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Confront and Change the Neoliberal Order? By John W. Warnock Presentation to the Dialogue on Poverty, Welfare and the CST: What Kind of Saskatchewan Do We want? Sponsored by the Canadian Council on Social Development and the Social Policy Research Unit, Faculty of Social Work, University of Regina. September 30, 2005 My presentation departs from that of others. While I think it is very useful to set forth goals for social welfare and social policy in Canada and Saskatchewan, I think to a large extent this can be a utopian exercise. We have to confront the fact that we live in a political world where our governments and those who primarily influence them are strongly committed to the political economy system of neoliberalism, what we all know as the free market and free trade regime. Under this system the role of governments in the economy is being minimized. Government revenues are shrinking. Everywhere, what we know as the historic Keynesian welfare state is being cut back and even abolished. We know this all too well in Canada. Those of us who look at the figures know that government program spending has steadily and significantly declined as a percentage of the gross domestic product. The first priority of our federal and provincial governments has been to cut certain taxes: income taxes for those in the higher brackets, wealth taxes, and taxes on corporations. Here in Saskatchewan resource royalties have been drastically cut. Those taxes that have been increased are consumption taxes, user fees and taxes, and property taxes, all of which fall hardest on middle and lower income people. For example, in the 2004-5 federal budget, spending initiatives called "building a secure society" (which includes the Canada Health and Social Transfer) was projected to be $15,614 million. In that same year "general tax relief," or as we call it tax cuts, was estimated to be $29,599 million. When the federal NDP recently focused on a $4.5 billion tax cut for business they ended up misleading the general public. At no time did they indicate the real extent of the grossly inequitable tax cuts. (See Appendix: Budget Plan, Annex 1, Budget 2003) The political shift to the right There has been a steady shift to the political right in the years since the election of Margaret Thatcher (1979) and Ronald Reagan (1980). We have seen the collapse of the Soviet system in Eastern Europe and the USSR. In the rest of the world the communist parties and their trade unions have either disappeared or have been greatly reduced. Without discussing why this happened, the fact remains that these parties and trade unions were strong advocates for social justice for the poor and the working class. That pressure on our governments and the social democratic parties disappeared. In Eastern Europe since 1989 we have seen the electorates shift between new right wing nationalist governments and then governments led the by so-called reformed communists, the Parties of Democratic Socialism. But whatever group of parties happens to be in office, nothing changes; unemployment remains high, there are gross inequalities of income, wealth and status, and the general standard of living of the large majority remains well below what it was under the old state communist regimes. The Globe and Mail reports this week that the average income in Russia has fallen to $U.S.150 per week. The result has been disillusionment with the political system. In the western European countries (as well as Australia and New Zealand) all of the social democratic parties have moved steadily to the right. They support free trade and the free market. In government they remove controls on capital, support deregulation and privatization of state enterprises, cut social programs, and support militarization. (See Moschonas, 2002) In the recent German election the voters were basically given a choice of supporting the Social Democratic Party-Green Party coalition or the Christian Democratic Party-Free Democratic Party coalition. The SPD-Green government had enacted the Hartz IV "reforms" which greatly reduced the power of trade unions and the Agenda 2010 plan which radically cut pensions, unemployment insurance and welfare programs. The CDU-FDP coalition approved but just wanted to go faster and further. Voters in the United Kingdom were given a similar choice, between Tony Blair's New Labour and the even more right wing Tories. In the 1980s the Labour parties in New Zealand and Australia went even farther than Margaret Thatcher in repealing the welfare state. (See Riches, 1997) We know this trend only too well in Saskatchewan. There has been little if any difference in policy orientation between the Tory government of Grant Devine (1982-1991) and the subsequent NDP governments of Roy Romanow and Lorne Calvert. During the NDP government of Allan Blakeney (1971-82) Saskatchewan had the highest minimum wage in Canada and social assistance rates were well above the poverty line and