Social Policy, Inequality and Neoliberalism: The Breakdown of the Postwar Settlement

1
Social Policy, Inequality and Neoliberalism The
Breakdown of the Postwar Settlement

• February 25

2
The Franchise From a privilege to a right

• At the time of Confederation, the vote was
  generally restricted to white males over the age
  of 21 who met various property or income
  qualifications.
• From 1867-1885 eligibility was determined in by
  the provinces. Again from 1898-1920 the provinces
  determined eligibility but with some federal
  oversight.
• Property and income based restrictions were
  gradually eliminated by 1920.

3
Electorate as Percentage of Population

• In the first three elections after Confederation
  (1867-1874) between 11 and 12 of the population
  was eligible to vote.
• From 1887-1917 between 20-30.
• From 1917 to 1921, the electorate went from 28
  to 51 of the population.
• The lowering of the voting age in 1970 added some
  2 million Canadians to the electorate.

4
Source http//www.sfu.ca/aheard/elections/histor
ical-turnout.html
5
Class Struggle and Political Reform

• Farmers Siege of Ottawa, 1910
• Winnipeg General Strike, 1919
• Formation of Progressive Party, 1920
• Formation of Communist Party of Canada, 1921
• Turmoil of the Great Depression formation of
  Social Credit party, formation of the Cooperative
  Commonwealth Federation, On-to-Ottawa Trek and
  the Regina Riot.
• Rise of industrial unions, 1930s and 40s.

6
CCF

• Co-operative Commonwealth Federation (Farmer,
  Labour, Socialist), formed in 1932.
• In 1933 it produced, as a statement of
  principles, its Regina Manifesto.
• As a social democratic party, it was influenced
  by the British Labour Party, but it also had a
  very strong origins amongst agrarian interests,
  particularly in Saskatchewan.
• Initially, trade union involvement was basically
  non-existent, but there were members of small
  socialist and labour parties along with social
  democratic academics.
• CCF becomes NDP, 1961

7
The Labour Movement in Canada
8
Labour Movement

• Four major waves of working-class resistance and
  labour militancy when the labour movement
  expanded its membership and its goals
• the 1880s,
• the end of First World War,
• during and after the Second World War,
• and the decade after 1965.

9
Development of unions in Canada

• Until 1872, union activity was illegal in Canada.
  Yet workers had formed unions and went on strike
  regardless.
• By the 1830s and 40s, larger towns and cities in
  British North America saw the rise of craft
  unions organized around specific trades such as
  printers, carpenters, shoemakers, tailors,
  cabinet makers or other skilled workers.
• In the 1850s and 60s, some local craft unions
  began affiliate with the emerging national
  organizations in the United States. Thus
  beginning the growth of international unions
  across North America.

10
The Nine-Hour Movement of 1872

• Early in 1872 a meeting in Hamilton launched the
  movement which spread across southern Ontario and
  Quebec, with workers creating local Nine-Hour
  Leagues.
• Thousands of workers in Hamilton, Toronto,
  Brantford, Stratford, London, Oshawa, St.
  Catharines, Sarnia, Guelph, Kingston, Montréal,
  and Halifax went on strike to secure the
  nine-hour day.
• It included printers at the Globe newspaper in
  Toronto owned by George Brown, a prominent
  Liberal and arch rival of Sir John A Macdonald.
  When his employees joined the strike, Brown had
  them charged for engaging in a seditious
  conspiracy.

11
The Nine-Hour Movement of 1872

• In response, 4,000 workers demonstrated to
  protest the arrests of the striking printers.
• This led to the Trade Unions Act which legalized
  union formation. However, it did not require
  employers to recognize unions or engage in
  collective bargaining.
• In 1876, federal legislation granted some legal
  room for picketing.
• A national labour organization, the Trades and
  Labor Congress of Canada (TLC) was established in
  1886.

