low productivity. Workers are likely to follow the pattern of wage employment already prevalent in the marginal work world and work only long enough to earn the money necessary to buy those necessities not produced at home. A number of economists attribute this pattern to the high levels of unemployment insurance and transfer payments which the dependent regions receive. It may easily be as much a product of the low wage levels and seasonal employment structure already existing in these regions. To lower minimum wage rates would probably exacerbate the situation further. The most controversial of the adjustments implied in Courchene's model are those related to migration. Courchene accepts the proposition that wage

65 Transfer Dependency vs Dependency Theory differentials encourage labour mobility. He also maintains that the flow of federal funds into the 'have-not' regions has enabled those regions to keep minimum wage rates high and still retain a sizeable proportion of their populations. It would appear to follow that one consequence of reducing minimum wage rates would be to increase emigration from dependent regions. Several of Canada's regional development programs have attempted to deal with regional dependency by encouraging emigration of 'excess population' and 'excess labour force' from these regions. Almost always there is opposition and resistance to such measures at both local political and community levels, however (Iverson and Matthews 1968; Matthews 1976), and .indeed throughout the country. One of the ironies of Courchene's theory of transfer dependency is that it attracts interest and support at the local planning levels although it implies a strategy of emigration. One reason for this is that Courchene rarely explicitly advocates emigration. Throughout his work he calls for a return to 'natural adjustments' without explaining that migration is one. When he declared in a speech to a Newfoundland audience that, 'Too much of Canada's policies toward its regions has been directed towards preventing the economic adjustments of the area' (1978b) his address was favourably reported in the St John's Evening Telegram (4 November 1978). His audience was apparently unaware that one interpretation of his remark was that it was time for some of them to leave the region. It is clear that Courchene has long advocated migration as a means of regional economic 'adjustment.' In 1970 he argued that migrant labour should 'bear the lion's share of adjustment' (1970, 551), and in 1974 he came close to advocating not just increased out-migration but the actual depopulation of certain dependent regions (1974a, 26) . A clear indication of Courchene' s attitude is also found in his studies of those who have migrated: he concludes that there is a direct relation between the financial gain to be obtained from migration and the distance people are willing to travel. On this basis he argues that migration 'appears to be economically motivated' (1974b, 147) and 'can be treated as an economic variable' (1970, 571). Once again jhere is some merit in Courchene's interpretation. Unlike some politicians (Smallwood 1973, 352) Courchene recognizes that a large population is not a prerequisite for industrialization (1974a, 26) . To some degree migration to and from a region is a reflection of the quality oflife and working conditions there. If a large number of people leave a region it is probably because there are no jobs for them or because wages in the region are lower than elsewhere. In that sense migration is an economic variable. To consider migration only in this way is to neglect the social, cultural, and psychological factors involved in any decision to move, however, and par-

66 The Creation of Regional Dependency ticularly to neglect each person's constant evaluation of the relative merits of social and cultural versus economic factors . Furthermore, Courchene's post facto analysis of the consequences of migration is not sufficient fully to explain the motives, causes, or processes of migration. When one takes into account these social, psychological, and motivational factors , there are a number of other ways of interpreting Courchene's empirical finding that migration is associated with economic well-being after moving. It may indicate that people who move are economically motivated while those who remain behind (the majority of the population) are motivated by more social considerations. It might also be that, once people are forced to move, they try to maximize the consequent economic gain. However, this in no way suggests that economic considerations could be taken as a primary motive in moving. Indeed, people may so value their way of life that migration is a last resort when government policies have made life both socially and economically impossible in their present location. Under such circumstances, a reduction in transfer payments and the subsequent decline in minimum wage rates are not likely to produce the emigration Courchene anticipates. Rather, people may first adjust their way of life to a reduced standard of living and their living conditions will have become worse rather than better. If economic incentives were sufficient to make the residents of Canada's dependent regions move, the higher rates of unemployment and lower average incomes in these regions should have already spurred them to do so. They have demonstrated their desire to remain where they are despite the economic disadvantages involved. There is a further obstacle to emigration becoming a significant 'adjustment' as is assumed in the transfer dependency model. Courchene does not seem fully to take into account that migration from any region reflects the opportunities available elsewhere. Lowering minimum wage rates in dependent regions is not likely to encourage emigration unless there is somewhere for people to go. The historical evidence supports this contention. When unemployment rates in the Atlantic region of Canada have been high the rate of emigration from that region has been comparatively low while the emigration rate from the region has been highest when its unemployment rates have been lowest. On the other hand, there has frequently been a direct correlation between the rate of emigration from the Atlantic region and employment rates in Ontario, a favourite destination for many Atlantic province migrants. This suggests that migration from the Atlantic provinces is governed not so much by forces pushing people out of the region as by forces pulling them into the more developed regions. When conditions are bad and unemployment levels high in the Atlantic region, unemployment levels are

67 Transfer Dependency vs Dependency Theory also high in central Canada and there is simply no place to go. Given the current economic and industrial recession in central Canada, it is unlikely that Ontario can absorb an influx of Atlantic province migrants in the foreseeable future no matter how many incentives to move are offered. Indeed, this may well explain why there has been a net inflow of migrants into at least two of the Atlantic provinces in recent years. The employment situation elsewhere is now so bad that many of those who previously migrated have become unemployed and are returning home where family support systems can sustain them and where there is the possibility of employment in the region's expanding resource sector. Finally, consideration needs to be given to which segment of the labour force is most likely to be influenced by lowering minimum wage rates. This is unlikely to have much effect on the incomes or migration rates of those in the middle and upper income brackets. Its greatest impact will be on those employed at low income levels. Despite Courchene's statement that 'across income groups ... migration rates are higher for the low income classes than they are for the middle-income class' (1974b, 142), a closer examination of his data reveals that in the Atlantic provinces (the poorest and most dependent region) those from upper and middle income groups had a higher rate of migration than those from lower income groups (ibid. 30, 42). The latter have shown comparatively less interest in moving in the past and there is little to indicate that they would be more inclined to move if their income level dropped. Low-income workers are probably labourers who do not possess skills readily marketable elsewhere. This probably explains their previous lower rates of migration and nothing will have altered. In addition, many will probably value the social and economic benefits of family and community support more than employment at a slightly higher income in a distant community. The other category of persons potentially affected should the transfer dependency model be implemented are the unemployed. It has already been argued that lowered minimum wage rates would be unlikely to open existing jobs for them and that their economic situation would not likely improve if low-wage industry were attracted to the area. A decrease in transfer payments might well eliminate some of the projects designed to aid them. Therefore it is the unemployed who would be the major 'victims' of implementing the transfer dependency approach to regional underdevelopment. These unemployed might be materially benefitted if the fourth thrust of Courchene's argument were implemented. Coincident with his support for reduced transfer payments, Courchene advocates the introduction of a negative income tax system (1973, 349-69; 1978a, 168-78). According to Cour-

68 The Creation of Regional Dependency chene, negative income tax is more effective than transfer payments as a tool to distribute income equitably. 'It has always struck me as anomalous that Canada has a very comprehensive tool of sharing wealth or income among provinces (i.e. a system of equalization payments) but a far less comprehensive system of sharing income among individual Canadians (i.e. the non-existence of a negative income tax' (1978a, 168) . One potential advantage of negative income tax would be to offset some of the undesirable effects of reducing transfer payments. In particular, it might compensate for some of the income lost to the people in dependent regions and it could also provide a floor below which wages could not fall in the absence of any minimum wage rates. To the extent that the negative income tax provided a real wage floor it would be operating in much the same way as a reduced minimum wage rate, however. If, on the other hand, a negative income tax program provided a level of financial support above a minimum 'poverty line,' it would be performing much the same function as transfer payments now do. There would then be little point in formally reducing transfer payments and indeed Courchene does not consider that desirable (1973, 359), attempting to counter that possibility by arguing that the guaranteed income level should be different in each region (ibid. 360)°:-Tilose unemployed in regions where incomes are low would then have a lower guaranteed income than those in similar circumstances in are-as where the average wages are higher. Such measures would guarantee that a negative income tax would not by itself be an instrument for reducing regional inequality. Finally, it seems likely that proposals to introduce negative income tax would be unpopular. Many of the public, as well as some politicians and some of the press, already see it as paying people not to work, and there is little probability that the negative income tax system will be implemented. On the other hand, there is likely to be much support, particularly in the richer provinces, for ending transfer payments which many residents and leaders of the developed regions regard as handouts to dependent regions. Unfortunately, Courchene's statements do little to allay their suspicions. Thus, the theory of transfer dependency presents a major problem. A reduction in transfer payments coupled with lower minimum wage rates and efforts to encourage emigration might bring extreme hardship to many residents of poorer regions. The only possible way to offset that would be to offer some form of guaranteed income. There is, however, danger that those responsible for regional planning will proceed with the former and ignore the latter.

69 Transfer Dependency vs Dependency Theory DEPENDENCY THEORY

Sociological theories of social change fall into two groups. Those approaches which are known as modernization theories see regional underdevelopment as the result of some lack in underdeveloped regions which must be overcome by the introduction of'modern' industry, 'modern' management, 'modern' education, and other ' modernizations' if the regions are to become developed. The other approach to social change within sociology is underdevelopment theory which sees social and economic 'backwardness' to be the product of specific social and economic forces operating to make a region underdeveloped. In recent years, this underdevelopment approach has fostered a distinctive approach to social change known as dependency theory. It originated in the work of sociologists and economists attempting to explain the reasons for and the nature of underdevelopment in Central and South America. From there it developed and it is now used widely to explain underdevelopment throughout much of the so-called third world. It has also begun to be used by sociologists to explain the persistence of regional pockets of underdevelopment in the more developed nations. There are a number of scholars in other countries whose work is central to the advancement of dependency theory but there is as yet no single proponent of outstanding note in Canada or any one scholar whose work incorporates the various strains within it. Most Canadian work relies on concepts and comparisons developed elsewhere. The discussion which follows outlines the general stages of dependency theory and makes reference to Canadian work which supports the analysis of each stage. The roots of dependency are found in analyses of imperialism by Marx and Lenin (1916), and in more recent work on capitalist economic growth and uneven development by Baran (1957) and Mandel (1968, 1973, 1975). The central argument is that the capitalist economic system is by nature an expansionist one in which the more economically advanced countries must extend their influence and control over the more backward ones. This is seen as an inherent consequence of the accumulation of capital or surplus value into the hands of the few , leaving too little capital circulating in society. Thus the margin of capitalist profit is reduced and the survival of the capitalist system itself is threatened. The future of the capitalist system can be ensured only as long as new outside sources of capital are available. Such resources are available in 'backward' countries and regions. Thus the theory of imperialism sees a relation of domination and subordination between advanced and backward countries and regions as implicit in capitalism.

70 The Creation of Regional Dependency Dependency theory transforms the concept of imperialism into a theory of underdevelopment. Whereas traditional western theories of modernization have explained the plight of backward countries in terms of a lack of resources or entrepreneurial initiative, dependency theory explains it as the result of dependency on more developed countries. From this perspective, development and underdevelopment are not separate phenomena but manifestations of the same social and economic processes. One of the earliest and most widely known proponents of this theory is Frank (1969) who sees the world as an interlocking set of metropolis-hinterland relationships in which the underdeveloped countries are the economic hinterlands of the more developed ones (ibid. 146-7) . Though it is not often stressed, Frank extends his argument to an analysis of the relation between developed and underdeveloped regions within a nation. Simultaneously and consequently these national metropoles ... maintain an exploitative relationship with their respective provincial peripheries which is an extension of the relationship the world capitalist metropolis maintains with them. On the regional and sectoral levels as well, the provincial commercial centres, which are in the economically disadvantageous position of a periphery with respect to the national and international metropoles, are for their own part in turn an exploiting metropolitan centre to their respective rural hinterlands ... The metropolis sucks capital out of the periphery and uses its power to maintain the economic, political, social and cultural structure of periphery and its peripheral metropoles ... (Frank 1970, 227-8)

Frank does not use this argument as the basis for an analysis of regional divisions and differences, however. Instead he suggests that fundamental regional differences do not exist because of the power of the capitalist system to penetrate and undermine all aspects of non-capitalist society (1970, 221-30) . Consequently, he gives relatively little attention to the internal social structures of hinterland societies, concentrating instead on the mechanisms of capital transformation between nations. Chorney has adapted his argument to Canada, contending that the process of urbanization has homogenized regional differences (1977), while Acheson (1972, 1977) and Naylor (1972) have clearly documented the extent to which Atlantic Canada was drained of its capital by central Canadian interests. Three other overlapping variants of dependency analysis can be identified. The work of both Mandel and Amin focuses on the nature of 'unequal exchange' or 'uneven development.' Like Frank, Mandel's dominant concern is the unequal exchange between underdeveloped and developed countries and the transfer of value from the former to the latter (197 5, 360-1}.

71 Transfer Dependency vs Dependency Theory The movement of capital itself is seen as producing ' uneven development' (ibid. 85) and in his most recent work Mandel emphasizes the role of multinational monopolies in facilitating this process (ibid. 316-20) . In an earlier essay Mandel attempted to transform this theory into a theory of regional disparities, arguing that poorer regions usually provide natural resources for industries in metropolitan areas and that, even when these resources are refined locally, outside economic interests frequently control the industry and surplus profit still tends to leave the region. Building on Marx's argument that capitalism needs a 'surplus army' of labour, Mandel notes that it can be provided by the unemployed in peripheral regions who are drawn into the metropolis when times are good and laid off to return home when economic conditions deteriorate. Thus the metropolis rarely has to pay the economic cost of its surplus labour pool (Mandel 1973). Veltmeyer (1978) has shown that the migrant labour force of Atlantic Canada operates in much this manner. Amin (1976) also focuses on the role of capital in creating unequal development between rich and poor nations and rich and poor regions. His analysis, however, extends beyond a consideration of capital transformation to a discussion of some of the social changes involved when the capitalist system transforms traditional pre-capitalist social structures in peripheral societies. As long as dependency theory concentrated primarily on processes of capital exchange, it had relatively little to offer as a framework of sociological analysis. In addition, its preoccupation with international exchange between countries shed little light on the nature of regional disparity within them. The works of Galtung on imperialism and of Sunkel and Dos Santos on the nature of dependency are valuable because they focus on the way in which dependency relations alter the structure of dependent societies. Galtung's analysis hinges on the relations between the elite or 'centre' group in the metropolis, the ' Centre' nation, and the elite or 'centre' group in the hinterland, the 'Periphery' nation. He contends that both groups have interests in common which lead them to form an alliance or 'bridgehead.' 'The basic idea is ... that the centre in the Centre nation has a bridgehead in the Periphery nation, and a well-chosen one: the centre in the Periphery nation. This is established such that the Periphery centre is tied to the Centre centre with the best possible tie: the tie of harmony of interest' (1971 , 83) . Gal tung contends further that a disharmony of interest exists between the centre and periphery groups in each nation and that a conflict of interest exists between the large periphery groups in the developed and underdeveloped nations (ibid. 84) . Sunkel moves this analysis closer to a theory of regionalism by focusing directly on the effect of dependency within both developed and underdevel-

72 The Creation of Regional Dependency oped nations. He suggests that there is a 'simultaneous process of dual polarization' in which each nation is transformed into advanced and backward regions (1973, 140) . Furthermore, in a reversal of Frank's argument, he declares that dependency involves more than a simple division into elite and workers, that a segment of each social class is integrated into the larger world economic system, while the remainder is 'marginalized' (ibid. 168-9). In short, there is a dual economic system. In much the same vein, Dos Santos argues that a relation between a metropolis and its hinterland can be established only with the support of those groups in the hinterland which profit by it. As a result, certain groups in the underdeveloped society or region are 'compromised' into supporting its inferiority (Dos Santos 1973, 78) . Sunkel and Dos Santos both contend that the main instrument of dependency is the multinational corporation which hinders the development of local industry in underdeveloped regions by removing the surplus capital necessary to establish such operations (Dos Santos 1970, 235; Sunkel 1973, 166). Sunkel contends that multinationals also affect the type of economic leadership possible at the local level because decision-making is centralized and little scope is left for local managers (ibid. 167) . Dos Santos notes that any resident displaying some entrepreneurial skill is quickly bought out by outside capital (1973, 71). The works of Galtung, Sunkel, and Dos Santos are closer to a theory of regional divisions than any of the work previously discussed. Their focus is more explicitly social and they are explicitly concerned with the relationship among regions within both developed and underdeveloped societies. In addition, the works of all three authors have the considerable advantage of emphasizing the interaction between the main divisions of class and region in a society. Clement bases his analysis of the political economy of regionalism in Canada on the works of Galtung and Sunkel, declaring that their ideas constitute 'a model of international economic relations and their regional and class implications' (1978, 92) . He has empirically demonstrated that many of Canada's corporate elite are the co-opted 'compradors' of economic interests in other countries (1975, 117) and that the economic elite in Canada's dependent regions are often the agents of economic interests in Canada's more developed regions (1978) . His research illustrates how the actions of such elite groups serve to increase the dependency of their home region. However, an examination of the commercial elite of Canada's peripheral regions would suggest that the development of dependency has gone beyond that described by Clement. The indigenous local elite of most of Canada's smaller towns and cities is being transformed into a unique 'franchised elite'

73 Transfer Dependency vs Dependency Theory who own franchised branches of national and international businesses, and who have replaced the owners of old family firms in the power structure of each region. Sociological research on the relation between the traditional commercial elite and this new 'franchised' group still needs to be undertaken. Two other dependency theorists can also be seen as opposing Frank's assertion that capitalist imperialism transforms all economic systems it touches into capitalist (dependent) ones. LaClau (1971) argues that different 'modes of production' may exist alongside capitalist ones. Thus many rural areas have a strong feudal or patron-client type of economic and social organization co-existing with industrial and commercial capitalism. This deceptively simple observation offers a new dimension for regional analysis. If multiple economic systems exist side by side within a region, each will have its own class organization. An examination of the way in which the competing classes and social structures in each region are interrelated with one another can, therefore, reveal much about the nature of social organization within and among regions. Thus, 'mode of production' analysis can provide rich insights into the internal social organization and dependency of Canada's peripheral regions, and has been employed in chapter 10 of this volume. Concern with the internal social structure of dependent societies is even more central in Cardoso's work. Cardoso's thesis is that all dependent societies are not necessarily underdeveloped, and that there is considerable scope for what he terms 'associated-dependent development' ( 1972a, 1972b, 1973, 1977~ Cardoso and Faletto 1979). The phrase was chosen deliberately to combine two notions that traditionally have appeared as separate and contradictory: development and dependence. In my view, changes in international capitalist organization have produced a new international division of labour. The moving force behind these changes is the multinational corporation ... To some extent, the interests of the foreign corporations become compatible with the internal prosperity of the dependent countries. In this sense they help promote development. Because of this fact, the growth of multinational corporations necessitates a reformulation of the traditional view of economic imperialism which holds that the basic relationship between a developed capitalist country and an underdeveloped country is one of extractive exploitation that perpetuates stagnation. Today, the massive investment of foreign capital aimed at manufacturing and selling consumer goods to the growing urban middle and upper classes is consistent with, and indeed dependent upon, fairly rapid economic growth in at least some crucial sectors of the dependent country. (1973, 149)

74 The Creation of Regional Dependency Cardoso's theories seem particularly relevant to an analysis of regionalism in Canadian society because they depict the Canadian situation so accurately, in particular the relation between the central 'developed' regions of Canada and the hinterland 'underdeveloped' regions. In comparison with some of the countries in the so-called third world, Canada's hinterland regions are not underdeveloped. However, they are most assuredly dependent developed in that their economic growth is highly constrained and determined by decisions made outside the region in the economic centres of this and other countries. Also of interest is Cardoso's analysis of the social implications of dependent development. He is critical of those who foresee an alliance between the local economic elite and the mass of workers in a dependent society. Like Galtung, Dos Santos, and Sunkel, he argues that local entrepreneurs frequently owe their position to their ties with outside economic interests. He contends that as a result they are likely to advocate increased dependency (ibid. 163). The increasingly important middle class and industrial working class are also likely to believe their interests best served through dependent rather than independent development. (In Canada the debate over Quebec independence is being fought on just this issue.) Thus, Cardoso denies that the process of dependence is the same in all countries and regions and proposes a detailed analysis of the various types and forms dependency can take (Cardoso and Faletto 1979, 12). He particularly stresses the need for a close examination of the way in which each local social structure alters the process of dependency. Evan's (1979) work on Brazil is an extensive application of the 'dependent development' theory formulated by Cardoso and his colleagues. In Canada, there has been no similarly sustained attempt to examine the nature of dependent development. However, it is possible to see close parallels between the work of Cardoso and his colleagues and several Canadian researchers. Most notable is the work of economist Harold Innis who laid much of the groundwork for a dependency analysis of regional divisions in Canada by consistently distinguishing between the 'centre' and.the 'margin' in Canadian society, and discussing the nature of this discrepancy (Innis 1930, 18). Likewise Veltmeyer's work on class transformation in Halifax (1978) and Brym and Sacouman's collection of papers on Atlantic Canada (1979) can be seen as empirical investigations of the nature of dependent development. The foregoing review of the various approaches within dependency theory demonstrates its utility in analysing regional divisions in Canadian society as well as the relations between Canada's regions. Dependency theory focuses on the more social aspects and consequences of dependency, and on the

75 Transfer Dependency vs Dependency Theory specific ways in which local social organization interacts or articulates with external economic and social influences. In addition, regional analysis based on dependency theory satisfies the more general requirements of any framework which purports to explain regional divisions in Canada. It does not simply identify regional differences but provides an explanation for them in the context of a larger theory. It avoids territorial determinism in favour of explaining regional differences in social terms. It recognizes that social and economic considerations are mutually reinforcing and interrelates economic, social, and political factors in explaining regional differences within nations. It avoids purely economically deterministic explanations and focuses on the more social and cultural aspects of dependency. It interrelates class and region, two of the main divisions in Canadian society. Finally, the dependency framework has the further advantage that it is compatible with some of the major social scientific analyses of Canadian society, particularly those relevant to an analysis of Canadian regionalism. 'TRANSFER DEPENDENCY' VERSUS 'DEPENDENCY THEORY'

Transfer dependency and dependency theory clearly constitute two different approaches to the nature of regional dependency. This is particularly obvious in their explanations of the causes of regional dependency. Transfer dependency attributes regional dependency to too much external money being poured into a region in the form of transfer payments. Dependency theory attributes it to the systematic draining of capital and resources from one region by other regions. In Canada, there are data which can be used to support both positions. Dependency theorists rely on historical data documenting the movement of wealth from Canada's eastern provinces in the period from 1890 to 1920. In contrast, exponents of transfer dependency point to the substantial flow of money into those provinces in recent years in the form of transfer payments. There is no simple resolution to this contradiction. However, dependency theorists can legitimately argue that the eastern regions of Canada would not need today's transfer payments if they had not earlier been drained of their wealth, implying that the advocates of transfer dependency do not take into account the historical background to the present situation. They can also note that the existence of a substantial inflow of transfer payments into Atlantic Canada and other dependent regions today is not, in itself, a justification for their reduction or elimination as some exponents of transfer dependency appear to believe. Both theories also incorporate hypotheses about the relation of the nature and function of migration to regional dependency. According to transfer dependency, emigration of excess labour from a dependent region is regarded

76 The Creation of Regional Dependency as desirable because it is seen as contributing to a natural balance in the region. Dependency theory sees migrants as the victims of an exploitative economic system and dependency theorists appear to regard programmed migration of those who would prefer to stay at home as undesirable. It is not clear how dependency theorists would overcome the existing conditions which require the seasonal migration of a large reserve army of the unemployed from one region to another. Presumably a more equitable distribution of economic power and industry in the country would be necessary as well as a reduction in the chains of dependency which link local entrepreneurs to investment capital outside the region. A third difference between the two theories lies in their views on the power of local governments and local economic interests to change existing conditions. Transfer dependency theorists see provincial governments and local entrepreneurs as having this power and argue that transfer payments should be reduced or eliminated in order to force provincial leaders to take the steps necessary to counteract underdevelopment. Dependency theorists, however, argue that the conditions of the 'world economic system' combined with the power of giant multinational corporations reduce the possible success of local initiatives. Indeed, they suggest that the failure of many local initiatives has been the result not of a lower level of entrepreneurial ability but of the inability of local leaders to control the major national and international economic forces which make their regions dependent. Some attention should also be given to the difference in value orientation between the two theories. It is clear that the dependency theory position is a value-oriented perspective and takes a normative stand against external exploitation. It declares that the existing structure of capitalist economic organization in Canada maintains the interest of certain groups within the central developed regions at the expense of many of those in the dependent peripheral regions of the country. It is not always realized that transfer dependency is also value oriented and normatively biased. It sees maximization of economic welfare as the goal of the system and consequently economic well-being is often divorced from broader social and cultural considerations. The consequence is an instrumental approach to development and a tendency to treat the economic system as natural rather than created. Bell criticizes contemporary economists on much the same grounds, contending that they 'make accumulation an end in itself' and noting that 'economic policy can be efficacious as a means; but it can only be as just as the cultural value system that shapes it' (Bell 1978, xi), a position which will be discussed later. The transfer dependency position tends to ignore the cultural values of many of those who wish to remain in dependent regions.

4

The Significance of Regional Differences in a Distinctive Canadian Sociology

Just as Albertans want more control over their destiny, primarily for economic reasons, Quebecers, I sense, want also more control over their destiny - essentially for cultural and linguistic reasons. Hence, just as Albertans want more government decisions made in Edmonton than in Ottawa, I think Quebecers, for different reasons, but somewhat similar motives, want more government decisions made in Quebec City and fewer in Ottawa. Thus the objective of both provinces is to want less suffocation by Ottawa. (Peter Lougheed, Toronto Globe and Mail, 14 April 1977)

Expressions of regionalism are heard everywhere throughout Canada today. Separatism in Quebec and isolationism in Alberta are only two of the more important contemporary manifestations of regionalism. The Berger inquiry (1977) gave renewed impetus to a variety of native and northern rights movements. Prospects of oil riches have so aroused the regionalism of Newfoundlanders that Premier Peckford felt it necessary to deny publicly that a wealthy Newfoundland would separate from Canada. Even so, Mr Peckford's own intense regionalism was clearly evident when he declared, with reference to the 1980 referendum on separatism in Quebec, that it was time to rewrite the constitution of Canada to make the federal government ' an agency of the provinces and not the other way around' (Macleans 26 May 1980, 20). Even Premier Lougheed, who in 1977 could so rationally equate Alberta's and Quebec's interests, declared on the day after that 1980 referendum, 'I do not feel we are prepared to be stampeded into constitutional discussions based on some euphoria of Canadianism that arose out of the decisions yesterday ...' (Toronto Globe and Mail, 27 May 1980). While regionalism and regional differences have probably always been present in Canada, they have seldom been the focus of direct scrutiny as

78 The Creation of Regional Dependency Schwartz's 0967) study of twenty years of public opinion polls in Canada demonstrated. Though she discovered that regional origin was a key determinant of personal opinion, not one poll in all that time appears to have focused specifically on regionalism and asked Canadians their opinions of regional differences. Perhaps one reason why there has been no sustained attempt to develop a regional sociology in Canada is the virtual obsession among Canadians with the nature of unity and the characteristic and unifying features of Canadian identity. As a result, Canadian sociologists have focused their attention on Canada as a whole and comparatively little consideration has been given to regionalism and regional differences. Indeed, some leading Canadian sociologists have dismissed regional differences as unimportant in understanding Canadian social structure. For example, Porter provided no analysis of the regional basis of the Canadian elite in his 1965 analysis. Furthermore, in a plenary address to the Canadian Sociological and Anthropological Association he declared, 'It has never struck me that regions provide basic group identities in Canada' (1975, 6). It was Porter's opinion that as long as capital and people travel freely throughout Canada there is no basis for the formation of regional identities. Recent events suggest that his opinion was ill founded. In this chapter an attempt is made to rectify this neglect of Canadian regional differences. The first step will be a demonstration of the significance of regional considerations in any analysis of Canadian society. This is necessary to counter the contention that regional factors are of little relevance in understanding the nature of Canada. The difficulty stems largely from a lack of data, as those who minimize regional considerations have frequently failed to collect or present data so that the strength of regional differences in Canada might be determined. Once it is established, the explanation of regional differences in Canada will be considered, with particular reference to dependency theory and how it can be used to explain the nature of these differences. The goal of this analysis is the development of a theoretical and analytical framework capable of illuminating the nature of Canadian regional divisions. It is also hoped that this chapter will contribute to the development of a Canadian sociology - the formation of an interrelated set of concepts capable of explaining the distinctive features of Canadian social life. The argument will be made that a Canadian sociology should evolve from those concepts which can explain the divisions in Canadian society, particularly the regional, ethnic, and social class divisions. The focus in this chapter will be on regional divisions, and the claim will be made that they are among the most significant features of Canada's social organization.

79 Significance of Regional Differences THE SIGNIFICANCE OF REGIONAL DIVISIONS IN CANADIAN SOCIETY

To justify the claim that regional divisions are of major significance in the social organization of Canada, it is necessary to demonstrate that such divisions do indeed exist. Before proceeding to document these differences, however, it is important to indicate one major difficulty involved in so doing. Almost all data in Canada are provided in provincial rather than regional terms. It is possible to get approximate regional data by treating blocks of provinces as regions but many social and cultural groups overlap provincial boundaries. There is, unfortunately, little to be done about this problem. The limitations of the data simply require that provinces are equated with regions, even though this is likely to underestimate the extent of regional divisions in Canadian society. Two types of regional differences can be identified. There are the objective differences in economic well-being, education, urbanization, and similar factors, as well as objective differences of a more complex nature, such as social class, which reflect the social organization of each region. In addition to these objective differences, there are also significant subjective differences among outlook and value orientations of the residents of the different regions. Indicators of economic disparity are used most frequently to substantiate claims of objective regional differences. Even though Canada was a world leader in establishing programs to eliminate regional economic disparity, these regional differences have persisted almost unchanged over the past fifty years. Throughout this period per-capita personal income in Ontario has been almost exactly double that in the provinces of Prince Edward Island and Newfoundland (Economic Council of Canada 1965, 101; Chernick 1966, 7; Green 1971, 4; Gibbon 1976, 13a). As Table 1 indicates, the four eastern provinces have consistently had much lower average earnings than the remainder of the country, though there has recently been a real increase in per-capita income in the three western provinces. These differences reflect the distinctive economic bases of the regions and sub-regions of the country. Stevenson points out that development is uneven in Canada largely because the major sectors of the economy have been concentrated in different provinces and regions (1979, 87-90). Ontario has dominated the secondary manufacturing area and, until recently, export-based agriculture dominated the west. Fishing has been dominant in the four eastern provinces and mining and forestry in British Columbia, producing a sense of distinctiveness and even regional antagonism in isolated sub-regions throughout the rest of the country. These differences in resources and economic base have in turn

80 The Creation of Regional Dependency TABLE I Average earnings in constant (I 971) dollars as a percentage of national average income, 1946-75 Province

1946

1951

1956

1961

1966

1971

1975

Newfoundland Prince Edward Island Nova Scotia New Brunswick Quebec Ontario Manitoba Saskatchewan Alberta British Columbia

90.0 91.2 88.9 96.7 104.4 93.0 103.1 92.5 99.8

93.0 78.9 85.0 83.1 97.8 104.8 93.9 92.5 97.9 105.0

81.4 77.8 84.3 82.5 97.2 106.2 91.3 85.7 96.0 108.5

85.7 75.9 84.3 79.4 97.1 106.1 93.7 88.7 97.2 105.5

77.5 69.0 81.3 79.5 99.0 105.7 98.7 90.4 96.0 107.7

79.5 66.7 83.4 78.5 97.4 107.6 89.1 79.6 96.8 106.5

86.5 75.9 88.8 84.9 99.1 100.3 87.9 105.9 108.0 108.5

SOURCE: Calculated

by the author from data on earned income for the specified years in Revenue Canada, Taxation Statistics, standardized by using the Canadian Consumer Price Index for those years.

generated regional differences in class, with the result that each provincial government has 'become the representative and spokesman for a distinct set of interests, rather than a microcosm of the country as a whole' (ibid. 87). These fundamental economic differences are reflected in another obvious regional difference, the structure of employment and unemployment. Table 2 shows the heavy concentration of primary labour force employment in the eastern and western provinces and the greater concentration of industrial employment in Ontario and Quebec. Because the population of these provinces is much larger than that of any of the others, over half of Canada's industrial labour force is concentrated there. These differences in employment are matched by differences in levels of unemployment among the main regions of the country. Throughout the past thirty-five years the annual and seasonal unemployment rates in the Atlantic region and Quebec have been approximately twice that in Ontario and the prairies (Ostry 1968; unpublished Statistics Canada sources). Regional economic differences in Canada are interrelated with social ones. While definitions of quality oflife differ from region to region, one indication · of objective differences in styles of social life can be obtained from the statistical data on urbanization in each of the different provinces and regions. Table 3 shows that in Ontario, Quebec, and British Columbia over 75 per cent of the population lives in urban centres, in the eastern provinces between 38.3 and 56.9 per cent, and in the prairie provinces between 53.0

81 Significance of Regional Differences TABLE2 Provincial labour force by category of industry, 1971 (expressed in percentages) Category of industry•

NFLD

PEI

NS

NB

QUE

ONT

MAN

SASK

ALTA

BC

Total primaryt Total secondary Manufacturing Construction Total tertiary*

10.4 22.4 11.9 10.5 67.2

18.9 16.3 9.8 6.5 64.8

7.7 21.9 14.4 7.5 70.4

8.5 23.9 16.2 6.8 68.5

5.6 28.6 23.1 5.5 65.8

5.3 30.1 24.0 6.1 64.4

13.5 19.1 13.8 5.3 67.4

29.4 10.2 5.4 4.8 60.4

16.8 16.7 9.1 7.6 66.5

7.6 23.0 16.0 7.0 69.4

SOURCE: Calculated from Canada Year Book 1974, 336. Ottawa, Information Canada, 1974 • Categories of industry comparable to those of Economic Council of Canada (1965 , 124) t Includes agriculture, forestry, fishing and trapping, mines, quarries, and oil wells :J: Includes transportation, communication, and other utilities; trade; finance, insurance, and real estate; community business and personal service; public administration and defence; unspecified and not stated

TABLE3 Urban population distribution of Canadians by province, 1971 Province

Per cent urban

Number of cities over 50,000

Number of metropolitan areas

Ontario Quebec British Columbia Alberta Manitoba Nova Scotia New Brunswick Newfoundland Saskatchewan Prince Edward Island

82.4 80.6 75.7 73.5 69.5 56.7 56.9 57.2 53.0 38.3

20 13 2 2 2 2 I I 2 0

9 3 2 2 I I I I 2 0

SOURCE: Compiled from data in Canada Year Book 1974 (Ottawa, Information Canada 1974)

and 73.5 per cent. The differing extent of urbanization among the provinces and regions is also seen in the location of the country's major urban centres. Ontario has twenty of the forty-five largest cities and nine of the twenty-two major metropolitan areas, Quebec has thirteen of the major cities and three of the major metropolitan areas. No other province or region even approaches such an urban orientation.

