From the Net to the Net: Atlantic Canada and the Global Economy 9781442602618

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From the net to the Net Atlantic Canada and the Global Economy

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From the net to

the Net

Atlantic Canada and the Global Economy JamesSacowman HenryVeltmeyer

Garamond Press Aurora, Ontario

© The authors, 2005

No part of this book may be reproduced or transmitted in any form, by any means, electronic or mechanical, without permission of the publisher, except by a reviewer who may quote brief passages in a review. Printed and bound in Canada Published 2005 in Canada by Garamond Press Ltd, 63 Mahogany Court, Aurora, Ontario L4G 6M8 Cover design by Mark Rushton

Library and Archives Canada Cataloguing in Publication From the net to the Net : Atlantic Canada and the global economy / [edited by] James Sacouman, Henry Veltmeyer. Includes bibliographical references and index. ISBN 1-55193-051-X 1. Atlantic Provinces—Economic conditions—1991-. I. Sacouman, R. James, 1948- II. Veltmeyer, Henry HC117.A8F76 2005 330.9715 C2005-901435-0

Cover photos courtesy Nova Scotia Archives and Records Management, photographer: W.R. MacAskill and Communications Nova Scotia, photographer: Michael Creagen. Garamond Press gratefully acknowledges the support of the Department of Canadian Heritage, Government of Canada, and the support of the Ontario Media Development Corporation of the Government of Ontario.

ContributingAuthors Michael Clow is Professor of Sociology at St. Thomas University, Fredericton, New Brunswick. Ronald Colman is Executive Director of GPI Atlantic, Halifax, Nova Scotia. Colin Dodds is Chief Researcher at GPI Atlantic, Halifax, Nova Scotia. Scott MacAulay is Associate Professor at the Department of Anthropology and Sociology, University College of Cape Breton, Sydney, Nova Scotia. Joan McFarland is Professor of Economics and of Gender Studies at St. Thomas University, Fredericton, New Brunswick. Barbara Moore is an activist in CUPE and is currently a Lecturer in Sociology at Saint Mary's University. James Sacouman is Professor of Sociology at Acadia University in Wolfville, Nova Scotia. Anthony Thomson is Professor of Sociology at Acadia University in Wolfville, Nova Scotia. Henry Veltmeyer is Professor of International Development Studies at Saint Mary's University and adjunct professor of Political Science at the Universidad Autonoma de Zacatecas (Mexico). He is the author of numerous publications on the political economy of global and regional developments, including, most recently, System in Crisis (2003) and The Dynamics of Glohalization/Antiglohalization (2004). Thorn Workman is a Professor of Political Science at the University of New Brunswick where he teaches social and political thought.

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Contents Introduction: Towards a New Political Economy of Development in Atlantic Canada JamesSacoumanandHemy Veltmeyer Chapter 1: Rethinking Underdevelopment in Atlantic Canada Henry Veltmeyer Chapter 2: Just More of the Same? Confederation and Globalization Michael Claw

1 7

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Chapter 3: Capitalist Restructuring on Canada's East Coast JamesSacouman

51

Chapter 4: Income Distribution in Nova Scotia, 2000 ColinDoddsandRonald Colman

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Chapter 5: The Decaying Social Compact in Atlantic Canada ThomWorkman

85

Chapter 6: Call Centres: A New Solution to an Old Problem? Tom GoodandJoanMcFarland

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Chapter 7: Contradictions in Community Economic Development: New Dawn Enterprises ScottMacAulay

115

Chapter 8: State Employment and Trade Unionism: Signs of Renewal? Antho^Thomson

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Chapter 9: Policy Issues in the Trade Union Movement: Two Views from Labour BarbaraMoareandJames Sacouman

169

Notes

189

Bibliography

199

Index

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Introduction

Towards a New Political Economy of Development in Atlantic Canada James Sacouman and Henry Veltmeyer

This book explores various dynamics of change and development in Atlantic Canada - four provinces on Canada's east coast that have been at the centre of an unsettled debate on the global political economy of regional development. In the late 1970s and into the 1980s, in a context different than that which prevails today, Atlantic Canada provided an important setting and stage for this debate and associated explorations in what we might term "regional political economy" - the political economy of the Maritimes and Newfoundland. The impact of this corpus of historical and social scientific work was such that by the early 1980s, a number of commentators and analysts across the country spoke and wrote about the emergence of a new and important school of thought: the Maritime Marxist school.1 Distinguishing characteristics of this school include the following: 1. It was the first extended and collective scholarly effort in Canada to link capitalist development to labour and other social movements in one region. 2. It was committed not only to understanding but also changing the situation of most people in the region. Few participants in these studies and the associated debate had any illusions that reforming capitalism could provide an acceptable solution to the problems experienced by so many people, especially the working class.

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3. Historical and structural analysis of actual struggles in all their concreteness, past and present, and in terms of the objectively given and subjectively (politically) determined conditions, was the preferred approach - an approach to which the Maritime Marxist school, in the account given of it by various commentators, made a number of exemplary contributions. 4. This collective effort was interdisciplinary in form, drawing scholars from a broad range of sciences bumaines - history, the social sciences and cultural studies. 5. More so than in Canadian political economy at the time, and more in line with analysis and theory in Latin American social science, analysts in the region stressed the complexity of the class situation of people under conditions of under-development and "dependency" within a global process of capitalist development. In the process these analysts expanded political economy to incorporate issues of gender and culture as well as politics as critical components of a reconstituted class analysis. However, despite its promise, by the 1990s this new school had virtually disappeared. Possible reasons for this intellectual development include: 1. For diverse as yet unknown reasons the movement of organized labour became increasingly quiescent both in the region as elsewhere. To the extent that the political economy of regional development was tied to this movement academe turned its analytical concerns and lens towards other "developments" or inwards. As a result, political economy suffered an involution, losing much of its intellectual dynamism. 2. Petty production, petty producers, and, thus, petty producer struggles in the Maritimes and Newfoundland - a major focus of the Maritime Marxist school in the 1970s - all but disappeared. Under these and other conditions some unique regional features of labour and production on the East Coast disappeared, taking some analysts with them. 3. Other analysts switched their focus to other parts of the Americas - Latin America to be precise - where anti-systemic social movements have exhibited more dynamism, requiring a closer look and more study. 4. In Canada and much of the capitalist world, a generalized shift away from Marxism towards more fashionable anti-Marxist post-structuralist forms of analysis and theorising flowered for a brief time. In this context (see Veltmeyer, 1997 and 2001 for an exposition and critique of this intellectual trend), publication outlets for Marxist and other forms of structural analysis became increasingly scarce as the gate-keepers of academic scholarship followed the dominant trend of anti-structuralism (in the form of

Introduction

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post-structuralism and post-development); despair about the possibility of substantive change and diverse inward-looking career concerns also had an effect. 5. Related to the above, we can also identify a failure of political economists in the region to construct and consolidate a school of thought - to build on the trend-defining studies of the late 1970s and early 1980s. With graduate schools in the region and the rest of Canada abandoning historical materialist forms of structural (and political) analysis, the next generation of students was often "left" without a centre, a situation reflected in the oft-repeated question "What's left of the left?" 6. Finally, it turns out that the intellectual immobility and political quiescence discussed above coincides with the emergence of a process of "globalization" associated with, and facilitated by, a new form of capitalist development, a "new economic model" (neo-liberalism). The question, one that is raised by this volume and addressed in various contributions that make it up, is whether this process of globalization has anything to do with the intellectual and political developments that we have identified. Exactly what globalization has to do with the political economy of regional development is the central concern and focus of the studies edited in this volume. The studies in this volume revisit the earlier debate in a new context provided by what many see as an epoch-defining shift in social and economic organization associated with "globalization" - the internationalization of capital and trade and a trend towards the integration of nation-states into a single global economy based on capitalist principles. Defined in these terms, globalization appears as an irresistible force, inevitable and inescapable in its effects, all countries and people having to adjust the best way they can - to insert themselves into the process under the most favourable conditions, or to make the best deal, possible. This book looks at the dynamics of this process as well as strategic responses to these dynamics as they are unfolding in Atlantic Canada. The stance of the editors and authors of this volume is that appearances to the contrary globalization in this regional context is by no means inevitable; nor is it immutable. Indeed, as elsewhere diverse organizations of people in an increasingly vocal and politically effective "civil society" are coming together to mobilize the forces of opposition to globalization in its neo-liberal form. In Atlantic Canada as elsewhere there is emerging a search for an alternative form of change, development, and globalization that is partici-

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patory and liberating, sustainable in terms of both the environment and livelihoods, as well as equitable and socially inclusive - based on initiatives from within civil society. In most accounts given by proponents of what we might term the "new international political economy" (NIPE), this alternative form of development is predicated on major changes to the dominant economic model (neoliberal capitalism) and a challenge to the power structure that supports it. This book explores key dimensions of this process in a specific regional context. In this context the book provides an important set of case studies into regional political economy in the latest phase of capitalist development. In Chapter 1, Henry Veltmeyer reviews alternative theoretical perspectives on the leading issues of globalization and regional development available at the levels of theory and practice. The chapter also explores the connections found between developments in Atlantic Canada and elsewhere in the world. Michael Clow and James Sacouman in Chapters 2 and 3 respectively provide alternative perspectives on the long-term developments in the region and on the relevance of various alternative analytical tools. Sacouman argues the need for a reconstituted form of Marxist class analysis that takes into account both structural and political factors while Clow, although generally supportive of this view, argues for the need to adjust one's theoretical discourse to changed conditions - and to construct the relevant new tools of regional analysis. In this argument he takes a long historical sweep over developments in the region from Confederation to the contemporary push towards globalization. In Chapter 4, Ronald Colman and Colin Dodds provide a systemic investigation into the dynamics of income distribution within a globalizing albeit peripheral economy. The focus of this analysis is Nova Scotia but the patterns that they identify are global. Global patterns are also the case with respect to the dynamics of the minimum wage discussed by Thorn Workman in Chapter 5. The issue addressed by Workman is contextualized and framed by an analysis of the regional political economy in an era of globalization. Chapter 6 provides another probe into the political economy of globalization in the form of an analysis of a "call centre" approach toward regional development. Governments in the region have been falling over each other in their efforts to convince one call centre or another to locate in their constituency. This appears to be the major, if not only, response of these governments to the forces of globalization operating on the regional and local economies. Call centres represent to them the "new economy," and as such the future. Tom Good and Joan McFarlane provide a critical investigation into the local and regional dynamics of this "new economy."

Introduction 5

Chapter 7 turns towards another major thrust in the political economy of regional development - community economic development. Nova Scotia has witnessed a long history of community-based co-operative forms of regional development. In this sense its history is comparable to the Basque region of Spain or Gujarat in India. However, the forces of globalization and the retreat of governments from their economic development role have given the community development movement a new lease of life. Scott MacAulay provides a critical case study of New Dawn, an important expression of a Community Economic Development (CED) approach that is initiated "from below" or "from within" (civil society) but generally supported by governments across the country. Chapters 8 and 9 shift from a focus on structural issues to a concern with the dynamics of political struggle. In Chapter 8, Anthony Thomson focuses on the struggle within the public sector of the labour movement while Barbara Moore and James Sacouman, in Chapter 9, present two detailed "voices of labour" speaking on the anti-globalization struggle in Nova Scotia. This volume is evidence that scholarship on the East Coast has neither died nor gone to the heaven of uninvolved tranquility/senescence. New and creative forms of analysis are developing. These take into account both new material and socio-cultural conditions for "making do" by the large majority and also emerging social struggles to contest these new conditions. This book hopes to be a new beginning, again.

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Chapter 1

Rethinking Underdevelopment in Atlantic Canada Henry Veltmeyer

The central focus of the essays in this volume are on the political economy of Atlantic Canada, particularly with regard to the dynamics of regional underdevelopment and development. In this regard, these essays, and the volume as a whole, return to a concern that was central to a number of studies and writings in the region in the late 1970s and the early 1980s (see in particular Brym and Sacouman, 1979). The economic and political dynamics of these developments in the region gave rise a debate as to the nature of the region's political economy, namely, the structural and political sources of the development problems experienced in the region and what was to done about these problems - how to move forward, on the basis of what strategic actions and policies. Since these problems, and any proffered solutions, of necessity were context-specific, they beg a number of questions that are raised and addressed in various ways by the authors of this volume. The first question is: In the two decades or so that have transpired since the problem of regional development was placed on various agendas, what has changed? Relatedly, how relevant are the ideas used at the time for understanding the political economy of regional developments today in what is seemingly or arguably an entirely new and different context - that of a neo-liberal globalization process? How are we to understand the dynamics of change and regional development today in this context? Are the various theoretical models and propositions in use in the 1970s and 1980s still relevant, which is to ask, can they still be applied? If not, what adjustments need we make in these ideas, and, more importantly, in the associated prescriptions for collective action?

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Our approach to an analysis and retrospective look at these issues and ideas is based on what might be termed the "political economy of regional development." The origin, if not the theoretical basis, of this approach in the contemporary context is a project initiated in the first instance by the United States government in the late 1940s in the context of its policy efforts to prevent those countries who were shaking off the yoke of colonialism (and imperialism) from falling prey to the lure of communism and to ensure that their development be on a capitalist path (Esteva and Sachs, 1992; Tucker, 1999). In this post-World War II context,1 the U.S. government established a "4point" program of financial and technical assistance - ODA (Overseas Development Assistance), or "foreign aid" in current parlance - for the "economically backward" countries of the so-called "Third World" (see Esteva [1992] on the idea of development as an invention and artifice used by the United States and other capitalist democracies involved in setting the parameters of the Bretton Woods international economic order). "Development" in this context was one of three such macro-economic or geo-political "projects" designed and implemented in the post-World War contexts - the other two being "systemic transformation" ("socialism"), advanced in the 1960s and 1970s as a revolutionary alternative to the reformist development project, and "globalization," advanced in the 1990s as a means of creating a global economy based on the workings of the free market and "free enterprise." As for the idea and project of "development," subsequently widely implemented in the countries that make up the "third world," it gave rise to diverse dynamics (of theory and practice) that can be traced out decade by decade in different regional contexts, including Canada's Atlantic provinces. In this introductory Chapter, I will trace out these dynamics in their diverse dimensions and as they have unfolded in theory and in practice. The aim is to provide an over-arching framework of ideas for understanding developments in Atlantic Canada over the years, particularly the past two decades. The "Development Project" in its various dimensions provides an analytical and theoretical framework for our look at the dynamics of capitalist development in Atlantic Canada. To this purpose the Chapter is organized into three parts. In the first part, the most fundamental dynamics of development theory and practice over the past five decades of development are reviewed. The second part identifies some of the critical issues associated with the development project

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and that continues to surround the theory of regional and international development. Part three turns to the political economy of Atlantic Canada - to diverse ideas advanced to explain the dynamics of development in this regional and local context.

Development in Theory and Practice Development entails a generalized improvement in the socio-economic conditions lived by the population and the changes in the institutional structure of society needed to bring about these improvements. Although there are serious issues surrounding the question of definition - what is "development" associated theories of development seek to explain in particular: 1. what moves the process forward - the driving forces; 2. the obstacles and facilitating conditions as well as the appropriate agents of change, and prescribing for these agents the most effective strategy for bringing about "development" and their policy alternatives. Development so defined and theorized, can be viewed in one of two ways or a combination thereof - as the result of: 1. subjective decisions consciously oriented towards a predetermined goal and an associated strategy - the means chosen by the development agent to achieve these goals; or alternatively; 2. the objective workings of the interconnected structures (institutionalized practices) of "the system." On this basis, development can be viewed in terms of an identifiable set of structural and/or strategic factors, usually both.2 This means that development in practice requires and entails subjectively made decisions and strategic actions pursued under the constraints of the objectively given conditions of the system. As Karl Marx established as a matter of principle: while systems may function, it is individuals who act - but not under conditions of their own choosing. Under these conditions, "development" can also be viewed as the unintended consequences of actions taken in the direction of a predetermined goal but with an awareness of the given constraints.3 Theories of development and underdevelopment do not emerge in a vacuum or spring from the head of some scholar; they emerge in response to objectively determined, albeit subjectively perceived and defined, conditions; and, as established by Marx in a different context, solutions to these problems do not appear until the conditions that gave rise to them are superseded. This means, in effect, that ideas about development must be understood in their

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historic context, that is, the conditions giving rise to them. And it also means that theorizing tends to be post facto rather than a determining or influential factor in the development process. In the first two development decades - the 1950s and 1960s - in the postwar context outlined above, the dominant idea was that development entailed economic growth, that is, expansion of society's forces of production (GNP measured on a per capita basis), and required changes at the level of the structure of production and in the values that underpin society's key institutions.4 In effect (in theory, that is), development entailed a process of industrialization (the transformation of a backward agrarian society into one based on industrial production) and modernization (transformation of a system oriented towards traditional values into a modern society). These theories of growth and modernization, which framed, informed, and directed the form that analysis would take for decades, took various forms but can be boiled down to the following propositions: 1. Economic growth entails an increase in the rate of savings and investment the accumulation of financial and physical capital - beyond a critical "takeoff" point; 2. Economic growth requires investment of this capital in industry, fueling a process of industrialization, having as it does a much higher multiplier effect than agriculture, in terms of incomes and employment, that is, return on investment; 3. The state (or, more precisely, the government) is the major agency of this "development" - in the provision of infrastructure, strategic planning, and, most importantly, in the absence or weakness of an endogenous capitalist class, assuming the "functions of capital" (investment, entrepreneurship, and management); 4. Economic growth requires an inward orientation of production, expanding the domestic market with relevant policies to increase the purchasing power capacity (increased wages, etc.); 5. Nationalization of economic enterprises in strategic industries and sectors is required; 6. Regulation, by the state, of private economic activity and markets in capital and in goods and services, is necessary; and 7. Protection of domestic producers from the forces of the world economy, the power of foreign capital.5 In the 1970s, the context for the development project was radically changed, with the end of what historians have dubbed "the golden age of capitalism"

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(25 years or so of unprecedented rapid growth) and a system-wide crisis in the conditions of economic production, a crisis reflected in a downward trend in economic growth and in the growth of productivity. Under these conditions, both development thinking and practice took a number of turns. In a radical sidestream of development thought and practice, on the left of the political spectrum, the very notion of development was rejected as an option in favour of a more radical transformation of the dominant capitalist system and its transformation into one based on socialist principles, a transformation that would require the agency not of the state but of anti-systemic social movements oriented towards social revolution rather than reform. The essential features of the reform approach of the 1970s was an enhanced role for the state in terms of: 'programs that would establish the social conditions of development (education, health, social welfare); •a poverty-oriented strategy designed to meet the basic needs of the poor, including reforms designed to improve access to society's productive resources (land reform, etc.); redistributive "growth with equity" policies via taxation and other measures designed to redistribute more equitably market-generated incomes; and an integrated program of rural development that corrected for the urban bias of government policies as well as the neglect of agriculture. A second mainstream response to the conditions of systemic crisis in the 1970s, and the failure to close the global development gap, was the beginnings of a search for an alternative form of capitalist development - development that is initiated from below and within civil society rather than from above and by the outside, and consequently, more equitable and socially inclusive, human in form and scale, participatory, and sustainable in terms of both the global environment and livelihoods (Chopra, Kadekodi, and Murty, 1990; Griesgraber and Gunter, 1996; Goulet, 1989; Rahman, 1991; Veltmeyer and O'Malley, 2001). In the 1980s and 1990s, this search evolved into an international and global movement directed against capitalist development and globalization in its dominant neo-liberal form. Although this "alternative development" movement has not, even today after close to thirty years, produced a generally acceptable or useful model to inform analysis and strategies for change, it has produced a generally agreed-upon set of fundamental principles for the construction of such a model. These principles include the following:

12 From the net to the Net Development should be socially inclusive - it must incorporate as many sectors and social groups as possible, including women, indigenous peoples, the poor, and other "hitherto excluded" groups and communities (Stiefel and Wolfe, 1994); Development should be initiated not "from above" (by government within the state apparatus) and "the outside" (multilateral and bilateral ODAs) but "from within and below" (community-based and grassroots organizations in "civil society"); Development should be equitable, people-centred, human in form and scale, sustainable in terms of both the environment and livelihoods, and above all, participatory, predicated on community or popular involvement as well as on the increased participation of women and the poor (Chambers and Conway, 1998); Development should take the form of social empowerment - capacitating individuals and groups to participate actively in the development process, and, with regard to decisions that affect their livelihoods, to build on their "social capital," that is, their mutual and solidarity networks and the culture of solidarity that characterizes these networks (Coleman, 1988). The Conservative (Neo-Liberal) Counter-Revolution The 1970s opened with a manifest propensity towards systemic crisis, ending more than two decades of unprecedented rapid growth (Marglin and Schor, 1990). This tendency towards crisis emerged under conditions of what ended up being the "last great offensive" of labour in its struggle for higher wages and improved working conditions (Davis, 1984; Crouch andPizzorno, 1978). In the early 1980s (1973 in Chile, somewhat later in Europe) the labour movement brought about a reaction of the propertied classes, and capital, which then launched a counter-offensive and, with it, a class war as well as a counter-revolution in development theory and practice (Toye, 1987). Under conditions of this counter-revolution, there emerged a call to abandon the development project in favour, however, not of social revolution, but on the contrary, of "globalization" - the integration of countries across the world into a free market capitalist and global economy under conditions of a neo-liberal "new world order" (Drache and Getler, 1991; McBride and Shields, 1993; Ostry, 1990; Petras and Veltmeyer, 2001).6 This process of globalization was advanced, and the underlying "project" achieved, on the basis - that is, with the aid of - the "new economic model" (Bulmer-Thomas, 1996)7 This model is defined in terms of the following propositions:

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1. A realistic rate of currency exchange (that is, devaluation) and measures to stabilize the economy - tight fiscal and monetary policies (balanced accounts, low inflation, etc.); 2. Privatization of the means of production and state enterprises, reverting the earlier process of nationalization of strategic industry and selling public assets to the private sector; 3. Liberalization of capital markets and trade, reversing earlier policy of state protection and opening up domestic firms to the forces of free competition and market prices; 4. Deregulation of private economic activity, reducing the impact of government regulations on the operations of market forces; 5. Labour market reform - reduced regulation and employment protection, erosion of minimum wages, restrictions on collective bargaining, and reduced public expenditures; 6. Downsizing of the state apparatus and decentralizing decision-making powers to provincial and local levels of government, allowing for a more democratic and participatory form of top-down development; and 7. Construction of a global free market in both capital and tradeable goods and services, the last of various "steps to hell" in the words of Joseph Stiglitz (2002), former head economist at the World Bank but now a major critic of the IMF's neo-liberal policies.

Issues in the Political Economy of Regional Development The Notion of "Region"

The central concern of this book is with patterns of change and development that have unfolded, as it were, in the Maritime Provinces and Newfoundland, which make up what is commonly known as "Atlantic Canada." As administrative-political units of the dominion of Canada, "Atlantic Canada" also constitutes a "region" of sorts. Regions have been, and are, defined for different purposes and analytically raise some of the same difficulties and ambiguities that surround the even more nebulous concept of "community." Both communities and regions are identified, for the sake of analysis, on the basis of conditions that are both objective and subjective. Objectively, a "region" is located (defined, that is) in terms of a position shared by groups of individuals in a broader system of institutionalized practices or structures which, for the purpose of the "development project" (to bring about economic progress and with it an improvement in associated

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socio-economic conditions and corresponding changes), is most commonly defined in economic terms. Thus, for the purpose of public policy vis-a-vis regional resource transfers, Canada has been broken up into five "regions" in terms of levels of socio-economic conditions and development - that is, into "have" and "have-not" provinces - and therefore categorized as either providers or recipients of income transfers. There is a rough correspondence to provincial boundaries for administrative purposes but analytically regions cut across these boundaries; "the North," for example, not only includes the Territories but also pans of Ontario and Quebec, the most populous provinces. As with the notion of "community" there is also a necessary subjective dimension to the notion of a "region," such that in theory it also denotes a sense of identification and sense of belonging - an attachment to symbols and to place. Without this subjective dimension, the term "region" would serve a similar purpose as the statistical category "income group" does for economists and, as it happens, for Dodds and Coleman in this volume: to establish correlations and patterns of limited variation between these "groupings" and a set of objectively defined socio-economic conditions related to income. But while such statistically-defined analytical units can serve to identify patterns of variation in socio-economic conditions, they are useless as units of political analysis - in identifying political dynamics of struggle and so forth. These require a sociological rather than a statistical grouping or categorization, that is, the grouping must be based on subjectively defined meanings as well as empirical correlations between patterns of "social facts." Only thus would the units and categories of analysis correspond to groups of individuals who can and do act with conscious purpose and a strategic vision to mobilize their forces in one direction or another. Matters of Context and Dynamics Development theory is commonly related to ideas that are used to state a set of domain assumptions (principles), describe conditions (concepts), explain patterns of variation (theories), orient analysis to the critical variables and interconnections (models), and to prescribe strategies or policies for change. Ideas, however, do not arise in a vacuum: they invariably specify conditions and real problems that are "real" (not just a matter of interpretation) and, in general, as Marx established long ago: 1. Ideas do not determine developments and events - they merely reflect the effects of operative productive and political forces;

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2. Ideas can outlive the conditions that gave rise to them, creating, in effect, a lag between determinant conditions and corresponding ideas; and 3. Ideas only acquire force when they relate to material conditions and can be used to advance the interests of some social group. What this means, among other things, is that ideas need to be contextualized and connected to both interests and the forces that seek to advance these interests. In this context, ideas can be referred to as ideologies. Thus, for example, we have the idea of "globalization" - or the idea of a free market that works in everyone's interest to the common good. These and other such ideas serve to advance the interests of a particular social group, in this case, an emergent "international capitalist class" (Robinson and Harris, 2000; Salbuchi, 2000; Sklair, 1997). These interests are advanced by the use of ideas as ideologies, that is, as a means of mobilizing the action of others in a desired direction by appealing to the interests of these others - identifying these interests with their own. Ideas, in short, can be used to inform and direct action in two ways. One is in the form of theory, that is, to explain the consequences of alternate courses of actions in terms of the general situation and given conjuncture of objective and subjective conditions that constitute the context for action. The other is as ideology - that is, not as description and explanation but as prescription for action or policy. As for "theory" the issue is this: To what degree is it possible to transpose one situation into another and see patterns across contexts? Or, to put it differently, can one analyse the situation of people who live and work in Canada, in one of the Atlantic Provinces, in terms of situations and conditions experienced elsewhere and transposed to the region? For example, do the patterns and conditions that have been identified at the global level apply to the region? Is it valid or useful, or accurate, to analyse the political economy of Atlantic Canada in terms of a theory derived from conditions experienced elsewhere, that is, in terms of a structural analysis? Continuing this particular example, in the late 1970s and early 1980s a form of analysis, Maritime Marxism (Brym and Sacouman, 1979; Cannon, 1984; Clow, 1984), emerged on the basis of an explicit or implicit comparison with conditions experienced in contexts as diverse as nineteenth-century Europe and post-war Latin America. The question is: How useful are such comparisons based on one form of structural analysis or another? In the 1980s proponents of a post-structuralist, post-Marxist, and post-modernist approach towards analysis went so far as to reject all forms of structuralism and associated meta-narratives and

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theories.8 This assault on the possibility of social science, which is predicated on structuralism and materialism in analysis - that is, the object of socioeconomic conditions - resulted in a re-assessment of social scientific forms of analysis (Gulbankian Commission, 1996). In the contemporary context of a supposedly irresistible and irreversible trend towards globalization, the question is whether or not the situation of Maritimers and Atlantic Canadians can best be analysed in terms of ideas forged in the analysis of conditions experienced in other parts of the globe, or in terms that emphasize the uniqueness of the region. The authors in this volume do not generally confront this question directly; nevertheless, it is an inescapable feature of their analysis. James Sacouman, for example, argues the continued usefulness of a Marxist form of class analysis abandoned by many over the last decade - ironically, one might add, given the increasing transparency of conditions associated with class position and struggle. These conditions attest to the continued relevance of class analysis, albeit in reconstructed form. As for the notion of "globalization," regarded by many as a set of epochdefining changes in the global political economy, does it serve as a framework of ideas or a model for the analysis of conditions experienced by people in the region? Clow and Sacouman raise this question in this volume, as does Thorn Workman (2003) who has analysed the regional political economy in terms of a "regulationist" (post-Fordist) model of a globalization process. French "regulationism" (e.g., the work of Aglietta, Boyer, and Lipietz) provides a distinctly new perspective on the global and regional dynamics of the "new political economy." In regard to Atlantic Canada, the question is whether globalization provides an entirely new context for policy alternatives and social struggles. In fact, as recognized by the authors of this volume, "globalization" is a code word for the neo-liberal agenda of global capital. This agenda, as discussed above, is advanced via policies of austerity and cutbacks in social programs, privatization, liberalization, deregulation, corporate downsizing, and the "restructuring" of labour. It is with reference to the social and economic dimensions of these policies that the authors in this volume write of "globalization." Coleman and Dodds, for example, document the relative decline in incomes of Nova Scotians in the last decade of the twentieth century. Although they do not explore the dynamics of this decline nor analyse its socio-economic conditions, it is clear enough that these derive from the regional im-

Rethinking Underdevelopment in Atlantic Canada 17

pacts of the globalization process set in motion by the government's neoliberal policies over the last decade and a half. The pattern of relative income declines - and an absolute decline for the lowest decile of income earners that they identify exactly parallels developments in the global distribution of incomes under the neo-liberal policies adopted by governments across the world as a means of advancing globalization in neo-liberal form. These neo-liberal policies also constitute a fundamental point of reference in the search for policy alternatives - and the ongoing struggle for a new world, a new system based on economic as well as political democracy and relations of greater social equality and solidarity. All of the authors in this volume agree that such a system would entail some form and greater level of "socialization." The unresolved question is how to achieve or bring about such a development? Structure and Agency in Analysis Like the pioneers of development or political economics most of the authors in this volume generally focus on the structural dimension of analysis. In Chapter 8, Thompson, however, takes up the political issues of class struggle, as does Sacouman in Chapter 3. In the case of Thompson, he turns to the public sector of the labour movement in the region. Most of the voices of labour presented and discussed in the final chapter, Chapter 9, also relate to this sector, which reflects somewhat the character of the labour movement in the region, that is, the prominence of public sector unions in the struggle. In part, however, it simply reflects Thompson's specific interest in the public sector unionism. With a focus on diverse dimensions of a class struggle in the region both Thompson and Sacouman illustrate the antinomies of structure and agency involved in any development process. If one were to take a broad overview of the search for a regional pattern in this process, it would be possible to identify within the region both the conditions of a generalized system-wide crisis in the capitalist system as well as a series of efforts to restructure a way out of the crisis. This restructuring, as Workman in Chapter 6 makes clear, takes diverse forms, look, for example, at the Good and McFarland's study on call centres and the "new economy" in this volume as well as points made by both Clow and Sacouman, among others (particularly Workman). But it is essentially directed by the neo-liberal agenda of global corporate capital. This is to say, this restructuring can be, and generally is, analysed in structural terms as a process, but behind the appearance of unintended consequences of a process that unfolds under conditions that individuals or governments

18 From the net to the Net cannot control - there is clear evidence of a political and ideological, that is, neo-liberal, agenda at work.9 Development and the Class Struggle Vis-a-vis the process of change, there are essentially two options available in practice. One is to struggle for change in the form and on the basis of a social movement. The other is to bring about change and development via the modality of "development," that is, programs or projects initiated and implemented "from above" (the government) or "from below" - from within "civil society." For the past decade or so development has been based on a partnership approach - partnering bilateral and multilateral institutions of development assistance, various levels and forms of government, non-governmental "third" or "voluntary" sector organizations (NGOs and VSOs), as well as community-based organizations in the popular sector.10 The political dynamics of this partnership approach vis-a-vis the voluntary sector in Nova Scotia and the Community Development Association (CDA) movement in Newfoundland are explored by Julia Sagebien (1993) and David Curran (1992). As for development "from below" as a strategy, it is represented by organizations such as New Dawn, which is profiled and critically examined by Scott MacAuley in this volume. In the context of the global South - particularly in Latin America as regards the most recent wave of peasant-based and -led or indigenous sociopolitical movements - it would appear that social movements have generally eschewed the development option, even in its alternative and participatory form. In effect, in the context created by the widespread implementation of the neo-liberal agenda of structural and policy reform, there are two alternative paths towards economic development: one taken by what could be termed the "Social Left" engaged in the politics of local or municipal development, the other taken by the generally anti-systemic social movements that in many countries dominate the political landscape in the rural areas (Petras, 1997a, 1997b). The former are generally oriented towards a reformist approach to change and a non-confrontationalist politics. The latter, on the other hand, generally view themselves as engaged in what is essentially a form of class struggle (Stedile, 2000). In this struggle, these popular, indigenous, or classbased organizations have generally opted for a confrontationalist political approach vis-a-vis the state and the power structure. These movements include the Zapatista movement (EZLN) in Chiapas, the Confederation of Indigenous Nationalities in Ecuador (CONAIE), the Cocaleros in Bolivia, and the Rural Landless Workers Movement in Brazil (MST).11 At the level of tactics,

Rethinking Underdevelopment in Atlantic Canada

19

these and other such anti-systemic movements are oriented in their struggle not towards dialogue, but towards direct collective actions such as the cortas de ruta (highway blockades), a widely utilized tactic used in the struggle of indigenous organizations for land and territorial "autonomy" - and against the neo-liberal agenda of most governments in the region (Petras and Veltmeyer, 2003; Veltmeyer and Petras, 1997,2000). As for Atlantic Canada, the alternative development option most often takes the form of "community economic development," a strategy initiated by community-based organizations such as New Dawn and with roots in the Antigonish Cooperative Movement. As MacAuley in Chapter 7 sees it, things have not changed that much since the 1970s, the heyday of the "Community Development Movement" both in Atlantic Canada and in the global South. At the time, as shown by David Curran (1992) in regard to the Community Development Association (CDA) movement in Newfoundland, provincial and local governments in the region tended to use the CD As as extension agents - that is, as a way of penetrating the community, delivering services, et cetera, without having to bear the economic and political costs of direct employment, thus avoiding the entire unionization issue. This approach was also widely used in Latin America in a similar context (Veltmeyer and O'Malley, 2001). The advantage of this approach towards development - from the perspective of the governments involved - is that it does not require a change in the power structure; the approach accepts the basic institutionality of capitalism, namely private property in the means of production, the market, the state, and the social relations of wage labour. Inshore fishers in Nova Scotia and Newfoundland in the 1970s adopted struggle as their modality of action. Development was not an option and has not been an option ever since, notwithstanding their orientation towards negotiation and dialogue with the government in the form of the Department of Fisheries and Oceans (DFO). In this struggle, the government emerges not as a partner but as an adversary. For the most part, however, the struggle of both inshore fishers and workers in the region is based on a tripartist or corporatist model of negotiations and dialogue. Within the institutionality of the existing system of labour and industrial relations, and the associated framework of political rules, the labour movement is very limited in how it can act and what it can do - which is basically to sit down at the negotiation table. The achievements as well as the dynamics of struggle reflect the limitations of this model. The voices of labour, in this regard, are eloquent if not classconscious. Unlike their counterparts in the global South, they have not yet

20

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drawn the lesson that achievement of their demands will entail an anti-systemic struggle and a politics of direct collective action. In this struggle the basic interlocutor or "enemy" is the neo-liberal agenda of global capital adopted and pursued by the governments of the day in Canada, as elsewhere in many parts of the world.

From Regional Analysis to Regional Development on Canada's Atlantic Periphery The academic discipline of regional science was established in large part as a means of systematizing ideas about the development at the level of "regions," an elusive category that, as noted above, is easier to define in administrative and political than in analytical terms. In analytical terms, it can be used to categorize entire groupings of nation-states such as ASEAN, Southern Europe, the Pacific or Atlantic Rim, and Latin America and the Caribbean. The concept of "region" can also be used to group spatially-located and contiguous administrative units of a nation-state that occupy an identifiable position within a larger structure and that share certain objective and subjective conditions generated by the structure. Thus, we can speak or write of Atlantic Canada as a regional grouping of four provinces on the east coast of the country that share a certain socio-economic status and, in subjective terms, also a sense of identity and belonging. To the degree that this and other such administrativepolitical units share certain conditions relative to a broader or endogenous process of economic development, we can establish the "region" as a useful unit of analysis (and theory construction). Indeed, "regional science" for what it might be worth was established to this end. In analysis and theory, regionalism is normally specified in terms of a combination of structural, strategic, and contextual factors. Analysis over the years and in diverse contexts has tended to shift across variations of at least five types of theory, none of them able to adequately explain the dynamics of regional development. These factors range from entrepreneurship to government policy and planning, from the political dynamics of decision-making on the authoritative allocation of society's productive resources to the workings of the operating economic (that is, capitalist) system.12 At the level of development practice it is possible to trace out in diverse regional contexts each of the models that were constructed for the purpose of promoting "development" at the national level. Some of these models, discussed above, are used as points of reference to diverse development strategies reviewed in other Chapters of this volume. They are outlined - again in the Canadian context - in Choudury (1988), Courchene (1998), and Sagebien

Rethinking Underdevelopment in Atlantic Canada

21

(1993). In this context, the design and implementation of these models can be seen to parallel, if not reflect, decisions made and actions taken elsewhere. Development in practice has taken two fundamental forms, shifting between them as circumstances and politics dictated. One basic approach, based on what we can term "liberal political economy" (the traditional or orthodox paradigm), is to blame un- or underdevelopment on market failure and to remedy this failure by strengthening the functioning of markets by releasing what George W. Bush in his 2002 National Security Report termed "the forces of... freedom and private enterprise." Courchene, among others (as with the Halifax-based Institute for Market Research), tends to take this view and advocates policies supportive of it. An example of this approach can be found in the now defunct Economic Council of Canada (ECOC) (1977) which attributed underdevelopment in the Atlantic region to a combination of factors - natural resource endowment, shortage of capital, low level of urbanization and industrialization, as well as the lack of skilled labour, entrepreneurship and management skills, and, of course, a lack of aggregate demand. An alternative approach based on a radical form of political economy that presupposes the need for systemic transformation informed regional analysis in the late 1970s and early 1980s but was not put into practice. Like the more liberal-oriented proponents of "political economy," these radical political economists presupposed the absence or weakness of market institutions and of a class able to assume the "functions of capital" vis-a-vis development. However, unlike the economists in the neo-liberal tradition, political economists in this alternative "structuralist" tradition of "development economics" turned towards government (the "state" in the literature): regional development planning and transfer payments to the "have-not" provinces or region. Courchene (1998) from one perspective (neo-classical or liberal), and Veltmeyer (1988) from another (radical structural or Marxist), reviewed the history of this approach, which, as it turns out, dominated public policy over the years (until the late 1980s with the shift in power from the Liberals to the Tory conservatives).

In Lieu of a Conclusion: The "Periphery" in Development Theory As noted above, one of the two models constructed by development theorists of the 1950s through the 1970s was that of a worldwide or international system divided into a centre and its periphery. This idea was constructed not as a theory but as a model. However, it provided an analytical framework for the construction of diverse theories, ranging from:

22 From the net to the Net

'Canada's economic staple production and trade on the margins of an international economy (Drache, 1977; Innis, 1940; Watkins, 1963); 'the Economic Commission for Latin America and the Caribbean (ECLAC) thesis of unfair trade, with unequal terms and conditions for countries at the centre of the world economic system and its Latin American periphery (Prebisch, 1959); 'trade as a mechanism of exploitation - the extraction of a surplus produced by workers and producers under conditions of regional dependency (Marini, Dos Santos); ' dependent uneven capitalist development in a global economy (Cardoso, 1972); 'the "development of underdevelopment" within the world capitalist system (Frank, 1969); 'the neo-mercantilist power of foreign capital and associated transnational corporations - the silent surrender of Canada to this power (Levitt, 2002); 'a systemic tendency towards the centralization and concentration of capital and an associated process of proletarianization and immiseration - the General Law of Capital Accumulation (Sacouman, 1981; Veltmeyer, 1978,1979); 'unequal development within the world capitalist system (Amin, 1970, 1974); >the dynamics of political dependence of peripheral regions on political power at the centre, on decisions and policies made by an Ottawa-based political elite (Clow, 1984); >in a more recent historical and theoretical context, the unequal distribution of political power within a nation-state system in an era of globalization and the limits of state power for countries on the semi-periphery (Boyer and Drache, 1996; Drache and Getler, 1991; Laxer, 2001); and >in the same context, a process of transformation from a Fordist to a post-Fordist regime of accumulation/mode of regulation (Workman, 2003). These and other theories have all been constructed within the framework a centre-periphery model. Most often, the model was used to explain developments, or the lack thereof, at the world or international level. From the 1950s to the 1970s a number of competing theories were so constructed, generating an extensive debate (Kay, 1989) by scholars who, for the most part, operated (that is, thought) within a political economy paradigm predicated on the belief in the need for radical or fundamental change in, or overthrow of,

Rethinking Underdevelopment in Atlantic Canada 23

the operating capitalist system. The "periphery" in this context was constituted by countries in three broad regions within the world system, namely Latin America and the Caribbean, sub-Saharan Africa, and large pans of Asia. In the late 1960s and early 1970s, however, the centre-periphery model was also used to analyse the structure of Canada's relationship of dependence on U.S. capital - on Canada as an appendage of U.S. capital (Hutcheson, 1978; Laxer, 1976; Levitt, 2002). That is, Canada was viewed as a periphery of sorts - a "semi-periphery" in the hapless term coined by Emmanuel Wallerstein13 - to categorize countries such as Canada that combine features of both development and underdevelopment. In the context of the early 1970s, this analysis was used to support a politics of Left nationalism, namely, the NDP Waffle faction. Behind this politics was an historic analysis of the founding of Canada in the nineteenth century as an appendage of U.S. industrial capital - and of the subsequent industrial underdevelopment of Canada's three Maritime provinces on the periphery of a capitalist development process (Acheson, 1972). That was in the early 1970s, giving rise some years later to a political economy of regional development - a centre-periphery school of regional analysis (Brym and Sacouman, 1979). In the late 1990s, a group of Canadian scholars resurrected this form of analysis, but did so with reference not to the regional question, but rather to the political dynamics of Canada's international relations, namely, the efforts of the federal government to project itself as middle-power (Laxer, 2001). Here the centre-periphery model is once again used as an analytical category, this time as a means of analysing the semi-peripheral status of countries like Mexico, Norway, and Canada within a process of neo-liberal globalization (Laxer, 2001). Similar uses of a centre-periphery model can also be found in the study of "regional development" both in Canada and elsewhere. One example of this is the analysis constructed, and explanations offered, by the proponents of "Maritime Marxism," a school of thought that emerged in the late 1970s in Atlantic Canada. This analysis, it would seem, virtually disappeared within a few years of heated debate - around explanation for historic and contemporary developments in the region, its uneven development or underdevelopment (Brym and Sacouman, 1979; Fairley, Leys, and Sacouman, 1988). Diverse theories were constructed (see above), and variations of different approaches were evident. However, the unifying factor in this analysis was the notion of a system structured in terms of a centre and its periphery. On this basis, analysis of regional underdevelopment was modeled, as it were, on developments elsewhere in the world capitalist system, particularly on its Latin

24 From the net to the Net

American periphery. This, for example, was the case of the theoretical model advanced by Veltmeyer (1979) among others to explain the evolution of Atlantic Canada in the context of Canada's historic development The centreperiphery model, if not the theory advanced by Veltmeyer and others, was used as a reference point for various subsequent analysis of developments in Atlantic Canada, particularly Nova Scotia (Brym and Sacouman, 1979; Morley, 1986). However, this theory was not advanced as a total explanation - only as a means of identifying the structural or systemic forces involved. Over the years since the mid-1980s, the centre-periphery model seems to have fallen into relative disuse, although this could be a reflection of the relative neglect of the regional question in Canadian scholarship since that time. In any case, it could be argued that no better model has ever been advanced as a toolbox of ideas for identifying the structural factors and process involved in regional development,14 raising questions about the need to revisit the question in a new, more current context - that of a trend towards globalization. At least one regional political economist (Workman, 2003) has moved in this direction. For the most part, however, the challenge has not yet been taken up or met, leaving large lacunae in recent scholarship on Canada's regional development in a global context.

Chapter 2

Just More of the Same? Confederation and Globalization Michael Clow

It is widely argued that we have entered a fundamentally new era of "globalization" (Dahms, 2002; Fotopoulos, 2001; Burbach and Robinson, 1999). We are urged to accept that the verities of the past are no more and that we need a fresh new way of thinking to encompass the new realities for which our old thinking has been unprepared. I think this is largely nonsense. Instead, I argue much of the writing on globalization often misconstrues old and familiar phenomena as new. Rather than join the chorus about the startlingly newness of the trends we observe around us at the beginning of the twenty-first century, I emphasize the continuity of the process of capitalist development which is obscured by all the hype about globalization. I want to draw our attention to the lessons to be learned from something old and familiar which we seem to have forgotten about as of late, namely, the process and aftermath of the annexation of the Maritime colonies into the Dominion of Canada more than a 130 years ago. There is much insight to be gained by examining the similarities and differences between what we are facing today under the labels "globalization" and the experiences of the Maritimes within "Confederation." Our efforts to understand both the development of the Maritimes after 1860 and the current direction of our society in the early years of this new century can be advanced by comparative analysis. The chapter consists of three sections. The first establishes the continuity in the process of capitalist development that underlies Confederation, the Free Trade Agreement (FTA), the North American Free Trade Agreement (NAFTA), the proposed Free Trade Agreement of the Americas (FTAA), and globalization. The second illustrates what light the experience of Confederation can throw on the FTA, NAFTA, and FTAA and globalization. The third

26 From the net to the Net

argues that reflection on our contemporary experience of globalization and its lesser relations, the trade pacts, should sensitize us to the political nature of the events and process that shaped this part of British North America in the nineteenth century.

