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The Creative Economy- Behind The Optics

My next contact with the “creative economy”, was with AlanHinsey, who was then a key mover and shaker at The MidCoast Magnet .

Around that time I was reading two books, one titled Free Agent Nation *by Daniel H Pink and the other The Non- Profit Economy by Burton A Weisbrod **

Free Agent Nation described the economy that I recognized from my every day perspective- the micro economy made up of small business owners such as are located in small town communities like the Boothbay Peninsula. Free Agent Nation described an America of independent individualistic free agents, preferring to run their own businesses rather than to be company men in gray flannel suits. To my daily perspective, this seemed like a true portrait of America.

The Non-Profit Economy by Burton Weisbrod, written in the 1980’s, described an over all economy made up of three separate and distinct sectors- the private sector, the government sector –and the non-profit sector. Each sector, in theory, served a function that the others couldn’t serve and in so doing complemented the others to the benefit of the larger society. This, I also took to be true, not knowing then that Maine State Enterprises was already deeply entrenched and had grown long tendrils of “quasis” that linked government with non-profits and private business so that Maine State Inc and associates, had become one continuous indistinguishable sector, serving a singular mission and using the separate functions of each sector “creatively” in service of the agenda at the core of Maine State Inc, that of high growth investors, justified by claims of serving “public purposes”.

FAME is a corporation chartered by special act of legislation that serves a key redistributive function in the Maine State Enterprises Network.

Andersen Studio is located in Midcoast Maine. At that time I had recently put my vision for a ceramic slip casting network in to writing  but a network can’t come into being unless there are other interested parties and so one has to reach out to the community in the hopes of finding others that can help to bring the network into being. To that end I contacted Alan Hinsey at Midcoast Magnet.

Mr Hinsey visited our studio and showed no interest. After which, we never heard from him again. He did not even do so much as to suggest anyone that we might contact, or include us in a data base of information available to others at Midcoast Magnet, even though Mr Hinsey functioned as a community organizer in the Midcoast Region where our family business has been located since 1952.

Midcoasr Magnet is a non-profit organization in the Maine State Enterprises network.
This is the current list of advisory board members:

MIDCOAST Magnet Advisory Board
Richard Aroneau – Planet Toys
Dan Bookham – Camden-Rockport-Lincolnville Chamber of Commerce
Kevin Callahan - CallahanPro
Ed Cervone – Maine Development Foundation
Bettina Doulton – Cellardoor Winery
Paul Gaudreau - Union Pottery
Alan Hinsey - Knox/Waldo Regional Economic Development
Donna McNeil – Maine Arts Commission
Hannah Pingree -Speaker of the Maine House of Representatives
Richard Remson – Artist
Lee Webb - Margaret Chase Smith Center for Public Policy
Brian Willson - Three Islands Press

You can see the catch all economic sector that I described above by observing the advisory boards of countless community and business organizations, such as Midcoast Magnet,  where there is commonly found a representative from the Maine Development Foundation. and other government representatives. The purpose of the Maine Development Foundation, as usually stated in its charter in kinder gentler words, is to obliterate the separation between the three  distinct economic sectors as described in The Non-profit Economy  in the 1980's.

§916. Establishment

The Maine Development Foundation is hereby established to foster, support and assist economic growth and revitalization in Maine. The foundation shall carry out its purposes in complement to and in coordination with the economic development activities of the private sector, community and regional agencies and State Government. [1977, c. 548, §1 (NEW).]

The legislature “formed” ( the popular language of choice)  the Maine Development Foundation in violation of Article IV, Part Third , Section 14 of the Maine State Constitution, which prohibits the legislature from chartering corporations by special act of legislation and providing no exception for non-profit corporations- which the Maine Development Foundation is stated to be in the special act of legislation that serves as its charter.

 Section 13.  Special legislation.  The Legislature shall, from time to time, provide, as far as practicable, by general laws, for all matters usually appertaining to special or private legislation.
Section 14.  Corporations, formed under general laws.  Corporations shall be formed under general laws, and shall not be created by special Acts of the Legislature, except for municipal purposes, and in cases where the objects of the corporation cannot otherwise be attained; and, however formed, they shall forever be subject to the general laws of the State.

