Free markets work for First Nations too
Troy Media – By Joseph Quesnel
Is it necessarily ‘right wing’ to recognize the role of the free market in elevating populations out of poverty?
That was the charge made against me after I delivered a presentation in early May at the Debating Aboriginal Policy conference held at Mount Royal University in Calgary.
The issue was whether land claims settlements could address Native welfare dependency. The answer was a tentative yes, but there were provisos, including the fact that the money received must be invested wisely. For example, the Ngai Tahu, a Maori tribe on the South Island of New Zealand, has used its settlements to invest in sound ventures.
Land claim settlements can fight poverty
I also argued that land claims can fight poverty because some land claims involve transferring reserve land title from the Crown to the Native government, which can use it to create a full property rights system.
However, my arguments were based on accepting the validity of the free market, which my opponent rejected.
But accepting the reality of the success of free markets is not really a right-wing argument. It is simply an acceptance of reality.
A new report by the Washington, D.C.-based Brookings Institution presents empirical proof for the most die-hard Marxist. The report, called Poverty in Numbers: The Changing State of Global Poverty from 2005 to 2015, pointed out that nearly half a billion people escaped living at or below the poverty threshold of US$1.25-a-day between 2005 and 2010 because of economic growth, in other words, free markets. The report projects, another 300 million people will escape poverty over the next four years.
The main drivers are China, India, and Brazil. By 2040, China will likely raise its per capita income to $85,000, double the forecast for the European Union.
It is undisputable that these countries were successful at raising so many of its citizens out of poverty by embracing free market economics, which includes secure property rights and the rule of law, under an export-driven, low-wage economy.
But we also have a real world experiment in Canada. Statistics Canada reports that Natives living in the free-market dominated Canadian mainstream (cities) do better than those living on reserves where the mainstream market is not allowed to function and land is held by government.
While some still insist that traditional indigenous economies – hunting, fishing and trapping – can save First Nations, it is naïve to think they can generate the capital necessary to sustain modern First Nations.
To raise incomes and expand opportunities for their own members, First Nation communities need to embrace entrepreneurship and work with the private sector, not fight it.
Taking the bull by the horns
Most of the largest resource development projects – whether diamonds in the North or oil sands in the West – involve partnerships between private companies and First Nations. Some are taking the bull by the horns, like a group of Alberta First Nations which is building its own oil upgrader and refinery northeast of Edmonton. The project will create thousands of construction jobs and eventually require over 1,000 full time positions. There is also the Osoyoos Indian Band in BC’s Okanagan, whose active cultivation and engagement with the private sector has taken a permanent bite out of unemployment for the First Nations there. For First Nations located near non-Aboriginal communities, there is tremendous opportunity for commercial and residential construction.
The answer does not lie in retreating from the market and relying on public administration jobs. There are limited opportunities in that area, with members continuing to depend on social assistance, robbing them of their dignity. That is one experiment that has failed First Nations in Canada time and time again.
One wonders how many more real-world experiments we need before the diehard collectivists concede the argument.
Joseph Quesnel is a policy analyst with the Frontier Centre for Public Policy where he writes about Aboriginal and property rights
Category: First Nations
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