COLUMN

New strategies for an old game

Dian Cohen December 15 1986
COLUMN

New strategies for an old game

Dian Cohen December 15 1986

New strategies for an old game

COLUMN

Dian Cohen

The coincident timing of the Grey Cup and the Liberal party policy convention offers food for thought about the economy. In sports there are winners and losers; the nature of the game is adversarial and confrontational. In politics things were just as simple in the good old days. There was a time when we believed that we could easily identify the good guys and the bad guys, just as we believed that even long-standing problems had simple solutions.

Because we were so sure that we could mould the economy to our liking, politicians, like football strategists, found it easy to call the plays. If the problem was starvation, the solution was a few billion dollars in foreign aid. If more economic growth was needed, the answer was to lower interest and tax rates. If industrial labor-management disputes reared their heads, the answer could be found at the bargaining table. Economic recovery automatically meant shrinking unemployment and low inflation meant increased affluence.

Hardly anyone believes in the simple life anymore. Among Canadians across the country, there is widespread doubt that any one political party has better answers to the issues than another or that, once in power, any one leader can untangle the problems inherent in the system. Increasingly, people tell me that they are uncertain about whether some of our more intractable problems—interest rates, the deficit, even unemployment—can be solved through domestic political decisions alone.

Politicians, if they are to see us into the 1990s, have some serious issues to address. Among them are the implications of the huge structural change our economy has undergone. From 1948 to 1975 public budgets expanded and politicians developed a clear perception of their own role: to keep track of the wealth, to skim off the tax revenue from that wealth and to redistribute it according to their own views of social equity. That wealth flowed bountifully from wheat, lumber, pulp and paper, oil, natural gas and heavy industry. Now, those resources are no longer as valuable—yet, because they have always been there, we have only partially developed alternatives to maintain our cash flow. For the future, politicians such as Brian Mulroney and John Turner, who came of age during

the 1950s, must struggle to learn something that they never thought they would have to learn: to govern without much money, to redistribute scarcity and to build confidence in our ability to find a new source of wealth.

Another problem facing politicians is recognizing that simple majorities— the mass markets for political ideasare becoming harder to identify. A new network of socially and politically conscious Canadians has emerged from the inflation of the 1970s and the recession of the early 1980s. These voters are less willing to grant a clear social and economic policy mandate to government. They are also more likely to support a minimization of government’s prescriptive involvement in the economy.

Significantly, those people are not marginal participants in Canadian life who seek to enter the mainstream. They are middle-class Canadians who

Politicians such as Mulroney and Turner must learn something they never thought they would have to learn

fear that their hard-won place in the economy is threatened. They are concerned about the future of their children. And as a group they challenge modern politicians to drop the leftright ideological baggage of old-style confrontational politics. Our leaders need new ways to define and mediate the complex array of demands being made by an increasingly pluralistic world.

Among the issues that have yet to be confronted realistically—or constructively—by any Canadian political party is free trade. For example, at the November Liberal policy convention John Turner was faced with radically differing views on the subject. But as Donald Macdonald, whose royal commission recommended freer trade, said subsequently, in the absence of consensus a leader has to lay down a firm position—in this case, in support of the free trade talks. Turner must make a decision one way or another—although the details might be up for discussion later—and his party should respect that position. Another far simpler example is the very concept of a

job, the most basic bond of Canadians to their economy. It no longer follows that if you are an industrious person and obey all the rules you will automatically find a job. And certainly very few people can now assume that they will spend a lifetime with the same employer. The slow progress toward pension portability is one attempt to meet that challenge. But as a society we have yet to address seriously the question of a permanent incomesupport system that can be sustained for as long as it takes to redefine work. Indeed, last week’s Forget commission report on the unemployment insurance system steps beyond its mandate to recommend income support both for the working poor and the unemployed (page 14). Because it suggests radical changes to the system we all know, it has been damned on all sides. Yet the critics know that our present systems of unemployment insurance, welfare and job retraining are ill-suited to a lengthy transition period of high unemployment among the mainstream of the Canadian middle class.

All the energy that goes into political bickering—and that will only increase as social tensions are exacerbated by the transition—could be used to concentrate on finding new models, new solutions, made-in-Canada ways of adapting to the restructured economy. And that in turn means that the onus will be on politicians to break through the old rocksolid base line of public mistrust. Dealing effectively with the deficit, unemployment, free trade, international debt and tax reform means cooperation—not just among political parties but among academics, labor leaders and businessmen. It does not mean gratuitous confrontation that goes nowhere.

Otherwise, industries where employers and unions indulge in protracted battles may find themselves with nothing left for which to fight, and politicians may find themselves without an audience. We could be a backwater within a short time if we continue such destructive behavior.

Let’s not allow that to happen. Let’s leave adversarial games on the playing field. In the business of the nation’s economy, there is no time or room for disagreement just for the sake of it.

Dian Cohen is a Montreal-based economics writer.