12
Knights of Labor

• The 1880s were a decade of unprecedented
  working-class militancy, centred in the emergence
  of an organization called the Noble and Holy
  Order of the Knights of Labor, a body different
  from the trade unions inasmuch as it sought to
  bring all workers into one grand organization
  (Palmer, 1992 120).
• We mean to uphold the dignity of labor, to
  affirm the nobility of all who earn their bread
  by the sweat of their brow.

13
Knights of Labor Tactics

• The leadership of the Knights spoke of class
  co-operation rather than class struggle and
  tended to dislike strikes, but the Knights were
  involved with most of the major labour struggles
  and strikes of the 1880s and early 1890s.
• The Knights actively engaged in electoral
  politics from the early 1880s.
• The Knights organized some of the first Labour
  Day celebrations in Canada, e.g. Toronto, 1882.

14
Winnipeg General Strike, 1919

• metalworkers struggling for union recognition
  asked for support, as a result some 25,000-30,000
  workers went on strike, strike lasted 6 weeks.
• Essential services were maintained during the
  strike as authorized by the Central Strike
  Committee.
• the North-West Mounted Police fired into a crowd
  killing two strikers.

15
Winnipeg General Strike, 1919

• Workers in other cities struck in sympathy with
  Winnipeg.
• Victoria, Vancouver, New Westminster, Prince
  Rupert, Calgary, Edmonton, Medicine Hat, Prince
  Albert, Regina, Saskatoon, Brandon, Port Arthur,
  Toronto, Montreal, and Amherst, Nova Scotia, all
  saw general strikes called to support the workers
  in Winnipeg and to protest the arrests of strike
  leaders.

16
Industrial Unionism

• The great watershed was the 1940s. Before that
  point, almost every effort by various labour
  movements to win a permanent place in Canadian
  industrial and political life was beaten back by
  hostile employers and a generally unsympathetic
  state.
• It was only during and immediately following
  World War II that unions made the breakthrough
  that allowed them to operate, within a tightly
  controlled framework, in most mass-production,
  resource, and transportation industries (Heron,
  1996 xviii).

17
Industrial Unionism

• breakthrough for industrial unionism in the
  manufacturing sector came in 1937 with the strike
  for union recognition at the GM plant in Oshawa.
• 1943, one in three union members in the country
  was on strike.

18
Rise of Institutionalized Collective Bargaining

• 1944 Privy Council Order PC 1003
• established a process to allow workers to certify
  a union,
• once a union was certified the employer was
  obligated to recognize the union,
• it also established grievance-arbitration
  procedures which involves a mechanism for the
  resolution of grievances without resort to strike
  action
• banned strikes during the life of a collective
  agreement, banning sympathy or solidarity strikes

19
Rise of Institutionalized Collective Bargaining

• 1945 Ford Windsor strike workers blocked the
  plant with cars arbitration and Justice Ivan
  Rand came up with what has been known as the Rand
  formula all members of bargaining unit pay dues,
  but does not compel them to be members of the
  union, union dues to be paid automatically by
  check-off

20
Postwar bargaining system

• institutionalized the labour movement,
  incorporated them into the system.
• Grievance procedures meant that disputes were
  settled by professionals rather than rank and
  file membership
• institutionalized procedures rather than
  mobilization or strikes
• union leaders were pushed to police their own
  members to prevent them from striking during the
  term of the collective agreement
• Cold War era of the 1950s meant that Communism
  and radicalism in general was suppressed by
  government, business and unions.

21
Rise and Fall of the Postwar Settlement in Canada

• End of WWII ushers in era of Keynesian demand
  management, development of welfare state and
  institutionalized collective bargaining regime.
• Economic turbulence of the 1970s and the
  corporate response turns the tide in the
  direction of ne-liberalism.