82 The Creation of Regional Dependency A further indicator of objective regional social differences in Canada can be found in data on levels of education in the different regions. For example, a study of education in the Atlantic provinces in the 1960s revealed that illiteracy was two to four times as high there as in the rest of the country (Atlantic Development Board 1969, 1-4). Though 1971 census data reveal a substantial improvement in Newfoundland, there was little change in the other three Atlantic provinces. In 1971 all four Atlantic provinces had significantly fewer university educated persons than the rest of Canada. Using such criteria as extent of urbanization, average community size, occupational base, employment and unemployment, and education, it is relatively easy to establish that objective social differences exist among Canada's regions. However, such differences themselves are indicators of yet another major social difference, a difference in social class. One such class difference is the extent to which the dominant economic elite of Canada is found primarily in the central region. In spite of Porter's protestations that regionalism has little importance in Canada, most of the major corporations he studied are based in Toronto and Montreal and it is likely that the majority of members on their boards of directors live in or near these centres. Though there are some east coast and west coast members on the boards, they are frequently token representatives, there because the firms in question do a large amount of business in their region or because they once owned local firms bought out by these larger ones. It is unfortunate that Porter thought so little of regionalism as an explanatory variable that he neglected to provide data on the regional background or places of residence of the nation's elite. However, Clement's more recent study of the economic elite does provide some information on the relation between regionalism and elite membership (1975, 224-30). Clement examined the places of birth of Canada's economic elite and found that the central provinces are over-represented. Even he does not provide data on their present places of residence, arguing that 'if residence were used, it would be too susceptible to the clustering of elite members in the metropolitan centres of Toronto and Montreal after migration from their places of birth' (ibid. 224). However, the fact that an overwhelming proportion of Canada's economic elite moves to these centres is strong evidence of regional differences in access to Canada's elite positions unless one is willing to migrate. Regional social class differences in Canada go well beyond the elite. The processes of urbanization and industrialization have affected class structure in all regions to the extent that the numbers of independent commodity producers and self-employed business people everywhere have declined. All regions now have a class structure dominated by a relatively small number of

83 Significance of Regional Differences owners of manufacturing and commercial enterprises and composed largely of wage labourers. The class structures of Ontario and Quebec have been affected more than those elsewhere, however. Cuneo has shown that there are clear regional differences in occupation and relation to the means of production (1978, 132-56) . In particular, he established that the 'new' middle class of proprietors and professionals comprises nearly twice as much of the labour force in Ontario and Quebec as in the Atlantic region (ibid. 141-2). On the other hand, wage labourers comprise only 44 per cent of the labour force in the prairies but 58 per cent of the labour force in Ontario and Quebec, and 62 per cent of the labour force in Atlantic Canada. It would be relatively easy to demonstrate in similar fashion that significant differences exist among Canada's regions in terms of other factors, most notably age and ethnic composition. Such differences in turn produce somewhat (Jifferent patterns of social organization in each region. But do they create significant regional differences in what Porter termed 'group identity'? Furthermore, do any such differences in identity manifest themselves in regionally different patterns of behaviour? Like Porter, Chorney suggests that this may not be the case. Though recognizing that there is a strong 'division of labour' among the regions of Canada, he contends that the combined power of mass urbanization and multinational corporations has hindered the formation of class and regional consciousness and tended to produce a homogenized culture (1977, 111-13). Gibbins also argues that the movement of population and the rise of urbanism have produced a 'decline' in regionalism in western Canada. Somewhat surprisingly, he contends that this is accompanied by an 'incontestable' decline in political regionalism as well ( 1980, 65-117). However, data from other sources contradict this argument and support the proposition that regional differences in Canada are to be found at the levels of consciousness and identity. Some of the strongest evidence to support this claim is found in Schwartz's (1967) study of Canadian responses to public opinion polls. She found that region of residence had a major impact on attitudes. 'One of the clearest findings from an examination of public opinion polls over a twenty-year period, was the continuing relevance of where people lived to their outlook on national problems' (197 4, xi). In response to this, Schwartz undertook a national study to determine the extent of Canadian regional persistence, the factors which contribute to it, and its impact on personal identity. Her clearest findings were that Canadians have an extreme awareness of regional differences and a general consensus on the economic future of each region (ibid. 85-6) . Despite this awareness and consensus, more than 75 per cent of the residents of each region preferred to live where they did than in any

84 The Creation of Regional Dependency other region (ibid. 88-9). Schwartz's findings demonstrate that there is not only identification of but also identification with. their home regions on the part of the majority of Canadians, and these are the two processes necessary for group identity formation (see chapter 1). Thus Schwartz's findings contradict Porter's assertion that regions in Canada do not provide the basis for group identities. Moreover, Schwartz contends that regional homogenization, which Chorney sees as the result of increased urbanization and industrialization, is likely to occur only where the level of urbanization is similar in all regions and where cities are clearly linked to their surrounding hinterland (ibid. 318-19). These conditions are not met in Canada and there is not regional economic equality. When conditions of 'institutionalized inequality' exist, her data clearly indicate that 'regionalism is not a declining force' (ibid. 313). Simeon and Elkin's work on regional political cultures in Canada also reveals clear regional differences in outlook and identity on certain political dimensions. Most striking is the division into two main groups. One is made up of the respondents living in poorer, less economically developed areas, whether English or French speaking. It includes people from the Atlantic provinces and French Canadians both inside and outside Quebec. At the other extreme are residents of the two wealthiest provinces, Ontario and British Columbia, and a third, Manitoba. Ranged between, but closest to the second group on most dimensions, are residents of the two other prairie provinces. (Simeon and Elkin 1979, 19)

These dimensions are those of political efficacy (or belief in one's ability to affect political decision-making), political trust, and degree of political involvement. So-great are the regional differences on these dimensions that Simeon and Elkin are able to develop a four-fold typology based on efficacy and trust and show that there are statistically significant differences in the type of political attitude prevalent in each region of the country. French-Canadians and a majority of residents in each of the Atlantic provinces have the lowest levels of trust and belief in the efficacy of government, even though Jheir level of political involvement is not significantly lower than that in otherr~gions. Though Schwartz and Simeon and Elkin demonstrate conclusively that regional differences in identity and attitudes exist in Canada, they do not indicate the source of these differences. Presumably some at least are the result of regional differences in social class, ethnicity, urbanization, and other factors. Porter (1965, 32) and a number of other social scientists have argued that under such circumstances a regional interpretation is not justified

85 Significance of Regional Differences as it simply exaggerates the importance of regions and does not consider the factors which actually account for regional differences. However, Simeon and Elkin 's subsequent analysis clearly indicates that regional differences in political attitudes in Canada cannot be accounted for simply in terms of those other factors either separately or in combination. As a second stage of their analysis, they used separate controls for social class, education, party identification, sex, age, and size of community and proved that, 'Regional differences remain substantial after controls are introduced. At the same time most of the control variables had strong effects, albeit ones of varying direction and magnitude in different provinces' (ibid. 43) . Similarly, when they undertook analysis of variance to determine if class, education, or party identification accounted for as much variance in efficacy and trust as region, they discovered that few of the interaction effects were significant. 'This implies that the effects of region and the other variables are indeed independent of each other' (ibid. 43). Consequently, Simeon and Elkin conclude that region in and of itself is a significant explanatory variable in Canadian society and that the country is characterized by distinctive 'regional cultures.' In sum, the data presented here establish that regional divisions play a major role in Canadian society and are significant at three levels of empirical analysis. First, regional differences exist at the level of objective economic and social indicators. Second, the social organization of Canadian society has major regional differences in terms of social characteristics such as class and urbanization. Third, regional differences form a basis of group identity and culture in Canadian society. To the extent that a comprehensive Canadian sociology should focus on the fundamental divisions in Canadian society, the data just presented indicate that the analysis of regional divisions should occupy a particularly important place. However, it is one thing to identify empirically that regional differences exist. It is quite another thing to explain them. AN EXPLANATION OF REGIONAL DIVISIONS

Sociologists, compared with some other social scientists, have given relatively little attention either to the nature of regionalism or to providing an explanation of it. The work begun by Vance and Odum to explain the distinctive nature of the southern United States from a regional perspective did not long sustain the interest of sociologists. In 1960, Martindale tried to integrate regional analysis with community studies, arguing that regions are simply 'movements toward community' (1960, 216) and as such should not be thought of in territorial terms but as 'a kind of integrated system of social life

86 The Creation of Regional Dependency in which geographic area is secondary or even irrelevant' (ibid. 33) . Martindale's work is in sharp contrast to much of that done by geographers who frequently emphasize territorial considerations and/or resources in defining regions. Economists, on the other hand, tend to focus exclusively on economic factors and often see regional differences only in terms of disparities to be overcome through economic planning and urban-industrial growth. The framework of explanation to be presented here is closer to Martindale's position that to any of these other perspectives. While accepting that some consideration of territory is important in identifying regions, it is the contention here that regions are social phenomena and as such can only be explained socially. In making this argument, the term social is used in the broadest sense and includes all forms of social organization: economic and political organization as well as ethnic and class structure. In particular it is important to emphasize that social and economic considerations are mutually reinforcing. Economic differences in resource base and industrial structure create social differences in community size, pattern of urbanization, employment structure, and even social class differences. Social factors such as family size and composition, age, education, religion, and ethnicity, as well as cultural identity and outlook, have an impact on the economic structure and productivity of any region. In addition it should be emphasized that government policies also play a major role in creating regional divisions (see chapter 5) and frequently contribute to regional antagonisms. In sum, regional divisions are not simply the 'natural' products of climate and territorial barriers, but are the social products of economic, social, and political experience. What is needed, then, is a framework of explanation which explains regional differences in other than territorial terms and which emphasizes the interrelations among social, economic, and political factors. Moreover, such a framework must not only identify the indicators of regional disparity or regional differences, but must also be capable of explaining them in the context of a broader social theory. The identification of regional differences without theory has little meaning (see chapter 1). Furthermore, such a framework should also provide some insight into the conditions that foster regional differences, and should provide a basis on which to analyse the relations among regions, between each region and a central government, and between each region and other nation-states. The position taken here is that dependency theory is capable of meeting these requirements. As dependency theory was examined in detail in the preceding chapter it is sufficient here to summarize the major stages of the dependency theory perspective. Those wishing more detailed analysis can consult the preceding chapter or refer to the excellent reviews of the theory and its applications in

87 Significance of Regional Differences Girvan (1973), Kahl (1976), Long (1977, 71-104), Palma (1978), and the Review of Radical Political Economics ( 1978). Dependency theory is built on the marxist argument that capitalism can survive only through the exploitation and subjugation of other areas. This is seen as necessary in order to obtain new markets and, hence, sources of capital to compensate for the capital usurped from the economic system by the capitalists. Based on this proposition one can identify four stages to the dependency theory argument as it applies to the phenomenon of regional differences and regional disparities. The first stage is the obvious analogy that exploitation among nations has its counterpart at the regional level within nations. The focus here is primarily on the nature of economic exchange among regions, and underdeveloped regions are said to be drained of their resources and wealth by the developed ones. The second stage of dependency theory also rests on marxist analysis and emphasizes the necessity supposedly inherent in capitalism of a large 'reserve army' of labour which can be exploited at will. Underdeveloped regions are seen as containers for such labour pools which can be drawn into the central economy when industry is expanding and laid off when economic conditions deteriorate. It is the third stage of dependency theory which marks the formation of a distinctive body of theory and empirical research that extends beyond traditional marxist analysis. At this level, attention shifts from the movement of wealth and population to a consideration of the social structures which develop not only to facilitate the process of regional dependency but also as a consequence of it. The focus here is on the nature of social class and on the way in which 'bridgeheads' are formed between the dominant class of the developed area and the dominant class of the dependent area, with the elite of the dependent region becoming 'compromised' into supporting the domination of their region. At this stage there is also emphasis on the conflict of interest between the elite and the working class in both developed and dependent areas, and on the conflict of interest between the working class groups from each area. In the fourth stage of dependency theory attention shifts from a consideration of the links between developed and dependent regions to a consideration of the consequences of dependency on the social and economic structures of the dependent region itself. Much of the attention here is with the relationship between capitalist and non-capitalist modes of production in each region. This stage provides a particularly fertile theoretical base for the analysis of the actual conditions of dependency in Canada's underdeveloped regions (see chapter 10).

88 The Creation of Regional Dependency Dependency theory as just described fulfils the requirements outlined earlier for a theory which can explain regional differences and divisions in Canada. Dependency theory explains regional differences in the context of a larger body of theory, and in doing so focuses on social rather than environmental factors. It interrelates social, economic, and political factors, identifies the conditions of exploitation that foster regional differences, and provides a framework whereby the relations among regions, between regions and the central government, and between regions and other nations can be explained. Its most obvious weakness is its general neglect of such attributes as values, identity, and identification which contribute to regionalism. The implications of this will be examined in some detail later in this volume. To establish fully the ability of dependency theory to explain regional differences in Canada would require an application of the theory in an empirical investigation of at least one region of the country. Such a detailed investigation would be the subject for another book, and will not be attempted here. However, the discussion of dependency theory presented in this and the previous chapter justifies its use as a framework for explaining Canadian regional differences. TOWARDS A CANADIAN SOCIOLOGY

This chapter is intended to contribute to a distinctive Canadian sociology capable of explaining the most distinctive features of Canadian social organization. It is important, therefore, to examine the requirements of a distinctive national sociology, the contributions already made towards establishing it, and the relevance and relation of dependency theory to those contributions. Throughout the past decade, many Canadian sociologists have advocated a Canadian sociology capable of explaining the unique features of Canadian life. Many of those have done so on nationalistic grounds and with strong nationalistic fervour and rhetoric. For example, Stolzman and Gamberg declare that 'the initiation of a national sociology is inextricably bound up with the aspirations for an independent Canadian nation' 0975, 101) . They contend that 'the first step in the building of such a sociology will be to reject all those modes of sociological inquiry which obscure the semi-sovereign nature of the major schools of Canadian social reality' and proceed to examine 'a few of the major forms and tenets of American sociology whose importation and application to Canadian society directly or indirectly buttresses American hegemony over Canada' (ibid.). Such vehemence is sure to affront those who believe that sociology, as a science, should aim at the development of universal laws with the broadest possible application. Positi-

89 Significance of Regional Differences vistic sociology is based on the belief that there is an order to the social world and that this order may be understood using the same framework of explanation (if not the same techniques) as that employed in understanding the physical world. It would be ridiculous to suggest that the physical world operates on different principles in Canada than elsewhere. Many positivist sociologists therefore argue that social structure and social behaviour operate under universal social laws and that a national Canadian sociology is impossible and that the call to develop one brings into question the assumptions upon which social science rests. Stronger criticism is raised against the value orientation which frequently accompanies such calls. The implication that existing Canadian sociology does little more than copy American ideology and should be replaced by a distinctively Canadian ideology obviously is contrary to any belief in sociology as an objective, value-free discipline. From that perspective, knowledge and values are incompatible and nationalism is certainly a value orientation. As Rex declares, 'The bad experience of American cultural domination in this field by no means implies that a benighted capitalist-imperialist sociology should be replaced by an equally benighted nationalistic one' (1976, 511) . Similarly, Jarvie argues that nationalistic attacks on foreign intellectual domination are nothing but ad hominem arguments which cannot be considered in any way scientific (1976, 525-6). He contends that to label a statement as 'foreign' and consequently to dismiss it because of this is 'to smudge reason, to confuse it with propaganda, to invent pseudo-arguments against argument' (ibid. 527). In short, as Hiller has pointed out, the call for a national sociology 'challenges the existence of universality, and indeed, of objectivity itself. Universality and nationality therefore appear to be opposing and conflicting ideas' (Hiller 1979, 124). The case for a national Canadian sociology need not rest on purely ideological and value-laden grounds, however, and it does not violate the principles of social scientific explanation. Though all societies have similarities and can be explained by a common set of concepts, each society is also in some way unique, in part because of its different historical experience. In order to understand the nature of any society's social organization it is necessary to examine how this organization was shaped by its unique historical experience. As Clark says, 'There is nothing about the society that can be fully understood except in relation to how the society developed ... In a word, Canadian society can be understood only if viewed within an historical perspective' (1976a, 5). There is another justification for the development of a distinctive Canadian sociology. The application of concepts developed to explain other societies can certainly tell us something about the ways in which we resemble or

90 The Creation of Regional Dependency differ from other societies, on dimensions relevant to them rather than to us. However, the application of American or European concepts to Canadian society leads us to see ourselves as a variant of American or European society, rather than as an entity in our own right, and it deters us from looking for those dimensions particularly relevant to our own society. As a result the unique character of our own social organization may be completely overlooked. As Clark notes, 'It will be objected, of course, that sociologists in Canada cannot avoid doing what American sociologists do, because the problems of the two countries are the same ... If one looks for nothing different, one is not likely to find anything different' (Clark 1974, 18) . Hiller points out that, 'to the extent that the rules of scientific logic and procedure are globally similar, sociology retains its claim to universality. To the extent that the aim of sociology is to build a strong comparative framework, the discipline is universal as well. However, to the extent that social life is too diverse and society-specific to be explained with universalistic theory, sociology benefits from the existence of national sociologies that attempt to grapple with the meaning of social life in a particular national context' ( 1979, 132). But there is a limit on how far this type of analysis can go. If there is too great a concentration on the idiosyncratic and unique, one runs the risk of losing sight of the relation of these unique elements to Canadian society as a whole. Indeed, one of the weaknesses of Canadian sociology is that too much consists of studies of specific ethnic groups, social classes, communities, regional groups, and so on, with little attempt being made to link these particulars to the general social structure of Canadian society. Smith touches on this issue when she states that, 'The present structure of local social relations is built into and determined by organizational processes external to it' (1975, 371). Similarly Marsden and Harvey declare that, 'regional or community studies ... are useful only in so far as they relate the social structure or processes of the region to the larger national and international systems within which they operate' (1979, 213-14). A distinctive Canadian sociology must, therefore, identify the most important features of the social organization and relate them to the whole. The argument that general theoretical frameworks developed in the context of other societies have only limited value in relation to Canada should not be taken as a repudiation of general frameworks per se. Indeed, the appeal for a distinctive Canadian sociology is an appeal for a comprehensive framework of analysis attuned to the unique historical experience of Canadians. The basis upon which to develop such a framework can best be laid by analysing two approaches already made in Canadian sociology, one by Clark, the other by Lipset.

91 Significance of Regional Differences Clark recently declared that 'sociologists in this country have fought shy of looking at their society as a society' (1976b, 142), yet he attempted to develop just such a comprehensive approach. His framework rests on the work of two other thinkers, the frontier thesis expounded by Turner and the staples theory enunciated by Innis. Clark's application of the frontier thesis can be found throughout his early work. He argues that Canada had a frontier experience similar to the American one which led to a weakening of traditional ties and religious ethics (1942; 1948). Indeed, he argues that the frontier fostered irregularities and that the resultant 'maladjustment' characterized Canadian social development after 1920 (1968, 112). If Clark borrowed from Turner, he imitated Innis. Innis emphasized the economic importance of the fur trade ( 1930) and so Clark examined the society which had fostered it. As he says, 'It was an effort to look at the Canadian society within a similarly historical perspective which guided my first attempts to study it' (Clark 1976a, 5). Likewise, where Innis documented the development of Canada's fishing economy, Clark analysed the development of eastern maritime society (1942). However, missing from Clark's work is the sense of original theory and perspective which so infused and enlivened Innis' analysis. Innis developed the staples perspective to explain the economics of Canadian resource development but there is no similar explanation of the sociology of resource development in Clark's analysis. Whereas Clark worked to merge the frontier thesis with Innis's economic theories, Lipset sought to merge it with American functional sociology, arguing that the different frontier. experiences of Canada and the United States had produced different value orientations. He then tried, with little success, to 'prove' the validity of his contentions by using Parsonian pattern variables ( 1965). Both Clark and Lipset use the frontier perspective but, in developing a comprehensive sociology of Canada, they take different tacks. Lipset's is probably more sociological in its attempt to fuse the frontier approach with the functionalist sociological paradigm dominant in the United States in the 1950s and early 1960s. Clark attempts to fuse frontier theory with Canadian economic history and, because he focuses on some of the uniquely Canadian patterns of development, his work may have more explanatory power than tipset's which simply applies two frameworks borrowed from American theory to Canadian society. Chief among the shortcomings in both comprehensive approaches is the emphasis on frontier determinism. The frontier undoubtedly influenced Canadian development a century ago but it is hard to accept that it is still a dominant factor in Canadian social organization. Clark's assertion that the unique character of Canadian society can be understood only in terms of the

92 The Creation of Regional Dependency distinctive historical experience which shaped it is well founded, but both authors place so much weight on that experience as a determining factor in present day events that they obscure the intricate social processes now taking place. Significantly, both analysts fail to demonstrate empirically the supposed causal link between the frontier and existing values. Ultimately, the frontier thesis fails to explain the historical facts of Canadian development. It is a prime example of how a perspective borrowed from American theory can fail to illumine the unique aspects of Canadian society. Adherents to the Laurentian or metropolitan school of Canadian history argue that, in Canada at least, the primary influence in shaping the country came not from the frontier but from the urban-commercial centres of Europe and eastern Canada. Moreover, they argue that that influence was strengthened by the easy access to the frontier provided by the east-west St Lawrence waterway. That made the development of western Canada very different from that of the western United States. The waterway gave eastern commercial interests a route to the heart of Canada and enabled them to dominate the western frontier in a pattern of development very different from the one in the United States. Careless sums up the basic differences between frontierism and metropolitanism as follows: The chief point to observe is that the rise of metropolitanism is the other side of the coin to frontier expansion ... It may be seen when this analysis is carried through that the frontier, far from being essentially independent and self-reliant, is in the largest sense a dependent. It constantly requires metropolitan aid and control, though by the same token it may come to resent and resist it. (1967, 80) Historically speaking, the functioning of metropolitanism may do more to explain the course of Canadian history than concepts of frontierism borrowed from the United States and set forth before the significance of the modern metropolis was clear. (ibid. 82)

Indeed, metropolitanism is an interpretation of Canadian history which focuses on how a unique commercial structure underlay the whole of Canadian historical development. It serves as a model of the type of explanation advocated here as the basis for a distinctive Canadian sociology. There are other reasons for being uncomfortable with Clark's and Lipset's approaches to a comprehensive understanding of Canadian society. In varying degrees both are concerned with discerning the nature of Canadian national character. Studies of national character have always been part of sociology and also of anthropology as studies of culture and personality. They

93 Significance of Regional Differences have always run the risk of degenerating into stereotype, in part because of the difficulty in providing empirical proof that a deeply held and unconscious belief is widely distributed throughout a whole society. Both Lipset and Clark have avoided the obvious pitfall of trying to ascertain such fundamental beliefs through some introspective technique and have focused instead on observable patterns of behaviour that may demonstrate underlying value orientations. But values, by definition, are not directly observable and supposed empirical indicators may always be challenged as based on speculation and interpretation. This difficulty is compounded in Lipset's work by his attempt to look for unifying value orientations which characterize the whole society. There are obvious obstacles to such an endeavour in any society as differentiated and complex as Canada. Undoubtedly there are some broad values and beliefs held in common by most Canadians but most people throughout the world would profess similar ideals. They can hardly be considered distinctively Canadian. It might be possible to assess the national character of societies with a common culture where little social change has occurred, but Canadian society is so complex and has changed so rapidly that any such attempt seems fruitless. As Careless has observed, 'Canada, if one nation, is eminently divisible' (1969, 1). Canada has major ethnic cleavages, social class barriers, and regional divisions. To search for unifying and homogenous factors in the face of such diversity seems pointless. Studies which attempt to interpret Canadian society by searching for a common set of values have two major weaknesses. An assumption is made that there is unity in Canadian society and facts are sought to support this assumption. The many social and behavioural indicators which might well have led to the opposite conclusion frequently are ignored. This seems particularly true in studies which credit one particular factor or event with shaping the whole of Canadian development, the frontier experience, for example, or the northern identity, or the loyalist influence. As Hardin has noted, those studies 'seem to be looking for common characteristics and for a common rootedness which aren' t there' (1974, 9) . Perhaps more important, by focusing on and searching for a unity of values, many studies frequently ignore the fundamental social organization of Canadian society. This study has shown that regional divisions are basic characteristics of Canadian social organization and numerous others have documented fundamental ethnic and social class divisions. To ignore such basic organizational cleavages while searching for nebulous unifying values does not seem logical. Indeed, to assert that there is a unity in Canadian society in the face of these divisions seems to be unjustified.

94 The Creation of Regional Dependency To understand the unique nature of Canadian society it is necessary to move away from the search for common values and focus instead on the nature of Canadian social organizations. The most distinctive feature of Canadian social organization is not its unity but its diversity. Consequently, a comprehensive Canadian sociology capable of analysing the most unique features of Canadian social life must focus on diversity and differences. In Hardin's words, we need to 'go at the puzzle backwards' (1974, 12). A distinctive Canadian sociology is one capable of explaining the diversity of Canadian society. Significantly, dependency theory focuses on social structure and social organization and assumes that divisions and the conflicts they produce are critically important aspects of social life. Historical evidence and recent events suggest that three aspects of Canadian life contribute most to its diversity: its ethnic, class, and regional divisions. Any comprehensive interpretation of Canadian society must give consideration to all three. However, as the empirical evidence presented earlier clearly demonstrates, regional divisions are particularly important in all aspects of Canadian social life, social organization, and consciousness. Dependency theory seems exceptionally useful in explaining the nature of these regional divisions while at the same time linking them to the social class and ethnic structure which sustains them. Dependency theory thus provides a strong basis for developing a sociology capable of explaining the most important and unique aspects of Canada's social organization. At least one obstacle remains, however. Dependency theory, like other approaches discussed in this chapter, is not a Canadian creation but a borrowed framework. However, even the major American theories so castigated by Canadian nationalists have their roots in European theories, and the development of a totally new framework for interpreting Canadian society, though ideal, is unlikely. Instead, it is more likely that a theory developed externally will slowly be adapted and altered to explain more and more of the distinctive attributes of Canadian society. Dependency theory seems to be an excellent candidate for this role. First, as was pointed out in chapter 3, it is compatible with long traditions in Canadian economic history and sociology and this should make a synthesis of the two relatively easy. Second, its strong commitment to historically relevant explanations of society should lead those who employ it to consider the historical experience of Canada and the way in which it has shaped our present social organization. Third, more dependency theorists are realizing that the process of dependency is not the same everywhere, and are using the framework to explain unique reactions to dependency in specific empirical settings. Their work provides a model of how the framework can be used in Canada to help illumine some of the

95 Significance of Regional Differences unique features of our social organization. Finally, dependency theory focuses on the divisions and conflicts within a society, a focus more likely to lead to an explanation of what is unique in Canada than a focus on unity and harmony. Canada is a society of fundamental divisions and differences where regional divisions and differences are particularly important. Dependency theory cannot, of course, explain all aspects of Canadian society, but it seems particularly suited to explaining the origin, nature, and persistence of these regional divisions and relating them to other aspects of Canada's social structure.

PART TWO

Regional Development in Canada: Policy and Theory

The first part of this book was concerned with the general issues involved in the identification, explanation, and significance of regional differences. It also examined how regional differences in Canada could be identified and explained. Though still concerned with regional phenomena, the concern here is with the nature of regional development and regional development policy. Though this part examines Canadian regional development policies and practices, the chapters in it attempt to build, out of the Canadian experience, a general theoretical framework about the nature of regional development policy and its application. This part departs from the previous one in other ways as well. The nature of dependency theory, a major preoccupation in Part One, is not the focus of attention here. Rather, the concern here is with how the dependency of certain regions of Canada occurred and the role of government policy in creating that dependency. Conversely, there is an examination of those regional development policies now being employed in an attempt to overcome regional dependency. Part One emphasized that any consideration of regional differences and disparities must consider the subjective perceptions of both the planners and those for whom the plans are being made. This part is concerned with the nature of these subjective perceptions, particularly with how they have influenced regional policy formation, dependency, and underdevelopment in Canada. An underlying theme is the nature of value orientations. The chapters in this part examine the value orientation underlying regional development policies and how they appear to differ from those of the people for whom the policies were designed, leading the latter to respond in ways that are seen by planners as unpredictable and undesirable. The value biases of individual researchers in investigating such value-laden issues as those involved in regional policies are also discussed.

98 The Creation of Regional Dependency Chapter 5 examines the value orientations which historically underlie Canadian regional development policy. It is argued that since the early 1960s the value orientation of these policies has shifted from focusing on rural development to emphasizing urbanization and industrialization. As a result deliberate efforts have been made to move some of those perceived as 'excess' population from rural to urban areas. It is also argued that the general thrust of Canadian regional development policy may in fact be increasing the dependency and underdevelopment of regions such as Atlantic Canada. Chapter 6 describes and analyses a federal program aimed at moving people out of rural areas. The Newfoundland Resettlement Program was intended to phase out up to 700 communities. This chapter examines the value orientation shaping the program and the process of resettlement. In these communities the process leading to the decision to resettle as well as the moving process itself bore many of the characteristics of collective behaviour such as one finds described in studies of crowd formation , panic, and disaster. The analysis here shows how this pattern of 'collective contagion' was essentially caused by the structure of the resettlement program and by the actions of those responsible for administering it. Chapter 7 focuses on the role of a researcher and is concerned with values and value freedom in sociological research, particularly when that research involves an evaluation of the effectiveness of social policy. It shows how such research calls into question the whole issue of objectivity in social scientific research. This chapter suggests that some semblance of rational judgment can be maintained in policy research only through a direct focus on all values involved in the formation and application of social policies. The analysis in chapter 8 stems from the author's research on communities that refused to resettle. That research demonstrated that people judge the quality of life and potential well-being of their communities using different values from those of planners and focus on different aspects. Previous work (Matthews 1976) demonstrated that planners often judge the wellbeing of communities on the criteria of economic viability while the residents use criteria of social vitality. Chapter 8 expands that distinction into a framework of related concepts which can be used to examine the key social dimensions of any community, the relations of public policy to that community, and the relation between any community and the larger region and society in which it is located.

5

Federal Regional Development Policy

Regional disparities have been a pervasive feature of the Canadian economic landscape since well before the turn of the century. The economic, social, cultural and political structure of the country has been shaped and conditioned by the existence of regional disparities, and their persistence has continued to pose Canada with one of its principal problems of public policy. (Mark Daniels [l 981 , 551)

The above quotation implies that the present pattern of regional economic disparities in Canada existed before Canada was formed , and has thus shaped its social, economic, and political structure. Such a view ignores the fact that the present pattern of regional economic differences in Canada was not preordained but has been created. That pattern has been created since Confederation, and is the product of political, economic, and social forces operating in this country. The causal relationship between those forces and regional economic disparities is largely the reverse of that depicted by Daniels. It is therefore useful to begin this analysis with a brief look at how these disparities occurred. ORIGINS OF REGIONAL DISPARITY

It is clear that economics played a major role in Confederation. Though it is now easy to regard ihe Maritimes as having always been poor and the central area as always developed, that is not historically accurate. Before Confederation Nova Scotia and New Brunswick had engaged in a lively and highly profitable trade in fish , timber, ships, and even mineral products with Great Britain, the United States, and the West Indies (Acheson 1977; Naylor 197 5). In contrast, central Canada was at a disadvantage. Cut off from the sea when the St Lawrence was frozen, its supplies and few staple exports had to

100 The Creation of Regional Dependency go overland via New York and Boston. In summer many supplies entered New York in bond and had to be shipped up the Lake Champlain waterway to Montreal and Ontario through various canal systems in upper New York state and Pennsylvania. In the second half of the nineteenth century even this tenuous trade route was threatened by American talk of posting tariffs on trade through New York and by the possibility of war. If the central region of British North America were to develop it needed its own railway to the sea. Confederation was of obvious economic benefit to central Canada for l\ would provide a direct land route to the sea for that railway. The leaders of the maritime provinces were unable to see equal benefits for their territories and steadfastly opposed confederation. By the 1860s, however, they had been convinced that their traditional trade with the north-east United States would be unaffected by confederation and that the proposed railway would give their industries access to the largely unindustrialized regions of.Montreal and Quebec. Thus, Confederation became a reality. However, as Hutcheson (1978, 38) points out, Confederation was only one stage in a long-range plan for the development of British North America from sea to sea. Canada had to expand westward quickly, for American settlers were already threatening to spill northward into the north-west. To expand westward would require an influx of population to fill up the west, the development of an economic base to supply it, and a railway to import goods to western settlers and bring out their agricultural produce. The post Confederation government of John A. Macdonald had to develop policies not only to encourage immigration, but also to develop the economy of the new country so that it could sustain the cost of railway construction both east and west. Accordingly, regulations were passed favouring the immigration of central Europeans. To take care of the economic needs of the country a 'National Policy,' which placed tariffs on imported American goods and culminated in the Tariff Act, was passed in 1879. Its purpose was to cut off the flood of American goods into Canada, to encourage the development of Canadian industry, and to provide income for the construction of the railway from the tax revenue. In retrospect, this tripartite combination of confederation, immigration, and taxation established the pattern of regional specialization and regional economic disparity which still exists. Confederation originally had little effect on the pattern of trade or on the economy of the Maritimes (Acheson 1977, 91) but the economic structure was altered substantially by the imposition of Canadian tariffs and by retaliatory measures taken by the Americans. Merchants and industrialists in the Mari times were largely cut off from one of their major markets and sources of supply. In addition, in the 1870s a decided slump in the market for ships

101 Federal Development Policy and ships' spars affected almost one-third of New Brunswick's exports and a sizeable portion of Nova Scotia's trade (ibid. 1972, 3). Ironically, the tariffs originally renewed prosperity in the maritime region. With improved rail links the maritime merchants and industrialists became the only suppliers for the whole central Canadian market as there were comparatively few industries in Ontario and Quebec. Indeed, maritime merchants rushed to expand their operations to keep up with the new demand and by 1855 the region was undoubtedly the industrial centre of the new dominion. 'With less than onefifth of the population of the Dominion, the region contained eight of the twenty-three Canadian cotton mills - including seven of the nineteen erected after 1879 - three of the five sugar refineries, two of the seven rope factories, one of three glass works, both of the Canadian steel mills, and six of the nation's twelve rolling mills' (ibid. 14). Industrial growth was accompanied by the development and expansion of financial institutions throughout maritime Canada. Almost every town had its own savings bank which would finance local merchants who wished to construct new or expand existing manufacturing operations. In this period three of the six current national banks in Canada were formed in Halifax. Until 1890 it appeared as if the maritime region would reap the most economic benefit from Confederation. Maritime underdevelopment followed quickly in the 1890s, however. The Maritimes were at the end of a 2,000 mile rail supply line to the new markets in central Canada. As long as there was little industry in the centre of the country, this did not matter. But one of the goals achieved by the tariff policy was the development of industry in Ontario and Quebec. This new industry could supply the central market far more cheaply than industry in Atlantic Canada, which had to pay costly transport charges to get its goods to market. The result was a series of failures in Atlantic industry and, by the early decades of the twentieth century, the dominant industrial power had shifted to Montreal and Toronto. A similar shift occurred in financial power. As industries in the Atlantic region collapsed, they undermined the community banks which simply were not large enough or diversified enough to withstand the economic shock. Many simply folded. Moreover, Naylor (1975, 1) documents that those banks which did survive were bought out by the growing financial groups in central Canada. Economic control thus shifted west also and the headquarters of the major banks were moved to central Canada. The new central financial groups had little interest in encouraging economic growth in Atlantic Canada. Instead, most of the savings deposited at branches throughout the Atlantic region were used to finance industrial and railway expansion in central and western Canada. In short, the Maritimes were reduced to financ-

102 The Creation of Regional Dependency ing, in part, their own growing dependency. As Naylor says: 'When the maritime banking structure disappeared ... its demise showed a remarkable synchronization with the end of economic and social advance in the area. Maritime underdevelopment and the loss of its financial independence went hand-in-hand' (ibid. 150). As the Mari times declined in economic well-being, the centre of the country flourished, in part because of the entrepreneurial activity of its business and commercial elite. The commercial elite of Montreal and, to a lesser extent, Toronto were also those most directly involved in railway construction and in banking. In addition, many were actively involved in federal and provincial politics, some being part of Macdonald's government (Berton 1972). Under such circumstances, it was understandable that the state became the instrument of the dominant class. Banking policy, railway policy, and tariff policy all increased the wealth of those in economic and political power in central Canada. Yet the 'National Policy' did not work entirely as had been planned. Comparatively few Canadians in central Canada became directly involved in industrialization. To fill the vacuum and circumvent the tariff, American industrialists began to build plants in Canada. Although the goods they produced were more expensive than when they had been supplied from the American operations, the tariff provided protection from competition from industries in other nations. Most American industrial investment was in central Canada partly because that was where the major untapped market was and partly because it was closer to American operations in upper New York (Chorney 1977, 126). Thus the Tariff Act of 1879 not only undermined the industrial base of the Maritime provinces, but also established the branch plant phenomenon characteristic of so much Canadian industry today. By locating primarily in Quebec and Ontario the branch plants contributed to regional industrial disparity. Ray calculated that 45 per cent of American-controlled manufacturing employment in the 1960s was within 100 miles of Toronto, 64 per cent within 300 miles, and 83 per cent within 400 miles. He also calculated that, if American-controlled manufacturing employment had the same distribution as Canadian-controlled employment, there would be an increase of approximately 20 per cent in employment in the Atlantic provinces (Ray 1968). The western region of Canada was intended to serve as the economic hinterland. The policy of encouraging immigration from central Europe ensured that the prevailing social elite would not include residents of the west. Without a background from one of the two 'charter groups' of English and French, newcomers would find it difficult to reach the corridors of economic

103 Federal Development Policy power. The fact that they were isolated in small communities some 2,000 miles from the seats of power did not improve their chances. If Canada were to fulfil its 'national dream' of stretching from sea to sea, however, the railway had to be built and the west had to contribute to the cost. While the railway became the means whereby western agricultural produce came east for milling and shipment, it also increased the economic well-being of Ontario and Quebec merchants. As the means of shipping goods manufactured in Ontario and Quebec westward, it increased the economic well-being of Ontario and Quebec producers, giving them a further edge over their competitors in the maritime provinces. It is doubtful if Macdonald and his colleagues were far-sighted enough to see the eventual consequences of the tariff on the regional structure of Canada. As Careless has recently argued, 'the imposition of the tariff was not just centralist greed and self-interest, but part of a genuine nation-making effort' (1981, 32). Though it is the west which now reacts most strongly to the consequences of early Canadian tariff policies, the west in 1879 was little more than 'a few whites and a long-standing thinly spread community of Indians and Metis in the wilderness .. .' (ibid.). The west as we know it was created by these policies. If any region of the country has a right to complain it is not the west, however, but the Maritimes. The preceding overview of Canadian economic history demonstrates the validity of the contention that the pattern of regional disparity existing in Canada today was not natural but created. It is worth noting that the Leader of the Opposition in Canada, the Honourable Joe Clark, also shares this opinion, declaring in the House of Commons, 'But it is in fact quite justified for the West and Atlantic and Northern Canada to note that national policy, from the construction of seaways, through to most transportation and tariff policy, has encouraged growth to concentrate in Canada rather than to disperse in Canada' (House of Commons, Debates, 18 February 1977). Too often planners and politicians, like most Canadians, think of the Maritimes as having always been backward and naturally underdeveloped, and of the central region (particularly southern Ontario) as fertile ground for industry. That this simply is not true should be considered in regional planning. This overview also raises the issue of the continuing effect of historical patterns and social structures on Canada's regional structure. The current pattern of regional differences and disparities was created in the process of making Quebec and Ontario economically strong. If that pattern persists today despite fifty years of programs aimed at changing it, one must surely ask if these two provinces still benefit so greatly because they use their power and influence to frustrate any such programs. If that is the case, policy

104 The Creation of Regional Dependency makers must first discover ways of neutralizing that influence before their policies can be effective in eliminating regional disparities. THE CHANGING VALUE ORIENTATION OF REGIONAL DEVELOPMENT POLICY

Any policy is a goal-value system, an attempt to achieve a goal deemed legitimate in terms of a set of values. Usually a policy spells out in detail the means whereby a goal is to be achieved. Thus social and economic policy can be conceptualized as a means-end schema in which the means and end are governed by certain values. The following discussion will examine the changing value orientations inherent in Canada's regional development policy. Canada's regional development policy began with Confederation and was effectively established with the imposition of the Tariff Act of 1879. These developments were not seen as regional development policies, and the pattern of regional development and regional underdevelopment which they created was not necessarily a deliberate goal. In contrast, during the last fifty years the federal government has attempted to find ways to eliminate at least the most extreme regional disparities. These efforts began in March 1935 when the Prairie Farm Rehabilitation Act was passed in an attempt to alleviate the growing plight of western farmers. To open the west, tracts of land had been granted to railway companies which in tum sold portions to prospective farmers. Frequently the land was not productive, especially in southern Saskatchewan and Alberta, in which some areas are technically classified as desert. In the 1930s the plight of prairie farmers was compounded by dust-bowl conditions, which made farming impossible throughout much of the west, and by an international depression which left little market for those crops that were grown. The result was that many farms were abandoned, their operators joining a flood of migrants to the city to compete for work with the large numbers of unemployed there. The Prairie Farm Rehabilitation Act provided limited funds to farmers to keep small farms operating. In 1948 a similar program was established to open new farmland in the maritime provinces under the Maritime Marshlands Rehabilitation Act (Buckley and Tihanyi 1967, ii). It is clear that both programs placed a high value on rural development . Similar values were incorporated in a more ambitious program begun under the Agricultural Rehabilitation and Development Act passed by the House of Commons in June 1961. This was the first attempt at formulating a comprehensive regional development policy for Canada (Daniels 1981, 56). ARDA focused on 'land use' projects designed to 'salvage lands as agriculture

105 Federal Development Policy retreated from marginal areas' (Buckley and Tihanyi 1967, 18). Most of its early programs were small, but by the mid- l 960s a co-ordinated farm consolidation program was planned for rural Ontario and it was followed by similar programs for other regions (ibid. 21-2) . In the mid-1960s these programs came under close scrutiny from economists. In a study commissioned by the Economic Council of Canada Buckley and Tihanyi were highly critical of the land development strategy of ARDA and its predecessors: 'The farm assistance policies advanced by ARDA are remarkable for their tendency to evade the question of what might constitute an effective solution for marginal farm units ... ARDA farm programs are judged unlikely to have had any appreciable impact on the problem of lowincome farming' (ibid. 16-17) . Their report outlined two ways of promoting per capita economic growth in any area. The first was assistance with 'development projects' and the second, described as 'labour force adjustment' and later simply as 'adjustment,' incorporated measures designed to encourage the movement of population out of underdeveloped areas (ibid. 17). The term 'adjustment' is frequently found in economic policy proposals and generally is used as a synonym for changes regarded as desirable. As those who use the term tend to see the economic system as operating through a natural sequence, it is common for them to assume that the desired adjustments should be made in the rest of the social system. Quite frequently those who argue for adjustments and particularly for 'labour force adjustment' are arguing for some measure of labour force migration. This was true of Courchene's theory (see chapter 3), and it is also true of Buckley and Tihanyi's analysis as their report makes clear. In the long run, departures from the area of origin will tend to improve the local balance between labour and physical capital (including natural resources) in favour of the latter, making possible the attainment of higher productivity for the remaining labour force. Under the conditions prevailing in most parts of Canada, it is likely that a lowincome rural area must rely heavily on downward adjustments in the size of its labour supply before significant increases in local productivity can be hoped ,for. (ibid. 17)

It is also noteworthy that Buckley and Tihanyi seem to consider 'adjustment' a more important goal than rural development projects which they regard as frequently the result oflocal pressures that tend to compromise fundamental economic principles: 'ARDA cannot remain immune from the pressures to provide "development" of a locally tangible nature even if program planners themselves realize the strong need for "adjustment." This pressure can

106 The Creation of Regional Dependency easily lead to situations in which economic principles are compromised and projects are accepted for ARDA financing even when they are economically unsatisfactory' (ibid. 19). Buckley and Tihanyi's analysis was not the only basis for an attack on existing regional development policies. In the 1960s the growth-pole theory expounded by Perroux and Hirschman was gaining a considerable following among regional planners in Canada. As we have seen, that theory was clearly antithetical to rural development, arguing that regional economic growth can be stimulated best by establishing large 'master' industries in underdeveloped regions. Such industries were seen as capable of altering the whole pattern of economic relationships within the region by developing strong links with the suppliers of raw materials and services on the one hand and with those outlets receiving the products on the other. It was assumed that one of the advantages of building a master industry was that it would encourage many users of its product to establish in the underdeveloped region as well. Industry on the scale envisaged by the growth-pole theorists requires an extensive work force and services usually available only in a larger centre, and industry of that size would obviously produce more goods than could be consumed locally. Thus there is a decided orientation in favour of urban development in the growth-pole theory that is the antithesis of the orientation towards rural development found in ARDA . As a result, the principles of growth-pole theory informed all Canadian regional development planning from 1965 through the next decade. In 1965 the federal government established the Fund for Rural Economic Development (FRED), in many ways a compromise between old techniques of development and new growth-pole theories. The focus remained on rural development but there was a decided emphasis on rural adjustment as well that involved farm consolidation and the assisted migration of 'surplus' population from rural areas. The FRED program was undoubtedly the most comprehensive and systematic effort in regional planning and development ever undertaken in Canada. It was based on a growing awareness that regional underdevelopment could not be solved through piecemeal programs and limited assistance with self-help projects. FRED programs were envisaged as comprehensive federal-provincial co-operative exercises to be completed in stages. The first stage involved research into the social and economic problems of selected target areas. This was followed by months and years of carefully worked out and integrated planning designed to overcome them. When this was completed the program entered the 'plan implementation stage' (Poetschke 1971, 273). Unfortunately, by the time that much of the planning had been accomplished, federal policy had changed

107 Federal Development Policy and the FRED program was cancelled. Only five plans were ever approved. Four were relatively small localized plans (ibid. 275-80) all of which expired in 1976 (Daniels 1981, 57) . Only the Prince Edward Island Development Plan, which continues until 1984, was extensive enough to take full advantage of the FRED program. The cancellation of the FRED program coincided with the election of Pierre Elliott Trudeau as prime minister of Canada in 1968. Trudeau moved regional planning into the political arena in that same year. His campaign platform had rested largely on two promises. In Quebec he informed his audiences that, if elected, he would introduce measures to provide French-speaking Canadians economic and social equality with English Canadians throughout the country. In much of the rest of the country he argued that regional disparities had the same potential to divide the country as did the more publicized division between French and English and he declared that, if elected, he would make an effort to rectify them (Phidd 1974, 174). Shortly after his victory, Trudeau established the new Department of Regional Economic Expansion (OREE) . There can be little doubt that OREE policy was based on the growthpole theory of development. Early statements outlining its programs and goals referred to three related programs: infrastructure assistance, industrial incentives, and social adjustment (Francis and Pillai 1972, 46). All three were to take place in 'special areas' selected by the department in co-operation with the provinces (ibid. 54-5). These 'special areas' were selected primarily in the belief that certain centres within underdeveloped regions could be made attractive to industry once 'substantial improvements have been made to the infrastructure and social services currently available in them' (ibid. 54) . Between 1970 and 1973 twenty-three areas were identified as 'special areas' entitled to special assistance (Daniels 1981 , 57). The areas were large and included all of the island portion of Newfoundland, much of the Atlantic provinces, almost all of Quebec, much of eastern and northern Ontario, and a substantial portion of the western provinces. Within these special areas certain centres were given special 'infrastructural assistance.' The orientation of OREE is evident in its statement that such assistance was designed 'to provide the utilities and services that industry requires' as well as 'adequate social capital facilities to meet the needs of the growing population' (ibid. 55, emphasis added). Twenty of the twentythree special areas were designated for infrastructural assistance (ibid. 56) . Obviously, OREE programming favoured urban growth and industrial development. In addition to infrastructural development to make selected centres attractive, industries would be attracted by direct cash grants to encourage them to set up operations or expand existing plants in the 'special areas.' As

108 The Creation of Regional Dependency Daniels notes: 'The industrial incentives program instituted by the Regional Development Incentives Act continued to be aimed at the private investor and was, indeed, the only major regional development program not funded under cost-sharing arrangements with the provinces. It provided incentive grants and loan guarantees to companies to establish, expand, or modernize industrial activities in designated areas' (ibid. 57-8). With its focus on industrialization and urbanization, DREE programming was the embodiment of the growth-centre strategy. Canadian regional development policy had made a 180-degree turn from 1930 to 1969. Moreover, its dominant consideration was economic development and relatively little effort was spent in examining the social structure and social vitality of the areas affected by DREE programs. By the mid 1970s DREE policies were beginning to receive considerable criticism. It was suggested that the Liberal party had used DREE programs to reward industries for partisan financial support (Phidd 1974, 185-8). DREE was also accused of paying industries to close old plants in industrial areas and open new ones in underdeveloped areas, without any net gain in jobs. David Lewis, the New Democratic party leader made such criticisms the basis of his campaign book ( 1972). However, by far the most criticism came from the provincial governments. DREE's cost-sharing infrastructural assistance programs placed a heavy burden on the provinces, many borrowing money to take advantage of available DREE funds. Furthermore, the industrial incentives program was a source of irritation because it operated without any direct provincial involvement. Perhaps because of this, most special area agreements had been allowed to lapse by 1975 and DREE programming began to take another tack. After 1974 the general thrust of DREE policies centred on greater co-operation with the provinces and decentralization of administration. DREE worked out 'General Development Agreements' (GD As) with each of the provincial governments except Prince Edward Island where the massive FRED program was still in effect. Those agreements still fostered DREE policies of infrastructural development, but provincial departments of economic development were involved in identifying the services they most needed, their location, and explicit development strategies to exploit economic opportunities. In addition, DREE decentralized its operations to the extent that two-thirds of its staff worked outside Ottawa in the 'underdeveloped' regions themselves (Daniels 1981, 58). Both measures were clearly intended to meet objections that DREE policies and programs were out of touch with provincial government objectives and provincial needs.