Capitalist Development and Increasing Scale of Economic Unions So sensitive to "difference" have we become in the last 25 years that we often neglect to take proper notice of the continuities which link the last several hundred years of capitalist political, economic, and social development. Among these is the increasing geographic scale of the territory enclosed within a single economic union. To make the case for comparing Confederation and its aftermath to the FTA, NAFTA, FTAA, and globalization, it is necessary to closely attend to the definition of these terms, to the kind of historical processes to which they refer, to the economic dynamic which gave occasion to them, and to which social groups pursue (d) them. In doing so we can establish the continuity which makes useful the comparison and contrast of their specific circumstances and consequences. This section of the chapter has three parts: 1) a close look at each of the economic and political unions signified by globalization, FTA, NAFTA, FTAA and Confederation; 2) the identification of the inner dynamic of capitalist development which gave rise to all of them; and 3) a comparison of the specific circumstance which catalyzed each specific instance of the general phenomena with which we are dealing. Instances of Economic and Political Union The key to understanding the specific events and processes with which we are concerned - globalization, the FTA, NAFTA, FTAA and Confederation - is the recognition that they are all instances of economic and political unions. Confederation is usually thought of as a political union, but its purpose was economic (Brodie, 1990:97-105). Globalization, the FTA, NAFTA, and the FTAA are generally understood as the creations of a new integrated economy - an economic union - but the political character of these fusions is usually inadequately grasped. This is not to say these unions are identical in their form. But they all belong to the same category of processes. Let us look at each in turn. "Confederation" refers to the unification of the disparate British North American colonies of the mid-nineteenth century into a single British colony, the Dominion of Canada. Few would disagree that a single political and economic entity, the Dominion of Canada, was created by the process we

Just More of the Same? 27

call Confederation, but the usual mode of thinking about Confederation emphasizes its political character and purpose - one nation from sea-untosea and all that. But the purpose of Confederation was economic. Confederating as a political union of disparate and unconnected colonies was a strategy to facilitate a scheme later given the moniker of "The National Policy" in the 1870s (when its logic of capitalist development in Canada within the British Empire was under attack from continentalist alternatives). The Confederation scheme involved four well-known key elements (Brodie, 1990:97-105): 1) the creation of the British North American super-colony which would amalgamate all British holdings in North America, and allow the refinancing of the Canadas' public debt (while putting their political house in order); 2) the establishment of a railway to link the Maritime colonies with the Canadas to form a single economic entity from the separate colonies, then the extension of that railway system across the continent to tie all British possessions together and thereby open up the Canadian West (as railways had the American West); 3) the settlement of the Prairies as a wheat-growing area to provide a new staple export economy and a captive market for Eastern manufacturers; and 4) the establishment of a protective tariff to make foreign manufactures more expensive than domestically manufactured ones, thereby fostering industrialization which would be stimulated by the new and larger economic unit (linked by rail, stimulated by railway construction and the creation of a colonial economy in the West dependent on Eastern bankers, merchants, and manufacturers). Globalization refers to the ostensibly rapid and unprecedented emergence of a single integrated global economy over the last 30 years. Global markets, global companies, global competitiveness, and corporate ambitions for a global arena of unfettered operation are the recipe for a bright economic future proposed by businessmen, their political servants, and their cheerleaders in the media. In defining the signs of globalization, most refer to the increasing internationalization of trade and investment and the decline of national economic autonomy. This process is usually identified as involving four dimensions of activity: 1. increasing direct industrial investment by transnational corporations in developing areas of the world in pursuit of cheap labour, producing a global production system; 2. the breakdown of long-standing national monopolies and monopsonies (a monopoly shared by a few multinationals) in the developed countries as these nationally based corporations sought to expand their operations into other advanced economies;

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3. growing international flows of short term speculative capital investment in stocks, bonds, futures, and currencies; and 4. more and more neo-liberal state policies, international agreements (e.g., NAFTA and the European Community treaties), and the activities of international agencies (e.g., the World Bank, World Trade Organization, and International Monetary Fund) designed to facilitate the first three processes. The intent and effect of these efforts has been to allow employers and investors to profit from speculation as well as investments in manufacturing and resource production in larger and larger proportions of the globe under terms more and more favourable to the rapid accumulation of capital. The rhetoric of "globalization" reflects both the efforts to consolidate national economies into larger units, and the ambitions of corporations to create a single world economy in which they can operate without let, hindrance, or regulation from the population. But globalization is no less a movement towards an important measure of international political union as well. The treaties between the national governments which have established the rules and regulations regarding investment, production, and distribution across the globe have involved the establishment of a network of international rule-making and dispute settlement institutions - most importantly the just-mentioned World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank (WB). The WTO passes binding judgments on what national governments can and cannot do to govern economic and social affairs inside their borders under the new international regime of free trade, and its power over national governments is growing with every round of trade talks. The IMF has enforced harsh conditions on countries seeking debt relief, and imposed restructuring policies on national governments that have destroyed the networks of public services in many Third World societies in the name of fiscal responsibility to the world's banks. These international institutions are binding nations into an increasingly uniform policy framework and limiting the powers of national governments to act as they chose. A world government of sorts has been constructed and is expanding its powers (Burbach and Robinson, 1999:35). Globalization requires an increasing degree of international political union to achieve the economic goal of its architects. The Free Trade Agreement (FTA) of 1989 between the American and Canadian governments formally integrated the Canadian economy into that of the United States. The North American Free Trade Agreement of the early 1990s, an international treaty between the United States, Canada, and Mexico,

Just More of the Same? 29

expanded the enlarged American economy of the FTA to absorb Mexico into a single economic zone covering all of North America. Under the FTA and then NAFTA, the satellite economies of Canada and Mexico were formally assimilated into the American imperium. The proposed Free Trade Agreement of the Americas (FTAA) will formally integrate all economies in North, Central, and South America (excluding Cuba) into that of the United States. Creating one North American market - the liberal realist conception1 of the economy - was the declaratory purpose of the treaty between the U.S., Canada, and Mexico. However, the FTA and then NAFTA also involved a measure of political union as well, since it is impossible to maintain one economy without an established and evolving set of rules and regulations governing investment, production, and exchange, and a means to settle disputes - without a "governmental structure" of some kind. Thus there exists a legally binding NAFTA dispute settlement mechanism. Furthermore, there is concerted pressure from various actors in the corporate world and governments within NAFTA for a heightened level of political union in order to deepen the economic union. These pressures to form a uniform social and policy environment vary from the general agreement in the NAFTA to harmonize - that is make the same - all policy matters, to calls for common customs and immigration policies and common currencies. In the aftermath of September 11th, military, security, and border control integration is speeding up as well. "Globalization," FTA, NAFTA, FTAA, and Confederation, then, all refer to processes of economic and political union. These unions are not identical in form. But they all belong to the same category of processes, and as we will see below, they arise out of the same basic dynamic of capitalist development. What Lies Beneath?

We can quickly identify an underlying process within capitalist development which neatly explains the formations of larger and larger economic and political unions. This common process forms the underlying continuity between all the economic and political unions of interest. That dynamic is the omnivorous struggle of capitalists - employers and their investors - to accumulate more and more wealth (Mandel, 1977:60-65), a process which drives them among other things - to increase the geographic ambit of the labour, resources, and market within which they can operate. Most Marxist scholars would divide the last five centuries of the emerging international economy2 into four periods, each corresponding to different dominant forms of business enterprise: 1) mercantilism, 1500-1800; 2) com-

30

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petitive industrial capitalism, 1800-1880; 3) national monopoly capitalism, 1880-1945; and 4) the contemporary period of emerging global monopoly capitalism since 1945 (see Veltmeyer, 1983a and 1983b; Burbach and Robinson, 1999). There are grounds for a debate over the dynamics of mercantilism, the long period when merchants, not employers and wage labour, dominated the economy. But at least since the second period, investment, production, and exchange have been dominated by the capitalist mode of production proper that is, the system of wage labour - and governed by the "game" we can call capitalist development. The basic sociological insight is that social existence is organized, and that the way we organize our activities creates the situations in which we live. "Game" in this sense is another way of talking about social structure and its consequences, intended and unintended. Societal games are endeavours people create and enter into in the process of organizing society in particular ways. These games, these ways of organizing our lives and activities, are social processes invented by (some) humans and "played" by humans. Games do not play themselves, nor do they impose themselves on us like the regularities and processes of nature. They are socially constructed. Most people usually find themselves forced to play a game not of their own devising, often against their will for lack of other options or even as the consequence of brute force. These ways of organizing our lives have objectives and rules which direct, guide, and constrain people's behaviour. As long as people are "playing the game" - by choice or necessity - their behaviour is not really "free." There are compulsions under which they live (see Wood, 2000), as well as opportunities with which the game presents them. The endeavour which governs modern society at least since 1800 with the rise to dominance of the capitalist mode of production is the attempt by capitalists - that is employers and investors - to have money make more and more and more money for them, to make bigger and bigger and bigger their enterprises (see Mandel, 1977: 60-65). This expansion of private accumulations of capital3 is accomplished by employers and investors engaging in one round of investment-production-profit-reinvestment after another. Wealth is accumulated in this game primarily4 by paying workers less than the value of what they produce.5 Only capitalists have a real and genuine interest in perpetuating this game. But they developed enough political power to initially set it up and keep the game in motion with only a minimum of concessions to other classes, dragging the rest of society along subject to its rules and consequences. And they will continue to impose this game, with varying accommodations to those in other classes, until these

Just More of the Same? 31

other social actors develop the power to end the capitalists' game and replace it with a different one opposed to it. How does this game of employers and investors expanding their accumulation of wealth lead to the creation of economic and political unions on a larger and larger geographic scale? An important part of the capitalist game is that capitalists are in competition with each other for profits and investment opportunities in their pursuit of accumulating greater and greater wealth. Either capitalists compete directly with other firms in the same kind of business, or indirectly - they operate in sectors of the economy competing for capital, government-supplied advantages, skilled manpower, and other resources. Each capitalist must therefore seek not only to accumulate more and more capital but also to make the greatest rate of accumulation possible. Those who do not accumulate faster than the pack fall victim to the dog-eat-dog competition of employers and investors - a process which inevitably means fewer fatter dogs. Thus, capitalists' desire to turn money into investment to make more money as quickly as possible becomes not only a goal but also a goad driving them all a compulsion as well as an opportunity presented by the capitalist system (see Wood, 2000). The frantic search for new markets and customers, new technologies and new products, and new investment opportunities, in order to "grow the firm" and to keep ahead of the game, is not simply the means to turn money into more money, but the means of sheer survival for all employers and investors. The drive towards economic and political unions of larger and larger geographic scope flows directly from the goal of accumulating more capital more quickly. New sources of labour, new investment opportunities, and new customers flow from expanding the geographic scale of the economy in which enterprises can freely operate. Confederation, the FTA, NAFTA, FTAA, and globalization are all just schemes of economic and political union on a larger and larger geographic scale designed to allow capitalists to expand the scope of their operations and continue their all-consuming game. All these economic and political unions follow directly from the compulsions and opportunities of competitive capital accumulation, the monomaniacal and defining obsession of the capitalist class. The Specific Impulses to Each of These Economic Unions The only agents capable of action in society are actual living human beings. Social structures cannot act. It would be wrong to see people's actions as entirely free-floating, of course. The way society's activities are already

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organized creates the situations and circumstances to which people respond. But it is the conflict and co-operation between people in response to their situations which reproduce the existing organization of society, or which changes it. Individuals may be important in this process, but only insofar as they are capable of mobilizing others into politically effective groups struggling with and against each other. If Confederation, the FTA, NAFTA, FTAA, and globalization are all traceable to the same tendency of capitalists to seek to broaden their geographic scope of operation in pursuit of the accumulation of capital, we should remind ourselves of the obvious: The people pushing these schemes have always been the leading members of the employer/ investor class. It is important not to lose sight of this fact. These schemes of economic and political union do not invent themselves and they do not occur automatically or inevitably. True, they arise as imperatives as well as opportunities for employers and investors out of the changing circumstances of previous capitalist development - out of the game in which our lives and activities are organized - but to exist, these new unions must be successfully imposed on workers, the petit-bourgeoisie, and other capitalists who do not see themselves in a position to take advantage of a new larger economic union (see Robinson and Harris, 2000: 23-6). At each stage, one group of capitalists attempts to create a new political and economic union which will allow them - they hope - to develop and formalize their exploitation over the people and resources of a larger geographic zone, and thus to consolidate themselves as the dominant fraction of a new "national" bourgeoisie. The usual catalyst is some son of crisis of accumulation that makes previous political and economic arrangements, ones which had worked for a time, no longer able to assure the leading capitalists the opportunity to expand. Many of those joining these new schemes to allow the game to continue will not survive the subsequent dog-eat-dog competition amongst their fellow capitalists, but businessmen are gamblers always looking for the next "big break." The case is most transparent with regard to Confederation (because we know much about it). The wild scheme of pulling together all the British North American (B.N. A.) colonies, building railways across the continent, settling the West, and using a protective tariff to force the rate of manufacturing growth was occasioned by the abandonment by Britain of the mercantilist system in the late 1840s. While the sky did not in fact fall on the Chicken Littles6 of the British American colonies (Britain continued to buy Canadian exports, including Maritime lumber, fish, and ships), the colonial merchants of Britain's American colonies could no longer rely on their protected posi-

Just More of the Same? 33

tion in the British market and the Empire. All of the B.N.A. colonies endured a prolonged crisis (Brodie, 1990: 92-96) in which their resource industries faced uncertain markets, and their nascent manufacturing industries struggled against the limitations of their small population and foreign competition. A new economic strategy was required, new markets and new activities had to be envisioned, if the prosperity of mid-century and new investment opportunities were to be secured. A sense of general crisis prevailed amongst the capitalists of British North America, and the hunt was on for how to assure themselves of a "good business climate" to their liking. The Confederation scheme of 1867 grew out of the interests of capitalists in Montreal and Toronto, but Maritimers who simply put the blame for the union on the Upper Canadians, or even Upper Canadian capitalists, miss a key point. Enough business and political leaders in New Brunswick and Nova Scotia were drawn in to take the bait to allow London to push the measure through and annex the two colonies to the Dominion. Many others, including Nova Scotia's Joseph Howe, felt that their societies - and their future possibilities of exploiting them - were being gobbled up by the capitalists of the Canadas. After all, the name of the new super-colony told the story! Globalization at the cusp of the twenty-first century is simply an expression of the general trend for capitalists in all the major economies to seek as wide a field of operations as they can. It is the simple extension of the trend towards concentration and centralization of both financial and industrial capital on a larger and larger scale - not a new process at all but a continuation of a process underway since the early nineteenth century. More than a century ago local economies in the major developed nations were fused into national economies characterized by many small firms - the new Canadian economy at Confederation being a good example. In the conditions of the Great Depression of 1873-1896 the dog-eat-dog competition of these many small firms in these emerging national economies could only be escaped by the elimination of competition and the emergence of a small number of very large dominant national corporations in the last decades of the nineteenth and the early decades of the twentieth century. Having monopolized national economies in the period after 1880, expansion overseas of production in the form of the multinational corporations began quite incrementally, with American firms setting up production in Canada in the late nineteenth century to "jump" the National Policy tariff barrier, and German companies doing the same in nearby European countries at roughly the same period.

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While the United States emerged from World War II as the only surviving major capitalist power left standing - making minor industrial economies like Canada and Sweden temporarily relatively stronger than "normal" - the political needs of their Cold War coalition-building forced the United States not only to acquiesce to the rebuilding of Western European and Japanese national economies (and their corporations), but to assist in it. In the post-World War II period, multinational capitals flourished in the developed world. The U.S. focus on a permanent war economy enabled European and Japanese firms to make their much-vaunted move into the consumer markets of North America in the 1950s and 1960s. Partly as a result of this revival of rival multinational capitals, the long post-World War II economic boom ran out of gas in the late 1960s. With the breakdown of the long boom in the late 1960s, the intensity of international competition between the multinationals in the developed world increased. Corporations sought advantage in their competition with each other during a period of slow growth in the 1970s through both technological innovation and the search for cheaper labour. Investments in transportation, telecommunications, and computers gradually made it possible by the 1980s to establish a single global production network for each corporation, one taking advantages of dirt-cheap Third World labour for industrial production. On the global scale, this cheap labour strategy is predicated upon producing wherever on the globe it is cheapest to do so, and to sell to whoever has the money to buy wherever in the world. Speculation on commercial real estate, stock prices, currencies, and whatever else can be found increased in importance and gradually became the "global casino" sector of the economy with which we are now familiar, riding alongside the increasingly integrated "real economy" of oil, cars, and other tangible goods (Salutin, 2002). Global markets, global companies, global production and marketing, global competitiveness, and corporate ambitions for a global arena of unfettered operation are the gospel of capitalists at the beginning of the twenty-first century. All the contemporary attempts to form large-scale economic and political unions - the FTA, NAFTA, FTAA, the European Community, and globalization one and all - emerge out of the general crisis of accumulation which followed the collapse of the post-World War II long boom in the late 1960s (Merrett, 1996: 1; Workman, 1996: 18; McBride and Shields, 1993; Brodie, 1990:154 and 182; Panitch and Swartz, 1983: 30; Marcussen and Torp, 1982: 9-12). The logical outcome of globalization - other things remaining constant - is quite predictable: the emergence of world-girdling monopsony in the twenty-first century.

Just More of the Same? 35

Many authors who focus on globalization rather than the formation of "regional" economic and political unions in Europe and the Americas argue that a single "transnational" class of capitalists who owe no allegiance to any state or society has emerged as the dominant fraction in all the developed countries and most of the underdeveloped, and that its members are the authors of the concerted effort to build a global economy safe for their own free and unfettered operation (Robinson and Harris, 2000). From the belly of the U.S. beast, and considering the key role not only of U.S. capital but also of the U.S. state and military in the emergence of the New Order, one may be excused the sneaking suspicion that U.S. imperialism is a key element of the process of globalization. What is more, it is evident that the melding of the world economy is much more "chunky" than rhetoric suggests: The fusing of European society into one European Community, or of Canada and Mexico into the U.S.A., is much farther advanced than a uniform fusion of the world into a single global political and economic unit. More limited efforts toward "regional" international integrations, in Europe and the Americas, reflect the fact that the major Northern nations and the particular capitalists they serve are not uniformly politically powerful on a global scale. European capital has built and is building its new "home market" in the European Community, and is well on its way to completing the construction of a United States of Europe. The European central government is in place, with even a Parliament elected by normal liberal-democratic standards, as well as a powerful civil service. The common currency, the Euro, marks the high degree of European economic integration. On this side of the Atlantic, the FTA, NAFTA, andFTAA are evidence of U.S. capital's strenuous efforts at the expansion of its "home market" to include the whole of the Americas. Although the global ambitions of the largest European, U.S., and Japanese corporations point them towards the construction of a world economic and political union suitable to their purposes, they are also engaged in the construction of smaller and more tightly integrated economic and political unions in their own zones of political as well as economic dominance. If the FTA, NAFTA, and FTAA show the political and economic strength of U.S. capital in the Americas, the effort devoted to the achievement of the United States' long-anticipated Manifest Destiny to rule from pole to pole in the Americas also signals the relative weakness of U.S. corporations in the word as a whole. Accentuated by the Cold War and the U.S. focus on largely unproductive military spending, U.S.-owned firms in the consumer and capital goods sectors were hard pressed by European and Japanese rivals by the late 1960s. The solution decided on by the leading U.S. capitalists was to seek

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to lower the costs of production, not primarily through technological innovation but by seeking cheaper and cheaper sources of labour inside the U.S. and then in politically secured areas in the Americas. First the higher wage areas of the North-East and the Mid-West of the United States were abandoned (what became the Rust-Belt) in favour of the un-unionized and low wage areas of the U.S. South (where environmental controls are lax and the local state actively encouraged the influx of cheap-wage seeking corporations). Soon U.S. multinationals were going further afield, moving production sites for their worldwide operations into Mexico (and soon even lower wage areas of the captive Americas and beyond). Out of this has come the NAFTA strategy of integration (following upon the heels of having formally gobbled up the Canadian economy under the Free Trade Agreement of 19897). Now the larger goal of a Free Trade Area of the Americas agreement (FTAA) is to incorporate even lower wage areas of the American imperium into formal economic and political union with the United States. Rather than viewing the current state of capitalist development as representing some fundamentally new and unprecedented situation for which we have no previous points of reference, it is more useful to recognize the continuity between the present and the past. In doing so we can avoid the tendency "to exaggerate the differences between our present era and the past" (Carroll, 2001: 8) and identify the differences which do exist and assess their significance.

What Light Does the Maritime Experience Within Confederation Cast on NAFTA and Globalization? The annexation of the Maritimes into the Dominion of Canada and its subsequent economic history provide an interesting standpoint from which to examine contemporary efforts at broader economic and political union. In particular, it gives us a basis in experience from which to assess the likely economic and political consequences of the FTA, NAFTA, FTAA, and globalization for Canada. I will organize my discussion under the following rubrics: 1) the differing forms of political and economic union, and the "structures of governance" they embody; 2) predictions of the economic consequences for Canada of NAFTA and "globalization;" and 3) the changes in social relations caused by contemporary political and economic unions. Forms of Political and Economic Union There are clear contrasts between the political forms under which the colonies of British North America were unified, and the forms of political union

Just More of the Same? 37

now underway through the FTA-NAFTA-FTAA processes and globalization. We shall examine these first, then look at a point of similarity. The unification of the Maritime colonies into the Dominion of Canada can be faulted in many ways, but it was both overt and was institutionalized under political forms which were normal for the period. By stark contrast, the political unions occurring under NAFTA and globalization are occurring by stealth and are creating extremely undemocratic supra-national political institutions which are more eighteenth century in form than nineteenth or twentieth century. Though the imposition of Confederation had little democratic mandate and was imposed by London, it was at least clear and unambiguous that the Maritime colonies were being subject to a thorough-going economic and political union with the Canadas and their other annexations (the Hudson Bay Company lands and British Columbia). Everyone knew a new political and economic entity, a British North American super-colony given the name the Dominion of Canada, was being formed. Moreover, the form of the political institutions of the new Dominion were those of nineteenth-century postResponsible Government already familiar to people in all the well-established British North American colonies - British-style parliamentary government for internal colonial affairs with London continuing its control over external relations. The powers of the Imperial, federal, and provincial governments were relatively clear, or thought to be clear, and - if we ignore the gross violation of Maritimers' rights when they were annexed against their will to the Canadas - the union's form of government involved no diminution of the level of democracy with which the population was familiar. Indeed, citizenship in the Dominion allowed Maritimers another (federal) arena of parliamentary and extra-parliamentary politics in which to fight for greater rights and entitlements. By contrast, the forms of political union represented by the FTA, NAFTA, FTAA, and "globalization" are covert, the formation of new societies by stealth. If we cast our memories back to the FTA debate of the late 1980s, you will remember the outright lies of the Business Council on National Issues (BCNI) and its front man Mulroney denying the fact that the FTA represented political union. We hear a lot more about further political union with the United States lately - calls for a common currency, a "common perimeter" in the wake of September 11th, and even outright membership in the American union. And we still have the denial of the reality of a substantial measure of global political union even as the WTO and IMF regularly rules

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that national government's actions to be ultra vires. Mendacious deception is an integral part of the neo-liberal form of "good governance." If we look at the major governmental institutions established by the NAFTA and globalization treaties, what is striking is their profoundly undemocratic character, even by the very weak standard of liberal-democracy8 as we have known it in the twentieth century. These new forms of governance go well beyond the commitments in the FTA and NAFTA for harmonization of all policies. The NAFTA trade dispute settlement mechanism, and the global political institutions like the WTO, IMF, and World Bank, are completely undemocratic. Under the guise of being inter-governmental institutions, they represent only multinational capital - whose members closely collaborate in policy making and adjudication - and governments whose leaders and functionaries now act almost exclusively in the interests of transnational capital (Burbach and Robinson, 1999:29-32). This covert supra-national government-by-and-for-capital excludes by design all other social classes from participation in global governance. This strategy of going around national liberal-democratic institutions, while denying the existence of such supra-national governance, is at least partly designed to perpetuate the myth of the all-powerful and autonomous market. The new government of the NAFTA region, and the new level of world government represented by the WTO, IMF, and World Bank, are governments which quite literally are little more than "the executive committee of the [transnational] bourgeoisie,"9 a new reality which bears out William Carroll's recent characterization of the neo-liberal conception of the state's job in its most naked form: "government's proper role is simply to enact and enforce the laws that sustain the free market system" (Carroll, 2001: 7).The move towards international economic and political unions has allowed the achievements of two centuries of mass political struggle to be substantially erased by subterfuge. There is something else worth noting in the contrasting forms of political union represented by Confederation and today's new regional and global one. While the capitalists who formed Confederation were no friends of egalitarian democracy, they were clearly nowhere near as threatened by it as the transnational capitalist class. Why? Put simply, the scope of their Confederation plan as a rearrangement of society was much less ambitious than that of contemporary transnational capital. The architects of Confederation did not seek to reverse the democratic political achievements of their era. Transnational capital is seeking to establish a world free of precisely the kinds of economic compromises and workers' rights that characterized the post-World War II consensus in the developed world. The rhetoric of the

Just More of the Same? 39

neoliberals notwithstanding, capitalists have no inherent attachment to democracy, or to competitive markets for that matter. Capital's only real attachment is to the rights of those with property, which above all else means the right to be free from the interference of society in the use and investment of their capital. Transnational capitalists seek to dramatically reduce democratic control over society fundamentally in the process of building a new world suitable to their purposes. We need to reflect on the evidence of their ruthless determination to see through their remaking of our world, right here at home. We have seen how the representatives of capital in Ottawa have engaged in extra-legal violence against APEC protesters in Vancouver and anti-FTAA protesters in Quebec City. Armed with the new police and legal powers occasioned by their astute opportunism after September 11th we need to get our heads around the facts that we Canadians no longer live in a liberal-democracy as we understood it even 30 years ago. We cannot take liberal-democracy for granted in Canada during the coming years of struggle. The one thing familiar to the Maritime experience of Confederation around the current situation of emerging supra-national regional and world governmental institutions are the ambiguities of living within a complex and multilayered system of government. When the Maritime colonies were annexed into Confederation, their colonial-cum-provincial governments were not abolished, their powers, responsibilities, and fiscal bases were only diminished. A similar process - rather than the disappearance of national government - is what is occurring under globalization and regional bloc formation. A new layer of plutocratic government in the form of the WTO, World Bank, and IMF at the global level and NAFTA-FTAA institutions at the American are being imposed over and on top of the existing layers of state institutions with which we are familiar. All these layers of "extra-parliamentary" governance have the same effect - to limit and subvert, if not eradicate, democracy without the formal imposition of an authoritarian state. Whatever the intention of the architects of the new supra-national institutions, the way this awkward set of state and quasi-statal institutions will work is far harder to predict than even predictions around Canadian federalism have proven to be. The situation is complicated by the fact that NAFTA and "globalization" have removed elements - but by no means all - of the dimensions of what O'Connor (1973) called the accumulation function to the upper layers of institutions, while leaving legitimation and repression to the national and provincial levels of government. NAFTA institutions and the WTO/ IMF/WB have no army or police to force the population into line, and no

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means of raising and redistributing taxes to accommodate the population either. Capital depends on lower levels of government to do this at their behest. Have they thought through the unintended consequences of their actions? Have we? The Economic Consequences for Canada of NAFTA and "Globalization" The experience of the Maritimes within Confederation (see Clow, 1984) gives us a very good vantage point from which to predict the likely economic development of Canada within the American imperium and the larger entity being built under the rubric of globalization. Indeed, back in 19871988,1 argued that the FTA would lead to the "Maritimization" of Canada - that under the FTA the entire country would experience a process similar to the de-industrialization of the Maritime region during the concentration and centralization of capital within the integrated Dominion of Canada during the period 1880-1920. While the Maritimes initially underwent a very rapid expansion of manufacturing output in the wake of the 1879 National Policy tariff and the completion of the Intercolonial Railway, that expansion was followed by a process of de-industrialization. The most obvious element of that process was the closing of Maritime factories, most notably the wholesale collapse of manufacturing in the 1919-1925 period. But that disappearance of Maritime manufacturing was the outcome of a larger process, the bankruptcy or "branch planting" of Maritime manufacturing, financial institutions, and the wholesale and retailing sector, by national corporations from the mid-1880s until World War I.10 This branch-planting or take-over was followed by a "shedding" of those branch-plant factories by the new Montreal-based corporations in the immediate aftermath of WWI (i.e.,1919-1925). The result was the virtual disappearance of manufacturing - de-industrialization - and the loss of thousands upon thousands of jobs those factories had provided. The Maritime economy collapsed into a more or less permanent state of depression which lasted until late in the 1960s. In proposing Maritimization of all of Canada under the FTA (and by extension under NAFTA and "globalization") I expected a similar process to occur in an integrated North American economy: the overall outcome of the Canadian versus American competition that will follow from Free Trade will be a consolidation of ownership and production in the United States, just as the outcome of national competition [in the aftermath of Confederation] was the consolidation of

Just More of the Same? 41

production and ownership in Central Canada. What is already the most foreign-owned economy in the Western world will inevitably become more so, and the least industrially developed even less so. ... the hope of modern aspiring Beaverbrooks is surely their place in the sun of the United States, with the even more glowing dream of moving on to the prospect of being leaders of truly world-scale corporations, leaving little provincial Canada far behind. Most of these aspiring business "heroes" will be frustrated in their hopes of glory and power, of course. But almost all ordinary working Canadians can be assured of their fate well beforehand. ... continental free trade can only lead to monopoly on a continental scale, as a national economy has led to national monopolies. It is simply stupid to believe that those monopoly companies will be located in the smaller and weaker Canadian economy. (Clow, 1988a) At the time I expected four major developments: 1. the closing of U.S. branch-plant factories in Canada, and the movement of production back to the U.S. or its movement to cheap-labour sites elsewhere; 2. investment by Canadian firms in Canada in production for customers on a continental scale, followed by many bankruptcies and plant closures in Canada, as they lose battles with their competitors in the United States; 3. increased Canadian investment in U.S. investment opportunities (or those in even cheaper labour areas of Mexico - at that point, the maquilladora zones) rather than in Canada (that is, the move to an American locus of operation and identity from a Canadian one); and 4. the takeover of Canadian retail and wholesale operations and services by American firms, with the same impact on Canadian manufacturing as it had on Maritime manufacturing. (Clow, 1988b) Writing in 1987-1988,1 expected a similar process of impoverishment as had struck the Maritimes to follow from the same processes of corporate movement: We can expect a plunge in employment, in wages, and in living standards similar to that which was visited upon the Maritimes in the early part of this century as a consequence of the flight of capital to Central Canada. ... an economic collapse of what will be but the Canadian regions of the U.S. economy will not only wipe out huge numbers of the jobs of Canadian workers, but pull down the whole small business sector and

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most of medium-sized business too. Small and medium-sized business will continue to depend on the health of the local Canadian economy and they will go down like a house of cards when the unemployment caused by corporate emigration strikes home - again, as occurred in the Maritimes in the first part of this century. (Clow, 1988a) While the Canadian economy has not fallen apart in the years after the FTA became our supreme constitutional document, I believe that all of these trends are well advanced, as a perusal of current and back issues of the CCPA Monitor and other Canadian Centre for Policy Alternatives sources confirm. The processes at play in NAFTA and "globalization" have certainly led to large-scale job losses in manufacturing and increasing economic inequality consistent with my arguments. One good deep depression, and the acceleration of these processes will lead rapidly, rather than steadily, in the forecasted direction. Changes in the Field of Social Relations

One of the claims of those who argue that "globalization" and its lesser relations such as the FTA, NAFTA, and the FTAA are a fundamental rupture with the past is that it tears up the patterns of cleavage within societies in an unprecedented way. Many suggest that globalization occurs during an era of development in which class relations are increasingly secondary to those of "identity politics" - gender, sexual orientation, or ethnicity (Teevan and Hewitt, 2001: 383-84; Brym, 2001: 33-36, 98, 488-91). In actual fact, whatever else has been politicized during the post-World War II period,11 class relations have certainly not been marginalized. The FTA, NAFTA, FTAA, and globalization are driven by class forces, the omnivorous and unquenchable appetite of capital for more capital, and spearheaded by elements of the capitalist class. Rather than processes marking the end of the analytic importance of class, the FTA, NAFTA, FTAA, and globalization are about the politics of class toutcourant. The real changes in political life being produced by globalization and its lesser relations are not in the nature of social relations but in their geographic field. As in the case of the aftermath of Confederation, the familiar antagonisms of inter- and intra-class relations do not disappear but rather are played out on a larger geographic field - alliances and antagonisms of the same kind persist but are played out over a larger social space. These do produce different outcomes for the participants than would otherwise occur, but no new kinds of social processes were initiated by the act of political and economic union.

Just More of the Same?

13

In a related vein, among some Marxists there is a tendency to argue that the re-orientation of class relations onto a global scale (or continental scale in the case of NAFTA, hemispheric in the case of the FTAA) is unprecedented. This idea that globalization has caused unprecedented upheaval in class relations misses recognizing the isomorphic experience of Maritimers in the aftermath of Confederation. It is my contention that the people of the Maritimes went through a social dislocation very similar to the present one Canadians face as they are pulled into the new economic unions of globalization and its lesser relations. What we need to remind ourselves at this point is that the Maritime colonies had almost no economic or political relations with the Canadas - much less to people in the lands to the west of the Canadas - before Confederation. Our economic and political links were outward across the seas - to Britain, to the Caribbean, and to the United States. Confederation forced a considerable reorientation of economic activity. The measures of what came to be called "The National Policy" substantially reorganized the geography of our social relations in a way every bit as dramatic and full of import as NAFTA, the FTA, or globalization are doing to Canadians today. Confederation both dearticulated many of our patterns of our socio-economic and political relations, and re-articulated them along trans-continental lines. Confederation was a scheme created by central Canadian - "Canadian" in the proper sense of the time - capital. Some capitalists in the Maritimes in the mid-1860s bought into this scheme of transcontinental expansion. Once it became zfait accompli, most capitalists in this region accepted it as the "opportunity structure" in which they existed. In so doing, Maritime capitalists reoriented themselves to the national economy, and they invested their money into manufacturing food products, clothing and the like, and iron for railways, as the National Policy made these profitable (rather than investing in the woodto-ships basis of what was much of Maritime pre-Confederation manufacturing12). Maritime capitalists initially thrived as the manufacturing base of the region and the Dominion expanded in the 1880s and 1890s. Most of these enterprises then died as the consolidation of capital in manufacturing in the Dominion occurred. Maritime bankers adapted to the centralized Canadian branch-bank system imposed on them, or collapsed - the most successful taking full advantage of the national economic opportunity to became the very largest of Canadian banks, and they abandoned the region as a principal site of investment. Capitalists in the Maritimes had to re-orient themselves in the light of the new geographic scope and economic opportunities of the Dominion.

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As for labour, a national economy threw Maritime workers into competition with workers employed by rival firms in central Canada. The eventual result was the emergence of national trade unions and trade union centrals riven by regional tensions of interest. Indeed, as American capital took over the production of manufactures and resources after the late nineteenth century, labour took its place in American ("international") unions like the United Mine Workers.13 What is going on now within NAFTA, and the new global economy, is a similar process of geographic reorientation. Rather a larger percentage of Canadian capitalists bought into the FTA, NAFTA, and globalization than their Maritime counterparts bought into Confederation, but even those who declared themselves opposed to the FTA - like the McCains and the Stronichs - have acted within its opportunities since it became an accomplished fact. Today Canadian workers and labour organizations face international situations in the same way Maritime workers faced a national one after Confederation, and not surprisingly Canadian labour organizations have begun to think about continental workers' coalitions in response to NAFTA - to respond in other words to the larger geographic field on which they find themselves. The point to be drawn is simple: Having one's geographical frame of reference turned upside down and finding oneself in a position of competition with members of one's class in places with which one had had no prior relations is not a new phenomenon. To argue otherwise is simply to be guilty of a poor historical memory. In both cases, the Maritimes within Confederation and Canada within the larger economic and political unions of our time, "we" were/are a smaller and politically marginalized population within a larger and dominant society. When it comes to "harmonizing" within the union the Maritimes danced to the tune set by central Canada; within NAFTA and globalization we will dance to the U.S. tune, like it or not. Given the history of the Maritime experience as a basis of prediction, the political, economic, and social effects of becoming part of a continental or global geographic field of class relations dominated by one "partner" are not to be taken lightly. Those familiar with Maritime development will recall that the "harmonization" process which the Maritimes underwent with the rest of the new country did not serve Maritimers well. The industrialization of the Maritime economy by the 1860s was heavily built on forward linkages from our resources, particularly the forward linkages from wood, wind, and water. Tree harvesting had become dependent on winter wage work early in the nineteenth century; the move from petit-production to industrial production in

Just More of the Same? 45

sawmilling, shipyards, marine sundries, and in the crewing of shipping lines had followed suit. Unlike the Canadas, Maritime industrial capitalism and the workforce were not built on the production of food products, clothing, and agricultural machinery. The National Policy tariffs changed the pattern of investment towards the Canadian pattern, tying us directly into competition with Central Canadian industry at the very time the Depression of 18731896 would catalyze the formation of national monopoly capitalism which would undermine the region's economy. Similarly, the imposition of the Canada's banking system undermined the financial-industrial linkages of the region (Clow, 1988a). The "harmonization" of Canada's economy and policy with the neo-liberal norms of the American and global economy will undermine any internal democratic processes, and make us helpless to set an alternative course. The Canadian state will be substantially hamstrung to ameliorate the devastation of the population under de-industrialization as long as we remain part of these unions predicated on neo-liberalism. The FTA requires further negotiations to provide for the destruction of all the un-American social programmes, public enterprise, public medical care, environmental laws, and the national system of public services, and so forth. With a carbon-copy of U.S. laws and practices forced upon us, the full costs of the economic decline of Canada will be borne by Canadians without even the present welfare state to act as a "safety net," nor the ability of the Canadian people to use the government and public enterprise to change the situation (Clow, 1998a). The erosion of the public sector and the endless drumbeat of privatization - even of health care - owes much of its "common sense" to the political climate created by the layers of neo-liberal economic and political unions in which we are now enmeshed. "Maritimization" is more than a neat rhetorical phrase. The history of the Maritimes in Confederation is an excellent standpoint from which to speculate about the nature and outcome of the layers of political and economic union in which we are entangled. The Maritime experience stands in need of further comparative analysis with what we see going on around us today.

From the FTA, NAFTA, and "Globalization" to Confederation About what should our contemporary experiences of NAFTA and "globalization" make us more cognizant when we study Maritime development within Confederation? Our experience of NAFTA and "globalization" should sen-

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sitize us above all to the importance of politics. Politics is the process of conflict and co-operation required for any group of people to make and implement decisions, to organize and conduct activities. I stress not principally "formal politics" - elections, voting, and Parliament - nor only the actions of bureaucrats and diplomats. None of these can be ignored, since these new economic and political unions are the product of formal politics, as they are the outcome of international treaties. But what is of clearest import here is class politics - both inter- and intra-class. On this point I take up five matters on which reflection about our contemporary experience can usefully guide our examination of the Maritime experience within Confederation: 1) the importance of agency; 2) the importance of the state power; 3) the variable "nature" of the state; 4) the sensitivity of outcome to political framework; and 5) the importance of unexpected and unintended consequences. Agency Capitalist development generally can best be thought of as the product of the capitalist class' efforts to proceed with its social "project" (that of private capital accumulation) in the face of the efforts of other classes, both precapitalist and those created in the process of capitalist development, to proceed with their competing agendas for social development. As the history of the last 20 years reminds us, new economic and political unions do not just happen; they do not come into existence spontaneously in response to structural forces. They are socially constructed, works of artifice made by specific fractions of the capitalist class through social struggle. Granted these members of the capitalist class are doing so in response to the structural compulsions and opportunities they face in pursuing their game - but these political and economic unions are "accomplishments." They are designed to achieve the purposes of some people and run roughshod over others. If we see the battles in which we are immersed today for what they are, we should not lose sight of the struggles of our Maritime ancestors. Confederation was not inevitable. It was an achievement of certain elements of the capitalist class - particularly the dominant fraction of capital in the Canadas and it was resisted by others. The Centrality of the State Power The possession of effective state power has been a key feature of NAFTA and globalization. As we have already noted, these are creations of international treaties which create new governmental structures as a key feature of

Just More of the Same? 47

these unions. Contrary to those who argue that NAFTA and globalization indicate the declining importance of the "state," it has been actions of capitalists through the mechanisms of nation-states which have created these economic and political unions and the new complex of governmental structures designed to facilitate transnational or imperial capital's purposes. This should sensitize us to that fact that Confederation depended on the power of the British state being enlisted behind the Confederation scheme, and on the British government's ability to simply override resistance in the Maritimes. By the same token, uncritical acceptance of the particular economic and political framework - Canada - in which the Maritimes has existed since 1867 is a serious mistake in analysis. The Dominion of Canada was organized to achieve the purposes of the dominant capitalists of the 1860s in the Canadas, and we should never lose sight of that in how we understand the process of its construction, its particular form, or its outcome. The Nature of the State Twenty-five years ago there a fierce debate about the "role of the state," a debate which really addressed the nature of the state (see Whitaker, 1977; Panitch, 1977; Albo and Jenson, 1989). NAFTA and the "globalization" processes should remind us that the state is not an entity with a fixed nature. Governments in form and in policy reflect the changing balance of social struggle in a society. If 30 years ago it made some sense to talk about the "relative autonomy" and the complexity of social forces and purposes represented and reflected in state policy, then our experience of the FTA, NAFTA, and "globalization" indicate that was only conjunctural. Today the state acts in a much more single-minded fashion to service the needs of capital, in particular those needs of the transnational fraction of the capitalist class in each society. The process of the formation of contemporary economic and political unions demonstrates that the state and its actions reflect the changing circumstances of the mobilized power of social groups, and is quite capable of being used in an instrumental manner when a particular group has become sufficiently politically dominant. If this be so, then we are unwise to presume that the Canadian state has been neutral with regard to regional development. Though it would be wrong to see the development of the Maritimes as the result simply of state policy favouring other regions - especially Central Canada - it would be equally wrong to regard the Canadian state and its policies as representing the interests of even all elements of capital, much less all elements of society, in some regionally neutral and even-handed way.

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Sensitivity of Outcome to Political Framework of Union If one looks at the outcome to date of the FTA and NAFTA, one of the features worth noting is what sectors of the economy have not (yet) come under sway of U.S. capital, in spite of a U.S. buying spree in this country. The banks remain Canadian owned, the proportion of foreign ownership of airlines is limited, and the hospitals remain in public hands. Why? Because the political conditions of economic union matter; these areas of economic activity are not wide open to foreign takeover - at the moment - because of political restrictions on foreign private investment made in the treaty of union due to popular resistance and the desire of some capitalists to secure their bailiwick from competition. By contrast, in the Maritimes manufacturing, banking, and merchandizing were taken over by Central Canadian interests by the end of the nineteenth century because there were no restrictions on extra-regional ownership under the terms of Confederation or subsequent federal policy. The political conditions of union, and of subsequent policy, matter to the outcome of processes of concentration and centralization of capital. Unexpected and Unintended Consequences All things remaining constant, the outcome of globalization is quite predictable from the outcome of concentration and centralization of capital in each country: the emergence of world-girdling monopsony. But of course, all things are not constant and will not remain constant. It is not simply that there is resistance to transnational capital. Or even that a "major economic crisis or collapse could stymie or even reverse" (Burbach and Robinson, 1999:37) the project of transnational capital. Almost no one in the transnational capitalist class is worrying about it, but the Earth's ability to support the continued expansion of economic activity for very much longer is very much in doubt (see Clow, 1996,1995). The political and economic consequences of rapidly accelerating environmental degradation may well be a major factor in gumming up the game of achieving global monopoly in ways no one can imagine at this point. The same vulnerability to unexpected consequences was true of the plans of the Maritime capitalists who bought into Confederation. They did not foresee the Great Depression of 1873-1896, nor understand its consequences for their plans to expand manufacturing for the new national base of customers. We must not commit an error in understanding our past by forgetting that many outcomes of a process are unexpected and unintended by the participants in a process.

Just More of the Same?

49

Conclusion Globalization and the formation of the FTA, NAFTA, and FTAA are economic and political unions that can be usefully compared to Confederation. In each case a fraction of the class of employers and investors in different countries/regions, faced with both the need and opportunity to expand their geographic field of operations in order to continue their all consuming passion to accumulate more and more and more capital, used the effective possession of state power to create a new economic and political union to facilitate that goal. The specific features which distinguish the particular unions do count, of course, but in the main it is indeed deja vu. The experience of the Maritimes in Confederation throws considerable light on the processes of the present. Confederation was a relatively straightforward creation of a larger British colony out of smaller scattered ones, and this was accomplished under normal British political institutions of the period: The role of the state, the gradually increasing (male) suffrage, and Responsible Government (Parliamentary government in the colony over internal affairs) were continued into the new colonial state. By contrast, the political unions represented by NAFTA and globalization are covert, and the governmental institutions they have created are highly undemocratic. These unions are best characterized as "by capital, for capital." Organizations like the WTO nominally represent the signatory governments, but in practice they are very close to Marx's notion of an "executive committee of the [transnational] bourgeoisie." The new forms of transnational governance are highly instrumental in character, and they are plutocratic - they do not represent you and me one little bit. Familiar from the Maritime experience of Confederation are the ambiguities of living within a complex and multi-layered system of government Maritime provincial, federal, and Imperial governments in one case, and provincial, national, NAFTA and global governmental institutions in the other. Rather than an unprecedented disruption of historic patterns of social relations, the people of the Maritimes went through a very similar social dislocation to the one Canadians now face. Confederation and its re-orientation of economic activity under the "National Policy" substantially reorganized the geography of Maritimers' social relations in a way every bit as dramatic and full of import as NAFTA, the FTAA, or globalization are now doing to Canadians generally. And in both cases the new political and economic relations remain primarily class-based ones, not a welter of "identity" or lifestyle cleavages (Teevan and Hewitt, 2001: 383-84; Brym, 2001: 33-6, 98, 488-91).

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Similarly, the historical experience of the Maritimes in Confederation would lead us to expect, under globalizing free trade agreements, a pattern of deindustrialization and foreign takeover in Canada such as the Maritime region experienced within the Dominion of Canada. Continental (or global) free trade can only lead to monopoly on a continental (or global) scale, as a national economy led to national monopolies. It is simply foolish to believe that those monopoly companies will be located in the smaller, weaker, and politically marginal Canadian economy, as it was for Maritime supporters of Confederation to believe they stood a hope of beating their Canadian rivals at their own game. On the other hand, experience of NAFTA and "globalization" should sensitize us to the importance of politics in understanding the development of the Maritimes within the Canadian union. Like the current attempt by transnational capitalists to create international political and economic unions, on their terms, Confederation was not inevitable. Confederation was an achievement of certain elements of the capitalist class, particularly the dominant fraction in the Canadas, against the interests and opposition of others. Similarly, the possession of effective state power by servants of transnational capital has been a key feature of NAFTA and globalization. Creating new continental and global governmental structures are a key feature of these agreements. Confederation depended on the power of the British state being enlisted behind the Confederation scheme, and the British government's ability to override resistance in the Maritimes. The way the state has shifted over the last 30 years to being a direct instrument of transnational capital should alert us to a critical examination of the specific interests represented by the Canadian state in 1867 and subsequently. The fact that certain sectors of the economy are being rapidly taken over by foreign interests in Canada, and that others are not, should lead us to examine critically the effects of political conditions on the developmental outcome of processes of concentration and centralization of capital under Confederation.

