Recently I’ve felt compelled to address the concept of ‘value’ and how that relates to Municipal Government.
In Sechelt we have a situation developing where people are divided, and the debate is being focused on persons, rather than issues or ideas.
I’ve made it clear that I won’t be getting into any of that, I’ll be focusing instead on how to bring ‘value’ to our community. To me, that’s the only question any candidate should be addressing in this election.
Without a clear picture of that, anyone can reasonably assume their interest is to serve political careers, rather than the town and its citizens.
What is Value?
Jeffrey Sachs is a real-world economist, with real-world experience of improving the daily lives of people in a variety of countries. He’s the person you hire to lift 20 million people out of poverty over 10 years by enacting proper economic oversight. Over the years, he’s helped 50+ countries around the world get on a basic footing to enact government services. That, my friends, is value.
Everyone knows that governments tax their citizens. Anyone focused on ‘value creation’ is going to ask what these citizens get in return for their money.
To quote the BC Community Charter, the purposes of Municipal Government are:
- providing for good government of its community
- providing for services, laws and other matters for community benefit
- providing for stewardship of the public assets of its community
- fostering the economic, social and environmental well-being of its community.
In a legal sense, these purposes are open to interpretation, but the intent of the law is clear and not open for debate: it is to create value for community benefit.
Threats to ‘value creation’
After the financial crisis of 2008, economists of all stripes were rushing to explain, as Alan Greenspan put it: “how so many people, in so many places, got it all wrong” (himself included). In his latest saga on the subject, Greenspan writes considerably about “animal spirits”: the things that get in the way of markets producing optimal value creation, at every level of the economy, including governments.
Sachs put it another way, and summed it up in one sentence: “the economic and political elite have lost their moral compass”. They became more focussed on personal gains, rather than their own pivotal position in ensuring general prosperity. Consequently, the system faltered dramatically.
The shockwaves of the 2008 Financial Crisis touched everywhere on earth: including the District of Sechelt.
Housing has long formed the backbone of the coastal economy, and has been in the doldrums ever since 2008. If it weren’t for the careful oversight of the Bank of Canada during those times, Sechelt would be in serious financial trouble today; the sort of trouble that makes daily life miserable, and community development a non-starter.
Municipal governments across the country face an uncertain future. It’s lost on the average person that in the very near term, service delivery from local governments could become untenable. Yes, it’s that serious.
The very same problem extends upwards to provincial and national levels: a direct result of our focus having ignored the concept of ‘value creation’.
What’s the fix?
One major economy has hummed along relatively untouched by the 2008 Financial Crisis and its aftershocks: Germany. We can learn from the characteristics of what they have done and improve our situation.
They have a committed focus on ‘value creation’ that exists at every level of the economy: for customers, employees, taxpayers, businesses, and governments. Consequently, their system is thriving.
How thriving? One important measure, the current accounts balance, is the definition of how much an economy sells versus how much it buys. A positive number is what you look for to say an economy is experiencing real growth and health.
We should all become familiar with the concept of ‘current accounts’, and what it means. As an isolated ‘ferry bound’ economy it does much to describe our collective predicament.
Germany’s current account surplus per person is 15X the closest competitor (China), and by ‘orders of magnitude’, the highest in the world. By comparison, governments in North America are achieving among the lowest scores, historically and currently, in the ENTIRE world.
German governments, as the “drivers of the economic bus”, are doing a great many things that ours in Canada are not doing. We need to understand what they are and get to work on changes.
How do we bring ‘the fix’ to Sechelt
There are many practical steps we can implement to get on a better footing at the very core of ‘value creation’ in our local economy.
The basic idea is: we need the most skilled people working in the most efficient workplaces, producing goods that have a customer.
To achieve this, we need to focus on three key areas:
- Exploring value added production. By turning low value products into higher value end uses, we move further up the commodity chain, e.g. producing value added wood products from our community forests.
- Enacting efficiency gains to government and business. By producing more service more cheaply, or with better end use, we can discover and grow our local competitive edge, e.g. cost saving analysis of Municipal service delivery.
- Getting serious about education in our community. Focus on our youth, and the technical apprenticeship and mentorship WE KNOW leads to gainful employment and a chance at middle class life, e.g. high school trades apprenticeship programs.
Governments in positive association with businesses, community groups, citizens and unions can do a great deal to spur productive outcomes for everyone.
However, that won’t be possible until we achieve basic personal respect and collective will to do good for our communities.
Let’s start by changing the nature of our debate from persons to issues, and understanding that value is the basis of what we do.