109 Federal Development Policy ALTERNATIVE PROPOSALS FOR A 'NEW' CANADIAN REGIONAL DEVELOPMENT STRATEGY

A continual frustration for a social scientist is the difficulty of proving that a theory works in practice. In contrast, natural scientists and engineers can usually demonstrate that activities based on their theories have worked exactly as they predicted. It is hard to refute the validity of theories which when put into practice can put a man on the moon. In contrast, social scientists rarely are able to experiment on people and societies. They usually must make do with so-called natural experiments which occur by chance in the society around them. Canada's regional planners, however, are more like natural scientists and engineers than social scientists. Particularly during the past two decades they have had an opportunity to apply their theories in an attempt to reduce Canada's regional economic disparities. They have based their plans primarily on a combination of neo-classical economic theory and the growth-centre strategy. It now seems legitimate to examine whether the evidence indicates that they have been successful. In 1971, shortly after DREE programs began, Newfoundland had an unemployment rate of 8.4 per cent. Seven years later it had risen to 16.4 per cent. Indeed, with the exception of Alberta, all Canadian provinces had higher rates of unemployment in 1978 than in 1971. More significantly, the poorer provinces which had received most DREE funding had the greatest increases (McAllister 1980, 39) . If regional disparity is thought of in relative rather than in absolute terms, there has been virtually no alteration in the way in which provinces are ordered in terms of unemployment. Throughout the past fifty years, the Atlantic provinces have consistently had the highest unemployment rates, followed by the prairie provinces, British Columbia, Quebec, and Ontario. The only notable exception to this has once again been Alberta, where recent developments in the oil industry reduced unemployment rates in the late 1970s. There is some evidence that the gaps in income levels among the provinces are narrowing, however. Ontario and British Columbia, which in the 1930s had per capita disposable income up to 30 per cent higher than the national average are now only about 10 per cent above it. The prairie provinces which have had levels as low as 30 per cent below the national average are now generally slightly above it. The Atlantic provinces, despite thirty years of regional planning, have been able to raise the relative position of their incomes only about 15 per cent and remain some 20 per cent below the national average (Daniels 1981, 56). While this trend is certainly in the right

110 The Creation of Regional Dependency direction, one must question if it represents any fundamental change. The narrowing gap may be simply the result of the massive transfer payments made by DREE and other agencies to the underdeveloped regions and may not reflect any fundamental change in economic well-being. It is also possible that the narrowing gap reflects the deteriorating economic well-being of the provinces of Ontario and Quebec rather than any improvement in the poorer provinces. This view is certainly suggested by Daniels, who notes that: 'In the last two decades, a period roughly corresponding with the introduction of explicit public policy instruments aimed at ameliorating regional disparities and promoting regional economic development, there has been little change in income and employment gaps among the regions. To be sure, the disposable income series shows some modest propensity to close since the early 1960's, but even that appears to be a trend which began ten years ago' (ibid. 56) . it is significant that Daniels was, from 1973 until 1979, the assistant deputy minister for planning and co-operation in the Department of Regional Economic Expansion, and later became senior assistant secretary for economic policy in the federal cabinet. He can hardly be considered unfairly biased against DREE and it would appear from his statement that DREE failed to alter significantly the balance of regional economic disparities in Canada. A number of regional development experts have suggested alternatives to DREE programs and policies. In a critical but constructive look at DREE and the alternatives to it, McAllister (1980) suggests that DREE failed largely because of bureaucracy and because no clear and accepted goals were formulated for it by federal politicians. He argues that it is necessary to specify clear goals (figures) with respect to income, participation rates, and unemployment rates. In addition he advocates ending the federal 'poker game' with the provinces. He argues that once federal financial goals and programs have been established, the provinces should be directly involved in their implementation (1980, 19-21) . The most significant aspect of McAllister's analysis is his call for 'regional self-sufficiency' rather than 'the extreme positions of either "small is beautiful" or "big is beautiful"' (ibid. I 9) . Here McAllister clearly sets himself apart from the growth-pole theorists while also trying to distance himself from the perspective of Schumacher (1975) and his followers who advocate small-scale technological development as the solution for underdeveloped areas. To achieve regional self-sufficiency McAllister argues that it is necessary to abandon 'centralist Canadian protectionist policies no longer appropriate as they may once have been' (1980, 41) . In short, he is attacking the program of tariff protection which, as we have seen, was partly responsible for the current pattern of regional disparities. Yet McAllister hedges his bets, warning that 'care must be taken not to go "whole-hog"

111 Federal Development Policy into a freer trade approach' (ibid.). As McAllister sees it, what is needed is regional specialization in terms of the mainstream sections: fisheries, wheat production, key transport nodes, and so on. In addition, he makes a strong case for encouraging smaller scale activities: 'The regions of Canada might be prudent to concentrate much attention on the welfare of small farms, small businesses and the semi-subsistence activities that people can fall back on in times of inflationary pressures. Such activities can provide a 'rar more socially meaning[ul and economically productive cushion than broad social programs such as unemployment insurance or family allowances' (ibid. 41). In many ways McAllister's position is typical of that of an economist from an underdeveloped region. He wants to use central capital but have local influence, to throw off certain protective tariffs which benefit central regions and expand export trade in the resources produced by the peripheral regions. He wishes to build up small-scale local economic activity not only to employ more people in these labour intensive activities but also to provide security in the fluctuating world of staples markets. Yet it would be unfair to dismiss his argument simply because it is more or less what might be expected from a local advocate. Indeed, it is probably the best discussion of regional disparity in Canada written by an economist. McAllister's call for a reduction of centralist protection policies shows his grasp of the role which they play in hindering the development of Canada's peripheral regions. His advocacy of regional specialization shows his recognition of the importance of local resources in any strategy of regional development. In contrast, growth-pole theory advocates the introduction of enterprises with little or no resource Qase in the local region and which must compete with similar operations elsewhere for both their supplies and their markets. Small industries do not have to rely on a distant market for their customers and have the advantage of being closer to the local market than any external competitors. Though their product runs may be small and thus their manufacturing costs higher, that is often offset by lower transportation costs. Finally, McAllister is one of the few orthodox economists who appears to recognize the importance of social factors and 'socially meaningful' work. An alternative position is reflected in the work of Daniels which is more in line with the 'transfer dependency' position. Like McAllister, Daniels recognizes DREE's failure to reduce regional disparities, but his proposed alternatives differ substantially from McAllister's. Rather like the military leader of antiquity who put to death the messenger who brought bad news, Daniels questions the indicators used to establish if regional disparity has been altered, asking if the problem of regional disparity can 'be viewed realistically in terms of these classical indicators' (1981, 58). He does not, however,

112 The Creation of Regional Dependency suggest what indicators might be used in their stead. Daniels bases his approach to regional disparity on a theory of adjustments that must be made if transfers are absent: 'It is a simple matter of arithmetic. If a region has a declining share of output, in the absence of compensating transfers, accommodating adjustments must take place' (ibid. 60). As he notes, these adjustments will involve changes in income, the labour market, and / or demographic factors . Regional development policy from Daniels' perspective seems largely to involve 'adjustments' in these three spheres, while making sure that transfer policies are 'appropriate. ' As he says: 'Regional policy may therefore have to be directed towards accommodating the required adjustment to continued regional imbalance .. . The main goal of regional policy can become one of smoothing the required accommodation' (ibid.) . If regional development policy involves adjustments, Daniels is aware of opposition to using migration as the 'adjustment' to solve regional disparity. He notes that, 'the idea of increased mobility may be simply unacceptable from a human, social and political point of view' and declares that his own proposal does not advocate that solution (ibid. 61) . On the other hand, migration does seem to dominate his attention and he argues that, if other adjustment processes are precluded, 'such net migrations must occur,' and he calls for 'the reduction of barriers to interregional mobility as an important element of regional policy' (ibid.). Indeed, he adds that, if migration is ruled out because of human, social, and political factors, 'the encouragement of a " stay option" will force pressure back on labour market adjustment ... unemployment rates will rise further, and especially if transfers are tied explicitly to such rates through say, unemployment insurance schemes, more income will flow into the lagging region, thus ameliorating the aggregate circumstances in the area' (ibid.). Though he may deny it, this certainly seems to be an argument for using migration as the major adjustment. Daniels' proposals stand in marked contrast to McAllister's. However, the focus on adjustment and migration in Daniels' work is similar in many respects to the neo-classical approach expounded by Courchene and the perspective on regional development policy put forth by Buckley and Tihanyi. As these approaches were contrasted with dependency theory, it is appropriate at this point to examine Canadian regional development policy using dependency theory as a basis. REGIONAL DEVELOPMENT POLICY FROM A DEPENDENCY THEORY PERSPECTIVE

Dependency theory, as we have seen, attributes the economic underdevelopment of peripheral regions in a developed society to an historical pattern of

113 Federal,Development Policy social relationships in which developed regions exploit underdeveloped ones. Underdeveloped regions are exploited for natural resources, labour, and even the capital required for their own exploitation (Mandel 1973). Resources are sent outside the underdeveloped areas for refining, reducing local economic gains. Even if they are refined locally, economic control of local industry usually rests outside the area and the bulk of the profit still leaves the underdeveloped region. The surplus of local labour in underdeveloped regions usually ensures that natural resources can be obtained at minimal labour cost, while this labour pool also benefits manufacturing industries located outside the region. This labour can be drawn in during times of economic expansion and returns home when times are tight. Political leaders, local businessmen, and ordinary citizens frequently purchase goods and equipment manufactured in the economic centres. This ensures a region's continued economic dependency for such acquisitions reduce the amount of local capital available to finance economic growth. Underdevelopment is not simply the process of one region exploiting another, however, but is also a process in which a dominant class, located for the most part in the developed region, comes to exploit the underdeveloped region. Even then, this process does not occur simply through the direct action of the dominant class. Rather, the process of regional subordination and exploitation is actually mediated through the actions of an elite group within the underdeveloped region itself. This group thus serves as a 'bridgehead' for the exploitation of the underdeveloped region (Galtung 1971). It is possible to examine Canadian regional development policy to see if it effectively reduces the dependency of the underdeveloped regions or if it, instead, increases that dependency. In any such analysis, the focus is on whether the exploitation of underdeveloped regions for their resources, labour, and capital is increased or decreased by regional development policy, and on the interests being served by existing policies. At issue is whether Canadian regional development policies counteract the historical pattern of regional and class exploitation or whether they simply reinforce it. It is noteworthy that Hodge, the director of the School of Urban and Regional Planning at Queen's University, has described Canadian regional development planning as 'colonialism' pursued with an eye to exploiting rural and hinterland areas to serve the needs of metropolitan ones (1975, 87-94) . However, Hodge's statement considers only part of the problem with Canadian regional development policies. Such policies do not just serve metropolitan interests over hinterland ones, but also operate in the interest of the dominant class in both the hinterland and the metropolitan areas. A central feature of OREE policies has been the attempt to provide the infrastructural facilities required by industry as well as incentives to private investors in those industries. Par-

114 The Creation of Regional Dependency ticular efforts have been directed towards giving such incentives to investors from outside the underdeveloped region. However, as we have seen, these outside interests have historically played a central role in the process of underdeveloping Canada's peripheral regions. Thus, OREE regional policies have been directed at assisting those interests that have helped create regional underdevelopment in the first place and benefit most from it. Such a strategy of development fails to deal with the underlying structural conditions which create regional underdevelopment. Until a policy able to counterbalance the power of these dominant interests is in place, it is extremely unlikely that the pattern of regional inequality in Canada will be altered appreciably. When industries come from outside an underdeveloped region, the basic aim of the owners is to remove wealth from the area rather than to increase the wealth and benefit the living conditions of those who live there. The fact that some will benefit by employment in the new plant has to be weighed against the cost of lengthening dependency and a future in which economic power and decisions remain outside local regional control. Of course a number of local industries and entrepreneurs also receive and benefit from industrial incentive grants. Such grants benefit the region more for they allow capital to be built up within the local area. Certainly this has advantages over giving funds to outside corporations. However, it should not be overlooked that many such firms are engaged in resource exploitation, and the grants subsidize the export of resources from the region rather than encouraging local development. In cases where local firms receive grants to further secondary manufacturing of local resources before they are exported, a considerable portion of the labour value is added locally and local workers do benefit. Obviously, even more effective are grants to local firms to develop local resources for home consumption. Though this maximizes local advantages, the apparent illogic involved in such an approach remains. Such a strategy attempts to alleviate regional disparity and worker poverty by giving large sums of money to those who are already well-off and who, if successful, will succeed in increasing their fortunes. Somewhat surprisingly, OREE has had difficulty in directing subsidies into local enterprises and the incentive program has tended to favour outside interests. As Usher has demonstrated, the 'principle of need' whereby applicants for incentive grants must prove that they need subsidies and that their projects could not be carried out without them, favours outside entrepreneurs. Firms already operating in the region find it difficult to prove that a proposed investment would not be made without government assistance

115 Federal Development Policy (197 5, 562). There is also considerable evidence to suggest that incentive programs do little to increase the level of capital investment in the region. Springate interviewed executives of firms receiving incentives and found that two-thirds of the firms interviewed would have carried out their projects without the grants (1972). A similar study by the Atlantic Provinces Economic Council (1971) indicated that at least one-third of the firms surveyed would have proceeded to develop without OREE assistance. If grants are made for projects which would have been undertaken anyway, they become the equivalent of windfall profits. When most of the grants are made to investors outside the region, it becomes obvious that the system of incentives is clearly in the interests of an outside dominant class. Finally, if industrialists receive large sums of money from the government, then it is in their interest to see that this type of program continues. The evidence just presented indicates that ultimately OREE programming increased the dependency of underdeveloped regions on outside interests and led to further exploitation of local resources, labour, and capital, exacerbating the problem it was intended to alleviate. It could, of course, be argued that simply because regional development incentives benefit the rich does not mean that they necessarily hurt the poor. An argument can be made that jobs are provided and that the total society benefits from stimulating the local economy. Though Marxists sometimes think in zero-sum terms when it comes to class relations (Poulantzas 1978, 117-19), it is at least worth considering whether in fact regional development policies do benefit. everyone - even if not equally. There is some evidence, however, that, even in the short run, few workers benefitted from the program offered by OREE. Woodward indicates that OREE subsidies favoured assistance for machinery and equipment, a policy 'inconsistent with the department's primary objective - employment' (1974, 162-3, 173) . If that is true, OREE programming offers relatively little employment to the large unemployed labour force of peripheral regions. To be successful the growth-pole model requires that industry be technically efficient in order to overcome the additional costs involved in transporting its goods to market. Such technical efficiency may be antithetical to a policy aimed at promoting employment. PROSPECTS FOR REGIONAL DEVELOPMENT POLICY

There are several conflicting schools of thought within social theory about the relation between the state and the ruling class. Poulantzas contends that a unified capitalist class controls the state structures and uses them for its

116 The Creation of Regional Dependency own purposes (1978). In contrast, Miliband argues that there is at least some degree of 'elite pluralism' where competing elite groups at least ensure that there are some elements of countervailing power within the capitalist system. However, both theorists also qualify their positions. Poulantzas points out that some social policies make it possible for certain dominated classes to usurp some of the economic power of the dominant class as long as its political power remains inviolate (1978, 193), while Miliband argues that in spite of divisions among elite groups, together they still constitute a dominant class within the capitalist system. Miliband contends that, even under 'bastard forms of socialization' the bias involved in the operation of the modern state ensures that capitalist interests automatically benefit from state intervention (1969, 72). Both approaches must lead one to question if regional development policy will ever be able to reduce regional disparities in Canada. According to both analyses, a successful policy for eliminating regional disparity is impossible within the present economic system because it must inevitably benefit some ruling class. In Canada, as in most industrial societies, that class is clustered in the central or metropolitan area of the country. Poulantzas' statements leave open the possibility of developing policies to raise the economic if not the political well-being of the working class in underdeveloped regions. This may potentially be possible. However there is little evidence to suggest that past or present policies have been successful in doing so. Indeed, the historical and contemporary evidence suggests that regional development policy in Canada has favoured the dominant class in both the underdeveloped and the developed regions. If the pattern of regional development policies has been to favour the central regions over peripheral ones and the interests of capital over labour, it is important to consider the conditions under which this pattern is likely to change. Marxists argue that change will come only when the historical forces of capitalism have run their course and the revolution of the working class has occurred. There is little evidence that such a social and political revolution is likely to disrupt eastern and western Canada in the near future, however. An alternative theory of the conditions needed to effect change can be found in Gans (1972) . Gans examines the persistence of poverty despite our belief that it is harmful to our society and despite endless programs aimed at either eliminating or reducing it. He contends that, if any aspect of a social system persists, it must be functional in some way to society. He does not, however, adopt the usual functionalist position that society is essentially a monolithic entity in which all parts must contribute to the functioning of the whole. Rather, he argues that it is possible for certain generally undesirable

117 Federal Development Policy elements of social structure to persist if they benefit the more powerful interest groups in society. He argues that poverty has persisted because it benefits those who hold economic and political power in society and, moreover, he argues that it will not likely be eliminated until 'alternatives' are found to replace it. Gans examines its various social, cultural, and political functions only to find that no apparent functional alternatives exist (within a capitalist system) for some of the main economic and social functions of poverty. The implication for regional development policy is that any policies will likely remain unsuccessful until they are directed at reducing the role played by regional disparity in maintaining the well-being of the central regions and their dominant classes. While both marxists and Gans suggest that it is unlikely that any regional development policies (short of revolution) will ever totally alter the pattern of regional economic disparity in Canada, there are certainly ways to improve the relative position of underdeveloped regions. It is necessary first to reject the growth-pole and master industry approach to regional development and any policy based on it. Such approaches inherently favour the central and dominant interests. Second, any approach based on a pattern of 'adjustment' by migration is unacceptable not only because it is too socially disruptive and unpopular, but also because there is reason to believe that it will not work. Change in the pattern of regional disparity in Canada must occur through policies designed to eliminate the historic pattern of the dependency of the peripheral regions. Protectionist policies which favour central regions over peripheral ones, perpetuating underdevelopment, must be eliminated. Deliberate attempts must be made to enhance the economic self-sufficiency of underdeveloped regions by developing local resources and industries which will satisfy local needs. In this way underdeveloped regions can have an economic advantage in production and begin to reduce their economic dependency and the constant drain of scarce capital. Finally, and most important, is the need for employment. Efforts should be made to promote labour-intensive rather than technologically efficient industry. The fundamental goal of regional development policy should be regional self-sufficiency, not industrialization and urbanization. Yet there is little evidence that the federal government will ever adopt such guidelines to regional development. If it is not forced to do so by the provinces, our peripheral regions are doomed to a future of underdevelopment perpetuated by our regional development policies.

6 A Study in Regional Development and Collective Behaviour: The Newfoundland Resettlement Program

The Newfoundland Resettlement Program was designed to eliminate many rural Newfoundland communities and existed as a joint federal and provincial program from 1967 until 1975. During that period it assisted approximately 150 Newfoundland communities to move. However, its operation created considerable debate, and there was much opposition to it from academics, journalists, and some of those most affected by it. Though the resettlement program and its consequences have been described in detail in other works, there has been little attempt to go beyond description and explain some of the social behavioural processes involved in it. One reason for doing so here is that an analysis of the resettlement program provides a useful bridge between the structural analysis presented in the previous chapters, and the more voluntaristic perspective incorporated in the remainder of this book. The resettlement program embodied the values of the growth-pole theory of regional development. It was an attempt to move a significant proportion of the population of Newfoundland out of rural areas into larger centres. It was hoped that, in doing so, a sizeable number of underemployed and unemployed would find stable work in industrial and service jobs. As its origin slightly preceded the FRED program and the critique of the ARDA program by Buckley and Tihanyi, it is the first evidence of a change in orientation in Canadian regional development policy. It may also be seen as an extension of the values of central Canadian planners and perspectives into the culture and way of life of an underdeveloped hinterland region. This will be seen more clearly in the next chapter which focuses on the difference in perspectives and value orientations between those who designed the resettlement program and those who were affected by it. Clearly those affected by the resettlement program did not analyse it as 'a growth-pole strategy of development from a centralist perspective.' They

119 The Newfoundland Resettlement Program had neither the analytical categories nor the inclination to do so. Their concern was how to make the best of their lives in the difficult situation in which they found themselves. Sometimes their 'definitions of the situation' had much in common with those of the policy makers, sometimes not. But once having made these definitions they acted in accordance with them, frequently in ways different from those intended by the planners. When that happens, when people respond differently than anticipated, a general structural approach is often not sufficient to explain what is really happening. Though such an approach shows how local events are part of a larger situation, some very important aspects of social life are missed. To understand fully any social behaviour, and particularly to make an analysis of regionalism and the impact of regional development policy, it is necessary to examine the definitions of the situation by all those involved and to consider how they affect the outcome of public policy. This requires a different type of research and data from that on which the more structured political economy approach is normally based. Fortunately, with respect to the Newfoundland Resettlement Program such data are available from the author's study of eighteen communities 'resettled' Overson and Matthews 1968) and an additional three communities which refused to resettle (Matthews 1976). Those data help reveal how people respond to the structural conditions around them and act in various ways to control and change them. Consequently, this analysis demonstrates the dialectical relationship between action and structure. The analysis in this chapter is focused on the way in which the structure and design of the resettlement program and the actions taken by those involved in its management and operation precipitated a mass movement of population from rural Newfoundland. Though the goal of the program was certainly emigration from rural areas, it had not been envisaged that the response would occur on the seal(? and in the manner it did. Usually less than six months passed between the time a community first showed interest in moving and complete abandonment of that community. Taken by surprise, there was simply not enough time for the planners to 'plan.' They too were responding to pressures brought on by structural conditions. Ironically, the more they tried to take control of the program and simply 'explain' it to people who indicated their willingness to move, the more they precipitated even more hasty migration. We have here evidence of the way in which planners tried, and frequently failed, to take control of their own development policies. The situation provides an excellent illustration of both the power and the impotence of planners. Though much has been written about the resettlement program elsewhere, the analysis here differs considerably from previous work. Much of

120 The Creation of Regional Dependency that earlier work was descriptive, and analysis was generally restricted to an explanation for the moves of specific communities. The analysis here is broader in scope. Though the structure of the resettlement program will be described briefly, no data will be given on the process of resettlement in any specific community. Rather, the aim here is to generalize from a range of specific case studies to obtain insight into the general patterns and processes involved. In this analysis the resettlement process will be examined as a phenomenon of collective behaviour. None of the previous writing on the resettlement program examines it from this perspective. STRUCTURE OF THE NEWFOUNDLAND RESETTLEMENT PROGRAM

The resettlement program began in 1965, but it grew out of a program begun in 1954 by the Newfoundland government which was operated by the Newfoundland Department of Welfare. That program originated in response to a request from a community leader and some residents of several small communities in islands in Bonavista Bay for assistance in moving to the mainland of Newfoundland. Their reasons for wanting to move were understandable. The fishery which had been the mainstay of their existence had been in steady decline for fifty years. Many men had already moved away to work, frequently to the logging camps on the nearby mainland which supplied wood for a large paper mill. The islanders now wanted to move permanently to mainland communities close to the logging camps or to the town where the paper mill was located. The government set up a 'centralization program' to help these people and others like them (Lane 1967). The amount of money provided each family was small, seldom over $400, and to receive it every family in a community had to move. Indeed, no money was received by anyone until the whole community had done so. Under that program 110 communities were moved (Newfoundland 1972a). The 'centralization program' was still in effect when the federal government began to take a greater interest in regional planning. The first interest in resettlement was displayed by the Department of Fisheries which made provision for it in its 1965 budget estimates. For the next several years the program was administered at the federal level by Fisheries and was taken over by DREE only in 1969 when a variety of regional development programs were collected under one minister. In Newfoundland, the development of a resettlement program different from the previous centralization program led to the establishment of a resettlement division within a new department of social and community development. Such administrative arrangements illustrate the difference between federal and provincial perceptions of the nature

121 The Newfoundland Resettlement Program and role of the resettlement program. Ottawa saw it as simply an adjunct of fishery policy. In those communities deemed unpromising for a continued fishery, it seemed reasonable to federal officials to move the fishermen and their families to other locations. Their attitude was similar to that of a large corporation which learns that one of its plants is no longer profitable. Under such circumstances it is often economically wise to close the operation. However, in Newfoundland a different set of values was in motion. Whereas centralization had been considered simply as an extension of the Department of Welfare (with all its concomitant implications about unearned handouts), the resettlement program was the pride of a new department engaged in social planning. In consequence, provincial officials may have administered it more zealously than originally envisaged federally. The resettlement program was enacted through legislation by both the parliament of Canada and the legislature of Newfoundland. In some respects it resembled its predecessor. For example, it stipulated that, before any assistance was granted, at least 90 per cent of the households in any community must certify in writing their willingness to move. In later years this proportion was subsequently reduced to only 75 per cent. However, there were important differences between the two programs. One of these differences was simply the amount of money involved. Those approved for assistance were eligible for $1,000 plus an additional $200 for every household member. This was a significant sum to most fishermen who, in 1968 for example, earned on average less than $700 from fishing. In addition, money was available to help with the cost of moving personal effects and in some cases money was even provided to move houses by barge or specially designed truck to new communities. The most significant difference, however, was that the Resettlement Act required that the move of every household be approved by a specially established resettlement committee consisting of senior federal and provincial civil servants. In practice this meant that the head of each household had to indicate on the application form where his family wished to move and the resettlement committee decided if that location were desirable for that particular household. In general, the committee approved any location for households without children if the adults were beyond normal child-bearing age. They had no interest in interfering with the desire of an elderly couple to go and live near their children in a village as isolated as the one in which they now resided. However, in cases where children or young adults were involved, approval was granted only if the household indicated willingness to move to a centre with good educational facilities and opportunities for employment. Thus the resettlement program involved not only the planned evacuation of certain

122 The Creation of Regional Dependency communities but also the planned growth of certain selected centres and both emigration and immigration became government controlled. One of the weaknesses of the program was that the resettlement committee did not offer any advice on where to move. Perhaps they wished to shoulder no blame for unsatisfactory moves. If so, it surely was a case of planners being unwilling to take responsibility for the consequences of their plans. As a result, some families had to apply several times before they chose a location deemed satisfactory by the committee. The planners drew up a confidential list of what they called 'growth centres,' communities approved for people to move into without any question. From a list of about a dozen communities, it grew to seventy-seven. Given the state of the Newfoundland economy and the high level of unemployment in most centres, it is difficult to determine what could have been the defining characteristics of a 'growth centre' if seventy-seven communities were so identified. It may be of interest to note that at one of its monthly meetings the resettlement committee also drew up a list of communities likely to resettle. This list was based simply on the opinions of the members of the committee and was circulated among them without any title or designation. Its existence was kept secret but it was probably the source of the persistent rumour that the government had a 'blacklist' of communities slated for resettlement. Significantly, many of the communities listed were indeed resettled. RESETTLEMENT VERSUS MIGRATION

Every government report on the resettlement program has emphasized that it was assisting an ongoing and normal process of migration. It is emphasized that Newfoundlanders have always been very mobile, that the island was populated by people slowly drifting along the coast as the local fishing grounds in established fishing centres became overcrowded, and that in recent years the process had been reversed as people moved out of communities where the fishing was poor, virtually abandoning some. According to the statistics, which usually accompany such statements, between 1946 and 1954 some forty-nine Newfoundland communities were totally evacuated without any government assistance. It is possible to quibble with this figure, some of these 'evacuations' amounting to nothing more than the combination of nearby communities in published census reports. However, Newfoundlanders are highly mobile and very small and isolated communities were indeed disappearing even before the centralization program came into effect. The problem is that the conclusion drawn is not true. Neither the

123 The Newfoundland Resettlement Program centralization nor the resettlement program can be construed as assisting an ongoing process. As social phenomena resettlement and migration are completely different. As almost every study of geographic migration clearly demonstrates, certain segments of the population are more geographically mobile than others. Those most likely to move are young people who have just completed their formal education and are entering the job market. Next are young married couples either without children or with pre-school children. By the time a person acquires a family and several years of work experience in a community, it is relatively rare for him or her to think of moving. Resettlement is a very different social process from the slow flow of young people to more urban areas characteristic of many industrial and most industrializing societies. The only common factor is that both involve the movement of people. The fundamental difference is that the resettlement program required a whole community to move and all government activity was directed to that end. Normal migration is obviously completely different. However, it was clearly advantageous to anyone who wished to move to obtain assistance under the resettlement program and they placed enormous pressure on those who wished to remain. Just as most government reports emphasize that resettlement is 'normal,' so they emphasize that no pressure was ever put on anyone to move. The government did not have to exert pressure; pressure was built into the program and was applied by friends, neighbours, and relations within a community. One measure of the extent of this pressure was that most communities moved within six months from the first individual enquiry about the possibility of assistance under the resettlement program. The suddenness of the decision to resettle was indicated by the large number of those who indicated their willingness to move and their desire for resettlement assistance but who did not fill in that part of the document identifying the community in which they wished to resettle. This created some difficulty and, indeed, suggests that some decisions to move were made so quickly that no consideration was given to the place of resettlement. Most community applications eventually were approved on the basis of the signatures with the understanding that each household's relocation site would be negotiated later. In sum, resettlement was a community- rather than an individual-based phenomenon, and this distinguishes it from normal migration. It took place under conditions of considerable social pressure in which those desiring to move usually had to pressure their parents, siblings, uncles, aunts, and all the rest of their family to move with them if they were to qualify for assistance. This collective pressure is not a part of the normal migration process.

124 The Creation of Regional Dependency Finally, the process of moving was sudden and the decision to move was made before thought was given about the best place to relocate. This sudden and relatively uncalculated process also distinguished resettlement from migration. Given these differences the process of community resettlement cannot be understood sociologically using the concepts employed in explaining migration. It is a social process different from migration and requires a different framework of explanation. It can best be understood using those concepts normally employed to explain collective behaviour such as crowd formation, panic, and reactions to disaster. RESETTLEMENT AS COLLECTIVE BEHAVIOUR

Collective behaviour has been variously defined, but most definitions emphasize a considerable level of what is called social strain or stress and a breakdown of the traditional norms and values used to handle that stress. For example, Smelser states that 'some form of strain must be present if an episode of collective behaviour is to occur. The more severe the strain, moreover, the more likely is such an episode to occur' (1962, 48). Smelser describes the 'causes' of strain in terms parallel to those used here to describe social policy, stating that, 'The principal kind of strain on situational facilities involves a condition of ambiguity as to the adequacy of means for a given goal' (ibid. 51). Thus, it is likely that any policy which is itself a goalvalue system and which challenges traditional goals and values in a community places a considerable strain on the residents of that community. The resettlement program placed considerable strain and stress on the residents of many rural Newfoundland communities by challenging the goals and values on which their whole way of life was predicated. It brought into question the legitimacy of those values which had kept families in remote locations for several generations. Barton has developed one of the most useful ways of understanding community-based social stress in his analysis of communities affected by disasters. He defines collective stress as situations in which 'many members of a social system fail to receive expected conditions of life from the system ... It can arise not only from a worsening of conditions, but from a sudden rise of expectations that the system fails to meet, as in a "revolution of rising expectations"' (1969, 38). Barton also suggests that the effects of collective stress on any social system or community can vary in terms of four factors: the scope of impact, the speed of onset, the duration of the impact, and the extent to which a community, on the basis of prior experiences in similar

125 The Newfoundland Resettlement Program situations, is socially prepared for a crisis (ibid. 40-1). These four categories provide a useful guide for an analysis of the impact of the resettlement program as a stress producing agent. Resettlement came at the worst of times for many Newfoundland communities, and promised their residents an opportunity to have the best of times. Though Barton does not emphasize the need for an historical perspective in order to understand collective behaviour, that perspective is important in understanding the scope of impact of the resettlement program. In the midI 960s, most rural fishing communities in Newfoundland were in some ways worse off than they had been previously. Because of overfishing by offshore fishing fleets, inshore fish stocks were rapidly declining. At the same time, overfishing had produced a glut of fish on world markets and most fishermen found it difficult to make an adequate living. In Barton's terms, the residents of many remote Newfoundland communities were indeed 'failing to receive the expected conditions of life. ' On the other hand, a revolution of rising expectations was occurring. Confederation with Canada had brought new social welfare benefits and a number of service-oriented jobs for many. In addition, new roads and schools and such amenities as electricity were reaching every sub-region of the province. The residents of many remote communities without such facilities could look across the bay and envy the electric lights and traffic of neighbouring communities. It is significant that those communities considered most likely to move under the resettlement program were not the most remote but those close to communities which had acquired some amenities. It was 'relative deprivation' more than anything else that produced a rise in expectations and made isolation simply unbearable. If, as Barton suggests, collective stress arises from either worsening conditions or rising expectations that the system fails to meet, then Newfoundland's remote communities in the 1960s were in the interesting position of experiencing both stresses simultaneously. They were thus particularly vulnerable to any policy or program which might intensify either stress. Rapidly rising or falling expectations may produce strain and stress which may indeed lead to some manifestation of collective behaviour, though this does not invariably occur. Most analyses of collective behaviour agree, however, that it is more likely to occur if stress is accompanied by high levels of ambiguity and anxiety (Smelser 1962, 51 , 88; Quarantelli and Hundley, Jr 1969, 542). Certainly, the conditions in rural Newfoundland before the resettlement program began were sufficient to raise the anxiety level of most residents. The manner in which the program was announced not only increased the anxiety but also introduced a high level of ambiguity.