Chapter Three

Capitalist Restructuring on Canada's East Coast James Sacouman

In the last quarter century, the class structure of the capitalist world has changed substantially. Capitalist concentration and centralization, in a neo-liberal model that is unfettered by a collapsed socialist bloc, is revisiting class processes and formations typical of the nineteenth century, although in a new more global context. Direct or unmediated forms of exploitation and impoverishment typical of the nineteenth century have returned in the form of neo-liberal imperialism, but on a truly global scale. In its own specific way, the political economy both of Canada and the Atlantic provinces has changed "back to the future." As a further consequence, "what is to be done" in the Atlantic region has changed. A class analysis of Atlantic Canadian political economy1 that is rooted in earlier regional forms of capitalist development, therefore, is inadequate to the task of understanding the current reality in order to change it for the betterment of the vast majority. A serious rethinking of the region's political economy, particularly in regards to class structure, is badly overdue. This chapter briefly reviews developments in the capitalist restructuring of society and the economy at the global level and then in Canada in order to identify the major changes in the political economy of the East Coast - the Maritime provinces and Newfoundland and Labrador - over the past two decades since this problem was last systematically analysed. Some implications for both the class struggle and policy alternatives are then outlined. The central argument here is that since the 1970s, in the new era of globalization and neo-liberal capitalist development, the capitalist class war waged against the working class and petty producers in this region has become more direct and in some ways more vicious. This is because of the relative retreat

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of the state from its historic social responsibilities as a result of the "neoliberal capitalism" (Martinez, 1999) that has dominated government policy. This class war over the past few decades has taken diverse forms, waged in different forms and campaigns, but to some extent has returned to its classical form in regards to the socio-economic conditions of the working class identified for England as early as 1844 by Friedrich Engels and more generally by Karl Marx over the following decades. As established by Veltmeyer in the opening chapter, in the early 1970s, in the face of system-wide crisis, the capitalist class in diverse contexts launched a major counter-offensive against labour, halting and reversing the historic gains that it had achieved in many years of struggle. Workers and communities in Atlantic Canada by no means were immune from this process. On the contrary, workers and small producers in the region, together with their families and communities, have been particularly hard hit by the assault of capital on labour. In the face of this assault, which, unfortunately, has not been documented let alone analysed in any systematic way, the working people in the region have not been passive (see Workman, 2003). They have resisted and have actively struggled against this assault on their livelihoods and conditions of work. This is clear enough even with a cursory look at the history of the labour movement in the region. However, it is just as clear that the working class, such as it is and in its most diverse forms, has been fighting a losing battle, which is to say, as elsewhere in the world, capital has had the upper hand as well as control over the instruments of state power. This state power has been wielded by the agents of capital, or their middle-class political lackeys, in its own class interest in the context of sustained efforts to privatize the means of social production, deregulate private economic activity, and liberalize markets. The various conditions of these policies have been hard on many and devastating for some - particularly workers, small producers, and their rural communities. The adjustments to the changed requirement of the new world order, and the so-called information-rich "new economy," have generally been made at the expense of workers and small rural communities at social costs of enormous proportions. In the face of these costs the need for both policy alternatives and direct action has become ever more urgent. Something needs to be done. For one thing, working people, middle-class intellectuals such as the contributors to this volume, and other socially and politically conscious members of "civil society," working through all many varieties of social and political organizations, must reassert the need for non- and anticapitalist alternatives that promote and deepen socially inclusive forms of democracy, equality, and solidarity. And, I would add, this assertion should

Capitalist Restructuring on Canada's East Coast 53

recognize the need for a socialism led by the working class and the search for ways of building the conditions of its possibility and attainment in the current context. Changes in the Class Structure of Global Capitalism Over the last quarter century, capitalist development has been subject to a large number of interrelated structural changes: 1. the globalization of capital and markets, combined with continuing restrictions on the mobility of human labour power (Martinez, 1999; Veltmeyer and Petras, 1997; Petras and Veltmeyer, 2001); 2. the rise and consolidation of transnational forms of finance capital and imperialism based on the agency of "international financial institutions" (EFIs) such as the World Bank and the International Monetary Fund (IMF), international organizations such as the World Trade Organization (WTO) and Policy Forums (and Foundations) such as the U.S. Council on Foreign Relations (CFR), well described as "the brain trust of the world" (Salbuchi, 2000; Shrybman, 1999); 3. the rapid growth in information-rich computer-based technologies and an associated extension and deepening of corporate control over forms of knowledge and ways of organizing social production and work (Sinclair, 2000); 4. the global extension and intensification of relations of exploitation and social exclusion - and associated conditions of social inequality in the distribution of wealth and incomes and poverty - "immiseration" to be more precise (Chossudovsky, 1997); 5. the cancerous spread of neo-liberalism as an ideology, policy, and enforced practice (Clarke and Barlow, 1997). 6. The end of an alternative system and "second world" of state socialism and with it a general crisis in social welfare and social democratic reformism (Communist Party of Canada, 2001: ch. 5 and ch. 7); and 7. The systemic domination of U.S. imperialism and the projection of power in its diverse forms and dimensions - economic, political, ideological, cultural, and military. The class effects of these and other structural changes in capitalist development have been twofold. On the one hand, there has been a major worldwide concentration of capital and associated forms of wealth and income that has resulted in a situation in which just 358 individuals, all men, dispose of as much income-generating wealth as 1.4 billion of the poorest population in the world of developing countries (Naiman, 2001: 231-32). Under these

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conditions (of exploitation and social exclusion), the destitute and absolute poor, those individuals and families that are forced to subsist on less than a dollar a day - an estimated 25 per cent of the world's population - are immiserated. On the other hand, there has been a rapid and massive increase in the "proletariat" - a mass of workers and producers and landless workers separated from their means of social production - as well as a global reserve army of labour of momentous proportions. Marx theorized this "multiplication of the proletariat" and the growth of an "industrial reserve army" in terms of the workings of "the general law of capital accumulation" and, as such, this is the flipside of a trend towards the concentration and centralization of capital (see Veltmeyer, 1979). The structural effects of the workings of this law, and the associated proletarianization process, can be traced out most clearly in a historic trend towards the "disappearance of the peasantry" all over the world and the precipitous decline in the number of small or independent commodity producers. Of course, today, the proletarianization process is a global phenomenon but is unfolding primarily in countries on the South of the global divide. In the North, in countries like Canada, the major issue is dis- or un-employment rather than proletarianization. There is also a distinct gender dimension to these and other "developments" (proletarianization, impoverishment, etc.), with women bearing the brunt of these conditions of neo-liberal adjustment resulting from the changed requirements of the new world order. Under these conditions, women, workers, peasant farmers and small producers, indigenous communities and the poor, and the diverse social and political organizations have been assaulted economically, politically, culturally/ideologically, and militarily. The world in this context resembles less a "global village" and more a battlefield in which the most diverse forms of working people and "civil society" are ranged against the new "transnational capitalist class" and the host of political and economic organizations through which they exercise their hegemonic power over the system (Petras and Veltmeyer, 2001). This one-sided war of capital on the working class and working people has also intensified a global ecological crisis of unprecedented proportions and what appears to be a structural economic crisis of overproduction in capitalism itself (Kovel, 2002; Petras and Veltmeyer, 2001). It has also, of course, led to further imperialist wars of domination, in the guise of the war against "international terrorism," "rogue regimes," the "axis of evil," and so on, further exacerbating the systemic ecological and economic crises. However, the critical assault on nature and on working people and their communities has led to new levels of resistance to capitalist rule and associated state

Capitalist Restructuring on Canada's East Coast 55

terrorism (Barlow and Clarke, 2001; Chang etal., 2001). Like capitalism these forms of resistance have also been well and truly globalized (McNally, 2002).

Changes in the Canadian Class Structure Associated with these global changes in capitalism, a number of changes in the Canadian political economy over the last quarter century are particularly noteworthy: 1. heightened exploitation of labour via the extension and intensification of the working day (see, for instance, Jackson and Robinson, 2000); 2. an assault on job security and the rise of part-time and other contingent forms of labour (Veltmeyer and Sacouman, 1998; Broad, 2000); 3. privatization of the public sector (Turk, 2000; Townson, 200la; Browne, 2000); 4. the diminution of the welfare state, including the dilution of regional development policies and the end of the rhetoric of Canada-wide development (Mooers and Shields, 2000); and 5. anti-democratic imposition of the free trade agenda on this hemisphere and the none-too-silent surrender of Canadian sovereignty - and the capacity to make independent foreign and domestic policies in the national interest - to the U.S. state and to what George W. Bush in his 2000 National Security Report termed "the forces of freedom ... and private enterprise." Among the class effects of these changes in Canadian political economy has been an intensified polarization between the capitalist and working classes, on the one hand, combined with the uneven immiseration of the working class itself by gender, "race" and ethnicity, age, and region. But the big question today is the extent to which the Canadian labour movement and its allies in the social movements can lead the counter-assault against capitalist selfaggrandizement and for social justice.

Changes in the Class Structure of Atlantic Canada In the light of global and Canada-wide changes in capitalism, the following recent changes in the political economy of the East Coast (with particular reference to Nova Scotia) are of note: 1. The Destruction of the Industrial Proletariat in Cape Breton

Almost all that is left of industrial Cape Breton is a human and environmental disaster of massive proportions; for example, "The estuary [around the Sydney tar ponds] contains 700,000 tons of toxic sludge, a witch's brew of carci-

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nogenic chemicals 35 times worse than New York's infamous Love Canal" (Barlow and May, 2000:2). The coal and steel industries, created by rapacious finance capital, never developed as a basis for local/regional manufacturing. One of Canada's historically most militant sections of the industrial proletariat (see, for example, Frank, 1999) has finally been reduced to begging for better severance pay. Prior to that, the mainland coal miners of Westray, Pictou County had been blown away by capitalist greed (O'Neill and Schwartz, 1997). In place of the militant trade unionism2 in the coal and steel industry on Cape Breton Island, a relatively creative, grassroots environmental movement to repair the human and natural disaster that corporate greed has created has emerged. This movement, while of major importance, cannot be expected to replace working class militancy at workplaces, but might keep the flame of struggle alive until the organized working class on the Island and in the province gets better organized on a class-struggle basis. 2. The All But "Final Solution" to the Persistence of a Petty Producer Class in the Inshore Fisheries, on Farms, and on Woodlots The ground fish component of the fisheries has been decimated in Atlantic Canada (see, for instance, Williams, 2001). State policies favouring the offshore corporation and promoting overfishing of the resource in both the inshore and offshore components of the ground fisheries has beggared many offshore and fishplant workers as well as petty producers, especially in Newfoundland and Nova Scotia. Many small coastal communities in the region have thereby been forced into decline as active production sites. In many cases, "development" is being redefined as the tourism of the "quaint."3 In these rural areas, from a class perspective, seasonal productive work has been replaced by chronic unemployment or, at best, seasonal unproductive work. A major redefinition of the rural coastal class structure towards intensified immiseration is underway. On the other hand, the market value of the shell fisheries (lobster, scallops, crabs, mussels) has substantially increased over the last decade (see, again, Williams, 2001). Within the minority of coastal communities in the principal shell fisheries subregions (such as southern Nova Scotia and the Acadian zone of the Northumberland Strait area), an objective and subjective transformation of the rural class structure from petty producers to small capitalists is occurring, coupled with the immiseration of those who were unable to expand.

Capitalist Restructuring on Canada's East Coast

57

Over the last decade, indigenous peoples in the Maritimes (primarily Mi'kmaq) have won/reclaimed their legal rights to participation in the fisheries. Many reserves, often restructuring themselves as capitalist enterprises, are now entering the fisheries, especially the shell fisheries, in sufficient numbers (greater than two per cent) to be perceived as threatening to the primarily white inshore small capitalists. In regard to class-rooted organizations, the Maritime Fishermen's Union (MFU), for example, has changed from a militant, petty producer-based union fighting for both economic and cultural survival4 to a small business interest group attempting to co-manage the fisheries with the state, big capital, and the emerging aboriginal businesses. Thus, a formerly militant organization of petty producers in the inshore fisheries has become, like successful farmer organizations in agriculture, much more like a chamber of commerce than a union. The MFU, in fact, has recently led the attack on newly recognized aboriginal fishing rights in both New Brunswick and Nova Scotia. On the other hand, the state-induced leadership structure on many of the indigenous people's "reserves" has facilitated a tendency for corrupt family-rooted leaderships to siphon off, away from the community, the profits from "their" new fisheries enterprises. In forestry on the East Coast, the stubborn persistence of rural petty producers reliant on either a "farm" woodlot or on leasing stumpage from the pulp corporations is currently threatened. In the main, these petty producer families are being immiserated in two ways. Pulp companies are gradually changing their extraction strategy towards one involving the use of more of their "own" crown land stock that is clear-cut and processed by "their" workers. Also, there is an increasing tendency for the pulp companies to cut and sell directly the hardwoods on "their" crown lands to other big corporations (often "from away"). Many petty producers who cut, split, and deliver hardwoods for home fuel are being thrown into chronic unemployment. 3. Rapid Expansion of the Private Sector and the Containment of Public Services Throughout Atlantic Canada, as in the rest of Canada, the "MeWorld" of low-paying, precarious, highly mobile, and difficult to unionize service sector jobs continues apace (Moody, 1997). A clear case of such "McDonaldization" is the rush on the East Coast to attract call centres (see Good and McFarland, this volume). A further instance is the cancerous growth in corporate casinos.

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The class implications of such growth is twofold. On the one hand, proletarianization or, perhaps better, working-classization is rampant, especially among young people, often female. However, the classical proletariat that is being thrown out of productive activity in the region is generally not being re-employed in this type of contingent service work. On the other hand, this proletarianization is occurring under rigid conditions of low pay and no or poor benefits. Additionally, there is an overwhelming tendency of such employment to be fleeting. Because of the threat of capital flight to cheaper labour areas as far away as India, and also because of high turnover (both chosen and enforced), the McDonaldized working class is always on the knife-edge of immiseration. As in the rest of Canada, proletarianization of the public sector in the form of unionization and militancy has advanced in the face of a well-documented privatization process (Duffy, Glenday, andPupo, 1997). Certainly, a solid proportion of the increasingly militant unionization-privatization class struggles in Canada - in the hospitals, educational institutions, the postal service, and in direct state employment - have been waged on the East Coast. In many respects, class struggles in the public sector have become central both in Canada and on the East Coast, and the public sector unions have themselves become much more central within the Canadian and regional labour movement (Workman, 2003). Emerging Sectors

The informal economy, in particular marijuana production in the region, apparently, has kept pace with the better-known British Columbian situation (the currently illegal nature of this production leaves it difficult to document). An important contribution to the political economy of actual production in the region would be a class analysis of the change from overwhelmingly petty commodity production to an incipient, at least in terms of hydroponics, semiproletarianized production under centralized control by biker gangs. Over the last quarter century, tourism has expanded its role in the region as a major holding pen for the seasonally employed and the Atlantic Canadian reserve army.5 As elsewhere, casinos add to the "authentic flavour" of romanticized, dead, virtually dead, or never-existing cultures and subcultures.6 What is comparatively important in this "zoo-ification" process is its large seasonal impact on the regional and Canada-wide class structure. The "culture industry" in the region has expanded to encompass significant movie and television production. In particular, over the last quarter cen-

Capitalist Restructuring on Canada's East Coast 59

tury the music and comedy industry has discovered that the East Coast is undoubtedly a major Canadian base of production.7 Lastly, as a partial counter to the general decline in productive full-time work, the offshore oil and gas industry is increasingly becoming a crucial player in the regional economy. Nevertheless, so far the number of real jobs (rather than three weeks on board, three weeks off work onshore) do not cut it.

Major Effects of Class Restructuring: Increased Inequality and Relative Impoverishment The distributional effects of the above changes in class structure have created a dramatic increase in inequality of income and of wealth globally, Canada-wide and on the East Coast. First, the last quarter century has steadily produced unprecedented rates of inequality between the rich and the poor globally (Lee, 2001). In 1970, the top 20 per cent of the world's people earned thirty-two times the income of the bottom 20 per cent. This grew steadily to forty-five times in 1980, to fifty-nine times in 1989, and to seventy-four times in 1997. By 1993 the top 10 per cent of the world's people had increased their share of world income to 51 per cent; the bottom half (50 per cent) of the world's population had fallen to a mere 8.5 per cent of world income. Even the World Bank (World Bank, 2003) has recognized that its own and the IMF's demands on the countries of the world has exacerbated enrichment for the few and often absolute impoverishment for the majority of the world's people. In Canada, too, the rich got richer and the poor got poorer over the last quarter century. With respect to accumulated wealth or net worth in Canada, the wealthiest decile of family units held 53 per cent of the wealth in 1999, having increased their inflation-adjusted wealth by 122 per cent since 1970; the negative wealth (more debts than assets) of the poorest decile of family units actually worsened by 28 per cent from 1970 to 1999 (Kerstetter, 2002: 4). The gap between the poorest and richest widened while the bottom half of families stayed about the same, 1970 to 1999 (Kerstetter, 2002: 14). In Atlantic Canada, the poorest also got poorer and the rich richer. Between 1984 and 1999, median wealth of family units in the region declined in Newfoundland by 22.5 per cent, in Prince Edward Island by 4.1 per cent, and in Nova Scotia by 1.3 per cent; in New Brunswick median family wealth rose by 14.0 per cent, as compared to a Canada-wide rise of 10.6 per cent (Kerstetter, 2002:21; all calculations are mine). As with the rest of Canada, the categories of family type that were most likely to be poor were lone-parent mothers under 65 and unattached men and

60 From the net to the Net

women, especially young people (Kerstetter, 2002:44; data are unavailable for ethnicity/race). In Canada, about 20 per cent of women who are poor are lone-parent mothers, 51 per cent are spouses in poor families, and 29 per cent are on their own (Townson, 200Ib: 1). Child poverty in Canada and in Atlantic Canada has actually increased since 1989, the year the Canadian House of Commons committed itself to eliminating child poverty by 2000. Between 1989 and 1999, child poverty increased by 38.4 per cent in P.E.I, (to 17.3 per cent of all children), by 29.8 per cent in Newfoundland and Labrador (to 25.7 per cent), by 12.4 per cent in Nova Scotia (to 18.1 per cent), and by 0.6 per cent in New Brunswick (to 18.0 per cent) (Canadian Centre for Policy Analysis-Nova Scotia [CCPA-NS], 2003: 6). In Nova Scotia, visible minority children, First Nations children, and children with disabilities were all about twice as likely to be poor as compared to the Nova Scotian average (CCPA-NS, 2003:5). On the East Coast, impoverishment is underpinned by the class restructuring of exploitation over the last quarter century that was documented in earlier sections of this Chapter. In order to create more wealth for the wealthy few, wages have been driven downward by both businesses and by the federal and provincial states. Perhaps the clearest example of this class-rooted downward trend is the steady and real decrease in the value of the provincially legislated minimum wage over the last quarter century. In Nova Scotia between 1977 and 2000, the real minimum wage actually declined by 22.4 per cent; its nominal value needed to be, in 2000, $7.97 (instead of the $5.70 it was in 2000) in order to actually keep pace with inflation relative to the 1975 legislated minimum wage (Workman and Jacobs, 2002:2-3). The minimum wage is so crucial to life chances of the Nova Scotian working class because so many workers are paid at or near the minimum wage. In 1999, over one-quarter of all hourly waged workers in Nova Scotia earned less than $8.00 an hour and one-half of all hourly waged workers earned less than $11.42 an hour (Workman and Jacobs, 2000:7). Women workers were even worse off. In 1999, one-quarter of all female hourly waged workers earned less than $7.00 an hour and one-half of all female hourly workers earned less than $10.00 an hour (Workman and Jacobs, 2000: 8). Even a catch-up legislated minimum wage of $8.00-$8.50 would directly impact against the impoverishment of a large minority of the working class, especially women and other super-exploited categories of people.

Capitalist Restructuring on Canada's East Coast 61

Federal-provincial downloading and de-"universalizing" of social assistance programs has directly attacked the poorest of the population, in particular women and other over-represented categories of the impoverished (see Moore, 1997). Severe cutbacks in other social services, in workers' compensation, in accessibility to unemployment insurance, in health care and in its accessibility, and in post-secondary education and its accessibility, have all impacted most negatively on the poorer half of the entire working-class population, both the currently employed and the unemployed, in this region of century-long, often severe, lack of employment.9

What Can and Is To Be Done? Since the 1970s, the capitalist class war on the working class and small producers in this region has become much more direct and of a vicious manner, as understood by Marx and Engels in the nineteenth century, though this is occurring in a now globally imperialized world. The relative uniqueness of the Atlantic Canadian class structure and its class struggles as compared to the rest of Canada has lessened over the past quarter century. However, the relative and absolute impoverishment has not lessened. As responses rooted in the working class have intensified, one-sided and increasingly more obvious class warfare is required. These responses and their programmatic direction need to be carefully analysed and discussed by working class-interested organizations. From the perspective of the changed class structure in this region, a policy program that could build the working class as a whole against the capitalist onslaught should, minimally, redress the social injustice that has been established and solidified during what, from a working-class perspective, has at best been a "lost quarter century." Such a program, centred on the working class, could (and should) include a number of components that can be fought for nationally, regionally, and provincially. In the first place, a significant increase in the legislated minimum wage needs to be demanded and attained. An immediate increase of the minimum wage to $8.00-$8.50 would merely get us back to the 1970s. An increase to $12.00 dollars would attack the impoverishment of all workers, especially women, visible minorities, First Nations people, persons with disabilities, and the young. Significant increases in the minimum wage have been demonstrated to be almost neutral on traditional measures of economic growth but crucial for the working class as a whole (Goldberg and Green, 1999). Similar increases in pensions and other employment-related benefits that have been

62

From the net to the Net

clawed back during this period also need to be raised significantly for both full-time and part-time workers. Secondly, given the urgent need for more full-time jobs in the region as well as the increasing intensity and length of the actual working week for those who are working, a substantial reduction in the working day and working week, with no reduction in pay or loss of services to the public, is central to any employment strategy. Again, the experience in France around this issue indicates increases in the creation of "real" jobs via this strategy, that the overall effects on the economy are somewhat positive, and that the positive impact on the working class, both at work and in the community, is major.10 Thirdly, significant decreases in unemployment, together with fairer income taxes and the introduction of a meaningful tax on wealth beyond the Canadian average, could then be easily tied to significant increases in unemployment benefits, rates and types of social assistance, and to the expansion of complete, universally accessible public services in health care, education (including child care), and housing, and in programs of environmental sustainability Lastly, in order to facilitate and ensure the overall impact of the above changes on the working class, workers' rights to unionization, free collective bargaining, and the right to strike need to be protected and extended. An expanding trade union movement could thus securely lead a coalition of workers to attain this modicum of social justice, in alliance, most immediately, with movements of women, visible minorities, First Nations persons, persons with disabilities, and youth. This coalition is entirely possible because the policy program actually expresses the real concerns of each "interest group." And, of course, these "interest groups" encompass the vast majority of people. Such a policy program is not, in and of itself, socialist. But, building the working class as a whole in Canada and Atlantic Canada, when undertaken in tandem with building solid alliances, can provide a solid basis for the eventual collective and concerted attainment of a massively self-conscious, fully democratic and empowering worker-led socialist project. That project, although not possible or on the agenda today or tomorrow, would represent a much more complete working class response to the capitalist class' war on the working class of our country and region.

Chapter Four

Income Distribution in Nova Scotia, 20001 Colin Dodds and Ronald Colman

Economic growth statistics are the most widely used measure of well-being and progress. When the Gross Domestic Product (GDP) is growing, we are assumed to be "better off" as a society.2 Economic growth statistics, however, send highly inaccurate and misleading signals to policy makers and the public when they are misused in assessing societal well-being. For example, crime, pollution, sickness, and accidents all make the economy grow simply because money is spent on prisons, cleanup costs, hospitals, and drugs. And by valuing our forests, fisheries, and other natural resources only when they are harvested and sent to market, we count the depletion of our natural wealth as economic gain and progress. Even in strictly economic terms, the GDP measures total income, but tells us nothing about how income is shared. The GDP can grow even if most people are getting poorer and if inequality is growing. On the other hand, the Genuine Progress Index (GPI) distinguishes between social activity that improves quality of life and that which does not.3 With regards to income, the GPI addresses two core societal values directly - livelihood security and equity. A decrease in poverty and income security is one of the core indicators of well-being and progress in the Genuine Progress Index. When there are fewer people living in poverty, for example, the GPI goes up. If the poor are getting poorer, by contrast, there will likely be greater desperation and higher rates of illness, crime, poor educational attainment, and low productivity, all of which are highly correlated with poverty. Higher rates of poverty therefore signify a loss in social capital and can prove costly to the economy.

64

From the net to the Net

Income Data and Those ... Statistics It is important to bring deconstructed income data into the policy realm. What we count, measure, and report not only signifies what we value but also literally determines what gets attention in the policy arena. The comparative lack of reporting on basic economic income distribution data signifies the low policy priority currently given to indicators of basic livelihood security and equity. The data in this analysis are strictly economic, reporting on income trends by quintile (from the top 20 per cent to the bottom 20 per cent), and might therefore be expected to receive more attention than more complex social and environmental indicators. But this has not been the case. Quintile data are crucial for assessing trends towards greater income equality or inequality, and for assessing how different economic policies, such as free trade, tax cuts, debt reduction, and cuts in government services affect different sectors of the population and have an impact on their livelihood security. Even economic growth itself may have a different impact on the rich than on the poor, and the changing composition of the GDP impacts lower income groups differently than higher income groups. Remarkably, even though this information falls in the realm of conventional economic analysis and is vital for basic policy-making, it gets very little attention and is reported very infrequently. Even though the economic growth statistics (GDP) are assiduously reported on a monthly basis and followed closely by political leaders, economic experts, and journalists, the most recent Statistics Canada quintile data available at the time this Chapter was initially written - that is, in 2000 - was from 1998. To comprehend to what extent the reported indicators shape the policy agenda, we need only reflect on how economists, politicians, and the Toronto Stock Exchange (TSE) would react if the year was 2000 and the latest available GDP figures were for 1998. Yet that is the priority currently given to income distribution statistics. When income trends are reported, they are generally reported as national and provincial averages. But these averages conceal vital information. An increase in income among the wealthy can skew the averages up, even if the poor are getting poorer. Indeed, GDP itself can grow rapidly even while most people are getting poorer. Without income data by income group, we can never test the assumption that a growing economy makes us "better off." Although these income trends by quintile are a core and basic indicator of well-being, they have aroused little interest in either the research or policy arenas, and income distribution figures are rarely reported. This basic infor-

Income Distribution in Nova Scotia, 2000 65

mation is not available, for example, in the annual Nova Scotia Statistical Review published by the Department of Finance. Until 1999, data on income by quintile group were not even readily available to the general public, which helps explain the dearth of both published information on the subject or of considered policy attention to the basic livelihood security and equity issues raised in this report. When GPlAtlantic embarked on this research in 1998, all data were obtained from Statistics Canada through special custom tabulations.

The Dynamics of Income Distribution Across Canada and in Nova Scotia The public availability of this information is important. These basic data on household income and livelihood security should be given at least equal consideration to the economic growth statistics; they should be released in a far more timely manner, as frequently as the GDP (that is, every quarter). The timeliness of data is vital in making policy. One would hope that government would alter policy if they knew that income was declining for the poor even as the economy grew. As it stands now, the event has already happened before politicians and economists can react to it. The outdated income data leads policy makers to rely on more current sources of information (for example, the GDP) and to assume that there is a causal link between economic growth and income. There is not. The income gap between the rich provinces (Ontario and Alberta) and the rest of the country grew dramatically in the 1990s, with Ontario and Alberta's wealthy households making the greatest gains in the country. In 1990, for example, the average Nova Scotian household had 82 cents in disposable income for every one dollar in Ontario. By 1998, the average Nova Scotian household income had dropped sharply to 73 cents for every one dollar in Ontario (Table I).4 In constant 1998 dollars, the average Nova Scotian household has lost nearly $3,000 in disposable income since 1990, an 8 per cent decline, and the second highest rate of loss in the country after Newfoundland. During the same period, the average Ontario household has gained $1,806 (up 4 per cent) and the average Alberta household $2,111 (up 5 per cent). "Average" income figures for Canada clearly conceal growing regional income disparities.6 The disposable income of Nova Scotians grew during the 1980s, so the overall average income decline since 1980 is $1,065 per household (down 3 per cent) compared to an increase of $3,000 in Ontario (up 7 per cent) (Table 2)7

66 From the net to the Net

Table 1: Average Disposable Household Income in Constant 1998 CDN$ Compared to Ontario5 Per Cent of Ontario 1980

1990

1998

Canada

94.8

90.1

87.6

Newfoundland

81.9

82.0

71.7

Prince Edward Island

81.6

76.3

75.2

Nova Scotia

80.6

82.4

72.9

New Brunswick

79.5

79.8

76.6

Quebec

87.4

80.0

74.3

Manitoba

87.7

81.9

78.7

Saskatchewan

90.9

78.1

74.4

Alberta

101.9

90.6

91.7

British Columbia

102.7

93.8

89.4

Table 2: Change in Average Disposable Household Income, 1980-1998 (1998 CDN$)8 1980

1990

1998

1990-1998

Canada

40,375

39,497

39,943

+$446 +1.1%

Newfoundland

34,856

35,951

32,697

P.E.I.

34,757

33,444

34,309

Nova Scotia

34,305

36,093

33,240

-$2853

New Brunswick

33,837

34,953

34,956

Quebec

37,227

35,061

33,900

1980-1998 -$432

-1.1%

-9.1%

-$2159

-6.2%

+$865 +2.6%

-$448

-1.3%

-7.9%

-$1065

-3.1%

+$3

0.0%

+$1119

+3.3%

-$1161

-3.3%

-$3327

-8.9%

Ontario

42,583 43,816 45,622 +$1806 +4.1% +$3039

+7.1%

Manitoba

37,364

35,907

35,923

+$16

0.0%

-3.9%

Saskatchewan

38,728

34,206

33,964

-$242

-0.7%

Alberta

43,407

39,704

41,815 +$2111 +5.3%

British Columbia 43,715

41,099 40,768

-$3254

-$331

-0.8%

-$1441

-$4764 -12.3% -$1592

-3.7%

-$947

-6.7%

Further analysis below describes which income groups have benefited and lost the most from the income shifts of the 1990s. Note that Nova Scotians have lost ground to both of their fellow Maritime neighbours.

Income Distribution in Nova Scotia, 2000 67

Average incomes can be misleading, even within a province, because relatively few high incomes can skew the average higher. Nova Scotia's average disposable household income is actually $5,000 per annum (17.5 per cent) more than the average income of the middle quintile. Closer analysis of the average income loss in Nova Scotia shows that it has not been borne equally by all segments of society. Since 1990, all income groups have seen their disposable income decline, but the decline has not been evenly shared. In constant dollars, since 1990 the poorest 20 per cent of Nova Scotian households have lost 29 per cent of their disposable income, and the rich just 1 per cent.9 The average income of the poorest households is also 14 per cent less in real terms than it was in 1980, while the average income of the wealthiest 20 per cent of Nova Scotian households is 3 per cent higher than in 1980.10 In fact, all Nova Scotian household groups, except for the richest 20 per cent, have experienced a decline in spending power since 1980. The poorer the household, the bigger the percentage drop in income; although in absolute dollar terms, middle income Nova Scotians have lost the most. Middle income households have $3,600 less in constant dollars on average than they did in 1990 and $3,130 less than in 1980 (Table 3).11 Table 3: Average Disposable Household Income by Quintile, Nova Scotia 1980-1998, and Top Quintile, Ontario (1998 CDN$)12 1980

1990

1998

9,495

11,490

8,205 -$3,285 -28.6%

-$1,290

-13.6%

Second

20,762 21,630

18,421 -$3,209 -14.8%

-$2,341

-11.3%

Third

31,424 31,885 28,295 -$3,590

-11.3%

Fourth

42,294 44,666 41,545 -$3,121

-7.0%

-$749

-1.8%

Highest

67,630 70,822 69,858

-$964

-1.4%

+$2,228

+3.3%

Ontario Top

83,985 87,687

Lowest

1990-1998

1980-1998

-$3,129 -10.0%

97,170 +$9,483 +10.8% +$13,185 + 15.7%

In sum, Nova Scotia's low- and middle-income groups became much poorer between 1980 and 1998 while the wealthiest 20 per cent of Nova Scotians became somewhat richer and Ontario's wealthiest 20 per cent became a lot richer.13 On average, the poorest 20 per cent of Nova Scotian households now survive on just $8,205 a year (aftertaxes and transfers), while the richest 20 per cent have nearly $70,000 in disposable income (aftertaxes and transfers). The richest 20 per cent of Ontario households have nearly $100,000 in annual disposable income (Statistics Canada, 2000a; 2000b: 109,124).

68

From the net to the Net

Figure 1: Change in Average Disposable Household Income by Quintile, Nova Scotia, 1980-1998 (1998 CDN$)14

The average Nova Scotian household's disposable income in 1998 was $33,240, the second lowest in Canada after Newfoundland ($32,697) (Statistics Canada, 2000b: 94,99,104,109,114,119,124,134,139,144). However, the average income in Newfoundland is lower than that in Nova Scotia only because the rich in Nova Scotia have a higher income than the rich in Newfoundland (Statistics Canada, 2000b: 99,109).

Low Income and Poverty The poor in Nova Scotia are actually considerably worse off than the poor in Newfoundland and the other Atlantic provinces. The disposable income of the poorest 20 per cent of Nova Scotian households is 12 per cent lower than that of the poorest 20 per cent in Newfoundland and 20 per cent less than that of the poorest 20 per cent in P.E.I. and New Brunswick (Statistics Canada, 2000b:00, 104,109, 114). In fact, low- and middle-income Nova Scotians (the lowest 60per cent of households) have the lowest average disposable household income in the country, also less than that in Newfoundland.15 As noted above, middle-income groups in Nova Scotia actually lost the most income in absolute terms, so most Nova Scotian households saw a sharp drop in their disposable income in the 1990s and now have the lowest incomes in Canada.16 Further investigation is required into the dynamics of Nova Scotia's low income households, into the intensity and duration of their exposure to poverty, into their demographic composition, and into policy factors that may

Income Distribution in Nova Scotia, 2000 69

have deepened the poverty of low-income groups. For example, higher per capita populations of students, single parents, or elderly will affect inter-provincial comparisons, and cuts in government services and social assistance payments can accentuate losses in market income. In particular, recent Statistics Canada analyses of the duration of low-income exposure, using the Survey of Labour and Income Dynamics, merit replication at the provincial and regional levels (Morisette and Zhang, 2001). These studies will allow a more detailed and nuanced profile of the populations most at risk than this analysis of average household incomes by quintile. The Nova Scotia trends are part of a national trend: The poor became poorer throughout Canada and in every province in the 1990s. But the poorest 40 per cent of Nova Scotians have lost more income in both absolute and percentage terms since 1990 than the bottom 40 per cent in any other province (Table 4). Table 4: Average Disposable Household Income, Lowest 40 per cent of Households, Canada and Provinces, 1980-1998 (1998 CDN$)17 1980

1990

1998

1990-1998 1980-1998

Canada

16693

17043

15989

-6.2%

-4.2%

Newfoundland

14828

17254

13909

-19.4%

-6.2%

Prince Edward Island

14614

15626

15273

-2.3%

4.5%

Nova Scotia

15129

16560

13313

-19.6%

-12.0%

New Brunswick

15366

16169

15245

-5.7%

-0.8%

Quebec

-10.5%

15641

15132

14000

-7.5%

Ontario

18148

19277

18510

-4.0%

2.0%

Manitoba

14875

15808

14778

-6.5%

-0.7%

Saskatchewan

15660

14683

14578

-0.7%

-6.9%

Alberta

16937

16925

15955

-5.7%

-5.8%

British Columbia

17464

17224

16665

-3.2%

-4.6%

The Income Gap in a Global Context Because of the trends described above, the gap between rich and poor grew sharply in Nova Scotia in the 1990s. In 1990, the richest 20 per cent of Nova Scotian households had an average disposable income that was 6.2 times greater than the poorest 20 per cent, making Nova Scotia the third most equal province in the country, based on quintile comparisons.18 By 1998, the richest 20

70

From the net to the Net

per cent had 8.5 times the income of the poorest 20 per cent after taxes and transfers, making Nova Scotia the second most unequal province in the country after Alberta (Table 5).19 Table 5: Average Disposable Household Income Ratios, 1980-199820 Richest 20% : Poorest 20% Richest 40% : Poorest 40% 1980

1990

1998

1980

1990

1998

Canada

8.2

7.1

8.5

3.9

3.8

4.2

Newfoundland

7.6

5.8

7.3

3.9

3.3

3.9

Prince Edward Island

7.4

6.2

6.7

3.9

3.4

3.7

Nova Scotia

7.1

6.2

8.5

3.6

3.5

4.2

New Brunswick

6.7

6.1

7.0

3.5

3.4

3.7

Quebec

7.6

6.9

7.9

3.9

3.8

4.0

Ontario

7.8

7.1

8.3

3.8

3.7

4.1

Manitoba

8.8

6.7

7.6

4.2

3.7

4.0

Saskatchewan

8.1

7.3

7.4

4.1

3.8

3.9

Alberta

9.1

7.4

10.4

4.3

3.8

4.5

British Columbia

9.3

7.6

8.0

4.1

3.9

4.1

In 1980, the richest 40 per cent of Nova Scotian households had an average disposable income that was 3.6 times greater than the poorest 40 per cent, the second most equal distribution of income based on quintile comparisons.21 By 1998, the wealthiest 40 per cent had incomes 4.2 times greater than the poorest 40 per cent, again the second most unequal distribution of income in the country after Alberta (Table 5).22 In Alberta, needless to say, the inequality gap is due largely to the rich being much richer than most Canadians; in Nova Scotia it is due more to the poor being considerably poorer than most Canadians. The richest 20 per cent of Nova Scotian households now have 42 per cent of the total disposable income in the province, up from 39.2 per cent in 1990. The poorest 20 per cent have just 4.9 per cent of the income, down from 6.4 per cent in 1990 (Statistics Canada, 2000b). In fact, the richest 20 per cent of Nova Scotian households have 27 per cent more income than the bottom 60 per cent combined, up from 9 per cent more in 1990. Only in Alberta do the poorest households have an even smaller share of household income.23 The inequality rankings nationwide are somewhat different when GINI coefficients are used (see below).

Income Distribution in Nova Scotia. 2000 • 71

Again, the Nova Scotia trend is part of a national trend: inequality is increasing across the country. In the 1990s, the poorest 20 per cent of households saw their disposable income share fall in every province except Saskatchewan,24 and the next 40 per cent saw their income share fall in every single province.25 In fact, middle-income earners in every province have less real disposable income now than they did 20 years ago, while the richest 20 per cent have increased their income share in every province.26 Nova Scotia's income gap between rich and poor is now far closer to the profiles of more unequal countries like the United States than to more equal countries like Denmark and Sweden. As noted, Nova Scotia's poorest 20 per cent of households have 4.9 per cent of the disposable income while the richest 20 per cent have 42 per cent of the income (or 8.5 times as much as the poorest). In the United States, the poorest 20 per cent have 5.2 per cent of the income and the richest 20 per cent have 46.4 per cent of the income (or nearly 9 times as much as the poorest). By contrast, in Denmark and Sweden, the poorest 20 per cent have 9.6 per cent of the income and the richest 20 per cent have 34.5 per cent of the income (or just 3.6 times as much as the poorest).27 In 1990, Nova Scotia's income gap was exactly half way between the U.S. and Danish ratios.

Measuring Income Disparities: The GINI Coefficient This study focuses on an analysis of income groups by quintile. However, the most commonly used measure of equality and inequality is the GINI coefficient (named after the Italian statistician Corrado Gini), which does not compare average incomes by quintile group, but considers each household income as a separate entity. The GINI coefficient therefore computes the income gap over the entire income spectrum rather than by comparing only the top and bottom income groups. Thus, perfect equality in the GINI computation occurs if 10 per cent of the population has 10 per cent of the income, if 20 per cent of the population has 20 per cent of the income, if 30 per cent has 30 per cent of the income, and so forth; this would produce a GINI coefficient of 0.0. At the other extreme, if one person has all the income, and all the rest have none at all, the GINI coefficient would be 1.0. In other words, higher numbers (e.g., 0.408 in the United States, 0.316 in Ontario) represent a more unequal income distribution than lower numbers (e.g., 0.247 in Denmark, 0.279 in Prince Edward Island).28 Graphically, perfect equality is represented in GINI computations by a straight forty-five degree line, and the degree of inequality is calculated ac-

72 From the net to the Net

cording to the area between that line and a rising income distribution curve. The greater the area between the curve and the forty-five degree line, the more unequal the income distribution and the higher the GINI coefficient. The GINI coefficient has advantages and disadvantages over the quintile comparison method used in the previous section. On the one hand, it is certainly a more comprehensive computation of equality and inequality, because it does include all incomes, including those in the middle. However, unlike the quintile comparison, it does not necessarily tell us about changes in the gap between the rich and the poor. Because it accounts for all incomes, the GINI coefficient can change dramatically as a result of shifts among the middleincome groups and even if the gap between rich and poor does not change at all. Because the GINI coefficient measures a different dimension of inequality than the quintile group comparisons, the World Bank uses both measures in its "Distribution of Income" figures. For that reason, too, both measures are also given here. Table 6: Disposable Income GINI Coefficient for Economic Families (Two or More People), Canada and Provinces, 1990 and 199829 1990

1998

Canada

0.291

0.315

Newfoundland

0.286

0.307

Prince Edward Island

0.274

0.279

Nova Scotia

0.278

0.302

New Brunswick

0.280

0.299

Quebec

0.282

0.303

Ontario

0.284

0.316

Manitoba

0.277

0.296

Saskatchewan

0.301

0.291

Alberta

0.287

0.310

British Columbia

0.300

0.297

The GINI results confirm that income inequality is rising across the country in every province except Saskatchewan and British Columbia. In the GINI compilations, Nova Scotia ranks fifth in Canada in inequality, after Ontario, Alberta, Newfoundland, and Quebec, rather than second when just rich and poor incomes are compared (Table 6). This indicates that there are smaller

Income Distribution in Nova Scotia. 2000 73

income gaps among the middle-income groups in Nova Scotia than in some other provinces.30 By both measures (GINI and quintile comparison), Prince Edward Island is the most egalitarian province in Canada. The poorest 40 per cent of Island households have actually seen their average disposable income increase by 4.5 per cent since 1980, the best record in the country during a 20-year period when the lowest 40 per cent of households saw their incomes decline in eight out of ten provinces.31 Not only does Prince Edward Island have the smallest income gap between rich and poor, it also has the lowest poverty rates in Canada both for men and for women, and the lowest rate of child poverty in the country (Statistics Canada, 2000b). It is also the only province in which the poor earn higher incomes today than they did in 1980 and 1990. The reasons for Prince Edward Island's remarkable record in the face of contrary national trends merit investigation.

Income Distribution and the Market Up to this point, we have considered only disposable income, which actually consists of three factors: 1) earned market income (wages, interest, dividends), plus 2) transfers from government (= total income), minus (iii) taxes. In other words, disposable income reflects what people actually have in their pockets to pay their rent, buy their food, and support themselves. However, it is essential to analyse the components of income carefully, both to assess the success or failure of the free market to provide income benefits, and particularly to emphasize that there is no ideological divide in this analysis. Both the Left and the Right firmly agree that reliance on earned income is generally far preferable to reliance on government transfers, and all political parties hold that higher disposable and market incomes signify economic well-being. As well, higher market incomes produce higher tax revenues for governments, enhancing their capacity to provide adequate health, education, and other services. Presumably a healthy economy, therefore, is one in which the market effectively contributes to economic well-being, and in which market income represents a correspondingly high proportion of disposable income. That, too, would be a test of the effectiveness of an increasingly open and unregulated market and of its capacity to improve market opportunities. Incomes dependent increasingly on government transfers are not only a drain on the public purse and a tax burden, but are interpreted as a sign of lost personal independence. However, it is precisely in market income that the major declines

74

From the net to the Net

have occurred, particularly for poor and middle-income Nova Scotians. This is cause for concern, regardless of ideological predisposition, because it signifies a failure of the market economy to generate income benefits. Table 7: Average Market Household Income, First Quintile, Canada and Provinces (1998 CDN$)32 1980

1990

1998

Canada

4918

5,185

3,993

Newfoundland

3731

3,859

1,799

Prince Edward Island

1567

3,619

4,289

Nova Scotia

3717

5,129

2,558

New Brunswick

4205

3,974

3,393

Quebec

3882

3,560

2,867

Ontario

6172

6,850

5,640

Manitoba

4161

4,203

3,768

Saskatchewan

5268

4,201

3,854

Alberta

6857

6,151

3,830

British Columbia

4967

5,888

5,334

The poorest 20 per cent of Nova Scotian households have seen their average market income fall by more than 50 per cent since 1990.33 As a percentage of disposable income, market income for the poor is now just 31 per cent, the lowest level ever recorded.34 Though all provinces except Prince Edward Island saw a decline in real market income for the poor, the drop was steepest in Nova Scotia ($2,571) (Table 7).35 It is essential to conduct further analyses to determine why the market economy has increasingly failed to provide an adequate income for the poor. Employment patterns for low income groups must be carefully examined to assess whether particular types of work are less available, whether this may be partly due to the export of unskilled primary jobs to low-income countries, and whether the growth of temporary service jobs has depressed earned incomes. If the poor are increasingly marginalized from the labour market, are there particular forms of education and skills training that can be promoted to remedy the situation? Again, Prince Edward Island is a notable exception to the national trends. Not only is Prince Edward Island the most equitable province in the country, as noted earlier, it is also the only province that has successfully harnessed

Income Distribution in Nova Scotia, 2000 75

market forces for the benefit of the poor and in which the poor earn higher incomes today than they did in 1980 and 1990.36 Average market income for the lowest 20 per cent of households in Prince Edward Island is higher in real terms than in any province except Ontario and British Columbia, and is fully 68 per cent higher than in Nova Scotia.37 Middle-income Canadians across the country have also seen their market income drop since 1990 in every province. Nova Scotian households lost an average of more than $6,000 (constant 1998 CDN$), or 20 per cent of their market income, since 1990, the sharpest decline of any province, and nearly $6,500 since 1980.38 This has made middle-income Nova Scotians increasingly dependent on government transfers, up by 73 per cent, or $3,600, since 1980.39 Table 8: Transfer Payments by Quintile, Nova Scotia: 1980-1998 (CDN$ 1998)40

Average

Q1

Q2

Q3

Q4

Q5

1980

5547

5960

7933

4914

5009

3924

1981

5716

6147

8301

5056

4551

4526

1982

6339

6205

9395

6355

5037

4695

1983

6391

6144

8450

7555

5251

4537

1984

6445

6473

8881

6402

5694

4777

1985

6545

6601

8857

6936

5753

4595

1986

6822

6943

9268

7007

5818

5075

1987

6580

6563

8900

6699

5141

5595

1988

6427

6810

9449

6538

4612

4725

1989

6734

6953

9454

6709

4940

5609

1990

6908

6904

9343

7174

5965

5155

1991

7211

7481

9596

7485

6048

5443

1992

8066

7120

10412

8610

6801

7383

1993

8038

7528

10247

8538

7790

6091

1994

7522

6542

9909

8566

6936

5658

1995

7487

6410

10227

8816

6963

5023 5430

1996

7310

6243

9325

8689

6864

1997

7019

6022

8866

8475

6704

5016

1998

6931

5859

8953

8504

6357

4970

76

From the net to the Net

By contrast, cash transfer payments to Nova Scotia's poorest 20 per cent of households dropped by an average of 15 per cent, or $1,045 in constant 1998 dollars, between 1990 and 1998, and by 22 per cent, or $1,670, since 1993 alone, accentuating the decline in market income and leaving the poor in particularly dire straits.41 This indicates that government transfer payments have partially compensated for the market income decline for middle-income Nova Scotians but not at all for the poorest Nova Scotians (Table 8).

Income Distribution and the Government A Matter of Transfers Contrary to the popular image that transfer payments help the poor most, it is noteworthy that middle income Nova Scotian households actually receive an average of 45 per cent more in government cash transfers in dollar terms than the poorest 20 per cent of Nova Scotians. Even the second wealthiest 20 per cent of Nova Scotian households receive 8.5 per cent more in government cash transfers than the poorest 20 per cent.42 Further investigation is required into the demographic and policy factors that underlie shifts in the composition of government transfers. For example, the loss in transfer payments to the poor may be due to declines in total social assistance, child tax benefit payments, and local transfers in the 1990s. Canada Pension Plan payments and Old Age Security, on the other hand, go to all income groups, albeit in unequal portions. Those payments have increased substantially in the same period, reflecting increasing numbers of aging retirees. Eligibility and benefit changes in employment insurance have also affected income groups differently. Because employment insurance is tied to income, a decline in market income for the poorest Nova Scotians may have reduced both their eligibility for employment insurance and the amount of benefits received. Employment insurance therefore tends to benefit middle-income groups with longer work records and higher wages rather than the lowest income groups who may be more marginalized from the labour market. This, too, may help account for the higher proportion of total transfers accruing to the middle quintiles at the expense of the poorest 20 per cent. Similarly, longer work histories and higher incomes can impact the size of pension transfers. In short, the shift in distribution of transfer payments can only be assessed by investigating the changing composition both of the transfers themselves and of the demographic composition of the recipients.

Income Distribution in Nova Scotia, 2000 77

The Dynamics of Economic Growth and Income Distribution In conventional economics, without consideration of social and environmental variables, it is assumed that economic growth, signified by a rising GDP, necessarily makes people "better off." For example, Brian Crowley, of the Atlantic Institute for Market Studies, has written that "growth is a tide that lifts all boats, and the poor in both wealthy and impoverished countries get their full share of the fruits of growth (Crowley, 2001: C2). Nor do the incomes of the poor fall harder than those of the better-off during economic crises." Similarly, a World Bank study by Aart Kray and David Dollar, entitled Growth is Good for the Poor, asserts that the "income of the poor rises one-forone with overall growth" (Kray and Dollar, see endnote 2). However, the income data of the 1990s indicate that this was not so. In fact, real average disposable household income in Nova Scotia declined in the 1990s even as the national and provincial GDP increased.43 If economic growth produced benefits, the question is: Where have the benefits of increased production gone? Only the incomes of the wealthy were positively correlated with economic growth. The poorer a household was in the 1990s, the less correlation there was with economic growth.44 The disparity between income and growth is even greater when market income rather than disposable income is considered, although conventional economic theory holds that it is precisely market income that should respond most directly to growth. Our data on both disposable and market income trends in relation to GDP show a positive correlation between disposable income and GDP nationally for the wealthiest 40 per cent of households and a negative correlation for the poorest 40 per cent. (The higher the number, the stronger the correlation, either positive or negative.) These income-economic growth correlations stand up for both provincial and national GDP, and cannot therefore be attributed to particular regional trends alone. Considering market income in Nova Scotia, only the wealthiest 20 per cent improved their prospects as GDP increased, while the average market income of Nova Scotia's poorest 20 per cent of households moved in the opposite direction to GDP. The closest correlation between disposable income and GDP is for the very wealthiest, indicated below by Ontario's richest 20 per cent of households. Thus, except for the wealthiest, it cannot be asserted that a rising GDP necessarily makes people better off even in strictly economic and income

78

From the net to the Net

terms, and even without consideration of social and environmental variables. On the contrary, the GDP can increase even while most people are worse off, and even while inequality grows. Given the high correlation between GDP growth and income for the wealthy, however, it makes sense for that group to argue that economic growth promotes well-being. It does appear to promote their economic well-being, at least in income terms and at least in the immediate sense. Because the top 20 per cent control 42 per cent of disposable income in Nova Scotia, the use of average income statistics can conceal the fact that the majority may not be reaping the fruits of economic growth (Statistics Canada, 2000b: 109). In Nova Scotia, "average" disposable household income is 17.5 per cent higher than the average income for the middle quintile.45 For this reason, it is very important to analyse even the standard economic data by income group in order to assess whether particularly economic strategies are actually benefiting the population. On several occasions, this study has noted the need for further investigation into the causes of the trends described here. One of the most fruitful areas of investigation is certainly an assessment of where the benefits of increased production and GDP growth have actually gone in the last decade. An increasingly open and unregulated market and increasing dependence on the international market have resulted in exports accounting for a growing share of GDP. It is likely that very large companies have been better positioned to avail themselves of export opportunities than smaller enterprises, and that this export growth has fuelled corporate profits and increased the share of GDP accruing to higher income groups. It is important to explore, therefore, whether the increasing share of exports in GDP may account for some of the dramatic shifts in income equality and market income seen in the 1990s, and for the failure of GDP growth to "trickle down" to lower income groups. Coupled with this trend is the possibility that foreign ownership of large enterprises along with takeovers and mergers have resulted in an increasing share of profits and income leaving both the Atlantic region and the country as a whole. GDP, after all, measures total production within the country, region, or province regardless of who owns the producing enterprise and where the profits go. It is essential to investigate whether these trends, too, may account for a growing share of GDP not being translated into income benefits for Nova Scotians and Canadians. We know that a "rising tide" has not "lifted all boats." But considerable further investigation is required into the reasons that a growing GDP has

Income Distribution in Nova Scotia, 2000

79

failed to reduce income inequality and falling real incomes for the lower- and middle-income groups.

