Intro to the Study of Political Economy (continued)

1
Intro to the Study of Political
Economy(continued)

• October 1

2
The Politics of Economics

• Mercantilists
• Physiocrats
• Classical Economics (Political Economists)
• Marxism
• Neoclassical Economics
• Keynesianism
• Neoliberalism

3
Marx and Engels

• The Communist Manifesto, 1848 Capital A
  Critique of Political Economy, Vol. 1, 1867.
• Capital comes into the world dripping from
  head to foot, from every pore, with blood and
  dirt.
• The history of all hitherto existing society is
  the history of class struggles.
• The proletarians have nothing to lose but their
  chains. They have a world to win. Workers of all
  countries, unite.

4
Marx and Engels

• The bourgeoisie, historically, has played a most
  revolutionary part.
• The bourgeoisie cannot exist without constantly
  revolutionising the instruments of production,
  and thereby the relations of production, and with
  them the whole relations of society.
• The bourgeoisie, during its rule of scarce one
  hundred years, has created more massive and more
  colossal productive forces than have all
  preceding generations together.

5
Neoclassical Economics

• A return to classic (free market) economic
  thought
• A move toward abstract theory and models and away
  from historical analysis.
• The foundation of modern economics as an academic
  discipline.

6
John Maynard Keynes

• The General Theory of Employment, Interest and
  Money, 1936
• Amid the great Depression, Keynes argues that the
  state had to play a greater role in ensuring
  sufficient demand and directing investment.

7
John Maynard Keynes

• Keynes was a reformer, but he was not
  anti-capitalist, he was not a socialist.
• Ought I to join the Labour Party?...To begin
  with, it is a class party, and the class is not
  my classthe Class War will find me on the side
  of the educated bourgeoisie.

8
Neoliberalism

• Friedrich von Hayek, The Road to Serfdom, 1944
• Milton Friedman, Capitalism and Freedom, 1962
• Neoliberals advocate free market economics and
  minimal state intervention in the economy (at
  least in terms of social policy and activist
  industrial policy).

9
Production, Profits, Classes

• Oct. 1

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Overview

• The relevance of class in Canada.
• Class divisions or categories.
• Class politics in Canada.
• The rise and decline of the welfare state in
  Canada.

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Economic and Social Class in Canada?

• There is a common (mis)perception that there are
  no class divisions in Canadian society.
• Class issues have often been overshadowed by
  religious, ethnic, language and regional politics
  in Canada.

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Class divisions in Canada

• Even if they havent always been the focus of
  political debate, there are huge disparities in
  income and wealth among Canadians.
• Poverty generally tends to result in social
  stigmatization, lower levels of education,
  greater health problems and an earlier death
  compared to higher income Canadians.
• The wealthy are able to provide advantages for
  their children that others lack, and the absence
  of inheritance or estate taxes in Canada
  facilitates the passing on of family wealth and
  advantage to subsequent generations.

13
Class Categories

• Class categories are usually described in one of
  two ways.
• Class positions are gradients along the scales of
  income, wealth, occupation and education.
• Class positions are positions in the economic
  system, related to ownership of productive
  property, control over conditions of work and
  control over labour.

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Relations to productive property

• The owners and managers of productive property,
  or the means of production. The bourgeoisie.
• Small business owners, farmers, self-employed
  professionals. The petite bourgeoisie.
• Salaried professionals, especially those in the
  public sector, such as civil servants, teachers,
  nurses. The new middle class.
• The workers or labourers, who sell their labour
  power for a wage or salary. The proletariat.

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Class Analysis

• Business owners and their employees have, at a
  basic level, conflicting interests over levels of
  pay and benefits, conditions and pace of work,
  and control over the workplace.
• At the level of the wider society, business
  owners and workers have different interests when
  it comes to labour legislation, taxation levels
  and policies, and social programs among other
  issues.

18
Class Politics in Canada

• Historically, working class movements in Canada
  have fought for the right to form unions and
  bargain collectively over wages, benefits,
  conditions of work and the length of the workday
  and workweek.
• They have pushed for various social programs,
  including social assistance, public pensions,
  unemployment insurance, public health care and
  child care programs.
• They have increasingly pushed for policies
  dealing with pay equity and sexual and racial
  harassment.

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Keynesianism and social programs in Canada

• The collapse of the Canadian economy during the
  Great Depression of the 1930s, the protests in
  that decade, the labour militancy of the 1940s,
  the rise of the Co-operative Commonwealth
  Federation (CCF), and an international shift to
  Keynesian economic policies led to the
  development of social programs in Canada in the
  post-war period.

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The Rise 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. amended (1971)
• Spouses Allowances (1975)
• Canada Child Tax Credit (1993)
• National Child Benefit (1997)

21
Corporate militancy

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

22
Corporate demands on the state

• Business in Canada mobilized to push for the
  Canada-US Free Trade Agreement and subsequent
  forms of continental integration and
  globalization.
• Business has pushed governments at all levels to
  lower taxes.
• Business continues to fight environmental
  regulations, including the Kyoto Accord.

23
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.

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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

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Total Public Social Expenditure as a Percentage
of GDP, 2001

• Denmark 29.2
• Sweden 28.9
• France 28.5
• Germany 27.4
• Belgium 27.2
• Switzerland 26.4
• Austria 26.0
• Finland 24.8
• Italy 24.4
• Greece 24.3
• Norway 23.9
• Poland 23.0
• Netherlands 21.8
• United Kingdom 21.8

• Portugal 21.1
• Luxembourg 20.8
• Czech Republic 20.1
• Iceland 19.8
• Spain 19.6
• New Zealand 18.5
• Australia 18.0
• Slovak Republic 17.9
• CANADA 17.8
• Japan 16.9
• United States 14.8
• Ireland 13.8
• Mexico 11.8
• South Korea 6.1

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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.