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UBC Theses and Dissertations

The role of the federal state : tripartism, incomes policy in Canada, 1966-78 Russell, James Albert 1980

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THE ROLE OF THE FEDERAL STATE: TRI PART ISM, INCOMES POLICY IN CANADA, 1966 - 78 . B.A. , C a r l e t o n U n i v e r s i t y , 1966. A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n THE FACULTY OF GRADUATE STUDIES (Department o f A n t h r o p o l o g y and S o c i o l o g y ) We a c c e p t t h i s t h e s i s as c o n f o r m i n g t o the r e q u i r e d s t a n d a r d THE UNIVERSITY OF BRITISH COLUMBIA September 1980 0 James A l b e r t R u s s e l l , 1980 by JAMES ALBERT RUSSELL In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of Brit ish 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 representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. S DepiftmShl of a The University ©f Briti&h islymfefi Weebreek Plaei Vancouver, Canada VST 1WS A b s t r a c t Th is t h e s i s i s an a n a l y s i s , i n a M a r x i s t p e r s p e c t i v e , of the r o l e of the f e d e r a l s t a t e i n managing the c r i s i s of c a p i t a l accumulat ion by means of incomes p o l i c y proposals and programs and t r i p a r t i t e i n s t i t u t i o n s i n the pe r iod 1966-78. The theory c o n s t r u c t e d i s based on a M a r x i s t understanding of the r o l e of the s t a t e v i s a v i s the c a p i t a l i s t c l a s s and the working c l a s s i n the p e r i o d of monopoly c a p i t a l i s m . Incomes p o l i c y and t r i p a r t i s m are seen as s t a t e programs and i n s t i t u t i o n s which e f f e c t a t r a n s f e r o f n a t i o n a l income from wages and s a l a r i e s to p r o f i t s by f u r t h e r i n t e g r a t i n g the working c l a s s i n t o the c a p i t a l i s t economy. The problem of managing the c o n f l i c t s c reated by the economic c l a s s s t r u g g l e i s d i s c u s s e d . Sources i n c l u d e government and t rade union documents, labour h i s t o r y s t u d i e s and i n t e r v i e w s w i t h t rade u n i o n i s t s . I m p l i c a t i o n s and problems r e s u l t i n g from new i n s t i t u t i o n s o f i n d u s t r i a l r e l a t i o n s are d i s -cussed f o r the s t a t e and f o r the t rade union movement. TABLE OF CONTENTS CHAPTER I: INTRODUCTION 1 Relevance of t h i s Study 2 Research D i f f i c u l t i e s / D o c u m e n t s 5 Argument 6 O r g a n i s a t i o n 8 CHAPTER I I : THEORETICAL STATEMENT 11 An A l t e r n a t i v e T h e o r e t i c a l E x p l a i n a t i o n 21 Capi.tal R e s t r u c t u r a t i o n and Monopoly C a p i t a l i s m 26 The Canadian S t a t e 30 CHAPTER M l : THE DEVELOPMENT OF INCOMES POLICIES IN CANADA ^0 Income P o l i c y : The F i r s t I n v e s t i g a t i o n 40 P r i c e s and Incomes Commission: The Second I n v e s t i g a t i o n k6 CHAPTER IV 61 Labour: An H i s t o r i c a l Review 61 S t r u c t u r e of the CLC 71 Cont ro l s and Labour ' s Man i fes to f o r Canada 75 The Contro l Per iod 80 C a p i t a l R e s t r u c t u r a t f o n : The Royal Commission on Corporate Concent ra t ion 85 CHAPTER V: CONCLUSION 32 Two Leve ls of A n a l y s i s : I n t e r n a t i o n a l and Nat iona l 32 T r i p a r t i s m and Incomes P o l i c y 101 The Impact of Wage-Pr ice Cont ro l s 104 I m p l i c a t i o n s f o r the Labour Movement 105 Further Study 108 BIBLIOGRAPHY 113 LIST OF TABLES 1. Rate of Surplus Value in the years 1959 - 70 Page 103 1 CHAPTER I: INTRODUCTION In Oc tober 1975 the Canad ian government i n t r o d u c e d a two -year program o f w a g e - p r i c e c o n t r o l s . T h i s a c t i o n had been p receded by s e v e r a l y e a r s o f h i gh i n f l a t i o n , r i s i n g unemployment and w i d e s p r e a d deba te r e g a r d i n g the economic causes f o r t he se e f f e c t s . C o n t r o l s were f o l l o w e d t h r e e months l a t e r by a p r o p o s a l f o r t r i p a r t i s m - - j o i n t p l a n n i n g by b u s i n e s s , government and laboui which would come i n t o e f f e c t f o l l o w i n g c o n t r o l s as the long range s o l u t i o n to i n f l a t i o n and unemployment. The Canad ian Labour Congres s (CLC) responded to the g o v e r n m e n t ' s t r i p a r t i t e p r o p o s a l a t i t s May 1976 c o n v e n t i o n . Over the next two y e a r s , a d d i t i o n a l documents were p r o d u c e d , both by the government and the CLC, on t r i p a r t i s m . The government had a r g u e d , in i n t r o d u c i n g c o n t r o l s , t h a t t h i s was a n e c -e s s a r y s t e p to s t a b i l i s e p r i c e s , p l a n f u t u r e deve lopment and put an end t o e x c e s s i v e wage demands by o r g a n i s e d l a b o u r . It was argued t h a t c o n t r o l s would a l l o w a c o o l i n g - o u t p e r i o d d u r i n g which the problems f a c i n g the economy c o u l d be a n a l y s e d and the a p p r o p r i a t e programs to s o l v e the se problems d e v e l o p e d . The government s t a t e d t h a t h i gh wage s e t t l e m e n t s in the p r e c o n t r o l p e r i o d , combined w i t h o t h e r f a c t o r s such as the i n t e r n a t i o n a l o i l c r i s i s , had c r e a t e d a squeeze on p r o f i t s and damaged Canada ' s i n t e r n a t i o n a l t r a d e p o s i t i o n . In making the p r o p o s a l f o r t r i p a r t i s m , Pr ime M i n i s t e r T rudeau d e c l a r e d t h a t what was needed was an e f f e c t i v e sense o f s o c i a l r e s p o n s i b i l i t y on the p a r t o f b u s i n e s s and l abour in moving i n t o a p o s t - c o n t r o l s o c i e t y . The CLC, Canada ' s l a r g e s t l a b o u r c e n t r a l , responded to the c o n t r o l s program by immed ia te l y c e a s i n g p a r t i c i p a t i o n in a l l government a d v i s o r y b o a r d s , i n c l u d i n g the Economic C o u n c i l o f Canada. They argued t h a t the p r i c e c o n t r o l component o f the a n t i - i n f l a t i o n program would be i n e f f e c t i v e and t h a t o r g a n i s e d l a b o u r was be ing made to pay, through wage c o n t r o l s , f o r the i n f l a t i o n o f the p r e v i o u s y e a r s . The C L C ' s r e sponse to the t r i p a r t i t e i n v i t -2. at i o n , L a b o u r ' s M a n i f e s t o f o r Canada' , t o a l a r g e deg ree a c c e p t e d the g o v e r n -m e n t ' s a n a l y s i s o f the p r e - c o n t r o l p e r i o d w i t h the e x c e p t i o n o f r i s i n g wages as the main reason f o r i n f l a t i o n . The M a n i f e s t o a c c e p t s the n e c e s s i t y f o r a more p lanned economy a n d , p r o v i d e d t h e r e would be "an equa l s h a r i n g o f power " , endo r se s t r i p a r t i s m as an o p p o r t u n i t y to make " g r e a t changes in the i n s t i t u t i o n o f Canada " . A l t h o u g h s k e p t i c a l o f the gove rnment ' s i n t e n t and warn ing t h a t c o - o p t i o n c o u l d r e s u l t in a k i n d o f " l i b e r a l c o r p o r a t i s m " , the Manj f e s t o a rgues t h a t t h e r e i s an o p p o r t u n i t y to move towards s o c i a l democracy , an o b j e c t i v e wh ich the M a n i f e s t o w r i t e r s t h i n k i s w o r t h w h i l e . T r i p a r t i s m i s a system o f i n s t i t u t i o n s i n v o l v i n g r e p r e s e n t a t i v e s o f b u s i n e s s , government and l a b o u r f o r the s t a t e d purpose o f i n f o r m a t i o n s h a r i n g and the deve lopment o f economic and s o c i a l p l a n n i n g . The o b j e c t i v e o f t h i s p l a n n i n g i s t o d e v e l o p an economy t h a t i s c h a r a c t e r i s e d by p r i c e s t a b i l i t y and h i gh l e v e l s o f employment w i t h o u t s a c r i f i c i n g economic g rowth . I n c o r p o r -a ted in t h i s system i s the idea t h a t r e s p o n s i b i l i t y f o r the economy i s sha red between the p a r t i c i p a t i n g g r o u p s . The a c t u a l i n s t i t u t i o n s in a t r i p a r t i t e system c o u l d i n c l u d e economic p l a n n i n g t a s k f o r c e s f o r the economy as a whole o r f o r s p e c i f i c economic s e c t o r s , c o n s u l t a t i v e forums d e v e l o p i n g and d i s c u s -s i n g p o l i c y and c o l l e c t i v e b a r g a i n i n g i n f o r m a t i o n c e n t r e s . E x i s t i n g s t a t e i n s t i t u t i o n s and b ranches o f government m i n i s t r i e s might be c o n v e r t e d t o c o n t r i b u t e t o t r i p a r t i s m . It w i l l be argued in t h i s t h e s i s t h a t the p r i m a r y purpose o f t h e s e i n s t i t u t i o n s i s to i n t e g r a t e l a b o u r , th rough the t r a d e u n i o n s , i n t o economic d e c i s i o n - m a k i n g in such a way t h a t l a b o u r a c c e p t s and h e l p s to d e v e l o p the c a p i t a l i s t economic s y s tem. Hence, t r i p a r t i s m c r e a t e s a system o f i n t e g r a t i v e s t a t e i n s t i t u t i o n s . R e l e v a n c e o f T h i s S tudy The a t tempt to s tudy e v e n t s o f the pa s t decade from an h i s t o r i a n ' s p o i n t 3. o f v iew may appear somewhat r a s h , However, s tudy o f the deve lopment o f c o n -temporary i n s t i t u t i o n s can p r o v i d e some i n s i g h t i n t o the o v e r a l l d i r e c t i o n o f s o c i e t y . W h i l e t h e r e i s v e r y l i t t l e p u b l i s h e d m a t e r i a l , a s i d e from newspaper and magaz ine a c c o u n t s on the deve lopment o f t r i p a r t i t e i n s t i t u t i o n s , t h e r e a r e a t p r e s e n t s e v e r a l t h e s e s in p r e p a r a t i o n in both S o c i o l o g y and P o l i t i c a l S c i e n c e . ^ Canad ian r e s e a r c h e r s have s t u d i e d the se k i n d s o f s t r u c t u r e s as ... . they have d e v e l o p e d in wes te rn Europe . Much o f t h i s work has been sponso red and p u b l i s h e d by government ( see Paul M a i l e s , I n s t i t u t i o n s o f I n d u s t r i a l 2 R e l a t i o n s in C o n t i n e n t a l E u r o p e , 1973). The i m p l i c a t i o n s o f t h e s e s t r u c t u r e s f o r i n d u s t r i a l r e l a t i o n s and f o r the Canad ian l a b o u r movement a r e l a r g e . F u t u r e s tudy o f s t a t e - c o r p o r a t e - 1 a b o u r r e l a t i o n s w i l l have to take them i n t o a c c o u n t . For s o c i o l o g i s t s , the main a rea s o f c o n c e r n t h a t r e l a t e t o t h i s t o p i c would be p o l i t i c a l s o c i o l o g y , Canad ian s o c i e t y and complex o r g a n i s a t i o n s . The c o r p o r a t i s t a s sumpt ions u n d e r l y i n g t r i p a r t i s m a l s o have i m p l i c a t i o n s f o r the s tudy o f d e m o c r a t i c i n s t i t u t i o n s as i t i s q u i t e l i k e l y t h a t the d e v e l o p -ment o f t r i p a r t i s m would r e s u l t in a s h i f t o f p o l i t i c a l d e c i s i o n - m a k i n g from P a r l i a m e n t to the t r i p a r t i t e b o d i e s . For M a r x i s t s o c i o l o g y and t h e o r y , the e n l a r g e d r o l e o f the s t a t e in the f u n c t i o n i n g o f the economy, which would n e c e s s a r i l y o c c u r in a t r i p a r t i t e s y s t e m , r a i s e s many q u e s t i o n s , W h i l e t h i s has been the s u b j e c t o f s tudy in Europe- in the pas t decade ( M i l i b a n d , P o u l a n t z a s , e t c . ) , i t i s more r e c e n t l y t h a t Canad ians have g i v e n s e r i o u s a t t e n t i o n t o t h i s p r o b l e m . P a n i t c h , e d , (1977) and P r a t t and R i c h a r d s (1979) have made r e c e n t c o n -t r i b u t i o n s on the Canad ian s t a t e a t both n a t i o n a l and r e g i o n a l l e v e l s . Is the i n c r e a s e d r o l e o f the s t a t e in the economy - e v i d e n c e o f q u a l i t a t i v e change o r can i t be i n c o r p o r a t e d as q u a n t i t a t i v e change i n t o M a r x i s t t h e o r y ? M i l i b a n d , 4. in The S t a t e in C a p i t a l i s t S o c i e t y , and P a n i t c h (1976) in h i s study of B r i t -i sh incomes p o l i c y , suggest that the change i s q u a n t i t a t i v e . G a l b r a i t h , in The New I n d u s t r i a l S t a t e , argues fo r a q u a l i t a t i v e change, s t a t i n g that a p o s t - c a p i t a l i s t s o c i e t y has developed w i t h a h i g h l y i n t e g r a t e d c o r p o r a t e -s t a t e i n t e r l o c k . Th is t h e s i s argues that the expanded r o l e of the s t a t e i s c o n s i s t e n t w i th the t r a d i t i o n a l r o l e of the s t a t e in c a p i t a l i s t s o c i e t y . The development of c a p i t a l i s m , f i r s t i n t o the monopoly form w i t h i n the framework of the n a t i o n s t a t e , and then the f u r t h e r i n t e g r a t i o n of the wor ld economy through the m u l t i n a t i o n a l c o r p o r a t i o n , has n e c e s s i t a t e d a g r e a t l y en larged s t a t e r o l e . However, t h i s en larged s t a t e r o l e cont inues to s a n c t i o n c l a s s s o c i e t y . The r o l e of the s t a t e has a l t e r e d to s u i t the needs of modern c a p i t -a l i s m but the r e l a t i o n s h i p s between c l a s s e s remain fundamental ly u n a l t e r e d . A l s o of re levance f o r M a r x i s t s o c i o l o g y i s the problem of a t r i p a r t i t e framework and the i d e o l o g i c a l hegemony of the c a p i t a l i s t c l a s s . The o f f e r of t r i p a r t i s m to the t rade union movement i s an i n v i t a t i o n from the s t a t e f o r the working c l a s s to share r e s p o n s i b i l i t y f o r the performance of the c a p i t a l i s t economy, The i n t e g r a t i o n of the t rade union movement i n t o a t r i p a r t i t e i n s t i t u t i o n a l framework would make i t i n c r e a s i n g l y d i f f i c u l t to c o n c e p t u a l i s e an a l t e r n a t i v e to c a p i t a l i s m w i t h i n the labour movement. From t h i s perspec -t i y e , Gramsc i ' s w r i t i n g s are p a r t i c u l a r l y r e l e v a n t . Much of h i s work develops the M a r x i s t idea of a new s o c i e t y emerging from the womb of the o l d . For t h i s to o c c u r , Gramsci argued that the working c l a s s must develop i t s own o r g a n i s a t i o n s w i t h i n the workp lace . These would e v e n t u a l l y be in a p o s i t i o n to cha l lenge the hegemony of c a p i t a l i s t i d e o l o g y . In h i s v iew, t rade unions and workers ' c o u n c i l s , under the l e a d e r s h i p of a p o l i t i c a l p a r t y , were key p a r a l l e l o r g a n i s a t i o n s that could lead to the development of an a l t e r n a t e ideology to c a p i t a l i s m . The es tab l i shment of a t r i p a r t i t e system would seem 5. t o be an a t tempt to a c h i e v e t h i s , but f rom a c a p i t a l i s t / s t a t e p e r s p e c t i v e r a t h e r than a work ing c l a s s one . T r i p a r t i s m can be seen as a mechanism wh ich would s t r e n g t h e n c a p i t a l i s t i d e o l o g y w i t h i n the work ing c l a s s by e n t a n g l i n g the t r a d e un ions in a web o f s t a t e / c o r p o r a t e i n s t i t u t i o n s . T h i s t h e s i s i s i n tended as a c o n t r i b u t i o n to M a r x i s t s o c i o l o g y in the a r e a o f s t a t e - l a b o u r r e l a t i o n s in the Canad ian con tex t . . Because o f the r e l a -t i v e l y l a t e a c c e p t a n c e o f the t r a d e un ion movement in Canada, most Canad ian l abour h i s t o r y does not pay a g r e a t dea l o f a t t e n t i o n t o the s t a t e e x c e p t i n -s o f a r as the s t a t e h i n d e r e d un ion o r g a n i s i n g . It i s o n l y w i t h i n the pa s t twenty y e a r s t h a t the s t a t e has changed i t s approach to t r a d e un i on s and a t tempted to i n t e g r a t e them i n t o the s o c i a l and economic system r a t h e r than c o n c e n t r a t e on r e s t r i c t i n g t h e i r range o f a c t i v i t i e s . W i th the fo rma l a t t empt s by the s t a t e in the l a s t twe l ve y e a r s to e s t a b l i s h an incomes p o l i c y f o r Canada, the s tudy o f s t a t e - l a b o u r r e l a t i o n s changes as the s u c c e s s o f an incomes p o l i c y i s u s u a l l y dependent on the agreement o f the groups i t a f f e c t s . Thus the t h r u s t o f s t a t e p o l i c y towards un i on s s h i f t s f rom one o f r e s t r i c t i o n t o one o f c o - o p t i o n . Research D i f f i c u l t i e s / D o c u m e n t s A major p rob lem in r e s e a r c h i n g t h i s t h e s i s was t h a t o f d i s t a n c e . A l t h o u g h government and t r a d e un ion documents a r e r e a d i l y a v a i l a b l e in V a n c o u v e r , the a u t h o r s o f them r e s i d e m o s t l y in O n t a r i o . Two t r i p s to Ottawa d u r i n g the c o u r s e o f the r e s e a r c h h e l p e d in t h i s r e g a r d , but o f t e n f o l l o w - u p i n t e r v i e w s which may have been u s e f u l c o u l d not be c o n d u c t e d . C o o p e r a t i o n in g i v i n g i n t e r v i e w s , a t t e n d i n g to f o l l o w - u p c o r r e s p o n d e n c e and m a i l i n g o f p o l i c y s t a tement s was done p r o m p t l y by s t a f f members o f un ions and the CLC, It was more d i f f i c u l t t o e s t a b l i s h c o n t a c t w i t h government r e p r e s e n t a t i v e s a n d , as a r e s u l t , the i n t e r p r e t a t i o n s o f the g o v e r n m e n t ' s p o s i t i o n in t h i s t h e s i s a r e d e r i v e d m a i n l y f rom p u b l i s h e d documents and newspaper r e p o r t s . P u b l i s h e d documents have t h e i r l i m i t a t i o n s , but a t l e a s t they a r e a v a i l -a b l e . It was f r u s t r a t i n g to l e a r n , however, t h a t u n p u b l i s h e d documents p e r -t i n e n t t o t h i s s tudy e x i s t e d but were not a v a i l a b l e t o the p u b l i c . The P r i c e s and Incomes Commis s ion , f o r examp le , in a d d i t i o n to i t s f i n a l r e p o r t , a u t h o r e d a p r o p o s a l f o r w a g e - p r i c e c o n t r o l s wh ich was not p u b l i c l y r e l e a s e d . It would be i n t e r e s t i n g t o l e a r n how c l o s e l y the g o v e r n m e n t ' s c o n t r o l s program t h r e e y e a r s l a t e r (1975) adhered t o the Commi s s i on ' s r e p o r t . Ano the r l i m i t a t i o n c o n c e r n s the i n t e r p r e t a t i o n o f i n f o r m a l and t h e r e f o r e u n p u b l i s h e d d i s c u s s i o n s between government l e a d e r s and the CLC. An i n t e r v i e w , f o r examp le , d i s c l o s e d the f a c t t h a t an i n f o r m a l approach was made by the government to the CLC a f t e r the T h i r d Annual Review (1966) o f the Economic C o u n c i l o f Canada was i s sued t o d e t e r m i n e under what c o n d i t i o n s the CLC would a g ree t o an incomes p o l i c y . " ' S i n c e t h e r e i s a lmos t c o n t i n u o u s c o n t a c t between the CLC and government o f f i c i a l s , t h e r e i s no way o f knowing the import o f t h e s e d i s c u s s i o n s and what s i g n i f i c a n c e , i f any , they would have f o r t h i s t o p i c . It c o u l d o n l y be d e t e r m i n e d th rough an e x h a u s t i v e s e r i e s o f i n t e r v i e w s w i t h the p a r t i e s c o n c e r n e d , p r o v i d e d t h a t they were w i l l i n g t o d i s c l o s e t h i s s o r t o f i n f o r m a t i o n . Argument T h i s t h e s i s w i l l o u t l i n e a M a r x i s t t h e o r e t i c a l framework f o r a n a l y s i n g the r e l a t i o n s h i p between the s t a t e and the two main s o c i a l c l a s s e s in advanced c a p i t a l i s t s o c i e t i e s . It w i l l be argued t h a t the s t a t e i s not an independent s o c i a l f o r c e in s o c i e t y but a system o f i n s t i t u t i o n s s u b j e c t t o a v a r i e t y o f p r e s s u r e s and a c t i n g in the o v e r a l l i n t e r e s t o f the c a p i t a l i s t c l a s s . - T h e s e p r e s s u r e s a re g e n e r a t e d from two main s o u r c e s : c o m p e t i t i o n between f r a c t i o n s o f the c a p i t a l i s t c l a s s and c o n f l i c t between the c a p i t a l i s t and the work ing 7. c l a s s e s . Due t o the expanded r o l e o f the s t a t e in the monopoly c a p i t a l i s t p e r i o d , both o f t he se forms o f c o n f l i c t tend to f o c u s c o n f l i c t i n g demands on the s t a t e . T h i s tends t o make a p e r i o d o f c r i s i s appear as a t o t a l one f o r the s o c i e t y as a whole r a t h e r than a c r i s i s w i t h i n a p a r t i c u l a r i n s t i t u t i o n a l o r d e r o r r e g i o n . ^ The s t a t e ' s r o l e in t h i s s i t u a t i o n , i t w i l l be a r g u e d , i s t o manage the c o n f l i c t s g e n e r a t e d by the c o n t r a d i c t i o n s o f c a p i t a l i s t s o c i e t y in such a way t h a t n e c e s s a r y c a p i t a l a c c u m u l a t i o n o c c u r s w h i l e the l e g i t i m a c y o f the economic and s o c i a l o r d e r i s m a i n t a i n e d . T h i s a n a l y t i c a l framework w i l l be a p p l i e d to the Canad ian s i t u a t i o n in the 1964-78 p e r i o d . It w i l l be argued t h a t a c r i s i s o f c a p i t a l a c c u m u l a t i o n o c c u r r e d d u r i n g t h i s p e r i o d . The a t t e m p t s by government to s o l v e t h i s p rob lem by f i r s t a t t e m p t i n g a v o l u n t a r y incomes p o l i c y ( the P r i c e s and Incomes Commis-s i o n ) brought about a c r i s i s o f l e g i t i m a c y as l a b o u r , r e p r e s e n t e d by the CLC, r e j e c t e d t h i s k i n d o f s o l u t i o n . The c r i s i s was brought t o a head when the government i n t r o d u c e d a compu l so ry w a g e - p r i c e c o n t r o l s program in O c t o b e r 1975 The governments a t tempt to s o l v e the c r i s i s o f l e g i t i m a c y was the t r i p a r t i t e o f f e r o f J anua ry 1976, T h i s method o f managing the c o n f l i c t appeared to meet w i t h some s u c c e s s o v e r the next two y e a r s as an i n f o rma l b a r g a i n i n g p r o c e d u r e e v o l v e d between the government and the t r a d e u n i o n s . The main CLC document in t h i s p r o c e d u r e was L a b o u r ' s M a n i f e s t o f o r Canada w h i l e the government responded w i t h the g reen paper Agenda f o r C o - o p e r a t i o n , T h i s p r o c e s s r e s u l t e d in an i n f o r m a l a c c e p t a n c e by the CLC o f i n t e g r a t i v e i n s t i t u t i o n s even though t h a t body had , a f t e r i n i t i a l a c c e p t a n c e in 1976, O f f i c i a l l y r e j e c t e d t r i p a r t -ism in 1978 as an i n s t i t u t i o n a l s t r u c t u r e . The p e r i o d o f c r i s i s has brought about an a l t e r e d r o l e f o r the t r a d e un ions and the main l a b o u r c e n t r a l , the CLC, on the n a t i o n a l p o l i t i c a l s c e n e . The a t tempt to c r e a t e an i l l u s i o n o f economic p a r t n e r s h i p and j o i n t r e s p o n s i b -8. i 1 i t y f o r the economy has r e s u l t e d in the es tab l i shment of v a r i o u s economic s e c t o r task f o r c e s and c o n s u l t a t i v e groups w h i c h , taken t o g e t h e r , d e f i n e the problems and o b j e c t i v e s f o r the economy as a whole . At t h i s po in t in t i m e , the t rade union c e n t r a l has no s t a t e d p o l i c y on these t r i p a r t i t e b o d i e s , It w i l l be argued that the f a i l u r e to develop such a p o l i c y w i l l l i k e l y r e s u l t in the i n c l u s i o n of s t a t e / c o r p o r a t e t h i n k i n g and p e r s p e c t i v e s in the t rade union movement. Th is would produce a deepening of c a p i t a l i s t ideology w i t h i n the working c l a s s o r , more l i k e l y , c o n f l i c t w i t h i n the t rade union movement between those f a v o r i n g a c o r p o r a t i s t type o f s t r a t e g y ( t r i p a r t i s m ) and those r e j e c t i n g c o - o p e r a t i o n w i th the c o r p o r a t i o n s and the s t a t e as they advance a s o c i a l i s t p o l i t i c a l p e r s p e c t i v e . The p o l i t i c a l t r a d i t i o n s of the t rade union movement w i l l be important f a c t o r s in determing the outcome of t h i s c o n f l i c t . Whatever the outcome, the t rade union movement w i l l be permanently a l t e r e d w i t h a s h i f t of power and emphasis from p lan t and l o c a l b a r g a i n i n g to the t rade union c e n t r a l , The response of the t rade union movement to t r i p a r t i s m , whether in acceptance or r e j e c t i o n , w i l l n e c e s s i t a t e a much s t ronger labour c e n t r a l than has p r e v i o u s l y e x i s t e d . O r g a n i s a t i o n The content of t h i s t h e s i s i s separated i n t o two main a r e a s . The second chapter prov ides a M a r x i s t t h e o r e t i c a l framework f o r a n a l y s i n g the r e l a t i o n -sh ips between the s t a t e and the two main s o c i a l c l a s s e s in the monopoly c a p i t a l i s t p e r i o d . Chapters III and IV examine the pe r iod from 1964-78 in Canada, from the f i r s t i n v e s t i g a t i o n of incomes p o l i c y to the end o f the two-year compulsory c o n t r o l s program. Chapter III summarises the attempts at a v o l u n t a r y incomes p o l i c y and ends w i t h the i n t r o d u c t i o n of c o n t r o l s . The v o l u n t a r y attempts were researched by the Economic Counc i l of Canada in t h e i r Th i rd Annual Review and the P r i c e s and Incomes Commission, The i n t r o d u c t i o n 9. o f compu l so ry c o n t r o l s were i n s t i t u t e d a t t h a t p a r t i c u l a r t i m e . Because o f the impor tance o f p o l i t i c a l t r a d i t i o n in d e t e r m i n i n g l a b o u r ' s r e a c t i o n t o c o n t r o l s , a b r i e f r e v i e w o f l abour h i s t o r y i s p r e s e n t e d w i t h emphas is on the p o l i t i c a l a l l i a n c e s o f the t r a d e un ion movement. T h i s i s f o l l o w e d by an a n a l y s i s o f t he C L C ' s r e a c t i o n t o c o n t r o l s ( L a b o u r ' s M a n i f e s t o  f o r Canada) and the n e g o t i a t i o n s wh ich p roceeded d u r i n g the c o n t r o l s p e r i o d between the government and the CLC. The Royal Commiss ion on C o r p o r a t e C o n c e n t r a t i o n i s b r i e f l y rev iewed as an i n d i c a t i o n o f a c o r p o r a t e / s t a t e s t r a t e g y f o r the deve lopment o f Canad ian c a p i t a l i s m . The f i n a l c h a p t e r p r e s e n t s c o n c l u d i n g remarks l i n k i n g the t h e o r y o f Chap te r II to the h i s t o r i c a l deve lopment o f incomes p o l i c y and t r i p a r t i s m in Canada o u t l i n e d in Chap te r s III and IV. Some s p e c u l a t i v e comments a r e made on the d i r e c t i o n o f s t a t e / c o r p o r a t i o n / l a b o u r r e l a t i o n s . The i m p l i c a t i o n s f o r the l abour movement o f a t r i p a r t i t e i n s t i t u t i o n a l framework a r e d i s c u s s e d . F i n a l l y , some s u g g e s t i o n s f o r f u r t h e r s tudy a r e made. 10. CHAPTER I: FOOTNOTES 1. Two r e l a t e d M.A. theses a r e n e a r i n g c o m p l e t i o n a t C a r l e t o n U n i v e r s i t y by Hea ther M a c A l 1 i s t e r and Dav id L e n g i l l e . 2 . In 1976, C h a r l e s Connahan was " commis s i oned t o recommend improvements in Canad ian labour-management r e l a t i o n s based on the West German e x p e r -i e n c e . " , Canad ian D i m e n s i o n , V o l . 12, No. 3 , J u l y 1977. 3 . Leo .Pan i t c h , S o c i a l Democracy and I n d u s t r i a l M i l i t a n c y : The Labour  P a r t y , the T r a d e Unions and Incomes P o l i c y , 19**5~74 (Cambr idge: 1976, k. A n t o n i o G r a m s c i , S e l e c t i o n s f rom the P r i s o n Notebooks (New Y o r k : I n te r -n a t i o n a l P u b l i s h e r s , 1971). See p a r t i c u l a r l y the s e l e c t i o n s under the head ing s " T h e Modern P r i n c e and '. 'State and C i v i l S o c i e t y " , 5. I n t e r v i e w w i t h Rober t B a l d w i n , CLC r e s e a r c h s t a f f , O t tawa. 6, See J u r g e n Habermas, L e g i t i m a t i o n C r i s i s ( Bo s ton : Beacon H i l l , 1975) , P a r t I. 11 CHAPTER II Th is chapter w i l l present a t h e o r e t i c a l framework, in a M a r x i s t p e r s p e c -t i v e , f o r a n a l y s i n g the r e l a t i o n s h i p s between the s t a t e and the two main s o c i a l c l a s s e s . D e f i n i t i o n s w i l l be provided f o r key words and c o n c e p t s , and the ways in which they r e l a t e to each o ther w i l l be e x p l o r e d . An a l t e r n a t i v e t h e o r e t i c a l p o s i t i o n w i l l be examined and reasons g iven f o r i t s r e j e c t i o n . The s p e c i f i c nature of the Canadian s t a t e w i l l then be d e s c r i b e d and examined in the context of the theory . The rea l events which must be e x p l a i n e d in the t h e o r e t i c a l model are the i n t r o d u c t i o n o f wage/pr ice c o n t r o l s in the F a l l of 1975 and the proposal f o r t r i p a r t i s m made by the government three months l a t e r in January 1976. The i n t r o d u c t i o n o f c o n t r o l s represented a r a d i c a l depar ture from government peace - t ime p o l i c y in Canada. The proposed t r i p a r t i t e framework f o r the p o s t -c o n t r o l per iod suggested s i g n i f i c a n t change in i n d u s t r i a l r e l a t i o n s , govern -ment involvement in economic p lann ing and an acceptance and i n t e g r a t i o n of the t rade union movement i n t o p o l i c y d e c i s i o n - m a k i n g which was a l s o unpreced-ented in Canada, These r a d i c a l depar tures from accepted p r a c t i c e would suggest that a major c r i s i s was o c c u r r i n g f o r the government and i t s r o l e in s o c i e t y as w e l l as a c r i s i s of c a p i t a l i s t development,^ The t h e o r e t i c a l model must prov ide an e x p l a n a t i o n of t h i s c r i s i s o u t l i n i n g the f a c t o r s that caused i t to o c c u r , At i t s most general l e v e l , the nature of t h i s dual c r i s i s , in a M a r x i s t p e r s p e c t i v e , can be formulated in the f o l l o w i n g way: when c a p i t a l accumula-t i o n i s i n s u f f i c i e n t f o r the r e s t r u c t u r a t i o n of c a p i t a l , the s t a t e w i l l ac t to promote the t r a n s f e r of income from the working c l a s s to the c a p i t a l i s t c l a s s . Th is t h e o r e t i c a l p r o p o s i t i o n incorpora tes the t w o - f o l d c r i s i s of c a p i t a l i s t development as we l l as p r o v i d i n g an i n d i c a t i o n of the c r i s i s f o r the s t a t e as i t p i n p o i n t s the key r o l e that the s t a t e p lays in r e l a t i o n to the c a p i t a l i s t 12. c l a s s and the working c l a s s . The main c a u s a t i v e f a c t o r i s i d e n t i f i e d as i n s u f f i c i e n t accumulat ion f o r c a p i t a l r e s t r u c t u r a t i o n . Thus the i n t i a l r e q -uirements f o r the t h e o r e t i c a l model are met in the p r o p o s i t i o n . So as to be i. c l e a r regard ing the use of terms, d e f i n i t i o n s w i l l f i r s t be p resented . The r e l a t i o n s h i p s which emerge from the p r o p o s i t i o n w i l l then be examined. C a p i t a l a c c u m u l a t i o n : i s the process whereby c a p i t a l i s c reated in the form of p r o f i t as the r e s u l t of the p roduct ion p rocess . The va lue produced in the p roduct ion process goes to two p a r t i e s : to the workers in the form of wages to reproduce t h e i r means of s u b s i s t e n c e and to the c a p i t a l i s t s in the form of su rp lus v a l u e . C a p i t a l accumulated i s that p o r t i o n of su rp lus va lue a v a i l a b l e f o r r e - i n v e s t m e n t , or the net p r o f i t r e s u l t i n g from p r o d u c t i o n . C a p i t a l i s a l s o accumulated through t a x a t i o n and made a v a i l a b l e , through s t a t e appara tuses , f o r f u r t h e r c a p i t a l i s t development. R e s t r u c t u r a t i o n of c a p i t a l : Th is invo l ves the r e a l l o c a t i o n of c a p i t a l i n t o new areas of p l a n t and technology and i s g e n e r a l l y a s s o c i a t e d w i t h per iods of t e c h n o l o g i c a l breakthrough, To some e x t e n t , t h i s i s a cont inuous p r o c e s s . For the most p a r t , however, t h i s occurs at s p e c i f i c stages of c a p i t -a l i s t development which can be i d e n t i f i e d . These per iods would be towards the end of the downswing and beginning of recovery from major per iods of r e c e s s i o n (not the o r d i n a r y "bus iness c y c l e " ) . The i n t r o d u c t i o n of computer-i s a t i o n and automation in the e a r l y postwar pe r iod ( l a t e 1940's) would be an example. It i s necessary f o r c a p i t a l i s t development that t h i s process occur in order to prevent s t a g n a t i o n and f a l l i n g ra tes of p r o f i t . The labour process i t s e l f i s r e s t r u c t u r e d d u r i n g these per iods from l e s s to more c a p i t a l i n t e n s i v e p r o c e s s e s . S t a t e : At the most general l e v e l , the r o l e of the c a p i t a l i s t s t a t e i s to reproduce c a p i t a l i s t r e l a t i o n s of p r o d u c t i o n . In p r a c t i c e , t h i s r e s u l t s 13. in two pr imary f u n c t i o n s : 1 e g i t i m i s a t ion and a c c u m u l a t i o n . The i d e o l o g i c a l r o l e of the s t a t e i s to l e g i t i m i s e the d i v i s i o n of s o c i e t y i n t o c l a s s e s . In order to accompl ish t h i s t a s k , the s t a t e i s presented as a n e u t r a l a r b i t e r above narrow c l a s s i n t e r e s t s and tending the i n t e r e s t s of the c o l l e c t i v i t y . The accumulat ion r o l e of the s t a t e i s c a r r i e d out through the tax system and s t a t e apparatuses which m o n i t o r , promote and superv i se the shares of n a t i o n a l income acc ru ing to v a r i o u s c l a s s e s . The s t a t e a l s o ensures a s u f f i c i e n t f low of c a p i t a l and s e r v i c e s to the c a p i t a l i s t c l a s s f o r development through gov-ernment c o n t r a c t s , p lann ing and c o - p r d i n a t i o n . The s t a t e i s a l s o sub ject to c l a s s pressure from the working c l a s s . It l e g i t i m a t e s i t s f u n c t i o n here by the p r o v i s i o n of s o c i a l s e r v i c e s and l e g i s l a t i o n ( e . g . the working d a y ) . In c l a s s s o c i e t y , the s t a t e a c t s in the i n t e r e s t of the r u l i n g c l a s s . In c a p i t -a l i s m , t h i s i s the c a p i t a l i s t c l a s s . When normal means of 1 e g i t i m i s a t ion break down, the over t c o e r c i v e apparatuses of the s t a t e are used . Consequent-l y , c o e r c i o n should be seen both as par t of the l e g i t i m a t i n g f u n c t i o n and as an ex t en s ion of i t , Th is d i v i s i o n of f u n c t i o n s a t t r i b u t a b l e to the s t a t e is used here s o l e l y f o r d e f i n i t i o n a l purposes . In p r a c t i c e , these f u n c t i o n s are i n e x t r i c a b l y interwoven. Furthermore, the s t a t e i s sub jec t to pressures from the two main c l a s s e s as we l l as f r a c t i o n s of s p e c i f i c c l a s s e s . Ac tua l s t a t e programs, whether accumulat ion or l e g i t i m i s a t i o n , depend on the dynamic generated by c l a s s c o n f l i c t and the r e l a t i v e s t r e n g t h of c l a s s e s at a p a r t i c -u l a r po in t in t i m e . T rans fe r of income: Th is process occurs in two ways: 1) by r e g u l a t i o n of income shares going to wages and s a l a r i e s on the one hand and p r o f i t s on the other ( fo r example, wage c o n t r o l s ) ; and 2) through the tax system e i t h e r d i r e c t l y to c e r t a i n c o r p o r a t i o n s or through s t a t e programs e s t a b l i s h i n g s e r v i c e s which i n d i v i d u a l c a p i t a l i s t s would f i n d ^ t o o c o s t l y ( e . g . roads , hydro ) . 