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British Columbia's new reality : the politics of neo-conservatism and defensive defiance Shields, John Mackie 1989

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BRITISH COLUMBIA'S NEW REALITY: THE POLITICS OF NEO-CONSERVATISM AND DEFENSIVE DEFIANCE By JOHN MACKIE SHIELDS B.A.(Hons.), The University of Windsor, 1978 M.A., The University of Windsor, 1981 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY in THE FACULTY OF GRADUATE STUDIES (Department of P o l i t i c a l Science) We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA March 1989 ©John Mackie Shields, 1989 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of P f f L l T j C f l L ^ / £ WC£ The University of British Columbia Vancouver, Canada Date DE-6 (2/88) Abstract British Columbia has long been viewed by social scientists as a laboratory for social and political experimentation. The appearance in the province in the 1980s of what Premier William Bennett termed the 'new reality' and the subsequent Social Credit government's bold new policy directives has led to close scrutiny by the academic community. A debate has begun concerning the nature and meaning of the Social Credit governments' legislative agenda, as well as the character and significance of the forces which have arisen to resist this new political direction. The importance of understanding the changing political climate in British Columbia is evident because, as past practice illustrates, what transpires in B.C. may have bearing upon political developments in other parts of Canada. This dissertation advances the argument that B.C. politics after July 1983 entered a new era. Social Credit governments, as of this date, departed from the practices of the previous Keynesian consensus, targetting the welfare state and its defenders for attack. The provincial government embraced a neo-conservative solution to the crisis of capitalism. Neo-conservatism abandons pan-class resolutions to 'political' problems, adopting instead a radical and confrontational approach. It attempts to redefine the role of the state in society, seeking the transformation of 'political* questions into private or economic Issues capable of resolution In the market place. The province's July 1983 Budget and the 1987 B i l l 19, considered herein, are the two prime examples of this rightward shift. Social Credit's conversion to neo-conservative public policy / has met with vigorous extra-parliamentary opposition which arose in both 1983 and 1987 to resist its formative legislation. While the province has long had a polarized political culture, in this 'new era 1 politics has breached the confines of parliamentary-based struggle and asserted itself in the streets and workplaces. This extra-parliamentary struggle has been marked by shifting strategies and tactics and, I argue, can be best understood as 'defensive defiance' to neo-conservatlsm. i i i contents Page Chapter 1 The New Political Reality in British Columbia: Struggling Against 'Restraint' 1 I. The Character and Motivation of Restraint in British Columbia: The Current Debate 2 II. Neo-Conservatism in British Columbia: Assessing the Literature 19 III. Perspectives on the Extra-Parliamentary Struggle in British Columbia 25 IV. Extra-Parliamentary Opposition in British Columbia: Evaluating the Literature 44 V. Statement of Thesis 48 Notes 51 Chapter 2 The Rise of the Right and the Assault on the Welfare State 58 Introduction 58 The Rise and Decline of the Keynesian Welfare State 59 Neo-Conservatism: Resurrecting the Market and Class 87 Response From the Base 106 Notes 118 Chapter 3 Staples and State: The Political Economy of British Columbia 129 Introduction 129 The Structure of British Columbia's Economy: Staples as the Engine 130 I. Staples Societies: Some Theoretical Considerations 130 i v II. The British Columbia Economy 133 The Capitalist State: Contending Interpretations 152 A Theory of the Advanced Capitalist State Outlined 159 Conclusion 165 Notes 167 Chapter 4 Politics, Struggle and Public Policy in British Columbia 173 The Shaping of Politics in a Resource Based Democracy 173 Building the Foundations of the British Columbian Welfare State: Its Character and the Forces Shaping Its Evolution 179 The Coalition Against the Socialists 190 Social Credit and the Rise of the British Columbia Economy 193 Social Credit and Social Spending 199 The Rise of White Collar Unionism 203 The Defeat of Social Credit 210 The NDP Takes Office 213 Social Credit Regains Power 218 Conclusion 222 Notes 226 Chapter 5 The Politics of Restraint, British Columbia Style 234 Restraint: Defining a Concept 234 British Columbia Restraint: The First Steps 239 The 1983 British Columbia Election 244 The Restraint Steamroller 248 Public Sector Unions Targetted 257 v The Assault on Rights 270 Cuts to Services , 282 Centralizing State Power 291 Conclusion 293 Notes 298 Chapter 6 The Solidarity Experience: Class and Social Struggles in Lotusland 314 Introduction 314 The Parliamentary Resistance to 'Restraint* 315 Defensive Defiance: The