22
The Shift to Keynesianism

• Great Depression of the 1930s
• War economy, 1939-45
• Foreign models Franklin Delano Roosevelt
  (1933-45) in USA, Labour Party government
  (1945-51) in Britain.
• Prestige of our good ally, the Soviet Union!
• Rise of the CCF
• Rise of industrial unionism

23
Rise of the Postwar Settlement in Canada

• 1943 Report on Social Security in Canada
• 1945 White Paper on Employment and Income commits
  the government to goal of high and stable levels
  of employment
• 1946 Rand Formula collective bargaining

24
Labour Militancy in the 60s and 70s

• There was a significant burst of labour militancy
  in the late 60s up until the mid 70s, led by
  young workers, often rebelling against their own
  union leadership as well
• Canada had more strikes and more workers on
  strike than any advanced capitalist country other
  than Italy about a third of these were illegal
  wildcat strikes
• Late 60s also saw the beginning of the
  unionization of the public sector.
• In 1972, Quebecs public sector workers engaged
  in a public sector general strike, perhaps the
  biggest strike (and among the most radical) in
  Canadian history.

25
The Growth of Social Programs

• Old Age Pensions (1927)
• Blind Persons Allowance (1937)
• Unemployment Insurance (1941)
• Family Allowances (1944)
• Old Age Security (1951)
• Hospital Insurance (1957)
• Canada Pension Plan (1966)
• Canada Assistance Plan (1966)
• Guaranteed Income Supplement (1966)
• Medical Insurance (1968)
• U.I. expanded (1971)

26
The Backlash Business Militancy and Social
Conservative Movements
27
Onset of Inflation () in Canada

• 1971 2.9 1982 10.9
• 1972 4.7 1983 5.7
• 1973 7.8 1984 4.4
• 1974 10.8 1985 3.9
• 1975 10.8 1986 4.2
• 1976 7.5 1987 4.4
• 1977 8.0 1988 4.0
• 1978 9.0 1989 5.0
• 1979 9.1 1990 4.8
• 1980 10.2 1991 5.6
• 1981 12.4 1992 1.5

28
Rising Unemployment () in Canada

• 1967 3.8 1987 8.8
• 1969 4.4 1989 7.6
• 1971 6.2 1991 10.3
• 1973 5.5 1993 11.4
• 1975 6.9 1995 9.6
• 1977 8.0 1997 9.2
• 1979 7.5 1999 7.6
• 1981 7.6 2001 7.2
• 1983 12.0 2003 7.6
• 1985 10.6 2004 7.2

29
The International ContextAmerican Leadership
Challenged

• The Nixon shock, the US ends the convertibility
  of the US dollar to gold, 1971
• OPEC oil embargo and oil crisis, 1973
• The United States withdraws from Vietnam, 1973
• proposals for a New International Economic Order,
  1974
• Iranian Revolution, 1979

30
The Backlash

• The combination of
• domestic social movements,
• international economic turbulence
• and international political uncertainty
• led to a social and political backlash against
  the welfare state and the rights of labour.

31
Corporate militancy

• The period from the mid-1970s onward has been
  described by some as class politics (or class
  war) from above, as the business sector has
  aggressively mobilized to defend their interests
  in Canada and elsewhere.

32
The Backlash American Right-wing Populism

• Barry Goldwater, Republican presidential
  candidate, 1964.
• Ronald Reagan, Governor of California, 1967-75.
• Richard Nixon elected US president, 1968.

33
The Backlash The Christian Right

• The rise of the American religious right in the
  1970s.
• groups like The Moral Majority.
• leaders include Jerry Falwell and Pat Robertson.
• issues such as abortion are central to the
  backlash.

34
The Backlash Corporate Organizing

• American
• Business Roundtable, 1972
• International
• International Chamber of Commerce, 1919
• Mont Pelerin Society, 1947
• Bilderberg Conference, 1954
• World Economic Forum, 1971
• Trilateral Commission, 1973
• Trilateral Commission Report The Crisis of
  Democracy 1975

35
Trilateral CommissionThe Crisis of Democracy

• In recent years, acute observers on all three
  continents have seen a bleak future for
  democratic government (1975 2).
• The image which recurs in these and other
  statements is one of the disintegration of civil
  order, the breakdown of social discipline, the
  debility of leaders, and the alienation of
  citizens (1975 2).
• This pessimism about the future of democracy has
  coincided with a parallel pessimism about the
  future of economic conditions (1975 3).