126 The Creation of Regional Dependency The first most rural Newfoundlanders heard about the resettlement program was 'when Joey announced it over the radio.' 'Joey,' of course, refers to Joseph R. Smallwood, then in the middle of his twenty-six years as the province's first premier. He was regarded as a messianic figure, particularly in rural Newfoundland where his staunchest supporters were. He had led the fight for confederation with Canada and was subsequently credited with achieving the material benefits it had produced for most people. So great was his charisma that many homes proudly displayed his photograph and he strengthened his personal power by various tactics suggesting that all government action came through him. For example, in the mid- I 960s anyone wishing to call any government department in the capital of St John's could simply pick up a telephone and dial J-0-E-Y, to be connected immediately with a government telephone operator in the Confederation Building. When Joey announced the resettlement program nearly everyone concerned took what he said very seriously indeed. Unfortunately, no record remains of Smallwood's exact words in announcing the program. However, in many ways, what he said is not as important as how it was perceived. As far as some of his listeners were concerned, Smallwood definitely indicated that up to half of Newfoundland's remote communities would ultimately have to resettle. Such an interpretation is consistent with some of his other pronouncements at about the same time. For example, he called a provincial election to obtain a mandate for inaugurating a new policy of industrial development to replace the fisheries. Though he now denies it, he is widely reported to have campaigned on the slogan, 'Burn your boats - there will be two jobs for every man.' Some of those who were interviewed after resettling made reference to the impact of this campaign slogan on their decision to resettle. In the circumstances, Smallwood's reported statement that many remote communities would have to move was bound to raise the anxiety level of rural Newfoundlanders. At that time, 80 per cent of Newfoundland's 972 communities had fewer than 500 residents. The ambiguity of his announcement meant that people in almost every community began to wonder if they would have to move. It seemed obvious to many that, if moving were inevitable, then there were advantages in being among the first to go. The residents of any community who moved first would have the best pick of the available jobs and the limited number of vacant houses in other communities. Consequently, the manner in which the resettlement program was first announced created conditions precipitating other aspects of collective behaviour. Blumer identifies three 'elementary mechanisms' of collective behav-

127 The Newfoundland Resettlement Program iour which he terms milling, collective excitement, and social contagion ( 1969, 68-71). It is his contention that one leads to the other, the milling or circulating of people raises the level of collective excitement so that collective contagion results. He defines social contagion as 'the relatively rapid, unwitting and nonrational dissemination of a mood impulse, or form of conduct ... What is most interesting and spectacular about social contagion is that it attracts and infects individuals, many of whom originally are merely detached and indifferent spectators and bystanders ... This may be viewed as a lowering of social resistance brought about by the fact that they suffer some loss of self-consciousness and accordingly of ability to interpret the activity of others' (ibid. 70). Though, recently, some writers have argued that Blumer's concept of social contagion gives insufficient attention to new social norms which may emerge under conditions of crisis and stress, his framework appears to describe aptly the processes involved in resettlement. The announcement of the resettlement program did indeed produce milling behaviour as people in every rural community began to discuss the program and how likely it would be to affect their community. This general 'milling behaviour' clearly resulted in 'collective excitement' in many communities to the point where 'contagious' group action became possible and where new social norms did indeed begin to appear. The collective excitement arising from the announcement of the resettlement program itself was further enhanced by the way in which the program was organized and applied. In most communities the internal impetus for resettlement came from someone who already had extensive contacts outside it. In many cases such persons were working away from home and found the separation from family difficult. They saw in resettlement a way in which their family could move to where their jobs were without having to bear the relocation costs. Outside workers also played another important role in the resettlement process. Those who had already moved from a community were permitted under the Resettlement Act to receive assistance if their move had occurred in the preceding six months. In most communities there were many persons who had spent a lifetime in seasonal work outside the community but who could still qualify for assistance. There were also many younger persons just out of school, or even on vacation from school, who were working away from home for the summer. Such persons were often willing and eager to sign the petition as it ensured them of at least twelve hundred additional dollars. As a result there were a considerable number of middle-aged family men who might have wished to remain where they were, but who were forced into relocating by their children already living away from home.

128 The Creation of Regional Dependency Most community moves began with a letter from one of these 'outwardly mobile' individuals asking for some form of assistance in relocating. Such enquiries were usually answered by a letter from the Director of Resettlement explaining how interested persons might go about collecting names of others in their community who were interested in resettling. In some instances there were repeated requests from individual residents for relocation assistance, while in other cases the original enquirer then submitted a petition containing the names of several residents. In either event, the Director of Resettlement usually responded by visiting the community to 'explain' the program. Barton's theory of community stress claims that the extent of stress is largely a product of the speed of onset and duration of impact of the stressproducing agent and of the preparedness of the community. While this framework was developed to assess the impact of such 'instant' phenomena as natural disasters, it is relevant to the resettlement process as well. The residents of most communities first heard that they might be resettled when their merchant, priest, or teacher received word that the Director of Resettlement would be holding a public meeting in their community. As they usually did not know that their friends and neighbours had written to the Director of Resettlement, the announcement had the effect of a sudden and disastrous event. From their perspective, it was proof that their community was 'slated for resettlement,' and the levels of their anxiety, ambiguity, and agitation certainly were not reduced. Most rural communities were also unprepared for a visit by the Director of Resettlement in another way: most had never had a public meeting. Community decisions were taken by the local merchant (in his role as head of the school board, for example) or were the result of informal discussions in his shop. In most small Newfoundland communities the shop remained open six days a week from early morning to late at night. Partly this was the result of a lack of home refrigeration, which meant that fresh meat and produce had to be purchased daily. However, it also facilitated community decision-making. In the afternoon the merchant's wife would 'serve in the store' as the women gathered for a discussion while picking up the ingredients for the evening meal. In the evening her husband would preside when the men gathered for a smoke and a chat. That was the traditional seat of government, not some public meeting. Even federal and provincial political representatives would never call a public meeting in such a small community. Instead they would make infrequent visits (usually just before an election) by boat or float-equipped plane. They would stroll through the community as far as the merchant's house or shop, chat, and perhaps have a meal or a drink, and then stroll back through the community,

129 The Newfoundland Resettlement Program briefly chatting with residents along the way. An announcement of a public meeting to discuss the resettlement program was equivalent to a declaration that the traditional order of the community no longer existed. It implied social change, change which most such communities were ill-prepared to withstand. What occurred in the meeting itself was even more important. The first significant feature of the general meeting in most communities was the absence of all traditional community leaders. The merchant rarely attended and, if he did, he had little or nothing to do with running it. Usually he opposed the resettlement program but his opposition could easily be seen as self-serving for he had most to lose if the community were resettled. He would have to compete with the merchants of some other community if he set up shop elsewhere, and that was an unlikely possibility as he received no compensation for any premises, wharfs, and sheds in his possession. Finally, the resettlement of the community would mean a complete loss of status for the man who had previously dominated all links to the outside world. With the appearance of the Director or Resettlement, the merchant was no longer in charge of community life. The first item of business during the general meeting was an explanation of the resettlement program. It is clear from those interviewed and from the documents handed out that resettlement was described in glowing terms. Better educational facilities were emphasized, as were 'opportunities for employment in the off-season in the casual work-force of the larger community.' No mention was made of the difficulty inshore fishermen would have in obtaining places to fish when they moved into communities where the best fishing 'berths' were all occupied. Moreover, there was no discussion that because the average education of household heads who moved comprised only a little more than four years of schooling, few would be able to find stable employment if they could not fish. The resettlement documents even concluded with the declaration that resettlement 'tends to offer a wider scope for the development of better citizens,' a statement that amounts to outright propaganda. In addition to describing the resettlement program, public meetings had a second function: the election of the local resettlement committee. The official publicity sheets explained the process as follows: After the necessary documents (consisting of a two page petition) have been received in the community, one or more of the interested group will call a public meeting of the householders in the community. This meeting should have a quorum of not less than 50 percent of the householders of a community. From this meeting a committee

130 The Creation of Regional Dependency of three shall be elected. This Committee shall consist of (I) chairman, (2) secretary, and (3) one other member.

As might be expected, those elected to serve on the committee were frequently those who had shown most interest in the program originally. Often they had more status because they had skills in demand outside the community and a well-paying job in consequence. The local committee therefore consisted of the strongest advocates of moving and it became at once the first and the last duly elected community government filling the leadership vacuum left by the local merchant. Having accomplished the tasks required of him under the Resettlement Act, the Director of Resettlement usually left the community, having set in motion a process which almost invariably led to the relocation of most communities he visited. With his departure the local committee soon became the key leadership group in most communities. Its official duties and obligations were described in the documents as follows: Part I of the petition shows that a community committee has been legally formed and contains the necessary resolutions. It also authorizes the committee to negotiate with the Fisheries Household Resettlement Division on behalf of the householders of the community. Part II of the petition shall contain the names of the households (as well as requested information shown therein) in a community who wish to resettle. It shall be the duty of the local committee to circulate this petition throughout the community.

In short, the official role of the committee members was to find out who wished to resettle and get them to sign the petition. However, they were now virtually the only leaders in a community where social contagion raged. Turner and Killian note that when there is a 'sudden and obvious breakdown in a formal system of social control as a result of the dereliction of the role occupants' a variety of spontaneous behaviors may arise (1957, 21). Under the resettlement program, these new leaders began to expand their original roles and take a more active part in securing names of prospective movers than had officially been envisaged. Though the local committee was required only to gather information, it became a pressure group in many communities. Most committee members talked freely about who had signed or were likely to sign the petition. In numerous instances they suggested that people should sign simply to swell the total number of names, with the implication that a signature was not a commitment. In other cases widows or elderly people were persuaded to sign

131 The Newfoundland Resettlement Program on the grounds that those upon whom they depended for care were about to sign. Many committees were particularly zealous in obtaining the signature of those who had moved away within the preceding six months. However, even these tactics might not have been successful if it had not been for rumour. Most works on collective behaviour refer to the role played by rumour. Smelser, in an analysis of the creation of collective beliefs (1962, 79-130), argues that they have three basic functions: to reduce the ambiguity created by conditions of structural strain, to avoid ambiguity by permitting people to move from a high level of abstraction to rather specific situations, and to prepare people for action. Among the types of collective beliefs he discusses are those which induce hysteria, serve as wish-fulfilment, or rouse antagonism towards some agent or threat perceived as hostile. Shibutani terms rumours 'improvised news' (1966) and suggests that rumour spreads in direct relation to the importance of any situation and the ambiguity surrounding it. If the demand for news exceeds the supply of information available through conventional means, rumours are likely to arise (ibid. 52) . He suggests that migration is particularly vulnerable to rumour, especially when little is known about the places to which migrants are moving (ibid. 60) . Shibutani divides rumours into deliberate and extemporaneous: The first and more common form of rumour construction is deliberate. In it men who are caught in an ambiguous situation pool their intellectual resources, examine each item critically, and arrive at some decision through rational discussion . (ibid. 71) Tension also puts people who are similarly upset into rapport; men become suggestible, and new definitions sometimes emerge with remarkable speed. For want of a better term this mode of development might be designated as extemporaneous, in contrast to deliberate. (ibid. 96)

Prophetically, Shibutani also notes that 'sometimes a rumour that forecasts an event can become a self-fulfilling prophecy in that it contributes to its own outcome' (ibid. 147). It is clear that communities involved in the process of the debate on resettlement were prime breeding grounds for rumour. Split by internal dissension and faced with a situation involving migrations to relatively unknown places, they were under considerable strain and surrounded by considerable ambiguity. Most important, they were cut off from outside channels of information about the nature of the resettlement program or its alternatives. They were also without clear channels of communication with the government,

132 The Creation of Regional Dependency and the traditional community leaders who had previously provided such channels of information were either no longer trusted or were no longer willing to work on behalf of a community which seemed to be betraying them. The new resettlement committee in the community had no established ties to government or any knowledge of how to create them. Under such circumstances it is not surprising that rumours flew and residents quickly began to 'improvise news' to try to reduce their sense of ambiguity. Rumours developed in every community faced with resettlement. The most common was that those who failed to sign the petition would not be eligible for assistance if the required majority of residents did sign. Such a rumour was patently false and could quickly have been laid to rest if anyone in the community had contacted the appropriate government officials, but in every community studied that particular rumour spread unchecked. It belongs to Smelser's category of hysterical beliefs, and functioned much as he described: In this 'floundering around' for meaning one result is the rise of a hysterical belief. How does a hysterical belief reestablish some level of stability? It eliminates the ambiguity which gives rise to anxiety by positing a threat that is generalized and absolute. Thus, the threat, originally only ambiguous or precarious, becomes certain to harm or destroy. In this way a hysterical belief structures the situation and makes it more predictable ... In an ambiguous setting, a person is anxious because he does not know what to fear; holding a hysterical belief, a person at least believes he knows what he fears. (1962, 85)

a

To be isolated in remote location without friends and neighbours was frightening for a person in a remote community even to contemplate. Under such circumstances one's very survival would be in question. If that were not bad enough, in most communities it was rumoured that, if most people left, the government would cut off all services to those who remained. There were rumours that the weekly coastal boat service would end, that the school would be closed, that the post office would no longer function, and that the cqmmunity would never get any modern facilities. Such rumours served to increase the level of hysteria. The traditional community leader, the local merchant, might have put an end to such rumours had he not, in many communities, become the victim of rumour himself. It was said that the merchant wanted people to remain simply because of the money he made from them. Such rumours come under Smelser's category of hostile belief and were a form of displacement.

133 The Newfoundland Resettlement Program Unable to attack the forces threatening their existence, many members of the community attacked instead those on whom they had previously depended. A number of those interviewed declared that the merchant had charged exorbitant rates to transport them to a nearby community in his passenger boat when they needed medical care or other aid. Some even stated that their primary purpose in moving was to escape from the control of their former merchant. Finally, there were those rumours, dealing with the supposedly better educational facilities and job opportunities in potential relocation sites, that could only be called wish-fulfilment. It is impossible to determine who began the rumours or if they were deliberate or extemporaneous. Undoubtedly many were deliberate in Shibutani's sense - attempts by men caught in ambiguous situations to pool their knowledge. Others were probably deliberate, in the more devious sense of the term, in that they originated with members of the local committee to further their own purposes. There is some evidence that committee members frequently spread 'information' about who would probably sign the petition. There is, however, no evidence that committee members ever took steps to determine the truth of any rumours, even though they were in the most likely structural position to do so. Most rumours were probably simply 'extemporaneous,' improvised by people caught in a quickly changing social situation which they were unable to influence. As Smelser notes, the appearance of such generalized beliefs is often 'a prelude to panic' (1962, 84). Some form of panic is frequently associated with collective behaviour. Smelser defines panic as 'a collective flight based on a hysterical belief' (ibid. 131) and the requisite conditions are declared to involve opportunities for communication, opportunities for escape, the presence of some strain, the presence of a hysterical belief, and a process of mobilization for flight involving some level of leadership. On the other hand, he notes that the presence of social control mechanisms minimize the influence of these conditions. For panic to develop, traditional patterns of social control must be overcome (ibid. 133). In recent years it has been argued that flight need not be seen as social disintegration, however. Rather, as Mawson (1978) has noted, flight usually is directed towards maintaining social cohesion as people try to retain their ties with people and objects they value. He advocates the use of the term 'collective flight' rather than panic. Most of Smelser's conditions for collective flight were present in the resettlement situation. Interviews with those who moved indicate that resettlement was often an instance of collective flight. In several communities, all

134 The Creation of Regional Dependency those interviewed said that they had moved 'because everyone else was moving.' Resettlement was also an escape from conditions of intense strain and ambiguity. However, it would be wrong to depict the process of resettlement as mindless and irrational panic. Most of those who moved had clear explanations for doing so. The most common reason given was 'for the sake of the children' and the move was to places with better schools. Employment was also a prime consideration and a move was often made to the closest community with better opportunities. If the men did not find jobs, at least they could return to their old homes to fish during the fishing season. Indeed, many deliberately left their old homes intact as a kind of insurance against failure in the new community. While the old home stood, there would always be some place to which they could return. Mawson's analysis suggests that these reasons (or rationalizations) given for moving in no way contradict the fact that the resettlement program provides a textbook example of collective behaviour. Rarely did any community rationally consider an alternative to moving. Resettlement became collective flight, but even people in flight attempt to reach safe ground. RESETTLEMENT AND THE ROLE OF PLANNERS

One of the underlying themes of this book has been the relationship between planners and the people for whom the plans are made. One of the purposes in including this discussion here has been to demonstrate some aspects of this relationship. It seems evident that the resettlement program was part of a general shift in Canadian regional planning from a policy of rural development to one which emphasized the development of selected growth centres and the phasing out or 'adjustment' of rural communities. The resettlement program illustrates how that goal was implemented. It also illustrates other aspects of planning. One aspect of planning is the relation of planners to their own plans and policies. A logical and hierarchical process is implicit in most planning. Policies are decided and formulated into specific plans at a senior level. These plans are then implemented by local officials. If the preceding analysis of the Newfoundland resettlement program has tended to depict the officials of the Resettlement Division in a rather unfavourable light, it is largely because it has examined the process of resettlement from the perspective of those affected by it. To leave this impression would be unfair to the local planners. When their actions are viewed in the context of the logical and hierarchical nature of planning, a different light is cast on their role in the process. Too

135 The Newfoundland Resettlement Program often policy analysis takes only one perspective. It adopts either the viewpoint of the planners or that of the people for whom the plans were made. Such one-sided approaches fail to understand the attitudes and behaviour of the other side in the planning process. If we are fully to understand the resettlement process, it is necessary at this point to examine the resettlement program from the perspective of the planners involved in its implementation. The research on resettlement left no doubt that most officials of the Resettlement Division believed in what they were doing and honestly felt that they were serving the people of isolated rural communities by helping them migrate to centres where more facilities were available. They were particularly desirous of moving them to places where better educational facilities were available for their children. They saw no future for young people in small outports. Indeed, many of these officials had, themselves, migrated to cities from small outports. They felt that they had benefitted through moving, and in some degree were thus converts to the process of migration. Furthermore, it should be realized that their job was to resettle people. They were paid not to consider alternatives but to administer the resettlement program. Had they repeatedly informed their superiors that certain communities should not be resettled, they would probably have been dismissed. Moreover, the only indication that they were doing their job adequately was the number of people they resettled in any given period. To do their job well, they had to move as many as possible as fast as possible with the least disruption. Far from being callous administrators, they made many visits to some communities once the decision to move had been made, their express purpose being to help those, like the aged, who were unable to cope with the crises involved in moving. The problem was that the resettlement program got out of the control of the planners themselves. On numerous occasions resettlement officials privately voiced their concerns that certain communities were moving more quickly than anticipated, and that there was simply not enough time for the resettlement staff to prepare for the move. However, they found themselves in an administrative predicament. Once enough people had signed a petition it was forwarded to the resettlement division. At that point, resettlement was virtually assured. Indeed, to try to stop it would have been not only illegal but also impossible. The administrators of the program became impotent to affect the direction and speed of their own policy. Like the people they were serving, they became the victims of hysteria and collective behaviour. This has important implications for planners and planning. The resettlement process in Newfoundland was largely created by the organization of the

136 The Creation of Regional Dependency resettlement program itself, coupled with the somewhat underdeveloped state of formal organization in rural Newfoundland. On one level the plan was highly successful in that it moved a large number of communities. It is hard to believe, however, that the designers of the plan really wished to precipitate the level of collective hysteria involved in the process of resettlement. The obvious conclusion is that planners must ensure that implementation of their policies and plans does not threaten local culture and values to such an extent that panic, fear, and collective behaviour result.

7 Ethical Issues in Regional Policy Research

When a social scientist undertakes policy research, ethical and moral dilemmas frequently arise. Such difficulties are particularly likely to occur when that research is sponsored by a government. In his capacity as an advisor to government, the researcher must evaluate programs of social change. No matter how objective his final analysis may seem, he is engaged at some level in the process of manipulating the behaviour of other people. The social scientific literature is replete with essays on the process, problems, and politics of evaluative studies as well as summaries of such analyses (Suchman 1967; Kelman 1968; Beals 1969). The analysis presented here differs, however, from most of these works in that it is not abstract and ungrounded, but is based on research experience. Few studies of the nature of policy research link theory with practical research. Yet is is only by examining the consequences of our research that an assessment of its effectiveness and limitations can be made. The analysis here is concerned with three aspects of policy research which provide thorny ethical problems: the relationship of the social scientific researcher to those funding him and to those whom he is studying, the definition of policy goals, and the extent to which value freedom and objectivity are possible when studying and assessing value-based programs. From the point of view of regional research, such considerations cast light on the role of values both in the formation of regional development policies and in the assessment of the effectiveness of such policies. WORKING WITH GOVERNMENT AND WITH THE PEOPLE

The analysis here is based on the experience of the author when he was involved as a co-investigator in a study of the Newfoundland community resettlement program (Iverson and Matthews 1968). Funds for that research

138 The Creation of Regional Dependency came from the federal Department of Fisheries. That department placed few restrictions on the research. Its only conditions were that 'the attitudes of those families already moved under the Resettlement Program' be investigated, and that the report of the research findings include recommendations on ways in which the government might improve the operations of its program. Such broad terms of reference can probably be attributed to the fact that there was a dearth of information on resettlement. The program was in operation and people were moving, but no information was available about their reasons for moving or about the effect of the resettlement program on their lives. As nobody knew anything, there was almost free rein to take whatever research thrust we wished. However, there were few sources to guide us in deciding which direction to take. There were also two problem areas which had to be overcome before the research could begin. It was necessary first to establish a relationship with both levels of government and, second, to devise some method for choosing a sample of people to be studied. It quickly became obvious that the resettlement planners in the Newfoundland government were not sympathetic to the research. The federal government had funded the study but the provincial government officials were responsible for implementing it. They were naturally wary of our efforts. This conflict between federal and provincial officials was destined to colour the reception of our findings by both levels of government. Moreover, provincial officials considered it too early to begin a full study of the new program. Only eighty-two families had actually resettled at the time we began our research, although twenty-five communities had already been approved for relocation. We were committed by our contract to interview those families who had already moved, but there were not yet enough to make such a study practical. To compensate for this lack of subjects, we decided to expand our study to include a sample of households which had relocated under the previous provincial government plan. Though there were important differences, that plan had been the inspiration for the federalprovincial one, and had only just been terminated. In making this decision we reasoned that we were adding a valuable longitudinal dimension to our study. By studying 'matched' communities from the same geographic areas, we hoped to keep constant some extraneous variables and to be able to assess the different effects of each plan. Though this strategy was within the bounds of our commitment to the Department of Fisheries, they ultimately proved to be unimpressed with it. The federal officials regarded the original provincial plan as a welfare program, largely irrelevant to their conception of resettlement as a strategy for fishery devel-

139 Ethical Issues in Research opment. To make matters worse, when the final report received widespread newspaper coverage, few columnists distinguished between the conclusions drawn for each program. Thus federal officials often found themselves attacked for previous provincial failures. It should be noted, however, that one of the most important findings was that there appeared to be no major differences between the two programs in either the process or the effects of resettlement. In a two-month period we interviewed 128 families, seventy-one from nine communities which had moved under the new federal-provincial program. Our study was probably the first social scientific attempt formally to interview rural Newfoundlanders and we had been warned by local sociologists and anthropologists that our questions would so intimidate potential respondents that we would get a low response rate. In contrast, all but a couple of those contacted were more than willing to answer our questions, readily giving up their normal routines of splitting fish, cutting hay, or building homes to talk to us. Such willingness may reflect a different conception of the value of time among rural Newfoundlanders than that found in more urban areas. If so, it is an indication that a move to urban life requires psychological as well as social adjustments. THE RESETTLEMENT REPORT: GOAL AND POLICY DEFINITION

The ethical questions raised by government-funded research centre on the goals of government policy. As was noted earlier, social policy is above all a goal-value system. From the planner's value position the goals are in the best interests of the society at large, though sometimes planners knowingly develop plans not necessarily in the best interests of those most directly affected by them. For example, as was partly true for resettlement, they may plan for future generations at the expense of the existing population. To the extent that policy research provides information to the government, it is potentially providing information which can assist planners in implementing their goals at the expense of the wishes of some of the people concerned. In this case the report which was submitted highlighted the conflict between the values and goals of the planners and those of the people. However, when a government is committed to a policy, such analytical niceties are unlikely to cause them to change the goals of their program. Though they may be moved to alleviate some of the more striking inequities, the program will likely be continued. Policy research presents a web of ethical dilemmas. When one undertakes to go beyond reporting what is observed and make suggestions about desir-

140 The Creation of Regional Dependency able policy changes, the problem of the researcher's values arises. Any such suggestions may reflect the values and goals of the planners, those of the people, or an entirely different set of values held by the researcher. In such circumstances the researcher can limit himself to considering only the means used to implement a policy, expand his analysis to a consideration of whether or not a policy is accomplishing the goals for which it was designed, or expand his scope still further to a critical evaluation of the desirability of the goals themselves. For example, our recommendations concerning resettlement stemmed from our concern with the problems of those who resettled. Our recommendations were: (i) that the government take a more active role in the actual resettlement process than they were currently taking; (ii) that the government collect more information on communities applying for resettlement before making decisions; (iii) that the government establish a body of community development workers to assist the people in the process of moving; (iv) that criteria for growth centres be defined better; (v) that the provincial administrators be included in meetings of the Federal-Provincial Resettlement Committee; (vi) that more money be provided for housing; (vii) that extra assistance be provided for people with large families, for the aged, and for those with special problems; (viii) that more attention be given to the problems of integration into the new communities. In retrospect, it is important to note that not one of them deals in any way with the goals of the program. Each deals with the means used to implement the policy and attempts to make it more efficient by reducing the difficulties encountered by migrants in moving from one community to another. We were so concerned with easing the specific day-to-day problems of those with whom we talked that the question of the necessity for resettlement was never considered. Though such a failure is cause for concern, perhaps an even greater cause for concern is that we can legitimate our failure to consider policy goals by referring to the oft-cited need for social scientific objectivity. Most social scientists concerned with preserving objectivity distinguish between policy research which recommends new goals and that which restricts itself to evaluating the effect but not the legitimacy of either the means or the goals of policy (Weber 1949, 52-4). It is argued that there is no objectively valid basis upon which to evaluate the means or goals of present policy or to suggest new goals. To do so would call for 'value judgments' not required when assessing the efficiency of the means being used in achieving the desired goals. One writer who upholds this perspective claims that 'the purpose of social science research should be to deepen, broaden, and extend the policy-maker's capacity for judgment - not to provide him with answers' (Millikan 1970, 35-6).

141 Ethical Issues in Research There are major problems with this solution. Contrary to popular belief that government-sponsored research reports gather dust on bureaucratic shelves, we found great willingness among federal and provincial officials to read our reports and implement our suggestions. Our conclusion that the 'means' of the resettlement program were inadequate provided the impetus to change them. As a result, the resettlement process was accelerated and more people than ever were encouraged (and may have felt coerced) to resettle. Perhaps we should simply have indicated the problems without also indicating solutions. Even if had we been content to do so, however, would we have been any less responsible for the acceleration of the program? A discussion of the outcome of two of our suggestions is relevant here. In our report we argued that a corps of community development workers should be established to assist those in the process of resettling. The government officials agreed with this suggestion and such workers were appointed. It would appear, however, that these 'development workers' did little to assist those who resettled in any of the ways we had intended. Instead, they functioned primarily as public relations advocates for the program. Ironically, these 'resettlement workers' could justify their role by referring to our recommendations that the government more accurately inform potential migrants of the actual workings of the program. It would seem that our study of the resettlement program led to its expansion with no questioning of the legitimacy of its goals. Under the circumstances, it appears evident that policy research should directly investigate and question the goals of social policy. Though the study of policy goals involves social scientists in non-objective evaluation and would be challenged by many on both theoretical and methodological grounds, our experience suggests that such an approach is absolutely necessary in policy research. POLICY RESEARCH AND VALUE FREEDOM

The long-established belief that social scientific investigation should be 'value free' conflicts with the obvious fact that the formation of social policy implies making decisions in terms of a set of values. The researcher who undertakes to evaluate the impact of policy for government agencies faces a conflict over where his allegiances and responsibilities lie. He frequently finds himself obtaining from those affected by a program information which can be used against them in the battle over implementing that program. In such circumstances is his primary responsibility to the government, to the people, or to some set of broader goals of his own related to objectivity and value-freedom? For many social scientists hired as consultants, the belief in

142 The Creation of Regional Dependency value freedom and political neutrality leads them to attempt some measure of neutrality as free-floating intellectuals unallied with any power group. However, the research experience previously described suggests that this position is neither desirable, nor even possible, to maintain. Many reservations about policy research arise from a misunderstanding of traditional social scientific thinking on value neutrality and objectivity. For example, Weber is often identified as a major proponent of a 'value-free sociology' (Gouldner 1963, 39), but Weber argued explicitly for 'the scientific treatment of value judgements' (Weber 1949, 54) . He declared that it was possible to evaluate the effectiveness of social policy in achieving a goal without discussing the legitimacy of that goal (1949, 52). While Weber was undoubtedly correct in arguing that there is little scientific basis for assessing the goals of policy, the research experience on which the present analysis is based clearly indicates that his solution is impractical. The social scientist who confines himself to examining the means and not the goals of policy is being blind to the realities of the situation. He is refusing to recognize the power structure involved in policy formation and implementation, and he is refusing to accept responsibility for the consequences of his own actions. Moreover, the solution to this problem goes beyond simply communicating his findings to those with power and to those who lack it, as Mills has argued (1961, 185) . The very differences in power between these two groups likely means that the policy will still be implemented without any consideration of the desirability of its goals or the legitimacy of its means. To the extent that his research helps make policy more efficient, the social scientist has an obligation to assess the desirability of policy, particularly for those most affected by it. Policy is nothing less than an attempt to alter the conditions of people's lives. Because the social scientist consults all parties involved, his knowledge has the potential of being more broadly based that that of the other parties concerned. Indeed, the social scientist investigating policy has a responsibility to judge. As Gray has argued, not to do so is to be both hypocritical and irresponsible, 'for if the discipline which claims to know the most about the nature of social life does not offer its most reasoned judgements, to whom does the obligation fall? It would seem to those less competent to make them-which would also seem absurd' (Gray 1968, 180). The doctrine of value freedom in social research and of the separation of means and goals in policy research has lately undergone considerable examination. Friedrichs addressed the general issues involved and concluded that any research, pure or applied, involves value decisions at every stage (1968; 1972).

143 Ethical Issues in Research The decision we make regarding problem selection, the appropriation of conceptual tools and their accompanying grammars and logics, the risking of hypotheses, the approximation of control, the impact of observation, the level of error admissible, the impact of prediction on future behaviour, selectivity in communication, and the attitude we take regarding the application of the findings - all either demand or imply a value commitment that transcends the empirically given. (1968, I I)

He concluded that what appears to be value freedom is instead an 'embarrassingly real value judgement' to adopt an attitude of indifference towards the application of research findings. Focusing on the power issues involved, Becker (1966) argues that social structural reasons make it impossible for a sociologist to remain impartial when studying policy. He states that any social structure has a 'hierarchy of credibility' in that 'credibility and the right to be heard are differentially distributed through the ranks of the system' (ibid. 241). Becker warns that whenever we start listening to 'underdogs,' we can expect to be accused of taking sides. A common charge is that social scientists, in the course of their work and for varying private reasons, fall into sympathy with those they study and do not, therefore, give a balanced report (ibid. 240). Becker points out that there is no escaping this dilemma for 'there is no position from which sociological research can be done that is not biased in one way or another' (ibid. 245). His advice is simple- to 'avoid sentimentality' and to indicate explicitly 'whose side we are on' (ibid. 246-7). Becker's position, however, confuses a variety of alternative positions which can be taken in evaluating social policy. Obviously taking sides is possible, but such an advocacy position is always open to the charge of bias. One can be accused of bias even when one is not intending to take sides, however. Indeed, the resettlement report described earlier was subject to just this sort of attack. In response to it one economist wrote: It is easy for social scientists and writers with an interest in rural societies to become genuinely committed to the welfare of the people they have studied and have come to know, admire, and love. Thus, some may become emotionally adverse to rural depopulation, which would mean loss of the subject of their concern. They may be driven to rationalize arguments which will seek to conserve or restore the rural environment to which they have formed an emotional and intellectual attachment. (Copes I 972, 147)

However, if one has attempted to be value neutral it is possible to respond to such charges with the declaration that the data were collected in a valid and

144 The Creation of Regional Dependency reliable manner and that one has only reported what they indicate. It is far more difficult to have data and conclusions accepted as valid when a position of advocacy has deliberately been adopted. Though Becker may have wished to improve on the position that policy research can and should be neutral and value free, he plays into the hands of those who are all too willing to adopt ad hominem arguments and declare that sociological research is biased and not worthy of consideration. Gouldner has responded to Becker's advocacy position. Though agreeing with Becker that it is impossible to be value free, Gouldner charges that Becker has simply replaced the myth of value freedom with 'a new myth, the myth of the sentiment-free social scientist' (1968, 105). He argues that 'a bland confession of partisanship merely betrays smugness and naivety. It is smug because it assumes that the values that we have are good enough; it is naive because it assumes that we know the values we have' (ibid. 112). He calls on us to condemn complacency rather than sentimentality, arguing that it is complacent to think 'that we have solved the problem of objectivity by good-naturedly confessing that we do indeed have a standpoint and by openly specifying what it is' (ibid. 112). Gouldner considers a social scientist complacent if he makes value judgments without struggling to understand his own values and motives. The preceding discussion highlights the two major issues involved in policy evaluation. Such research has traditionally been defended with reference to the traditional canons of objectivity and value freedom. However, if the necessity or possibility of value freedom is denied, what replaces it? A related question involves the stage in research analysis at which the evaluation of policy goals should be undertaken. Weber argued that it is possible to separate evaluation from an examination of the operation of the program itself, and that the operation of the program can be assessed before its goals are evaluated. Friedrich's recent work has argued that they are analytically inseparable, and that the analysis of both must be undertaken simultaneously. If policy research is to be accepted as legitimate, it must find some way to deal systematically with both of these issues. Gouldner has provided a basis for dealing with the first of these issues and his analysis has implications for the second as well. He argues that a sociologist's value commitment is not merely inescapable, as Becker has claimed, but can also be viewed 'as a necessary condition of his objectivity' (1968, 113). He likens the role of the sociologist to that of the judge. Though a judge may indeed award benefits to one party, his decision is considered impartial. Moreover, judicial decisions are respected for impartiality and objectivity, not because they are value free, but because they are made in

145 Ethical Issues in Research terms of some clearly defined and explicit set of values. Similarly, the role of a social policy researcher is not simply a matter of choosing sides and pushing on regardless, but of making judgments with reference to a clearly defined system of values. Gouldner argues that a sociologist is complacent when he makes value judgments without struggling to understand his own values and motives. He labels his position 'normative objectivity.' From this perspective, policy researchers cannot be faulted for siding with the subjects of their concern, as Copes has charged. They can, however, be criticized if they have failed to examine their own values and the extent to which their decisions are thereby affected. The essence of Gouldner's position is that values themselves are the keys to policy research. The decision to take sides when evaluating policy is legitimate and can be accepted by others as legitimate if the values underlying the decision are clearly defined and accepted as legitimate. The essential prerequisite in policy research is an awareness by the researcher of his own values. A clear statement of these values must be part of the analysis. Gouldner's approach appears to offer a viable alternative to both the classic objectivity argument and the advocacy position outlined by Becker. The second issue which must be faced in policy research is that of the separability of analysis and evaluation. Weber hoped to maintain objectivity though the segregation of facts and values, and this came to be accepted as the standard operating procedure for sociological analysis. Weber argued that, although values may influence our choice of a problem to study, analysis of that problem can and should be done without value judgments. Significantly, some who argue for a relevant sociology still maintain his distinction, declaring that evaluation can be undertaken only after the evidence has been collected and objectively analysed. For example, Gray says: ' By no means is one recommending a licence to offer value judgments at random, resulting in a "this I believe" type of sociology. Rather it is to proceed as significant minds always have - this is, after a careful, fairminded, and reasonably objective consideration of the facts - to offer whatever meaningful judgement seems appropriate' (1968, 180). His position closely resembles Weber's who allowed a social researcher his right as a citizen, but not as a social scientist, to make judgments about policy goals after analysis had been completed. It ignores Friedrich's position that value judgments are incorporated at every stage of research, Becker's argument that value freedom is a myth, and Gouldner's analysis that value statements are a legitimate and necessary part of policy research. In the face of these arguments, it is difficult ·to maintain the position that it is possible and desirable to assess the operation of a policy program separately from an evaluation of its goals.

146 The Creation of Regional Dependency Indeed, to separate fact from value in this case would involve a consideration of the means of policy separately from a judgment of the goals of policy. That is more a theoretical distinction than an actual possibility. While the preceding discussion has examined the possibility of being objective in policy research and the legitimacy of incorporating values into policy assessment analysis, it has not adequately dealt with the related issue of accountability. Under Becker's advocacy approach the researcher is accountable to those he studied, taking their side and making his information available to them. In Becker's formulation he is clearly not accountable to those who designed the policy and who may well be providing the funds for his research. Under Gouldner's value-awareness approach there is a less clearcut specification of the accountability of the researcher. However, a statement of one's values and a focus on the values involved in the policy do not require that one is accountable to any of the parties involved in the policy issue. This is the most realistic and practical position to take. Whenever a policy researcher is accountable to any side involved in a policy process, he is open to the charge of bias and almost sure to be discredited. This is not to say that the policy researcher is without any type of accountability. He can be held accountable to ensure that the product of his labours, the reports he produces, are not secret but are available to all parties in some public form. Some may argue that this is not an adequate safeguard in that those being studied frequently lack the training of the policy makers and cannot adequately interpret the research findings. Moreover, they usually do not have the power of the planners to affect the outcome of the policy and implement any new policy directions suggested by the researcher. However, the solutions to these problems go beyond the power and responsibility of the policy researcher. These problems cannot be solved by social scientific means. All the social scientist can do if he is concerned about these issues, is to point out the extent of the differential power in any policy situation, and the implications for policy formation. These are political differences and can only be solved politically. To be sure, knowledge can be power, and the policy researcher is engaged in the production of knowledge. However, all he can be expected to do, as a social scientist, is to ensure that this power is available to all parties. If the social scientist wishes to engage in the power struggle, then it should be clear that this is a personal decision and not part of his responsibility as a researcher. In concluding this analysis, it is useful to compare the position taken here with another recent work on policy evaluation by a Canadian researcher. Rutman has recently outlined four basic aproaches to evaluation research which, though not mutually exclusive, he declares to be 'competing para-

147 Ethical Issues in Research digms' (1980, 64-5). He distinguishes between ' holistic anthropological approaches,' which attempt to determine 'the meaning attached to the program by the people under investigation,' and 'decision-theoretic approaches,' which are designed to 'help the decision-maker' assess 'the utility of various courses of action.' Both positions are contrasted with 'goal-free evaluation, ' aimed at examining the 'actual' rather than the 'alleged' effects of policy, and the 'adversary model,' in which various competing positions on policy are 'cross-examined.' It is clear that the legitimation approach advocated here does not fit any one of Rutman's categorizations exclusively. In so far as it considers the meanings attached to the policy by those affected by it, and the way in which their interpretations differ from those of planners, it is a 'holistic' approach. At the same time it recognizes that an important purpose of evaluative research is to help policy makers assess the utility of various courses of action, and thus could be considered a 'decision-theoretic' approach. It also stresses the importance of examining the actual rather than the alleged effects of policy and in that sense fulfils the requirements of 'goal-free evaluation.' Finally, though not fully ascribing to an 'adversary model,' it recognizes the potential adversarial nature of policy implementation. Rutman admits that his four categories are not mutually exclusive, and accepts that some approaches to evaluation research may combine some or all of his categories. His assertion that the four approaches are competing paradigms is therefore questionable. It is difficult to see how these four approaches can be considered to be distinctive paradigms when they so clearly overlap and can be integrated into the legitimation approach advocated here. Indeed, the four do not seem to be paradigms at all, but simply different issues and dimensions which must be examined in each approach to evaluative research. In contrast, the objectivity approach, the advocacy approach, and the legitimation approach, discussed earlier in this chapter, do offer competing positions on many of Rutman's dimensions, and thus seem to fulfil more satisfactorily the definition of mutually exclusive paradigms.