Income Disparities and Free Trade There are many facets of an increasingly open and unregulated market economy that have affected income and equality trends. The economic restructuring of the 1990s included expanding globalization and free trade, labour market changes including the growth of service jobs and the loss of many highpaying primary jobs, the merger and downsizing of many businesses, government debt and deficit reduction, government service cutbacks, and the diffusion of information technology and its new skill requirements. Many excellent studies, including research by Statistics Canada and detailed regression analyses designed to isolate causal relations, have examined the potential impact of these changes on income and equality trends. While not assessing causality, the descriptive data presented in this report do challenge some of the conventional assumptions that an increasingly open and unregulated market necessarily provides greater market opportunities that will improve the well-being of Canadians. These assumptions are nowhere stronger than in the debate on free trade. While free trade is only one element of market restructuring, and while no attempt is made here to create a causal link between free trade and declining incomes, it is worth posing a question here as one example of the type of investigation that is required at this time. Similar questions could be asked about other potential causes of the rising inequality and declining real incomes described in this report. Here we simply ask: Are Canadians and Nova Scotians better off since free trade, as is so often claimed? It is generally asserted that free trade improves the well-being of Canadians.46 However, income analysis does not support this assertion. It is essential to raise this question here because both the 1989 Canada-U.S. Free Trade Agreement (FTA) and the later North American Free Trade Agreement (NAFTA) were both supposed to create new market opportunities for Canadians and to improve well-being. In the 1980s, before the Canada-U.S. Free Trade Agreement and the North American Free Trade Agreement, average disposable income increased in real terms for Canadian and Nova Scotian households in all income groups. Average household market income also increased for all income groups in Nova Scotia except the middle, which showed no change.47 Because disposable income grew by a greater percentage for the poor than for other income groups in the 1980s, the income gap between rich and poor

80

From the net to the Net

also narrowed in this period, and equality grew.48 In every province, including Nova Scotia, the poorest 20 per cent of households increased their share of disposable income in the 1980s. And in every province the income gap in 1990 was less than it had been ten years earlier.49 This situation reversed in the 1990s.50 Since the free trade agreements, average market and disposable incomes for poor and middle-income households have fallen sharply, and inequality has grown both in Nova Scotia and throughout Canada. Eighty per cent of Nova Scotian households are worse off in real terms since free trade, with declines in both market income and disposable income. Only the wealthiest 20 per cent have done better since free trade.51 The equality gains of the 1980s have been so eroded that the income gap between rich and poor in Nova Scotia is considerably greater today than it was in 1980. Income is affected by many factors, and these simple correlations do not prove that free trade caused incomes to fall and inequality to increase, nor that it is the sole cause of falling real incomes among low-and middle-income groups. There were certainly other significant impacts on income during the 1990s, like government debt reduction and cuts in services, changing employment patterns and skills requirements, and (in Newfoundland and Nova Scotia) the collapse of the Atlantic cod stocks. But it is also likely that the elimination of trade barriers has exercised a strong negative pressure on wages, as companies rely on cheaper labour to increase their competitive advantage. Causation aside, however, it can be stated that the income statistics provide no evidence that free trade has improved the economic well-being of the vast majority of Canadians and Nova Scotians, as is generally claimed, and they indicate that the reverse may be the case. Real disposable household income has fallen since free trade for low- and middle-income Canadians (the bottom 60 per cent) in every province in the country, and most sharply in Nova Scotia and Newfoundland.52 Certainly the negative income and equality trends of the last decade do demand further investigation into the impacts on economic well-being of Canada's and Nova Scotia's growing dependence on the international market. Many of the key trends identified in this analysis are national trends, and so the issues raised here should be investigated for the country as a whole. Nevertheless, Nova Scotia has fared poorly even in relation to the rest of Canada, so both the trends and their potential relation to free trade are even more acute in this province. In simple economic terms, 80 per cent of Nova Scotians are worse off since free trade. The charts show that both market income and disposable

Income Distribution in Nova Scotia, 2000

81

income have fallen in real terms for 80 per cent of the population, and that only the wealthiest 20 per cent have done better since free trade. The fall in market income is particularly significant because of the assertion that the free trade agreements would create new market opportunities.

Towards a Conclusion: The "What" and "Why" of National Income Trends This Chapter has focused on an analysis of income groups by quintile because there has been very little exploration of this subject on a provincial and regional basis. However this is by no means the only approach to the subject of poverty and inequality. There have been substantive studies on percentages of the population that fall below the official low-income cut-off (LICO), and Statistics Canada has just completed a new study on the dynamics of low income, using longitudinal data in the Survey of Labour and Income Dynamics. These studies, currently available only at the national level, examine the duration of low-income periods, the extent to which particular groups of Canadians are exposed to low income, and which people are most likely to have low income for longer periods of time (Morisette and Zhang, 2001). This builds on earlier work on the depth of poverty and is vitally important to provide a more detailed profile of the population at risk. By contrast, this GPI study did not examine the demographic composition of the different income groups, nor the dynamics of movement in and out of those groups, nor the extent of exposure of particular groups to low income. However, GPlAtlantic strongly recommends that this present study be followed by regional and provincial analyses of Statistics Canada's data on low income and on the dynamics of poverty, some of which have so far been publicly presented only at the national level. This Chapter has focused on the "what" rather than the "why" of income and equality trends, and should therefore be seen merely as a first step in provoking further investigation into the dynamics and causes of the trends described here. For example, further research is essential to determine: why national trends towards greater inequality are accentuated in Nova Scotia; why the poor in Nova Scotia are worse off than in any other province, and whether this can be explained by demographic differences among the provinces; whether a more detailed analysis of income sources and relative average amounts received by source can shed light on inter-provincial and quintile differences;

82

From the net to the Net

why and how PEI has successfully reduced poverty and inequality to the lowest levels in the country, and resisted national trends towards greater income inequality; why market income in particular has dropped so precipitously for lowand middle-income Nova Scotians in an era of increasing dependence on international markets and at a time when more open and unregulated markets are intended to create greater market opportunities; whether changes in employment patterns and skills requirements are partially responsible for the apparent increasing marginalization of the poor from the market economy and labour market; why GDP growth has not raised incomes for lower- and middle- income groups; whether the increasing proportion of GDP growth attributable to exports has routed growth benefits to large international companies at the expense of lower- and middle-income groups, and whether an increasing proportion of profits and income may be leaving the region and the country; why the trend towards greater equality in the 1980s reversed so sharply in the 1990s; and what demographic and policy factors may explain the increase in transfer payments to middle-income Nova Scotians and the decline in transfers to the poor. There are many other vital research questions that stem from the data presented in this Chapter. Here we can only ask some provocative questions in the hope that they will spur further investigation. For example, we have asked whether a growing dependence on the international market, free trade, and an increasingly open and unregulated market has actually served most Nova Scotians or whether it may be contributing to a decline in economic well-being. Also, we have noted that the drop in market income and deepening of poverty are particularly significant in light of arguments that freeing up markets will alleviate poverty. However, the Chapter makes no pretence at answering these causal questions, and offers them as directions for important future research. The 1990s saw a major restructuring both of the market economy and of government itself. This included expanding globalization and free trade, labour market changes such as the growth of service jobs and the loss of many high-paying primary jobs, government debt and deficit reduction, the downsizing of many businesses, government service cutbacks, and the diffu-

Income Distribution in Nova Scotia, 2000 83

sion of information technology and its new skill requirements. All these changes have affected income dynamics and equality trends in significant ways. Investigations into these causal factors are essential in order to offer constructive recommendations to policy makers. For example, policy makers: will want to know whether cuts in services to the poorest Nova Scotians may exacerbate the stresses of dramatically falling market incomes; will want to assess the potential impact of proposed tax cuts on growing inequality in the province in order to assess whether such cuts disproportionately favour higher income groups that have already seen their share of total income rise sharply in the last decade; and they will want to consider whether export promotion and other policies that further our dependence on the international market actually translate into higher standards of living for ordinary Nova Scotians. Thus, income distribution data provide essential information on a wide variety of vital policy issues that directly impact the well-being of Nova Scotians. It is hoped that the basic data on income distribution in this report will assist further analytical efforts and spur a constructive dialogue aimed at improving the long-term well-being of all Nova Scotians.

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Chapter Five

The Decaying Social Compact in Atlantic Canada Thorn Workman

Atlantic Canada boasts less than 10 per cent of Canada's population, but is home to almost one quarter of the country's food banks. Moreover, many working people and families with two income earners regularly use these food banks. The line between eking out an existence from paycheque to paycheque and lapsing into a desperate struggle to meet basic needs is growing thinner by the month, and a dispiriting number of Atlantic Canadians now choose between purchasing groceries or buying other necessities. In an article from the Saint John Telegraph Journal in 1998, a volunteer worker at the Open Hands food bank in Moncton, New Brunswick, succinctly spoke directly about the fact that many working people in the region are forced to resort to food banks: "The man and woman both work at minimum wage ... A sick child and the money was gone. It wasn't a story -1 saw the prescription receipts" (Telegraph Journal, 1988: Al). How can we make sense of the fact that so many of the region's working families must resort to food banks to "get by?" The short answer to this question is that we are now witnessing the working-class casualties of the capitalist class' redoubled efforts to drive down wages in Canada. This reinvigorated assault began in earnest during the 1970s and has accelerated to this day. It is a concerted attack that takes shape within the boardrooms and think-tanks of global capital, and is then executed by willing bureaucrats, managerial hirelings, and politicians alike. The overall strategy is sometimes called the "Washington consensus" or the "neo-liberal order." Regardless of the appellation, however, it targets working people around the world, and workers in Atlantic Canada have not been able to sidestep its harmful effects. Atlantic Canadian workers are sharing in the fate of working people the world over, a fate that often leaves them struggling to survive on nonliving wages.

86 From the net to the Net To express this most baldly, the fact that many Atlantic Canadian workers toil away in low-wage jobs that fail to provide them with enough income to meet their basic needs is an intentional consequence of the new global order.

Situating Atlantic Canadian Workers in the Evolving Global Order Of course, this brief answer can be fleshed out a little more. We must begin this elaboration with a brief word about what we late moderns incline to call "methodology," especially since so much intellectual commentary today is riddled with mystifications of the most pernicious variety. The challenge before us is to dwell on the experiences of working people in Atlantic Canada without losing sight of the evolving global capitalist order. To this end, the chapter is self-consciously premised on the recognition that informative accounts of the global economy are not helped along much by reified analytical models - world systems analysis, world order theory, core-periphery, and so forth - that "structurally" explain practices in terms which are detached from "sensuous" human experience, with conceptual systems that fail to capture the oppressive social relations which inhere in the capitalist order of things, or with intellectual frameworks that lapse into derivative accounts of human conduct devoid of any deliberative content. To express this critical point in Hegelian terms, a proper account of the global economy and the place of Atlantic Canadian workers within it must enlist our analytical capacities associated with "reason" just as they enlist those capacities expressed by the moment "understanding." Sorting, classification, and modeling have their important place in the development of sociological analysis, but such tools cannot be allowed to extinguish our capacity to contemplate the world in a more dialectical manner. At best, when we fix or freeze the vistas of capitalist social relations with sclerotic conceptual systems we are bound to miss the manner in which people "roll over" their social relations on a daily basis by resisting the predations of social power or negating capitalist life in thought and practice. At worst, static models sometimes encourage us to talk about productive life as though the world contained no people at all - no suffering, no misery, no anxiety, no optimism, no decisions or choices, and so on. To the point, we must probe the experience of Atlantic Canadian working people in the evolving global order in analytical terms that touch or "speak to" their everyday experiences, using terms that have emerged organically from the historical press of capitalism. As we struggle to make sense of the trials and tribulations of Atlantic Canadians in the evolving global economy over the last two decades, we must remember to bring human beings back into our concep-

The Decaying Social Compact in Atlantic Canada 87

tions of the class struggle just as surely as we re-insert a broader sense of class struggle back into accounts of the evolving global capitalist economy. One way to begin to accomplish this (but certainly not the only way) is to pose a simple question: "What's new about the so-called new global order the world of the 'Washington consensus' and its neo-liberal socio-political hegemony?" One could argue that very little about the new world order is novel or groundbreaking. Despite the plush rhetoric about decisive breaks with the past - "post-industrial," "post-capitalist," "post-Cold War," "postconsumer," "information age," the "new economy" and many others - the basic features of capitalist productive relations continue to prevail. Rudimentary social relations governed by private property and wage labour are still the norm. Indeed, as the global order has congealed in the last 25 years it has, if anything, continued to extend these essential features of capitalism while eroding the last vestiges of the old "pre-capitalist" ways. Capitalism's celebrated capacity to "profane everything holy" and "melt" away established social relations, as Marx once put it, shows little sign of abating. Secondly, the politics of class struggle continue to play a central role in and between most social formations. That is, at the level of socio-political relations we continue to be impressed by the continuity of a class struggle that sets the political agenda and governs the course of political compromise. Lastly, the international system is still ordered monastically by the global capitalist class and its institutional fronts. A handful of states, especially the United States, continue to organize the imperial order and deploy its military "strike forces" wherever and whenever needed. A set of leading institutions including the World Bank, the IMF, and the WTO attend to the day-to-day operations of global capitalism, and continue to coerce recalcitrant power centres to respect the "Washington consensus." Counter-hegemonic tendencies within the ILO, the UNDP, or UNESCO have been politically tamed. And at the same time, the princes and courtiers of the imperial system continue to work out their differences in a variety of bodies including the G-7, the OECD, the Trilateral Commission, and the World Economic Forum. So what has changed? And what, if anything, has changed to affect the lives of Atlantic Canadian working people? In a word, the basic capitalist order has changed very little, but within it the northern political settlement between the capitalist class and working people is being re-worked and reformulated.1 After years of social conflict and political struggle in the opening decades of the twentieth century, a Compact had congealed to govern class relations in the first two decades after World War II. This "Fordist" compact, as it has sometimes been called, reached its zenith between 1945 and 1965.

88 From the net to the Net

This mid-century order contained a number of distinctive features that permitted working people to make appreciable gains in wages, working conditions, and social programs. On the productive side of things the Fordist order was driven by its "mass production" reflex as epitomized by the assembly line and ideologically sanctioned by Taylorist labour doctrines. Of course, much of the early part of the twentieth century was also spent cultivating a pool of mass consumers eager to purchase cars, refrigerators, stoves, and so on. The "mass production for mass consumption" nexus was helped along by the grudging acceptance of trade unions and labour laws by Canadian elites, particularly since unions helped to regulate production, worked to dampen social conflict, and helped to provide the necessary disposable income to maintain the notoriously high levels of post-WW II consumption. On the policy side of the post-WW II order we saw the emergence of the Keynesian Welfare State. Working people had fought tooth and nail for the social programs that emerged in the aftermath of the WWII. Elite ratification of these developments appeared in Keynesian doctrines that espoused counter-cyclical state spending to smooth out the boom and bust cycles of the capitalist economy. All was happy, or, at least, bearable for about twenty relatively prosperous years. Exceptionally high rates of corporate profitability in the first two decades after WW II helped to convince the capitalist class that the Fordist system was politically viable. And for its part, the working class was making appreciable gains: Real wages were on the rise, jobs conditions slowly improved, social programs began to provide unprecedented levels of protection against the rougher edges of capitalist society, and much of the Fordist labour regime became entrenched in law. Of course, for working people in Atlantic Canada and elsewhere there were trade-offs, including the suspension of a more transformative political struggle and the acceptance of increasingly tedious jobs. Nevertheless, the Fordist compact could endure until a shock of some kind made it unpalatable for either of the parties. Indeed, that shock came when the profitability crunch hit northern capital in the late 1960s and early 1970s. As soon as it appeared that low rates of profitability would persist, the Fordist class compact was unilaterally rejected by the capitalist class. The deal, in a manner of speaking, was off; the socio-political compromise was shredded by the leading centres of capital. In spirit, Fordism died in the early 1970s, but since so much of the Fordist order was entrenched in corporate conventions and state policies, it would take considerable time before Fordism died in practice. The underlying goal of the post-Fordist agenda has always been simple and rather straightforward: lower wage costs. The larger transnational firms

The Decaying Social Compact in Atlantic Canada

39

did what any good capitalist firm does when facing tougher times, namely, they redoubled their efforts to drive down wages. This timeless struggle over wages has intensified in recent decades, and the ramifications for Atlantic Canadians have been profound. From the standpoint of the capitalist class and its parasitic bevy of professionals, Fordist socio-political conventions stood in the way of this goal. Fordism was deemed to be too inflexible with respect to wages, and a concerted strategy to weaken labour has been afoot in the last three decades. When we bear this simple goal in mind we can begin to understand the effect of the post-Fordist world on Atlantic Canadian working people over the last generation. Buzz expressions about "increasing Canadian competitiveness" and "enhancing labour market flexibility" are little more than thinly veiled summations of an agenda guided by the singular goal of driving down wages. In the wake of this co-ordinated assault on working people Fordist production conventions have been restructured and the Keynesian policy framework has been repudiated altogether. The restructuring of production has included extensive corporate relocation to cheaper labour zones across the South, the intensified use of sub-contracting, short-term contracting and outsourcing, the increasing use of shorter production runs, and the extensive reorganization of the shop floor into smaller "teams" with a wider range of productive tasks. Because of its emphasis on such things as rapid retooling and its stress on matching production runs with segmented world markets, the name "flexible production" has sometimes been affixed to these changes. On the policy side of the post-Fordist order we have seen neo-liberal thinking supplant Keynesian policy doctrines. At its core, neo-liberalism emphasizes "free markets," and to this end it has supported a drastically reduced role for the state in the economy. Accordingly, privatization, government downsizing, deregulation, cuts to social programs, reduced corporate taxation, relaxed environmental laws, and a generalized emphasis on social austerity have become commonplace. Taken together, flexible production and neo-liberalism encourage lower wages inter alia by weakening established unions, undermining worker solidarity, eroding the confidence of working people, extracting more out of workers, and forcing working people into low-wage jobs. After 30 years it is reasonably safe to claim that the basic features of the post-Fordist world have congealed. Mass production for mass consumption, once the hallmark of the post-WW II era, has given way to "flexible production" for increasingly "segmented consumption" wherever possible. The Keynesian policy framework has been cashed in for a neo-liberal outlook that

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extols the virtues of free markets and attacks the dirigiste role of the state that typified much of the twentieth century. The culture of plenty that was evident in the early post-1945 period has been supplanted by a culture of austerity that seeks to ratchet down social expectations. And the Fordist worker - often unionized, protected by an array of labour laws, accustomed to respectable wages and working conditions, protected by a modest social safety net, and hopeful about the future - has been slowly ceding ground to the "flexible worker," that is, a person who will pass through numerous careers as an adult, who will have to re-tool continually for the new economy, who is an "associate" rather than a worker, who will have lower expectations about wages and working conditions, and who cannot rely on state programs during transitional job periods.

The Atlantic Canadian Working Poor And so the parents of baby boomers lived in a world that is very different from ours, especially on the policy side of things. It is within this sea change of the last 30 years that we can begin to make sense of the fate of Atlantic Canadian working people, particularly since the effects of this change on working people across the region are now becoming clear. For those workers who remain protected by unions, we have seen a stagnation in union density - hovering around thirty per cent since the mid-1970s - across the region in the last 25 years, a stagnation that halts the historic growth of unionization rates during the middle phase of the twentieth century (Statistics Canada 2002, author's calculations). Although service sector employment accounts for two of every three jobs across the region, union density rates in some of the service industries such as accommodation and food services - the backbone of the highly touted tourist industry - are often less than 10 per cent. And in the strongly unionized "state sector" linked to the unprecedented growth of the capitalist state in the twentieth century public administration, health care, and education - we have seen an unrelenting attack on working people, a kind of "worker bashing" akin to the more recognized practice of "poor bashing." In the worker-unfriendly atmosphere of neo-liberalism, Atlantic Canada has seen a steep decline in strikes and lockouts. Over the last 25 years the region as a whole experienced a decline in strikes and lockouts of more than 75 per cent. Predictably, we have began to see declines in real wages hit the region during the 1990s, a development made all the more noteworthy by the fact that the last decades experienced very low rates of inflation. Between 1992 and 2001, average weekly wages lost 7.7 per cent of their value in Nova

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Scotia, 4.9 per cent in Prince Edward Island, 3.5 per cent in Newfoundland, 0.4 per cent in New Brunswick.2 Moreover, labour laws continued to atrophy across the region, and any laws that would have enhanced the collective capacities of workers, especially "first contract legislation," anti-scab legislation, and the easing of certification procedures, continue to lag behind much of the country, and have little prospect of being passed in the near-to-medium future. For all that the last few years have been unkind to the typical Fordist worker, they have been even worse for those Atlantic Canadian workers who remain "unprotected" by unions and thereby exposed to the blunter edge of neo-liberal policies. This aspect of the assault on working people is most clearly evident when we examine the performance of minimum wages across the region. It was inevitable that the minimum wage would become a site of struggle in an era so aggressively devoted to lowering all wages, but even with this expectation in mind the ground it has lost to inflation is stunning. On the surface the minimum wage better than doubled in all four provinces, with the greatest increase of 128 per cent being registered in Nova Scotia (Statistics Canada, 2002, author's calculations). Politicians have boasted that these increases help wages keep pace with the rate of inflation. Nova Scotia Labour Minister Guy Brown stressed that the 1996 hike in the minimum wage to $5.35 per hour in the region's most populated province was to "help people keep pace with increases in the cost of living."3 This claim cannot be substantiated. Turning first to Newfoundland, if provincial governments had pegged Newfoundland's 1976 minimum wage to the rate of inflation over the last 25 years, it would have reached $7.98 by the year 2000. The fact that the nominal minimum wage stood at just $5.50 in 2000 attests to its poor performance. Expressed in constant 1992 dollars, the minimum wage of $6.49 in 1976 plummeted to just $4.85 in 2000, a decline of more than 25 per cent (Statistics Canada, 2002, author's calculations). Even the three legislated increases in 1996, 1997, and 1999 failed to improve the performance of the province's minimum wage in any appreciable way, despite the fact that the provincial rate of inflation was very low throughout the decade. An equally disturbing performance of the minimum wage unfolded in Nova Scotia. The post-1976 CPI-adjusted minimum wage for the province would have been $7.97 by the year 2000, but the legislated wage at that time stood at only $5.70. In constant 1992 dollars, Nova Scotia's minimum wage fell from $6.43 in 1976 to less than $5.00 per hour in 2000, a decline in value of more than 22.6 per cent. As for New Brunswick, the decline in the minimum wage was even more drastic. The CPI-adjusted minimum wage com-

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mencing in 1976 would have been $8.84 per hour in the year 2000, but in fact was less than $6.00 per hour by the close of the survey period. In constant dollars New Brunswick's real minimum wage declined by $2.19 between 1976 and 2000, a loss of 39 per cent of its value in 25 years. A regionally comparable decline is also evident in Prince Edward Island, where the 1976 minimum wage of $6.44 fell to $5.01 in 2000, an overall drop of 22.2 per cent (Statistics Canada, 2002, author's calculations). Figure 1: Real Minimum Wages In Atlantic Canada4

As graphically illustrated in Figure 1, the withering of the minimum wage across the region provides a sobering indication of the neo-liberal assault on working people. It is telling that the CPI-adjusted minimum wage between 1976 and 2000 would have lifted a single person above the poverty line anywhere in the region. In St. John's, for example, a single person in the year 2000 would have had to make $7.58 per hour to reach the poverty threshold, and the post-1976 CPI-adjusted wage would have been $7.98. In Charlottetown, to take another example, the LICO-adjusted minimum wage - that is, the minimum wage adjusted for Low-Income Cut-off - to lift a single person out of poverty would have been $7.52, while the CPI-adjusted minimum wage commencing in 1976 would have stood at $7.69. In other words, had governments pegged the minimum wage to the rate of inflation anywhere in the region over the last 25 years, a single person working for minimum wage would have at least made enough money to cross the poverty threshold. An even more drastic decline in the minimum wage is evident in New Brunswick. The CPI-adjusted minimum wage commencing in 1976 would have been $8.84 per hour in the year 2000, but in fact was less than $6.00 per hour by the close of the survey period. In constant dollars New Brunswick's real minimum wage declined by $2.19 between 1976 and 2000, a loss of 30

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per cent of its value in 25 years. A regionally comparable decline is also evident in Prince Edward Island, where the 1976 minimum wage of $6.44 fell to $5.01 in 2000, an overall drop of 22.2 per cent. It is commonly claimed by Canada's leading right-wing, business-funded, ideological factories - the Fraser Institute, the C.D. Howe Institute, and Atlantic Canada's own corporate-driven think-tank known as the Atlantic Institute for Market Studies - that the concern about the minimum wage is overdrawn. They are inclined to argue that primarily younger people work at the minimum wage, younger people who tend to live at home and who therefore do not face the same financial burdens as workers who are supporting a family. Moreover, they also stress that most workers pass through the minimum wage on their way to more prosperous incomes later in life. Such claims ignore the fact that the minimum wage in Atlantic Canada is an important benchmark wage. It acts as a low-end baseline against which other wages across the economy may be judged and assessed. Moreover, it ignores the fact that so many people across the region work for wages that are very close to the minimum wage. As visually represented in Figure 2, in the year 2000, for example, one quarter of all hourly wage workers in Atlantic Canada were working for wages that were within about $2.50 of the minimum wage. In Newfoundland, twenty-five per cent of all hourly wage workers were working for $7.50 per hour or less, and the minimum wage in that year was just $5.50, a difference of just two dollars. In Nova Scotia, the lower-quartile wage in the same year was $8.07 and the legislated minimum wage was just $2.37 above the minimum wage. On the Island the at least one quarter of all hourly wage earners worked at rates within $2.40 of the minimum wage in 2000, and in New Brunswick the comparable figure was just slightly higher at $2.50. Figure 2: Hourly Wages in Atlantic Canada, 20005

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These figures reveal that many workers in Atlantic Canada are employed at rates that are very close to the minimum wage; they allow us to begin to understand why so many working people across the region experience difficulties and daily hardship, and why they must occasionally resort to food banks to make it through some months. The lower-quartile wages across the region do not allow a family of four to cross the poverty threshold with ease. To use Halifax as an example, a family of four would have needed an annual income of $29,653 over a year to reach the poverty line in 2000. Allowing for daycare challenges, if both adults had worked a total of sixty hours per week at the lower-quartile wage, their gross income would have been just $25,178. This would have left a total dollar gap of at least $4,475 and a monthly shortfall of $373, or roughly half the cost of a two-bedroom apartment in the city in 2000. The gap between total income and the poverty line over a year would have been 15.1 per cent (Statistics Canada, 2002, author's calculations). Of course, the poverty line hardly leaves a family basking in comfort, and such a family would run into increased challenges when faced with such common things as a family illness, special holidays, or the need to purchase back-toschool supplies. The picture of low-wage work is even worse for Atlantic Canadian women. It is important to observe that the deepening exploitation of women around the world in the post-Fordist era has been frequently noted. Women comprise most of the labour force in export processing zones, and within the factories located there, they endure innumerable abuses, including sexual and verbal assault, exposure to harsh chemicals, intrusive surveillance, and repetitive strain injuries. Moreover, these same women face life in communities riven with high poverty, chronic unemployment, and widespread despair (Klein, 2000; Barndt, 1999). More disturbing still, it is commonly observed that most women in the South receive below-subsistence levels of income that do not permit them to meet their basic needs. Although the abuse of labour is much more dramatic in the South than it tends to be in the North, it is clear that a disproportionate number of Atlantic Canadian women work for non-living wages as well. Women comprise almost half of the labour force across the region, but a far greater number of women in Atlantic Canada are in low-wage jobs. In Newfoundland, for example, the median hourly wage for women in the year 2000 was just $10.06 per hour, and the lower-quartile wage was just $6.07. This means that half of the female workforce in Newfoundland worked for an hourly wage that was within $4.56 of the minimum wage. Worse still, one quarter of all hourly wages for women in Newfoundland was within 57 cents of the minimum wage in the year 2000. In sharp con-

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trast, the lower-quartile wage for men in Newfoundland was $10.00 per hour, or more than four dollars above the provincial minimum wage (Statistics Canada, 2002, author's calculations). Figure 3: Anchor Effect of Minimum Wage for Men and Women, 20006

As is evident in Figure 3, women's wages are very low in the rest of the region. Nova Scotia's median wage for women is $10.44 and the lower-quintile wage was just $7.32. One quarter of the hourly-rated female work force in Nova Scotia was working within $1.62 of the minimum wage in the year 2000. The median and lower quartile wages for women in New Brunswick were $10.78 and $7.25 respectively in the same year. On the island the corresponding hourly rates were $11.00 and $7.50. These statistics are revealing. Although women comprise almost half the workforce across the Atlantic Canada region, they find themselves in a disproportionate number of lowwage jobs. On average, the hourly wages of one-quarter of all female workers across the region were within $4.42 of the legislated minimum wage. Women in Atlantic Canada seem to be no more immune to some of the harmful effects of the post-Fordist order than their counterparts in the South. The new global order is driven to create as many low-wage jobs as possible, and women are disproportionately absorbed into the low-wage economy. This is undoubtedly due to the persistent effects of patriarchal consciousness. Across the South it is clear that women are preferred by managers for a number of reasons including the belief that they are better suited to tedious work, the sense that their fingers are more nimble, the conviction that women are more docile, and, it is to be feared, because local managers desire to prey upon female workers sexually. Although these factors are undoubtedly operative at times in Atlantic Canada, it also can be reasonably supposed that the prevailing patriarchal

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belief that women's income is always supplementary to a man's income is one of the leading factors in the unequal absorption of women into low-wage jobs. A cultural belief persists that women earn "pin money" while men bring home the family wage. Simply put, the managers in low-wage sectors might very well be disposed to hiring more women because of this prevailing patriarchal belief. The overall effects of the post-Fordist order on Atlantic Canadian working people look even bleaker when we consider those state policies that are deliberately crafted to drive working people into low-wage jobs. To put this another way, in its headlong rush into neo-liberalism - voluntary "structural adjustment" in Atlantic Canada we might say - successive governments at both the federal and provincial have redesigned government programs with the goal of forcing "idle" workers into low-wage positions. These changes show up most clearly in the case of unemployment insurance claims and regional welfare transfers. Welfare transfers will be discussed below; first, we turn to unemployment insurance. Flqure 4: Unemployment in Atlantic Canada7

Reforms in the early 1990s gutted the unemployment insurance system, and the effects of this restructuring have reverberated among working people across the region. As evident from Figure 4, rates of unemployment over the last 25 years have undulated slightly, but remained relatively high. In any given year, the overall unemployment rates were likely to be between 10 and 15 per cent in any given province, and typically a few points higher in Newfoundland. It is noteworthy that rates of unemployment in Atlantic Canada are invariably higher than the national average over our survey period. It should also be noted that this picture of the official unemployment rate represents the most optimistic measure of joblessness across the region. Although the official unemployment rate hovered between 10 and 20 per cent, the real unemployment rate - including workers who have become discouraged, who are waiting to be recalled, who expect to start work more than five weeks

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down the line, and those who are not receiving the hours they would prefer is significantly higher. In the year 2000, for example, Newfoundland's official unemployment rate was 16.7 per cent, but its real unemployment rate was 26.8 per cent. In Nova Scotia, the real unemployment rate was 13.7 per cent, although the official rate was 9.1 per cent. Comparable figures in Prince Edward Island were 16.6 per cent and 12.0 per cent, and in New Brunswick they were 14.9 per cent and 10.0 per cent. In all four provinces the real unemployment rate was at least four percentage points higher than the official rate, and in Newfoundland the variation was more than 10 per cent. Figure 5: Deterioration of Unemployment Insurance for Atlantic Canadians8

Given the fact that unemployment across the region is chronic, we should not expect to see a drastic decline in unemployment insurance beneficiaries. Reforms to the unemployment insurance system, including a hostile name change to the program ("Employment Insurance," or El), have created a substantial decrease in beneficiaries across the region. As graphically illustrated in Figure 5, the number of beneficiaries fell dramatically after the 1994 anti-worker reforms. In Newfoundland, for example, the average number of monthly beneficiaries was 63,000 between 1990 and 1994, but during the remainder of the decade this figure fell to less than 36,000. In 1992, the official unemployment rate in Newfoundland was 20.2 per cent, and the average number of unemployment insurance recipients in any given month of that year was 69,727; in 1997, with the official unemployment rate still stuck at almost 19 per cent, the average number of successful unemployment insurance claimants in any month had fallen to 33,718, a decline of more than 50 per cent. Worse still, by the close of the 1990s, successful claimants were receiving much less than their counterparts at the outset of the decade. Between 1992 and 2000, the average weekly benefits for regular claims declined by 10.5 per

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cent on the Island, 8.4 per cent in Newfoundland, 8.0 per cent in New Brunswick, and 3.5 per cent in Nova Scotia. To sum up, reforms to the UI system have hit Atlantic Canadians hard, especially because of the seasonal nature of much of the economy. Since this particular program is in no way "cash strapped," it is easily to see that the goal of the reforms was to drive "idle" workers back into the low-wage economy. The goal of weaning so-called "employable" workers off state programs is also evident in the area of welfare transfers to single individuals. This trend is clearest when we examine the adequacy of welfare transfers to people deemed as "single employables" by the state. In 1990, welfare income as a percentage of the poverty line varied widely across the region. A single person in Newfoundland would have received only 32 per cent of the necessary income to reach the poverty line. In Nova Scotia, a similar person would have received 48 per cent of the necessary income, and in Prince Edward Island the corresponding income was 60 per cent of the poverty threshold. The lowest rate was in New Brunswick, where a "single employable" would have received less than 25 per cent of the necessary income to reach the poverty line in 1990. This unimpressive picture had worsened considerably by the end of the 1990s. In Newfoundland, the corresponding measure of welfare income adequacy had shamefully plummeted to just 9 per cent. Rates in Nova Scotia and Prince Edward Island fell to 31 per cent and 38.0 per cent respectively. Only the already low figure in New Brunswick held its ground during the decade. These figures help us to see that the state has redoubled its efforts to turn out potential workers for the low-wage economy in the neo-liberal era.

Conclusion Why are many working people in Atlantic Canada forced to resort to food banks? The longer answer to this question asserts that the post-Fordist era is essentially defined by the intensified effort to drive down the social wage globally, and especially in the North. Atlantic Canadian workers are smack dab in the line of fire. Unionized workers have taken a direct hit, and nonunionized workers have been dealt an even harsher blow. Accordingly, we have an intensification of low-wage work across the region and state policies expressly redesigned to throw workers back into the web of the lowwage job market. It is a cruel combination that leaves many workers across the region struggling with non-living wages. Since most monthly costs are fixed and inescapable, the only flexibility many working people have is in the area of grocery purchases. Food bank use is inevitable. The most basic point of this paper, however, is that neo-liberal governments are deliberately creating such hardship.

Chapter Six

Call Centres: A New Solution to an Old Problem? Tom Good and Joan McFarland

At the beginning of the 1990s, New Brunswick faced particularly troubling economic prospects. Despite a large amount of federal assistance through equalization payments and a variety of regional development programs, the province had experienced an increased rate of unemployment with each major economic downturn since the Second World War. The onset of the recession of the early 1990s was therefore troubling enough, but the situation was compounded by the ascendancy of the political Right, which led to reduced federal support for "have not" provinces, cutbacks in social programs, and economic restructuring necessitated by the drive to integrate the Canadian and U.S. economies. Official unemployment in New Brunswick in the early 1990s exceeded 40,000 people - 12 per cent of the active labour force. In addition, there were about 20,000 part-time workers seeking full-time work, and thousands more who were self-employed on the margins of the economy. Moreover, New Brunswick, like other slow growth areas, experienced a below-average labour participation rate, indicating another 30,000 "hidden unemployed" (Statistics Canada, 1991-1995). Taken together, these figures generate an estimated overall labour surplus in the province at the time of about 100,000 - over 25 per cent of the total labour force. The old problem of slow economic growth and high unemployment appeared more intractable than ever. Facing these realities, the Liberal government of Frank McKenna - which was first elected in a landslide in 1987 and presided over the province's economy for most of the 1990s - formulated what it called a New Economic Strategy, featuring the vision of a self-reliant New Brunswick built around "information technology." Promoters of the strategy held out the promise of an economy freed from its traditional re-

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source base of forestry, mining, and fishing - sectors where employment was in long-term decline - and without the burden of high transportation costs to distant markets. Here was a way, they argued, for New Brunswickers to put the experiences of underdevelopment behind them; here was a shortcut to the twenty-first century. Not surprisingly, the reality failed to match the rhetoric, and as the 1990s progressed the government focused increasingly on one aspect of the grand strategy, the campaign to attract call centres to New Brunswick. In the words of a recent government publication: "[A] critical part of the new economic strategy since the early 1990s is the knowledge-based service sector, of which call centers represent a significant part" (New Brunswick and NBTel, 1999: 6). (In government publications, the American spelling of "center" is ubiquitous, as if to convey to readers that New Brunswick is no provincial backwater, but as American as advanced technology itself.) The government's call centre initiative has indeed been significant. From its beginnings in 1991 when a subsidiary of General Electric established the first call centre in the province, the industry has now expanded to nearly 100 centres employing approximately 14,000 workers (Turner 2001: 86). Call centres now provide work for one employee in every fifteen in the province's private sector. Each typically employs more than 100 people, with the large ones employing 500 or more. The industry divides into two segments: "outbound" and "inbound." Those engaged in outbound calling - telemarketing, public opinion surveys, fundraising - tend to be specialized businesses with multi-site operations and relatively small payrolls. Those receiving inbound calls - reservations, financial services, help desks - are often large-scale workplaces operated directly by major corporations (in New Brunswick these include Air Canada, Royal Bank, and Xerox), although a growing number of companies are beginning to contract out their inbound call centre tasks to specialist firms. Outbound call centres represent the low end of the business with generally inferior wages and working conditions; inbound call centres, especially those requiring operators with specialized knowledge, represent the high end. In this paper we examine the economic and political dynamics that have given rise to the call centre industry in New Brunswick. Our objective is to explore the extent to which the call centre initiative represents a new departure in economic development strategy and the extent to which it is a continuation of old policies in new packaging.1 We argue that three sets of forces have enabled the call centre business to take off in New Brunswick: technological developments, the capacity of

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multinational corporations to exploit pockets of unemployment in hinterland regions, and the province's aggressive implementation of a neo-liberal policy agenda. The first section of the paper examines the reorganization of work that has produced a footloose, labour-intensive, call centre industry in the 1990s. The second section considers the importance of New Brunswick's pool of surplus labour in attracting call centres to the province. The third section describes the role of government in boosting the rate of profit for New Brunswick call centres through direct subsidies and policy initiatives to manage the local labour market in the interests of capital. The concluding section assesses the call centre initiative in New Brunswick and briefly discusses some implications for the future. Since the nineteenth century, New Brunswick has followed a path of dependent development, relying heavily on externally controled merchant capital, and later industrial capital, to exploit its natural resource base. Many of these undertakings were arranged by invitation, with the political elite serving as facilitators. While the parallels are by no means exact, New Brunswick's call centre initiative is also heavily dependent on out-of-province companies, is designed to exploit a marketable resource (in this case, potential workers), and is implemented by politicians and bureaucrats making a hard-sell pitch to individual companies. From the beginning, New Brunswick call centres have been a state-sponsored initiative, in collaboration with the local private sector telephone company, NBTel. To entice call centres to locate or relocate in New Brunswick, NBTel promises them up-to-date technology while the government offers a "workready workforce" and financial incentives. The reliance on NBTel to provide the infrastructure necessary to implement the strategy - and to reap the benefits from it - shares much in common with the "power for industry" strategy of the provincial government and its electrical utility, NB Power, in the early post-WW II period. "The Partnership Works!" proclaims a call centre promotional package, going on to explain: "Both the Province of New Brunswick and NBTel believe in a lifetime commitment to their customers customers truly are their business... They work hard every step of the way to ensure the success of their customers" (New Brunswick and NBTel, 1999:7). The "customers" in this context are, of course, the firms involved in operating the call centres, and the provincial government's commitment - a lifetime commitment, no less - is to use the resources of the state to ensure their success (in other words, their ability to make money). Another government

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sponsored publication asks (Canada and New Brunswick, 1996: 4): "What province is earning the reputation as the most pro-business in Canada?" Indeed, it's New Brunswick and it's a reputation that's well deserved. In its broad conception, then, the government's call centre campaign is organized as a corporatist alliance between private capital and the state in which state power is used to deliver enhanced profits in exchange for local jobs. It is a formula undoubtedly familiar to anyone who has studied the economic history of the province.

Call Centres and the Reorganization of Work The deconstruction and recombination of labour processes - in order to reduce the labour-time involved in production and increase potential profits - is a fundamental dynamic of capitalism. For many companies in the 1990s, this dynamic has resulted in the reorganization of a variety of work activities sales, financial transactions, information and technical support services - into a call centre format. Financial institutions, for example, found that they could use call centres as a low-cost alternative to providing certain local branch banking services. Advertisers found they could use telemarketing as a costeffective alternative to junk mail. Airlines discovered that call centres could reduce their reliance on independent travel agents and enable them to drive down sales commissions; for example, Air Canada, which has five call centres across the country, recently announced that it was cutting the maximum commission paid to travel agents by over 50 per cent. This reorganization of work within sectors, Richard Walker argues, is only one aspect of a much larger process: The transformation of work must be taken up in the broadest possible terms, in which changes in the labour process, technology, organization and industry location are all seen as so many facets of the same immense process: capitalism's never ending revolution of the forces of production and of the conditions of life for working people around the world. The transformations of work [that] capitalism brought on by the rationalization, division, and automation of labour processes are quite diverse ... and can move in unexpected directions. This creates an uneven and unstable terrain on which capital and labour contest the content, performance, and rewards of work. (1989: 89) Technology is a key factor in this shifting terrain. Call centres are a product of new developments in telecommunications technology which have driven down long-distance charges and generated new types of capital equipment, including fibre optic networks, digital switching systems, and Telephony Com-

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puter Integration (TCI) which links computer networks and firm-specific software. Most of the work done by call centre employees is structured by the TCI configuration and the switching system which queues incoming calls, distributes these calls to workers, arranges recorded messages, and even reroutes calls to other cities or countries in multi-site call centre operations (Delottinville, 1994). A call centre worker, known in the business as a TSR - telephone service representative (inbound) or telephone sales representative (outbound) - performs a very limited number of standardized activities. TSR jobs have been designed according to Taylorist principles with a minimum number of carefully defined, highly specific tasks, which are linked through the specialized computer software systems to achieve an integrated workflow. Most of the employee-employee and employee-customer socializing which is characteristic of many service sector workplaces is eliminated in this work setting. The machine-controlled pace of work creates significant opportunities for speedup. And close electronic monitoring by management increases the intensity of work effort. All of these factors reduce unit labour-time and increase potential profits in a call centre setting. Call centres in Canada developed in the first instance primarily in the Ontario-Quebec heartland. Customizing the technology for the specific needs of a particular business typically required the attention of fairly senior personnel in a central location with access to a matrix of support services. However, once systems became standardized, it was a relatively straightforward process to spin them off as free-standing operations. Call centres became "footloose." In this era of globalization, corporations have become increasingly adept at segmenting bits of the production process, and relocating them in farflung places where they can extract a cost advantage. Their obvious profitmaximizing strategy is to seek out locations which possess, first, the necessary technical capabilities, and second, a pool of low-cost, capable labour. In its bid to become the location of choice, New Brunswick has addressed both of these factors. NBTel entered the call centre business early and it continues to offer upto-date technology to the industry. The company currently employs over 250 staff in call centre support, offering new centres assistance with "design and set-up of the center, telephony design, partnership strategies, full installation and testing of telecommunications infrastructure, real estate acquisition... as well as recruiting and training. This 'turnkey' solution is provided at no charge!" (New Brunswick and NBTel, 1999:6).

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In addition, NBTel offers 24-hour support services, and the use of telecommunications equipment with no capital outlay: NBTePs Business Communications Service (BCS) is a unique business approach to providing telecommunications service, where call centers are charged on a per-agent, per-month basis. NBTel will purchase most telecommunications hardware and software... This protects call centers from financial risk, since they are not required to outlay any capital to establish their telecommunications platform. NBTel maintains and upgrades the platform, which reduces the call center's business risk. (New Brunswick and NBTel, 1999:7) What a remarkable arrangement. Call centres can set up in New Brunswick without incurring any up-front capital costs and without any capital subsidies from government. This is a far cry from the federally funded economic development strategies of the 1970s and 1980s - DREE, DRIE, and the GDAs2 - that used hundreds of millions of dollars in public money to subsidize new private sector capital investments. A primary objective of these programs was to expand the province's resource industries and manufacturing in an effort to provide a stronger economic base for vulnerable communities. The method of choice was to raise the private rate of return on investment by having the government contribute a significant portion of the capital cost, but receive none of the profits. In the end this strategy, though very expensive, proved no match for the structural realities of underdevelopment. By contrast, the call centre strategy focuses not on heavy industry, but on the inherently less capital-intensive service sector. Moreover - and here is where the real advantage lies - excess capacity generated by new technology provides NBTel with low (and falling) marginal costs, permitting the company to charge call centres that are being added to the system competitive long distance rates that are nonetheless sufficiently above marginal cost to enable the company to recover, over time, the cost of the capital equipment it makes available (an arrangement analogous in some ways to a lease). With these arrangements in place, New Brunswick's strategic effort to attract call centres rests squarely on labour market considerations.

