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Why welfare-state skeptics merit
Canadians’ skepticism

Vancouver Sun, January 31, 1998
Earlier this month on this page, economist John Richards claimed that people are more skeptical of the state today than they have been for a long time. The Simon Fraser University professor attributed the decline in our collective faith in the state, as he has apprended it, to two factors:

(1) The death of communist central planning, symbolized by the collapse of the Berlin Wall in 1989, has tarnished the whole idea of doing things collectively through government.

(2) Public sector unions - have battened onto the welfare state like barnacles, and given it a bad name.

If only it were that simple.

How many times have you heard a friend or family member say, during a discussion about hospitals, or schools or social assistance, "We're doing it the wrong way; that's collective financing, and look what happened to the old Soviet Union"? I know where Richards is reaching - that the repercussions work indirectly - but it's an intellectual stretch too far.

How many times has a public servant made a difference in your life? Recently, a member of my family underwent surgery for cancer and then chemotherapy. She was impressed by the attentiveness and sheer hard work of of everyone involved, moreso than she expected, and her standards are high. It would take an awful lot of argument to convince her that members of the B.C. Nurses' Union and the Hospital Employees Union are a debilitating influence on the welfare state.

It would be even harder to convince her that, as Richards puts it, we are profoundly sceptical of "the ability of the modern welfare state to reach any promised port of destination."

Safe navigation by the public sector certainly figures in electoral politics in Canada. In the last B.C. election, the key issue was whether spending on education and medical care would keep pace; even the Liberals, knowing the public's feelings, swore they would maintain it. Preston Manning, of all people, is now backing off his previous declarations that he will slash government spending.

There is probably no disagreement that in the last 15 years the public sector, particularly in Canada and the U.S., has been taking a political beating. What has really been happening?

I don't think it's any secret.

□ Starting in the 1980s, the anti-communitarian political parties, with leaders like Margaret Thatcher, Ronald Reagan and Brian Mulroney, hammered the public-service ethos, collective action, and the importance of community. With most mass-media owners and a great deal of private-sector corporate money on their side, they had a field day.

□ The same well-heeled corporations also undertook new-style political initiatives, among them investments in so-called "think tanks" to reflect their perspective. The C.D. Howe Institute, the publisher of Richards' book, is a typical case. The only countervailing groups with a collective access to funds, the labour unions, were slow to respond and were badly outgunned.

□ Corporations also stepped up their public-policy lobbying efforts, with organizations like the Business Council on National Issues. Bill Clinton's failure to get approval for even a watered-down version of medicare in the U.S. wasn't caused by the collapse of the Berlin Wall, but by the massive lobbying and public-relations spending of American health-insurance companies.

□ The mass-media, the crucial factor in all this, fell in with the ideological fashion being generated. They glorified market activity and private business with vastly expanded coverage and with adulatory, gee-whiz treatment. They simultaneously seemed to abandon their critical faculties. Outrageous spending and structural bureaucratic waste in the private sector were passed over as being part of the natural free-enterprise order of things. On the other hand, even minor cases of waste in the public sector could generate a storm of journalistic invective. Invidious comparison, downgrading the public sector, was inevitable.

□ The intrusion of brand-name and other marketing into our lives reached unprecedented, and quite undesirable, heights. This marketing constitutes a propaganda system in the classic sense. It is also, of course, the propaganda of private-sector, market goods. No countervailing messages about social and environmental values, and the public-sector which serves them, come into the picture. This constant, one-way "marketing" can't help but distort values and, with that, distort economies.

□ Spending on social programs in Canada was unfairly blamed for the huge federal government debt. A revealing (and suppressed) 1991 Statistics Canada study showed that high interest rates (44 per cent) and tax concessions and loopholes (50 per cent) were most responsible. Program spending could be held accountable for only 6 per cent of the debt. The media not only fed this wrong impression about the causes of the debt, they also largely failed to explore the appropriate response, namely a more disciplined and fairer tax system and low interest rates. Only spending cuts were offered as a possibility. It was media failure on a grand scale, with sweeping political consequences.

□ Finally, the media and commercial power of the United States has grown even greater in the last 15 years and become truly globalized, complete with lobbying techniques and advertising bureaucracies. And the Americans have never believed in government.

It's a credit to our underlying political tradition and our sense of community that government and the public sector have stood up to this punishment and bias as well as they have.

This brings me to the other claim Richards made: that the measurable limit on our willingness to do things together as a community can be read in the entrails of his statistics.

This objective, measurable limit is a fiction. The size of public sectors in democratic countries reflects public preferences, as Richards himself pointed out. We can't, then, just ignore the impact of money politics, ideology, media bias and cultural power on those preferences, and how those preferences can be swayed.

OECD comparative figures make the point. The percentage of government expenditures relative to GDP in 1995 - the most recent figures available - was 53, 27, 47, 62, 48, 36, 66, 34, 53 for the Netherlands, Japan, Canada, Denmark, Austria, the United States, Sweden, Iceland and Belgium respectively. Which one is the limit?

What we do together as members of a society and what we leave to the market is the most important political question of our time. To get the balance right hinges on debate and understanding, and that in turn depends on an open and equal democratic environment. We don't have one.

Establishing a more open and equal democratic environment is, then, the necessary first step - the first "retooling" we should undertake. If Richards and the people at the C.D. Howe Institute were genuinely interested in our achieving the right community/market balance, they would be fighting hard to break up concentration of mass-media ownership and to make such ownership more representative; they would be criticizing money politics and the influence it buys; and they would be taking on the marketing propaganda that distorts values.

If Canadians together manage those kinds of changes, then we can put the debate on a proper footing.
Copyright © Herschel Hardin 2005
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