36
The Crisis of Democracy

• Changes in the international distribution of
  economic, political, and military power and in
  the relations both among the Trilateral societies
  and between them and the Second and Third Worlds
  now confront the democratic societies with a set
  of interrelated contextual challenges which did
  not exist in the same way a decade ago (1975
  4).

37
The Crisis of Democracy

• The problems of inflation, commodity shortages,
  international monetary stability, the management
  of economic interdependence, and collective
  military security affect all the Trilateral
  societies (1975 4-5).
• Given the relative decline in its military,
  economic, and political influence, the United
  States is more likely to face serious military or
  diplomatic reversal during the coming years than
  at any previous time in its history (1975 5).

38
The Crisis of Democracy

• in recent years, the operations of the
  democratic process do indeed appear to have
  generated a breakdown of traditional means of
  social control, a delegitimation of political and
  other forms of authority, and an overload of
  demands on government exceeding its capacity to
  respond (1975 8).

39
The Crisis of Democracy in the United States

• Samuel P. Huntington on the dangers of the
  democratic upsurge of the 1960s
• The vitality of democracy in the 1960s raised
  questions about the governability of democracy in
  the 1970s (1975 64).

40
The Crisis of Democracy in the United States

• The essence of the democratic surge of the 1960s
  was a general challenge to existing systems of
  authority, public and private. In one form or
  another, this challenge manifested itself in the
  family, the university, business, public and
  private associations, politics, the governmental
  bureaucracy and the military services (1975
  74-75).

41
The Crisis of Democracy in the United States

• People no longer felt the same compulsion to
  obey those whom they had previously considered
  superior to themselves in age, rank, status,
  expertise, character, or talents. (1975 75).

42
The Crisis of Democracy in the United States

• At the end of the 1950sabout three-quarters of
  the American people thought that their government
  was run primarily for the benefit of the people
  and only 17 percent thought that it primarily
  responded to what big interest wanted. These
  proportions steadily changed during the 1960sBy
  the latter half of 1972, only 38 percent thought
  that government was run for the benefit of all
  the people and a majority of 53 percent thought
  that it was run by a few big interests looking
  out for themselves (1975 78).

43
The Crisis of Democracy in the United States

• some of the problems of governance in the United
  States today stem from an excess of democracy.
• Neededis a greater degree of moderation in
  democracy (1975 113).

44
The Crisis of Democracy in the United States

• the effective operation of a democratic
  political system usually requires some measure of
  apathy and noninvolvement on the part of some
  individuals and groups. In the past, every
  democratic society had had a marginal population,
  of greater or lesser size, which has not actively
  participated in politics. In itself, this
  marginality on the part of some groups is
  inherently undemocratic, but it has also been one
  of the factors which had enabled democracy to
  function effectively (1975 114).

45
The Crisis of Democracy in the United States

• Marginal social groups, as in the case of the
  blacks, are now becoming full participants in the
  political system. Yet the danger of overloading
  the political system with demands which extend
  its functions and undermine its authority still
  remains. Less marginality on the part of some
  groups thus needs to be replaced by more
  self-restraint on the part of all groups (1975
  114).

46
The Crisis of Democracy in the United States

• We have come to recognize that there are
  potentially desirable limits to economic growth.
  There are also potentially desirable limits the
  indefinite extension of political democracy
  (1975 115).

47
The Backlash in Canada

• In Canada, the backlash was, to some degree,
  delayed. While 1968 saw the victory of Nixon in
  the US, Canada experienced Trudeaumania in the
  same year.
• Still, the Canadian corporate elite would engage
  in a similar process of organizing as occurred
  elsewhere.

48
Institute for Political Involvement

• A Report on the Prospects for Increased
  Involvement of Business People in the Canadian
  Political System. April 1978.
• The premise of the enquiry is that the
  business-government relationship is generally
  ineffective and frequently counter-productive,
  while the political component of the relationship
  has remained neglected and unexaminedthe process
  of public policy formulation would benefit from
  greater business participation (1978 1).

