Niall Ferguson has been sounding the alarm for the past couple of years about "the stationary state."
The stationary state is an idea that goes all the way back to Adam Smith, the founder of economics, in his classic book The Wealth of Nations. As Ferguson, the Harvard historian and author of The Great Degeneration: How Institutions Decay and Economies Die, explains, Smith's long-neglected ideas of the attributes of a stationary state are back in vogue.
Simply put, the stationary state features excessive government bureaucracy, a huge and growing divide between the wealthy elite and the rest of the population and a political and economic system that favors that wealthy elite. Small businesses have little to no chance of success with innovative ideas and products against oppressive amounts of red tape and protectionist policies. The majority of the population sees its wages and spending power frozen or declining against inflation while personal debt levels soar. Governments slash spending and services to appease voters unwilling to pay more in taxes to invest in new infrastructure. Feeling increasingly powerless to make effective change, fewer and fewer residents vote, volunteer or take part in community-building exercises.
Sound familiar?
Ferguson describes the North American and European economies as being in a stationary state. He's quick to emphasize that Western countries are not in full decline yet but that's the lesson from history that we're doomed to repeat unless things change, not just at the economic and national government level, but also at the social, individual and local government level.
From a population standpoint, Prince George has been in a stationary state for more than 30 years. While the city has enjoyed impressive growth in the retail and residential sector in the past three decades, that growth is the result of an aging population, fewer people per household and rising personal spending and consumer debt, not because there are more people and more paycheques driving true growth.
And it's been the public sector, not the private sector, that has seen the real expansion since 1980 in Prince George. The private sector has not kept pace to the construction of a host of new public facilities (the Civic Centre, the Multiplex (CN Centre), the Aquatic Centre, Two Rivers Art Gallery), along with developments paid for with federal and provincial support, such as the airport expansion, UNBC, the hospital expansion and the cancer centre. Those public sector projects have brought with them a bureaucracy of public servants needed to operate them. Meanwhile, thousands of jobs in forestry and industry have disappeared, never to return due to technological change, and they have yet to be replaced by a new generation of entrepreneurs and innovators
Ferguson argues that Western countries, from the most powerful leaders right down to individual citizens, are masking the stationary state with lavish spending that will be paid for by their children and their grandchildren.
In Prince George, successive mayors and councillors have raced forward with a "me, too" race with Kamloops and Kelowna for civic development, without addressing the threat an aging population base and little change in the number of residents poses to the local and regional economy. The candidates for mayor, city council and regional district director in the 2014 election need to be asked what they plan to do to address the stationary state Prince George and region finds itself in.