14. Working c l a s s : For purposes of t h i s paper , except where o therwise s t a t e d , the working c l a s s c o n s i s t s of a l l wage and s a l a r i e d workers . Th is inc ludes workers in p roduct ion who produce s u r p l u s va lue and workers in c i r c u l a t i o n , exchange and s t a t e employees who may have su rp lus labour e x t r a c t e d but not su rp lus va lue (because they are not engaged in p r o d u c t i o n ) . A thorough c l a s s a n a l y s i s would have to account f o r these d i f f e r e n c e s in terms of the r e l a t i o n -sh ip to the means of p roduct ion but the argument developed here i s not 3 dependent on that l e v e l of a n a l y s i s . Cap i t a 1 i s t c l a s s : The c a p i t a l i s t c l a s s owns the means of p roduct ion and has at i t s d i s p o s a l the surp lus va lue produced in the p roduct ion p r o c e s s . In the development of c a p i t a l i s m , i n d i v i d u a l owners have been rep laced by c o r p o r -a t i o n s which may or may not be c o n t r o l l e d by i n d i v i d u a l s . At any one t i m e , there may be a dominant f r a c t i o n of t h i s c l a s s ( e . g . those c o n t r o l l i n g the mul -t i n a t i o n a l s ) / b u t , except where e x p l i c i t l y s t a t e d , c a p i t a l i s t c l a s s w i l l r e f e r to the whole c l a s s and not a f r a c t i o n t h e r e o f , There are three se ts of r e l a t i o n s h i p s which r e q u i r e e x a m i n a t i o n . They a r e : 1) between the working c l a s s and the c a p i t a l i s t c l a s s ; 2) between the s t a t e and the c a p i t a l i s t c l a s s ; and 3) between the s t a t e and the working c l a s s . Whi le the r e l a t i o n s h i p between c a p i t a l i s t s and workers i s c l e a r l y s t a t e d and accepted in M a r x i s t theory , being u l t i m a t e l y c h a r a c t e r i s e d by c a p i t a l ' s " innermost s e c r e t " , the e x t r a c t i o n of su rp lus v a l u e , the r e l a t i o n -sh ip between the s t a t e and the two main s o c i a l c l a s s e s i s the sub jec t of debate . In t h i s , Marx can on ly be taken as a beginning po in t f o r a n a l y s i s . Th is i s not only due to Marx 's c o n c e n t r a t i o n on the r e l a t i o n s h i p between the c a p i t a l i s t c l a s s and the working c l a s s , but a l s o due to the great expansion of the r o l e of the s t a t e w i t h the advent of monopoly c a p i t a l i s m . The neces -s i t y f o r a much broader r o l e f o r the s t a t e i s c l e a r l y a s s o c i a t e d w i t h 15. c a p i t a l i s m in i t s advanced, monopoly s t a g e . In Monopoly Cap i ta1 , Baran and Sweezy s t a t e that the fundamental c h a r -a c t e r i s t i c of c a p i t a l i s m in i t s monopoly stage i s the v i r t u a l d isappearance of p r i c e c o m p e t i t i o n : "We must recogn ise that c o m p e t i t i o n , which was the predominant form of market r e l a t i o n s in n ine teenth century B r i t a i n , has ceased to occupy that p o s i t i o n , not on ly in B r i t a i n but eve ry -where e l s e in the c a p i t a l i s t w o r l d . Today the t y p i c a l economic u n i t in the c a p i t a l i s t wor ld i s not the smal l f i r m producing a n e g l i g i b l e f r a c t i o n of a homogenous output f o r an anonymous market but a l a r g e - s c a l e e n t e r p r i s e producing a s i g n i f i c a n t share o f the output of an i n d u s t r y , o r even severa l i n d u s t r i e s , and ab le to c o n t r o l i t s p r i c e s , the volume of i t s p r o d u c t i o n , and the types and amounts of i t s investments . The t y p i c a l economic u n i t , in other words, has the a t t r i b u t e s which were once thought to be possessed on ly by m o n o p o l i e s . " Whi le c o m p e t i t i o n cont inues to e x i s t , in some areas more than o t h e r s , i t i s not the d e f i n i n g c h a r a c t e r i s t i c that i t was in the e a r l i e r development of c a p i t a l i s m . Under c o m p e t i t i v e c a p i t a l i s m , the e x i s t e n c e of a s p e c i f i c f i r m was on ly of l o c a l i n t e r e s t . With monopoly c a p i t a l i s m , the d isappearance of one or two la rge f i r m s could r e s u l t in severe d i s l o c a t i o n of the economy. In ins tances where t h i s i s l i k e l y to o c c u r , modern governments have e i t h e r taken over la rge f i r m s threatened w i t h bankruptcy or a s s i s t e d them, In a d d i t i o n to government c o n t r a c t s , the s t a t e has numerous p lann ing and r e g u l a t o r y bodies that f u n c t i o n as s e r v i c e s to the monopoly s e c t o r . The k i n d of p l a n n i n g c a r r i e d out by monopoly f i r m s s imply cou ld not be done under c o m p e t i t i v e c a p i t a l ism. Baran and Sweezy ques t ion whether the expanded r o l e f o r the s t a t e under monopoly c a p i t a l i s m j u s t i f i e s the term " s t a t e monopoly c a p i t a l i s m " as a more a p p r o p r i a t e d e s c r i p t i v e phrase . They dec ide a g a i n s t i t f o r two reasons : "The s t a t e has always played a c r u c i a l r o l e in the development of c a p i t a l i s m , and w h i l e t h i s r o l e has c e r t a i n l y increased quan-t i t a t i v e l y we f i n d the ev idence of a q u a l i t a t i v e change in recent decades unconvinc ing . . . Even more important i s the f a c t 16. that terms l i k e " s t a t e c a p i t a l i s m " and " s t a t e monopoly c a p i t a l -i sm" almost i n e v i t a b l y c a r r y the connota t ion that the s t a t e i s somehow an independent s o c i a l f o r c e , c o o r d i n a t e w i t h p r i v a t e b u s i n e s s , and that the f u n c t i o n i n g of the system i s determined not on ly by the c o - o p e r a t i o n of these two f o r c e s but a l s o by t h e i r antagonisms and c o n f l i c t s . . . in r e a l i t y , what appears to be c o n f l i c t s between bus iness and government are r e f l e c t i o n s ^ of c o n f l i c t w i t h i n the r u l i n g c l a s s . " There are some problems w i t h both of the above reasons but they are not s u f -f i c i e n t to warrant changing the te rmino logy . The q u a n t i t a t i v e change has c e r t a i n l y cont inued s i n c e the p u b l i c a t i o n of Monopoly C a p i t a l (1966) and i t i s l e g i t i m a t e to q u e s t i o n what would c o n s t i t u t e q u a l i t a t i v e change. P r i c e and income c o n t r o l s , f i r s t in the Uni ted S ta tes and then in Canada, dur ing the 1 9 7 0 ' s , c e r t a i n l y was ev idence of a more aggress i ve and f a r - r e a c h i n g s t a t e r o l e . But the i n t e n t of these programs was in keeping w i t h the prev ious r o l e of the s t a t e . The second reason , of r e l u c -tance to lend credence to the view that the s t a t e i s an independent s o c i a l f o r c e , i s a good argument but the way in which Baran and Sweezy fo rmulate i t seems to support the t r a d i t i o n a l M a r x i s t view that the s t a t e i s merely a too l of c a p i t a l . Th is i m p l i e s that o ther c l a s s e s can have r e l a t i v e l y l i t t l e , i f any, impact on s t a t e p o l i c y . The r e l a t i o n s h i p between the s t a t e and the working c l a s s should not be seen as o p e r a t i n g in one d i r e c t i o n o n l y , but as a dynamic one in which the s t a t e a l s o reac ts to working c l a s s p r e s s u r e . A wide v a r i e t y of s o c i a l programs as w e l l as labour l e g i s l a t i o n are areas of s t a t e a c t i v i t y which w i l l be s t rong or weak, depending on the s t r e n g t h and o r g a n i s a t i o n of the working c l a s s . Whi le Baran and Sweezy have attempted to update M a r x i s t economic t h e o r y , t h e i r idea o f the s t a t e does not seem to have been a l t e r e d a c c o r d i n g l y , Marx de f ined the s t a t e as a "committee f o r managing the common a f f a i r s of the whole b o u r g e o i s i e . " ^ For many y e a r s , M a r x i s t t h e o r i s t s accepted t h i s 17. t o mean a v e r y l i m i t e d autonomy f o r the s t a t e and a r o l e t h a t p r i m a r i l y r e a c t e d t o demands from the c a p i t a l i s t c l a s s . It was a l s o assumed t h a t the most l i m i t e d r o l e f o r the s t a t e was the most b e n e f i c i a l one f o r c a p i t a l i s m . R e c e n t l y , the s u b j e c t has r e c e i v e d more a t t e n t i o n and r e s e a r c h . The p u b l i c a -g t i o n o f The Canad ian S t a t e : P o l i t i c a l Economy and P o l i t i c a l Power has sparked more i n t e r e s t in Canada in the l i n k a g e s between the s t a t e and s o c i a l c l a s s e s . Ra lph M i l i b a n d beg in s w i t h Ma rx ' s d e f i n i t i o n and expands on i t in the f o l 1 o w i n g way: " T h e n o t i o n o f common a f f a i r s assumes the e x i s t e n c e o f p a r t i c -u l a r o n e s ; and the n o t i o n o f the whole b o u r g e o i s i e i m p l i e s the e x i s t e n c e o f s e p a r a t e e lement s wh ich make up t h a t whole . . . the s t a t e cannot meet t h i s need (management) w i t h o u t e n j o y i n g a c e r t a i n deg ree o f autonomy. In o t h e r words , the n o t i o n o f ^ autonomy i s embedded in the d e f i n i t i o n i t s e l f . " T h i s does not imply t h a t t he s t a t e i s autonomous from the b o u r g e o i s i e . It conno te s a r e l a t i v e autonomy from p a r t i c u l a r c l a s s f r a c t i o n s , but i t s o v e r a l l management must be in the long range i n t e r e s t s o f the whole b o u r g e o i s i e , P o u l a n t z a s approaches the prob lem from the p o i n t o f v iew o f r e p r o d u c t i o n o f a mode o f p r o d u c t i o n . The s t a t e m a i n t a i n s : " . . . t h e u n i t y and c o h e s i o n o f a s o c i a l f o r m a t i o n by c o n c e n t r a -t i n g and s a n c t i o n i n g c l a s s d o m i n a t i o n , and in t h i s way ^ r e p r o d u c i n g s o c i a l r e l a t i o n s , i . e . c l a s s r e l a t i o n s , " In o r d e r to a c t in c a p i t a l ' s long range i n t e r e s t , r e p r o d u c i n g c l a s s r e l a t i o n s , the s t a t e may be p l a c e d in a p o s i t i o n o f c o n f l i c t in r e l a t i o n t o c a p i t a l ' s s h o r t term i n t e r e s t s ( o r , more l i k e l y , a f r a c t i o n o f the c a p i t a l i s t c l a s s i n t e r e s t ) . Both approaches g r a n t a wide range o f management autonomy, Marx no tes an e a r l y example o f s t a t e autonomy and how i t i s used to manage c o n f l i c t in h i s d i s c u s s i o n o f the passage o f the F a c t o r y A c t s in B r i t a i n . ^ In p a s s i n g the l e g i s l a t i o n , the s t a t e a c t e d a g a i n s t the s e l f -18. perce ived i n t e r e s t s of the c a p i t a l i s t c l a s s whose spokesmen p r e d i c t e d the r u i n of the economy should the a c t s come i n t o f o r c e . The s t a t e , in t h i s i n s t a n c e , was fo rced to respond to the sus ta ined pressure brought to bear by the working c l a s s , p a r t i c u l a r l y under the l e a d e r s h i p of the C h a r t i s t movement in the l 8 3 0 ' s and l 8 4 0 ' s : v " A f t e r c a p i t a l had taken c e n t u r i e s to extend the working day to i t s normal maximum l i m i t , and then beyond t h i s to the l i m i t of the n a t u r a l day of twelve hours , there f o l l o w e d , w i t h the b i r t h of l a r g e - s c a l e indus t ry in the l a s t t h i r d of the e i g h t -eenth c e n t u r y , an avalanche of v i o l e n t and unmeasured encroachments . . . As soon as the working c l a s s , stunned at f i r s t by the no ise and tu rmoi l of the new system of p r o d u c t i o n , had recovered i t s senses to some e x t e n t , i t began to o f f e r r e s i s t a n c e . . . For three decades, however, the concess ions wrung from indus t r y by the working c l a s s remained pure l y ^ n o m i n a l . " Each concess ion had to be fought f o r and was almost always fo l lowed by t e s t cases c h a l l e n g i n g the v a l i d i t y of l e g i s l a t i o n or va r ious forms of non-compl iance by i n d u s t r y . The ten hour day b i l l , passed in 1848, was met by the manufacturers ' r e v o l t . Indust ry , however, managed to a d j u s t to t h i s encroachment on i t s freedom: "The very manufacturers from whom the lega l l i m i t a t i o n and r e g u l a t i o n of the working day had been wrung step by step in the course of a c i v i l war l a s t i n g h a l f a century now po inted b o a s t f u l l y to the c o n t r a s t w i t h the areas of e x p l o i t a t i o n w h i c h . , were s t i l l ' f r e e ' . " The es tab l i shment of lega l l i m i t s in the main branches of indus t ry c reated new spokesmen fo r r e g u l a t i o n in order to p r o v i d e , in Marx 's words, the equal e x p l o i t a t i o n of labour . C o n f l i c t management cont inues to be a c e n t r a l r o l e of the s t a t e and one in which the r e p r e s e n t a t i v e s of c a p i t a l are not always p leased by the outcome. With f o r m a l l y recognised working c l a s s o r g a n i s a t i o n s ( t rade u n i o n s , e t c ) , the kind of very open p r o t r a c t e d s t r u g g l e desc r ibed by Marx does not occur q u i t e so o f t e n . Insofar as these c o n f l i c t s p o l a r i s e s o c i e t y , the s t a t e attempts to 19. r e s o l v e them before they g i ve b i r t h to p o l i t i c a l movements which might th reaten c a p i t a l i t s e l f . The s t a t e , in managing c o n f l i c t before i t reaches the po in t of d i s r u p t i n g s o c i e t y , has a d e l i c a t e task of compromise, search ing f o r s o l u t i o n s that w i l l be a c c e p t a b l e to the r e p r e s e n t a t i v e s o f c a p i t a l as we l l as the working c l a s s . C o n f l i c t between the s t a t e and c a p i t a l can be a r e f l e c t i o n of c l a s s c o n -f l i c t , as above, or a r i s e as the r e s u l t of compet i t i on between f r a c t i o n s of the c a p i t a l i s t c l a s s . The argument for'management autonomy f o r the s t a t e i s b u i l t more around the l a t t e r than the former . Th is neg lec t of i n t e r - c l a s s c o n f l i c t i s most commonly seen in those a n a l y s t s adopt ing O'Connor 's f u n c t i o n -a l i s t concept ion of the s t a t e as o u t l i n e d in The Corporat ions and the S t a t e 14 and The F i s c a l C r i s i s of the S t a t e . A l though O'Connor 's d i v i s i o n of s t a t e f u n c t i o n s i n t o the c a t e g o r i e s of accumulat ion and l e g i t i m i s a t i o n may p rov ide a c o n c i s e c a t e g o r i s a t i o n and convenience fo r a n a l y t i c a l purposes , the two f u n c t i o n s a r e , in r e a l i t y , inseparab ly i n t e r t w i n e d . The long range accumulat ion goal of c a p i t a l and the reproduct ion of c a p i t a l i s t r e l a t i o n s of p roduct ion cannot be achieved wi thout l e g i t i m a t i n g theory ( ideology) and p r a c t i c e ( s o c i a l reforms and s e r v i c e s ) . Undue r e l i a n c e on the c o e r c i v e f u n c t i o n as opposed to rea l attempts at l e g i t i m i s a t i o n would not be in the long range i n t e r e s t s of a c c u m u l a t i o n . It would l i k e l y produce working c l a s s m i l i t a n c y i n c l u d i n g va r ious forms of n o n - c o o p e r a t i o n , s t r i k e s and the subvers ion of the product ion process (machine b r e a k i n g , e t c ) , . Furthermore, the absence of such programs as unemployment i n s u r a n c e , job r e t r a i n i n g , h e a l t h c a r e , workers ' compensat ion, e t c , would at the very l e a s t produce a less s k i l l e d and less r e l i a b l e work f o r c e , At the same t i m e , these programs were not handed to the working c l a s s on a p l a t t e r ; they were the r e s u l t of many years of s t r u g g l e by o r g a n i s a t i o n s r e p r e s e n t i n g the working 20. c l a s s ( t rade unions and p o l i t i c a l p a r t i e s ) , ' ^ It "Was in response to the growing p o l i t i c a l power of these o r g a n i s a t i o n s that w e l f a r e s t a t e programs 16 were launched in Canada. Two p o i n t s emerge: 1) l e g i t i m i s i n g programs are not i n i t i a t e d s imply because some people in power have a good idea (which may a l s o be t r u e ) , but are used as t o o l s in managing the c l a s s s t r u g g l e ; and 2) i n s o f a r as the programs which can be termed l e g i t i m i s i n g a s s i s t in the long range development o f c a p i t a l i s m and not j u s t the i n d i v i d u a l working c l a s s b e n e f i c i a r i e s , they act as par t of the accumulat ion process ( l o n g - t e r m ) . Accumulat ion and l e g i t i m i s a t ion are a l s o l i n k e d in another way which i s perhaps more c e n t r a l to t h i s t h e s i s . The c a p i t a l accumulat ion task is o b v i o u s l y one in which the s t a t e i s under pressure from the c a p i t a l i s t c l a s s as a whole. Th is f u n c t i o n must be c a r r i e d out w h i l e m a i n t a i n i n g l e g i t i m a c y in the eyes of the subord inate c l a s s e s . Susta ined pressure from the c a p i t a l - . ; i s t c l a s s on the s t a t e to inc rease accumulat ion ( i . e . the share of n a t i o n a l income going to p r o f i t s as opposed to wages and s a l a r i e s ) w i l l almost i n v a r -i a b l y have to be accompanied by s t a t e a c t i o n to main ta in l e g i t i m a c y , How f a r the s t a t e can move in the d i r e c t i o n of increased accumulat ion and what t r a d e - o f f s in the form of l e g i t i m i s i n g programs w i l l have to be made w i l l be determined not merely by c a p i t a l i s t p ressure on the s t a t e but by the c l a s s s t r u g g l e i t s e l f , Leo P a n i t c h , in S o c i a l Democracy and I n d u s t r i a l M i l i t a n c y , The Labour P a r t y , the Trade Unions and Incomes P o l i c y , 19^5 - 7 ^ , ^ has shown how the h i g h l y c o n s c i o u s , m i l i t a n t B r i t i s h working c l a s s h a s , on two occas ions in the post -Wor ld War II p e r i o d , defeated incomes p o l i c i e s i n i t i a t e d by gov-ernment. The l e v e l s of o r g a n i s a t i o n and consc iousness of the working c l a s s , as r e f l e c t e d fn t h e i r t rade unions and p o l i t i c a l p a r t i e s , w i l l be the key determinants in the outcome of the s t r u g g l e by the c a p i t a l i s t c l a s s to increase accumulat ion a t the working c l a s s ' expense. 21 . An A l t e r n a t i v e T h e o r e t i c a l E x p l a n a t i o n The p r e c e d i n g s e c t i o n has o u t l i n e d a t h e o r e t i c a l framework f o r a n a l y s i n g t h e i n t e r r e l a t i o n s h i p s between the s t a t e and the two main s o c i a l c l a s s e s from a M a r x i s t p e r s p e c t i v e . The argument has been made t h a t t h i s p e r s p e c t i v e p e r -haps once o f f e r e d t h e b e s t e x p l a n a t i o n o f how c a p i t a l i s t s o c i e t y f u n c t i o n e d b u t , t h r o u g h c a p i t a l i s t development, a p o s t - c a p i t a l i s t s o c i e t y has d e v e l o p e d which has made M a r x i s t t h e o r y o f s o c i e t y outmoded. A c c o r d i n g t o t h i s l i n e o f t h i n k i n g , t h e development o f o r g a n i s a t i o n , both p u b l i c and p r i v a t e , combined w i t h s o p h i s t i c a t e d modern t e c h n o l o g y , has r e s u l t e d i n a s o c i a l r e a l i t y w h i c h makes the v e r y terms c a p i t a l i s m and s o c i a l i s m a n a c h r o n i s t i c . A l t h o u g h not always acknowledged, t h i s p o i n t o f v i e w owes* much t o Max Weber who was one.of th e f i r s t s o c i a l s c i e n t i s t s t o p o i n t t o the enormous r o l e p l a y e d by bureau-c r a t i c o r g a n i s a t i o n , ^ D a n i e l B e l l (The End o f I d e o l o g y ) , ^ and o t h e r s t a k i n g up t h i s theme i n the 1950's a r e i n t h i s t r a d i t i o n . More r e c e n t l y , John Kenneth 20 G a l b r a i t h , i n The New I n d u s t r i a l S t a t e , has put f o r t h t h i s k i n d o f a n a l y s i s . T h i s s e c t i o n w i l l b r i e f l y o u t l i n e h i s p o s i t i o n and examine some o f t h e weak-ness e s w h i c h , a t a t h e o r e t i c a l l e v e l , make i t an i n a d e q u a t e r e f l e c t i o n o f s o c i a l r e a l i t y . G a l b r a i t h argues t h a t the e n t r e p r e n e u r i a l c o r p o r a t i o n , owned and c o n t r o l -l e d by an i n d i v i d u a l o r a f a m i l y , has been r e p l a c e d by the mature c o r p o r a t i o n where o w n e r s h i p and c o n t r o l have become s e p a r a t e d . A c t u a l c o n t r o l has passed t o what he terms the t e c h n o s t r u c t u r e , a s c i e n t i f i c a l l y e d u c a t e d c l a s s t h a t has come t o assume the management o f l a r g e c o r p o r a t i o n s . Because o f the t e c h n i c a l i n p u t o f modern d e c i s i o n - m a k i n g , t h i s group has e f f e c t i v e p o l i c y c o n t r o l o v e r the c o r p o r a t i o n and, because t h i s group does not a c t u a l l y own t h e c o r p o r a t i o n , t h e i r d e c i s i o n - m a k i n g i s based on d i f f e r e n t a s s u m p t i o n s and g o a l s than the o l d c l a s s o f e n t r e p r e n e u r s . T h i s p u t s , argues G a l b r a i t h , the m a x i m i s a t i o n o f 22, p r o f i t , c o n f l i c t w i th t rade unions and antagonism towards the expanded r o l e of the s t a t e in q u e s t i o n . Rep lac ing these are max imisat ion of co rpora te s i z e , i n f l u e n c e and l o n g e v i t y ; a r e c o g n i t i o n of t rade unions as p a r a l l e l bureau-c r a t i c o r g a n i s a t i o n s whose i n t e r e s t s are more or l e s s c o i n c i d e n t w i t h that o f the c o r p o r a t i o n and a symbio t i c r e l a t i o n s h i p w i th the s t a t e in which the s t a t e p r o v i d e s : " . . . t r a i n e d manpower, the r e g u l a t i o n of aggregate demand a n d , ^ though l e s s e x p l i c i t l y , . . . s t a b i l i t y in wages and p r i c e s . " In a d d i t i o n , the s t a t e prov ides l u c r a t i v e guaranteed c o n t r a c t s which s i m p l i f y long - te rm corporate p l a n n i n g . Much of the above roughly p a r a l l e l s Baran and Sweezy's a n a l y s i s in Monopoly Capi t a l : the Great Depression of the 1930 's as the p i v o t a l decade when c o n t r o l passed from the e n t r e p r e n e u r i a l a r i s t o c r a c y to the f a c e l e s s c o r p o r a t i o n ; o l i g o p o l y power a l l o w i n g c o r p o r a t i o n s to c o n t r o l t h e i r p r i c e s , c o s t s and markets ; an enlarged r o l e f o r the s t a t e both to serve the c o r p o r a -t i o n and prov ide the s t a b i l i t y fo rmer ly s u p p l i e d by market f o r c e s ; the development of consumerism and the m a n i p u l a t i o n of consumer markets . These are the major changes which led G a l b r a i t h to hera ld the new i n d u s t r i a l s t a t e w h i l e Baran and Sweezy s t a t e that c o m p e t i t i v e c a p i t a l i s m has become monopoly 22 c a p i t a l i s m or Ernest Mandel to term i t more a p o c a l y p t i c a l l y Late Capi t a 1 i sm. The main d i f f e r e n c e s between the a n a l y t i c a l frameworks which lead G a l b r a i t h to view c a p i t a l i s m as an outmoded concept w h i l e Baran and Sweezy s t a t e a new stage of c a p i t a l i s t development has occur red cent re around two i s s u e s : 1) the r o l e of G a l b r a i t h ' s t e c h n o s t r u c t u r e ; and 2) the r e l a t i o n -sh ip between c o r p o r a t i o n and s t a t e . With regard to the f i r s t p o i n t , Baran and Sweezy, w h i l e r e c o g n i s i n g the d i v i s i o n in la rge c o r p o r a t i o n s of ownership and c o n t r o l , advance the f o l l o w i n g argument: 23. "The f a c t i s that the managerial st ratum i s the most a c t i v e and i n f l u e n t i a l par t of the p r o p e r t i e d c l a s s . A l l s t u d i e s show that i t s members are l a r g e l y r e c r u i t e d from the middle and upper reaches of the c l a s s s t r u c t u r e . . . It i s of course t rue . . . that in the t y p i c a l b ig c o r p o r a t i o n the management '. .• i s not sub jec t to s t o c k h o l d e r c o n t r o l , and in t h i s sense the ' s e p a r a t i o n of ownership from c o n t r o l 1 i s a f a c t . But there i s no j u s t i f i c a t i o n f o r conc lud ing from t h i s that managements in general are d i vo rced from ownership in g e n e r a l . Qui te the c o n t r a r y , managers are among the b iggest owners; and because of the s t r a t e g i c p o s i t i o n s they occupy, they f u n c t i o n as the p r o t e c t o r s and spokesmen f o r a l l l a r g e - s c a l e p r o p e r t y . Far from being a separate c l a s s , they c o n s t i t u t e in r e a l i t y the lead ing echelon of the property -owning, c l a s s . " Th is argument i s not complete ly c o n v i n c i n g as i t r e l i e s h e a v i l y on a community of i n t e r e s t between owners and managers due to a common c l a s s background. Other f a c t o r s , such as e d u c a t i o n , may in t roduce c o n f l i c t between job r e q u i r e -ments (what i s good enough to s e l l or meet minimum government standards) and job s a t i s f a c t i o n (at tempt ing to produce the best p o s s i b l e product) which i s a po int G a l b r a i t h argues . S ince t h i s s t r i v i n g f o r p e r f e c t i o n ( ' t h e best Z e n i t h 2k e v e r ' ) i s an important par t of the s a l e s e f f o r t , the p o s s i b i l i t y that top managers might a c t u a l l y b e l i e v e i t cannot be ru led o u t , Harry Braverman, in Labor and Monopoly C a p i t a l , p resents a more c o n v i n -c i n g argument f o r i n c l u d i n g top execut i ves and managers in the c a p i t a l i s t c l a s s : " . . . the f a c t that the o p e r a t i n g e x e c u t i v e s of a g i a n t c o r p o r a -t i o n are employed by that c o r p o r a t i o n , and in that c a p a c i t y do not own i t s p l a n t s and bank a c c o u n t s , i s merely the form g iven to c a p i t a l i s t r u l e in s o c i e t y . These o p e r a t i n g e x e c u t i v e s , by v i r t u e of t h e i r h igh managerial p o s i t i o n s , personal investment p o r t f o l i o s , independent power of d e c i s i o n , p lace in the h i e r a r -chy of the labor p r o c e s s , p o s i t i o n in the community of c a p i t a l -i s t s a t l a r g e , e t c . , e t c . , a re the r u l e r s of i n d u s t r y , act ' p r o f e s s i o n a l l y ' f o r c a p i t a l , and are themselves par t of the c l a s s that p e r s o n i f i e s c a p i t a l and employs l a b o r . T h e i r formal a t t i t u d e of being part of the same p a y r o l l as the p roduct ion workers , c l e r k s , and p o r t e r s of the same c o r p o r a t i o n no more robs them of the powers of d e c i s i o n and command over the others in the e n t e r p r i s e than does the f a c t that the g e n e r a l , l i k e the p r i v a t e , wears the m i l i t a r y u n i f o r m , or the pope and c a r d i n a l pronounce the same l i t u r g y as the p a r i s h p r i e s t . The form of 2k. h i r e d employment g i ves exp ress ion to two t o t a l l y d i f f e r e n t r e a l i t i e s : in one c a s e , c a p i t a l h i r e s a ' l a b o r f o r c e 1 whose duty i t is to work, under e x t e r n a l d i r e c t i o n , to inc rease c a p i t a l ; in the o t h e r , by a process of s e l e c t i o n w i t h i n the c a p i t a l i s t c l a s s and c h i e f l y from i t s own r a n k s , c a p i t a l chooses a management s t a f f to represent i t on the s p o t , and in represent ing i t to superv i se and o rgan ise the labor of the working p o p u l a t i o n . . . The i r pay l e v e l i s s i g n i f i c a n t because beyond a c e r t a i n po in t i t . . . c l e a r l y represents not j u s t the exchange of labour power f o r money- -a commodity exchange—but a share in the su rp lus produced in the c o r p o r - 9 r a t i o n . " ^ Th is t r a n s f e r of su rp lus v a l u e , in the form of wages w e l l in excess of a hundred thousand d o l l a r s per y e a r , i s a weighty argument f o r p l a c i n g t o p - l e v e l e x e c u t i v e s in the c a p i t a l i s t c l a s s , Furthermore, s i n c e su rp lus va lue c r e a t e s a c o r p o r a t i o n ' s p r o f i t , t h i s a l s o prov ides an i n c e n t i v e f o r p r o f i t making on beha l f of the c o r p o r a t i o n . G a l b r a i t h ' s argument that s i z e , p r e s t i g e and l o n g e v i t y of the c o r p o r a t i o n are more important f a c t o r s than maximis ing p r o f i t to the top e x e c u t i v e s has some mer i t but not as an i n d i c a t i o n that c a p i t a l i s m has been superceded. Long term p lann ing and growth both c o n t r i b u t e to long term p r o f i t making. Extreme emphasis on shor t term p r o f i t max imisat ion made sense in c o m p e t i t i v e c a p i t a l i s m when p r i c e s , c o s t s , e t c . were set by market c o n d i t i o n s not by the r i n d i v i d u a l en t repreneur . With the mature c o r p o r a t i o n , to use G a l b r a i t h ' s word, shor t term p r o f i t p r o f i t max imisat ion might w e l l j e o p a r d i s e long term p r o f i t making a b i l i t y . Investment in market c o n t r o l in one country or e x t e n -s ion i n t o other c o u n t r i e s might on ly be p o s s i b l e by a c c e p t i n g a s m a l l e r shor t run p r o f i t . The f a i l u r e to inves t in market c o n t r o l might mean a growth lag f o r an i n d i v i d u a l c o r p o r a t i o n which would e v e n t u a l l y see i t being squeezed out of wor ld markets . In s h o r t , there i s no rea l ev idence that the d e s i r e f o r p r o f i t s has d isappeared or been markedly reduced but that p r o f i t s , t o o , must be planned and that the methods of r e a l i s i n g p r o f i t s have become, as c a p i t a l -25. ism has , more complex. With regard to the second p o i n t , the r e l a t i o n s h i p between the c o r p o r a -t i o n s and the s t a t e , G a l b r a i t h produces a less c o n v i n c i n g argument and one that o f t e n seems c o n t r a d i c t o r y . G a l b r a i t h argues that because there i s l e s s open i n f l u e n c e p e d d l i n g , b r i b e r y and o u t r i g h t purchases of s t a t e l e g i s l a t u r e s and Congressmen that the mature c o r p o r a t i o n i s l ess ab le to ac t in i t s own i n t e r e s t s to o b t a i n the passage of l e g i s l a t i o n favourab le to i t : "The t e c h n o s t r u c t u r e of the mature c o r p o r a t i o n i s f a r l e s s a b l e to deploy f i n a n c i a l resources f o r p o l i t i c a l purposes than was the e n t r e p r e n e u r i a l c o r p o r a t i o n , has l e s s i n c e n t i v e to do so and , in consequence of i t s group c h a r a c t e r , i s f a r ~ 7 l ess e f f e c t i v e in d i r e c t p o l i t i c a l a c t i o n . " But , two pages - l a t e r , he s t a t e s : "What seemed, at f i r s t g l a n c e , to be a damaging a c c e s s i o n of power by the s t a t e was damaging p r i n c i p a l l y to the e n t r e -p r e n e u r i a l c o r p o r a t i o n . For the mature c o r p o r a t i o n i t was not . Rather , i t r e f l e c t e d the accommodation of the s t a t e t02g i t s n e e d s . " G a l b r a i t h has i d e n t i f i e d a change in the form of the r e l a t i o n s h i p between c a p i t a l and the s t a t e but the u n d e r l y i n g content remains u n a l t e r e d . G a l b r a i t h then proceeds to o u t l i n e the r e l a t i o n s h i p between c o r p o r a t i o n and s t a t e in a manner which makes i t very c l e a r tha t the change he has i d e n -t i f i e d has a c t u a l l y r e s u l t e d in a much more t i g h t l y i n t e g r a t e d i n t e r l o c k : "The s t a t e i s s t r o n g l y concerned w i t h the s t a b i l i t y of the economy. And w i t h i t s expansion or growth. And w i t h educ -a t i o n . And w i t h t e c h n i c a l and s c i e n t i f i c advance. And, most n o t a b l y , w i t h the n a t i o n a l de fense . These are the n a t i o n a l goa ls . . . A l l have t h e i r counte rpar t in the needs and goa ls of the t e c h n o s t r u c t u r e . The t e c h n o s t r u c t u r e r e q -u i r e s s t a b i l i t y in demand f o r i t s p l a n n i n g . Growth br ings promotion and p r e s t i g e . It r e q u i r e s t r a i n e d manpower. It needs government u n d e r w r i t i n g o f research and development. M i l i t a r y and other t e c h n i c a l procurement support i t s most developed form of p l a n n i n g . At each po int the government has goa ls w i t h which the t e c h n o s t r u c t u r e can i d e n t i f y i t -s e l f . Or , p l a u s i b l y , these goa ls r e f l e c t a d a p t a t i o n of p u b l i c goa ls to the goals of the t e c h n o s t r u c t u r e . . , There in l i e s the i n f l u e n c e which makes pure l y pecuniary ~ q r e l a t i o n s h i p s p a l l i d by c o m p a r i s o n . " 26, The r e l a t i o n s h i p between c o r p o r a t i o n and s t a t e that G a l b r a i t h d e s c r i b e s so w e l l i s ev idence of the domance of the f r a c t i o n of the c a p i t a l i s t c l a s s represented by the la rge c o r p o r a t i o n . The o ld ent repreneurs w i t h the f a m i l y c o r p o r a t i o n s s t i l l e x i s t as an i n c r e a s i n g l y l e s s important f r a c t i o n of the c a p i t a l i s t c l a s s and, as a consequence of t h e i r d e c l i n i n g r o l e , are less ab le to win r e p r e s e n t a t i o n fo r themselves at a s t a t e l e v e l . The open i n f l u e n c e peddl ing t y p i c a l of the era of domance, as a f r a c t i o n of the c a p i t a l i s t c l a s s , by the e n t r e p r e n e u r i a l c o r p o r a t i o n i s s imply no longer necessary , The s t a t e , p a r t i c u l a r l y in the United S t a t e s , has adopted the goa ls of the la rge m u l t i n a t i o n a l c o r p o r a t i o n s as i t s own. Congressmen on the p a y r o l l would on ly be a p o t e n t i a l embarassment. C a p i t a l R e s t r u c t u r a t i o n and Monopoly C a p i t a l i s m In the era of c o m p e t i t i v e c a p i t a l i s m , r e s t r u c t u r a t i o n proceeded w i t h r e l a t i v e l y l i t t l e s t a t e involvement . Firms which ceased to be c o m p e t i t i v e under changing market c i rcumstances s imply ceased to e x i s t . Th is cont inues to be the case f o r the sec to r of the economy which s t i l l operates on the b a s i s of c o m p e t i t i o n w i t h the s i g n i f i c a n t d i f f e r e n c e that many of t h e s e , when they f a i l , are taken over by the monopoly s e c t o r . As a r e s u l t of the expanded s t a t e r o l e in the monopoly p e r i o d , as manager of the economy, a c r i s i s of c a p i t a l i s t accumulat ion in a pe r iod of r e s t r u c t u r a t i o n appears as a t o t a l c r i s i s f o r s o c i e t y w i t h the focus on the s t a t e . Nowhere i s the weakness of the f u n c t i o n a l view of the s t a t e in a n a l y s i n g the d i s c r e t e f u n c t i o n s of accumulat ion and 1 e g i t i m i s a t i o n more apparent than in t h i s k ind of s i t u a t i o n . David Wo l fe , in h i s a r t i c l e "The S t a t e and Economic P o l i c y in Canada, 30 1968-75", adopts O'Connor 's framework of a n a l y s i s . In h i s argument, c l a s s e s e f f e c t i v e l y d isappear and e x p l a n a t i o n s are o f f e r e d in terms of the "breakdown of i n t e r n a t i o n a l markets" ra ther than the s t r u c t u r e of c a p i t a l i s m i t s e l f : 27. "The c o n t r a d i c t o r y nature of these f u n c t i o n s (accumulat ion and l e g i t i m i s a t i o n ) has led to attempts by the s t a t e to implement p o l i c i e s of c o n f l i c t management, such as incomes p o l i c i e s , ra ther than attempt to r e s o l v e the u n d e r l y i n g c o n f l i c t s themselves . In l i g h t of the a n a l y s i s h e r e , there seems l i t t l e l i k e l i h o o d that c u r r e n t e f f o r t s by the s t a t e in Canada to r e s o l v e i t s economic problems w i l l be s u c c e s s -f u l " . 