Formation and Mobilization of Solidarity 320 The Mobilization for Strike Action 330 The 'Kelowna Accord' 340 The Trade Unions Versus the Community Groups: Tensions in Solidarity 344 Solidarity and the Trade Unions 357 Conclusion 364 Notes 373 Chapter 7 The Demise of the Keynesian Industrial Relations System in British Columbia 392 Introduction 392 The Rise of the Keynesian Industrial Relations System 395 1984: Taking the Unions Out of the Labour Code 416 The Transformation of State Sponsored Labour Relations Under the Vander Zalm Administration 434 The Major Provisions of B i l l 19 444 Conclusion 67v i Notes 471 Chapter 8 Labour's Resistance to B i l l 19 486 Introduction 486 The Responses to B i l l 19 488 Labour's Plan of Action 492 The Boycott versus the Protracted General Strike: Labour's Strategy Debate 510 The B i l l 19 Boycott and the Solidarity Experience 520 Conclusion 531 Notes 535 Chapter 9 Conclusion: Neo-Conservative Restraint and Defensive Defiance Considered 543 References Cited 556 v i i Llat of Tables Table I Exports of B.C. Products 1952-1980 Table II Distribution of British Columbia Union Membership by Industry 1974, 1983 Table III Percentage Breakdown of B.C. White Collar Union Membership 1983 Table IV The Largest Ten Unions in British Columbia Table V Percentage of Union Membership for B.C. and Canada 1942-1983 Table VI B.C. Ministry of Human Resources Expenditures 1956-1980 Table VII B.C. Provincial Election Results 1966-1983 v i i i Acknowleqements I wish to chiefly acknowledge Philip Resnlck, the supervisor of this dissertation, who suggested I explore this exciting area of B.C. politics, and whose unflagging encouragement and suggestions have been invaluable to me. Warren Magnusson, for his insightful commentary, and the other members of my Committee must also receive my sincere thanks. My colleagues and friends, who critiqued portions of earlier drafts, I warmly acknowledge. I am grateful to the S.S.H.R.C. for its generosity. I also thank Hawley Neuert whose support and editorial assistance were central to the completion of this project. Chapter 1 The New P o l i t i c a l Reality in British Columbia: Struggling Against 'Restraint' In July 1983, British Columbia's re-elected Social Credit government introduced a budget and a package of legislation which generated an unprecedented level of p o l i t i c a l debate and social conflict in the province. Since that date, academics and other observers and c r i t i c s of the government have posited their interpretations of what this 'political event' represents. Did i t mark the beginning of a radical restructuring of economic, social and p o l i t i c a l relations in the province, or was this a much less profound development representing a more temporary period of adjustment? What motivated the government's sweeping 'restraint' program? What were the significance and nature of the forces of opposition which arose to resist the state's measures? These are but a few of the questions raised. It is essential to understand that the government's actions constituted only one dimension of the p o l i t i c a l phenomenon which developed in July 83, because its actions generated an immediate response in the form of a mass extra-parliamentary movement. There exists a certain symmetry between the government's actions and the opposition's reaction. The dialectic which has occurred between these two opposing forces demands that B.C. politics from 1983 on be analyzed in a hol i s t i c manner; that i s , both restraint and its 1 opposition must be examined In concert so that the p o l i t i c a l phenomenon which emerged in 1983 in B.C. can be understood. This dissertation w i l l focus upon the B.C. Social Credit government's "restraint program' by f i r s t examining William Bennett's 1983 Budget and accompanying 26 b i l l s , and secondly, B i l l Vander Zalm's 1987 rewriting of the province's Labour Code with the passage of B i l l 19. These two events have been chosen as foci because they introduced the formative legislation which fundamentally shaped the new direction of B.C.'s policy of 'restraint'. As well, the government's actions in each of these periods generated a very active and large extra-parliamentary response from the forces of opposition. An understanding of the character of B.C.-style 'restraint', and the nature and prospects of those opposed to 'restraint', may be best gained through a closer examination of these p o l i t i c a l conjunctures, undertaken within this dissertation. I. The Character and Motivation of Restraint in British Columbia:  The Current Debate Numerous explanations have been advanced concerning the motivations behind the Socreds' July 1983 Budget, the accompanying legislation, and the nature of these changes. Possibly, the most effective way to approach this matter would be to break down the explanations into three broad categories; namely the centrist or middle ground accounts, the right's explanation, and the left/neo-Marxist interpretations. 