8 Three Key Dimensions in Regional Development: Economic Viability, Social Vitality, and Political Validity In 1968 the Institute of Social and Economic Research at Memorial University of Newfoundland held a large planning conference to discuss the recently completed report on the Newfoundland resettlement program in the context of broader plans for Newfoundland's development. Social scientists from Canada and Europe were invited, as well as a large number of planners and senior administrators from the governments of Newfoundland and Canada. That conference cl~arly demonstrated how the terminology used and the concepts employed influence the way in which reality is perceived. One of the most interesting features of that conference was the terminology used by government officials. One popular term, repeated almost endlessly, was 'viability.' Though this term was never defined at that forum, it was clear that viability was thought to be related in some way to selfsufficiency. The criteria of self-sufficiency being used in this context were almost invariably economic. Many rural Newfoundland communities were declared to be non-viable in terms of economic self-sufficiency, and resettlement was declared to be necessary to move the inhabitants of such communities 'into the manpower stream of Canada.' These opinions were obviously different from, if not in conflict with, the views of many of the residents of rural Newfoundland who had been interviewed in the course of research on the resettlement program (Iverson and Matthews 1968). Though most had readily admitted that their communities had declined in terms of economic self-sufficiency to the point that many had been forced to move away to find work, they indicated that they would have chosen to remain in their former communities had that choice been given. As far as they were concerned, even though there was general agreement

149 Three Key Dimensions that their communities had declined economically, there were other aspects of community life which they valued. Basically they refused to accept that their previous communities had been non-viable. To them, their communities had been perfectly viable, with only one problem. There were no jobs. They moved because they saw little future for their children should they continue to remain 'once everyone else was moving.' To be sure, it is possible to argue that economic self-sufficiency is such a necessary aspect of community viability that its absence is itself sufficient grounds for declaring a community non-viable. One might even suggest that the willingness of people to move from communities that they otherwise liked is ample proof of this. However, such an emphasis tends to give insufficient consideration to aspects of social structure other than economic ones. In this particular case, it clearly does not capture adequately the way in which people from the small resettled communities emphasized those other conditions when talking about their former homes. It was clear from such conversations that they judged their communities by other (or perhaps additional) criteria than economic viability. They were concerned about schools for their children and whether there was going to be a resident clergyman. They were strongly attached to other people in their communities, many of whom were relatives or close friends. In contrast to the planners' criteria of economic viability, the residents of such communities used criteria of social vitality in judging their quality of life. In 1976 a study was undertaken of three communities in rural Newfoundland which had resisted the pressure to resettle (Matthews 1976) . It became apparent that their resistance depended on the presence of a strong leader or group of leaders who opposed resettlement and who were recognized as valid representatives of the community, not only by those within the community but also by government agencies responsible for its fate. Such community leadership and control can be described as political validity and is a third dimension of community life which must be considered in an analysis of the social structure of a community. Before attempting to develop these three dimensions into a framework for analysing regional and community social life under conditions of social change and development, it is useful to describe one of the communities that refused to resettle. A brief description gives some understanding of the empirical basis for the more detailed analytic framework developed later. It also serves to legitimate the assertion that these three dimensions are indeed important in community life and helps to identify some of the more subtle features of each dimension.

150 The Creation of Regional Dependency ECONOMIC VIABILITY, SOCIAL VITALITY, AND POLITICAL VALIDITY IN 'SMALL HARBOUR'

'Small Harbour' (a pseudonym) is a community of slightly more than 200 people on an island off the east coast of Newfoundland. It is similar to a dozen such communities scattered throughout an island archipelago in this area. Small Harbour first attracted public attention when it broadcast a statement over all radio and television stations in Newfoundland protesting the pressure to resettle which its residents were experiencing. The statement said in part: It is hard to believe that our government could have so little regard for human beings and reach such a deplorable decision. This decision by our government to strip us of our birthright and deny us of our freedom of choice is only the same as the Russians did in Czechoslovakia in 1968. Since 98 percent of the people of our community are opposed to the Centralization Program, we are proud to announce that we are here to stay. Therefore it is time for the government to abandon their attempt to force the people to move by denying them public services, and make a speedy decision to give our community the public services we are requesting but have long been denied.

Though it was not made clear at the time, the impetus for this statement came from a letter which the community council had received from a federal cabinet minister refusing its request for increased services on the grounds that the community was slated for resettlement. Small Harbour was included on the 'blacklist' of communities which were likely to resettle (see chapter 6). However, it was clear from Small Harbour's response that if any isolated Newfoundland community still thought of itself as having a legitimate way of life, it was this one. From a strictly economic perspective it is easy to see why planners might consider Small Harbour non-viable. The decline of fish stocks in the area began early in this century and the community has had a declining economic base since then. However, like many other communities on Newfoundland's north-east coast, the men of Small Harbour adapted by building larger boats and making a journey of some 300 to 500 miles to fish off the coast of Labrador for the summer. Small Harbour's offshore location also made it a favourite stop for many small vessels on the journey to and from Labrador. Thus, many of the adult members of the community saw the 'good old days' as the early part of this century, when the harbour each spring and fall was filled with the vessels of passing fishermen. However, by the 1960s, the Labrador fishery had also failed and many fishermen were forced to look for

151 Three Key Dimensions land-based work in other parts of the province. Though some families had moved when their household heads found work elsewhere and many young people left as soon as they had finished their schooling, well over half of the remaining household heads worked away from the island. Some worked outside the community almost all year, returning on weekends when weather and ice conditions permitted. The majority worked at seasonal summer jobs and returned to spend the winter months with their families. The only men who remained in the community all year were the elderly, two village shopkeepers, permanent welfare recipients, and a handful of household heads still able to make a living from fishing combined with gardening, brief periods of 'road work,' and a variety of other activities. Though it might be concluded that Small Harbour was non-viable, that opinion was not shared by many of its residents. To be sure, it was common for rural Newfoundlanders contemplating resettlement to deny that they intended to move, almost up to the day that they did so. To do otherwise would have seen them virtually ostracized as traitors to the community by those who wished to remain. Yet one of the interesting things about Small Harbour was that many residents freely admitted that they had been tempted to move but had decided against it. They had a wide variety of reasons for not going. Most emphasized that it was far cheaper to live on the island than anywhere else because they owned their own house, grew their own vegetables, had woodlots, caught small game for food, and had few of the expenses of urban dwellers. They stayed because they were more 'selfsufficient' in Small Harbour than they would be anywhere else. Most of the household heads were employed in labouring jobs on the Newfoundland mainland. Few could count on permanent employment because of their lack of skills and education. However, when they were laid off there were few places they could live with their families more cheaply than in Small Harbour. Faced with the chronic economic instability characteristic of the unskilled in underdeveloped regions, they could see no economic advantage if they were to move with their families to other communities or more urban areas. To the economists and regional planners responsible for the resettlement program it would likely have seemed absurd that the people of Small Harbour and similar communities wished to remain where they were because they believed themselves economically self-sufficient. In market terms, Small Harbour was anything but self-sufficient. Far more was being spent on keeping people there than they could earn by producing goods for sale on the market. Few local residents could even find work there. Thus there were two conceptions of the nature of economic viability present. At the formal level

152 The Creation of Regional Dependency of economic well-being, it was clear that Small Harbour had little if any economic viability. None the less, many of the residents considered their economic well-being to be greater there than it would be elsewhere. It was in large part their criteria for judging informal economic viability which led the people of Small Harbour to resist the efforts to resettle them. On the basis of economic conditions alone, however, it is doubtful if the residents of Small Harbour would have wanted to remain where they were. Their almost desperate desire to remain was probably influenced more by social considerations which more than outweighed economic ones. In short, they judged their community not only in terms of its economic viability but also in terms of its social vitality. To a large degree the social vitality of any community depends on the formal institutions available for socialization and social support, in particular the school and the church. In Small Harbour, education was a major concern. Like many rural communities social vitality seemed to depend on its ability to provide school facilities. If they were not available, many families would feel forced to leave 'for the sake of the children.' In Small Harbour children who wished to continue their education after grade 8 were forced to leave the island and attend high school in a nearby mainland community. They boarded during the school year with families there, returning home on weekends when weather and ice conditions permitted. Declining school enrolment because of emigration from the community had begun to put even the junior school in Small Harbour in some jeopardy. Department of Education regulations required that there must be a minimum number of students per classroom in order to receive support for a teacher. If enrolment declined, so too did the number of teachers. In Small Harbour one member of the school board stated that, 'If we had lost one more pupil this year, we'd have lost a room. So if one big family went, the schooling would get bad right there. We'd have to move.' In contrast, church organization in the community seemed to be improving. Churches in rural Newfoundland have had considerable difficulty finding enough trained clergy to maintain an effective ministry. This has been a particular difficulty for the more established churches which require rigorous theological training before ordination and before their clergy are permitted to perform the various sacraments. Most have been forced to give up services in isolated rural areas. Understandably, many of their devout followers are upset by this rejection on the part of the church in which they had placed their faith, trust, and hope for salvation. Under the circumstances they are often willing to change their religious denomination to one which can provide the services they feel necessary. In many communities in rural New-

153 Three Key Dimensions foundland the Church of England had given way to Methodism, which in turn had given way to the Salvation Army. In recent years the Salvation Army has also found it increasingly difficult to serve all its members, and is facing competition from such sects as the Pentecostals, Jehovah's Witnesses, and Plymouth Brethren. In 1976 Small Harbour had three established churches, the Church of England, the United Church, and the Salvation Army, but had not had the services of any clergy from these denominations for nearly a year. Community members were unable to receive the sacraments of baptism, communion, and matrimony, and the absence of regular services was considered a major loss. However, for three months a Pentecostal clergyman had been stationed in the community. He had built a house and church virtually singlehandedly (because the adherents of the other three denominations refused to let him use their buildings) and some residents were now beginning to convert to his denomination. To the residents this was an indication that the social life of the community was improving. The decline of the community's social vitality had been stopped. As one community member put it: 'I think that church is going to take everybody.' It was not only the formal social structures of school and church that Small Harbour residents meant when they spoke of the desirable social environment in their community. Many also emphasized the importance of having family and neighbours close by, not only for socializing, but for help and assistance in the rough times. Like most poor people with few marketable skills, the people of Small Harbour had little to fall back on except the help that could be provided by their friends and relatives. Indeed, just as it was possible to distinguish between the formal and informal levels of economic viability in any community, so it would appear to be possible to distinguish between the formal and informal levels of social vitality. All communities must find formal ways of socializing their young, and handling the social problems and basic social needs of their adults. This is usually done through the institutions of family, church, and school. However, there is also an important informal level of social vitality which must also be taken into account. This centres on the network of social relations among the members of any community. Perhaps the chief reason for Small Harbour's survival was the nature of its community leadership. Most small Newfoundland communities were dominated by the village merchant and the process of resettlement effectively alienated such traditional leaders from the rest of their community. The residents of Small Harbour, however, had decided that, if the community were to survive, it had to be incorporated and have an elected community council. Though few communities as small as Small Harbour had ever applied for

154 The Creation of Regional Dependency incorporation, in due course it became incorporated and it was the first elected council that had written various government departments requesting services. The statement opposing resettlement had also come from the community council. Clearly the community had valid political leadership which was formally organized and in a position to fight the pressure to resettle. Furthermore, this formal structure had grown out of an informal community group representative of the community and, as the interviews revealed, was generally respected by it. Evidence from Small Harbour and other communities indicates that a valid leadership group in a community, whether formally or informally constituted, is critically important in its social life. A MODEL FOR COMMUNITY AND REGIONAL ANALYSIS

Frequently, the models and theories used by sociologists are created by professional theorists who have done little if any empirical work, and whose intellectual products consequently seem to have little relevance to the real world of social behaviour. The model to be presented here takes on increased legitimacy because it has been grounded in the analysis of the social organization and experience of Small Harbour and other communities like it. The preceding description of Small Harbour has shown that the organization of community life can be analysed in terms of its relations of economic viability, social vitality, and political validity. These three relational structures of community life constitute the primary areas of social organization within a community (the structural element) and also provide the settings for interpersonal interaction (the relational element). In short, it is possible to analyse both the structure of a community and the processes of social interaction within it in these terms. In his analysis on the nature of communities (1960, 1964) and on the nature of social change and development (1962), Martindale argues that all societies and communities must solve three sets of problems if they are going to survive and carry their population throughout the changes in a normal lifetime and in a normal year. He identifies the problem areas as mastery of nature, socialization, and social control, and argues that 'institutional solutions to the problems of collective life' develop in each area. Furthermore, he contends that the solutions must be stable, consistent with one another, and relatively complete. The analysis of community structure and social change thus becomes the analysis of how institutionalized patterns of collective life develop and become stable, consistent, and complete. The identification of economic viability, social vitality, and political validity parallels Martindale's earlier formulation in that both frameworks identify the eco-

155 Three Key Dimensions nomic, social, and political spheres as important. However, the framework presented here goes somewhat beyond Martindale's and has certain advantages over it. A departure from Martindale's earlier formulation is found in the distinction made here between the formal and informal aspects of community social organization. Martindale has been content to focus on the formal organizational structures of communities. However, much of the viability, vitality, and validity of community life comes from the informal relations that develop. These would be missed by focusing only on the more formal relational structures. The framework for analysing community organizational structure presented here really involves six dimensions: the formal and informal economic viability of a community, the formal and informal social vitality of a community, and the formal and informal political validity of that community. The framework presented here also differs from Martindale's in the way in which it handles social integration. Most approaches to community analysis focus only on the social structure and do not consider the nature of integration within that structure. While Martindale's approach certainly has advantages over these, his identification of consistency, stability, and completeness as the basis of social integration is both rather limited and somewhat biased. It is limited to the extent that it emphasizes only the organizational integration of community life and fails to consider the personal integration of individuals into the community. It is biased to the extent that it emphasizes the processes leading towards integration in a community without similarly emphasizing the processes of discord and conflict. Moreover, Martindale's presentation of his framework raises some questions concerning the origin or source of the supposed stability, consistency, and completeness of a community. Though he emphasizes that in his view social change is the result of individual action and not of societal forces or mechanisms, his analysis does leave an impression that stability, consistency, and completeness are somehow inherent in the social structure. The framework developed here is in opposition to any such mechanistic model of society. By examining the way in which individuals are personally integrated into a community as well as the organizational integration of that community, it avoids thinking of social structure as having mechanistic forces which extend beyond the actions of the individuals involved in it.

Formal and Informal Economic Viability The economic organizations of any society comprise all the formal and informal organizations involved in material production and exchange. Anthro-

156 The Creation of Regional Dependency pologists have demonstrated that even the most 'primitive' societies have some fundamental organizational structure for the production of the food, clothing, and shelter necessary for survival. Moreover, most such societies have evolved complex formal and informal organizations for the exchange and barter of such goods. In more industrialized societies, the social organization of production and exchange has evolved to the point where massive industrial organizations for production and complex market systems for exchange exist. In addition, to facilitate these organizational processes, means of exchange have been developed which centre around money, banking, and credit. In the type of small communities being considered here it is difficult to discern much formal organizational structure for production and distribution. Small boat crews are essentially productive units, of course, but their level of formal organization often does not extend much beyond the family networks on which they are based. The village store may be regarded as a means of exchange, but it is difficult to establish that the community therefore has an economically viable social organization. On the other hand, there is likely to be a variety of informal organizational structures that facilitate production and exchange. These include the informal exchange of goods and services in which residents of all societies engage and that constitutes the so-called hidden economy. In many small communities this exchange is substantial. Indeed, one reason why people chose to remain in such communities appeared to be the long-term benefits received from this informal (non-market) type of exchange. Another important element of this informal economy is its production for subsistence (again a non-market activity), a point frequently overlooked by outside economic planners who focus on formal economic viability. Indeed, it was on this basis that the residents of Small Harbour and other similar communities concluded that they were 'self-sufficient.' A third element of the informal economic viability of a community is the way in which it uses available welfare and other formal assistance to supplement its formal economic activity. For example, many rural fishermen, farmers, and loggers require varying amounts of seasonal assistance in the form of unemployment insurance or welfare in order to make their formal economic activity viable. Though it might be argued that the need for such assistance demonstrates a lack of economic viability, in many cases relatively small amounts of assistance can create an economically viable community. Thus, from the perspective of many residents of such communities, assistance such as this comes to be seen as an integral element in the economic viability of their community, in much the same way that the president of a large Canadian oil company has recently

157 Three Key Dimensions argued that his oil-sands production project can go ahead only with some level of governmental assistance or a guarantee of a fixed return on investment considerably higher than he now believes the market will provide. Arrangements of this sort are part of the informal viability of an economic operation whether they occur at the level of a multinational corporation, or in a small isolated community. One problem in assessing the economic viability of a community is that, although evidence of the viability of its formal economic organization is difficult to obtain and evidence of its informal economic viability difficult to assess, it is easy to obtain economic indicators suggesting that a community is not economically viable. Statistics are usually readily available to document low levels of income, high rates of unemployment, and high levels of welfare and other subsistence payments. It is relatively easy to adopt an input-output perspective which often seems designed to establish that small communities are not viable. The costs of government services to a community can easily be added and compared with data on the income generated in a community and the value of produce shipped from it. It is only a short step from this to a form of cost-benefit analysis which shows that the cost of maintaining a community is greater than the benefits derived. A great deal of regional and community planning is done on this basis and there is a considerable danger in it. The fact that much of the product of such communities goes for home consumption and never enters the market or provides a cash income is ignored in such a calculation. In some sense the community is its own product and to ignore that in a cost-benefit analysis of economic viability is roughly equivalent to ignoring the cost of capital investment and salaries in calculating the benefits from a large industrial enterprise.

Formal and Informal Social Vitality Whereas outside planners tend to emphasize considerations of economic viability to the exclusion of considerations of social vitality, local residents of a community or region tend to temper their consideration of its economic deficiencies with consideration about its social vitality. The social vitality of a community can be measured in terms of all the formal and informal social structures not primarily concerned with either economic well-being or social control. The heart of the social vitality of any community centres around its basic organizations and activities dealing with socialization. Every society and every community must find some way of socializing its members according to its norms and values and the ways it provides to earn a livelihood. In more 'primitive' societies this is done primarily in the family

158 The Creation of Regional Dependency but in modern societies much of the socialization functions have been taken over by formally organized educational systems and by religious organizations. In communities such as Small Harbour some occupational training is given by the parents, fathers teaching sons how to fish and mothers teaching daughters the traditional skills of housekeeping. However, most residents are critically aware of the need for schools to teach their children the skills necessary in the modern world. One way to assess the social vitality of any community is to examine the extent to which these socialization functions are being performed, either at an informal level in the family or through more formally organized bodies such as the school or church. A decline in informal ways of socialization does not necessarily indicate a decline in community vitality. It may simply indicate that more have been formally organized. On the other hand, a decline in formal ways of socialization is often taken by outsiders and local residents alike as evidence that the social vitality of the community is severely threatened. Social vitality of a community is not defined simply in terms of socialization, however. Sociation and communication are also of considerable importance. Most people engage in social activity not only to make a living, but also for the benefits derived purely from contact with other people. Simmel (1950) referred to the pure form of social activity for its own sake as 'sociation' and it is in this sense that the term is used here. In every community people associate with others in such structures and formal gatherings as church groups and service clubs. They also have intricate networks of informal social relations with a variety of people around them. In some of these commodities are exchanged, but many serve simply to provide friendship or activities for leisure time. Any assessment of the social vitality of communities should consider the extent to which there are such formal and informal sociation networks, for they are often critical in their residents' personal assessments of the quality of life. Either at a manifest or latent level, one of the functions of much social activity is communication. People need to know what is going on in their community and about its relation to the larger world. When the channels of formal communication break down or become disrupted, people create new channels and even improvise information (see chapter 6). When such communities are relatively small and isolated, the importance of formal and informal channels of communications, particularly with the outside world, becomes critical. Unless these channels of communication are maintained, the actual survival of some of the members of the community may be threatened. Thus, there is no surer way to undermine the social vitality of a remote

159 Three Key Dimensions community than to inform it that its communication and transportation links with the outside world are in danger of being broken. Formal and Informal Political Validity

Any society or community, no matter what its size, has to develop some means to control deviance and maintain social order. In small communal societies the basis of social control may rest in the power of the headman or community leader who has formal power to maintain some measure of order. The most effective informal mechanism for maintaining order in small societies is probably gossip. However, as societies increase in size and complexity they must develop a more complex system of formal and informal organizations to maintain law and order. These include all the organizations in a society involved in law enforcement, as well as those involved in making and adjudicating laws. However, in most small communities, the force of law is not as important as the nature and quality of community leadership. The leaders may be formally organized, as in a community council, or they may be an informal group of people who take responsibility for decision-making. In either case, one of the most important factors is whether or not the leaders represent the rest of the community. There are two very different ways in which they may do so. First, they may represent their communities by reflecting the general attitudes and values of the community as a whole. This is critically important in determining whether or not these persons are accepted by the community as 'valid' leaders. It might seem that formally elected leaders would be representative in this way. However, those leaders generally come from among the better educated and better informed members of the community and are also likely to have more contact with the outside world than the majority of community members. Such characteristics immediately set them apart from the community and their opinions and decisions do not necessarily reflect the attitudes and values of the majority of those they supposedly represent. When this happens the 'validity' of even formally elected leaders may therefore be in question. An even greater problem exists in demonstrating that informal leaders within any community represent the majority of that community's residents. They cannot point to any electoral process whereby their right to leadership has been validated. Moreover, they are usually the elite from one of the key economic or religious sectors of community life and their positions set them apart from the rest of the community and possibly alienate them from those

160 The Creation of Regional Dependency segments who have other values or who deal with rival merchants or follow different religious leaders. Consequently, the validity of informal leaders is almost always open to question. However, there is a second sense in which the leaders of any community can be seen as representing it. Leaders represent their community to the outside world as well. In rural communities in Newfoundland the traditional leaders were usually the merchants. They were often the only community members who had contacts with outside political and administrative bodies. All political dealings with the community were arranged through them and they also negotiated with the educational authorities to ensure that teachers were available each year, with the church authorities to obtain the services of a clergyman, and with virtually all outside administrative bodies. In many communities these external ties serve to validate the traditional leaders in the eyes of the community. As was implied in the preceding discussion, the leadership of a community can come from many sources and sectors. While we habitually think of political leadership in terms of elected office holders, those who speak on behalf of many communities are its merchants, clergymen, and teachers. These are not political leaders, but leaders of the economic and socialization organizations in the community. In essence, they attempt to transfer formal or even informal leadership in one sphere of community life into leadership in other spheres. Thus, the lines between economic, social, and political leadership are not as clearly drawn as might be assumed from the analytical framework presented here. One of the issues involved in a community is whether leaders who validly represent its economic, educational, and religious interests can also be accepted as valid representatives of its political and social control interests. In most small communities the leaders find themselves performing a function akin to that of a 'bridgehead' between it and the outside world. Galtung argued that such persons frequently have interests more in common with the outside world than with those who make up the majority of the population in their own region (1971). In most small communities the leaders find themselves in a position analogous to that of Clement's 'compradors,' agents of outside exploitation in their own community (1975). They may be validated as leaders by their ties to the outside world, but these same ties may ultimately align them with interests that are not those of the majority of residents in their communities. Thus, any assessment of the validity of community leadership should pay attention to whose interests are being served by any particular leader. Attention should also be given to the difference between perception and reality. In some cases the community (and even the

161 Three Key Dimensions leader) may think that he is serving community interests when in fact it may be possible to demonstrate that the leader's actions are serving outside interests. Where the interest of local residents and outsiders coincide, there is no problem. When they diverge, however, the leaders involved are in a particularly anomalous and often vulnerable position. THE BASIS OF COMMUNITY AND REGIONAL INTEGRATION

The model of community organization and interaction outlined to this point can be presented schematically (see below). One of the advantages of this framework is that it pays equal attention to both the formal and informal organizational structures in any community, as well as to the relationship between the two. Despite this, it would still be difficult to fully comprehend and analyse community life using this framework. Though it is usually possible to find indicators of each of the dimensions identified by the framework, these indicators do not by themselves give insight into the nature of community integration. As was noted earlier, the integration ofa community is affected by both the extent to which and the way in which the various organizational spheres are tied to one another, and by the manner in which community members feel individually bound to it. A comprehensive understanding of the nature of community life must therefore also examine both these aspects of community integration. One of the strengths of Martindale's analysis is his recognition that identifying a community's organization structure is not sufficient to explain its social integration. Consequently, he identified stability, consistency, and completeness as the 'principles of community formation.' The organizational structures of any community are related to one another in these three ways and, on that basis, an analysis of the nature of the social integration among them may be made. It should be noted, however, that reverse relationships may exist, and that the integration of any community may be characterized by relationships of instability, inconsistency, and incompleteness which threaten the basis of community life. However, in addition to organizational integration, it is also important to understand how the members of a particular community relate to it individually. That is, it is important to understand the meaning community life has for them. At this point there is a close parallel between the analysis of the nature of regions and regionalism presented earlier, and the discussion here of the nature of community integration. It was argued earlier that, although a region may be identified in terms of territorial location and social organization, it cannot be said to exist unless it is also possible empirically to establish

162 The Creation of Regional Dependency Formal and Informal Relational Structures of Community Life Formal organizational level

Informal organizational level

Economic viability

Basic economic organizations of a community or society, including all forms of formally organized production and exchange such as fishing and farming groups, stores, produce markets, factories and processors, unions, banks, and welfare organizations

Informal production and exchange organizations of a community, many of which are non-market processes, especially (a) the hidden economy of reciprocal mutual exchange of goods and services among kin and neighbours, (b) the subsistance economy for home consumption, and (c) the supplemental use of welfare and other transfer payments from the cash economy which make this economy viable

Social vitality

All organizations formally organized for socialization in the values, norms, and skills necessary to live in the community and society (schools, churches), formal organizations for communication (radio, telecommunications, television, newspapers), and all groups formally organized for sociation (service clubs)

All informal groups and activities in the society engaged primarily in socialization, sociation, and communication, including many informal networks and friendship groups, as well as informal communication networks which spread information, news, and gossip. To understand the role and significance of such groups attention must be paid not only to their form, but also to the content of what is exchanged and its meaning for those involved

Political validity

All formally organized groups and positions of leadership and control in the community recognized as valid by the members of the community

All informal mechanisms of control and leadership in the community which the residents of the community accept as legitimate and in their interest

163 Three Key Dimensions that its residents identify with the region and modify their actions accordingly. In parallel fashion, it can be argued that, in addition to considering the formal and informal organizational structure of a community, it is also important to consider the way in which its members identify with it and express that identification in and through their actions. It is thus possible to extend the concept of regionalism to community analysis as well. The essence of community integration lies in the level of 'communitism' which the members of a community demonstrate through their actions. Chapter 1 identified the elements of regionalism as the formation of an identity in which the region plays a significant part, the identification of and with a region, and a demonstrated commitment to that region. These elements also constitute the basis of personal integration into a community. As these were described at length earlier, there is no need to repeat that analysis here. However, some further attention does need to be given here to the importance of this level of personal integration in the functioning of any community. The experience of Small Harbour is a case in point. At a formal organizational level, Small Harbour clearly lacked many aspects of economic viability, social vitality, and political validity. Indeed, it was difficult to establish that there was any firm basis of formal and informal community organization. Yet Small Harbour was able to survive when other communities, often with stronger formal and informal organizational structures, quickly yielded to the pressure to resettle. The answer must be found in the level of personal social integration displayed by the residents of Small Harbour. Those who remained in the community not only identified with it but were also committed to it and to its survival. As a result, they took action which led to the maintenance of their community despite its lack of viability and vitality. The level of personal individual integration in a community may be examined in a variety of ways. For example, the extent of personal integration of individuals into a community can be determined by examining their identity and degree of identification and commitment to it. This can be done using measures which assess the importance of membership in the community to residents' self-conception. Alternatively, the attitudes of community members towards and their feelings for their community can be examined. Hunter, for instance, contends that people actually live in 'symbolic' as much as in physical communities and that it is important to understand their sentiments towards their communities because these 'emotions' constitute the bases for their actions (197 4, 117-39) . One of the most fruitful ways of examining both organizational and personal community integration is through an examination of the social networks in any community. This includes the

164 The Creation of Regional Dependency informal network of exchange relationships whereby members of a community redistribute their goods and services and thus enhance their community's economic viability, the informal networks in which friends and neighbours carry on the social activities involved in community life, and, finally, the informal network of those who frequently shoulder many of its leadership roles. Traditionally, sociologists have used network analysis in examining the structure of organizational integration of a community. The shapes of formal and informal networks are plotted and such aspects of networks as connectedness, density, size, and range are examined (Mitchell 1969, 1-50). The use of network analysis in this manner not only gives considerable insight into the informal organizational structures of the community but also helps determine how the informal organizational structures of economic viability, social vitality, and political validity are linked to and integrated with the more formal ones. This approach thus provides considerable information about the organizational social integration in any community. Recent network analysis has taken a new direction. Whereas traditional network analysis emphasized the form of social networks, some recent examples have concentrated instead on two other dimensions. One of these is the content of the network. Here the focus is on what is exchanged in and through network ties (Fischer et al. 1977). Such a focus allows an assessment of the significance of network ties at an organizational level and helps demonstrate the links between organizational social integration and personal social integration in any community. Network research has also begun to focus on the meaning which network ties have for those involved in them (Fine and Kleinman 1980), a focus of particular benefit in examining how and why individuals are personally integrated into a community. EVALUATING THE SOCIAL IMPACT OF PUBLIC POLICIES

In this chapter a framework has been presented which can be used for analysing the formal and informal organization and integration of a community, as well as the actions and personal integration of community members into it. At this point it is useful to consider how that framework might be used to evaluate the effect of public policy on communities. Canadian social scientists have shown an increasing interest in what is termed 'social impact assessment,' a subject which is primarily concerned with evaluating the impact of public policy on social life. One of the recent works in this area is by Bowles (1981) and explicitly builds on the present author's previous work by identifying economic viability and social vitality as

165 Three Key Dimensions two key dimensions to consider in any 'social impact assessment in small communities.' Bowles sees this as consistent with his definition of social impact assessment (borrowed from D' Amore and Rittenberg) as the process of 'assessing the effects of projects or policies on people - the human implications of what we do. It attempts to forecast the effect that a proposed development will have on the quality of life - the traditions, lifestyles, interpersonal relations, institutions, and living environments' (ibid. 5-6). Bowles notes that such assessments can be made either before or after a policy has gone into effect, but that the methodology is somewhat different in each case. Given Bowles' use of earlier work by this writer, the following discussion can be seen as a direct response to his analysis. He is correct to note that methodology is a key and controversial dimension of social impact analysis. Most social impact assessments employ social indicators as the primary measure of the nature of social life, and from this try to determine the impact of various policy proposals on that way of life. However, Bowles' acceptance of standard social indicator methods as the basis for social impact analysis needs some reconsideration, particularly as his work may well become a handbook for community analysis by planners and policy makers. The earlier critique of the social indicators approach to social research (see chapter 1) pointed out the tendency of those using such an approach to emphasize economic considerations and to give comparatively little consideration to social concerns. It also indicated a decided tendency to focus on the so-called objective indicators and to ignore the more subjective dimensions of social life. Most social impact assessments of communities that employ a social indicator approach also display these tendencies. Those studies are apt to emphasize the impact of a proposed policy on the economic viability of a community and make little reference to its probable impact on the social and cultural structure of that community. There is also a tendency to look for objective indicators or quality-of-life or well-being, without considering either the problem of values inherent in such indicators or the 'meaning' of the changes to the people likely to be most affected. In short, there is frequently little difference between regional policy analysis based on the social indicator approach and most community social impact assessments. Another problem with many social impact assessments of communities is related to the distinction between the formal and informal dimensions of community life. There is a tendency of social impact assessments to focus primarily on the formal social structural aspects of a community, ignoring to a large degree the less formalized patterns of social interaction involved. This is probably because most social impact assessments are made by people from

166 The Creation of Regional Dependency outside a community who have seldom taken the time or made the effort necessary to understand the informal social dynamics which affect the viability, vitality, and validity of community life. A further problem with many community social impact assessments is the difficulty they have in obtaining insight into the social integration of community life. The emphasis on indicators of disparate aspects of community life before and after inauguration of a policy can produce a fragmented understanding of a community. It is not impossible to develop measures of both the organizational integration and the personal integration of communities but social impact assessments rarely do so. Bowles recognizes some of these limitations. For him the social vitality of any community is as important as its economic vitality and should be considered in any social impact assessment of a community. Bowles also shows an awareness of the importance of subjective considerations, though he develops no framework for examining the nature of personal integration into a community (ibid. 45-55). What he does not recognize is the distinction between the formal and informal aspects of economic viability, social vitality, and political validity. Moreover, there is a decided tendency in his analysis (reminiscent of Tonnies' treatment of Gesellschaft) to see all contractual and formal arrangements as somehow lessening the social vitality of any community (ibid. 48-9). This is an over-reaction to those approaches to social impact assessment which give legitimacy only to the more formal aspects of community life. What is needed is more balance between the two extremes. The framework developed in this chapter overcomes some of the problems presented by other approaches, primarily because it does consider certain dimensions of community social life that are frequently overlooked. Community social impact assessments may be undertaken in two ways. One approach is to use a framework simply as a checklist or guide. In such an approach, one or more indicators are obtained of each of the community dimensions identified in the framework. Such an approach is likely to produce a fragmented picture of community life no matter what framework is used for a guide. The alternative is to undertake an analysis which not only focuses on each dimension of community life but also attempts to discover how they are integrated and the meaning they have for the residents of the community. Such an approach is likely to take longer and cost more but it is also likely to develop the comprehensive knowledge of social life essential to any social impact assessment of a community.

PART THREE

The State and Regional Development in Atlantic Canada

One of the aims of this book has been to establish the validity of dependency theory as the basis of a sociological perspective for analysing regional diversity in Canada. Much of the discussion in Part One was directed towards this end. However, as was noted previously, one of the problems with the framework as it is now used is that it tends to involve a strong structural determinism. In contrast, much of the analysis in Part Two emphasized the need for incorporating a more 'voluntaristic' approach to understanding regional dependency. The chapters in Part Two examined various ways in which people most affected by various forms of state action respond to it and alter it. Part Three again demonstrates the legitimacy of a more voluntaristic perspective within the dependency approach, this time investigating the actions of those who make state policy rather than those who are the subject of it. It should be emphasized, however, that this incorporation of a voluntaristic perspective is not seen as a repudiation of dependency theory, but rather as an attempt to explain the actions of various types of people under the conditions of dependency that the theory so aptly describes. The marxist perspective sees the state as operating in the interests of the dominant class in capitalist society and, in some analyses, leads to a teleological form of explanation wherein the state is seen as an integrated and monolithic force operating invariably in the interests of the dominant classes and at the expense of the working class. Some reasons why this conception of the state may not accurately reflect the nature of the state in a federal political system have been examined earlier. It was suggested that the federal government could act, in some instances at least, according to class interests different from those of the provincial governments. One reason is that the provincial governments control most of the staple resources and capitalist attention is usually directed to that level. As a result, the federal government

168 The Creation of Regional Dependency on occasion might act as an arbitrator of the general good in the interest of lower classes and serve to control some excesses of the provincial governments. Chapters 9 and 10 focus on the actions of particular individuals responsible for the direction of state policy. Chapter 9 examines the social and economic development of Newfoundland in the period from 1949 to 1972, when Joseph Smallwood reigned as premier of that province. It shows how government efforts to achieve development in fact served to increase the underdevelopment of that province. Though the over-all perspective is that of dependency theory, attention is paid to the way in which Smallwood's own actions and those of the government which he directed contributed to this result. Chapter 10 considers the role of the federal government in fishery development in eastern Canada between 197 5 and 1980. It tries to substantiate that, at least on occasion, the federal government can operate in opposition to the immediate interests of the dominant class. Throughout this period, federal fishery policy for the east coast was directed at breaking the control exercised by the fish processors over the fishermen and fish plant workers. One reason for this may well be that the offshore fishery is the one staples resource over which the federal government has substantial control. On the other hand, it is unlikely that the federal government would have taken the strong stand that it did had not Romeo LeBlanc been the minister of fisheries ies throughout most of this period and in charge of fishery policy formation. It provides another example of the way in which the actions of individuals can influence the direction of state policy.

9 The Smallwood Legacy: The Development of Underdevelopment in Newfoundland

84. Eighty-four. In all Newfoundland and Labrador. 84. 84 What? 84 Schools with indoor toilets. That was Newfoundland on the day that I became Premier. Today: 838 Schools have indoor toilets. We have not in those years, produced any new or original education theory, philosophy, or practice. But we have put indoor toilets in 744 [sic) schools that didn't have them. That's progress. (Joseph R. Smallwood, To You with Affection from Joey)

Joseph Smallwood presided as premier of Newfoundland from its incorporation as a province of Canada in 1949 until his electoral defeat in 1972. During that period every facet of Newfoundland life was altered as Smallwood strove 'to bring Newfoundlanders kicking and screaming into the twentieth century.' His political activities have been analysed a number of times (Rothney 1962; Gwyn 1972; Neary 1971, 1972; Noel 1971; Matthews 1972), but little systematic attention has been given to analysing his social and economic policies and their significance in the development of Newfoundland. This chapter attempts to do so. Smallwood himself has provided lengthy documentation of many of these policies and programs (1969, 197 3), and similar lists can be found in the budget speeches and platforms of the Liberal party which he headed. T\le

170 The Creation of Regional Dependency analysis here differs from these sources by examining the Smallwood government's social and economic accomplishments in the context of the broader issues associated with development and change. To establish a basis for such an analysis, some of the obstacles to social and economic development facing the Newfoundland government throughout Smallwood's term in office will be outlined. With this as a guide, Small- · wood's development orientation and tactics and his particular programs for social and economic development will be examined and the appropriateness of his strategies, and their strengths and weaknesses, assessed. OBSTACLES TO NEWFOUNDLAND SOCIAL AND ECONOMIC DEVELOPMENT

Newfoundland has many social problems that are impediments to economic development. These include relatively rigid religious cleavages and class divisions. However, the most basic and fundamental problem for social and economic development would appear to be related to population structure. Probably the greatest obstacle to development throughout the Smallwood period was the growth rate and dispersion of Newfoundland's population. A royal commission on social and economic development in the province noted that, 'Economic development embraces the whole socio-economic process whereby an economy's real income increases at a rate faster than its population growth' (Newfoundland 1972b, 6). Newfoundland's population has grown so rapidly that economic gains have largely been dissipated (see Table 4). The high birth rate and low death rate which produced the population surge during the nineteenth century continued until the acute depression of the 1930s. However, with the postwar 'baby boom' the birth rate soared, as Table 5 shows. Just as this expansion was ending elsewhere Newfoundland joined Canada. There followed a period of unprecedented prosperity for most Newfoundlanders which, in conjunction with a family allowance system that paid a 'baby bonus' for every child, led to a continuation of the baby boom until the mid-1960s. Throughout this period Newfoundland had the highest birth rate of any province and the large juvenile population also served to lower the death rate to the lowest in Canada. The developmental implications of this high rate of population growth are far-reaching. A large juvenile population means that a relatively small proportion of the population must support the rest. By 1966 over 51 per cent of the population was under 19 and those over 65 comprised another 5.9 per cent. This situation was aggravated by the fact that, traditionally, few Newfoundland women worked outside the home. In part as a result of these factors, in 1968 less than 24 per cent of the population was employed.