5 These statements r e f l e c t a misunderstanding of the r o l e of the s t a t e ; a m i s -understanding which stems from the f u n c t i o n a l i s t a n a l y s i s that Wolfe d e r i v e s from O'Connor, It seems to imply that a r e s o l u t i o n to the problem of c a p i t a l -ism ("the u n d e r l y i n g c o n f l i c t s themselves") needs no a c t i v e , o rgan ised working c l a s s promoting i t s own view of s o c i e t y . Ins tead , the c o n t r a d i c t i o n s in the s t a t e w i l l " s o l v e " the problem by themselves . In M a r x i s t theory , the s t a t e ' s task i s not to r e s o l v e u n d e r l y i n g c o n -f l i c t s ; r a t h e r , i t i s p r e c i s e l y one of c o n f l i c t management. The c r i s i s that Wolfe i s r e f e r r i n g to has , in h i s v iew, been brought about by Keynesian monetary and f i s c a l p o l i c i e s . These were int roduced to remove both the bust and boom from c a p i t a l i s t development and a l s o a s s i s t the s t a t e and the mono-poly s e c t o r c a r r y out t h e i r long range p l a n n i n g . They were a l s o int roduced at a time when r i s i n g working c l a s s m i l i t a n c y , the growth of t rade unions and p o l i t i c a l p a r t i e s supported by the working c l a s s were a l l perce ived as a 32 th rea t to the c a p i t a l i s t system i t s e l f . Thus Keynesian p o l i c i e s were them-se lves an attempt at c o n f l i c t management by the s t a t e . C o n f l i c t management i s one of the s t a t e ' s h i s t o r i c r o l e s under c a p i t a l -ism. Th is r o l e may take d i f f e r e n t forms as c a p i t a l i s t development and r e s t r u c t u r i n g proceeds . To suggest that the s t a t e has now, in e f f e c t , reached i t s l i m i t and i s presented w i t h an unso lvab le c r i s i s , i s e q u i v a l e n t to suggest ing that c a p i t a l i s m has developed " a l l the p r o d u c t i v e f o r c e s f o r which i t is s u f f i c i e n t " . At b e s t , t h i s i s a very l i m i t e d h i s t o r i c a l c o n c e p t i o n . 28. There i s a c r i s i s f o r the s t a t e but whatever s o l u t i o n i s attempted w i l l not t r y to r e s o l v e the u n d e r l y i n g c o n f l i c t s themselves . These c o n f l i c t s are rooted in the c l a s s r e l a t i o n s of c a p i t a l i s t s o c i e t y and emerge as c l a s s c o n f l i c t . The s o l u t i o n to the s t a t e ' s c r i s i s j_s_ conf 1 i c t management and the 33 masking of c o n f l i c t so that the pr imary r o l e of reproducing c l a s s r e l a t i o n s of p roduct ion can be f u l f i l l e d . The f o l l o w e r s of O'Connor a rgue , w i t h some v a l i d i t y , t h a t , in the monopoly c a p i t a l i s t p e r i o d , a g r e a t e r burden is p laced on the s t a t e to ensure c a p i t a l i s t development. Th is increased burden leads to a c r i s i s of l e g i t i m a c y on the one hand or of accumulat ion on the other because of the c o n f l i c t i n g nature of these two f u n c t i o n s . It has been argued above that t h i s k ind of c o n f l i c t is an e v e r - p r e s e n t , ongoing problem f o r the managers of the c a p i t a l -i s t s t a t e but i t does not n e c e s s a r i l y mean a c r i s i s f o r the c a p i t a l i s t system i t s e l f . The f u n c t i o n a l i s t argument tends to become removed from the problem of reproducing c l a s s r e l a t i o n s of p roduct ion because the c o n t r a d i c t i o n s i t i d e n t i f i e s are w i t h i n the s t a t e rather than emerging from the r e l a t i o n s between c l a s s e s . The cu r ren t f i s c a l c r i s i s , analysed by W o l f e , was i t s e l f brought about by the attempt to manage the c o n f l i c t s which occur red in an e a r l i e r per iod of c a p i t a l r e s t r u c t u r a t i o n in the 1 9 3 0 1 s . What t h i s suggests f o r the contemporary per iod i s not an unso lvab le c r i s i s f o r the s t a t e but the n e c e s s i t y f o r the s t a t e to develop new apparatuses and programs to complement a new per iod of r e s t r u c t u r a t i o n . Th is i s c e r t a i n l y not an automatic or guaranteed process ( that such new programs would always be s u c c e s s f u l ) . The s t a t e is capable of e r r o r , as Pou lantzas has po inted o u t . Th is process i s , however, par t of the s t a t e r o l e , d e s c r i b e d by P o u l a n t z a s , as reproducing c l a s s r e l a t i o n s of p r o d u c t i o n . Each per iod of c a p i t a l r e s t r u c t u r a t i o n has i t s own p a r t i c u l a r problems 29. and d i m e n s i o n s . The p e r i o d o f t h e 1970's i s d i f f e r e n t i n many ways from t h a t o f t h e 1 9 3 0 1 s . In the e a r l i e r p e r i o d , t h e advanced c a p i t a l i s t c o u n t r i e s were d e v e l o p i n g i n t o the monopoly form but s t i l l i n the c o n t e x t o f n a t i o n a l s t a t e s and economies. In t h e p r e s e n t e r a o f r e s t r u c t u r a t i o n , monopoly c a p i t a l i s i n the p r o c e s s o f i n t e g r a t i n g c a p i t a l i s m on a w o r l d w i d e b a s i s t h r o u g h the m u l t i -35 n a t i o n a l c o r p o r a t i o n . In t h i s p r o c e s s , n a t i o n a l governments a r e a d o p t i n g programs t h a t a r e s u p p o r t i v e t o monopoly c a p i t a l — the dominant f r a c t i o n o f the c a p i t a l i s t c l a s s i n most advanced c o u n t r i e s . T h i s means th e s u p p o r t o f c a p i t a l i s t c o n c e n t r a t i o n t h a t w i l l r e s u l t i n fewer l a r g e c o r p o r a t i o n s but ones w h i c h a r e a b l e t o o p e r a t e on a w o r l d w i d e b a s i s . What was l a r g e w i t h i n a n a t i o n a l economy i s not n e c e s s a r i l y l a r g e on a w o r l d l e v e l . There i s e v i d e n c e t h a t t h i s has been an a r e a o f i n c r e a s i n g c o n c e r n f o r t h e Canadian government d u r i n g the 1970's (see Chapter I V ) . In o r d e r t o produce w o r l d - s i z e d c o r p o r a t i o n s , t h e r e must be an i n c r e a s e d c o n c e n t r a t i o n o f c a p i t a l t h r o u g h m e r g e r s , b a n k r u p t c i e s and t a k e o v e r s as w e l l 37 as an i n c r e a s e d push f o r a c c u m u l a t i o n t o expand p l a n t and t e c h n o l o g y . The s t a t e s u p p o r t s t h i s p r o c e s s t h r o u g h e x i s t i n g a p p a r a t u s e s as w e l l as t h e c r e a t i o n o f new ones i n o r d e r t o promote the n e c e s s a r y c o n c e n t r a t i o n and a c c u m u l a t i o n . T h i s a l s o i n v o l v e s the development o f new approaches t o i n d u s -t r i a l r e l a t i o n s and t r a d e u n i o n s as much o f the n e c e s s a r y a c c u m u l a t i o n i s a c c r u e d t h r o u g h i n c r e a s i n g the r a t e o f s u r p l u s v a l u e . I t can a l s o be e x p e c t e d t h a t some members o r f r a c t i o n s o f the c a p i t a l i s t c l a s s would f i n d t h e m s e l v e s i n o p p o s i t i o n t o i n c r e a s e d c o n c e n t r a t i o n ( t h e o l d e n t r e p r e n e u r i a l c l a s s and 38 s m a l l b u s i n e s s m e n ) . Major p e r i o d s o f c a p i t a l r e s t r u c t u r a t i o n , such as the 1930's, a r e accompanied by r e s t r u c t u r i n g o f the l a b o u r f o r c e . The l a b o u r p r o c e s s becomes c h a r a c t e r i s e d by more c a p i t a l i n t e n s i v e p r o c e s s e s . Changes r e s u l t i n t h e 30. r e l a t i o n s h i p s between work ing c l a s s o r g a n i s a t i o n s , the c o r p o r a t i o n s and the s t a t e . From the 1930's, i n d u s t r i a l un i on i sm emerged and the t r a d e un i on s e x i s t e n c e became f o r m a l l y a c c e p t e d in l abour l e g i s l a t i o n , In a s i m i l a r manner, changes can be p r o j e c t e d out o f the g o v e r n m e n t ' s p o l i c y papers d u r i n g the c o n t r o l s p e r i o d from 1975 t o 1978 ( the two main documents were The Way Ahead 39 (1976) and Agenda f o r C o - o p e r a t i o n (1977). These p o l i c y p a p e r s , a l t h o u g h l a r g e l y d i r e c t e d a t l a b o u r , need not be i n t e r p r e t e d as be ing dependent on l a b o u r ' s r e s p o n s e ; they more l i k e l y r e p r e s e n t the d i r e c t i o n the government would l i k e to f o l l o w i r r e s p e c t i v e o f l a b o u r ' s c o o p e r a t i o n . The Canad ian S t a t e T h i s s e c t i o n w i l l o u t l i n e the complex o f i n s t i t u t i o n s w h i c h , t o g e t h e r , form the s t a t e . T h e n , drawing on the t h e o r e t i c a l framework d e v e l o p e d t o t h i s p o i n t , the c r i s i s which l ed t o w a g e - p r i c e c o n t r o l s and the p r o p o s a l f o r t r i p a r t i s m w i l l be d i s c u s s e d . The d e f i n i t i o n o f the s t a t e p r e s e n t e d e a r l i e r was a f u n c t i o n a l one which d i d not s p e c i f y what a c t u a l l y c o n s t i t u t e s the s t a t e . Ra lph M i l i b a n d , in The S t a t e in C a p i t a l i s t S o c i e t y , w r i t e s : " T h e r e i s one p r e l i m i n a r y prob lem about the s t a t e wh ich i s v e r y se ldom c o n s i d e r e d , y e t which r e q u i r e s a t t e n t i o n i f the d i s c u s s i o n o f i t s n a t u r e and r o l e i s t o be p r o p e r l y f o c u s e d . T h i s i s the f a c t t h a t ' t h e s t a t e ' i s not a t h i n g , t h a t i t does n o t , as s u c h , e x i s t . What ' t h e s t a t e ' s t ands f o r i s a number o f p a r t i c u l a r i n s t i t u t i o n s w h i c h , t o g e t h e r , c o n s t i t u t e i t s r e a l i t y , and wh ich i n t e r a c t as p a r t s o f what may be 2JQ c a l l e d the s t a t e s y s t e m . " The government i s perhaps the most v i s i b l e s t a t e i n s t i t u t i o n because i t speaks f o r the s t a t e b u t , as M i l i b a n d s t a t e s , i s not n e c e s s a r i l y the most power fu l s t a t e i n s t i t u t i o n a t any p o i n t in t i m e , P a n i t c h , f o l l o w i n g M i l ( b a n d ' s f r a m e -work, in "The Ro le and Nature o f the Canad ian S t a t e " , s p e c i f i e s t h e s e i n s t i t u t i o n s : "The s t a t e i s a complex o f i n s t i t u t i o n s , i n c l u d i n g government , but a l s o the b u r e a u c r a c y (embodied in the c i v i l s e r v i c e as w e l l 31. as i n p u b l i c c o r p o r a t i o n s , c e n t r a l banks, r e g u l a t o r y com-m i s s i o n s , e t c . ) , the m i l i t a r y , the j u d i c i a r y , r e p r e s e n t a t i v e a s s e m b l i e s , and ( v e r y i m p o r t a n t l y f o r Canada) ... the sub-c e n t r a l l e v e l s o f government, t h a t i s , p r o v i n c i a l e x e c u t i v e s , l e g i s l a t u r e s , and b u r e a u c r a c i e s , and m u n i c i p a l governmental ^ i n s t i t u t i o n s . " The Canadian s t a t e i s a f e d e r a l s ystem w h i c h d u p l i c a t e s a l m o s t e v e r y i n s t i t u t i o n a t p r o v i n c i a l and f e d e r a l l e v e l s . The d i v i s i o n o f powers between f e d e r a l and p r o v i n c i a l l e v e l s , as embodied i n the B r i t i s h N o r t h A m e r i c a A c t (1867) and amendments, has been i n t e r p r e t e d i n d i f f e r e n t ways h i s t o r i c a l l y . Throughout most o f t h i s c e n t u r y , t h e s e d e c i s i o n s have tended t o s h i f t j u r i s -d i c t i o n s more t o the p r o v i n c e s . T h i s i s a r e f l e c t i o n o f t h e development o f p r o v i n c i a l l y o r r e g i o n a l l y based c a p i t a l as w e l l as the p e n e t r a t i o n o f f o r e i g n c a p i t a l d e v e l o p i n g r e s o u r c e s i n s p e c i f i c r e g i o n s . The s t a t e has been d e f i n e d as a c t i n g i n c a p i t a l ' s l o n g range i n t e r e s t s . I t i s v e r y u n l i k e l y t h a t the s t a t e c o u l d e s t a b l i s h a p o l i c y opposed by t h e e n t i r e c a p i t a l i s t c l a s s but i t can happen t h a t the s t a t e would a c t a g a i n s t t h e i n t e r e s t s o f one f r a c t i o n o f t h i s c l a s s w h i l e p r o m o t i n g t h e i n t e r e s t s o f a n o t h e r f r a c t i o n (a more dominant o n e ) . The changes s u g g e s t e d i n the a n a l y s i s i n t h e p r e c e d i n g s e c t i o n a r e , on the w h o l e , i n t h e i n t e r e s t s o f b i g c a p i t a l , and, p a r t i c u l a r l y , n a t i o n a l l y based c a p i t a l . P r o v i n c i a l l y o r r e g i o n a l l y based c a p i t a l might be e x p e c t e d t o oppose t h i s p o l i c y w h i l e t h e r e p r e s e n t a t i v e s o f f o r e i g n - b a s e d m u l t i n a t i o n a l s might see t h e i r i n t e r e s t s as n e i t h e r advanced nor t h r e a t e n e d by such a program f o r development. Each o f t h e s e f r a c t i o n s makes r e p r e s e n t a t i o n t o l e v e l s o f government, and i n some c a s e s , when a p a r t i c u l a r f r a c t i o n becomes dominant, is, r e p r e s e n t e d by t h e s t a t e . In a f e d e r a l s y stem, such as Canada, a f r a c t i o n may be dominant p r o v i n c i a l l y o r r e g i o n a l l y and have i t s i n t e r e s t s r e p r e s e n t e d a t t h a t l e v e l . I f t h e n a t i o n a l c a p i t a l i s t c l a s s i n t e r e s t s compete w i t h t h e p r o v i n c i a l l y dominant 32. f r a c t i o n , then the competing i n t e r e s t w i l l be r e f l e c t e d i n s t a t e p o l i c i e s a t the p r o v i n c i a l and f e d e r a l l e v e l s as c o n f l i c t s w i t h i n the s t a t e . F o r e i g n i n v e s t m e n t , m a i n l y t h r o u g h U.S. m u l t i n a t i o n a l s , reached a peak i n Canada i n the mid-1960's. A f t e r t h a t t i m e , a c c o r d i n g t o K a r i L e v i t t ' s 43 a c c o u n t i n S i 1ent S u r r e n d e r , Canada became a net e x p o r t e r of c a p i t a l t o the U.S. t h r o u g h the p r o f i t s earned by the m u l t i n a t i o n a l s . Sparked by a s e r i e s o f books, i n c l u d i n g L e v i t t ' s , a r o y a l commission and a new wave o f n a t i o n a l i s m , 44 from George G r a n t ' s Lament f o r a N a t i o n t o t h e W a t k i n s and Gray R e p o r t s , the Canadian government t e n t a t i v e l y began t o d e v e l o p a s t r a t e g y f o r C a n adian-based c a p i t a l i n the 1970's. T h i s p o l i c y had the s u p p o r t o f t h e r e p r e s e n t a -t i v e s o f l a r g e c a p i t a l c o n c e n t r a t i o n s t h a t were a l s o Canadian and some o f t h e i r r e p r e s e n t a t i v e s became key spokesmen f o r the p o l i c y , i n c l u d i n g W a l t e r Gordon and E r i c K i e r a n s , a p a s t p r e s i d e n t o f both the M o n t r e a l and Canadian 45 s t o c k exchanges. T h i s was done w i t h o u t s e r i o u s l y r e s t r i c t i n g the o p e r a t i o n s o f t h e f o r e i g n - o w n e d m u l t i n a t i o n a l s . F o r e i g n c a p i t a l s t i l l r e c e i v e s the s e r v i c e s p r o v i d e d by the Canadian s t a t e . C a p i t a l a c c u m u l a t i o n i s a f u n c t i o n not j u s t o f t h e f e d e r a l government but a l s o o f the p r o v i n c i a l governments. However, the p r o v i n c i a l s t r a t e g i e s f o r a c c u m u l a t i o n a r e much more l i k e l y t o c l o s e l y r e f l e c t the i n t e r e s t s o f t h e dominant p r o v i n c i a l c a p i t a l . O f t e n the p r o v i n c i a l s t r a t e g i e s w h i c h r e s u l t a r e i n c o n f l i c t w i t h t h e f e d e r a l s t r a t e g y . T h i s r e f l e c t s t h e s e r v i c i n g o f d i f f e r e n t c l i e n t g r o u p s , T h i s c o n f l i c t has been v o i c e d h i s t o r i c a l l y i n e v e r y p r o v i n c e but O n t a r i o , The w e s t e r n p r o v i n c e s have c l a i m e d e a s t e r n e x p l o i t a t i o n w h i l e t h e M a r i t i m e s have p o i n t e d t o c e n t r a l Canada dominance. Throughout th e 1970's, the themes o f p r o v i n c i a l r i g h t s and d e c e n t r a l i s a t i o n have been r a i s e d by the p r o v i n c i a l governments. Resource c o n t r o l and management have been the key i s s u e s . These a r e l i n k e d t o development s t r a t e g i e s w h i c h would b e n e f i t 33. d i f f e r e n t f r a c t i o n s of the c a p i t a l i s t c l a s s , In a f e d e r a l system such as Canada, t h i s type of c o n f l i c t i s almost i n e v i t a b l e . With the en larged r o l e of the s t a t e in the monopoly c a p i t a l i s t p e r i o d , these c o n f l i c t s are exacerbated . The d i f f e r e n t f r a c t i o n s of the c a p i t a l i s t c l a s s a l s o have d i f f e r i n g ideas on the r o l e of t rade unions in s o c i e t y . The p r o v i n c i a l governments and the reg iona l bourgeo is ies a s s o c i a t e d w i t h them were q u i t e w i l l i n g to 46 respond to w a g e - p r i c e c o n t r o l s when they were i n t r o d u c e d , but showed l i t t l e i n t e r e s t in the t r i p a r t i t e proposals which f o l l o w e d . In f a c t , some r e p r e s -e n t a t i v e s of smal l c a p i t a l feared t r i p a r t i s m as a step towards s o c i a l i s m , The d i f f e r i n g r e a c t i o n to the t r i p a r t i t e p roposa ls are r e l a t e d to the s t r u c t u r e and k inds of c a p i t a l and , in p a r t i c u l a r , t h e i r p lann ing procedures . The s m a l l e r c o n c e n t r a t i o n s of c a p i t a l represented at reg iona l l e v e l s have, in g e n e r a l , l e s s s o p h i s t i c a t e d and s h o r t e r range p lann ing procedures . In a d d i t i o n , they would tend to be c l o s e r to the c o m p e t i t i v e model of c a p i t a l i s m ra ther than the monopoly s e c t o r . As a r e s u l t , the small c a p i t a l f r a c t i o n would see less to be gained from t r i p a r t i s m than would the monopoly s e c t o r . The fragmented nature of the Canadian c a p i t a l i s t c l a s s i s r e f l e c t e d in t h e i r d i f f e r i n g r e a c t i o n s to programs l i k e t r i p a r t i s m . And the p r o v i n c e s , consc ious of s h i f t i n g power r e l a t i o n s , would see a th rea t to t h e i r j u r i s d i c t i o n s over labour r e l a t i o n s as such a program would have st rong f e d e r a l g u i d e l i n e s . In Canada, the per iod immediately preceding the c o n t r o l s program, 1966-7 5 , represented a steady b u i l d up in the economic c l a s s s t r u g g l e fo r shares of n a t i o n a l income going to p r o f i t s on the one hand and to wages and s a l a r i e s on the o t h e r . During t h i s p e r i o d , there were two major attempts to i n s t i t u t e 47 a v o l u n t a r y incomes p o l i c y . The attempt by government to put t h i s program in to p r a c t i c e , the P r i c e s and Incomes Commission, was seen by labour as an attempt to f r e e z e wages w h i l e co rpora te p r o f i t s would be a l lowed to i n c r e a s e . 3h. Labour, in t h i s i n i t i a l phase, managed to remain uncoopted. F o l l o w i n g the f a i l u r e of t h i s v e n t u r e , the government's statements on the economy i n c r e a s -i n g l y r e f l e c t e d the view that labour was unreasonable , that labour was r e s p o n s i b l e f o r high unemployment and, in making e x c e s s i v e wage demands, was a c t i n g a g a i n s t the n a t i o n a l i n t e r e s t . These statements r e f l e c t e d the v iew -po in t that a h igher ra te of c a p i t a l accumulat ion was in the i n t e r e s t of the co l l e c t i v i . t y . 48 Having f a i l e d to i n s t i t u t e v o l u n t a r y c o n t r o l s , in l a t e 1975 the govern -ment int roduced a compulsory c o n t r o l s program. From the po in t of view of t h i s a n a l y s i s , t h i s a c t i o n would imply a twofo ld c r i s i s of accumulat ion and l e g i t -i m i s a t i o n . On the one hand, a h igher r a t e of c a p i t a l accumulat ion had not been achieved and , on the other hand, the working c l a s s and i t s o r g a n i s a t i o n s had not accepted v o l u n t a r i l y that a h igher r a t e of c a p i t a l accumulat ion was in the n a t i o n a l i n t e r e s t and that the government was a c t i n g in the n a t i o n a l i n t e r e s t , as a n e u t r a l a r b i t e r , in promoting c a p i t a l a c c u m u l a t i o n . In t h i s i n s t a n c e , the f u n c t i o n s of accumulat ion and 1 e g i t i m i s a t ion are revealed as being two s i d e s of the same c o i n . An a n a l y s i s which separated accumulat ion and l e g i t i m i s a t ion as two d i s c r e t e f u n c t i o n s would f a i l to understand the p a r t i c u l a r c r i s i s which faced the Canadian government in the 1970's. With the i n t r o d u c t i o n of the w a g e - p r i c e c o n t r o l s , the government acted to promote a c c u m u l a t i o n , At the same t i m e , t h i s a c t i o n heightened the c r i s i s of l e g i t i m a c y , Three months l a t e r , the government issued i t s t r i p a r t i t e p r o p o s a l , It w i l l be argued in t h i s t h e s i s that t r i p a r t i s m , as proposed by the government, represented an attempt to rega in l e g i t i m a c y as the government a c t i n g in the n a t i o n a l i n t e r e s t , Th is invo lved a t r a d e - o f f w i t h the unions in which increased s o c i a l s e r v i c e s , economic p l a n n i n g , and p a r t i c i p a t i o n in n a t i o n a l d e c i s i o n - m a k i n g were o f f e r e d in exchange f o r an incomes p o l i c y which 35, would g u a r a n t e e a s u f f i c i e n t l e v e l o f a c c u m u l a t i o n f o r c a p i t a l i s t deve lopment and r e s t r u c t u r a t i o n . To summarise t h i s c h a p t e r : The s t a t e a c t s to promote c a p i t a l a c c u m u l a -t i o n by m o n i t o r i n g the sha re s o f n a t i o n a l income a c c r u i n g to wages and s a l a r i e s on the one hand and to p r o f i t s on the o t h e r . The monopoly c a p i t a l -i s t p e r i o d b r i n g s about an e n l a r g e d r o l e f o r the s t a t e , c h i e f l y in the a r e a o f long range p l a n n i n g . One o f the methods used to a c c o m p l i s h s u f f i c i e n t a c c u m u l a t i o n w h i l e m a i n t a i n i n g l e g i t i m a c y i s the i n t e g r a t i o n o f work ing c l a s s o r g a n i s a t i o n s in p l a n n i n g and a d v i s o r y b o d i e s . In t h i s c o n t e x t , governments t r y t o ge t t r a d e un ion agreement to an incomes p o l i c y wh ich w i l l s e t g u i d e -l i n e s f o r wage s e t t l e m e n t s . T h i s a l l o w s c o r p o r a t i o n s to p l a n more e f f e c t i v e l y o v e r long p e r i o d s . A f u r t h e r a n t i c i p a t e d r e s u l t i s a smoother o p e r a t i o n a t the p l a n t l e v e l due to a reduced number o f s t r i k e s and o t h e r j o b a c t i o n s . T h i s p o l i c y tends to make the t r a d e un ions a c t as an arm o f the s t a t e by f o r c i n g them to assume much more d i r e c t l y the m o n i t o r i n g and c o n t r o l o f t h e i r membersh i p, 36. CHAPTER I I: FOOTNOTES 1, C r i s i s i s used here t o embrace both economic and s o c i a l v a r i a b l e s . J u r g e n Habermas, i n L e g i t i m a t i o n C r i s i s , s t a t e s : " I n l i b e r a l c a p i t a l i s m , c r i s e s appear i n the form o f u n r e s o l v e d economic s t e e r i n g problems. Dangers t o system i n t e g r a t i o n a r e d i r e c t t h r e a t s t o s o c i a l i n t e g -r a t i o n , so t h a t we a r e j u s t i f i e d i n s p e a k i n g o f economic c r i s i s ... Economic c r i s i s i s i m m e d i a t e l y t r a n s f o r m e d i n t o s o c i a l c r i s i s ; f o r , i n unmasking t h e o p p o s i t i o n o f s o c i a l c l a s s e s , i t p r o v i d e s a c r i t i q u e o f i d e o l o g y o f the market's p r e t e n s i o n t o be f r e e o f power. The economic c r i s i s r e s u l t s from c o n t r a d i c t o r y system imper- ."•' a t i v e s and t h r e a t e n s s o c i a l i n t e g r a t i o n . I t i s , a t t h e  same t i m e , a s o c i a l c r i s i s i n w h i c h the i n t e r e s t s o f a c t i n g groups c o l l i d e and p l a c e i n q u e s t i o n the s o c i a l i n t e g r a t i o n o f s o c i e t y . 1 , 1 (emphasis i n o r i g i n a l ) ( B o s t o n : Beacon P r e s s , 1975), 24-30. From t h i s p e r s p e c t i v e , t h e e v e n t s o f the p e r i o d under s t u d y can be sum-m a r i s e d i n t h i s way: I n s u f f i c i e n t c a p i t a l a c c u m u l a t i o n l e d t o a t t e m p t s by the s t a t e t o s e c u r e v o l u n t a r y agreement t o an incomes p o l i c y . The f a i l u r e t o s e c u r e t h i s agreement posed a t h r e a t t o c a p i t a l i s t d e v e l o p -ment which e v e n t u a l l y r e s u l t e d i n the co m p u l s o r y c o n t r o l s program. T h i s a c t i o n l e d t o the t h r e a t o f s o c i a l d i s i n t e g r a t i o n as i t unmasked " t h e o p p o s i t i o n o f s o c i a l c l a s s e s " . The r e s u l t i n g t r i p a r t i t e p r o p o s a l was an a t t e m p t t o r e i n t e g r a t e by a c h i e v i n g a new consensus o f economic g o a l s and v a l u e s w h i c h was a l s o c o n s i s t e n t w i t h the need f o r c a p i t a l accumu1 a t i on. 2, Leo P a n i t c h , i n h i s a r t i c l e "The R o l e and N a t u r e o f the Canadian S t a t e " , adds the d i s c r e t e f u n c t i o n o f c o e r c i o n t o the a c c u m u l a t i o n and l e g i t i m a -t i o n f u n c t i o n s . In p r a c t i c e , however, t h e r e i s not even a f i n e l i n e between c o e r c i o n and l e g i t i m a t i o n . The c o e r c i v e a p p a r a t u s o f t h e s t a t e ( p o l i c e , m i l i t a r y , e t c . ) e x i s t s t o e n f o r c e l e g i s l a t i o n and t h e d e c i s i o n s o f the j u d i c i a r y which a r e c o e r c i v e i n t h a t f a i l u r e t o obey them a u t o -m a t i c a l l y engages the c o e r c i v e a p p a r a t u s . To s e p a r a t e c o e r c i o n from l e g i t i m a t i o n i s t o p r o v i d e - " l e g i t i m a t i o n " w i t h l e g i t i m a c y , 3, L i n d s a y 4, W i t h the development o f t h e c o r p o r a t i o n , the top managing e x e c u t i v e s o f the c o r p o r a t i o n a r e i n c l u d e d i n t h e c a p i t a l i s t c l a s s by v i r t u e o f t h e s u r p l u s v a l u e i n c o r p o r a t e d i n t h e i r s a l a r i e s , See d i s c u s s i o n o f G a l b r a i t h ' s t e c h n o s t r u c t u r e and quote from Braverman, pp, 22 - 23 o f t h i s c h a p t e r , 5, Baran and Sweezy, Monopoly C a p i t a l : An Essay on the American Economic and S o c i a l Order (New Y o r k : M o n t h l y Review P r e s s , 1966), p, 6, 6. | b i d p p . 66 - 7. 37. 7. Marx and E n g e l s , The Communist M a n i f e s t o (Moscow: Progress P u b l i s h e r s , 1971) , p. 34. 8. Leo P a n i t c h , e d . , The,Canadian S t a t e : P o l i t i c a l Economy and P o l i t i c a l  Power (Toronto: U n i v e r s i t y of Toronto P r e s s , 1977). 9. Ralph M i l i b a n d , "Pou lantzas and the C a p i t a l i s t S t a t e " , New L e f t Review 82 (Nov. - Dec. 1973), P- 85. 10. Nicos P o u l a n t z a s , C lasses in Contemporary C a p i t a l i s m (London: Ve rso , 1978), pp. 24 - 5. 11. K a r l Marx, Capi t a l (New York : V i n t a g e , 1977). V o l . I. See pages 389 -410. 12." I b i d . , pp. 389 - 90. 13. I b i d . , pp. 408 - 9. 14. James O'Connor, The F i s c a l C r i s i s of the S ta te (New York : S t . M a r t i n ' s P r e s s , 1973) and The Corporat ions and the S ta te (New York : Harper , 1974). 15. These s o c i a l s e c u r i t y programs are not l i k e l y to be mainta ined through times of economic r e c e s s i o n wi thout cont inued suppor t . 16. See the a r t i c l e s by Swar tz , "The P o l i t i c s of Reform: C o n f l i c t and Accomodation in Canadian Heal th P o l i c y " and F i n k e l , " O r i g i n s of the Wel fare S t a t e in Canada", in P a n i t c h , e d , , op, c i t , 17. Leo P a n i t c h , S o c i a l Democracy and I n d u s t r i a l M i l i t a n c y , the Labour Par ty the Trade Un ions , and Incomes P o l i c y : 1945 - 74 (Cambridge: 1976), P a n i t c h a t t r i b u t e s the defeat of A t l e e ' s Labour government in 1952 and W i l s o n ' s in 1969 to labour d i s s a t i s f a c t i o n w i t h the incomes p o l i c i e s of these governments. 18. Gerth and M i l l s , e d s . , From Max Weber (Oxford : 1946), 19. Daniel B e l l , The End of Ideology (New. York : Free P r e s s , 1965). 2 0 . John G a l b r a i t h , The New I n d u s t r i a l S t a t e (Boston ; Houghton M i f f l i n , 1971). 21. I b i d , , p. 310, 22. Ernest Mandel , Late C a p i t a l i s m (London: New L e f t Books, 1975). 23. Baran and Sweezy, op , c i t , , p, 34, 24. The s a l e s e f f o r t i s an important f e a t u r e f o r Baran and Sweezy o f mono-poly c a p i t a l i s m as the means through which c o r p o r a t i o n s c r e a t e needs and, t h e r e f o r e , buyers f o r t h e i r p roduc ts . Baran and Sweezy suggest that the s a l e s e f f o r t , to some e x t e n t , has rep laced p r i c e c o m p e t i t i o n . 3 8 . 2 5 . Harry Braverman, Labour and Monopoly C a p i t a l (New York : Monthly Review P r e s s , 1 9 7 4 ) , pp. 404 - 5 . 2 6 . An argument can a l s o be made tha t such p lann ing i s necessary to prevent a f a l l i n g p r o f i t r a t e . In terms of c a p i t a l i s t development, t h i s l i n e of t h i n k i n g could be o u t l i n e d on the b a s i s of the tendency of the p r o f i t ra te to f a l l in Cap i ta1 I I I . In t h i s manner, most of B a l b r a i t h ' s a r g u -ment cou ld a c t u a l l y be incorporated i n t o M a r x i s t theory , 2 7 . G a l b r a i t h , op. c i t . , p. 3 0 4 . 2 8 . I b i d . , p. 3 0 6 , 2 9 . I b i d . , pp. 311 - 1 2 . 3 0 . P a n i t c h , e d . , op. c i t . , pp. 251 - 8 8 . 3 1 . I b i d . , p. 2 5 2 . 3 2 . |n " O r i g i n s of the Wel fare S t a t e in Canada," in P a n i t c h , e d . , op, c i t . , F i n k e l p o i n t s out that the reforms int roduced by the King voernment towards the end of the Second World War were almost a l l p o l i c i e s which King had favoured s i n c e 1918 and w r i t t e n about in h i s book, 1  ndustry  and Humanity. It was not u n t i l the " s h i f t in c l a s s f o r c e s " (p. 3 6 0 ) , brought about by the 1 9 3 0 ' s depress ion and the war , that King f e l t ab le to put some of these ideas i n t o p r a c t i c e , 3 3 . In t h i s c o n t e x t , the s t a t e i s not s u c c e s s f u l l y f u l f i l l i n g i t s r o l e i f the c o n t r a d i c t i o n s are "unmasked". C o n f l i c t should i d e a l l y never appear as c o n f l i c t . See Habermas, Footnote 1, t h i s c h a p t e r , on the tendency of economic c r i s i s to "unmask" the o p p o s i t i o n of s o c i a l c l a s s e s , 3 4 . It Is not as s imple as Cy Gonick , in I n f l a t i o n or Depress ion , suggests that the government w i l l now opt f o r a la rge dose of unemployment (a 1 9 3 0 ' s p o l i c y ) . The government, through t r i p a r t i s m and incomes p o l i c y , w i l l attempt to barga in w i t h o rgan ised labour f o r increased e x p l o i t a -t i o n as a t r a d e - o f f f o r cont inued s o c i a l s e r v i c e s and job s e c u r i t y , 3 5 . See P i e r r e J a l e e , Imper ia l i sm in the S e v e n t i e s , f o r an account of world resource c o n t r o l by the m u l t i n a t i o n a l s based in the advanced coun -t r i e s and, p r i m a r i l y , in the U .S .A . A l s o Nicos P o u l a n t z a s , C lasses in  Contemporary C a p i t a l i s m , f o r a d i s c u s s i o n of the r o l e of the s t a t e in the advanced c o u n t r i e s as hosts of f o r e i g n m u l t i n a t i o n a l c a p i t a l , 3 6 . Th is w i l l be d i s c u s s e d , f o r the Canadian c a s e , in Chapter IV in a s e c t i o n on the Royal Commission on Corporate C o n c e n t r a t i o n . 3 7 . Th is i s one of the o f f s e t t i n g f a c t o r s Marx d i s c u s s e s in h i s treatment of the tendency of the p r o f i t ra te to f a l l (Capi t a l I I I ) . G e n e r a l l y s p e a k i n g , new p lan t and technology r e s u l t s in a h igher ra te of e x p l o i t -a t i o n as i t reduces the v a r i a b l e c a p i t a l component, The work f o r c e a f t e r such changes i s u s u a l l y s m a l l e r , Far from c r e a t i n g more jobs in the economy, a l though i t does produce new j o b s , technology modern isa t ion reduces the o v e r a l l number of jobs as fewer workers are requ i red to 39. produce the same o u t p u t . 38, See the a r t i c l e w r i t t e n by the r e p r e s e n t a t i v e o f sma l l b u s i n e s s in P e r s p e c t i v e s on the Royal Commiss ion on C o r p o r a t e C o n c e n t r a t i o n , G o r e c k i and S t a n b u r y , e d s . 39, The Way Ahead (1976) and Agenda f o r C o - o p e r a t i o n (1977). See Chap te r IV f o r a d i s c u s s i o n o f t h e s e documents . 40, Ra lph M i l i b a n d , The S t a t e in C a p i t a l i s t S o c i e t y (London: Q u a r t e t , 1973), P. 46, 41, P a n i t c h , op . c i t . , p. 6. 42, See L a r r y P r a t t , " The S t a t e and P r o v i n c e - b u i l d i n g : A l b e r t a ' s D e v e l o p -ment S t r a t e g y " , in P a n i t c h , op . c i t . 43, Ka r i L e v i t t , S i l e n t S u r r e n d e r ( T o r o n t o : M a c M i l l a n , 1970), 44, George G r a n t , Lament f o r a N a t i o n ( T o r o n t o : M a c M i l l a n , 1970). 