Continuities and Discontinuities: The Political Economy of Social Welfare and Labour Market Policy in Canada 9781442623118

Table of contents :
Contents
Acknowledgments
Introduction
Part I. Political Economy in Transition: Implications for the Canadian Welfare State
1. Neo-conservatism and Beyond
2. Changing Gears: Democratizing the Welfare State
3. Need and Welfare: ‘Thin’ and Thick’ Approaches
4. Challenges for a New Political Economy
5. Social Welfare and the New Right: A Class Mobilization Perspective
Part II. Canadian Social Welfare Policy
6. Decentralized Social Services: A Critique of Models of Service Delivery
7. Holistic Social and Health Services in Indian Communities
8. Neo-conservatism and Social Policy Responses to the AIDS Crisis 126
9. Poverty: Myths, Misconceptions, and Half-truths
10. Rhetoric and Reality: Health Care Cutbacks in Three Provinces
11. Social Assistance and ‘Employability’ for Single Mothers in Nova Scotia
12. False Economies in Newfoundland's Social and Child Welfare Policies
13. Mothers and Children: Ensuring Acceptable Standards of Living
Part III. Canadian Labour Market Policy
14. Regional Development Policy and Labour Markets in Atlantic Canada
15. Towards a Neo-corporatist Labour Market Policy in Quebec
16. The Political Economy of Ontario’s Labour Market Policy
17. Labour Markets and Neo-conservative Policy in British Columbia, 1986–1991
18. Defending the Welfare State and Labour Market Policy
19. Part-time Workers, the Welfare State, and Labour Market Relations
20. Canadian Organized Labour and the Guaranteed Annual Income
Epilogue
Contributors

Citation preview

Continuities and Discontinuities The Political Economy of Social Welfare and Labour Market Policy in Canada

Continuities and Discontinuities assesses the making of Canadian social and labour market policy in the context of two factors - globalization and neo-conservatism. Specialists from a variety of fields and disciplines examine the relation between Canada's changing political economy and its social welfare and labour market policy. These essays analysing continuities and discontinuities in policy emerged from research that was presented at the 5th Conference on Social Welfare Policy held at Bishop's University in 1991, and that has been revised to reflect the situation of the mid-1990s. Part i introduces the three broad areas explored in the volume. Part n addresses new trends in Canadian political economy and their relation to public policy. Part in analyses social welfare policy. Of the essays included, several investigate the democratizing of the Canadian welfare state and controversies in the conception and definition of poverty. Others address the AIDS crisis, health policy, and social policy issues that primarily affect women, children, and native peoples. In Part iv recent Canadian labour market policies are investigated and appraised, and alternatives suggested or evaluated. One essay argues that employment security and high wages could generate high productivity and international competitiveness; another examines the impact of the growth in part-time employment on the welfare state; a third probes the relation of organized labour to a guaranteed annual income; others investigate the impact of neo-conservatism on labour market policy-making in various provinces and regions. Globalization and neo-conservatism continue to shape change and require constant evaluation. These thought-provoking and informative essays are an important contribution to the ongoing debate on social welfare and labour market policy in Canada.

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EDITED BY ANDREW F. JOHNSON, STEPHEN McBRIDE, and PATRICK J. SMITH

Continuities and Discontinuities: The Political Economy of Social Welfare and Labour Market Policy in Canada

UNIVERSITY OF TORONTO PRESS Toronto Buffalo London

1

University of Toronto Press Incorporated 1994 Toronto Buffalo London Printed in Canada ISBN 0-8020-2916-7 (cloth) ISBN 0-8020-7421-9 (paper)

Printed on acid-free paper

Canadian Cataloguing in Publication Data Main entry under title: Continuities and discontinuities : the political economy of social welfare and labour market policy in Canada Papers from a conference held at Bishop's University, August, 1992. Includes index. ISBN 0-8020-2916-7 (bound) ISBN 0-8020-7421-9 (pbk.) i. Public welfare - Canada - Congresses. 2. Manpower policy - Canada Congresses, i. Johnson, Andrew Frank, 1947. n. McBride, Stephen, m. Smith, Patrick J. HVio8.c65 1994

361.971 C93-095io8~5

Contents

Acknowledgments

ix

Introduction

3

Parti Political Economy in Transition: Implications for the Canadian Welfare State 1

Neo-conservatism and Beyond

25

PHILIP RESNICK

2

Changing Gears: Democratizing the Welfare State

36

LEO PANITCH

3

Need and Welfare: Thin' and Thick' Approaches

44

PATRICK K E R A N S

4

Challenges for a New Political Economy

62

CAROLINE ANDREW

5

Social Welfare and the New Right: A Class Mobilization Perspective ROBERT MULLALY

76

vi

Contents

Part II Canadian Social Welfare Policy 6

Decentralized Social Services: A Critique of Models of Service Delivery

97

BRAD MCKENZIE

7

Holistic Social and Health Services in Indian Communities

no

GARY SCHAAN

8

Neo-conservatism and Social Policy Responses to the AIDS Crisis

126

GUY POIRIER

9

Poverty: Myths, Misconceptions, and Half-truths

148

KEN BATTLE

10

Rhetoric and Reality: Health Care Cutbacks in Three Provinces

174

LESLIE BELLA

11

Social Assistance and 'Employability' for Single Mothers in Nova Scotia

191

STELLA LORD

12

False Economies in Newfoundland's Social and Child Welfare Policies

207

DOUGLAS DURST

13

Mothers and Children: Ensuring Acceptable Standards of Living

218

SUSAN M. CLARK

Part III Canadian Labour Market Policy 14

Regional Development Policy and Labour Markets in Atlantic Canada JAMES BICKERTON

235

Contents 15

Towards a Neo-corporatist Labour Market Policy in Quebec

vii 253

A N D R E W F. JOHNSON

1.6

The Political Economy of Ontario's Labour Market Policy

268

STEPHEN McBRIDE

17

Labour Markets and Neo-conservative Policy in British Columbia, 1986-1991

291

PATRICK J. SMITH

18

Defending the Welfare State and Labour Market Policy

306

LEON M U S Z Y N S K I

19

Part-time Workers, the Welfare State, and Labour Market Relations

327

JOHN SHIELDS and BOB R U S S E L L

20

Canadian Organized Labour and the Guaranteed Annual Income

350

RODNEY HADDOW

Epilogue

367

Contributors

373

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Acknowledgments

The chapters in this book were developed from lectures and papers presented at the 5th Conference on Social Welfare, held at Bishop's University, in Lennoxville, Quebec, in August 1991. We wish to thank Bishop's University, Ministere de la sante et des services sociaux (Quebec), the Ministry of Community and Social Services (Ontario), National Welfare Grants (Health and Welfare Canada), the Secretary of State (Canada), and the Social Sciences and Humanities Research Council (SSHRC) for their financial support of the conference. National Welfare Grants expressed an interest in disseminating the diversity of views exchanged at the conference by providing a substantial and flexible publication subsidy. Part of the SSHRC grant was also used to subsidize publication of this book. In addition, Bishop's University's Publication Committee and Lakehead University's Faculty Development Committee provided funds to defray editorial expenses. More than financial support was required - and was given generously - in order to make this book possible. Virgil Duff, executive editor of the University of Toronto Press, encouraged us to initiate and to complete the project, as did Evariste Theriault of National Welfare Grants; two anonymous reviewers provided comments and suggestions that greatly improved argumentation presented in various chapters and in the text as a whole; and John Parry improved the manuscript with his deft copy-editing.

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CONTINUITIES AND DISCONTINUITIES: T H E P O L I T I C A L E C O N O M Y O F SOCIAL W E L F A R E A N D LABOUR MARKET POLICY IN CANADA

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Introduction

For over thirty years following the Second World War, Canadian public policy was made largely in the context of economic growth and prosperity marred only by periodic and relatively brief fluctuations. Discourse on public policy was dominated by Keynesian economic theory, which promoted an activist, interventionist role for government in the domestic economy and which supported construction of a far more comprehensive and generous welfare state than previously had been countenanced. A variety of labels have been applied to this era - the post-war settlement, the post-war consensus, the Keynesian welfare state era, and so on. All the labels carry the connotation of social harmony assured by the state's attention to economic prosperity combined with social justice. Indeed, apart from its humanitarian motivation, Keynesian theory provided an economic justification for the welfare state: social expenditure could help to sustain aggregate demand and thereby ensure both full employment and enhanced business opportunities. The policy atmosphere of the 19908 is so different and so unchallenged that it is worth recalling the conventional wisdom of the recent past in order to put present 'certainties' in perspective. Since the 19705, both the economy and public discourse have undergone dramatic changes. The long post-war boom came to an end in the 19705, which was a decade marked by discovery of 'stagflation/ the conjunction of inflation and unemployment. The 1980$ opened and closed with deep economic recessions, and the much-acclaimed economic boom, which separated them, was shallow in its impact; after seven years of uninterrupted growth, unemployment rates in the early 19905 remained well over 7 per cent, and soup kitchens, food banks, and the like could barely cope with demand. In this period, the predominance of Keynesian ideas was first challenged and subsequently eroded by a number of doctrines, including monetarism, supply-side theory, and

4

Introduction

public choice theory. Despite the substantial differences among these approaches, all have essentially reasserted the validity of pre-Keynesian classical economic theory. The labels attached to the new doctrines were as various as those applied to the Keynesian era and included 'neo-conservative/ 'neo-liberal/1 and 'new right/ Most of the contributors to this book prefer the 'neo-conservative' designation, although some make use of the others - for example, Mullaly favours the term 'new right/ and Haddow, 'neo-liberal/ Neo-conservatism is defined more fully later in this introduction. Here we note the following. Neo-conservative policy prescriptions have sought to shrink the size of the state and to curb its scope, to restore the primacy of market forces, and, particularly, to dismantle the social welfare state, which is still alleged to be excessive, an obstacle to creation of wealth, and a drain on the state's ability to compete economically in international markets. Though not all-pervasive, these ideas came to dominate policy processes at the federal level in Canada and in many provinces,2 where proponents continue to claim that market forces must be liberated, by 'downsizing' the state and by emasculating social welfare policies, so that the state can meet the challenges posed by global economic restructuring. Such ideas clearly imply acceptance of business cycles, including the downward cycle, as an essential restructuring mechanism.3 By contrast to the Keynesian era, in which public policy was designed to smooth out the peaks and troughs - especially the troughs - of business cycles, the new policy perspective provides no commitment to maintenance of full employment. These ideas have, therefore, had a major and primarily adverse affect on labour markets. Thus uncertainty, flexibility, insecurity, adaptation, and adjustment appear to be permanent features of neo-conservative regimes. It could be argued that these features of labour markets are really outcomes of structural economic factors rather than products of neo-conservative economic doctrines themselves. Nevertheless, these ideas are significant inasmuch as they legitimize these features as unavoidable, normal, and even desirable. They also legitimize efforts to trim the state and, in particular, to exact cutbacks to supposedly 'wasteful' social expenditure. Yet social welfare policy accommodates the unemployed and unemployables - that is, the casualties and refugees of the labour market; thus unfavourable labour market conditions have exerted additional pressures on already hard-pressed social welfare policies and services. Indeed, the new policy paradigm simultaneously increases need for social welfare and decreases availability of social welfare programs, services, and benefits.

Introduction 5 The relationship of a changing Canadian political economy (including ideological responses to structural economic changes) to social welfare policy and labour market policy, developed in the context of this new policy paradigm, provides the theme for this volume. The chapters are organized and grouped into three parts, which correspond to broad, but interconnected, themes: new trends in political economy and their relationship to public policy; continuities and discontinuities in social policy; and continuities and discontinuities in labour market policy. The logic of the linkages among the three themes has been presented above. The remainder of this introduction elaborates on remarks made above and explains how each chapter fits with the general framework. We first consider continuities and discontinuities in relation to two factors - the nature of the changed and changing economic environment summed up in the term 'globalization/ and the neo-conservative response to it, including the contradictions involved in implementing these ideas in the spheres of social welfare policy and labour market policy. We subsequently look at the individual contributions to the volume. GLOBALIZATION, RESTRUCTURING, AND ECONOMIC CRISIS

There appears to be broad agreement that the world economy is undergoing fundamental restructuring, characterized by greater mobility for capital, rationalization of production in a global context, and economic interdependence among nation-states. In the 19805, according to Warskett, capital tended to move 'to sites of cheap, exploitable labour and away from areas with high direct and indirect wage costs, high taxation, and attempts by states to impose some control over investment decisions/4 This process has been accompanied by greater specialization of production and a trend of abandoning national markets for larger regional trading areas.5 Such trends both reflect and contribute to the power of business corporations. In the face of a market 'bursting free from the bonds of national societies, subjecting a global society to its laws/ nation-states are very much on the defensive.6 Indeed, for many nations it seems that the priority of promoting domestic welfare 'has shifted to one of adapting domestic economies to the perceived exigencies of the world economy/7 These developments suggest that we are in the midst of one of those historic turning points when established ways of doing things cannot be maintained but where the shape of things to come is both contested and unclear. In this situation, identification of sources of continuity and discontinuity is both difficult and intellectually important, carrying with it both

6

Introduction

theoretical and practical implications. Furthermore, controversies about the extent of nation-states' ability to resist global forces compound the difficulty of accurately capturing these trends but also add to the urgency of the task. Erosion of national power is analysed often in terms of a transition from Fordism, a regime of production and accumulation based on national-domestic markets, to post-Fordism driven less by domestic demand than by international trade and competitiveness. Post-Fordist production is characterized by 'flexible specialization' in which, critics argue, most of the costs of flexibility are borne by labour.8 According to Drache, these costs have been endured by Canadian labour. And he points out that the costs include a decline in real minimum wages which has particularly affected women, visible minorities, and immigrants; further bifurcation of the labour market into 'good jobs' and 'bad jobs'; and greater animosity by the state towards social welfare programs, the so-called safety-net for labour. Nation-states have responded in various ways to the pressures that issue from the need to compete in world markets and from renewed assertiveness on the part of capital. In Canada, governments' response has been to accommodate capital and to stimulate 'free market' forces, as reflected in the continuing influence of neo-conservatism. Many of the chapters that follow trace the effect of this approach on social welfare policy and on labour market policy. Neo-conservative ideology causes discontinuity in these policy fields but, as several contributors make clear, is not ubiquitous. NEO-CONSERVATISM AND ITS IMPLICATIONS

Neo-conservatism can be considered both as a technical set of economic doctrines and prescriptions and as a philosophical critique of the collectivist ethos and corresponding institutions characteristic of Western societies in the Keynesian era.9 At a technical level, the monetarist component of neo-conservative economic theory assigns control of inflation to the state as its leading priority. Inflation, the theory suggests, is always attributable to excessive money supply, itself the result either of government borrowing or overuse of the printing presses. Monetarist theory asserts that a great many social and economic ills, including unemployment, ultimately derive from inflation. Accordingly, government activity to sustain full employment by applying Keynesian techniques is judged to be self-defeating; spending may create jobs in the short term but will fuel inflation in the long term. Thus there is little that governments can do to relieve unemployment except, in the long run, to control inflation;10 this goal will allow unemployment to gravitate to its 'natural' level. The attention of policy-makers is thus

Introduction

7

directed to controlling inflation through controlling the money supply. And one corollary is that government indebtedness should be avoided because deficits increase the money supply and generate inflation.11 Essentially, therefore, this brand of economics prescribes balanced budgets and the traditional doctrine of 'sound finance/ At the technical level, monetarist theory does not specify the actual scope of state activity. What is important is that such activity be financed through balanced budgets. The impetus to shrink the Keynesian-style welfare state comes from a philosophical critique of the effects of a large welfare state, supplemented by a second component of neo-conservative economic theory - supply-side economics - which posits that taxation at levels sufficient to finance the post-war state reduces individual incentives and overall economic performance. Hoover and Plant succinctly summarize the relationship between monetarism and supply-side theories as follows: They complement each other ... Most conservative monetarists hold to the supply side doctrines ... and therefore reject the theoretical option, held open within monetarist theory, to reduce budget deficits by raising taxation, because of what they see as the negative incentive effects ... Hence a combination of monetarist and supply-side economics leads naturally into a critique of public expenditure and the principles and values which have underlain its growth since World War n/" Behind the technical economic propositions lie a series of philosophical assumptions that 'markets are inherently superior to any other way of organizing human societies/13 In this perspective, state intervention in markets through macroeconomic policies, crown corporations, encouragement of collective bargaining, and much social provision impedes rather than improves their operation. In some cases, inhibition of market forces flows from encouragement of monopolies; for instance, trade unions are often cited as an example in the neo-conservative literature. In other cases, disincentives are created; for example, it is argued that unemployment insurance has a work-disincentive effect that raises measured unemployment. The logic of the doctrine of market superiority requires the state to remove impediments through such measures as reduced expenditure, deregulation, privatization, contracting out, and tightening the rules for unemployment insurance and other social welfare programs. Paradoxically, removal of market impediments may necessitate assertive state action, hence Gamble's characterization of (British) neo-conservatism as combining a strong state with a free economy.14 The neo-conservative case against the welfare state and social spending is a curious blend of economics, morality, and political science. The critique

8

Introduction

includes claims that the welfare state reduces freedom, results in dependence for its clients, creates pressure groups that have an interest in its perpetuation, imposes socialist and egalitarian values, and meets social needs less efficiently and fairly than would the market/5 Infringements of freedom are said to occur because the costs of the welfare state imply coercive redistribution of income from taxpayers to beneficiaries. In addition, the latter have few choices other than those determined by welfare state agencies and often face restrictions and surveillance as a condition of receiving benefits. (Some recipients of social services become dependent on state benefits, it is alleged, and their dependent status can be passed on to subsequent generations.) Public choice theory suggests that social service agencies strive to maximize their budgets and will be joined in this endeavour by client interest groups.16 The conjunction of bureaucratic self-interest and interest group pressure is said to create potent demands to define new social needs and to expand services and spending. The principles of uniform, standardized, and universal benefits that are built into some social programs are adduced as evidence of the socialist and egalitarian predilections of the Keynesian welfare state - values obviously not shared by proponents of neo-conservatism. Finally, some neo-conservatives claim that participation in the market provides greater benefits than does dependence on the state's largess. This claim is based partly on the well-known 'trickle-down' analogy and partly on general arguments about the superiority of market mechanisms and their maximization of choice to consumers. Each of these assertions is obviously open to challenge, but it is not our purpose to undertake such an enterprise here. Several chapters present assessments or evaluations of the effect of neo-conservatism on particular policies. The impact includes an agenda of restraining growth of social services and spending; reducing existing programs; escaping from the allegedly socialist and egalitarian principles embodied in some social programs by targeting benefits towards the 'truly needy/17 Such an orientation is clearly compatible with an economic agenda of cutting state spending, reducing the state's deficits, and developing a minimalist state/8 But the desire to free the market involves neo-conservatism in a contradiction: an activist and strong state is condemned in theory but in practice may be necessary to accomplish neo-conservative ends. One example (alluded to previously) is the combination of the impulse to reduce social services and the increased demands placed on these services as a result of neo-conservative economic policies, particularly through their effects on the labour market. Neo-conservative economic policies lead to high unemployment and thus fuel demand for social assistance. Thus the relationship be-

Introduction

9

tween traditional social policies and labour market policies is becoming increasingly entangled - a trend that is now apparent in the political aims and policies of the federal and most provincial governments and that is dealt with in a number of the contributions in parts n and in of this volume. In justifying their approach to social welfare and labour market policy, which emphasizes discontinuities with the era of the Keynesian welfare state, neo-conservatives often argue that governments have no or little choice. In this view, nation-states are powerless to resist global economic forces but can produce desirable outcomes for their citizens only by embracing the logic of increasingly internationalized market forces. There is considerable comparative evidence, however, that indicates that policy stances adopted by nation-states in response to global restructuring can produce quite different labour market and social policy outcomes from those resulting from implementation of neo-conservative policies/9 This fact suggests that nation-states are much less prisoners of circumstance than is implied in some rather determinist interpretations of economic globalization. Further, it seems that the policy stance adopted by states is influenced heavily by the prevailing ideology and economic paradigm and that, while the policy package recommended by neo-conservatism has everywhere been associated with high unemployment and increasing social disparities, alternative policies do exist. Thus many of the problems of Canadian society identified in the individual chapters are not economically determined; they are the product of the mediating ideology of neo-conservatism. Economic globalization obviously matters. However, ideologically conditioned policy responses to globalization also matter. And many of the chapters that follow posit alternative responses to existing social and labour market policies. Developing an alternative to the currently dominant approach has been in the forefront of recent debates within Canadian political economy. Part i of the book contains four chapters that reflect on the current condition of political economy, broadly defined as the study of the interaction between state and market,20 and seek to draw out implications for Canadian social policy. Philip Resnick (chapter i) reviews the neo-conservative challenge to the fundamentals of the Keynesian welfare state. He argues that while a significant portion of the neo-conservative agenda has been implemented, the result has been far from the resounding success that would render the new right unassailable. Significant policy failures under conservative leadership have led to high budget deficits, low economic growth, and large trade deficits. Resnick raises the possibility of going beyond neo-conservatism and

10 Introduction assesses the prospects of the moderate left in the 1990$. The neo-conservative critique of Keynesianisjn had incorporated economic, political, and moral dimensions. The ability of the left to set the agenda of the 19905, in Resnick's view, depends on its ability to address each of these dimensions. Success will involve taking markets more seriously, taking democracy more seriously, and constructing an alternative moral vision to that of neo-conservatism. A strong social, environmental, and economic role for the state is foreseen, and Resnick advances enhanced economic democracy as an alternative to the failure of market economics. In the political arena, too, Resnick sees considerable scope for greater popular participation in connection with a moral vision that promotes the values of community, equality, and recognition of the many-sidedness of the human condition. Leo Panitch's chapter (no. 2) recalls a mid-1980s discussion on the topic Ts Social Policy Dead?' between 'do-gooders' and 'cost-cutters/ The debate ended in a stalemate. The 'do-gooder' side ran out of ideas for incremental expansion of the welfare state; in practice, no new addition had been made for almost 20 years. But the 'cost-cutters' failed to reduce dramatically the size or cost of the welfare state. Thus Panitch recommends an alternative social welfare policy based on participation, empowerment, and mobilization. Panitch claims that the need to forge an alternative social policy has become compelling and urgent; such a project would involve major discontinuities in the existing pattern of social policy, but cost-cutting had made much deeper inroads than had seemed likely five years earlier. He argues that defeat of the 'do-gooder' approach had much to do with the inability of its supporters to mobilize either clients or employees of the welfare state - a failure that he links to structural characteristics of the latter organization. Consequently, reform of social policy requires institutional transformation, involving mobilization of those with a common interest in social programs a process of democratization that must be carefully distinguished from devolution involving privatization. Such mobilization will be fuelled by those seeking to fill the 'needs' addressed by these programs. Patrick Kerans provides a theoretical examination (chapter 3) of the concept of need - a central ingredient in the justificatory theory of the welfare state. He argues that, with demise of the consensus around the Keynesian welfare state, theory must strike new ground to understand and defend communal provision. Social welfare has been thought of as non-market allocation of resources, based on need. However, the notion of need is profoundly ambiguous. Over the past several years, a debate among English-speaking philosophers has hammered out a universal, objective notion of need, which, its proponents claim, gives moral weight to need-based allocation. Its objec-

Introduction

11

tivity is rooted in the harm that can be determined to befall the person whose need is not met. While this 'thin' notion of need lays the foundation for a moral critique - even transcending cultural barriers - of allocative institutions, it delivers the notion and provision of need to experts. Others have challenged the 'thin' approach, arguing that the moral weight of human need lies not so much in the objectively determined harm that ensues from needs not met as in the moral assessment of the further aims of the one who professes the need. The claims that people make in the name of their welfare are rooted in need if what they claim is a precondition for their self-realization, for their flourishing. These root notions can, however, be understood only within a particular cultural context. Thus there arises a 'thick' approach to need, which uses hermeneutic methods to understand the socially generated meanings of the aspirations that give rise to welfare claims. This approach focuses not on the notion of need so much as on the politics of legitimate interpretation of need. This chapter makes two interrelated arguments. First, given the particular difficulties and discontinuities that welfare provision faces, the 'thin' approach cannot succeed. Second, while neither of the two approaches can stand alone, they must be understood as complementary. Caroline Andrew (chapter 4) asks whether political economy can help us to understand and influence contemporary social policy. Her chapter reminds us of the extent and speed of change in today's society; she draws attention to some of the issues created by change - multiple social identities; emergence of newly significant social actors, including women and racial, ethnic, and visible-minority groups; articulation of new issues that fit awkwardly, if at all, into the categories of traditional political economy; shifting boundaries between public and private; and coexistence of new democratic forms and concentrated power structures. By putting the concepts of class, state, and dependence at the centre of their analytical perspective, political economists have told us much about ourselves and our world. But Andrew considers that the traditional focus of political economy on class, as the fundamental category, makes it difficult to take into account gender, race, and ethnicity at the same time. Canadian political economy may have failed to address these challenging topics adequately. However, Andrew argues, the ability of political economy to challenge unequal power and relations of domination means that a revitalized discipline has much to offer. Robert Mullaly (chapter 5) emphasizes the continuing role of class analysis in understanding the neo-conservative assault on the Canadian welfare state. He argues that the extensive literature on the restructuring of the Canadian welfare state has viewed the parameters of the welfare state too

12

Introduction

narrowly and, as a result, has underestimated the effects of current restructuring. His chapter has two purposes: to show that the restructuring is part of a larger neo-conservative or new-right agenda to stratify society along class lines glorifying profits, power, and privilege, and to specify some reasons why, after thirty years of stable growth and development of the welfare state, neo-conservatives have been able to break the post-war social contract, or compromise, with labour. The chapter is concerned also with identifying reasons for labour's inability to mobilize against the agenda of the new right. Mullaly claims that we can understand the restructuring of the welfare state only if we view and analyse the welfare state as a class-based institution. His use of the term 'restructuring' is deliberate; Mullaly does perceive continuities with the past in the structure of a welfare state, managed by neo-conservative governments, but he also recognizes that a restructured welfare state will serve as an enhanced device for social control. Hence, the welfare state will manifest continuities as well as discontinuities. As the preceding discussion makes clear, political economy is, as usual, in transition. Lively debates continue to characterize this perspective on political life. In terms of the analysis of the contemporary welfare state in Canada, a number of themes stand out. One is the continued usefulness of class analysis for many political economists. By the same token, however, class can be seen as only one and, for some political economists, by no means the most important social cleavage or explanatory factor. The need for our analytical perspectives to integrate and give due weight to such factors as gender, race, and ethnicity is a major theme of this part of the book. Similarly, political economists and, for that matter, the political left have stressed too little the study of democracy and democratization of the state. Inattention to such matters may have undermined their capacity to mobilize in defence of the welfare state and other institutions that have been under political attack for quite some time. Part ii of the book consists of eight chapters that trace continuities and discontinuities in various areas of Canadian social welfare policy. Chapters 6, 7, and 8 (by McKenzie, Schaan, and Poirier, respectively) discuss, among other things, the theme of democratizing the welfare state. The substantive subjects addressed by Schaan (native social services) and Poirier (AIDS) are areas of growing importance. Both chapters help us understand these issues and point to the need for further integration of these topics into analysis of social welfare policy. Next, chapter 9 (by Battle) seeks to demythologize poverty and related social problems of the new era. Chapters 10, 11, and 12

Introduction

13

(Bella, Lord, and Durst, respectively) examine the impact of neo-conservatism on social policy reform at the provincial level. Finally, Clark's longitudinal study of poverty in Nova Scotia points to the inadequate integration of social and labour market policies and to the need for alternatives. Brad McKenzie's chapter (no. 6) deals with models of service delivery. He indicates that decentralization of delivery of social services is a common policy response to the unresponsive and alienating qualities attributed to centralized bureaucracies of the welfare state. However, this response needs to be carefully planned, as models of decentralization reflect quite different policy objectives. Privatization, motivated by desire to contain costs, emphasizes a quasi-market approach to provision of social services. Other forms of decentralization are consumerist or participatory because they emphasize improved or more democratic services. Within these latter two approaches, three distinct field-based models of decentralization are identified. First, area teams are designed to improve accessibility without major changes either to service philosophy or to power and decision-making authority. Second, community-oriented services stress new, competence - building relationships with community and consumer groups. Third, political decentralization requires devolution of power to communities and local service units situated there. Evidence from theoretical analysis and case studies provides support for those initiatives that offer community-oriented services and devolution of power. However, McKenzie cautions, future success of such programs depends on their capacity to address a number of policy issues, including need for political support, for adequate resources, for service coordination, and for accountability. McKenzie's conclusions may not be entirely relevant to programs that are associated with Native people, as Gary Schaan explains (chapter 7). Schaan explores an elusive concept, the Spirit Circle. He points out that development of the Canadian social welfare system since the 1930$ has been based on federal-provincial accommodations which have addressed only marginally the unique legal and socio-economic circumstances of Indian communities. He then argues that the Spirit Circle, a widespread symbol of Indian community and personal integration, has come to represent holistic integration of the fragmented programs and services at the community level. Indian self-government presents an opportunity to achieve this integration. Indian communities are more able than either the federal or provincial governments to manage the integration of social and health services necessary to overcome Indian political and economic marginalization with Canadian society. However, as the contrasting examples of Indian child welfare arrangements in Canada and the United States show, only a balance between

14

Introduction

adequate 'resourcing' and jurisdictional authorities can allow development of the institutional infrastructure to provide necessary services under Indian self-government. On the subject of AIDS, Guy Poirier (chapter 8) proposes a framework, similar to McKenzie's, that may help explain policy responses to the existing crisis in advanced capitalist societies. State responses have been conditioned by neo-conservative social policies and implemented through restructured health policies. Such policies are rooted in the new right's critique of the Keynesian welfare state and have been supported by neo-conservative governments elected in the 1980$. The policies promoted by these governments involve privatization - shifting of responsibility for social problems, such as AIDS, from the public to the private sector. The chapter charts the process by which social policy has been privatized and shows how this phenomenon explains policy responses to AIDS. Ken Battle (chapter 9) takes a broader approach to social welfare policy. Rather than evaluating a policy per se, he analyses the problem that most social welfare policies endeavour to redress, directly or indirectly - poverty. He points out that poverty is one of the troubling continuities of Canadian social policy, as is the set of enduring myths and misconceptions that surrounds it. Battle's identification and debunking of some of the major myths about poverty in Canada can be expected to generate controversy both within and outside the policy community. Battle attempts to explain the reasons for these myths and misperceptions and makes recommendations on how to increase public awareness and understanding of poverty. Leslie Bella (chapter 10) analyses provincial governments' struggles to shoulder the financial burden created by federal cuts to transfer payments. She uses data from health care and looks at three provincial governments that have been compelled to reduce spending. Right-wing governments, such as those of Bill Bennett in British Columbia and Grant Devine in Saskatchewan, supported their actions with neo-conservative rhetoric. The Liberal government of Clyde Wells in Newfoundland and Labrador responded to a federally induced fiscal crisis by implementing extensive painful buget cuts, but without recourse to neo-conservative rhetoric. Thus even provinces facing fiscal crises (such as Newfoundland) may be able to implement cutbacks that limit the effects of neo-conservatism in Ottawa and even contain some progressive elements. This tendency to 'off-load' social spending to the provinces has entailed tightening of eligibility for social assistance. According to Stella Lord (chapter 11), some provinces, such as Nova Scotia, have introduced regulations that obligate single mothers on social assistance to seek work actively. A

Introduction

15

federal-provincial employability-enhancement initiative introduced in 1985 committed both levels of government to work to remove obstacles to employment. It allowed for diversion of Canada Assistance Plan funds to finance job training and employability programming and has stimulated development of an employability infrastructure in the province. The infrastructure, based on improved cooperation between different levels of government and the bureaucracies delivering social assistance and job training, develops ways of identifying, assessing, counselling, and referring clients. It allows clients more universal application of the concept of employability to single mothers than was previously possible. However, because the main goal of the initiative is to constrain social spending and reduce dependence on social assistance, rather than dealing with the real structural and systemic barriers to employment for women on assistance, the concept of employability being applied is flawed. It: is unlikely to improve significantly women's chances to become self-sufficient. There seems to have been little discussion in government circles about certain policies affecting children in Newfoundland. Douglas Durst (chapter 12) notes the incongruous and counterproductive impact of certain developments in the province's social policy, which, in recent years, has involved 'clawing back' of social welfare programs. His chapter examines the topic of children entering the care of public officials as a result of reasons related to income and family structure. He describes the findings of a study that explores the reasons why children have come under the care and custody of public authorities in Newfoundland. In addition, Durst analyses the continuity of recent provincial policy decisions and their effect on women and children. Social policies designed to trim financial support have failed; indeed, the financial and personal costs of providing custody for the children of single-parent families have, in fact, increased costs. Newfoundland spends the most on child welfare and the least on social assistance in comparison with the other Atlantic provinces. In contrast to Bella, Durst depicts the Wells government as neo-conservative one. However, Susan M. Clark's chapter (no. 13) complements that of Lord. Her longitudinal study of Nova Scotian mothers and children investigates the causes of poverty and reflects on approaches available for its alleviation. The study documents the high level of poverty associated with families with young children and describes the factors that contribute to low income. Despite initiatives such as pay and employment equity, women do not enjoy improved economic status, given the increased financial responsibility that they have assumed for themselves and their children. In this context, there are obvious connections between the problems analysed by Clark (and Lord)

16 Introduction and the changing nature of labour markets as described by Shields and Russell in chapter 19. Labour market strategies, therefore, appear to have had a limited effect on women's economic security. In addressing the needs of mothers and children living on low incomes, Clark argues that it is time to reconsider family policy that would integrate the different initiatives and services required to improve the circumstances of poor families. The assumptions on which such an approach should be based require discussion and agreement before being initiated. The chapters in part n cover a wide range of empirical and theoretical matters: alternative models for delivering social services: the analysis of poverty; the impact of neo-conservative restraint on health care, social assistance, child welfare, and AIDS victims; and the relationship between social welfare policy and labour market policy. And four general patterns emerge. One is the sheer difficulty of trying to maintain adequate social provision in the neo-conservative era. A second pattern is the search for theoretical and practical alternatives to the dreary reality of restraint; this clearly involves a recognition that the Keynesian welfare state itself was inadequate in many respects and, in any case, that there can be no easy return to it. Third, the need to devise new organizational forms emerges; this impulse seems to be triggered by a recognition, on the one hand, that the Keynesian welfare state was excessively bureaucratic but, on the other, that neo-conservatives seem to mean privatization, a worrisome notion, by their frequent use of the term 'decentralization'; thus, an earnest search for democratic alternatives has begun in these chapters and elsewhere. Finally, the exceedingly close connection between social welfare policy and labour market policy is identified, a relationship which is fully discussed in the chapters included in Part in. The seven chapters of part in examine continuities and discontinuities in Canadian labour market policy. Several chapters - for example, those by Bickerton (14), Johnson (15), and McBride (16) - point to growing preoccupation with labour market policy in the public arena. This former 'orphan' has now been elevated to the status of a key policy area that addresses a wide array of problems, including international competitiveness and regional development, and that endeavours to alleviate the conditions of the economically disadvantaged. However, it is uncertain whether labour market policy can, in fact, serve as a multi-purpose instrument, given the bifurcated labour market that Shields and Russell depict. Still, development of a coherent labour market policy is advanced as one solution to the increasingly complex problems of the neo-conservative era, and a wide variety of solutions in fact

Introduction

17

stand behind similar-sounding neo-conservative slogans. James Bickerton alludes to one such solution. Bickerton (chapter 14) reviews the role of labour market policy in the context of efforts to promote regional development in Atlantic Canada. For three decades, regional development policies have been used to stimulate and shape economic development in Atlantic Canada. However, the original concentration on rural development has been superseded by a much narrower focus on urban growth centres and on modernization of rural resource industries. During most of the 19705 and 19805, regional development policies paid little attention to the labour market. At the same time, federal policies continued to shape labour markets in Atlantic Canada, seldom, if ever, in a direction congruent with regional development policy. A recent shift in the latter, however, targets the labour market as a crucial factor in the region's future economic well-being and, generally, provides more support for development of human resources than for other forms of state assistance. Both continuities and discontinuities have characterized federal intervention in regional labour markets. Changes have been contingent upon a number of factors: federalism and the state of federal-provincial relations, changing national and international economic pressures, and the accumulated experience of policy failures in regional development. Bickerton's chapter recognizes these changes, as does Johnson's. Andrew F. Johnson (chapter 15) contends that Quebec's recent initiatives in the labour sector eclipse those of the federal government, at least in inventiveness. Quebec has embarked on a long-term and comprehensive economic development strategy which consists of two components - an industrial plan and a labour market policy. Neo-corporatist structures are being created and institutionalized to ensure the success of the labour market component of the policy. Johnson identifies potential difficulties that may emerge in implementing the labour market strategy. But he also acknowledges that the strategy, combined with a determined spirit of cooperation among the social partners, may well assist Quebec to meet effectively the challenge of global competition, to reduce its exceedingly high rates of unemployment, and, in turn, to decrease expenditure on social assistance. A specific labour market strategy, designed to realize these goals, may well be better than none. Stephen McBride's chapter (no. 16), on labour market policy in Ontario, suggests as much. In seeking to account for discontinuities in the development of such policy, McBride draws on such factors as international economic pressures, the structural position of Ontario's economy within Con-

i8

Introduction

federation, the preferences of powerful class-based economic interests, and the impact of ideological influences on federal-provincial conflicts over policy. The recent policy agenda has been driven, at the provincial level, by a desire to create new partnerships - between federal and provincial authorities and between labour and business, as the key labour market 'partners/ The search for new accommodations is ongoing, and new structures for managing programs were agreed to in late 1991. Nevertheless there are indications that the new partnerships may be easier to conceive on paper than to bring about in practice. Patrick J. Smith (chapter 17) finds no similar search for new accommodations in British Columbia between 1986 and 1991. Smith explores the policy directions of William Vander Zalm's ostensibly neo-conservative government and argues that it is possible to assess the continuities and discontinuities of BC labour market policy only in relation to the premier's unique an unusual style of governance. Accordingly, 'rational' models of policy-making are designated as 'insufficient descriptors/ Instead, Smith uses the construct of 'policy gambling/ with its elements of surprise and uncertainty, to analyse BC labour market policy under Vander Zalm. Leon Muszynski's chapter (no. 18) shifts from the theoretical/case study approach to a purely theoretical one. It begins by reviewing trends in poverty and inequality. It then sets out to link recent theoretical developments in two separate fields - institutional (labour market) economics and political sociology. Muszynski argues that Osterman's 'choice theory' of internal labour markets, combined with Esping-Andersen's 'welfare state regime theory/ provides a coherent framework for understanding the emergence of a dualized society in Canada and the United States. This framework allows for a vision of an alternative relationship between the welfare state and the labour market, in which employment security and high wages help to generate high productivity and a competitive international position. Employment security and high wages are not exactly associated with parttime employment, according to John Shields and Bob Russell. They examine the growth of part-time work in Canada and its effect on the welfare state. They surmise that the welfare state was configured upon a norm of full-time male wage employment. The shift to alternative forms of work has challenged many of the assumptions that guided formation of the welfare state. At any rate, Shields and Russell (chapter 19) pursue four tasks: they chart the growth of part-time and alternative employment forms; examine theories of employment change, especially notions of flexibility and flexible specialization; analyse the position of part-time workers in the welfare state; and explain welfare strategies adopted by the part-time work-force. They conclude that current issues and conflicts that lead workers to seek alterna-