The Geography of Surplus Labour Call centres are labour-intensive activities in which wages and fringe benefits are by far the largest cost component: consultants estimate labour costs at approximately 60 per cent of total costs, followed by long distance charges of 20 to 25 per cent, and other operating costs at about 15 per cent (Boyd Com-

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pany, 1999:12). A hardworking, competent, and low-cost labour force is the key to making profits in this business. New Brunswick, with its large pool of surplus labour, replenished each year by 9,000 high school graduates, 4,200 community college graduates, and 4,000 university graduates,3 is an attractive potential site. Throughout most of the 1990s, call centres have had an opportunity to pick and choose from an abundant labour supply. Cameo, the subsidiary of General Electric that was the first to locate in New Brunswick (in 1991), was impressed with the labour supply in New Brunswick. Within a few weeks of receiving resumes, they were able to screen 1,000 applicants down to 600 prospects who met their criteria. The company would only consider university graduates who were bilingual. In Cameo's words, the quality of the applicants "was outstanding."4 Job applications continued to flow in as new call centres were established: "The Royal Bank, for example, had 2,000 applicants for 90 customer service positions, while the UPS office in Fredericton had 5,500 applications for fewer than 400 jobs" (McFarland, 1996:12). Hiring has typically been done through newspaper ads, followed by a "job fair" and individual interviews. According to a recent publication (New Brunswick and NBTel, 1999:3), 70 per cent of New Brunswick call centre workers have post-secondary education, and 45 per cent are bilingual. Employers seem well satisfied. For example, a representative of Hospitality Franchise Systems, an American hotel reservation service which set up in the province, was fulsome in his praise of New Brunswick workers: "We had new employees that set records for every training class ... They grasped the information we were trying to communicate better than any of the classes that we had ever put through, in any of our programs, in any centre" (quoted in McFarland, 1996: 12). And a manager at UPS commented that: "Innate customer service skills and positive attitudes are characteristic of the local labour force" (quoted in New Brunswick and NBTel, 1999: 8). While only a few call centre jobs are high-skilled - requiring problemsolving skills and a detailed knowledge of a company's products - it would be a mistake to underestimate the capabilities required of most call centre workers, or TSRs. Each TSR is a primary contact point between a company and its customers, and the ability to project a positive corporate image - competent, friendly, helpful - is a key part of the job. As the connecting link between customer and computer, a TSR must be able to convert the desires of the customer into data for the computer. This requires not only the skill-base to

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work with the computer but also the communication skills and versatility to perceive and respond effectively to the concerns of each caller. Moreover, workers must be able to deal with stressful situations. Few jobs which are machine-ordered and machine-paced require workers to engage with others in any kind of direct, personal communication, let alone engage strangers in what are often contentious circumstances - especially for outbound TSRs who must regularly deal with annoyed people on the other end of the line, and inbound TSRs on the "complaints desk." Moreover, the extensive reliance on part-time workers, non-standard conditions of employment, and rigid workplace discipline in the industry also has a gender dimension. The combination of clerical and interpersonal skills required for these jobs are frequently characterized as a "feminized labour processes" (Fox and Sugiman, 1999: 60). Our field work shows that in a typical call centre, 60 to 80 per cent of the employees are female (although managers tend to be male). Our surveys5 also indicate a high proportion of young workers; the average age is well below thirty and is declining as the industry expands. Finding suitable workers is only part of the challenge in managing the human resources side of a call centre operation. The organizational key, which is essential for maximizing profits, is to operate each call centre in a way that minimizes unit labour costs (that is, the cost of the labour required to perform each discrete activity - each sale mhade, each complaint handled, each service rendered). This involves the widespread use of "flexible workers." Typically, the volume of telephone traffic ebbs and flows, with peak hours of the day, peak days of the week, and peak seasons of the year. Whenever there are more workers on duty than necessary, unit labour costs rise. Flexible hours enable call centres to shift the costs of adjusting labour inputs directly onto the workers. For example, in the immediate aftermath of the destruction of the World Trade Centre, telemarketing agents [in New Brunswick] spent a week of reduced hours and cancelled business ... Clients from financial institutions to long distance telephone carriers or membership-oriented firms sat back and took a long, hard look at the mood in the United States and made client-by-client determinations whether to call off Canadian workers calling US customers. (McLaughlin, 2001:2) A surplus supply of available labour permits the creation of this type of just-in-time workforce, so that immediate adjustments can be easily implemented.

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While a few employees seem energized by the pace of call centre work, most find what they do "boring," "monotonous," and "mundane" - predictable responses in a Taylorized, assembly-line work setting where workers control neither the content nor the pace of their work. They describe the workload as "heavy," "stressful," and "they expect too much." One worker on a complaints desk noted with an air of resignation that "260 calls a day from rude and angry people ... it's hard to deal with at times." Intensive management of the workforce is also characteristic of most call centres. Performance indicators are pervasive, with individual scores sometimes posted on electronic screens in the workroom for all to see. Supervisors can, and do, listen in on calls at any time - heightening the sense of perpetual surveillance. In our interviews, workers describe disciplinary actions ranging from verbal and written reprimands, to the assignment of undesirable shifts, to demands that employees work unpaid hours "to meet quota," to outright dismissal. Although this style of management is not universal, call centres workers almost invariably feel "under pressure." As comments from call centre workers illustrate, they are quite aware of the implications of this power imbalance: The company feels that New Brunswick is a cheaper place in wages and benefits. They see New Brunswick as desperate, whose workers will settle for anything as long as it is a job. I don't like the way it's making New Brunswick workers look, willing to work as cheap labour at twice the workload. We are made to feel lucky to have a job, but they are also lucky to have us. (McFarland, 1996:15) Virtually all call centres in New Brunswick pay wage rates below the average service sector wage in the province, but they are not minimum wage employers. Our own surveys show call centres typically paying wages in the range of $9.00 to $12.00 an hour, but there is a good deal of confusion surrounding pay rates in the industry.6 Newspaper articles, using government and industry association officials as sources, refer to average salaries of $26,000 a year (Hrabluk and Tutton, 1999: Bl) - about $13 an hour. Buchanan and Koch-Schulte report that the starting wage for "temporary part-time" call centre workers in New Brunswick was $13.00-$15.42 an hour in 1998 (2000: 13). A recent announcement for a new CEBC call centre suggested salaries up to $36,000 a year - nearly $20 an hour - but at the subsequent job fair this was scaled down to $25,000 (Llewellyn, 2000: B4). When the actual hiring is done, salaries at CEBC are likely to be even lower. Private consultants retained

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by the government estimated the average wage in 1999 at a new financial services call centre in New Brunswick would be $366 a week - approximately $10.00 an hour, or about $19,000 a year (Boyd Company, 1999:12).

Bidding for Call Centre Jobs The call centre industry is one of the few industries in Canada that is labour intensive, fast growing and footloose. As such, it was bound to catch the attention of governments in high unemployment areas. According to a study by Price Waterhouse Coopers (cited in Buchanan and Koch-Schulte, 1999: 4), by mid-1998 the call centre industry employed 330,000 people across Canada in 219,000 agent positions, and was growing at a rate of 20 to 25 per cent per year. Motivated by the political imperative of "job creation," the McKenna government offered call centres that moved to New Brunswick the opportunity for a better "bottom line" - by minimizing their costs through wage subsidies and tax breaks, and by maximizing their output through the use of a captive workforce. In McKenna's words: There is no magic to it. When they crunch the numbers and consider all the factors, New Brunswick comes up as the best choice for their call centre, (quoted in New Brunswick and NBTel, 1999: 8) Unlike the regional development strategies of the 1970s and 1980s that relied on federal subsidies to support private capital investments, the province's call centre strategy was designed around direct wage subsidies. The government's normal practice has been to structure its contribution in the form of three-year "forgivable" loans, which need not be repaid provided certain specified employment targets are met. Since 1991, call centres have received close to $50 million in forgivable loans and grants, an average of about $6,000 per full-time job equivalent, with some centres (including Cameo and UPS) receiving over $10,000 a job (Buchanan and Koch-Schulte, 1997: 93). Only a handful of centres in the province (including the Royal Bank and Canada Post) have received no financial incentives. As implemented by the government, the cash-for-jobs payments are subject to bilateral negotiation with each firm; in the words of a civil servant heavily involved in the process - borrowing from the lexicon of the private sector - "we bid the job."7 Ostensibly, the government money is for training, recruiting, and set-up costs, and is not an operating subsidy. However, as a rule of thumb, the government calculates the payment based on 10 per cent of the estimated overall wage bill for a call centre's first three years of operation (Hrabuk and Tutton, 1999: Bl). Not surprisingly, other provincial governments have attacked the

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cash-for-jobs deals - particularly the $11 million paid to UPS, the world's largest private sector courier, for 1,030 jobs - as "job poaching" and "race to the bottom" competition (Buchanan and Koch-Schulte, 2000:93). But many have now been drawn into the same practices; Nova Scotia, for example, recently beat New Brunswick at its own game, agreeing to pay Xerox $7.5 million for 600 jobs in the Halifax area - more than $12,000 a job (Richardson, 2001:1). Ironically, one of the reasons for the federal government assuming primary responsibility for regional development policy in the late 1960s was precisely to avoid the tax-holiday-and-subsidy bidding wars which provincial governments and municipalities were then engaged in. Forgivable loans are only part of the financial assistance package: Direct training subsidies are also available to call centres coming into New Brunswick. According to the government's 1999 website, "New Brunswick's Workready Workforce Program is the Government's commitment to offer a work-ready workforce to New Brunswick companies," including: •The delivery of industry-responsive training. We will even customize existing courses to meet specific company requirements; •The Government works with companies to provide in-house training; •Financial assistance for training new employees on-site or at a New Brunswick training establishment. Cost avoidance and reimbursement scenarios are available.8 Moreover, since the early 1990s the government has provided additional assistance to employers in lowering labour costs through changes in workers' compensation, which have restricted claims and reduced benefits (New Brunswick, Workers' Compensation Board, 1992). Especially significant for the call centre industry, claims based on workplace stress are now disallowed and claims based on soft tissue injuries have been severely curtailed by bureaucratic means. As a result, New Brunswick workers' compensation premiums are now among the lowest in Canada, and coverage for injured workers is among the worst in Canada. To cut call centre operating costs still further, in 1994 the government removed the 11 per cent provincial sales tax (PST) on call centre 1-800 numbers. And in 1997, the integration of the PST with the federal GST produced additional savings by giving companies a full rebate on all sales taxes paid on business expenditures in New Brunswick. However, the "harmonized" GSTPST was implemented simultaneously in all the Atlantic provinces, which eliminated New Brunswick's cost advantage and intensified inter-provincial competition within the region.

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While Premier McKenna invited call centres to "crunch the numbers," he also invited them to consider "all the other factors." The feature attraction among "the other factors" has been the neo-liberal policy agenda of the federal and provincial governments which have reshaped New Brunswick labour markets to enable businesses like call centres to extract greater output per worker at lower cost. The broad context was established by the federal government through its restrictive macro-economic policy regime (cf. Stanford, 1999), and its radical changes to the unemployment insurance program. The scale of the changes to this program is clear from the fact that this program provided benefits for 83 per cent of the unemployed in Canada in the late 1980s, but only 32 per cent in 1997 (Little, 1998:2). Eligibility was curtailed by increasing the amount of work time required to qualify for benefits, and by denying benefits to anyone leaving a job "without just cause." The new rules were particularly onerous for those entering the workforce for the first time, those re-entering the workforce after a significant absence, and those working part-time hours. Female workers and young people - precisely those most likely to be working in call centre jobs - were also those most likely to fall though the safety net of unemployment insurance, and be forced to make whatever arrangements they could with potential employers. The New Brunswick government contributed further to the creation of a compliant workforce in the call centre segment of the labour market by ensuring that the alternatives available were especially unattractive. The government ensured that the minimum wage, which was between $5.25-$5.50 an hour for most of the 1990s, remained one of the lowest in the country, and also ensured that social assistance benefits continued to be far below the poverty line and lower than almost every other province (Ross etal^ 1994:23). Government policy on another front has ensured call centres an increased supply of low cost student labour. Cuts in government operating grants for higher education has pushed up tuition fees at the same time that student aid has been converted almost exclusively into student loans (not, one might add, the forgivable kind). The combination has resulted in a financial crunch for a large number of students; in fact, by the mid-1990s more than half the university students in the province were working both during the school year and in the summer (Maritime Provinces Higher Education Commission, 1998: 41). Call centres have been major beneficiaries of this increased financial pressure on students. Cendant, for example, recently made a deal with a local university in which the company designates certain part-time positions specifically for students and the university provides the workers.

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Provincial government industrial relations policies during the 1990s were yet another element in the drive to consolidate a pro-business environment. The tone was set in 1991 when the McKenna administration provoked a bitter confrontation with its own public sector workers by breaking open signed collective agreements in order to impose a wage freeze. Later in the decade, it sat idly by as three large private sector strikes and lockouts dragged on, not just for months but for years. Reference to this anti-union environment even appeared on the government's 1996 web site, as a selling point for relocating to New Brunswick: The industry that reflects call centre activities the most is the communications industry and [in that industry] New Brunswick has the lowest rate of unionization in Canada ... NBTel is the only telephone company in Canada with non-unionized clerical employees ... There has never been an industry attempt to unionize [call centres in the province]. (New Brunswick, Department of Economic Development and Tourism, 1999) Except in heavy industry and in the public sector, the province is essentially unorganized. At present Air Canada is the only unionized private sector call centre in New Brunswick. There can be little doubt that the government intends to keep things that way. Shortly after workers at ICT Group, a large U.S.-based call centre operation with over thirty locations and the only telephone company in Canada with non-unionized clerical employees, voted to unionize in 1999, the company closed its Saint John operation. The government took no action whatever to protect the workers rights or their jobs, despite the public funds received by the company: There has never been an industry attempt to unionize [call centres in the province]."You unionize, your job is gone," said Cindy Caissie, a 24 year-old telemarketer who had been at the centre for two years. "That's the message here." (Malik and Tutton, 1999: Al) The government's anti-union stance is simply one more aspect of its wideranging neo-liberal agenda designed to deliver to employers a low cost, "workready workforce."

Conclusions The emergence of the call centre industry in New Brunswick has been largely determined by three factors: technological change and the dynamics of capital, the geography of surplus labour, and neo-liberal government policies. At the beginning of the 1990s, the McKenna government put forward what it

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called a New Economic Strategy, which promised to avoid the pitfalls of the past and help speed New Brunswick along the information highway. Attracting call centres to the province was "a significant part" of the plan. There were indeed some new aspects to the strategy. First, the provincial government rather than the federal government assumed responsibility for design and implementation, reversing the pattern of the previous quarter century. Second, instead of focusing on subsidies to stimulate capital accumulation, the new strategy focused on direct wage subsidies and indirect assistance to employers through labour market policies that were intended to increase potential profits by providing a low cost, malleable workforce. Third, the strategy targeted more peripheral segments of the labour force, specifically women and young workers, rather than the male "breadwinners" whose jobs were the employment target of industrial development strategies in prior decades. However, in fundamental ways, the "new" economic strategy was not new at all. As with previous development strategies, it was based on a concept of the role of the state as being in the service of particular capitalist interests. In a pattern familiar from the past, the strategy has had a corporatist orientation, with the government aggressively aligning itself with specific companies - in this case, NBTel and out-of-province call centres/Although the detailed elements of this strategy differ from past undertakings, the overarching objective has remained unaltered - to stimulate economic activity by raising the potential profits available to private sector "partners." Despite the fact that the call centre strategy has focused largely on labour, workers and their organizations have been deliberately excluded from any partnership. In all of these respects, McKenna's call centre strategy unquestionably belongs in the time-honoured tradition of New Brunswick political and economic dependency. Yet, at a superficial level, the call centre strategy has apparently provided a partial "solution" to the unemployment problem. For the province as a whole, the influx of call centres has produced 14,000 much-needed jobs. Even if workers in the industry currently experience below-average wages, difficult working conditions, and autocratic management, this situation may be only short term; if the local labour market tightens sufficiently, workers may well be able to achieve some bargaining power and gain improvements. The upturn in the economy at the end of the decade, and the big jump in call centre employment in the province over the past twenty-four months, provided a real-world test of this hypothesis. For the first time in more than a decade, the occasional help wanted sign appeared. Call centre employers, through their association, expressed concerns to the government; other low wage employ-

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ers also felt the pressure - especially from call centres. A front page newspaper article reported that "in order to compete with call centres that pay $8 to $10 hourly, [Tim Hortons] is considering raising its hourly rates [currently $6.00] to retain its employees" (Stewart, 2000: Al). This development provided the government with a stark choice: Should it allow workers to benefit from the tightening low-wage labour market, or act in the interests of employers to restrict demand at the low end of the labour market in order to keep wages down? In the coded words of Employment Minister Norm McFarlane: "We've got our challenges on the labour side ... We have a lot of people working in this province and we have to be aware of the labour situation" (Richardson, 2000: Al). To no one's great surprise, the government decided to preserve the low wage environment, in part by curtailing cash incentives for new call centres. The political reality is that, as New Brunswick has become more dependent on call centre jobs, the government has become more and more anxious to satisfy the industry in order to protect those jobs. The fear that these footloose enterprises might relocate yet again creates an incentive for the government to perpetuate its regressive policies of the 1990s, and gives fuller meaning to the rhetorical flourish of its "lifetime commitment" to these firms. While the government's policies may prop up employment in the short run - though not without costs to the workers - long-term prospects are a different story. Many companies currently operating call centres are actively working to develop and refine new internet technologies so that customers can conveniently input data directly into company computers to execute sales, make reservations, and conduct other business - all without the need for call centre workers as intermediaries. As these developments become widespread, they appear likely to spell an end to call centres as mass employers, leaving little more than a "boutique industry" of specialized services. In the long run, then, the idea that call centres are even a partial solution to New Brunswick's chronic unemployment problem may turn out to be illusionary.

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Chapter Seven

Contradictions in Community Economic Development: New Dawn Enterprises Scott MacAulay

Taking community economic development (CED) at its word - that it is about another way of doing things, another way of addressing the needs of people in communities with high rates of unemployment, population out-migration, and poverty - is tempting.1 It is a temptation that is grounded in a general discontent with the way things have been done, or the way things have worked out, which has resulted in whole geographic communities being decimated by plant closures and industry relocations. Severe physical and emotional pain has been visited upon very large numbers of working people who see the social and cultural foundations of their livelihoods threatened by capitalism's never-ending search for profit-maximizing means and locations. It is a temptation, too, that is grounded in hope - a hope that we can turn things around, that we can, from our own little corners of the world, find ways to prosper economically and keep the things that we value socially and culturally about our communities in place. Definitions of CED abound (Maclntyre, 1998; Douglas, 1994; Boothroyd and Davis, 1993). In very general terms, Douglas (1994:22) says that CED is "development by the community, for the community" and that this distinguishes it from development which occurs "as a result of the ebb and flow of market forces and occasional government intervention."2 Identifying ideological nuances in the range of definitions that exist is beyond the scope of this chapter (see MacAulay, 2000: 50-57), but it is safe to say that CED practitioners and theorists would agree that whatever its other aspirations, CED aims to be a participatory approach to meeting people's

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economic needs. It claims that all people in the community have a stake in its economic development and, therefore, should have a say in its economic development. In doing this, "advocates of community economic development argue that the key to success is the building and strengthening of local institutions and processes that enable community members to participate in and run their own affairs" (Reed, 1999: 665).3 Taking these aims seriously suggests the counter-hegemonic potential that is inherent in CED. A community economic development approach which aims to meet the needs of all the people and to do so in a way that is participatory counters the logic of capitalist development which prioritizes profit over need and which limits participation in economic development decisionmaking to those who own the means of production. The aims of CED arise out of discontent and can be understood as a potential challenge to capitalist hegemony in that spontaneous reactions to the experiences of economic hardship, political subordination, or social marginalization, independent of any particular ideological motivation, contain the "immediate desire to replace a given leadership by a different one" (Gramsci, 1971:197). Yet it is absolutely critical, as Gramsci reminds us, to examine "how the means that are employed correspond to the proposed goal" (1996: 187). The means favoured in Canadian CED are community development corporations (CDCs) (Mason, 1991: 116). CDCs are umbrella organizations, usually incorporated as not-for-profit corporations, which own for-profit business subsidiaries. Profits of subsidiaries are kept within the umbrella structure and reinvested in the community. According to Mason (1991:11617), profits are used for the "much broader aim[s] of institution building, human resource development, community self-reliance and community autonomy which are considered to be the underlying factors responsible for economic development." In Atlantic Canada, CED and CDCs in particular have gained legitimacy as tools for development in economically depressed communities. In 1986 the Royal Commission on Employment and Unemployment in Newfoundland called for government support for the creation of CDCs (Government of Newfoundland, 1986). The federal government's Atlantic Canada Opportunity Agency recognizes CDCs as eligible for business assistance. In recent years, the University College of Cape Breton Press has published a number of books on CED (Lotz, 1998; Maclntyre, 1995, 1998; MacLeod, 1997). And organizations as diverse as the Atlantic Provinces Economic Council (O'Neill, 1988) and the Canadian Institute for Research on Regional Development at the Universite de Moncton (Savoie,

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2000) have turned their attention to understanding the economic and government policy implications of CDCs. This chapter contributes to the discussion of CED in Atlantic Canada by focusing on the Cape Breton experience. This is done by examining the structure and activities of one leading CDC, New Dawn Enterprises Limited. Reed describes New Dawn as representative of the "ethical business enterprises" CED strives to create, enterprises that are "committed to meeting the needs of the local community" (1999:660). It will be argued, however, that the case of New Dawn demonstrates that CED practice often contradicts its aims and can represent, instead, what Wood calls "the universalization of capitalism itself... the logic of commodification, accumulation, and profit-maximization penetrating every aspect of our lives" (1996: 37), including the way we care for each other as members of a community.

New Dawn Enterprises Ltd. New Dawn Enterprises Limited, Canada's oldest and, according to many, most successful community development corporation, is located in industrial Cape Breton. O'Neill (1988: 18) describes New Dawn as "the standard by which CDCs should be measured." Savoie (2000: 116) says the corporation represents the "logical conclusion" of CED that "all initiatives should have their origin in the community itself, and the community should be responsible for providing and controlling all resource inputs and, ultimately, for deciding who benefits from the efforts." New Dawn is the focal point of CED activity in industrial Cape Breton. Indeed, it is the nucleus of what has been described as a "Family" (deRoche, 1998) of CDCs. Family members include BCA Holdings (a venture capital company), and New Deal Development Limited and Tompkins Development Corporation, both of which own and manage commercial and residential property. These corporations have close ties. First, they are located in the quasiurban setting of the Cape Breton Regional Municipality that includes the former City of Sydney and coal and fishing communities such as Glace Bay, New Waterford, Dominion, North Sydney, and Sydney Mines. Second, each is structured as a not-for-profit corporation. Third, their collective mission can be summed up as doing business with a community purpose. Fourth, the corporations are heavily reliant on volunteer labour recruited according to business and technical expertise and willingness to serve the mission. Fifth, they trace their origins back to one charismatic person who has served as organizer and intellectual mentor.

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Along with Family members mentioned above, New Dawn was instrumental in organizing the Cape Breton Labourers' Development Company in Sydney, a CDC owned and managed by local 1115 of the Labourer's International Union (LIUNA) that builds lease-to-purchase houses for members (Perry and Lewis, 1994; MacLeod, 1991a: 16-17). The New Dawn model has also been influential in the formation of Development Isle Madame in rural Cape Breton (Malcolm, 1998) and the Great Northern Peninsula Development Corporation in Newfoundland (MacLeod, 199Ib). More generally, Mason (1991:127) credits New Dawn with having an "important demonstration effect" on CED activists in Canada. New Dawn functions as a not-for-profit holding company with various for-profit subsidiaries. Incorporated as a company limited by guarantee, New Dawn cannot distribute dividends to shareholders. All profits made by the for-profit subsidiaries are reinvested by New Dawn into CED activities.4 Subsidiaries have traditionally operated in housing and real estate, but in the last five years there has been a shift to health care services. New Dawn organizes its activities into three divisions.5 The Real Estate Division has two companies. One owns and manages a residential/light industrial park and the other owns and manages apartment complexes throughout the Cape Breton Regional Municipality. Three companies, specializing in services for the elderly, operate under the Health Care Division. The Social Development Division includes an accredited private career college and the Volunteer Resource Centre that co-ordinates a wide range of non-profit community services, such as the Meals on Wheels and Friendly Visiting programs for senior citizens. New Dawn is an important part of the local economy with an annual payroll of over two million dollars, two hundred employees, and assets of approximately $20,000,000 (New Dawn, 2000; Basso andjohnstone, 1999).

The Family and the Antigonish Movement Historically, New Dawn and the Family link their approach to local development with that of the Antigonish Movement of co-operative development and adult education. The Antigonish Movement emerged in eastern Nova Scotia in the 1930s in the context of the Great Depression and class unrest in the coal mines and steel plants of industrial Cape Breton. By the end of the decade, it was responsible for the creation of 142 credit unions, thirty-nine consumer co-operatives, eleven fish plants, and seventeen lobster canneries. Co-operative membership in Nova Scotia numbered around 10,000 (Alexander, 1997: 88). According to MacSween (1998: 80), New Dawn's current President:

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New Dawn's philosophy is grounded in the adult education principles and practices of the Antigonish Movement as established by Moses Coady and Jimmy Tompkins. Their emphasis on the value of co-operation and the potential of each community to determine its economic destiny serve as New Dawn's philosophical anchor. MacLeod (1996:6) argues that for the Antigonish Movement and the Family the "philosophy and commitment are the same... The initiating concern springs from the same deep sense of human solidarity shared by all peoples." Nevertheless, as much as the Family insists on and is proud of its role as the inheritor and current expression of the ideas which founded the Antigonish Movement, it also insists that the organizational characteristics of co-operatives make it difficult for them to meet the community's current economic needs. Its critique of the Movement, it says, is not ideological; it is practical (MacAulay, 2001). This critique follows three lines of argument. First, co-operatives by their very nature pander to "special interest groups:" Although the co-operative is a vast improvement over the traditional corporation, the primary intent or concern of co-operatives in general is the well-being of a special interest group - the member-consumers or employees (in the case of worker co-operatives). Co-operatives usually claim to represent the good of their members, not the general community. (MacLeod, 1996:3) The Family argues that it averts this problem by operating through a structure that it claims is owned by the entire community through trustees who serve as directors. Second, co-operatives are perceived by Family CED advocates to be unifunctional, that is, they tend to be very narrow in the range of services or products they provide. A typical consumer co-operative grocery store, for example, is not constantly searching out new and diversified local opportunities for expansion. It does not link up with other consumer co-operatives to create their own commercial credit and educational institutions. Being unifunctional is viewed as a strategic weakness in a global economy. The success of multinational corporations has taught that it is important to "have many functions and be open to change" (MacLeod, 1995:46). Unfortunately, co-operatives have proven "inadequate in the face of radical economic changes during the last 30 years or so. The co-operative sector has been mainly concentrated in the retail-consumer area and in domestic finance through credit unions. It has not been flexible enough to serve as an instrument for job

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creation and economic survival in marginal economies" (MacLeod, 1996:3). New Dawn and other members of the Family consider themselves to be an integrated and diversified model of CED, taking lessons in organizational structure more from Spain's Mondragon system of co-operatives (MacLeod, 1997) than from Antigonish. Third, Family CED advocates argue that consumer co-operatives and credit unions in Nova Scotia are linked too tightly to second tier co-operatives to be answerable to local communities. Co-op Atlantic and Credit Union Central of Nova Scotia are nominally owned by member-owned co-operatives and credit unions, but real control over business policies and practices in local co-operatives and credit unions, it is argued, is exercised by executives employed by second-tier organizations. The Family believes the dangers of control and influence from outside the geographic community are avoided by grounding ownership and governance locally. The Family's criticisms of co-operatives are clearly addressed in its choice of the CDC structure. What is less clear, operationally, is where the philosophical continuity lies. As will be discussed later, unlike co-operatives, the Family's CDCs are not open and democratic; neither is the Family engaged in popular adult education. These discontinuities are rarely addressed by the Family as problematic. The reason is that the Family and the Antigonish Movement have a common orientation to capitalism. Both models claim similar objectives: to make people "masters of their own destiny" (Coady, 1967) in the case of the Antigonish Movement, and to "restructure the old order... [with] the goal of personal empowerment through community-building" (MacSween, 1998: 87-88) in the case of the Family of community development corporations. These are grand visions. In practice, however, both operationalize CED in a way that does not make the community in any way autonomous from the capitalist economy and does not represent a challenge to the hegemony of the "old order." Their aims - of building a community economy that meets people's needs in an inclusive and participatory way - are sacrificed to the demand to achieve what can be achieved within the existing system, using business enterprises. The Antigonish Movement was firmly embedded in a discussion of competing models of political economy - socialism and capitalism - and offered critiques of each as contrary to an appropriate model for the harmonious functioning of society and the just allocation of economic power and wealth to all individuals. In its analysis of the problem of eastern Nova Scotia, it took class seriously by criticizing a local merchant class which made excessive profits on the backs of primary producers (fishers and farmers) and a class of

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foreign owners of Cape Breton coal and steel which unjustifiably subjected workers to inhumane living and working conditions. The danger of mass proletarianization and the population's susceptibility to the revolutionary message of socialism loomed large as a result of the unchecked expansion of capitalist social relations into all sectors of the regional economy. The Antigonish Movement's solution was to establish co-operative enterprises that would democratically redistribute economic power, giving primary producers and wage earners in eastern Nova Scotia ownership of consumer retail and credit services that affected their lives most immediately. It was, its advocates argue, a "middle way." While the Antigonish Movement did not endorse democratization of the entire economy, it did create democratic enterprises that were open to all to join. It defended these as a logical extension of the principles of political democracy. In the context of political economy, this "middle way" would ultimately be supported by all class interests in society as a way to ensure balance between the divisive forces tending either toward unfettered capitalism or state socialism. Thus, the Movement's vision of the balance it sought to achieve accepted, as per Roman Catholic social thinking, the inevitably of a social and economic hierarchy in society (Baum, 1977). The Antigonish Movement recognized the existence of competing interests and could accept, even as it tried to counter it, the logic of workers and petty producers being drawn to socialism. Co-operatives were proposed as a socially progressive alternative; they were "the people's way of getting into business" (Coady, 1971:41). As for the state of co-operatives in Atlantic Canada today, they have been roundly criticized by Movement sympathizers for abandoning the commitment to democratic reform of the economy - a criticism not made by supporters of the Family of community development corporations - and focusing instead on business success. According to a former director of the St. Francis Xavier University Extension Department (Webb, 1993: 3-4), "the social role of co-ops has actually been seen as a drag on the economic performance of successful and established co-ops."6 In the Family's analysis and prescription, the focus, it claims, is the objectified community, not class conflict. The problem is the survival of a way of life or, more specifically, from a CED perspective, of the local economy. The Family does not offer value-based judgments of the macro-structures of society, other than to say government and large private sector capitalist interests cannot be harmonized with achieving what is in the best interest of the community because, structurally, their interests lay elsewhere. The Family, through its community development corporations, fills a niche, and thereby meets needs that

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would not otherwise be met. In this sense, the Family is not opposed to anything. Rather, its intention is to plug a hole in the system. This is different from the Antigonish Movement, which stated its opposition to the capitalist system's distribution of economic power and wealth and, at the same time, emphatically dismissed the socialist alternative. Ideologically, however, both models end up supporting capitalism. The issue of ideological continuity between the Antigonish Movement and the Family can be addressed at a number of levels. First, both cases acknowledge that a certain amount of the blame for the community's economic problem has to be placed on the community itself. Coady (1967: Ch. 2) exhorted that the "people let themselves down." MacSween condemns Cape Breton's culture of dependence and the resultant leadership vacuum in the community: For generations economic development on Cape Breton Island has been prescribed. Gradually, Cape Bretoners have come to conclude that they are neither capable nor responsible for determining their future. Furthermore, the prospect of deciding upon a direction and assuming responsibility for that direction has become something to be feared. (1994: 206-7) The Antigonish Movement and the Family accept that the external forces of capitalism and governments are not entirely at fault. At best, these forces have been negligent of community needs; at worst, they have contributed to lessening the community's capacity to do things for itself because they manipulate community interests to serve their own. Nevertheless, it is the community, in the Family's rhetoric, or the people, in that of the Antigonish Movement, that must bear responsibility for not taking constructive action to make the local economy more independent. Breaking out of this dead-end passivity requires an ethic of self-reliance that results in the creation of business enterprises that stand independent of state-imposed solutions and which can withstand (although Coady hoped they could also transform) the vagaries of free market capitalism. Second, in both cases, a moral dimension to the task at hand is identified. The formulation of the moral dimension draws heavily on the tradition of Roman Catholic social thinking, which the Antigonish Movement explicitly recognized and promoted. In recent years, the Family has attempted to more directly articulate a spiritual authority for its activities. Greg MacLeod, the key player in the history of the Family and himself a Roman Catholic priest, has written extensively and positively about the Mondragon co-operatives in the Basque Region of Spain. In a recent publication MacLeod asks:

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Why is this book necessary when a number of observers have already written about Mondragon? Because, in analyzing the Mondragon complex in terms of their own particular interests, these writers have neglected a crucial element, namely its basis in Judaeo-Christian values. (1997: 14) The current chairperson of New Dawn talks about "a real presence" in the organization "of, I'll call it, a gospel commitment. I'll call [it] a theology ... The Antigonish Movement, Coady, Tompkins, co-ops, credit unions and so forth are all very much in the vernacular of all New Dawn does" (personal interview with Joe MacLean, November 29,1999, Sydney, N.S.). The idea that there is a "theology" underpinning the CED tradition of the Antigonish Movement and the Family gives it ideological legitimation as, inherently, a good thing, beyond rebuke and criticism; not only are the programs that emerge out of the tradition supposed to serve the local good, but they also serve a higher good. Thus, voices which may be critical of the tradition for not having done enough to make the community more independent are restricted to focusing solely on its technique, for example the Family's critique of the Antigonish Movement's technique, not its ideology. The debate over techniques invariably comes down to a debate over which ones are best suited to communities surviving within a capitalist economy. Third, the Antigonish Movement and the Family have a similar view of class conflict. The Antigonish Movement engaged in a debate over capitalist and socialist models of political economy. In its analysis, the Antigonish Movement criticized the injustice of class inequality and warned that it should not be allowed to intensify, but it did accept class hierarchy. In keeping with the social democratic tradition in Canada: [Class] was used descriptively, not as an explanatory factor. Class was perceived as a barrier to equality of opportunity ... and the rational allocation of human resources, not as a structural problem for society inherent in capitalist social relations, nor as an explanatory framework. (Clement, 1988:168) The Family, on the other hand, does not appear to consider class an issue; it does not even acknowledge models of political economy other than capitalism. These differences, however, mask a significant and fundamental continuity. In the program enacted by both, class is negated. The Antigonish Movement does it by inclusion, bringing members and potential members of the proletariat into ownership positions of enterprises that are fully integrated

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into the capitalist system. The Family does it by exclusion, conceptualizing CED through the lens of a community that has interests that are imposed on everyone by virtue of their residency in a particular place. The community has a problem that requires middle-class technical sensibilities to create structures that will ensure the geographic community's economic stability in a capitalist system. In both cases, the skills of managing a capitalist enterprise are essential to achieving competitiveness, staying alive economically, and delivering on the promise of redistributed economic power in the case of the Antigonish Movement, and, in the case of the Family, community economic sustainability. On this issue, Greg MacLeod sounds remarkably like Moses Coady, who said: "The techniques of running a co-operative business are exactly the same as those of a corporation ... The real distinction between co-operation and old time business is that co-operation is private non-profit business and the latter is private profit business" (Coady, quoted in Clement, 1988:143). For MacLeod, "the Family" represents "an attempt to appropriate some of the techniques of the conventional business corporations and adapt them to personalistic and community purposes... Though the ethos and goals are community improvement, the technique is similar to private business methods" (1997:143) The distinction has to do with the use of profit, not disagreement with capitalist hegemony about the need to make one. This profit-making imperative shapes New Dawn's vision of community and its practice of CED.

New Dawn's Vision of Community Ideologically, New Dawn presents itself as part of an emerging "third sector" that relies neither on the private nor the public sector to solve the community's economic problems. Indeed, community development corporations are considered to be "futuristic community business structures" (MacLeod, 1995: 45). MacSween explains New Dawn's third sector status this way: In 1976, by the fact of its creation, New Dawn stood against the common belief that the public sector could solve all problems for all people. Now, twenty years later, New Dawn stands against the conventional belief that the private sector and free market capitalism will provide the solution to every social and economic problem. (1997b: 189-90) While verbally distancing itself from the public sector and the private sector, New Dawn, in fact, draws on features of both sectors to explain and legitimate its practice. For instance, in its most recent annual report, the chairperson of New Dawn celebrates the fact that:

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New Dawn continues to be a significant corporate citizen in industrial Cape Breton. It continues to pay its way and to strengthen its assets ... We strive to be good managers with a social imperative. Our commitment is social and characterized by volunteer effort as we seek a new understanding of business and its reconciliation with the social needs of the community. (New Dawn 2000:2) And with respect to the public sector, New Dawn's president claims that: New Dawn is as accountable as any public structure. The directors function as community trustees. They are the guardians of New Dawn, indirectly answerable to the community it aspires to serve. (MacSween, 1994: 56) New Dawn's understanding of the sociology of community, and its structure, however, both contradict its claim to be community-based and community-accountable. In the end, New Dawn's "bottom-line" reliance on business methods to meet the needs of people in an inclusive way means it is unable to do so. The reliance on business methods is an integral part of New Dawn's world view. Greg MacLeod agrees with Jose Maria Arizmendiarrieta, founder of the Mondragon co-operatives in the Basque region of Spain, who "after many years of reflection and practical involvement [concluded] that the business corporation is the basic cell or building block of a modern society ... [and] this is where reform must begin" (1997: 76-7). MacLeod understands community as an organism and CED as a strategy that aims to "meet the needs of the total community as opposed to the needs of one special interest group" (1995: 23) by focusing on the essential building block of business. "Business," of course, is "capitalist" business but MacLeod sees no point to adding the adjective. Ideologically, it would be a dangerous thing to do because it would raise the spectre of class interests, thus distracting from CED's call for everyone to put aside their differences, recognize their common interests, and pull in the same direction. Capitalism and its structural requisite class exploitation necessarily fade into the background as taken-for-granted features of human economic relationships in their communities. Only then does community qua organism begin to make practical sense. An important clue to New Dawn's motivation is found in Kasmir's (1996) observation that Arizmendiarrieta was rooted in the conservative faction of Basque Roman Catholic social activists. She concludes that the Mondragon project amounted to an effort to subvert the strong class-based politics of the region and that this explains its survival under the Franco regime.

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CED's sociological naivete is startling. Its idealization of community as a mechanism for harmony suggests the political seductiveness of the term. As Raymond Williams observes: Community is unusual among the terms of political vocabulary in being, I think, the one term that has never been used in a negative sense. People never, from any political position, want to say that they are against community or against the community. You can have very sophisticated individualist arguments about the proper sphere of society, but the community, by contrast, is always right... Paradoxically, the reference to community to justify a variety of local projects makes it complicit as a projection of reductions rather than of expansions, a projection of simplifications rather than of the kind of complex liberation which genuine community and a new national politics could be. (1989: 112-113, 117) Within community development discourse, appeals to a notion of community come from a range of political positions. Writing about the British experience, Craig (1998) points out the confusion over different uses of the term. For the Right, a return to community-controlled institutions is a victory for individual freedom over the intrusive paternalism of the welfare state. For the Left, a focus on community means empowerment of working and nonworking people who are poor. Craig (1998: 3) refers to Etzioni, the communitarian theorist influential in Tony Blair's New Labour government, and argues that for Etzioni "a good society is one in which people live freely, take responsibility for themselves, their families and their communities, and solve most problems at the level of the neighbourhood and household." Craig concludes that the current political emphases on community can be both a scapegoat for the left in the face of an emasculated welfare state and a useful piece of ideological symbolism for the Right's agenda of a "classless" austerity program. CED fails to understand that the task of "complex liberation" requires coming to grips with the complex and divisive structures which wreck the potential for community harmony suggested by the organism metaphor. Macrostructures which marginalize whole groups of people according to their gender7 and race, and the social conflict embedded in the capitalist class system cannot be dismantled by rhetorical appeals to the common interests of all people who live in a geographic community. Indeed, these structures are strengthened; ignoring them simply legitimates them, as people's attention and activities are encouraged to focus elsewhere. MacLeod, for example, argues that:

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an industry only works if it is able to fit into and enhance life in the local society. An attempt is made [in CED] to relate new industries to what is already there. The perspective relates to long-term growth and stability. As a community activist, my perspective is an organic one. (1995: 24) His perspective does not raise the question of whether or not the structure of a geographic community currently supports a relatively even distribution of economic and political power. If the structure of the community does not, CED, as he understands it, will "enhance" and make "stable" systemic inequality. Thus, his view is one that conserves existing hegemony by protecting the interests of those people who have benefited from it. Given CED's focus on the economic, these, inevitably, are capitalist class interests. People in the community who are economically marginalized and exploited gain nothing in the way of economic power for themselves. They gain nothing in the way of organizational skills to mobilize for themselves. Community hierarchy remains intact. Class interests, of course, are not wholly contained within the community. They are fully part of regional, national, and global systems of core/ periphery capitalist relationships.8 Some views of CED are explicit about the a priori need for geographic communities to integrate strategies for addressing local needs with public and private institutions in the broader capitalist system. Maclntyre, for example, states that: "CBED [community-based economic development] involves the sharing of power with bureaucracies such as governments, banks, universities, and large corporations at the local level" (1995: 86). Her view limits the range of legitimate leadership for CED by privileging people in the community who share a common world view and language with these external agencies. Attempts to secure community autonomy and meet people's needs through the forging of an inclusive agenda are emasculated by the involvement of powerful outside class forces. Thus, CED is easily manipulated to respond to a narrow band of class interests in the community and to reflect an imposed ideological vision. With a class-blind and in many other respects blind pro-capitalist analysis of community, it is only logical for a community development corporation like New Dawn to describe its methodology in these terms: "Identify the community problem; determine a business-based approach to solve it; do the deal; evaluate the results" (MacSween, 1998: 80). By applying this methodology, New Dawn pursues its "preoccup[ation] with remaking the Cape Breton community" (MacSween, 1997b: 187).

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In terms of governance, MacSween claims that New Dawn is "volunteer driven, democratic, [and] inclusive" (1994:7). Again, the image presented is community-based and community-controlled. In fact, New Dawn's structure is exclusive and elitist. As MacSween admits, "New Dawn has always been conspicuously led by the middle class" (1994:186). The organization is governed by committees structured to oversee specific aspects of its operations. The whole of its operations is overseen by an Executive Committee which is appointed by a Board of Directors, where ultimate authority in the organization resides. The Board of Directors itself is a self-appointed body that traces its origins back to the original founders of New Dawn. "Essentially, the Board replaces itself, a process some people have described as a closed system" (MacSween, 1994:133). The legitimacy of directors as actors for the community good is said to be assured by the fact that New Dawn's Articles of Association state that directors "should" come from a cross-section of the community.9 The directors' legitimacy is further defended by pointing out that they do not receive financial compensation for their service; neither are they private shareholders who stand to benefit from dividends. Their only interest, as directors, is said to be the community. As residents of the community, their interests are thought to be the same as everyone else's, whatever class differences may exist. Thus, according to MacLeod: The refreshing experience of many people involved in community economic development is the discovery that there are business persons with communitarian values10 who would like to be able to modify and adapt their business practices to what they feel in their hearts. Most business persons do not like to see closed factories and long lines of people on unemployment and welfare. (1997:141) Ideologically, as discussed above, this organic view of community assumes that interdependence within a geographic locale is synonymous with common interest. The hard issues of class, race, and gender conflict - and democratic ways to resolve these issues - are swept aside. The leadership of New Dawn is exercised by volunteer directors recruited according to their formal expertise and recognized commitment to the community. They are primarily drawn from business people and middle-class professionals and are appointed by other directors with similar backgrounds. This biased selection and retention process ensures that the vision of "remaking the Cape Breton community" by applying business methods to meet community needs remains unquestioned. With respect to the rest of the community, New Dawn purposely keeps a low profile. "While the organization creates opportunities to celebrate accomplish-

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ments, honouring staff, board, and friends, these are private affairs. Acclamations are held inside the organization" (MacSween, 1994:66-7). Given that the governance of New Dawn is not linked democratically to the community and that it "attempts to minimize its visibility," it is difficult to see how the organization is in any meaningful way accountable to the rest of the community in whose service New Dawn finds its purpose. The organism analogy, by reifying the concept of community, does not allow the question to arise. It is assumed that leadership is undertaken because it is functional to CED, and that it is done in a way that is practical and nonpolitical. This makes public scrutiny and formal democratic accountability a waste of precious time. The perspective is closely allied with the groundswell of communitarian thinking that underpins much of what is currently happening in community development in the United States. According to Sites, a "central strategic implication of communitarianism ... [is that] rebuilding community is a social process of co-ordination ... rather than a political process of mobilizing members to initiate conflict in order to advance demands based on rights" (1998: 57). Similarly, in development jargon in Canada and in Latin America, O'Malley argues that the term '"community5 is offered as an anodyne for the very real conflicts - not only personal and political but also objective and structural that beset social groups by virtue of their involvement in the global dynamics of state, market and the structural features of late twentieth-century technocratic civilization" (1998: 1). Ideologically, reference to "community" "obscure[s] the fact that there is considerable conflict and differentiation, not all of it positive, within the social grouping (no matter how small or large) denoted by the use of the term 'community'" (O'Malley, 1998:4). It is only with a nuanced understanding of the sociology of community removed from his analysis that MacLeod (1997: 147-8) can argue that in "a community business the board has to do [and is capable of doing] what is best for the total community whether the total community is involved or not." This is how New Dawn legitimates its closed structure. Whatever the organization's authority as an exemplary model of CED in Atlantic Canada, it cannot be said to rest on its commitment to broad-based participation. Moreover, by describing itself as a community development corporation, New Dawn is not identifying the source of its accountability. Rather, it is ideologically disguising the fact that it is accountable only to self-appointed directors. These directors (not community members at large) have what Clement would call "real ownership" of New Dawn's assets insofar as this involves "directing the

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use of production and disposal of its products, including such matters as investment decisions... [and] directing the immediate labour process, including co-ordination and control of workers" (1988: 136). Perhaps New Dawn could be forgiven for being undemocratic if it was successfully meeting the needs of people in the community. New Dawn's capacity to meet these needs, however, is limited by its acceptance of capitalist hegemony and its dependence on business enterprises that must prioritize the needs of capital. New Dawn's effort to respond to the need for affordable housing in the region is indicative. The Cape Breton Association for Housing Development is the New Dawn subsidiary corporation that owns and manages the bulk of the community development corporation's real estate. According to a promotional brochure, "New Dawn's achievement in housing development [for families in the low- and middle-income range] underscores the importance of a community-based approach to solving economic and social problems in Cape Breton" (New Dawn, n.d.). It was the desire to address the deteriorating state of Cape Breton's housing stock that was one of the original motivations for New Dawn's founders. In the late 1960s and early 1970s, "there seemed to exist a common perspective, both on the pan of people living in Cape Breton and by those from away, that housing in Cape Breton was a critical issue" (MacSween and MacPhee, 1996:9, emphasis in the original). Finding a way to respond to the crisis in housing was an important challenge to the fledgling community development corporation. And since that time, "one of the key elements of [New Dawn's] development strategy has been to provide affordable housing" (1996: 9). Its housing stock was also critical to New Dawn's ability to raise money for new ventures. For the past 20 years New Dawn dealt with the issue of capital through its real estate holdings. Throughout the 1970s and 1980s Cape Breton's real estate was subject to the same, though less intense, inflationary spiral experienced by the rest of the country. As a result, whatever building New Dawn constructed or bought one year was worth more the next. The organization was able to raise whatever capital was required by selling or leveraging one of its holdings. (MacSween, 1997a: 17) The situation took a turn for the worse in the 1990s when "the value of real estate was spiraling downward. New Dawn's practice of using real estate to raise its capital requirements was no longer sustainable" (MacSween, 1997a:

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17) as Cape Breton's economy suffered from increasing instability in its traditional industries of coal and steel. The problem of the decreasing value of its real estate was compounded by changes in government programs that New Dawn had successfully used to underwrite the costs of providing housing to low-income families. As of the late 1990s, in terms of its ability to meet the housing needs of low-income community residents, New Dawn had to rely on market rent. Housing became a risky venture: "in business terms, the market was getting softer and, notwithstanding our goal of affordable housing, our expenses kept going up, but rent couldn't follow that... It became an incredibly skinny operation and the struggle all the time was to cover one's costs" (personal interview with Rankin MacSween, October 20,1999, Sydney, N.S.). New Dawn did attempt to carry on its commitment to housing, focusing on growing demand for senior citizen rental units. It discovered, however, that even if you assume you could find a benefactor who would give you the capital cost and not charge you interest on that, it was still so skinny. How do you make it work? So, the conclusion was that "we can't do affordable housing unless it is subsidized... There was a need. There still is, but the market for downtown is an upper level market [i.e., a high economic rent is required]" (personal interview with Rankin MacSween, October 20,1999, Sydney, N.S.). Given the economic barriers to building new housing units, the efforts of the Cape Breton Association for Housing Development are shifting to a focus on maintaining the value of assets already owned. These assets, it is argued, represent a substantial achievement that cannot be put at risk by continuing to expand to meet needs in an unstable market. Twenty years ago New Dawn was just a dream ... and when you have a dream and not a whole lot of assets it's son of gung ho, go for it. What have we got to lose? But now we have some 150 people with jobs. It's a lot of buildings. It is a lot of older people who are served. Now, there is very much a sense that there is a lot to lose; not just for New Dawn, but for the people served by New Dawn. (Personal interview with Rankin MacSween, Sydney, N.S., October 20,1999) New Dawn has reached a limit. The need for affordable housing for lowto middle- income families remains. Yet, it is no longer profitable to meet that need. The organization cannot imagine an alternative solution. The same factor of having to make a profit that caused New Dawn to curtail expansion of its housing operations12 has drawn the corporation into the field of health care for senior citizens. "New Dawn's health care involve-

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ment is the result of the need and pursuing that need in a rational way" (personal interview with Rankin MacSween, October 20,1999, Sydney, N.S.) Health care, like housing, is a community need. More importantly, it is an area where government subsidies are becoming more readily available, thereby ensuring profitability. The former chairperson of New Dawn admits that "health care is no different" than housing in its need for government subsidy. "New Dawn has no money to solve health care. But New Dawn as an organization has built up some credibility and capacity in health care. The government may very well want to support it." (personal interview with Rankin MacSween, October 20,1999, Sydney, N.S.). What all this amounts to is an image of the community development corporation model, as represented by New Dawn, shifting direction in the face of community economic decline to find needs that are also profit-making opportunities. The needs tend to be ones that the private sector is hesitant to capitalize on because of narrow profit margins. This limits New Dawn's range of choices for development initiatives. In instances where there is the potential in a given sector to make a profit without government subsidy, New Dawn seems content to leave it to the private sector. In the case of downtown housing for seniors (see above), where rents would require high-paying tenants, MacSween says: "That's not who we are. If that market is there, maybe some other people should meet it" (personal interview with Rankin MacSween, October 20,1999, Sydney, N.S.). Those "other people" may well include one of the private business persons who sits on the corporation's board of directors. New Dawn, therefore, does not move into areas where the private sector can thrive. It does not change the structure of the community's economy to make it more independent, but, rather, picks up the pieces of a declining economy and tries (for a time successfully, in the case of housing) to hold them together so that private sector profit-making in other areas of activity can carry on as normally as possible. CED as practiced by New Dawn uses capitalist methods and attempts to protect middle-class interests in the geographic community in the face of community economic decline. Should the economy recover, MacSween admits, "we'd get squeezed out pretty fast... [The] private sector plays more of a role in a community when the economy is strong." Thus, even though "the reason [New Dawn] does business is to be independent" (personal interview with Rankin MacSween, October 20,1999, Sydney, N.S.) the organization's very existence is threatened when the economy regains its buoyancy.