45, The impact o f economic n a t i o n a l i s m on the Canad ian c a p i t a l i s t c l a s s shou ld not be u n d e r e s t i m a t e d , A r a t h e r s t a r t l i n g example o f t h i s i s the s t a tement a t t r i b u t e d to Gordon B l a i r , P r e s i d e n t o f A l b e r t a Gas and Trunk L i n e , r e p o r t e d in Chap te r V, t h a t he s u p p o r t e d the n a t i o n a l i s t economic a n a l y s i s o f the W a f f l e M a n i f e s t o , 46, T h e r e was some v a r i a t i o n in the p r o v i n c i a l r e s p o n s e s , In B . C . , where the NDP government had j u s t o r d e r e d s t r i k i n g worker s back to work, o p p o s i t i o n was e x p r e s s e d , but t h i s was more o f a p o l i t i c a l manoeuvre to t r y t o s h i f t d i s c o n t e n t from V i c t o r i a to Ot tawa, 47, See Chap te r III f o r an accoun t o f the Economic C o u n c i l o f Canada ' s i n v e s t i g a t i o n o f incomes p o l i c y and the a t tempt made to s e c u r e a v o l -u n t a r y incomes p o l i c y by the P r i c e s and Incomes Commiss ion, 48, Compulsory c o n t r o l s were immed ia te l y p receded by one l a s t a t tempt a t v o l u n t a r y ag reement : the T u r n e r round o f consensus t a l k s . The C L C ' s t e n - p o i n t program o f May 1975, a r e sponse to T u r n e r ' s e f f o r t s , was r e j e c t e d by the government . T u r n e r s u b s e q u e n t l y l e f t and c o n t r o l s were brought in t h a t O c t o b e r , 49, T h i s was c o n t a i n e d in Pr ime M i n i s t e r T r u d e a u ' s New Y e a r ' s a d d r e s s f o r 1976, 4 0 CHAPTER I I I In t h i s c h a p t e r , the background lead ing up to compulsory wage and p r i c e c o n t r o l s w i l l be p r e s e n t e d , paying p a r t i c u l a r a t t e n t i o n to the i n v e s t i g a t i o n s made of incomes p o l i c i e s by the Economic Counc i l of Canada and the P r i c e s and Incomes Commission. The change in s t a t e p o l i c y from a f r e e market p o s i -t i o n to one which a l lowed f o r a much broader s t a t e involvement in the d e t a i l e d f u n c t i o n i n g of the economy w i l l be examined in the context of the repor ts issued by these b o d i e s . The t h e o r e t i c a l concepts developed in the preceding chapter w i l l be used in a n a l y s i n g t h i s m a t e r i a l . The f i r s t par t of t h i s chapter w i l l cover the per iod up to the es tab l i shment of the P r i c e s and Incomes Commission (PIC) in 1969. Th is was the f i r s t s e r i o u s attempt to in t roduce an incomes p o l i c y . The second par t w i l l review the PIC recommend-a t i o n s and end w i t h the i n t r o d u c t i o n of compulsory c o n t r o l s in October 1975. The f o l l o w i n g chapter w i l l cover the compulsory c o n t r o l s program and end w i th the Canadian Labour Congress convent ion of 1978, In each s e c t i o n , the government p o l i c y w i l l be d e s c r i b e d along w i t h l a b o u r ' s r e a c t i o n , as represented by the Canadian Labour Congress (CLC) , and any counter proposals coming from the CLC, Throughout the p e r i o d , there was a L i b e r a l government in Ottawa and , except f o r the f i r s t few y e a r s , i t was led by P i e r r e Trudeau. During t h i s p e r i o d , the CLC underwent two'major changes. The f i r s t was the fo rmat ion of unions in the p u b l i c s e r v i c e s e c t o r . Th is tended to " C a n a d i a n i z e " the t rade union movement, p r e v i o u s l y dominated by i n t e r n a t i o n a l or American un ions , and l e d , i n d i r e c t l y , to the second change. Th is was the move towards autonomy which fo rced i n t e r n a t i o n a l s to be more respons ive to the needs of t h e i r Canadian members. The o v e r a l l e f f e c t of these changes was to s t rengthen the CLC. Incomes P o l i c y : The F i r s t I n v e s t i g a t i o n Before 1964, the n a t i o n a l government's i n t e r e s t in the CLC was m i n i m a l . 41 . The CLC was r a r e l y inc luded in government a d v i s o r y boards . I ts i n f l u e n c e or c o n t r o l over i t s membership was not thought to be very important f o r purposes of government p o l i c y . In 19&5, however, the f i r s t i n d i c a t i o n of g r e a t e r government i n t e r e s t in the CLC in the f u t u r e occur red when the Economic Counc i l of Canada was i n s t r u c t e d by the government to undertake " a broad examinat ion i n t o p r i c e s , c o s t s , incomes and p r o d u c t i v i t y , and t h e i r r e l a t i o n -sh ip to sus ta ined economic growth."^ The Counc i l was asked to review the p o l i c i e s and exper iences of other c o u n t r i e s in t h i s f i e l d and t h e i r 2 re levance f o r Canada." At t h i s p o i n t , 1965, Canada was e x p e r i e n c i n g i t s second year of i n f l a t i o n and the beginning of an i n f l a t i o n a r y per iod that was to dominate quest ions of economic p o l i c y f o r the r e s t of the 1960's and most o f the 1970's. Canada's prev ious exper ience w i th attempts to monitor p r i c e s and incomes e i t h e r through v o l u n t a r y or compulsory means had been l i m i t e d to wart ime. In the twenty year per iod from the end of the Second World War to 1965, there had been r e l a t i v e l y l i t t l e i n t e r e s t in a governmental r o l e that a c t i v e l y sought to impose g u i d e l i n e s on the p r i v a t e s e c t o r . Except fo r b r i e f p e r i o d s , the time from 1945 - 65 had been one of sus ta ined economic growth w i th r e l a t i v e l y low unemployment and a high degree of p r i c e s t a b i l i t y . Th is was an era d u r i n g which i t was w ide ly assumed that c a p i t a l i s t s o c i e t y could meet b a s i c needs and that adequate instruments e x i s t e d to ensure e c o n -omic growth. N e v e r t h e l e s s , c e r t a i n problems were recognised and i t was in order to research these problems that the government e s t a b l i s h e d the Economic Counc i l of Canada in 1963. It was g iven the mandate to repor t on the longer term prospects f o r the Canadian economy. From time to t i m e , the government would d i r e c t the Counc i l to research p a r t i c u l a r areas of concern . In the i n t r o d u c t i o n to the Th i rd Annual Review (1966), the Counc i l s t a t e s : 42. "From the beginning of our work, we have been much concerned w i t h the inherent d i f f i c u l t y of a c h i e v i n g the goal of r e a s -onable p r i c e s t a b i l i t y in a Canadian economy which was s u c c e s s f u l l y a c h i e v i n g high employment and rap id growth of output and l i v i n g standards . . . in the F i r s t Annual Review (1964) . . . we noted that p o l i c i e s designed to achieve f u l l employment may be in c o n f l i c t w i t h the p o l i c i e s needed to ^ avoid i n f l a t i o n . " * It i s , t h e r e f o r e , in the context of a t r a d e - o f f approach between p r i c e s t a b i l i t y and unemployment that the Counc i l approached i t s task of e v a l u a t i n g incomes p o l i c i e s in 1966. Nowhere i s the i n f l a t i o n a r y surge , p e r s i s t i n g through r e l a t i v e l y h igher ra tes of unemployment, a n t i c i p a t e d which was to cont inue f o r the remainder of the 19601 s and throughout the e n t i r e decade of the 1970's. In order to determine the range of e f f e c t i v e n e s s of a p r i c e s and incomes p o l i c y , i t i s f i r s t necessary to examine what f a c t o r s cause p r i c e s and incomes to be s e t . The Counci l concludes regard ing p r i c e s t h a t : " . . . the c e n t r a l paradox fo r Canada - - the r e l a t i o n s h i p to be sor ted o u t - - i s that w h i l e the need to s tay c o m p e t i t i v e e x t e r n a l l y i s unquest ionably one of the most important reasons f o r paying c l o s e a t t e n t i o n to Canadian p r i c e s and c o s t s , these same p r i c e s and cos ts are to a q u i t e unusual ^ extent determined by e x t e r n a l i n f l u e n c e s , " These i n f l u e n c e s are s a i d to r e s u l t almost e x c l u s i v e l y from Canada's p o s i t i o n as an e x p o r t i n g n a t i o n . The Counc i l s t a t e s that 23% of Canada's Gross Nat iona l Product (GNP), f o r 1964, was made up of f o r e i g n t rade and t h e r e f o r e p r i c e s were e s t a b l i s h e d , to a la rge e x t e n t , f o r exported goods by i n t e r n a t i o n a l r a t h e r than domestic markets . No mention was made of the r o l e in p r i c e s e t t i n g played by the f a c t that Canada's economy, in many a r e a s , was dominated by f o r e i g n ownership and the o v e r l a p p i n g e f f e c t of the r o l e of fore ign-owned m u l t i n a t i o n a l s in determin ing p r i c e s in Canada. These were f a c t o r s that would st rengthen the e x t e r n a l i n f l u e n c e on Canadian p r i c e s . Turning to incomes, the Counci l conc ludes : 43. " . . . wage b e n e f i t s which unions have obta ined f o r t h e i r mem-bers appear to have been p o w e r f u l l y a f f e c t e d by the general s t a t e of the economy . . . our a n a l y s i s of a c t u a l wage s e t t l e -ments tends to reconf i rm the importance of demand pressures as a b a s i c f a c t o r in p r i c e and cost developments. Whatever may be the independent e f f e c t s of unions on wages, they are c l e a r l y much a f f e c t e d by f l u c t u a t i o n s in the general l e v e l of economic a c t i v i t y . " In o ther words, w h i l e wage se t t lements may have a minor c o n t r i b u t o r y e f f e c t on i n f l a t i o n , t h i s i s a component which has f a r l ess impact on i n f l a t i o n than pressures r e s u l t i n g from the market , i . e . supply and demand. The r e s u l t of these two c o n c l u s i o n s , one regard ing p r i c e s , the o ther on incomes, leaves l i t t l e room f o r a p r i c e s and incomes p o l i c y to have any general e f f e c t on economic performance. It was w i th t h i s economic understanding that the Counc i l began i t s examinat ion of incomes p o l i c i e s , The Counci l i d e n t i f i e d three p r i n c i p a l components which make up an incomes p o l i c y . These a r e : 1) a set of general t a r g e t s f o r the whole economy i n d i c a t i n g an a p p r o p r i a t e course of development f o r the major forms o f income and f o r p r i c e s ; 2) some means of render ing n a t i o n a l g u i d e l i n e s meaningful and re levant f o r i n d i v i d u a l p r i c e and wage d e c i s i o n s ; 3) means of inducing people to f o l l o w the g u i d e l i n e s , ^ The Counc i l then prov ided nine reasons f o r i n s t i t u t i n g an incomes p o l i c y s t a t i n g t h a t , a s i d e from the f i r s t , there was no p a r t i c u l a r p r i o r i t y as to o r d e r . These a r e : 1) to promote a " b e t t e r t r a d e - o f f between high employment and reasonable p r i c e s t a b i l i t y , p a r t i c u l a r l y in c i rcumstances where e x c e s s i v e p r i c e and cost inc reases have posed a t h r e a t to balance of payments v i a b i l i t y , " ; 2) to guide the longer run d i s t r i b u t ion of income; 3) "a d e s i r e to ach ieve what might be judged on s o c i a l grounds to be a b e t t e r long - run wage s t r u c t u r e , " ; 4) to improve labour-management cooperat ion on matters a f f e c t i n g p r o d u c t i v i t y and growth; 5) to c o n t r o l dominant s e c t o r s of the economy; 6) to change a c l i m a t e of e x p e c t a t i o n s developed in an i n f l a t i o n a r y p e r i o d ; 7) to c u r t a i l p r i c e and income increases when government launches expansionary monetary and f i s c a l p o l i c i e s ; 8) to a l l o w government to share economic r e s p o n s i b i l i t y w i t h p r i v a t e groups ; 9) to educate the p u b l i c regard ing p r i c e and wage e x p e c t a t i o n s . ^ Having de f ined the reasons f o r an incomes p o l i c y and s t a t e d the area of t h e i r general e f f e c t in the Canadian s i t u a t i o n , the Counci l then asked : In what s o r t of country would an incomes p o l i c y have the best chance of success? The c r i t e r i a suggested inc luded the f o l l o w i n g : a u n i t a r y s t a t e w i t h s t rong c e n t r a l powers w i t h a t r a d i t i o n of c o n s i d e r a b l e government i n t e r v e n t i o n in the d e t a i l e d f u n c t i o n i n g of the economy; a comparat i ve l y s e l f - s u f f i c i e n t economy (one where f o r e i g n t rade accounts f o r a low percentage of GNP); a high c o n c e n t r a t i o n of p r i v a t e economic power w i t h both management and t rade unions having s t r o n g , c e n t r a l i s e d o r g a n i s a t i o n s ; not a wide range of r e g i o n a l economic d i s p a r i t y ; a severe economic c r i s i s or war which would increase the w i l l i n g n e s s to cooperate . In 1966, Canada met none of the above c r i t e r i a , Canada i s a f e d e r a l s t a t e w i t h many areas of j u r i s d i c t i o n d i v i d e d between the c e n t r a l government and the p r o v i n c e s , i n c l u d i n g labour r e l a t i o n s . The c o u n c i l had a l ready noted Canada's dependence on i n t e r n a t i o n a l markets . For both unions and management h i g h l y c e n t r a l i s e d o r g a n i s a t i o n s which could have any s t rong r e g u l a t o r y g power over t h e i r members d i d not e x i s t . Canada had a r e l a t i v e l y low propor -t i o n of i t s work f o r c e belonging to unions (about 30% in 1966), The two main labour c e n t r a l s , the Canadian Labour Congress (CLC) and the Confederat ion o f N a t i o n a l Trade Unions (CNTU), were, a c c o r d i n g to the C o u n c i l , in the nature of f e d e r a t i o n s of t rade unions j o i n e d together to promote common i n t e r e s t s , , , the s t r u c t u r e of the Canadian labour movement i s f a r from such that the Canadian c e n t r a l bodies could enter i n t o meaningful under tak ings that 4 5 . 9 would b ind member un i on s t o the o b s e r v a n c e o f a s e t o f g u i d e l i n e s , " T h i s a p p l i e d even more so to employer o r g a n i s a t i o n s , wh ich a r e " . . . in no p o s i t i o n whatever to commit i n d i v i d u a l emp loyer s t o c o m p l i a n c e w i t h income o r p r i c e g u i d e l i n e s . " ^ The C o u n c i l a l s o d i s c u s s e d the d i f f i c u l t i e s o f a p p l y i n g g u i d e l i n e s t h a t would be a p p r o p r i a t e to the d i f f e r e n t r e g i o n s o f Canada, In c o n c l u s i o n , the C o u n c i l s t a t e d : " . , . we a r e not d i s p o s e d to r u l e out c o m p l e t e l y , or under a l l c i r c u m s t a n c e s , a r e s o r t t o incomes p o l i c y in C a n a d a . " In a sudden emergency, i t might be an e f f e c t i v e temporary p o l i c y " . . . pend ing the m o b i l i s a t i o n o f b e t t e r measures to f o l l o w , " ^ The C o u n c i l recommended the a p p r o p r i a t e use o f f i s c a l and monetary p o l i c i e s as the bes t l e v e r s f o r b a l a n c i n g p r i c e s t a b i l i t y , growth and employment. I ts a n a l y s i s r e s t e d on the a s s u m p t i o n t h a t the f r e e market shou ld be i n t e r f e r e d w i t h o n l y when a b s o l u t e l y n e c e s s a r y : " . . . the economy max imizes i t s growth when 12 r e s o u r c e s seek out t h e i r a r e a s o f h i g h e s t r e t u r n , " N e v e r t h e l e s s , the C o u n c i l noted t h a t the t r a d i t i o n a l monetary and f i s c a l p o l i c i e s aim o n l y a t a f f e c t i n g a g g rega te demand and some p o l i c i e s s hou ld be d e v e l o p e d to d e a l w i t h prob lems o f s u p p l y . An example recommended was a n a t i o n a l manpower program to ease up b o t t l e n e c k s in growth p e r i o d s due to a l a b o u r s h o r t a g e , It i s not s u r p r i s i n g t h a t , in the l i g h t o f the C o u n c i l ' s recommendat ions , no forma l a t tempt was made by the government t o i n t r o d u c e an incomes p o l i c y a t t h a t t i m e . An i n f o r m a l approach was made to the CLC t o d e t e r m i n e under what c o n d i t i o n s , i f any , the CLC would p a r t i c i p a t e in an incomes p o l i c y . As the CLC, by t h i s t i m e , was r e p r e s e n t e d on the Economic C o u n c i l o f Canada, they were w e l l aware o f the C o u n c i l ' s r e p o r t . The CLC emphas i sed in i t s r e p l y t h a t t h e r e were two main c o n d i t i o n s a t t a c h e d to i t s s u p p o r t . The f i r s t was a g u a r a n t e e o f adequa te m o n i t o r i n g o f p r i c e s to i n s u r e t h a t r e a l wages c o n t i n u e d to r i s e . The o t h e r c o n d i t i o n was t h a t the main aim o f such a p o l i c y be to 4 6 . c r e a t e a f u l l employment economy. F u r t h e r , the CLC would only p a r t i c i p a t e in 13 a v o l u n t a r y program. Th is l a s t c o n d i t i o n cou ld be a r e f l e c t i o n o f the CLC's d e c e n t r a l i s e d s t r u c t u r e which gave the labour c e n t r a l very l i t t l e c o n t r o l over i t s member a f f i l i a t e s . In such a s i t u a t i o n , the CLC cou ld not count on d e l i v e r i n g support of i t s a f f i l i a t e s wi thout the b e n e f i t of a c o n -ven t ion of the CLC approv ing such a p o l i c y . Such a convent ion would a l s o have had to s t rengthen the labour c e n t r a l ' s c o n t r o l over the a f f i l i a t e un ions , Given the t r a d i t i o n a l b a s i s of power w i t h i n the CLC (see next c h a p t e r ) , the major a f f i l i a t e s might w e l l be r e l u c t a n t to see the power of the labour c e n t r a l s t rengthened , P r i c e s and Incomes Commission: The Second I n v e s t i g a t i o n The Economic C o u n c i l ' s Th i rd Annual Rey j ew was submitted f o l l o w i n g two years of i n f l a t i o n a r y pressure in the Canadian economy, The s i x years before t h a t , 1958 - 6 4 , had been marked by modest inc reases in both p r i c e s and wages. By the time the government next cons idered an incomes p o l i c y , in the F a l l of 1 9 6 8 , there had been four s u c c e s s i v e years of i n f l a t i o n . T r a d i t i o n a l p o l i c i e s to check monetary expansion in 1968 and measures to reduce the ra tes of p r i v a t e and p u b l i c spending had not succeeded in s lowing the s t rong demand pressures coming from both i n t e r n a l and e x t e r n a l s o u r c e s , Unemployment, which had reached a low fo r the decade of the 1 9 6 0 ' s at 3,6% in 1 9 6 6 , was r i s i n g a g a i n . On the b a s i s of past performance, r i s i n g unemployment would r e s u l t in p r i c e s t a b i l i s a t i o n but t h i s was not o c c u r r i n g , |n a d d i t i o n , the war in Vietnam was e x e r t i n g s t rong i n f l a t i o n a r y pressure on the U.S. economy, Th is had i t s usual t r a n s f e r e f f e c t on Canadian p r i c e s and c o s t s , In the F a l l of 1 9 6 8 , the Prime M i n i s t e r held separate informal d inner meetings w i th s e n i o r r e p r e s e n t a t i v e s of f e d e r a t i o n s of workers ' o r g a n -i z a t i o n s and employers ' a s s o c i a t i o n s , ' 1 ^ D iscuss ions were a l s o held w i t h 47. r e p r e s e n t a t i v e s o f each of the ten p r o v i n c i a l governments. Fo l l ow ing these meet ings , the government re lased i t s White Paper P o l i c j e s f o r P r i c e S t a b i 1 j t y in December 1968. In i t , the government concluded that the means a v a i l a b l e to i t f o r i n f l u e n c i n g the o p e r a t i o n of the Canadian economy were not s u f f i c -ien t " . . . to r e s o l v e the very rea l c o n f l i c t which e x i s t s at the present t ime between the o b j e c t i v e s of m a i n t a i n i n g high l e v e l employment and r e s t o r i n g 16 the p r i c e s t a b i l i t y that i s necessary f o r s u s t a i n e d economic g r o w t h , " The government s t a t e d that f i s c a l and monetary measures had been i n s u f f i c i e n t to r e s t o r e s t a b i l i t y and proposed a p r i c e s and incomes commission to e x p l o r e other s t e p s . The P r i c e s and Incomes Commission was appointed in June 1969, w i t h the mandate " . . . to i n q u i r e i n t o and report upon the causes , processes and c o n -sequences of i n f l a t i o n . . . (and) . . . to inform those making cu r ren t p r i c e and income d e c i s i o n s , the general p u b l i c and the government on how p r i c e s t a b i l i t y may best be a c h i e v e d , " ^ The Commission was not g iven any execu -t i v e powers. The assumption was that agreement cou ld be worked out between the government, employers and unions wi thout adopt ing any c o e r c i v e measures. I n i t i a l meetings of the Commission produced general agreement from both union and employer r e p r e s e n t a t i v e s that i n f l a t i o n was an important problem and a l l p a r t i e s committed themselves to f u r t h e r d i s c u s s i o n . However, a number of problems q u i c k l y a r o s e , George Haythorne, a member of the Commis-s i o n , has w r i t t e n that there were s i x main d i f f i c u l t i e s which developed w i t h i n the f i r s t four months of the Commission's a c t i v i t i e s : 1) The proposed r e s t r a i n t p o l i c y had been termed v o l u n t a r y by the media . A l though v o l u n t a r y agreement was i n i t i a l l y sought , i t was the Commission's i n t e n t i o n that the programme in i t s f i n a l form would become mandatory, w i t h whatever f e d e r a l and p r o v i n c i a l l e g i s l a t i v e or o ther 48. 1 g s a n c t i o n s t h i s might r e q u i r e . 1 ' 2) Some statements regard ing p a r t i c i p a t i o n in the programme issued by the Commission were " . . . i n t e r p r e t e d , p a r t i c u l a r l y by some union l e a d e r s , as an unwelcome t h r e a t . " 3) The government's announced cutback of expend i tures f o r the f i s c a l year 1970 - 71 was " . . . i n t e r p r e t e d . . . (by unions) . . . as an unacceptable attempt to f i g h t i n f l a t i o n by i n c r e a s i n g unemployment," 4) Some proposals by the Commission were too s p e c i f i c p a r t i c u l a r l y as gen -e r a l agreement had not been reached p r i o r to t h e i r announcement, 5) The Commission moved too h a s t i l y to check i n f l a t i o n and paid more a t t e n -t i o n to negat i ve measures " . . . than to p o s i t i v e steps to ach ieve p r i c e s t a b i l i t y , income s e c u r i t y and increased employment," 6) some workers ' and employers ' r e p r e s e n t a t i v e s , , . were not convinced that the governments would take d e c i s i v e a c t i o n to a s s i s t in r e s t r a i n i n g p r i c e s , rents and other incomes, and were opposed to any r e s t r a i n t 18 without such a c t i o n , " The l a s t f i v e p o i n t s are f a i r l y s t r a i g h t f o r w a r d , but the f i r s t one, concern ing the t r a n s i t i o n from v o l u n t a r y to mandatory, has some i n t e r e s t i n g i m p l i c a t i o n s , Th is was probably a l a r g e r s tumbl ing b lock than Haythorne suggests . P a r t i c i p a n t s in a j o i n t v o l u n t a r y agreement to deal w i t h the spec -i f i c problem of i n f l a t i o n cou ld envisage a j u d i c i a l and l e g i s l a t i v e apparatus e s t a b l i s h e d which might have a much wider and longer term e f f e c t than that i n i t i a l l y a n t i c i p a t e d . Trade union r e p r e s e n t a t i v e s were r e l u c t a n t to encour -age such a s t r u c t u r e . In any c a s e , the CLC and the CNTU, in a j o i n t s ta tement , announced t h e i r withdrawal from p a r t i c i p a t i o n in the d i s c u s s i o n s in October 1969. In t h e i r s ta tement , they r e i t e r a t e d t h e i r concern about i n f l a t i o n and urged a f r e e z e on p r i c e s as the best method of d e a l i n g w i t h the problem, 49. They a l s o repeated t h e i r concern that the s o l u t i o n to i n f l a t i o n should not r e s u l t in h igher unemployment r a t e s . The Commission proceeded w i t h a n a t i o n a l c o n f e r e n c e , attended by employer r e p r e s e n t a t i v e s , on p r i c e s t a b i l i t y in e a r l y 1970 wi thout union p a r t i c i p a t i o n . Agreement was reached on a p r i c e r e s t r a i n t program at the conference and a f u r t h e r meeting was then held w i t h union r e p r e s e n t a t i v e s in an attempt to e s t a b l i s h wage g u i d e l i n e s . No agreement was reached at t h i s meeting and the Commission proceeded to announce u n i l a t e r a l l y a t a r g e t f o r wage inc reases in the coming y e a r . Haythorne s t a t e s the 6 per cent upper ta rget had l i t t l e p o s i t i v e i n f l u e n c e , and in some s i t u a t i o n s i t may even have provoked ra ther 19 higher demands than would have been advanced o t h e r w i s e . " Whi le t h i s i s s p e c u l a t i o n which cannot be v e r i f i e d , what remains to be answered i s why the Commission set a s p e c i f i c g u i d e l i n e to which union r e p r e s e n t a t i v e s had not agreed and which could not be enforced under e x i s t i n g l e g i s l a t i o n . One CLC source suggested that the PIC Commissioners b e l i e v e d that union members would f o r c e t h e i r l e a d e r s h i p to m a i n t a i n the g u i d e l i n e . T h i s , of c o u r s e , was not done and the CLC i n t e r p r e t e d the a r b i t r a r y g u i d e l i n e as another th rea t should v o l u n t a r y agreement not be f o r t h c o m i n g , Haythorne, in rev iewing the p r i c e r e s t r a i n t programme, s t a t e s : "Whi le o ther i n f l u e n c e s were of course a l s o at work, the p r i c e r e s t r a i n t programme helped to reduce the y e a r - t o -year inc rease in the consumer p r i c e index from 4,5 per cent d u r i n g 1969 to 3 - 3 per cent d u r i n g 1970 and s t i l l 2 0 f u r t h e r to 2.9 per cent dur ing 1971," Among "other i n f l u e n c e s " was the f r e e i n g of the Canadian d o l l a r in May 1970 from the f i x e d l e v e l of U.S. o.925. Th is a c t i o n soon r e s u l t e d in p a r i t y w i t h the U.S. d o l l a r and t h e r e f o r e had the e f f e c t of reducing import p r i c e s gener -a l l y . It i s d i f f i c u l t to e v a l u a t e which a c t i o n , the p r i c e r e s t r a i n t programme or the f r e e i n g of the d o l l a r , had more e f f e c t , It cannot be assumed that the 50. p r i c e r e s t r a i n t programme was as s u c c e s s f u l as the reduced inc rease in the consumer p r i c e index would suggest . The r i s e of the Canadian d o l l a r from U.S. 0 .925 to p a r i t y i s the rough e q u i v a l e n t of an e i g h t per cent decrease in p r i c e on a l l U.S. imports and s i m i l a r decreases f o r a l l o ther imports s i n c e comparable changes i n . t h e exchange rate w i t h other c o u n t r i e s a l s o o c c u r r e d . Given Canada's p o s i t i o n as a t r a d i n g n a t i o n , the t o t a l change in the consumer p r i c e index could be a t t r i b u t e d to the f r e e i n g of the d o l l a r and not to the p r i c e r e s t r a i n t programme. What i s c e r t a i n i s that the govern -ment was a b l e to c l a i m " s u c c e s s " on p r i c e r e s t r a i n t wi thout l a b o u r ' s c o o p e r a t i o n . The government cou ld c l a i m bus iness coopera t ion in d e a l i n g w i t h i ssues of n a t i o n a l concern and t h e r e f o r e , use the p r i c e r e s t r a i n t programme to make an a t t a c k on the p o s i t i o n put f o r t h by the un ions . The p r i c e r e s t r a i n t programme was concluded a t the end of 1971 and the Commission wound up i t s a c t i v i t i e s by June 1972, Among the f i n a l recommenda-t i o n s of the Commission was a proposal f o r a comprehensive , , , mandatory 21 r e s t r a i n t programme, f o r p o s s i b l e use in the f u t u r e , " Th is repor t was not p u b l i c l y r e l e a s e d . The main f i n d i n g s of the Commission were pub l i shed in a 2° report e n t i t l e d I n f l a t i o n , Unemployment and Incomes P o l i c y , Th is document concluded that " . . . a f u l l - f l e d g e d c o n t r o l system . . . ( i s ) . . . the on ly form of i n t e r v e n t i o n l i k e l y to be e f f e c t i v e enough to be worth a t tempt ing in the 23 near f u t u r e , " The repor t f u r t h e r s ta ted that the p o l i c y cho ices open to the government had become very narrow, Whi le "demand management must p lay the c e n t r a l r o l e " , by i t s e l f i t i s regarded as i n s u f f i c i e n t , A wage -p r i ce c o n t r o l s programme, or incomes p o l i c y , i s seen as the instrument which would g i ve space f o r a more e f f e c t i v e long - te rm p o l i c y , |n t h i s c o n t e x t , a temporary r e s o r t to c o n t r o l s o f f e r s a means of b r i n g i n g cost and p r i c e increases more promptly and r e l i a b l y i n t o l i n e w i t h the change in demand 51. c o n d i t i o n s . " In order to prevent a new outbreak of i n f l a t i o n f o l l o w i n g the c o n t r o l s p e r i o d , the commissioners s t a t e that such a programme: " . . . should on ly be used as par t of a l o n g e r - r u n p o l i c y aimed at m a i n t a i n i n g u n d e r l y i n g demand c o n d i t i o n s both dur ing and a f t e r the c o n t r o l per iod c o n s i s t e n t w i t h the ta rge t ra tes of inc rease in average p r i c e and incomes ^ 1 eve I s . " The P r i c e s and Incomes Commission deserves a t t e n t i o n f o r two main reasons . F i r s t , i t was, at that t i m e , the on ly attempt in Canada dur ing peace - t ime of government to b r ing about t r i p a r t i t e agreement ( b u s i n e s s , gov-ernment and labour) on matters of economic p o l i c y . Second, i t assumes a much more aggress i ve r o l e f o r the s t a t e in managing the economy. In doing s o , i t i m p l i c i t l y r e j e c t s the " f r e e market" as a mechanism which maximises economic and s o c i a l b e n e f i t s f o r s o c i e t y . Whether t h i s i s done as the r e s u l t of an assumed change in the economic s t r u c t u r e , the PIC commissioners do not s t a t e . However, they do a s s i g n the f o l l o w i n g r o l e to government: " In modern s o c i e t i e s n a t i o n a l goverments are r e s p o n s i b l e f o r the o v e r a l l management of the economy. In t h i s sense , i f an overshoot of demand is a l lowed to o c c u r , the respon -s i b i l i t y must H e w i th the government. Th is remains t rue even though in t h e i r conduct of economic p o l i c y govern -ments cannot ignore the p u b l i c mood and s o c i a l pressures of the t i m e , and t h e i r freedom of a c t i o n i s l i m i t e d by a 2^ wide v a r i e t y of p r a c t i c a l c o n s t r a i n t s , " The PIC report was issued in 1972, s i x years a f t e r the Economic Counci l of Canada's Th i rd Annual Review (1966), The Counc i l had been very e x p l i c i t about the c o n d i t i o n s which the authors f e l t needed to e x i s t f o r an incomes p o l i c y to be e i t h e r necessary or s u c c e s s f u l , It had concluded that none of those c o n d i t i o n s e x i s t e d at that t i m e . In the succeeding s i x years none of these c o n d i t i o n s had a l t e r e d s u f f i c i e n t l y to suggest that a c o n t r o l s program was needed, Whi le i t i s t rue that i n f l a t i o n had cont inued to p e r s i s t th rough -out the i n t e r v e n i n g s i x y e a r s , t h i s was not the k ind of c r i s i s which the 52. Economic Counc i l f e l t would mer i t the i n t r o d u c t i o n of c o n t r o l s , Whgt had changed was the a n a l y t i c a l framework and the u n d e r l y i n g assumptions about the Canadian economy which the PIC commissioners brought to the task as compared w i th those of the Economic C o u n c i l , In 1966, the Economic Counc i l assumed that a minimum of government i n t e r v e n t i o n in the economy was d e s i r a b l e . The p o t e n t i a l p o l i c y range unleashed by P IC ' s statement that the government i s r e s p o n s i b l e f o r the o v e r a l l management of the economy i s f a r broader and more long - te rm in nature than that envisaged by the Economic C o u n c i l , A second major change brought to the a n a l y s i s by PIC was a c o n s i d e r a b l e down-p lay ing of the r o l e of e x t e r n a l f a c t o r s in s t r u c t u r i n g Canadian p r i c e s . Whi le not mentioned s p e c i f i c a l l y , i t i s c l e a r l y the p o s i t i o n taken by the Economic Counc i l to which the PIC commissioners are r e f e r r i n g when they s t a t e : "C lose d i r e c t l i n k s between the Canadian and f o r e i g n p r i c e s of many i n t e r n a t i o n a l l y - t r a d e d goods c e r t a i n l y do e x i s t , but the o v e r a l l p r i c e l e v e l s of the two c o u n t r i e s (the U.S. and Canada) are not so r i g i d l y l i n k e d , , , the degree to which Canada imported i n f l a t i o n dur ing the 196O 1 s was more a consequence of Canadian exchange r a t e p o l i c y than of 27 f o r e i g n i n f l a t i o n as s u c h , " Thus P|C assumed much more m a n o e u v r a b i l i t y in Canadian economic p o l i s y v i s - a -v i s the United States and i n t e r n a t i o n a l markets g e n e r a l l y than was understood to e x i s t by the Economic C o u n c i l , As ide from p o l i c y op t ions f o r governments, the d i f f e r e n t p o s i t i o n taken by PIC, regarding government r e s p o n s i b i l i t y f o r economic management, a l s o c a r r i e d weighty i m p l i c a t i o n s f o r the labour movement and the f u t u r e c l i m a t e of i n d u s t r i a l r e l a t i o n s , The main i m p l i c a t i o n f o r the labour movement in the PIC report was that i t is par t of the government's r o l e in managing the economy to superv i se shares of income a c c r u i n g to va r ious groups in s o c i e t y . Market f o r c e s , by themselves , could not be r e l i e d upon to appor t ion a p p r o p r i a t e 53. sha re s o f n a t i o n a l income go ing t o p r o f i t s on the one hand and wages and s a l a r i e s on the o t h e r . T h i s o f c o u r s e immed ia te l y r a i s e s the q u e s t i o n s o f what a r e a p p r o p r i a t e sha res o f n a t i o n a l income and what pa rameter s need to be c o n s i d e r e d in maing t h i s t ype o f d e c i s i o n . The a s sumpt ion o f PIC was t h a t the government , as the government a c t i n g in the n a t i o n a l i n t e r e s t as a n e u t r a l a r b i t e r , i s the a p p r o p r i a t e body to i n t e r v e n e and a d j u s t the outcome o f market f o r c e s . In t h i s c a s e , the government a r b i t r a t e s between p r o f i t s ( c o r p o r a t i o n s ) and wages ( u n i o n s ) . The presumed aim o f such an a r b i t r a t i o n i s t o p roduce an economic env i ronment t h a t a l l o w s f o r s t e a d y growth in the economy w i t h o u t undue i n f l a t i o n o r unemployment, A f u r t h e r e x t e n s i o n o f government r e s p o n s i b i l i t y and one o f the parameter s t h a t must be c o n s i d e r e d in the a r b i t r a t i o n i s the i n t e r n a t i o n a l t r a d e marke t . P r i c e s and wages must be m o n i t o r e d in such a way as t o keep Canada c o m p e t i t i v e in i n t e r n a t i o n a l m a r k e t s , An a d d i t i o n a l f a c t o r , one t h a t i s not r a i s e d by P IC, but can be i n f e r r e d from t h e i r p o s i t i o n on government r e s p o n s i b i l i t y i s t h a t the government must a t tempt to i n s u r e a h e a l t h y c l i m a t e f o r c a p i t a l i n v e s t m e n t , An impor t an t f a c t o r in c r e a t i n g such a c l i m a t e i s the l a b o u r s i t u a t i o n , B e s i d e s the prob lem f o r c a p i t a l o f man-hours l o s t due to s t r i k e s , t h e r e a r e g e n e r a l s k i l l l e v e l s , the s u p p l y o f l a b o u r and i t s r e l i a b i l i t y . A n e g o t i a t e d incomes p o l i c y in c o n j u n c t i o n w i t h a comprehens i ve manpower program would p roduce a more f a v o u r a b l e env i ronment f o r new, c a p i t a l - i n t e n s i v e deve l opment . Both o f t h e s e recommendat ions were p r e s e n t e d to the government by PIC, From t h i s , i t c o u l d be i n f e r r e d t h a t the PIC commi s s i one r s were , in f a c t , c o n c e r n e d w i t h the prob lem o f c a p i t a l i n v e s t m e n t . In summar i s ing the r o l e o f P IC, t h e r e a r e two main o b s e r v a t i o n s . The f i r s t i s t h a t i t was a f a i l u r e in the immediate sense o f p r o d u c i n g an ag reed 5k. upon formula f o r c o n t r o l l i n g p r i c e s and e s t a b l i s h i n g wage g u i d e l i n e s , P I C ' s importance, however, l i e s more in the impact that i t had on f u t u r e p o l i c y d e c i s i o n s . The i n t e r p r e t a t i o n that PIC made of the r o l e of government in managing the economy was a s i g n i f i c a n t change from the r o l e ass igned to government by the Economic C o u n c i l , The acceptance of t h i s i n t e r p r e t a t i o n provided the government w i t h the i d e o l o g i c a l j u s t i f i c a t i o n i t needed f o r both the Royal Commission on Corporate Concent ra t ion and f o r the l e g i s l a t i o n which e s t a b l i s h e d the A n t i - I n f 1 at ion Board (wage and p r i c e c o n t r o l s ) , Th is i s not to imply a causal r e l a t i o n s h i p between PIC on the one hand and the Commission on Corporate Concent ra t ion and c o n t r o l s on the o t h e r . It was, however, the f i r s t p o l i c y document issued by government that brought both i n t o the realm which should be overseen by government, Other fo rces were, of c o u r s e , at work at the same t i m e . Ch ief among these was the whole issue of f o r e i g n ownership which a l s o had i t s roots as a p u b l i c i ssue in the decade of the 1960 's . The concern over f o r e i g n ownership c e r t a i n l y prov ided a b a s i s fo r an examinat ion of Canada's c o r p o r a t i o n s , P IC 's view of the r o l e of government as o v e r a l l manager of the economy al lowed f o r s u p e r v i s i o n of the s t r u c t u r e of c o r p o r a t i o n s and not j u s t the ownership of them. It i s not our purpose here to o u t l i n e the m e r i t s o f the PIC a n a l y s i s as compared to some other view of the economy compiled by a d i f f e r n t group of economists such as the Economic Counci l of Canada, An i n f o r m a t i v e c r i t i q u e is provided by Kardouche and Caramazza in Wage and P r i c e C o n t r o l s fo r Canada? 