49
Institute for Political Involvement

• To be credible, the private sector must
  demonstrate its capacity to develop practical
  solutions to pressing national problems,
  particularly in identifying workable alternatives
  to further government actions (1978 4).

50
James Gillies. 1981. Where Business Fails

• James Gillies on the failure of business in
  Canada to play an effective role in the public
  policy process.
• As Canada entered the last two decades of the
  twentieth century, the interrelationship between
  business, particularly between the chief
  executive officers and directors of large
  corporations, and the federal government was, at
  best, strained (1981 1).

51
Where Business Fails

• In Canada, from Confederation until after World
  War II, the goals of society and the corporation
  have been perceived to be much the
  same...Consequently, until the 1960s there was
  relatively little criticism of corporations
  there was a congruence between the public and
  private sector (1981 18).

52
Where Business Fails

• According to CEOs, the reasons for the
  deterioration of business relations with Ottawa
  during the 1970s fall into two broad categories
  first, the failure of business to have sufficient
  impact in the determination of the public
  interest and, second, the failure of the
  government to operate effectively (1981 29).

53
Where Business Fails

• the planning and execution of an effective
  business-government relations strategy must
  become a highly professional activityCorporate
  management must understand how governments make
  decisionsThey must devise corporate strategies
  that are pro-active and include political action,
  public debates, massive educational programmes,
  advocacy advertising, and other activities and
  costs that many corporations have assiduously
  avoided (1981 139).

54
Canadian Council of Chief Executives (CCCE)

• Founded in 1976 as Business Council on National
  Issues (BCNI). CCCE 2001.
• composed of the chief executive officers of 150
  leading Canadian enterprises, widely recognized
  as Canada's most influential business
  organization.
• The companies they lead collectively administer
  C3.2 trillion in assets, have annual revenues in
  excess of C750 billion.
• Thomas d'Aquino was the CEO and President of the
  BCNI/CCCE for 28 years, on January 1, 2010 he was
  replaced by John Manley, the former cabinet
  minister during the Chrétien government.

55
Business Organizations

• Canadian Chamber of Commerce (CCC), 1925
• Canadian Federation of Independent Business
  (CFIB), 1971

56
The Backlash Corporate and Advocacy Think Tanks

• Conference Board of Canada, 1954
• C.D. Howe Institute, 1973
• Fraser Institute, 1974
• Atlantic Institute for Market Studies (AIMS),
  1994
• Montreal Economic Institute, 1999
• Frontier Centre for Public Policy, 1999

57
The Backlash Neoliberal Citizen Groups

• National Citizens Coalition, 1967
• Canadian Taxpayers Federation, 1990

58
The Backlash Conservative Foundations

• corporate or family foundations that donate money
  to non-profits
• corporate foundations are set up at arms length
  from corporation to engage in good works
• family foundations are set up by wealthy families
  and individuals to provide funding to causes
• these foundations have been important pools of
  resources to fund think tanks
• e.g. Donner Foundation, John Dobson Foundation

59
The Backlash Socially Conservative Groups

• Alliance for the Preservation of English in
  Canada, 1977
• REAL Women, 1983
• Focus on the Family Canada, 1983
• Catholic Civil Rights League, 1985
• Reform Party, 1987
• Defend Marriage Coalition

60
Crisis of Keynesianism

• economic difficulties, a crisis of public finance
  (rising public sector deficits and debt), and
  concerns about global competition provided the
  context for the shift away from Keynesianism and
  toward neoliberalism.
• Foreign models Margaret Thatcher (1979-1990) and
  Ronald Reagan (1981-1989).

61
End of Keynesianism

• In 1979, the American govt turned to high
  interest rates to squeeze inflation and the Bank
  of Canada followed, these high interest rates led
  to the most significant economic recession since
  the 1930s, but it served the purpose of squeezing
  inflation and disciplining labour.