Introduction

19

tive employment relationships are likely to influence the future direction and comprehensiveness of the welfare state. Rodney Haddow's chapter (no. 20) likewise examines an alternative. He examines the position of organized labour and of its opponents in the Canadian debate on a guaranteed annual income (GAI). Haddow traces the debate from its origins in the 19605 but emphasizes the period since 1984. He argues that labour's ideas in regard to a GAI largely reflect the class interests typically advanced by labour movements and social democratic parties in Western democracies. These organizations have usually pursued a policy to 'decommodify' workers - that is, to limit their material vulnerability and their dependence on the labour contract. From their perspective, social policy should include full employment and retraining as well as universal social benefits. Because a GAI is selective in design - intended for use only by the least advantaged citizens - and because its design is explicitly intended to create work incentives, it is a quintessentially liberal or 'commodifying' social policy. As such, it was regarded with scepticism by labour in the 19805, especially because it was being touted as an alternative to full employment and universal social programs. Curiously, one version of the GAI is currently supported by busines which is attracted to its market orientation. In the mean time, labour has been unable to form alliances with social policy organizations to advance its own agenda. Haddow argues that the financial dependence (on the state) and pragmatism of these groups preclude a systematic challenge to a liberal paradigm. Consequently, labour is a largely isolated actor in the GAI debate. Haddow, like most of the other contributors to this volume, is somewhat pessimistic about the immediate prospects for developing a more humane welfare state. Clearly, neo-conservatism has dominated the making of social welfare and labour market policy, with results that were not anticipated by its proponents - increasing expenditures, high levels of unemployment, more poverty, and, as a dramatic illustration of all this, seven years of prosperity during which food banks have become a growth industry. These are not indicators of a successful ideological and policy experiment. But, perhaps, there are still some grounds for considerable optimism. Policy failures may not automatically spark a search for alternatives. Nonetheless, it was the perceived failure of the Keynesian approach that led to the neo-conservative search for alternatives. Thus history suggests that the apparent failure of the neo-conservative approach may, in turn, nurture yet another spirited attempt to discover new alternatives for social welfare policy and for labour market policy in the 19905. The analyses presented by the contributors to this book provide a solid basis for such an optimistic expectation.

zo

Introduction NOTES

1 'Neo-liberal' is often used as synonymous with 'neo-conservative,' as in this volume, but some writers draw a distinction between the two, especially in relation to their views on the size and role of the state, thus rendering the neoliberal position somewhat more tolerant of state intervention where need can be demonstrated. See C. Galipeau and A. Johnson The Old Right, the New Right and the State: An Introduction' Journal of History and Politics 8 (1991) 10. 2 For a distinction between 'domination' and 'hegemony7 and arguments that neoconservative ideas have failed to achieve hegemonic status, see L. Haiven, S. McBride, and J. Shields eds. Regulating Labour: The State, Neo-Conservatism and Industrial Relations (Toronto 1991). 3 B. Chernomas 'Keynesian, Monetarist and Post-Keynesian Policy: A Marxist Analysis' Studies in Political Economy 10 (1983) 123-42. 4 G. Warskett 'Long Term Strategies for Labour' Studies in Political Economy 33 (1990) 122. 5 D. Drache and M.S. Gertler eds. The New Era of Global Competition: State Policy and Market Power (Montreal and Kingston 1992) x-xii. 6 R.W. Cox The Global Political Economy and Social Choice' in Drache and Gertler eds. The New Era 335. 7 Ibid. 337. See also P.J. Smith The Making of a Global City: The Case of Vancouver' Canadian Journal of Urban Research i (1992) 99-112. 8 D. Drache The Systematic Search for Flexibility: National Competitiveness and New Work Relations' in Drache and Gertler eds. The New Era 257-62. 9 K. Hoover and R. Plant Conservative Capitalism in Britain and the United States (London 1989) 16, 10 For a critique of these assertions, see G. Davies Governments Can Affect Employment: A Critique of Monetarism - Old and New (London 1985). 11 For a sympathetic account of these doctrines, see D.G. Green The New Right (Brighton 1987) chap. 3. 12 Hoover and Plant Conservative Capitalism 33. 13 A. Gamble The Free Economy and the Strong State (London 1988) 38. 14 Ibid. 15 Hoover and Plant Conservative Capitalism chap. 3; D.S. King The New Right (Brighton 1987) chap. 3. 16 See P. Dunleavy Democracy, Bureaucracy and Public Choice (New York 1991) for a useful discussion on this point. 17 See A.F. Johnson 'Canadian Social Services beyond 1984: A Neo-Liberal Agenda' in A.B. Gollner and D. Salee eds. Beyond 1984: Canada under Mulroney

Introduction

21

(Montreal 1988) for an analysis of the ideological foundations of the Mulroney government's overall approach to social welfare policy. 18 See J. Wolfe Robert Nozick: Property, Justice and the Minimal State (Stanford 1991) for a discussion of the minimal state. 19 See S. McBride Not Working: State, Unemployment, and Neo-Conservatism in Canada (Toronto 1992) chap. 2. 20 M. Hawlett and M. Ramesh The Political Economy of Canada (Toronto 1992) 9-11.

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PART I POLITICAL ECONOMY IN TRANSITION: I M P L I C A T I O N S F O R T H E C A N A D I A N W E L F A R E STATE

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1 Neo-conservatism and Beyond PHILIP RESNICK

It is no secret that during the 19805 what is commonly called the new right captured the political and economic agenda in Western countries, especially in the English-speaking world. The coming to power of Margaret Thatcher in Britain and Ronald Reagan in the United States symbolized this sea change in policy; so, in slightly more muted fashion, did the victory of Brian Mulroney in Canada in 1984 and neo-conservative ventures in provinces from British Columbia to Newfoundland. As important as the electoral victories scored by parties of the right and the particular policies that they introduced was the success of right-of-centre intellectuals, journalists, and academics in claiming the intellectual high ground after decades of domination by those of a more liberal or socialist bent. Several factors - the intellectual respectability that writers such as Friedrich Hayek or Milton Friedman came to enjoy;1 the new prominence of approaches such as public choice in the social sciences;2 and weakening of both Keynesian and Marxist paradigms in the face of such phenomena as stagflation, deficit financing, globalization of capital, and the pervasive crisis of the command economies of the Marxist-Leninist world - bespoke this transformation. The emergence of such think-tanks as Britain's Institute for Economic Affairs, the American Enterprise Institute, and Canada's Fraser Institute suggested that the right had learned from Gramsci of the importance of organic intellectuals; it was determined - on issues from affirmative action to social spending to public enterprise to moral philosophy - to hoist its adversaries on their own petard.3 There were three levels to the neo-conservative challenge to the Keynesian/ welfare state consensus. First, and most familiar, is the economic challenge. Faced with the ending of the thirty-year expansion that had characterized the period since the Second World War, with slower economic growth in

26

Political Economy in Transition

various OECD countries, significant budget deficits, and double-digit rates of inflation, neo-conservatives in the 19708 could lay the blame on the liberal/ left. Keynesianism had 'built-in tendencies' to deficit financing, welfare expenditures were 'destroying the work ethic/ state spending was generally 'out of control/ and government regulation was 'sapping the vitality of the market system/ Only a return to neo-classical principles, a shift in emphasis from state activities to private-sector production and entrepreneurial initiative, or so it was alleged could set the balance right. Second, the political challenge followed headlong on the economic. Neo-conservatives set out to discredit what they took to be a bloated public sector and those who had most benefited from it. In a reversal of the class arguments invoked by many on the left, some on the right came to speak about the 'new class' of public-sector employees. Central government bureaucrats, social workers, and public housing officials, for example, were seen to be the real beneficiaries of an ever-expanding state sector. These groups had come to enjoy new political power in the statist political economies of the West, at the expense of the producers of wealth in the private sector.4 Nor were they alone, it was claimed. Whole sections of society had bought into the rhetoric of the welfare state, coming to believe in their entitlement to ever-greater benefits, regardless of social cost. Welfare recipients, tenants in public housing, single mothers, and members of racial minorities were some examples that neo-conservatives liked to cite. To these had been joined groups of unionized workers, in both the public and private sectors, insistently pressing on the political-economic system their demands for more. Governments were faced not only with a fiscal crisis but also with spiralling demands which, if not checked, could supposedly lead to a wholesale breakdown in political legitimacy as well. The authors of the Trilateral Commission of 1975 spoke of overloaded government and of the danger from the excessive expectations that different social groups had come to hold in Western societies in the 1960$ and early ±97os.5 To counter what these critics took to be an incipient threat to liberal democratic institutions and to the capitalist system itself, there would be the need to rein in excessive participatory demands. Governments, in particular the executive branch, would have to regain full autonomy in the making of foreign policy, after the havoc wreaked by opposition to the Vietnam War. And there would have to be less talk about entitlement, as governments shed some of their new-found distributive reponsibilities, returning to their more traditional role of authoritatively enforcing the rules and contracts of a 'free-market' society. Third, the most telling part of the new right's agenda was its appeal to

Neo-conservatism and Beyond 27 transcendental moral principles. This appeal took two quite distinct, at points even contradictory, forms. Yet they coalesced in a powerful amalgam. One strand in the new right's appeal was its critique of the liberal/left in terms of liberty and individual rights. The liberal/left's obsession with equality of condition and with collective rights had led, as Hayek had presciently predicted back in 1940, to the road to serfdom, with the state substituting its will for that of the citizens/clients whom it governed. Far from treating members of society as independent moral agents, governments had rendered them passive and dependent. The very notion of liberty had become mortgaged to the selfish and self-aggrandizing interests of government bureaucrats, trade union leaders, and the like. The liberal/left - and its professional spokepersons in particular - were far less respectful of democracy than they made out. They had, to use a term coined by Giovanni Sartori, been guilty of 'demophily/ substituting so-called love for the people for willingness to allow the people to live their lives in their own way.6 The more sinister version of this was Marxism-Leninism, with its vanguard party claiming to speak in the interest of working people, while allowing them negligible input into the governance of society. But social democracy, with its notion of the cradle-to-grave welfare state and its doctrine of maximum state intervention, was scarcely better. A minimal version of the state, freeing members of society and market actors to 'do their own thing/ would greatly enhance the practice of liberty. Arguments along these lines were developed by such philosophers and writers as Antony Flew, Keith Joseph, Michael Novak, and Robert Nozick.7 The other strand in the argument of the new right, particularly of the us 'moral majority' sort, was an appeal to 'traditional' moral and religious values against the supposed licentiousness and immorality of the liberal/left. It was most striking in the defence of the 'family' against those forces that would allegedly bring about its dissolution - radical feminism, gay rights, abortion on demand, and so on. Linked to this strategy was defence of religion as the moral underpinning of society and rejection of the implicit godlessness and secularism of the left.8 At yet another level, the right wrapped itself in the flag of patriotism, exemplified most clearly in Margaret Thatcher's Falkland Islands venture, in the hard-nosed military build-up of the Reagan years, and in Bush's Gulf War posture. As suggested above, the emphasis on liberty coming out of one strand of the new right, and that on authority and order out of another, were not perfectly compatible. Yet, as Roger Eatwell has argued, the right seems to have less of a problem bringing together different 'styles of thought' than does the left, given the latter's commitment to a rational, Enlighten-

28 Political Economy in Transition ment-derived notion of ideology.9 And certainly through the 1980$, the right showed itself adept at keeping its interpretation of liberty and of morality/authority front and centre of the political stage. Let me now turn to the 19908, first taking stock of what a decade or so of neo-conservative policies has wrought. There can be no question that in the economic arena a fair measure of the neo-conservative agenda has been implemented. There has been a rolling-back of social expenditures, particularly those directed towards the poor - one thinks of food stamps or hotlunch programs in the United States or public housing in Britain. There has been large-scale privatization of public enterprises in countries such as Britain and Canada - in the latter, Air Canada, Petro-Canada, and Potash Corp. of Saskatchewan are three examples. There is a new emphasis on competitiveness and productivity. The power of trade unions has been drastically pruned in Britain and reduced to an almost residual role in the United States. Yet the new right has proven less successful in mastering larger macro-economic forces, in pruning deficits, or in rolling back the more universally targeted programs of the welfare state. In the early 1990$, Britain, Canada, and the United States were in recession, with unemployment rates in the first two hovering above 10 per cent and in the latter 7 per cent. Inflation may not be the problem that it was in the late 19705 and early 19808, but growth is almost non-existent and all three nations are running negative trade balances in the 19905 compared to Germany, Japan, and the 'four tigers' of East Asia (Hong Kong, Singapore, South Korea, and Taiwan). Nor are deficits, as the new right would have it, solely the responsibility of the Keynesian/social democratic left. No American administration did more than Reagan's to stoke the federal deficit, with its program of massive tax reduction for the rich, ever-greater military expenditure, and deficit financing, with Japanese and others buying up its Treasury bills. And the legacy of the 'savings and loan' scandal - a story of inadequate regulation, if ever there was one - will put a far greater burden on the ordinary American taxpayer than all the foreign loans contracted by Third World countries put together. Nor is the British economy, fourteen years after the Thatcher revolution' began, or the Canadian one, after two terms of Brian Mulroney, a model of fiscal rectitude. There is no easy fix to the problem of deficits, especially not when one indulges in wholesale tax giveaways to the corporations and the wealthy. Where the welfare state is concerned, the new right has chipped away at a variety of programs, thereby weakening the notion of social solidarity that came out of the Depression and the war. Yet as Ramesh Mishra has argued,

Neo-conservatism and Beyond 29 the right has been less successful in taking on such programs as old age security, unemployment insurance, and medicare, which are universal in character rather than social assistance.10 There is a groundswell of public support for universal programs - enough to give new right governments pause in any attempt to restore the 'nightwatchman state/ The notion of a social safety net has taken reasonable hold over the past 50 years, and although there are and will continue to be glaring differences between how it is defined in Switzerland and the United States, as opposed to Sweden and the Netherlands, there is no simple way of turning back the clock, as the new right might have hoped. Politically, the new right's success in shifting the agenda its way is clear enough. Public ownership has been reduced, not only in the developed market economies of the West but in what, until recently, was the communist world and in many Third World countries as well. The collapse of the Marxist-Leninist model has given parties of the right a new lustre, as 'true defenders' both of market capitalism and of the pluralist political system that usually accompanies it.11 In contrast, social democratic parties have had to move rightwards, emphasizing their own commitment to a mixed economy with a vibrant market sector, discarding any lingering commitment to economic planning or expanded public ownership and, where in power, as in Australia, France, and New Zealand at various times, following economic and social policies that scarcely differ from governments of the right.12 Left-of-centre parties have been forced to come to terms with the logic of 'global competition' and 'cost-effectiveness' and with a political climate more hostile to an increased role for the state than in the aftermath of the Second World War. In a number of areas, most conspicuously the environment, the Western public is willing to entertain a significantly expanded regulatory role for the state. But the balance, to use Hirschman's fitting metaphor,13 has shifted from public to private over the past decade. As for the 'moral high ground,' the right has wrapped itself in the mantle of democracy - a remarkable role reversal when one thinks back to the historically anti-democratic temper of conservative thought, especially in Europe - and been successful in putting the left, identified with statist, bureaucratic socialism, on the defensive. It may be patently unfair to paint social democrats with the same brush as Marxist-Leninists, or to tax Western Marxists, themselves often sharp critics of the absence of democracy in the East, with the sins of Stalinism. Yet the right has been better at appropriating the liberal-democratic heritage - in particular, the two-plus party system, separation of powers, and individual rights - for itself, leaving defenders of the left sounding like also-rans.

30

Political Economy in Transition

The rise of religious fundamentalism and the reassertion of traditional religious values in a number of Western societies where secularism had dominated political discourse have also contributed to a resurgent right, as in the United States. Yet mainstream churches, including the Catholic, have often taken positions on social questions such as welfare expenditure, taxation and deficit, and north-south relations a good deal more progressive than the acolytes of a purely market-driven model of society.14 The remainder of this chapter addresses the prospects for the moderate left one with a commitment to a measure of equality, redistributive social policies, and internationalism of a different kind from that practised by transnational corporations - to affect the 19905. There should be no illusion that there is to be some sudden about-turn in the economic or political priorities of the core capitalist states - that the pendulum is about to swing dramatically leftwards after a decade or more of moving to the right. It may have gone about as far right as it is likely to go, and a modest swing from neo-conservatism may be under way. The defeat of George Bush in the 1992 American presidential election certainly bespeaks this. Still, before it can hope to reclaim the agenda, the left in Canada and elsewhere in the Western world needs to engage in some of the same soul-searching and reformulation of positions - economic, political, and moral - that intellectuals of the right engaged in during the long Keynesian period that preceded the political ascendancy of neoconservatism in the 19705. First, in the economic area, the left has no choice but to take markets a lot more seriously than was its wont in the past. The economic failures of the command economies of the East has put paid to the notion that there is some non-market-based alternative to the economic prosperity and growth of large-scale modern societies. The west wind, to reverse Mao's adage of 1957, has prevailed over the east in the real economic world of technological innovation, productivity, living standards, and much else. This does not mean that we all must fall down and worship the golden calf of capital. The history of capitalism shows a proclivity not only to periodic economic crises and breakdowns but also to forms of rampant inequality and injustice that cry to heaven, of the type described in the novels of Dickens or in documentaries from Third World favellas today. Without the intervention of the state, through imposition of child protection laws, occupational safety standards, minimum wage legislation, and various of the measures that make up the social safety net, wage labourers, salary earners, small-scale farmers, and others are at an unacceptable disadvantage in their relations with the owners and managers of capital. Moreover, some of the great sue-

Neo-conservatism and Beyond

31

cess stories of late-twentieth-century capitalism have been countries such as France, Germany, Japan, South Korea, and Taiwan, which have elements of indicative state planning, public ownership, even worker participation in the operation of industry.15 There are more forms of capitalism, involving encroachments on the marketplace, than are dreamed of in the philosophy of Milton Friedman. Having acknowledged as much, we also need to encourage much more realistic debate within parties and movements of the left. The federal NDP'S economic statement of 1991, Putting People First, with its blunt acceptance of the importance of the market but a strong pitch for environmental priorities and for a compensating regulatory role for the the state, is a good example.16 Indeed, more can be made of the market socialist-type arguments developed by such writers as Robert Dahl and Saul Estrin.17 Economic democracy is a powerful concept to invoke against the role of corporate capital in the marketplace and has greater normative appeal than the old-fashioned one of state ownership. The left needs to develop and amplify its views in this area, not only at the national level but also with regard to world-wide operations of transnational corporations. Then there is the issue of the environment, which poses a greater challenge to the unhindered power of capital at the end of the twentieth century than the industrial proletariat of yore. How to integrate an environmental perspective into leftist economic strategy in a way that can reconcile the legitimate needs of future generations with those of our own? - or the developmental needs of the Third World with the rather different priorities of the core countries? These needs raise questions about taxation and inter-societal transfers at the global level. Here left and right stand as opposed as ever. The left must make the case for some minimal global safety net, financed in part through transfers from north to south.18 It also has to revive the whole question of a tax on wealth and capital, as well as the question of an environmental tax on wealth and captial. Here economic and moral issues begin to intersect, and the left should press its arguments home as clearly as possible. But it cannot forget that the productive side of the economy must be able to sustain the distributive and environmental policies, domestically and globally, that will be required. That is the intellectual tight-rope on which the left must learn to manoeuvre. Second, politically, there are significant flaws in the operation of democracy as we know it in the West, and as our elites would like to project it to the rest of the world. There is the ongoing problem of the power of capital and the latter's control over media and political parties. One does not have to subscribe to the wooden language of Marxism-Leninism, with its glib

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Political Economy in Transition

dismissal of 'bourgeois' democracy as a sham; but we would be equally naive to ignore the disproportionate power that large corporations and corporatefunded media and pressure groups bring to the political arena, not only during election periods but all the time. Can there be real equality of citizens' rights, 'isonomia' as the Greeks termed it, and far-reaching pluralism, when we begin with such an uneven playing field? There is also the serious problem of voice, of citizens' participation above and beyond the casting of ballots during periodic elections. This is not to disparage representative institutions, which are the form that democracy must take in large societies of the nation-state variety. Yet there are polities, even in our own day, that practise forms of direct democracy, along with the indirect variety. Take, for example, Switzerland, with its frequent referenda and citizens' initiatives. Certainly on key issues of sovereignty or constitutional change, there is a strong case to be made for letting the people have the final word. Much of the post-Meech malaise in Canada was all about this issue, with evidence in public opinion surveys of widespread support for such devices as an elected constituent assembly and binding referenda in constitutional matters.19 The defeat of the Charlottetown Accord in a Canadawide referendum was clear confirmation of citizens' dissatisfaction with a top-down style of constitutional politics.20 The question of voice, what the Greeks termed 'isegoria,' or the right to equal participation in the deliberations of the assembly, spills over into other concerns as well. It underlines the vigorous role that various social movements - women's, environmental, and aboriginal, to speak of but three important ones of the past decade - have come to play in politics. It speaks to the renewed importance of civil society as a genuine counterweight to the power of the state, wherever democracy is to be instilled. (Compare the experience of both Latin America and eastern Europe in this regard.)21 And it suggests the need at the international level to ensure that non-governmental organizations are able to get concerns about human rights, environmental depradation, and the investment priorities of transnational corporations and international economic agencies made public. Democracy, in its etymological sense of power of the people, not simply of their governments, is something that the left should address without remission - not because democracy is an issue that cannot cross right-left lines, but because the left is in a unique position to infuse the debate with the participatory and egalitarian elements that the right tends to play down. Third and finally, there is the question of moral vision. Martin Jay, in 'Fin-de-siecle Socialism/ highlights the fact that the left, at the end of the current century, finds itself in as serious a quandry as the 'bourgeoisie'

Neo-conservatism and Beyond 33 seemed to be in at the end of the nineteenth. The left's transformative vision seems to have come to naught, with the verities of collective ownership over the means of production or of a society not ruled by the profit motive fatally undermined by the heavy-handed versions of communism that this century has experienced. Where the future seemed to lie with the left at the end of the last century, along with a sense of moral righteousness, does the same hold true a hundred years later? 22 In one sense it does not, if one means by this a quasi-theological belief in the tenets of socialism or Marxism of the nineteenth-century variety. But it is much less obvious that egalitarianism as a credo has been swept aside, to be replaced with the 'let the devil take the hindmost' variant of individual liberty offered by neo-conservatism. Here I stand firmly with the communitarian school, with its extolling of the values of community over atomism, of the eminently social nature of human beings as opposed to purely market man or woman.23 And I stand with the humanist socialism of writers such as Erich Fromm, attempting to posit a vision of socialism that remained profoundly respectful of the moral and ethical autonomy of human beings.24 But we must reinforce the internationalist dimension in any communitarian or democratic socialist vision. If we are to posit a degree of equality of wealth - what the Greeks referred to as 'isomoiria,' or equal division of the land - we have no choice on the threshold of the twenty-first century but to do so in planetary terms. The crucial lesson that the left may have to learn from the failed experience of Marxism-Leninism, in particular, is the need for balance in its thinking. Our view of democracy must balance commitment to individual rights with commitment to political participation and to economic and social equality. We must reconcile the isonomia of citizens' rights, with isegoria, or participation rights, and> isomoiria, or economic equality.25 Any one of these by itself will not do - whether the fraudulent equality of condition of Marxism-Leninism, bereft of any free expression or debate, or the notinsignificant individual liberties of Western democratic states, but with inadequate participation or economic equality to back these up. In the same way, it will be important to avoid infatuation with only one dimension of the human condition. The most striking failure of orthodox Marxism was its excessive preoccupation with the purely economic level of human relations, the so-called base, at the expense of the moral and political. (The young Marx seemed to see things more clearly, as did Gramsci, for that matter.) The left must be as good as the right, even better, at welding together a moral vision that takes human beings to be the end and not simply a means, with a normatively compelling vision of democracy and an

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Political Economy in Transition

economic one that balances market with a defensible and effective role for the public sphere. There is a place for a religious variant - for those who feel so inclined - in such a vision, no less than for a secular one; for a broadly pluralist conception of the left that synthesizes many strands and spurns a too-familiar insistence on orthodoxy and monolithic thought; for an economic vision that is practical and related to what Nove very properly called 'feasible' socialism26 - rather than to the endless pursuit of some kind of classless holy grail. It is with a vision of this sort that we can prepare the groundwork for a definitive shift away from neo-conservatism. NOTES

1 F. Hayek The Road to Serfdom (Chicago 1944) and Law, Legislation, and Liberty (Chicago 1979); M. Friedman Capitalism and Freedom (Chicago 1962); M. Friedman and R. Friedman Free to Choose (New York 1980). 2 D. Mueller Public Choice (New York 1979);}. Gwartney and R.E. Wagner eds. Public Choice and Constitutional Economics (Greenwich, Conn., 1988). 3 On the Gramscian role of think-tanks, I have benefited from discussions with Sharon Fuller, a PhD student at the University of British Columbia. 4 Cf. I. Kristol Two Cheers for Capitalism (New York 1978) and Reflections of a Neoconservative: Looking Back, Looking Ahead (New York 1983); G. Tullock The Vote Motive (London 1976). 5 M. Crozier, S.P. Huntington, and J. Watanuki The Crisis of Democracy (New York 1975). 6 G. Sartori The Theory of Democracy Revisited (Chatham, NJ, 1987) 474-9. 7 R. Nozick Anarchy, State, and Utopia (New York 1974); A. Flew The Politics of Procrustes: Contradictions of Enforced Equality (London 1981); K. Joseph and J. Sumption Equality (London 1979); M. Novak The Spirit of Democratic Capitalism (New York 1982). 8 For an exposition of some of these themes, see J.M. Kolkey The New Right (Washington, DC, 1983). 9 R. Eatwell 'Is There an "Essentialist" Philosophical Core?' and The Right as a Variety of "Styles of Thought",' chaps. 4 and 5, in R. Eatwell and N. O'Sullivan eds. The Nature, of the Right: European and American Politics and Political Thought since 1789 (London 1989). 10 R. Mishra The Welfare State in Capitalist Society (Toronto 1990) chaps. 2 and 5. 11 This explains the victory of right-of-centre parties in the first multi-party elections in several of the post-communist states of eastern Europe. 12 Cf., for example, E. Dupoirier 'Inegalites sociales: 1'opinion, un acteur a part entiere' in O. Duhamel and J. Jaffre eds. SOFRES: L'etat de I'opinion, 1991

Neo-conservatism and Beyond

13 14 15

16 17 18 19

20 21

22 23

24 25 26

35

(Paris 1991), showing a majority of respondents believing that social inequality had increased in France over the past twenty years. A.O. Hirschman Shifting Involvements: Private Interest and Public Action (Princeton, NJ, 1982). Cf. G. Baum and D. Cameron Ethics and Economics: Canada's Catholic Bishops on the Economic Crisis (Toronto 1984). Cf., for example, J.R. Freeman Democracy and Markets: The Politics of Mixed Economies (Ithaca, NY, 1989); S. Haggard Pathways from the Periphery: The Politics of Growth in the Newly Industrializing Countries (Ithaca, NY, 1990); and J. Zysman Political Strategies for Industrial Order: State, Market, and Industry in France (Berkeley, Calif., 1977). Putting People First: Towards a Fair, Environmentally Sustainable and Democratic Economy Report adopted by the federal NDP convention, June 1991. R. Dahl A Preface to Economic Democracy (Berkeley, Calif., 1985); J. Le Grand and S. Estrin Market Socialism (Oxford 1989). Cf. UN Human Development Report 1992 (New York 1992) 79 for a proposal along such lines. A Globe and Mail/CBC survey in March-April 1991, Globe and Mail (22 April 1991) A4, showed 56 per cent of English Canadians and 60 per cent of Quebecois supporting a proposed constituent assembly; an Angus Reid-Southam survey of April-May 1991 showed 68 per cent of English Canadians and 57 per cent of people surveyed in Quebec supporting the idea. Cf. D. Cameron and M. Smith eds. Constitutional Politics (Toronto 1992) and the October and December 1992 issues of Canadian Forum. Cf. G. O'Donnell and P. Schmitter eds. Transitions from Authoritarian Rule (Baltimore, Md.: Johns Hopkins University Press 1986) and J. Keane ed. Civil Society and the State (London 1988). M. Jay Fin-de-siede Socialism (London 1988). Examples of contemporary communitarian writings would include C. Taylor The Malaise of Modernity (Concord, NH, 1991); M. Sandel Liberalism and Its Critics (Oxford 1984); and M. Walzer Spheres of Justice (New York 1983). Cf. Erich Fromm ed. Socialist Humanism: An International Symposium (New York 1965). P. Resnick Tsonomia, Isegona, Isomoiria arid Democracy at the Global Level' Praxis International 12 no. i (April 1992) 35-49. A. Nove The Economics of Feasible Socialism (London 1983).

2

Changing Gears: Democratizing the Welfare State LEO PANITCH

In the mid-1980s, Michael Mendelson - at the time deputy minister of community services for the NDP government in Manitoba, and today assistant secretary to the cabinet of the NDP government in Ontario - delivered an address with the disturbingly provocative title 'Is Social Policy Dead' ? Drawing an analogy with those who had asked in the 19605 whether God were dead, Mendelson contended that it was necessary in the 1980$ to ask whether social policy could any longer help us decide what kind of society we wanted to live in and motivate us to action. Presenting the ideological debate over social policy as a contest between 'Mr. Do-Gooder' and 'Baron Cost-Cutter/ Mendelson argued that the dogooder approach to social policy, which had dominated the field since the Second World War, had reached a dead end with the second wave of welfare state reforms of the mid-1960s. Based as it was on a steady, gradual increment of reforms within capitalism to help and protect those who are unjustly treated in the marketplace, it had become 'an impoverished and exhausted concept for the last two decades/ The Canadian welfare state, far from offering 'a continually improving and expanding structure of social programmes/ had experienced no fundamental new addition since 1968. The only major reform that remained on the do-gooder schema was the notion of a guaranteed annual income, which was itself problematic in light of the high structural unemployment characterizing the advanced capitalist economies of the 19805. If it were introduced in this context, it would function probably as a means of 'ratifying and endorsing' a permanent underclass of unemployed rather than as a humanitarian measure for income redistribution. Mendeldon's argument, then, was that the do-gooder philosophy had exhausted itself as an inspiration for social policy in Canada even before the

Changing Gears: Democratizing the Welfare State

37

neo-conservative 'Baron Cost-Cutter' arrived in the 19805, advocating slashing of social programs to the end of promoting free markets and lower taxes. Indeed, Mendelson was convinced that cost-cutting, with its espousal of selfreliance and rugged individualism, was profoundly in contradiction with the highly interdependent social relations typical of today's economy and was incapable of providing a useful alternative to social policy. At a pragmatic level, our neo-conservative cost-cutting barons simply failed to understand that social programs assist the smooth operation of capitalist economies. In ameliorating some of the negative effects of economic restructuring and in stimulating consumer demand as an automatic counterweight to economic recession, social programs obviated the need for far more intrusive and direct interventions in the economy. The proof that they were indispensable lay in the fact that the cost-cutters, for all their rhetoric, had little effect. Their self-reliant approach had had little influence in Canada and had proved very costly politically when parties had attempted directly to reduce social expenditures. This was why the federal government sought rather to reduce transfers to other levels of government. Moreover, even where, as in Reagan's United States, or even more so in Thatcher's United Kingdom, an apparently successful ideological assault on the welfare state had taken place, all the reductions and contractions in social programs 'had little impact on their total cost to the public treasury or on the shape and nature of the social security system/ Mendelson's conclusion was that the two contending views in social policy - do-gooder welfare statism and cost-cutting, free-market individualism were both incapable of providing meaning and guides to action. In so far as the contest between them defined the limits of social policy, social policy was dead. In a tantalizing conclusion, however, Mendelson tentatively suggested that a third stance could be developed out of the collective work of social policy students, practitioners, and consumers. It would have to transcend the limits of its two predecessors if it were to resurrect social policy. Such an alternative social policy would need to shift its focus from provision of benefits, maintenance of incomes, and availability of goods and services. Rather, it would foster three key elements. First, 'social participation,' would include productive work, and if that could not be done through standard macroeconomic policies, then it might have to be achieved through 'redistribution of work and guaranteed meaningful jobs/ Second, social programs would aim to reinforce and create power for their participants rather than establish or reinforce their dependence. Third, 'social programs will assist those with a common interest to come together to help each other meet their needs and assert their role within society, so as to change the society around them/

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Political Economy in Transition

This was a remarkable proposal by a senior administrator, all too much neglected, or at least too little acted upon, in the mid-1980s. Yet its message grows ever more compelling and, indeed, urgent. The effects of neo-conservative cost-cutting have not been as trivial as Mendelson thought that they might be. In G-/ capitalist countries (Canada, France, Italy, Japan, the United Kingdom, the United States, and West Germany), the 19805 saw a reversal of the inexorable rise in the share of the state in total spending ... After rising sharply in the recession of the early 19805 (though not as fast as in 1974-5) the share of government spending stabilized. Total social expenditure grew in real terms by 2.6 per cent per year in the early eighties, down from 4.2 per cent during 1975-80 and 6.5 per cent per year in the years up to 1975. Social security transfers stabilized as a per cent of GDP in the mid-1980s, after comprising much of the increase in public spending earlier. The decline of two percentage points in the OECD unemployment rate helped, but much more significant was the tendency for the real value of benefits to be curtailed ... The ratio of unemployment benefit to earnings has tended to be reduced ... and eligibility criteria have been tightened ... Direct public expenditure on welfare programmes has also been restrained. Government investment has been particularly hard hit, but the rise in current spending on health and welfare has also been held back.... Heavy pressure has been exerted on public sector pay as a way of holding down the cost of services.1

Exhaustion of the do-gooder approach, which opened the way for the cost-cutting, was not merely an ideological problem, a running out of programmatic ideas after 1968. The pragmatic aspect of welfare state reforms, which was supposed to contribute to the steady growth and smooth working of the capitalist economy, became increasingly open to question because of reemergence of recurrent capitalist economic crises - in 1973-5, *n tne early 19805, and now again in the early 19905. Whether one saw the welfare state as functional to smooth capitalist growth, or capitalist growth as functional to an ever expanding welfare state, the alleged symbiotic relationship became ever more fraught in this context - with the one not being able to live with, or live without, the other. The second wave of welfare state reforms in the 19605, under conditions of nearly full employment and rapid unionization of public employees, did foster considerable worker militancy, which threatened high productivity and profits while also producing a fiscal crisis and inflationary pressures. Even if the first great post-war crisis of 1973 was not a direct product of these contradictions, but the result of more fundamental and long-term processes finally coming to the fore, the auto-

Changing Gears: Democratizing the Welfare State 39 matic stabilizers of welfare state expenditure and Keynesian policies of deficit financing were now clearly limited in their effects. Cost-cutting in social policy extended through the 19808, right into the new recession in the 1990$. Even Sweden, so long pointed to as the ultimate proof that government can equitably distribute the results of slower growth in a manner that preserves high employment and social benefits, succumbed, under a social democratic government, in the face of an outward flow of capital and a Thatcherite policy offensive by the domestic capitalist class.2 All of this reinforces the claim that social policy can be revived only by its explicit association with social participation, empowerment, and mobilization - or, in a word, with democratization of the state. The general defeat of the do-gooder's approach may be associated with a number of crucial factors, not least the growing internationalization of capital, but inability to counter this development did have something to do with the very limited mobilizing potential of the welfare state. Few employees or 'clients' of the welfare state felt that the public agencies really belonged to them - were theirs to influence and control. This was true even if they recognized the ideology of market freedom as a sham and understood that, as markets get deregulated, more and more people who are defeated in market competition get more and more regulated and policed and judged as welfare agencies and courts - those quintessential state apparatuses - do not empty but rather fill up. I do believe that in the 19905 we are in for an epic struggle as the terrain of social policy debate shifts from more state versus less state to democratization of the state versus its privatization. This is not a matter just of finding an alternative ideological approach to social policy. Implementing this approach will involve transforming most current structures and practices, which block democratization. Mendelson, it will be recalled, did not pretend that he had a fully worked out alternative back in 1986. He suggested quite correctly that it would emerge only out of the collective action of social policy students, practitioners, and consumers who escaped the conceptual limitations of the old ways. I have been enormously heartened of late by encounters with workers at the heart of the welfare state in Canada. One such meeting was with policy analysts and ancillary workers in the income maintenace branch of Ontario's Ministry of Community and Social Services (ComSoc). I had received an invitation to 'facilitate' a workshop at a retreat of these workers after one of their number had heard me on the radio speaking of the emotions that I had felt, as a member of the generation of 1968, on seeing Alexander Dubcek

40 Political Economy in Transition reappearing in late 1989 to address the masses in the very square in Prague that had been filled with Soviet tanks twenty years before, putting down his attempt to democratize socialism. Seeing this historic wrong righted almost rekindled the radicalism of my youth - the belief that popular alliances of workers, students, and intellectuals could 'change the system.' At the same time it brought to mind the failure of my generation to change the system here in the West, the frustration of our goals for participatory democracy as against both the capitalist corporations and the bureaucratic state. That this comment should have elicited an invitation to lead a workshop of ComSoc workers was itself rather interesting. They told me that people working in the policy branch at the lower or even middle levels were actively discouraged, even sometimes prohibited, from having direct contact with those at the front line of the ministry's operations branch. Everything had to move up to - and down from - the respective assistant deputy ministers (ADMS) in each branch. When I remarked that this reminded me of the democratic centralism practised in Romania (which was much in the news at the time), this statement not only amused them but emboldened them to spin all kinds of ideas about how their ministry, and their work, could be organized more democratically. Why could not employees and clients of the ministry elect ADM from a panel of choices put forward by the minister? Perhaps there should be referenda on policy among clients - say, among the elderly in extended-care institutions who might be encouraged to discuss and vote on a series of options on reforming the institutions currently being considered inside the ministry. Above all, there was strong feeling that administering programs for and dispensing and regulating benefits to atomized, isolated, impoverished people was not enough. Public employees were well placed to facilitate collective organization for the poor, so that they would no longer face the state or the market as powerless and passive individuals but have some collective identity and power. But then, after some time of elaborating such ideas, the fear set in. I saw them look around, catch each others' eyes, and remind themselves that they might be marginalizing themselves, compromising their careers, or even worse, by just expressing such ideas, much less practising them. And this fear, which was palpable, also reminded me of Romania, What place does such fear among civil servants have in a democracy? I doubt whether this fear is dispelled today, despite the change of government in Ontario. I had a similar experience of democratizing pressures coming from within the public sector when I was invited to speak at the Convention of the United Nurses of Alberta in July 1991. These nurses are militant and not

Changing Gears: Democratizing the Welfare State

41

likely to be as easily frightened as social workers; they staged a 2o-day-long illegal strike a few years ago. The government had taken away their right to strike in a special piece of legislation in the early 1980$ - a classic example of how promotion of the free market yielded not less state but a more coercive state. Of course, restrictions on, or complete removal of, public-sector workers' right to strike is nothing new. Indeed, it became quite commonplace throughout the 1970$ and 19808 at both the federal and provincial levels in Canada. The International Labour Organisation's Committee on Freedom of Association has ruled that no less than six Canadian provinces - Ontario and Alberta, of course, among them - are contravening UN Convention 87, Concerning Freedom of Association and Protection of the Right to Organize, to which this nation has been a signatory since 1972, by virtue of their permanent restrictions on public- and para-public sector workers' right to strike. The insistence of the Alberta nurses on their right to strike can be seen as an example of democratic pressures coming from within the welfare state. As is so often the case, the nurses' militancy is itself but a manifestation of a deeper malaise - nurses' oft-expressed frustration with the way in which hospitals are organized and their sense of exclusion from managerial and administrative decision-making. I found considerable enthusiasm at the Alberta nurses' convention when I suggested that their union should bargain for one paid hour a week, timed at overlapping shifts, for nurses on each ward to meet together and discuss the administration of their ward and the hospital as a whole. Similarly, part of their paid duties should be to organize discussions among patients on these questions. Imagine it - such discussions at least once a week in the sunroom might be therapeutic for patients, and they certainly would help build solidarity among providers and users of health services. Yet, however enthusiastic delegates were about such ideas, it is surprising that even as militant and ably led a union as the Alberta nurses should not have contemplated this kind of structural change. Their reluctance, like the fear of change that I saw in the eyes of the workers in ComSoc, suggests that the problem is not just the shedding of old conceptions of social policy. Once that is done, the real difficulties lie ahead. How to transform or transcend the existing institutions of the welfare state - which are structured explicitly to manage and administer and regulate in a manner that prevents social participation, empowerment, and mobilization? The welfare state reforms had little to do with changing the state itself - that is, with altering the mode of administration in which social policy became embedded. That mode is fundamentally undemocratic, constructed according to strict doctrines of secrecy and hierarchy that owe much to the nineteenth-century British Colonial Office, or even the Indian army on which it was modelled.

