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SILENT COUP:
Confronting the big business takeover of Canada

By Tony Clarke



Our political leaders are engaged in nothing less than the systematic dismantling and restructuring of the socioeconomic system that was built up in Canada over the past 60 years. Corporate Canada has all but succeeded in its mission to eradicate the Keynesian social welfare state in this country.

The goal is to restore Canada to an unimpeded free market economy. At the heart of this counter-revolution is the destabilization of the public sector and the crowning of the private sector as the engine of economic and social development. When it comes to Canada's future, the free market is to reign supreme, unfettered by government intervention and regulation. To paraphrase Maude Barlow of the Council of Canadians, the Canadian experiment of a "social nation state" is being dismantled in favour of a "corporate nation state."

Like most counter-revolutions, this too was carried out through an organized coup d'état. But this was no ordinary political coup. It was not engineered by an armed military assault on Parliament Hill in Ottawa. Instead, it was finessed by a band of CEOs from Bay Street in pin-striped suits. The takeover was hostile, but not violent. There was no overthrow of the prime minister or the minister of finance or the rest of the cabinet. On the contrary, these politicians were seen by the CEOs as useful servants for implementing their counter-revolution.

The strategy of big business was to seize control over the levers of public policy-making at both national and provincial levels. Coordinated by the Business Council on National Issues, the country's leading corporate CEOs mobilizd a powerful shadow cabinet in Ottawa to oversee and direct the basic reorientation of fiscal, economic, social, and environmental policy-making in Canada. Nor was this political coup carried out through a sudden, dramatic action. It was gradually developed by the BCNI and its allies through a series of actions on multiple policy fronts over a period of no less than 20 years.

In effect, this is what John Ralston Saul, one of Canada's leading contemporary political philosophers, means when he says that "we are now living in the midst of a coup d'état in slow motion." In his 1995 Massey Lecture series, Saul lamented the growth of corporate power in our society which, he says, is disfiguring the ideal of the public good, turning citizens into consumers, and weakening the fabric of democracy.

Instead of citizens making a conscious choice to move down this path, Saul deplores the fact that what we have called a counter-revolution has been planned and pulled off by economic and political élites. Even in the United States, he notes, a president can be elected on a mandate to bring in comprehensive health care, only to find that his plans to do so are thwarted, not so much by Congress itself, but by the mobilization of what he calls the "corporatist forces."

"What the corporatist system is telling us," says Saul, "is that the democratic system is no longer appropriate." This is the same message that the powerful Trilateral Commission started promoting almost 20 years ago when it attacked the Keynesian state for creating "excess democracy."

Indeed, the turning of the millennium signals the dawn of a new political era: the age of corporate rule. The common theme running through all of Corporate Canada's strategies and campaigns--from privatization and deregulation to free trade, from corporate tax reforms to deficit-slashing and the dismantling of public services and social programs--is the re-invention of the role and powers of government.

The BCNI calls it the return to "minimal government." But what is really going on is that the Canadian state is being completely reorganized and restructured to serve the interests of transnational competition and investment in the new global economy. And with this, the fundamentals of our political life--the nation state, citizenship, and democracy itself--are being radically reshaped in the image of the corporation and free market economics. This is the trajectory along which the counter-revolution is now moving and taking us in its wake.

Yet somehow Canadians seem to be sleepwalking through this critical moment of our history. As Saul puts it, "We are engaged in an unconscious process which can be described as slow, masochistic suicide. And suicide," he adds, is usually "the product of an inability to see ourselves in the context of our reality."

But if the role and powers of the state are being reorganized to further advance the interests of transnational corporations, then what kind of state is being created as a replacement for the Keynesian model of government?

At this point, what seems to be emerging is a corporate state that is primarily designed to create the conditions necessary for profitable transnational investment and competition. This, in turn, calls for a more authoritarian model of government. For if the central task of this new corporate state is to facilitate profitable investment and competition, this in effect means that all of the major sectors of a national economy and society--fiscal, monetary, industrial, resource, service, social, cultural, agricultural, trade, transportation, environment, entertainment, communications--need to be reorganized to serve these ends.

While the driving force behind this agenda is the power of domestic and transnational capital, corporations realize that only governments have the authority and legitimacy to restructure the country's economy and society. The state, therefore, has a strategic role to play, not only in reorganizing the main sectors, but also in disciplining the population to make the necessary adjustments to this new system of corporate rule. To do so, certain powers need to be concentrated and centralized in the hands of the national government, while others need to be devolved and decentralized in the hands of provincial governments and agencies.

Just as the Keynesian state was largely organized around the theme of social welfare, so it can be argued that the new corporate state is being organized around a common theme: investor security. The prime focus is on security for profitable investment. For the state, the name of the game is to provide a secure place and climate for profitable transnational investment and competition. In other words, security for investors, but not citizens.

Ottawa and the provinces are getting out of the business of ensuring that the basic economic and social needs of Canadians are adequately met, and instead are getting into the business of ensuring that corporations have the conditions they need to become more profitable and competitive. This is what investor security means as an organizing principle for governments today. The priority is on providing security for corporations, not for citizens, whose lot has become one of growing insecurity. Over the past few decades, we have witnessed a massive transfer of wealth and power from the public to the private sector which has, in turn, altered the power dynamics of this market federalism. In addition to the transfers that take place through the sale of public sector institutions and enterprises, and the removal of regulatory measures over the operations of corporations in particular industries, there are the direct transfers between governments and banks paid in the form of interest on loans.

Between 1988 and 1995, reports economist Jim Stanford, the federal government increased its debt loans to Canadian banks by over 500%, from $15 billion to $80 billion. As a result, Ottawa now pays the Big Five banks close to $7 billion dollars annually in interest payments on these risk-free loans. In other words, the record-breaking profits racked up by the banks in recent years are largely due to a direct transfer of wealth from citizens to bankers in the form of interest payments on government debt loans.

Says Stanford, "The banks and other financial institutions are cashing in on our deficit...the 'debt' of Canadian taxpayers has become an 'asset' of the commercial banks [which in turn] can be recycled through the banking system to regenerate even more profit-making loans for the banks."

Adds Winnipeg journalist Frances Russell, Ottawa ends up acting as a "debt collector" for affluent investors.

In the final analysis, we are now living under a system of corporate rule that is dealing death blows to democracy in this country. What the Trilateral Commission targeted as "excess democracy" 20 years ago has all but been wiped out. Not only have citizens' rights been subverted in favour of investors' rights, but our society is rapidly moving in the direction where virtually only corporations can be said to have full citizenship status. The state, both at federal and provincial levels, has been restructured to primarily serve corporate demands for capital accumulation by securing a safe haven for profitable investment and competition.

Given the mastery which big business now has over the public policy-making apparatus in Ottawa, elected Members of Parliament have been reduced to a role of simply rubberstamping the decisions already made by cabinet in the interests of the big business shadow cabinet.

When it comes to the major fiscal, economic, trade, social and environmental issues of the day, citizens' organizations which collectively represent the majority of Canadians on these issues are summarily dismissed in Ottawa as "special interest groups" and deprived of any effective voice in the corridors of power.

The agents of corporate rule have dealt a heavy blow to the very heart of democracy: civil society.

Tony Clarke is the director of the Polaris Institute and a former national chair of the Action Canada Network. The foregoing article was excerpted from his new CCPA/Lorimer book, "Silent Coup: Confronting the Big Business Takeover of Canada," in which he not only explains how the corporations seized power, but also gives a detailed plan for restoring true democracy in this country. His book is now available at most major bookstores or from the CCPA.

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