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Conclusion In 1999 the Social Sciences and Humanities Research Council (SSHRC) announced major funding for a CED research project. Led by MacLeod (1999), "The Knowledge Economy and Community Economic Development" study combines the efforts of fifteen academics and CED practitioners to "identify factors that allow community-based business initiatives to survive in the postindustrial economy, and to communicate relevant information and technologies to academics and to a network of community economic groups in Canada and abroad" (MacLeod, 1999: i). New Dawn Enterprises and another Family member, BCA Holdings, are among the cases to be analysed. The project proposal lists four research objectives: The first is to investigate the experience of CEDCs [community economic development corporations] in their attempts to promote local economic development. The major goal here will be to understand the range of problems that CEDCs face in developing and supporting new business ventures (for example, finance, managerial and organisational knowhow, technical support, marketing, export, etc.). The second research objective is to compare and contrast the experience of these east coast [Canadian] CEDCs with CEDCs in other pans of Canada and the developed world (especially with the highly successful Mondragon Co-operative Corporation in Spain). The third research objective, which relates to the action research component of the project, is to learn from the actual experience of attempting to promote more effective CEDCs. The fourth objective is to evaluate the (potential) contribution of government programmes and policies and collaboration with university researchers to the success/failure of CEDCs. Again, this evaluation will involve comparisons with the activities of governments and researchers in other non-metropolitan regions of Canada and the developed world. (MacLeod, 1999:1) The third research objective, promoting effective CED, will be accomplished by "direct intervention" (MacLeod, 1999:4) through the placement of University College of Cape Breton MBA-CED students as interns in community development corporations. The students will research business opportunities and take a hand in establishing new businesses, as well as "introduce and expand the role of technology in activities of the firm and, where applicable ... introduce other standard business practices designed

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to increase efficiency and competitiveness" (1999: 4). The internship program is part of a "plan to develop a cadre of highly trained managers able to take on managerial responsibilities in the community business sector in the next millennium" (1999: 5). The third and fourth objectives, evaluating government and university collaboration, relate to the goal of promoting a very specific model of CED. The details of the model are suggested by two "presuppositions" that underpin the research: The first is that CEDCs must increasingly integrate themselves into the KBE (knowledge-based economy) in order to remain competitive and provide the growth that local economies need. There are two basic ways in which this needs to be done. On the one hand, in their associated businesses in the traditional (resource, service, and industrial) sectors of the economy, CEDCs have to introduce and expand the use of information technology across the full range of business activities (for example, marketing, production, accounting, etc.). On the other hand, they must develop new businesses in areas that are more central to the KBE (for example, software development, information processing, etc.). The second presupposition is that CEDCs need to be more tightly and effectively integrated, both within individual CEDCs and among CEDCs in larger geographic regions. Within individual CEDCs this implies a more traditional corporate form (capable of allowing for increased vertical and horizontal integration) that includes a full range of business services (e.g., a financial branch, a research and development arm, etc.). Across CEDCs it implies the creation of new forms of co-operative partnerships and confederations that can better promote collaborative ventures and mutually supportive practices. (MacLeod, 1999:3) The basis for these presuppositions is the Mondragon Co-operative Corporation in Spain which, historically, has informed much of MacLeod's efforts in the Family of community development corporations and which the proposal hails as a "prominent" (MacLeod, 1999: 2) CED success story. Mondragon is singled out because of its success as a business: [I]n a little more than forty years, [it] has grown to be one of the largest corporations in Spain, with annual sales measured in billions of dollars. Even more significant than its sales volume, has been its commitment to local economic development, a commitment that has led it to become the largest employer in the Basque region of Spain. (MacLeod, 1999: 2)

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Ideologically, the proposal effectively marginalizes any consideration of CED's broader aims. CED is reduced to a strategy for local economic development that unambiguously accepts success within the capitalist economy as the only criterion that matters. "Effective" community economic development initiatives are those that excel in: a) initiating a more proactive, systematic approach to the development of new firms in the more vital sectors of the KBE; b) incorporating information technology more efficiently into different aspects of the operations of firms (e.g., marketing, product development, etc.) and c) developing more effective organisational structures (i.e., ones which allow for greater horizontal and vertical integration, insulate new firms from market pressures until they are able to compete, retain resources in the local community, etc.). (MacLeod, 1999:1) The proposal is silent on the aims of meeting people's needs in the community in an inclusive and participatory way. Instead, the goal of CED is to play a role in "sustaining and revitalizing local economies in the KBE" (MacLeod, 1999:1). The need to be profitable and competitive is the priority. In terms of democracy, being inclusive, participatory, and accountable to people in the local community are not things the study chose to focus on. It is interesting that the Mondragon Co-operative Corporation is celebrated for its business success and its "accent on high technology" (MacLeod, 1999: i) with no mention of its alleged democratic underpinnings. Kasmir's (1996) important critique of the Mondragon co-operatives aside, others have focused on their implications for a strategy to counter capitalist hegemony. Schweickart (1993:65), for example, argues that the "most outstanding structural feature of a Mondragon firm is its democratic nature." In the SSHRC proposal, CED initiatives are evaluated strictly as business enterprises. The instrumental approach to education, the desire to professionalize rather than popularize CED activity, as evidenced in the training of young people to be business managers of community development corporations, further suggests the entrenchment of CED in capitalist hegemony. Douglas (1994: 22) stated that CED is a type of development that does not occur "as a result of the ebb and flow of market forces and occasional government intervention." If this is the case, the use of business, any type of business, as the main tool for this type of development is contradictory.13 Certainly, New Dawn's story is. Gramsci advised vigilance towards the relationship between means and ends. The means employed by CED organizations like New Dawn do not correspond to the aims of meeting

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community needs and do not do so in a way that is participatory and inclusive; the problem here is compounded by the fact that, as we saw above, the very notion of "community" is used in a vague manner. The structure isolates and legitimates middle-class leadership. It leaves the middle class to its own devices and methods for meeting community needs, at a price people can pay. This is done through a community development corporation, or any other form of capitalist enterprise, which facilitates middle-class interests independent of participation and pressure from the people most marginalized in the community. The commodification of "caring" is almost complete. The welfare state's recognition of the provision of basic needs as a public responsibility and its method of meeting these needs through income redistribution are accepted by capitalism's advocates as threats to global capitalist competitiveness (Leonard, 1990). What was public is now private, and the lofty notion of "caring" - a notion so often included in the warm and fuzzy rhetoric of CED - is increasingly subjected to capitalist profit and loss calculations. Indeed, MacSween (1994: Ch. 1) is hopeful that New Dawn will continue to benefit from opportunities to deliver, for a profit, services once provided by government. Ideologically, it is assumed that this is the way forward. This is, however, what Gramsci would call "a vulgar liberal conception [which] can be traced in a whole series of works purporting to be connected with the philosophy of praxis and [which] have given rise to infantile forms of optimism and folly" (1971:179). In their acceptance of the private sector's right of first refusal, third sector organizations like New Dawn are dependent on a weak economy and government subsidy for their profitability. They will abandon their profit when the private sector wants to move in. And they will not participate in a search for other ways to meet community needs when government subsidies recede. The only method they recognize is the capitalist method. If a need cannot be met profitably, it must and will go unfulfilled. In effect, their commitment, first, is to capitalism and, only secondarily, to meeting the needs of people in the community.

Chapter Eight

State Employment and Trade Unionism: Signs of Renewal? Anthony Thomson

Something seemed different - or refreshingly similar - about the labour movement in Nova Scotia in the early years of the new century. Once again the public gallery of the House of Assembly was filled by the angry voices of working people. A Conservative government was forced to back down from its plan to impose a legislated contract on provincial health care workers. After a decade of quiescence, the use of the strike appeared to be on the rise. Beyond provincial borders, Nova Scotians joined the people's campaign against global imperialism as state repression in Quebec City radicalized the next generation of activists. Even the apparent right-wing hegemony supporting another round of imperialist war seemed likely to fracture as the real results abroad became apparent and the heavy costs at home - including the loss of civil liberties - were realized. These bad times were potentially good times for resistance and social change. A quarter century ago, the Canadian labour movement reached a highwater mark of resistance that had not been achieved since the early decades of the twentieth century. Since then, however, with the collusion of the federal and provincial states, the corporate elite and their ideological handmaidens have established a hegemony that overwhelmed for a time the voices of opposition. We are witnessing the early signs of basic fissures that are appearing in this hegemonic wall. This chapter is intended to contribute to the contemporary debate about the future and prospects of the labour movement. Much has been written about the need for union renewal, both quantitatively and qualitatively. I intend to review briefly the recent past, focusing on the establishment of the post-1945 labour consensus, the rise of public-sector militancy, and the con-

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sequences of the ascendancy of the Right. Workers' resistance to the state-led attack on organized labour will be exemplified by an overview of two recent, militant struggles involving municipal employees and health care workers in Nova Scotia. The essay will conclude with some observations on the meaning and prospects for union renewal.

Institutionalized Labour Relations: 1945-1970 The second major imperialist war of the twentieth century fundamentally altered international relations and class power in the advanced capitalist West. According to Samir Amin (1998: 40), during the post-1945 "social and national" period, a threefold global shift occurred in the balance of class forces. In the underdeveloped world oppressed peoples achieved some freedom and popular power through wars of national liberation and the erection of "developmentalist states." In "actually existing socialism," what appeared to be a planned, social, and economic alternative to global capitalism was being reconstructed and was becoming increasingly widespread. The third component of this period of social and national construction was the Western welfare state. "National Keynesian policies" in advanced capitalism were rooted in the achievement of a larger share of political power on behalf of the working class.1 Although labour was still treated as a commodity under Keynesianism, the achievement of a national social security system supplemented the benefits of collective bargaining, which allowed organized labour to maintain wages that were more or less proportional to productivity increases (Amin, 1998:41). As Canada's working class was mobilized and politicized during the war-induced full-employment boom, the ranks of the union movement nearly tripled in size, reaching thirty per cent of the non-agricultural workforce by 1948. Strike activity increased to rival the labour revolt of 1919. During and immediately after World War II, both the Communist Party and the CCF reached high-water marks. The other side of this story of growing militancy, however, was co-optation. Canadian workers were free to bargain collectively within a set of regulations which Panitch and Swartz called "one of the most restricted and highly juridified frameworks for collective bargaining in any capitalist state" (1993: 12-13). The result was the institutionalization of collective bargaining within a structure that maintained, within the relatively new balance of class forces, the absolute domination of capital. The main consequence of the consensus bargaining framework was to demobilize the working class and replace direct organization and action with a legalistic framework for recognition, bargaining, and the curtailment of wildcat strikes. The labour movement may have

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become a "giant" but, in Heron's words, it was a tame giant (Heron, 1996:7778). A more bureaucratic and legalistic unionism focused almost exclusively on the wages and benefits obtainable through collective bargaining. Management reserved and was allowed to reserve for itself control of important workshop issues such as the power to determine staffing requirements, the work routine, and the introduction of new technology (Gonick, 1983:9; Mahon, 1983: 149-86). Meanwhile, as corporations and the state prepared a place at the table for organized labour, trade union leaders, like respectable guests, washed their hands before sitting down for dinner. The militant leadership of the new industrial unions and the 1940s strike wave had been supplied, in the main, by labour activists and radicals, many of whom were affiliated with the Communist Party. In the Cold War atmosphere of the late 1940s and 1950s, however, both conservative trade union leaders and social democrats who were committed to the new labour consensus drove many of the reds and radicals out of the labour movement (Panitch and Swartz, 1993:16; Heron, 1996: 80-1). The dominant culture of advanced capitalism in the 1950s and 1960s enshrined the belief in certain prosperity and a sense of justifiable entitlement (Amin, 1998). The welfare state inaugurated an unprecedented growth in public services in education, health, and social security, creating a multi-faceted social wage for the working and middle classes, and a fragile and makeshift safety net for more oppressed groups. This meant large increases in state budgets and in government employment. From the point of view of the Right, it was the era of "Big Government:" some state ownership of natural resources, some degree of social regulation of private businesses, and a relatively progressive tax structure. In Canada under the Liberals and then Prime Minister Diefenbaker's "red Tories," Keynesian fiscal and social policies became the norm, being consolidated in the 1960s under Prime Ministers Pearson and Trudeau. The Canadian welfare state was not a product only of the changed balance of class forces, but also reflected the rise to consciousness and action of other social groups, such as middle-class women and ethnic minorities. While it is certainly true that Trudeau's entrenchment of individual rights had the effect of focusing attention more on individual entitlement than collective action to secure group benefits, part of Trudeau's legacy did endorse the movement towards collective rights, such as multiculturalism, as long as they were based on non-class differences. As Panitch and Swartz point out (1993: 6), the right to free collective bargaining and the right-to-strike were conspicuously omitted from the Canadian Charter of Rights and Freedoms.

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Collective bargaining was a crucial component of the post-war consensus. Between 1945 and 1975, Palmer (1992) argues, the Canadian union movement became a willing partner in a consensus involving the state and corporate directors. Moderate economic prosperity, riding on the coat-tails of U.S. expansion, allowed unions to maintain what was regarded as a reasonable share of national income. The accommodation of labour within the model of business unionism provided the plums of limited consumption for the organized working class. This accommodation was not accomplished through fully blown tripartism, although structured negotiations did take place among state and corporate elites, and some labour leaders. The framework of collective bargaining as it had been established in Canada during the Second World War was maintained. Collective bargaining became highly legalized and professionalized. Solidarity was undermined by the tradition of enterpriselevel bargaining and by the reiteration of management rights, which narrowed the range of work-place issues that could be bargained. New technology, staffing, the work process, and routine usually remained the prerogative of management. Unions bargained on behalf of what they defined as the immediate material interests of workers, procedures of formal ratification were maintained, and the membership could be brought out onto the picket lines as a tactic of last resort. The strike was not an empty threat, but was an integral part of the system. To be effective collective bargaining had to have behind it the rhetoric and potentiality of the strike. What was most crucial to the exercise of workingclass power was not just the strike as a tactic but also the potential in the process of full collective bargaining for membership decision-making. This included establishing initial demands, ratifying or rejecting contracts, debating and voting on tactics, as well as experiencing the physical act of maintaining a picket line and understanding the varieties of polarization that direct confrontation produces. There was a direct action component to labour relations and some tradition of solidarity and militancy was maintained. At the same time, it was a solidarity that was hedged-in and circumscribed. In many cases it was still business unionism within a context of relative prosperity, still largely focused on short-term economic priorities. As employment fluctuated within acceptable levels, as inflation advanced just beyond the reach of wage gains, a degree of working class militancy persisted. Merged with demands originating from wider social movements involving women and visible minorities, union demands were extended beyond bread and butter issues in the struggle to secure wider social benefits, such as pay equity, affirmative action, and parental leave provisions. These

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demands exposed many of the contradictions in the union movement and helped precipitate, in many instances, a crisis of control as the gulf widened in most unions between the elected leadership and full-time staff, and the membership. In this set of circumstances, public-sector organizations became a crucial component of the labour movement. A multitude of social forces coalesced in the public sector, which became, in large measure, the most progressive element in the union movement driven not only by issues inherent in the position of state workers in late capitalism, but by the make-up of public service employment. Women were employed in government services in numbers that were at least proportional to men; in some instances, such as in nursing, women predominated. Particularly in the public sector, then, contradictions between workers and employers, as well as contradictions within the union movement itself, were compounded. On the one hand, women brought a new agenda to the collective bargaining table, reinforcing their new militancy with the consciousness and actionorientation of the feminist movement. On the other hand, many of the newly organized groups of employees were self-consciously middle class, exercising a degree of autonomy and skill in the workplace and holding formal certification of educational differentiation. While unionization of the public sector was an indication of the erosion of the material foundation of this middleclass consciousness, the inclusion of semi-professional workers also altered the direction and orientation of the union movement.

Collective Bargaining Rights for State Employees The decade 1965-1975 brought to fruition a campaign to bring the benefits of collective bargaining to the public sector. The public sector was not without a degree of unionization prior to this period. Blue-collar municipal workers have a long history of unionization and the same is true of postal workers. The more semi-professional state employees, such as teachers and civil servants, had organized independent associations (or self-proclaimed unions), though in most cases they remained aloof from the labour movement, reflecting their status consciousness. Middle-class status, however, is dependent on the maintenance of some invidious distinctions. The post-war labour consensus had undermined some of these disparities as the working class secured for itself a consistent share of the national income. As the Canadian state generally became increasingly "welfarist" in the 1950s and 1960s, in the restricted sense noted above, major economic and political changes were underway that affected public-sector employees. Largely through the solidarity and militancy of several strategically placed unions, such as the

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postal and health care workers, and by municipal employees who were long organized but only recently invigorated, government employees won rights that had long been denied them. The breakthrough first occurred in Quebec where in 1965 the Liberal government endorsed the principle of collective bargaining, including the right-to-strike, for provincial employees. This was followed in 1967 by the Federal Public Service Staff Relations Act, legislation that the government was compelled to adopt in the face of militant strikes for recognition. To varying degrees, public-sector employees in various jurisdictions struggled in numerous ways to obtain recognition. The right-to-strike was the crown jewel in the union demands. It was not always secured nor secured intact, usually being conceded to government employees in a restricted form. The rights of civil servants were even more restricted than employees in the private sector. As Panitch and Swartz point out, "Vital issues, including pensions, job classifications, technological change, staffing, and use of part-time or casual labour, were wholly or partly excluded from the scope of bargaining" (1993: 17). Even before these rights had been legislated, and increasingly thereafter, public-sector workers began to use their newly-awarded bargaining power to alter the terms of their labour contracts, to close the salary gap with privatesector workers and, beyond that, to establish new standards of equity. Publicsector unionization occurred at the apex of a revival of militancy among organized workers in Canada that was illustrated by a strike wave that was maintained at a high level for the entire decade prior to 1976.2 Much of this militancy occurred among public-sector workers and was propelled by attempts to catch up to the wages and benefits of similar occupational groups in the private sector. It was further fueled by seriously high inflation that quickly eroded what gains employees in all sectors could make. Public-sector workers were seen as so far in the forefront of both organization and confrontation in the 1970s that some commentators heralded them as the new progressive vanguard, institutionally inclined towards socialism (Johnston, 1978:1-17). Others, such as Palmer, disputed this interpretation. For him, the public sector overall was organized in a negotiated manner between previously existing "associations" and the state. It was a creation of the newly emerging union bureaucracy and the government. Despite important exceptions, he concludes, this initial organization tended to be "bureaucratised and conciliatory" (Palmer 1992:354-55). This was certainly variable; employees in the health and education fields, for example, were usually more militant than most federal or provincial civil servants.

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For most federal and provincial civil servants, employers conceded collective bargaining rights within the bureaucratic and legal framework of Canadian industrial relations.3 Unionization from above, Panitch and Swartz conclude, was "debilitating" for those cap-in-hand public-sector associations that had not engaged in "the mobilization and struggle for recognition which was so much a part of the formation of the original labour movement." The largest federal union, the Public Service Alliance of Canada (PSAC), for example, was "born almost entirely of legalism, rather than mobilization and struggle" (Panitch and Swartz, 1993: 20). That meant that public-sector unions were not favourably placed to withstand the change in the economic and political climate that loomed in the 1970s. The other side of this coin was the significance of progressive elements in the new public-sector unions - as well as in other progressive, nationalistic unions in Canada - that helped revitalize the labour movement. The movement was not just stronger in numbers. Among public employees there were, first, important advances in the fundamental issues of rights and entitlement. The argument from a standpoint of rights was a powerful motivator, especially when compounded by an awareness of unequal treatment in wages and salaries. The new union growth also meant the greater inclusion of women in the labour movement. Between 1962 and 1984, the proportion of women in the union movement jumped from 16.4 per cent to 38.5 per cent, and the rate of unionization was over three times greater for women than men (Krahn and Lowe, 1988: 199). In tandem with a growing movement in society at large, women's issues were raised, debated, and often won in bargaining, exemplified by the movement towards pay equity. Key issues of specific concern to women brought a revival of wider social union issues to the movement, as solidarity extended beyond the confines of the union into the wider community. Many progressive changes can be attributed to the effects of the women's movement and the leadership of women in the union movement, however unequal this leadership still is. The progressive side of public-sector unionization was founded on these new demands for equal rights (organization and bargaining) and equality rights (issues raised by and on behalf of women and minorities). In addition to these progressive currents, another structural feature of public-sector unionization had a potentially contradictory effect. In most cases, private-sector employees produce material goods or services for private profit and the threat to withdraw services strikes directly at capital accumulation. Public-sector workers deliver necessary, often essential services to the public.

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Arguably, a public-sector-service strike does not threaten the interests of capital directly but, on the contrary, disrupts services that the welfare state has devised for the middle and working classes. At times, especially in the early years of organization and militancy, public-sector unions were able to develop a considerable degree of worker-client unity. The battle lines were not just about adding a dollar to a day's pay, or even about general issues of rights or fairness; they were also about the quality of services the "public servant" was providing to the citizens.4 When the postal workers first struck, illegally, they had widespread public support. So did the nurses in Nova Scotia when, in 1973, they resigned en masse at the crest of a wave of public sympathy that induced a quick and very favourable settlement. Later that wave was broken and, as it was sucked back to the sea, it carried much of the public's good will away with it. As the public sector grew in the embrace of Keynesianism, the Canadian labour movement was significantly changed. Government employee unions became the largest in Canada; more than one in every three unionists was a public employee. Much of what was most progressive in the labour movement of the early 1970s was centred in the public-sector unions, led by a new generation of activists schooled, at least in part, in the social movements of women and counter-cultural anti-authoritarianism. The weaknesses of this new union movement were quickly exposed, however, when global capitalism entered a new era of crisis in the early 1970s. As variable forms of economic crisis became endemic to the Canadian economy in the 1970s and 1980s (Wolfe, 1983: 7-26), the state was charged with the task of restoring profitability at the expense of labour. The wage and price control programme was one of the fig leaves of legitimacy that the state used to cover the reduction in real wages that resulted from state activism on behalf of capital.

The Capital-State Counterattack Inflationary spirals coupled paradoxically with endemic stagnation indicated that, by the 1970s, capital was in a new crisis. Growth rates declined, markets stagnated or shrank, the price of resources (notably oil) increased, and profit margins were reduced (Panitch and Swartz, 1993:20). Governments responded by increasing subsidies to industries, but such policies exacerbated inflation and induced further worker militancy. The Keynesian solution of deficit financing appeared to be out of control as government deficits ballooned as a result of inflation and the policy of high interest rates. Furthermore, North American-based capital was facing increasing competition from the reconstructed economies of West Germany and Japan, as well as from the newly

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industrializing countries such as Taiwan and South Korea. The result was the beginning of a quarter century of employer and state counterattack against the labour movement in Canada. Labour is only now re-emerging from this deep trough. The crisis of the early 1970s initiated a basic change in class power. The relative post-war balance of class forces could not be maintained since it was increasingly detrimental to the interests of capital. Clearly a period of tough bargaining was to ensue, but the new shift in class forces was not going to be a pushover. In the private sector, employers began to demand concessions, rollbacks, and more extreme "management rights." This right-wing ideology was embraced by the state vis-a-vis its own employees. Just as state employees in the 1960s and 1970s had become the militant spearhead of the Canadian labour movement, so too, in the 1970s and 1980s, they became the chief target of government coercion. Government intervention included direct action to reduce workers' incomes, beginning with so-called voluntary restraints and highlighted by the 1975 wage controls which, together with other fiscal manipulations, culminated in the recession of the early 1980s and a concerted program of cuts to the social safety net. The tax burden was shifted from corporations to individuals and then to lower-income taxpayers by increasing non-progressive taxes and expanding so-called voluntary taxation through state-sponsored lottery schemes. The Canadian state - at all levels - mounted an extensive campaign of coercion to withdraw the collective bargaining rights of state employees that had been won through extensive struggles throughout the 1960s and 1970s. Ad hoc legislation to force state employees back to work was utilized routinely and fines and the threat of imprisonment were used to coerce union members and leaders. Collective bargaining was suspended for state employees for various periods of time. In Nova Scotia, the Buchanan Tories introduced their copy-cat "6 and 5" program in 1981 on the heels of a plan to replace collective bargaining in the public sector with compulsory arbitration (see Thomson, 1984). The main thrust of state legislation was to curtail the power of organized workers, especially in the public sector. By the 1980s, throughout advanced capitalism, coercion had become the predominant state response designed to limit the rights, expectations, and freedoms of labour. The "New Right" intended to intensify this class warfare and make its victory permanent. Margaret Thatcher came to governmental leadership in Britain in 1979; Ronald Reagan in the U.S. in the following year; Brian Mulroney in Canada in 1982. Common to all of these new regimes was

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the recognition that the labour movement had to be brought to its knees. The level of resistance and militancy varied greatly by country and sector. While Canada was somewhere between the British and U.S. poles of labour resistance, the Canadian Union of Postal Workers (CUPW) was a convenient nail that stood out for the hammer of state reaction. An illegal strike by the postal workers had initiated the campaign for collective bargaining in the 1960s. With a radical leadership and an active rank-and-file, CUPW had become the very model of a militant union. As the postal workers actively resisted government wage policies and fought hard for progressive gains, most controversially over a demand to control technological change in the workplace, the big guns of the media and government were leveled at them. There was much to undermine. Some of the early success of CUPW could be attributed to public support. It took a flood of negative publicity in the capitalist press to undermine this support, leaving the postal workers awash in public disapproval. The primary bludgeons of the right-wing campaign were the Postal Services Continuation Act and the incarceration of CUPW President, JeanClaude Parrot. The singling out of the most progressive unions and leaders was a particular kind of substitutionism. The real targets were the public sector, the collective bargaining process itself and, overall, the labour movement as a whole. Public employees, the last to win union rights, were the first to lose them. In the 1980s, federal employees and then, successively, provincial public-sector workers were bound in the straightjacket of legislated "restraint." Governments exercised their unilateral power to establish terms of employment. Government rhetoric still pronounced these measures to be "exceptional," under the assumption that free collective bargaining was still the labour relations norm. In practice, however, the exceptional became the norm, a situation Panitch and Swartz labeled "permanent exceptionalism" (Panitch and Swartz, 1993). Right-wing parties were swept to power on the coat-tails of the movement from prosperity to austerity; suitably humbled by the power of capital the New Democratic Party (NDP) often followed suit. The attack on the public sector, as a crucial protagonist, took many forms. Principal among them were the use of legislated rollbacks, wage freezes, and interference to the point of the negation of the collective bargaining process. Undergirding them all was the promotion of right-wing ideology. It was not enough to defeat the militant unions and legislate away bargaining rights; the capitalist agenda required a wholesale shift in ideological power as well as a return to a more obvious class rule. A nexus of ideas was spun, linking large

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government deficits and an image of heavy individual tax burdens with greedy public-sector workers and welfare-state abuse.

Labour's Response Canadian labour leaders responded to these attacks in the 1970s, Palmer states, but their opposition was "fragmented and fairly inconsequential." In his view, the labour movement had "lapsed into a complacent confidence" by 1975 and was ill-prepared to defend workers' interests (Palmer, 1992: 341, 344). The response of much of the trade union bureaucracy was not to re-mobilize the rank-and-file but, more often than not, to go cap-in-hand to the state as a junior partner in the hope that their influence could be preserved in a scheme of co-operation. The state, however, had other plans. While public-sector unions led the fight-back in the 1980s, they did so in increasingly difficult conditions. Just as a strike actually helps a business with its bottom line during a recession, in periods of declining government revenue, the state budget may also be balanced on the backs of workers who can be forced to walk the picket lines. Since this necessarily involves disadvantaging the public, the government hard-line in labour relations is done in tandem with an ideological attack on the supposed greed of government employees and their organizations. For the unions, then, these were usually defensive strikes, rear-guard battles, and workers usually lost more than they gained. As organization stagnated, as many workers lowered their horizons even on bread-and-butter issues, militancy overall declined, and the strike wave did not outlast the recession of the early 1990s. Palmer argues that the decline in labour disputes in the mid-1980s actually overestimates employee militancy in that period. A significant proportion of the disputes were lockouts, "provoked by an increasingly confident capital," or were defensive battles in the face of demands for concessions from employees. This militancy also underscores the co-existing quiescence of many sectors of the traditional working class (Palmer, 1992:347). A strike against the state does not have the same effect, economically, as a strike against a profitable private sector corporation. The latter is a blow directly against the corporate elite and the accumulation of capital. There was one other important nail in what the government hoped would be the coffin of militant trade unionism in the public sector. The private sector was busily reorganizing itself, merging, downsizing, outsourcing, and running away to even more labour- and environmentally unfriendly locations. Loss of jobs, threats to employment, workplaces closing temporarily or permanently - all these scenarios undermined the union movement and had a

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dampening effect on labour militancy. The blue-collar workforce in Canada has been a frequent victim of corporate restructuring. The recessions of the early 1980s and early 1990s greased the path of the merger and downsizing juggernaut, providing an apparently objective legitimation for repressive measures taken in both the private and public sectors. In fact, the more the state can lay the blame for its decisions on uncontrollable economic conditions, the less legitimacy it loses. State policies may be perceived as the result of political choices, and the instruments of such choices may be susceptible to political pressure. When the cause of the economic malaise is identified as "globalization," or reified as the consequences of a market economy that is guided by an "invisible" rather than a palpable and identifiable hand, fatalism rather than fight-back prevails. Capital was not only reinventing itself, the New Right was busily restructuring government. The Keynesian welfare state was anathema to the New Right - in their vision and rhetoric, welfarism was nothing short of a redistribution of wealth from the hard-working rich to the undeserving poor. Politically, it was the tangible symbol of working-class power. In the dogma of laissezfaire, both "Big Labour" and "Big Government" were hamstringing the corporate sector. State restructuring meant, among other things, the removal of what was left of the burden of taxation from the wealthy to the backs of the middle and working classes, the elimination of state-sponsored programs in favour of private-sector delivery (everything from health care to education and corrections), and the deregulation of businesses to give capital a free reign in the marketplace. Once ingested, this magic mushroom inevitably brought about the shrinking of the state and of state employment. Restructuring in the state sector meant, among other things, job losses and privatization. Unemployment Insurance (Ul) was targeted early and often, followed by pensions and family allowance allotments. Social assistance and health care followed as the federal government substantially cut transfer payments to provinces, forcing provinces to dismantle their own versions of welfarism. As the welfare state was whittled away, public employees and many white-collar workers who had hitherto been impervious to economic decline faced the same insecurity that blue-collar workers lived with as a normal condition of wage labour. The dual effect of the counteroffensive and the economic recessions had the predictable dampening effects on organized labour as can be illustrated by the data in the following charts, showing work stoppages (Chart 1) and per cent of work time spent in stoppages (Chart 2) in Canada.5

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Chart 1. Canada: Work Stoppages, 1976 - 2000

Chart 2. Canada: Work Stoppages, Percent Time Stopped: 1976-2000

If we examine the data for Nova Scotia over the last few decades, the overall patterns are similar to the Canadian data, with some minor differences. There was proportionately more activity in Nova Scotia in the early 1990s (Chart 3).6 In addition, the impression of a recent revival of a degree of strike activity is marginally reflected in a small rise towards the end of the decade. On the other hand, the percentage days spent in work stoppages tell a slightly different story (Chan 4): The fight-back appears to have been stronger in the early 1980s and to have basically flattened out since then.

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Chart 3. Stoppages, Nova Scotia, 1973-2001

Chart 4. Days Lost, Nova Scotia, 1973-2001

What is most interesting, however, is the examination of this more recent period singling out "public administration" (Charts 5 and 6). The 1998,1999, and 2000 figures indicate a revived militancy; the days lost (Chart 6) are particularly striking. The fiscal year ending in 2001, however, had no public administration strikes (though there was a 28-day strike by unionized university faculty which is classified under "services"). Of course, in small jurisdictions an uncharacteristically prolonged strike involving a significant number of employees can appear to have a magnified significance relative to the labour movement overall. The 2000 total, for example, is from the strike by Halifax School Board employees, which is examined below. Work stoppage data is not always the clearest indication of militancy. The second case study below analyses a dispute that culminated in a campaign of mass resignation undertaken by

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Chart 5. Stoppages, Nova Scotia Public Administration, 1973-2001

Chart 6. Days Lost, Nova Scotia Public Administration, 1973-2001

nurses in 2001 in the face of legislation that would deprive them of the rightto-strike. Nurses and other health-care workers organized a small-scale wildcat strike and walked out briefly at the strike deadline, neither of which actions was reflected in the stoppage data obtained from the Nova Scotia Department of Environment and Labour for that year. As the section on union renewal will argue, breakthroughs in organizing, militant strikes, and other indices of trade union consciousness need to be sustained and built upon before any claim to significance can be justified. The charts do, though, illustrate one objective basis for the impression of revival in Nova Scotia. Traditionally, trade unionism in Nova Scotia has been dominated by two main industries: coal mining and steel production centred largely in Cape Breton, and the Atlantic fishery. As the smokestacks are finally demolished in

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Sydney, all that is left of the legacy of the steel plant are the tar ponds, arguably the worst environmental disaster in Canada (see, e.g., Barlow and May, 2000). Employment in the coal fields has shrunk to a fraction of the 10,000 who used to go down underground. The deindustrialization of Cape Breton has been a long, painful, and conflictual process. Sucked dry by outside capital, the provincialization of the industry and small-scale reinvestment was a temporary respite, won by the struggle and determination of the Cape Breton community as a whole. From the point of view of right-wing Nova Scotian politics, this employment lifeline was dictated more by short-term political opportunism than long-term industrial strategy. The current Hamm administration in Nova Scotia explicitly campaigned to leave Cape Breton swinging in the breeze, banking on mainland and rural support. The Cape Breton labour movement has been downsized to a shadow of its heroic past. The decline in the fishing industry, as always, is a more complex phenomenon. The widespread collapse of the offshore fishing industry, whatever its causes, has had a devastating effect on many small, rural communities in Nova Scotia. At the same time, the shellfish industry is thriving, at least temporarily. From the point of view of the labour movement, the decline in the fishery has primarily affected the more proletarian offshore fishers. The prosperous inshore shell fishery is still dominated by small boats and, at most, a semi-proletarian workforce. Efforts to unionize the inshore fishery and to bargain over the price of the catch has had some successes over the last quarter century, principally through the Maritime Fishermen's Union (MFU). Much of the industry remains solidly petty bourgeois, however, and maintains only the most tenuous of connections with organized labour. The ripest plum for unionization in Nova Scotia has been, since the early 1970s, the three Michelin Tire plants, scattered in separate rural counties. These plants are basically all that remains of the once-heralded post-war developmental strategy of the provincial state. Geared largely for export, the economic benefit of this capital investment at public expense has been limited to the wages and salaries of the Michelin workforce. These enclave tire plants could never have become the fountainhead of ^industrialization, which helps account for the consistent failure of organized labour, principally the Canadian Auto Workers Union (CAW), to organize this rural workforce. The CAW may have better luck in the new call centres, which represent the contemporary version of the provincial state's employment strategy (see Chapter 6, this volume). In the short run the considerable labour force that has been lured into these centres may be seasoned for unionization, although this labour-intensive "industry" appears to be highly unstable and transient.

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Employment in the public sector continues to be numerous and, despite the anti-state campaign outlined above, relatively stable. Although some important groups remain outside the "house of labour," most significantly the Nova Scotia Teachers' Union (NSTU), the organized labour movement in Nova Scotia is numerically dominated by the public sector. This is reflective of the dependent status of Nova Scotia's political economy and the attrition resulting from the complete shutdown of industrial Cape Breton and the devastation of the offshore fishery. Public employees have been consistently targeted over the last twenty years. Their struggles exemplify both the concerted state-led attack on once-secure and desirable jobs, and the response of a group of workers that has its own internal fissures of gender, class consciousness, and status. Two specific cases of state-union conflict in the Halifax Regional Municipality highlight the recent militancy of unionized public-sector workers in Nova Scotia: the strike of outside municipal workers and the near mass resignation of nurses. They may also be used to illustrate many of the fundamental themes that shape collective bargaining in the public sector: the struggle over the imposition of management rights and contracting out, the importance of a militant rank-and-file, the need for democratic leadership, the necessity of building alliances with clients and co-workers, and the crucial role of the state, whether covert or overt, in public-sector labour relations.

Halifax School Board vs. NUSPE The collective bargaining debacle between Nova Scotia Union of Public Employees (NSUPE), affiliated with the Canadian Confederation of Unions (CCU), and the Halifax School Board exemplifies the employer offensive that had been underway since the early 1990s. The Board demanded numerous concessions from the 340 custodians and maintenance workers and found that there was considerable "give" from the union on some of these employer demands (NUPSE Strike Update, March 27,2001). Other than the reduction of benefits, the key issue was a major overhaul in staffing, work scheduling, job cuts, and lay-off policy. Tactically, the Board offered some increase in wages (though less than the increase in the cost of living) in return for broadening management rights in staffing and scheduling. This "flexibility" for management was the most important issue in dispute. Scheduling involved compelling employees to work in the evenings and on the weekends without paying an overtime differential. NSUPE recognized these measures as taking a giant step towards the creation of a casualized workforce. There was, then, a lot at stake.

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The Nova Scotia Union of Public Employees rode the 85 per cent strike mandate onto the streets in March 2001. The striking workers maintained a high public profile throughout the strike, giving the dispute a public presence that helped build solidarity both within the union and with other groups. Many students, other staff (such as teachers, librarians, and secretaries), as well as parents offered crucial support. The union connected the custodian's struggle with the controversy over school closures, making the issue of service to students a unifying point. The heat on the employer was further turned up when School Board Secretaries, organized by Nova Scotia Government and General Employees Union (NSGEU), voted 88 per cent in favour of a strike. Again the issues were concessions, contracting out, and job security (Halifax Herald, March 28,2001). The struggle of one group was connected to the battle of all other Board employees who had a stake in the outcome. NSUPE was prepared at the outset for the difficult time ahead. Picketing was organized and co-ordinated - a few schools were selected for mass picketing, given the large number of separate work sites in the district. The Board backed up its tough stance at the table with additional confrontational tactics. Casuals were hired, escalating the tension on the picket lines. The Board petitioned the N.S. Supreme Court to issue an injunction limiting the number of pickets to make it less difficult for these so-called "replacement workers" to cross the lines. The Board also hired security guards in an attempt to intimidate the picketers (Halifax Herald, March 28 and April 2,2001). In the publicity war, the Board called on the union to submit the employer's offer to an employee vote, implying that NSUPE was acting undemocratically. This tactic, which attempts to call the tune for the workers, is designed to undermine public support and eat away at the fringes of union solidarity. Of course, the reverse is not argued: Employer representatives do not submit every minor modification in contract language that are proposed by union negotiators to the full Board. On March 29, NSUPE took the battle to Province House, staging a noisy demonstration inside and outside the Legislature. As the strike lengthened, both the filth inside the schools and the pressure on the employer grew. Two weeks into the strike, sympathetic students at Queen Elizabeth High School staged a sit-in to protest the deteriorating health conditions caused by the lack of custodial care. When the schools had not been closed three weeks later, students and the Parent-Teacher Association went public again to complain about the dust, the stench, and the grime. By early May, the NSTU rated more than half of the 101 schools as being in "poor" sanitary condition (Halifax Herald, March 29, April 6, April 24, and May 8,2001).

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NSUPE tactics were sometimes even more directly confrontational, including an occupation of a school. There was no evidence that the will of the employees was being broken or that they were being successful starved out. Faced with an impending loss of the school year, the government peeped out from the shadows and appointed a mediator. The Board, though, continued to talk tough: They weren't prepared to move on negotiations and threatened that the walkout would be prolonged into the summer, when schools would be closed. In that case, the Board would be able to thoroughly casualize the custodial service, intimating that tenders would have to go out soon in order to have cleaners in place for September (Halifax Herald, May 17 and May 21,2001). Contracting out services is the immediate longer-term goal of public-sector employers. What was at stake was made clear in a comparison with the private sector, made revealingly at the time the mediator was appointed. Public-sector custodians, the argument went, had it much better than private sector workers. As Peter McLaughlin wrote in the Halifax Daily News, quoting sources in the private cleaning industry, "getting a job with the school board is like striking the custodial motherlode." Halifax School Board custodians earned $14.55 per hour, in addition to benefits generally unavailable in the private sector, including sick days and a pension. In the words of one manager McLaughlin quoted, public-sector workers want a "free ride." Those the manager termed "my people" were paid as little as $6.00 to $7.50 per hour; they were obliged to work in the evenings, as well as on weekends and holidays: "They do whatever it takes to get the job done" (cited in Peter McLaughlin, Halifax Daily News, May 17,2001). It is clear what was at stake in the NSUPE strike. The tone of the argument was that public-sector wages and benefits are undeserved; it wasn't that the conditions in the private sector are scandalous and keep whole families below the poverty line. Mid-strike mediation talks finally led to a settlement exactly two months after the strike began and about a month before the regular end of the school year. The 2 per cent increase for each of three years was a normal settlement. The union agreed to the new work schedule, which imposed evening and weekend shift work.7 The custodians won layoff protection during the summer and other holidays, and the promise that workers would not be disciplined for strike-related activities. On the crucial staffing issue, the grievance procedure was changed to allow union challenges to layoff decisions.8 What the strike against the Halifax School Board exemplified was not only class-struggle unionism, but also class-struggle management. Meanwhile, an-

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other confrontation was brewing in Halifax, this time directly bringing the government onto the front lines.