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Political Economy in Transition

Mr. Do-Gooder's social policy was not, moreover, just about maintenance of incomes, provision of benefits, and availability of goods and services. It was engaged in regulation of the people who were its clients, establishing rules that governed their behaviour in many large and small, intimate and public, spheres of life; at the same time, it reinforced or created norms that set a cultural standard, often for the whole society. This aspect of the state, what Corrigan and Sayer3 call moral regulation, goes all the way back to the poor law and even earlier and explain how social policy, in ameliorating some of the deleterious effects of markets, has also sustained and even created the obedient citizen. Recently, feminist scholars have insightfully applied this kind of understanding to the regulation of gender roles in and through the welfare state, involving moral regulation of women as dependent subjects. The do-gooder approach 'takes for granted/ as Nancy Fraser has aptly put it, 'the definition of needs in question, as if that were self-evident and beyond dispute. It therefore occludes the fact that the interpretation of people's needs is itself a political stake. Clearly, this way of framing the issues poses obstacles for feminist politics, since at the heart of such politics lie questions about what various groups of women really need and whose interpretation of women's needs should be authoritative/ Fraser contends that the us welfare system is split into two gender-linked subsystems - a 'masculine' one, involving rightsbearing beneficiaries of the social insurance schemes attached to the labour market, and a 'feminized' one, in which people are dependent clients in systems of public relief.4 Yet the assumption that men are not dependent, by virtue of their gender, often leaves them out of the welfare system altogether when they drop out or are pushed out of the labour market. This was movingly demonstrated in a brilliant feature article in The Nation (8 July 1991), written by Peter Marin: 'Why Are the Homeless Mainly Single Men?' The subtitle provides the nub of the answer: Tn America men are not supposed to be dependent/ Thus revival of social policy along the lines envisaged by Mendelson in the mid-1980s will involve a great deal of discontinuity - the closing of many institutions as well as the transformation of others. Public-sector unions will have to discern the difference between privatization and institutional transformation to empower workers and clients. The key, as Mendelson seemed to understand, is mobilization. Can front-line workers learn how to encourage and facilitate the organization of those who are currently dependent and atomized so that they can become collective agents in the determination of their own fate? Can unions organize and win high standards of living for public employees who work in more decentralized, community-

Changing Gears: Democratizing the Welfare State

43

based settings? Can those senior administrators and politicians who helped to spawn Mendelson's 'conceptual revolution' take out enough time from managing the existing system and trying to secure a 'partnership' with business to lead and inspire this transformation? It is asking a lot. States are not used to mobilizing, except for war. And the structures suitable to striking compromises with business are not the ones that will give the highest priority to popular mobilization for redistibution of power. Those who know what needs to be done have yet to figure out how to do it practically. That is what we need to concentrate on now.5 NOTES

1 P. Armstrong, A. Glyn, and J. Harrison Capitalism since 1945 (Oxford 1991) 310-11. 2 See R. Taylor 'Sweeden Comes in from the Cold' Financial Times (14 June 1991). 3 P. Corrigan and D. Sayer The Great Arch: English State Formation as Cultural Revolution (Cambridge, Mass., 1985). 4 N. Fraser Unruly Practices (Minneapolis 1989) 145-53. 5 Also using the above examples of Ontario's ComSoc workers and Alberta's nurses, I take up this question in a broader context in my introductory article to G. Albo, D. Langille, and L. Panitch eds. A Different Kind of State: Popular Power and Democratic Administration (Toronto 1993) 2-16.

3

Need and Welfare: Thin' and Thick' Approaches PATRICK KERANS

This is a time in the short history of the welfare state when discontinuities loom much larger than continuities. Perhaps the most obvious discontinuity is that the Keynesian welfare state - that is, a set of political arrangements that were the subject of an overwhelming consensus - has ceased to exist. Full employment had seemed a policy objective with which all could agree. Now many economists and political figures argue that full employment itself cannot or should not be a policy goal, since it would lead to inefficiencies and fuel inflation. But beyond this controversy, and more devastating, many people rejected Beveridge-style universal programs after full, highwage employment became controversial. The crucial agreement between right and left during the heyday of Keynesianism - namely, that social goals and market efficiency support each other - is now rejected by both. Nor is there any turning back. Part of the consensus had been that the cost of social programs would be borne by the surplus generated by economic growth. As Pareto optimality demanded, nobody was to be expected to cut back in order that others might move ahead. But environmental considerations make it clear that the era of that kind of high-growth economy is definitively over. It seems a particularly apt time to try to develop a more adequate account of welfare.1 Traditionally, the argument for an alternative to market-based distribution of resources has been based on the notion of need. Welfare and need are notions that have long been connected: welfare is enhanced when needs are met. There are, however, two ways to understand welfare. Proponents of communal provision have long insisted that minimum standards of welfare (or well-being) are matters of social justice. Welfare in a broader sense (one could, as this paper is meant to show, almost talk of well-seeking) is a key characteristic of the good life.

Need and Welfare: 'Thin' and Thick' Approaches 45 The ambiguity in the notion of welfare is reflected in an ambiguity in the notion of need. The more usual usage has been that basic human needs are common, universal criteria for the justice of allocative measures. Some have insisted, however, that need can be understood only within particular cultural contexts. Anthropologists, for instance, probably in their attempt to distance themselves from Malinowsky's functionalism, seem to have abandoned the notion of need altogether. Doyal and Gough speak of a 'pluralist' and a 'humanist' approach to need;2 Soper, of 'open' and 'closed' theories, rooted in cognitive and normative discourses;3 Weale, of a 'positive' and a 'normative' approach;4 and Penz, of need based on community standards and need as intrinsic to social justice,5 Doyal and Gough have recently characterized the pluralist approach as 'relativist';6 Penz and Soper call the alternative approach 'essentialist.' I have adopted Eraser's use of 'thin' and 'thick' notions of need.7 Fraser urges thereby that the focus should be on needs-talk, on the politics of interpreting needs, not on the nature of need; she rejects, however, the allegation that this focus is relativist.8 While she is ambiguous concerning the compatibility of the two approaches, the metaphor of thin and thick evokes a continuous spectrum rather than a dichotomy. I wish to argue that the two approaches are interdependent and complementary rather than oppositional. THE 'THIN' NOTION OF NEED A 'thin' notion of need is objective, universal, and abstract. It has been the commonly held notion largely because, since at least as far back as Marx's formulation of the needs principle, it has served as a constitutive criterion for distributive justice.9 There are two reasons for insisting on the universality of need. The deontological tradition since Kant has argued that need, in order to carry moral weight, must be universalizable. Furthermore, needs must be universal - that is, broader than and prior to social formations - if unmet need is to serve as the base for a moral critique of social formations.10 A need is universal if it is rooted in the human physical constitution or flows from general obligations imposed by basic social roles.11 The objectivity of need has been argued by many English-speaking philosophers whose central concern has been that the objectivity and universality of need provide the moral foundation for non-market allocation of resources. They have made a sharp distinction between 'need' and mere 'want,' attributing that distinction to the harm that ensues from an unmet need.12 This harm gives rise to the moral weight of need.12 Harm, almost all these philosophers insist, must be construed strictly; merely subjective impres-

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sions will not do; there must be objective, empirical evidence.13 On this account, a person can need something even without knowing of its existence.14 Implied here is the possibility of a 'science of needs/ People as politically diverse as Sydney Webb and Abraham Maslow have made this assumption explicit. This notion of need evokes the 'revelatory' character of the natural sciences with respect to people's common-sense, everyday knowledge. Scientific categories can subvert the truth of common-sense knowledge; for example, the sun does not 'come up' in the morning. They can also impute their own meaning to experience; for example, a doctor explains a patient's inarticulate experience of discomfort and points to the patient's need for a prescription, operation, or whatever. Giddens, while agreeing that the natural sciences possess this quality, rejects the suggestion that this revelatory model can be 'directly transferred' to the social sciences.15 While it is difficult to quarrel with the philosophical quest to establish the moral weight of need, there is, from a social or political viewpoint, a serious difficulty with this understanding of need. The objectivity of need delivers the subject into the hands of experts. Braybrooke, for instance, says explicitly that his notion of need will tend to put the establishment of social minima 'beyond polities' by making them a matter of consensus.16 He admits, however, the danger of paternalism and officiousness, of 'arrogant and pernicious elitism.'17 Lesser is grudgingly carried by the logic of the starting position of Plant et al. and allows that, under certain conditions, experts will know better than the people who experience need just what it is they need.18 Critics both to the right and to the left of the welfare state have pounced on this weakness of need-as-knownby-experts. From the right, critics since Pareto have insisted that this concept gives rise to the 'despotism of experts' and have rejected the very notion of needs.19 On the left, critics have focused on the dependence created by welfare programs and ascribe this to the role of the welfare state as reinforcer of the relations of domination and subordination that result from the market.20 While I do not disagree with this diagnosis, I find it more parsimonious to say simply that dependence is forced on people when an expert - whether a policy-maker or a social worker in the living-room - has the authority to tell them what they really need. The thin notion of need-determined-by-experts is abstract: its meaning can be grasped only within the theoretical frame of the expert's discipline; it is therefore abstract, in the sense that it cannot take into account the myriad socially generated meanings of actions and larger projects that constitute the everyday world and therefore the frame of meaning for people's needs as experienced in that context.21

Need and Welfare: 'Thin' and Thick' Approaches 47 A 'THICK' APPROACH TO NEED AND WELFARE A 'thick' understanding of need, by contrast, is rooted in an attempt to understand the cultural context in which people name their needs. It relies on interpretive methods to grasp the full particularity of the meaning of social action generally and of need in particular, in its everyday context. There are negative and positive reasons for attempting the shift to a thick approach. The thin version has, as I have suggested, a crippling weakness in that it consigns the notion of need to experts. More positively, an adequate understanding of welfare seems to entail a thick approach. Perhaps an overview of one recent debate will bring out the weakness of the thin view. In 1976, the International Labour Organisation adopted a 'basic needs strategy for development.' This was an attempt to challenge economic definitions of development, in reaction to the worsening terms of trade between north and south, and the resultant immiseration of so many countries in the Third World. The initiative had come from scholars at the Fundacion Bariloche in Argentina.22 In their attempt to base their moral objections against current economic practice on universal and objective criteria, they rooted their notion of need in states of illness or disintegration, to be determined by the latest scientific research. This definition, so evidently drenched in objectivist assumptions, was quickly supplemented by 'insistent calls for popular participation in the definition, implementation and benefits of basic-needs strategies.'23 Since most of the scientific capability was in northern countries, the criteria as initially defined were easily controlled by the very people who had caused the problem in the first place. True development, it was rapidly established, meant that communities in the impoverished countries had to discover their own deficiencies, set their own priorities, and develop their own capacities to meet their goals.24 Similarly, an adequate theory of welfare in general must expand its criterion of what constitutes a need from 'harm which is determined by experts' to 'what people, in the course of personal and community development, aspire to.' In attempting better to understand welfare, and its connection with a thick approach to need, we have turned to a variety of strands of thought. In philosophy, the communitarians have emerged as a distinctive school and seem to be growing in influence. They complement the arguments of those who continue to articulate critical theory. Feminist theorists are shedding strong light on the thought of both schools. In sociology, there is a concerted attempt to restore a balance between agency and structure and so - especially in the literature around new social movements - to explore the processes of human creativity with respect to social change. What emerges is a

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view of humankind that goes beyond that of a possessive individual as producer and infinite consumer of utilities - a more classical view of humans as developers and enjoyers of their own uniquely personal capacities.25 This was also Marx's position. Marx himself condemned capitalism mainly because it frustrated human development and self-actualization. Correlatively, he saw communism as a society in which people could become fully human - that is, fully realize their potential as all-round creators.26 This view leads to a notion of 'the self-expanding process of needs creation, whereby the satisfaction of one need gives rise to another/ 27 This in turn gives rise to the Marxian notion of persons 'rich in needs/ who, the more they meet their needs, discover further needs, which are more evidently personal and incommensurate with those of others.28 A theory of needs should serve as a basis for a rich image of human beings and should demand of social constructions that they respect this richness.29 Nor is this view individualistic; the self-realizing person can emerge only within the context of social relations characterized by mutuality, respect, and care. This approach will enable theory to make the shift from compensatory to empowering welfare,30 facilitating a move past a 'deficit model' of the welfare state, where any communal provision labels - however implicitly the recipient as weak, incapable, demeaned. Historically, the deficit model has assumed that the market is the normal and normative vehicle for provision of resources. Those who have achieved self-reliance will be able to provide for themselves and their dependants through their economically creative activity within the market; only those who cannot meet the challenges of the market will not be able to provide, and the safety net of the welfare state is there for them.31 Titmuss, who spent so much energy arguing for non-stigmatizing communal provision, nonetheless gave as his basic argument for communal provision the idea that the casualties of economic and technical progress should be compensated by the rest of us who have been its beneficiaries. It would seem that rooting out stigmatization requires a model of welfare that assumes that everyone needs the affirmation and support of a community in order to develop personal capacities and achieve personal autonomy. Central to a thick approach to need is the value of diversity - a strong theme among communitarians.32 There are two levels - self-actualization and selfdetermination - at which the emergence of human capacities can be understood, both of which confirm the diversity of human needing.33 Self-actualization points to the range of capacities that people seek to develop: motor skills, aesthetic sensibilities and competences, and conceptual and linguistic

Need and Welfare: Thin' and Thick' Approaches 49 abilities; the list could be extended indefinitely. One way to account for the uniqueness of each person's path to self-actualization is to point to the extraordinary range of those abilities and their combinations. Perhaps self-determination fully reveals the true diversity of human needing and of welfare. The human capacity for critical reflection and autonomy enables people to understand who they really are by articulating a genuine autobiographical narrative. Once this is accomplished, people can fathom which of their needs are genuine and should be struggled for. Self-determination is possible only when one has been acknowledged and affirmed within a community. What distinguishes each community is the goods with which it identifies. I accept that the theory of welfare outlined here falls within the ambit of what Fay calls 'critical social science/ which 'defines liberation as a state of reflective clarity in which people know which of their wants are genuine because they know finally who they really are, and a state of collective autonomy in which they have the power to determine rationally and freely the nature and direction of their collective existence/34 This is not to overstate the capacity for self-understanding. Fay, for instance, speaks of the experiencing the opacity and historical embeddedness of human action - like the sociologists' unintended and unforeseeable consequences of action, which derogate from a person's ability to achieve total self-reflection. Self-knowledge and autonomy are never complete; people never have either the foresight or the power to construct a set of institutions that would be completely satisfactory. Fay seems to see in the 'hyperrationalism' of critical theory the danger of another types of jacobinism. But critical theory is, after all, only critical; it sets forth counterfactual norms which, because of its insistence on the mutuality of communicative behaviour, call for constant reflection, self-criticism, and self-correction. In short, a critical or dialogical theory of welfare posits only guidelines for a process towards welfare (what might be called well-seeking). Welfare, in this sense, is not an end-state; it is rather an asymptotic goal. Before I assess the relative merits of the two approaches, and make an argument for their complementarity, I shall sketch briefly what seem to be the institutional implications of the thick approach. TOWARDS A 'THICK' THEORY OF WELFARE In their quest for self-realization, people encounter unsatisfactory material and social conditions. To pursue their welfare goals, people make claims; thus welfare can appropriately be theorized within a broad framework of

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claims and institutional responses. The framework can be sketched in a preliminary way as a process: claims are made, based on needs and aspirations articulated after a group process whereby the members achieve a newly emergent critical consciousness. These claims are made against a variety of institutions, which respond after having filtered the claims by a consistency check with the prevailing official welfare discourses. Some claims are accepted; some are rejected; most are accommodated. A taxonomy of accommodation will develop the initial observation that each accommodating measure is at the same time a measure to marginalize the claim and, by implication, the claimants. Examples of marginalization include stigmatization, impoverization, institutionalization, and punishment. Claims arise from dissatisfaction with the share of resources allocated to the claimants or with the normative identities ascribed to them - or, as is more usually the case, from dissatisfaction with both. The political struggles that arise from such claims are not simply conflicts over who will control economic and social resources; they are also 'over the power to give meaning to the world by defining legitimate participants, issues, alternatives and alliances/35 People will consider that they are represented adequately if not only their interests (in the traditional sense of that phrase) but their identity - who they are, what they aspire to, what their values are - are represented. Politics is a struggle for identity as well as for resources. Nothing about this approach entails rejecting the nexus between welfare and need: the process sketched here leads to enhanced welfare if it meets claimants' needs. The key is the insistence that people, in struggling for their identity, must learn to name their own needs. While the binary of private and public - which Habermas elaborates as 'everyday world' and 'system' - is problematic, it none the less provides a helpful framework in which to explore the struggle to name needs. The everyday world is characterized by relations of trust, mutuality, and 'communicatively achieved' consensus around values and norms and by collaborative social action.36 The ruling practices of modern institutional systems 'colonize the lifeworld' and tend to result in 'system integration' - that is, actions coordinated by the functional interlacing of unintended consequences.37 THE PUBLIC WORLD

To name one's own needs and to make claims based on them will be a struggle. The social identity of groups can be formed only within the matrix of unequal social power which already exists. Many will receive overt economic threats. Others will experience the exercise of both political and economic power when their aspirations are treated simply as irrelevant to any

Need and Welfare: 'Thin' and Thick' Approaches 51 'responsible' political agenda. Almost all will have to deal with the internalization of role expectations imposed on them by a manipulative mass market. Claimants, when they confront institutions, are meeting personnel whose behaviour is tightly focused and controlled by the rules that make up the institution. In other words, institutions are able to relate to clients' claims only in a particular way because they are comprised of a particular set of rules, both significative and normative. Institutions are the embodiment of systems - that is, of constellations of structural elements that give coherence and continuity to institutions, which define their relations to other institutions and to people living their everyday lives.38 That an institution embodies a system manifests its ambiguity: it renders a service, but only on its own terms; it serves but, in serving, controls. Because the design and everyday operation of institutions are an integral part of the hegemonic, legitimating institutional order, claims will initially be accepted as 'responsible' only if they are part of the services and resources that institutions are designed to provide. People's identities and consequently their needs will have been assigned a defined, delimited meaning within the hegemonic symbolic order that constitutes social systems. In order to name their needs, to articulate their aspirations, people must become critically aware of the list of 'responsible' needs that come with their role expectations. As people struggle to come to terms with their own sense of the meaning of their lives, to write their own biographies, to articulate their aspirations, their needs and claims become 'explosive' with respect to the hegemonic order.39 In this sense, they engage in a struggle for identity. People making claims will therefore have to recognize those hegemonic patterns that result in their subordination and strategize to overcome them. Thus claims will be expressed inevitably as criticism of the institutional order to which members of the group have hitherto been uncritically and submissively subjected and which has deprived them of needed resources. Indeed, as, for example, the history of Canada's First Nations has demonstrated, simply to have one's need for a given resource met is quite likely to increase one's sense of dependence rather than one's sense of satisfaction. As Eraser puts it, the bureaucratic procedures of the welfare state 'disempower clients, rendering them dependent upon bureaucracies and ... preempting their capacities to interpret their own needs, experiences and life problems.'40 This outcome can be avoided, or at least partially counteracted, only if a group has itself come to identify its needs and has settled on a political strategy to demand the resources needed. Claims made by non-hegemonic groups are usually marginalized. While there are many forms of marginalization, stigmatization is perhaps the most important and involves rejection of the grounds of a claim at the level of

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meaning. Claims made on the basis of a need articulated in light of autonomy and self-actualization are claims for resources which, if given on the grounds of the claim, would enhance the personal sense of dignity and the social identity of the claimant. To stigmatize claimants means to grant them some moderated amount of the resources claimed, but in such a way as to demean them, to reinforce their identity as subordinate. In contrast to earlier, religiously based cultures, modern society's empirical inequalities have no extra-social sanction; indeed, they are prima facie infractions against the proclaimed ideal of equality. As such, they must be explained away - so construed that they are understood not to violate the ideal of equality. The most obvious way to do this is to construe the inequality as arising from some deficiency in the person who experiences the inequality. A whole variety of such 'explanatory categories' have been engendered by the relevant expert systems, each reinforcing the last. In the late nineteenth century, these categories pointed to moral deficiencies (weakness, laziness, shiftlessness, irresponsibility, culminating in a person's being 'undeserving'). However, such deficiencies have now to be empirical, discoverable by scientific method. One basic category - unemployed - is drawn from economics and surrounded by methodological assumptions from that discipline, of which the most important is that people tend to choose leisure over work. A subsidiary question can be employability; to deal with it, or at least to explain why a person cannot be fully competitive in the market, experts draw categories from medicine or developmental psychology - for instance, categories of physical disability or mental disability or of mental illness. These are reinforced by - and form a single system of domination with other categories that give legitimacy to gender and racial discrimination. THE EVERYDAY WORLD

While the public, institutional world (and the order that it imposes) form the backdrop, a person learns to name her/his needs within the everyday world. Within that world, people pursue the good life and, to that end, are spurred to name their needs in the never-ending process of human flourishing: self-formation, self-actualization, self-realization, enrichment, growth. Thus the process of naming needs, and of the consequent quest for welfare enhancement, is dynamic and open-ended.41 It is, therefore, a source of dynamism, of constant pressure for social change. I do not thereby wish to connote that welfare is somehow the goal of isolated individuals. No matter how intensely personal the process of welfare enhancement, it is essentially a social process.

Need and Welfare: Thin' and Thick' Approaches 53 From a psychological viewpoint, people will be able to achieve the status of 'actor' or of claimant only if they have received the personal support that only a group can offer. The notion of 'internalization' highlights the necessity of this personal support. In the face of the public systems, which people experience as framing their everyday world of experience, people, as I have already argued, internalize a segmented system of need and discount their own dreams and aspirations. Philosophically, the language of self-understanding and self-definition (that is, the language that mediates decisions about which personal capacities should be valued and developed and what values are worthy of personal commitment) is a community product. People begin life embedded in social relations; their first awareness is of those social relations; their progress towards adulthood is in large measure a recognition of the obligations that stem from those social relations; their awareness of their needs and aspirations emerges from reflection on those social relations. As Taylor remarks, 'A self exists only within what I call "webs of interlocution"/42 This embeddedness of each human in community implies that emergence of an autonomous human subject is radically dependent - both psychologically and philosophically - on recognition of others. At the most intimate level of affection, primary recognition provides the encouragement to face both personal shortcomings and social obstacles and to have the courage to dream, to ask what could be; it 'is the psychic basis for the development of all further levels of self-respect/43 Instances of this recognition are that given by parents to children, that given mutually by partners in intimate relationships, and by friends. Less usually - but, in terms of the theory here proposed, absolutely crucial - it is accorded mutually by peers in a variety of groups, where inarticulate dissatisfaction is subjected to critical reflection, leading to the naming of needs.44 This process of encouragement that enables members to name needs also creates mutual responsibilities, whereby members are held accountable to 'be serious/ so that 'mere wants' will not be inflated into needs. The full process of humans becoming autonomous also requires mutual recognition in the public sphere, where each affirms the other as a subject of a full complement of rights. This form of recognition accords status and, as such, is static, since the complement of rights is in accordance with a common understanding of already existing social norms. However, it is also dynamic - the logic of this recognition is that it be extended to all human beings and that the complement of rights be enlarged. A thin theory of need and welfare concentrates on this form of recognition, since it focuses on the question of justice.

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A third form of recognition involves social acceptance of the individualized other, the affirmation of alternative visions of the good life and the valuing of each person's sense of her/his capacities and their relative worth. This recognition is struggled for in the public sphere, but not where authoritative decisions are formally made. Fraser calls this arena 'the social/45 While the issue is beyond the scope of this paper, a thick theory of welfare must analyse the political strategies required by groups making claims to achieve such recognition from other groups. This third form of recognition gives rise to the possibility of an ethical assurance of the emergence of self: 'ego and alter meet within the realm of values and goals, and through mutual recognition, signal each other the undeniable meaning of each person's life for the other/46 Thus framing the notion of recognition on which the universality of rights turns are two other forms of recognition: one is rooted in the mutuality of care, and the other is the nuanced, fully concrete equality of solidarity. TWO C O M P L E M E N T A R Y APPROACHES

It would seem that neither the thin nor the thick approach to need (hence to welfare) will stand without the other. The thin notion of need is neither objective nor univeral. Several philosophers have pointed out that need is not rooted in an objective notion of harm to which all reasonable people could reasonably give consent but is a normative, contestable notion. Need, the argument goes, is always predicated with respect to a further goal: T need x' always must be supplemented by the phrase 'in order to accomplish or attain y/ The moral weight that gives rise to an onlooker's obligation to meet the need is grounded not in the harm, but in the onlooker's moral assessment of the claimant's objective.47 The welfare claims outlined here have as their objective the self-realization (or, in the words of some philosophers, the 'flourishing') of the claimant. The vision of human flourishing is, however, inescapably culturally conditioned, so that the notion of need becomes contestable.48 Thus, as I have outlined the problem, the task of the claimants is to persuade the adherents of the hegemonic framework that this latter ought to be reworked to accommodate the new claims; this task will probably entail making common cause with other marginalized claimants. But they will not establish the legitimacy of their claim simply by demonstrating the objectivity of the harm caused by their unmet need. The recent study on needs by Doyal and Gough, while it goes much of the way to bridging the gap between a thin and a thick notion of need, illustrates the insufficiency of a thin notion of need. They begin with the problematic

Need and Welfare: Thin' and Thick' Approaches 55 of a thick understanding. Constitutive to becoming a person, a subject, an agent, each individual - within the context of a community that offers recognition and support - chooses substantive goods. Since each person has a right to this kind of personal development, there is a corresponding obligation that the objective preconditions for such growth be provided. Thus Doyal and Gough define serious harm as 'the significantly impaired pursuit of goals which are deemed of value by individuals/49 Because participation in community is essential to pursuit of such goals, a thin theory of needs is a search for 'universalisable preconditions which enable minimally impaired participation in the forms of life both in which individuals find themselves and also which they might subsequently choose if they believe their existing form of life to be wrong. Without the discovery of such conditions, we will be unable to account for the special moral significance which we wish to impute to basic need-satisfaction/50 Doyal and Gough argue that survival - basic physical health - and basic autonomy - 'the ability to make informed choices about what should be done and how to go about doing it,'51 or the capability of initiating actions are the requisite preconditions, hence the most basic human needs. Elements of autonomy include understanding of self and one's culture, the mental health required to formulate aims and beliefs and to take responsibility for what one does, and a range of opportunities for new and socially significant activities. These latter are grouped around what the authors take to be the four essential social preconditions of need satisfaction - production, reproduction, cultural transmission, and political authority. These in turn are reflected in four universal social roles - householder, parent, worker, and citizen.52 By rooting their argument in each person's right to choose her/his own particular good life, Doyal and Gough seem to have avoided consigning the notion of need to experts. They, too, have at least pointed to a process whereby people distinguish between their needs and their wants. They stress 'the importance of individuals being able to explore their intellectual and emotional capabilities in optimal ways,' such that 'experts constitute just one group of participants' in the debate to determine needs. 'Justice without participation,' they tell us, 'is empty, participation without justice is blind/53 However, in their concluding remarks, where they argue for a dual political path of centralization and decentralization, they make it clear what they mean by the second half of their aphorism. Individuals are not always the best judges of their own needs, either because of poor education and lack of relevant expertise or because their ability to differentiate between needs and wants has been distorted by a range of external influences.54

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They are failing to take into account the ambiguity in the notion of participation itself. People's participation in a decision will be satisfactory to them only if they agree with the broad frame in which the question is put and with its underlying purpose. If experts frame those questions, then there is no reason to expect that people whose everyday experience is not grasped 'thickly' by those experts will recognize those decisions as contributing to the ongoing narrative of their lives - in a word, as contributing to their welfare. Participation presupposes that kind of agreement; it cannot create it.55 Lurking behind Doyal and Cough's concept of 'participation' seems to be the assumption made explicit in the classical arguments of Titmuss and Marshall in favour of universality - namely, that the purpose of universal programs is the social integration of all.56 Perhaps that assumption is still satisfactory in culturally homogeneous nation-states. At an abstract level, it derogates from any sense of plurality except the most formal; historically, the First Nations of Canada have come to name such integration as cultural genocide. The attempt to ground the distinction between need and want in the expertise of natural science will not work; that expertise does not constitute a satisfactory frame for the politics of interpreting need. A 'thick' notion of needs, however, seems to lead only to endless political struggle over need interpretation. Thin theories of justice have developed an irrefutable argument with respect to universality which implies recognition of the dignity and worthiness of the abstract, generalized other. The purpose of a thick, interpretive approach is critical rather than prescriptive; it points to the 'ideological limits of universalistic discourse ... the unthought, the unseen and the unheard in such theories.'57 This can happen only within a dialogical framework, where those without power are heard out as carefully as any others.58 CONCLUSION

This chapter has assumed major discontinuities in social, economic, and political reality during the past fifteen years. It has argued that while any theoretical attempt to grapple with the new realities must preserve some continuity with a more traditional argument to ground social welfare in an objective, universal notion of need, that approach cannot stand alone and must be supplemented with a thick approach. The two approaches, I have argued, are complementary. Human needfulness is rooted in human bodiliness. We begin, as Bloch so

Need and Welfare: 'Thin' and 'Thick' Approaches 57 pithily reminded us, empty.59 We start life radically dependent on the care of the other members of an intimate lifeworld in order to grow. In the course of that growth, dependence shifts to interdependence, both within a larger group of peers and within a smaller, intimate community of one's own choosing. Such growth - the development of capacities - is guided by a value constellation (or a series thereof), at first that learned from the community and later, with the evolution of personal autonomy, that to which the person makes a commitment. But how can that driving mechanism, even if it is granted for the sake of argument, be legitimately called need, in the sense that it has moral weight? The arguments that I have reviewed make it clear that the weight of 'need' rests on the obligation of the subject to pursue the end. Do people have a moral obligation to grow? This is the nub of Doyal and Cough's argument that people have a right to optimization of need-satisfaction: commitment to a good (which shapes a value constellation, which gives rise to the need for development of certain capacities) is just that - commitment, rather than half-heartedness. In that sense, a morally serious person has a legitimate need to develop that seriousness. Furthermore, throughout this process of growth, the body is experienced as the vehicle for the never-ending expansion of capacities, of differentiation of experiences, of possibilities for communication. Dependent on the experiences and insights that come with cultivation of a unique set of capacities, and on the frame of reference set by commitment to a unique value constellation, the sense of need that drives this process will have to be approached 'thickly/ There will always be room for a politics of need interpretation. At the same time, the fragility and opacity that colour our experience of 'having a body' imply the undeniability of much that a thin theory of need presses on us. Because many of the natural processes of my own body are opaque to me, only the revelatory findings of experts can minimize my fragility. Because even in the closest, most satisfactory community, aspects of the other are opaque to me, I can minimize my fragility only through a mutually agreed on set of rights. The complementarity of the two approaches to welfare and to need seems to arise from this inescapable ambiguity of being embodied and from the three-fold need for recognition and affirmation that this siutation entails. It seems therefore misleading to attempt to construe the relationship between the two approaches in such a way that one becomes the larger frame within which the other is to be grasped.

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1 Glenn Drover and I have for some time been working on a project to formulate a theory of welfare, the outline of which is enunciated here. All aspects of this paper have benefited from protracted discussions with him. I can claim only the shortcomings. 2 L. Doyal and I. Gough 'Human Needs and Socialist Welfare' Praxis International 6 no. i (1986) 43. 3 K. Soper On Human Needs: Open and Closed Theories in a Marxist Perspective (Brighton 1981). 4 A. Weale Political Theory and Social Policy (New York 1983) 7. 5 P. Penz 'Normative Issues in Social Needs Assessment: A Theoretical Overview' unpublished paper, Toronto, 1987, 8-14. 6 L. Doyal and I. Gough A Theory of Need (London 1991). 7 N. Fraser Unruly Practices: Power, Discourse and Gender in Contemporary Social Theory (Minneapolis 1989) 163 refers to C. Geertz The Interpretation of Cultures (London 1973), who develops the notion to underpin an 'interpretive theory of culture/ /. Rawls A Theory of Justice (Cambridge 1972) develops a 'thin' theory, independent of any particular notion of the good. 8 Fraser Unruly Practices 181-2. While I find her work (and this distinction in particular) enormously helpful, her examples could easily lead one to conclude that she means that only decisions about providing are essentially contestable, rather than assessment of the need itself. (Thanks to Peter Penz for this distinction.) 9 D. Miller Social Justice (Oxford 1976) 24-31. Cf. also S.I. Benn and R.S. Peters Social Principles and the Democratic State (London 1959) 107-54. 10 N. Geras Marx and Human Nature: Refutation of a Legend (London 1983); and N. Geras 'The Controversy about Marx and Justice' New Left Review (1985) 150. 11 D. Braybrooke Meeting Needs (Princeton, NJ, 1987) 46-8. 12 Doyal and Gough Theory of Need 2. For a bibliography, see Braybrooke Meeting Needs 307-9. 13 Braybrooke Meeting Needs 108; Raymond Plant et al. Political Philosophy and Social Welfare (London 1980) 20-51, 95. 14 Doyal and Gough Theory of Need 42; R. Plant Modern Political Thought (Oxford 1991) 190 gives a clear, succinct account of this argument. 15 A. Giddens The Constitution of Society: Outline of the Theory of Structuration (Berkeley and Los Angeles, Calif., 1984) 335. 16 Braybrooke Meeting Needs 67-8. 17 Penz 'Normative Issues' 17; see also Braybrooke Meeting Needs 14. There is

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18 19

20

21 22 23 24

25 26 27 28 29 30 31 32 33 34 35

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good historical reason for recognizing this danger. The Webbs argued that the individual should not be allowed to fall below a national minimum (scientifically determined, as we already noted) 'whether he likes it or not/ Cf. B.L. Crowley The Self, the Individual, and the Community: Liberalism in the Political Thought of F.A. Hayek and Sidney and Beatrice Webb (Oxford 1987) 113. H. Lesser True and False Needs' in Plant et al. Political Philosophy 152-72. For example, A. Flew The Politics of Procrustes: Contradictions of Enforced Equality (Buffalo, NY, 1981) 117; W. Gaylin et al. Doing Good: The Limits of Benevolence (New York 1978). London Edinburgh Weekend Return Group In and against the State (London 1980) 42; B. Jessop The Capitalist State: Marxist Theories and Methods (Oxford 1982) 78-141; C. Offe Contradictions of the Welfare State (Cambridge 1984) 102-4, 131-45. D. Smith The Everyday World as Problematic: A Feminist Sociology (Toronto 1987) 151-79. C. Mallmann 'Society, Needs, and Rights: a Systemic Approach' in K. Lederer ed. Human Needs (Cambridge 1980). R. Sandbrook The Politics of Basic Needs: Urban Aspects of Assaulting Poverty in Africa (Toronto 1982) i. G. Chichilnisky Basic Needs and the North/South Debate (New York 1982) 5. Unfortunately, Doyal and Gough in Theory of Need 153-5 construe development as 'the relativist wave' engulfing the objectivity of the notion of basic need. C.B. Macpherson Democratic Theory (Oxford 1973) 4, 20, 30, 34-5, 56. J. Elster, Making Sense of Marx (Cambridge 1985) 83; cf. also 61, 521. Ibid. 71. A. Heller The Theory of Need in Marx (New York 1976) 37; F. Feher and A. Heller 'Forms of Equality' Telos 32 (1977) 1-17. J. Galtung The Basic Needs Approach' in Katrin Lederer ed. Human Needs (Cambridge 1980) 70. F. Block Revising State Theory: Essays in Politics and Postindustrialism (Philadelphia 1987) 31-2. See, for instance, D. Stone The Disabled State (Philadelphia 1984). See, for instance, M.Walzer Spheres of Justice: A Defence of Pluralism and Equality (New York 1983). S. Benhabib Critique, Norm, and Utopia: A Study of the Foundations of Critical Theory (New York 1986) 340. B. Fay Critical Social Science: Liberation and Its Limits (Cambridge 1987) 205. J. Jenson '"Different" But Not "Exceptional": Canada's Permeable Fordism' Canadian Review of Sociology and Anthropology 26 no. i (1989) 74.

