The NDP and its radical roots

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In preparation for its upcoming Montreal convention (April 12-14), the New Democratic Party released a proposed new preamble to the party constitution. The draft from a committee of distinguished party members predictably got the attention of the Toronto Globe and Mail editorial board. It is about time the NDP rid itself of its "poisoned historical roots," exclaimed the Globe.

The NDP was formed in Calgary as the CCF (Co-operative Commonwealth Federation) in 1932, year three of the Great Depression, which would only end in 1939, with the onset of World War II. In 1933 the party adopted its program, known as the Regina Manifesto.

Faced with economic failure, stupendous unemployment, widespread poverty, and seeing no end in sight, the drafters of the Manifesto went looking for the roots of the crisis. These were the financial system, and the excess privileges granted private property owners, or capitalists.

The CCF proposed another vision: social ownership and public management. Democratic control of the economy was to replace collusion among monopolies and robber barons that served no interests, not even their own.

The CCF was dismissed as radical. The wealthy and powerful spared no efforts to discredit its policies. Nonetheless, in line with CCF thinking, the Conservative government facilitated creation of the Bank of Canada to stabilize the failed financial system, and in 1938 brought it under public ownership.

At the outbreak of the war, with the Liberals under Mackenzie King having replaced the Conservatives, the government introduced the main elements of the CCF program, including a largely planned economy with comprehensive wage and price controls, and an expansion of public debt. Full employment was easily achieved. In order to prosecute the war effort, women were brought into the official labour force in large numbers for the first time. If social democracy was necessary to win the war, then so be it.

Radical means going back to the roots of a question or a problem and trying to find its source, so as to better understand what to do. The roots of the CCF/NDP were in the busted world economy of the 1930s. For a period of 25 to 30 years after the war, the problems of financial instability, economic stagnation and failure seemed gone for good.

The CCF itself never won favour west of Manitoba, and was eliminated as a political force by John George Diefenbaker in the Tory sweep of 1958. Reborn as the NDP in 1961, the party was an ally of the minority Liberal governments in the construction of the modern Canadian welfare state that began in 1963, and ended in 1968 with the adoption of medicare.

From the 1970s until today, the world economy has struggled from successes to failures. Markets have expanded enormously. Sectors have boomed and contracted, new industries appeared and others vanished. Financial instabilities and upsets have followed no predictable pattern other than to recur with depressing regularity.

The financial collapse of 2007-09, and the accompanying bailouts of the banking system have inaugurated a new wave of skepticism about the workings of the economy. In 1944, Karl Polanyi had pointed out that money, land and labour were fictitious commodities. As the economy spluttered and lagged, a new generation discovered that pretending money, land and labour could be made subject to market pricing like so many carrots or potatoes was dangerous and wrong.

In the 1930s American economists such as Irving Fischer and Frank Knight had pointed to fractional reserve banking as a main contributing factor to the Depression. They did not just favour regulating bank lending tightly, they wanted to remove the ability to create money from the banks altogether.

A new school of scholars known as modern monetary theorists draw on a critique of private debt creation in advancing their own ideas of what monetary and fiscal policy need to do: manage demand, control interest rates and assure full employment.

The main actors in the Canadian economy, the big banks, financial and insurance corporations, pipeline companies, oil and gas interests, mining operations, telecom giants, and foreign-owned manufacturing concerns are all trying to game the system. This is obvious in the absolute disregard shown for scientific knowledge about climate change and environmental damage shown by interests tied to the Alberta bitumen sands, including of course both levels of government. It is evident in the colossal fraud of excessive remuneration to management and owners, and the expansion of low-wage, precarious employment at the same time. A study from McMaster University and the United Way estimated that barely 50 per cent of the Toronto-Hamilton area labour force have full-time jobs with benefits.

The NDP needs fresh thinking about what to do as we confront the economic stagnation of today. A look back to the CCF analysis of the 1930s shows the economy is not going to heal itself. Laissez-faire social democracy is not a viable economic option.

The Harper Conservatives have been deceiving Canadians with their wall-to-wall advertising; the government has no Economic Action Plan.

Knowing it will never satisfy its critics, coming out of its convention the NDP needs to present a program that addresses the problems of financial instability and the limits of markets. In the words of Tommy Douglas, "Courage my friends, 'tis not too late to build a better world."

Duncan Cameron is the president of and writes a weekly column on politics and current affairs.

Photo: Matt Jiggins/Flickr

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