Capitalism vs State Capitalism and Potash

By Andrew Jackson
The Progressive Economic Forum

The Government of Saskatchewan wants nothing to do with a state (read China) corporation takeover of Potash Corp. The Globe reports:

“The Saskatchewan government signalled Wednesday that it is unlikely to support a takeover of the Saskatoon-based company by a sovereign wealth fund or other state-owned firm from China or other large potash-buying nation. The fear is that the new owner’s primary motive – to supply food and fertilizer for their populations – would conflict with the province’s goal of supporting its people through higher potash prices".

“It would seem to us at first glance that their interest and the interest of taxpayers of Saskatchewan may not be aligned,” Saskatchewan Energy Minister Bill Boyd said in an interview.”

Perhaps I am missing something but is this more logical than saying a propos of BHP Billiton or other foreign capitalist suitors:

“The fear is that the new owner’s primary motive – to maximize profits for non Saskatchewan residents – would conflict with the province’s goal of supporting its people through higher potash prices.

“It would seem to us at first glance that their interest and the interest of taxpayers of Saskatchewan may not be aligned.”

Be the purchaser capitalist or state capitalist, the province still owns the resource and can set royalties as it sees fit. If that power is not enough, then perhaps the province should take over the company itself.