60 Political Economy in Transition 36 Eraser Unruly Practices 117, especially note 8. She draws heavily, if critically, on Habermas and clarifies his use of terms. 37 J. Habermas The Theory of Communicative Action, vol. 2, Lifeworld and System: A Critique of Functionalist Reason (Boston 1987) 332-73. 38 This formulation owes much to Giddens Constitution of Society, see, for instance, xxi, 17, 25, 31. 39 J. Habermas Legitimation Crisis (Boston 1975) 78. 40 Fraser Unruly Practices 130. See also Offe Contradictions 112. 41 Doyal and Gough Theory of Need 4. 42 C. Taylor Sources of the Self (Cambridge 1989) 36. See also A. Melucci Nomads of the Present: Social Movements and Individual Needs in Contemporary Society (Philadelphia 1989) 63-73. 43 A. Honneth 'Integritat und Missachtung: Grundmotive einer Moral der Anerkennung' Merkur 50 (1990) 1049. The discussion in the following paragraphs depends on Honneth's analysis. 44 See N. St-Amand and H. Clavette Entraide et debrouillardise sociale chez des personnes aux prises avec des problemes psychiatriques: Importance pour la formation professionelle (Ottawa 1990) for an empirical account of the relative help accorded formerly hospitalized psychiatric patients by their families, their peer groups, and their professionals as they struggle to achieve coherence and meaning in their lives. 45 Fraser Unruly Practices 156. 46 Honneth 'Integritat und Missachtung' 1051. 47 Plant Modern Political Thought 197-9. 48 D. Wiggins 'The Claims of Need' in T. Honderich ed. Morality and Objectivity (London 1985) 157. Subsequently Wiggins returns to the point, arguing that essential contestability does not lead to relativism. In his words, there can nonetheless be a 'principled' discussion. See D. Wiggins Needs, Values, Truth: Essays in the Philosophy of Value (Oxford 1987) 314-18. 49 Doyal and Gough Theory of Need 50. 50 Ibid. 51. See also A. Gewirth Reason and Morality (Chicago 1978), and Human Rights (Chicago 1982); J. Griffin Well-Being: Its Meaning, Measurement and Moral Importance (Oxford 1986) 43. 51 Doyal and Gough Theory of Need 53. 52 Ibid. 80-90. Doyal and Gough cite approvingly Braybrooke Meeting Needs 48-50. 53 Doyal and Gough Theory of Need 298, 297,141. 54 Ibid. 298. 55 C. Taylor Hegel and the Modern World (Cambridge 1979) 114-16.

Need and Welfare: Thin' and Thick' Approaches 56 R. Titmuss Commitment to Welfare (London 1964) 122 and Social Policy (London 1974) 33-46; T.H. Marshall Social Policy in the Twentieth Century (London 1964) 65-123. 57 S. Benhabib The Generalized and the Concrete Other: The Kohlberg-Gilligan Controversy and Feminist Theory' Praxis International 5 no. 4 (1986) 415-16. 58 N. Eraser Toward a Discourse Ethic of Solidarity' Praxis International 5 no. 4 (1986) 426. 59 E. Bloch Das Prinzip Hoffnung (Frankfurt 1959) 21.

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4

Challenges for a New Political Economy CAROLINE ANDREW

What should we be asking of a new political economy? The theoretical perspective that we adopt should be capable of clarifying issues intellectually but also of making understandable the reality in which we live and, further, of helping us know how to act. Indeed, as Mahon argues, one of the great virtues of political economy as a perspective has always been the intimate relationship between the theoretical questions posed and the political reality of the society.1 This link continues to be vital - theorization needs to be intimately related to political reality. Therefore the renewal of theory comes about through theoretical reflection but also through the ability to observe clearly the political reality of the day. One's theoretical perspective or intellectual method should have this quality of responding to, of being intimately connected with, what is going on in society, with what must be addressed politically. Theory should help to explain what is significant in the changing socio-political environment and give a sense of how to act politically. It is by these criteria that we should judge political economy - has it done this, can it do this, and, most important, will it do this? At the same time, these criteria seem to me extraordinarily difficult because so much is changing now - transitions in eastern Europe, the movements for increased democracy in Africa, and radical changes in the labour movement, in the political representation of labour, and in women's political consciousness, to mention only a few examples. It seems to me very difficult - perhaps impossible - to know what is important and what is peripheral. And without a sense of what is current political reality, how can we judge the appropriateness of theory? But I recently felt supported in my anguish, or at least my indecision, in how to think about these problems while reading a presentation by Anne

Challenges for a New Political Economy 63 Showstack Sassoon. She writes: 'We should not be worried if the analyses of recent development which we possess are partial and feel inadequate. In fact, I would go much further and say that we should be extremely wary of those analyses which present themselves as definitive ... However dramatic the situation, and dramatic and painful it is, however anxious it makes us feel, and however acute the sensation of pathos, we should try to allow ourselves to enjoy the beautiful confusions and contradictions, the ironies of history/ 2 It is comforting, perhaps even exciting, to have intellectual support for a position of uncertainty, for not being sure about what is really going on in the world. It reinforces my sense that I am quite certain that I am not certain. Despite this uncertainty, I decided to start evaluating the challenges facing political economy by trying to look at reality. In doing this I have taken as my model a text by Beatrix Campbell.3 Campbell structures her text around visits to three localities to see what are the current forms of economic, social, and political activity and who are the major actors. From this observation, she moves to more theoretical considerations about the changing nature of political and social action. But because she starts by observing what is most striking politically, her theorizing can take account of political reality. Clearly Campbell's approach represents a simplification of reality. Any observation takes place through conceptual filters, and the relationship of theoretical understanding to observable reality is a much more complex one than I have suggested here. But, having raised this difficulty, I cannot deal with it at length at this time. We shall go on to the case studies, recognizing their somewhat fragile status. THREE CASE STUDIES

After some hesitation, I chose as examples Vancouver, BC, Chicoutimi, Que and Guelph, Ont. There is an arbitrary element to these choices, but, at the same time, they can be justified. Canada is an urban society and increasingly so. It is dominated by the one huge conurbation running from Windsor to Quebec, and Guelph is an example of an urban centre that is part of this huge metropolitan region. There are also more isolated urban centres, and this justifies Chicoutimi. Vancouver is included in order not to have our examples limited to the centre of Canada. However, the specific examples chosen are less important than is the general perspective - the idea of trying to deduce from reality the important theoretical questions. To begin with Vancouver, I have used the newspapers for the first week of August 1991 to bring together a whole series of items that can connect us to the current political reality.

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• The municipal arts budget is cut. The Vancouver Children's Festival is threatened. • In Surrey, a Vancouver suburb, a municipal by-law is proposed limiting the size of houses. For those people in favour of the by-law, it is seen as a way of preventing the building of mega-houses which destroy the character of neighbourhoods and the quality of their planning. For those people opposed, it is a racist measure designed to exclude immigrant families from middle-class residential neighbourhoods. • A total of 332 hospital beds have been closed since the June 1991 provincial budget. A union spokesperson indicates that health care workers should be becoming members of hospital boards. • The Vancouver municipal council is spending $170,000 a year for a program of English as a second language for civic employees. • An ecological group has lost a judicial battle. The company against which it is protesting has obtained an injunction outlawing demonstrations by the group. • An agreement has been reached between the Engineering Student's Association and the University of British Columbia. The association promises to stop all racist and sexist activities, and, in exchange, the university agrees to hand over the student fees that it had withheld from the association. On to Chicoutimi. Here my data sources are different - studies by Christiane Gagnon on Alcan and shifting corporate politics;4 by M. Anadon, D. Masson, M. Tremblay, and P. Tremblay on the role of women's groups in regional development;5 and by Juan-Luis Klein on regional and local organizational structures and democratic practices.6 These studies are themselves based on an appreciation of current political reality, and certain common themes emerge. • Unions are relatively absent from regional political struggles. This situation parallels the reduction in the number of unionized Alcan employees. • Environmental questions are increasing in importance. • The activities of women's groups are growing as part of the broadly defined social policy field. • Alcan's corporate strategy is changing. It seeks to appear to be a good regional corporate citizen. • There are numerous examples of local democratic practices and organizational innovations by local groups. Our third example is Guelph. Once again, the impressions are more in the form of rapid images.

Challenges for a New Political Economy 65 • Women's groups are creating alternative services. • The former agricultural college, now the University of Guelph, is active in biotechnology. University researchers develop links with private enterprise, facilitated by the centres-of-excellence programs of the Ontario and federal governments. • Urban development is obliterating the countryside. Greater Toronto moves closer and closer to Guelph, and very-low-density, suburban projects are multiplying. People are worried about the loss of the 'experience of place' as described by Tony Hiss. • Guelph, Waterloo, Kitchener, and Cambridge form the Technology Triangle, a joint marketing organization set up by their industrial commissioners. They try to develop contacts with the 'four motors of Europe' by 'selling' the idea of a dynamic, entrepreneurial region - the local going global. • The Ontario Worker's Compensation Board announces that it will hold public consultations on the issue of including burn-out and stress in the list of illnesses that it covers. So what do we conclude from these brief visits? Some issues are clear multiple social identities, and emergence of significant social actors - women, racial, ethnic, and visible minority groups. New issues are not easily reduced to the old terms - the environment is clearly an example, but so too is control of technology. Frontiers of public and private are shifting - new services are offered, often through voluntary labour on the part of groups. But the state cuts services, pushing burdens back on to the community, very often onto women. Democratic practices and innovations are widespread at the local level, but multinational corporations increase their influence and conventional state politics appears increasingly sterile and subject to manipulation. The perception of the attractiveness of localities - their image of liveability - becomes more important as a part of economic development strategies. Some aspects clearly relate to major themes of political economy - the closing of hospital beds in Vancouver, Alcan's redeployment strategies, and suburban development in Guelph. But in some cases, the perspective is new for political economy - micro-analysis of the organization of services and concern for democratic innovations in the workplace. In other cases, the interconnections between factors (gender and class, race and class and gender), rather than the factors themselves, pose the intellectual challenges for political economy. The question is not only whether political economy can deal with these new issues but whether it has done so. This is not a new question, and there has been much recent debate on the limits and possibilities of political economy. Gordon Laxer underlines the

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limits - criticizing the inability of political economy to use historical evidence properly: There is still a marked tendency for Canadian history to be viewed as a means to confirm theory. The state in its ideological dimension is given inordinate importance and history is often bashed into shape to fit preconceived theories/7 Rianne Mahon is much more positive. In a text on the 'new' political economy for the 19908, she evaluates the 'old' political economy in terms of what she sees to be its three key concepts: dependence, class, and state.8 We have learned much about ourselves and about the world by putting these concepts in the centre of our analyses. Pat Marchak's evaluation covers both limits and possibilities. She underlines the criticisms but sees signs of renewal from within: Apart from that ideological process, however, there were scholarly reasons for a decline in political economy. Though stimulating debates were undertaken, political economists began, toward the middle of the 1980% to sense that the paradigms with which they were working were deficient in important ways. The major problems in the analysis we had used through the 19/o's, lay in the uneasy combination of the Innis-Watkins staples theory and a selective version of neo-Marxism. We were unable to develop a solid theory of the interaction between class and state, and we had great difficulty combining the somewhat 'economistic' version of history with an appreciation of culture. We continued to debate, but could not resolve, the relationship between gender and class inequalities. We were also deficient in our grasp of organizations and organizational power, independent of class power. A regrouping, and a period of groping for new ways of looking at political economy, are currently in progress.9 D E F I N I N G THE C H A L L E N G E S

Let us go back to our three case studies to draw out the challenges that face political economy. What are the perspectives or issues or sensibilities that we would like the discipline to be able to deal with? The major issues emerging from our snapshots of reality are the challenges posed by the analysis of relations between genders and among race, ethnicity, and socio-political identities; by the analysis of culture and ideas; and, by the analysis of action. These are the crucial issues for a pertinent political economy. To start with feminism, one could think that this challenge had been met feminist research is more than flourishing, and a visit to any bookshop illustrates the quantity and quality of recent production. However, one can

Challenges for a New Political Economy 67 unfortunately still reiterate the conclusion of Maroney and Luxton - that 'to those working within political economy we insist that without an analysis of sex/gender systems their analysis is flawed and incomplete/10 The vast majority of people who conduct women's studies or feminist research are women, and, conversely, too many studies by men ignore these perspectives. And this, despite the numerous studies that indicate that in order to understand the evolution of the paid work-force, the development of the union movement, or the workings of the welfare state, one needs a grasp of gender relations. This refers not to the formula 'add women, and stir' but rather to reconceptualization which takes seriously the analysis of gender. There are, of course, splendid examples of this kind of analysis. Margaret Hillyard-Little's detailed study of reports by welfare workers about single mothers in early-twentieth-century Ontario allows us to see the process of constructing gendered poverty.11 The lives of those women are revealed, but so too are the ways in which these lives have been categorized and classified by the Ontario Mothers Allowance program. Many other examples spring to mind. Suzanne Mackenzie's look at twentieth-century urban development in Canada gives proper emphasis to the impact of the way in which the division of private and public got built into the spatial patterns of Canadian cities.12 David Rayside's study of Alexandria reveals a perceptive analysis of the intersection of class, sex, and ethnicity.13 And there are others. Feminist research has tried to corne to terms with the questions of multiple social identities and their analysis. Class and gender, class, race, and gender, class, race, gender, and sexual preference - how to recognize each properly while acknowledging their interrelationships? Joy Parr observes: 'Any systemic approach that assumes that "everything falls into one category or another, but cannot belong to more than one category at the same time" belies the wholeness of consciousness and experience. Life as we live it is not subdivided sequentially. We exist simultaneously, rather than sequentially, in the social relations of class and gender/14 Looking at the social relations of race, class, and gender has been both challenging and intellectually fruitful in terms of the conceptualization of multiple social identities. As one example, Nitya Duclos's presentation on racial minority women as the disappearing women in human rights cases argues that complication is the only solution: With a legal description that corresponds to the sophistication of the lived experience of discrimination, we can build an antidiscrimination law that truly begins to redress it. By drawing on a multiplicity of complex situations, tribunals can begin to build up a doctrine which is able to conceptualize race as a complex category - and one which

68 Political Economy in Transition either distinguishes between race, colour, ancestry, place of origin and so on, or redefines these categories in a meaningful way. Similarly, we may begin to break down the simple parallelism that currently exists among the various grounds (gender, race, disability, age, and so on) and ask how they differ, and how these differences could be acknowledged in antidiscrimination doctrine ... For racial minority women and for others who straddle the current categories of difference, complicating our human rights law in the ways I have suggested is not one of several options for reform. It is the only way not to disappear.15

At present, some researchers are trying to raise these issues and to formulate research proposals in ways suitable to the realities of race, ethnicity, and multiple social identities. Schaan's work on holistic changes to health and social services in Indian communities, Duder's on services to black children in Montreal, and Desmarais and Levesque's on Inuit women and their role in their communities all try to integrate the understandings of different experiences into our view of what social policy is and should be.16 Discussion of race and ethnicity has entailed discussion of gender. We should not subsume analyis of race and ethnicity, nor of gender, under some general category of minorities (speaking, of course, in terms of power, not of numbers). I fully agree with Nitya Duclos, with Joy Parr, and with Anne Showstack Sassoon in 'striving to capture process, diversity, particularity/ The analysis of race and ethnicity poses an awesome intellectual challenge, as well as an obvious political one, in Canada, as even my very superficial descriptions of our three localities indicate. Political economy is only beginning to take up this challenge, and, although there are some important studies done, an enormous amount remains to be done. This task is to be linked with that of integrating women. Both projects pose the question of how to analyse multiple social identities and how to do this without assuming a hierarchy of variables. Political economy suffers from a certain heritage of assuming that class must be the fundamental category and therefore of suspecting other categories of being the product of false consciousness and manipulation. However, political economy understands the analysis of domination and of political power and therefore has intellectual roots that are useful for the analysis of multiple social identities. Another challenge may be referred to, somewhat loosely, as the integration of culture and ideas. The analysis of ideas, of their materialization in the working of our societies, and of their influence in social and political life needs to be better understood and better integrated into our studies. The integration is under way, but not yet to a sufficient degree. Jane Jenson's

Challenges for a New Political Economy 69 work on the universe of political discourse is an eloquent example of the kind of analysis that is needed.17 She argues that the way in which a political issue is articulated and presented will help to determine the legitimacy of various categories of actors and will therefore influence the access and the influence of these actors. This conceptualization permits analysis both of the way in which issues are articulated and of the material conditions that affect these issues. As Jenson argues, political struggles relate to questions of who has the right to put forward demands, of who can speak in the political arena, and of what is the definition of politics. These are absolutely fundamental questions for the analysis of social policy. For example, public housing agencies are only just beginning to come to terms with the fact that more of their clients are women. The definition of people seen currently to be legitimate actors in questions relating to public housing is 'the poor' or 'the elderly/ but not 'women/ And this definition affects planning and implementation of public housing programs. Those who are seen as legitimate actors can more readily advance their claims and their solutions, and these will be listened to with greater attention. On defining the boundaries of the political, the example of violence against women illustrates clearly these processes. Forty years ago, this was not seen as a political question, and therefore there were few or no programs or political actions. There are still people who regard it as a private question, but the majority in our society sees it as an issue for which the state has responsibility, therefore as a political question. Programs arid activities have followed the change in the articulation of the question. The definition of legitimate political actors allows us to trace the evolution of ideas in society. In relation to the environment, for example, how many of us laughed the first time that someone talked to us of the political equity of species - one tree, one vote - or even the idea of equality between animals and humans. But these ideas are more and more present in our society, and our political analyses should take account of this. Another example of work that tries to analyse seriously the role of ideas in politics is that of Jocelyn Letourneau.18 He looks at the construction of the idea of 'the modern' in relation to the Quiet Revolution in Quebec and the processes by which this idea was constructed and disseminated there. Political action in Quebec since the 19605 cannot be understood without realization of how Quebec society has constructed for itself a sense of being modern since the 19605 and having not been modern before that period. The construction of both images is important. The impact on political action is not simply from what happened in the past; it is from the particular form in which the images and perceptions of the collective past are constructed,

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recreated, and structured by the elites of that society. We need to understand those processes in order to fathom the way in which ideas shape politics. But I wish to refer also to the challenge of integrating cultural factors. An aesthetic sensibility should be incorporated into our analyses, and, in the same way that we attempt to give full justice to the representation of multiple social identities, we should endeavour to comprehend the multiciplicity of levels of exposition. Without accepting entirely the thesis of post-modernity, we can recognize the calling into question of the one true answer as a positive development. Doreen Massey remarks: 'Post-modernism holds out the potential democracy of a plurality of voices and points of view, the end to a notion of science and society which has in fact (to be distinguished from "by necessity'') been unremittingly and tediously male, a partriarchal hierarchy with a claim to truth. Modernism, on the other hand, points to the possibility of progress and change. Things may be patriarchal now (including, OK lets admit it, modernism itself) but they need not always be so; more than that, it is possible to judge between alternatives, and history is on our side/19 Contradictions, ambiguities, and juxtaposition of different levels of explanations in our analyses may be indications of their richness, not of their failure. This is not a call for incoherence or for lack of logic but rather for being open to the ambiguities of reality, to the fact that reality includes contradictions and that, if we are to understand what is going on in our societies, we must not reduce everything to a single level of explanation. One splendid example is a thesis recently completed by Marta Savigliano. The thesis deals with the political economy of passion: the tango, exoticism, and decolonization. The author brings different kinds of analysis to bear: Tn writing this dissertation I have dealt with many conflicting voices: academized and orderly, poetic and chaotic, male, hegemonic and female, subversive, collective and personal, totalizing and specific, white and mestizo, in English and in Spanish, of the colonizer and of the colonized/20 Within the thesis, she examines a variety of questions that exist at different levels within an overall analysis: her own introduction to the tango by her grandfather, the analysis of the intersection of sex, race, and class in the tango, the craze for the tango in Japan, her own questions of identity as a Third World woman, a criticism of post-modernism as colonialist, and many others. The result is a richly nuanced, multi-levelled analysis of the political economy of passion, of how '"exotic" objects have been constituted by applying an homogenizing practice of exoticization; a system of exotic representation that commoditized

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the non-west in order to suit Western consumption/21 and one that recognizes material reality while acknowledging symbolism, aesthetics, and individual voice. I come now to a final challenge - that of incorporating analysis of intervention or practice. Our case studies show that organization and delivery of social services are critical political issues. The ways in which services are delivered and the relationships engendered between providers and those who receive the services represent crucial dimensions of social welfare policy. Our descriptions of Vancouver, Chicoutimi, and Guelph, as well as many other studies, illustrate the complex link among different models of services - traditional, alternative, state, community, commercial, cooperative - and the relationships among these services and the moving boundaries of the public and private sectors in our societies. Indeed, the political importance of questions related to the way in which services are delivered is illustrated particularly clearly in this volume, with respect to social welfare policy and to labour market policy. Besides raising the issue of better conceptualizing the links between these two areas (a subject explicitly addressed by Leon Muszynski in chapter 18 of this volume), analysis of these two demonstrates multiple programs and policies in which the actual practice of intervention is crucial to success. Two studies that exemplify this concern for better understanding the consequences of practices of intervention are Stella Lord's (chapter 11), on the Social Assistance Recipients Programme and institutionalization of the 'employability' concept, and Marcy Cohen's, on new directions in training policy in Canada.22 Despite these examples, much still remains to be done in order for political economy to take account properly of the study of practice. This goal can be achieved partly through an increase in the numbers of studies being done - once we have a sufficiently large corpus of material, we can begin to reflect on general patterns. But it is also an area that needs theoretical investigation - our lack of understanding of intervention comes not only from the paucity of empirically rooted knowledge but also from our failure to consider this a proper subject for reflection. Gilles Paquet's work on 'delta knowledge' offers one useful avenue towards the theoretical conceptualization of practice. In a paper that he wrote with Willem Gilles, the authors describe three forms of knowledge - of the humanities (alpha), of the sciences (beta), and of the social sciences (gamma). There is also delta knowledge: The delta territory is the world of practical philosophy, the world of reflection in action ... Delta knowledge emerges

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from the concerns for the particular, the local, the timely and the oral. It flows from a reflection on experience, a conversation with the situation/23 This kind of knowledge would appear to be particularly appropriate for explaining many of the micro-relationships of the welfare state. The recent interest in the caring relationships, of understanding how these can or cannot be institutionalized, presupposes sensitivity to lived experience, to the point of view of Donald Schon's 'reflective practitioner/24 It also requires sensitivity to gender, as Baines, Evans, and Neysmith argue: 'We believe that a perspective on caring uncovers the complexities and ambiguities of women's relationship to the welfare state and their experiences as they negotiate the social service system/25 We must analyse the material social and economic conditions that underpin the welfare state and that have been described by political economists. In addition, we should relate these analyses to the broad political strategies of the welfare state, as does Keith Banting, but also to the ways in which state policies affect the lives of people.26 This broadening is crucial if we are to renew progressive debate about the future of the welfare state, rather than just denouncing, often after the fact, the cutbacks to social programs, many of them the very programs that we have criticized for their bureaucratic, impersonal rigidity. In order to renew this debate, we have to look more clearly at the practices of the welfare state and at the relationships of intervention. The analysis of such practices of state intervention leads us to a debate about integration of 'agency' within our intellectual perspectives. One of the ways to incorporate in our intellectual perspectives the views of individual social actors is to consider seriously the analysis of practices or programs of intervention and their relationship to direct service delivery. The analysis help will also us understand an increasingly important sector of the labour force - public-sector workers active in these practices. Many of us have an additional hurdle to overcome in dealing with this challenge, because of a double division of labour, discipline biases, and intellectual snobbery. The first division of labour to be overcome is that between service providers and university researchers. Traditionally research was done by the latter about the former. Questions of practice and the understanding of practice, not surprisingly, received little priority. In addition, the division of labour internal to the university further complicates understanding of practice. Those sectors of the university that have thought most deeply about these questions are some of the professional programs - social work, management, and education. For those of us in the 'purer/ more theoretical social sciences, our own prejudices inhibit us in our thinking about practice. This is not to suggest that professional faculties have analysed these ques-

Challenges for a New Political Economy 73 tions perfectly - far from it - but they have thought about these questions more than the rest of the academy.27 Once again, good studies exist, but much remains to be done. And a political economy relevant to the 19905 must relate issues of practice and of intervention to general analysis of the evolution of the welfare state. We need to link the changing economy and world of work to daily practices. These links are essential for a renewed debate about progressive alternatives in social policy. This question is one of the central themes in Leo Panitch's chapter (no. 2, above) on the imperatives of reviving concern for democracy within the welfare state. DOES POLITICAL ECONOMY HAVE A F U T U R E ?

With all these challenges, with everything that political economy has not integrated or is only beginning to integrate, why should we wish to keep political economy? Why should we be talking about a new political economy? Part of the answer returns us to a point raised at the beginning of this chapter - a perspective, such as political economy, that directs us to the analysis of class, state, and dependence is important. These concepts are relevant, and any effort to take account of new questions or perspectives should continue the attempt to deepen the understanding of these three key ideas. My attempt here is intended not to dilute political economy into some vague pluralism by the addition of multiple factors but to find a way to integrate new political realities, often at a micro-level of analysis, into the macro-analytical insights of the 'old' political economy. In addition, as the quotation from Doreen Massey suggested, political economy does provide a way of judging alternatives and therefore of being linked to reflection about political action. It helps us not only to think, but also to act. The ability to focus on questions relating to the inequality of power and to relations of domination is central to the pertinence of political economy. A revitalized political economy is essential if we are to remember why we want to know things and why we want to change them. NOTES

1 R. Mahon The "New" Canadian Political Economy Revisited: Production, Space, Identity' paper presented at Carleton University, Ottawa, 1991. 2 A.S. Sassoon Women and the State (London 1987) 2. 3 B. Campbell 'New Times Towns' in S. Hall and M. Jacques eds New Times: The Changing Face of Politics in the 19905 (London 1989) 279-99.

74 Political Economy in Transition 4 C. Gagnon 'Le mouvement associatif: a la recherche d'espaces d'autonomie?' in C. Gagnon J.-L. Klein, M. Tremblay, and P.A. Tremblay Le local en mouvements (Chicoutimi 1989) 105-18. 5 M. Anadon, D. Masson, M. Tremblay, and P. Tremblay Vers un developpement rose (Chicoutimi 1990) 1-53. 6 J.-L. Klein and C. Gagnon Le social apprivoise (Chicoutimi 1989). 7 G. Laxer The Schizophrenic Character of Canadian Political Economy' Canadian Review of Sociology and Anthropology 26 no. i (1989) 186. 8 R. Mahon 'The New Canadian Political Economy Revisited/ 9 P. Marchak 'Sociology, Ecology and a Global Economy' Cahiers de recherche sociologique (1990) 14, 98. 10 H.J. Maroney and M. Luxton Feminism and Political Economy (Toronto 1987) ix. 11 M. Hillyard-Little 'Gendered Poverty: Single Mothers in Ontario' paper presented at the 5th Conference on Social Welfare Policy, Bishop's University, August 1991. 12 S. MacKenzie 'Building Women, Building Cities: Toward Gender Sensitive Theory in the Environmental Disciplines' in C. Andrew and B.M. Milroy eds. Life Spaces (Vancouver 1988) 13-30. 13 D. Rayside A Small Town in Modern Times (Montreal 1991). 14 J. Parr The Gender of Breadwinners (Toronto 1990) 8. 15 N. Duclos 'Disappearing Women: Racial Minority Women in Human Rights Cases' paper presented at the University of Ottawa, 1991, 49. 16 See Schaan's chapter (7) in this volume. Also see S. Duder 'Race and the Delivery of Social Services: Black Children in Substitute Care' and D. Desmarais and C. Levesque 'Femmes Inuit de Quebec et developpement' papers presented at the 5th Conference on Social Welfare Policy, Bishop's University, Lennoxville, Quebec, August 1991. 17 J. Jenson 'Gender and Reproduction: Or, Babies and the State' Studies in Political Economy 20 (1986) 9-46. 18 J. Letourneau 'Le Quebec moderne: histoire, memoire, identite' paper presented at le congres de 1'Association internationale de Science politique, Buenos Aires, 1991. 19 D. Massey 'Flexible Sexism' Environment and Planning D: Society and Space 9 (1983) 31. 20 M. Savigliano 'Political Economy of Passion: Tango, Exoticism, and Decolonization' PhD thesis, University of Hawaii, 1991 3. 21 Ibid. i. 22 See M. Cohen 'A New Direction for Training Policy in Canada: In Whose Interest?' paper presented at the 5th Conference on Social Welfare Policy, Bishop's University, 1991.

Challenges for a New Political Economy 75 23 W. Gilles and G. Paquet eds. 'On Delta Knowledge' in G. Paquet and M. Von Zur Muehlen Edging towards the Year 2000 (Ottawa 1989) 20. 24 D. Schon The Reflective Practitioner (New York 1983). 25 C. Baines, P. Evans, and S. Neysmith Women's Caring (Toronto 1991). 26 K. Banting The Welfare State and Inequality in the i98oY Canadian Review of Sociology and Anthropology 24 no. 3 (1987) 309-38. 27 I would like to thank Roland Lecomte for our discussions concerning development of the ficole de service social at the University of Ottawa, which helped me to understand both the importance and the nature of reflection on practice.

5

Social Welfare and the New Right: A Class Mobilization Perspective ROBERT MULLALY

Much has been written in the past decade about the crisis of the welfare state. There is by now consensus in the literature that the welfare retrenchment policies of most Western nations including Canada represent an attempt to deal with the stagflation and rising budget deficits brought on by the fiscal crisis of the 19705. Using Canada as a case study, this chapter posits that retrenchment has moved beyond mere concern for reducing the deficit. These policies are now part of a larger, class-based agenda to establish a new dual social order - a dynamic, well-off sector has full-time jobs, good incomes, and work-related benefits, and everyone else, including socially disadvantaged groups, has low-wage or unemployed misery. Profits, power, and privilege are pushed upwards. This program has been termed variously neo-conservatism, neo-liberalism, and the new right. 'New right' will be the term used in this chapter; it refers to that sector of the capitalist class and its political allies who seek a new social order. A considerable literature now exists on the economic, political, and social doctrine of the new right, and there will be no attempt here to repeat even its basic tenets. Suffice to say that restructuring of the Canadian welfare state is not a goal in itself, but is one of the means being used to restratify society. Other means include 'free trade/ making the tax system more regressive, privatization, and deregulation.1 In terms of the major theme of this book - continuities and discontinuities in Canadian social and labour market policy - the welfare state represents both a continuity and a discontinuity. The new right needs the welfare state because it promotes social control and reduces social unrest, and so it will continue. However, to restratify society along class lines, the new right will restructure the welfare state itself. The welfare state, however, is moving further away from the principle of 'provision according to need' towards

Social Welfare and the New Right 77 that of 'provision according to privilege or class position/ This continuity and this discontinuity provide the point of departure for this chapter. The first section of this chapter focuses on the restructuring of the Canadian welfare state over the past decade. I argue, first, that this restructuring is moving the welfare state further away from the notion of citizenship (equality of entitlement) to one based more on class (inequality of entitlement) and, second, that this restructuring has been underestimated by many writers because it has not been accompanied by the bombastic rhetoric of Reagan or Thatcher and because the parameters of the welfare state have been defined too narrowly. Using Titmuss's seminal work on 'the social division of welfare/21 see the welfare state as more than a simple collection of programs and services for low-income and vulnerable groups. It also includes fiscal welfare and occupational welfare, and I argue that these latter two welfare systems, which benefit the rich and well-off workers, are growing at the expense of general welfare programs for the unemployed and the underemployed. Restructuring can be understood only if we view the welfare state as a classbased institution. And its classbase can be appreciated only by examining all of its sectors - its fiscal, occupational, and general welfare components. As part of this classbased analysis, I show how restructuring of the welfare state assists the new right in achieving a new social order. In the second section of this chapter, I seek to explain how the new right has broken the post-war social contract/compromise between capital and labour and why there has been no effective opposition to its programs. W. Korpi's class-based 'power resources' theory of conflict3 helps explain these phenomena. Several reasons for the new right's success and for the failure of the working class to mobilize are presented, along with a challenge to 'organic intellectuals'4 who are concerned about equity and social justice to move beyond their current fixation on critique and to join with the working class in its current struggle against the new right's agenda. SOCIAL CONSTRUCTION OF A SOLUTION TO THE FISCAL CRISIS

Accounts of the fiscal crisis of the 19705 are now commonplace in the political economy and social welfare literatures. Following closely behind the first oil-price increase which sent shock waves throughout the West in 1973, a new economic phenomenon occurred that could not be readily controlled or resolved by Keynesian economic solutions -- stagflation. This combination of high inflation and high unemployment undermined general confidence in the mixed economy and the welfare state. This much is history.5

78 Political Economy in Transition Mishra makes a crucial point about the fiscal crisis.6 He states that although a rising budget deficit, increasing inflation, stagnation, and high unemployment may constitute 'objective' phenomena, the analyses, explanations, and interpretations of these phenomena are 'subjective/ In other words, a crisis may be seen as a set of objective circumstances, but it includes a subjective interpretation. Such interpretations are defined in terms of ideology and group interests. This is an important insight if we are to avoid theories of determinism. Mishra notes two different ideological responses to the crisis - from the right and from the left. The new right calls for a 'return to a "pure" form of capitalism - the rigour and discipline of the marketplace - including unemployment as "natural" and inevitable in a market society, privatization, a lean even if not mean social welfare system, and reliance on non-government sectors for meeting social needs/7 Social democrats have responded by maintaining or consolidating the welfare component (full employment, equity, and a high level of social expenditures) of welfare capitalism. Each response 'represents a different cluster of values and a different pattern of the distribution of power and privilege in society/8 The United States, Britain, and, to a lesser extent, Canada fall within the first response; Sweden, Norway, and Austria, within the second. Restructuring the Canadian Welfare State Canadian governments adopted the new right's doctrine as a response to the fiscal crisis, but later than most other Western countries. Unlike the United States and Britain, however, Canada's policies of monetarism, deregulation, privatization, and reduced social expenditures were not accompanied by a vehement anti-welfare and anti-union rhetoric or by a direct frontal assault on the welfare state.9 The reasons for this are historical,10 political,11 and class-based.12 Nevertheless, the Canadian welfare state is being restructured, but indirectly and gradually. If left unchecked, restructuring will produce a class-based, dual welfare state that will reflect and reinforce the dual social order that the new right seeks. 1 believe that some scholars have underestimated the significance of this restructuring for the welfare state and for the nature of society. Restructuring has not taken the form of a full-fledged, frontal assault, complete with Thatcherite and Reaganite rhetoric, and scholars have defined the parameters of the welfare state narrowly. For example, focusing on aggregate government expenditures has led Jenson13 to find no attack on the Canadian welfare state, only 'corrosion/ Similarly, Lightman and Irving14 contend

Social Welfare and the New Right 79 that Brian Mulroney backed away from his 1984 promise to reduce the deficit through expenditure reduction, and they support Jenson's thesis of corrosion. Use of aggregate social expenditures, however, overemphasizes the new right's inability to retrench and restructure. In Britain, for instance, LeGrand and Winter make much about the durability of the welfare state by noting that social expenditures have actually risen under Thatcherism/5 Increased spending there, though, is a function of the high unemployment created by monetarist policies. Thus conclusions based on levels of social expenditure may be misleading. They tell us nothing about the nature of the welfare state with respect to issues of equity and justice, and they deflect attention away from the ideologically driven restructuring that is taking place. Another method used to assess changes in the welfare state derives from Richard TitmussV6 classical distinction between residual and institutional welfare states. In the former, the state intervenes only when the two normal channels of social protection - family and market - break down, and any assistance is minimal, temporary, and for marginal groups in society. The latter addresses the entire population, is universalistic, and is based on an institutionalized commitment to welfare. This approach has been favoured by many social welfare theorists and researchers to show how elements of our welfare state are shifting from institutional elements to residual elements under the new right. This welfare typology is a vast improvement over the 'black box' expenditures approach - it looks at the content of the welfare state and its principles of distribution, whereas the black box involves only the level of input (expenditures) into the welfare state and is devoid of any qualitative or normative considerations. Welfare typology is useful for assessing the content of welfare states selective versus universal programs - the conditions of eligibility, quality of benefits and services, and, most of all, status of beneficiaries - but it fails to assess the impact of the welfare state on its citizens. The new right may argue for a residual welfare state, social democrats may seek an institutional welfare state, and welfare pluralists may argue for a public-private mix, but none of these socially constructed models reveals the effect of their respective systems on people's actual living conditions. If social welfare is all about the well-being of people, it is an ironic fact that we have no data bank (other than a few arbitrary social minimum levels) that helps us assess actual living conditions. Sweden has a social accounting system which measures the 'level of living' of its citizens along nine dimensions of well-being: health, employment and working conditions, economic resources, knowledge and access to education, family conditions and social integration, housing, safety of life and