28 A Commentary on the F i n a l Report of the P r i c e s and Incomes Commiss ion , " What i.s of i n t e r e s t i s why the Commission opted f o r wage and p r i c e c o n t r o l s not only in the face of the prev ious research conducted by the Economic Counci l and numerous o ther s t u d i e s which ques t ion the e f f e c t i v e n e s s of incomes p o l i c y but a l s o in the face of i t s own f a i l u r e to secure agreement from the 55. p a r t i e s concerned. There was the obvious o p p o s i t i o n of the t rade unions to an incomes p o l i c y . Somewhat more muted was t h e . o p p o s i t o n of la rge s e c t i o n s of the f i n a n c i a l community and some c o r p o r a t i o n s . The above study by Kardouche and Caramazza was commissioned by the Bank of M o n t r e a l , Ulman and F lanagan, two American economis ts , had concluded in t h e i r 1971 study of western Europe that in none of the v a r i a t i o n s so f a r turned up has incomes p o l i c y succeeded in i t s fundamental o b j e c t i v e . . . o f making f u l l employment c o n s i s -29 tent w i th a reasonable degree of p r i c e s t a b i l i t y , " The PIC c o n c l u s i o n s regard ing the use of c o n t r o l s c o n t r a d i c t e d those of the Senate Committee on Nat iona l F inance (Growth, Employment and P r i c e S t a b i l i t y , 1971) even though the Senate r e p o r t ' s f i n d i n g s on the causes and processes of i n f l a t i o n c l o s e l y p a r a l l e l e d those of PIC. Given the above, one can wonder i f perhaps the PIC commissioners saw other o b j e c t i v e s than the one d e s c r i b e d above (Ulman and Flanagan) f o r i n t r o d u c i n g a c o n t r o l s program, In h i s review of the background f o r PIC, Haythorne s t a t e s : "From 1957 to 1963 the share of Canada's income going to p r o f i t s and c a p i t a l had r i s e n s t e a d i l y , The s i t u a t i o n was reversed in 1964 when l a b o u r ' s share began to r i s e , a t rend which cont inued u n t i l 1970, Given these c o n d i t i o n s . . . _ n a c t i o n to s t a b i l i s e the economy was c l e a r l y r e q u i r e d , " Whi le the PIC commissioners do not inc lude t h i s as par t of t h e i r argument f o r c o n t r o l s , they were not unaware of t h i s s i t u a t i o n as the q u o t a t i o n i s from an a r t i c l e by George Haythorne, one of the PIC commiss ioners , Whi le an incomes p o l i c y , by i t s e l f , does not n e c e s s a r i l y s t a b i l i s e p r o f i t l e v e l s , i t does s t a b i l i s e the cost of labour f o r c a p i t a l . The removal of u n c e r t a i n t y regarding wages does a l l o w f o r more e f f i c i e n t and accura te long term c a p i t a l investment d e c i s i o n s . Of almost equal importance to the cost of wages in long term c a p i t a l investment would be time l o s t dur ing c o n s t r u c t i o n and i n i t i a l 56. o p e r a t i o n due to unscheduled work stoppages such as s t r i k e s and other job a c t i o n s . The main cause of s t r i k e s has t r a d i t i o n a l l y been over wages, a l though h e a l t h and s a f e t y issues have a l s o played t h e i r p a r t . An incomes p o l i c y would remove the t h r e a t of s t r i k e s and slow downs over wages. Al though t h i s i s on ly i n f e r r e d from the PIC repor t i t s e l f , i t i s in keeping w i t h the broader r e s p o n s i b i l i t y f o r the economy that the PIC commissioners a s s i g n to government. It i s a l s o c o n s i s t e n t w i t h statements issued by c a b i n e t m i n i s t e r s of the time who e x p l i c i t l y s t a t e d that one of t h e i r reasons f o r i n t e r e s t in western European arrangements (Sweden and West Germany in •3 1 p a r t i c u l a r ) was the c l i m a t e of labour r e l a t i o n s , The PIC f i n a l report was rece ived by a government which had r e c e n t l y been reduced to m i n o r i t y s t a t u s . Th is f a c t o r p a r t l y e x p l a i n s why there was no a c t i o n taken on the PIC recommendations u n t i l 1975 when the L i b e r a l government d id not have to r e l y on the par l iamenta ry support of the New Democratic Par ty to s tay in power, The on ly a l t e r n a t i v e e x p l a n a t i o n was that the government r e j e c t e d the P|C c o n c l u s i o n s f o r three years and then was d r a m a t i c a l l y c o n v e r t e d . Th is hypothes is does mer i t some c o n s i d e r a t i o n . Conservat i ve leader Robert S t a n f i e l d had fought the 1974 e l e c t i o n on a p l a t -form that inc luded wage and p r i c e c o n t r o l s , L i b e r a l leader P i e r r e Trudeau had argued c o n v i n c i n g l y a g a i n s t them, as a newspaper a r t i c l e quot ing one speech he gave i l l u s t r a t e s : "The proposed 90 day f r e e z e , fo l lowed by up to two years of c o n t r o l s , would take vast numbers of bureaucrats to admin-i s t e r . Even then , i t wou ldn ' t work, he s a i d : 'You c a n ' t f r e e z e execut i ve s a l a r i e s and d i v idends because there are too many loopholes to squeeze t h r o u g h , 1 Mr, Trudeau s a i d Conservat i ve leader Robert S t a n f i e l d had a l ready s a i d he would not f r e e z e the p r i c e of farm produce and f i s h . He cou ld not f reeze the p r i c e of U.S. imports or Arab o i l , and he admitted he would exempt housing p r i c e s , 'So what 's he going to f r e e z e ? ' Mr. Trudeau shouted , 'Your ,~ wages. He's going to f reeze your w a g e s , ' " 57. The most l i k e l y e x p l a n a t i o n f o r the reve rsa l on p o l i c y regard ing c o n t r o l s i s that dur ing the per iod 1972 - 74 i t was thought that c o n t r o l s might be unnecessary to " s t a b i l i s e " the economy. P u b l i c r e a c t i o n to a f u l l - f l e d g e d c o n t r o l s program was l i k e l y to be adverse and i t was g e n e r a l l y thought that the Conservat i ves had l o s t the 1974 e l e c t i o n because of the stand they had taken in support of a c o n t r o l s program. I n f l a t i o n cont inued at a high ra te in t h i s per iod but^there was l i t t l e s t a b i l i t y in p r o f i t l e v e l s as a share of n a t i o n a l income; they were on the r i s e , It i s q u i t e l i k e l y that the downturn in p r o f i t l e v e l s in 1975 as a share of n a t i o n a l income was the most important s i n g l e f a c t o r in the r e s o r t to c o n t r o l s . The percentage of the n a t i o n a l income accounted f o r by wages and s a l a r i e s f e l l from 72.8% in 1970 to 67% in the f i r s t h a l f of 1974, w h i l e b ig business p r o f i t s and i n t e r e s t c l imbed 33 to 22,3% in 1974 from 17% in 1970. Th is trend was r e v e r s e d , however, as unions t r i e d to make up f o r t h e i r rea l loss in wages due to cont inued high i n f l a t i o n throughout t h i s p e r i o d . The unions in t h i s case are . e s s e n t i a l l y r e a c t i v e as t h e i r increased wage demands are based on co rpora te p r o f i t s earned dur ing the l i f e of the preceding c o n t r a c t . By m i d - 1 9 7 5 , l a b o u r ' s share of the n a t i o n a l income had r i s e n to 70 ,8%, w h i l e p r o f i t s ' share had 34 f a l l e n back to 2 0 . 1 % , At the time of the 1974 e j e c t i o n , the percentage of n a t i o n a l income a c c r u i n g to p r o f i t s was h igher than at any time s i n c e the e a r l y 1 9 6 0 ' s , when l a b o u r ' s share had begun the inc rease which peaked in 1970, The r i s i n g p r o f i t l e v e l s , as a percentage of n a t i o n a l income, up to 1974 may have convinced the government that a r e s o r t to c o n t r o l s would be unnecessary . In any c a s e , the government would not have rece ived support f o r a c o n t r o l s program, d u r i n g , i t s m i n o r i t y per iod from 1972 - 74 , from the NDP, as the l a t t e r had a c l o s e a l l i a n c e w i t h organ ised labour which was adamantly opposed to c o n t r o l s , The 58. 1975 reve rsa l i s most e a s i l y exp la ined as a means of p revent ing a "squeeze on p r o f i t s " . However, t h i s i s not the only f a c t o r which brought about the i n t r o d u c t i o n of c o n t r o l s . Other arguments f o r a c o n t r o l s program could apply at almost any po in t in an i n f l a t i o n a r y surge where there was a l s o a high degree of labour m i l i t a n c y . The 1975 p r o f i t l e v e l s seem to be the s t rongest f a c t o r in e x p l a i n i n g why c o n t r o l s were int roduced at that p a r t i c -u l a r t i me , 59, CHAPTER I N : FOOTNOTES 1. David C, S m i t h , Incomes P o l i c i e s : Some f o r e i g n exper iences and t h e i r  re levance f o r Canada (Ottawa: Queen's P r i n t e r , 1966) , p. ~, 2 . I b i d . 3 . Economic Counc i l of Canada, Th i rd Annual Review (Ottawa: Queen's P r i n t e r , 1966) , p. 3 , 4 . I b i d . , p. 54. 5 . I b i d . , pp. 131 - 32, 6. I b i d . , pp. 149 - 50. 7. I b i d . , pp. 151 - 53 , 8 . I b i d , , p. 159, Th is i s an area where some changejhas taken p l a c e . For u n i o n s , the C a n a d i a n i s a t i o n r e s o l u t i o n s of the CLC in 1970 and 1974 strengthened the labour c e n t r a l . For management, a l though no major o r g a n i s a t i o n a l changes o c c u r r e d , the i n c r e a s i n g c o n c e n t r a t i o n , to some e x t e n t , a c t s as a c e n t r a l i s i n g f a c t o r , 9 . I b i d . , p. 161 . 10. I b i d . 11. I b i d , , p, 162, 12. I b i d , , p, 170. 13. Th is informal approach was revealed dur ing an i n t e r v i e w w i t h Robert B a l d w i n , CLC Research s t a f f in August 1978, 14. George Haythorne, " P r i c e s and Incomes P o l i c y : the Canadian e x p e r i e n c e , 1969 - 7 2 " in I n t e r n a t i o n a l Labour Review. V o l , 108, No, 6 , Dec, 1973, Haythorne was one of the P|C commiss ioners . 15. ( b i d . r i 16. Quoted in Summary Repor t , P r i c e s and Incomes Commission (Ottawa.: Queen's P r i n t e r , 1972), John H, Young, Chairman, 17. Haythorne, op, c i t , 18, I b i d , 19. I b i d , 20 , Ibid, 2 1 , Ibid, 60. 22. I n f l a t i o n , Unemployment and Incomes P o l i c y , F i n a l Report of the P r i c e s and Incomes Commission, John H. Young, Chairman (Ottawa: Queen's P r i n t e r , 1972). 23. Summary Repor t , P r i c e s and Incomes Commiss ion . , op, c i t , , p, 1, 2k. I b i d . , p. 7. 25 . I b i d . 26. I b i d . , p. 2 . 27. I b i d , , pp. 17 - 18. 28 . Caramassa and Kardouche, Wage and P r i c e C o n t r o l s f o r Canada: A Com-mentary on the F i n a l Report of the P r i c e s and Incomes Commission ( C D . Howe Research I n s t i t u t e , 1973), 29. R , J . Flanagan and L. Ulman, Wage R e s t r a i n t : A Study of Incomes P o l i c i e s  in Western Europe (Berke ley : U n i v e r s i t y of C a l i f o r n i a , 1971). p. 216, 30. Haythorne, op, c i t , 3 1 . Haythorne, op , c i t . 32. From the f i r s t i n v e s t i g a t i o n i n t o incomes p o l i c i e s conducted by the Economic C o u n c i l , Canadian students of i n d u s t r i a l r e l a t i o n s have been s tudy ing western Europe, David S m i t h ' s Incomes P o l j c j e s (1966) was a background study f o r the Economic C o u n c i l ' s Th i rd Annual Review. Paul Ma 11es' I n s t i t u t i o n s for. I n d u s t r i a l R e l a t i o n s in Cont inenta l Europe (1971) was f inanced by a grant from the Department o f Labour and p u b l i s h e by the Queen's P r i n t e r , Both the B u l l o c k Report ( B r i t a i n ) and C o - d e t e r -minat ion (West Germany) were s t u d i e d s e p a r a t e l y , These are reported on in Djmens i o n , V o l , 12, No, 3 , J u l y 1977. In Djmens i o n , John Munro, then M i n i s t e r of Labour , s t a t e s the government's i n t e r e s t in s tudy ing these forms i s to l ea rn by example what can be done about the high number of days l o s t due to s t r i k e a c t i v i t y in Canada, 3 3 . Reported in the Toronto S tar and quoted in P a n i t c h , "Wage and P r i c e C o n t r o l s " , Th is Magazine, V o l . 10, No, 1, Feb, - March 1976, 3k. I b i d . , p. 5 - 6 . 61 CHAPTER IV In t h i s c h a p t e r , the s t r u c t u r e of the labour movement i n Canada w i l l be examined as w e l l as some h i s t o r i c a l f a c t o r s which i n f l u e n c e d how labour responded to w a g e - p r i c e c o n t r o l s , Government documents p e r t a i n i n g to c o n t r o l s w i l l be analysed as w e l l as the impact of the Royal Commission on Corporate C o n c e n t r a t i o n , The l a t t e r document had no d i r e c t r e l a t i o n s h i p t o c o n t r o l s , but p rov ides some i n d i c a t i o n s of the r e s t r u c t u r a t i o n of c a p i t a l that was proceeding dur ing t h i s p e r i o d . The i n t r o d u c t i o n o f w a g e - p r i c e c o n t r o l s in 1975 represented the f i r s t ins tance of such a program in peace time in Canada, The CLC and CNTL) have been mentioned in pass ing as responding n e g a t i v e l y to v o l u n t a r y p roposa ls fo r wage c o n t r o l s in the 1966 - 75 p e r i o d . A b r i e f review of the s t r u c t u r e of the Canadian labour movement and i t s a l l i a n c e s w i l l a s s i s t in understanding the c o n t r o l s pe r iod and, in p a r t i c u l a r , l a b o u r ' s r e a c t i o n . The main i ssues are the s t r u c t u r e s of the labour c e n t r a l s , the h i s t o r i c a l dominance of i n t e r n a t i o n a l unions and the p o l i t i c a l a l l i a n c e between labour and the CCF/NDP, F i r s t , an h i s t o r i c a l overv iew of the labour movement w i l l be p r e s e n t e d . Labour: An H i s t o r i c a l Review The f o l l o w i n g review of the h i s t o r y of the labour movement in Canada is n e c e s s a r i l y b r i e f and , t h e r e f o r e , on l y intended to h i g h l i g h t a few themes of re levance to t h i s t h e s i s . Anyth ing l a r g e r would n e c e s s i t a t e another t h e s i s . The m a t e r i a l that t h i s review i s based on has been w r i t t e n main ly by h i s t o r i a n s . P o l i t i c a l s c i e n t i s t s have made a s i g n i f i c a n t c o n t r i b u t i o n but much of t h e i r work r e l i e s on the pr imary i n v e s t i g a t i v e work o f the h i s t o r i a n s . There i s , however, in the h i s t o r y of the Canadian labour movement, a vast amount of untapped m a t e r i a l of i n t e r e s t to h i s t o r i c a l s o c i o l o g y and to s o c i a l h i s t o r i a n s . The cur rent review d i d not extend to the l a t t e r group b u t , at t h i s d a t e , the c o n t r i b u t i o n o f s o c i o l o g i s t s would appear to be meager. T h i s , 62, perhaps , i s more o f a comment on h i s t o r i c a l s o c i o l o g y in Canada as s u c h , ra ther than the s p e c i f i c c o n t r i b u t i o n of h i s t o r i c a l s o c i o l o g y to the study of the labour movement, A h i s t o r y of the labour movement in Canada could not be w r i t t e n wi thout re fe rence to the t rade union o r g a n i s a t i o n s of the United S t a t e s , H, A, Logan, in Trade Unions in Canada, notes that the f i r s t i n t e r n a t i o n a l u n i o n s , in the l 8 5 0 ' s , were B r i t i s h , but w i t h i n a decade the i n f l u e n c e of American unions was f e l t , ^ The f i r s t major U.S. group to appear was the Knights of Labour. Th is o r g a n i s a t i o n achieved some s t r e n g t h , c h i e f l y in Ontar io and Quebec, I ts i n f l u e n c e was v i r t u a l l y terminated in 1902 when the Trades and Labour Congress (TLC), at the behest o f I ts parent group, the American Federa t ion of Labour (AFL) , amended i t s c o n s t i t u t i o n " t o exc lude the Knights o f Labour and other independent n a t i o n a l unions cons idered by the i n t e r n a t i o n a l ,2 de legates to be ' q u e s t i o n a b l e r e p r e s e n t a t i o n ' " . The TLC had been formed in 3 I883 - a n d , from i t s s t a r t , had been t i e d to the AFL. The format ion of the TLC marked the permanent presence of i n t e r n a t i o n a l u n i o n i s m , o rgan ised on a c r a f t b a s i s , in Canada, U n t i l i t s merger w i t h the Canadian Congress of Labour (CCL) in 1956, to form the Canadian Labour Congress (CLC), the TLC was recognised by government as the main o r g a n i s a t i o n r e p r e s e n t i n g t rade unions in Canada, U n l i k e i t s American c o u n t e r p a r t , the TLC never deve loped , to the same e x t e n t , the ideology o f bus iness un ion ism. The AFL c o n s i s t e n t l y adopted a nonpar t i san p o l i t i c a l s tance of rewarding f r i e n d s and pun ish ing enemies. The TLC was f r e q u e n t l y rebuked or quest ioned by AFL r e p r e s e n t a t i v e s f o r i t s f l i r t a t i o n s w i t h l e f t wing p o l i t i c a l movements. Furthermore, the TLC's o p p o s i t i o n to dual unionism was more muted than the A F L ' s , Often i t was on ly under pressure from the AFL that the TLC e x p e l l e d members who were " d u a l " 6 3 . ( i . e . belonged to i n d u s t r i a l u n i o n s ) , The TLC, at severa l p o i n t s in i t s e a r l y h i s t o r y , accord ing to M a r t i n Robin in Radica l P o l i t i c s and Canadian Labour, cons idered a f f i l i a t i o n w i t h s o c i a l i s t p a r t i e s o r was a c t i v e in p lann ing independent labour p a r t i e s . T h e l a s t major attempt, in thj .s_d i r e c -t i o n was dur ing the F i r s t World War w i t h the Canadian Labour P a r t y , A f t e r i t s f a i l u r e , the TLC was h e s i t a n t in g i v i n g i t s support to a p o l i t i c a l party or becoming invo lved in forming one. The o r g a n i s a t i o n s t rayed on ly once from t h i s stand in 19^5 when i t supported the L i b e r a l s . The e l e c t i o n of 19^5, however, was c r u c i a l , as the C o - o p e r a t i v e Commonwealth Federat ion (CCF) made i t s f i r s t and , as i t turned o u t , l a s t attempt to ga in major 6 par ty s t a t u s . I n d u s t r i a l unionism d id not become f i r m l y e s t a b l i s h e d in Canada u n t i l IT the l a t e 1 9 3 0 ' s . U n t i l that t i m e , the main attempts had been p r i o r t o , d u r i n g , and b r i e f l y in the a f te rmath of the F i r s t World War, Notable in t h i s regard were the e f f o r t s of the Western Federat ion of Miners and the One B ig Un ion ,^ P a r t i c u l a r l y s t rong in the west , these o r g a n i s a t i o n s were m i l i t a n t l y opposed by both company and s t a t e . P o l i t i c a l a l l i e s , such as the S o c i a l i s t P a r t y , accord ing to R o b i n , were o f t e n u n r e l i a b l e and p r e f e r r e d to engage in educat iona l a c t i v i t i e s and a b s t r a c t debate . In some of the b i t t e r Vancouver Is land coal mining s t r i k e s , t h i s extended to a r e f u s a l of support f o r workers g engaged in v i o l e n t c o n f r o n t a t i o n s , In the pre -Wor ld War One p e r i o d , these k inds of d i s t u r b a n c e s were most f requent in the coal mining i n d u s t r y , and p a r t i c u l a r l y in A l b e r t a and B r i t i s h Columbia, The A l l - C a n a d i a n Congress of Labour (ACCL), a l though i n d u s t r i a l in base , was formed in 1927 p r i m a r i l y "as a labour cen t re f o r n a t i o n a l as opposed to 9 i n t e r n a t i o n a l u n i o n i s m , " It was dominated by the Canadian Brotherhood of Rai lway Employees (CBRE) and was " i n favour of independent p o l i t i c a l a c t i o n 64. by t r a d e u n i o n s and c r i t i c a l o f the p o l i t i c a l i n a c t i v i t y o f the T L C . " ^ H o r o w i t z , i n Canadian Labour i n P o l i t i c s , a t t r i b u t e s the c l o s e t i e s between the ACCL and, i n p a r t i c u l a r , t he CBRE, t o the CCF as an a d d i t i o n a l reason f o r r e l u c t a n c e on the p a r t o f the TLC t o o f f i c i a l l y s u p p o r t t h e CCF as t h e r e was c o n s i d e r a b l e a n i m o s i t y between t h e two l a b o u r c e n t r a l s . ^ In 1940, the ACCL j o i n e d w i t h the r e c e n t l y e x p e l l e d Committee f o r I n d u s t r i a l O r g a n i s i n g o f the TLC t o form the CCL, The CCL was a l s o r i v a l t o the TLC, as the TLC had r e p l i c a t e d t h e A F L 1 s e x p u l s i o n o f the CIO, H o r o w i t z s u g g e s t s t h a t t h i s c o n t i n u e d t o make the TLC wary o f the CCF, Why t h i s would have r e s u l t e d i n the TLC's s u p p o r t f o r t h e L i b e r a l P a r t y i n t h e 1945 e l e c t i o n remains a ques-t i o n w h i c h H o r o w i t z does not s a t i s f a c t o r i l y e x p l a i n . I t i s p o s s i b l e t h a t the i n t e r n a t i o n a l l i n k s o f the o r g a n i s a t i o n were a more p o w e r f u l r e a s o n . In the U.S., R o o s e v e l t ' s Democrats were s t r o n g l y s u p p o r t e d by l a b o u r and, i n the 1945 e l e c t i o n , t he L i b e r a l s ran on a r e f o r m p l a t f o r m , Trade u n i o n membership reached a peak, up t o t h a t t i m e , i n the e a r l y 1920's. D e c l i n e f o l l o w e d , and wasn't r e v e r s e d u n t i l t he l a t e 1930's. A c c o r d -i n g t o S t u a r t J a m i e s o n , i n Times o f T r o u b l e , p r o s p e r i t y i n the 1920's and d e p r e s s i o n i n the 1930's appear t o be the main c a u s e s . The 1920's saw the TLC and c r a f t u n i o n i s m dominant. The v i o l e n t s u p p r e s s i o n o f s y n d i c a l i s m i n the Winnipeg G e n e r a l S t r i k e o f 1919 made any a l t e r n a t i v e t o c r a f t u n i o n i s m a d i f f i c u l t road t o f o l l o w . A l s o c o n t r i b u t i n g t o the d e c l i n e i n u n i o n member-s h i p was the r e s t r u c t u r i n g o f c a p i t a l , Jamieson s t a t e s : " T e c h n o l o g i c a l change and m e c h a n i s a t i o n d i l u t e d o r t r a n s -formed t r a d i t i o n a l s k i l l s and broke down numerous c r a f t d i s t i n c t i o n s , but the main l a b o u r o r g a n i s a t i o n s were un a b l e or u n w i l l i n g t o make s t r u c t u r a l a d a p t a t i o n s t o ^ t h e s e changes." The main i n d u s t r i a l u n i o n o r g a n i s i n g d r i v e s o f t h e 1930's had no d i r e c t l i n k s w i t h e a r l i e r a t t e m p t s i n Canada. The l a t t e r had been c o n c e n t r a t e d i n 6 5 . the West, p a r t i c u l a r l y in coal mining in A l b e r t a and B.C. In the 1 9 3 0 ' s , the focus s h i f t e d to Ontar io and the newer mass p roduct ion manufactur ing indus -t r i e s . A l t h o u g h , accord ing to Abel l a ' s account in N a t i o n a l i s m , Communism and  Canadian Labour , most of the i n i t i a l o r g a n i s i n g in the 1930's was accompl ished independently by Canadians , c l o s e l i n k s were forged w i t h the A F L ' s Committee 1 3 fo r I n d u s t r i a l Organis ing in the U.S. As w i t h the r e l a t i o n s h i p between the AFL and the TLC, a f f i l i a t i o n brought a great deal of e x t e r n a l i n f l u e n c e to bear on the Canadian labour movement w i t h the p a r a l l e l s t r u c t u r e of the CIO and the CCL. From the beginning of the CCL, as the TLC's Committee f o r I n d u s t r i a l Organis ing in 1937, people connected to the CCF were a c t i v e l y invo lved in 14 o r g a n i s i n g and support work. A l s o invo lved were members of the Communist P a r t y . In the e a r l y 1 9 3 0 ' s , the CP had fo l lowed a course of independent o r g a n i s i n g in l i n e w i t h Comintern d i r e c t i v e s . In 1935, the Comintern changed i t s s t r a t e g y to one of encouraging un i ted f r o n t s . For the labour movement, the i m p l i c a t i o n of t h i s d e c i s i o n was the abandonment of independent work. The Canadian CP a b r u p t l y brought the o r g a n i s a t i o n s they had formed i n t o the mainstream of the labour movement. As a consequence, the CP was a l s o i n t e g -r a l l y invo lved in the beginnings of the CCL as much of the work which they had been doing invo lved i n d u s t r i a l workers . However, the 1935 Comintern d e c i s i o n was on ly the f i r s t in a s e r i e s of sharp p o l i c y s h i f t s , The Canadian party d u p l i c a t e d these s h i f t s in r e l a t i o n to t h e i r domestic . p o l i t i c a l a c t i v i t y . As the CP was n o t , in r e l a t i o n to the Canadian labour movement of the 1 9 3 0 ' s , a r e l a t i v e l y i n s i g n i f i c a n t f r i n g e group, these changes in p o l i c y d i r e c t l y a f f e c t e d the course of the labour movement. Fernando C l a u d i n , in h i s book The Communist Movement; From Comintern to C o m j n f o r m , ^ argues that the p o l i c y s h i f t s occurred as a r e s u l t of the s u b o r d i n a t i o n of Comintern p o l i c y to the 66. f o r e i g n p o l i c y goa ls of the Sov ie t s t a t e . C laud in s t a t e s that the most s u c -c e s s f u l communist movements of the per iod were the ones that e i t h e r ignored the Moscow Comintern d i r e c t i v e s or i n t e r p r e t e d them in such a way to s u i t t h e i r own needs. The Canadian Communist Par ty was not one of t h e s e , Abel l a notes that many of the Communists invo lved in the Canadian labour movement had a great deal of p r e s t i g e due to the o r g a n i s i n g work they had done. To the members of t h e i r u n i o n s , and those in o ther u n i o n s , p o l i c y s h i f t s in 1935 (the Common Front a g a i n s t F a s c i s m ) , 1939 (the Moscow-Ber l in p a c t ) , 1941 (defence of the Sov ie t Union) and c o n t i n u i n g through to the end of the war and a f t e r ( r e b u i l d i n g the democrat ic A l l i e s of the Sov ie t Un ion ) , seemed to occur w i t h l i t t l e , i f any, r e l a t i o n to the s p e c i f i c Canadian s i t u a t i o n . During the war , t h i s p o l i c y r e s u l t e d in outrageous a t t a c k s on Canadian labour leaders who became, accord ing to the CP, a l l i e s of Fascism f o r t h e i r r e f u s a l to a g r e e , at some p o i n t s , to n o - s t r i k e and no -wage - inc rease c o n t r a c t s , Horowitz s t a t e s t h a t , w i t h i n the labour movement: "The p o l i t i c a l energ ies of the CCFers , , , , t h r o u g h o u t t h i s per iod were devoted p r i m a r i l y to b a t t l e w i t h the Commun-i s t s — a b a t t l e ranging in i n t e n s i t y from undercover fntr i .que ^ to open c i v i l w a r , " It is debatable whether the development of a d i s t i n c t i v e Canadian s t r a t -egy f o r the CP could ever have been s u c c e s s f u l in Canada as unique n a t i o n a l s t r a t e g i e s were in China and Y u g o s l a v i a dur ing t h i s p e r i o d , What i s c e r t a i n i s that the ambivalent and c o n t r a d i c t o r y responses adopted in conformi ty w i t h the Comintern l i n e led to the t e r m i n a t i o n of s i g n i f i c a n t CP i n f l u e n c e on the labour movement. Th is reached i t s c l imax in the purges c a r r i e d on in the labour movement in the l a t e 1940's and e a r l y 1950 1 s . 1 ^ In i t s wake, the CP l e f t a p o l i t i c a l par ty (the CCF) a f r a i d of a labour takeover and a labour movement ( p a r t i c u l a r l y the CCL) a f r a i d of the dominat ion of a p o l i t i c a l par ty which d i d n ' t t r u l y support t rade u n i o n s , 67. In 19^3, the CCL had recommended that i t s member unions a f f i l i a t e , by l o c a l , w i t h the CCF. Horowitz c i t e s f i v e reasons why t h i s d i d not occur on any la rge s c a l e : 1) CP o p p o s i t i o n ; 2) the i n f l u e n c e of i n t e r n a t i o n a l u n i o n s ; 3) the r i v a l TLC was f r i e n d l y to the L i b e r a l s in ]Skk - kS and the CCL was concerned l e s t i t lose i n f l u e n c e ; A) a f t e r 19^5, there was l e s s enthusiasm f o r a par ty that was c l e a r l y a t h i r d p a r t y ; 5) there was l e s s enthusiasm from .-'the CCF, which feared becoming a labour p a r t y . In r e l a t i o n to t h i s l a s t p o i n t , the CCF was q u i t e e x p l i c i t : "At the same time that our CCF becomes based more and more on the organ ised working c l a s s - - t h e on ly permanent and s o l i d b a s i s in c a p i t a l i s t s o c i e t y — ( w e must) . . . make sure that there i s not any t rade union dominat ion of the par ty so that farmers and middle c l a s s people know that they can come in on an equal f o o t i n g and have an equal v o i c e ^g w i t h organised l a b o u r . " In h i s d i s c u s s i o n of why the CCL chose to a l l y i t s e l f w i t h the CCF, w h i l e the TLC d id n o t , Horowitz does not p rov ide a very c o n v i n c i n g argument. He p o i n t s out that there were CCFers in both o r g a n i s a t i o n s , His main c o n c l u s i o n , in t h i s r e g a r d , cent res on the problems the o l d e r Congress (TLC) had had in at tempt ing to e s t a b l i s h a p o l i t i c a l par ty f o r labour in the pre-1920 per iod whereas the younger Congress (CCL) was prepared to attempt a more innovat i ve approach, A more l i k e l y e x p l a n a t i o n would seem to hinge on the presence of the Communist Par ty in the r e s p e c t i v e Congresses. In the CCL, the CP was s t r o n g l y represented in the I n t e r n a t i o n a l Woodworkers o f America (!WA), the United Auto Workers (UAW), the United E l e c t r i c a l Workers (UEW) and in the Mine , M i l l and Smelter Workers, Such was not the case w i t h i n the TLC, where the CP had no s i m i l a r base of suppor t , It would seem that the CCL had a reason to i d e n t i f y i t s e l f w i t h a p o l i t i c a l p o s i t i o n that the TLC d id not have. An a l l i a n c e w i th the CCF provided the CCL w i t h a p o l i t i c a l ideology to f i g h t communism as w e l l as the o r g a n i s e r s to do s o : 68. "The c a p t u r e o f the !WA and the UAW by CCFers broke the back o f Communist power i n the Canadian l a b o u r movement. In b o t h t h e s e u n i o n s , the Communists p r o b a b l y c o u l d not have been d i s l o d g e d w i t h o u t the a i d o f the i n t e r n a t i o n a l . In UE and M ine, M i l l , the Communists were s u p p o r t e d by the i n t e r n a t -i o n a l ; t h e s e u n i o n s c o u l d t h e r e f o r e not be l i b e r a t e d from ^_ w i t h i n , and they were e x p e l l e d from the CCL e a r l y i n 1949." In the c o n t e x t o f the above a n a l y s i s , i t i s i n t e r e s t i n g t o n o t e t h a t H o r o w i t z s t a t e s t h a t t h e h e i g h t o f CCL p o l i t i c a l s u p p o r t f o r the CCF o c c u r r e d d u r i n g the 1949 e l e c t i o n . The above a n a l y s i s i s not i n t e n d e d t o advance a c o n s p i r a c y approach t o l a b o u r p o l i t i c s . T here i s no doubt t h a t most o f the l a b o u r p e o p l e who s u p p o r t e d the CCF were genuine i n t h e i r commitment. For many l a b o u r l e a d e r s who had no s t r o n g p o l i t i c a l commitments, however, the p a r l i a m e n t a r y s o c i a l i s m o f t h e CCF was, a t the l e a s t , a "made i n Canada" p o l i c y , as opposed t o the e x t e r n a l l y d i r e c t e d CP. The l a t t e r , as i t had d e m o n s t r a t e d on more than one o c c a s i o n , had been a l l t o o ready t o use the l a b o u r movement f o r ends w h i c h were not c l e a r l y t o be seen as o b j e c t i v e s i n the immediate i n t e r e s t o f the Canadian l a b o u r movement, For l a b o u r l e a d e r s who were f i r s t and f o r e m o s t / i d e n t i f i e d w i t h the l a b o u r movement, the CCF would have appeared t o be a v e h i c l e t h a t would advance l a b o u r ' s i n t e r e s t w i t h o u t s a c r i f i c i n g i t as the r e s u l t o f e x t e r n a l d i r e c t i v e s . In 1943, the Canadian Congress o f Labour (CCL) e n dorsed t h e CCF as " t h e p o l i t i c a l arm o f l a b o u r " . T h i s r e s o l u t i o n has o f t e n been c i t e d as e v i d e n c e o f an e a r l y a f f i l i a t i o n l i n k i n g w o r k i n g c l a s s o r g a n i s a t i o n s t o a s o c i a l i s t p a r t y i n Canada, A c c o r d i n g t o Abel l a , t h e above r e s o l u t i o n was p a s s e d , i n 20 p a r t , t o p r e v e n t the growth o f Communist s u p p o r t w i t h i n the C o n g r e s s , In p r a c t i c e , CCL p o l i t i c a l i n i t i a t i v e s were v e r y l i m i t e d , There was l i t t l e more than token encouragement w i t h i n the o r g a n i s a t i o n t o d e v e l o p i t s p o l i t i c s o r t o i n v e s t i g a t e the p o l i t i c a l p o s i t i o n s o f the CCF o r o t h e r p o l i t i c a l p a r t i e s 69. w i t h rega rd to l a b o u r . T h i s s i t u a t i o n c o n t i n u e d u n t i l 1956 when the TLC merged w i t h the CCL to form the Canad ian Labour Congress (CLC ) . CCL r e p r e s e n t a t i v e s w i t h i n the CLC argued a c o n t i n u a t i o n o f s u p p o r t f o r the CCF but t h i s met w i t h some o p p o s i t i o n from the fo rmer TLC c r a f t a f f i l -i a t e s . For i t s p a r t , the CCF watered down i t s s t and f o r s o c i a l i s m ( the c o o p -e r a t i v e commonwealth) a t i t s W inn ipeg c o n v e n t i o n in 1957, c a l l i n g i n s t e a d f o r a "mixed economy". Accomodat ion was reached when the CCF, w i t h l a b o u r i n v o l v e m e n t , was succeeded by the New Democra t i c P a r t y (NDP) in 1961. The a c t u a l i nvo l vement o f the CLC s t i l l remained m i n o r . S t r u c t u r a l l y , CLC a f f i l i a t e s can a f f i l i a t e w i t h the NDP and have r e p r e s e n t a t i o n a t NDP c o n v e n -t i o n s . I n d i v i d u a l un ion members may a l s o j o i n the NDP th rough c o n s t i t u e n c y a s s o c i a t i o n s . The NDP b i e n n i a l c o n v e n t i o n p r o v i d e s r e p r e s e n t a t i o n d i r e c t l y f rom the t r a d e un ion a f f i l i a t e s o f the CLC and a l s o through c o n s t i t u e n c y 21 a s s o c i a t i o n s wh ich a r e awarded d e l e g a t e s on the b a s i s o f t h e i r membersh ip. The CLC, as a body, has r a r e l y taken independent p o l i t i c a l p o s i t i o n s o r conduc ted e x t r a p a r l i a m e n t a r y p o l i t i c a l campa igns . T h i s l a c k o f p o l i t i c a l deve lopment w i t h i n the CLC makes i t d i f f i c u l t f o r the CLC to respond p o l i t i -c a l l y when a s i t u a t i o n f o r c e s such a re sponse on i t , P o l i t i c a l r e p r e s e n t a t i o n from the CLC has l a r g e l y been c o n f i n e d t o i n d i r e c t r e p r e s e n t a t i o n th rough the NDP caucus in P a r l i a m e n t . 