62
Canadian Govt Response

• Restraint imposed on labour, especially public
  sector workers.
• Anti-Inflation Program (wage and price controls)
  1975-1978
• Public Sector Compensation Restraint Act (6 and
  5 program) 1982-1984

63
Federal Govt Response

• Monetary Restraint
• From 1975 onward, Canadas central bank, the Bank
  of Canada, was committed to monetary restraint.
• Particularly in the 1980s, the Bank of Canada
  followed the lead of the US Federal Reserve in
  using high interest rates to defeat inflation.

64
Federal Govt Response

• Restraint imposed on transfers to provinces
• Established Programs Financing (EPF) block
  funding arrangement replaced cost-shared programs
  for health and post-secondary education, 1977

65
Major Privatizations by Federal Government

• de Haviland 1986
• Canadair 1986
• Teleglobe 1987
• Canadian Development Corporation 1987
• Air Canada 1988
• Petro-Canada 1991
• Nordion International 1991
• Telesat 1992
• CNR 1995
• NavCanada 1996

66
Federal Govt Response

• Massive spending cuts,
• especially in 1995 budget.
• Canada Health and Social Transfer (CHST)
• replaces EPF and
• Canada Assistance Plan (CAP)

67
Federal Govt Response

• The 1995 federal budget marked a fundamental
  shift in the role of the federal state in Canada
  
• (McBride, 2005 106).

68
Social programs in retreat

• Corporate interests have mobilized to advocate
  neo-liberal policies including
• free trade agreements,
• the deregulation of foreign investment in Canada,
• tax cuts,
• the privatization of public services, and
• reductions in social spending.
• Successive federal governments have responded by
  restraining social spending and attempting to
  reduce the role of the state in the economy.

69
Canada in comparison

• Canadians tend to compare ourselves with the US
  and point to stronger social programs and public
  health care, but compared to other rich developed
  countries, Canada spends relatively little on
  social programs and has a relatively high degree
  of social inequality.
• In 2007, UNICEF ranked Canada 12th among 21 rich
  countries in child well-being.
• http//www.unicef.org/media/files/ChildPovertyRep
  ort.pdf

70
Corporate Restructuring

• At the same time that the state was engaged in
  this shift to neoliberalism employers were
  responding through economic restructuring to deal
  with the labour militancy and the economic
  turbulence. The corporate sector responded by
• re-organizing workplaces,
• speeding up production,
• introducing new technologies in a process
  described as lean production,
• they also investing internationally,
• and moved to support trade and investment
  liberalization.

71
Growing Inequality under Neoliberalism

• From 1946 to 1980, family incomes grew at all
  points in the distribution, so incomes shares
  remained roughly unchanged, and median family
  incomes and living standards rose rapidly. In the
  1981 to 2006 period, when the gains from growth
  went to the top end of the distribution, real
  incomes for most families stagnated (Osberg,
  200817).
• After 1995, ongoing changes in transfers rapidly
  reduced the redistributive role of the Canadian
  state (Osberg, 2008 30).

72
Growing Inequality under Neoliberalism

• Declining unionization, a lower minimum wage,
  higher unemployment, less social insurance
  protection and more openness to international
  competition probably interact strongly in their
  impacts on inequality. If so, they should be
  viewed as a policy package, to contrast with
  the policy package of the period before 1980
  (Osberg, 2008 34).

73
Conclusion

• Canadians tend to consider their society to be a
  kinder, gentler, more egalitarian version of the
  United States.
• However, the more generous welfare state in
  Canada only emerged in the 1960s. And by
  international standards, Canada looks more like
  the US than different.
• By the 1980s, many of these programs were
  beginning to be whittled away. In the mid-1990s,
  Canadian governments made a serious shift to
  fiscal restraint.

74
Wal-Mart Nation Tales from the Big Box Wars

• Documentary, 43 min long, available from York
  University library.
• Discusses Wal-Mart
• and working conditions in their stores,
• and working conditions among suppliers,
• and local economies,
• the environment and consumption patterns.