8o Political Economy in Transition property, leisure time pursuits, and political resources. These dimensions measure the product of the welfare state as it affects quality of life. They provide information on the level of living and changes over time, and it identifies groups that lag behind in terms of quality of life (it focuses on differences based on class, gender, age, and region). Obviously, such information has tremendous potential for social planning. As long as we in Canada resort to aggregate social expenditures or to ideal types of welfare models for assessment, our arguments and conclusions will continue to be based mainly on an arbitrary, theoretical, and ideological level, not on the real living conditions of people. Social Division of the Canadian Welfare State In the absence of a true social accounting system in Canada, I shall use Richard Titmuss's pioneering analysis of the 'social division of welfare'17 to analyse the restructuring of the Canadian welfare state that has been occurring as part of the new right's program to create a dual society. It will be argued below that the new right is moving the welfare state away from the notion of citizenship (equality of entitlement) to one of class (inequality of entitlement). It will also be argued that this restructuring removes several restrictions to capital accumulation. Titmuss described three welfare systems in society which over time have developed alongside each other, but independently - fiscal, occupational, and general welfare. These systems are class-based - fiscal welfare benefits most of all the capitalist class and high-income groups; occupational welfare, primarily the working class, with high-wage earners benefiting more than lowwage earners; and general welfare, mostly the un- and underemployed. Titmuss's first system, fiscal welfare, operates mainly through the Income Tax Act and allows portions of income to escape taxation by way of exemptions, deductions, allowances, deferrals, and reduced tax rates. Because there is no visible government spending involved, and because government does not publish the amounts of money involved, it has been referred to as Canada's hidden welfare system.18 These government subsidies, or more appropriately tax expenditures, take two forms - tax breaks to corporations (corporate welfare) and tax breaks to individuals. It is estimated that the government spends (i.e. does not collect from corporations) $30 to $50 for every $100 in direct spending - which amounted to $3O-$5O billion in 1985 alone.19 Whereas the corporate sector generally thinks of welfare for the poor as government benevolence, it sees tax expenditures as an unquestionable right and as a mark of good business practice.20 Fiscal welfare rewards

Social Welfare and the New Right 81 higher-income groups - the greater the income, the more substantial the benefits. Although the new right claims that tax expenditures represent investments in the economy, the evidence indicates that they yield dividends, not investment.21 Esping-Andersen contends that countries governed by the new right emphasize fiscal welfare, given the electoral importance of those who receive it.22 In 1972, David Lewis coined the phrase 'corporate welfare bums' to refer to the handsome government handouts to business and the shockingly low corporate taxes that were paid. Following these well-publicized disclosures, there were some lame, but unsuccessful attempts to close the more glaring corporate-tax loopholes. However, the fiscal welfare system continues to grow.23 It went from $6 billion in 1979 to $8 billion in 1980, for example.24 Faced with a growing budget deficit mainly because of a serious drop in revenues resulting from tax expenditures during the 1970$ and early i98os,25 Finance Minister Michael Wilson allayed business fears by stating publicly that existing tax breaks and other business bonuses would not be interfered with because, as he put it: The current economic recovery is much too fragile and taking away incentives to business might adversely affect the desired economic upturn/26 With Canada-us free trade, the corporate sector will argue that more tax expenditures are necessary if it is to be competitive in the North American market, and increased fiscal welfare will increase pressure to reduce welfare spending on the working class. Fiscal welfare consists also of tax concessions to individuals. Individuals are able to deduct certain expenses, such as contributions to a registered retirement savings plan (RRSP) or to a private health plan, from their income tax. These tax deductions are based on class rather than on citizenship, as they tend to benefit higher-income earners. When mainstream welfare programs such as health care and pension provisions yield modest benefits, those persons who are better off will push for private schemes to supplement public programs and will seek tax subsidies to offset their private costs. This creates a dual welfare system, with higher-wage earners having access to a subsidized private welfare system and workers with lower incomes relying on minimal government programs. The new right encourages this duality by passively guaranteeing only a 'social minimum' and by actively subsidizing private welfare schemes.27 Private schemes to supplement Medicare and government pensions, for example, are big business in Canada. Titmuss's second welfare system comprises occupational fringe benefits distributed through the workplace. Health benefits and pensions are common forms of 'occupational welfare' as are perks such as housing allowances, interest-free loans, company cars, and expense accounts. This latter set of

8 2 Political Economy in Transition benefits forms part of the occupational reward system, given usually to topechelon workers. Such benefits are based not on need but on a person's position in the organization. Businesses finance these fringe benefits by passing on some of the costs to the consumer of their products or services and by deducting the remaining costs from their income tax as business expenses. Thus consumers and the general public pay for occupational fringe benefits. Occupational welfare achieves two goals for the new right. First, it fragments the working class. One section has to rely on an underfunded and inadequate general welfare system, with access to a few modest occupational fringe benefits, if a member is able to secure employment. Another group occupies full-time jobs with good pay and work-related benefits and therefore does not feel the need for an adequate general welfare system. Thus the potential for working-class mobilization is greatly reduced. Second, occupational welfare helps to make workers,28 especially the managerial class, loyal to the organization. And because the organization is, for the most part, driven by market forces and is controlled by the capitalist class, such welfare encourages adherence to the new right. In sum, the whole 'tendency' of occupational welfare, according to Titmuss, 'is to divide loyalties, to nourish privilege, and to narrow the social conscience/29 Titmuss's third welfare system is referred to commonly as social or general welfare. It consists of modest universal transfers, means-tested programs, and minimal social insurance plans oriented mainly to low-income people and other vulnerable groups. Its major aim is to relieve poverty by providing a safety net for those who cannot meet their basic needs in the market and who do not have access to private or occupational plans. Whereas fiscal welfare, which serves principally the rich, has been thriving under new right policies, and occupational welfare, which serves mostly the managerial and middle classes, has continued to grow, general welfare in Canada has been savaged in recent years. In 1990 alone, the federal government amended the Unemployment Insurance Act by ending its contribution to the fund, increasing the waiting period, and decreasing the duration of benefits for many areas of the country; cut contributions to voluntary women's and natives' groups; reduced funds for social housing by 15 per cent; froze Established Program Financing (EPF) transfer payments for health and education; capped Canada Assistance Plan (CAP) payments to three provinces; implemented cuts to EPF and CA (passed in 1991); froze the federal contribution to legal aid at 1989 rates for two years; and 'clawed back' family allowance and Old Age Security payments from people with annual incomes of more than $5o,ooo.3° Prior to the

Social Welfare and the New Right 83 1990 budget, some writers suggested that 'so far' Canada had not followed the United States and Britain in attempting to dismantle directly and overtly the welfare state.31 Although excessive rhetoric did not accompany the retrenchment in the 1990 budget, which was presented as fiscally responsible, one can no longer suggest that general welfare programs are not under attack in Canada. And the most vulnerable people in our society depend on these programs. Although the 1990 budget represented a bold step towards restructuring of the welfare state, it was only the continuation of a process that had been occurring for over a decade. Wolfe32 noted that although the government's share of GNP remained virtually the same after 1975, its share of social expenditures dropped from 46 per cent in 1976 to 40 per cent in 1982. Banting's33 review of social programs found a pattern of erosion or stagnation of benefits and increased emphasis on income-tested programs. Banting34 and Muszynski35 note that in addition to benefits being cut and eligibility conditions toughened, the unemployment insurance program has become more labour market-oriented in terms of its management and work incentives have been reinforced. The National Council of Welfare has found that, with respect to programs eligible for funding under CAP, there has been a decrease in real benefits along with tougher eligibility criteria and increased surveillance of clients.36 It is not only income-tested programs that have been affected by the new right. Universal programs have been tampered with as well, though not so obviously. Universal programs are much more difficult to retrench, because they benefit both the middle and working classes and, therefore, have a strong constituency.37 Thatcher, Reagan, and, more recently, Mulroney all found this out when they tried to retrench universal programs. Residual programs, in contrast, which are mostly means-tested and serve only part of the working class, tend to divide the working class, as one sector perceives itself as paying for the program while obtaining no visible benefits.38 Mulroney made three attacks on the principle of universality after declaring it a sacred trust in the 1984 election campaign. His first budget (1984) called for limits to the indexation of two universal programs - family allowances and old age security. In the face of a huge backlash against deindexing old age security, the government backed down. The deindexing of family allowances, however, remained. The second attack on universality (1989) took the form of 'claw-backs' on family allowance and old age security payments and was presented as progressive social policy - only those with incomes above the threshold would pay back their benefits, on a sliding scale.39 This back-door approach undermines universality as it draws atten-

84 Political Economy in Transition tion, at least at income-tax time, to the fact that one group is paying for the family allowance and old age security benefits of another group, which fact weakens the constituency for these programs. If universality truly were a sacred trust, equity would be sought through a reformed system of progressive taxation. The fact that the threshold for the claw-backs is not indexed can only serve to weaken support for universality further over time as more and more recipients will be subject to the claw-backs.40 Mulroney's third attack on universality occurred with his government's announcement that Canada's 48-year-old universal family allowance program would be replaced with a 'targetted' child benefit program on i January 1993. In sum, most of the restructuring of the welfare state has been in the area of general welfare programs - for low-income and vulnerable groups. Fiscal welfare has not been touched; it continues to grow and to facilitate capital accumulation. Occupational welfare has also continued to expand, at the expense of general welfare. It not only divides workers, but also reflects the new right's preference for market solutions to social problems, and it has become a major growth industry for profit-making.41 The general-welfare sector, in contrast, has been eroded under a policy of gradualism for more than a decade. Restructuring of the welfare state can be understood only if it is viewed as a class-based institution. And only examination of all its sectors - its fiscal, occupational, and general welfare components - can reveal its class base. Towards a Two-Nation Society Restructuring the welfare state along class lines carries out several functions for the new right in its effort to develop a two-nation society. First, changes since 1979 have directed income away from middle-income earners towards the top, and low-income Canadians have seen government benefits diminish through inflation and actual cuts.42 More and more people have had to resort to food banks and meal programs (almost a half-million Canadians in 1990) and to rely on emergency shelters - i per cent of the population in 1990. The trend is obviously towards more inequality, not less. Second, restructuring increasingly ties programs into the labour market and, by decreasing benefits, commodifies workers and welfare services,43 which become dependent on market distribution. Esping-Andersen contends: 'The question of social rights is ... one of de-commodification, that is of granting alternative means of welfare to that of the market.'44 The new right must eliminate any elements of decommodification because it weakens the absolute authority of the employer. Conversely, commodification makes

Social Welfare and the New Right

85

workers dependent on the market and more difficult to mobilize for solidaristic action.45 Third, the severe cuts to government funding for women's and natives' groups represent another function of the new right's program - silencing of dissidence. For over 20 years, these groups were important advocates for their constituencies, which have been historically disempowered by the state. The new right government has shown its intolerance of criticism by attempting to silence its most vocal critics.46 The lesson is clear. Accept what is given to you unquestioningly, or risk losing it. Fourth, welfare restructuring facilitates transition from Fordist to postFordist production.47 The post-war Canadian economy was based on mass production and consumption of goods, which required large numbers of blue-collar workers. Advanced technology has reduced the need for labour, and the main occupational area now seems to be the service sector. This situation has generated an occupational pattern polarized into a relatively small, highly skilled, and well-paid sector and a relatively large, low-skilled, and low-paid sector.48 Government policies, such as accepting high unemployment as a necessary price for restructuring industry, amendments to the Unemployment Insurance Act, deregulation of the labour market to create a 'flexible' labour force, and encouraging marginal workers such as women to fill the growing part-time employment market at low wages and without fringe benefits, have facilitated restructuring of the economy and dualization of the work-force.49 Fifth, federal retrenchment passes responsibilities to the provinces.50 Although there is some variation in the ways in which the provinces have responded, there are also some similarities. All provinces have pursued, at different rates, privatization, voluntarism, and greater local responsibility. Much of the welfare burden has been shifted to private charities. Food banks, soup kitchens, clothing depots, and emergency shelters have become institutionalized means of meeting human need. In addition to reducing the federal deficit at provincial expense, this shift of welfare from public to private auspices decreases the power of the working class, as the alternative to the market becomes more grim and less viable. In the absence of an alternative, workers are much more likely to assume those low-paying jobs without fringe benefits that are part of post-Fordist capital accumulation. Sixth, shifting of parts of the welfare state from the public to the private sector creates a different set of governing principles for welfare. Functionalists would have us believe that it does not matter if the provision of welfare services is public, private, or a mix of the two. For them, welfare is a functional necessity for society, and its form does not matter as long as the

86 Political Economy in Transition function is carried out. Such a view, however, pays no attention to questions of equity, justice, or entitlement. The private sector, by relying on charity and voluntarism, cannot ensure that people will have an adequate income or standard of service.51 Only governments can guarantee rights. The private sector or the local community may not pick up the slack left by governments' withdrawal from social welfare. In fact, available evidence points the other way.52 Without statutory rights, the working class becomes less resistant and more vulnerable to a developing social order in which it serves as the commodified means for greater capital accumulation. In sum, restructuring of the welfare state by the new right is not an end in itself, but one of the means to 'restratify' society. The fiscal crisis called into question the viability of the Keynesian welfare state, which challenge in turn provided the opportunity and the justification for reordering society along class lines, within the limits of electoral and other political constraints.53 These factors, taken together with such supplementary and complementary policies as building more inequality into the tax system, deregulation, privatization, the GST (which increases workers' resistance to introduction of new social programs), and 'free trade/ make clear the aims of the new right. Its concern is not about simply reducing the deficit and ensuring profitability. It seeks 'above all to redistribute power and privilege upwards and to establish ideological hegemony of the right, weakened during the halcyon days of postwar welfare capitalism/54 CLASS CONFLICT AND THE WELFARE STATE: A POWER RESOURCE PERSPECTIVE

It was noted above that the fiscal crisis of the 19705 allowed the new right to restratify society and restructure the welfare state. Why, after 30 years of growth and development of the welfare state, has the new right been successful in retrenching it? Although business was never enamoured of the welfare state, it offered only nominal resistance to it prior to 1975. Conversely, why have supporters of the welfare state, particularly in the labour movement, been unsuccessful in defending it? Why is the 'social contract' or the 'social compromise' established after 1945 being repealed by the new right? Several social welfare theorists have commented on the class conflict within the welfare state. For example, Korpi's studies have shown that the making of post-war social policy is not consensual and depoliticized but is based on significant conflicts of interests between different collectives or classes. Opposing interests have battled not only over the scope of social policy but also

Social Welfare and the New Right 87 over specific strategies and goals.55 Mishra contends that understanding of welfare issues requires sensitivity to distributional conflict and class struggle.56 Wolfe57 claims that Canada's state elites, faced with a substantial increase in working-class mobilization during the Depression and war years, adopted a range of policies associated with the Keynesian welfare state. Other studies indicate that mobilization of workers, or fear of it, has influenced development of all of our major programs.58 O'Connor suggests that what Canada has in the way of social programs is a result partly of working-class mobilization but that, because of workers' weak organization and low mobilization, the welfare state has not developed as it has in countries with stronger working-class movements.59 Why has the working class not been able to resist the new right's assault on the welfare state that it helped initiate and develop? To help answer this question, I shall apply Korpi's 'power resources' theory of conflict to the current struggle between the working class and the new right with regard to the welfare state and free trade. Korpi's theory differs from both the pluralistic and Marxian conceptions of conflict. The pluralistic approach views power resources as being distributed relatively equally among groups in society, and the Marxian (especially the Leninist) view assumes dichotomous distribution, with the capitalist class controlling practically all of them. Korpi, in contrast, holds simply that distribution differs among nations and can change over time and therefore can lessen or increase inequality.60 Korpi asserts that the major power resources in capitalist democracies are related to class structures and are based either on control of means of production or on organizations' ability to mobilize large numbers of people in similar situations to collective action. The difference in power resources between labour (and allies) and business interests (and allies) will help determine distributive processes in society, citizens' social consciousness, the shape and function of societal institutions, and the level and pattern of manifest conflicts.61 In the first three areas, the new right has gained the upper hand over the working class in the past decade, and in the fourth, conflict has become more visible and more intense, as battle lines have been drawn on social and economic policy, including free trade. According to Korpi's theory, the new right could break the post-war social contract and achieve supremacy only by increasing its power resources over those of labour. What, then, are these power resources ? First, a key determinant of the power resources of social classes is organizational capacity. Human capital has inherent limitations compared with investment capital. It has less influence in production, a smaller domain, and less convertibility, and it is generally not a highly scarce resource.62 To offset

88 Political Economy in Transition these limitations, the working class requires collective organization. Conversely, to offset working-class mobilization, capital requires a unified association to represent its interests. Wolfe63 reviewed the organizational developments of the capitalist class and the working class in Canada and found that national associations of business, such as the Chamber of Commerce, the Canadian Manufacturers' Association, and the Federation of Independent Business, have not built a unified national business interest. However, because of a perceived shift in the government's policy mix in favour of welfare concerns under Lester Pearson and Pierre Trudeau, the Business Council on National Issues (BCNI) was formed in 1976. It is an elite organization of the chief executive officers of 150 leading corporations and 'has become the most powerful and effective interest group in Canada - to the point where it can now exercise hegemony over both the private sector and the state/64 It has reoriented public policy so that Ottawa withdrew from the National Energy Program, reshaped competition policy, and promoted 'free trade/65 In contrast, labour has not overcome its historical divisions between English and French workers, between craft and industrial unions, between workers in the manufacturing industries of central Canada and those in the resource-based industries of the east and west, between labourism and socialism, and between national and international unions.66 There is now abundant evidence that the capitalist class is conscious of its class interest and is organized to pursue it,67 whereas the working class does not have the same level of awareness or organization. Second, the relationship that social classes have with the state can be a major source of power. This is reflected at the political level to the extent that their interests are represented by political parties. Wolfe68 attributes development of the Keynesian welfare state in Canada to the change in the balance of class forces that occurred during the Depression and the war years but notes that the failure of the CCF/NDP to win a federal election has limited working-class influence on the state. The NDP has won provincial power and was influential in expanding the welfare state during Pearson's minority governments, but it has never been fully supported by labour, and, because of this lack of unity, the welfare state never developed here to the same extent as in many European countries. The balance of class forces and the Keynesian compromise that were established during the Depression and the war and that remained relatively stable after 1945 have of course broken down, and since 1975 there has been a considerable shift to the right, as expressed in reduced state intervention.69 The Mulroney government, which did not start out neo-conservative, responded to business with each successive budget by abandoning the social compromise and by launching new

Social Welfare and the New Right 89 efforts to reorient the state's accumulation strategy.70 Williams71 has argued that the business sector has had more contact than labour with senior government officials and that, as its contacts have increased, the positions of government have more closely approximated those of business. However, the reverse has not occurred - business has not changed its position on restructuring the welfare state. Williams notes also that, although labour continues to have contact with government, it has not been associated with more pro-welfare policy positions. Thus, given a corporate class that is cohesive, a labour movement that is fragmented, and a state that is decentralized, capital has the most ability to influence decisions, as evidenced by the success of the BCNi.72 Third, since 1975, capital has been more aware of its own class interests than has the working class. This situation has resulted in greater capitalist mobilization, as mentioned above. The labour movement in North America in general, and in Canada in particular, is still based largely on a classcollaborationist view of unionism rather than a class-conflict view.73 The former conceives of labour unions as protecting and advancing the interests of union members only by fighting for a larger share of the wealth produced by workers within the context of capitalism. Labour's major concern during the free trade debate was with job losses rather than with retrenchment of the welfare state. The class-conflict view holds that labour unions are to protect and advance the interests of the 'total' working class, which necessitates eventual abolition of capitalism. As long as the working class subscribes to the liberal belief that there is a harmony of interests between capital and labour, it will remain fragmented and vulnerable to the more organized and more class-conscious capitalist class. Fourth, articulation of a vision of society affects power resources. This is the area where the intellectuals74 who are concerned with a democratic and just society have abandoned (or failed to join) the working class. Faced with the fiscal crisis and the breakdown of the Keynesian paradigm, the new right was able to offer a distinctive perspective on the fiscal crisis, complete with diagnosis and cure. This approach favoured strengthening the capitalist element in welfare capitalism at the expense of the welfare element.75 This vision was legitimated and validated by the intellectual sector of the new right - mainly economists and new right think-tanks such as the CD. Howe and the Fraser institutes. Where is the vision from the left that favours the working class ? In the absence of such a vision, what choices does the electorate possess ? Much was written in the 19805 attacking the new right's policies and strategies, but over time the critique became increasingly academic. The new right has its intellectual spokespersons, but the working class does

90 Political Economy in Transition not. Where is the 'new' New Left? And where, to use a vulgar Marxist term, is the 'praxis'? SUMMARY

In this chapter, I have argued that the current restructuring of the Canadian welfare state must be seen as part of the larger class-based agenda of the new right. This program aims to reorder society using a variety of means, including economic and social policy, in such a way that not only profits but also power and privilege are pushed upwards. The fiscal crisis has provided the new right with the opportunity and the justification for breaking the post-war social compromise and for pursuing its ultimate goal of a dual society. To understand post-1975 restructuring, one must examine all components of the welfare state - that which caters to the rich, that which caters to the well-paid working class with good permanent jobs, and that which serves the growing sector of the working class with low-paid, marginal jobs. Retrenchment has been concentrated in general welfare programs and has followed a process of gradualism unlike the draconian attacks on the welfare states in Britain and the United States. This gradualism has minimized reaction and mobilization. 1 presented several functions of this restructuring for the new right and its goal of restratifying society. Finally, I analysed differences in power resources between capital and labour in an effort to explain the success of capital, or the new right, in realizing its goals to date and the failure of working-class mobilization. This analysis also challenges social-policy intellectuals to become involved with the working-class movement and to move beyond their fixation with critiques of new right policies and actions. To transcend our current reactionary and defensive posture will require both recognition of the class-based nature of the welfare state and development of a social accounting system more meaningful than simple macro expenditures and welfare typologies. And it will require development and articulation of a viable alternative76 to the new right's vision. NOTES

i It is beyond the scope of this paper to discuss these other means of restructuring. There is by now a substantial literature on these other means. For examples, see D. Wolfe 'The Canadian State in Comparative Perspective' Canadian Review of Sociology and Anthropology 26 no. i (1989) 95-126 re: free trade; E. Lightman

Social Welfare and the New Right 91

2 3

4 5 6 7 8 9 10 11 12

13 14 15

16 17 18 19 20 21 22 23 24

and A. Irving 'Restructuring Canada's Welfare State' Journal of Social Policy 20 no. 10 (1991) 65-86 re making the tax system more regressive; and J. Ismael and Y. Vaillancourt eds. Privatization and Provincial Social Services in Canada: Policy Administration and Service Delivery (Edmonton 1988) re privatization. R. Titmuss Essays on the Welfare State (London 1963). G. Esping-Andersen and W. Korpi 'Social Policy as Class Politics in Post-War Capitalism: Scandinavia, Austria and Germany' in J.H. Goldthorpe ed. Order and Conflict in Contemporary Capitalism (Oxford 1984) 179-208. A. Gramsci Selections from the Prison Notebooks first pub. 1928 (New York 1971). R. Mishra The Welfare State in Crisis (Brighton 1984). R. Mishra The Welfare State in Capitalist Society (Toronto 1990). Ibid. 14. Ibid. 12. Lightman and Irving 'Restructuring' 65-8; and Mishra The Welfare State in Capitalist Society. Lightman and Irving 'Restructuring.' Mishra The Welfare State in Capitalist Society. J. O'Connor 'Welfare Expenditure and Policy Orientation in Canada in Comparative Perspective' Canadian Review of Sociology and Anthropology 26 no. i (1989) 127-50. J. Jenson 'Different but Not "Exceptional": Canada's Permeable Fordism' Canadian Review of Sociology and Anthropology 26 no. i (1989) 69-94. Lightman and Irving 'Restructuring.' J. Legrand and D. Winter The Middle Classes and the Defence of the British Welfare State' in R.E. Goodin and J. LeGrand eds. Not Only the Poor (London 1987) 147-68. 147-68. Titmuss Essays. Ibid. National Council of Welfare The Hidden Welfare System (Ottawa 1976) and The Hidden Welfare System Revisited (Ottawa 1979). F. McKenna 'Corporate Welfare - Alive and Well in the 19805' Perception 8 no. 5 (1985) 25-6. National Council of Welfare The Hidden Welfare System. McKenna 'Corporate Welfare.' G. Esping-Andersen 'The Three Political Economies of the Welfare State' Canadian Review of Sociology and Anthropology 26 no. i (1989) 10-36. National Council of Welfare The Hidden Welfare System Revisited. 'Still Nursing after All These Years' Special Report, Canadian Business (lanuary 1985) 69-70.

92 Political Economy in Transition 25 G. Ternowetsky 'Controlling the Deficit and a Private Sector Led Recovery' in J.S. Ismael ed. The Canadian Welfare State (Edmonton 1987) 372-90. 26 'Corporations Dining Sumptuously at Public Trough' Macleans (11 February 1985)

2.

27 Esping-Andersen 'The Three Political Economies'; Mishra The Welfare State in Capitalist Society. 28 N. Tudiver 'Forestalling the Welfare State: The Establishment of Programmes of Corporate Welfare' in A. Mosovitch and J. Albert eds. The Benevolent State: The Growth of Welfare in Canada (Toronto 1987) 186-202. 29 Titmuss Essays. 30 Editorial 'A Bleak Year for Social Progress' Perception 15 no. 2 (1991) 4-6. 31 Jenson 'Different but Not "Exceptional"'; Lightman and Irving 'Restructuring'; Mishra The Welfare State in Capitalist Society. 32 D. Wolfe 'The Rise and Demise of the Keynesian Era in Canada - Economic Policy 1930-1982' in M.J. Cross and G.S. Kealey eds. Modern Canada 193019805 (Toronto 1984) 46-78. 33 K. Banting 'The Welfare State and Inequality in the 19805' Canadian Review of Sociology and Anthropology 24 no. 3 (1987) 309-38. 34 Ibid. 35 L. Muszynski 'The Politics of Labour Market Policy' in G.B. Doern ed. The Politics of Economic Policy (Toronto 1985) 251-304. 36 National Council of Welfare Welfare in Canada: The Tangled Safety Net (Ottawa 1987). 37 W. Korpi 'Social Policy and Distributional Conflict in the Capitalist Democracies: A Preliminary Comparative Framework' West European Politics 3 no. 3 October 1980) 296-316; Mishra The Welfare State in Capitalist Society. 38 Mishra The Welfare State in Capitalist Society. 39 E. Lightman 'Caught in the Middle: The Radical Right and the Canadian Welfare State' in H. Glennerster and J. Midgley eds. The Radical Right and the Welfare State: An International Assessment (London 1991) 141-60. 40 L. Cohen and E. Lightman 'Sneaky Tax Grab at Seniors' Income' Globe and Mail (28 December 1989). 41 D. Stoesz and H. Karger 'The Corportisation of the United States Welfare State' Journal of Social Policy 20 no. 2 (1991) 157-71. 42 D. Ross 'The Facts on Income Security 1990' Perception 15 no. 2 (1991) 8-14. 43 The notion of 'intellectual' is borrowed from Antonio Gramsci's work on the role of intellectuals in relation to class politics and the eventual transformation of society. For Gramsci, there are two major types of intellectuals, those who are traditional, outside of society, and reflecting upon it, and those who are organically linked to a particular social class. The term 'intellectual' in this

Social Welfare and the New Right 93 chapter refers to 'organic' intellectuals, of whom Gramsci says, 'every social group, coming into existence on the original terrain of an essential function in the world of economic production, creates together with itself, organically, one or more strata of intellectuals which give it homogeneity and awareness of its own function not only in the economic but also in the social and political fields' (Selections 5). 44 Esping-Andersen 'The Three Political Economies' 21. 45 Ibid. 46 Lightman 'Canada and the New Right'; J. Overton 'Dissenting Opinions' Perception 15 no. i (1991) 17-21. 47 Jenson 'Different'; Mishra The Welfare State in Capitalist Society. 48 Mishra The Welfare State in Capitalist Society 38. 49 Jenson 'Different'; Mishra The Welfare State in Capitalist Society. 50 Lightman 'Canada and the New Right/ 51 Mishra The Welfare State in Capitalist Society. 52 Ibid. 53 Ibid. 54 Ibid. 119. 55 Esping-Andersen and Korpi 'Social Policy.' 56 Mishra The Welfare State in Capitalist Society. 57 Wolfe 'The Canadian State' 95-126. 58 D. Guest The Emergence of Social Security in Canada 2nd ed. (Vancouver 1985); J. Struthers No Fault of Their Own - Unemployment and the Canadian Welfare State 1914-1941 (Toronto 1983); D. Swartz 'The Politics of Reform: Conflict and Accommodation in Canadian Health Policy' in L. Panitch ed. The Canadian State: Political Economy and Political Power (Toronto 1977) 311-42. 59 O'Connor 'Welfare Expenditure.' 60 Korpi 'Social Policy.' 61 W. Korpi Political Democracy as a Threat to Capitalism - a Comparison between Neo-corporatism and a Power Resource Perspective (Stockholm 1984). 62 Ibid. 63 Wolfe The Canadian State.' 64 D. Langille 'The Business Council on National Issues and the Canadian State' Studies in Political Economy 24 (Autumn 1987] 70. 65 Ibid. 66 D. Drache 'The Formation and Fragmentation of the Canadian Working Class 1820-1920' Studies in Political Economy 15 (Fall 1984) 43-89. 67 Langille The Business Council on National Issues/ 68 Wolfe The Canadian State/ 69 Ibid.

94 Political Economy in Transition 70 Mishra The Welfare State in Capitalist Society; Wolfe 'The Canadian State/ 71 A. Williams 'Access and Accommodation in the Canadian Welfare State: The Political Significance of Contacts between State, Labour and Business Leaders' Canadian Review of Sociology and Anthropology 26 no. 2 (1989) 217-39. 72 M. Ornstein 'The Social Organization of the Canadian Capitalist Class in Comparative Perspective' Canadian Review of Sociology and Anthropology 26 no. i (1989) 127-50. 73 J. Galper Social Work Practice: A Radical Perspective (Englewood Cliffs, NJ, 1980). 74 Esping-Andersen ('The Three Political Economies') notes that without a welfare system workers are simply commodities in the market, depending for their welfare entirely on employment. When workers have a right to an alternative to the market as a means of welfare, then they are decommodified. However, the mere presence of a social welfare system may not necessarily bring about decommodification if it does not significantly emancipate workers from market dependence. Inadequate benefits, with an attached social stigma, will dampen any decommodification by compelling people to participate in the market. The current restructuring of the Canadian welfare state has curtailed any decommodification that was associated with it. 75 Mishra The Welfare State in Capitalist Society. 76 There are of course many different schools of leftist thought, ranging from social-reformism to all-out revolution. However, as Nove points out, there are certain basic values, principles, and beliefs that are common to most schools of leftist or socialist thought. Most leftists seek an alternative to a society that is based on private ownership and private profit. Both reformers and revolutionaries envision a world with no great inequalities of income and wealth, where economic and political power is more evenly distributed, where public ownership serves public interests, where people have greater control over their lives and the conditions of their work, and where proper planning for the good of all replaces the vagaries of the marketplace. A. Nove 'Socialism - Why?' in H.B. McCullough ed. Political Ideologies and Political Philosophies (Toronto 1989) 165-71.

PART II CANADIAN SOCIAL WELFARE POLI

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6 Decentralized Social Services: A Critique of Models of Service Delivery BRAD McKENZIE

Over the past decade, a new ideological consensus has emerged about many of the problems of highly centralized and professionalized institutions of the welfare state, particularly as instruments for the delivery of personal social services such as those for children and families. These services have been criticized by some as ineffective and inefficient because they are unresponsive to local needs, inaccessible and hence alienating to users, highly professionalized and overly specialized, and subject to control by senior politicians and managers rather than by local communities and clients and hence undemocratic. It is now widely accepted that centrally organized generic services in Canada do not respond well to the unique needs of ethnic minorities and Aboriginal people. And the unresponsive and restrictive nature of many public services has led many well-qualified members of staff to leave for private practice. Decentralized delivery of personal social services is frequently advocated. However, there is too little attention paid to the long-term results of different forms of decentralization and to the particular circumstances that influence results. Here the debate about policy or service effects is often obscured by failure to recognize ideological goals being promoted under the guise of 'decentralization' and 'participation/ Neo-conservative policy stresses that only decentralization, along with privatization, can encourage individual and community self-reliance while reducing welfare state expenditures. Liberals and social democrats support decentralization as a means of reducing alienation, encouraging service responsiveness, increasing prevention, and extending local democracy. More recently, the socialist agenda has included a form of radical decentralization with the locus of control at the neighbourhood level.1 Thus any analysis of the future of decentralization is confronted both by the ambiguity of the term and a diverse range of predicted results. De-

98 Canadian Social Welfare Policy centralization has a wide variety of applications. However, in this analysis of the effects of decentralization, I have selected applied models from the personal social services, particularly child welfare in Britain and Canada. Decentralized delivery of such large, legislatively mandated welfare state programs has been most controversial, particularly in relation to concerns about equity and social justice. DECENTRALIZATION: POLITICAL ECONOMY CONSIDERATIONS Decentralization can describe the extent to which power and authority are extended down through an organizational hierarchy or the delegation of authority to field offices. There can be a political dimension, too: do local structures promote participatory democracy and enable consumers and community members to influence decisions that affect their lives?2 These concerns are similar to the three forms of decentralization identified by Rein as relevant to the social services3 - political (redistribution of political power and policy-making authority), territorial (geographic dispersal of service delivery units), and administrative (delegation of decision-making authority to subordinate officials operating services in neighbourhood areas). The term 'community-based' complicates the issue; it describes the capacity of the local community to influence policy and service response4 and resembles Rein's notion of political decentralization. Thus human service organizations may be more or less community-based, depending on the relative influence of local and external factors. Based on research in England, Hambleton and Hoggett identify physical, organizational, and relative power as separate considerations in the decentralization process.5 The scope of services is included as an organizational consideration; which services are to be decentralized and to what degree is one service to be linked or integrated with others at the neighbourhood level? Decentralization of power provokes questions about the kinds of power and control to be decentralized, and to whom. Control may involve day-today decision-making, strategic or policy decision-making, and authority over finances. Such forms of control may be delegated from central and senior officials to staff in local offices, from managers and producers of services to user groups, and from managers and producers of services to the community at large. Decentralization of certain functions may occur at the same time as increased centralization of others. For example, development of neighbourhood offices for delivery of social services may coincide with an increase in central control over funding, policy-making, or quality control. Indeed, cen-

Decentralized Social Services 99 tralized control and influence over certain functions may be necessary to ensure effectiveness and efficiency in a highly decentralized system. There is considerable ideological debate about the impact of decentralization on welfare state provision within the three major approaches - privatization, welfare pluralism, and collectivism. The neo-conservative strategy connects decentralization with privatization based on the market model. Where possible, social services are to be provided by the for-profit sector. Service contracting or direct subsidies to consumers may encourage this transition. The non-profit sector may also be used, but competition is to be encouraged among contractors. These methods reduce the functions of government as a service provider, and it becomes a purchaser of services within a market environment. Desire to contain costs, reduce public expenditures, and model social services on market principles shapes such decentralization strategies. Welfare pluralists advocate decentralized provision of social services by four sectors - state, voluntary, commercial, and informal. Such a system reduces the role of the state, which is not the only possible instrument for collective provision of welfare.6 Decentralization and participation are persistent themes in welfare pluralism, and some proponents advocate partnership, through adoption of a set of policies and practices designed to ensure that public and private agencies respond in a systematic and coordinated fashion to community needs.7 Service contracting then allows government and community-based agencies to engage in joint ventures to maximize the efforts of both state- and community-provided service initiatives through collaborative rather than competitive actions. This model of decentralization is consumerist in orientation, because it emphasizes improving quality of service by increasing accessibility, responsiveness, and flexibility of social services. The model, which may be initiated in local areas through a bottomup strategy or across a larger geographical area through a managerial, topdown strategy, invokes primarily territorial and administrative decentralization. Welfare pluralism is well established, particularly in North America. However, it is criticized because it may lead logically to neo-conservative solutions, which include privatization of welfare to the commercial sector and more reliance on the informal care provided by women, which is likely to increase their oppression as a source of unpaid labour.8 Collectivist, or participatory decentralization stresses devolution and local democracy in social services.9 This more communitarian, socialist approach assumes entitlement to different levels of service based on need. However, it is not well developed, partly because of the conflict within socialism between solutions emphasizing central planning and control and more participatory models of social provision. As the limitations of central planning have be-

ioo Canadian Social Welfare Policy come more apparent, there is more interest in participatory models, where users and community members more directly control the design, production, and delivery of local services. Such models can involve localization of representative democracy, funding and support to groups of users and advocates, and development of local committees and boards to influence service development. Although participation is an essential component of this model, greater input from community and consumers is frequently an objective within the consumerist model as well. For this reason, it is difficult in practice to distinguish clearly between consumerist and participatory models. I examine both in more detail following a discussion of the competitivemarket alternative. THE COMPETITIVE-MARKET ALTERNATIVE

Advocates of the private market for delivery of social welfare contend that market competition combined with consumer choice leads to more efficient production and distribution of welfare. Related benefits are assumed to include lower state expenditures and more self-reliance, as dependence on the state decreases. Privatization is most frequently defined as the selling or transfer of publicly owned and operated services to individuals or organizations in the private sector that operate these for profit or personal benefit. Consumers are expected to purchase services from a range of options, although income- or means-tested benefits may be available in the form of fee subsidies, vouchers, or fee waivers to facilitate access. This type of privatization, common in some areas of social welfare provision, is not as prevalent in fields such as child welfare. However, even here some ancillary services, including group homes and home care, have been transferred to the commercial sector in many Canadian jurisdictions. Moreover, as Parker argues, other forms of privatization must be considered. These include specific steps to encourage supply and use of private forms of welfare, which may replace or compete with public services, thereby reducing the burden on publicly provided services; competitive contracting to the commercial or voluntary sector; and incorporation of private-market principles and practices within public social services.10 An example of encouragement of private forms of welfare is reflected in the recent actions of Manitoba's Conservative government in childcare. Elimination of administrative grants and large government-imposed fee increases in the publicly supported childcare sector have forced many parents who are not eligible for subsidies to seek private, non-licensed alternatives. At the same time, this approach has reduced waiting lists for licensed childcare