In 2011, under a Republican controlled, House, Senate, and Governor LePage’s Administration , the following list of corporators was added to the charter for the Maine Development Foundation

3. Ex officio corporators.  Ex officio corporators consist of the heads of the major state departments and agencies and the Chancellor of the University of Maine System. State department and agency heads include the following:
Treasurer of State;
Director of the Governor's Office of Policy and Management;
Commissioner of Economic and Community Development;
Commissioner of Agriculture, Conservation and Forestry;
Commissioner of Professional and Financial Regulation;
Commissioner of Education;
Commissioner of Environmental Protection;
Commissioner of Administrative and Financial Services;
Commissioner of Health and Human Services;
Commissioner of Inland Fisheries and Wildlife;
Commissioner of Labor;
Commissioner of Marine Resources;
Commissioner of Transportation;
Chief Executive Officer of the Finance Authority of Maine;
Executive Director of the Maine Municipal Bond Bank; and
Executive Director of the Maine State Housing Authority.
[ 2011, c. 655, Pt. EE, §13 (AMD); 2011, c. 655, Pt. EE, §30 (AFF); 2011, c. 657, Pt. W, §6 (REV) .]

Lest there be any doubt that Maine State Inc is more than just a figment of my imagination, I point to the list of corporators above and to the endless trail of networked government, non-profits and private sector corporations that I continue to follow in this blog.

Maine Technology Institute is another key player in Maine State Enterprises’s mission. MTI serves a key function in redistributing wealth from the tax payers and the non-profit sector to the new owners of the means of production, which we can safely say are qualified members of the self-described  “creative class”, a term coined by Governor Badacci’s guru, Richard Florida.

Alan Hinsey is now the host of Maine Biz Sunday, which serves as public relations for Maine State Enterprises In this interview on Channel Six, Alan Hinsey promotes the Maine Technology Institute as an “industry driven, publicly funded, non-profit corporation “formed by the legislature”. This is stated in a matter of fact manner, although the formation of such a corporation by the legislature is a violation of the Rule of Law in the State of Maine as codified in our constitution and voted into being by the will of the people.

There are no exceptions or provision for publicly funded corporations in Article IV Part Third Section 14 of the Maine StateConstitution, which states that all corporations, however formed, are subject to general law- and so if general law would permit any corporation to be publicly funded, it would permit all corporations to be publicly funded (tax payer subsidized), which in a communist nation like China would also mean publicly owned- but that is not the case in Maine where publicly funded does not mean that the public shares in the profits. In Maine the model is to socialize the risk and to privatize the gain.

The so-called “creative class” prides itself on being a world-class, globally oriented movement. So why then, when Alan Hinsey interviews Chellie Pengris on Maine Biz Sunday, does Alan Hinsey fail to ask Representative Penigris an obvious question when Ms Penigris states in so reasonably sounding a tone that Maine workers need to be trained in high tech manufacturing in order to compete in the global market place ?  That clear and simple and should-be-obvious question is “ How will Maine workers making higher than average wages with all the best benefits compete in the global labor market against countries like China where the workers wage currently hovers around $2.00 an hour, (having recently been rumored to have gone up about 20%)  the working conditions are notoriously poor, and workers unions discouraged? The question seems almost on the tip of Mr Hinsey's tongue but is never directly presented and Ms Pengris side skirts the issue by placing the emphasis on defense contracts which is only a portion of the high tech investments that Maine State Inc is capitalizing. This interview is published on a Progressive website, usually known for advocating cutting defense expenditure's to save money and so it is deliciously ironic that Ms Pengris is putting forth defense contracts as the cornerstone of Maine economic revival.

The answer to that question can be found in the later interview in which Alan Hinsey promotes the Maine Technology Institute. There in he states that the poster child of the creative economy in Maine is Textech and lauds Textech for having “facilities in China and Thailand”. He doesn’t say “manufacturing facilities” but that is the nature of the facilities to which Mr Hinsey refers, leaving the question “How consciously did Mr Hinsey omit the descriptor “manufacturing” ?

Following the interview with Chellie Pengris, Mr Hinsey may have had good reason to omit the word “manufacturing” from his vocabulary. Ms Pengris interview is targeting the support of the Maine people by creating an optic in which the government is training the Maine work force for high tech manufacturing jobs in Maine - not entirely untrue but leaving out a few fundamental business considerations that any high growth investor should know- that Maine is nowhere near competitive enough in the global labor market to capture any significant portion of sustainable high tech manufacturing jobs. Alan Hinsey knows this as is evident of his choice of Textech as the ‘poster child” for Maine State Inc’s “innovative economy movement”.Alan Hinsey also mentions that Textech has received a transfer of wealth from Maine Technology Institute on seven occasions.