171 The Smallwood Legacy TABLE4 Population of Newfoundland and Labrador, 1836-1971 Year

Population

Year

Population

1836 1857 1869 1874 1884 1891 1901 1911

75,094 124,288 146,536 161,374 197,335 202,040 220,984 242,619

1921 1935 1945 1951 1956 1961 1966 1971

263,033 289,588 321 ,819 361,416 415,074 457,853 493,396 522,104

SOURCES: Census of Newfoundland and Labrador 1935, 1, 9; T. Thahane, Population Growth and Shifts, Newfoundland 1972; Canada Year Book 1968 (Ottawa: Queen's Printer, 1968)

TABLES Newfoundland live birth, death, and natural increase rates per 1,000 population Time

Average live birth rate

Average death rate

Average natural increase rate

1921-5 1926-30 1931-5 1936-40 1941-5 1946-50 1951-5 1956-60 1961-5 1966-70 1971

26.7 25.1 23.4 25.8 29.8 36.2 34.l 34.6 31.5 25.8 24.5

14.0 13.7 12.8 12.4 11.8 9.3 7.6 7.2 6.6 6.2 6.1

12.7 11.4 10.6 13.4 18.0 26.9 26.5 27.4 24.9 19.6 18.4

Canada Year Book 1956, 1961, 1968 (Ottawa: Queen's Printer, 1972), (Ottawa: Information Canada); Vital Statistics, Preliminary Annual Report I 971, Statistics Canada cat. no. 84-201 SOURCES:

The high birth rate and large juvenile population devoured the very real economic gains achieved after confederation. Between 1949 and 1967 Newfoundland's total personal income increased at an annual average of 8.5 per cent, the highest in Canada. In the same period, the per capita income

172 The Creation of Regional Dependency increased by only 6.5 per cent annually (Newfoundland, December 1968) . In 1970, the per capita income was $1,784, a remarkable rise from its 1949 level of $472, but still much lower than the Canadian average of $3,092 or the Ontario average of $3,584 (Newfoundland 1972b, 6) . One way Newfoundland might have narrowed this gap was by curbing its population growth drastically. The effects of the high birth rate on both social and economic development were by no means temporary. The birth rate has declined sharply since 1971, but in the years it will take the population born before then to reach the labour force, Newfoundland will have many more entering the labour force than leaving it through retirement or death. The Newfoundland government estimated that it would have to produce 3,000 to 4,000 new jobs a year to absorb these workers and their estimates were probably conservative (Newfoundland 1970b, 11) . In addition to finding jobs for the thousands already unemployed or employed only on a seasonal basis, upwards of 80,000 new jobs had to be developed in Newfoundland over a twenty-year period if these additional Newfoundlanders were not to be unemployed or forced to migrate. The rate of population growth was only part of the population problem, however. The dispersion of population created more difficulties. Only 40 per cent urban in 1949, by 1971 over 57 per cent of the population lived in urban centres of 1,000 or more (see Table 6). Newfoundland's rural population had also continued to grow, although more slowly. Moreover, the rural population was widely dispersed. As late as 1961, 815 of 1,104 communities had less than 300 inhabitants (see Table 7). By 1971 there were only 878 communities but 545 still had fewer than 300 residents and 226 had less than 100. This dispersion of rural population has been a major impediment to the provision of modern services in Newfoundland. It was simply too costly to provide many communities with facilities such as electricity, roads, telephones, hospitals, and modern schools. It was also often impossible to find qualified doctors, nurses, and teachers willing to live in comparative isolation. This, itself, might well have led the Newfoundland government to consider ways of dealing with population dispersion. In addition, many politicians and officials saw the isolation and dispersion of much of the population as an impediment to economic development. They believed that only by concentrating the population in large centres would there exist a sufficient 'labour pool' to entice new industry. They also argued that only in such centres could young Newfoundlanders receive the training necessary to obtain industrial employment Overson and Matthews 1968, 146). For these reasons population centralization became a major thrust of Newfoundland's social planning.

173 The Smallwood Legacy TABLE6 Rural and urban population of Newfoundland and rural and urban percentages for census years 190 l to 197 I Census year

Total census population

Rural population (under 1,000)

Per cent rural

Urban population (over 1,000)

Per cent urban

1901 1911 1921 1935 1945 1951 1961 1966 1971

220,984 242,619 263,033 289,588 321,819 361,416 457,853 493,396 522,104

186,458 186,485 198,555 203 ,986 218,886 206,621 225,833 226,707 223,304

77.5 76.9 75.5 70.4 68.0 57.2 49.3 45.9 42.8

49,616 56,161 64,478 85,602 102,933 154,795 232,020 266,689 298,800

22.5 23.l 24.5 29.6 32.0 42.8 50.7 54.l 57.2

SOURCES: 1901-45 compiled from 'Statistics on Communities of over 1,000 Population' in

Census of Newfoundland 1945: 2. 1951-66 compiled from Canada Year Book 1956 (Ottawa: Queen's Printer, 1956) , Canada Year Book /968 (Ottawa: Queen's Printer, 1968). 1971 statistics provided by Statistics Canada. Urban and rural percentages calculated by the writer. TABLE 7 Number of communities in Newfoundland by population of community, census years, 1961, 1966, 1971 Population of community 0-49 50-99 100-199 200-299 300-399 400-499 500-999 1,000-4,999 5,000-9,999 10,000 and over SOURCES:

Number of communities 1961

1966

1971

238 174 263 140 83 69 83 47 5 2

153 148 222 125 91 48 116 60 7 2

113

113 196 123 82 44 126 71 8 2

1961: Census of Canada 1961, 92-538, Builetin SP-4 ' Population of Unincorporated places of 50 persons and over,' Canada Year Book /968 (Ottawa: Queen's Printer, 1968) 197, 'Incorporated Towns and Villages, 1961; Dominion Bureau of Statistics, St John's, Newfoundland, supplement listing unincorporated places with less than 50 persons. 1966 and 1971: unpublished data, Statistics Canada, St John's, Newfoundland, 'Province of Newfoundland: Unincorporated Communities with a Population of less than 50 for 1966 and 1971,' 'Population of Unincorporated Places of 50 Persons and Over, Newfoundland: Population of Incorporated Cities, Towns and Villages, Census Years 1951-1971.'

17 4 The Creation of Regional Dependency However, population factors are certainly not the only underlying conditions contributing to Newfoundland's lack of development. The simple fact that Newfoundland is an island means that goods produced there cannot be transported overland to markets. The additional labour costs in loading goods from boats to trains or trucks puts Newfoundland products at a disadvantage when competing for North American markets with neighbouring Nova Scotia and New Brunswick. Newfoundland's economic prospects are further hampered by her isolation. Though central Canadians tend to think of the Atlantic region as relatively small, it is worth noting that St John's is approximately the same distance by sea from Halifax as Halifax is from Boston. Goods produced in Newfoundland for export must travel great distances to reach their markets. One of the favourite advertisements published by the Newfoundland Department of Economic Development during the Smallwood era depicted a map of the world with Newfoundland at the centre and concentric circles drawn at 500-mile intervals around it (The Atlantic Yearbook 1971, 289). Though the advertisement contended that Newfoundland was 'right in the middle of things,' the inference that Newfoundland was the one place in the western world which was farthest from all major world markets could also be drawn. Newfoundland's labour force presented further obstacles to economic development. Major advances had been made in education and training, but a large part of the labour force remained illiterate. In 1961 , 18.0 per cent of all Newfoundlanders and 26.7 per cent of the rural population were illiterate: twice the national illiteracy rate. More important, over 25 per cent of those between thirty-five and forty-four and over 12 per cent of those between twenty-five and thirty-four were illiterate (Atlantic Development Board 1969). Much of the labour force (either literate or illiterate) was unskilled for anything except manual labour and inshore fishing. An examination of the structure of Newfoundland's labour force gives further insight into her economic problems. At the turn of the century almost the entire labour force of Newfoundland was made up of inshore fishermen. In 1911, 43,795 men were employed in catching and curing fish (Great Britain 1933). Despite the increase in population there were 35 per cent fewer fishermen by the time of confederation with Canada in 1949, although these 28,000 fishermen were still the mainstay of the economy (Roberts 1968). From 1949 until 1970 the number of fishermen stabilized at around 18,000 or about 20 per cent of the labour force (see Table 8) . The popular picture of Newfoundlanders as fishermen, loggers, and miners does not reflect reality. By 1970 the three together comprised less than onequarter of the labour force.

175 The Smallwood Legacy TABLES Employment in Newfoundland by selected industry, 1970 (yearly averages) Industry

Number employed

Primary Forestry Mining Fishing• full-time part-time occasional

2,200 5,900 17,765 1,855 7,282 8,628

Secondary Manufacturing Non-durables Durables Construction

12,600 10,700 1,900 7,600

Tertiary Trade Wholesale Retail Finance Community, business, and personal services Non-commercial sector Commercial sector Public administration and Defence Transportation, communication, and other utilities

18,200 6,100 12,100 2,300 30,300 21,600 8,700 8,600 14,600

SOURCE: Most of the data above are taken from 'Estimates of Employees by Province and Industry,' February 1971, Statistics Canada cat. no. 72-008. This tabulation does not include fishermen , and the data on fishing are taken from 'Fisheries Statistics, Newfoundland 1971,' Statistics Canada cat. no. 24-202 • Because the Newfoundland fishery is seasonal, many inshore fishermen are listed as part-time and occasional even though they would regard themselves as full-time fishermen. However, a small number may also be employed in other industries (notably forestry) during the off season.

176 The Creation of Regional Dependency These statistics also indicate the general failure of the Newfoundland government to attract manufacturing industry. Only 12,600 of the approximately 160,000 persons employed in 1970 were in manufacturing, and most of those were producing food for the local market. Less than 2,000 were producing durable goods. The employment structure also reflected the extensive amount of construction which took place in Newfoundland after confederation. During the early 1960s, nearly 7 per cent of the labour force worked in construction (Newfoundland 1967, 123), slightly surpassing the national average (Canada Year Book 1968, 759) . As Newfoundland's urgent construction needs were met, the government faced the spectre of adding these few skilled workers to the already large unemployment rolls. Perhaps the most striking feature of the Newfoundland employment structure was the large segment of the labour force in service (tertiary) activities. By the 1970s it amounted to approximately 50 per cent of the labour force . While this is common in most industrially developed societies it seems unusual for a society with such a small manufacturing base. It would seem obvious that Newfoundland could maintain this level of service only because it received substantial financial support from the other Canadian provinces through federal transfer payments. Insularity, isolation, illiteracy, and a low level of skills were problems which faced the Newfoundland government at confederation. They can be regarded as background conditions which any future economic policy had to try to overcome or alter. The problems of a small manufacturing base, an unbalanced labour force, and a dependence on federal transfer payments which have just been discussed, seem to be of a different order. Though partly the result of insularity, isolation, and illiteracy, they were also the result of the government's attempts to solve these problems over the twenty-three years of Smallwood's reign. At this juncture it seems impossible to separate Newfoundland's economic problems from the programs which attempted to overcome them and a direct examination of Newfoundland's social and economic development policy between 1949 and 1972 is, therefore, desirable. BASIC DEVELOPMENT TACTICS

The government of any country, region, or province lacking in development is torn between spending its limited resources either on services providing immediate comforts but little long-term security or on developments offering the possibility of long-term employment but little in the way of immediate creature comforts. Smallwood and his government were faced with this dilemma.

177 The Smallwood Legacy In his own assessment of his career, Smallwood would have us believe that he chose industry before services: Even before I became Premier, I had made up my mind on the greatest single issue that would exist in Newfoundland from the moment it became a province. We could spend the millions in our cash surplus to build roads, bridges, and causeways, and schools, hospitals, and water and sewer systems, and the hundred and one other improvements that we needed so desperately. But every instinct in me rose up in alarm at the idea. By following that course, we would have better roads, schools and hospitals, more housing, electricity, water and sewage systems, and public libraries than we had ever dreamed of - and still most of our people could be unemployed ... Surely our common-sense told us that the only sane course for us to take was to create jobs: not just jobs building houses and roads, schools and hospitals, electric lighting, and all the rest ofit, happy as such development would be; but jobs producing pulp and paper, minerals, cement, building boards, and other products that could be sold for cash. (1973, 334-5)

Yet the most cursory examination of the spending patterns of Smallwood's government reveals that most of his 'cash surplus' went to provide services rather than industrial development. Indeed, much of the limited resources went into two services alone: education, and transportation and communications. In 1949-50, the first year of confederation, 12.6 per cent of the provincial budget was spent on education, 11.4 per cent on transportation and communication, and only 3/10 of 1 per cent on trade and industrial development (Newfoundland 1970a, Table G-3). Admittedly this was not a usual year and by 1954-5, 7.9 per cent of the provincial budget was spent on trade and industrial development. By that time expenditures on transportation and communication had increased to 21.5 per cent of the budget and that on education to 16.5 per cent. This pattern continued throughout the succeeding decade. By 1959-60 transportation and communication accounted for 24.2 per cent of the budget and by 1964-5 (just prior to the completion of the Trans-Canada highway in Newfoundland) they reached a massive 31.3 per cent (Newfoundland 1970a, 1971). Throughout that same period educational expenditures remained at between 16 and 17 per cent but expenditures on trade and industrial development sagged. From 7. 9 per cent in 1954-5, they fell to 2.1 per cent in 1959-60, and to 7/io of 1 per cent in 1964-5. Only when the Trans-Canada highway was completed did they begin to rise: to 6.2 per cent in 1969-70 and to 9.3 per cent in 1971-2, the last year of Smallwood's reign (Newfoundland 1972c) . By that time increases in salaries had raised the cost of education to well over 20 per cent of the annual budget.

178 The Creation of Regional Dependency One could just as easily single out expenditures on health services and on social welfare for comparison, as expenditures in those years also far exceeded those on trade and industrial development. Education and transportation and communication were chosen for comparison, however, primarily because they best exemplify Smallwood's perception of development. The quotation which begins this chapter is more in line with his development tactics than his more recent formulation of them would have us believe. From the moment of confederation he strove to develop a program of education universally available from primary school to the post-secondary level. He also provided millions of dollars to build a network of roads and air links not only within Newfoundland but with the rest of Canada as well. In both areas Smallwood showed great imagination. In the sphere of education he built regional and vocational schools and transformed Newfoundland's junior college into one of the largest universities in Canada. But as long as the average annual income from fishing remained less than $700, few ordinary Newfoundlanders would ever be able to afford higher education. Consequently, Smallwood established the most comprehensive system in Canada of scholarships and bursaries for all levels and types of education and even briefly introduced North America's only system of free university education. He also attempted to upgrade Newfoundland's traditional occupations by establishing North America's only college of fisheries and navigation. In the area of transportation, Newfoundland's traditional dependency on the sea delayed highway development. At the time of confederation there was no trans-island highway, few local roads, and only 121 miles of pavement. Canada's west had been lured into confederation with a promise of a railway link to central Canada. In 1949, Newfoundland was in no position to bargain for a similar highway link. Nevertheless, Smallwood continually demanded more than the 50 per cent of construction costs that the federal government had given other provinces to build the Trans-Canada highway. In 1960 he won from Lester Pearson a pledge of 90 per cent of costs should the Liberals regain power in Ottawa. Five years later Smallwood's dream was a reality. Unfortunately, this portion of the Trans-Canada highway ran through the uninhabited centre of the island and did not reach the majority of rural Newfoundlanders who lived on remote peninsulas and offshore islands. For them, Smallwood's government built a network of over 5,000 miles of secondary roads. Smallwood also founded an airline. Gander-based Eastern Provincial Airways was originally a bush-pilot operation begun with a grant from the Newfoundland government. Thanks to Smallwood's manipulations it was able to

179 The Smallwood Legacy obtain sufficient federal and provincial financing to become a major regional carrier (Gwyn 1972, 282) . Originally it linked isolated communities within Newfoundland. It still provides this service, while its jets also link the province to maritime centres and Toronto. It also remains the only transportation link between the island of Newfoundland and the rich Labrador hinterland. These developments in education and in transportation and communications formed the cornerstone of Smallwood's development policy, and he regarded them as a necessary part of his goal to lure outside developers to Newfoundland. Without improved transportation and communications it would be virtually impossible to attract outside industrialists. If they did come, they would not likely employ local labour unless local residents had the education and skills which they required. Moreover, the Newfoundland people themselves demanded these developments. They had already had a taste of prosperity during the Second World War and they were unlikely to return to the isolation, peasant servitude, and hardships of the past. It is probably because he provided these services that Newfoundlanders reelected Smallwood for twenty-four years. It is no mean achievement and certainly no shame for a politician to provide greater creature comforts, better educational facilities, and improved transportation and communications facilities for his constituents. All of these have made life in Newfoundland more agreeable. It is the theme of the analysis here, however, that Smallwood's efforts have left the province a legacy of underdevelopment. By spending most of his cash resources on such amenities he was able to create short-term employment but few long-term jobs. The result is that Newfoundland continues to have the highest level of unemployment in the country. Had outside developers been lured to the province it might have been possible to maintain sustained economic growth. To understand why they did not come it is necessary to look more closely at Smallwood's social development policies and strategy for economic growth. SOCIAL DEVELOPMENT POLICY

The Smallwood government faced two fundamental problems: a high rate of population growth offset any overall economic gains made in the province and the wide dispersion of population made the provision of services exceedingly difficult. Somewhat surprisingly, Smallwood saw Newfoundland's high birth rate as contributing to ultimate economic development and, if anything, boasted about it and encouraged it. His position on population growth is reflected in the following quotation from his autobiography:

180 The Creation of Regional Dependency I remember a brief conversation I once had in the air terminal at Gander with Prince Philip. There was an immense jam of cheering youngsters there from around central Newfoundland to greet the Queen and the Prince. 'We have the highest birth rate in North America,' I told him. 'Our population is growing at a faster rate than anywhere else in Canada.' He seemed to take a dim view of that fact, but his response changed quickly when I pointed out that we were only half a million souls in Newfoundland, which didn't make too good a market for industries catering to the Newfoundland market. 'When we have a million people in the province, they'll be able to support dozens of factories and other kinds of enterprises that couldn't survive today,' and he nodded in agreement. (Smallwood 1973, 352)

On the other hand, Smallwood did everything possible to resettle and centralize the population. From the point of view of increased economic development, both approaches were misguided. Though a population twice its present size would indeed require twice as many goods and services, it is unlikely that twice as many people would be needed to produce them, for large industries are more efficient than small ones. Smallwood hoped that an increased population would lure new industries to the province. Yet a doubling of population would require at least a doubling of Newfoundland's job openings, as approximately 4,000 new jobs a year were required simply to maintain the already miserable level of employment. Unless a high number of jobs could be created, a large part of the population would be unemployed or would have to migrate. As Baran has pointed out, unemployment is a likely consequence of the type of strategy Smallwood proposed. It is argued ... that a rapid increase of the population exercises pressure on the wage level, and leads to higher profits, thus promoting capital accumulation and rendering investment at the same time more attractive to the capitalist entrepreneur ... There surely is no obvious reason for making such an assumption - the lowering of wages resulting from an intensified competition for jobs among workers would, by reducing the income of wage earners, cause a drop in aggregate consumers' demand without this drop being offset by a corresponding increase in investment. In fact, investment would be discouraged by the reduction of consumers' purchases, and furthermore the availability of cheap labor would tend to weaken the incentives to introduce labor-saving machinery the development and production of which themselves represent an important investment opportunity. Thus the increase of the labor supply and the cheapening of labor might lead not to growth of investment and output but rather to growth of unemployment - open or disguised. (1957, 66-7)

181 The Smallwood Legacy One indicator of the success of Smallwood's approach to population growth and development is the rate of migration from the province during and immediately after his term in office. If an increasing population did indeed serve to provide more jobs, fewer Newfoundlanders would have to leave the province to obtain work. Smallwood appears to have believed that this was indeed what was happening: On the day I became Premier, our population was 347,000. Today it is 510,000. I am Premier today for 163,000 more Newfoundlanders than I was the first day. Because: Newfoundland, since Confederation, has had the highest birth-rate in Canada. And the lowest death-rate. And I have been successful in keeping most of our people home ... keeping them in Newfoundland. It took a lot of improvements, a lot of progress in many directions ... but these did create an air of hope and confidence. But the mad rush away from Newfoundland was stopped. (1969, 137)

However, by using census statistics coupled with statistics on births and deaths it can be seen that this was true only of the early years of Smallwood's tenure. In his later years the rate of emigration from Newfoundland was higher than it had been for at least forty years; even higher than in the depression of the 1930s when nearly one-quarter of Newfoundland's population subsisted on a 'dole' of six cents a day. Indeed, from 1957 to 1971 the number of people leaving the province annually exceeded by 3,000 to 4,000 the number entering it (see Table 9). Significantly, this figure is approximately equal to the number of new jobs which the Smallwood government itself estimated would have to be created to cope with the expanding population. It reflects the complete failure of Smallwood's development tactics. The first attempt to deal with the problem of population dispersion was the Smallwood government's centralization program begun in 1953. It offered small sums of money to each household in communities where everyone had agreed to move. It was, as we have seen, replaced in 1967 by the federalprovincial resettlement program which raised the grant available for each household, and lowered the proportion of the community required to be willing to move before assistance was granted. In addition, each family had to move to an approved destination, a 'growth centre,' before receiving any

182 The Creation of Regional Dependency TABLE9 Average yearly net migration and net migration per 1,000 population in Newfoundland, 1922-71

Census period

Total natural increase

Actual population gain

Total net migration•

Average yearly net migration

Average yearly net migration per 1,000 populationt

1922-35 1936-45 1946-51 1952-6 1957-61 1962-6 1967-71

43,416 47,837 54,596 53,623 60,168 58,265 48,540

26,555 32,231 39,579 53,658 42,779 35,543 28,708

-16,861 -15,606 -15,017 +35 -17,389 -22,722 -19,832

-1,204 -1,561 -2,503 +7 -3,478 -4,544 -3,966

-4.4 -5.1 -7.3 0.0 -8.2 -9.5 -7.5

• Minus figures indicate that the net migration was emigration. Thus, the figures indicate how many more people left the province than entered it. t Rates of net migration were calculated on the average population during the census period, which was obtained by averaging the total population at the beginning and end of the census period.

assistance. Seventy-seven of Newfoundland's larger communities were declared to be growth centres and hence approved reception centres. The resettlement program was but a part of the larger approach to regional development known as the growth-centre strategy of development. That approach posits that regional development is most likely to occur around 'growth centres' containing 'master industries' which have extreme 'propulsive potential' for development. Its relevance as a strategy for economic development in Atlantic Canada is examined in detail by the Atlantic Provinces Economic Council (1972) and Glover (1973). Canning (1971) has discussed its utility as a development strategy for Newfoundland. There are a variety of objections to the Newfoundland resettlement program. Many of those who resettled had no intention of moving only a few months before. They were persuaded to move by government reports that a large number of Newfoundland communities would have to be disbanded and by their relatives and friends who wanted to move but could obtain government assistance only if the vast majority of the community moved. Moreover, the resettlement program also made it too easy for government officials to encourage resettlement without consideration of the alternatives. It can also be argued that the resettlement program actually increased the dualism between rural and urban Newfoundland. Policies which focus on

183 The Smallwood Legacy urban development and assume that the traditional rural sector of the society will somehow adjust, may actually increase the rural-urban schism. There is a danger in over-emphasizing the extent of such dualism given the dependency of both rural and urban areas on the same world economic processes. Nevertheless, there is considerable evidence that many rural Newfoundlanders have value orientations different from those of their urban counterparts. Even though many rural Newfoundlanders are forced to go away to obtain work, their goal is to make their traditional way of life more viable, and there is little basic change in their attitudes and values. One of the strongest arguments against the Newfoundland resettlement program is that it eliminated traditional jobs before there were sufficient jobs available for those already unemployed. Most of the so-called growth centres in Newfoundland had very little industry, differing from smaller communities primarily in size and in the services they provided. Many who resettled in them still had to travel long distances from their new homes to find work or were forced to join the ranks of the unemployed. It has been suggested that the resettlement program was a deliberate attempt to create large pools of labour as a precondition to attract new industry (Mowat and De Visser 1968) . Certainly, one of the assumptions of the growthcentre strategy is that large industry is the best solution to regional underdevelopment and it is obvious that such organizations must have a large labour pool on which to draw. Moreover, a large industrial complex needs services such as water and sewage facilities unavailable in rural areas. However, if the resettlement program was a deliberate attempt to create large unemployment pools, it was particularly machiavellian for it placed the workers at the mercy of the large corporation. It is to the corporation's advantage if large labour pools exist, for lower wages can be paid. Industry can hire and fire at will for there are always unemployed persons anxious to work no matter what the conditions of work. As Mandel notes, 'Capital has a vested interest in maintaining at its disposal vast reserves of labour on the national market' (1973, 6). In sum, Smallwood's policies of population development contributed to the level of unemployment in Newfoundland, encouraged the migration of population within the province, and forced many who could not find work to emigrate. ECONOMIC DEVELOPMENT POLICY : THE STAPLES

At the time of confederation in 1949 the Newfoundland economy was based on the staples of fish, forest products, and, to a lesser extent, mining. Prime among these, of course, was the fishery.

184 The Creation of Regional Dependency There is a widely held belief among Newfoundlanders that the Smallwood government rejected the fishery. They point to attempts to resettle fishermen and efforts to diversify the economy. As Neary (1971, 11) has pointed out, Smallwood's twenty-three years in office can be seen as loyal support for the benefits which he provided to the fishermen as well as establishing their over-representation in the Newfoundland legislature. Copes documents that under Smallwood assistance to the inshore fishery surpassed the income generated from it, and government support to the offshore fishery was similarly substantial (1972, 65-75, 230-43). If government statements about the fishery were relatively low-keyed, it was probably because fish stocks had so declined that the catch per-man-year dropped 50 per cent in the decade from 1956 to 1966 (Newfoundland 1967, 184). If Newfoundland were to survive it obviously had to develop alternative sources of employment and income. There were problems in the forest industry as well. At confederation over 60 per cent of the productive forest land had already been leased to the two paper mills at Corner Brook and Grand Falls under ninety-nine-year agreements made in 1902 and 1923. Only 14 per cent of the productive forest land on the island was still held by the crown (ibid. 156). However, the mining industry offered more possibilities. With the exceptions of the large iron ore mine at Wabana, the lead and zinc mine at Buchan's, and two small flourspar mines, Newfoundland's mining potential was largely untapped, though most of it remained undiscovered as well. A further staple had not been exploited either. This was hydro-electric power. At confederation even the few existing industries had been forced to curtail production because of lack of power (ibid. 275) . In the first years of confederation the Smallwood government harnessed a number of small hydro resources and brought electricity to many homes. In the early 1960s it began to develop the 600,000 horsepower potential at Bay d' Espoir on Newfoundland's south coast. The major source of hydropower was the vast Churchill Falls waterway in central Labrador, however. The potential sevenmillion horsepower on the upper Churchill was among the largest in the world and the lower Churchill offered still further power potential. The development and utilization of Newfoundland's abundant hydro-electric power resources was critical if the province were ever to develop an industrial base. Indeed, enough cheap electric power could be developed to put Newfoundland and Labrador among the industrially advanced areas of the world. The most significant aspect of Newfoundland's development is the manner in which Smallwood's government undertook to exploit these staple resources. The pattern chosen was that set in railway construction and paper

185 The Smallwood Legacy making in the late nineteenth and early twentieth centuries. Large industrial concerns were offered tempting concessions to come to Newfoundland and undertake to develop its resources. Mining companies were offered exclusive exploration and mining rights to large concessions, often amounting to thousands of square miles. Desperate efforts were made to attract industrialists willing to establish a new paper mill in Newfoundland and another in Labrador. The right to develop Churchill Falls was given to private industrialists. In all these cases developers were offered virtually free use of Newfoundland's natural resources and were usually given such additional incentives as tax concessions, outright grants, and government backing for construction loans. The only major resource development undertaken by the government alone was the Bay d'Espoir power development and that power was itself used to entice industrial developers to establish in the province. Most evidence suggests that Smallwood's strategy for staples development brought little lasting benefit to Newfoundland. There was an enormous increase in the value of minerals produced from $27.5 million in 1949 to $336 million in 1971, mostly due to the development of iron ore in Labrador (Newfoundland 1970a, 1971, 1972c) . But most of the profit from the sale of these resources undoubtedly left the province and there was no development of secondary mineral processing and manufacturing within it. Moreover, the concessions system created many of the same problems that had proved detrimental to the further development of Newfoundland's forest industry. As the royal commission on Newfoundland's economic prospects noted, few companies involved possessed either the capital or the technical knowledge to explore properly their large holdings (Newfoundland 1967, 147). Indeed, the commission recommended that regulations should be introduced governing the size of the concessions and the extent of explorations required (ibid. 147-50). Given this, it might have been more beneficial if the government had undertaken preliminary mineral exploration and then either developed the resources itself or attempted to get competitive bids for concessions. This tactic has proven to be a highly lucrative source of funds in areas where the availability of resources has been shown to be fairly certain (Alaskan oil, for example). Newfoundland's mineral development under Smallwood was a resounding success in comparison with the development of forest products, however. Throughout his political career Smallwood made numerous public announcements of a 'third' paper mill at Come-By-Chance, a 'fourth' mill at Stephenville, and even hinted at a 'fifth' mill in Labrador. None of these ever materialized until, towards the end of his regime, Smallwood convinced the head of Canadian Javelin, John C. Doyle, to build a linerboard

186 The Creation of Regional Dependency (cardboard) mill at Stephenville. Because all the wood in the area was already under contract, supplies for the mill were to be cut in Labrador and shipped to Stephenville. The only reason for building the mill in Stephenville appears to have been the closure of the American airforce base which had been the main employer in the community. Hundreds were left unemployed and Smallwood was obviously desperate to find work for them in the area. By the time the mill opened the government's investment in it had risen from an original estimate of fifteen to twenty million dollars to well over a hundred million dollars, and it was doubtful if the mill itself were worth that amount. The opening of the mill coincided with the defeat of Smallwood's government. The Progressive Conservative government which replaced it immediately nationalized the mill (an unusual measure for a Conservative regime) in an attempt to get fiscal control. They operated it for a few years, and then closed it. It had opened at such cost that profit was impossible. When it closed hundreds in Stephenville and many more in Labrador were put out of work. Indeed, many Labrador residents had spent their life-savings in logging equipment which was no longer of any use. The Stephenville operation has recently been sold at a considerable loss to a large multinational corporation. Perhaps the staples development by the Smallwood government which has been, in the long run, most detrimental to the province's economy is the Churchill Falls hydro project. Mathias cites it as one of the few examples of 'forced growth' from which a Canadian province has gained, arguing that Newfoundland got a major development which it could not afford itself and also that it 'created a source of revenue of $15 million a year, a sizable source of funds for a province whose expenditures in 1966 were $131 million.' He admits that the private backers of the project would receive between $22 and $23 million annually (1971, 50) . Newfoundland's Conservative government, however, contradicted Mathias' statements. In a heavily documented statement they showed that the revenue to the province would not reach $15 million until after 2002 (Neary 197 3, 213-14). But this profit was illusory for, under the Federal-Provincial Tax Equalization Agreement, Newfoundland's payment from Ottawa would be reduced by at least that amount of revenue from the development. If matters were to stop there at least there would be some benefit to the Canadian economy as a whole but, under a 1965 act, the federal government agreed to return to the provinces 95 per cent of taxes collected annually from public utilities after subtracting this amount from their tax equalization payment. As part of its agreement with the developers of Churchill Falls power, the Smallwood government agreed to give half of its share of these taxes to them. As its tax

187 The Smallwood Legacy equalization payment would be reduced by that amount, Newfoundland and Canada thus lost money through the operation of Churchill Falls. Indeed, the more successful Churchill Falls became, the more Newfoundland would lose. Eventually the Conservative government which succeeded Smallwood, after threatening to nationalize the development company, came to an agreement to purchase the Churchill Falls development project. ECONOMIC DEVELOPMENT POLICY : INDUSTRIAL DEVELOPMENT

We have seen how Smallwood's staples development centred on luring developers to Newfoundland. Offers of concessions were the basis of Smallwood's industrial development strategy as well. Unwilling to wait for staples to be harnessed, he wanted industry immediately: 'The delay there had to be in obtaining the necessary facts about our natural resources was hard to take. It was not in my nature just to wait for the results of the surveys: I had to do something while I was waiting' (1973, 345) . In the first few years after confederation twenty small industrial plants were started. Most had been enticed to the province by offers of development capital and various other concessions (Gwyn 1972, 140-69) . Less than half are still functioning. In only four cases did the government itself directly control the operation of these industries. Two of those involved the government takeover of existing asphalt and creosoting plants built during the war and closed shortly after confederation (Smallwood 1973, 351). They were ultimately sold to local economic interests. The other two were a cement mill and a gypsum board factory which the Smallwood government decided to build after a fruitless search for developers both in North America and in Europe. As Smallwood explained, I told Valdmanis [Director General of Economic Development] to go ahead with my preparations but wondered in my own mind who could build the two plants and own them when they were ready for operation. I had no thought whatever that the government should operate them; indeed I would have greatly preferred it if private enterprise had been willing to build and own the plants in the first place ... The two plants were built by us and went into production, and for a short period, they were operated by the Government. I looked about to find private operators who would be willing to buy both plants, but without luck ... I invited the Lundrigan firm in Corner Brook [a Newfoundland construction firm which was booming as a result of the post-confederation developments] to put together a Newfoundland Company to take over the ownership and operation of the gypsum plant. This they did, and they continue to this day to operate the plant successfully. We made a similar arrangement for the cement mill. (ibid. 348)

188 The Creation of Regional Dependency Throughout the remainder of Smallwood's administration there were many similar instances where industries were lured to the province by government incentives. It was near the end of his period in office that Smallwood produced his most ambitious industrial development scheme. His dream was to turn Newfoundland into a major producer of chemicals and oil products. The project began with his attempt to lure a phosphorus manufacturing company to Long Harbour by offering it cheap hydro-electric power from the Bay d'Espoir development. Power is a major cost factor in phosphorus production and this was incentive enough. Once the plant was in operation, however, it was widely rumoured that because of a miscalculation it would receive more in subsidy from the provincial economy than it would ever return in taxes. Shortly after, Smallwood announced an agreement whereby Shaheen petroleum of New York would build one of the world's largest oil refineries in Come-by-Chance. The $170 million project was the largest industrial development ever attempted in the province. Again, the pattern of enticements and concessions was followed. Though Shaheen would build the refinery with funds from British investors, a huge portion of the debt was guaranteed by the Newfoundland government. The refinery itself was established as a provincial crown corporation free from most federal and provincial taxes. Though Shaheen had little direct investment in the operation, his firm was guaranteed a percentage of the profits and given an option to purchase it after several years for $10 million (Gwyn 1972, 314-17; Smallwood 197 3, 472-83). At that time there were no known oil reserves of commercial quantity in Newfoundland or indeed within 1,500 miles. Yet Smallwood did not consider this a deterrent. Other areas had plenty of oil, but in all the world there were only a score of ports deep enough to take the 200,000-ton oil tankers which transported it. Come-By-Chance was one. As far as Smallwood was concerned the refinery had much to offer. It would employ several thousand construction workers just as the Churchill Falls development was being completed and an election was looming. Once completed, however, it would produce a maximum of only 450 jobs and Smallwood was certainly astute enough to realize that. If that was to be the only gain, the workers might just as well be put to work building pyramids. The advantage of the refinery was seen to be its ability to spawn other types of related industry until Newfoundland became a major petrochemical centre (Smallwood 1973, 473). Smallwood and his government had embraced the growth-centre theory which holds that development can best be achieved through establishing a 'propulsive industry.' The petrochemical industry is

189 The Smallwood Legacy potentially the most propulsive industry possible in a world where so many common household products and industrial tools are manufactured from oil by-products. Thus, Smallwood's policies of social development and industrial development were both founded on growth-centre theory. In Newfoundland, however, the strategy failed. The refinery produced not one 'multiplier' job and soon closed its doors. Like the pyramids it is a monument to its creator. Unfortunately it is a much poorer tourist attraction. AN ASSESSMENT OF SMALLWOOD'S DEVELOPMENT POLICY

Smallwood's strategy of staples and industrial development concentrated on offering Newfoundland's natural resources and limited cash surplus to outside developers to entice them to establish in Newfoundland. As his efforts often ended in failure, the reasons for his adoption and continued use of this strategy bear investigation. It is worth emphasizing that this was the major strategy advocated by the federal government from the early 1960s and even before that the provincial governments competed with one another in offering concessions to attract private industry. But Smallwood, at least prior to confederation, was an avowed socialist. He had been a writer for a socialist workers' paper in New York city and a union organizer in Newfoundland (Gwyn 1972, 20-38). Why then had he given 'no thought whatever' to developing Newfoundland's resources with public funds or constructing and operating more factories as government-run crown corporations? The probable answer is that he was attempting to provide such a high level of services that little was left for resource exploitation or industrial development. Smallwood claims as much. 'We hadn't,' he says, 'the accumulated cash capital in Newfoundland, then, to finance natural resources development, even if there were known resources to develop' (1973, 337). Moreover, he could not depend on the local economic elite to provide the initiative for industrial development. Most were engaged in commercial trade which promised major profits as a result of the influx of money. They were unwilling to invest their capital in speculative industrial development. Smallwood sweepingly condemns them: It was useless to turn to the businessmen of Newfoundland. Most of them were scrambling around, like henhawks eyeing a chicken coop, for their share of the millions of family allowances and other cash pouring in from Ottawa. Wholesale jobbing, retail shops, they were stocking up to the bursting point, telegraphing and telephoning urgently to the mainland for more supplies, and scouring Canada for new agencies. I didn't dare venture my life in that mob of single-minded traders. It would

190 The Creation of Regional Dependency be useless to talk to them about investing in new industries, so I would have to search outside, and I did. (ibid. 346)

Of course this is not unusual. Baran describes how the traditional elite of most underdeveloped societies use their excess capital to buy land and lend money at high rates of interest, thereby making 'but little contribution to increase of productivity' (1957, 167). Indeed, as Levitt (1970), Naylor (1975), and Clement (1975) have demonstrated, Canada's economic elite has generally preferred the safer commercial and banking sectors of the economy rather than investment in Canada's industrial development. That has been left to foreign economic interests. Smallwood defends his actions by arguing that they were in the best interest of the Newfoundland people. I think that the worst lie spread around about me is the lie that says that when I strive to get a new industry started, a new mine opened up, a new fish plant established, or any new business enterprise started, it is because I am trying to help the big fellow, the rich merchant, the wealthy man ... Is there anyone left in Newfoundland today who is so thick-headed, so foolish, so ignorant, as to believe sincerely that I worked hard to bring these industries into Newfoundland for the sake of a few rich men ... Surely every Newfoundlander knows in his heart that I have tried to develop Newfoundland for the people of Newfoundland ... In the United States, that strongest and most prosperous nation in all the world, industries of all kinds are started by rich men and rich companies. They employ millions of men and women for workers, but they get richer themselves through their industries ... If a Lord Northcliffe, a Sir Eric Bowater, a John C. Doyle, a Henry Ford, a John D. Rockefeller, a John M. Shaheen starts up an industry that gives jobs to thousands, should a Government, a President, a Premier be condemned because industries are started by rich men who want to become richer? (1969, 89-90)

The obvious answer is no. But the question not asked is if a premier should also offer these 'rich men' most of his resources and much of his scarce capital so that they may employ local labour and become richer on the surplus value derived from those workers' efforts. Smallwood argues that such incentives were necessary because those most influential in industrial development did not normally appreciate Newfoundland's advantages. 'Newfoundland's own reputation outside was excellent - if you were a partisan of fogs and dogs and codfish. There couldn't have been many spots in North or

191 The Smallwood Legacy Central America less likely to occur to the minds of developers and promoters than Newfoundland. It would almost certainly be the last spot considered for the site of an industry' (1973, 337) . The time has surely come to assess the consequences of such an approach to underdevelopment in Newfoundland and indeed throughout other underdeveloped regions of Canada. To what extent is chronic unemployment and poverty the product of such development programs? Isolation and insularity are not enough to account for Newfoundland's failure to develop. Other societies, most notably Japan, Great Britain, and Taiwan have overcome similar problems. Unlike them, moreover, Newfoundland had an abundance of staple resources. One conclusion to be drawn from the preceding analysis is that Newfoundland and the other underdeveloped regions of Canada lack development largely because they have been exploited by outside interests which have drained them of their surplus capital. By making resources available to these outside interests (and even paying them to take them) they have directly contributed to their own underdevelopment. In Newfoundland there is ample evidence to substantiate such an analysis though Alexander suggests that it does not fully explain the extent of underdevelopment in Newfoundland. He assigns part of the blame to the local mercantile elite who were unable or unwilling to take an effective role in the economic leadership of the country in the years before confederation. 'It would be possible to develop an exploitative thesis of Newfoundland's development, but the exploitation exercised from outside is a less convincing explanation of the country's problems than the inability or unwillingness of its elite to mobilize the country to manoeuvre more effectively in the space allowed by a metropolitan-dominated world' (Alexander 1975, 6-7) . There is some truth in Alexander's statement but it seems unreasonable to expect Newfoundland's economic elite to behave differently from those in other underdeveloped areas. Most place personal economic interests over those of the larger society. Indeed, a small entrepreneur probably has little alternative, especially when both federal and provincial governments are committed to development by large-scale 'propulsive' industrialization. The amount of capital required for such an enterprise is usually well beyond the reach of local entrepreneurs. Most Newfoundlanders would credit Smallwood for the 'development' of modern Newfoundland. If the criteria are improved facilities and living conditions, that credit is due. Analysis of the social and economic development of the province, however, suggests that his policies contributed to continued underdevelopment. It is worth asking whether Smallwood really did have alternatives to his chosen strategy of development. The pressures on him to

192 The Creation of Regional Dependency provide services and jobs were enormous but it does seem possible that he might have chosen a better way. That way would have rejected the idea that Newfoundland's economic ills could be solved through industrialization centred around propulsive industries. It would also have rejected a strategy of development based on offering resources and financial concessions to outside developers to lure them to Newfoundland. It would have involved as well a social policy which encouraged rural development rather than resettlement. Emphasis would have been on developing the local economy to the fullest extent possible. The immediate task would have been the development oflocal resources for local consumption. In that way local residents would receive the most value for their resources, the local economy and society would remain integrated, and small local entrepreneurs would be encouraged rather than supplanted by outside interests. The difference between this strategy and Smallwood's is one of scale but the goal is somewhat different. It is self-sufficiency, not industrialization and urbanization. Such an approach is close to Schumacher's 'small is beautiful' (1975). Although there is a danger that those who advocate it are labelled as rural romantics who wish to keep Newfoundland society traditional and industrially backward, there are advantages in developing the rural economy as fully as possible, giving some who wish to remain in villages a greater chance of doing so. Any 'development' should also, of course, encourage the growth of small and intermediate industry. Because a commercial elite might well be reluctant to invest capital in such undertakings, much of the financial backing would probably have to come from the provincial government. Yet government investment in such industry would probably not be greater (and might indeed be considerably less) than the amounts invested in Smallwood's strategy. Smallwood and his government could and should have ascertained and perhaps developed at least some staples resources. The cost might well have necessitated joining with private investors but, by being directly involved in the process of development, the government would have been better able to ensure that more surplus capital entered the provincial economy. The pace of resource development might have been slowed, but in the long run the province stood to gain a larger share of the profits. It will be argued that such efforts were not practical given Newfoundland's limited resources. Yet at confederation the federal government took over all past debts and the province was left with a surplus of $45 million (Gwyn 1972, 140). It was granted special (if insufficient) development funds under the terms of union and has received many more millions in federal develop-

193 The Smallwood Legacy ment aid since. If the province were able to arrange massive loans offunds to give developers, it should have been able to raise similar amounts for developing its own resources. Few small societies ever have the opportunity to alter their economic history completely and move from economic dependency to self-sufficiency. Whether or not Smallwood's government was given that opportunity in 1949 will always be a matter of conjecture. By 1972, however, its dependency was so severe that self-sufficiency no longer seemed possible.