Decentralized Social Services 101 centres and the related political demand for increased government action in funding more childcare spaces. This neo-conservative strategy, which abandons shared responsibility between parents and the state for care of children, represents a return to a residual model of welfare, where government accepts responsibility for only those in absolute poverty. Competitive contracting by the public sector can involve either the commercial or the voluntary sector. While these types of organizations differ in the extent to which they operate out of pecuniary self-interest, some nonprofit organizations are not community-based, voluntary organizations, and their fee structure may allow for accumulation of significant amounts of equity. As well, some Canadian jurisdictions have contracted with providers such as therapists and professional foster parents who operate on a fee-forservice basis. Most strategies to privatize the personal social services have involved efforts to instil within public or quasi-public services such market principles and practices as implementation of internal markets, in which agencies must purchase services from other related service organizations, and devolution of budget and operational responsibility for scarce resources. A more recent trend is replacement of social service professionals as managers by business management personnel and principles, which emphasize reduction of costs through efficiency auditing, increased workloads, and restricted service mandates. The resulting system focuses on competition, the role of user as consumer rather than participant, individual self-interest, and the tenets of 'scientific management/ CONSUMERIST AND PARTICIPATORY MODELS OF DECENTRALIZATION

Decentralized Teams One trend in decentralized service delivery features area teams serving a limited geographical area. In Britain, this method followed experiments with locally based family advice centres in the 1970$. Often these teams were geographically dispersed, although the management structure remained quite hierarchial and centralized. Community participation was limited, there was no integration of field and residential services, and area teams were most often deployed around specialties defined by client groups or functions. Area teams are also common in Canada. Child welfare agencies serving areas as different as the city of Toronto and rural regions in Manitoba have adopted this model. Formal and comprehensive evaluations of these initiatives have not been

iO2 Canadian Social Welfare Policy undertaken, but there is some evidence that use of decentralized area teams can increase organizational flexibility, accessibility, and responsiveness to local needs. Despite delegation of more decision-making and control to local units, services remain professionally controlled, and major changes in service philosophy or program development are uncommon. Community-Oriented Decentralization Community-oriented, or 'patch-based' services in Britain offer a more conceptually refined notion of social service decentralization. Organized ideally to serve a population of 5-10,000, these services reflect a desire for users' input, community empowerment, and recognition of the needs of staff. Services must be accessible and delivered in ways that enable staff to understand users' issues and build alliances with them. Service integration is emphasized for efficiency, and local autonomy in decision-making maximizes innovation and effectiveness. Local staff, volunteers, and user groups mediate local interests and accountability, whereas professional interests are expressed through a participative approach to management and lateral integration with other agencies and teams. The result is a 'community'- rather than ' client'oriented practice.11 While local communities are supposed to share in decision-making, mechanisms are neither clearly identified nor consistently implemented. There have been evaluations of patch-based experiments. In one study, the patch model was successful in achieving service integration and emphasizing work with the local community.12 Staff gained in influence and contributed more, and there was greater mobilization of community resources. While consumers reported no difference in quality of service, more consumers received service, referrals got earlier responses, and other agencies were more satisfied with the work of the team. Another study found improved service and more evidence of preventive, community-oriented services.13 Although decentralization led to increased workloads, managers seemed to stress more team-building and participation in making of decisions. In Britain, resource constraints have limited implementation in many settings, and there is some professional resistance to the generic service role and related requirements for prevention and outreach. Patch-based services have served as a model for experiments in neighbourhood-based services in Quebec,14 and the Winnipeg trial (1985-91) with community-based child and family services reflected a similar normative approach. In the Winnipeg model, new community-based agencies opened neighbourhood-based offices able to serve approximately 30,000 people. In

Decentralized Social Services 103 the first two years, the new agencies initiated more than 300 new community prevention programs involving over 17,000 residents. After 1987, higher service demand in child protection restricted resources for prevention activities. Decentralization and new outreach programs made service more accessible to neighborhoods; as a result, both voluntary requests for service and cases requiring intervention because of abuse and neglect became more common. The net-widening effects of the new system led to heavier caseloads and more children in care. However, there was also evidence of a less adversarial relationship between parents and social workers and greater use of short-term placements and of less restrictive substitute-care arrangements for children in care.15 Services improved, particularly in terms of accessibility, community involvement, responsiveness to the community, volunteer participation, prevention, and early intervention. Community boards helped democratize child and family services and became advocates for local agencies. This situation placed them at the centre of conflicts with government over resources, prevention services, and a community-oriented approach. Despite such community pressure, the province's Conservative government, elected in 1988, adopted a highly centralized and restrictive method of funding, and agencies had to adopt a more residual and crisis-oriented approach to services. Community-based boards that criticized the government were discharged in 1991, when local agencies were centralized. Political Decentralization Another model of decentralization combines neighbourhood organization of services with community control and sharing of political power. Generic staff roles and service integration are common. Participatory democracy may be a feature of community-oriented services but is an essential component of political decentralization. This latter, collectivist approach to decentralization involves more community control and is more likely to lead to a broader range of services and more innovative methods of delivery. This model of decentralization has been attempted in the United Kingdom, and in one area of London neighbourhood offices were developed to serve between 16,000 and 20,000 residents each. Each district office was governed by approximately five councillors, who also served on a central council. In one district, an advisory committee held monthly public meetings, which were designed to facilitate community input to elected officials and senior managers and were very well attended; positions adopted at these meetings helped shape policies and programs. While such a highly politicized environment did conflict, on occasion, with professionally determined

104 Canadian Social Welfare Policy priorities, there was a strong sense of community ownership and support for local services. Service delivery teams varied in size hut there was considerable attention paid to localization and integration of services, implementation of participatory democracy, and decentralization of budgets. In Canada, decentralization of child and family services to First Nations communities has transferred significant measures of control over services to local jurisdictions. Development of a community approach to caring, with local staff working in cooperation with community-based committees, has in many cases led to new, more culturally appropriate methods of intervention and to trust between service providers and local residents. First Nations communities associate increased control over services such as child welfare with their claims to sovereignty and self-government. As well, the services now provided seem more supportive of families and more preventive than those previously offered by mainstream agencies. Political decentralization in First Nations will often produce community pressure to broaden the scope of services provided through such program components as child welfare. Greater access increases demand, and higher demand for new and more innovative services is likely as communities identify a broader range of needs and entitlements. Limited resources restrict the scope and effectiveness of services under political decentralization, and local politics may impair delivery. In some First Nations communities, local leaders have intervened to protect prominent community residents or relatives rather than the women and children who have been victimized.16 CONCLUSION AND IMPLICATIONS

The competitive-market model, which incorporates various forms of privatization, emphasizes efficiency, fiscal accountability, and facilitating of consumer choice where feasible. However, neo-conservative privatization of such services as child welfare has demonstrated preoccupation with financial criteria such as unit costs and overall trends in input costs at the expense of quality and outcome of services. Despite these obvious problems, the current popularity of this method of delivering welfare state programs requires that it be examined carefully, particularly in relation to the personal social services. Many problems with privatization reflect the inherent limitations of market principles when applied to the social services. Greater choice and competition are supposed to lower the price and increase the supply and quality of goods and services.17 However, the market is unable to provide adequate choice in personal social services because of limits to choice; individuals' lack of resources, including information, for making appropriate choices; and

Decentralized Social Services 105 inability to satisfy some needs on the basis of individual choice. It is difficult for users to exercise consumer sovereignty even in the more voluntary components of the personal social services. First, the state is unwilling to commit the resources required to enable all potential consumers to purchase needed personal services under ideal market conditions. And second, governments that favour privatization are concerned primarily with containing costs. However, Bella has demonstrated that privatization of services to the disadvantaged may create new groups of service providers which will lobby government for both increased funding and supportive policies.18 Under these circumstances, government may strengthen centralized strategic control over funding in order to keep down costs, even though this practice conflicts with market decentralization. Competitive contracting for service delivery presents similar problems in relation to both costs and quality of service. There is little empirical evidence that competitive contracting in the social services actually promotes cost savings without reductions in service quality. In addition, the rules of competition, which in the ideal market are controlled by the client in the form of choice, are here determined by government. While competition normally involves consideration of both cost and quality, quality indicators are much more difficult to ascertain. Because of this difficulty, governments have tended to impose funding limits based on political and financial criteria, paying only casual attention to need and to quality and outcome of services. This form of competitive contracting makes it almost impossible to establish criteria and effective mechanisms for regulating service quality among the wide variety of providers encouraged under privatization. The question of access and its effect on equity and social justice must also be considered. Social services are concerned broadly with redistribution of social costs and benefits, and in the personal social services this involves the issue of access to needed services. Privatization and concern for holding down costs are likely to reduce equity and social justice. First, general cost control and cutbacks in funds reduce the availability of prevention and early intervention services. Second, denial of personal social services to Voluntary/ or 'non-crisis' recipients discriminates against families or individuals that cannot afford alternate services from the private market. Third, frequency and quality of intervention fall as staff members experience heavier caseloads and increased work demands because of restricted funding. Within the market alternative, the rhetoric of community and decentralization does not receive practical expression in legislation or policy guidelines; it is employed instead to justify privatization and a quasi-market model of provision. As demonstrated, preoccupation with cost containment at the

io6 Canadian Social Welfare Policy expense of service quality, and inability to facilitate private choice and control over needed services, militate against this model of decentralization for personal social services. The three non-market models of decentralization are progressively more difficult to implement. The decentralized team approach requires no major organizational change, and it can produce some benefits, particularly vis-avis accessibility and responsiveness. However, because it is not linked to major organizational or policy change, it is not as likely to be associated with a major shift in service philosophy, substantial innovation, or increased democratization. Community-oriented and political forms of decentralization have the greatest potential for addressing problems common to delivery of various centrally organized personal social services such as child and family services. However, only emphasis on participatory democracy can increase accountability to the community and involve consumers and communities more directly in defining local needs, influencing program development, and participating in delivery of services. Examples of decentralization reviewed in this study also demonstrate that planning and implementation require careful attention to several policy issues. In decentralization, the state or the voluntary sector can help develop participatory, community-oriented solutions to personal social service problems. However, several Canadian jurisdictions have promoted privatization by restricting funding, enforcing policies supporting a market model, and intervening directly to eliminate community-based components of decentralized services. All of these outcomes are affected both by the model of decentralization adopted and by the ideology that shapes objectives related to this policy. Improved accessibility can significantly raise service demand and related costs in the transition from highly centralized service provision; administrative costs and infrastructure requirements may also grow. Decentralization entails two major issues. First, decentralized agencies' influence and control over service direction will be increased by specification of rights and responsibilities relative to resource allocation, financial accountability, program development, and service standards. Service contracts are one means to this end and may be applied to agencies, district offices, or teams. Contracting would thus be based on partnership, rather than competition, leading to a more systemic and coordinated response to community needs, through strengthening of working relationships between central authorities and local providers, development of contract provisions based primarily on stability and maintenance of an adequate level of social services, and adoption of a flexible approach to negotiation and administration of procedures for accountability.

Decentralized Social Services

107

Second, there is the issue of resource adequacy, particularly in a time of restricted social spending. Decentralization will lower costs only if accompanied by rationing of services in ways likely to counter the objectives of community-orientation. However, the elasticity of need in the social services means that resources will always be inadequate. Thus localized agencies will need flexibility in budgeting and opportunities to engage with their community in the search for required resources. Unless the budget is carefully considered, the benefits of decentralization are likely to remain elusive. The state should adopt a broader perspective in assessing the costs and benefits of decentralization. The rights of citizenship include individuals' participation in policy processes concerning public programs that affect their interests. Three interrelated types of costs may inhibit exercise of citizenship rights - costs of participating in policy choices, of producing and delivering goods and services, and of acquiring and consuming services. Decentralization can reduce acquisition costs through increasing access and lessening stigmatization. However, increased public expenditures as well as higher workloads and new job expectations for staff may impose new production and delivery costs. Governments face a policy dilemma. Decentralization, particularly transition from a highly centralized model, is likely to create pressure for new resources, at least in the short term; yet the goal of more accessible and responsive services depends on these changes. What type of decentralization will maximize efficiency and effectiveness ? In child welfare, some functions, such as local service planning and control over budget, must be decentralized if community-based services are to be more flexible and responsive. However, other functions, such as allocation of resources, fiscal accountability, general goal setting, and monitoring of minimum standards, require more centralized control. Economies of scale may require central provision of some services. Community-oriented practice in such fields as child welfare requires staff with generic skills who are committed to new ways of working with the community. However, specialists are necessary in responding to complex needs such as treatment of sexual abuse, and some of these services may not be able to be fully decentralized. How to achieve service integration ? Decentralization of single-service sectors such as child welfare presumes that improved relationships with other services will evolve through physical proximity. Common service boundaries, shared locations, and mandated commitment to joint working relationships are also required. Highly decentralized systems may have diffculty in coordinating responses across regional boundaries. Effective management information systems are needed to assist in service planning and continuity. As well, linking methods of identifying local needs with regional approaches may challenge the top-down approach to program development.

io8 Canadian Social Welfare Policy How can accountability affect democratization of services? Legal and formal aspects of accountability are commonly recognized through financial and non-financial monitoring functions. Financial accountability includes maintaining spending within acceptable levels and adopting acceptable accounting and reporting procedures. It may also include the responsibility of government to fund service providers at a level that enables them to implement legislative and policy requirements effectively. Non-financial accountability relates to relevance, process, and outcome. Accountability for outcomes, particularly in relation to efficiency and effectiveness, is difficult. Non-financial accountability is subject to local variability, and in a community-based system some forms of it may require a negotiated agreement between central authorities and local providers. The political dimension of accountability goes beyond the right of government to exercise authority and includes actions by interest groups, including local boards, in advocating for or against programs and bringing to public attention special service needs and priorities. It may include a concern for client empowerment and development of more participatory approaches to community input and control. These objectives can be enhanced in a community-based system through mechanisms such as community boards, the localization of representative democracy, and open community forums. Direct funding and involvement of user groups in service provision and policy development may also help. Without sufficient attention to democratization of social welfare, services such as child welfare are likely to remain preoccupied with residual and social control functions. Under these conditions, decentralization will fail to address adequately many of the problems of the centralized service model that it was designed to replace. NOTES

1 See P. Beresford and S. Croft Whose Welfare? (Brighton 1986) and S. Wineman The Politics of Human Services: Radical Alternatives to the Welfare State (Boston 1984). 2 Wineman The Politics of Human Sciences 52-3. 3 M. Rein 'Decentralization and Citizen Participation in Social Services' Public Administration Review 32 (1972) 687-701. 4 A.W. Tourigny and J.A. Miller 'Community-Based Human Service Organizations: Theory and Practice' Administration in Social Work 5 no. i (1981) 79-86. 5 R. Hambleton and P. Hoggett 'Decentralisation: Themes and Issues' in R. Hambleton and P. Hoggett eds. The Politics of Decentralisation: Theory and Practice of a Radical Local Government Initiative (Bristol 1984) 1-15.

Decentralized Social Services

109

6 S. Hatch and L. Mocroft Components of Welfare: Voluntary Organization, Social Services and Politics in Two Local Authorities (London 1983). 7 P.M. Kettner and L.L. Martin 'Purchase of Service Contracting: Two Models' Administration in Social Work 14 no. i (1990) 15-30. 8 P. Beresford and S. Croft 'Welfare Pluralism: The New Face of Fabianism' Critical Social Policy 3 no. 3 (1984) 19-39 and N. Johnson The Privatization of Welfare' Social Policy and Administration 23 no. i (1989) 17-30. 9 R. Hambleton and P. Hoggett 'Beyond Bureaucratic Paternalism' in P. Hoggett and R. Hambleton eds. Decentralisation and Democracy: Localising Public Services (Bristol 1987) 9-28. 10 R.A. Parker The Restricting of Welfare: Going Private' (Bristol 1990) unpublished paper, Bristol, 1990. 11 R. Hadley, P. Dale, and P. Sills Decentralising Social Services: A Model for Change (London 1984). 12 R. Hadley and M. McGrath When Social Services Are Local: The Normanton Experience (London 1984). 13 Hadley, Dale, and Sills Decentralising Social Services. 14 J. Guay Neighborhood Mutual Aid Project: Final Report A project funded by National Welfare Grants, Health and Welfare Canada (Quebec 1992). 15 B. McKenzie, K. Kristjanson, and A. Penner The Regionalization of Child and Family Services in Winnipeg: Trends in Service Demand, Resources and Effects on Service Providers, 1985/86 to 1987/88 (Winnipeg 1989). 16 R. Harrison 'A Licence to Abuse' Winnipeg Sun (22 December 1991) 5. 17 M. Friedman and R. Friedman Free to Choose (New York 1980). 18 L. Bella 'Privatization in the Human Services and the Restructing of Interest Group Activity' unpublished paper, Banff, 1987.

7

Holistic Social and Health Services in Indian Communities GARY SCHAAN

Expansion and development of the Canadian social welfare system since the 19305 have seen practical accommodation between the federal and provincial governments over division of powers, financial arrangements, and delivery mechanisms.1 The resulting systems - social services, income security, and health care - which were intended primarily to address individual needs, were designed within a federal/provincial political and bureaucratic framework. A notable failure of these arrangements has been marginalization of Indians and Indian communities, resulting in fragmented programs, jurisdictional confusion, and unnecessarily complex funding arrangements. Canadian social welfare policy has never included an effective role for communities, much less Indian communities. The prospect of Indian governments controlling social and health services could signal not only explicit recognition of the special place of Indian communities within the Canadian social welfare structure but also a shift to more decentralized or localized decisionmaking and policies. Indian communities have an obvious interest in effective social and health care planning.2 While conditions have improved over the past 25 years, current arrangements still do not respond to community needs. Community healing, holistic intervention symbolized by the Spirit Circle, has been a response to persistent fragmentation of social and health authorities and institutions resulting from Indian communities' complex social and legal position within Canadian social welfare.3 The Spirit Circle, or Medicine Wheel, has moved beyond its Plains Indian origins to other Indian communities and cultures as a living symbol of social, psychological, and physical healing. It differs from European-derived approaches, which focus on the individual. Holism represents traditional Indian worldviews and the integrity and completeness of the individual within

Holistic Social and Health Services 111 a community. Different applications of the symbol of the Spirit Circle are developing. 'Community' has become a theoretical concept in design and programming of social and health services. Yet Indian communities remain viable socio-political units. Community healing requires recognition of Indian government authorities and institutions, as well as continuing commitment by government to support Indian government services. Indian jurisdiction in such fields as child welfare requires a shift in the outlook of health care and social service practitioners, with implications for federal and provincial planning of social and health programs. The shift would entail recognition of Indian communities' authority and ability to design and deliver social and health programs as a means to bridge marginalization of these communities. In practice, few communities would probably choose to abandon entirely the existing framework. They can make highly selective 'market choices' about whether they would develop delivery systems or contract with government or other agencies, including Indian agencies, for health care, child welfare, employment training, or other services. This chapter argues that integration of Indian social and health services, symbolized by the Spirit Circle, is possible. It presents a comparative analysis of Indian child welfare in the United States and Canada, which demonstrates the importance of balancing resourcing and jurisdictional authorities in order to provide services under Indian self-government. But, first, it is necessary to describe the persistent fragmentation mentioned above. FRAGMENTATION OF INDIAN SOCIAL WELFARE

Since 1945, legislation in Canada has widened the role and influence of government in regulation and delivery of health and social services. Yet the practical jurisdictional and fiscal accommodations that underlie present policy did not address the unique constitutional position and socio-economic circumstances of Indian communities. The Jurisdictional Context Colonial regimes reduced much of the self-governing authority of aboriginal political systems. With proclamation of Indian lands legislation in 1868 and the first Indian Act in 1876, the superintendent-general of Indian Affairs assumed control over Indians and their lands. The Indian Act imposed the band as the recognized organization, consequentially fragmenting traditional social and political structures.

112 Canadian Social Welfare Policy Figure 1 Localizing community control: a conceptual model Management

Services and infrastructure

Institutional development

Social development

Selfgovernment Fiscal arrange-

Legislation

ments

Revenue

Economic development

Authority

The federal Pariament passed this and subsequent Indian Acts under the provisions of section 91(24) of the Constitution Act, 1867, which gives it exclusive legislative authority for 'Indians and lands reserved for Indians/4 The special relationship between the federal crown and Indians was further strengthened by section 35 of the Constitution Act, 1982, which recognizes and affirms aboriginal and treaty rights. Since then, the central political debate among federal and provincial governments and the Indian leadership has been over the definition of these rights, including that to aboriginal selfgovernment. The Indian Act is still Ottawa's principal legislative instrument in its relationship with most Indian communities.5 It defines the band, status Indian, and reserve lands. It provides for a restricted form of government by band council and chief and limited by-law-making authority on reserve lands, subject to ministerial approval. Historically, the federal government has been reluctant to legislate for Indians, outside the various Indian Acts, in contrast with a long-standing policy of federal legislation for veterans. The Indian Act, excepting limited reference to education and the Indian Health Regulations, is silent on social and health services (see Figure i). Section 88 of the Indian Act permits

Holistic Social and Health Services 113 provincial laws of general application to apply to Indians on reserves, unless these laws are inconsistent with federal legislation. Provinces legislate for health and social service programs under section 92(13) of the Constitution Act, 1867, which sets out as an exclusive power of the provincial governments 'property and civil rights/ resulting in uncertainty or at best unneeded complexities over authorities and responsibilities for social and health services on reserve lands. The Fragmentation of Programs The mid-1960s saw considerable innovation in Canadian social welfare policy, with the federal government helping to develop national standards for social and health programs. It is instructive to view the discussion of that time as it affected Indians. The Federal-Provincial Conference on Indian Affairs (1964) typified a debate that continues to this day.6 The focus was Indian welfare and community development. Community development was at that time a popular model for intervention and social change (despite the fact that in Canada the tradition of strong local government had been and continued to be eroded). Federal and provincial ministers and officials (there were no Indians represented) discussed proposals to remove obstacles to provision of welfare services to Indians on reserves. Ottawa claimed to be ill-positioned to provide Indians with effective and efficient welfare services. The deputy minister of citizenship and immigration (then responsible for Indian affairs) stated: Tt would be better, rather than trying to improve federal (welfare) services, to call in provincial services/ His counterpart from National Health and Welfare 'suggested that Indian people should be eligible for the same (welfare) services as other residents of the Provinces/ The provinces agreed with the proviso that Ottawa assume responsibility for all costs for on-reserve Indians. Some also held that it was constitutionally responsible for funding services off reserves. The federal government contended that only federal legislation pertaining specifically to Indians could limit the scope and extent of provincial responsibilities for Indians and Indian communities; provinces should provide and pay for full services to Indians off reserve, while they and Ottawa would pay for equivalent services on reserve that fall within provincial jurisdiction of general application.7 This federal-provincial debate on authority over and responsibility for Indian social and health programs persists. In spite of a federal and provincial consensus that Parliament can legislate for Indians, outside of the Indian Act, it largely fails to do so. Consequently,

114 Canadian Social Welfare Policy provincial laws of general application apply to Indians on reserve as well as off reserve. The only social service specifically mentioned in the Indian Act is education; the act allows for provision of schooling under federal, provincial, and territorial governments, public or separate school boards, or religious institutions, but not through schools run by Indian bands. A consistent federal position - that services and programs to Indians, including communities on reserves, must be accommodated within existing federal-provincial jurisdictional arrangements and practices - resulted in gaps in programs and services. In child welfare, provinces have enforced their statutes in such matters as custody and adoption of children on Indian reserves, while non-statutory services such as counselling and family support have been available inconsistently to Indians on reserves, because Ottawa and the provinces often refused to assume financial responsibility. Federal preference has been for delivery of social services through institutions accredited under provincial jurisdiction or to prevailing provincial standards - for example, in child welfare. It is widely recognized that there has been neglect in development of Indian child and family services. One approach has been development of Indian-managed child welfare agencies operating under provincial authority. As a condition of entering into agreements on such agencies, provinces require that service delivery meet their standards. This demand can deny services to reserve communities if funding is not available to improve standards. Native child care workers sometimes find that provincial regulation prevents their participation in social services because of lack of training or education and because of insensitivity to native values in provincial statutes and institutions. Heightened interest, however, has led recently to introduction of native welfare studies within universities. A number of provinces have legislation (Ontario) or policies (British Columbia) requiring consultation with the band concerned in custody matters affecting Indian children. Financing of health and social services for Indians is confusing, complex, and uncertain, with arrangements depending on status, residence (on or off reserve), service definition, the funding program, and location (Table i). For example, Ottawa pays for education for status Indians resident on reserves. Support for post-secondary education is available on and off reserves. The federal government pays for community health services provided on reserve and, to a certain extent in some northern areas, off reserve as well. Noninsured health benefits and health insurance premiums are paid both on and off reserve. Generally, while Ottawa funds social services and income support on re-

Holistic Social and Health Services 115 TABLE 1 Some service arrangements for status Indians on reserves Federal statutory authority ?

Applied standards

Program delivery

Main funding source

Social assistance

Indirect Canada Assistance Plan

Provincial rates

Band Federal Provincial

Federal

Child welfare: statutory services

No

Provincial

Provincial agency (Indian agency)

Federal

Child welfare: non-statutory services

No

Not consistent

Indian agency Band

Federal, if available Band

Elementary and post-secondary education

Yes Indian Act

Provincial accreditation and curriculum

Band Federal Provincial

Federal

Community health

Yes Indian Health Regulations

Federal/ provincial accreditation

Federal Band

Federal

serves, and the provinces do so off reserve, there are anomalies. For example, neither level provided or funded on reserve the full range of social services developed for other citizens. Also, most provinces require that Indians live off reserve for one year to be eligible for provincial social assistance. The federal government repays the provinces for assistance paid in that oneyear period.8 Since the mid-1960s, development of health and social service programs for Indians has progressed. Indian conditions, obviously worse than those of the general population, could not be neglected. In a climate of social reform that saw introduction of federal-provincial cost sharing, expanded and universal health care, and national standards for social assistance, Ottawa began to spend money on programs on Indian reserves. It emphasized housing, health care, education, social assistance, and economic development. The

n6 Canadian Social Welfare Policy prevailing philosophy was intervention through community development, rather than Indian control. By the late 19705 federal emphasis changed in response to Indian demands for Indian management of services, resulting, for example, in band-run schools and the Alternative Funding Arrangement (AFA). Introduced in the mid-igSos, the AFA gave bands or tribal councils the ability to manage a global budge negotiated for a five-year period, with built-in provisions for cost escalators. Indian Child Welfare Agencies are being developed through tripartite agreements among federal and provincial governments and Indian tribal councils. Indian-administered, they operate under provincial jurisdiction. Despite the obvious benefits of increased funding and devolution of programs to Indian management, the legal, institutional, and fiscal framework remains highly fragmented, costly, and ultimately non-accountable to Indian communities. It is also enormously complex. There are major differences between, and even within, provinces in delivery and support of programs for Indians on reserves. At the community level, bands must deal on an ongoing basis with federal and provincial bureaucracies and regulations. A PARADIGM SHIFT

Reactions by Indian communities to these complexities reflect their political, economic, and social diversity.9 The continued relevance of the community provides a unique opportunity for Indian bands to consider innovative approaches to social and health services, through new programs, management of institutions delivering services, or authority to legislate programs and services. Indian Management Opportunities have developed for bands under the Indian Act to manage services, including health, education, and social services, under federal and/ or provincial authorities. For example, the Health Transfer Program of the Department of National Health and Welfare allows Indian-managed public health services, permitting communities (bands or tribal councils) to take over administration of Indian health facilities and budgets other than noninsured health benefits. Tripartite child welfare agencies are another instance of Indian-managed programs. Several such agencies operate under agreements between the federal and provincial governments and, typically, a tribal council. They are generally federally funded on reserves, and operate both on and off reserves

Holistic Social and Health Services 117 under provincial jurisdiction and to provincial standards in provision of statutory and non-statutory services. Indian Government Indian government has the most potential to address inconsistencies in the place and role of Indian communities within the Canadian social welfare system.10 If Indian communities are to manage integration of social services and health care, they require control over institutions accountable to the community, effective authority, and adequate revenues (Figure i). Localizing control through self-government would permit Indian communities to bridge the gap between federal and provincial authorities and responsibilities, which has made them a footnote in the development of Canadian social welfare. Consideration of Indian government also raises questions about the prevailing ideology behind social welfare in Canada. The history of government policies towards Indians is replete with attempts to reshape traditional Indian social and cultural institutions to conform to European values. Approaches to social policy more tolerant of collective values may achieve a minimum standard of social equity and access to services, not only for Indians but for other Canadians. A Loss of Focus in Canadian Health and Social Services Delivery of health and social services in Canada, as in other Western developed economies, is based largely on intervention at the level of the individual. Interventions reflect an evolution from nineteenth-century socio-political ideology to that of a modern industrialized and technologically advanced society. In 1867 the community was an operative social concept, and individual welfare was equated with the well-being of the community at large. Today, social welfare is increasingly regulated through codification of individual responsibilities and rights in exchange for provision of institutionalized health and social services. Except in public health and, more recently, environmental protection, most health and social services are directed to the individual, or the individual within a nuclear family. The intervening agent is the medical or social service professional, operating within a specialized institution. The 'community/ like the school or the family, is a means through which interventions can operate. The terms 'community' and 'family' are often used not in a descriptive or sociological sense but to design settings to approximate normalization. In

n8 Canadian Social Welfare Policy some cases, this social programming might lead to development of notional normality, where none might ever have existed. Examples include group care homes for disturbed children, the mentally handicapped, or the disabled. Social services and health care authority over accreditation, eligibility and access, standards, levels of support, and program design are the prerogative of the state, represented typically in Canada by the province. Typologies of social services, social assistance, health services, and education have become increasingly refined and complex. The complexities require specialist attention to coordinate service delivery and funding responsibilities among local, provincial, and federal governments .Training of professional caregivers and administrators includes dissemination of knowledge of these distinctions.11 Social welfare policy in Canada has been characterized by practical federal-provincial jurisdictional and fiscal accommodations. This system has evolved into increasingly regulated behaviour, with an emphasis on individual rights that parallels steady erosion of cohesive social units such as the family and the community. INDIAN CHILD WELFARE

Jurisdictional authority, combined with accountable institutions, is necessary for community control. Rather than being a conduit for intervention, the community as government would be able to define the approach to social and health services and make effective choices about the means to do this. This possibility is ephemeral, of course, without resources. The approaches to Indian child welfare policy in the United States and Canada are polar opposites. An American Perspective In the United States, as in Canada, the federal government has jurisdiction over Indians. However, in the United States there is a concept of Indian tribes as 'sovereign dependent nations' that does not exist in Canada. The Indian Child Welfare Act, passed by Congress in 1978, sets out guidelines for custody hearings involving Indian children in state courts, recognizes tribal courts as having competent jurisdiction in matters of Indian child welfare, and provides for appropriations to pay for services to strengthen Indian families both on and off reservations.12 The act gives tribes exclusive jurisdiction over Indian child custody and proceedings. It establishes preference of adoptive placement under state laws:

Holistic Social and Health Services 119 first, with the extended family; second, with other tribe members; and, third, with other Indian families. It requires state records to be kept of placements. Provision is made for supporting Indian child and family programs, including development of child welfare codes. Congress is paramount and has authority not only to establish rights such as tribal court jurisdiction but to restrict or remove such rights. This is a different concept than aboriginal and treaty rights in Canada, which are constitutionally recognized and affirmed. General Canadian recognition of Indian rights, which would not be subject to legislative amendment, might hinder negotiation of specific rights to self-government. The Canadian federal government, unlike the American, is reluctant to enact Indian-specific legislation. Control over Indian child welfare in the United States operates through tribal courts. This control is principally over custody, as it does not prohibit emergency temporary removal of the child by the state. It gives priority to the collective rights of the community over the individual rights of the child, running counter to current trends in child welfare. In the United States, per capita funding in 1989 on the 949,075 recognized Indians was $4,109 (Canadian), compared to Canadian spending of $11,321 per capita for on-reserve Indians.13 These figures reflect different perspectives in social policy towards Indians and non-Indians. A criticism of the Indian Child Welfare Act when it was introduced was that it delegated jurisdiction before adequate programs or funds were available to strengthen Indian family services and child protection.14 Indian Child Welfare in Canada The Canadian approach represents a more pervasive support network for social and health programs, but without effective Indian control.15 In Canada, provinces have jurisdiction over Indian child welfare. While Ottawa has jurisdiction over 'Indians' under section 91(24), provincial child welfare laws, in the absence of federal legislation, apply under section 88 of the Indian Act as laws of general application. While provinces have statutory authority over apprehension, placement, custody, and adoption of children on reserve lands, they have been reluctant to fund or provide non-statutory child and family services on reserves. Governments have accepted this lack of fit between legislative authority and financial responsibility, which is detrimental to Indian communities. Lack of effective Indian authority over child custody resulted in 'adopting out' by some provincial agencies.

12O Canadian Social Welfare Policy LOCALIZING COMMUNITY CONTROL

A simple yet surprisingly valid argument for Indian self-government is that the communities are positioned better than government to understand and manage the complexities of their unique circumstances.16 Design and implementation of integrated health and social services under Indian government would assume community-based institutions, power to legislate over appropriate subject matters, and access to revenues. It would require practical accommodations in arrangements in social welfare between jurisdictions. But cooperation can be expected. As the example of Indian child welfare shows, federal policy has avoided intrusions into perceived spheres of provincial interest. Indian Government Jurisdiction The scope of Indian governments jurisdiction over health and social services would depend on a number of factors, not least being the goals or vision of the community. Indian jurisdiction could allow Indian communities to realign the jurisdiction and program typology of social and health services. No doubt there would be various arrangements. Having the authority need not mean that a community would exercise it. Nor would all communities choose to integrate programs such as income support, education, social services, and health care into new models of delivery. Obviously there are practical and other limits to community government. Certain powers such as accreditation of health professionals, if available, would be of questionable worth, if, for example, it resulted in dumping of unqualified doctors into the community. Increased authority and responsibilities for professions such as nursing, however, might facilitate access to health care for the many isolated Indian communities. Indian governments might obtain jurisdiction over members off reserve lands in such matters as adoption or custody of the community's children. The concept of having more than one authority able to legislate within a given jurisdiction is not foreign to Canadian constitutional law and jurisprudence and may permit building of bridges between people on reserve and those off reserve. Reciprocal arrangements between Indian governments and provinces or provincial agencies can also be envisaged. New Institutional Arrangements The Department of Indian Affairs and Northern Development dominates the relationship between the federal government and Indian communities.

Holistic Social and Health Services 121 Indian governments, with recognized powers, will begin to equalize relations, altering the institutional context without affecting the underlying constitutional and symbolic relationship between the federal government and Indian peoples. Indian government means Indian institutions that are accountable. These may be based in the community or developed on a tribal-council or regional basis to deliver social and health services, and they may demonstrate the workability or economy of delivering of effective services in small, selfgoverning communities. Institutions of Indian government larger than a band are particularly difficult to develop for two reasons. First, the band is an accepted building block for self-government. Second, as in the example of child welfare services (as opposed to jurisdiction over custody and adoption), practical social and health delivery arrangements will sometimes have to extend off reserve, requiring involvement of the province. Financing Indian Government Services Federal subsidies for social and health programs under provincial or territorial jurisdiction are in principle no different than federal subsidies of social and health programs under Indian jurisdiction.17 Local community control requires a revenue or resource base. Indian bands have local powers over taxation and may in future obtain more significant revenue powers on their lands or over their members. Even so, most, if not all, do not have the economic base to generate sufficient revenues to finance required services. Not incidentally, complexities caused by overlapping legislation and funding policies make it difficult if not impossible to manage health and social services for Indian communities effectively from within the federal and provincial governments. The view that Indian government would be inefficient presumes that it is an added layer of government. A valid cost analysis should identify corresponding institutional and organizational adjustments. More than theoretical savings should be available to finance institutions and adminstration of Indian governments. Closing the Circle Indian self-government, if it can develop fully, may serve as an instructive model for future restructuring of health and social services in Canada. It should be regarded not as a resolution of a single problem but rather as an opportunity for a new relationship which will require adaptation of the existing federal-provincial framework in social welfare policy. This relation-

122 Canadian Social Welfare Policy ship would develop over time, as have federal-provincial relations, if it is based on mutual recognition of shared social policy objectives and practical accommodation to meet those objectives. Indian government is a means to empower Indian communities to achieve what the federal and provincial governments have failed to do - bridge the gap with the rest of Canadian society. Present jurisdictional arrangements need to evolve if it is to permit Indian holistic approaches to health and social service delivery. A New Perspective on Canadian Social Policy Beginning in the mid-1960s, there was increasing internalization of government authority over the social and physical well-being of Canadians. Rapid growth of expenditures was matched by expansion of government revenues. Policy was based on a philosophy that social ills could be appropriately addressed through a social welfare safety net that targeted individuals, with universal criteria for access. It is now clear that demand outstrips supply. Government has viewed this as a management problem, requiring greater efficiency in administration and the slowing of demand through the timehonoured practices of queueing for access to services such as health or user fees; alternatively, it can risk future fiscal crisis by continuing to spend more to meet expanding, albeit legitimate, demands. Governments have devloped increasingly elaborate standards in education, health care and social services There is also a growing trend to pass responsibilities for cost control and revenue generation from federal to provincial governments and from the provinces to municipal and local community-run institutions, such as school boards, hospitals, and children's aid agencies. The 'consumer' of the service is seen as the individual user. In the midst of present-day nationwide economic and political uncertainty, the concept of community healing put forward by some Indian communities, symbolized by the Spirit Circle, suggests rethinking of the place of community and collective values within the structure of social welfare policy in Canada. NOTES

1 The views and opinions expressed in this paper are those of the author alone and do not represent policies or positions of the government of Canada or of its Department of Indian Affairs and Northern Development. 2 The statistics are telling. The crime rate on reserves is three times and the suicide rate is twice the national average. In 1986, Indian children were placed

Holistic Social and Health Services 123 into care about 2.7 times the national average. Government transfer payments are a major source of income. While infant mortality rates for Indians dropped from 22 per thousand in 1981 to 17 per thousand in 1986, they still remained twice the national average. Indian and Northern Affairs Canada, Highlights of Aboriginal Conditions (1990). These statistics are only nationally representative; 596 Indian bands spread like an archipelago across Canada. Some 279,671 of the 466,337 registered Indians in Canada live in these reserve communities (Indian and Northern Affairs, Basic Departmental Data - 1990 [1990]), which are culturally diverse, differ in social and economic circumstances, represent different histories of contact with European society; and are situated in different regions and provinces. 3 For example, Professor Herb Nabigon of Laurentian University uses the Medicine Wheel in native counselling in conjunction with the traditional sweat-lodge ceremony of his Ojibway culture (by kind permission, unpublished manuscript). The Medicine Wheel is used for healing practices within prisons and with substance abusers. It also functions as a model of community intervention. See Clifford White et al. 'Native Mediation Model for Urban Communities/ presented at the Northern Justice Society Conference, Sitka, Alaska, 14-18 April 1991. 4 The term 'Indian' itself can be the source of some confusion. It can be read under section 91(24) or under section 35 of the Constitution Act. Under the Indian Act, it may mean status Indian or band member. Status establishes eligibility for tax exemptions and for federally funded programs such as non-insured health care and post-secondary education and is the basis for federal program funding for communities. In practice, the effective demarcation between provincial and federal jurisdiction under section 91(24), as well as assumed responsibility for programs or services, has come to be based on the administrative definitions 'Indians' and 'reserve lands' in the Indian Act. The definition of status Indian under the Indian Act does not represent a 'full' description of federal legislative competence. Courts have ruled that the term 'Indian' under section 91(24) includes Inuit, for whom there is no special legislation. The federal government also legislates land claim settlements or modern treaties, whose beneficiaries may include non-status Indians. The Native Council of Canada has maintained that Ottawa is responsible for providing services and program funding for nonstatus and off-reserve status Indians. 5 It is no longer the exclusive statute, since passage of self-government legislation for the eight Cree and Naskapi bands in 1984, under the James Bay and Northern Quebec Agreement, and for the Sechelt band of British Columbia in 1985. Despite a policy introduced in 1986 to negotiate community self-government, these remain the only examples.

