John W. Warnock

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Saskatchewan Political Economy | Social Democracy and Neoliberalism | The Role of the New Democratic Party in Government

Structural Adjustment of Capitalism in Saskatchewan

by John W. Warnock
Saskatoon: Canadian Centre for Policy Alternatives - Saskatchewan
September 2003
ISBN: 0-88627-329-3



Extracts: Introduction

Over the past twenty five years we have witnessed a major transformation of the capitalist system of production. In the popular press, this is termed the shift from the Keynesian welfare state to globalization. Political economists refer to this as the restructuring of the capitalist system, a change in the system of capital accumulation.

The old capitalist system is described as the "industrial paradigm," "organized capitalism," or "Fordist production." It was closely identified with the nation state and its support for capital accumulation, mass production and consumption, the rise of the trade union movement, and the Keynesian welfare state. The old system emerged during World War II as the capitalist system began to recover from the second great international depression in the 1930s. It involved varying degrees of national planning to try to moderate the boom and bust swings of the business cycle. With a goal of full employment, and an expanded welfare state, the Fordist system of mass production and mass consumption was seen as an attempt to create "capitalism with a human face."


Restructuring Saskatchewan

While in opposition (1982-91), the NDP developed a policy position that was clearly to the left of the Tories. They opposed all the major policies of Grant Devine's government and promised a return to the social democratic orientation of the Blakeney government. They strongly opposed the privatization of Crown assets and were extremely critical of the Tory's tax policies. They promised to raise the royalties and taxes on the resource industries back to the levels they were under the Blakeney government. They would end poverty in Saskatchewan and close the food banks. Public opinion polls in 1991 showed that the general population wanted a return to "The Saskatchewan Way," a mixed economy with a progressive and caring welfare state.

In the debate in the Legislature, the NDP caucus set forth a clear alternative to the Tory government. They were supported by the Saskatchewan Coalition for Social Justice and the Saskatchewan Federation of Labour. In the October 1991 provincial election, the NDP won by a land slide.

It was soon clear that the new NDP government headed by Roy Romanow was going in a different direction than expected. With the first budget, they sent a clear message that the NDP government would continues the policy of capitalist restructuring begun by the Tory government of Grant Devine. The excuse for the change in direction was the large budget deficit and debt. But as the SFL and the Coalition for Social Justice pointed out, when the CCF government of T. C. Douglas took office the debt was considerably higher as a percentage of the annual operating budget. The Douglas government was determined to introduce major social changes. They introduced a progressive taxation system and paid off the debt over 21 years. In contrast, the Romanow government decided to continue the restructuring of capitalism as demanded by the business community. (See Brown et al, 1999; Warnock, forthcoming 2004.)

The NDP has now been in office in Saskatchewan for twelve years. The outline below summarizes the major thrust of the government in the implementation of the global program for the restructuring of capitalism. In this process, the NDP government has followed the patterns set by the Labour governments in New Zealand and Australia, but fear of defeat at the polls has prevented them from going as far as the Labour government of Tony Blair in Great Britain.


(1) Taxation policy. The stated goal has been to reproduce the tax structure that exists in Tory Alberta. There have been income tax cuts, particularly for those in the highest income brackets. Business and corporate taxes have been cut. Users taxes have been increased. Cutting provincial grants to school boards and municipalities has resulted in higher property taxes and users fees. They removed the municipal business tax. Royalties and taxes on resource industries have been steadily reduced to about one-third the level they were during the Blakeney government. To try to make up for some of the lost revenues, the NDP introduced government-sponsored gambling


(2) Privatization and deregulation. The NDP government sold the remainder of the government's equity in the Potash Corporation of Saskatchewan, Sask Oil, Cameco, and the Lloydminister Heavy Oil Upgrader. It sold Sask Forest Products to MacMillan Blodell Corporation. It removed the limits on foreign ownership for the privatized corporations imposed by Grant Devine's Tory government. The NDP has carried out a piecemeal privatization of the Crown utility corporations, including an increase in contracting out. Since 1982, the number of government employees has fallen from 12,000 to 9,000. Environmental protection services have been hit hard by budget cuts. At the municipal level, the lack of city planning has enhanced urban sprawl and the changes brought by large shopping centres and box stores.


(3) Agriculture and rural development. The NDP government endorsed the closing of grain elevators, the abandonment of branch RR lines and the construction of large elevators. It strongly supported the move by the management of the Saskatchewan Wheat Pool to become a private grain company raising capital on the stock market. It expressed no opposition to the move by Archer Daniel Midland to take over UGG and the Alberta and Manitoba pools. It welcomed the expansion into Saskatchewan of foreign agribusiness giants Cargill, ConAgra and Dreyfus. It abolished the GRIP program to assist farmers in need. It abolished the hog marketing board and has actively promoted, supported and financed corporate hog megabarns. It has provided large subsidies and other supports for the huge foreign-owned chemical corporations developing genetically engineered crops. It gave additional grants to Intercontinental Packers and then stood aside as it was bought out by U.S. giant Smithfield Foods. It gave Cargill a grant to build an oilseed crushing plant. The NDP announced it would put up 40 percent of the capital to help Broe Industries of Denver to establish four ethanol plants in the province.


(4) Northern development. In spite of promises made while in opposition, the NDP government has refused to share resource royalties with the Aboriginal communities in northern Saskatchewan. Northern development centres on the extraction and export of uranium, owned and controlled by two corporations, Cogema and Cameco, both heavily subsidized. U.S. giant Weyerhaeuser bought MacMillan Blodel, a move endorsed by the NDP government. The new Forest Resources Management Act grants the forest giant access to over 12 million acres of forest land with virtually no regulation or monitoring by public servants. Royalties are minuscule, far smaller than the costs of maintaining the forest. Massive clear cutting remains the mode of wood extraction. The NDP has refused to implement the principles of the Forest Stewardship Council.