22 David Kwavnick, in O r g a n i z e d Labour and P r e s s u r e P o l i t i c s , t akes q u i t e a d i f f e r e n t approach to the s tudy o f l a b o u r than t h a t g e n e r a l l y p r e s e n t e d in the l i t e r a t u r e , as i t i s based on p l u r a l i s t , as opposed to s o c i a l c l a s s , a s sumpt ions about " s o c i e t y . In t h i s c o n t e x t , l a b o u r i s seen as one o f many compet ing i n t e r e s t g roups ( a l ong w i t h b u s i n e s s , f a r m e r s , p r o f e s s i o n a l s , e t c . ) O r g a n i s a t i o n s a r e seen as o b j e c t s to be m a n i p u l a t e d by t h e i r l e a d e r s and t h i s book, on the w h o l e , i s more about the a s sumpt ions Kwavnick ho ld s about the 70. m o t i v a t i o n s of labour leaders than about the labour movement per s e , Kwavnick repor ts Claude J o d o i n ' s P r e s i d e n t i a l address to the 1958 and I960 CLC Conventions as ev idence that labour leaders s t i r up o p p o s i t i o n to bus iness w i t h i n t h e i r ranks q u i t e n e e d l e s s l y and t h e r e f o r e f o s t e r the idea 23 that bus iness i s opposed to t rade un ions . S tuar t Jamieson has po inted o u t , though, that the l a t e 1950's saw renewed a t t a c k s on u n i o n s , p a r t i c u l a r l y w i th the spread of Boulewarism: "A new posture of ' toughness ' in management a t t i t u d e s and p o l i c i e s a l s o became ev ident dur ing the l a t t e r 1 9 5 0 ' s , ! t was best e x e m p l i f i e d by the h i g h l y p u b l i c i z e d technique known as 'Boulewar ism' . . . |t was tantamount to a u n i l a t e r a l r e j e c t i o n , by management, of c o l l e c t i v e barga in ing w i t h ^ un i o n s . " P laced in t h i s c o n t e x t , J o d o i n ' s remarks would appear to be j u s t i f i e d as a response to an immediate th rea t to the o r g a n i s a t i o n he led ra ther t h a n , as Kwavnick s t a t e s : alarms r a i s e d p e r i o d i c a l l y by the Congress l e a d e r s h i p , , . (as) , , , ac ts of obeisance to the h i s t o r y and t r a d i t i o n s of organized l a b o u r , " A f u r t h e r example of Kwavnick 's s i n g u l a r reading of labour h i s t o r y is h i s treatment of the Newfoundland d i s p u t e between the (WA and the Uni ted Brotherhood of Carpenters and J o i n e r s of America in 1958 - 9 and c a r r y i n g on f o r the f o l l o w i n g f i v e y e a r s , Kwavnick concludes h i s b r i e f review w i t h : t h i s study demonstrates that c o n s i d e r a t i o n s of o r g a n i s a -t i o n a l i n t e g r i t y o v e r r i d e such other supposedly v i t a l c o n s i d e r a t i o n s as freedom of a s s o c i a t i o n , the u n i t y of the ^ labour movement, and the o s t e n s i b l e aims of o rgan ised l a b o u r , " Kwavnick mentions at the beginning of h i s study of the d i s p u t e that the IWA had been d e c e r t i f i e d by Act of the Newfoundland l e g i s l a t u r e and fo rb idden to enter the prov ince again by the same a c t , but f a i l s to draw out any i m p l i c a -t i o n s . In t h i s s i t u a t i o n , CLC support of the IWA might have r e s u l t e d in the workers in the l o c a l s invo lved having no union r e p r e s e n t a t i o n at a l l . 7 1 . Furthermore, a l though Kwavnick 's c l a i m that the CLC i n d e f i n i t e l y postponed t a k i n g a stand on the issue has some m e r i t , the u n i t y of the labour movement was in f a c t mainta ined in that both u n i o n s , d e s p i t e t h r e a t s of w i t h d r a w a l , remained a f f i l i a t e d to the CLC, Kwavnick s t a t e s t h a t , " the c o n t r o l of r a i d i n g i s the t rue f u n c t i o n of 27 the CLC . " More than h a l f way through h i s book, he grants an a d d i t i o n a l one: apart from ensur ing peace among union leaders by p o l i c i n g r a i d i n g a c t i v i t i e s , the Congress 1 p r i n c i p a l f u n c t i o n i s to act as the r e p r e s e n t a t i v e of labour in i t s r e l a t i o n s w i t h the f e d e r a l government," The economic and s o c i a l goa ls of the CLC are d i smissed as a r i t u a l f o r fo rm's sake f o r i t s members, " g i v i n g the government what f o r " , and thereby enhancing the s t a t u s of the l e a d e r s h i p , A l though some of Kwavnick 's c r i t i c i s m s of the CLC are j u s t i f i e d , the unbalanced nature of h i s p r e s e n t a t i o n d e t r a c t s from the s tudy , The r i g i d adherence to i n i t i a l assumptions puts many o f h i s statements and c o n c l u s i o n s i n t o q u e s t i o n . S t r u c t u r e of the CLC The CLC i t s e l f , in the words of the Economic Counc i l of Canada, i s more 29 in the nature of a c o n f e d e r a t i o n of t rade un ions , The CLC does not r e p r e s -ent anyone d i r e c t l y ; i t s members are a f f i l i a t e d un ions , Because of t h i s head w i th no d i r e c t l i nkage to the body, there i s a tendency f o r the CLC l e a d e r -sh ip to become somewhat d i vo rced from i t s base. In order to r e l a t e to government, the CLC headquarters are in Ottawa, a l s o the headquarters of the n a t i o n a l p u b l i c s e r v i c e sec to r u n i o n s , w h i l e most of the major i n d u s t r i a l a f f i l i a t e s have t h e i r main o f f i c e s in Toronto or M o n t r e a l , In t h i s s i t u a t i o n , the l e a d e r s h i p of the CLC spends much of i t s t ime r e l a t i n g to government p o l i c y . Th is produces a tendency to see th ings in a s i m i l a r framework to 30 t h e i r oppos i te numbers in the government bureaucracy . The b i e n n i a l congress , one of the most democrat ic in North America or Europe, o c c a s i o n a l l y reconnects 72. the l e a d e r s h i p to the ba se , but t h i s i s i n f r e q u e n t , The CLC i t s e l f , w i t h r a r e e x c e p t i o n s , does no o r g a n i s i n g : t h i s i s done by the a f f i l i a t e un ions (hence the d i f f i c u l t y in d e v e l o p i n g n a t i o n a l s t r a t e g i e s such as o r g a n i s i n g the p o o r e s t p a i d i n d u s t r i a l w o r k e r s ) . S t r u c t u r a l l y , t h e r e has e x i s t e d a tendency f o r power to d i s p e r s e among the l a r g e r a f f i l i a t e s . T r i p a r t i t e n e g o t i a t i o n s , a t a n a t i o n a l l e v e l , c o u l d seem v e r y a t t r a c t i v e to the CLC l e a d e r s h i p w h i l e , a t the same t i m e , h o l d i n g l i t t l e i n t e r e s t f o r the a f f i l i a t e u n i o n s . T h i s r e l a t i v e weakness a t the c e n t r e o f the CLC i s caused by two main f a c t o r s — s t a t e l a b o u r l e g i s l a t i o n be ing s p l i t i n t o f e d e r a l and p r o v i n c i a l j u r i s d i c t i o n s and the h i s t o r i c a l dominance o f i n t e r n a t i o n a l u n i o n s . In a d d -i t i o n to the Canad ian l abour c e n t r a l , each p r o v i n c e has i t s own l a b o u r c e n t r a l . The p r o v i n c i a l f e d e r a t i o n s a r e l i n k e d to the CLC b u t , g i v e n d i f f e r i n g c i r c u m -s t a n c e s and p e r s p e c t i v e s , i n c l u d i n g p o l i t i c a l o n e s , the p r o v i n c i a l c e n t r a l s o f t e n f i n d themse l ve s in c o n f l i c t w i t h the CLC, A f u r t h e r f a c t o r i s the d u p l i c a t i o n o f the Quebec-Canada s p l i t w i t h i n the l abour movement, The Quebec F e d e r a t i o n o f Labour (QFL) i s a f f i l i a t e d to the CLC, w h i l e the C o n f e d -e r a t i o n o f N a t i o n a l T r a d e Unions (CNTU), o f a p p r o x i m a t e l y equa l s i z e to the QFL, i s not and f u n c t i o n s as an independent c e n t r a l , A. r e c e n t example o f the k i n d o f c o n f l i c t wh ich can emerge w i t h i n the CLC was the p o s i t i o n taken by the B,C, and Saskatchewan F e d e r a t i o n s a g a i n s t t r i p a r t i s m , w h i l e i t was s t i l l o f f i c i a l CLC p o l i c y , Changes in the s t r u c t u r e o f i n d u s t r i a l r e l a t i o n s w i t h i n Canad ian f e d e r a l i s m p r e s e n t prob lems f o r the managers o f the s t a t e and l a b o u r , w i t h i t s t h r e e - t i e r e d s t r u c t u r e , i s c o n f r o n t e d by i t s own s e t o f prob lems in f o r m u l a t i n g c o h e r e n t p o l i c i e s , Weakness brought about by the dominance o f i n t e r n a t i o n a l un ions p r e s e n t s q u i t e d i f f e r e n t p r o b l e m s , The c r a f t un ion movement 's t i e s through the T r a d e s 73, and Labour Congress (TLC) t o the American F e d e r a t i o n o f Labour (AFL) were more or l e s s d u p l i c a t e d between the CCL i n d u s t r i a l u n i o n s and t h e Congress o f I n d u s t r i a l O r g a n i s a t i o n s ( C I O ) , D e s p i t e t h e f a c t t h a t most o f t h e i n i t i a l i n d u s t r i a l u n i o n o r g a n i s i n g work i n Canada was done by Canadians w i t h l i t t l e a s s i s t a n c e from the U.S., most u n i o n s a f f i l i a t e d w i t h t h e i r A m erican c o u n t e r -p a r t s . T h i s e v e n t u a l l y r e s u l t e d i n c o n s i d e r a b l e abuse, w i t h the Canadian 31 branches l o s i n g both f i n a n c i a l and p o l i c y autonomy, Canadian members' dues went s o u t h and many o f t h e Canadian branches had no p o l i c y c o n v e n t i o n s o f t h e i r own, The c o n t r o l o f s t r i k e funds i n the U.S. o f t e n p r e s e n t e d Canadian l o c a l s w i t h d i f f i c u l t s i t u a t i o n s i f t h e i n t e r n a t i o n a l had recommended a s e t t l e m e n t which the l o c a l d i d not want. There had always been some c r i t i c i s m from segments o f the l a b o u r movement r e g a r d i n g t h e s e a r r a n g e m e n t s , but l i t t l e was a c t u a l l y done u n t i l t h e decade o f t he 1 9 7 0 1 s , " P r e s s e d by demands f o r g r e a t e r autonomy, the Canadian Labour Congress a t both i t s 1970 and 1974 c o n v e n t i o n s s e t f o r t h g u i d e l i n e s w h i c h 32 work towards t h i s g o a l , " One o f t h e s e g u i d e l i n e s was t o make s e p a r a t e Canadian p o l i c y c o n v e n t i o n s f o r i n t e r n a t i o n a l u n i o n s mandatory. Under p r e s s u r e from breakaway Canadian u n i o n s i n B,C, and Quebec, the Canadian P a p e r w o r k e r s Union was formed from the Canadian l o c a l s o f t h e U n i t e d P a p e r w o r k e r s I n t e r n a t -i o n a l Union i n 1972, T h i s was one example o f an o u t r i g h t break and s e v e r a l o t h e r i n t e r n a t i o n a l s , i n c l u d i n g the l a r g e s t , the S t e e l w o r k e r s , s e r i o u s l y 33 c o n s i d e r e d t h i s o p t i o n . Most of t h e s e wound up t a k i n g g r e a t e r autonomy, but s t i l l w i t h i n the c o n t e x t o f t h e I n t e r n a t i o n a l , Many o f the f i n a n c i a l a r r a n g e -ments w h i c h p r e v i o u s l y made th e branch p l a n t u n i o n s e x t r e m e l y dependent on the i n t e r n a t i o n a l s were a l t e r e d t o p r o v i d e i n c r e a s e d f i n a n c i a l autonomy. T h i s r e s u l t e d i n more independent p o l i c y p o s i t i o n s , For example, the Canadian s e c t i o n o f t h e S t e e l w o r k e r s r e f u s e d t o c o n s i d e r the i n t e r n a t i o n a l p r e s i d e n t ' s 74. n o - s t r i k e commitment. Whi le the d i r e c t i o n towards autonomy has met w i t h approval from former c r i t i c s , the extent has been q u e s t i o n e d , Canadian u n i o n i s t s are wary of arrangements such as those made by the S t e e l w o r k e r s ' U.S. parent which r e q u i r e no membership r a t i f i c a t i o n of some c o n t r a c t s , The " C a n a d i a n i s a t i o n " of the i n t e r n a t i o n a l unions w i t h i n the CLC i s r e l a t i v e l y recent and i t remains to be seen whether the long term e f f e c t of these changes w i l l be to s t rengthen the labour c e n t r a l , U n t i l r e c e n t l y , however, the power in the Canadian labour movement has res ted w i t h i n the l a r g e r a f f i l i a t e s , U n t i l the format ion in the 1960's of the p u b l i c s e r v i c e s e c t o r u n i o n s , these l a r g e r a f f i l i a t e s were almost e x c l u s i v e l y i n t e r n a t i o n a l un ions , It has been noted a l ready that the Economic Counci l of Canada had doubted the e f f e c t i v e n e s s of an incomes p o l i c y because of the lack of s t rong i n t e r m e d i a r i e s in both labour and management o r g a n i s a t i o n s . In the face of v o l u n t a r y c o n s t r a i n t program, the weakness at the cent re of the CLC may have been b e n e f i c i a l , Co-opt [on of CLC leaders would have been r e l a t i v e l y mean-i n g l e s s when the rea l power in the labour movement lay e lsewhere , |n response to a l e g i s l a t e d incomes p o l i c y , as was the case w i t h wage -p r i ce c o n t r o l s , the s t r u c t u r e of the labour movement becomes a rea l problem, Wage and p r i c e c o n t r o l s demanded a s t rong response from the CLC, Th is was not for thcoming because of the near feudal s t r u c t u r e of the labour movement, In a d d i t i o n to s t r u c t u r a l reasons , the t r a d i t i o n a l n o n - p o l i t i c a l p r a c t i c e of the labour movement c o n t r i b u t e d to the lack of response to the c o n t r o l s . , program, Having r e l i e d on the NDP, as i t s p o l i t i c a l arm, the CLC had encour -aged l i t t l e p o l i t i c a l educat ion among i t s own membership, From 1966 o n , the government had been c o n s i d e r i n g an incomes p o l i c y . During that t i m e , the CLC had f a i l e d to conduct a campaign w i t h i t s membership to educate them on the i ssues invo lved should an incomes p o l i c y be i n t r o d u c e d , A f t e r the f a i l u r e 75. o f the P r i c e s and Incomes Commis s ion , the government had i n c r e a s i n g l y blamed 34 l a b o u r f o r h i gh unemployment and i n f l a t i o n by e s c a l a t i n g wage demands. The CLC had done l i t t l e to combat t h i s v i e w p o i n t a n d , as a r e s u l t , a s i g n i f -i c a n t p o r t i o n o f i t s membership b e l i e v e d t h a t the g o v e r n m e n t ' s c l a i m s were c o r r e c t . . Wi th i t s own membership d i v i d e d and c o n f u s e d on the i s s u e s at s t a k e , i t i s not s u r p r i s i n g t h a t the immediate re sponse o f the CLC went no f u r t h e r than a v e r b a l p r o t e s t and w i thd rawa l f rom government a d v i s o r y boards such as the Economic C o u n c i l o f Canada, Subsequent CLC a c t i o n s f a i l e d to c l a r i f y t h i s s i t u a t i o n a n d , in f a c t , s e r v e d to c o n f u s e . C o n t r o l s and " L a b o u r ' s M a n i f e s t o f o r Canada " W a g e - p r i c e c o n t r o l s were i n t r o d u c e d in m i d - O c t o b e r , 1975, A s i d e f rom w i thd rawa l f rom government a d v i s o r y b o a r d s , t h e r e was no f u r t h e r a c t i o n p lanned u n t i l March 1976 when a p r o t e s t d e m o n s t r a t i o n was c a l l e d f o r P a r l i a -ment H i l l . The next CLC c o n v e n t i o n was s c h e d u l e d f o r May 1976 and i t would be then t h a t a l t e r n a t i v e c o u r s e s o f a c t i o n would be c o n s i d e r e d , B e f o r e t h a t o c c u r r e d , Pr ime M i n i s t e r T r u d e a u , in h i s 1976 New Y e a r ' s a d d r e s s , p r e s e n t e d l abour w i t h a new s e t o f p rob lems , T r u d e a u ' s message was t h a t Canad ians were l i v i n g beyond t h e i r means: Canada ' s i n t e r n a t i o n a l t r a d e s i t u a t i o n was t h r e a t -ened due to h i gh l a b o u r c o s t s ; OPEC's p r i c e i n c r e a s e s f o r o i l had s e r i o u s l y t h r e a t e n e d a l l wes te rn c o u n t r i e s and Canada was no e x c e p t i o n . W a g e - p r i c e c o n t r o l s , he s a i d , had had to be i n t r o d u c e d to p r o v i d e a c o o l i n g - o u t p e r i o d d u r i n g which a l t e r n a t i v e s c o u l d be c o n s i d e r e d , The a l t e r n a t i v e Trudeau p r e s e n t e d as a s o l u t i o n was t r i p a r t i s m , T h i s would b r i n g about an e f f e c t i v e sense o f shared r e s p o n s i b i l i t y and mutual dependence on the p a r t o f a l l Cana-d i a n s , T rudeau q u e s t i o n e d the i m p e r a t i v e o f economic growth and sugges ted t h a t the f r e e , m a r k e t was outmoded and needed to be r e p l a c e d by economic p l a n -n ing conduc ted j o i n t l y bu b u s i n e s s , government and l a b o u r , Wi th the se new 76. s t r u c t u r e s in p l a c e , c o n t r o l s would not be n e c e s s a r y . T h i s l a s t p o i n t c o u l d be i n t e r p r e t e d as meaning t h a t the removal o f c o n t r o l s was c o n d i t i o n a l , depend ing on a p o s i t i v e re sponse to the t r i p a r t i t e p r o p o s a l , T r u d e a u ' s speech was w i d e l y seen as an a t tempt t o p l a c a t e l a b o u r . The q u e s t i o n i n g o f the c u r r e n t v a l u e o f the f r e e market and the p r o p o s a l f o r economic p l a n n i n g were v iewed as t h r e a t s to the p r i v a t e c o n t r o l o f the e c o n -omy by c a p i t a l . But t h e s e comments d i d not go a l o t f u r t h e r than Dwight E i s e n h o w e r ' s musings about the c o n t r o l e x e r t e d o v e r the Amer i can economy by the m i l i t a r y - i n d u s t r i a l complex. And l a b o u r c o n t i n u e d t o be i d e n t i f i e d as one o f the main s o u r c e s o f i n f l a t i o n a r y p r e s s u r e , W h i l e economic growth was q u e s t i o n e d , t h e r e i s l i t t l e r e l a t i o n between c o r p o r a t e p r o f i t and economic 35 g rowth , T rudeau was a t t e m p t i n g to p l a c e the government in the r o l e o f n e u t r a l a r b i t e r in the s t r u g g l e f o r sha re s o f n a t i o n a l income a c c r u i n g to wages and p r o f i t s , He p o r t r a y e d the government as a c t i n g in the n a t i o n a l 36 i n t e r e s t o v e r and above s p e c i f i c c l a s s i n t e r e s t s . T h i s i s what c o u l d be e x p e c t e d t o o c c u r from the e a r l i e r o u t l i n e o f the r o l e o f " the s t a t e in c a p i t a l 1st s o c i e t y , The g o v e r n m e n t ' s p o s i t i o n , as e x p r e s s e d in T r u d e a u ' s New Y e a r ' s a d d r e s s , p r e s e n t e d the CLC w i t h a new se t o f p rob lems , No p o l i c y r e s p o n s e , e x c e p t the e x p r e s s i o n o f o p p o s i t i o n , had y e t been made to w a g e - p r i c e c o n t r o l s and no a c t i o n had been taken t h a t i n v o l v e d CLC membersh ip. F u r t h e r m o r e , a s i g n i f i -c an t p o r t i o n o f the CLC membership would have found T r u d e a u ' s speech c o n v i n c r . i n g . For t h i s s i t u a t i o n , the CLC had o n l y i t s e l f t o blame in t h a t i t had f a i l e d to i n i t i a t e a p o l i t i c a l e d u c a t i o n program among i t s membership d u r i n g the p r e c e d i n g decade , F i n a l l y , the CLC c o u l d not i gno re the t r i p a r t i t e p r o p -o s a l , O p p o s i t i o n to c o n t r o l s w i t h o u t a re sponse to t r i p a r t i s m would p l a c e the CLC jn a v e r y n e g a t i v e p o s i t i o n . A re sponse to T r u d e a u ' s p r o p o s a l had t o 77. be a c l e a r a l t e r n a t i v e and t h i s demanded the k i n d o f p o l i t i c a l re sponse t h a t j the CLC had t r a d i t i o n a l l y l e f t t o the NDP as i t s " p o l i t i c a l a r m " , The f a i l u r e o f the CLC to d e v e l o p a p o l i t i c s o f i t s own was now c o s t i n g the o r g a n i s a t i o n d e a r l y . When i t was p r e s e n t e d in May to the CLC C o n v e n t i o n , L a b o u r ' s M a n i f e s t o f o r Canada showed a l l the weaknesses and l a c k o f c o h e r e n c e 37 and c l a r i t y t h a t one might e x p e c t in such a s i t u a t i o n , The Man j f e s t o i n d i c a t e s s u b s t a n t i a l agreement w i t h the gove rnment ' s a n a l y s i s o f the p r e - c o n t r o l p e r i o d . It a g rees t h a t a d i r e c t r e t u r n to the s t a t u s quo i s not the bes t a l t e r n a t i v e : "The economic prob lem has to be s o l v e d ; the economic, sys tem has to be managed more e f f e c t i v e l y ; some measure o f p r i v a t e d e c i s i o n - m a k i n g power has t o be taken o v e r by g o v e r n m e n t , " The absence o f a d e t a i l e d c r i t i q u e o f the g o v e r n m e n t ' s economic p o l i c i e s in the p e r i o d l e a d i n g up t o c o n t r o l s l e a v e s one w i t h the i m p r e s s i o n t h a t the M a n i f e s t o w r i t e r s a g ree t h a t some such a c t i o n as c o n t r o l s was, in f a c t , n e c e s s a r y . If t h i s was not the c a s e , then the Man j f e s t o shou ld have i n d i c a t e d what e x a c t l y the " economic p r o b l e m " was, and how l a b o u r ' s v iew o f i t d i f f e r e d from the g o v e r n m e n t ' s . The f o u r t e e n page M a n i f e s t o c o n c e n t r a t e s on s p e c i f y i n g c o n d i t i o n s f o r l a b o u r ' s p a r t i c i p a t i o n in t r i p a r t i s m , It i s s t a t e d t h a t t h e r e can be f o u r p o s s i b l e outcomes f o l l o w i n g c o n t r o l s and T r u d e a u ' s s p e e c h : 1, That Trudeau has r e d i s c o v e r e d h i s y o u t h f u l r e fo rm i sm and has d e c i d e d to use h i s power to " b u i l d a more e q u i t a b l e and p l anned s o c i e t y " , A l t h o u g h t h i s i s r e j e c t e d as the l e a s t l i k e l y outcome ("You d o n ' t draw o r g a n i s e d l abour i n t o a new p o l i t i c a l a l l i a n c e by a t t a c k i n g the v e r y b a s i s o f i t s e x i s t e n c e " ) , the f a c t t h a t i t i s even c o n s i d e r e d i s i n t e r e s t i n g , 2, A form o f " l i b e r a l c o r p o r a t i s m " : " s y s t e m a t i s i n g the p r e s e n t s u b s t a n t i a l but f ragmented a s s i s t a n c e p r o v i d e d to i n d u s t r y by g o v e r n m e n t " , wh ich i s 78, i d e n t i f i e d as the gove rnment ' s p r o b a b l e i n t e n t , 3, A s t r a i g h t r e t u r n to the p r e c o n t r o l p e r i o d , wh ich i s d i s m i s s e d as u n i i k e l y . k. The government w i shes to move out o f c o n t r o l s in such a way t h a t " o r g a n i s e d l abour i s not a b l e t o r e c o v e r the l o s s e s i n c u r r e d in the 39 c o n t r o l p e r i o d " , wh ich i s i d e n t i f i e d as the most l i k e l y outcome. The M a n i f e s t o o p t s f o r t r i p a r t i s m in o r d e r to b r i n g about the f o l l o w i n g o b j e c t i v e s : " D i r e c t inves tment to c r e a t i n g j o b s in s econda ry m a n u f a c t u r i n g and }n the r e g i o n s where they a r e most needed; Ensure t h a t the r e s o u r c e s a r e a v a i l a b l e to meet b a s i c needs such as h o u s i n g ; Implement a programme o f n a t i o n a l manpower p l a n n i n g ; P l an f u t u r e urban growth and p r o t e c t land f o r food p r o d u c t i o n ; N e g o t i a t e the d i s t r i b u t i o n o f our n a t i o n a l income on an e q u i t -a b l e b a s i s ; Deve lop a n a t i o n a l t r a n s p o r t a t i o n p o l i c y wh ich would complement a n a t i o n a l i n d u s t r i a l s t r a t e g y ; Implement a s o c i a l s e c u r i t y and h e a l t h s e r v i c e s system which would a p p l y e q u a l l y t o a l l C a n a d i a n s ; E s t a b l i s h our n a t i o n a l s o c i a l and economic p o l i c i e s . " I t ,seems c l e a r t h a t the Man j f e s t o wr i t e r s a r e f l e s h i n g out p o i n t one o f the f o u r p o s s i b l e i n t e r p r e t a t i o n s o f T r u d e a u ' s s p e e c h . The o b j e c t i v e s l i s t e d above read v e r y much l i k e a L i b e r a l P a r t y campaign p l a t f o r m . The C L C ' s p r e -o c c u p a t i o n w i t h "what Trudeau: .means" seems to i n d i c a t e t h a t t h e i r c o o p e r a t i o n can be had. Any d i f f e r e n c e s between the M a n i f e s t o and the government p o s i t i o n o u t l i n e d in the g reen p a p e r , Agenda f o r C o - o p e r a t i o n (see below) seems to be q u a n t i t a t i v e r a t h e r than q u a l i t a t i v e : more economic p l a n n i n g , more e q u i t a b l e income d i s t r i b u t i o n , more h o u s i n g , more j o b s , more s o c i a l s e r v i c e s . W h i l e the government may not be w i l l i n g o r a b l e to meet t he se demands, t h e r e i s n o t h i n g here t h a t would not be ag reed to in p r i n c i p l e . The main re sponse to wage c o n t r o l s was a t t a c h e d to the M a n i f e s t o in the form o f a r e s o l u t i o n a l l o w -ing the CLC e x e c u t i v e c o u n c i l to c a l l f o r a one -day g e n e r a l work s toppage as 79, a day o f p r o t e s t . W h i l e i t may have been s i g n i f i c a n t t h a t , f o r the f i r s t t i m e , the l a b o u r movement responded w i t h someth ing a p p r o a c h i n g a p o l i t i c a l programme and approved o f a n a t i o n a l s t r i k e a c t i o n , i t was a l s o c l e a r t h a t the re sponse was s t i l l w i t h i n the c o n f i n e s o f l i b e r a l d e m o c r a t i c c a p i t a l i s m as a system which re fo rm c o u l d p e r f e c t . L a b o u r , as r e p r e s e n t e d by the CLC, s t a t e d t h e i r o b j e c -t i v e as s t r i v i n g f o r a n a t i o n a l consensus w j t h government and b u s i n e s s in the i n t e r e s t o f the c o l l e c t i v i t y . In such a f ramework, i t would s i m p l y be a m a t t e r o f n e g o t i a t i o n t h a t would d e t e r m i n e how much l a b o u r can g e t ; " L a b o u r has a lways se t the p r i c e a t wh ich i t would s u p p o r t the sy s tem, At the l o c a l o r p l a n t l e v e l , l a b o u r , th rough c o l l e c t i v e b a r g a i n i n g , n e g o t i a t e s t h e . p r i c e a t wh ich i t a g rees t o s u p p o r t the p l a n t e n t e r p r i s e . At the n a t i o n a l l e v e l the p r i c e o f l a b o u r ' s s u p p o r t has been l e g i s l a t i v e measures in the f i e l d o f s o c i a l s e c u r i t y , , , The p r i c e o f l a b o u r ' s s u p p o r t in the f u t u r e must be an equa l sha re in the economic and s o c i a l d e c i s i o n - m a k i n g on a n a t i o n a l b a -• •  si 'sr • w i t h o t h e r p a r t n e r s - - b u s i ness and government , , , The game i s dangerous but the s t a k e s a r e h i g h . It i s not r e a l l y a q u e s t i o n o f " c o - o p e r a t i n g " w i t h the government ^ but one o f s t r e n g t h and b a r g a i n i n g a b i l i t y , " It i s easy t o see why the CLC adop t s t h i s a n a l o g y , The p r i m a r y t a s k o f a t r a d e un ion i s to n e g o t i a t e a c o n t r a c t r e p r e s e n t i n g the worker s in a p a r t -i c u l a r p l a n t . It i s q u e s t i o n a b l e whether the ana logy h o l d s at a n a t i o n a l p o l i t i c a l d e c i s i o n - m a k i n g l e v e l . At the p l a n t l e v e l , l a b o u r n e g o t i a t e s t o r e p r e s e n t workers in a s p e c i f i c system ( c a p i t a l i s m ) and in the c o n t e x t o f a body o f l a b o u r l e g i s l a t i o n which i s t aken as a g i v e n , |n n e g o t i a t i n g w i t h the government , l a b o u r would soon f i n d t h a t i t was s t i l l o p e r a t i n g w i t h . c e r t a i n g i v e n s not s u b j e c t t o n e g o t i a t i o n , A l t h o u g h s t a t e d v e r y m i l d l y , the H a n i f e s t o op t s f o r many re forms which would r e s u l t in a t r a n s f e r o f power, L a b o u r ' s M a n i f e s t o c a l l s f o r s o c i a l democracy ( p r e - c o n v e n t i o n d r a f t s used the word s o c i a l i s m ) by which they mean a system t h a t c o n s i d e r a b l y reduces s o c i a l . 80. and economic i n e q u a l i t y . Th is k ind of system could be perce ived as a th rea t to the p r i v a t e d e c i s i o n - m a k i n g power of c o r p o r a t i o n s , |n s t a t i n g that the Man j f e s t o 1 s o b j e c t i v e s could be obta ined by s t r e n g t h and b a r g a i n i n g a b i l i t y , the CLC i s assuming that Mr, Trudeau and h i s c o l l e a g u e s were prepared and a b l e to n e g o t i a t e fundamental re forms. The CLC s t a t e s as an u n l i k e l y outcome of the t r i p a r t i t e proposal that perhaps "Trudeau has red iscovered h i s youth fu l reformism" but they s t a t e the most l i k e l y outcome of wage c o n t r o l s would be a d i r e c t loss to labour : "Organised labour is not ab le to recover the losses incur red in the c o n t r o l p e r i o d , " The Man j f e s t o then o u t l i n e s a course of a c t i o n and a proposal that i s almost t o t a l l y in response to the f i r s t outcome a l ready i d e n t i f i e d as u n l i k e l y . The Man j f e s t o v i r t u a l l y ignores what would happen in the event that the most l i k e l y outcome would occur and f a i l e d to suggest a course of a c t i o n s u i t e d to i t . The M a n i f e s t o was p r i m a r i l y a s c e n a r i o developed from w i s h f u l t h i n k i n g p ro jec ted onto the government leader (h i s youth fu l reformism) ra ther than a c t u a l government p o l i c y as represented by c o n t r o l s , The CLC accepted an incomes p o l i c y in the f u t u r e , in the context of t r i p a r t i s m , w i t h -out e f f e c t i v e l y responding to the one fo rced on labour by compulsory wage-p r i c e c o n t r o l s , To a great e x t e n t , t h i s cou ld be expected , g iven the h i s t o r -i c a l and s t r u c t u r a l background d i s c u s s e d e a r l i e r , but the M a n i f e s t o f a i l e d to move beyond these c o n s t r a i n t s by p r o v i d i n g the foundat ion f o r an e f f e c t i v e p o l i t i c a l educat ion programme f o r the labour movement, The Contro l Per iod In the year f o l l o w i n g the p u b l i c a t i o n of Labour 's M a n i f e s t o f o r Canada, any idea that the CLC had e n t e r t a i n e d of a c t u a l l y e s t a b l i s h i n g a t r i p a r t i t e system e f f e c t i v e l y d i sappeared . The government issued two p o l i c y papers dur ing t h i s p e r i o d : The Way Ahead in October 1976, and Agenda f o r Co -operat jon 8 1 . in May 1977. If the r e p r e s e n t a t i v e s of c a p i t a l had been wor r ied that Trudeau had in f a c t red iscovered h i s y o u t h f u l re fo rmism, they could f e e l reassured by these two documents. In Agenda f o r C o - o p e r a t i o n , the government makes the f o l l o w i n g argument: "We have, w i t h i n Canada, the a b i l i t y and the o p p o r t u n i t y to ach ieve economic progress w i t h less i n f l a t i o n . What i s r e q -u i r e d is not on ly good p o l i c y from governments, but an e f f e c t i v e sense of shared r e s p o n s i b i l i t y on the par t of a l l ^ Canad i a n s . " The idea of shared r e s p o n s i b i l i t y , c o n s i s t e n t l y repeated in both government papers , i s in d i r e c t o p p o s i t i o n to the ways in which market economies have t r a d i t i o n a l l y been understood to f u n c t i o n , |n a market system, i n d i v i d u a l s and/or groups m e e t ! i n the marketplace to buy and s e l l goods or labour and attempt to maximise income or p r o f i t . The e x t o l l i n g of the v i r t u e s of the market economy are as conspicuous in both Agenda and The Way Ahead as are the appeals f o r r e s p o n s i b l e behaviour on the par t of c a p i t a l and labour w i t h i n t h i s same market system. The quest ion becomes: who does the government wish to be more r e s p o n s i b l e and whose behaviour i s the government at tempt ing to modify in f o r m u l a t i n g the p o l i c i e s conta ined in the two papers? Al though the green paper Agenda fo r C o - o p e r a t i o n s t a t e d that b u s i n e s s , labour and governments must a l l develop a sense of shared r e s p o n s i b i l i t y , i t was labour which was p e r s i s t e n t l y i d e n t i f i e d as the major th rea t to p r i c e s t a b i l i t y and the re tu rn to high rates of i n f l a t i o n in the p o s t - c o n t r o l p e r i o d , Th is marked a c o n t i n u a t i o n of the government's p o s i t i o n in the p r e - c o n t r o l p e r i o d : That r i s i n g wages were the main fue l in the economy f o r i n f l a t i o n . Should labour not modify its:position, the green paper suggests an i n d e f i n i t e ex tens ion of wage c o n t r o l s : "But i f we are to avo id much more d i r e c t government i n t e r v e n -t i o n on. a r e g u l a r bas i s in a l l spheres of economic a c t i v i t y , i n d i v i d u a l s and groups must share the wider r e s p o n s i b i l i t y f o r t h e i r a c t i ; i o n s , " 82, In p lace of a t r i p a r t i t e d e c i s i o n - m a k i n g body, the proposal in Agenda suggests a m u l t i - p a r t i t e , n o n - d e c i s i o n - m a k i n g c o n s u l t a t i v e forum in which labour would be in a m i n o r i t y p o s i t i o n : " P a r t i c i p a n t s would be chosen to r e f l e c t the view of business. , l a b o u r , f a r m e r s , f i s h e r m e n , consumers, p r o f e s s i o n a l s , c o - ^ o p e r a t i v e s , and perhaps o t h e r s , " The r o l e of t h i s group would be pure ly a d v i s o r y w i t h respect to government but h o p e f u l l y modify the economic behaviour of the p a r t i c i p a t i n g groups: "The government would not expect, any ' f i n a l c o n c l u s i o n s or repor ts , , , to emerge , , , a l though i n d i v i d u a l members would be expected to communicate t h e i r own percept ions and i n -s i g h t s to t h e i r r e s p e c t i v e c o l l e a g u e s . . . D i s c u s s i o n s in the c o n s u l t a t i v e forum could be expected to i n f l u e n c e the ^ d e c i s i o n s of the v a r i o u s p a r t i c i p a n t s , " The c o n s u l t a t i v e forum could d i s c u s s as f r e e l y as i t wished but the govern -ment would be e q u a l l y f r e e to f o l l o w a p o l i c y of i t s own independent c h o i c e . Such a forum, however, could g i ve an appearance that p a r t i c i p a t i n g groups had a c t u a l l y had a hand in f o r m u l a t i n g p o l i c y . Th is cou ld e i t h e r g i ve p o l i c i e s a c e r t a i n l e g i t i m a t i o n they might not o r d i n a r i l y have or produce a great deal of d i s t r u s t among the memberships of p a r t i c i p a t i n g groups of t h e i r own l e a d e r s h i p s . Agenda f o r C o - o p e r a t i o n was re leased one year a f t e r Labour ' s Man i fes to  f o r Canada, and s i x months a f t e r the one-day general s t r i k e c a l l e d by the CLC, The p r o t e s t s t r i k e had o b v i o u s l y been i n e f f e c t i v e in c o n v i n c i n g the govern -ment of l a b o u r ' s s t r e n g t h . The response to the s t r i k e c a l l had been uneven and there had been no f o l l o w - u p a c t i o n to i t . The proposa ls conta ined in Agenda withdrew any rea l power o f f e r e d to labour in Trudeau's New Y e a r ' s address . It was a c l e a r r e j e c t i o n of t r i p a r t i s m and of the Man j f e s t o . The m u l t i p a r t i t e c o n s u l t a t i v e group w i t h v a r i o u s economic i n t e r e s t - g r o u p s having r e p r e s e n t a t i o n seems to be more in the d i r e c t i o n of "a k ind of l i b e r a l c o r p o r a t i s m " which the Man i fes to had warned a g a i n s t as the government's 8 3 . probable i n t e n t . If Agenda was f t h e response to the CLC's Man j f e s t o , as par t of a negot -i a t i o n process w i t h the government, then i t must be concluded that e i t h e r the CLC was f a r weaker than i t was g e n e r a l l y thought to be or the n e g o t i a t i o n analogy employed by the M a n i f e s t o w r i t e r s was f a l s e . The f a c t i o n w i t h i n the CLC which had s t r o n g l y supported the t r i p a r t i t e proposal responded to Agenda by say ing that the government had not been s e r i o u s about