124 Canadian Social Welfare Policy 6 Department of Citizenship and Immigration, Indian Affairs Branch, Report of Proceedings: federal-Provincial Conference on Indian Affairs, Ottawa, October 1964. 7 The only visible result of the conference was incorporation in the Canada Assistance Plan legislation of provision for federal-provincial Indian welfare agreements. To date, the only agreement has been with Ontario, signed in 1965. It resulted in provincial welfare administration on and off reserves (essentially federally funded on reserve). It is surprising how consistent the federal and provincial views have remained. A casual press review would show that some provinces still hold Ottawa responsible for costs of services for all Indians, on and off reserve. 8 Consider the similarities and differences in treatment of veterans. Provinces initially provide welfare payments to a veteran until the person receives benefits under the War Veterans Allowance Act, but they bill back the costs to Ottawa. While the practice is similar, there is no federal social assistance legislation for Indians, nor are their statutes for health and social services. A consequence is reduced accountability, as policies, including support levels, are established by Indian Affairs in conjunction with central agencies such as the Treasury Board. The policies are administrative in nature. While there may be consultation with Indian organizations, there is no accountability to these groups by federal agencies or officials. In the absence of statutes, there is only very general accountability to Parliament for appropriated funds spent on behalf of Indians. 9 While some communities see advantages to incremental development of new institutions and authority, others regard Indian government as a non-negotiable inherent or treaty right. Although these different positions may influence strategies, the common position of all Indian communities is that any change must be without prejudice to the special constitutional relationship between the federal government and Indians and to treaty and aboriginal rights. 10 I use the term 'Indian government' in a non-specific sense in this paper and do not refer thereby to any particular model or policy being used by the federal government, or being considered by a provincial government, or being proposed by Indian communities or political organizations. See, however, Medical Services Branch, Health and Welfare Canada, Principles Guiding a Policy on Health Services Transfer within an Indian Self-Government Agreement (1990). 11 Take, for example, child welfare. The Ontario Child and Family Services Act, 1984, establishes or recognizes specialized institutions such as family courts, offices of children's advocates, children's aid agencies, and child abuse registries. It has provisions for voluntary services, child protection, young offenders, rights of children, apprehension and detainment (extraordinary measures), adoption and custody, confidentiality and access to records, and licensing. Another exam-

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125

pie is education. Education at primary, secondary, and post-secondary levels is considered a provincial responsibility, while the federal government's involvement is predicated upon the theme of 'employment' and includes a hodge-podge of literacy training, skill development, and other programs, but not apprenticeship or certification of trades, skills, of professions, as these are matters under provincial authority. 12 Section 2(3} of the act gives an eloquent statement of intent, which has no counterpart in Canada: There is no resource that is more vital to the continued existence and integrity of Indian tribes than their children and that the United States has a direct interest, as trustee, in protecting Indian children who are members of or are eligible for membership in an Indian tribe/ 13 Department of Indian Affairs and Northern Development 'Indians in Canada and the United States,' undated information sheet. 14 See Ronald S. Fischler 'Protecting American Children' Social Work 25 no. 5. 15 See Together Today for Our Children Tomorrow, study prepared for the Council of Yukon Indians by ESSE Networks Ltd., Whitehorse, 15 July 1990. See also Indian Child and Family Services in Canada, Final Report of the Child and Family Services Task Force, Indian and Northern Affairs Canada, 1987. 16 This paper examines not methods to achieve Indian self-government but rather potential applications of a strong community voice in social welfare policy. This may be through negotiation of legislated agreements or constitutional recognition of aboriginal self government. 17 This only touches the surface of funding complexities facing Indian communities. For example, provinces and territories receive federal grants under Established Programs Financing (EPF) arrangements and the Canada Assistance Plan (CAP) on the basis of census counts, which include on-reserve Indians. Federal funding of on-reserve programs is tied to the number of resident status Indians. Lack of a workable model of funding arrangements may be one reason why there is no federal legislation establishing funding levels, criteria, and mechanisms. One result is that funding levels for ongoing programs for Indian bands are based on adjustments to historical levels, plus new program moneys.

8

Neo-conservatism and Social Policy Responses to the AIDS Crisis GUYPOlklER Acquired immune-deficiency syndrome - AIDS - has now been recognized as the most serious health epidemic of the latter part of this century. While the first reported cases in 1981 seemed to indicate that gay men in large American urban centres were the only group at risk, this characterization had been abandoned by 1990, when AIDS had been elevated to the status of world pandemic. In advanced capitalist societies such as Canada, the United States, and the United Kingdom, this pandemic coincided with the crisis of the Keynesian welfare state, the rise of the new right, and the election of neo-conservative governments. The legitimacy of solving social problems through state intervention was thus being questioned at the very time when epidemiological evidence suggested urgent and concerted action. Among those who have attempted to understand policy responses to this new pandemic, some have argued that AIDS represents a politicized health crisis which has been affected by the dominant ideological climate, while others have stressed that AIDS has emerged just as health policies were being transformed.1 No analysis, however, has yet been able to show how these arguments are, in fact, related. While much can be made about neo-conservatism as well as the inherent homophobia of the new right, these factors in themselves do not explain state responses to AIDS. Analysts who have pointed to shifts in health policies are unable to explain adequately why these transformations occurred. Consequently, there is a fragmented understanding of state responses to the crisis. The purpose of this chapter is to propose an alternative framework that can offer a more complete explanation of policy responses to the ongoing crisis. Policy responses to AIDS cannot be understood solely by reference to the ideological impact of the new right, nor can they be assessed as a case study

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127

of incremental changes in health policy. Rather, I argue that states' responses to the crisis have been conditioned by neo-conservative attitudes and have been implemented primarily through restructured health policies. This approach, rooted in the new right's critique of the Keynesian welfare state, can be characterized primarily as privatization, or the attempt to shift responsibility for social problems such as AIDS from the public to the private sector. In this connection, I develop a framework to chart the process in which social policy can be privatized and show how this can be applied to policy responses to AIDS. Specifically, I argue that many advanced capitalist societies such as the United States and Canada sought to privatize responsibility, principally through decentralization, voluntarism, and individualization. Two issues reveal the significance of privatization in neo-conservatism. First, privatization can consist of a series of shifts in the relations between welfare-providing sectors. Second, there are several types of privatization strategies. With regard to many areas of social policy, and specifically responses to AIDS, I argue that the voluntary and informal sectors can be the primary targets of certain privatization policies, especially since many social programs operated by the state could not be delivered profitably in the commercial sector. It would be somewhat simplistic, however, to argue that the new right insists on turning back the clock and recreating a pre-welfare state social order. Crozier, for example, has claimed: The solutions we are striving for are not necessarily market ones but rather models where, thanks to the self-regulation of social activities, categorical demands are partially replaced by the qualitative demands of individuals thus lessening the inflationist pressures of these demands/2 What is proposed here as a solution, therefore, is a redefinition of the role of the voluntary sector in provision of social welfare. While approach this can be interpreted as 'government load-shedding,' it has been presented by new right thinkers as 'empowerment of mediating institutions.'3 Such a solution implies a new and expanded role for the voluntary sector. As Stuart Hall has observed, this sector has known several transformations in the twentieth century.4 With the emergence and acceptance of the new right ideology, it stands poised in a contradictory position; it is being offered a pivotal role as long as it rejects its previous association with the principles and constituencies associated with the welfare state. Addressing voluntary-sector organizations, he wryly suggests: 'Why don't you lie back and learn to welcome your liberation from these statist encumbrances? ... fPJrovided you can slim yourselves down a bit, take to jogging metaphorically, straighten up and streamline, adopt the language of value for money,

128 Canadian Social Welfare Policy why can't you put yourself in the strategic position precisely to pick up that which is being contracted out? Don't your small-scale, flexible forms of working, your variable and undefined pay structures put you in a much better and more strategic position to profit precisely from an economy which is moving in this direction? After all, don't you actually have the contacts in local communities, the local networks which give you a massive advantage yourselves in becoming the pioneers of new forms of local regeneration and redevelopment?'5 It is through the use of such arguments, therefore, that voluntarism and the voluntary sector have been promoted by the new right. This promotion has been pervasive as well as productive, so that governments of all ideological stripes have adopted the new right rhetoric and now see voluntary organizations as an ideal model to provide welfare effectively.6 The voluntary sector, however, is not the only 'beneficiary.' The informal sector will also play an important role. Lisa Brush, for example, has also found that too often privatization has been seen as a transfer of state provision to the commercial sector. While not denying the importance of the voluntary sector, she nevertheless insists that privatization is more likely to entail a shift from public to domestic provision of services.7 This leads her to construct a framework that explains privatization as a shift between sectors of welfare provision. Brush reinstates the distinctiveness of the domestic sector as a welfare provider. In so doing, however, she neglects to take into consideration other sources of welfare provision (individuals, simple support networks) that, along with the domestic sector, have traditionally, and perhaps too hastily, been subsumed into the 'informal' sector. The solution, therefore, is to recognize the specificity of both the domestic and the individual, or informal sectors. Despite this shortcoming, Brush's framework not only identifies the welfare sectors but also shows that the welfare state funds, legislates, and regulates services provided in the private sector (market, voluntary, or domestic). Privatization therefore occurs not only as the state transfers to the private sector a service that it previously provided directly but also when it withdraws statutory support from other welfare sectors. Welfare state principles of social policy are lost through privatization as the state withdraws from ensuring and maintaining social welfare, whether or not it had been the direct provider of this welfare. While privatization strategies such as denationalization, deregulation, and contracting out involve transfer of actual services and programs, implicit privatization is often overlooked. Paul Starr defines the latter, as 'cessation

Neo-conservatism and Responses to AIDS 129 of public programs and disengagement of government from specific kinds of responsibilities (implicit privatization) or at a less drastic level, the restriction of publicly produced services in volume, availability, or quality leading to a shift by consumers toward privately produced and purchased substitutes (also called "privatization by attrition ")/8 Such a strategy helps account for the full impact of government cutbacks not only on social programs in most advanced capitalist societies, including Canada, but also in instances such as AIDS, where a new issue emerges and has to be managed by public officials. In these cases, inaction is not necessarily neglect but can be an implicit or indirect approach to handling of the issue. Some privatization strategies affect on the traditional role of the state visa-vis other welfare providers, but others can also influence the way in which the state itself provides welfare that has not, or has not yet, been transferred to the private sector. In this connection, it is important to consider changes that are taking place within the state itself through internal reorganization and decentralization. New right authors interested in social policy, as well as other 'welfare pluralists/ have devoted much attention to decentralization, which has also become an indirect privatization strategy.9 The rationale for decentralization is not more efficient social policy through local, as opposed to central government, delivery - this in itself would not affect the nature of social policies. Rather, the objective is to replace universality and national rules by a system that the new right and other welfare pluralists feel is sensitive to the dramatically different needs experienced in various communities. Decentralization can thus be seen as another type of privatization, and sub-central governments or regional authorities as another welfare provider. In such cases, local governments are faced with a number of options. They can continue offering the service (which is unlikely, because they lack the constitutional or financial means), or, more probably, they can either provide a pared-down version or become a way station to facilitate the transition to the commercial (market), voluntary, domestic, or informal sector. Even if one sub-central jurisdiction does provide a service on a statutory basis, the principles of universality and national standards erode because they are no longer necessarily available to all in that particular social formation. In light of the above discussion, and building on Brush's contribution, it is possible to construct a framework that captures all the relevant targets of privatization (see Table i). We can incorporate into such a framework the different types of privatization strategies suggested by Starr in order to provide a guide to the permutations involved in various privatization policies.10 Different privatization policies in social welfare can involve one or

130 Canadian Social Welfare Policy TABLE 1

Government and private-sector provision of services: methods and examples Methods of decentralization/privatization Contracting out

Attrition/ indirect

Deregulation

Transfer of assets

Ongoing state intervention

Legislation Regulation

Statutory proSocialized risk vision and/or services

Pared-down services

Local standards

Ad hoc grants

Local delivery

Market sector

New for-profit opportunities

Non-binding guidelines

Commercialization

Bids for services

Voluntary sector

Non-voluntary organizations

Consensual guidelines

Non-profit reprivatization

Contract for services

Domestic sector

New demands on women

Self-regulation

Shares or lumpsum payment

Vouchers or tax credits

Informal sector

New demands on care networks

Self-regulation

Shares or lumpsum payment

Vouchers or tax credits

Sector GOVERNMENT

DECENTRALIZATION

Sub-central jurisdiction PRIVATIZATION

several shifts located in Table i. The task, therefore, is to identify those that are relevant in the case of AIDS. This framework allows us to recast and expanded upon the findings of those who have studied responses to AIDS in the United States and Canada. AIDS AND NEO-CONSERVATIVE SOCIAL POLICIES

Current proposals for transforming of social policy in terms of the privatization favoured by the new right provide the best context for examining policy responses to the AIDS crisis. Conclusions pertaining to privatization do not necessarily contradict the findings of authors such as Fox, who have looked at such responses in relation to the historical transformation, but it goes beyond their initial contributions.11 Fox identified a number of shifts which, he believed, conditioned us responses to the crisis. These included transfer to the individual of responsibility for health care, cost containment, and decentralization to local governments. All these shifts are related closely to the

Neo-conservatism and Responses to AIDS 131 strategic preoccupations of the new right, as charted in Figure i. They are not, however, the only shifts relevant to responses to AIDS. Other authors have found evidence of equally significant shifts - as in Altman's work on voluntarism.12 The principal task, therefore, is to specify how this restructuring is conditioning AIDS responses. This process can be demonstrated in two steps: first, it can be shown that responses are being conditioned by new right social policy which is affecting health care as a whole; second, this same approach is also affecting specific responses targeted at the AIDS crisis. In the first instance, we can show that neo-conservative restructuring of policy is influencing the health care sector as a whole and, therefore, also AIDS. We can define the health care sector and health policy expansively to include all questions that have an impact on health, such as environmental protection, municipal infrastructure, and food standards. Here, I am concerned especially with health policy as it relates to health promotion, education, treatment, and care.13 A review of health policies in a number of advanced capitalist societies reveals several privatization shifts identified in Table i - pared-down services, commercialization, contracting out, and increased demand on the unpaid labour of women.14 These changes are having uneven consequences, depending on the policy issue involved as well as the national context. In AIDS, these shifts have been most notable in curtailed public health measures and in treatment and patient care. AIDS not only represented a new burden to advanced capitalist societies' health systems, which were under growing pressure to cut costs and limit access, but it also posed new types of demands which these systems were not equipped to handle. The United States In the United States, where predictions of spiralling costs to treat the epidemic in traditional hospital settings seemed to indicate the need for a massive and coordinated response, such proposals were either not contemplated or else considered 'non-starters/15 Policy innovations led not to national strategies but to funding cuts, program losses, and introduction of competitive measures into the existing system.16 The Reagan administration declined to make any public pronouncements on AIDS until 1987. AIDS was to be handled within the context of retrenched allocations, despite the pleas of the us Public Health Service (PHS). AIDS activists were not the only ones to accuse the administration of criminal negligence. Throughout the 1980$, congressional hearings periodically reported on federal inaction as well as the difficulties experienced by those fighting

132 Canadian Social Welfare Policy AIDS at the front lines. As early as 1983, testimony confirmed: 'Funding problems have been exacerbated by recent reductions in the size and flexibility of other Federal health grants and services programs. During previous health emergencies the PHS agencies frequently responded by redirectin personnel and resources from existing public health activities. Recent cutbacks in health funding and elimination of many categorical health programs, however, have limited the flexibility and funding options that were available to the PHS in the AIDS crisis/17 Congress responded by increasing funding for AIDS (most of it allotted to biomedical research), but it was not in a position to set up a national strategy to deal with education and treatment. The White House explicitly rejected such a strategy, or even targeted programs aimed at helping with the cost of treating people with AIDS. Reagan appointees expressed concern about the epidemic and insisted that everything possible was being done but at the same time declared that new programs were not going to be designed for AIDS.18 Despite such resolute non-intervention, the us government was not completely able to distance itself from the growing impact of AIDS. As more and more people living with AIDS exhausted their savings and came to rely on Medicaid and beleaguered public hospitals for care, and as the epidemiology of the disease itself changed and increasingly affected minorities who were already disproportionately dependent on public assistance, the cost of Medicaid-funded treatment increased federal contributions. Simultaneously, AIDS became a national issue. The death of Rock Hudson and especially the publication of Surgeon General C. Everett Koop's report calling for massive education campaigns raised understanding of the epidemic's potential impact. The Reagan administration's principal response to heightened awareness was a presidential commission.19 When the Report of the Presidential Commission on HIV was released in 1988, many of its recommendations (such as anti-discrimination legislation for people with AIDS and expanded drug treatment centres for intravenous drug users) were seen as unacceptable to the far right. AIDS activists were disappointed, expecting more from a non-partisan body. The commission's recommendations, including that of $3.1 billion in new state funding, were immediately shelved. Writing in one of the new right's more thoughtful publications, David Kirp observed that the government's actions were not surprising: 'For conservatives, this latest recital of unmnet AIDS needs amounted to empire building ... In their view, such shouts should be met with calls for cost consciousness and local responsibility. For liberals, on the other hand, the commission's report only confirmed that the Reagan administration's emphasis on localism and privatization as well as

Neo-conservatism and Responses to AIDS 133 hypersensitivity to the moral connotations of illness, threatened the public's security against infectious disease/20 The election of George Bush did little to alter Washington's position. Testifying at congressional hearings on AIDS funding, Philip Lee could only reiterate a familiar theme: 'In 1989, there is still no national policy or national plan related to the HIV epidemic ... No clear policy for financing the care of HIV infected persons has emerged except that the financing of care is not a federal responsibility/21 Canada Canada, along with other advanced capitalist societies, was also affected by AIDS, but the incidence of AIDS and HIV infection was substantially lower. Moreover, these countries generally were eighteen months behind the United States in terms of the progression of the epidemic. Nevertheless, despite lower caseloads, little distinguishes the initial Canadian response from the us one. A National Advisory Committee on AIDS (NAOAIDS) was formed as early as 1983, but the bulk of the federal response was undertaken by the Laboratory Centre for Disease Control at Health and Welfare Canada. The head of the centre, Dr AJ. Clayton, revealed the low priority afforded to AIDS by Ottawa when he stated in 1985: 'We still only have 205 cases in Canada in a three year period ... It's very important to keep this in perspective. We kill 4,500 people on the roads every year in Canada/22 By the end of 1990, the year in which Ottawa launched its first national AIDS and HIV strategy, more than 4,500 had been diagnosed with AIDS, arid it was estimated that ten times that number were HIV positive.23 As Lindquist and Rayside have found, the federal government neglected to lead in the struggle against AIDS.24 Such neglect consistent with the overall neo-conservative approach to social policy introduced by Brian Mulroney in 1984. The Conservatives came into office committed to restructuring the Canadian welfare state. As Rice has argued: 'The Conservatives would like to alter the social security system ... They want to shift priorities from universal to selective programs. At the same time they would like to develop mediating social structures that move responsibility for social security back to communities and families or, if possible, push costs onto the provinces and leave responsibility for the poor to voluntary organizations/25 In the case of AIDS, it shifted responsibility by delaying coordinated response, thereby forcing other sectors of society to respond. Despite mounting evidence of a national health emergency, Ottawa's policy initiatives were essentially reactive. It was only after publi-

134 Canadian Social Welfare Policy cation of the report of the Standing Committee on Health and Welfare, AIDS in Canada,26 in May 1986, that Health Minister Jake Epp announced the creation of a National Centre for AIDS (renamed the Federal Centre for AIDS the next year) and the first federal AIDS funding package, totalling $36 million over five years, with most of this money directed to research ($22.5 million). This did not leave many resources for urgent needs such as assisting community groups that were providing the bulk of non-hospital AIDSrelated services. Nor were other compelling needs, such as education and prevention campaigns, likely to be successful on a budget of $700,000 per year.27 Michael Phair, then chair of the Canadian AIDS Society, which represented community-based AIDS groups across Canada, put the federal allocation into perspective: 'When you compare that with the $50 million the government intends to spend on promoting the recent free-trade agreement, you see that it isn't very much/28 Despite the rapid spread of AIDS in Canada (an 86 per cent increase in 1986, and 57 per cent in 1987^), political leader continued to pay little attention. In the mean time, internal warfare at the Federal Centre for AIDS hampered any possible proactive role.30 At the 1988 National AIDS Conference in Toronto, frustration over lack of federal direction came from both AIDS activists and health practitioners. Dr Gate Hankins best expressed the feelings of the conference when she stated: 'All of us are disappointed at the sliding of AIDS down the political agenda ... The fight against AIDS has been hampered by a lack of resources and a lack of commitment/31 A month later, Health Minister Epp announced that Ottawa was increasing its AIDS funding by $129 million over five years. Although this was welcome relief for many AIDS groups, the consensus remained that the funds were 'dwarfed by the extent of the problem/32 Beyond the funding gaps, which were endemic throughout the 19805, inaction on AIDS also seemed to confirm Ottawa's retreat from its role of leading in national health policy, especially in response to a health emergency. New policy initiatives introduced by Perrin Beatty, when he became minister of health looked like a major change. At the Fifth International AIDS Conference in Montreal in 1989, Beatty promised to establish a national strategy on AIDS. The first step was setting up of the Parliamentary Ad Hoc Committee on AIDS, chaired by David MacDonald. The committee gave voice to those who were critical of the federal response and agreed that both coordination and funding of Ottawa's efforts were inadequate. It noted, for example, that $129 million over five years represented only one dollar per Canadian, while Australia was spending four times as much per capita on AIDS programs.33 The committee also set the parameters for federal action.

Neo-conservatism and Responses to AIDS 135 There was indeed a need for a national strategy, and it should be developed in consultation with all the 'partners' involved in the fight against AIDS. Partnership became the hallmark of the national strategy unveiled by Beatty in June 1990 with publication of HIV and AIDS: Canada's Blueprint and Building an Effective Partnership: The federal Commitment to fighting AIDS. These documents did not announce a grand strategy. Funding was to be increased to $112 million over three years, and the AIDS Community Action Program, which started funding community-based groups in 1989, received $6 million.34 The only new initiative was a national treatment registry which would help disseminate knowledge about therapies for people living with AIDS. Beatty's proposed strategy for the first time spelled out how Ottawa intended to handle AIDS policy. The government would participate as part of an overall collaborative effort: 'Increasingly, cooperation and sharing of resources are becoming necessary for any new initiative. The battle against HIV and AIDS can ill afford re-invention or duplication/35 In such a strategy, national leadership and coordination did not figure prominently. The emphasis instead was on strengthening 'community-based partnerships': 'While national undertakings have merit, the most effective education, prevention, treatment and care take place in the community and the workplace. Thus, a genuine and effective implementation of the Agenda requires partnership committees at the local level... Implementing the Agenda will require commitment and a shared sense of responsibility by all parties/ Leaving aside the tenuous implication that 'national undertakings' are somehow incompatible with community delivery, promotion of community-based partnerships was no doubt a positive message to many Canadians. Similarly, community-based AIDS organizations probably realized that their efforts were finally being recognized after years of official indifference. Ottawa, however, by emphasizing shared responsibility, local response, and partnership, was lowering expectations about its role. It was now openly advocating what it had indirectly practised throughout the 19808 - it was shifting primary responsibility for AIDS towards other levels of government and other sectors of society. The Mulroney government's not-so-indirect privatization strategy was not unique to AIDS responses. During the latter part of the 19805, Ottawa restructured its relations with a number of interest and non-profit groups. As Phillips has argued, these new 'partnerships' can take several forms. In community development partnerships, 'cultivation of financial and human resources at the grassroots level so that local communities can develop and deliver government policy is the intent of this type of partnership. The

136 Canadian Social Welfare Policy emphasis is on replacing centralized, homogeneous policy responses with community-sensitive innovative ones/36 What Phillips fails to add, however, and what is evident with AIDS, is that by appearing to be sensitive to community concerns, the federal government is effectively still 'load-shedding/ Less than a year after publication of the national strategy, there were signs that even Ottawa's minimal commitments were in jeopardy. First, work on the only new initiative announced in the Blueprint, the national treatment registry, was put on hold in February 1991, following conflict-ofinterest charges aimed at the contractor.37 In July, news leaked out that Ottawa was about to dismantle the beleaguered Federal Centre for AIDS. Activists and physicians alike asked: 'How can you have a national AIDS strategy if you don't have a national co-ordinating body/38 In September, federal program cutbacks appeared to threaten support for new community based AIDS groups.39 In both Canada and the United States, the outlook for the second decade of AIDS and HIV thus looked remarkably like the first. Federal inaction in both countries, however, did not eliminate the social needs associated with AIDS. Targeted responses to the crisis would have to emanate from other quarters. In this respect, three important shifts in social policy were going to play a role: decentralization, or transfer of administrative decision-making to subcentral authorities; voluntarism, or devolution of responsibilities to new non-profit service organizations; and individualization, re-emergence of personal liability for one's own welfare. SHIFTS IN POLICY

Decentralization Decentralization in the matter of AIDS entails a wide variety of measures often linked to the constitutional and institutional welfare arrangements negotiated and introduced in advanced capitalist societies after 1945. Despite different national experiences, however, the United States and, increasingly, Canada have seen devolution to local authorities - directly, by transfer of assets, or indirectly, by attrition (without necessarily any corresponding policy-making authority or fiscal capacity). The Reagan administration's 'New Federalism' reversed the New DealGreat Society momentum towards greater federal action in us social policy. Federal transfers of funds to states and municipalities were slashed. Between

Neo-conservatism and Responses to AIDS 137 1980 and 1987, the federal share of state and municipalities' revenues fell from 21.3 per cent to 16.8 per cent.40 States assumed a greater role in provision of health and social services and greater discretion in disbursement of federal funds. This meant in theory that states where the AIDS epidemic had been particularly severe could channel funds more easily to AIDS programs. In practice, however, such fiscal flexibility was hard to achieve, and the response from states as well as municipalities was uneven in the early days of the epidemic. Prosperous San Francisco could develop a model response, while New York, Newark, and other rust-belt cities and states were still reeling from the recession of the early 1980$. While many states would become more active as the extent of the epidemic became clearer, fiscally and politically conservative states such as Texas continued to lag behind their counterparts despite an increasing AIDS caseload. In Canada, decentralization was also one of the major political issues in the 19805. As in the United States, the federal government's role in financing sub-national jurisdictions has decreased, albeit at a slower rate (the federal share of provincial revenues decreased from 21.7 per cent in 1980 to 18.8 per cent in 199O.)41 These shifts did not, however, necessarily have a direct impact on care and treatment of people with AIDS. Largely through Established Program Financing (EPF) and the Canada Health acts, universal health insurance guarantees hospital care. While even this 'sacred trust' is being threatened by decentralization of social responsibility, with freezes in EPF transfer payments to the richer provinces,42 the long-term effects have not yet been felt on accessibility of hospital care. Not all care for people with AIDS is provided in hospitals, however, and universal health care did not guarantee launch of extended home care, public education, and prevention campaigns. Lack of a coordinated national strategy left gaps in education and patient care programs. Provincial policies did emerge to fill some of these gaps, most notably for education, but responses remained uneven. Some provinces, such as Ontario, could better afford AIDS education campaigns, funding of community groups, and provide supplemental grants for AIDS units in hospitals beginning to be overwhelmed with new patients.43 Others, such as Quebec, made belated entries into AIDS policy.44 The Vander Zalm government, however, made British Columbia the only province where the drug AZT was charged directly to patients.45 Overall, however, lack of a federal strategy had significant effects, especially in provinces with a smaller caseload. Now that the federal commitment to AIDS programming is again in question, community-based groups in these provinces are the most vulner-

138 Canadian Social Welfare Policy able. As a recent report indicated: 'Hardest Kit will be regions like Atlantic Canada, wriere provincial governments contribute little if anything to dayto-day operations of most groups/46 Voluntarism Trie second policy shift is that of voluntarism and its practical consequence, emergence of new types of voluntary organizations. Voluntary organizations have often been loosely defined as the coming together of groups of people who share a common objective. These can include neighbourhood groups, mutual aid societies, and pressure groups.47 Voluntarism, however, can also be characterized more narrowly as the movement away from state responsibility to the organized, private, nonprofit sector. The AIDS crisis is seeing emergence of new and formal voluntary, community-based groups that will, collectively, come to be known as AIDS service organizations, or ASOS. ASOS' involvement will begin in matters related to public health but will soon expand to include patient care and treatment. These non-profit, private-sector organizations will come to play a role very similar to that assigned to the new right's 'mediating institutions/ In the first years of the AIDS crisis, in countries such as the United States and Canada, ASOS offered the greatest share of the response, especially in education and counselling.48 While some non-profit groups in the United States were active in health issues, AIDS represented a new departure: 'What is different about the HIV epidemic is that a group of people took into their own hands the job of educating themselves to the dangers of the virus/49 The spontaneous emergence of community-based groups in the gay community earned the admiration of even the us Presidential Commission on HIV. In the commission's eyes these groups provided a valuable role model, since most were volunteer-driven, privately financed, attuned to local needs, and altruistic enough to help other, non-gay communities.50 Such a development was in tune with Reagan's overall neo-conservative plan to reduce the role of government as well as with the Bush administration's 'one thousand points of light' campaign. The irony of the situation was not lost on gay and lesbian community leaders, who were driven to this role by lack of resources.51 Nowhere was voluntarism more significant than in San Francisco, as Elizabeth Fernandez has argued: 'The touted San Francisco AIDS model, a system of home care relying primarily on community volunteers and only secondarily on the medical industry, helped set national public policy. It contributed to the development of AIDS programs in cities from Dallas to Berlin/52

Neo-conservatism and Responses to AIDS 139 Unlike in other us communities, San Francisco's ASOS could also count on local government assistance. By the end of the 1980$, however, as caseloads grew and the city's fina-nces became depleted, San Francisco became Virtually tapped out, financially and emotionally/53 If prosperous San Francisco, which had received some financial support from local government, could not sustain a middle-class, gay, white, volunteer-driven strategy, how could the model be developed elsewhere? As the epidemic continued to grow among minority groups that had already suffered the brunt of other neo-conservative policies, the limits of voluntarism were quickly reached. In Canada, community-based ASOS acted in a manner similar to their American counterparts.54 As early as February 1983, AIDS Vancouver was formed, and a month later the AIDS Committee of Toronto was set up. These groups were rooted in the gay and lesbian communities. They were also the first to organize education and prevention campaigns, as well as being the primary source of social support for people living with AIDS. Governments have duly noted the value of their contribution. The federal blueprint, for example, acknowledged: 'Perhaps no other sector of Canadian society has responded with such energy and commitment to the emergence of AIDS and Hiv/55 These community groups formed a national association in 1985 - the Canadian AIDS Society; by 1990, 31 ASOS belonged to the society.56 Early in the crisis, ASOS in Canada resembled their us counterparts not only in the type of services that they delivered but also in their funding and operating structure - they were volunteer organizations, financed mostly from private sources. Over time, however, several Canadian ASOS secured funding from municipal, provincial, and federal governments. The federal blueprint has recognized the value of AIDS voluntarism and, as discussed above, has built its strategy on self-sustaining community groups. As opposed to the us government, however, Ottawa conceded that new groups could have problems locating funds: 'To ensure that community groups continue providing this support, governments must strengthen the partnership, stabilize the funding for community groups and continue to guide them/57 The federal document added, however, that this type of funding would remain selective and perhaps even temporary: 'Such funding is critical in helping community groups through the transition of garnering support elsewhere in the community and thus broadening their base. Given the enormous human and economic impact of AIDS, other community members need to promote supportive policies and funding more actively/58 For ASOS, this does not seem to be a ringing endorsement of long-term federal core funding. While federal funding of community groups is more extensive in

140 Canadian Social Welfare Policy Canada than in the United States, it is still relatively recent and remains tenuous.59 Finally, when the value of volunteer labour is taken into account, community groups continue to be the prime agents in the struggle against AIDS.

Individualization A final policy shift, individualization, can be understood here in two ways. First, there is evidence that AIDS prevention policies have encouraged the perception that individuals should be held responsible for their health status as well as their illnesses. It would be false to claim that health and illnesses have only recently begun to be associated with individuals' 'characters' and 'lifestyles' and that 'blaming the victim' is a merely contemporary phenomenon. Nevertheless, social policy under neo-conservatism has been particularly resolute in reinforcing the individual's responsibility for health.60 This attitude has shaped responses to AIDS, especially on issues related to education and public health. As Mark S. Kaplan has argued: 'The ideology of personal accountability presumes that individuals' responsibility for their behavior will be sufficient to lead to major improvement in their health ... Individuals have some control over their lives. But it is a far cry from that to the current wisdom that "Just Say No to Drugs and Sex" will end the AIDS crisis/61 Individualization can be observed as well in treatment and care. Since the health needs of persons living with AIDS could not be met by available health programs, volunteer ASOS helped fill the gap. Often, however, they were not able by themselves, or even with the assistance of local governments, to provide the needed response. In the end, many individuals had to fend for themselves. This phenomenon is most apparent in the United States. In Canada, universal health insurance and the absence of a major commercial hospital sector ensured access and availability of hospital care. In the United States, lack of universal health coverage and the precariousness of employmentbased insurance has had two major consequences. First, people living with AIDS whose insurance coverage has expired have had to deplete their savings in order to qualify for retrenched Medicaid eligibility.62 Medicaid, however, has more often than not meant access to second-rate medical care at public hospitals. These hospitals, already severely hurt by federal and state cuts in funding, have had to bear a proportionately higher burden than private hospitals for Medicaid and uninsured AIDS patients.63 Second, the San Francisco model has not spread throughout North America. While white,

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middle-class gays in large urban areas had access to community-delivered programs, people from racial minority groups living with AIDS and HIV in the same urban centres, as well as all the so-called high-risk groups in smaller cities and rural settings, did not benefit from such support and, therefore, had to rely on unorganized and informal care networks. As Anselm Strauss and others have argued: 'For the most part, voluntary services reach only a small segment of the population ... So, even in San Francisco (but nowhere else in the Bay Area), which possesses probably the most successful "model" for managing the AIDS epidemic of any American city, the burden is still on the ill themselves and on their committed friends and kin/64 Similar deficiencies in health care that lead to individualization also occur in Canada. Here, too, urban-style support systems tend to be absent in isolated areas. Some people who are HIV positive have been abandoned by local health care professionals and left to their own devices.65 While the cost of health services in Canada is not an obstacle, some people living with AIDS and HIV move to large urban centres to receive adequate medical attention. CONCLUSION

The foremost objective of this chapter has been to propose an alternative framework for the study of public policy responses to the AIDS crisis in an era when neo-conservatism has sought to retrench and restructure social policy. State responses can be interpreted as the social policy version of the new right's 'trickle-down' theory, where responsibilities, as opposed to benefits, flow downwards until they come to rest with the individual him/herself. While graphic, such a characterization is incorrect in one important aspect, at least for AIDS. While the identified shifts all involve divestment of responsibility from the central government to other welfare providers, the process in the case of AIDS is neither simple nor linear. In other words, the torch was not handed directly to sub-national jurisdictions, which in turn passed it to the voluntary sector. In many cases, ASOS were the first off the mark, and only gradually did local governments become involved, as the central government's expected response never materialized. In other cases, ASOS never emerged to the extent posited by the San Francisco model, and individuals bore most of the costs of the epidemic. The proposed framework can analyse and account for these various experiences, both in the United States and in Canada, by situating them in their proper socio-historical context and not simply as a multitude of unrelated individual case studies. This, of course, does not diminish the diversity of different jurisdictions' responses to the AIDS epidemic. By focusing on priva-

142 Canadian Social Welfare Policy tization and the shifting of social welfare responsibilities, however, we can identify common threads as well as overall trends that are relevant not only to AIDS responses, but more generally to social policy as a whole. NOTES

1 On the politicization of AIDS, see D. Altman AIDS in the Mind of America (Garden City, NJ, 1986). For historical interpretations, see E. Fee and D. M. Fox AIDS and the Burdens of History (Berkeley, Calif., 1988). 2 M. Crozier £tat modestef t,tat moderne: strategies pour un autre changement (Paris 1987) 153 (my translation). In the same vein, and particularly attentive to the impossibility of recreating the past, Glazer has stated: 'Since the past is unrecoverable ... it counsels hesitation on the development of social policies that sanction the abandonment of traditional practices, and second, and perhaps more helpful, it suggests that the creation and building of new traditions, or new versions of old traditions, must be taken more seriously as a requirement of social policy itself/ N. Glazer The Limits of Social Policy (Cambridge, Mass., 1988) 8. 3 On 'load-shedding' and 'empowerment' in privatization strategies, see M. Bendick ]r 'Privatizing the Delivery of Social Welfare Services: An Idea to Be Taken Seriously' in S.B. Kamerman and A.]. Kahn eds. Privatization and the Welfare State (Princeton, NJ, 1989) 97-120. 4 Hall argues that the voluntary sector has been transformed from its nineteenthcentury philanthropic roots: 'Increasingly in its own many different ways it has had to develop a new philosophy of working in partnership with the expanding structure of the welfare state. Increasingly it has had to replace the old language of charity and philanthropic and do-gooding and moralising the poor with a language of rights and of entitlements/ S. Hall The Voluntary Sector under Attack? (London 1989) 12. 5 Ibid. 12. 6 R. Lawrence 'Voluntary Action: A Stalking Horse for the Right?' in Critical Social Policy 2 no. 3 (Spring 1983) 14-30. 7 For Brush, women are particularly susceptible to privatization strategies, a fact that has been ignored by much of the literature on the new right and privatization: 'Specifically, theories of the state informed by feminism are quick to point out that viewing the privatization of social services as a form of state-directed enhancement of market exchanges and the conditions for profit accumulation is in fact questionable. Ending state provision of services often results in their being returned, not to the market where a profit can be made, but in the home, where they fall to women unable to afford such services on the market/ L.D. Brush 'Understanding the Welfare Wars: Privatization in Britain under Thatcher' Berkeley Journal of Sociology 32 (1987) 270-1.

