The re-election of a Paul Martin government is likely to bring nothing but bad news This includes continuing neo-liberal economic policies, deepening social inequality and much more money for the military but not for social programs. At the same time Martin will seek greater alignment with George W. Bush’s agenda of homeland security and the pre-emptive war policies outlined in the “Project for a New American Century,” and, more recently, in “The National Security Strategy of the United States of America.”

Murray Dobbin has written a concise and well-researched, if not very radical book, which critically examines Paul Martin’s track record as both a major corporate CE0 and the Finance Minister behind the neo-liberal agenda. Dobbin has been prominent in the Council of Canadians, has close links to the Canadian Centre for Policy Alternatives, and was involved with the New Politics Initiative (NPI) in Vancouver.

The book is clearly pitched to a very broad audience, and fails to envisage any kind of radical alternative to capitalism. However, it remains a useful read for those interested in learning more about politics outside the framework of the anti-capitalist Left. It is also a good source of information for those who want to campaign against Martin during the forthcoming election. More broadly speaking, it offers background on how the neo-liberal agenda was implemented in Canada over the last 20 years

The triumph of the so-called “Washington Consensus” (free trade, deregulation and privatization), has had major negative human and environmental consequences at home and abroad. It is interlinked with a sharp shift to the right in politics. Dobbin does a good job demonstrating the hard right turn in federal politics in Canada (although he fails to deal with the global triumph of neo-liberalism, which has been implanted by governments of different stripes, including social democratic).

Exposing Martin

With his impeccable ruling class credentials, Paul Martin has the right stuff to be Prime Minister. Martin’s father was a prominent Liberal cabinet Minister in more reformist era. Martin himself served for 20 years as a corporate CEO (with subsidiaries of Paul Desmerais’ multi-billion dollar conglomerate Power Corporation), and was responsible for aggressive restructuring and downsizing in this capacity.

Additionally, Martin owned Canada Steamship Lines for 12 years, which used offshore tax havens in Barbados and Liberia to dodge taxes and employed flags of convenience in international shipping. FOC ships have a notorious reputation for intense crew exploitation and labour violations (including injuries and fatalities), and pollution and environmental damage such as oil spills. Through his business interests, Martin accumulated a personal fortune estimated at $70 million.

During Martin’s tenure, Finance became the dominant Ministry in government, and Martin, through his control of the purse strings, effectively set the Liberal government’s agenda. Although the neo-liberal agenda and free trade policies were introduced by Mulroney, there was a seamless transition to the new Chretien government, indeed an intensification of neoliberalism under the latter.

The new orthodoxy came to completely dominate the thinking of the upper levels of the federal bureaucracy, especially the Finance Department. Dobbin suggests that senior bureaucrats communicated their agenda directly to the International Monetary Fund which then wrote a report recommending exactly the policies they favoured.

“Deficit Crisis”

Sustained pressure from the Businees Council on National Issues (representing the major corporations), lobbyists, right wing think-tanks and commentators and the corporate media all fuelled the so called ‘Deficit Crisis.’ Dobbin demolishes the notion that the deficit was caused by increased social spending. Instead it was caused by high interest rates (raised by the Bank Of Canada to combat inflation and keep down wage demands), and decreased revenue (caused by slowed economic growth and many major loopholes for corporations to dodge billions in taxes). However, the deficit provided the perfect pretext to slash and burn social programs.

Dobbin documents how Martin’s ground-breaking 1995 budget sought to restructure the role of government, introducing what Martin called “responsible” policies on inflation, taxation, regulation and the labour market, as well as an aggressive new trade strategy.

The centrepiece of the 1995 budget however, was massive cuts to social program spending, some $25 billion in real terms. The budget speech triumphantly proclaimed, “Relative to the size of our economy program spending will be lower than at any time since 1951.” Regional economy development, natural resources, and transport and environmental regulation were the areas hit hardest by the cuts. Meanwhile the government gutted the Canadian Assistance Plan (CAP) guidelines for social assistance and introduced the new Canada Health and Social Transfer (CHST).

Dobbin sees the latter as part of Martin’s radical “decentralization plan,” which shrunk federal health and social transfers to the provinces, and massively downloaded costs to the provinces and municipalities. The neo-liberal era in Canada has seen a major transfer of wealth from workers’ wages into profits, and from the poor, and what Martin describes as the “middle class,” to the wealthy. While income for the rich grew by about 40 percent in the 1990s, workers’ income remained flat and poverty and desperation increased sharply.

Dobbin is best at defending universal and what he calls “nation-building” programs. By contrast, this book doesn’t raise issues that don’t fit in with its Canadian nationalist paradigm, such as colonialism and anti-oppression politics. Dobbin does, however, oppose Bush’s plan for a New American century. And he does provide evidence that the Canadian Council of Corporate Executives is now seriously promoting “deep integration with the US” as the best response to corporate interests.

In opposition to this, Dobbin (and Jack Layton), are championing national sovereignty and an enhanced role for the Canadian state. This is an attempt to stem the worst of the neo-liberal tidal wave but it is not a new agenda. Rather, it harks back to the heydays of the welfare state of 1960s and ‘70s, a national economic policy, and a supposedly “independent Canadian foreign policy.”

Missing the Root Problem

The book is written in a straightforward way, without left rhetoric or window dressing. Left-wing readers may be quite taken aback by the favourabale references to “social liberalism,” and “nation-building.” For Dobbin, the project is to build a new, reform-oriented, “social-liberal,” Canadian-sovereigntist coalition.

The book is written in a non-partisan fashion, never specifically mentioning Jack Layton. However the link is obvious — Layton seeks to build the same alliance at the electoral level, via a rebuilt NDP. Layton’s project sounds remotely radical only in light of the sharp shift of the entire spectrum of parliamentary politics to the right over the last decade.

Theoretically, it is possible to adopt alternative economic policies - certainly to make some limited adjustments. But will Capital accept the reversal of neo-liberal policies and a return to the expansionary, low unemployment, Keynesian policies of the welfare state era?

Dobbin clearly acknowledges that the Martin Liberals will never implement such changes to the business agenda. To his mind, it will be necessary to elect a federal government with an alternative agenda. Dobbin makes a case for voting, arguing abstaining simply allows corporations to use the government to ram through the corporate agenda.

However, any government with a policy agenda opposed to neo–liberalism, will be constrained and destabilized if it tries to make fundamental changes. In this book at least, Dobbin completely fails to highlight the need for mobilization and militant struggles. Certainly, a high level of class struggle and self organization will be needed to make or defend any real gains.

In an era of globalization, corporations can use the threat of capital flight to exert enormous pressure upon governmental policy. Today’s international capitalism is highly competitive, and operates under strong imperatives to raise its rate of profit. Thus it seems highly unlikely that neo-liberalism could be defeated within a Canadian nationalist framework.

The stress on national sovereignty also overlooks divisions, including the national oppression of aboriginal people and the Quebecois, the inequities of class, poverty, gender and race, and the scapegoating of immigrants and refugees. Moreover, it is not easy to mix “nation-building” and a sharp critique of Canadian imperialism, in terms of massive foreign investments, plunder of the third world, and the Canadian state’s very tight support for actions such as the coup in Haiti.