the o r i g i n a l p rop -46 osa l of t r i p a r t i s m . Th is was an odd response in that the Man j f e s t o had s t a t e d that the government, in a l l l i k e l i h o o d , was not s e r i o u s . In 1977, a long w i t h severa l major a f f i l i a t e u n i o n s , the Saskatchewan and B.C. Federa -t i o n s of Labour withdrew support f o r t r i p a r t i s m . F i n a l l y , at i t s May 1978 c o n v e n t i o n , the CLC o f f i c i a l l y repudiated t r i p a r t i s m . By that t i m e , the two-year mandatory wage -p r i ce c o n t r o l s program was over , During c o n t r o l s , the government issued two documents r e l a t i n g s p e c i f i -c a l l y to the p o s t - c o n t r o l s p e r i o d . The proposals conta ined in The Way Ahead and in Agenda f o r C o - o p e r a t i o n would have r e s u l t e d in f u r t h e r i n t e g r a t i n g labour i n t o the c a p i t a l i s t system, The main t h r u s t of these p o l i c y proposals was to invo l ve labour in i t s own e x p l o i t a t i o n through such s t r u c t u r e s as c o n s u l t a t i v e forums, government a d v i s o r y task f o r c e s , a c o l l e c t i v e b a r g a i n i n g in fo rmat ion cent re (suspected by labour of e v e n t u a l l y s w i t c h i n g from i n f p r -47 mation ga ther ing to e s t a b l i s h i n g b a r g a i n i n g t a r g e t s ) , changes in labour l e g i s l a t i o n to o f f e r more p r o t e c t i o n to the unorgan ised , government mediated 1 abour'-management r e l a t i o n s on an ongoing b a s i s at the p l a n t l e v e l and 48 plans to monitor p r i c e s f o r an open-ended per iod of t i m e . Th is would r e s u l t in a great expansion of the r o l e of government in the d e t a i l e d f u n c -t i o n i n g of the economy, The ob jec t of t h i s k ind of p lann ing i s to produce a more e f f i c i e n t 84, c a p i t a l i s t o p e r a t i o n w i t h a more d o c i l e and i n t e g r a t e d l a b o u r f o r c e . Labour r e p r e s e n t a t i v e s who p a r t i c i p a t e in p l a n n i n g and a d v i s i n g the government c o u l d c o n c e i v a b l y be p l a c e d in the p o s i t i o n o f e x p l a i n i n g government o r c o r p o r a t i o n p o l i c y t o r e c a l c i t r a n t work f o r c e s . Union l e a d e r s h i p c o u l d be s p l i t f rom i t s base by be ing p e r c e i v e d as an e x t e n s i o n o f e i t h e r management o r government . These p o l i c i e s would a l s o c r e a t e co rp s o f i n t e r m e d i a r i e s wh ich the Economic C o u n c i l o f Canada had found l a c k i n g in the l abour movement when t h a t body had c o n s i d e r e d incomes p o l i c y in i t s 1966 Annual R e p o r t . P a r t i c i p a t i n g in t he se k ind s o f programs, the CLC and the t r a d e un ions would be t r a n s f o r m e d from o r g a n i s a t i o n s r e p r e s e n t i n g worker s and d e f e n d i n g t h e i r r i g h t s i n t o o r g a n i s a -t i o n s o f c o n t r o l and s u r v e i l l a n c e , The C L C ' s re sponse to t he se p r o p o s a l s a t i t s May 1978 c o n v e n t i o n was c o n t a i n e d in the r e j e c t i o n f o the Man j f e s t o o f two y e a r s b e f o r e , Union members were aware o f how d r a s t i c a l l y t h e i r o r g a n i s a t i o n s would be changed i f the Agenda p r o p o s a l s were f o l l o w e d , However, in examin ing the two documents , A g e n d a - f o r C o - o p e r a t i o n i s not an u n r e a s o n a b l e re sponse to the Man j f e s t o , T h i s i s a n o t h e r i n d i c a t i o n o f how geat a m i s r e a d i n g o f the p o l i t i c a l s i t u a t i o n the M a n i f e s t o w r i t e r s had made. The 1978 CLC c o n v e n t i o n emerged w i t h a n o t h e r se t o f recommendat ions but 49 these were aimed not a t the government but a t i t s own membersh ip. A l t h o u g h the NDP was s t i l l endor sed as the " p o l i t i c a l arm o f l a b o u r " , the CLC v o t e d t o e s t a b l i s h i t s own p o l i t i c a l network f o r the coming f e d e r a l e l e c t i o n . T h i s p o l i t i c a l network would e x i s t not j u s t a t e l e c t i o n t ime but p r o v i d e a means o f m o b i l i s i n g the CLC membership a round s p e c i f i c i s s u e s o f c o n c e r n to t r a d e u n i o n i s t s on an ongo ing b a s i s . It would a l s o p r o v i d e a means o f p o l i t i c a l e d u c a t i o n f o r un ion membership which p r e v i o u s l y had not e x i s t e d , T h i s p l a n would a l l o w the un ion movement to e x p r e s s i t s own p o l i t i c a l d i r e c t i o n , 85, independent of a p o l i t i c a l p a r t y , ! t was recognised at the convent ion that t h i s would be e s s e n t i a l in f o r m u l a t i n g a more coherent response to govern -ment proposals in the f u t u r e , It would a l s o ensure that there would be rank and f i l e support f o r CLC p o s i t i o n s provided the necessary educat iona l work was c a r r i e d o u t . C a p i t a l R e s t r u c t u r a t i o n ; The Royal Commission on Corporate Concent ra t ion In the Spr ing of 1975, the government appointed the Royal Commission on Corporate C o n c e n t r a t i o n , I ts work was c a r r i e d out dur ing the w a g e - p r i c e c o n t r o l s per iod and the f i n a l report was issued in 1978 immediately a f t e r the e x p i r a t i o n of c o n t r o l s , If c o n t r o l s and the v a r i o u s p o l i c y p roposa ls in the government papers represent an e f f o r t to prov ide a more e f f i c i e n t , i n t e g r a t e d work f o r c e , the Royal Commission can be seen as approaching the same goal f o r c a p i t a l . The Commission's terms of re ference would seem to i n d i c a t e that the government f e l t that increased c o n c e n t r a t i o n may not have been in the p u b l i c i n t e r e s t . The Commission was asked ; "To i n q u i r e i n t o , report upon, and make recommendations concern i ng; a) the nature and r o l e of major c o n c e n t r a t i o n s of co rporate power in Canada; b) the economic and s o c i a l i m p l i c a t i o n s fo r the p u b l i c i n t e r e s t of such c o n c e n t r a t i o n s ; and c) whether safeguards e x i s t o r may be requ i red to p r o -t e c t the p u b l i c i n t e r e s t in the face of such concen-t r a t i o n s . " The terms of re ference f a i l to d e f i n e what is meant by the " p u b l i c i n t e r e s t " , George Radwanski , in h i s a r t i c l e in P e r s p e c t i v e s on the Royal Commission on Corporate C o n c e n t r a t i o n , s t a t e s that the report i s : a document that so t o t a l l y adopts the co rpora te v iew -po in t as i t s own in purpor ted l y c o n s i d e r i n g the p u b l i c i n t e r e s t that one repor te r a p t l y desc r ibed i t as reading ^ ' l i k e a w o l f ' s report on sheep w e l f a r e ' , " The main c o n c l u s i o n s of the repor t j u s t i f y " the present h i g h l y concentra 86. t e d i n d u s t r i a l s t r u c t u r e of Canada" and advances "... the p r o p o s i t i o n t h a t s i z e per se i s b e n e f i c i a l and a n y t h i n g o t h e r than 'world s c a l e ' i s economi-52 c a l l y i n e f f e c t u a l . " R a t h e r than q u e s t i o n p r e s e n t c o n c e n t r a t i o n , the r e p o r t s u g g e s t s Canadian i n d u s t r y i s not c o n c e n t r a t e d enough t o be c o m p e t i t i v e i n i n t e r n a t i o n a l m a r k e t s . The Report c o n c l u d e s : "... the i n f l u e n c e s t h a t have shaped the Canadian economy have made a h i g h d e c g r e e o f c o n c e n t r a t i o n i n e v i t a b l e . I f changes o c c u r t h e y a r e l i k e l y t o be i n the d i r e c t i o n o f more r a t h e r than l e s s c o n c e n t r a t i o n , c h i e f l y because o f ^ i n t e r n a t i o n a l c o m p e t i t i v e i n f l u e n c e s , " The Report o f t h e Commission perhaps r a i s e d more i s s u e s than i t s o l v e d r e g a r d i n g c o r p o r a t e c o n c e n t r a t i o n and the p u b l i c i n t e r e s t . What i s o f r e l e -vance here i s t h e e v i d e n c e i t p r e s e n t s c o n c e r n i n g r e s t r u c t u r a t i o n o f c a p i t a l . From t h i s p o i n t o f v i e w , one o f two e v e n t s i s o c c u r r i n g . E i t h e r the g o v e r n -ment i s s u g g e s t i n g t h a t more c o n c e n t r a t i o n o f c a p i t a l i s r e q u i r e d and w o r l d -s c a l e f i r m s must be d e v e l o p e d by Canadian c a p i t a l i s t s o r the government i s l e g i t i m i s i n g a p r o c e s s a l r e a d y underway, The f i r s t o f t h e s e a l t e r n a t i v e s would s u g g e s t a much more a g g r e s s i v e r o l e f o r government i n d e t e r m i n i n g p r i v a t e c a p i t a l i s t d e c i s i o n - m a k i n g than e i t h e r M a r x i s t o r l i b e r a l v i e w s would s u p p o r t . The M a r x i s t v i e w would s t a t e t h a t c a u s a l i t y has been r e v e r s e d w h i l e the l i b e r a l would o b j e c t t o the i n f r i n g e m e n t o f p r i v a t e d e c i s i o n - m a k e r s by government. The e v i d e n c e would a l s o s u g g e s t t h a t the government was a t t e m p t -ing t o l e g i t i m i s e r a t h e r than d i r e c t . In the p e r i o d from I960 t o 1975, c o n g l o m e r a t e growth i n Canada as a p e r c e n t a g e o f a s s e t s o f the top two hundred c o r p o r a t i o n s grew from 20% t o 54 57%, These f i g u r e s do not d i s c l o s e the amount o f merger a c t i v i t y between conglomerates- ( i . e . , c o n c e n t r a t i o n i n c r e a s e among c o n g l o m e r a t e s ) , I t was the proposed merger o f two c o n g l o m e r a t e g i a n t s t h a t s p a r k e d the e s t a b l i s h m e n t o f the Royal Commission, In the s p r i n g o f 1975, Power C o r p o r a t i o n a t t e m p t e d a 87. t a k e o v e r o f Argus C o r p o r a t i o n , T h i s would have: reduced Canada ' s a l r e a d y s c a n t number o f major c o n c e n -t r a t i o n s o f w e a l t h a v a i l a b l e f o r d i r e c t inves tment in i n d u s t r y from f o u r — t h e o t h e r two be ing Canad ian P a c i f i c Investments L t d , and the Canada Development C o r p o r a t i o n - -to o n l y t h r e e . " When he was asked t o comment on the p roposed m e r g e r , Pr ime M i n i s t e r T rudeau sa i d : "Hav ing looked around a g r e a t dea l w i t h i n the government , I f i n d t h a t we d o n ' t have any economic t o o l s t o s t op such a t a k e o v e r , and more impor tan t we d o n ' t even know i f such ^ a t a k e o v e r Is or i s not in the p u b l i c i n t e r e s t . " W h i l e the s p e c i f i c t a k e o v e r ment ioned above f e l l th rough f o r reasons u n r e l a t e d to government , the government f e l t i t n e c e s s a r y to e s t a b l i s h a p o s i t i o n on c o n c e n t r a t i o n . The Royal Commiss ion responded by j u s t i f y i n g i n c r e a s e d c o n c e n -t r a t i o n o f c a p i t a l as the most e f f i c i e n t method o f c o n d u c t i n g b u s i n e s s and compet ing w i t h g i a n t m u l t i n a t i o n a l s based in o t h e r c o u n t r i e s , The c u r r e n t r e s t r u c t u r a t i o n o f c a p t a l r e s u l t i n g in g r e a t l y i n c r e a s e d c o n c e n t r a t i o n r e q u i r e s m o d i f i c a t i o n s in the n a t u r e and s t r u c t u r e o f the l a b o u r f o r c e and o f i n d u s t r i a l r e l a t i o n s in o r d e r to o p e r a t e most e f f i c i e n t l y , W h i l e the e s t a b l i s h m e n t o f an incomes p o l i c y i s a d i r e c t a t tempt to t r a n s f e r n a t i o n a l Income from wages and s a l a r i e s t o p r o f i t s , the k i n d s o f s t r u c t u r e s sugges ted in the t r i p a r t i t e p r o p o s a l s and the government papers aim at c r e a t i n g a more e f f i c i e n t and e x p l o i t a b l e work f o r c e f o r a more c o n c e n t r a t e d c a p i t a l i s t economic s y s tem, T h i s i s f o r c i n g new k i n d s o f r e sponse s from the t r a d e un ions in which the un ions a r e hav ing t o r e a c t t o p o l i t i c a l deve lopments a t a n a t i o n a l l e v e l , W h i l e the b u l k o f t r a d e un ion a c t i v i t y c o n t i n u e s to be a t the p l a n t l e v e l , t h i s new a d d i t i o n o f p o l i t i c s at a n a t i o n a l l e v e l n e c e s -s i t a t e s the deve lopment o f new s t r a t e g i e s and new p o l i c i e s , The decade o f the S e v e n t i e s |n Canada has p l a c e d the t r a d e un ion movement in the n a t i o n a l 88. p o l i t i c a l scene not as a r e s u l t of union a c t i v i t y but because of the c o n -t i n u i n g development of c a p i t a l i s m . Many of the s t r u c t u r e s suggested by t r i p a r t i s m and the government p o s i t i o n papers dur ing the c o n t r o l s p e r i o d , or v a r i a t i o n s on them, are in p lace in some c o u n t r i e s of western Europe, Two of the c o u n t r i e s where these s t r u c t u r e s are q u i t e h i g h l y developed are Sweden ( i n d u s t r i a l democracy) and West Germany ( c o - d e t e r m i n a t i o n ) . These c o u n t r i e s both have a high degree of c a p i t a l c o n c e n t r a t i o n , Both systems r e q u i r e the coopera t ion and involvement of the t rade union movement and, in some c a s e s , such as c o - d e t e r m i n a t i o n , of i n d i v i d u a l workers who become workers ' r e p r e s e n t a t i v e s on managing boards, The Canadian government has sponsored numerous s t u d i e s of the s t r u c t u r e s developed in western Europe s i n c e the mid-1960's (the Economic Counci l of Canada e x t e n s i v e l y s t u d i e d the a p p l i c a t i o n of incomes p o l i c i e s in western Europe in 1965). It i s ev ident from the p o s i t i o n papers of the c o n t r o l per iod that much has been borrowed from the western European models, These European models prov ide one way of managing the k ind of c r i s i s faced by Canadian c a p i t a l i s m in the S e v e n t i e s , |t would appear that t h i s is the model the Canadian government i s a t tempt ing to deve lop , Th is w i l l be d i s c u s s e d f u r t h e r in the f o l l o w i n g , and f i n a l , c h a p t e r , ( 89, CHAPTER IV: FOOTNOTES 1, H.A. Logan, Trade Unions in Canada (Toronto: M a c M i l l a n , 1948) , p. 28, 2 , M a r t i n Rob in , Rad ica l P o l i t i c s and Canadian Labour ( I n d u s t r i a l R e l a t i o n s Cent re , Queen's U n i v e r s i t y , 1968) , p, 68, 3 , I b i d , , p, 23 . 4 , Dav id .Kwavnick , Organised Labour and Pressure P o l i t i c s (McGi11-Queen's U n i v e r s i t y Press^ 1972), 5 , R o b i n , op , c i t , . See f i r s t e i g h t c h a p t e r s , 6, Gad Horowi t z , Canadian Labour and P o l i t i c s (Toronto: U n i v e r s i t y of Toronto P r e s s , 1968), 7, See R o b i n , op, c i t , , Chapter X M , f o r h i s account of the One Big Union, A l s o D,C, M a s t e r s , The Winnipeg General S t r i k e ; Kenneth McNaught, A_ Prophet in P o l i t i c s ; . a n d Jay Bercusson , Fools and Wise Men: The R ise and  F a l l of the One B ig Union, A l s o on the Winnipeg general s t r i k e , an unpubl ished M.A, t h e s i s by Peter W a r r i a n , U n i v e r s i t y of Wate r loo , 8 , Rob in , op, c i t , , Chapter S i x , 9 , Horowi t z , op , c i t , , p, 6 3 , 10, I b i d , 11, I b i d , , pp. 63 - 66 . 12, S tuar to Jamieson , Times of T r o u b l e , 1900 - 66 (Ottawa: Informat ion Canada, 1968), 13, I r v ing Abel l a , N a t i o n a l i s m , Communism and Canadian Labour (Toronto; U n i v e r s i t y of Toronto P r e s s , 1973) , Chapters 1 & 2 , 14, Horowi t z , op, c i t , , pp. 66 - 6 7 , The a n a l y s i s in t h i s paragraph is drawn from Abel l a , Claud in and Horowi t z , The Communist Movement, 15, Fernando C l a u d i n , The Communist Movement: From Comintern to Com inform (London: Pengu i n , 1975). : 16, Horowi t z , op, c i t , , p, 85, 17, Abel l a prov ides the most d e t a i l e d account of the purges ; Horowitz i s a l s o u s e f u 1 , 18, Horowi t z , op , c i t , , p, 7 3 , Horowitz i s quot ing a l e t t e r authored by David Lewis , 19, I b i d , , p, 131, 90, 20. A b e l l a , op. c | t . , Chapter f i v e , 21. H o r o w i t z , op, c i t . 22. Kwavnick, op, c i t , 2 3 . I b i d . , p. 69 . 24. Jamieson, op. c i t , , p, 357. Boulewarism was a management t a c t i c of e n t e r -ing n e g o t i a t i o n s w i t h a f i n a l o f f e r and t e l l i n g the union to take i t or leave i t . If the union refused the o f f e r , management would break o f f n e g o t i a t i o n s and begin a l o c k - o u t . 25 . Kwavnick, op . c i t . , p. 7 1 . 26. I b i d . , p. 6 1 . 27. I b i d . , p. 40, 28. I b i d , , p, 120, 29. In t h e i r Th i rd Annual Review, See previous, c h a p t e r , 30 . The CLC s t a f f f u n c t i o n s , to a la rge e x t e n t , as a p a r a l l e l bureaucracy to government and engaged in d i a l o g u e w i t h government. S t a f f spend a g reat deal of time research ing and responding to government documents, |n a d -d i t i o n , the p r a c t i c e in the CLC and the a f f i l i a t e d unions as w e l l , has been to h i r e s t a f f out of u n i v e r s i t i e s ra ther than from t h e i r membership, Th is prov ides union s t a f f w i t h a s i m i l a r educat iona l background to the o f f i c i a l s in the government bureaucracy , 3 1 . Many Canadian branches of i n t e r n a t i o n a l unions d i d not have separate p o l i c y c o n v e n t i o n s . Given the f a c t that the Canadian branch in most i n t e r n a t i o n -a l s i s in a m i n o r i t y p o s i t i o n , t h i s meant that the p o l i c y of the i n t e r n a t i o n a l i n v a r i a b l y represented the view of American members. An except ion to t h i s i s the |WA which i s almost a reverse c a s e , 32. Cy Gonick , I n f l a t i o n or Depress ion : The Cont inu ing C r i s i s of the Cana- d ian Economy (Toronto: Lorimer and C o , , 1975), p. 382, 33 . Accord ing to N e v i l l e Hamilton of the Canadian Paperworkers Un ion , t h i s proposal was vetoed by the Quebec reg ion of the S tee lworkers who f e l t they would lose autonomy, ra ther than ga in i t , by s e p a r a t i n g from the i n t e r n a t i o n a l , 34. Th is was r e f l e c t e d immediately before the i n t r o d u c t i o n of c o n t r o l s in John T u r n e r ' s f i n a l budget address in 1975: "Turner conceded that l a b o u r ' s share of the n a t i o n a l output had f a l l e n s i g n i f i c a n t l y in the e a r l i e r stages of i n f l a t i o n , "but the balance has been f u l l y r e s t o r e d 1 and he warned once aga in that e f f o r t s to r a i s e l a b u r ' s share of the n a t i o n a l output would not be t o l e r a t e d , |n h i s words, these e f f o r t s are expressed in 'wage and s a l a r y demands ( that ) appear to bear l i t t l e r e l a t i o n s h i p to economic r e a l i t y ' " , Quoted in Gonick , op, c i t , , p, 149, 91. 35, Th is i s p a r t i c u l a r l y t rue f o r the monopoly s e c t o r which cuts p roduct ion ra ther than p r i c e s of i t s products dur ing a r e c e s s i o n , 36, Th is type of appeal to a wider community of i n t e r e s t s is very s i m i l a r to the j u s t i f i c a t i o n s f o r incomes p o l i c y put f o r t h by a success ion of Labour governments in B r i t a i n . For a treatment of t h i s , see P a n i t c h , S o c i a l  Democracy and I n d u s t r i a l M i l i t a n c y : The Labour P a r t y , the Trade Unions  and Incomes P o l i c y , 19^5 - 76 (Cambridge, 1976), 37, There i s a l s o a q u e s t i o n of t a c t i c s which deserves some mention here . The CLC was faced w i t h two separate i s s u e s : wage c o n t r o l s and the t r i -p a r t i t e p r o p o s a l , They chose to respond to these i ssues in one document. It may have been more i n s t r u c t i v e f o r the CLC membership and p o s s i b l e a l l i e s had they responded by s e p a r a t i n g the two i s s u e s , Th is would have e n t a i l e d a m i l i t a n t response to c o n t r o l s o u t l i n i n g l a b o u r ' s economic a n a l y s i s of the preceding per iod and a separate statement c o n t a i n i n g the p o l i t i c a l response to t r i p a r t i s m as a group of issues to be n e g o t i a t e d , 38, Labour 's Man i fes to f o r Canada, Canadian Labour Congress , 1976, p, 6. 39, I b i d , , p. 6, 40, Ib id. , p. 13. 41, I b i d , , p. 10, 42, "Agenda fo r C o o p e r a t i o n " : A d i s c u s s i o n paper on decont ro l and p o s t -c o n t r o l i s s u e s , Prime M i n i s t e r ' s O f f i c e , May 1977, p. 3. 43, I b i d , , p, 13, 44, I b i d , , p, 29, 45, I b i d , , p, 30 - 33. 46, Informat ion provided by N e v i l l e H a m i l t o n , Canadian Paperworkers Un ion , and Peter Warrian, United Stee lworkers of Amer ica , 47, Interv iew w i t h Robert B a l d w i n , CLC, 48, "Agenda f o r C o - o p e r a t i o n " , op, c i t , , pp, 49 - 54, 49, CLC, 1978 Convention P o l i c y Repor ts , 50, P e r s p e c t i v e s on the Royal Commission on Corporate C o n c e n t r a t i o n , Gorecki & Stanbury , eds , (Mont rea l ; I ns t , f o r Research on P u b l i c P o l i c y , 1979), P. x i , 51, I b i d , , p, x i i , 52, I b i d , , p, x i i . 53, | b i d , , p, x i i i . 92. Sh. I b i d . , p. 135. 55 . I b i d , , p. 67 , 56. I b i d , , p, 67. Quoted by Radwanski. 92 a CHAPTER V: CONCLUSION The main t h e o r e t i c a l statement developed in Chapter II was: when c a p i t a l accumulat ion i s i n s u f f i c i e n t f o r the r e s t r u c t u r a t i o n of c a p i t a l , the s t a t e w i l l a c t to promote the t r a n s f e r of income from the working c l a s s to the c a p i t a l i s t c l a s s . In t h i s c h a p t e r , the events o u t l i n e d in Chapters III and IV w i l l be cons idered in r e l a t i o n to the theory . S ince the i n t e g r a t i v e s t a t e i n s t i t u t i o n s which f i t under the t r i p a r t i t e umbre l la have been more f u l l y developed in western Europe, some of these arrangements w i l l be mentioned in terms of t h e i r re levance f o r the Canadian s i t u a t i o n . |n view of the recent adopt ion of t r i p a r t i t e i n s t i t u t i o n s in Canada, some of the comments here are s p e c u l a t i v e in n a t u r e . The r e l a t i o n s h i p between t r i p a r t i t e i n s t i t u t i o n s and incomes p o l i c y w i l l be d i s c u s s e d . F i n a l l y , some i m p l i c a t i o n s f o r the f u t u r e development of the labour movement in Canada w i l l be cons idered as w e l l as some suggest ions f o r f u r t h e r s tudy . Two Leve ls of A n a l y s i s : I n t e r n a t i o n a l and Nat iona l There are two pr imary l e v e l s of a n a l y s i s which are encompassed in the theory developed e a r l i e r . The f i r s t has to do w i t h c a p i t a l i s m as a wor ld system which recognises no n a t i o n a l boundar ies . Th is process has become more apparent s i n c e the end of the Second World War and i s most e a s i l y demonstrated in the massive growth of the m u l t i n a t i o n a l c o r p o r a t i o n . With t h i s d e v e l o p - . : ment, i t would be reasonable to expect an i n c r e a s i n g u n i v e r s a l i t y of economic c o n d i t i o n s and problems throughout the advanced c a p i t a l i s t c o u n t r i e s w i t h the m u l t i n a t i o n a l c o r p o r a t i o n s a c t i n g as a c a r r i e r . The second l e v e l of a n a l y s i s concerns Canada as a n a t i o n a l s t a t e and the s p e c i f i c development of c a p i t a l i s m , s t a t e i n s t i t u t i o n s and the t rade union movement w i t h i n i t , H i s -t o r i c a l development of economic, s o c i a l and p o l i t i c a l systems r e s u l t s in s i g n i f i c a n t d i f f e r e n c e s which can on ly be understood by s tudy ing the p a r t i c -u l a r development of these systems w i t h i n a count ry . The t h e o r e t i c a l framework 93. of Chapter II would prov ide a b a s i s f o r the s p e c i f i c study of incomes p o l i c y and i n t e g r a t i v e s t a t e i n s t i t u t i o n s in advanced c a p i t a l i s t c o u n t r i e s . Th is s e c t i o n w i l l exp lo re these two l e v e l s of a n a l y s i s . With the development of monopoly c a p i t a l i s m , i t w i l l be r e c a l l e d , f a r more s o p h i s t i c a t e d and long- range p lann ing was requ i red than had been needed under c o m p e t i t i v e c a p i t a l i s m . The i n i t i a l stages of t h i s process occur red w i t h i n the framework of n a t i o n a l s t a t e economies. It was pointed out e a r l i e r that both Baran and Sweezy and G a l b r a i t h were in agreement t h a t , f o r the United S t a t e s , the decade of the 1930 ' s was p i v o t a l . From that t i m e , monopoly c a p i t a l i s t s have been the dominant f r a c t i o n of the c a p i t a l i s t c l a s s in the U.S. The p lanning requirements of the monopoly c a p i t a l i s t s n e c e s s i t a t e d an expanded r o l e f o r the s t a t e . Th is expansion of the s t a t e r o l e a l s o helped develop the b a s i s f o r monopoly c a p i t a l i s m to expand to o ther c o u n t r i e s as m u l t i n a t i o n a l c o r p o r a t i o n s . It i s through the m u l t i n a t i o n a l c o r p o r a t i o n that c a p i t a l i s m i s becoming an i n t e g r a t e d wor ld system. The May 1980 i ssue of "Across : the Board" conta ined a l i s t o f the w o r l d ' s 100 l a r g e s t economic u n i t s f o r the year 1978, Of t h e s e , 61 were c o u n t r i e s , as measured by Gross Nat iona l P roduc t , and 39 were companies, as measured by t o t a l s a l e s , The accompanying a r t i c l e s t a t e s that f o r 1979, Exxon would move in to s i x t e e n t h p l a c e , becoming the l a r g e s t c o r p o r a t i o n on the l i s t , su rpass ing East Germany, I r a n , Mexico and Sweden. For 1978, General Motors had s a l e s g r e a t e r than the GNP of Yugos lav ia or S w i t z e r l a n d ; Royal Dutch S h e l l and. Ford g rea te r than A u s t r i a or Venezue la , Al though o i l companies predominate in the h ighest ranking companies, IBM had s a l e s g rea te r than the GNP of T h a i l a n d , U n i l e v e r g r e a t e r than L ibya or Co lumbia , and C h r y s l e r g r e a t e r than Egypt./* The small f irm producing a n e g l i g i b l e f r a c t i o n of a homogenous output f o r an anonymous market , the t y p i c a l case under c o m p e t i t i v e c a p i t a l i s m , pa les Sh. i n c o m p a r i s o n . Norman G i r v a n , i n "Economic N a t i o n a l i s t s v s . M u l t i n a t i o n a l C o r p o r a t i o n s " , d e s c r i b e s the main f e a t u r e s o f t h e m u l t i n a t i o n a l : "... d i v e r s i f i e d i n t e r n a t i o n a l i z e d p r o d u c t i o n under c e n t r a l i z e d c o n t r o l ; m a s s i v e s i z e and huge f i n a n c i a l r e s o u r c e s o f the b a s i c i n s t i t u t i o n a l u n i t ; t e c h n o l o g i c a l dynamism and vanguard-ism; and h i g h and c o n t i n u o u s l y g r o w i n g c o n c e n t r a t i o n o f 2 economic power." The s i z e and c o n c e n t r a t i o n a s p e c t s o f the m u l t i n a t i o n a l c o r p o r a t i o n s has r a i s e d the q u e s t i o n o f c o n f l i c t w i t h t h e n a t i o n s t a t e and whether t h e r e has been, as a r e s u l t , an e r o s i o n o f the economic power o f governments. G i r v a n s t a t e s : "Exponents of the c o r p o r a t e e t h i c l e a v e no doubt i n the mind t h a t the s i z e o f t h e m u l t i n a t i o n a l c o r p o r a t i o n has, i n t h e i r v i e w , rendered t h e n a t i o n - s t a t e a t e c h n o l o g i c a l l y o b s o l e t e i n s t i t u t i o n as a u n i t o f economic d e c i s i o n - m a k i n g ... In t h i s v i e w o f the w o r l d , the c o n c e r n f o r n a t i o n a l economic s o v e r -e i g n t y i s rega r d e d as some k i n d o f ' t r a d i t i o n a l custom'... i n much the same way as the c o l o n i a l powers i n A f r i c a r e g a r d -ed the ' n a t i v e ' s ' a t t achment t o v i l l a g e l i f e as an a n t h r o p o l -o g i c a l c u r i o s i t y w h i c h was i n i m i c a l t o h i s own w e l f a r e because i t i n h i b i t e d t h e sp r e a d o f t h e money e c o n o m y — i . e . ^ c o l o n i a l e x p l o i t a t i o n . " Whether the development o f the economic power o f t h e m u l t i - n a t i o n a l c o r p o r a t i o n s has eroded the economic d e c i s i o n - m a k i n g powers o f the n a t i o n s t a t e i s a d e b a t a b l e p o i n t . The s t a t e , as Baran and Sweezy p o i n t o u t , i s not an independent s o c i a l f o r c e and, h i s t o r i c a l l y , i t s powers o f economic d e c i s i o n -making have always been t i e d t o the i n t e r e s t s o f the dominant c a p i t a l , The r e l a t i o n s h i p between c a p i t a l and government i s , however, a l t e r e d as, n a t i o n a l governments i n c r e a s i n g l y d e a l w i t h m u l t i n a t i o n a l c o r p o r a t i o n s and l e s s so w i t h n a t i o n a l c o r p o r a t e i n t e r e s t s , Many o f the former n a t i o n a l c o r p o r a t i o n s now a r e m u l t i n a t i o n a l s t hemselves and the e x t e n t o f t h e i r n a t i o n a l l o y a l t i e s i n terms o f i n v e s t m e n t d e c i s i o n s , e t c . i s q u e s t i o n a b l e . The f o r m a t i o n o f the T r i l a t e r a l Commission by David R o c k e r f e l l e r , C h a i r -man o f Chase Manhattan Bank, i n 1973, p r o v i d e s some e v i d e n c e t h a t m u l t i n a t i o n a l 9 5 . i n t e r e s t s are a t tempt ing to i n f l u e n c e the p o l i c i e s of n a t i o n a l governments. The Commission c o n s i s t s of 250 businessmen, t rade u n i o n i s t s , p o l i t i c i a n s and academics from western Europe, Japan and North Amer ica . I ts s t a t e d o b j e c t i v e i s to f o s t e r c l o s e r cooperat ion among p r i v a t e c i t i z e n s from the above areas of the w o r l d : " R o c k e f e l l e r b e l i e v e d p r i v a t e c i t i z e n s have ' g r e a t e r f l e x i b -i l i t y than governments in the search f o r new and b e t t e r forms of i n t e r n a t i o n a l c o - o p e r a t i o n ' . . . In a c h i e v i n g i t s ends, the Commission d e f i n i t e l y sees too much p u b l i c p a r t i c i p a t i o n as a burden. A book - length ' T r i a n g l e Repor t ' c a l l e d The C r i s i s of Democracy s a i d that ' the e f f e c t i v e f u n c t i o n i n g of the democ- -r a t i c p o l i t i c a l system requ i res a c e r t a i n measure of apathy and n o n - p a r t i c i p a t i o n on the part of some groups and i n d i v i - . d u a l s . " United States P r e s i d e n t C a r t e r , V i c e - P r e s i d e n t Mondale and s i x t e e n key members of C a r t e r ' s a d m i n i s t r a t i o n were members of the Commission.'* The m u l t i n a t i o n a l c o r p o r a t i o n has played a s i g n i f i c a n t r o l e in " i n t e r -n a t i o n a l i s i n g " the problems faced by n a t i o n a l economies. Cy Gon ick , in I n f l a t i o n or D e p r e s s i o n , w r i t e s : the e f f e c t i v e n e s s of government p o l i c y instruments such as monetary and f i s c a l p o l i c y , t a x a t i o n , wage, and income p o l i c y d i m i n i s h when important segments of the economy are f o r e i g n -owned. M u l t i n a t i o n a l c o r p o r a t i o n s , because of t h e i r s i z e and f l e x i b i l i t y , can u s u a l l y escape the r e g u l a t i o n s of any one n a t i o n , , . The i n t e g r a t i o n of the wor ld economy has eroded the a b i l i t y of the n a t i o n - s t a t e to c o n t r o l aggregate economic a c t i v i t y , , , A s i g n i f i c a n t f e a t u r e of the 1970s i s the growing i n t e g r a t i o n of the c a p i t a l i s t w o r l d - - a r e s u l t of the lower ing of t a r i f f b a r r i e r s , the f r e e f low of investment c a p i t a l across n a t i o n a l boundar ies , and the preponderant r o l e of m u l t i n a t i o n a l c o r p o r a t i o n s , , , In the e a r l y years a f t e r World War II and through the f i f t i e s and e a r l y s i x t i e s each economy had i t s own business c y c l e , S lack times in North America were o f t e n matched by v igorous growth in Europe and Japan, Now the booms ^ and the slowdowns of a l l c a p i t a l i s t c o u n t r i e s c o i n c i d e , " Gonick goes on to show the c o i n c i d e n c e of i n f l a t i o n and r e c e s s i o n through the 1970's in a l l of the advanced c o u n t r i e s , As a r e s u 1 t , p o l i c i e s of n a t i o n a l governments tend, to show s i m i l a r i t y as w e l l . 96. The m u l t i n a t i o n a l c o r p o r a t i o n p lays another r o l e in s t a n d a r d i s i n g c o n d i t i o n s . These are the c o n d i t i o n s which a f f e c t the p lann ing and o p e r a t i o n of these c o r p o r a t i o n s . Examples of t h i s k ind of s t a n d a r d i s a t i o n would be s t r i k e a c t i v i t y , s k i l l l e v e l s in work f o r c e s and s t a t e a s s i s t a n c e to indus t ry programs, A country w i t h a high l e v e l of man-days l o s t due to work stoppages would conce i vab l y be under pressure to a l t e r t h i s or lose investment . Inadequate s k i l l l e v e l s w i t h i n a country might rece i ve the same t reatment . If s t a t e a s s i s t a n c e programs were less generous in a p a r t i c u l a r country then development cou ld be expected to lag or e l s e be conf ined to the e x t r a c t i o n of scarce resources a v a i l a b l e on ly in that c o u n t r y . Many of these concerns are reported on by the O r g a n i s a t i o n fo r Economic Cooperat ion and Development (OECD), an intergovernmental agency r e p r e s e n t i n g the same group of c o u n t r i e s as the T r i l a t e r a l Commission, The i n t e g r a t i o n of the wor ld economy through the m u l t i n a t i o n a l c o r p o r a -t i o n , a r e s u l t of c a p i t a l r e s t r u c t u r a t i o n , a f f e c t s the ways in which f u r t h e r r e s t r u c t u r a t i o n proceeds, F i r s t , new technology i s r a p i d l y put i n t o p lace once the d e c i s i o n to do so has been c e n t r a l l y made and , because of the branch p lant system of the m u l t i n a t i o n a l s , i t can be int roduced v i r t u a l l y everywhere, Second, p r o f i t - m a k i n g and ra tes of p r o f i t assume a r e l a t i v e l y uni form p a t t e r n as each branch of the m u l t i n a t i o n a l i s expected to show a book p r o f i t . The c o r o l l a r y to t h i s i s that rates of s u r p l u s va lue would a l s o tend to become more u n i f o r m . T h i r d , dur ing a per iod of major r e s t r u c t u r a t i o n , r e q u i r i n g increased c a p i t a l a c c u m u l a t i o n , the pressure to inc rease p r o f i t s at the working c l a s s ' expense would be f e l t in every country having m u l t i n a t i o n a l c o r p o r a t i o n s (which means every c o u n t r y ) . F o u r t h , the rap id development and spread of new techno log ies d i r e c t l y a f f e c t s the labour p r o c e s s , making o l d s k i l l s outmoded and demanding the rap id acquirement of new s k i l l s , 97. A l l of the above have a d i r e c t a f f e c t w i t h i n each n a t i o n s t a t e and w i t h i n a r e l a t i v e l y short t ime f rame. The 1970 ' s saw the i n t r o d u c t i o n of w a g e - p r i c e c o n t r o l s in the United States in 1971.