2 Much of the critique of the government's program has been offered from what may be termed a liberal or a mildly social democratic perspective. The British Columbia NDP argued that "Socred restraint" was, in essence, an act of "vengeance and h o s t i l i t y to the people of British Columbia who had the temerity to not vote Social Credit", to quote Dave Barrett.(1) The NDP further charged that the restraint program would not help to improve the provincial economy but would, in fact, result in a net drain upon i t . The government's goal, besides punishing i t s p o l i t i c a l enemies, was "plainly and simply" to destroy the programs which were created by the NDP government between 1972 and 1975.(2) The NDP did hint at broader forces behind the Socreds' moves by linking the Fraser Institute and its ideology to the government's actions,(3) but the details of this relationship remain undeveloped in their analysis. Generally speaking, the NDP's centrist perspective, while containing some validity, lacks any analytical comprehensiveness; i t remains largely rhetorical. The other force at the heart of the battle against the government, the Solidarity movement, offered an explanation which could also be faulted for lacking a firm foundation. The Solidarity leadership suggested that i t s opposition to the Budget was not a case of mere partisan p o l i t i c s . Solidarity argued that what was at the centre of the debate was something much more fundamental, namely a question of "rights which are central to Canada's democratic tradition".(4) In the attempt to build as broad a base of support as possible, they adopted a "middle 3 ground" perspective from which to analyze and c r i t i c i z e the government. Solidarity maintained that the ideal role of the state was that of an objective mediator for society's varied interests; the government was presented as an institution which had the responsibility to promote the liberal/social democratic goals of equality of opportunity and social justice. Solidarity's attack on the B.C. government rested upon the contention that the Socreds were acting as the agents of big business against the larger societal interests and were consequently violating Canada's democratic tradition. Once again, as with the NDP, the links between the Socreds and the Fraser Institute were cited to substantiate these charges. Solidarity concentrated i t s attack upon the government's break with the post-war social contract and its dismantling of social and human rights. The B.C. Federation of Labour, one of the prime components of Solidarity, made the following assessment of the government's motives: "Its theme on the surface is 'restraint for recovery' but i t could be more aptly be re-stated as 'strangulation for revenge'."(5) The methods to achieve restraint, and not restraint i t s e l f , were questioned. We are again provided with l i t t l e in the way of analysis about why the government introduced such draconian measures at this time. Solidarity's attempt to avoid projecting a 'radical' image led to a muddying of the analytical waters by its use of broad generalizations concerning attacks upon 'rights', without reference to a larger socio-economic framework. 4 One source which did attempt to introduce some rigour into the analysis was the B.C. Economic Policy Institute and the Pacific Group for Policy Alternatives. The major conclusion of these bodies was that the B.C. government, in introducing restraint, was not reacting to a real f i s c a l c r i s i s of the state. They asserted that the Socreds had based their policies upon a series of myths rather than economic facts. In contrast, the Institute claimed that its "policy judgements [were] based on careful analysis of facts, sound economic theories, and values that are widely shared by British Columbians."(6) Their evaluation of B.C. restraint flowed from a Keynesian-inspired perspective. To explain the government's actions, they provided a two part answer. F i r s t , the Socreds were attempting to induce an income redistribution. That i s , they were promoting a lowering of the incomes of the less well off, while raising the fortunes of the wealthy. Their success in carrying out this policy rested upon the Socreds' a b i l i t y to twist the right wing language of restraint in a manner which screened their real intentions. Second, the Socreds were promoting economic growth, but i t was growth of a particular kind. The government wanted to inspire the growth of new industrial activities based upon cheap labour. This was a strategy that would result in the raising of property values and consequently the bolstering of the incomes of the propertied class.(7) To defend their position, the institute and Pacific Group were able to marshall a battery of economic st a t i s t i c s and "facts". What remained absent in their investigation, however, was any 5 detailed account of the decidedly p o l i t i c a l and ideological motivations of the government. The academic separation which has largely divided the study of economics and politics in North America was mirrored in the policy analysis of Socred restraint by the institute