10

Class Interests and the Role of the State in Canada's East Coast Fishery

This chapter attempts to explain, from a sociological perspective, the developments in the east coast fishery of Canada during the period between 1970 and 1980. In addition, it examines the way in which the state in Canada, and particularly the federal state, has become involved in regulating and shaping the structure of the fishing industry. This examination attempts to shed light on the relationship between the state and the various interest groups involved in this resource. In addition, it shows how the actions of one person, the federal minister of fisheries and oceans, has shaped state policy in this area. In line with an earlier argument for a more voluntaristic perspective, this chapter attempts to demonstrate that, even at the level of policy formation itself, key individuals are responsible for shaping state action and, indeed, shape it in ways not necessarily in accordance with the dominant class interests of a society. Thus, this analysis will not focus on the working life, communal life, or even family life offishermen. Instead, the basic interest groups involved in the east coast fishery, the relationships among them, and the way in which government action has tended to serve certain interests at the expense of others will be examined. The analysis will show that there is a complex network of interest groups in the east coast fishery, bound together in an intricate and shifting web of alliances and oppositions. CLASSES, INTEREST GROUPS, AND MODES OF PRODUCTION IN CANADA'S EAST COAST FISHERY

The relations among classes, interest groups, and modes of production are complex. From a marxist perspective, there is a variety of modes of production including capitalist, feudal, and Asiatic. Within each of these there are class groups defined primarily in terms of their relation to the dominant

195 Canada's East Coast Fishery mode of production. Within the capitalist mode of production there are two dominant social classes: labourers who must sell their labour in order to survive and capitalists who own the modes of production and who purchase the labour power of others. In addition to these two classes there are vestiges of previous pre-capitalist class structures. Thus there is a variety of persons in what Wright has called 'contradictory class locations,' who retain some autonomy over their labour. 'The minimum criterion for semiautonomy ... is that such positions must involve at least some control both over what is produced (minimal economic ownership), as well as how it is produced (minimal possession)' (1979, 82) . Included in this category of semi-autonomous persons is a large number of small employers as well as a variety of semi-autonomous employees. Certain large groups of independent commodity producers, of which fishermen are but one category, are included as well (ibid. 84) . There has been a tendency for marxist and non-marxist analysts alike to describe the east coast fishery in terms of two competing groups: labour and capital. From a marxist perspective, Williams argues that capital and fishermen are locked in a struggle for control of the means of production: Marx says somewhere in Capital that fish are 'a means of production.' But even in the absence of any such theoretical sanction, it would be obvious that what is happening in Nova Scotia can best be described as the beginning of a struggle for control of the means of production. Nor is it merely an economic struggle narrowly defined, for fishermen well know that the industry is badly structured and underdeveloped and cannot produce significantly higher returns without major changes. This is also a political struggle then, first for control of the resource, then for conservation and planned rational development. And allied against fishermen who want to stay in and develop the industry are large Canadian corporations and foreign fleets that have strip mined the fishery into its present crisis condition. (1977, 6)

From a non-marxist perspective, Mitchell makes much the same assessment: These two approaches are surfacing in a fishing industry where the interests offishermen and processor are not the same. Processors want higher returns from plant operations. This can be brought about by processing a larger quantity of fish, thus keeping costs per unit as low as possible. To obtain these larger quantities ... processors are not overly concerned about whether they are caught by Canadian or foreign vessels. In fact, many have endeavoured to engage in joint ventures with foreign companies for this purpose, much to the chagrin of Canadian fishermen.

196 The Creation of Regional Dependency These fishermen are interested in obtaining increased wages or returns for their fishing effort. To do this they have to (a) bargain collectively against processors, and (b) reduce competition from foreign vessels. (1978, 175-6)

A capitalist society can, of course, always be described in terms of two interest groups or class groups: labour and capital. Both Williams and Mitchell have recognized that there is indeed a major cleavage in the east coast fishing industry between capitalists, who own most of the processing facilities and most of the deep-sea fishing fleet, and the fishermen and workers who man the boats, work in the processing plants, and sell their fish to these same plants. Yet that description, while not incorrect, fails to capture fully the divisions of labour and conflicting interest groups involved in the east coast fishery. Moreover, it does not adequately explain the behaviour of those involved in the fishery or the dynamic changes which have recently taken place. For example, the workers are not an homogenous group with common interests, but comprise a variety of different groups and thousands of individual self-employed fishermen all in competition with one another for two scarce commodities: fish and the money to be gained from selling them. Furthermore, until recently there has been little community of interest among those who purchase fish and those who process it. Instead there is a complex network of small community merchants, salt fish buyers, fresh fish buyers, and large processing plants all in some form competing or co-operating with one another. Wright's concept of contradictory class locations makes an important contribution to an examination of these conflicting levels of interest. Wright is almost alone among marxist analysts in declaring that, rather than tailoring a description of social structure to fit theoretical categories, those very groups which do not fit neatly into those categories should be examined. 'Rather than eradicating these contradictions by artificially classifying every position within the social division of labour unambiguously into one class or another, contradictory locations need to be studied in their own right' (1979, 62). If we are to understand the nature of the social relations in the east coast fishery, it is likewise necessary to go beyond a simplistic two-class description of its social structure and establish a basis upon which to examine the complex web of interest groups involved. One set of these interest groups stems from the fact that the fishery, in its social structure, is not yet fully a capitalistic system, but a combination of both capitalistic and non-capitalistic modes of production, interlocked with one another to produce what Wright has referred to as contradictory class locations. Some conflicts of interests within the fishery arise out of the social

197 Canada's East Coast Fishery relations between those workers who are fully part of the capitalist system and those who still retain some degree of being independent commodity producers. Others result from the conflict between those small employers who are in some measure still pre-capitalist in orientation and those who are clearly operating capitalistic enterprises. However, within the east coast fishery, there is another level of conflict of interest which does not grow out of a conflict between modes of production per se, but rather grows out of a conflict among those workers who are to varying degrees all part of a capitalistic mode of production. An example is the conflict of interest between the fishermen who catch fish inshore using small boats and those who work offshore on deep-sea draggers and trawlers. The conflict here arises largely out of the use of different 'means of production' by each type of fishermen. Wright's work is again of value in conceptualizing the nature of conflicts of interest arising from different technologies within one mode of production as distinct from those conflicts of interest which arise among workers in different modes of production. Wright distinguishes between 'immediate' interests within a given mode of production and 'fundamental' interests between modes of production (ibid. 89-91). Within the east coast fishery fundamental conflicts of interest exist among the fishermen engaged in different modes of production and immediate conflicts of interest arise from the use of different means or technologies of production by workers who are essentially all within a capitalist economic system. There is yet another basis for the formation of interest groups within the east coast fishery. In addition to conflicts of interest which arise out of different modes of production and out of different technologies of production within the east coast fishery, there appear to be conflicts of interest arising out of the different spheres of production involved. The east coast fishery is generally regarded as a unified system of productivity, but in fact two distinct spheres of production are involved. One is the hunting and harvesting of fish, the other is the processing of fish. In this respect the fishery is similar to agriculture. Within agriculture one sphere of production involves growing and harvesting produce, the other the processing, the cleaning, canning, and freezing of produce. In fishing, fishermen catch and sell the fish and processors 'refine' them and market them as a distinctively different product. In analytic terms, the fish processing industry is as distinct from fishing as automobile and appliance manufacturing is from mining. The two spheres have not been treated as analytically separate in the fishery largely because the same capitalistic iqterests dominate in both spheres of production. This gives them an immense degree of economic power to control all phases of the

198 The Creation of Regional Dependency fishing industry, and frequently ensures that their combined interests win out over all others involved. INTEREST GROUP CONFLICT WITHIN THE EAST COAST FISHERY

Based on the preceding conceptual analysis, it is now possible to discuss the conflicts of interests which exist among fishermen themselves, and how they influence their relationship with capital. That will be followed by a discussion of the role of union organizations and co-operative agencies in mediating these conflicts of interest. The same framework will be used in an examination of the nature of ownership within the fishing industry, and a discussion of the conflicts of interests which arise among the different types and levels of ownership. Both levels of analysis will form the basis of an examination of the relation of the state to all of the various interest groups within the east coast fishery. Among fishermen there is a fundamental conflict of interest between offshore fishermen employed on deep-sea trawlers and draggers and inshore fishermen who fish out of villages in small boats within a few miles of the shoreline. Though there is some dispute over whether the fish that are caught offshore would eventually swim inshore, biological evidence suggests that this is indeed the case (McCracken and MacDonald 1976). Because only a limited number of fish can be harvested without destroying the long-term sustained yield of the fish stocks, offshore and inshore fishermen are in conflict over what proportion of the take each group is allowed to catch. A further complication is that some fishermen (generally known as nearshore fishermen) operate out of local villages using larger boats (longliners) and better equipment. They can travel farther than the inshore fishermen but often choose instead to compete with them for local fish stocks. As a result, fishermen in many areas of the Atlantic provinces have had to purchase longliners (at costs over $100,000) to chase the same fish stocks they once caught with more primitive equipment. The implications of the situation are twofold. Not only does it complicate the relationships between categories of fishermen, but it also suggests that in some circumstances a form of intermediate technology may not be the solution to the problem of underdevelopment and unemployment. The conflict of interest among fishermen is not limited to that among offshore, nearshore, and inshore fishermen, however, but extends to the relationships among individual fishermen. In the offshore sector, until the 1970s, fishermen who signed on as crew for the deep-sea fishing fleet were considered 'co-adventurers' with the owners of the ship. As such, their sta-

199 Canada's East Coast Fishery tus was not that of workers but rather that of partners in the operation. They were paid only after all expenses of the voyage had been met, after the owner of the ship had received compensation for his capital investment, and after the captain, officers, and cook had received their salaries. Under this arrangement offshore fishermen often discovered that two weeks of hard work on the storm-tossed Grand Banks had in fact left them out of pocket as their share of the catch was not sufficient to cover their food and other expenses. The conflict among individual inshore and nearshore fishermen has always been intense. There was always potential conflict between individual fishermen over the placement of nets and traps, for in the waters adjoining any particular community there are only a limited number of choice places available. Moreover, a trap or net set too close to another may either catch all the fish or divide the catch so that neither fishermen takes an adequate catch. Such potential conflicts constantly threatened to divide those small communities in which some degree of co-operation and fellowship is necessary for survival. As a result, many communities developed a tradition of allowing individuals the right to set their nets and traps where they had been set the previous year. Many communities even accepted as customary that such 'berths' could be inherited, being passed from father to son or even to other crew of a particular fishing boat. In certain cases disputes arose over the placement of nets years after a location had been abandoned by a previous occupant, whose heirs now wished to claim his 'property.' Where traditional rights were generally accepted, there were important social and economic consequences, certain fishermen and their descendants thus being guaranteed good fishing grounds and therefore higher incomes while others were doomed to a future of comparative poverty. Interestingly, few seem to have realized that such traditional practices were the basis for differences in catch and income, and many rural fishermen were condemned as 'poor fishermen -just like their fathers' when some of the inadequacy of both generations may have been the result of customs beyond their control. Moreover, the existence of traditional fishing berths reduced migration between communities. Unless a newcomer could somehow join another fisherman (sometimes by marrying a relative), he was forced to fish in areas nobody else wanted. The conflict of interest among inshore fishermen was further complicated by their legal status. Throughout the Atlantic provinces in the 1960s many fishermen's groups attempted to organize fishermen into some form of union. One such union was formed in Newfoundland but court action made it difficult to unionize in Nova Scotia and New Brunswick. In both provinces the courts ruled that fishermen were not entitled to form unions because

200 The Creation of Regional Dependency they were not employed workers but independent and self-employed operators, each dealing with a processing facility or fish merchant for the purchase of his catch. This ruling served to underline the fact that inshore fishermen were in competition with one another for the 'favour' of selling their catch to the local fish buyer and, at a basic level, were in a conflict of interest with one another. In addition to the conflicts of interest between offshore and inshore fishermen, it should not be overlooked that each group also had a fundamental conflict of interest with those capitalist interests which effectively control their labour. The traditional 'capitalist' involved within the inshore fishery was the village merchant. Each spring he fitted out certain fishermen with the necessary gear which was 'carried on the books,' as was the food and other necessities used by those fishermen and their families throughout the ensuing months. In return, the fishermen agreed that they would bring their salted dried fish to the merchant for credit against their accounts. The merchant's goal, of course, was to make a profit, and to do so he had to extract whatever surplus he could from the produce of the fishermen. He was, moreover, at the bottom of an extensive capitalist supply system, receiving his goods from suppliers who also demanded a measure of profit. The fact that he usually set the price of fish as well as that of his goods usually ensured that he profited and the fishermen remained in debt. To describe such merchants as capitalist exploiters, however, fails to capture the essence of the social relationships involved. The merchant did not own the means of production and the fishermen sold not their labour but rather the product of it. Thus they did retain some characteristics of the status of independent commodity producers. Furthermore, the merchant and the fishermen lived in the same small community and, indeed, were often related through extensive kinship networks. This alone moderated the extent to which the merchant could victimize his 'workers.' In fact, both merchant and fishermen were in many ways dependent on one another for survival and were bound together by both explicit and implicit ties of obligation. The underlying social relations were, therefore, more feudal than capitalistic. Except in the most remote areas, however, the inshore fishery no longer retains its feudal character. Several changes altered its basic social structure and gave inshore and nearshore fishermen considerable independence from their ties of obligation to the village merchant. One change was the implementation of unemployment insurance for fishermen which, together with other forms of social assistance, gave them a continuing source of cash and some independence from traditional patterns of credit. Another change was the establishment in 1968 of the Canadian Saltfish Corporation which sets a

201 Canada's East Coast Fishery price for salt cod before the start of the fishing season, thus severely curtailing the power of the merchants (McCurdy 1978a, 28). Even more significant has been the development of fresh fish processing facilities and an extensive network of roads in most rural areas. Many fishermen now deliver their fish by boat or truck directly to fish plants and are paid directly. They are freed from salting and drying fish, giving them time to look for temporary wage labour when the best fishing period is over. A number even work in the fish processing plants during this period, processing the catch of their inshore and nearshore colleagues as well as the catch brought in by deep-sea vessels. Yet these developments, though freeing the inshore and nearshore fishermen from feudal-capitalist dependence on village merchants, have bound them just as firmly to a much more capitalist institution, the fish processing plant. The implications of this will be discussed in more detail later in this chapter. In contrast to the inshore fishery, the offshore fishery has been capitalist since its inception. The earliest deep-sea fishing vessels to operate from the Atlantic region were sailing schooners which used hand lines and baited trawls. Few fishermen had the capital to build and operate such vessels and most were owned by wealthy local merchants. It is worth noting that in some areas where fishermen were more prosperous (notably around Lunenberg), they pooled their surplus capital and invested jointly in such vessels. Yet, as Barrett demonstrates, such arrangements were generally short lived (1976, 19-26). In the depression of the 1930s, the cost of fishing gear rose drastically while the value of fish declined. Most joint operations quickly fell into debt and were taken over by the merchants who had funded the equipment. The switch to draggers and fresh fish processing in the last 25 years brought little change in the basic social organization of the deep-sea fishery but a considerable change in the operation of the fishery itself. Massive sums, well beyond the reach of any fisherman, are now required for ship construction and operation. As a result the offshore fishery has become dominated by large corporations, many of which have received government subsidies for the construction and continued operation of their ships. This has meant that the gap between fishermen and owners has widened in terms of their relative power and control over this technology of production, with the consequence that any conception of fishermen as 'co-adventurers' has become obsolete. In any case, it was little more than a self-serving ploy by the companies owning the draggers. Fishermen tolerated it for as long as they did partly because of their isolation from one another, which generally hampered collective action, partly because each individual fisherman depended on the good will of the boat owners for his employment, and partly because of the

202 The Creation of Regional Dependency compliance and complicity of provincial governments in permitting such practices to remain in effect. Further attention needs to be given to the relationship of inshore and offshore fishermen to one another. As was suggested earlier, the east coast fishery constitutes something of a zero-sum game, in which the benefits of one set of players are always at the expense of some other set of players. Though both groups of fishermen may have become more and more the epitome of wage labourers, if anything their conflict of interest vis-a-vis one another has intensified as fish stocks have declined. This has implications for an understanding of the nature of labour and class interests in underdeveloped areas. Several dependency theorists have accepted that there is a conflict of interest between labour in the developed areas and labour in the peripheral areas (Gal tung 1971), but they have tended to treat labour in the peripheral regions as essentially homogenous. The processes of social change in the east coast fishery clearly produced a conflict of interest among fishermen. Even more important is the different relationship of each of these two groups vis-a-vis capital. While both have something in common in the extent to which they are now essentially reduced to the position of wage labourers employed by capitalists, it is also clear that offshore fishermen have a harmony of interest with those capitalist interests which wish to see an expansion of the offshore deep-sea fishery. Given these various conflicts of interest among different groups of east coast fishermen, it is relevant to consider the role of worker co-operation and unionization in the east coast fishery. Though inshore fishermen had won some measure of independence from local fish merchants, their economic well-being was deteriorating as inshore fish stocks were rapidly being depleted because of overfishing by deep-sea draggers from many nations. Between 1956 and 1966, despite an increase of over 41 per cent in the number of inshore fishermen, the inshore catch in Newfoundland declined by more than 26 per cent (Newfoundland 1967, 184). Foreign and Canadian ships had a right to fish up to three miles from shore, and the few fish missed by the deep-sea draggers were harvested by the better equipped nearshore longliner fishermen. The plight of the inshore fishermen was intensified by the common property and 'open access' characteristic of the fishery, which 'sets this industry apart from others' (Copes 1978, 164) not only economically but socially. With no restrictions on entrance, the fishery became a haven for many who had tried other work and had been laid off. As a result, more men with better equipment were chasing fewer and fewer fish. One of the most economically depressed areas of the Atlantic region was the most remote corner of northern Newfoundland. There, in 1969, a num-

203 Canada's East Coast Fishery ber of onshore fishermen banded together to form a 'union' in an effort to force the small local fish plant to pay higher prices for their fish. When the fish processor refused to recognize the union on the grounds that the fishermen were independent entrepreneurs, the union lobbied the government for legislation allowing them the right to collective bargaining. For a variety of reasons their request was granted and during the next few years the union expanded to include most of the inshore fishermen in Newfoundland. In 1971 it merged with several locals of the Canadian Food and Allied Workers union, the bargaining agent for fish plant workers, and became the Newfoundland Fishermen, Food, and Allied Workers union. In 1974 it expanded into the offshore fishery, and in 1975 waged a province-wide deep-sea fishermen's strike for recognition. It now represents the entire labour force of the Newfoundland fishery. The fact that one union controls all labour involved not only in the Newfoundland inshore and offshore fishing industry, but also in the processing sector, gives it enormous influence. Clearly, the union is in a position to bring the entire industry to a halt in any strike situation. On the other hand, given the picture of conflict of interest just presented, there must be occasions when the union is torn by its mandate to represent 'opposing' interests. For example, there is continuing conflict about which segments of the fishery will benefit most from the new fish stocks made available by extending the offshore fishing limit to 200 miles, closing Canadian waters to most foreign fishing vessels. Around this issue there is unlikely to be union solidarity. It is a clear instance where in union there is not strength. Division within the union essentially weakens it, and any weakness increases the power of those capitalist interests which favour increased development of the offshore sector. Not all recent changes in the social organization of the east coast fishery have been confined to the workers. Over the past two decades there have been considerable changes in the organization of ownership and control within the fishery. Until recently, most fish caught inshore was salted and dried and went through the hands of the many small and semi-autonomous merchants. There was greater economic concentration in the offshore fishery and in fresh fish processing but a large number of independent operations remained. Indeed, many small fresh fish processing plants were family operations run on a seasonal basis and dependent on the inshore fishery. In addition, larger firms maintained their own deep-sea fleet to supply their processing operation. By the early 1970s, major social structural changes had begun in the offshore and processing sectors. Several of the larger concerns bought up

204 The Creation of Regional Dependency smaller ones and ownership of the offshore and processing industries was consolidated. Two large Nova Scotia firms, National Sea Products and H.B. Nickerson and Sons dominated the industry there, and in Newfoundland Booth Fisheries, the Lake Group of Companies, and Fishery Products began to dominate. The most significant changes occurred when the Nickerson company managed to buy a controlling interest in National Sea Products to form the largest fishing conglomerate in the region with plants throughout the Atlantic provinces (Williams 1977, 6; 1978, 31). In Newfoundland the Booth fishing interests, which had been largely foreign owned, were acquired by the locally owned Lake Group (Jamieson 1978, 16-17). However, the consolidation of the fishing industry did not stop there. The Nickerson empire proceeded to buy up many of the smaller fish plants, including those used by many inshore fishermen (Williams 1978). By 1980 this firm alone processed over 50 per cent of all groundfish caught and approximately 70 per cent of the lobster (personal communication with a senior company representative). Recent reports suggest that mergers may be in the offing between the Lake Group and Nickerson (St John's Evening Telegram, 10 October 1981). Even without these mergers these firms have almost total control of the complete fish processing industry on which the offshore catching fleet and the inshore fishermen depend. A $2 billion annual business is controlled by three firms. The livelihoods in every rural fishing community in eastern Canada, and in most larger processing and supply towns, are directly or indirectly controlled as well. It could be argued that these few firms have more power over the lives of people in the Atlantic region than any of the four provincial governments. Such consolidation has obvious implications for the relations between labour and capital within the fishery. Though fishermen in Newfoundland managed to unionize, those in the remainder of the region have not been able to do so on any widespread basis. Even in Newfoundland any action is limited by the immediate conflicts of interest among workers within the industry. In contrast, ownership is becoming more and more consolidated. That consolidation is obviously of concern to some fishermen and their union representatives and, indeed, to the government. Those in government are also concerned about the long-term social consequences of consolidation. THE ROLE OF THE ST ATE

It should be clear that any decision about the development of the east coast fishery involves not only the issues of efficient resource extraction and the maximization of economic good through the most efficient use of technology

205 Canada's East Coast Fishery but important social issues as well. There will probably be considerable growth in the offshore fishery and that in turn will have considerable effect on community structure and population mobility on the east coast. An expansion of the offshore fishery can take place only at the expense of the inshore fishery. Should the inshore fishery be reduced, the economic viability of many small fishing communities will be threatened and many of their inhabitants may be forced to move elsewhere. Moreover, the consolidation of control over the catching and processing offish has long-run implications for the class structure of the Atlantic region. When a small handful of persons effectively controls the means of production in both the catching and the processing spheres of an industry, the relative power of the workers to control their labour is likely to be effectively reduced. In such a situation the role of the state becomes critical. Unlike most natural resources in Canada, the fishery is largely under the regulatory power of the federal government. Though the actions of the federal state will have a greater impact on fishery development than those of the provincial governments, both levels of government can develop policies which favour the interests of certain groups at the expense of others. From a liberal democratic perspective, the state is viewed largely as an arbiter of various interests. Such a perspective could lead one to believe that the state in Canada will try to seek a balance among the various interest groups involved in the fishery to maintain the status quo. However, marxists see society in class terms, and generally see the state as acting in the interests of the dominant class in society. For example, both Poulantzas and Miliband see the state as essentially operating in the long-run interests of capital rather than workers, though both leave open the possibility that certain short-term (immediate) measures may give the appearance of being in the interests of the under class. Both federal and provincial governments have a long history of involvement in the regulation of the fishery. Considerable sums of money have been provided for wharfs and other facilities needed by both inshore and offshore fishermen. Construction of fresh fish processing plants and deep-sea draggers have been subsidized. More indirectly, the social structure of the fishery has been shaped by the resettlement program in Newfoundland and by programs aimed at population centralization in the other provinces. Finally, the refusal of some provincial governments to pass legislation permitting fishermen to unionize has severely reduced their chances to bargain effectively with consolidated capitalist interests. Given this, it is hardly surprising that some marxist analysts see the state operating to support the interests of capital in the east coast fishery. Indeed, the Poushinskys declare:

206 The Creation of Regional Dependency Our position here has been, following Poulantzas, that the action of the state, whether 'economic intervention' (e.g. boat subsidies) or 'social and political intervention' (e.g. relocation of people) has a special unity. This unity is the expression of the interests of the predominant faction of capital in this faction's role as the cohesion building for the power bloc. In particular, we see the role of the state in the fishery recently, over the past fifty years or so, as intervention to assist in the consolidation of the trends toward monopoly capitalism. We see an acceleration of the economic intervention of the state in favour of monopoly capital in particular. (1978, 25-6)

They describe those who think of the state as operating in any interests other than those of capital as naive: 'For fishermen who wish change to occur in specific directions, as well as for policy makers, or academics ... who wish to affect state politics in various ways, our analysis suggests that the "liberal" view of government as impartial arbitrator, granter of services and equalizer of incomes is naive ... Perhaps in the class struggle which does operate in the Atlantic fisheries it is useful to be aware clearly on which side of the fence the state acts' (ibid. 34) . Such statements are, of course, exaggerated, but it is important to consider if the state does act in the interest of capital in regulating the east coast fishery most or all of the time or if indeed it does attempt to act as ' impartial arbitrator.' It is also important to consider if the actions of the federal and provincial governments differ in this respect. If the state were indeed the tool of monopoly capitalism it would support the large fish processors over the small processors and fishermen; the interests of offshore fishermen over those of inshore fishermen. Admittedly there are some grounds for confusion concerning the federal position with regard to the east coast fishery. A 1976 federal statement, Policy for Canada's Federal Fisheries, took a stand which appeared to favour reducing the number of inshore fishermen and limiting the inshore fishery : In the inshore fisheries generally, especially those of the Atlantic region, the labour force far exceeds the industry's capacity for employment at an adequate level of income. This disparity explains the low level of labour productivity in the Atlantic fisheries. A reduction in the number of people employed in the primary fisheries would have different effects in different communities ... Where adverse social side effects such as reduced employment opportunities can be kept within acceptable limits restructuring should proceed. (Canada 1976, 56)

Copes sees this policy as clearly favouring the offshore fishery over the inshore one. 'The policy document is clearly in tune with current analytical

207 Canada's East Coast Fishery concepts in fisheries economics and is explicit in its adherence to these concepts' (1978, 167). He continues, 'The foregoing analysis appears to suggest that the federal government has been alert to the need for a shift of manpower and capital investment from inshore to offshore' (ibid. 169). Like many statements of government policy, however, that on fisheries is open to ambiguity in interpretation. For example, the policy also recommends a shift from purely economic considerations towards social ones and declares: 'The guiding principle in fishery management no longer would be maximization of the crop sustainable over time but the best use of society's resources. "Best use" is defined by the sum of net social benefits (personal income, occupational opportunity, consumer satisfaction and so on) derived from the fisheries and the industries linked to them' (Canada 1976, 53). Whatever the intention of the policy makers, Romeo Le Blanc, the minister of fisheries throughout most of the past decade, interpreted this policy as a declaration in favour of the inshore fishery at the expense of the offshore one. Time after time he demonstrated his unwavering commitment to the inshore fishery: In that worst of times we saw a chance to create the best of times ... We laid out in a public policy document our hopes and strategies for giving the fishery back to the fishermen, making the whole industry strong, and revitalizing fishing regions. (LeBlanc 1978a, 1-2) Who gets the first crack at these fish? Here I must say, as I have said publicly before, that I have a clear bias for the inshore fishermen. Not because of some romantic regard, not because of his picture on the calendars, but because he cannot travel far after fish, because he depends on fishing for his income, because his community in turn depends on his fishery being protected. (LeBlanc 1977a, 4) Each fleet sector, inshore, nearshore, and offshore, needs its fair share in the propositions that will most benefit society. And most important to society, for reasons I mentioned, are the inshore and nearshore fishermen. While I recognize the needs of the offshore fishermen, hard-working providers of year-round employment, surely we can no more ask 28,000 smaller boats to stay at the wharf to make room for the offshore fleet than we could ask the small plants to let us rationalize them out of business for the sake of two or three huge ones. (LeBlanc 1978b, I I)

LeBlanc also clearly favoured the fishermen over the processors and openly advocated the need for stronger fishermen's organizations, either unions or co-operatives.

208 The Creation of Regional Dependency Another sign of health is the strengthening offishermen's organizations which I have encouraged ever since taking this portfolio. I think we are past the day when, as happened in a Maritimes village after the fishermen formed a small group, the company agent held such a sway he was able to browbeat them into marching up to a justice of the peace to officially de-join ... The best way to ensure the fisherman gets nothing is the phony crusade of rugged individualism that ends too often with a solo sinking. We can't return the industry to a fragmented, ragged platoon of fishermen . (1978a, 5) Your Newfoundland union has given others a lesson in organization. If the Maritime fishermen were organized like you, we'd have come twice as far ahead in the last few years ... I remember my feelings of anguish during the 1974-75 strike when your organization was undergoing its baptism of fire, and fishermen and plant workers won a victory that is still rewarding them. The fishermen's right to enjoy what every other member of this society has come to expect was being challenged in the name of some outmoded concept - by an industry that, while expecting you to be coadventurers, had lost its own spirit of adventure and was rushing to ask for massive subsidies and suggest the government take over the trawler fleet. (LeBlanc 1978c, 20-1}

Moreover, LeBlanc challenged the fish processors by open discussions of the way in which they manipulate the market to pay fishermen low prices for their fish and increase their own profits: Why is his [the fisherman's] profit low? Not because his catching ability is low: the Canadian fleet is the most efficient, in terms of catch per vessel ton, of any fleet fishing the northwest Atlantic, and the most efficient Canadian vessels are beyond a doubt those independently owned. The independent man's profits are low because port market prices - the prices he gets for his fish - are low. Lower than in Europe. Lower than in the United States. Far lower than they should be, and generally no premium for quality. Why is the Canadian price so low, in the midst of a fish marketing area? Because the present rules of the game make it possible for fish companies in most Atlantic areas to pay artificially low prices. The key influence on raw material price and supply in the groundfish industry is processor-owner boats. If you pay your own boats an artificially low price, you get fish cheap. Because your fleet makes a loss on paper, you also get a tax writeoff. There is more: you also get fish from the independent boats cheap, because they have no bargaining power, and because the price you pay your own boats strongly influences the price to others, pushing it downward. (LeBlanc 1977b, 19-20)

209 Canada's East Coast Fishery These machinations provided LeBlanc with the justification for his most serious challenge to the processing industry's hegemony. LeBlanc strongly advocated separation of ownership between the deep-sea ships and the processing facilities. Turning the ships over to the fishermen themselves would, in his opinion, give them control of their own means of production and a right to sell their harvest to the highest bidder. I propose that in future we separate the fishing fleet from the processing companies in Atlantic Canada. I believe there is clear evidence, from Canadian experience and from other fisheries, that creating a truly independent fleet should improve the efficiency of vessel operations, improve the match of catching and processing capacity, raise fish prices and fishermen's incomes, increase the fishermen's bargaining power, create a healthier balance of forces in the industry, and invigorate fleet development by the fishermen. (LeBlanc 1977b, 22) I want the ordinary man to own something solid and to have power enough, with his mates, to resist control and instead shape his own destiny. We want to give the fishery back to the fishermen. That is why federal policy favours eventual separation of the fleet from the processors, and that is why I believe the independent fishermen should grow increasingly into the midshore and, as necessary into the offshore class of vessels ... Until the fishermen are truly equal partners, the federal government will stand up against the big interests and favour the fishermen ... (LeBlanc 1978c, 7)

Statements such as these make it difficult to accept that the federal state in Canada almost invariably acts in the interest of capital. To be sure, words are not actions. LeBlanc's words, however, were matched by deeds. He and the federal government withstood intense pressure from the processing industry to allow them a greater share of the catch and to allow them to develop a freezer processing fleet which would make many onshore jobs redundant. Again, the federal government, under LeBlanc's direction, permitted inshore fishermen to sell directly to foreign ships when they paid more than Canadian processors. Perhaps the most impressive demonstration of government commitment to the fishermen was its announcement that a significant portion of the herring catch would be reserved to provide funds for a maritime fisheries union. It can be demonstrated that, although the federal government has in the past supported the interests of fishermen, the provincial governments have generally supported the processing industry. In Nova Scotia particularly

210 The Creation of Regional Dependency there has been resistance to granting fishermen the right to bargain collectively and the premier has publicly attacked the federal government for not providing more capital for private owners. It is my perception, and my concern, that this opportunity is not being exploited as rapidly and thoroughly as possible. This is not primarily the fault of industry; rather the shortcomings stem from the failure of government, particularly the federal government, to offer private owners and operators the cooperation they need to expand the Canadian Fishery. (Buchanan 1978, 2) The industry is doing its best in trying to get ready to harvest the expanded resource for the province and for Canada. But it lacks the financial capacity to do the job by itself. And it has got very little help from Ottawa either in cash or in policies that would encourage private investment. (ibid. 4)

The former premier of Newfoundland, Frank Moores, attacked the federal government for emphasizing biological rather than commercial considerations in the fishery: 'It is my view that fishing development must be more commercially oriented. There is more to effective management than biology, with all due respect to the biologists' (Moores 1978, 4) . He also challenged its proposals to give the fishermen ownership of the ships. 'The recent Federal declaration of intent to turn over the ownership and operation of the offshore fleet to fishermen is not realistic or consistent with an efficient management system. This proposal and others give us cause for concern' (ibid. 1978, 6). In fact, Moores took the laissez-faire position that the full potential of the fishing industry could be achieved only if the private sector were allowed the greatest possible freedom: 'The full economic potential of the industry can only be realized if there is a commercial approach taken toward management of the industry. An approach that allows the private sector to function efficiently and competitively. We believe that government has a limited although important role to play. Our policy will be to allow private industry to develop and we propose to phase out our involvement in the fishery' (Moores 1978, 6). This position was reiterated in a policy statement by the government on the development of the Newfoundland fishery: 'Government involvement should decrease proportionately in favour of private enterprise' (Newfoundland 1978, 4). However, it should be emphasized that the white paper which accompanied this statement made a strong commitment to maintaining the traditional pattern of settlement and the inshore fishery on which it is based.

211 Canada's East Coast Fishery Social and economic considerations are, in the final analysis, the basis around which fisheries management and fisheries development strategies are initiated and implemented. Despite past efforts to 'centralize' and 'rationalize' the Province's fishing industry through such initiatives as the community resettlement program, it is quite evident that the fishery can generate and sustain an acceptable standard of living in the province's typically rural economy. The province's commitment to fisheries development and its commitment to maintaining the settlement pattern which exists throughout Newfoundland and Labrador, reflect the contribution which the fishing industry makes to the economy both from a social and an economic perspective. Resource improvement considerations do promise rewarding prospects for all sectors of the fishery, and it can be confidently stated that these growth prospects will further enhance the quality oflife throughout all areas of the Province in the challenging years which lie ahead. (Newfoundland 1978, 21-2)

Whether it is possible to foster private enterprise and at the same time ensure protection of the inshore fishery remains to be seen. It would appear that the Newfoundland government thought it could. LeBlanc obviously regarded the Newfoundland policy document as a change in provincial strategy for fisheries development: Newfoundland has just completed a major study of its fishing industry, and issued a white paper ... The paper stresses the importance of the inshore fishery, the development of the midshore fleet, the keeping of fleet expansion under limits, removing the debts of fishermen to processors, and making the fisherman a first-class citizen ... It could be a son of the federal policy document we issued two-and-a-half years ago, and subsequent planning documents. Differences may remain, but Newfoundland and the federal government have come much closer to a common ground. (LeBlanc 1978d, 8-9)

Mr LeBlanc was certainly premature and probably overly optimistic about the possibility of the provincial governments of Atlantic Canada coming to support his position. Moreover, that position neglects the political realities involved. Fish plants, trawler and dragger fleets, and their owners are all located in the Atlantic region. Consequently, they are potentially a considerable political force in that region, and one which each provincial government neglects at its peril. They not only control a sizeable amount of the economy in each Atlantic province but also contribute to the support of

212 The Creation of Regional Dependency provincial political parties. They are well placed to have a significant influence and impact on provincial fishery policies. In contrast, the federal government is far away in Ottawa, thousands of miles from the ocean, and the elected representatives from the Atlantic region constitute only a fraction of those in parliament and are divided between the two main parties. In Ottawa few politicians care about the east coast fishery because they see it as having little effect either on their own political fortunes or on broader issues of policy. Under such circumstances, a minister of fisheries can promote and implement policies opposed to the general orientation of his government and the dominant capitalistic interests in the industry. This is what has happened in the east coast fishery. LeBlanc appears to be aware that the policies which he personally has instituted are far more socialistic than those normally enacted by the Liberal government. 'But,' as he declared, 'I'm not a socialist. I simply believed then, and I believe now, that the fishery should be a partnership of equals: of governments, entrusted with the resource in the name of the people of Canada; of the processing and marketing arm, which needs to be strong and enterprising; and of the fishermen, who are the main owners of this resource, with all the obligations that it imposes, and all the rewards it may bring' (1978c, 2) . Despite his protests, LeBlanc's statement that the fish are the property of the fishermen is more socialistic than those generally made by his government. The government does not regard the forests as belonging to the woodcutters and not the paper-mills, minerals as belonging to lhe miners and not the mining companies, or the oil and gas resources as belonging to the people of the provinces in which they are located. LeBlanc openly admitted that his stand was designed to overcome the laissez-faire capitalist economic situation in the fishery: We had to overcome a system based on laissez-faire. A system in which conservation took second place to competition, in which total allowable catches and national allocations had to be painfully negotiated, and in which the resource inevitably came out the loser. We are not going to allow the same system to be resurrected under another guise. We are not going to create a sort of 'inter-provincial ICNAF' or a sort of 'InterProvincial Law of the Sea Conference.' We are not going to let 'The Enemy Without' be replaced by 'The Enemy Within.' Not ifl can help it. (1977c, 7-8)

It would appear that, to LeBlanc, the 'enemy within' is a combination of the processors and the provincial governments making agreements with 'the enemy without,' the international corporations which exploit the fishery throughout the world. LeBlanc's resistance to the combined efforts of these

213 Canada's East Coast Fishery groups became particularly apparent when he challenged the 'joint venture' approach to fishery ownership in some east coast provinces. The establishment of the 200-mile fishing limit in the early 1970s gave Canada exclusive control over all fishing within 200 miles of her coastline. Canada won this right in the interests of conservation and on condition that foreign fleets would still be granted permits to catch any of the annual quota not likely to be caught by Canadians. As a result, though their numbers are now much reduced, foreign fishing fleets still fish inside Canadian waters with full approval of the federal government. The federal government argues that, if it did not permit foreign access, acceptance of Canada's right to set quotas might be challenged by other nations. It further contends that granting foreign access to surplus stocks ensures that there will not be indiscriminate overfishing when the fish swim outside the protected zone. Finally, it argues that most agreements with other countries contain parallel clauses giving Canadian fish processors access to the sizeable markets in those countries (LeBlanc 1977a, 5-7) . The policy of co-operation with foreign fishing interests has upset the processing industry, however. Canadian fish processors have argued that they should be awarded contracts for the construction of floating factory ships to take advantage of those fish stocks not now utilized. LeBlanc has blocked their efforts to get assistance in the construction of such vessels, apparently because he sees these fish stocks as the property of fishermen rather than processors. Ironically, he has been attacked by fishermen themselves who criticize him for selling to foreign investors what they see as their rightful harvest. His reply is_that, 'On the day that Canadian fishermen can harvest the full production from that or any stock, there will no longer be foreign fishing for that stock. Under those circumstances, there will be no surplus. No one, least of all the foreign fishing nations, disputes that fact. There are no secret clauses to our agreements' (1977a, 17). Clearly, the imposition of the 200-mile fishing limit and statements such as LeBlanc's present enormous problems for the fishing industries of many foreign nations, most notably West Germany, France, Spain, and Portugal. In those nations private enterprise developed large fishing fleets and processing facilities which now have nowhere to go. In consequence, several foreign corporations have been anxious to invest in Canadian fishing firms and have their fleets adopted as Canadian ships. Ironically, some firms which have tried hardest to do this are those which, just a few years previously, sold their ownership of Canadian fish processing plants and fishing fleets to Canadian interests because they were then not financially profitable compared to European operations.

