Hinterland decline, resource rents, and resource wages: A critique of the theory of an Intrusive Rentier Syndrome

Abstract

The theory of an Intrusive Rentier Syndrome is a recent attempt in Canada to explain long-term decline in hinterland communities and regions dependent on mining and other primary industries. The theory claims that, in the resource region’s small or medium-sized communities with a large mine and other capital-intensive industry, unionized workers are able to gain a portion of resource rents and set a high-wage norm in the communities; the high-wage norm is a major obstacle to entrepreneurship and diversification. This critical examination of the theory focuses on the theory’s flawed views of the relationship among resource wages, resource rents, and community wages, the role of local demand, and the issue of low education. The analysis is centred on hardrock mining communities with special attention to Northern Ontario, the largest metal mining region in Canada. From the critique of the Intrusive Rentier Syndrome theory is proposed an alternative political economy of labour market “adjustment” in hinterland regions, one based on Marx’s labour reserve concept.