Opinion

New Dems Poised to Inherit a BC Shaped by Neoliberalism

BC Liberal rule has made this 'The Best Place on Earth' for the already prosperous.

By James Rowe, 3 Apr 2013, TheTyee.ca

Cigar and whisky

Who did well? Campbell's tax cuts shifted burden from wealthy to middle class and low-income. Image: Shutterstock.

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British Columbia's New Democrats will form government this spring if recent polling sticks. The May election is arriving amidst a crisis of the philosophy and policy-paradigm that has guided governance worldwide for the past 40 years: neoliberalism. Understanding neoliberalism's legacy, appeal, and current transformation -- both globally and in British Columbia -- can facilitate successful social democratic governance starting in May. Renewed social democracy in B.C. can yield ecological and social benefit in this region, but also serve as a model for other jurisdictions seeking alternatives to neoliberal orthodoxy. Political openings for progressives are afoot.

Neoliberalism in BC

Neoliberalism names ongoing efforts to reduce the state's social and environmental welfare role while expanding its function as a facilitator of profit accumulation. Classic neoliberal policies include deregulation, privatization, generalized tax cuts, the reduction of social spending, and trade liberalization. These policies unevenly benefit the economic elite, and have facilitated growing concentrations of wealth since becoming widespread in the 1980s.

One of Gordon Campbell's first acts of government in 2001 was a 25 per cent income tax cut for all British Columbians. Someone earning $20,000 per year saved a mere $236, while someone earning $80,000 pocketed a generous $1,947. Generalized tax cuts unevenly benefit upper-bracket earners. Moreover the $1.5 billion in lost yearly revenue has been primarily borne by middle and low-income earners who relied more on the government services that Campbell's Liberals cut to make up the shortfall (See Will McMartin's contributions to the book the Tyee published in 2005, Liberalized, and his various Tyee columns like this one.)

According to TD Economics, B.C. is now marked by the highest levels of income inequality in Canada and ranks first in terms of individuals living on low income. The BC Liberals are tops at base superlatives: Eleven years of (Neo)Liberal rule has made British Columbia "The Best Place on Earth" for the already prosperous.

Why did it take so long?

Gordon Campbell's Liberals won three majorities between 2001 and 2009. An analytical and political problem vexing progressives since neoliberalism's advent in the 1980s has been its relative popularity (the namesakes for Thatcherism and Reaganomics, for example, both won multiple elections). The standard explanation is that consent has been manufactured through a well-financed network of think tanks, industry organizations, and lobby groups that have successfully neoliberalized public discourse (See David Harvey's A Brief History of Neoliberalism).

Popular publics have been systematically hoodwinked into voting against their economic interests with false promises of increased freedom and prosperity. That freedom was to be achieved by limiting government taxation, redistribution, and regulation. As Gordon Campbell poetically protested on the campaign trail in 2001: "I'm not willing to let any government tax away my dreams." At the time he was protesting a property surtax on homes valued over $500,000 (in the early 2000s half a million bought far dreamier homes than today). Neoliberalism promises freedom for all, while delivering for the few.

To statistically illustrate neoliberalism's ideological success: In 1965 58 per cent of Canadians reported that they trusted government and only 36 per cent said that government wasted taxpayer money. By 1993 those figures had reversed: 33 per cent had trust in government and 79 per cent thought that governments were wasting tax monies (See Stephen McBride and Heather Whiteside's Private Affluence Public Austerity.)

But these numbers reveal another reason for neoliberalism's popular resonance: Publics have always been ambivalent towards centralized state power. Even before the neoliberal revolution began, 42 per cent of Canadians did not trust government and 36 per cent thought they wasted taxpayer money. It is helpful to draw a distinction between ideologically crafted distrust in government and more primordially populist resistance to hierarchical authority. Efforts to rebuild trust in government and forge social democratic or socialist alternatives need to address both the ideological and organizational power of the neoliberal movement, but also the pre-existing -- and quite warranted -- popular ambivalence towards centralized state power.

