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Neither America nor Europe: Where Canada Fits In

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In other words, the reigning political consensus, which was also a consensus on moral values, that characterized this country right up to the birth of the New Canada in 1960, took a quite different view of the role of the individual, of government, and of the effects of government intervention on people’s character than the one that prevails today. The view that predominates today on both sides of the border is of Canadians as kinder and gentler than their American neighbours, as more willing to use the power of the state in pursuit of public goods, as more welfare-minded, more socially left wing. It is also a view that could establish itself only by defeating and then consigning to a trunk in the never-visited attic of our collective memory the older view that had defined Canada for almost the first century of its existence and for many decades prior to 1867.

This revolution in Canadians’ intellectual and moral self-understanding was fed by many tributaries. We were certainly well plugged into the broad intellectual currents washing over Western civilization. For instance, the influence of Marxism, some branches of feminism, post-structuralism, and other “radical” philosophies in the universities and elsewhere helped to create fertile soil for new ideas across the West, while simultaneously demonizing the bourgeois virtues.33 Starting in the 1960s it became fashionable in intellectual circles to believe that individuals were the creation and the prisoners of social forces over which they had little control, and that the employer-employee relationship was essentially an exploitative and purely materialist one in which all the benefits were economic, and those flowed predominantly to the owners of capital. During the decades stretching roughly between the presidencies of John F. Kennedy and Ronald Reagan, it was not clear to many which side would win the Cold War, and Western capitalism’s ultimate decisive triumph as the superior economic system had not yet been satisfactorily demonstrated. The alternative collectivist models of Russia, China, Cuba, and even, incredibly, Albania exercised a peculiar fascination over many. Vietnam and the counter-culture produced a vibrant movement of protest and questioning of authority throughout the Western world, including the authority of traditional values and behaviours.


AND YOU THOUGHT MARX WAS DEAD AND GONE . . .

My daughter and a friend, who were in high school, were offered a job in a fast-food restaurant. This was to be their first experience of work, and they were suitably excited and a little anxious at this new transition to adultlike responsibilities and status. The mother of the friend squashed all of that simply by observing to the children that they would be crazy to take such work, which was obviously purely exploitative, all the benefit flowing to the restaurant, and none to the workers. In the vernacular, they were simply going to be “ripped off” rather than participating in a mutually beneficial exchange of values—some moral, some economic, some social, some cultural. Disillusioned and newly suspicious, the children declined the jobs and for years afterwards had a jaundiced view of and fraught relationships with employers.

Private communication with author


Not to be neglected in the list of ways in which Canadians’ old values began to fall into desuetude was the extent to which Canada copied American innovations. As is so often the case in Canada–U.S. intellectual history, America led the way with bold social experiments that didn’t really pan out. America drew back, but Canada rushed in and embraced the American innovations as the latest thing.34 Yet once the Americans had abandoned them, Canadians then deluded themselves that their now “distinct” approach demonstrated how different they were from the people they had originally copied, whereas in reality it proved the less flattering proposition that we are slower to learn from our mistakes.

The “War on Poverty” of Lyndon Johnson was one such innovation, an innovation whose failure was later documented in exquisite detail in Charles Murray’s path-breaking 1984 book, Losing Ground: American Social Policy 1950–1980. Even before Murray interred the remains, however, politicians in the United States had begun to back away from Johnson’s faith in state action as the saviour of the poor and disenfranchised. Daniel Patrick Moynihan, social commentator and later Democratic senator, quickly saw the faults of the traditional American approach to welfare, especially as it had been expanded under Johnson. Moynihan’s provocative 1965 study, The Negro Family: The Case for National Action, for the first time cast light on the potential social consequences of the American welfare system and the so-called War on Poverty. Richard Nixon, after becoming president, shut down the Office of Economic Opportunity, the central agency of Johnson’s “unconditional war on poverty,” and after Nixon’s 1972 re-election, he told a reporter the sixties had been a failure because “the government threw money at the problem.”35

Here at home, the Canadian left, far from being reflexively anti-American as it is today, drew much inspiration from such U.S. social policy, and the CCF and its successor, the NDP, were at least as inspired by American Progressivism and the Social Gospel movement36 as by British Labourism and Fabianism. In the period that interests us, Cy Gonick, influential editor of the iconic (on the left) Canadian Dimension, wrote admiringly of American social policy and lamented Canada’s status as laggard. “The United State has discovered poverty,” Gonick wrote in May 1964; “it is curious that this subject is being ignored by Canadian counterparts.”37 Welfarism was part of the new spirit of the age and Canada had a lot of catching up to do.