Health Care Workers Versus the N.S. Government Bill 68 By 2001, healthcare workers in Nova Scotia were divided into numerous classifications represented by a variety of unions, including the Service Employees International Union (SEIU), the Canadian Union of Public Employees (CUPE), the Nova Scotia Government and General Employees Union (NSGEU) and the Nova Scotia Nurses Union (NSNU). NSGEU represented four bargaining units with about 7,300 workers employed by the Queen Elizabeth II Health Sciences Centre, the Nova Scotia Hospital, and the Capital District Health Authority, under common agreements. The four groups were nurses, healthcare professionals,9 clerical and administrative support staff, and support staff.10 After five months, negotiations reached an impasse in February, 2001. Simultaneously, nurses organized by the NSNU were also negotiating. After a decade of underfunding and wage freezes aimed at reducing the real income of health care workers, these negotiations were inevitably tense and fractious. The most sensitive bargaining involved the nurses. For them, it was a relief to be in a position to redress some of the pay inequities that made nurses in Nova Scotia among the lowest paid in Canada. Recruitment and retention were crucial issues along with the quality of health care that could be provided under the regime of fiscal strangulation. Facing staffing shortages and increasingly difficult workloads, which were the result of the government policy of tightening the fiscal noose around public health care, nurses were part of a continental labour force, leaving the province for richer pastures in places such as Alberta or migrating south to Texas. The nurses represented by NSGEU in the regional municipality broke off conciliation talks in May, faced with an three-year offer of about 8.5 per cent for staff nurses and 6 per cent for other groups, such as practical nurses. With NSGEU backing, the nurses voted 97 per cent in favour of a strike in support of their demands, which included a number of workplace issues and a pay rise of about 20 per cent.n Simultaneously, however, the union urged the 2,900 member healthcare bargaining unit to accept what they were being given, about 6 per cent over three years. When the employees rejected this advice, voting 75 per cent in favour of mandating a strike, the union recanted and turned down the next proffered settlement on their behalf.12 The NSGEU members had taken a

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strong, militant stand and a strike deadline of May 27 appeared inevitable. Meanwhile, the Nova Scotia Nurses Union also took, initially, the same defeatist position. Representing almost 4,000 registered nurses in thirty-eight hospitals as well as 320 licensed practical nurses, the NSNU recommended that both groups accept the employer's offer, amounting to 10.5 per cent over three years for registered nurses and 6.3 per cent for practical nurses.13 This time it was the NSNU that underestimated the anger and determination of the nurses, who rejected the offer by a 75 per cent margin on June 12.14 As a healthcare strike in Halifax loomed, the government began to escalate a propaganda campaign to undercut the general public sympathy for the plight of the nurses and healthcare professionals and concern over the quality of the health care system. Hiding behind a supposed commitment to a balanced budget, government claimed the offers were both fair and the maximum that could be offered. Government members escalated scare propaganda about the effects of a healthcare strike, claiming that it threatened the health, even the life, of Nova Scotians. The Minister of Health implied that the union might not negotiate an acceptable protocol to maintain emergency services, and even if they did, the nurses could not be trusted to perform the work. The insult was compounded and made personal. It would soon be institutionalized. A strike was not inevitable, even at this stage. Following mediation, another offer was made to the 2,900-member NSGEU healthcare bargaining unit which the negotiating team unanimously recommended to the membership.15 It was, said the union, a "good deal" representing a victory that was the fruit of the strike mandate the healthcare workers had given the negotiators.16 The union was once again humbled in its acquiescence when this advice was rejected by the membership. The context of this vote had been significantly altered by the government that had escalated the situation to an immediate confrontation. The Cabinet had decided to reveal its iron fist. The legislature was recalled to push through Bill 68, an unprecedented measure that set a new benchmark for exceptional labour legislation in Canada. With Bill 68, Nova Scotia was doing more than following a path that had been cleared earlier by Alberta, Ontario, and P.E.L, which had also taken away the right-to-strike in the health care sector. Coming against the background of legislation that had frozen contracts and wages in the 1990s, Bill 68 was a leap into authoritarianism. When it was actually introduced as Bill 68, the Health Care Continuation (2001) Act, it was clear that this bargaining would be a sham. The right-to-strike was removed until March 31,2004. Collective bargaining could continue, but rather than end with arbitration, the usual

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alternative to a legal strike, Bill 68 authorized the government to impose a contract in both the current and the next round of bargaining. In an imposed contract, existing rights could be removed, including job security. Unions and individuals failing to comply with Bill 68 would receive heavy fines: $50,000 for a first offence by a union and $10,000 a day thereafter; $2,000 and $500 respectively for individuals. Bill 68 did not include any provisions for arbitration, a refusal that indicated the government knew it was on thin ice and that its demands would not be seen as reasonable by any third party. Article 13 of the Bill was an attempt to put the government above constitutional law. Under this provision, "No order or regulation made by the Governor in Council pursuant to this Act shall be questioned or reviewed in any court and no proceedings shall be taken or order made in any court to question, review, prohibit or quash any order or regulation made by the Governor in Council pursuant to this Act." These measures went well beyond the usual elements of permanent exceptionalism. It was a pre-emptive attack, taking away the right-to-strike before the first foot had hit the pavement. The clauses empowering the government to impose a contract if negotiations did not result in an agreement was an absolute assertion of management rights. Initially, NSGEU appeared to knuckle under the threat. When the union advised the healthcare bargaining unit to accept the mediated offer, part of the argument was that, otherwise, health care workers would "cast their fate with a government imposed deal that would likely be much worse."17 Instead, bargaining unit members chose to hold the fates in their own hands. Once again the leadership appeared more timid than the membership. The result was a race to see whether the first strike deadline would pass before the Legislature could vote on the Bill forbidding the strike. The crunch had come for the NSGEU. With its legitimacy at stake, the union took the plunge. In this atmosphere of threat and intimidation, nurses and other health care workers began to work-to-rule, refusing overtime, actually taking their full mandated breaks, and working to the letter of their contracts. The union organized a walkout, an act of civil disobedience. Workers held mass rallies, demonstrated in the streets, and marched to Province House where the Legislature was following the formalities necessary for making Bill 68 law. Nurses wore their uniforms and, to press home the point of retention, carried suitcases. With angry and militant workers, union leaders are forced to keep pace or lose their mandate. In this charged atmosphere, rhetoric flows freely. According to Rick Clarke, the president of the Nova Scotia Federation of Labour who was quoted in the Toronto Star, the Hamm government had "crossed a

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line" becoming "the most anti-union in 50 years" (Toronto Star, June 18,2001). With 2,900 health care workers and more than 2,100 nurses poised to strike, the government accelerated the debate in the House, meeting around the clock and hoping to ram Bill 68 through before the deadline. The hospital administration threatened discipline for the brief walkout and succeeded in getting a "cease-and-desist" order from the N.S. Labour Relations Board. They also cut back on services. Some hospital beds were closed and some surgeries canceled. This reflected the genuine staffing crunch that was worsened by the overtime ban, and was also a tactic to increase public fears over the threat of a strike and to legitimate the legislation. Bill 68 encompassed about 9,000 health care workers in the province, including the NSNU and other unions that had organized in the sector. Nurses from the NSGEU and NSNU reiterated their far-from-empty threat to leave the province for work in B.C. or Ontario. An ad hoc alliance of affected unions was initiated. Health workers organized by other unions, such as CUPE and CAW, as well as their supporters, picketed to show solidarity and joined in the day of protest (Toronto Star, June 20 and June 26,2001) - their turn was coming. Meanwhile, thousands of health care workers and their supporters demonstrated in front of the legislature, then carried their protest into the building, addressing the floor from the gallery. Making the legislature as uncomfortable as possible for the government members, demonstrators blocked the exits, forcing government members to leave the building on foot and through the crowd. It was a heady moment for the health care workers to see government members scurrying for cover. The passing of Bill 68 nevertheless appeared to be inexorable. The union leadership and members had to consider what steps to take when the employer succeeded in changing the conditions of contract resolution. The NSNU began to back away from the rhetoric of illegal walkouts suggesting that, after Bill 68, work-to-rule might become a permanent condition (Toronto Star, June 26,2001). Maintaining inter-union solidarity, even among essentially the same occupational group, is a difficult exercise. Undaunted, health care workers walked off the job in a legal strike on June 27 just a few hours before the Legislature would take the final steps to pass Bill 68. Workers marched to the House one more time for the denouement. This time, the Halifax Police riot squad was on hand to prevent the raucous protesters in the gallery from blocking the exit of MLAs. No one was permitted to leave the public gallery until the politicians had beaten a hasty retreat. If the legislation itself was not sufficiently heavy-handed, the police further alienated reporters who were prevented from leaving the gallery for

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their usual round of impromptu questioning of the MLAs as they left the House. Reporters decried these tactics as an infringement on the freedom of the press (Toronto Star, June 28,2001). Under the new law, the Cabinet was empowered to determine when and what parts of the legislation would be imposed following the strike. While the NSGEU debated continuing the strike as a wildcat, one of the issues was whether the union would pay members' fines or, as one strike leader suggested - putting her faith in another legal institution - hoping the courts would not actually levy such obviously unjust fines (Toronto Star, June 28,2001). In the face of the threats and uncertainty, but also riding the anger and exasperation of the members, the union leadership contemplated an alternative legal tactic to avoid Bill 68 - mass resignation. It was a tactic that had been used before, very successfully in 1973 by the nurses and then, with less success, by technologists and other health care workers in 1975. In mass meetings on the day after the brief legal strike, both the NSGEU nurses and healthcare workers endorsed the mass resignation tactic. It was clear that it would only work if the number of resignations was overwhelming. The union began to collect signed resignation letters from its members. When 75 per cent of the bargaining unit had sent in letters, they would be submitted to the employer, effective two weeks following submission. Mass resignation appeared to be a much more difficult tactic to pull off in 2001 than in 1973. To voluntarily surrender any claim to job security is a very difficult decision for employees to make. It is a measure of the militancy and anger of this sometimes middle-class and primarily female workforce that the union came within a fraction of its target. By July 4, NSGEU announced that the nurses were within 132 letters of achieving the necessary 75 per cent.18 The union had to maintain the appearance of solidarity and resolve in the face of mounting obstacles, not the least of which were a growing unease and wavering in the ranks as requests to withdraw resignation letters increased, along with the difficulties of maintaining an inter-union tactical alliance. Before the contradictions in the situation were exacerbated, however, the spell cast by the apparent reality of mass resignations was effective. In the end, the government backed down and proposed a compromise that the threetargeted unions (NSGEU, NSNU, and CUPE) were willing to accept. By agreeing not to implement the Act and allowing the dispute to be submitted to final-offer selection arbitration, the government caved in.19 Of course, having to scale back an assault is ultimately another form of victory. By granting arbitration, the government had not only succeeded in removing bargaining

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rights from the health care workers, but also made them glad of it - arbitration being more acceptable to most than the uncertainties of mass resignation. The Hamm government said that Bill 68 was unnecessary because they would impose essential services legislation at a later date that would remove crucial bargaining rights permanently. When it was finally announced, the arbitration decision was not an unqualified victory for the health service workers. The higher status groups were awarded higher raises than those provided for other occupational categories. As might be expected, when negotiations with physicians had been postponed in the thick of the battle, in a separate deal worked out well after the dust had settled, physicians received more than either group. To have negotiated this during the struggle over Bill 68 would have inflamed the situation, much as the large salary increase granted MPs and Senators had angered federal civil servants who were also in heated contact negotiations. While the withdrawal of Bill 68 was, as one labour leader claimed, a victory for organized labour, it was the kind of victory that comes when a situation turns out to be not as bad as it first threatened to be. Still, the government had hoped that the severity of the threat would have impelled the workers to back down - they had anticipated, unrealistically, a rapid return to management "peace" followed by a settlement on their terms. Bill 68 had by no means been the route to health care peace. Employee solidarity had been strong enough to maintain the atmosphere of chaos that the on-the-job protests had created. The government had overreached itself in the circumstances, having generated a crisis largely of its own making and then tried to blame the crisis for having to take draconian measures. Public-sector employers' decisions are more explicitly political choices in contrast to private-sector choices, which appear to be the result of blind, economic forces which employers are unable to control. In the era of globalization, the state has tried to leap onto the runner boards of this useful legitimation in an attempt to justify their decisions. In either sector, however, palpable human actions and political choices make such a claim transparent.

Remaking the Labour Movement The basic question, however, is not whether groups of employees, under particularly harsh repressive conditions, will respond militantly to provocation and even be relatively successful as a result. There are certainly some signs of renewal in these terms. The two public sector struggles in Nova Scotia discussed above, in the context of the history of public sector unionization and militancy, demonstrate, positively and negatively, that the conditions of union

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renewal include strong, effective and democratic leadership, close and effective relations and communication between leaders and the rank-and-file, inter-union solidarity, and, especially in the state sector, active public support. Long, bitter strikes, such as that waged in 2004 by public sector workers in Newfoundland and Aliant employees in Nova Scotia, show that workers are prepared to make great sacrifices to resist the neo-conservative agenda. The militancy and determination of many individuals almost obscures the ineffectiveness of the provincial movement as a whole. This raises the more general question of whether the labour movement overall has begun to revive; whether the stagnation that has set in for the last two decades is definitely being reversed. Rose and Chaison (2001: 34) raise the important question of what is meant by "revival." In their terms, revival is more than commitment to processes (such as organizing a group of the unorganized, or achieving victory in a strike); rather, revival must have specific, measurable outcomes. These include "significant and lasting gains in membership and density," greater collective bargaining strength, and greater political influence. In their attempt to revive the fortunes of the labour movement, trade unions face "the new economy, the new workplace, the reorganized labour market, and the new worker" (Heron, 1996:163). There is a growing literature on union renewal (see for example Schenk, 2000). In a limited sense, it is consistent with business unionism - getting more members, enrolling more clients, expanding union density. In Canada, however, union renewal has also reflected a call from people who believe the union movement can and should have a wider social role to play in progressive politics. Whatever the political agenda, maintaining and expanding organization are crucial elements. Union Density

According to Rose and Chaison, in the mid-1950s, union density in Canada and the U.S. stood at about 33 per cent of the non-agricultural workforce. By the late 1970s, it had begun to decline significantly in the U.S., dropping below 25 per cent. By 1999 it stood at only 14 per cent. In Canada, by contrast, there were modest increases throughout the 1980s, stabilizing at roughly the 1950 proportion (between 32 and 35 per cent) in the 1990s (Rose and Chaison, 2001: 36). Among organized sectors, unionization was steady in public administration (seventy-eight per cent organized) and in public services (education, 75 per cent; health, 51 per cent). On the other hand, manufacturing unions declined precipitously, to 36 per cent in 1991 and, as a proportion of the union movement as a whole, from 39 per cent in 1966 to seventeen per

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cent in 1991 (Heron, 1996: 131-2). Public-sector unionists have come to comprise fully half of the union movement overall. The reason for the different national outcomes has been subject to much debate. Heron accounts for the difference by asserting that labour's ties to NDP in the context of the decentralized Canadian state, vigilant labour-relations boards, and the fact that public-sector workers have won substantially greater collective bargaining rights in Canada, have resulted in the maintenance of most of the institutional framework of labour relations in Canada (Heron 1996:139). By the end of the decade, however, density in Canada also appeared to be declining. According to Finlayson, Statistics Canada's data indicates that only 30.1 per cent of paid workers currently are unionized, down from 33 per cent in the early 1990s. Union density is lower in the private sector, down to 18.2 per cent from 19.1 per cent in 1998. When the figures are calculated to account for the rising number of people who claim to be self-employed, only 14.6% of private sector workers are unionized.20 Union renewal, then, means organizing. Organizing in the "New Economy" The "New Economy" entails two fundamental changes: integration into the global economy and the decline of state economic intervention and regulation. There is an important distinction, however, between deregulation and intervention. What is termed globalization entails a struggle within the corporate sector to increase competitiveness, a struggle that erodes living standards and the dignity of work (Heron, 1996:163-64). In this new environment, the old policies of government deficit financing and economic protectionism are neither practical nor workable (when they are targeted at regulating the corporate sector). The state is prepared to intervene in a variety of ways in support of capital (in addition to the "permanent exceptionalism" of removing collective bargaining), bailing out industries such as the airlines, as well as whole countries and currencies in the face of global crises. Second, organization must take place in what Heron terms the "new world of work." Organizing must take place in the current state of working-class diversity and complexity, which poses serious obstacles to union growth (Meiskins, 1998). The "old worker" was a male, blue-collar worker in a craft union, or employed in a larger-scale workplace, organized in an industrial union. By the 1970s and 1980s, the union movement expanded to embrace office and service workers, many of whom were women in public employment. However, the new trend in employment is outside both of these blue-

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and white-collar preserves, where the unionized workforce is aging. Most growth has occurred in the private service sector, employing "New Workers:" disproportionately women, immigrants, minorities, youth, people of colour. These are low-wage, often part-time or casual, socially isolating jobs. The "New Workers" are scattered over innumerable, small employment locations; they are insecure, and frequently in and out of the labour market (Heron, 1996: 166). Organizing in these domains is "daunting" and has not been very successful. The pan-time density rate is 10 per cent in the private service-producing sector. Employment growth has been greatest in the service sector (finance, retail trade, hotels) where unionization stood at 5 per cent, while job losses were greatest in industries such as steel or autos where 80 per cent of those who lost their jobs to import competition or run-away-shops were union members (Rose and Chaison, 2001: 39-46). Even at that, in the U.S. auto parts industry, unionization dropped from 75 per cent to 25 per cent between 1978 and 1997 (Moody, 1998: 58). As Finlayson notes, "Of the 11.9 million paid workers in Canada, eight million - 67% - work in organizations with fewer than 100 workers," most of which are non-union shops. "[OJnly 12% of the 4.1 million Canadians employed in the smallest organizations - those with fewer than 20 employees - are union members. Yet this segment of the business sector arguably has the best prospects for job growth."21 In a recent survey of Canadian unions, workers attached higher priority to protecting current wage levels and employment than they did to organizing, and the priority for organizing itself was to be within the normative jurisdiction of the union rather than in newer areas of employment growth (Rose and Chaison, 2001:40). The marriage of unorganized workers with the currently unorganized is also threatened from the other side of the altar. In the 1990s, the union/non-union wage differential has shrunk from 25 per cent (1970s) to 8 per cent (1997) (Rose and Chaison, 2001:45). On the other hand, the labour movement is replicating the corporate merger mania, a process of bigger unions swallowing smaller ones that is under way in the U.S. as well as Canada (Moody, 1998: 58). Finlayson argues that the highly fragmented and fractious Canadian movement "is restructuring through mergers and consolidations" leading to multiple-industry "mega unions" such as "the Canadian Auto Workers, the Canadian Union of Public Employees, the Communication, Energy and Paperworkers and the United Steelworkers."22 Larger unions have more resources to expend on organizing the service sector. In British Columbia, for example, the CAW organized employees

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of Starbucks Coffee and McDonalds (the latter quickly being decertified, however) (Hainsworth, 1999:41,43). Conclusion What can be said, then, about union renewal? With respect to density and organization, one point of view is simply that the Canadian union movement has been doing comparatively well. Unionization was more or less maintained despite the precipitous decline in the rust-belt industries. There are significant difficulties involved in just maintaining a union as an organization. Members pay for it directly. Trade unions are not a heavily subsidized industry; they receive no government bailouts for losses of revenue. In hard times, it is difficult to maintain your position; gains require extraordinary effort. In addition to the practical "campaigns and ongoing programs" undertaken by unions, Heron, on the one hand, envisions a "new socialist politics" founded on the convergence of the labour movement with the "new social movements" (Heron, 1996:171). In contrast to Heron's broadly based social democracy embracing trade unions as one among a myriad of social movements, Palmer's political solution is more class-centred. In his view, "workers grasp intuitively that without organization and resistance their lot would be worse." This intuitive understanding is made concrete in actual struggles (Palmer, 1992: 413-15). Both Heron and Palmer share the belief that the union movement must be at least a crucial component of - if not at the head of - a new politics. The debate about union renewal raises directly the thorny issue of the types of class politics that the union movement represents. It is not enough to organize, although that is itself a very arduous undertaking in the present state of the working class. On the immediate canvas, labour renewal must begin at home, within the locals and unions themselves. This is most frequently couched in terms of the need for greater union democracy. The more democratic, the more informed and involved the members are, the more easily they are mobilized and educated; the more likely it is they will be self-motivated to be active in wider issues. Ironically, however, union renewal has not appeared to be principally a demand from below (unless incoherently and inarticulately). It has not emerged primarily from members' demands for greater democracy. In contrast to what might be expected from the analysis of business unionism, union renewal is more often a call from some of the full-time staff and some of the elected leadership who want to impel the union into more social activism. Seen from the point of view of the trade union leadership, motivating the members has been a perennial issue. How can they be induced to be active, to

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take part in educationals, to get out to local meetings, to take in interest in the activities of the union? These are laudatory objectives, made more difficult the more the union comes out of a tradition that is essentially undemocratic. Democracy, though, is not something that can be imposed. It must spring from below. The weight not just of union structure and history but of the whole social formation compels inactivity and alienation. Second, in terms of the state sector, renewal means unity among publicsector unions, perhaps including a movement to more effective sectional bargaining or related practices. In Nova Scotia but certainly not exclusively, the history of attempts at coalition building has been spotty at best and does not give reason to be optimistic. There has been no shortage of provocation, such as the Public Services Compensation Act of the 1980s and Bill 68. The difficulty has been maintaining the coalition in the face of particularistic interests. Certainly, for example, teachers elsewhere in Canada have proved to be sporadically quite militant in defence of their interests, as seen with the Centrale de Penseignement du Quebec (CEQ), the struggle in Ontario against the Harris government, and recently in British Columbia. In Nova Scotia, however, the NSTU has not always been the most consistent coalition partner. Coalitions are vulnerable to the government tactic of cutting separate deals with specific groups. Should the Nova Scotia government impose essential services legislation, it will present the labour movement with a common issue around which to build a new coalition. One key issue would then be how "essential services" will be defined and, therefore, which groups will be included or excluded. There is just as much potential for divisiveness and separate negotiations as for unity around a common purpose. Third, union renewal means increasing the unity between public- and private-sector workers. This is problematic in the current conjuncture when the state and corporations, largely through the skilful use of the media, have so effectively demonized the public sector. There is a major fault line here, susceptible to exploitation by the state and private interests, between the increasingly individualistic taxation base and the interests of those who are paid to provide public services. The essential point to stress is that there is a very complex nexus of interests involved, generating grounds for both unity and disunity. Ultimately this raises the question of social democracy. Unions have always been the major bulwark of social democratic politics and the public sector may be seen as logically connected to welfare state politics. Canada presents a complicated picture in this, however, since the growth of the welfare state is not exclusively connected with the election of social democratic parties. Not only do workers more often vote liberal than

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"Left," the welfare state in Canada, in its unsystematic and uneven implementation, emerged from policies implemented by the dominant political parties, though usually in response to organized movements and always within the framework of the best interests of capital. The issues of the historical connection between workers, unions, and social democracy, as well as the future direction of left-liberal politics in Canada, are beyond this essay, but they must be recognized as crucial questions in terms of the renewal of unionization and of social democracy. Finally, union renewal means unity between unions and social movements of reform. There is, though, a very mixed legacy here and another complex set of interests. The experience of Solidarity in British Columbia demonstrates both the promise but also the severe problems of joint action between unions and social movements, even when the aims are relatively specific rather than diffuse. Unions as organizations and the members they represent do not have only shared interests with wider social groups. This is true of some of the most important social movements today, including those focusing on the environment, women's issues, visible minorities, and the unemployed. There is a considerable gap between the platitude of making diversity the strength of the labour movement and the reality of sectional interests and short-term goals. Even in the recent People's Summit in Quebec (April, 2001), while the union movement played an important role as a catalyst and leader of the public demonstration, many social groups decried their ineffectiveness in the face of the massive demonstration of the fundamentally anti-democratic nature of state power in Canada. This observation brings the discussion of union renewal full circle. Without doubt there is a complex interplay of forces shaping the multi-faceted relationship between members and leadership. Union renewal must be accomplished within this complexity. For the union movement to be more than a basic and necessary insurance company for worker's economic interests, a movement from below and within the union organization must initiate renewal. The targets would include everyday practices in the union, including an effective shop-steward system, as well as the union structure itself. The conditions for such a renewal are even more daunting than those facing the expansion of current unionism in the fragmented service sector. Reform movements have been mounted from below, but they are easily derailed from a demand to reform the structure to conquest and occupation of its preexisting offices and privileges. It makes the call for reform seem so armchair and Utopian.

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This brings us to the other side of the circle - the renewal of radical politics. Social change always springs from a set of objective and subjective conditions, and is shaped by the complex relationship between them. Objective conditions are always contradictory and present both possibilities and obstacles to action. Genuine union renewal can occur only as part of a wider social movement encompassing the demand for social empowerment and democratization, which requires both a degree of centralization as well as intimate connections with increasingly active and broadly focused peoples' organizations. Seemingly Utopian or not, I regard this as a truism that bears reiteration.

Chapter Nine

Policy Issues in the Trade Union Movement: Two Views from Labour Barbara Moore and James Sacouman

The history of the trade union movement on the Canadian East Coast includes some of the most militant struggles for social equality in Canadian history. On the other hand, its history also contains numerous instances of rhetorical posturing and of major defeats at the hands of both private and public corporations. In order to identify important new and ongoing policy issues confronting the organized labour movement on the East Coast, we conducted lengthy interviews in May of 2003 with two of the most active staff persons in the union movement in Nova Scotia. Paulette Sadoway is a regional representative with the Canadian Labour Congress (CLC), Canada's largest "house of labour." The main focus of her job has been working with labour councils at the community level, assisting them to carry out with other movements in their communities the CLC programs, policy initiatives and mandates from each CLC Convention. Her work includes educational programs, strike support and, in general, putting the CLC action plan forward. John St. Amand is a long-time regional organizer for the much smaller Confederation of Canadian Unions (CCU). His main focus is to bring what he terms "the CCU approach" to the East Coast labour movement. Both interviewees are well-known activists. Both have consistently opposed the neo-liberal agenda on the East Coast. Neither is a proponent of business unionism (an ideology in which unions are "preoccupied with advancing the interests solely of their own immediate members and not at all interested in broader social or economic goals"), but rather both are advo-

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cates of social unionism (an ideology in which unions are "inspired by social democratic [or socialist, eds.] values and committed to advancing the interests not just of their immediate memberships but of workers in general") (Black and Silver, 2001:37). However, readers should realize from the outset that the interviewees are representatives of two different and competing labour centrals (with the CCU being very much smaller than the CLC), with sometimes dramatically different approaches to key questions. In this contribution, we present John St. Amand's stance first, since he was particularly concerned to provide a thirty-year context to what he sees as ongoing policy issues. Paulette Sadoway focuses on more recent and emerging policy concerns. Of course, neither spoke to us "on behalf of their respective centrals and should not be understood to be doing so here. Furthermore, it is equally obvious that the presentation here is not based on a survey of union staffers and does not at all pretend to present the current policy views of rank-and-file trade unionists on the East Coast. What we have here are two solid, if sometimes discordant, reviews of the issues by major actors in the regional movement.

John St Amand Over the last thirty years that I have been involved with the CCU, there have been four central policy problems within the Canadian labour movement, as I came to see them: 1. the problem of Americanization1 and, with that, bureaucratization and big business unionism; 2. the problem with the lack of democracy within the union movement; 3. the problem that we've never ever been able to push the organized labour movement nationally beyond the fifty per cent mark of workers; and 4. the absence of militancy. We have certainly had many sporadic instances of very remarkable forms of militancy in the trade union movement. I think of the history of the postal workers [Canadian Union of Postal Workers (CUPW), eds.\ for example. And, of course, many of the unions in the CCU have at the various times showed that they could be militant. But in terms of an overall tradition of militancy, the union movement in Canada is very much lacking and that continues to be the case. For the past twenty years, I've been involved in over fifty campaigns which have to do with breakaways from American unions, new organizing. Most of this work has been in Atlantic Canada but I have had some cam-

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paigns which have been national in scope. I should tell you in the first place that the CCU has been more of a ginger group or has been more of a catalyst on the questions of Canadianization and democratization. We realized many years ago, that perhaps if these things were to happen, more likely, they would happen inside the Canadian Labour Congress, which is the main house of organized labour, if you will. And that, in an important respect, happened with the formation of the Canadian Auto Workers (CAW) in the 1980s [when the Canadian section separated from the U.S.-centred United Auto Workers of America (UAW), eds.]. This, perhaps, served as a watershed event in turning the statistics solidly in favour of Canadianization. After that, it has generally been recognized that Canada's labour movement has been at least 70 per cent Canadian. What happened to the CCU after the formation of the CAW is very interesting. I suppose there developed two schools of thought. What would the CCU do? At the time we had about forty- to fifty-thousand members. Would we join up with the CAW or would we stay the course and continue to fight for a one hundred per cent Canadian movement? And so the main result from that debate, as it were, was that most affiliates of the CCU joined the Canadian Auto Workers, and in fact, actually gave the CAW more of a national base, certainly with the Canadian Association of Industrial Line Workers in British Columbia and the Canadian Association of Smelting and Allied Workers. You may remember the vicious strike by a CCU affiliate in Yellowknife at the Giant Gold Mine. After that struggle, they joined the CAW. Some of the unions that were the backbone of the CCU and provided the real political and positive ideological muscle to the CCU, like Mine Mill, joined the CAW. And [CCU co-founder, eds.] Madeline Parent's own union, the Canadian Textile and Chemical Union, joined the CAW. And there were many others. So, really, what remained was a loyal guard, you might say, and I was a pan of that group. But I thought that certainly here in Atlantic Canada that the fight against Americanization was not over. And also the fight for further democracy was not over. We still have 30 per cent American unions and I consider the American unions to be a force of imperialism. If we could see the day when, to the great extent, unionized workers in Canada would be in Canadian unions, then finally we would have hundreds and hundreds of millions of dollars under our control north of the border. We would no longer be fire-hosing dues dollars from the pockets of Canadian workers into the coffers of the headquarters of the American unions to subsidize two things: one,

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the continued Americanization of Canada, and second, to underwrite the sorriest excuse for a labour movement in the Western world - a union movement that in the 1980s had collapsed to around 10 per cent [as compared to a unionized worker population of about 34 per cent in Canada, eds.]. We thought that surely we could take all those resources and move to the question of organizing the unorganized to the extent of over 50 per cent of all paid labour. That was what we thought we could do. But in the context of neo-liberal social Darwinism, with Canadianization, we have failed to move on the questions of organizing the unorganized to bring about 50 per cent membership. Nevertheless, I still think it was a great thing that Canadianization defended Canadian workers against the assault that was advanced against them by the corporate agenda. And had we not Canadianized, had we still had a majority of Canadian workers in American unions, we would have been far worse off. It's very important that we had the formation of the Canadian Auto Workers and the continuing militancy of CUPW and other public sector unions and continued to get rid of American unions. It has, in terms of the defensive perspective, served us fairly well. But in terms of the overall question of effectively defending workers so that they could take more ground, so there could be less unemployment, so there would be less poverty, so there would be less wealth disparity, these things have continued to worsen. Had we not gone Canadian, things would have been worse. But had we not had the Mulroney victory [of the former Prime Minister who established free trade with the U.S. and led neo-liberalism into Canadian federal politics, eds.] in terms of what is referred to as imperialism really, we were thinking that we would take further ground for workers in Canada. There would be less wealth disparity, there would be less unemployment, there would be less poverty. Then there would be a stronger sovereign country. Imperialism still works within the Canadian trade union movement and especially within its bureaucracy and the real issues we have been discussing still need to be resolved. Since the CCU came to Atlantic Canada in some force, we've taken on probably a dozen American unions in big fights. Some were much bigger than others. But beginning with the Canadian Mineworkers union's attempt to kick out the United Mine Workers of America [UMWA, eds.] in the Cape Breton coal fields in 1982 and 1984, we sent a message to the labour movement here in Atlantic Canada and nationally. That was the biggest attempt to kick out an American union in Atlantic Canadian history. In that fight, we feel that we connected to the legacy of our greatest trade unionists, J.B. McLachlan, who fought against John L. Lewis and the American headquarters of the UMWA

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for much of his life. He fought for Canadian democratic force in the labour movement. We think we did something to bring that legacy back to life. It was a very important thing to do. Where we failed in those fights, we still ended up with a lot of people getting a fair bit of education - political, union, class struggle education. And the labour movement and the business sector here became quite concerned because CCU unions have a long history of being fighting unions and antiimperialist unions, and unions that have effectively fought for great contracts. This is a matter of fact, I would submit. The CCU didn't die with the failures of the CMU campaign. We went on to work in the pink ghetto shortly after the second campaign. This is another good thing about the CCU, its close connection to the women's movement, manifested through the life of Madeline Parent. We had a successful campaign at the Dalhousie University Children's Centre, we organized the Bryony House facility for battered women and their children in Halifax, and Chrysalis House in the Annapolis Valley. After that, the impact of the CCU took a fork in terms of the most important sector in Atlantic Canada, if not the Canadian economy, and that's telecommunications. I had the good fortune to work with Carl Simpson, who was the founder of an independent union at Maritime Tel and Tel [MT&T, eds.]. That union was a breakaway from an American union, the IBEW [International Brotherhood of Electrical Workers, eds.} back in 1984. The dissatisfaction with that American union at that time was not unique to Nova Scotia. There was similar dissatisfaction in the rest of Atlantic Canada and other places across the country, but those unions ended up with what is today known as the Communication, Energy and Paperworkers Union. But what happened in Nova Scotia was very interesting. They not only wanted to get rid of the American union, they didn't want the bureaucracy of the Canadian Labour Congress and they thought they would be better off with their own independent rank and file union. Now the connection here revolves around the clerical group at Maritime Tel and Tel which had been represented by an old business union, an old company union that comes right out of the legacy of the Rockefeller-King consultative process and the Ludlow Massacre in Colorado, for those familiar with some labour history in the United States [see Gitelman 1988 for background, eds.]. King was brought in to whitewash this for the Rockefeller empire. And Carl Simpson was very concerned about the divisive role that was being contributed to by this company union, know as the Telephone Employees Union [TEU, eds.].

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And increasingly the Atlantic Communications and Technical Workers Union [ACTWU, eds.] began to negotiate better contracts and represent their workers much better and eventually the clerical workers in the TEU wanted to know if they could join. Now there had been five attempts by groups inside that membership to get rid of this union, this organization that increasingly had been mired in corruption and incompetence. I had struck a relationship with Carl Simpson in the hopes that he might join, that the ACTWU, might join the CCU, which they never did, by the way, but they were always CCUfriendly. I think it had to do with a real fierce wish on their part to remain independent. They wanted to co-operate with others; they didn't want to be entirely on their own but they had a fierce wish to be on their own. Anyway, I went to Carl Simpson and he told me about this situation with the clerical workers. And for four years, we undertook a campaign for a province-wide sign up and it was successful. Under the new federal legislation, it was the biggest attempt, not only to sign up a single bargaining unit, but for such a bargaining unit to actually win. It solved the problem of union divisiveness at Maritime Tel and Tel and so we were able to form a one big union, a full force of three thousand in three bargaining units. And as soon as that win was solidified, the ACTWU embarked upon a labour education program based on CCU concepts and principles. The union went on to negotiate three collective agreements with MT&T that were equal if not better than any other telecommunication contract, certainly in Atlantic Canada, and certainly at Bell. So Fd say the CCU influences won in terms of Canadianization, in terms of democratization, in terms of militancy, in terms of labour education. And in terms of the political situation, it had a number of impacts. The ACTWU struck up a very friendly relationship with the Nova Scotia Union of Public Employees that at the time represented the workers for the city of Dartmouth. And in 1994-1995, that small union was faced with the threat of extinction because of amalgamation. The membership was going to be forced into run-off votes against one of the biggest unions in the Province, the NSGEU, the Nova Scotia Government Employees Union, and CUPE, the Canadian Union of Public Employees. Especially with regards to the Halifax bargaining unit, we were going to be swallowed up by numbers. At the time, NSUPE had the best contracts in the country for municipal workers. And so, the union was in a terrible dilemma. What were they going to do? Were they going to sit back and allow this extinction to happen? Or were they going to pull together, find some money, and get into some huge fights with these bigger unions? Eventually the leadership decided to do this and they eventually enjoyed the support of the ACTWU in those fights and the Con-

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federation of Canadian Unions across the country, which was very much reduced in their numbers of members because so many had gone to the Canadian Auto Workers. But it was still a force of about five or ten thousand. So NSUPE, with this support, engaged NSGEU and CUPE in some major fights for the hearts and minds of the municipal work force and were successful. We only had a membership of 450. But after it was all over, we had doubled that membership. We had not only saved the membership of 450 but had doubled that membership to 950. Then, on the basis of those wins, the library workers for HRM [Halifax Regional Municipality, eds.] thought that they would need a union after being in an association for many years. There were about four hundred of them. So they went shopping for a union, as it were. They looked at CUPE, they looked as NSGEU, and then they looked at NSUPE and then decided to join NSUPE. It was one of the most decisive new organizing victories in Nova Scotia in 1997. And that took our membership to about 1,300. That membership stands today at about 1,500. I think that the story of NSUPE is most extraordinary. It stands today as the most comprehensively developed example of the legacy of the CCU in Atlantic Canada. It has been a force for democracy in the union movement. The approach that it takes is that of a grassroots union. The way decisions are structured is a bottom-up approach. The staff has no power as such, a voice but no vote. And no one is paid, it is basically a grass roots concept on which it is based. And they have developed a remarkable record of militancy. The best example of that militancy is the strike in 2001 of the janitors and maintenance workers for a school board. It's one of the most impressive strikes in this province in many years. One bright spot in the American movement is the Justice for Janitors campaign. It's anti-capitalist, it's anti-imperial, it's direct action. And that's exactly what happened in the strike in Nova Scotia. The janitors took over a school, one of the largest high schools in Nova Scotia. They seized control of it for a day but they were prepared to stay for a couple of months. They stormed the House of Assembly with about two hundred students and probably about three hundred workers. What was in store for this group was effective decimation of their collective agreement and their bargaining unit, much in the same manner as had clearly taken place with the bus drivers represented by the NSGEU. Our negotiations followed those negotiations and faced the same agenda. Now this is a small union that's never been able to develop muscle in terms of a big strike fund. They've always been in a struggle so that they've never been able to do this.

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They succeeded in overcoming some problems. Being a member of the CCU makes you an enemy of the Canadian Labour Congress. But we do have a lot of friends inside of the Canadian Labour Congress. We include CUPW in that group; we've had a long association with them, especially the Nova Scotia Local, with all those people who we think are the heroes of the trade union movement and are very close to us. And in a major respect we have cultivated positive relations with the Canadian Auto Workers, another progressive force within the Canadian Labour Congress and the overall movement. The CAW participated in the takeover of the high school and lent us $100,000, as did the telephone workers. Now there are other fights that NSUPE has taken on in terms of the CCU model against American unions such as the Hotel Employee and Restaurant Employees Union [HERE, eds.]. Last year, I had the good fortune to co-ordinate two campaigns at two hotels here in the Halifax/Dartmouth area, at the Airport Hotel and the Harbourview Dartmouth Inn. We beat the existing American union by 100 per cent at one hotel and with 95 per cent of the vote at the other. What role did the Nova Scotia Federation of Labour and the Canadian Labour Congress play in this? They supported the American union that was affiliated to them. In fact, the Nova Scotia Federation of Labour actually called for a boycott of any hotel that was represented by the CCUlinked Nova Scotia Union of Public and Private Employees. The workers, Canadian workers, had wanted to sign up and to have a vote on the question of forming their own Canadian union, to get rid of their American union that was affiliated to the Nova Scotia Federation of Labour. This experience has turned out to be a very successful undertaking by NSUPE. The workers are much happier with their representation and there are many other hotel workers considering the NSUPE option. So this fight is not over. I also had the good fortune to lead the campaign to kick out the United Food and Commercial Workers union [UFCW, eds.] at the Larsens meat plant in the Annapolis Valley. And they sent in ten representatives from across the country to try to intimidate those workers into going against their wishes for a Canadian union. That failed miserably and we signed up about 75 per cent and we went on to win a vote of roughly the same percentage. We formed the Atlantic Meatpackers Union and they are now an independent union rather similar to the ACTWU. NSUPE has been very friendly to this fight and has incurred the wrath of the UFCW and I'm told now that the UFCW regularly leaflets the members of NSUPE, trying to get back at them, to raid them really. NSUPE has no problem with this at all.

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There have been many other campaigns. In 2000, NSUPE formed two rail divisions and we took on two national American unions, the Signalmen's Union and the Maintenance of Way Union. We went across the country trying to sign up those members and then the track guys on the railways. So we ended up going after 9,000 on the railway. We failed; but this was also the same time when the Canadian Auto Workers, to their great credit, facilitated the liberation of 28,000 members of the Service Employees International Union in Ontario, and for that, they were kicked out of the CLC. This was to the great celebration of those of us who were in the CCU. We hoped that this would lead to a new labour central that would mean a new day for militancy and act more in terms of what we think is needed today - an anti-imperialist movement, anti-capitalist, militant, effective, democratic. And there was even talk of the CSN [Confederation des syndicats nationaux-Confederation of National Unions, eds.] of Quebec joining. And so you would have had the CCU with muscle, had this transpired. But unfortunately the CAW, I think to the great regret of many of their own members, later decided to go back to the CLC. When NSUPE realized that we couldn't make it with the railway workers, 9,000 of them, we went to the CAW and said, well, you guys are no longer in the club, the CLC, why don't you tackle them since you already have a big presence on the railroad. These were the kind of problems we were running into in NSUPE. Here's a little Maritime union with small numbers taking on these big Yankee unions. And sometimes workers would say, well, you guys aren't on the railways and you're too damned small and who knows, you'd probably be trying to sell us a bunch of codfish sometime. So it was very funny; we had some wonderful meetings across the country. To their great credit the CAW took us up on that and I co-ordinated those campaigns through the CAW. And we tackled that for about twelve weeks and again we couldn't make it. Now that's a long story. But that story's not over; it has yet to be resolved. But, again, this is in the true spirit of the CCU - to de-Americanize the labour movement, to democratize it, make it more militant, anti-imperialist. The CCU has always been allied with other social movements. If you look at the history of the National Action Committee on the Status of Women [NAC, ed], the shakers and movers of that group largely came out of the CCU, people like Madeline Parent and Laurel Richie, who is now with the Canadian Auto Workers, were right there with all of the others who put these forces into play. Also, the struggle for equal pay for work of equal value largely came out of the CCU politics with so many other people in the women's movement.

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That was a huge development. In recent years, of course we've seen five billion dollars that has been paid back or is in the process of being paid back to the workers in the public sector. The CCU has also been very active in the anti-racist movement. In general, the CCU has stood for an integration of the movements around the labour movement because the labour movement is the movement that is at the point of production. That is where the mobilization, the militancy has perhaps paid off the most, around the economic aspect and the point of production. The more that Canadians have been able to do this, the more we've been able to address the pervasion of capitalist society. The CCU stands for the provision of a social wage to go along with the work wage, as it were. After World War II, a kind of social contract was agreed to between organized labour and the Canadian state that eased a lot of issues for organizing such as recognition and the compulsory dues check-off. But, I think it was as much a problem as it was a good thing. It largely took the guts out of the labour movement in major respects. The labour movement went to sleep. We lost a lot of our militancy because, of course, effectively we lost the right-to-strike when workers want. This was replaced by the grievance, by what Michael Earle calls industrial legality. But, during that period, the good thing that happened was there were a lot fewer Canadians living in poverty. And millions of working families did experience some upward mobility. But of course, this has all come to a screeching halt since the advent of the neo-liberal, social-Darwinian agenda. With respect to formal, electoral politics, first of all, the CCU is not affiliated to any political party, including the NDP [New Democratic Party of Canada, eds.], a social democratic party. And one reason for that was you'd never want to be in a situation where you would be beholden to them, especially public sector workers. This is not unique to the CCU actually. It is done to avoid disasters such as took place in New Zealand where you had 80 per cent of the workers unionized but aligned to the Labour Party, which swung to the right. And what could labour do? They were snookered. We need an independent political process for labour. That is not to say that we are syndicalists; we still think that we need a new party that is anti-capitalist. Although most of us probably support the NDP, we always try to push it to the left. In Nova Scotia, we don't have anti-scab legislation and even today the NDP does not have an effective position on this. It's not something they want to talk about very loudly. We think this is a mistake. We need the unconditional right-to-strike that we had years ago before the post-WW II social contract. We have paid a terrible price for not being able to negotiate tech change, for example. The employers run all over us. I know this

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from the experience at Maritime Tel and Tel. The deregulation and the selling off of certain parts of that business is part of the wealth transfer from the workers and the poor to the rich. We sit by and watch areas of that work that used to be unionized become privatized, deunionized and decontractualized, and we lose the ability to achieve a decent living wage. It's part of the wealth transfer, from the workers and the poor to the rich. The whole structure, the way collective bargaining is structured, has been part of the state apparatus and the legal industrial complex. The straightjacketing of the right-to-strike has really killed us. With respect to the immediate future, I think that we are in a deteriorating situation. We will continue to see a weakening of collective agreements. The whole process of collective bargaining is being used to destroy collective bargaining. The employers just come to the table now and just use the rules to kill us. I think that there will be growing interest in the model of unionism that I think that NSUPE showed in the 2001 strike. You can stay at the table so long and then you start making preparations for direct action. You build your links. You mobilize in as broad a way as possible. But over the next while we are going to see a continuing deterioration and increasing impoverishment. Unemployment, even though it won't be recorded officially, will get worse. We've seen an increasing casualization of work. I was talking to some people yesterday at a call centre and it was a shock how awful it is for young pink ghetto workers, part-time. They go to look after their children, make plans, they work for two hours and get sent home. And so then, they talk to people like me. Well, one thing you can do is organize. But we are confronting increasingly fascistic conditions. The employer is just running roughshod over the workers, using capital flight when unions are successfully organized. This happened to ITC, the call centre in New Brunswick that the CAW to their great credit organized it; two months later, the company moved to Maine. The labour movement has to figure this out. When we decide to go after them, then we have to think outside the box. And this could mean occupation. It could mean new ways of politicization. The workers will do something eventually. Our legacy here does go back to McLachlan. And the bright spots here are with the young people. I've been signing up people who are 15 and 16 years old. I never thought this would ever happen. And that strike with the janitors and maintenance workers? The students who were with us were high school students in the hundreds. I don't expect that law represents justice. Laws are tools that may or may not help you and you try to do the best that you can with them. Getting anti-

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scab legislation passed is a good thing. Rescinding the Michelin Bill is a good thing.2 But the struggle cannot be circumscribed by victories at the legal level. The law is there for the rich and the employers use it first and foremost. Besides needing policies that expand the right-to-strike to the period during the life of the contract, workers need to demand that the laws around organizing be made more reasonable, more sectoral, especially as they effect parttime workers. With respect to international policies such as Free Trade, the Canadian Labour Congress continues to have a very weak position. Where is the position against FTAA [the Free Trade Area of the Americas, eds.]> It's not there and it's not going to be there either. They want to negotiate it. They don't want to abrogate it. That's why we've got to look to places like Cuba and some of these anti-imperialist movements in the South. The North has to learn from the South here. I know, for example, that the postal workers have linked up with some of these things. So there's lots of potential here to develop. Many of our real policy problems are within the labour movement itself. There is a big trend towards super-bureaucratization in the labour movement, the move to organize the labour movement in terms of maybe five or six monolithic unions. And I'm entirely against it. The bigger you get the weaker you get because of bureaucratization. And you're structured into the whole capitalist system, imperialist system. So you're there to negotiate the conditions under which the workers will be scrounging. Instead, we should be starting negotiations with wildcat strikes. This has to come back and I think it will come back - taking radical action outside the system of modern industrial relations.

