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


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

Social Policy, Inequality and Neoliberalism The
Breakdown of the Postwar Settlement
  • February 25

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
  • From 1867-1885 eligibility was determined in by
    the provinces. Again from 1898-1920 the provinces
    determined eligibility but with some federal
  • Property and income based restrictions were
    gradually eliminated by 1920.

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.

Source http//
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.

  • 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

The Labour Movement in Canada
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.

Development of unions in Canada
  • Until 1872, union activity was illegal in Canada.
    Yet workers had formed unions and went on strike
  • 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.

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
  • 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

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

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.

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.

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
  • the North-West Mounted Police fired into a crowd
    killing two strikers.

Winnipeg General Strike, 1919
  • Workers in other cities struck in sympathy with
  • 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

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
  • 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).

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.

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
  • banned strikes during the life of a collective
    agreement, banning sympathy or solidarity strikes

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

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.

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.

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

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

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.

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)

The Backlash Business Militancy and Social
Conservative Movements
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

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

The International ContextAmerican Leadership
  • 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,
  • Iranian Revolution, 1979

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.

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.

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.

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

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

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).

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

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).

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).

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).

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

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).

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).

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).

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).

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

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).

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

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).

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).

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).

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).

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).

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).

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
  • 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.

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

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),
  • Montreal Economic Institute, 1999
  • Frontier Centre for Public Policy, 1999

The Backlash Neoliberal Citizen Groups
  • National Citizens Coalition, 1967
  • Canadian Taxpayers Federation, 1990

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

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

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).

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.

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

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.

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

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

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

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

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.

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//

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

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,
  • After 1995, ongoing changes in transfers rapidly
    reduced the redistributive role of the Canadian
    state (Osberg, 2008 30).

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).

  • 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.

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.