basic needs line. That has changed dramatically. Today Saskatchewan has the highest percentage of low wage jobs of any province in Canada. We also have the highest percentage of people working two or more jobs. What is the political alternative? There has to be an alternative to the present situation. How long can we accept a growing percentage of the population being marginalized, unemployed or under employed, with a growing percentage of people trapped in precarious work (part time, casual, temporary, contract and self-employment). All the data show a significant increase in inequality of income, wealth and status in Canada, Saskatchewan and in the industrialized world in general. On the international level, all reports show a widening gap in standard of living between the industrialized capitalist countries and the relatively less industrialized capitalist countries. It may be that most people in the First World consciously or unconsciously have come to the conclusion that what we have now is the best of all possible worlds. The alternate might be to see your job fly away to some distant less developed country. We have seen what happened to full employment and good social security in the USSR and Eastern Europe when they shifted from the Soviet model to free market capitalism and rule by a newly created capitalist mafia. Change can include devastating social and economic consequences. What is the alternate? In the First World the 1970s and 1980s saw the creation of the Green Parties. They were not simply ecology parties but parties of social justice. The West German Greens, the model for most of the European Green parties, wanted a third way that was a rejection of competitive capitalism as well as the hierarchical, bureaucratic, environmentally destructive Soviet system. But after a major internal debate in 1991, the majority who stayed in the party moved it to the right to accept the dominate position of private free market economics. While some Green parties remain strongly committed to social justice issues, they have rarely been able to win more than 10 percent of the vote. Those parties which joined "progressive" coalition governments with social democratic parties (as in France and Italy) also were required to move to the right and compromise their commitment to social justice. The Greens, operating as political parties, have been unable to build alliances with the trade union movement as well as the poor and marginalized. Only in Australia in recent years has a Green Party made a significant effort to build a base among inner city marginalized people. The former communist parties have dropped Marxism, and many now call themselves left social democrats. Some have joined with other groups and formed new Left parties in Europe. But they remain rather small. In the recent election in Germany the newly reorganized Left Party received almost nine percent of the vote. They took a strong stand in defence of the universal welfare state. But they still failed to attract the working class that had organized large demonstrations against the neoliberal policies being implemented by the SPD-Green government. In Europe there has been the rise of the new right wing nationalist parties which are sometimes called quasi or neo-fascist. In contrast to the fascism of the 1930s, which had it basis in the middle class, the new rightist parties have their roots in the marginalized people, particularly those who cannot find work which pays a living wage. These are the people who used to support the communist and social democratic parties. They have been abandoned by their parties. The other major development in the First World is the refusal of many people to be involved in any way in the political process, even voting. Elections in many Eastern European countries has dropped to less than 50%. All the European countries report a drop in voting. We know this trend in Canada. In the last two federal elections, 40% of the electorate refused to vote. In Saskatchewan the percentage of eligible voters turning out has dropped from 78% in 1991 to 53% in 2003. As elsewhere, the turnout in inner city ridings has dropped below 50%. Political scientists who have studied this problem find that those who refuse to vote have concluded that it does not matter who is elected for the parties all do the same thing when in office. Why should workers and the poor bother to vote when all governments are systematically cutting the programs that used to give them support? (See Borst, 2005) What is to be done There are a lot of examples of new political movements for social justice. The problem is that they all seem to be based in less developed countries which have experienced the full force of savage capitalism under the neoliberal political economy. With the collapse of the right wing regime in Argentina, for example, many were inspired when workers took over their own factories and began running them. But this movement has faded, as it did not have support in a strong political party and