Paulette Sadoway The key policy issues facing union members come out of the whole free trade agenda: privatization, deregulation, downsizing, the corporate rush for grabbing as much profit as they can in as short a time period as they can. This agenda impacts on workers in both the private sector and more recently in the public sector. In the private sector there continues to be pretty much the straightforward stuff that we saw happen immediately after the free trade agreement [NAFTA, eds.] was signed: factories pulling out, producers pulling out of Canada, leaving and going to the United States or Mexico or other developing countries and just shutting down production. In the public sector, more recently over the last five to eight years, there's been initiatives by governments, both federal and provincial, to privatize government services. So you're seeing increasing amounts of health care services

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being provided by the private sector or new services or new treatments, et cetera, not ever getting covered by the government and just being let go to the private sector. And there's a whole raft of government restructuring that has happened in Nova Scotia that has really hit the public sector hard. The provincial government here in Nova Scotia decided to amalgamate all of the regional health authorities into four district health boards and so the workers in those geographical areas were combined into one or two bargaining units creating a huge competition between unions to maintain the membership that they have. And now the provincial government has started to decentralize more and they are going back to more, I think they are called "health authorities." So, there's a de-amalgamation happening that will do the same thing again and will cause a bunch of run-off stuff happening among unions. And all the while this is going on, you see things like Pizza Hut and Tim Hortons appearing in the hospitals. They're privatizing out the services that were provided within the hospital structure. Same thing in education. And, in the last year or two, in community services. It is almost like there is a course book out there somewhere that someone has written on how to get the government out of providing services. I've seen very similar things happening at the federal government level here in the Atlantic that I know are happening right across Canada and, at the provincial level, initiatives like the Bill 68 fiasco that happened two summers ago when they tried to legislate health care worker's right-to-strike right out of existence. It backfired here in Nova Scotia, but that whole initiative came out of British Columbia. And, in fact, I think it was imported here by the Deputy Minister of Health who came from B.C. and brought that plan with him. So there's very similar kinds of things happening. And they do follow a pattern, you know. Cutback on the service so that the public gets totally pissed off with it and then you start privatizing it. So the public thinks that they are going to get better service from the private sector and they don't often think that the reason why the public service is deteriorating is because of the withdrawal of funds and support from those services on the part of the government. There are some huge challenges that the labour movement is facing. We have a membership that is aging. The average age of the union member is about fifty. And those union activists are really getting burnt out. So that's one huge challenge the labour movement has. We have realized it and are implementing programs to try and bring in youth. So one initiative is to increase the involvement of youth in the labour movement. That means getting involved where the work places are not growing and where employers are looking at

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cutting their labour force as a way of getting fat profits. It's really difficult to do that in the existing sort of realm of where unions are. So we've had to look at organizing programs to get new union members in, particularly in the service sector and in the hospitality industry. That's where a lot of young people are, in hospitality and retail, and a lot of young people are finding themselves stuck. So there's been a real increase in the efforts put in by many unions in Canada to organize new workers. Another direction that the CLC went at the national level under the leadership of Bob White was to really work at building coalitions, working with other groups in the community that share our concern, building alliances and support structures. So the CLC, for example, supports national organizations like the National Anti-Poverty Organization, the Canadian Centre for Policy Alternatives, the National Action Committee on the Status of Women and other organizations. We've got involved with them on a number of issues but also provide support. One of the advantages that the labour movement has is the automatic dues deductions that have really provided us with a real secure source of income that is independent and not politically attached. Many other organizations are dependent on government funding for their operation. We don't have to worry about that so much. So we provide support to other organizations and at the same time work with them on joint projects and campaigns. The third area that the CLC has been really increasing our level of activity in is the whole area of globalization: global solidarity, building links with other workers in other countries to take on the globalization initiatives by the corporate sector and to get workers working together around the world. Issues within the union movement of Canadianization and democracy are still there. There are still struggles happening within the labour movement from workers who are feeling disconnected from their unions and not represented. As recently as last year, there was a huge battle within the CLC over a group of workers who wanted to leave their international union and join a Canadian union. It was the CAW versus the Service Employees International Union. The CAW was found to be guilty of raiding and they were placed under sanctions so they couldn't participate in the CLC for a year before the sanctions were lifted. That generated a huge debate within the CLC about the process under which workers get to make the choice about which union they want to represent them. There's a lot of difficulty around this issue because, on the one level, the foundation of the union is supposed to be the union members. We really don't like it when union members make a decision that they want to

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leave their union since it is sort of like going shopping. If you don't like something, you take it back and you buy something else. A union really needs the commitment of the membership to make it a strong and vibrant organization. So when union members just sort of bail out that is problematic, whichever union they end up going in to. And that can become the pattern for dealing with problems in unions. On the other hand, there are cases where the union membership will try and try and try to address problems within their union and they just get blocked and stymied all the way. So the last recourse is really to leave that union. And so that debate has been ongoing within the CLC about how that happens and what role should the Congress play in that process. It's exacerbated by the broader context of downsizing because often it's easier for a union to organize workers that are already organized than to try and organize workers that have never had a union. So when a union is facing a loss of a number of members because their jobs have left the country, then sometimes the union may engage in raiding another union, rather than in organizing new members to build their numbers back up. In Canada generally, about 33 per cent of workers are in unions and we have been able to maintain a fairly high level, relatively speaking in North America, of unionization compared to the United States which, in the Regan era, went way down. I think it's now around 15 or 18 per cent in the United States. We attribute that difference to the fact that the Canadian labour movement did make a conscious decision a number of years ago that we were not going to focus our activities solely on the workplace and the immediate bread and butter issues of our workers. We took the position that what happens in the workplace very much is influenced by what happens within the broader political sphere. So, we've been involved for many, many years in political action that is aimed at educating our members about the broader political issues that impact them at the workplace. And I think that's a key factor in why we've been able to hold our membership levels at fairly constant levels. Outside of the labour movement, because of the fact that the world has become much smaller and is much more accessible, much more interdependent, I think that ultimately we need to have policy that address some very basic issues around physical survival of humanity on the planet. We really need to be looking at the way we treat the planet. That is number one and I would include in that the use of energy. We've just seen a war on Iraq because of the greed of oil companies in the United States, basically, who want to get their hands on a resource that they can gobble up and use as quickly as they can to make their profits go through the roof. And they're not thinking about

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the harm that does, not only at the direct level to the people of Iraq but to the globe as a whole. As long as we can keep consuming at the rate that we're doing and using oil to do it then the globe is getting destroyed. I would also include water in that. Water is a life-sustaining necessity that we all need. So these are things that we really need to be thinking about in a different way. As well, we need to be thinking about the quality of people's lives and how work fits into that. Work is a very important aspect of human life, of the quality of our lives, and so we need to making sure that everyone in the world has a quality of life that is comparable, wherever they live in the world. From the Canadian perspective, we really need to be thinking about foreign policy as a way of equalizing, of sharing, the resources of the world, rather than using the resources of the world to provide us here in North America with a level of comfort and consumption that is way beyond. That's a pretty broad example, the ultimate vision. At a more direct level, the federal and provincial governments need to be thinking about basic human needs of our citizens and their responsibilities in ensuring those things. So we have a huge gap between rich and poor people in Canada. That needs to be addressed. We have a health care system, one of the top in the world, that they're preparing to sell off to the business community. That needs to be addressed. We have, I think, 20 per cent of the world's fresh water. And we have a responsibility to protect that and make sure that it just doesn't get sold off to the highest bidder. We need to do something about the quality of life of the Canadian people. So in terms of immediate policy decisions, I think we need to talk about the minimum wage as a living wage, as a living wage in a meaningful sense, not as the lowest standard that they can get away with. And we need to think about how our communities to set up to support people living in them. Within the labour movement, our international department is one of the CLC Departments which has actually expanded in the last five years or so. What we've been doing is working with labour organizations in different parts of the world. There are five main parts of the world that we're working in. There's Africa, South America and the Caribbean, Eastern Europe, the Middle-East, and the newest one is the Far East - China, Korea, and Indonesia. What we're doing is working with workers' organizations using a lot of the educational materials that we've developed here in Canada to assist in developing programs for unions to use leadership training programs, et cetera. Just after the election in South Africa in 19941 was sent to South Africa for two weeks to meet with union educators in South Africa who were faced with a huge shortage of leadership because they had all been elected into

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government positions or they had been hired into government positions after the election when the ANC [African National Congress, eds.] became a government. So we helped them to develop an education program where they could train rank and file members to become leaders in the union. In 2000,1 was over in Nigeria where they were just celebrating a year of democratically elected government. But nobody knew how to use a democratic process to move their agenda forward. So we did a week-long training program with the trade unionists about what the democratic process is and how they develop strategies and work to put pressure on their government to enact policies that they were promoting. We've been doing that same kind of program in the Middle East, introducing gender issues to increase the participation and activity of women within the trade union movement. So there are a number of different programs that we're using. Often these programs are funded by CIDA [Canadian International Development Agency, eds.] from the Canadian government. This is because the labour movement in many developing countries is the most advanced in terms of having a structure and having people working. When you're talking about West Africa, for example, the trade union movement is the first organization among a group of organizations that CIDA works with overseas and CIDA works with trade unions through the CLC. In terms of the movements in Canada, the government needs to back off from their policy change in the way they provide funding to community organizations. They've switched from a sort of a core funding model, where they provided core funding to an organization to hire staff and then that staff carries out the mandate of the organization. They've switched to what they've called "outcome based" or some term like that, it means project funded. So the same staff person, working for an organization over a series of years, instead of being able to focus all of her time carrying out the mandate of the organization, is now spending 20 to 30 per cent of her time just dealing with the government trying to get funding for a new project, every year. This has really been a body blow to community organizations. It's made them much less able to take on the government in an advocacy role on behalf of the clients or the constituency that they represent. Having to go back for funding every year has directly limited the amount of time they have to put into the work that they do because they now have to jump through these bureaucratic hoops to get funding for another project for another six months or for another year, if they're lucky. That needs to change. These organizations have always been the source of really important information and analysis and work on behalf of the communities that they serve. But also, the

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government gets really good information from them. So that needs to change. I'm not very optimistic that it will change. I've seen it getting worse and worse. There are so many people I know who work as independent contractors and who spend 30 to 50 per cent of their looking for contracts. Within the labour movement, I think that we need to continue to go in the policy direction that was started under Bob White's leadership. There was really strong support and encouragement for unions to work with community groups in their communities and, on some levels, that still exists. But that support has been segregated or broken into different issues. For example, on the anti-globalization stuff, the labour movement has been working really well with other organizations, doing joint stuff against the WTO or FTAA or what have you. Within that group of anti-globalization projects would be our campaign against child labour, a campaign against sweatshops and that kind of stuff. On the issue of organizing, new organizing, we've been working quite a lot with youth groups like the Canadian Federation of Students to make connections with young people to promote unionization within their workplaces. I'd say that needs a bit more work and more development. While we do a fair bit of work around anti-poverty, I see it has sort of slipped off the map a bit in terms of a priority. While we talk about the gap between the rich and poor, the work that we're doing in the anti-poverty area could use a bit more support. There's also ongoing education that needs to happen at every level of the labour movement to keep us at a level of understanding the different cultures that there are in community organizations as compared to the labour movement. You know, there is no shortage of structure within the labour movement. But community groups very often work in a very loose structure. I think we have a lot to learn about that because our structure in many ways still, and increasingly, inhibits participation within the labour movement, never mind within the community organizations. So we can learn a lot from the way that community organizations function. At the provincial level, the Trade Union Act in Nova Scotia is archaic and it really needs to be updated. It is not in line with trade union acts in many other provinces. If you look at the history of the labour movement in Nova Scotia, we actually have a strong and proud history of organizing. Our trade union act reflects that proud history in that it has been a set of rules that have been put in place in order to counteract the organization of unions. The grievance procedure was put in place because unions were quite prepared to drop their tools when they had a grievance.

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The process that it takes to organize in Nova Scotia needs to be updated, needs to be brought into the twenty-first century. If workers sign cards to join a union, there's no reason why they should then have to vote to join. That second vote, of course, gives that piece of time to the employer to send the letters out and to threaten closures, as in the case of Michelin. There's no need for that to happen. It's really a challenge to get a union in place. And once you get a union in place, to get a first collective agreement is then another whole challenge. So there needs to be some legislation in place to get a first collective agreement. The other thing that really needs addressing is the whole issue that I mentioned earlier about amalgamations and privatization. We have successorship rights in Nova Scotia. But these rights disappear when applied to a public sector service being switched to the private sector. That has to be dealt with because the privatization is union-busting. They're shipping it out to the private sector. The private sector might hire you back to your job but it's going to be at a substantially lower rate of pay, your seniority is gone, you might not have the same benefit programs, et cetera, et cetera, et cetera. There needs to be much more rigorous enforcement of the rights of workers to unionize. Very rarely is an unfair labour practice ever upheld. In fact, I know of just one incident in the twenty years or so that I've been working in the labour movement where a certification order was actually granted to a union without the vote being counted because the union was able to prove that the employer's acts were so horrendous that the vote didn't really represent the wishes of the members. So that kind of stuff has to stop. In the recent situation of a hotel in Dartmouth [the Future Inn, eds.\ the labour board issued an order to the employer to put the workers back to work and he just blatantly refused. For the union to take that on, it would have had to go all the way to the Supreme Court. And the guy was boldly saying, "the labour board doesn't mean anything to me." So that kind of stuff needs to be addressed. One other point about labour relations policy concerns the hearing process of the board. The labour relations board can be dragged out ad infinitum to avoid getting anything settled. And that really undermines a union's ability to start bargaining. Those kind of regulatory tools need to be strengthened and taken seriously. Looking ahead, I am really optimistic about what I sense among the public at large. It's like the story of the emperor's new clothes. More and more the public is realizing that the emperor is not wearing any clothes. The anti-free trade debate that started in 1985-1986 and led into the federal election of

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1988 planted some really strong seeds among the public. And other initiatives like the Alternative Budget and the anti-globalization stuff has led to a growing critical mass of people who aren't taking it any more. Just recently, the Hamm Tories [Premier John Hamm's Conservative Party, eds.] announced the $155 [a tax rebate to Nova Scotians, eds.]. Public response to that, ten or fifteen years ago, wouldn't have happened in the way it has. Today, people say, "Well, that's the most expensive bottle of rum I'm ever going to receive." That kind of understanding of what's going on means that people get it! Another example is an MLA [Member of the Legislative Assembly in Nova Scotia, eds.] who visited a senior citizens manor in her riding during the war in Afghanistan and most of the people that were in there were veterans. Two-to-one, they said, "Those god-damned Americans. All they want is the oil. They don't care about the people in Afghanistan, they don't care about who the Taliban was or what they did in Afghanistan. All they want is the oil." That is quite phenomenal for people to have that level of understanding of what's going on and that gives me a lot of optimism. The work that I've been really privileged to do with the Halifax Peace Coalition in the last six months or so provides yet another example of important change. The young people that are working for peace are not interested in acquiring consumer goods at an exorbitant rate. They are looking for quality of life and they are looking for social justice for everyone. The level of commitment they have to these issues and their level of analysis certainly didn't exist when I was their age. That gives me a lot of encouragement.

Notes Introduction: Towards a New Political Economy of Development in Atlantic Canada 1. Articles in Brym and Sacouman (1979) and Fairley, Leys, and Sacouman (1990) provide the benchmarks of the earlier debate.

Chapter 1: Rethinking Underdevelopment in Atlantic Canada 1. Which includes, in addition to far-reaching movements of national liberalization, an ideological conflict and "cold war" between the blocs of countries, East and West; and the institutionality of a new world economic order - the dollar standard for international currency exchanges, the World Bank, the IMF, GATT (in 1994 replaced by the WTO), and an accord between labour and capital (to the effect that in exchange for "social peace" the former would participate in any productivity gains). 2. In effect, development can be viewed in strategic terms as a. project, that is, the result of activity that is consciously directed towards a preconceived and desired end and the choice of means to this end. Or it can be seen in structural terms as a. process, which is to say, the result of the workings of a system on people (and countries) depending on their position within this system. The strategic view focuses on variables related to action - the basic elements of a strategy, namely the goal to which action is directed and the selection of priorities vis-a-vis this goal; the means to achieve the objectives and the underlying goal; the agency involved in the action, usually in some organizational form to pursue the strategy. In contrast, a structuralist approach focuses on the objective conditions generated by the structure of the system and on the working of these conditions on individuals, countries, or regions depending on their location within the structure. 3. From the outset, the field of development was dominated by various types of "structuralism" - that of the pioneers of development economics in the 1950s and 1960s; of ECLAC, namely, "Latin American structuralism" within the dominant paradigm (orthodoxy); and a more radical line of structuralist analysis taken by scholars within an alternative Political Economy paradigm (Kay, 1989; Wilber and Jameson, 1975). Diane Hunt (1989) takes a somewhat different view, loosely defining each school of thought within the two paradigms identified by Wilbur and Jameson. 4. This point and associated arguments are debatable but to all intents and purposes, international development as a field of study, and as a geopolitical project taken up by many governments (and international organizations) in the "North," can be traced back to the late 1940s - to the pioneering ideas of a number of development economists in the "structuralist" tradition (Meier and Seers, 1984). In addition to the anti-colonial movement and associated nationalisms, and the emergence of an East-West ideological struggle and Cold War, the basic context for this evolution in development theory was provided by a secular path of unprecedented rapid economic growth within the institutional framework of the "world economic order" set up at Bretton Woods. French historians in this context wrote of "the

190 From the net to the Net thirty glorious years" while others more generally have done so in terms of "the golden age of capitalism" (Marglin and Schor, 1990). 5. These propositions constitute what in retrospect could be termed the "old economic model" vis-a-vis the "new economic model" described by Buhner-Thomas (1996). Propositions 1-2 are central to the theory of economic growth formulated by economists in this structural tradition. The basic idea is that the accumulation of capital (an increase in the effective rate of investment) is the driving force of economic growth process. The structuralist theoreticians advanced several ideas and models in this regard. The major one was the specification of a mechanism for increasing the savings rate by means of the extraction of surplus value from the traditional sector of agriculture to finance modernization (and the technological reconversion) of the industrial productive apparatus in the modern capitalist sector. Propositions 3-6 comprise what in retrospect could be viewed as the "old economic model" or "orthodoxy" vis-a-vis the new economic model which prescribes policies in the reverse direction - privatization, deregulation, and liberalization, as well as downsizing. Proposition 7 defines the central proposition of modernization theory advanced by the sociologists who entered the fray. Together with the structuralist theory of North-South trade, the theories of economic growth and modernization defined the analytical framework of development studies. 6. The academic literature on economic "globalization" (on its dimensions, forms, and dynamics) is now as extensive and voluminous as that on associated or facilitating the policy program of SAP. Some of the major issues in this debate can be found in the edited selection of essays in Desai etal. (2000), as well as Petras and Veltmeyer (2001). 7. The theory constructed on the basis of this model includes the following presuppositions: 1) the dynamics of the system derive from the utilitarian decisions (rational calculus of personal interest) made by each individual; 2) the motor of the economic expansion process is the international division of labour (production) based on the principle (the law) of comparative advantage; 3) private enterprise is the best conductor of this motor; 4) prices in their totality create and maintain a balance among demand and the supply of any commodities; and 5) the free market produces the maximum social welfare on condition of "getting prices right." This theory also served as the basis for a "new political economy," an approach towards development formulated in the 1980s by Ann Kreuger and others, particularly concerned with explaining the lack of development in sub-Saharan Africa. A "model" is a theoretically simplified representation of the critical variables of the system involved as well their interconnections. As such, unlike a "theory" per se, a theoretical model is designed not as an explanatory tool but rather as an orienting device, making analysis and theorizing possible. It is neither right or wrong but useful or not. As discussed below, theories of development and underdevelopment are generally constructed with the aid of one model or another. 8. On a critical exposition of these ideas and the associated attack on social science, structuralism, and Marxism, see Veltmeyer (1990,2002). 9. This issue is analysed in theoretical terms by Desai etal. (2000) as a debate on the nature of globalization - as a "process" or as an "ideology." 10. In the 1980s the major target of this partnership approach were the NGOs that proliferated in the wake of the retreat of the state from its hitherto dominant role in the economy. In the 1990s, however, as Mitlin (1998) points out, bilateral and multilateral ODAs turned towards the private sector as its principal partner organization. Primary responsibility for the implementing this strategy of incorporating the private sector (that is, the global corporations) into the development process was assumed by the United Nations, particularly the UNDP (Utting, 2000).

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11. On the dynamics of these and other "new anti-systemic social movements" in Latin America see Petras (1997), Petras and Veltmeyer (2002) and Veltmeyer (1997). 12. For an exposition of some alternative ideas used to explain the dynamics of regional development in the Canadian context see, inter alia, the Economic Council of Canada (1977), which makes reference to, and seeks to incorporate into its analysis, an understanding of four theoretical approaches towards regional analysis - neo-classical, staples, regional science, and development. Notably absent in this exposition of theoretical approaches is the Marxist or neo-Marxist approach towards regional development. On this approach, see the special issue on regionalism and development of the journal Radical Review of Political Economics (&7$). 13. The most systematic study of regional development in the mid- to late-1980s was conducted within the framework of an analysis informed not by any theory of regional development but a political economy of national development based on the political dynamics of public policy vis-a-vis the private sector and the market (Courchene, 1988; Higgins and Savoie, 1988; Sagebien, 1993).

Chapter 2: Just More of the Same? Confederation and Globalization 1. All theoretical traditions are realist in form (Barnes, Bloor, and Henry, 1996: 85) and so is everyday speech (Barnes, Bloor, and Henry, 1996: 83-84). Realist forms of analysis are explanations of reality that masks the elision between explanation and reality by arguing that theoretical objects and processes are real in the common-sense use of the word. The liberal model of society assumes that the market theory of the economy is a simple description of the real economy and how it operates. 2. A large and complex network of international trade and investment has been under construction since the sixteenth century. All colonial economies and many nominally "national" economies such as Canada's and Australia's have been producing much of their output for that world economy for centuries. The economic horizons of the Cunards, the Beaverbrooks, and the Bank of Nova Scotia were international and imperial, if not strictly global, a century ago. 3. Capital is money for investment in production (or speculation) for the purpose of making more of the same. 4. If most of their accumulation is from the direct exploitation of their workers, capitalists will try to get the highest possible prices from their customers any way they can, and pay the lowest possible prices to the small producers from whom they buy inputs (e.g., fish from inshore fisherman, potatoes from family farmers, or wood from woodlot owners). 5. Indeed, if employers did not pay workers less than what their labour produces, from where would profits come, particularly in competitive markets where commodities are supposed to sell to consumers for their value? 6. Reaction in the British North American colonies to the dismantlement of mercantilism was panic. Although manufacturing had begun in both the Canadas and the Maritimes, the backbone of the economy was resource exports (wheat in the Canadas, timber in N.B. and P.E.I., and fish and timber in Nova Scotia). The end of imperial preference seemed to portend the evaporation of their traditional British markets and sent the leading capitalists of the colonies into a spin. They felt that the Mother Country had betrayed them, and they were desperate for a secure new market for their staples. The likely new market for staples was the United States, where New England was undergoing a rapid industrialization behind tariff walls designed to keep out British goods. So great was the sense of panic and betrayal that the leading merchants of Montreal burned the Legislature and then drafted and signed the (treasonous) Annexation Manifesto in 1849 calling for the United States to march north

192 From the net to the Net and seize Canada from Britain by force! Apparently similar, if less formal, calls were heard in places as far removed from Montreal as Chatham, N.B., where a fear that Britain would turn to cheaper lumber sources spread despondency and sedition in the land. 7. The leading Canadian capitalists were by the 1970s completely integrated into American capital, a fifth column which readily adopted the "cheap labour in the Americas" strategy of their seniors in the United States. The newly formed Business Council on National Issues in the 1970s and its attendant right-wing think-tanks (the Eraser Institute and the C.D. Howe Institute) organized the larger capital class around this strategy and successfully created and backed their chosen political instrument, Brian Mulroney. They worked like demonic beavers and in the face of large-scale worker and other popular opposition, and the opposition of nationalists in the Canadian capitalist class - notably that "class traitor" John Turner - the "wanna-be Americans" of the BCNI succeeded in making Canada a formally integrated province of the American imperium. NAFTA came easily after that, and now the dominant elements of the Canadian capitalist class struggle against the Canadian people for the FTAA. In so doing capital in Canada has provided itself with the material prerequisites of becoming an integral element of the American capitalist class. We have yet to see which of them will achieve their personal goal of accumulating more capital, and which will be eaten by the others of their kind. 8. Democracy literally means "rule of the citizens" and implies not only a high measure of political equality amongst "the people," but that their will is sovereign in deciding how society will be organized and run. A thorough-going commitment to democracy implies the superior claim of politics over all other areas of life's activities. The liberal concept of democracy is a much more limited and constrained one because of the liberal's overriding commitment to the principle that economic affairs be run by privately owned businesses free from "unreasonable" government interference. What constitutes legitimate and reasonable impositions upon the freedom of enterprise as opposed to illegitimate impositions has been the focus of intense and furious debate amongst liberal theorists, but all liberals would agree that the people do not have a democratic right to impose socialism on the business community. 9. The reference here is, of course, to the "Bourgeois and Proletarians" section of Marx and Engels' 1848 Manifesto of the Communist Party, excerpted in an endless number of places (see Kimmel and Stephen, 1998:168). 10. Maritime de-industrialization was not only a prolonged process, but a complex one. The disappearance of Maritime manufacturing was just the final stage of the process by which Maritime firms in manufacturing, banking, and distribution were driven out of business, were branch-planted, or became big and moved out. 11. For instance, I do not subscribe to the thesis that social movements built around problems like the degradation of the environment are post-class phenomena. Environmental degradation is also rooted in the class dynamics of capitalist expansion. Gay liberation or feminist politics would seem to have little direct causal impact on what drives globalization. 12. By early in the nineteenth century, wood could not longer be obtained in the quality and quantity desired off of farmer's woodlots through relations of debt bondage. They had to be hired as wage labourers to produce it on Crown land back from settled areas. The required volumes of sawn lumber soon required wage-labour and technological innovation in sawmilling. The increasing opportunities for ship construction spurred a move to larger scale shipyards employing wage labour. And crewing ships meant wage-labourers at sea. 13. For one Maritime perspective on this issue, see the interview with John St. Amand of the Confederation of Canadian Unions (CCU) in Chapter 9 of this volume.

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Chapter 3: Capitalist Restructuring on Canada's East Coast 1. The best source of left analyses of the previous period is the now-defunct New Maritimes. Academic sources include Brym and Sacouman, 1979 and Fairley, Leys, and Sacouman (1990). 2. Militant trade unionism in Cape Breton has, in fact, been declining since the 1960s. For instance, the general pattern in trade union leadership has been from communist to social democratic to Tory. 3. See the seven volumes of the magazine of the Coastal Community Network, Coastal Community News. For further discussion of tourism as "development" see below on "zooification." 4. See the books cited above, endnote 1. 5. For more information on the Nova Scotian case, see Canadian Centre for Policy Alternatives-Nova Scotia (2003). For more on class processes, see Sacouman (1980). 6. For more on the invention and selection of anti-modern traditions, such as Anne of Green Gables in P.E.I, see McKay (1994). 7. For an overview of regional song production, see Brunton, Overton, and Sacouman (1994). 8. Presumably, the data are at least equally skewed against visible minorities, First Nations people, people with disabilities, and young people. 9. On these interrelated aspects, see Klein and Montgomery (2001). 10. For more details, see Basso (2003).

Chapter 4: Income Distribution in Nova Scotia, 2000 1. This component of the Nova Scotia Genuine Progress Index was entirely supported by GPlAtlantic's member and voluntary contributions, by GPIAtlantic's own contractual work, and by generous in-kind assistance from Statistics Canada. 2. An argument for economic growth as the means of prosperity for Nova Scotia can be found in Crowley, 2001: C2. Crowley's article is based on a 2001 World Bank report by Kray and Dollar (2000). 3. See < www.gpiatlantic.org > for a list of the reports published by GPlAtlantic. Among the issues addressed are the cost of crime, the value of housework and volunteerism, and the cost of AIDS. 4. Calculated from average after tax income data in Statistics Canada, 2000b: 109,124. 5. Calculated from average after tax income data in Statistics Canada, 2000b: 94,99,104,109, 114,119,124,129,134,139,144. 6. Calculated from average after tax income data in Statistics Canada, 2000b: 94,99,104,109, 114,119,124,129,134,139,144. 7. Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 94, 99, 104, 109, 114, 119, 124, 129, 134, 139,144. Data from Statistics Canada, 2000a has been translated to constant 1998 dollars using the respective provincial consumer price indexes. 8. Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 94, 99, 104, 109, 114, 119, 124, 129, 134, 139, 144. Data from Statistics Canada, 2000a has been translated to constant 1998 dollars using the respective provincial consumer price indexes. 9. Calculated from average after tax income data in Statistics Canada, 2000b: 109. 10. Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 109. 11. Calculated from average after tax income data in Statistics Canada, 2000b: 109. 12. Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 109 & 124.

194 From the net to the Net 13. Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 109 & 124. 14 Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 109. 15. Statistics Canada, 2000b: 94,99,104,109,114,119,124,129,134,139,144. 16. Statistics Canada, 2000b: 94,99,104,109,114,119,124,129,134,139,144. 17. Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 94, 99, 104, 109,114, 119,124, 129, 134, 139, 144. Data from Statistics Canada 2000a has been translated to constant 1998 dollars using the respective provincial consumer price indexes. 18. Calculated from average after tax income shares in Statistics Canada, 2000b: 109. 19. Calculated from average after tax income shares in Statistics Canada, 2000b: 94,99,104, 109,114,119,124,129,134,139,144. 20. Calculated from average after tax income shares in Statistics Canada, 2000b: 109. 21. Calculated from average after tax income shares in Statistics Canada, 2000b: 94,99,104, 109,114,119,124,129,134,139,144. 22. Calculated from average after tax income shares in Statistics Canada, 2000b: 94,99,104, 109,114,119,124,129,134,139,144. 23. Statistics Canada, 2000b: 94,99,104,109,114,119,124,129,134,139,144. 24. Statistics Canada, 2000b: 94,99,104,109,114,119,124,129,134,139,144. 25. Calculated from average after tax income shares in Statistics Canada, 2000b: 94,99,104, 109,114,119,124,129,134,139,144. 26. Statistics Canada, 2000b: 94,99,104,109,114,119,124,129,134,139,144. 27. International quintile gap figures are from World Bank, 2001. 28. International GINI coefficients are from World Bank, 2001. 29. Statistics Canada, 2000b: 147,150,153,156,159,162,165,168,171,174,177. 30. Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 94, 99, 104, 109,114, 119, 124,129, 134, 139, 144. Data from Statistics Canada, 2000a has been translated to constant 1998 Canadian dollars using the respective provincial consumer price indexes. 31 Statistics Canada, 2000b: 147,150,153,156,159,162,165,168,171,174,177. 32. Calculated from market income quintile data in Statistics Canada, 2000b: 105. 33. Calculated from market and disposable income quintile data in Statistics Canada, 2000b: 105,109. 34. Calculated from market income quintile data in Statistics Canada, 2000b: 90,95,100,105, 110,115,120,125,130,135,140. 35. Calculated from average market income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 105. Data from Statistics Canada 2000a has been translated to constant 1998 dollars using the respective provincial consumer price indexes. 36. Statistics Canada, 2000b: 90,95,100,105,110,115,120,125,130,135,140. 37. Calculated from market income quintile data in Statistics Canada, 2000b: 90,95,100,105, 110,115,120,125,130,135,140. 38. Calculated from transfer payment quintile data in Statistics Canada, 2000b: 106. 39. Calculated from transfer payment quintile data in Statistics Canada, 2000b: 106. 40. Calculated from transfer payment quintile data in Statistics Canada, 2000b: 106. 41. Statistics Canada, 2000a and Statistics Canada, 2000b: 90,95,100,105,110,115,120,125, 130,135, & 140. Data from Statistics Canada 2000a has been translated to constant 1998 dollars using the respective provincial consumer price indexes. 42. Statistics Canada, 2000a and Statistics Canada, 2000b: 91,96,101,106, 111, 116,121,126, 131, 136, 141. Data from Statistics Canada 2000a has been translated to constant 1998 dollars using the respective provincial consumer price indexes.

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43. GDP data are from Statistics Canada, N.d. a; disposable income data are from Statistics Canada, 2000b: 105. GDP data was translated into constant 1998$ using the consumer price index. 44. Average market, total, and disposable income by quintile was correlated against provincial and national GDP per capita in constant dollars using the correlation function in Microsoft Excel. The full results for Canada and all provinces are available at < www.gpiatlantic.org >. 45. Calculated from disposable income data in Statistics Canada, 2000b: 109. 46. See the Heritage Foundation website for an argument in favour of free trade: < wwwheritage.org >. 47. Calculated from average market income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 105. 48. Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 109. 49. Calculated using household after tax income data and household market income data from Statistics Canada 2000b: table 7.2, pp. 105 & 109. 50. Calculated from average after tax income data in Statistics Canada, 2000b: 94,99,104,109, 114,119,124,129,134,139,144. 51. Calculated from average market and disposable income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 105,109. 52. Calculated from average after tax income data in Statistics Canada, 2000a and Statistics Canada, 2000b: 94,99,104,109,114,119,124,129,134,139,144.

Chapter 5: The Decaying Social Compact in Atlantic Canada 1. Much of the following discussion is drawn from my book Social Torment (2003), especially Chapter 1. 2. Calculated from Human Resources and Development Canada, Workplace Information Directorate, 2001. 3. Nova Scotia, Department of Labour news release of May 7, 1996: "Minimum Wage Changes." < http://www.gov.ns.ca/cmns/msvr/nr-1996/nr96-05/96050709.htm >. Accessed: September 12,2002. 4. Statistics Canada, 2002. 5. Adapted and calculated from Statistics Canada, 2001. 6. Calculated from Statistics Canada, 2002. 7. Calculated from Statistics Canada, 2002. 8. Calculated from Statistics Canada, 2002.

Chapter 6: Call Centres: A New Solution to an Old Problem? 1. For a review of previous economic development strategies in the region, see for example Buchanan and McFarland (1997); Clow (1984); McFarland (1982); and Veltmeyer (1979). 2. DREE, the Department of Regional Economic Expansion, was introduced in 1968. It was followed by DRIE, the Department of Regional Industrial Expansion until it was dissolved in the late 1980s. The GDAs, General Development Agreements, initiated in 1973, were spending agreements between the federal government and individual provinces. 3. New Brunswick, Department of Economic Development and Tourism (1996). < http:// www.cybersmith.newbrunswick >. 4. New Brunswick, Department of Economic Development and Tourism (1999). < http:// gnb.ca/nbfirst/ >. 5. The authors wish to acknowledge the contribution of Ruth Buchanan and Kate Durling to earlier work on this project.

196 From the net to the Net

6. Because Statistics Canada does not consider call centres as a separate industry, but rather as a component of many industries, comprehensive data are not available. 7. Interview with Brian Freeman, New Brunswick Department of Economic Development and Tourism, May 16,1997. 8. New Brunswick, Department of Economic Development and Tourism (1999). < http:// gnb.ca/nbfirst/ >.

Chapter 7: Contradictions in Community Economic Development: New Dawn Enterprises 1. An earlier version of this paper was presented at the Canadian Centre for Policy Alternatives' conference "Underdevelopment in Atlantic Canada: Renewing the Debate," October 26-27,2001, St. Mary's University, Halifax, N.S. 2. In Nova Scotia, a government discussion paper defines CED as: a process that aims to improve the long-term viability of geographic subregions in the province. It involves managing economic change to effectively meet an area's needs and objectives through emphases on self-help, participation, partnership and control. It is based on a "bottom-up philosophy" that relies on using the community's own resources - people, capital, management, creativity, and pride to improve economic well being. (Nova Scotia, Department of Economic Development, 1993:2) 3. In British Columbia, a consultation process involving over thirty CED groups resulted in consensus on eleven CED principles: Equity, Participation, Community-building, Co-operation and Collaboration, Self-reliance and Community Control, Integration, Interdependence, Living within Ecological Limits, Capacity-building, Diversity, Appropriate indicators (Community Economic Development Centre, n.d.: 1-3). 4. See Corsano (1998) for a discussion of the legal/structural considerations of CED companies limited by guarantee. 5. Real Estate Division: Pine Tree Park Estates Inc., Cape Breton Association for Housing Development. Health Care Division: Cape Care Services Ltd., Sydney Senior Care Home Living Ltd., New Dawn Guest Home. Social Development Division: Highland Resources Ltd., Volunteer Resource Centre. 6. MacAulay (2002) argues that the ideological foundations of the Movement made inevitable the eventual focus on capitalist success. 7. Writing about women's experience of community under patriarchy, Balibar (cited in Scott, 1997:13) argues: "the only gender which is a community is the masculine, inasmuch as males establish institutions and develop practices to protect old privileges." 8. Fairley, Leys, and Sacouman (1990) remains the standard text for analyses which place Atlantic Canada on the periphery of Canadian capitalism. 9. There is no clear direction given in the Articles or in general policies to indicate exactly what this means, either in terms of what a cross-section of the community would look like or how enforceable the "should" is. 10. For a critique of communitarian values in CED, see Sites, 1998. 11. This practice was curtailed somewhat to recognize New Dawn's twenty-fifth anniversary. In October 2001, some two hundred people, from the local area and across the country, gathered for a celebratory conference, "Power of Participation: Building Communities for the 21st Century." Given CED's interest in creating locally owned enterprises, a curious choice for one of the guest speakers (her local roots aside) was Annette Verschuren, President of the Canadian subsidiary of the multinational corporation Home Depot Inc. Described in a recent edition of Business Week as a "$38 billion retailing juggernaut," Home Depot has been roundly criticized for its environmental practices and given dishonourable, if fleeting, mention in Naomi Klein's book No Logo (2000:427; see also 130,134).

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12. As a percentage of New Dawn's overall revenue, rental revenue decreased from 48 per cent in 1993 to 33 per cent in 2000 (New Dawn, 2000:30). 13. This is not to imply that Douglas himself reaches such a radical conclusion. He does not.

Chapter 8: State Employment and Trade Unionism: Signs of Renewal? 1. In Canada, as Panitch and Swartz claim, the welfare state emerged principally as a result of "a heretofore unparalleled shift" in class power favourable to the working class (Panitch and Swartz, 1993:10). 2. Department of Human Resources Development Canada (2001). < http://labour.hrdcdrhc.gc.ca/millieudetravail_workplace/chrono//table_e.cfm >. Accessed: October 24,2001. In 1975, an estimated 0.53 per cent of working time was lost in Canada during 1,171 strikes (Panitch and Swartz, 1993:15). 3. For Nova Scotia, see Thomson (1989). 4. For a discussion of these issues, see Thomson (1982). 5. Department of Labour (2001). "Annual Reports, Work Stoppage Tables. From 1997 to 1999." Available at: < http://www.gov.ns.ca/enla/pubs/24 October >. Accessed: October 24,2001. The current link goes to a chronological perspective that is updated (2003) but lists only "major strikes" - those with 500 or more employees. 6. Source: N.S. Department of Labour Annual Reports, Work Stoppage Tables. From 1997 to 1999, the Annual Report is available on-line at < http://www.gov.ns.ca/enla/pubs/ >. Accessed: October 24,2001. The Nova Scotia data for 2001 and 2002 was obtained with the assistance of the Department of Environment and Labour, Nova Scotia. 7. In a news release on July 16,2002, NSUPE registered a long series of complaints about the inefficiencies of this new shift schedule. See < http://www3.ns.sympatico.ca/nsupe/ > (Local 2). 8. Source: < http://maritimes.indymedia.org/precgi_features.php3 >. 9. This group includes occupations such as physiotherapist, laboratory technologist, pharmacist, radiation and occupational therapist, social work, and licensed practical nurse. 10. NSGEU press release, February 21,2001. Source: < www.nsgeu.ns.ca >. Accessed August 27,2002. 11. NSGEU press release, May 17,2001. Source: < www.nsgeu.ns.ca >. Accessed August 27, 2002. 12. NSGEU press release, June 7,2001. Source: < www.nsgeu.ns.ca >. Accessed August 27,2002. 13. "Timeline of the Halifax Hospital Strike." KingsJournalism Review 7 (October) 2001. < http:/ /journalism.ukings.ns.ca/kjr/2001-2002/timeline.htm >. Accessed: August 27,2002. 14. "Timeline of the Halifax Hospital Strike." KingsJournalism Review 7 (October) 2001. < http:/ /journalism.ukings.ns.ca/kjr/2001-2002/timeiine.htm >. Accessed on: August 27,2002. 15. NSGEU press release, June 13,2001. Source: < www.nsgeu.ns.ca >. Accessed on: August 27, 2002. 16. NSGEU Strike Bulletin 6, June 14,2001. Source: < www.nsgeu.ns.ca >. Accessed on: August 27,2002. 17. NSGEU Strike Bulletin 6, June 14,2001. Source: < www.nsgeu.ns.ca >. Accessed on: August 27,2002. 18. Halifax Chronicle Herald, July 6,2001; NSGEU Strike Bulletin 11, July 4,2001. Source: < www.nsgeu.ns.ca >. Accessed on: August 27,2002. 19. A binding arbitration award in 1999 involving paramedics - another health care group that was severely underpaid and overworked - had not gone the government's way (Halifax Daily News July 6,2001). 20. Jock Finlayson. "Despite the Rich Auto Contracts, Canadian Unionism's on the Slide." National Post. October 30,1999: D5.

198 From the net to the Net 21. Jock Finlayson. "Despite the Rich Auto Contracts, Canadian Unionism's on the Slide." National Post. October 30,1999: D5. 22. Jock Finlayson. "Despite the Rich Auto Contracts, Canadian Unionism's on the Slide." National Post. October 30,1999: D5.

Chapter 9: Policy Issues in the Trade Union Movement: Two Views from Labour 1. Throughout this chapter, "Americanization" is used in the sense of U.S. domination over the rest of the Americas. 2. The Michelin Bill was a series of provincial legislative manoeuvres in the 1970s that have so far succeeded in maintaining non-union workplaces at the three Michelin plants in Nova Scotia, despite numerous unionization attempts. Ultimately, the legislation required that all plants owned by a single manufacturing company be unionized, or not, at the same time.

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Index aboriginal 57 See also, Mi'kmaq action, collective 7,19-20 ACTWU (see Atlantic Communications and Technical Workers Union) analysis, class 2,4,16 regional 4,15,17 social-scientific 16 structural 2,15 Antigonish Cooperative Movement 19, 118-121 and theology 123 Atlantic Communications and Technical Workers Union 173-174. Atlantic Institute for Market Studies 93 BCNI (see Business Council on National Issues) Bill 68 / Health Care Continuation (2001) Act 157-161,166,181 bourgeoisie, petty 32 "new national" 32 transnational 38,49 Bretton Woods 8 Business Council on National Issues 37 C.D. Howe Institute 93 call centre 4,17,57,99-113 unionization 111,152 Canadian Auto Workers 172,177-178, 180,183 Canadian Centre for Policy Alternatives 42, 182 Canadian Labour Congress 169-170, 178, 183-186 Canadian Union of Postal Workers 146,171, 173,177 Canadian Union of Public Employees 174 Cape Breton 116,172

capital, capitalist class 10,15 capitalist development 1-4, 8, 11, 2223,51,53 capitalist hegemony 130,135 corporatist alliance 102 financial 10 flight 58 foreign 10,22 global 16,20,85-86,144 internationalization 3 multinational 34,38 physical 10 private accumulation 30,46 social 12 transnational 48,53 capitalism 120 golden age 10 neo-liberal 1,4,11 CAW (see Canadian Auto Workers) CBED (see Community-Based Economic Development) CCPA (see Canadian Centre for Policy Alternatives) CCU (see Confederation of Canadian Unions) CDA (see Community Development Association) CED (see community economic development) centre-periphery 21-24,127 class analysis 2,4,16,51 capitalist 10,15,46,54,85,89 competition 44 conflict 123 consciousness 19 forces 42 interests 125,126,132 merchant 120 perspective 56 politics 46 position 16 propertied 12

212 From the net to the Net relations 42-43,87 restructuring 59 structure 55 war 12,51-52,61 working 1,60,85 Coady, Moses 119,123,124 cocaleros 18 colonialism 8 Community-Based Economic Development 127 Community Development Association 1819 Community Development Corporations 116117,124,129,133-134,136 Community Development Movement 19 communism 8 community economic development 5,19, 115-136 communities, coastal 56 competitiveness 89 CONAIE (see Confederation of Indigenous Nationalities in Ecuador) Confederation 4, 25-28, 32-33, 36, 38-40, 42-49 Confederation of Canadian Unions 169-180 Confederation of Indigenous Nationalities in Ecuador 18 co-operatives 118-136 social role 121 corporations, transnational 22 credit unions 118,120 crisis 11-12,17,54 CUPE (see Canadian Union of Public Employees) CUPW (see Canadian Union of Postal Workers). debt, public 27 relief 28 Department of Fisheries and Oceans 19 dependency 2,22 culture of 122 deregulation 13,16,89 devaluation 13 development agent 9 alternative 11,19 capitalist 1-4,8,11,22-23,25-26,29-30, 46,51,116 economic 5,18-20

institutions 18 participatory 11-13,18 political 3 post- 3 practice 20 problems 7 project 8,10,12-13 regional 1-5, 7-8,20-21, 23-24, 55,108109 rural 11 social conditions of 11 sustainable 11-12 under- 2,9,21-23 unequal 22 DFO (see Department of Fisheries and Oceans) downsizing 13,16 ECLAC (see Economic Commission for Latin America and the Caribbean) ECOC (see Economic Council of Canada) Economic Commission for Latin America and the Caribbean 22 Economic Council of Canada 21 economists, political 3,21 economy 41 economic growth 10-11,61 global 3,8,12,22 informal 58 international 22 local 4 new 4, 52 peripheral 4,22-23 post-industrial 133 Engels, Friedrich 52,61 entrepreneurship 10,20-21 environment 11-12,36,48,55,78,89,152 EZLN (See Zapatista) First Nations 60,61 fishers 19,120 fisheries 56-57,151 food banks 85,98 Fordist 22,87-91 post- 16,22, 89,93,95-96 Fraser Institute 93 FTA (see trade agreements) FTAA (see trade agreements) gender 2,42,54 GDP (see gross domestic product) General Law of Capital Accumulation 22

Index 213 globalization 3, 25, 27, 33, 40-49, 51, 82, 103,148 forces of 4-5 issues of 4 neo-liberal 7,23 process 3,163 resistance to 182 Genuine Progress Index 63, 81 GINI coefficient 70-73 GNP (see gross national product) government as agent 10,19,21 essential services legislation 166 policy 11,20,111,113 Responsible 49 GPI (see "Genuine Progress Index") Gramsci, Antonio 116,135,136 Great Depression 33,45,48,118 gross domestic product 63-64,77-78, 82 gross national product 10 growth economic 10-11,63,77 with equity 11 decline 144 harmonization 44-45 healthcare 131-132 housing 131-132 IMF (see International Monetary Fund) imperialism 8,51,138 income, average 67 disparities 79 disposable 65,72-73,78 distribution 64-65,72-73,76-77 gap 65, 69, 71-73,142 household 80 national 81 subsistence 94 indigenous 12,18-19,57 industry, coal and steel 56,121,151 culture 58 oil and gas 59 pulp 57 industrialization 10,21 de-industrialization 40,45,152 re-industrialization 152 inequality 59,70-71 information technology 99 Institute for Market Research 21

International Monetary Fund 13,28,37-39, 59,87 investment, direct 27 domestic 41 foreign 48 patterns 45 return on 10,104 speculative 28,34 KBE (see knowledge-based economy) Keynes 88, 89,90,138,139,144 knowledge-based economy 134 labour 44 capitalist assault against 52,90 competition for 109 contracting out 155 costs 105 education 174,183 exploitation 55 laws 88,91 organized 2 market 79,89 militancy 138,147-148,150,161 movement 5, 12, 17, 19, 58, 137, 147, 152,161,163 part-time 106 skilled 105 student 110 surplus 99,101,106 Third World 34 volunteer 117-118,128 land, reform 11 Latin America 15,18-24 left 3,11,73 liberalization 13,16 low-income cut-off 92 MacLeod, Father Greg 122,123,124,125 Manifest Destiny 35 Maritime Fishermen's Union 57,152 Maritime Marxism school 1-2,15,23 market, domestic 10 free 8,12-13,15,73,78-79, 82, 89 global 27,80 Marx, Karl 9,14,49,52,54,61,87 marxist 16 anti- 2 post- 15 scholars 29,43

214 From the net to the Net MFU (see Maritime Fishermen's Union) Mi'kmaq 57 See also aboriginal Michelin 152,186 minorities 139,167 model, centre-periphery 21-24 corporatist 19 new economic 3,12,17 Mondragon 120,122-123,125,133-134 monopoly 27,41,45 monopsony 27,34,48 MST (see Rural Landless Workers Movement) NAG (see National Action Committee on the Status of Women) NAFTA (see trade agreements) National Action Committee on the Status of Women 182 "National Policy" 27,33,40,43,45,49 nationalization 10,13 neo-liberal 3-4,45 globalization 7,23 policies 28,110 New Dawn 18-19,115-136 and theology 123 New Economic Strategy 99,112 "new order" 35 "New Right" 145,148 "new world order" 12, 87 NGOs (see organizations, non-govern mental) New International Political Economy (NIPE) Nova Scotia Federation of Labour 174 Nova Scotia Government Employees Union 154,158-160 Nova Scotia Nurse's Union 156-160 Nova Scotia Teacher's Union 153,158-160 Nova Scotia Union of Public Employees 153, 174-177,180 NSGEU (see Nova Scotia Government Employee' Union) NSNU (see Nova Scotia Nurse's Union) NSTU (see Nova Scotia Teacher's Union) NSUPE (see Nova Scotia Union of Public Employees) ODA (see overseas development assistance) organizations, non-governmental 18 voluntary service 18 "overseas development assistance" 8,12 outsourcing 89

peasant 18, 54 periphery 21-24 political economy, liberal 21 post-modern 15 poverty 59-60, 63, 69, 73, 81, 90, 92-93, 98,110 child 60 poverty line 155 private sector 132,136 concessions 145 privatization 13,16,45,55,58,89,179-181 producers 22 domestic 10 petty 2,52,54,57 production capitalist mode 30 consolidation of 40 flexible 89-90 forces of 10 industrial 44-45 means of 13, 19 petit 44-45 petty 2,56,58 productivity 11 profits, corporate 78,88 crunch 88 reinvestment 118 proletariat 53-54,123-124 destruction of 55 proletarianization 58 protection 10,13 PSAC (see Public Service Alliance of Canada) Public Service Alliance of Canada 143 redistribution 11 regulation 10,16 -ist 16 resistance 54, 86 restructuring 16-17,79 Rural Landless Workers Movement 18 social, assistance 61 exclusion 53 empowerment 12 facts 14 forces 140 movement 1-2,5,11,18,55 relations 42,49,86,121 struggle 46 wage 98

Index 215 socialism 8,53,62,120-121,138 socialization 17 society, civil 3-5,11-12,18,52 South 89 state, as agent 9-10,17-19,46 attack on labour 138-139 declining importance 47 employment 137-168 power 52 role of 47, 89,101-104,108-109 welfare 126,136,139,141,167 structure, anti-structuralist 2 class 51,53,55 institutional 9 post-structuralist 2,3,15 structural analysis 2,15 structural adjustment 96 struggle, anti-systemic 11,18-20 class 51,58,87,172-173 political 5,87 social 5,16,46 subsidies 101 taxation, burden of 148 technology 102-103,113,135 Third World 8,18 labour 34 third sector 124 Tompkins, Father Jimmy 119,123 tourism 58 trade, free 79 agreements 25-49,55,79,180 internationalization 3 transfer payments 21,73,75-76, 82 Trudeau, Pierre Elliot 139 underdevelopment 21-23 unemployment 61-62 Cape Breton 152 insurance 96,110 New Brunswick 99,112 unions 17,19,90-91 aging membership 181 Americanization 171-173 bureaucratization 170,172-173,180,185

business unionism 169 call centre 111 Canadianization 171-172,174,182 collective bargaining 138,140,141-142, 145-146,157 concessions 153 density 162463,164,183 grassroots 175 internationalization 184-185 militancy 56,58,139-140,142,153,161, 169-170,172,174-175,177-178 national trade 44 political affiliation 178 political and economic 36-38,42,45,47 public sector 58,155 renewal 164-165 right to strike 62,90,139,142,157-158, 178,181 social unionism 170 trade 88,137-168 United Mine Workers 44 VSO (see organizations, voluntary service) wage, controls 145 decline 60,89 differential 164 labour 19 minimum 4,13,60,61,91-95,107,110 non-living 86,93 and price control 144 productivity 138 social 98,178 subsidies 108-109,112 Washington consensus 85,87 Westray 56 women equality 177 workers 60,93,95-96,112,139,140,143, 167 women's movement 173 workers worker's compensation 109 replacement workers 154 working conditions 120 Workready Workforce Program 109 World Bank 13,28,38-39,59,72,77,87 World Trade Organization 28,37-39,49,87 WTO (see World Trade Organization) Zapatista 18

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