^ A v o l u n t a r y attempt was made at the same time in Canada w i t h the P r i c e s and Incomes Commission and c o n t r o l s were e v e n t u a l l y e s t a b l i s h e d in 1975 a f t e r the Commission's f a i l u r e . A new attempt at incomes p o l i c y was made in B r i t a i n under the umbre l la of Labour 's Wi lson government in 1974. Incomes p o l i c i e s were a l r e a d y in e f f e c t in many c o u n t r i e s of western Europe i n c l u d i n g a l l of the Scandinav ian c o u n t r i e s , West Germany 8 and the Ne ther l and s . An attempt was made to in t roduce an incomes p o l i c y in France as par t of a worker - share owner scheme but was withdrawn under th reat of a general s t r i k e . The above i n d i c a t e s that s i m i l a r c o n d i t i o n s e x i s t e d in the advanced c o u n t r i e s and that the issue of c a p i t a l accumulat ion was one of the main concerns . What i s not exp la ined i s why a c e r t a i n program seems s u c c e s s f u l in one c o u n t r y , i s g rudg ing l y accepted in another or r e j e c t e d in a t h i r d . The e x p l a n a t i o n f o r these v a r i a t i o n s cannot be found in any general laws of c a p i t a l accumulat ion but in the h i s t o r y and i n s t i t u t i o n s o f s p e c i f i c c o u n t r i e s . Such f a c t o r s as the development of working c l a s s o r g a n i s a t i o n s , t h e i r l i n k s to p o l i t i c a l p a r t i e s , the degree of hegemony e x e r c i s e d by the c a p i t a l i s t c l a s s , the r e l a t i v e dominance of f r a c t i o n s of the c a p i t a l i s t c l a s s and the deve lop -ment and t r a d i t i o n of s t a t e i n s t i t u t i o n a l involvement in the f u n c t i o n i n g of the economy would a l l have t h e i r e f f e c t . Chapters M l and |V prov ided a d e s c r i p t i o n of these f a c t o r s in r e l a t i o n to Canada, w i t h p a r t i c u l a r a t t e n t i o n paid to the 1964 - 78 p e r i o d . These w i l l be b r i e f l y reviewed and analysed in r e l a t i o n to the t h e o r e t i c a l framework. In comparison to most c o u n t r i e s of western Europe, t rade unions in Canada developed i n t o la rge mass o r g a n i s a t i o n s l a t e r and a s m a l l e r percentage 98. of the work f o r c e was o r g a n i s e d . In both r e s p e c t s , the Canadian s i t u a t i o n i s more s i m i l a r to the United S ta tes than to Europe. Bu t , u n l i k e the American movement, Canadian t rade unions have a l l i e d themselves , at v a r i o u s p o i n t s , w i th s o c i a l i s t or s o c i a l - d e m o c r a t i c p o l i t i c a l p a r t i e s . Canadian t rade u n i o n s , on the whole , have not developed the ideology of bus iness unionism which e s t a b l i s h e d dominance in the American movement at the turn of the c e n t u r y . Th is d i f f e r e n c e has p e r s i s t e d d e s p i t e the s t rong i n f l u e n c e of U.S, i n t e r n a t -ional unions and p e r i o d i c pressure from them to adopt the American m o d e l . ^ In the l a s t decade there has been an increase in autonomy f o r the Canadian branches of i n t e r n a t i o n a l unions in the CLC. Th is has strengthened the CLC and i s l i k e l y to r e s u l t in a c l o s e r p o l i t i c a l a f f i l i a t i o n w i t h the NDP, a trend which has been v i s i b l e in the l a s t two f e d e r a l e l e c t i o n s , ^ The p o l i t i c a l a f f i l i a t i o n and stance of the Canadian t rade union movement has r e s u l t e d in r e s i s t a n c e to the es tab l i shment of an incomes p o l i c y un less i t i s inc luded in a package of s o c i a l democrat ic p o l i c y reforms. Governments have been u n w i l l i n g or unable to i n s t i t u t e such reforms and, as a r e s u l t , v o l u n t a r y consent to incomes p o l i c y has not happened. Th is i s in marked c o n t r a s t to the United S ta tes where P r e s i d e n t Nixon e s t a b l i s h e d w a g e - p r i c e c o n t r o l s in 1971 and a year l a t e r rece ived support from the AFL-CIQ in h i s campaign f o r r e - e l e c t i o n . The Canadian t rade union movement has r e s i s t e d the i n t r o d u c t i o n of an incomes p o l i c y bu t , as noted in Chapter IV, when compulsory c o n t r o l s were i n t r o d u c e d , f u r t h e r r e s i s t a n c e was i n e f f e c t i v e , It i s d i f f i c u l t to e s t a b l i s h what p o s i t i o n the d i f f e r e n t f r a c t i o n s of the c a p i t a l i s t c l a s s in Canada take on incomes p o l i c y because of the p e r v a s -iveness of f r e e market ideo logy . Th is i s even t rue of Canada's monopoly c a p i t a l i s t s whose c o r p o r a t i o n s do not operate on the b a s i s of a f r e e market economy. Accord ing to f r e e market i d e o l o g y , any i n t e r f e r e n c e by government 9 9 . in the f u n c t i o n i n g of the economy i s unwarranted. Wage-pr ice c o n t r o l s would be cons idered i n t e r f e r e n c e and an incomes p o l i c y would f i n d no support from f r e e marketeers . Desp i te t h i s , i t would appear that there are s i g n i f i c a n t d i f f e r e n c e s and that there is some support f o r the a n a l y s i s o f f e r e d in Chapter I i , Incomes p o l i c y and a t r i p a r t i t e i n s t i t u t i o n a l framework would most l i k e l y rece i ve support from the n a t i o n a l monopoly s e c t o r of the Canadian c a p i t a l i s t c l a s s . Al though f o r e i g n m u l t i n a t i o n a l i n t e r e s t s would l i k e l y b e n e f i t as w e l l , p a r t i c u l a r l y in t h e i r long- range p l a n n i n g , t h i s s e c t o r would be more r e l u c t a n t in i t s suppor t . The i n t e r e s t s of the f o r e i g n m u l t i n a t i o n a l s are h i g h l y c o n -cent ra ted in resource e x t r a c t i o n and, f o r t h i s group, the re levant l e v e l of 12 government i s not f e d e r a l but p r o v i n c i a l , The concess ions o f f e r e d to f o r e i g n m u l t i n a t i o n a l s by p r o v i n c i a l governments may w e l l be worth more to them than the p o t e n t i a l ga ins obta ined by an incomes p o l i c y and t r i p a r t i t e i n s t i t u t i o n s . Th is would a l s o ex tend , in some c a s e , to m u l t i n a t i o n a l s in manufac tu r ing . P r o v i n c i a l l y based c a p i t a l i s t s , depending on s i z e , the s o p h i s t i c a t i o n of p l a n n i n g , government s u b s i d i e s and c o n t r a c t s , e t c , would l i k e l y be s p l i t on the issue w i th the l a r g e r c o r p o r a t i o n s o f f e r i n g suppor t . As G a l b r a i t h p o i n t s o u t , in The New I n d u s t r i a l S t a t e , f r e e market ideology i s s t ronges t and c l o s e r to economic r e a l i t y in the s m a l l e r , c o m p e t i t i v e c a p i t a l i s t f r a c t i o n and t h i s group would l i k e l y be opposed, There are some i n d i c a t i o n s that the above i s r e p r e s e n t a t i v e of how these f r a c t i o n s of the c a p i t a l i s t c l a s s view incomes p o l i c y and t r i p a r t i s m , Ian B l a i r ? P r e s i d e n t of A l b e r t a Gas and Trunk L i n e , a n a t i o n a l c o r p o r a t i o n , opened a recent b i p a r t i t e meeting ( i n d u s t r y and t rade unions) w i t h the announcement that he regarded . the economic a n a l y s i s presented in the W a f f l e Man i fes to as c o r r e c t . In an e a r l i e r meeting of the same group, he had quest ioned the 100. presence on the committee of a r e p r e s e n t a t i v e of an American m u l t i n a t i o n a l 13 c o r p o r a t i o n . Th is person was subsequent ly removed from the committee. Another recent i n d i c a t i o n , in J u l y 1980, was the speech by the P r e s i d e n t of MacMi11an -B loede l , a m u l t i n a t i o n a l f i r m based in B r i t i s h Co lumbia , in which he argued in favour of s t rengthen ing the c e n t r a l government in the proposed c o n s t i t u t i o n a l r e v i s i o n s . One of h i s recommendations was that f e d e r a l govern -ment j u r i s d i c t i o n inc lude natu ra l r e s o u r c e s . Th is speech was promptly 14 responded to and r e j e c t e d by Premier Bennett of B.C. These examples, f o l l o w i n g as they do the Royal Commission on Corporate Concent ra t ion and a s e r i e s of i n d u s t r i a l s e c t o r task f o r c e s , seem to i n d i c a t e a l i n k between a t r i p a r t i t e i n s t i t u t i o n a l framework and a n a t i o n a l development s t r a t e g y f o r Canadian c a p i t a l that would s t r e n g t h e n , expand and f u r t h e r concent ra te t h i s s e c t o r . U l t i m a t e l y t h i s , means the cont inued development of a r e l a t i v e l y small number of w o r l d - s i z e d , Canadian based, m u l t i n a t i o n a l c o r p o r a t i o n s . The t h i r d f a c t o r to be reviewed i s the development and t r a d i t i o n of s t a t e involvement in the o p e r a t i o n of the economy. Except dur ing per iods of n a t i o n a l c r i s i s , such as war , t h i s area in Canada, u n t i l very r e c e n t l y , had been r e l a t i v e l y undeveloped, The per iod from 1964 - 78 saw s i g n i f i c a n t change in t h i s r e g a r d . Th is occur red in a p a r a l l e l f a s h i o n to the resurgence of the n a t i o n a l c a p i t a l i s t f r a c t i o n and the development of these c o r p o r a t i o n s i n t o m u l t i n a t i o n a l s . I d e o l o g i c a l l y , the s h i f t i s shown in Chapter I M in the d i s c u s s i o n of incomes p o l i c y and the a p p r o p r i a t e r o l e f o r the s t a t e . The f r e e market ideology u n d e r l y i n g the Economic Counci l of Canada's a n a l y s i s in t h e i r Th i rd Annual Review (.1966) is a l t e r e d to one that makes the s t a t e the o v e r a l l manager of the economy and r e s p o n s i b l e f o r the economy's p e r f o r -mance in the P r i c e s and Incomes Commission's Report (.1972), The Watkjns and Gray repor ts on f o r e i g n ownership p e r i p h a l l y r e f l e c t e d or a n t i c i p a t e d t h i s 101 . change. The es tab l i shment of P e t r o c a n , the i n t r o d u c t i o n of compulsory wage -p r i ce c o n t r o l s w i t h the A n t i - I n f 1 at ion Board , the Corporate Concent ra t ion Commission and the i n d u s t r i a l task fo rces a l l p rov ide evidence of a more a c t i v e r o l e f o r government in the economy. This r o l e prov ides a system of s t a t e apparatuses and p o l i c y g u i d e l i n e s which support the development of n a t i o n a l l y - b a s e d c a p i t a l . The p o t e n t i a l a l l i e s in t h i s endeavour are the f e d e r a l government, the n a t i o n a l l y - b a s e d c o r p o r a t i o n s and, somewhat r e l u c t a n t l y , but nonetheless c r u c i a l , the t rade unions as represented by the CLC. T r i p a r t i s m and Incomes P o l i c y The quest ion has been r a i s e d in a recent paper presented to the June 1980 meetings of the Canadian I n d u s t r i a l R e l a t i o n s A s s o c i a t i o n by Peter W a r r i a n , Research D i r e c t o r f o r the United Stee l workers , that t r i p a r t i s m and incomes p o l i c y should be cons idered separate i s s u e s , ^ The paper o f f e r s support f o r t r i p a r t i s m as a k ind of " s o c i a l b a r g a i n i n g " but t r e a t s income p o l i c y as a separate t o p i c . Throughout t h i s t h e s i s , i t has been assumed that incomes p o l i c y i s an i n t e g r a l part of a t r i p a r t i t e framework. There are no instances in the v a r i a t i o n s researched f o r t h i s t h e s i s in western Europe or North America where a t r i p a r t i t e system e x i s t s separate from an incomes p o l i c y . A l t h o u g h , f o r d e f i n i t i o n a l purposes the two can be made d i s t i n c t , in p r a c t i c e they are n o t . The reason fo r t h i s is that t r i p a r t i s m i s b a s i c a l l y a n e g o t i a -t i n g framework. In t h i s c o n t e x t , t rade unions are seeking p o l i c i e s b e n e f i c i a l to t h e i r members in the areas of s o c i a l and h e a l t h s e c u r i t y , j ob s e c u r i t y and favourab le labour l e g i s l a t i o n , •|n re tu rn fo r favourab le p o l i c i e s |n the above a r e a s , the main t h i n g that the t rade unions have to o f f e r i s more e x p l o i t a t i o n , From a c a p i t a l and government po in t of v iew, t h i s i s the on ly i ssue that the unions can g i ve in 102. exchange. Even wi thout s p e c i f i c agreement on ra tes of compensat ion, many of the components which go in to a t r i p a r t i t e system act to inc rease the ra te of e x p l o i t a t i o n . A reduc t ion in s t r i k e a c t i v i t y and other job a c t i o n s a l lows f o r more accura te p lann ing procedures , p a r t i c u l a r l y f o r new c a p i t a l investment . It cou ld a l s o be argued that a more e f f e c t i v e h e a l t h and w e l f a r e system c r e a t e s a more r e l i a b l e work f o r c e . Trade union coopera t ion in job r e t r a i n i n g programs makes f o r a more e f f i c i e n t work f o r c e . These f a c t o r s would a l l tend to increase the ra te of e x p l o i t a t i o n ( a l l o ther f a c t o r s remaining constant ) wi thout e i t h e r f r e e z i n g or reducing wages. Given the above, i t i s p o s s i b l e f o r a de f a c t o incomes p o l i c y to be in e f f e c t wi thout a c t u a l l y n e g o t i a t i n g incomes. Almost i n v a r i a b l y , however, wage increases are negot ia ted as par t of a c e n t r a l i s e d package f o r the economy as a whole or by economic s e c t o r . In Canada, reg iona l d i f f e r e n c e s would l i k e l y be an a d d i t i o n a l f a c t o r not present in western European arrangements, A f u r t h e r v a r i a b l e in western Europe is the r e l a t i v e d i r e c t involvement of government. For example, West Germany and Sweden have r e l a t i v e l y l i t t l e d i r e c t government involvement in a c t u a l wage n e g o t i a t i o n s , ^ w h i l e B r i t a i n ' s attempts at incomes p o l i c y under s u c c e s s i v e Labour governments have always fo l lowed the form of d i r e c t t rade union-government n e g o t i a t i o n , ^ The economic s e c t o r task f o r c e s e s t a b l i s h e d in Canada would suggest that a b i p a r t i t e system is deve lop ing w i t h government input by way of s t a t i s t i c a l repor ts and b a r g a i n i n g t a r g e t s , The a n a l y s i s presented in Chapter IV suggests that wage -p r i ce c o n t r o l s were e v e n t u a l l y int roduced to s t a b i l i s e shares of n a t i o n a l income a c c r u i n g to p r o f i t s on the one hand and wages and s a l a r i e s on the o t h e r , The r i s i n g share of n a t i o n a l income going to wages and s a l a r i e s in the per iod ]S6k - 70 was the main f a c t o r in moving the government to attempt a v o l u n t a r y incomes p o l i c y 103, w i t h the P r i c e s and Incomes Commission. Fo l low ing t h i s f a i l u r e , i t appeared f o r a short time that compulsory c o n t r o l s would not be necessary as p r o f i t ' s share of n a t i o n a l income rose d u r i n g the next few y e a r s . When t h i s s i t u a t i o n was aga in reversed and the Turner round of consensus t a l k s f a i l e d , compulsory c o n t r o l s were f i n a l l y i n t roduced . The background to t r i p a r t i s m i s concern over shares of n a t i o n a l income. An i n t e r p r e t a t i o n of t r i p a r t i s m that f a i l s to take t h i s i n t o account , from a t rade union po int of v iew, could lead to s e r i o u s t a c t i c a l e r r o r s . Car l Cuneo, in " C l a s s E x p l o i t a t i o n in Canada" , s t a t e s tha t the r a t e of su rp lus va lue in Canadian manufactur ing has r i s e n more or l e s s c o n s t a n t l y 1 g from 1917 - 7 1 . Cuneo c a l c u l a t e s the ra te of su rp lus va lue in e leven d i f f e r e n t ways and i d e n t i f i e s which sets of f i g u r e s he regards as most a c c u r a t e . The t a b l e below shows, f o r the years 1959 - 70 , r e p r e s e n t a t i v e F igures f o r the trend in the rate of su rp lus v a l u e : Year Rate of Year Rate of Surp lus Value Surp lus Value 1959 196 1965 257 1960 204 1966 270 1961 198 1967 270 1962 207 1968 274 1963 217 1969 276 1964 240 1970 257 As ide from the 1965 - 70 p e r i o d , there i s no other s i x - y e a r p e r i o d , w i th the except ion of the l a t e 1920's i n t o the 1 9 3 0 ' s , where the ra te of su rp lus va lue was the same or lower at the end of the per iod as at the b e g i n n i n g . Never the -l e s s , Cuneo's a n a l y s i s on ly covers manufactur ing and i t i s d i f f i c u l t t h e r e f o r e to make any g e n e r a l i s a t i o n s , fu r thermore , h i s a n a l y s i s extends on ly to 1971 thus s topping short of the c r u c i a l per iod fo r p r i c e - i n c o m e c o n t r o l s in the m i d - 1 9 7 0 ' s . However, h i s data would suggest t h a t , f o r Canadian manufac tu r ing , the 1965 - 70 per iod was the beginning of a downturn f o r c a p i t a l a c c u m u l a t i o n , 104. The Impact of Wage-Pr ice Cont ro l s There were severa l e f f e c t s of c o n t r o l s , some s h o r t - t e r m , o thers w i t h more f a r - r e a c h i n g i m p l i c a t i o n s . The most obvious e f f e c t was that over a two-year per iod the cost of v a r i a b l e c a p i t a l was set by government. Second, w i t h wages removed as a cause of s t r i k e a c t i v i t y , the number of man-days l o s t due to c o n t r a c t d i s p u t e s was c o n s i d e r a b l y reduced. Both f a c t o r s a s s i s t in long - te rm p lanning and thereby c o n t r i b u t e to corporate p r o f i t . T h i r d , c o n t r o l s a l lowed the government to 'draw the CLC i n t o i n d u s t r i a l task f o r c e s and other t r i p a r t -i t e b o d i e s . The CLC's concern that c o n t r o l s might be i n d e f i n i t e l y extended 19 should they not p a r t i c i p a t e was s u f f i c i e n t reason to p a r t i c i p a t e . These forums would a l s o serve to s o f t e n the way f o r f u t u r e forums which might e v e n t u a l l y be i n s t i t u t i o n a l i s e d , The Economic Counci l of Canada had s t a t e d that one of the reasons fo r an incomes p o l i c y is to reduce a c l i m a t e of high expec ta t ions generated dur ing an i n f l a t i o n a r y p e r i o d . Whi le i n f l a t i o n has cont inued s i n c e c o n t r o l s , i n i t i a l ev idence i n d i c a t e s that wage demands by t rade unions d i d , in f a c t , moderate f o l l o w i n g the e x p i r a t i o n of c o n t r o l s . It was not u n t i l June 1980 that average wage s e t t l e m e n t s , c a l c u l a t e d on a y e a r l y b a s i s , reached the l e v e l they had been at p r i o r to the i n t r o d u c t i o n of c o n t r o l s (Vancouver P r o v i n c e , August 8 , 1980), Thus the CLC's "most l i k e l y outcome", as s t a t e d in the May 1976 Man j f e s t o came to pass : that labour was not ab le to recover i t s losses i n c u r r red dur ing the c o n t r o l p e r i o d . Furthermore, s igned c o n t r a c t s s i n c e c o n t r o l s have tended to be f o r longer d u r a t i o n . One year c o n t r a c t s have become an except ion w h i l e three year c o n t r a c t s are not uncommon, as unions are f e a r f u l that c o n t r o l s w i l l be r e i n t r o d u c e d , Longer term c o n t r a c t s a l s o a s s i s t in co rporate p lann ing and tend to reduce s t r i k e a c t i v i t y . Both the Economic Counc i l of Canada in t h e i r Th i rd Annual Review and the 105. F i n a l Report of the P r i c e s and Incomes Commission, in one of t h e i r few p o i n t s of agreement, s ta ted that an incomes p o l i c y set by government should on ly be seen as a s h o r t - t e r m s o l u t i o n , "pending the m o b i l i s a t i o n of b e t t e r measures to f o l l o w " . The Royal Commission on Corporate Concent ra t ion i n d i c a t e d the course of f u t u r e development which they f e l t was best f o r Canada's c o r p o r a -t i o n s : more c o n c e n t r a t i o n and the development of w o r l d - s i z e d f i r m s . T h i s , combined w i t h an informal t r i p a r t i t e s t r u c t u r e , i s the core of the government's n a t i o n a l development s t r a t e g y as o u t l i n e d above, i n v o l v i n g both co rpora te and t rade union r e p r e s e n t a t i v e s , How e f f e c t i v e t h i s w i l l be remains to be seen. I m p l i c a t i o n s fo r the Labour Movement As mentioned at the end of Chapter IV, the 1970's brought the Canadian labour movement onto the n a t i o n a l p o l i t i c a l scene as a r e s u l t of the c o n t i n u i n g development of c a p i t a l i s m , The response of the CLC, at v a r i o u s p o i n t s in the g e s t a t i o n of incomes p o l i c y has been rev iewed, a long w i t h the main CLC document of the p e r i o d , Labour 's M a n i f e s t o f o r Canada. It seems ev ident from CLC a c t i o n s in the p o s t - c o n t r o l per iod that they remain committed to the s o c i a l and economic goa ls of the Man j f e s t o : what they c a l l s o c i a l democracy. One i n d i c a t i o n of t h i s i s t t h e i r increased support f o r the NDP, At the same t i m e , the CLC has o f f i c i a l l y r e j e c t e d t r i p a r t i s m , In p r a c t i c e , however, the CLC i s a l r e a d y invo lved in t r i p a r t i t e i n s t i t u t i o n s — n o t the s p e c i f i c ones proposed tn the H a n j f e s t o , but ones i n i t i a t e d by government, This puts the CLC and the t rade union movement in a c u r i o u s p o s i t i o n , A t r i p a r t i t e framework is coming i n t o p lace w i t h a c t i v e CLC p a r t i c i p a t i o n . Such bodies as the i n d u s t r i a l task f o r c e s , whether they are i n s t i t u t i o n a l i s e d (which i s a d i s t i n c t p o s s i b i l i t y ) or n o t , seem l i k e l y to become an ongoing f e a t u r e of s t a t e - c o r p o r a t i o n - t r a d e union r e l a t i o n s . These are par t of the content of t r i p a r t i s m even i f the name i s not used. 106, The CLC i s yet to develop a p o s i t i o n on these task f o r c e s in r e l a t i o n to t h e i r p o l i t i c a l , s o c i a l and economic p r i o r i t i e s . In the absence of such a p o s i t i o n , the CLC's entanglement in these t r i p a r t i t e task f o r c e s i s extremely l i k e l y to r e s u l t in the i n c o r p o r a t i o n of s t a t e and corporate t h i n k i n g i n t o t h e i r own p o s i t i o n s on economic and s o c i a l p o l i c y . Th is i s not to s t a t e that a CLC p o s i t i o n would n e c e s s a r i l y r e j e c t p a r t i c i p a t i o n or even s i g n i f i c a n t l y a l t e r the nature of that p a r t i c i p a t i o n , remembering the i n c o n s i s t e n c i e s conta ined in L a b o u r ' s ' M a n j f e s t o f o r Canada. But the acceptance by d e f a u l t of s t a t e - c o r p o r a t e views on the economy, and the a p p r o p r i a t e r o l e f o r l a b o u r , i s not l i k e l y to be in the long range i n t e r e s t of the CLC, i t s a f f i l i a t e d unions or the rank and f i l e membership. Even from an o r g a n i s a t i o n a l v i e w p o i n t , t h i s could have s e r i o u s consequences as the i n c o n s i s t e n c i e s and c o n t r a d i c t i o n s produced could r e s u l t in i n t e r n a l d i v i s i o n and c o n f l i c t which might present an unprecedented th rea t to the u n i t y of the labour movement. There are other consequences of t r i p a r t i s m w h i c h , in many ways, may have even more profound e f f e c t s on the labour movement. Ch ie f among these concerns the p o s s i b l e change in the t r a d i t i o n of c o l l e c t i v e b a r g a i n i n g in Canada, C o l l e c t i v e b a r g a i n i n g , w i th some e x c e p t i o n s , has been d e c e n t r a l i s e d , a process which goes on between a l o c a l rep resent ing workers in a p a r t i c u l a r work p lace 20 and management. In t h i s p r o c e s s , rank and f i l e members p lay an important and o f t e n lead ing r o l e , Thus, as one t rade u n i o n i s t r e p o r t e d , there were important r e s t r i c t i o n s which prevented paid o f f i c i a l s and n a t i o n a l r e p r e s e n t -a t i v e s from " g i v i n g away the f a r m " . The p o t e n t i a l d i r e c t i o n of the economic s e c t o r task f o r c e s i s to set general g u i d e l i n e s f o r l o c a l c o n t r a c t s in an economic s e c t o r as a whole. Local members are n o t , at p r e s e n t , represented on these task f o r c e s and there does not seem to have been any i n d i c a t i o n s that they should have such r e p r e s e n t a t i o n , A s i g n i f i c a n t element of rank and f i l e 107. involvement i s l i k e l y to be l o s t should the cu r ren t task fo rces take on the r o l e of e s t a b l i s h i n g b a r g a i n i n g t a r g e t s . Even now, w i t h high l e v e l union p a r t i c i p a t i o n in the task f o r c e s , some e f f e c t s can be expected as the l o c a l memberships must r e l y on these same high l e v e l o f f i c i a l s as resource persons f o r l o c a l b a r g a i n i n g . The o v e r a l l impact of t h i s would be a s h i f t in power r e l a t i o n s from the l o c a l l e v e l to the head o f f i c e s of unions and p o s s i b l y to t h e j a b o u r c e n t r a l (CLC) as w e l l , A t h i r d i m p l i c a t i o n i s the p o s s i b i l i t y of t rade union leaders becoming men of power at the n a t i o n a l economic l e v e l , It was mentioned in the d i s c u s -s ion of the Man j f e s t o in Chapter IV that t h i s p o s s i b i l i t y was one that p o t e n t i a l l y a t t r a c t e d the CLC l e a d e r s h i p in t h e i r endorsement of t r i p a r t i s m . However, the endorsement was q u a l i f i e d by the statement that t r i p a r t i s m would r e s u l t in labour having an equal share of power w i t h other p a r t n e r s - - b u s i n e s s and government. The task f o r c e s which have been e s t a b l i s h e d t o t h i s date g ive no i n d i c a t i o n that they w i l l e v e n t u a l l y p rov ide entrance to co rpora te 21 board rooms f o r t rade union l e a d e r s . Far from p r o v i d i n g labour w i t h an . equal share of power, these task f o r c e s would seem to be d i r e c t e d , f o r the most p a r t , at i n f l u e n c i n g l a b o u r ' s behav iour . In o ther words, l a b o u r ' s cooperat ion is being sought in order to inc rease economic p r o d u c t i v i t y and f a c i l i t a t e co rpora te expans ion . Whi le labour leaders may be led to t h i n k of themselves as persons of power, t h i s i s hard ly the c a s e , The i l l u s i o n of t h i s i s l i k e l y to increase the r e s p o n s i b i l i t y of t h e i r behaviour as seen from a co rpora te and s t a t e p e r s p e c t i v e , A f i n a l i m p l i c a t i o n which in some ways goes beyond the above, has to do w i t h the l e v e l of i n t e r n a t i o n a l coopera t ion in the labour movement. Although some o r g a n i s a t i o n s f o r in fo rmat ion shar ing do e x i s t , an expansion ?n t h i s area could be very v a l u a b l e f o r the Canadian t rade union movment f o r two main 108. reasons . F i r s t , many of the i n t e g r a t i v e i n s t i t u t i o n s of t r i p a r t i s m c u r r e n t l y being developed a l ready e x i s t in some western European c o u n t r i e s . The exper iences of these labour movements might be i n s t r u c t i v e . Going a l i t t l e beyond t h i s , the i n t e r n a t i o n a l i s a t i o n of c a p i t a l , through the m u l t i -n a t i o n a l c o r p o r a t i o n might make i t necessary fo r labour to ac t in a c o o r d i n a t e d , i n t e r n a t i o n a l manner. C o n f l i c t w i t h a branch of a m u l t i n a t i o n a l c o r p o r a t i o n might w e l l be doomed to f a i l u r e and the p o s s i b l e loss of jobs should the m u l t i n a t i o n a l dec ide to s h i f t o p e r a t i o n s to another count ry . The on ly e f f e c t i v e response to t h i s might be an i n t e r n a t i o n a l l y coord inated one i n v o l v i n g the labour movement of severa l c o u n t r i e s , Whi le c a p i t a l i s o r g a n -ised i n t e r n a t i o n a l l y , labour i s not and i t might be that i n t e r n a t i o n a l cooperat ion could on ly be p o s s i b l e f o l l o w i n g the fo rmat ion of an i n t e r n a t i o n a l o r g a n i s a t i o n that went beyond in fo rmat ion shar ing and i n t o the realm of a c t i o n . Fur ther Study There are severa l areas of research that emerged in the course of t h i s t h e s i s which were beyond the scope of t h i s s tudy . F i r s t is the r e l a t i o n s h i p between such o r g a n i s a t i o n s as the T r i l a t e r a l Commission, the O r g a n i s a t i o n fo r Economic Cooperat ion and Development (OECD), the European Economic Community on the one hand and i n s t i t u t i o n a l arrangements a t a n a t i o n a l l e v e l on the o t h e r . Some r e l a t i o n s h i p between these l e v e l s i s i n d i c a t e d and an i n v e s t i g a -t i o n of them could prov ide important i n s i g h t s i n t o the r e l a t i o n s h i p betwen m u l t i - n a t i o n a l c o r p o r a t i o n s and n a t i o n a l s t a t e s , If changes are o c c u r r i n g in t h i s r e l a t i o n s h i p , i t might be even more important f o r labour to develop i t s i n t e r n a t i o n a l l i n k s , A second area of research would invo l ve look ing at the labour process i t s e l f in Canada, through t h i s p e r i o d , The main work in recent years on the labour process is Harry Braverman 1 s Labour and Monopoly C a p i t a l which i s 109. based on United S ta tes development. Are there d i f f e r e n c e s between the U.S. economy and one such as Canada 's , based more on resource e x t r a c t i o n , that would be r e f l e c t e d in the labour process? Al though i t seems q u i t e l i k e l y that d e s k i 1 1 [ n g , one of the main themes of Braverman's work, has cont inued through the l a s t twenty years (most of h i s data do not extend beyond 1960), i t would be important to note e x a c t l y how t h i s has proceeded. The i n t r o d u c t i o n of new technology u s u a l l y invo lves the c l a i m that s k i l l l e v e l s are being i n c r e a s e d . In the per iod that Braverman s t u d i e d , he demonstrated that the reverse had happened, Is t h i s process c o n t i n u i n g in new technology i n d u s t r i e s ? I n i t i a l impressions would suggest that t h i s is s o , the c h i e f requirement demanded of the work f o r c e i n c r e a s i n g l y being f l e x i b i l i t y and a d a p t a b i l i t y ra ther than s k i l l , A f i n a l study suggested by t h i s t h e s i s would be an examinat ion of the development of the i n d u s t r i a , ! task f o r c e s and other t r i - or b i p a r t i t e i n s t i t -u t i o n s in Canada, As t h i s development d i d not begin u n t i l 1978, i t was l a r g e l y o u t s i d e the time frame cons idered in t h i s t h e s i s . It would be p o s s i b l e now to begin conduct ing in te rv iews w i t h many of the p a r t i c i p a n t s in these bodies as we l l as a c t i v e union members at the l o c a l l e v e l to see what impressions they have, i f any, of these new o r g a n i s a t i o n s , A d e t a i l e d study of the p o s i t i o n s take at the l a s t two CLC convent ions in 1978 and 1980 would be h e l p f u l but i t would seem t h a t , i f these bodies cont inue to f u n c t i o n , the 1982 convent ion w i l l see the f i r s t major debates on the r o l e of unions in these i n s t i t u t i o n s . From the a n a l y s i s h e r e , i t would seem l i k e l y that t r i p a r -t i t e i n s t i t u t i o n s w i l l deve lop , and t h e r e f o r e labour w i l l have to develop a p o s i t i o n in r e l a t i o n to them, A p a r a l l e l study to t h i s , or perhaps both could be incorporated in a l a r g e r s t u d y , would invo l ve the c l o s e r a n a l y s i s of the p o s i t i o n s of f r a c t i o n s of the c a p i t a l i s t c l a s s on these issues and how they 110. w i l l be r e f l e c t e d in the d i s c u s s i o n s around the r e p a t r i a t i o n of the c o n s t i t -u t i o n . I l l . CHAPTER V: FOOTNOTES 1. John H e i n , "The Top 100 Economies" , Across The Board (New York : C o n f e r -ence Board , May 1980), 2 . Norman G i r v a n , "Economic N a t i o n a l i s t s v . M u l t i n a t i o n a l C o r p o r a t i o n s " , in Car l W i d s t r a n d , e d , , Mul t i nat iona.l Firms in A f r i c a (Nord i ska Af r i k a -i n s t i t u t e t , 1975). 3 . I b i d . k. Quoted in B i l l H a r d i n g , Nukenomics: The P o l i t i c a l Economy of the Nuclear  Industry (Reg ina : Regina Group f o r a Non-nuc lear S o c i e t y , 1979) , P^  2 1 , 5 . Appointees to the U.S. A d m i n i s t r a t i o n must r e s i g n from the Commission, 6,. Gonick , op, c i t , , pp. 7 0 , 126, 7, I b i d . , p. 120, 8 , Paul M a l l e s , I n s t i t u t i o n s of I n d u s t r i a l R e l a t i o n jn C o n t i n e n t a l Europe (Ottawa: Canada Department of Labour , 1971), 9 , Economic Counci l of Canada, Th i rd Annual Review (1966) , 10, The l a s t major attempt to make Canadian unions conform to the p o l i t i c a l p r a c t i c e s of the i n t e r n a t i o n a l s occur red at the t ime of the TLC - CLC merger, See Horowi t z , op. c i t , , p. 234, 11, A l though on ly minor gains were made by the NDP in the 1979 and 1980 f e d e r a l e l e c t i o n s , there was a s t rong p a r a l l e l campaign conducted by the CLC and many o f the a f f i l i a t e un ions , 12, Th is would not be l i m i t e d complete ly to resource e x t r a c t i o n but would inc lude such o p e r a t i o n s as Michel in in Nova S c o t i a , R e c e n t l y , Michel in s u c c e s s f u l l y pressured the Nova S c o t i a l e g i s l a t u r e i n t o amending the labour code of that p r o v i n c e , The amendment, in e f f e c t , d e c e r t i f i e d one of the two Michel in p l a n t s in the p r o v i n c e . Such concess ions would not be a v a i l a b l e under an incomes p o l i c y / t r i p a r t i t e framework, 13, From an i n t e r v i e w w i t h Peter W a r r i a n , Stee lworkers r e p r e s e n t a t i v e on the task f o r c e , June 5 , 1980, 14, Reported in The Vancouver P r o v i n c e , J u l y 1980, 15, Peter W a r r i a n , "Comments on Chr i s J e c c h i n i s , T r i p a r t i t e C o - o p e r a t i o n and Consensus in Incomes P o l i c i e s and the F ight Aga ins t S t a g f l a t i o n : C e r t a i n European Exper iences and the Prospects f o r Canada", paper present -ed to Canadian I n d u s t r i a l R e l a t i o n s A s s o c i a t i o n , M o n t r e a l , June 3 , 1980, 16, M a l l e s , op . c i t , 17, P a n i t c h , op , c i t , 112, 18. Car l J , Cuneo, " C l a s s E x p l o i t a t i o n in Canada", The Canadian Review of  Soc io logy and Anthropo logy , V o l , 15, No. 3 , 1978"^  19. Interv iews w i th Robert B a l d w i n , CLC, and Peter W a r r i a n , S tee l workers . 20. Some of the except ions to t h i s form are in the c o n s t r u c t i o n i n d u s t r i e s in la rge c i t i e s and in the f o r e s t r y indus t ry in B.C. Pulp and paper in eas te rn Canada s t i l l f o l l o w s the union loca1-management form, 2 1 . Th is i s not to suggest that membership on corporate boards would r e s u l t in an increase in l a b o u r ' s power. Such arrangements e x i s t in West Germany and there i s no ev idence that l a b o u r , as a whole , b e n e f i t s . See Dimension, V o l . 12, No, 3 , J u l y 1977. P. 34, 11B. BIBLIOGRAPHY A b e l l a , I.M., N a t i o n a l i s m , Communism and Canad ian Labour ( T o r o n t o : U n i v e r s i t y o f T o r o n t o P r e s s , 1973) • B a r a n , Paul and Sweezy, P a u l , Monopoly C a p i t a l : An Essay on the Amer i can Economic and S o c i a l Order (New Y o r k : Month ly Review P r e s s ,1966). 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