In the parsing of language used by political forces, “innovative” has become synonymous with “high tech”, out side of which, in this narrowly conceived political vision, innovation does not exist. In the terminology of Maine’s “creative class” innovative means the sector designing new high tech products, seen as having the highest profit making potential to the high growth investors. The only manufacturing required  and practical to be done state side is prototype manufacturing to aid the designated “innovative class” in designing new products for the “global” market, which, as extended to the global labor market will be manufactured in places where labor is cheap, and where environmental regulations and labor rights practically non-existent, all radically lowering the cost of manufacturing over the cost in the United States, where we now have the highest corporate tax rates in the world to add to the already higher cost of manufacturing in the USA.

Prototype manufacturing provides jobs but in a much smaller number than product manufacturing and so the language is conveniently parsed to lend the impression that Maine State Inc is creating high tech manufacturing jobs for Maine workers, the industry of the future, which promises to pay higher than average wages and provide all of the top of the line benefits as so mandated by the legislature. “ High tech manufacturing “ is presented as more highly skilled and in all ways more desirable conferring, not only greater wealth, but also greater social status on the workers in high tech manufacturing. The disingenuous optics are designed to lure the work force into the high tech manufacturing sector and to justify the expenditure that the Maine State Inc bureaucracy costs the tax payer as that bureaucracy transfers the ownership of the means of production to the self designated “creative class”, using tax payer funds to do so.  Add to the picture that Maine’s State Inc’s manufacturing center at the tax payer subsidized University of Maine is offering prototype design services done by a workforce of students and as such  decreases the number of private sector jobs in prototype manufacturing that the state of Maine can sustain.

And all the while Maine State Inc is in bed with “high growth investors” through another corporation chartered by our legislature in violation of our constitution. The Small Enterprise Growth Fund is a taxpayer subsidized high growth investors corporation. High Growth investors have expectations of selling the business in which the investments have been made in a turn around time of approximately seven years, at which point the high growth investors expect to make a profit worthy of their name. High growth profits follow the cheap labor markets. Connect the dots.

Textech Is the “creative class” poster child because it owns the means of production in Maine and in China and Thailand. One hopes this means that the defense contracts that Textech procured are being manufactured in state side facilities but there is nothing offered in confirmation of that hope. From the point of view of one who is involved in manufacturing, defense contracts aside, I speculate that the Maine based manufacturing center, whether at Textech or the University of Maine, is used to develop prototypes, while the facilities in China and Thailand are used to manufacture products after they have completed the development stage. The product manufacturing sector represents the greater number of jobs. This speculation is based on common business sense. The state side facility, according to creative economy propaganda, maintains a  very expensive labor force, while manufacturing abroad is dirt cheap. It’s a no-brainer.

…And this , I submit, is a key reason why Alan Hinsey would have little interest in Andersen Studio’s vision of a Great American CeramicDesigner Craftsmen Network. If , in our vision for the future, American ceramic slip-casting network were swapped out for “facilities in China and Thailand” as is commonplace in the global ceramics industry, then Andersen Studio would qualify as a “creative economy” business by the measure of Maine State Inc and its associated  “creative class”.

Meanwhile, on the other side of the world changes are afoot. In China, manufacturing facilities are starting to locate inland, indicating an anticipation of selling to a more localized market. The Chinese are starting to venture into “creative class innovation” on their own, for which they will have a great advantage in the proximity of the manufacturing centers to the product designers.

END NOTE: These are some updates on the books mentioned above. I just discovered the two online papers by Burton Weisbrod and so I haven't read his views on the the entwining of the non-profit, government and private enterprise sectors- but I have been hoping to find papers like these for quite some time and so I look forward to reading them.

*(Free Agent Nation Revisited- Wall Street Journal 2011)

To Profit or Not To Profit- The Commercial Transformation of the Nonprofit edited by Burton Weisbrod 1998

The Future of the Nonprofit Sector: Its Entwining with Private Enterprise and Government  by Burton Weisbrod 1997


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