Canada is often regarded as a welfare state—particularly by its American neighbours. However, this is only a recent phenomenon. Until the 1960s the timing, extent and progression of Canadian welfare legislation lagged the US experience.

Douglas A. Allen, Welfare and the Family


We caught up with a vengeance, rapidly surpassing the United States, and were soon breathing down the necks of some of Europe’s welfare states with regard to the size of our social welfare apparatus. In one of those intellectual inversions with which history is replete, we began to associate the values of Canada’s first century with foreign values, American values, values that had nothing to do with us. We literally suppressed or at the very least forgot our history because it suddenly became inconvenient when faced with the need to rationalize the rapid spurt of growth in the welfare state.

So no change in the general zeitgeist of the post-war industrial world can prove a sufficient explanation for Canada’s sudden embrace of the welfare state, an innovation to which Canada had so far proved remarkably resistant. Others will find the popularity of left-wing ideas, the counter-culture, feminism, effective contraception, cities and city life, the attractions of Keynesian-style demand management, rejection of tradition and the rise of relativism and hostility to authority and other ideas abroad in the West at this time to be sufficient explanation of the direction Canada took in these years.

But the very ubiquity of those ideas makes them unsatisfying as an explanation as to why Canada suddenly fell in line with them so comprehensively after having resisted their rise so energetically over previous decades. Marxists and feminists in the universities were no more common in Canada than the United States, and Keynesian acolytes and big-government apologists were no rarer in the halls of government on their side of the border than on ours.

Yes, Rowell-Sirois eventually gained some traction, and programs like equalization and regional development, old-age pensions, and family allowances and unemployment and hospital insurance all predate (some barely) 1960,38 although these programs were tiny compared to their present-day equivalents. It is also the case that these programs on the whole were not ones that created individual dependence on the state for one’s livelihood. No one ever stopped working because they got state-financed hospital care. Unemployment insurance in this period created little disincentive to work, and old-age pensions offered meagre support for those past the age where they could work. Creating individual dependence on the state, as we shall see later, was really a new feature of the Canadian state’s expansion from the mid-sixties onward.

The state had been expanding on both sides of the border for years. I pointed out earlier that when Stephen Leacock warned of the impending arrival of socialism in Canada in 1924, the state in Canada was spending 11 per cent of GDP. By 1960, we were spending over 28 per cent.39 Again, however, there was nothing in that that distinguished Canada; government was carving out a bigger role for itself everywhere. No one denies that the zeitgeist was there, no one denies that government in general and the social service state in particular were growing. What has to be explained is not the direction of change, but rather its speed and scope and timing.

And here the parallel social and economic developments of Canada and the United States over the previous century must be given their due weight. We were two societies with a similar intellectual, philosophical, and institutional endowment. We Canadians thought of ourselves as the truer guardians of the British traditions of liberty and limited government, but the Americans fought a revolution in order to vindicate what they thought of as the rights and liberties of Englishmen. The spirit of the great liberal individualist John Locke presided over America’s founding debates in the eighteenth century, just as he did over the Confederation debates of the nineteenth.40

In most ways that matter, by 1960 we had comparable achievements and believed those achievements to be rooted in our shared heritage of limited government, individual freedom, personal responsibility, and the rule of law. Canada was not a European welfare state, we were not Sweden or France or Germany; indeed those were the ideas that were foreign to our history and traditional practices. We were resolutely North American, men and women, French-speakers and English-speakers, Westerners, Central Canadians, and Easterners together. Indeed, we often thought that what distinguished us from Americans was their less fervent attachment to those values that set us both apart from other peoples who had not yet understood the secrets of development, both personal and economic. We didn’t think we were Americans. We thought we were the superior brand of North American.