214 The Creation of Regional Dependency The processing industry would benefit from such joint ventures in that it would receive capital to expand and at the same time receive more fish from the large fleet of draggers and factory ships. More workers would be employed in the processing plants. As Mccurdy explains: A phrase has crept into the Newfoundland fisheries lexicon that threatens and intimidates the fishermen and their communities along the northeast coast. That phrase is 'joint venture' and it has come to mean a cooperative fishing endeavour in which foreign ships catch fish in Newfoundland waters for processing in Newfoundland plants. The joint venture system has the advantage to the fish companies of providing them with fish, and to the government of providing short-term relief to the province's staggering unemployment problems. (1978b, 26)

Because joint ventures would have immediate benefits for the provincial economies by providing more capital and employment, they won the approval of capitalist processors, offshore fishermen, fishplant workers, and provincial government officials. They were steadfastly opposed by LeBlanc and his department, however. In 1977 the Newfoundland government proposed to sell the Harbour Grace fish plant, which it had taken over several years earlier, to Nordsee, a German subsidiary of the giant Anglo-Dutch firm Unilever, which had owned a share in the Harbour Grace fish plant but had sold it. Most of the fish for this plant came from the inshore and nearshore fishery, but Nordsee proposed to use its fleet of freezer trawlers to catch the untapped stocks of northern cod, freeze them, and transport them to Harbour Grace for processing. LeBlanc, however, refused to issue fishing permits to the Nordsee trawlers and the project had to be dropped. As might be expected, LeBlanc was vehemently attacked by the residents of Harbour Grace, by the fish processors involved, and by certain members of the Newfoundland government. His actions have considerable wisdom, however, if one looks beyond their immediate impact to the long term. The problem with joint ventures is that the local economy and society become totally dependent on decisions made elsewhere by people with no direct identification with or commitment to the local society. Harbour Grace had begun to decline when foreign interests decided to sell. LeBlanc clearly wanted to ensure that 'the enemy without' did not get a second chance. Thanks to him, Canada now has almost total control and ownership over its east coast fishery, and there is little to be gained and much to be lost, economically and socially, through foreign ownership.

215 Canada's East Coast Fishery CONCLUSION

This chapter has presented a threefold argument. First, it has suggested that a simple two-class model of the fishing industry on Canada's east coast does not capture the complexity of the 'interests' involved in it. Second, it has argued that, in such a situation, the state does not necessarily side with the dominant capitalist interests, but rather can, and frequently does, side with other interest groups involved. Third, it has tried to show that the actions of one person in particular can, under certain circumstances, be instrumental in shaping state policy, and that a more voluntaristic perspective on the role of key individuals is necessary in understanding the role of the state. The major objection likely to be raised to this analysis concerns the shortterm versus long-term view of state action. Some may argue that the state sometimes fools people into thinking it is on the side of labour when, in reality, the long-run impact of its policies will demonstrate the opposite. It may also be claimed that the pattern described here should be seen as but a temporary departure from the traditional one. To some degree such criticism is valid. It is unlikely that the state will continue to be unswerving in its commitment to the small fishermen in the face of large-scale capitalistic interests. Moreover, when the political parties in power change, this balance may also change. On the other hand, it is hard to dismiss the evidence of change on the grounds that the new pattern will not continue. Faith about what will occur in the future cannot allow one to ignore what is happening in the present.

Conclusion: New Directions for Canadian Sociological Analysis and Regional Development Policy

In concluding this book, two topics deserve further consideration. First, it is relevant to make some assessment of the extent to which the writer has been successful in accomplishing the interrelated goals of developing a sociology of Canada and a Canadian sociology. Closely allied to this, it is useful to make some suggestions concerning the best direction for future analysts to take in contributing to these goals. Second, as so much of this book has dealt with the nature of policy in general, and Canadian regional development policy in particular, it is useful to spend a little time examining the implications of the analysis here for future regional development policy in Canada. NEW DIRECTIONS FOR CANADIAN SOCIOLOGICAL ANALYSIS

In this book an attempt has been made to contribute to a Canadian sociology by developing a set of concepts capable of dealing with the unique and distinctive features of Canadian society, and to contribute to a sociology of Canada by using some of these concepts to describe and analyse Canadian society. The four dimensions of region, regionalism, regional differences, and regional disparities have been defined and discussed, the goal being to emphasize the importance of incorporating certain social psychological and voluntaristic considerations into a structural analysis. Thus, such social psychological dimensions as regionalism and regional identity were incorporated into a framework of concepts that forms a useful Canadian sociology. However, a good deal of work remains to be done. A major national study of the nature of regionalism and regional divisions in Canadian society must be undertaken. All too frequently we have been content to assume that provincial boundaries and regional differences coincide. Most works which refer

218 The Creation of Regional Dependency to regionalism and regional differences in Canada are forced to use provincial data as approximations of regional data. That should not continue. We need to determine the nature of regionalism and regional differences in Canada economically, socially, social psychologically, and politically if we are ever to understand the nature of Canadian society and make adequate plans for its development. Some assessment must be made of the extent of regional consciousness and the ways in which it is related to provincial identity and is influenced by social class, ethnicity, community size, age, and a variety of other factors. Many social studies declare that regional differences are not salient factors in Canadian society because their analyses are based on provincial data. We know that regional differences overlap provincial boundaries and that there are sub-regions within each province. We need to know more specifically the psychological, social, and economic limits of each region and how they influence social, economic, and political events in the country. There is also a need for what might well be called the sociology of natural resource development. All too often Canadian social research has been fragmented into categories not particularly relevant to life in this country. For example, we have developed rural sociology, urban sociology, community sociology, ethnic sociology, and similar subdisciplines relevant to this society but which are also dimensions held in common with other nations, especially the United States. The most critical aspect of Canadian social life, apart from the fact that it is so regionally diverse, is that it is based on resources. A large portion of the population lives in one-industry resource communities, isolated from others by hundreds of miles. Though the majority of the population may live in large cities, the fate of those cities depends far more on what happens in such small, one-industry towns than often we like to admit. It is time to focus on this aspect of social structure in much the same way that Innis and his followers focused on staples as the basis of Canadian economic structure. Indeed, the approach to sociology advocated here has much in common with Innis's approach in economics or Creighton's in Canadian history. To be sure, notable steps have already been taken in this area. For example, Lucas examined the common features of these one-industry resourcebased communities (1971) . The problem with his analysis is that it did not extend beyond the communities themselves to show how other aspects of social life form an integral part of a resource-based society in which certain interests dominate and control social, economic, and political events. On the other hand, in the past few years much political economic analysis has attempted to deal with the nature of resource development in Canadian society. Yet the approach taken has become rather asocial and formally struc-

219 New Directions for Analysis and Policy tural, to the point that it tends to leave the dynamic interactions of people out of the analysis. What is needed is a sociology of natural resource development that combines the best of small community analysis and large political economic analysis, and which considers the way in which social change is altered and shaped by individuals. Such a sociology of natural resource development could proceed in a number of ways. Elliot's work (1981) is a useful start, though his approach might be better considered a sociology of law as related to resources. The approach advocated here is somewhat different and, not surprisingly, closely related to the approach taken throughout this volume. The analysis in this volume indicates that the key aspects of any sociology of natural resource development are the way in which resource development shapes society to produce distinctive patterns of uneven development between regions; the way in which conflicting interests develop at the local community level, the industry level, and the national level, each struggling to control that resource for its own benefit; the way in which at both provincial and federal levels the state responds to the claims of these various interest groups in ways which benefit some interests and hinder others; and the effect which state policy (and laws) have on the social structure, way of life, and outlook of those affected by them. Any study of the nature of regional divisions in Canada must focus as well on resource development, for the resource base of each region shapes its labour force and community structure as well as its pattern of development and underdevelopment. Studies which examine the relationship between the development of each region and the development of its resource base are required. It is also necessary to examine the interests involved and the way in which those affected by resource development relate to the surrounding social structure which affects them. THE 'LEGITIMATION CRISIS' IN CANADIAN REGIONAL DEVELOPMENT POLICY

Any attempt at regional analysis in Canada must deal with the nature of Canadian regional development policy as well as with various types of resource development policy. An underlying theme in this volume has been the way in which Canadian regional development policy as well as tariff policy, fishery policy, and a host of other related policies, have influenced the regional pattern of Canadian development. The inference is that the pattern of regional development and underdevelopment in Canada is not natural but created and that certain types of policies have produced the regional distribution of social structure and economic growth in Canada today.

220 The Creation of Regional Dependency

If one accepts this proposition, one must then question the validity of Canadian regional development policy throughout the past three or four decades. Most policies were sincere attempts to improve regional economic conditions but, as we have seen, those policies have done little to alter regional economic patterns but have endangered and altered social and cultural patterns within and even among regions. As a result, Canadian regional development policy faces what might be termed a 'legitimation crisis.' The idea of legitimation crisis being used here is found in the work of Habermas (197 3). Simply put, he argues that a political system produces a 'rationality crisis' when it is unable to accomplish the economic goals it sets for itself. Should that situation continue, it produces a 'legitimation crisis' in which the political system itself is questioned (Habermas notes that a legitimation crisis is an identity crisis for those who experience it). A kind oflegitimation crisis is occurring today in Canadian regional development planning. Moreover, this crisis extends to almost all regional development and fiscal planning. Those for whom plans are being made increasingly resist measures which often seem designed to undermine their local culture and way oflife. On the other hand, the planners themselves seem to be going through an identity crisis of their own, in which they question their own legitimacy and ability to make plans. Indeed, one of the attractions transfer dependency holds for many planners is that it allows them to abdicate their responsibility for regional development. A general feeling of helplessness appears to have permeated regional planning throughout the country to the point where much of it consists of little more than federal responses to requests for various types of assistance from the provincial governments, with little effort being made to plan coherently for social and economic development. A country as big and as regionally diverse as Canada must have regional planning if it is to fulfil its social and economic potential. Furthermore, the aim of regional policy should be to achieve as much economic and social equality as possible without undermining current cultural and social structures. To do that Canadian regional development planning has to overcome its 'legitimation crisis.' That can happen only when the planners and those for whom the plans are formulated work together, with an awareness of one another's goals and values and of the importance of social as well as economic considerations in any plan. Regional planning is certainly necessary in Canada, and good planning is preferable to bad planning.

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Index

Acheson, Thomas W. 70, 99, 100-1 achievement motivation 46-7 action : individual 7-8, 53-4; vs structure 7-8 adjustment (s): neo-classical theory of 61-2; natural 61; labour force 65, 105; and migration 65-6, 105-12; and wage rates 65-7; vs rural development 105-6; in Daniels 112; and resettlement 134, 183 Agricultural Rehabilitation and Development Act (ARDA) 104-5, 118 Alberta 25, 32, 77, 109 Alexander, David 191 Amin, Samir 70-1 Anderson, Charles H. 50 associated-dependent development: defined 73; related to Canada 74 Atkinson, Tom 25-6 Atlantic Canada 24, 34-5, 53, 66-7, 70-1, 74, 75, 79, 80, 83, 107, 109, 167 Atlantic Development Board 82 Atlantic Provinces Economic Council 115, 182 attitudes: and identity 24-5, 78, 83-4; regional 24-7, 83-4; and community

integration 163-4; to Newfoundland resettlement 183 Baran, Paul A. 47, 69, 190 Barrett, L. Gene 201 Barton, Allen H. 124-5, 128 Bauer, R.A. 20 Beals, Ralph L. 137 Becker, Howard S. 143-6 Bell, Daniel 76 Bell, David 13 Berger, Justice Thomas R. 77 Berger, Peter F. 22 Berton, Pierre 102 Bertrand, Alvin 40 Blishen, Bernard 25-6 Blumer, Herbert 126-7 Bowles, Roy T. 165-6 bridgehead: and regional underdevelopment 71, 113; and dependency theory 87; and political validity 160-1 British Columbia 52, 79, 80, 109 Brym, Robert J. 74 Buchanan, John M. 210 Buckley, Helen 104, 105-6, 118 Bunge, Mario 27-8 Buttel, Frederick 32

236 Index Canadian Saltfish Corporation 200-1 Canning, Stratford 182 capitalism 48; and regional disparity 49-50; goal of 49-50; and exploitation 49-51; and imperialism 69-73; dependency theory perspective on 87; and underdevelopment of Newfoundland 189-93; as mode of production 195; in inshore fishery 200-1, 215; in offshore fishery 201; and fish processing sector 203-4, 214; and joint ventures 213-14 Cardoso, Fernando Henrique 73-4 Careless, J.M.S. 92-3, 103 Carstensen, Vernon 16 Caskie, Donald M. 63 centralization: compared with resettlement 120-1, 181-2 centre and periphery: in dependency theory 71; in Innis' theory 74; see also metropolis-hinterland relationship character, national 92-3 Chernick, S.B. 79 Chorney, Harold 43, 70, 83, 102 Chua, Lily Aurora 32 Clark, Joe 103 Clark, S.D. 89-93 class interests: 8; focus of third stage of dependency theory 87; role of bridgehead in 71, 113; and Canadian regional development policy 113-15; marxist theory of 115-16; role of state in relation to 167-8; in Newfoundland development 189-92; immediate vs fundamental 197; in east coast fishery 194-8; 199-204, 215; focus of a sociology of resource development 218-19 class locations, contradictory: Wright's theory of 196; in east coast fishery 196-8

class structure: and power 45; in staples theory 45; in marxist theory 51; in recent sociological theories 52-3; Canadian 52-3, 72, 78-9, 82-3; and migration 67; polarization in 72; regional differences in 80-3, 86; and dependency theory 87 Clement, Wallace 13, 52, 53, 72, 82, 160,190 collective behaviour: in Newfoundland resettlement 120, 124-34; origins in social stress 124, 134; in disaster situations 124-5; three elementary mechanisms of 126-8; and social contagion 130; rumor in 131-3; role of leaders 131-4; collective flight in 133-4; panic in 133-4 commitment 8; defined 23; and regionalism 23-4, 36; and communitism 163 commodity producers, independent 82-3 communication 158, 161-2 communitism 163 community: and region 14-16, 85-6; eclipse of 15, 39; nature of 154; Martindale's theory of 154-5, 162; formal and informal organization of 155; social integration of 155, 161-3; economic viability in 154-7; social vitality in 157-8; political validity in 159-61; relational structures of 161; organizational integration of 162-4; personal integration in 162-4; one industry 218-19 compradors: and regional disparity 52, 72; and political validity 161-2 Confederation: impact on regional disparities 99; goals of 100 Converse, Philip E. 29 Copes, Parzival 143, 184,202, 206-7

237 Index cost-benefit analysis: of community viability 157 cost sharing: federal-provincial 61 Courchene, Thomas J. 10, 48, 58-62, 64-8, 105 culture: and regionalism 39-40, 44; and personality 46-7, 93; and regional policy 54; and national character 92-3 culture of poverty approach: defined 58-9; criticism of 59; compared with transfer dependency 59-60 Cuneo, Carl 13, 52-3, 83 Dale, Britt 29, 31, 33 Daniels, Mark 99, 104, 107-8, 109-12 Department of Regional Economic Expansion (DREE) 107-11 dependency 56; development and 70; in underdeveloped regions 71; development of 72; and Atlantic Canada 102; of Newfoundland 193; see also dependency theory, regional dependency dependency theory 5, 10, 53, 69-75; vs transfer dependency 56-76; view of regional disparity 60; origins 68-70; applied to Canada 69, 70, 71, 72, 74-5, 78, 86-7, 88, 112-15; view of metropolis-hinterland relationship 70; view of uneven development 70; view of multinational corporations 71, 72; explanation of centre and periphery 71; concept of bridgehead 71-2; concept of class structure 71-2; concept of polarization 72; concept of associated dependent development 73-5; use of historical data 75; causes in 75; view of migration 75-6; perspective on local government 76; value orientation of

76; modes of production in 73; social organization in 74-5, 94; as explanation of regional differences 78, 86-8; four stages of 87; basis of a Canadian sociology 94-5; interpretation of Canadian regional development policy 112-15; and voluntaristic perspective 167 detenninism: historical 6; class 6-7, 53; economic 6-8, 49, 53, 75; structural 6-8, 53, 57; cultural 7-8; environmental and climatic 38-9, 40; biological 38-9; mechanistic 155 development, uneven: and dependency theory 70-2; in Canada 79-80, 219; and dependency theory 87; and resource development 219 development approach 44, 46-7 De Visser, John 183 Dickens, Charles 37 Dos Santos, Theotonio 71-2, 74 Doyle, John C. 185 Duncan, Otis Dudley 40 Durkheim, Emile 41 Economic Council of Canada 20, 33-6, 44, 46, 47, 48, 49, 57-8, 79, 105 economic geography: theories of regional imbalance in 42-4 economic viability: defined 149; in Small Harbour 50-2; and community theory 154-7; and formal exchange 155-6; and hidden economy 156; and subsistence economy 156 Elkin, David J. 25, 84-5 Elliott, John 219 entrepreneurship: and regional differences 3, 46-7, 52; and underdevelopment 70; in dependency theory 72; in transfer dependency theory 76; in Newfoundland 191

238 Index ethnicity 83-4; in Canadian social organization 93; and charter groups 102 Evans, Peter 74 Faletto, Enzo 73-4 Fine, Gary Alan 164 Fischer, Claude E. 164 Fisheries, Department of: and resettlement 120-1, 138-9; development policy 168; and east coast fishery 204-10, 212-14 fishery (east coast): development policy for 169, 184; Newfoundland labour force in 174-5; classes in 195-6; contradictory class locations in 196-7; modes of production in 196-7; spheres of production in 197; technologies of production in 197; interest group conflict in 198-204; inshore vs offshore 198, 202-3; co-adventurer status in 198-9, 201-2; unionization of 199-200, 202-4; processing sector of 203-4; federal role in 204- 10; provincial role in 209-11; laissez-faire approach to 210; enemy within vs enemy without 212, 214; joint ventures in 213-14; foreign ownership in 213-14 Francis, J.P. 107 Freidrichs, Robert W. 142-3, 145 frontier thesis: of Frederick Jackson Turner 40, 91; and regional differences 40; and sectionalism 40-1; of Clark and Lipset 91-2 functional theory: of regional disparity 40-2, 51-2; and dependency 59; in Lipset 91-2;ofpoverty 116-17 Fund for Rural Economic Development (FRED) 106-7, 118

Galtung, Johan 71-2, 74, 113, 160, 202 Gamberg, Herbert 88 Gans, Herbert J. 116-17 geography 14, 42-3; see also economic geography George, Roy E. 46-7, 52 Gibbins, Roger 83 Gibbon, Brian 79 Giddens, Anthony 7 Girvan, Norman 87 Glover, Douglas 182 goal-value systems: defined 54; in planning 134; of social policy 139-41, 143 Gouldner, Alvin W. 142, 144-6 Gray, David J. 142, 145 Green, Alan G. 79 growth poles-growth centres 43, 44, 49; and master industries 43, 188; and Canadian regional development policy 106-8, 110, 115, 117; and resettlement 118-19, 122, 181-2; as basis of Newfoundland industrial strategy 188-91 Gwyn, Richard 69, 179, 187, 188, 189, 192 Habermas, Jurgen 220 Hardin, Herschel 93-4 Harvey, Edward 13, 90 Heberle, Rudolf 39-40 Henderson, D.W. 20 Hertzler, J.O. 16-17, 39 hidden economy 156, 161-2 Hiller, Harry 89-90 hinterland see metropolis-hinterland relationship Hirschman, Albert 106 Hodge, Gerald 113

239 Index Holland, Stuart 42-3, 50 Hundley, James R. Jr 125 Hunter, Albert 163-4 Hutcheson, John 100 identification: of regional differences 18, 21-36; defined 22; and commitment 22, 23, 36; and regionalism in Canada 84; and community integration 163 identity 8; defined 22; and regionalism 22; and attitudes 24-7; role identities 22-3; Canadian 24-5, 78, 83-4; personal 36; group 83; and communitism 163; focus of regional sociology

l 02; and Canadian regional development policy 107-8, 113-15, 117; of Newfoundland 177-8, 183, 185, 187-90 Innis, Harold 74, 91 Institute of Social and Economic Research (ISER) 148 interest groups: in fishery 198-203; two-class model of 215 Iverson , Noel 65 , ll9, 137-8, 148, 172 Jamieson, Don 204 Jarvie, LC. 89 Jensen, Merrill 41 Jocher, Katharine 41

218 immigration 100 imperialism: views of Marx and Lenin 69; and dependency theory 69-70; in Canada 70; of American sociology 88-9; and capitalism 169, 173 income: guaranteed annual 68; by province 80, 119 indicators: economic vs social 19-21, 27-9, 35, 79, 157-8; agglomeration of 20; defined 27; of level of living 27-8; regional 27-36, 79-80, 80-1, 111-12; subjective vs objective 27-36, 79; of quality of life 28-9, 31-6; quantitative vs qualitative 29; global vs domain 31-3; domain vs specific 32; of well-being 33; legitimacy of 37-8; of social class 79-80; of urbanization 80-1; of regional disparity 111-12; of economic viability 157; in social impact assessments 165-6; of population and development in Newfoundland 181-2 industrialization: and population 65; of Maritimes 101-2; of Atlantic Canada

Kahl, Joseph 87 Kelman, Herbert C. 137 Kennedy, Leslie W. 30-2 Keynesian approach 44, 48-9 Killian, Lewis M. 130 Kleinman, Sherryl 164 Knox, Paul L. 28, 30-3 Kuz, Tony J. 28-9, 31 labour force: in Canada 81 ; in Newfoundland 174-5 lack theories: of regional disparity 3, 46-7, 69; see also modernization theories La Clau, Ernesto 73 laissez-faire economics: and transfer dependency 60-1; and fishery development 210, 212 Lane, C. Max 120 Le Blanc, Romeo 168, 207-9, 2ll-14 Lee, Trevor 30, 31, 32 legitimation crisis: defined 220; in Canadian regional development policy 219-20

240 Index Lenin, V.I. 69 level ofliving: indicators of 27-8; and regional differences 27-9 Levitt, Kari 190 Lewis, David 108 Lewis, Oscar 58-9 Lindeman, Eduard C. 39 Lipset, Seymour Martin 90-3 Long, Norman 87 Lougheed, Peter 77 Lucas, Rex 218 Luckman, Thomas 22 McAllister, Ian 109-12 McCall, George 22-3 McClelland, David C. 46 McCracken, F.D. 198 Mccurdy, Earle 201,214 Macdonald, John A. 100, 102, 103 MacDonald, R.D.S. 198 Maciver, Robert M. 15-16 MacLaran, Andrew 31 Makerjee, Radharamel 38-9 Mandel, Ernest 50, 69-71, 113, 183 Manitoba 31 Marans, Robert W. 30, 31, 32 Maritimes: and Confederation 100; and national policy 100-3; see also Atlantic Canada, New Brunswick, Nova Scotia, Prince Edward Island Maritime Marshland Rehabilitation Act (MMRA) 104 market: failure of 47; in Keynesian theory 48; and capitalism 50-1; and regional disparity 50-1 ; vs nonmarket economy 155-6 Marsden, Loma 13, 90 Martindale, Don 85-6, 154-5, 162 Martinson, Oscar B. see Buttel, Frederick

Marx, Karl 67, 71, 195 marxist theory: classical perspective in 49; of regional differences 49-51; recent sociological developments in 52; of state and class structure 115-16; see also neo-marxist perspective Mathias, Philip 186 Matthews, Ralph 25, 47, 65, 98, 119, 137-8, 148, 149, 169, 172 Mawson, A.R. 133-4 merchants: traditional role in Newfoundland 128, 132; in Newfoundland resettlement process 132-3 metropolis-hinterland relationship: and underdevelopment 70; and Canadian regional development policy 113-14 metropolitan thesis 92 migration: transfer dependency theory of 60, 64-7; relation to wage rates 64-7; as an economic variable 65; as a strategy of adjustment 65, 66, 105, 112; causes of 66; consequences of 66; and employment 66; as a social variable 66-7; from Atlantic provinces 66-7; compared with resettlement 112-24; net 181; in Newfoundland 181-2 Miliband, Ralph 116 Millikan, Max F. 140 Mills, C. Wright 142 minimum wage rates: rationale 62-4; and poverty line 63-4; effect of lowering 64; and industrial development 64; and negative income tax 64; and emigration 68; and guaranteed annual income 68; as adjustment 67-8 Mitchell, Clyde L. 164, 195-6

241 Index modernization theories: of regional underdevelopment 69; focus on lacks 69-70 Moore, Harry Estill 16, 40-2 Moores, Frank D. 210 motives 7, 54; for migration 66 Mowat, Farley 183 multinational corporations: and regional underdevelopment 71-2; and underdevelopment 72; and associated dependent development 73; and regional identity 83 'National Policy': description 100; and Maritimes 100-2; and railroads 103; and central Canada 102-3 Naylor, Tom 70, 99, 101-2, 190 Neary, Peter 169, 184, 186 negative income tax: and transfer dependency 67-8; and minimum wage rates 68 neo-classical economic approach 10, 44, 47-8, 57-8, 60-1, ll2 neo-marxist perspective: and Canadian sociology 5 New Brunswick 13, 99, 100 Newfoundland 25, 34, 65, 79, 107, l 09, 148, 168, 170, 172; development of 169, 170-9; population 170-4, 179-83; isolation 174; labour force 174-6; manufacturing in 176; underdevelopment of 179; net migration in 181-2; fishery policy in 184, 210-11; forestry policy in 184; hydro policy in 184; staples development strategy in 184-7; industrial policy in 187-9; dependency of 193 Newfoundland, Government of 120, 170,172,176,177,184,185,202, 210-11

Newfoundland Resettlement Program see resettlement Noel, S.R.J. 169 Northcott, Herbert C. see Kennedy, Leslie W. Nova Scotia 46-7, 53, 64, 74, 99, 100; fishery policy in 209-10 Odum, Howard W. 15, 16, 40-2, 85 Ogburn, William F. 39 Ontario 34, 47, 52, 79, 80, 82, 83, 102, 103, 107, 109, II0 Ornstein, Michael D. 25 Ostry, Sylvia 80 Palma, Gabriel 87 Peckford, Brian 77 Perroux, Franfois 42-3, 106 Phidd, R.W. 107, 108 Phillips, Paul 19 Pillai, N.G. 107 planning: regional 54-5; goals 134; as logical and hierarchical process 134 Poetschke, L.E. 106-7 policy: as goal-value system 139; separation of means and goals of 142; evaluation of 164-5; see also regional development policy policy evaluation: role of research in 137-9, 141-6; ethical dilemmas in 139-41; value freedom in 141-2; Weber's position 142-3; Becker's position 142-4; Gouldner's position 144-7; separation of analysis and evaluation in 145; accountability in 146; competing paradigms of 146-7; and social impact analysis 164-6 political economy: and Canadian sociology 5; economic determinism in 6; structural determinism in 6-7

242 Index political validity: defined 149; in Small Harbour 153-4; and community theory 154-5; 159-61; and community leadership 159-61 population: and development 170-4; in Newfoundland 170-4, 179-83 Porter,John 78,82,83,84 Poulantzas, Nicos 115- I 6 Poushinsky, J.M . 205-6 Poushinsky, N.W. 205-6 poverty: functions of 116-17 Prairie Farm Rehabilitation Act (PFRA) 104 Prince Edward Island 79 production: modes of 7, 52, 53; and analysis of regional dependency 73; capitalist and non-capitalist 73; dependency theory of 87; varieties of 194; class groups in relation to 194-5; spheres of 197, 203-4; technologies of 197, 198-203 quality of life: defined 28; and regional differences 28-9; subjective vs objective indicators of 28-33; Canadian and European research on 32-6; economic vs social indicators of 33-6; and migration 65 Quarantelli, E.L. 125 Quebec: regions of 13; survival 42; class structure 52, 82-3; regionalism 56, 77; separatism 74; labour force 80; industrialization I 02; and 'National Policy' 102-4; and regional development policy 107, I IO Ray, D. Michael 102 region 9-10, 217; definition 12-18; and regionalism 12-18, 21-7; and territory 13-14, 85-6; and community

theory 14-15, 85-6; identification of 21-7, 86 regional dependency 9-1 O; two theories of 56-76; see also dependency theory, transfer dependency regional development policy (Canada) 97-8, 99-117, 217; Maritime Marshlands Rehabilitation Act 104; Prairie Farm Rehabilitation Act 104; Agricultural Rehabilitation and Development Act 104-5; Fund for Rural Economic Development 106-7; failure of 109-10; alternative proposals for 109-12, ll7; future of ll5-l7; Newfoundland Resettlement Program 118-36; legitimation crisis in 219-20 regional differences 9-10; paradigms of IO, 38; explanation 10, 37-55, 78, 85-8, 217; definition 12, 18-21; vs regional disparities 12, 18-21, 27-36; identification 18, 27-36; objective vs subjective indicators 18, 29-35, 79-82, economic vs social indicators 18-20, 29-30, 35-6, 79-85; and resources 45; significance 77-85, 218; lack of Canadian research on 78; and exploitation 78; in urbanization 80-1; in education 82; in social class 82-3; in attitudes towards region 83-4; in regional identity 83-5; in political culture 84-5 - theories: early sociological 38-42; economic geography 42-4; orthodox economic 44-9; staples 45-6; development 46-7; neo-classical 47-8; marxist 49-51 ; recent sociological 51-4 regional disparities 9-10, 217; definition 12, 18-21; vs regional differences 12,

243 Index 18-21, 27-36; and economic inequality 18; as value judgment 19; objective vs subjective dimensions 19, 27-35; economic vs social dimensions 19-20, 35-6; identification 27-36; indicators 27-36; British studies 32-3; Norwegian studies 33; Canadian studies 33-6; orthodox economic theories of 38, 44-9, 111; institutionalization of 64; origin of in Canada 99, 103-4; and Confederation 99 regional divisions: defined 21; basis of Canadian social organization 78, 93-4; objective economic and social indicators 79-80, 80-2, 85; significance 79-85; social organization indicators 80-3, 85; indicators of identity and culture 83-4, 85; three levels of 85; and community 85-6; explanation 85-8 regional identity: and Canadian identity 23-4; vs regional attitudes 23-7; and personal identity 36; in Canada 83-5 regional imbalance 42-4 regionalism 9- I 0, 2 I 7- I 8; and region 12-18, 21-7; definition 16-18; and consciousness of 16-17; and ideology 17; and region I 8; identification 21-7; and identity 22; three dimensions of 22-7; and commitment 23-4; Canadian studies 25-6, 84-5; British studies 26-7; psychological aspects 39; vs sectionalism 40-2; and communitism 163 research: ethics in 137-47 resettlement: description 98, 118-20, 180, 181-3; and Canadian regional development policy 118; and growthpole theory 118-19; as collective

behaviour 120, 124-34; compared with centralization 120-1, 181-2; structure of program 120-2; vs migration 122-4; and role of planners 134-6; and disaster situations 124-5; stress in 124-6; role of Director 128-9; research 137-41 ; conference 148-9; vs rural development 192; and fishery development 211 resources: and regional disparities 45-6, 50, 79, 113; and class interests 167; and Newfoundland development 183-7, 189; sociology 2 I 8-19; and resource communities 218-19 Rex, John 89 Riemer, Svend 16, 39, 40 Roberts, David K. 174 Rogers, Willard 29 Rothney, G.O. 169 Rutman, Leonard 146-7 Ryan, William 59 Sacouman, R. James 74 Schneider, Mark 31, 32 Schumacher, E.F. 110, 192 Schwartz, Mildred 17, 25, 78, 83-4 sectionalism: and frontier thesis 40-1; and regionalism 40-2 self-concept 163-4 Shaheen,John 188 Shibutani, Tamotsu 13 I Simeon, Richard 13, 25, 84-5 Simmel, Georg 158 Simmons, J.L. 22-3 Simpson, George L. 41 situation, definition of 119 Small Harbour 150-4; economic viability of 150-2; history 150-1; socialization in 152; social vitality of 152-3; political validity of 153-4

244 Index Smallwood, Joseph R.: and population growth 65, 179-81, 188-9; and resettlement 126, 180-3; development policy of 168, 169-93; development tactics of 176-9; responsibility for underdevelopment 179, 191-3; social policy of 179-83; staples policy of 183-7; economic policy of 183-9; industrial policy of 187-9; and socialism 189; and big business 189-90; assessment of development policies 189-93 Smelser, Neil J. 124-5, 131, 132-4 Smith, Dorothy 90 social class 16, 51; and regionalism 52, 82, 84; polarization 72; and Canadian social organization 93; see also class structure Social Forces 39 social impact assessments: and policy evaluation 164-5; Bowles' analysis of 165-6; critique of 165-6; use of indicators in 165-6 social networks: as basis of integration 164; characteristics 164 social organization 6; as basic characteristic of region 15; regional 44, 78, 83; and dependency theory 74-5; based on divisions 78; of Canada 88; and a distinctive Canadian sociology 93-4; community-based theory of 154-5; and political validity 154-7; and economic viability 155-7; and social vitality 157-8; and community integration 161-4; integration of 162-4; personal integration in 162-4 social vitality: defined 149; in Small Harbour 152-3; and community theory 154-5, 157-8; and communication 158; and socialization 158; and sociation 158

socialization 157-8, 161-2 sociation 158, 161-2 society, Canadian: explanation 10-11; unique organization of 11; and regional specialization 41-2 society, dual 72-3 sociology: theories of regional differences in 38-42, 51-4; dimensions of natural resource development of 218-19 - American: perspectives on regional differences 38-42, 85-6; imperialistic nature 88; vs Canadian 88-9 - Canadian: vs sociology of Canada 3-4, 85, 217; nature of 4-5, 85, 217; and unity in 78; development of 82-95, 217; and history in 89; and unique social organization in 89; comprehensive approach in 90 - regional 13, 39, 40, 41, 78 Spencer, Gary 59 Springate, J.U. 115 staples: in Newfoundland 183-7, 189; see also resources staples approach 44, 45-6, 91 state: power of 53, 76; relationship to dominant class 115-16; and regional development 167-8; and class interests 194; liberal democratic vs marxist view 205; marxist perspective on role in east coast fishery 205-6; role of federal in east coast fishery 20410, 212-14; role of provincial in east coast fishery 209-11 Stevenson, Garth 79 Stolzman, James 88 stress: and collective behaviour 124-5; and resettlement 124-7, 128 subsistence economy 156, 161-2 Suchman, Edward A. 137 Sunkel, Osvaldo 71, 72, 74

245 Index surplus value 50; and unequal development 69-70 Tariff Act see 'National Policy' Taylor, C.C. 26-7 Tepperman, Lorne 13 Tihanyi, Eva 104, 118 Townsend, A.R. 26-7 transfer dependency: theory of I 0, 57-68; vs dependency theory 56-76; and neo-classical economics 57-8; first thrust of 58-60; Courchene's theory of 58-68; and culture of poverty 58-60; and victim 59, 60, 64, 67; and laissez-faire 60; solutions in 60; perspective on transfer payments 60-l, 67-8; second thrust of 60- l; theory of adjustments 61-2; third thrust of 61-7; perspective on migration 64- 7, 75-6; and class structure 67; fourth thrust of 67-8; and negative income tax 67-8; and guaranteed annual income 68; causes of dependency in 75; role of local government in 75; value orientation of 76; in Daniels 110 transfer payments: transfer dependency perspective on 60- l; and wage rates 65; and negative income tax 67-8 Turner, Frederick Jackson 40-1, 91 underdevelopment: two perspectives 3-4; defined 4; vs undevelopment 4; regional 9- l 0; of Atlantic Canada 53, 70, 100-2; theory 69; process of 112-13; of Newfoundland 179, 191-3 unemployment: and wage rates 63; and migration 66-7 unity: and regional specialization 41-2; as focus of Canadian sociology 78,

83

urbanization: and regional differences 33, 39, 49; and regional homogenization 70, 83; regional differences in 80-1, 84, 86; and class structure 82-3; and Canadian regional development policy 98, 107, 117; and values 139; in Newfoundland 172-3, 182-3 Usher, Dan 114 Valentine, Charles A. 59 values: and norms 8, 157; and Canadian sociology 94; in social policy 139-46; and policy research 145-6; and Newfoundland resettlement 183; see also goal-value systems value freedom: doctrine 142; in policy research 142-6 value judgments: and regional disparity 9-10, 19-20; and facts 37; and social indicators 37-8; and goal-value systems 54; and regional policy 54-5; in Canadian sociology 89-90; in Upset 93; of people vs planners 98; in policy research 140-7; and objectivity 142 value orientation: of dependency theory 76; of transfer dependency 76; subjective regional differences in 79; of planners 97; of policy researchers 97, 139-40, 142-7; and Canadian regional development policies 97-8, I04-8, 118; of persons affected by planning 98; see also goal-value systems Vance, Rupert B. 16-17, 39, 85 Veltmeyer, Henry 53, 71, 74 voluntaristic perspective 7, 118, 167, 217 wage rates: legislation 48; transfer dependency perspective on 62-4; see also minimum wage rates

246 Index Wasserman, Ira M. 32 Watkins, Mel 45 wealth 52; and capitalism 49; and banking 101 Weber, Max 140,142,145 welfare: and economic viability 156, 161-2

Western Canada 42, 79, 80, 83, 102, 107 Wilkening, E.A. see Buttel, Frederick Williams, Rick 195-6, 204 Wirth, Louis 16 Woodward, Robert S. 115 Wright, Erik Olin 195-7