movement. The most successful example has been Venezuela under the leadership of Hugo Chavez. He was able to build on the strong political work of two major left wing parties, Radical Cause (Causa R) and Movement Towards Socialism (MAS), who had been elected government in Caracas and quite a few states. With strong majority support, Chavez has used the power of the democratic state to resist the two right wing parties, the Christian conservatives (Copei) and the social democrats (AD) and their allies in the business community and the United States. The World Social Forum has been a most important international development bringing together social movements, the peace movement and the green movement around the world to proclaim that "Another World is Possible." It is now moving out of Latin America to Asia, Africa and even Europe. But the organization is primarily a Third World movement. It has little support in the First World. It has stressed political organization at the community and non-government level. But in the neoliberal world where power is held by large corporations, the capitalist class, and their supporting governments, more is needed. The original German Greens in 1980 argued that the party "walked on two legs, one in the legislature and one in the popular movements." Unfortunately, that is no longer a case for the German Greens. But I would argue that this is the process that has to be developed, where popular groups are mobilized but also have a structure that can challenge the system through the electoral process. In my opinion the only way to contest the political power of big capital and their political allies, and confront their power on the international level, is to capture the state and build democratic state power. For years many of us were active within the popular alliances which opposed the free trade agreements with the United States and worked for social justice on the provincial level. We worked very hard on that project. But as we look back on that experience, it is hard to think of any battle that we actually won. A new strategy is needed. That is the only way we are going to build a political system that can eliminate poverty and injustice. John W. Warnock is a Regina political economist, sociologist, and author of Saskatchewan: the Roots of Discontent and Protest (2004). He has been a member of the steering committee of the Saskatchewan Coalition for Social Justice, an active board member of the Council on Social Development Regina, a member of the Poverty Action Group (Regina), and special adviser to the Aboriginal Council of Regina. With Della MacNeil he is author of The Disappearance of Affordable Housing in Regina (2000). Currently he is an active Saskatchewan Green and was a candidate in the last two provincial elections. Recommended references: Albert, Michael. 2003. Parecon; Life After Capitalism. London: Verso. Amin, Samir. 2003. Obsolescent Capitalism; Contemporary Politics and Global Disorder. London: Zed Books. Aronowitz, Stanley. 2003. How Class Works; Power and Social Movements. New Haven: Yale University Press. Bello, Walden. 2005. Dilemmas of Domination; the Unmaking of the American Empire. New York: Henry Holt and Company. Borst, Chris. 2005. "On Not Playing the Game: Reflections on the Federal Election." Socialist Studies Bulletin, No. 75, Winter, pp. 14-17. Callinicos, Alex. 2003. An Anti-capitalist Manifesto. Cambridge: Polity Press. Cavanagh, John and Jerry Mander, eds. 2002. Alternatives to Economic Globalization; A Better World is Possible. Report of the International Forum on Globalization. San Francisco: Berrett-Koehler Publishers Inc. Foster, John Bellamy. 2000. Marx's Ecology; Materialism and Nature. New York: Monthly Review Press. Hahnel, Robin. 2005. Economic Justice and Democracy; From Competition to Co-operation. New York: Routledge. hooks, bell. 2000. Where We Stand: Class Matters. London: Routledge. Kovel, Joel. 2002. The Enemy of Nature; The End of Capitalism or the End of the World? Halifax: Fernwood Books. Lerner, Gerda. The Creation of Patriarchy. New York: Oxford University Press. Mellor, Mary. 1992. Breaking the Boundaries; Towards a Feminist Green Socialism. London: Virago Press. Moschonas, Gerassimos. 2002. In the Name of Social Democracy. The Great Transformation: 1945 to the Present. London: Verso. Riches, Graham, ed. 1997. First World Hunger; Food Security and Welfare Politics. London: Macmillan Press Ltd. Shull, Tad. 1999. Redefining Red and Green; Ideology and Strategy in European Political Ecology. Albany: State University of New York Press. Wood, Ellen Meiksins. 2003. Empire of Capital. London: Verso. Woodin, Michael and Caroline Lucas. 2004. Green Alternatives to Globalization; A Manifesto. London: Pluto Press. Appendix: Government of Canada, Ministry of Finance. Budget 2003 - Budget Plan. Annex 1: Spending and Tax Relief Since the 1997 Budget. Table A1.9 Summary of Spending and Tax Action since 1997 budget. http://www.fin.gc.ca/fin-eng.htm Return to political economy. |