To explain our divergence from the United States in the decades following 1960 as somehow simply the result of a more “European” character, of profoundly different cultures and values, confuses what must be explained with the explanation. It is no good to argue that we are only middle of the pack among Western democracies in social welfare provision today41 when it is the movement to there from our very different starting point that we are trying to understand. We in effect changed teams. What must be explained is why we stopped being resolutely North American and moved so fast toward a European-style welfare state. Some of the shift is surely due to the zeitgeist of the Western world, but there is little reason to think that the zeitgeist was, of itself, so much more powerful in Canada than, say, in the United States. There had to be something specific happening in Canada, something unique to us, that can help us to understand the volte-face that we performed, almost overnight.

When I began writing this book, I was drawn to the argument that the most important change in the post-war period, and what made Canada particularly vulnerable to this new ideology of social welfare, was our rapidly faltering confidence in the ability of the economy to absorb all our children. But the more I dug into it, the more I realized that this was not enough of an explanation either. Not only had we faced similar waves of job-seekers before (as in the post-war period) but we had also met and mastered depressions and bouts of high unemployment without abandoning our principles. While our Boomer generation was the largest among the industrialized countries, America was not far behind, and it too had to expand universities and schools and other new infrastructure and institutions to manage the wave of youngsters. It was their president who said “We are all Keynesians now”42 and that same president (a Republican to boot) introduced price and wage controls well before Ottawa did. European countries that did not experience anything like North America’s post-war baby boom did, however, expand the size of their governments and welfare states significantly. Clearly you could have the boom without the massive expansion of government and particularly the welfare state (Australia and the United States), and you could have the expansion of the welfare state without any real boom at all (much of Western Europe).43

In any case, the rapid unfolding of the expansion of the welfare state and the dependence it brought in its train from about 1968 or so didn’t match closely enough the rise of the Boomers in the workforce. It didn’t match the economic cycles that might have been the giveaway of a Keynesian-inspired coup d’état. There had to be something else that suddenly supercharged what otherwise had been a rather lazy drift to expanded government in Canada. That something else was the destructive dynamic created by Quebec nationalism that unleashed a bidding war between Ottawa and Quebec City for the loyalty of Quebeckers. That bidding war used rapidly expanding government spending as its chief weapon and had important reverberations all around the country.

The attraction of this argument is only deepened by the regional nature of the growth of government in Canada over the period in question. If we back out Quebec, most of the rest of the country has seen dependency levels that most of the time are not so very different from what we might see in those peer jurisdictions such as the United States or Australia. As I’ll show in later chapters, the exceptions, places like Atlantic Canada or Manitoba, have certainly been drawn into the dysfunction and decline caused by excessive redistribution and the use of political power by organized groups to grant themselves economic and other privileges while preventing economic change. The important point to remember, however, is that they would never have been politically, economically, or demographically powerful enough to cause that increased redistribution and its consequences to happen in the first place. They did not drive the process, and they are only collateral damage from its effects. Quebec remains the key.


WHERE FREE MONEY COMES FROM

As a good friend of mine, the son of a former central bank president, once told me, while still a child he was out walking one day with his father. His father said to him casually, “If you found a $10 bill just lying on the ground with no one in sight, what would you know about who it belonged to?” The boy replied, “Nothing.” He never forgot his father’s reply: “You are quite wrong. You would know one thing with absolute certainty, and that is that it did NOT belong to you.”

Private communication with author


Before we talk about how we lost the political tradition I have just described, it might be valuable to take a moment and reflect on whether we should be happy to have jettisoned it. Maybe it was just tired old ballast that was weighing us down and preventing the emergence of a brighter and more compassionate future. After all, how we react to the story of the birth of the New Canada post-1960 will be conditioned by how we feel about that new country.

Fearful Symmetry - the Fall and Rise of Canada's Founding Values

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