(5) Downsizing social programs. With the cuts to government revenues, it was inevitable that programs would be slashed. Spending on K-12 and higher education was cut. There was a major streamlining of health services, cuts to the budget, and a decentralization of services with a centralization of budgeting power. The minimum wage fell to one of the lowest in Canada. Basic social assistance rates were frozen. Food bank dependence increased. The one exception to downsizing has been the corrections services. The province has the highest crime rate in Canada, and it also has the highest rate of incarceration. It has the highest rate of youth incarceration. Unemployed Aboriginal people fill the jails


(6) The environment. The NDP government abolished the Tory's Energy Options Panel, and in 1995 abolished the Saskatchewan Energy Conservation and Development Authority. They had both produced studies advocating soft energy paths rather than the use of coal. The NDP opposed the 1997 Kyoto conference on global warming, refused to send a delegation, and announced that only voluntary guidelines were necessary to deal with global warming and climate change. Recently, the NDP government has been refurbishing coal generating plants rather than introduce energy conservation and efficiency measures. Water pollution remains a serious problem outside major urban centres. While the NDP government has been praised by the Fraser Institute, it has regularly been given a failing grade by the Sierra Club and the Pembina Institute.


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The National Policy and 19th Century Imperialism and Colonialism


by John W. Warnock


Chapter in Murray Knuttila and Bob Stirling, eds. The Prairie Agrarian Movement Revisited. Regina: Canadian Plains Research Centre, University of Regina, 2007, pp. 147-168.


Centenary Symposium on the Foundation of the Territorial Grain Growers Association, University of Regina, Regina, Saskatchewan, November 24 and 25, 2001



Extract: Introduction


The term the "National Policy" was used by Prime Minister John A. Macdonald in 1878 when he presented a new protectionist tariff policy to Parliament. The new tariff was the main political policy in the platform on which the Conservative Party won the 1888 federal election. But as many political economists have argued, the National Policy was in the development process well before Confederation. The goal was the creation of a new Empire of the West where capital accumulation could occur through the exploitation of labour applied to the land. The farm movement, symbolized by the Territorial Grain Growers Association, was a class response to this accumulation process.

Those who have described the National Policy have almost always limited their analysis to developments within Canada. It is hard to find anyone who has written about the new Empire of the West and the movement of settlers to this area of British North America as part of the world wide phenomenon of the 19th century: the expansion of European imperialism to all corners of the globe, the acquisition of formal colonies within national empires, and the migration of around 55 million Europeans to other parts of the world. North America was very much a part of this world wide development and the transformation of public land into private land.

There are many historical and anthropological accounts of the invasion of North America by white Europeans and numerous studies of the decimation and genocide of the Aboriginal peoples of North America. In the last twenty years there have been significant new studies of how the people of the First Nations were deprived of their land and resources as well as the confinement of those who survived to small reserves and poverty. Academic studies and personal accounts have appeared on the impact of cultural imperialism and the attempt to assimilate Aboriginal people into the dominant European society. But this is rarely seen as part of the National Policy or part of European imperialism and colonialism. Few accounts link the new western imperialism with the expansion of Christianity around the world.

The National Policy was much more than just the displacement of the indigenous population with European immigrants. It was also part of the central imperial policy: the spread of capitalism to the pre-capitalist world. The imperial states claimed the land of all colonized areas of the world. In most of these areas, the land was still communally owned by the indigenous people and their societies. One of the central achievements of the imperialism of the 19th century was the transformation of communal property in land and resources to state ownership and then its privatization to individuals and firms. This was one of the central features of the National Policy.

Western capitalist imperialism and colonialism, with its close links to Christianity, required an ideological system of justification. Within Europe there was a tradition of dividing countries, nations and people between those who were "civilized" and those who were still seen to be in a state of "barbarism." It was England in its long colonial and imperial relationship with Ireland that developed the modern colonial process and created a new ideology to justify imperial domination and exploitation. The English brought the Irish system of colonialism and its ideological system to North America. This ideological system, strongly supported by the Christian churches, also served to justify the National Policy, the removal of the indigenous peoples from their land and resources in Western Canada, and the transfer of their resources to European immigrants.



The "Great Transformation" of Social Democracy


by John W. Warnock


A feature review of Gerassimos Moschonas,

In the Name of Social Democracy: The Great Transformation 1945 to the Present.

London: Verso Books, 2002.
Briarpatch Magazine, Vo. 34, No. 5, August 2005, pp. 26 - 28.





The historic core of social democracy

The triumph of social democracy came in the thirty years after World War II (the trente glorieuses - the thirty glorious years). The parties at that time were mass organizations, closely linked to the blue collar trade union movement. They dominated the left in all European countries, even managing to form governments in a number of countries. They stressed the "social democratic compromise" between the working class, the capitalist class and the state.

A common policy framework and ideology emerged during th is period. The four pillars were the promotion of working-class unity through wage solidarity, a push towards full employment, the redistribution of income and wealth, and a shift in balance of power to include the trade unions and the wage-earning class. Social democratic parties promoted a humane capitalist society rooted in a commitment to universal social programs, and standing on the side of the disadvantaged. This is the general approach we identify with the Co-operative Commonwealth Federation (CCF) in Saskatchewan after 1945.

However, as Moschonas stresses, social democracy had completely abandoned its roots in the struggle for socialism. The movement was transformed by capitalism, until the vision of a qualitatively different society was completely abandoned for that of "mediocre happiness," a term that the author borrows from Alexis de Tocqueville's description of the United States. The vision of social democracy had morphed into that of Adam Smith: we endure boring if not hazardous work, must adjust to a hierarchical command society, and are rewarded with family life and consumerism.


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