Neoliberalism has only had popular resonance in this part of the world because it taps into a pre-existing frustration with the centralized state. The modern state is a huge concentration of power; it often exists removed from the people and environments it is meant to manage. The state's concentrated power coupled with its distance from constituents can naturally breed alienation. Victoria is one hell of a distance from Ottawa, and Prince George is a long march from Victoria. It makes sense that people are uneasy about distant elites making decisions about their lives and commonwealth.

The New Democrats

It would be comforting for progressives if the BC NDP's recent resurgence could be primarily pinned on widening support for social democratic politics. But this would be a dangerous reading of recent polling. The two key policy moves that accelerated Campbell's end and the Liberal party's decline were the carbon tax in 2008 and HST in 2009. Both initiatives spawned populist tax revolts, which the NDP were happy to ride. Neither tax is progressive, but nor are they entirely regressive. Indeed the carbon tax, while not a perfect instrument, was widely supported by the environmental movement and is likely to be adopted by other jurisdictions in the coming years.

The carbon tax and HST backlashes were of Campbell's making; he and his party fell on their own swords. Anti-tax sentiment has been systematically stoked by the BC Liberals and their supporters as part of a broader neoliberal project. More primordially populist anger at arrogant political elites, with Campbell as the poster boy, also drove anti-tax sentiment.

The NDP strategically aligned themselves with the tax revolts and have seen electoral benefits. But this puts them in a bind. Increased taxes will be required to fund an effective social democratic agenda. But what about a storm of tax revolts? In their most recent budget the Liberals borrowed from the social democratic playbook and raised corporate taxes by one per cent and introduced a new tax bracket for those making over $150,000. No revolts are brewing and opinion polls show broad support for the changes.

There is increasing ideological room for social democratic governance in the wake of the 2008 financial crisis and social movement responses like Occupy Wall Street that shifted public discourse away from neoliberal austerity and towards income inequality. But Left governments in B.C. and beyond would be wise to proactively counter ideologically crafted distrust in government and more primordially populist concerns with centralized authority. Both can be addressed through reforms that shrink the distance between decision-makers and those affected by the decisions, that ultimately make the government more accountable, responsive, and democratic.

The future of government

Participatory budgeting is a democratic process enabling direct community control over portions of a public budget; it is a particularly effective way of increasing feedbacks between representatives and the electorate. Coupled with social media technology, participatory budgeting has potential to increase popular say over budget decisions and provide heightened social license for progressive government interventions (while prone to techno gee-whizism, Gavin Newsome's recent Citizenville is a repository of enabling ideas in this regard).

Recent polling by the Canadian Centre for Policy Alternatives reveals increased electorate willingness to pay higher taxes if it is clear where the monies will go: For example, 58 per cent of British Columbians said they'd pay more to protect forests and endangered species, and 69 per cent agreed with paying more to improve senior care. Setting the right process and mechanisms for increasing public input on budget priorities is a central governance challenge. Vancouver is home to two highly innovative online advocacy organizations -- Leadnow.ca and Openmedia.ca -- that have know-how and active communities that could help with visioning and logistics.

Progressive government interventions to address crises like climate change and income inequality are required the world over. In British Columbia we are poised to elect a party more ideologically open to making these needed interventions. But 40 years of neoliberal hegemony, and many more of hierarchical governance from Right and Left, have bred popular distrust in government. This distrust has been effectively mobilized by the Right to create popular support for the neoliberal revolution despite its elitist results.

There is growing ideological room for a renewed Left politics. But for this renewal to accelerate, and overcome neoliberal blowback, it must actively intensify feedbacks between representatives and the electorate. Tech savvy participatory budgeting is a particularly enabling way to increase social license for Left governance. We have a precious opportunity to promote social and ecological flourishing in B.C. and beyond by enacting model alternatives to neoliberal rule.

An open and participatory New Democratic government is no panacea for the contradictions of neoliberal capitalism. But it is a healthy and hopeful start.  [Tyee]

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