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8 P. Starr The Meaning of Privatization' in S.B. Kamerman and AJ. Kahn eds. Privatization and the Welfare State (Princeton, NJ, 1989) 15-48. 9 In analysing the restructuring of the welfare state, authors such as Johnson make a distinction between the new right's agenda and that of the 'welfare pluralists/ The latter are presented as a disparate group of academics and social policy critics who appear to accept a greater role for government than the new right, although they too would favour a substantial shift away from public provision in the 'mixed economy of welfare/ Their principal contribution, according to Johnson, is that 'decentralisation and participation are key features in welfare pluralist strategy/ N. Johnson The Welfare State in Transition (Amherst, Mass., 1987) 182. 10 Brush also attempted to construct such a framework by choosing to specify modes of intervention (subsidy, regulation, ownership, and provision) as opposed to privatization strategies. Such a framework, however, is not adopted here, because use of 'modes' can be very unwieldy. For example, in many cases, subsidy and ownership are redundant. See Brush 'Understanding' 275. 11 See Fox 'AIDS and the American Health Polity' in Fee and Fox eds. ^4/DS 316-43. 12 D. Altman 'Legitimation through Disaster: AIDS' in Fee and Fox eds. AIDS 301-15. 13 Concentration on public health and patient care and treatment may lead to neglect of research on and regulation of drugs for AIDS. While the welfare state has socialized risks associated with medical care and has maintained public health infrastructures, social policies have only indirectly affected research and drug production, which have often been important, under the rubric of industrial policy. Despite a few countries' attempts at indigenous research and production, the pharmaceutical industry is dominated by a few giant multinationals based in the United States, the United Kingdom, Germany, France, and Switzerland. These firms control production through international patents and can direct research in different national markets according to their own needs. Thus social policy little affects pharmaceutical research and production. 14 The exact nature of privatization depends on a society's internal conditions. For the United States, see D. Stoesz and H. Karger 'The Corporatisation of the United States Welfare State' Journal of Social Policy 20 no. 2 (1991) 157-71. For a comparative analysis of us and British privatization, see J. Mohan 'Health Care Policy and the State in "Austerity Capitalism"' in J. Simmie and R. King eds. The State in Action (London 1990) 4-94. 15 See D.M. Fox and E.H. Thomas 'AIDS Cost Analysis and Social Policy' Law, Medicine & Health Care 15 no. 4 (Winter 1987-8) 186-211. 16 Marmor observed: 'Deficits, a large defense budget, and the political unwillingness to raise taxes [have] put medical care policy in a paralytic vise. Only policy proposals that promise reductions in federal expenditures - like the heralded DRG

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20 21

22 23

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innovation in Medicare hospital reimbursement (1983) - are on the agenda of active discussion ... And the Gramm-Rudman-Hollings Act of 1985 has institutionalized the politics of constraint, making large-scale programmatic innovation practically unthinkable/ T.R. Marmor 'American Medical Policy and the "Crisis" of the Welfare State: A Comparative Perspective7 Journal of Health Politics, Policy and Law 11 no. 4 (1986) 629. United States Twenty-ninth Report by the Committee on Government Operations Together with Dissenting and Additional Views, the Federal Response to AIDS (Washington, DC, 1983) 4. Even in the much-maligned American health care system, there was a precedent for public programs to help finance treatment of costly diseases - the End Stage Renal Disease Program set up by Washington in the 19705. Fox and Thomas quote an anonymous official in the Health Care Financing Administration, who states that such a program was not going to be replicated for AIDS. See D.M. Fox and E.H. Thomas 'AIDS Cost Analysis and Social Policy' in Law, Medicine and Health Care 15 no. 4 (Winter 1987-8) 1897. The Department of Health and Human Services was funding some communitybased projects that would help to ensure non-institutional care for people living with AIDS. These AIDS Service Demonstration Projects, however, did not represent a long-term commitment to AIDS treatment; one-time grants were to help create a pool of local resources and thus relieve pressure on overburdened public hospitals: The underlying financing concept, often referred to as "seed money," has been that successful demonstrations, supported by Federal seed money, would attract other non-federal sources of financing or become financially independent/ United States Department of Health and Human Services, Public Health Service, Health Resources and Services Administration, AIDS Service Demonstration Programs 3 Year Report (Washington, DC, 1990) 25. D.L. Kirp 'The AIDS Perplex' Public Interest no. 96 (Summer 1989) 67. United States/Hearing before the Task Force on Human Resources of the Committee of the Budget, House of Representatives, AIDS Funding Issues (Washington, DC, 1990) 183. Quoted in Globe and Mail (15 April 1985) i. When the strategy was announced in June 1990, 3,824 Canadians had been diagnosed with AIDS. As of 7 January 1991, there were 4,590. Health and Welfare Canada Diseases Weekly Report 17 no. 2 (12 January 1991); Health and Welfare Canada HIV and AIDS: Canada's Blueprint (Ottawa 1990) 15. Evert A. Lindquist and David M. Ray side 'Federal AIDS Policy for the 19908: Is It Too Early for "Mainstreaming" in Canada?' in F. Abele ed. How Ottawa Spends 1992-93 (Ottawa 1992) 313-52. J.J. Rice 'Restitching the Safety Net: Altering the National Social Security

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26 27

28 29 30 31 32 33 34

35

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System' in MJ. Prince ed. How Ottawa Spends 1987-88: Restraining the State (Toronto 1987) 211. Implementation, however, met with considerable institutional and popular resistance. Attempts to inject market-oriented reforms in health care were inconsistent with the principles established by the Canada Health Act of 1984, as one report on health privatization commissioned by Ottawa concluded. Health and Welfare Canada Privatization in the Canadian Health Care System: Assertions, Evidence, Ideology and Options (Ottawa 1985). Attacks on universal programs, as through deindexing of pensions, met effective popular protest. The Mulroney government did not so much abandon its neoconservative principles as redirect its strategies; frontal assaults on social policies gave way to more indirect restructuring. Calls for restraint and tax reform were more subtle instruments to alter the Canadian social safety net. Some people have even suggested that the Free Trade Agreement negotiated with the United States was an effective strategy to fulfil the new right's program. See J.W. Warnock Free Trade and the New Right Agenda (Vancouver 1988). Canada, Standing Committee on Health and Welfare, AIDS in Canada (Ottawa 1986). Moreover, Ottawa was not involved directly in development of the national education campaign, which it contracted out to the Canadian Public Health Association (CPHA). The campaign was launched in March 1987 and floundered soon afterwards as major broadcasters initially refused to play its television ads and AIDS activists criticized the CPHA for not targeting the message to gay men. See G. Poirier 'Public Forum Votes Canadian Ads the Worst' in Rites 4 (May 1987) 8. Quoted in Regina Leader-Post (15 October 1987). C. Strike 'AIDS in Canada' Canadian Social Trends (Summer 1988) 2. M. Lynch 'Nothing Doing: Ottawa and AIDS' in Xtra no. 92 (15 January 1988) 3. Quoted in Globe and Mail (17 May 1988) Ai2. B. Peel, director of AIDS Vancouver, quoted in Globe and Mail (9 June 1988) Ai. Canada, Parliamentary Ad Hoc Committee on AIDS, Confronting a Crisis (June 1990) 60. That same year the Royal Society of Canada had recommended that $80 million be spent on prevention alone, and members of NAOAIDS had suggested spending at least $314 million on research and prevention. David Spurgeon Understanding AIDS (Toronto 1988) 98; Ad Hoc Committee Confronting the Crisis 61. Health and Welfare Canada, HIV and AIDS: Canada's Blueprint (Ottawa 1990)

36.

36 S.D. Phillips 'How Ottawa Blends: Shifting Government Relationships with Interest Groups' in F. Abele ed. How Ottawa Spends 1991-92; The Politics of Fragmentation (Ottawa 1991) 208. Phillips in fact is not critical of such

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37 38 39 40 41 42

43

44 45 46 47 48

49 50

51 52

developments. She sees them as positive and predicts that the number of collaborative partnerships will increase: 'An interventionist state no longer has legitimacy, the public service no longer believes it has all the answer or resources and the public is growing tired of unproductive conflicts among social and economic interests/ Ibid 210. 'Finances of Flagship Federal AIDS Program Probed' Toronto Star (10 February 1991). P. Berger, quoted in Medical Post (23 July 1991). 'AIDS Workers Slam Federal Cutbacks' Hamilton Spectator (5 September 1991). United States, Department of Commerce, Statistical Abstract of the United States 1990 (Washington, DC, 1990). Statistics Canada Catalogue 68-202. As Terrance Hunsley has argued, the federal retreat from health policy has significant implications: 'If decentralization of social responsibility is carried out, it is not clear that concomitant tax powers and accountability measures would be included in the package. If they are not, it means that Canadians are being deprived of acquired social rights/ T. Hunsley 'Canada's Social Future: Mutual Aid, or sauve qui peut' Canadian Journal of Public Health 82 no. 4 (July-August 1991) 236. 'AIDS Crisis Overwhelming MDS, Hospitals, Specialists Say' Toronto Star (21 December 1987) Ai; 'Ontario Adding $1 Million in AIDS War' Globe and Mail (27 January 1988) Ai5. 'AIDS Groups Will Receive More Money, Quebec Says' Globe and Mail (15 April 1987). See J. Dixon's discussion of the episode in Catastrophic Rights: Experimental Drugs and AIDS (Vancouver 1990) 111-13. 'AIDS Workers Slam Federal Cutbacks/ This is the definition adopted by Johnson The Welfare State 94-6. For a recent account of us community-based initiatives, see 'HIV and the Role of the Community' in N.F. McKenzie ed. The AIDS Reader: Social Political Ethical Issues (New York 1991) 493-597. N.F. McKenzie 'Introduction' in ibid 10. 'CBOS [community-based organizations] have led the response to the HIV epidemic in this country ... The development and response of CBOS [are] an example of how even the worst of times can bring out the best in people/ United States Report of the Presidential Commission on the Human Immunodeficiency Virus Epedimic (Washington, DC, 1988) no. This point has been made by D. Altman 'The Politics of AIDS' in J. Griggs ed. AIDS: Public Policy Dimensions (New York 1987) 25. E. Fernandez 'A City Responds' in McKenzie ed. The AIDS Reader 577.

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53 Ibid. 54 On the development of ASOS in Canada, see David M. Ray side and Evert A. Lindquist 'AIDS Activism and the State in Canada' Studies in Political Economy 39 (Autumn 1992) 37-76. 55 Health and Welfare Canada HIV and AIDS 26. 56 McGill Centre for Medicine, Ethics and Law Responding to HIV/AIDS in Canada (Montreal 1990) 17-1. 57 Canada, Health and Welfare Canada, HIV and AIDS 51. 58 Ibid. 59 For 1990-1, Ottawa provided less than 10 per cent of the $1.668 million revenues of the largest ASO in Canada - the AIDS Committee of Toronto. Over half of the revenues came from the provincial and municipal governments, and the rest from private foundations, fundraising, and community events. In comparison, the largest us ASO, New York's Gay Men's Health Crisis, had revenues of $14.313 million (us) in 1990; Washington contributed nothing, while state and city governments provided only 21 per cent of the total. AIDS Committee of Toronto Annual Report to Our Communities 1990-1991 (Toronto 1991); Gay Men's Health Crisis 1989/1990 Annual Report (New York 1990). 60 See B.D. Adam The State, Public Policy, and AIDS Discourse' Contemporary Crisis no. 13 (1989) 1-14. 61 M.S. Kaplan 'AIDS: Individualizing a Social Problem' Society 27 no. 2 (JanuaryFebruary 1990) 6. 62 See United States, Department of Health and Human Services, Public Health Service, AIDS: A Public Health Challenge, State Issues, Policies and Programs, Volume 2: Managing and Financing the Problem (Washington, DC, 1987) sec. 6. 63 D.P. Andrulis Crisis at the Front Line: The Effects of AIDS on Public Hospitals (New York 1989). 64 A.L. Strauss et al. 'AIDS and Health Care Deficiencies' Society 28 no. 5 (JulyAugust 1991) 68. 65 'AIDS Patients in Remote Towns Face Lonely Struggle' Globe and Mail (25 March 1991).

9 Poverty: Myths, Misconceptions, and Half-truths KEN BATTLE

One of the most depressing continuities - and implicit condemnations - of Canadian social policy is the persistence of widespread poverty and equally pervasive misunderstandings about it. Poverty is a stubborn, serious, and deeply rooted problem. Poverty persists because it is tightly woven into Canada's social and economic fabric yet remains a thin and weak thread of governments' political agenda. One better way of attacking poverty - and I emphasize the word one - is through research and analysis. We have made some noteworthy progress in recent years in charting and explaining the phenomenon, but much remains to be known, particularly regarding the dynamics of income change and the differential effects of poverty. There are both continuities and discontinuities in poverty trends and patterns, especially in the vulnerability of women and men to poverty, which this chapter will examine in detail. Unfortunately, researchers have made little headway in communicating their findings to the social policy community, the media, politicians, the educational system, and the public. Confusion and misperceptions abound about the nature, extent, and trends of poverty. The main purpose of this chapter is to identify, debunk, and correct some major myths, misconceptions, and half-truths about poverty in Canada. I use these terms advisedly, because few of the misconceptions are wholly false: most have some link with reality, though often so distorted as to paint a very misleading picture of the truth. Some popular notions about poverty bear no relation to reality and are just plumb wrong. Why, you may well ask, get so distressed about statistical facts, trends, and patterns that pale in comparison to the deprivations and damage of poverty itself? Well, why not get it right? I am not talking about minor errors or statistical nit-picking. I am talking about significant misrepresentations of reality and, in some cases, gross errors.

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By not getting it right, we in the social policy community risk further sullying an already pretty shaky reputation. Some of our opponents brand us as a bunch of dewy-eyed, bleeding-heart social workers, who are out of touch with reality; or as out-of-touch poverty intellectuals spouting Marxist gibberish; or as stuck-in-the~i96os dreamers ignorant of today's leaner and meaner society. Perpetuating myths and misconceptions about basic social and economic facts that are supposed to be our field of expertise does nothing to enhance our credibility. Data that run counter to accepted wisdom can spark a search for poverty factors and explanations that have gone ignored or misunderstood. For example, I discovered in the course of my analysis that both the 1981-2 and current recessions reduced the poverty gap between groups that have lower risk of poverty (such as families with male heads, single men) and those with higher risk (such as families led by women, single women) because the lowrisk groups are hit harder in relative terms. Low-risk groups experience a larger proportionate increase in unemployment and poverty during tough economic times, as well as a larger proportionate decrease in unemployment and poverty as the economy recovers. The chapter begins with the myth that poverty is ever-increasing. It then discusses the feminization of poverty and myths about child poverty. It ends by suggesting some reasons for persistent misconceptions about poverty and proposing some ways to improve public understanding of poverty statistics.1 POVERTY ON THE I N C R E A S E

Many journalists, opposition politicians, and social advocates claim that poverty is ever-worsening. However, this is simply not true. Poverty fell sharply in the 1960$ and 19705, largely because of the increase in two-earner families produced by the revolutionary rise in the participation of wives in the paid labour force. Despite a roller-coaster of rising-falling-rising poverty rates caused by two recessions, poverty levelled off in the 19805. The farthest back we can go in charting trends in poverty is 1961, when an estimated 4.75 million women, men, and children - 29.0 per cent of the Canadian population - lived below the poverty line. By the end of the 19605, the poverty rate had declined significantly to 23.1 per cent. The 19705 brought substantial progress: by 1977, the rate had fallen to a record low of 13.3 per cent.2 The recession of 1981-2 put an end to the long-term decline in poverty. In 1980,15.3 per cent of the Canadian population had low incomes. By 1983, the sharp rise in unemployment had pushed the national rate to 18.2 per cent. The proportion of Canadians with sub-poverty line incomes then fell,

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Figure 1 Poverty rate, Canadians, 1961-91

reaching 13.6 per cent in 1989 - the second-lowest ever. The current recession has halted the downward trend, pushing the rate back up to 16.0 per cent in 1991, still not as high as that for 1982-5. What will happen in the 19905? Once Canada finally emerges from the current recession, rates will probably ease once more, and there will another roller-coaster ride. However, unless unemployment recedes to a much lower level than we have come to expect as 'normal' in our mass-unemployment economy, I cannot envisage a progressive decline in poverty as we approach the turn of the century. The forces that create and sustain poverty - periodic recessions, unequal division of child-rearing responsibilities between women and men, marriage breakdown, low wages, inadequate social benefits, and poor education, among others - show no signs of weakening. THE FEMINIZATION OF POVERTY

In 1970, the Senate Committee on Poverty's landmark report, Poverty in Canada, showed on its cover the face of a grizzled old man clad in a cloth cap and coat. A more appropriate picture might portray a single-parent mother with her children, flanked by an elderly widow. The so-called feminization of poverty is one of the most widely touted - yet also most misunderstood features of poverty in Canada. Women are much more likely to be poor than are men, and we can parade a ream of statistics to prove it. Families led by women are four times more

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likely to be poor than are those headed by men; in 1991, their respective poverty rates were 40.7 per cent and 9.4 per cent. Families headed by women under age 65 face a poverty rate of 45.6 per cent - five times the 9.6 per cent figure for families led by non-aged men. The poverty rate for families led by women 65 or older was 13.8 per cent, as opposed to 8.3 per cent for families with elderly male heads. One-parent families led by women suffer one of the highest poverty rates of any group: six in every ten (61.9 per cent) had low incomes, compared to only one in ten (10.7 per cent) two-parent families, at last count. The poverty gap is not quite so wide for unattached individuals - 41.4 per cent of unattached women and 31.0 per cent of unattached men were poor in 1991. (By the way, 'unattached individuals' are real people - not astronauts, deep-sea divers, or mountain climbers who have slipped their tethers; in Statscan-speak, they are people living alone or with non-relatives.) A similar gap exists for unattached women and men under age 65 - 37.6 and 27.2 per cent, respectively, lived on low incomes. Elderly unattached women - most of them widows - run a very high risk of poverty: close to half (47.4 per cent) were poor in 1991, as opposed to 33.4 per cent of unattached aged men. Women make up a larger percentage of the poor than do men for most categories - except for low-income families, where men still predominate and women are generally over-represented among the poor (i.e. they make up a larger share of the poor than they do of the population overall). In 1991, females accounted for 55.8 per cent of low-income Canadians but just slightly more than half (50.6 per cent) of all Canadians. Women headed 36.1 per cent of all poor families but only 11.6 per cent of all families; men head the majority (63.9 per cent) of poor families. Women head nine in ten nonaged, low-income, single-parent families. Women comprise 60.7 per cent of poor, unattached individuals, compared to 53.5 per cent of all unattached individuals. In 1991, women represented 50.5 per cent of low-income, unattached individuals under age 65 but only 44.8 per cent of all non-aged, unattached individuals; 81.0 per cent of poor, unattached individuals 65 or older were women, as opposed to 75.0 per cent of all unattached seniors. However, 'feminization' implies that poverty is becoming more and more a women's problem - that their risk of poverty is rising steadily (especially relative to that of men) and/or that women constitute an ever-increasing share of the low-income population. A closer look at trends in both poverty rates and distributions indicates that the popular image of the feminization of poverty is exaggerated and is at most true only partly - for the elderly. While women remain far more poverty-prone than men, there has been long-term progress against poverty for both sexes; the poverty gap between

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Figure 2 Poverty rate, female and male Canadians, 1980-91

the sexes is not inexorably widening, and women do not constitute an evergrowing proportion of the low-income population generally. Figure 2 plots the trend in poverty rates for all people (i.e., women, men, and children together) according to sex from 1980 through 1991 (earlier data are not available, although we are able to examine longer-term trends for families and unattached individuals). Two clear patterns emerge: females face a higher risk of poverty than males, and the risk of poverty for both sexes rose with the 1981-2 recession, declined steadily 1984-9, and then rose again in 1990 and 1991 with the present recession. Males fared a bit worse than females: the poverty rate for men was one percentage point higher in 1991 (14.3 per cent) than in 1980 (13.3 per cent), while the rate for women went up by less than half a percentage point, from 17.3 to 17.6 per cent. Figure 3 illustrates the poverty gap between female and male Canadians. This measure simply divides the female poverty rate by the male poverty rate. In 1980, females were 1.3 times more apt to be poor than males; this ratio fell slightly with the recession to 1.2 by 1984, rose a bit with the economic recovery to 1.33 in 1988, and dipped with the current recession to 1.23 in 1991 - a tad less than in 1980. While the poverty gap between the sexes is significant, it is not all that large; it varies slightly over time and certainly is not widening. Figure 4 presents another gauge of the feminization-of-poverty hypothesis. It plots the trend in females' and males' share of the total low-income population. In 1980, 57.0 per cent of poor Canadians were female and 43.0

Poverty: Myths, Misconceptions, and Half-truths 153 Figure 3 Poverty gap between female and male Canadians, 1980-91

per cent were male; by 1991, their respective shares were 55.8 and 44.4 per cent. The male share rose slightly with the first recession, fell slightly as the economy improved, and increased again with the present recession, although Figure 4 Percentage distribution, low-income female and male Canadians, 1980-91

154 Canadian Social Welfare Policy Figure 5 Poverty rate, women and men aged 18 -64, 1980-91

the changes were small. Women make up a larger - but definitely not growing - proportion of the low-income population than men. Because averages can mask significant differences, I also looked at the poverty trends for elderly and non-elderly women and men (I discuss child poverty in a later section). Figure 5 traces the poverty rate for women and men aged 18 to 64 throughout the 19805 and into the 1990$. The results are much the same as for the low-income population overall. Non-elderly women and men have experienced the same roller-coaster ride of rising-fallingrising poverty rates over the 11 years, and the poverty rate at the start of the 19908 was higher than it was at the dawn of the 19805 (14.7 per cent in 1980 and 15.9 per cent in 1991 for women, 10.9 and 12.7 per cent, respectively, for men during the same period). Non-aged women run a higher risk of poverty than their male counterparts, but, as Figure 6 illustrates, the poverty gap between the sexes has not grown and, in fact, was smaller in 1991 than in 1980. Women outweigh men in the 18-64 poverty group, as shown in Figure 7, but their share has not increased; on the contrary, it was lower in 1991 (55.8 per cent) than in 1980 (57.8 per cent). The picture is different among Canadians 65 and older. The good news is that there has been significant progress against poverty for elderly women and men alike. Figure 8 indicates that the poverty rate for women 65 and older fell from 38.4 per cent in 1980 to 25.0 per cent in 1991, while men's declined more sharply, from 27.3 to 13.3 per cent. As a result, the poverty gap between elderly women and elderly men was wider in the late 19808 and

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Figure 6 Poverty gap between women and men aged 18-64, 1980-91

into 1990 and 1991 than earlier, although the trend was not perfectly linear. In 1980, the poverty rate for aged women was 1.41 times greater than that for aged men; it peaked at 1.93 in 1989 and was 1.88 in 1991 (see Figure 9). Women make up a growing majority of Canada's elderly poor, with their Figure 7 Percentage distribution, low-income women and men aged 18-64, 1980-91

156 Canadian Social Welfare Policy Figure 8 Poverty rate, women and men aged 65 and older, 1980-91

share rising from 64.4 per cent in 1980 to 71.7 per cent in 1991, peaking at 72.1 per cent in 1989 (see Figure 10). The preceding poverty statistics are important but rather abstract, since they do not distinguish between families and single persons. Figure 11 gives Figure 9 Poverty gap between women and men aged 65 and older, 1980-91

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Figure 10 Percentage distribution, low-income women and men aged 65 and older, 1980-91

the trend in poverty rates for families headed by women and by men since 1969. Incidentally, Statistics Canada's income survey defines the head of family as follows - the husband, in the case of married couples; the parent, in the case of single-parent families with unmarried children; the person Figure 11 Poverty rate, families led by women and by men, 1969-91

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Figure 12 Poverty gap between families led by women and by men, 1969-1991

mainly responsible for maintenance of the family, in one-parent families with married children; and the eldest member, in the case of families where relationships are other than husband-wife or parent-child. Women who head families are often single parents; the term 'female-led families' also includes women who are not single mothers, such as a woman living with a younger adult relative or an adult sister living with a younger brother. Figure 11 shows that the poverty trend for both male- and female-led families is the same roller-coaster as discerned for the population as a whole. In 1969, 46.9 per cent of families led by women were below the poverty line; in 1977, 38.1 per cent; in 1983, 44.4 per cent; in 1989, 35.5 per cent; and in 1991, 40.7 per cent. The poverty rate for families with male heads fell from 19.1 per cent in 1969 to 8.4 per cent in 1977, went back up to 12.1 per cent in 1984, declined to 8.1 per cent in 1989, and rose to 9.4 per cent in 1991. Figure 12 illustrates the poverty gap between female- and male-led families from 1969 through 1991. In 1969, families headed by women were two-anda-half times more likely to be poor than were families led by men. Because male-headed families enjoyed much greater progress against poverty during the 19705 than families led by women, the poverty-gap ratio had grown to 4.5 by 1977 (i.e. families led by women were four-and-a-half times more likely to be poor than were families led by men). The gap fell during the recession in the early 19805 and then climbed back up with the recent economic downturn. In 1990, the poverty-gap ratio of female- to male-led families reached a high of 4.7. One might perceive something of a U-shaped

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Figure 13 Percentage distribution, low-income families, by sex of head, 1969-91

curve in the family poverty gap between the sexes during the 19808 and perhaps the beginning of a W-shaped curve into the 19905. But much more significant than the ups and downs in the poverty figures is the fact that families led by women face a much higher risk of poverty than families led by men. What is the long-term prospect for family poverty? The poverty rate for families led by women fell from 46.9 per cent in 1969 to 40.7 per cent in 1991, but the gap in poverty rates between female- and male-led families was much wider in 1991 (4.3) than in 1969 (2.5), because families headed by men experienced even greater reduction in their poverty rates over the past two decades - ironically, mainly because more and more wives were bringing home a paycheque to supplement the family income and cushion it against income loss should the husband become unemployed. However, the poverty-gap ratio of families headed by women to those headed by men did not widen during the 19805; on the contrary, it was about the same in 1991 (4.3) as in 1980 (4.4). Women who head families ran a somewhat lower risk of poverty in 1991 than at the beginning of the 19805, whereas families led by men ran much the same risk of poverty in 1991 as in 1980. The thesis of the feminization of family poverty gains some support from long-term changes in poverty distribution, although the recent trend is less clear-cut. Certainly, the 19605 and the first half of the 19705 saw a steady and substantial increase in low-income families headed by women. Figure 13

160 Canadian Social Welfare Policy Figure 14 Poverty rate, two-parent families and single-parent families led by women, 1980-91

shows that in 1969 only 17.8 per cent of poor families had a woman as head; by 1977, women had almost doubled their share to 32.4 per cent. However, female heads' proportion of low-income families levelled off at 31 to 32 per cent between 1977 and 1987. The proportion of low-income families led by women since 1988 has been larger than in previous years, but we shall have to wait for the 1992 and 1993 figures to see if women's share continues to increase. The majority of low-income families - 63.9 per cent in 1991, or close to two in three - are still headed by men. Figures 14 and 15 track poverty rates and the poverty gap for two-parent families (defined by Statistics Canada to mean headed by fathers) and oneparent families led by women. In 1980, 57.7 per cent of single-parent families led by women under 65 were below the poverty line, as opposed to 9.4 per cent of two-parent families with non-aged heads, so the poverty gap between them was very wide - 6.1 times. The poverty gap between the two types of family narrowed during the recession to 5.0 by 1983, climbed back up to 6.4 by 1988, dipped to 6.2 in 1989, rose slightly to 6.3 in 1990, and fell to 5.8 in 1991. The poverty rate for one-parent families led by women was horrific in all years, ranging from a 'low' of 52.9 per cent in 1989 to a peak of 62.8 per cent in 1984; it registered an appalling 61.9 per cent in 1991. Figure 16 shows that single-parent families led by women form a pretty much steadily increasing proportion of all low-income families with children, rising from 38.1 per cent in 1980 to 45.5 per cent in 1990, though easing slightly to 45.0 per cent in 1991.

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Figure 15 Poverty gap between two-parent families and single-parent families led by women, 1980-91

I also analysed trends in poverty rates and distributions for families led by women and men under and over age 65, although space constraints preclude presentation of graphs here. The picture for families with non-aged heads is much the same as for all families. The poverty rate for both types of family Figure 16 Percentage distribution, low-income two-parent and single-parent families led by women, 1980-91

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rose in the first part of the 19805, fell from 1984 to 1989, then climbed back up to 45.6 per cent for families headed by women (less than their 47.7 per cent rate in 1980) and 9.6 per cent for those led by men in 1991 (more than their 8.4 per cent rate in 1980). The poverty gap declined as poverty rates rose during the first recession of the 19805 and then widened in the later 19805, although the latest figure (4.8 in 1991) was lower than the 5.2 of the previous year. The poverty gap is wide (from 4 to 5 times) and shows a slight U-shaped curve, indicating that the gap between families led by women under 65 and those headed by men under 65 has not widened; on the contrary, it was higher in 1980 (5.7) than in 1991 (4.8). Women's share of non-elderly poor families fluctuated during the 19805, ranging from a low of 28.6 per cent in 1981 to a high of 40.1 per cent in 1990, although it declined to 38.1 per cent in 1991. Again, the 1990 and 1991 figures are higher than in years past, but only time will tell if they extend into an upward trend or (as in the past) move up and down over time. The poverty rate for families led by women and men 65 or older fluctuated for both types of family but declined substantially during the 1980$ overall. In 1980, 22.4 per cent of families headed by aged women were below the poverty line, as opposed to 10.9 per cent in 1990, although the rate rose to 13.8 per cent in 1991; the poverty rate for families led by aged men fell even more, from 20.3 per cent in 1980 to 7.9 per cent in 1990, but crept back up to 8.3 per cent in 1991. The poverty-gap ratio between families led by elderly women and men rose sharply, from only 1.1 in 1980 to 1.7 in 1982 and then declined (albeit with ups and downs) to 1.2 in 1987, rising to almost 1.7 in 1991. However, the poverty gap for aged families is much narrower than that for non-aged families, and there is no evidence of a growing poverty gap among elderly families from 1980 to 1991 overall. Families led by women make up a small proportion of elderly low-income families, fluctuating up and down between only 12 and 19 per cent. So much for families. What about unattached Canadians? Unattached women still run a high risk of falling below the poverty line, but much less than in the past, and the same holds for men. The poverty rate for unattached women fell from 61.7 per cent in 1969 to 41.4 per cent in 1991, while the proportion of unattached men with low incomes was 38.3 per cent in 1969 and 31.0 per cent in 1991 (see Figure 17). The roller-coaster ride indicates little progress since 1977, particularly for unattached women. Figure 18 shows that the poverty gap between unattached women and men - the ratio of women's to men's poverty rates - did not fluctuate widely (ranging from 1.3 to 1.6) and certainly shows no evidence of a widening gap between the

Poverty: Myths, Misconceptions, and Half-truths 163 Figure 17 Poverty rate, unattached women and men, 1969-91

sexes - in fact, the gap was smaller in 1991 (1.3) than in 1980 (1.6). The poverty gap for unattached individuals is not nearly as wide as it is for families. At last count, unattached women faced a one-third higher risk of being poor than unattached men, whereas families led by women ran four Figure 18 Poverty gap between unattached women and men, 1969-91

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Figure 19 Percentage distribution, low-income unattached women and men, 1969-91

times the risk of poverty as those headed by men. This is hardly surprising the majority of male-headed families have two earners. Women have always constituted the majority of unattached Canadians with low incomes, but their percentage has not increased over the years. Figure 19 shows that, in 1969, women represented 64.5 per cent of poor, unattached individuals; by 1981, their share had risen slightly, to 66.0 per cent. However, women's proportion of the unattached poor fell from 66.0 per cent in 1981 to 62.2 per cent in 1982 and ranged between 60 and 64 per cent thereafter; in 1991, it was 60.7 per cent - less than in 1969. Nor does the feminization-of-poverty thesis gain support when we look at the trend in poverty among unattached women under age 65. The poverty rate among non-aged unattached women and men moved up and down over the 11 years, ranging from 34 to 40 per cent for women and between 26 and 35 per cent for men. Unattached women under 65 always have had a higher poverty rate than their male counterparts, but the poverty gap did not widen and, indeed, was smaller in 1991 (1.2) than in 1980 (1.5). Unattached women under 65 made up a larger share of the poor than men in 1980 and 1981, but since then they have been virtually 50-50. The feminization of poverty receives no vindication from an analysis of trends for unattached elderly women - an important group, because there are so many poor, unattached women (339,000 in 1991). While unattached elderly Canadians still run a high risk of poverty, there has been considerable

Poverty: Myths, Misconceptions, and Half-truths 165 progress against poverty for both women and men, caused mainly by improvements in public pension plans. Unattached aged women's poverty rate plummeted from 68.7 per cent in 1980 to 47.4 per cent in 1991, while men's fell from 57.8 to 33.4. The gap in poverty rates between elderly unattached women and men was somewhat higher in the late 1980$ and early 1990$ (1.4 to 1.8) than in the first part of the 19805 (1.2 to 1.3). However, the evidence is underwhelming: the poverty gap between unattached women and men did not widen steadily but peaked in 1988 at 1.8 and dropped to 1.6 in 1989 and 1.4 in 1990 and 1991. And while women account for the large majority of poor, unattached individuals 65 and older, ranging from 74.6 per cent in 1980 to 84.8 per cent in 1988, their share has not risen significantly or inexorably and actually declined from 1988 to 80.6 per cent in 1991. In summary, the theme of the feminization of poverty so entrenched in the minds of politicians, the media, and social policy and women's groups requires considerable qualification. The statistics firmly support the popular impression that women run a greater risk of poverty than men and show that women are over-represented in the low-income population. Single-parent families led by women are more likely to be poor than not, and almost half of elderly, unattached women live on low incomes. Sex-based differences in vulnerability to poverty are an unfortunate but significant continuity in Canadian life. But there is another aspect of this important continuity in the morphology of Canadian poverty. The evidence refutes the common conception that the poverty odds are ever-worsening for women or that poverty is increasingly a women's problem. Families led by women still face a relatively high risk of poverty, but they are at least somewhat less likely to be poor now than 20 years ago, as are their male counterparts. While the poverty gap between families headed by women and those headed by men, as measured by relative poverty rates, was considerably wider in 1980 than in 1969, it did not increase during the 19805 and was about the same at the beginning of the 19905 as in the latter half of the 1970$. Although women have doubled their share of the heads of poor families since the late 19605, six out of every ten lowincome families are headed by a man; women's share of poor families has been somewhat higher since 1988, but it did not increase steadily or considerably during the 19805. Unattached women are more vulnerable to poverty than are unattached men, but both sexes were less likely to be poor in the 19705, 19805, and early 19905 than in the 19605. The poverty gap between unattached women and men has not grown over time and is much smaller than is the poverty

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gap between families headed by women and families headed by men. Women have always made up the majority of unattached Canadians below the poverty line, but their share has changed little over the years and has not increased. While data on individual females and males are available only since 1980, they do not point to a feminization of poverty, in the sense either of a growing poverty gap between the sexes or of females forming an increasing share of the low-income population. The one caveat concerns elderly Canadians: while the poverty risk has lessened considerably for both sexes, it has fallen proportionately more for men than for women, so that the poverty gap between the sexes was somewhat wider in the period 1988-91 than 1980-7. So too has women's already high share of the aged poor increased over time, though modestly. While this analysis may paint a somewhat less bleak picture of trends in women's poverty than conventionally pprtrayed, it is by no stretch of the imagination any cause for complacency or congratulations. We have only to look at the dismal situation facing single-parent families led by women 61.9 per cent lived on low incomes in 1991 - to know that the war against poverty is far from declared, yet alone won. MYTHS ABOUT CHILD POVERTY

The following statements about child poverty are so oft-repeated that they appear to have become enshrined as conventional wisdom: 'More than a million [1.6 million] Canadian children are poor/ 'One child in four [or is it five, or six?] is poor/ 'A growing number of families with children are below the poverty line/ 'Children are the largest group among Canada's poor/ 'The typical poor child lives in a single-parent family/ When I delivered the first version of this chapter at the Conference on Social Welfare Policy in the summer of 1991, the most recent available income statistics, for 1989, disproved all these statements about child poverty. The number and percentage of poor children had declined steadily and substantially since 1984, contrary to conventional wisdom. Release of the 1990 and 1991 poverty data confirmed, as I had predicted, that child poverty is rising because of the current recession, so in that sense some of the myths became facts. But others remain false or inaccurate, even with the unfortunate resurgence of child poverty. Figure 20 shows that the trend in child poverty is the same as that noted earlier for poverty in general, although we have data only as far back as 1980. Child poverty climbed steadily during the recessionary years of the early 19805, from 984,000, or 14.9 per cent of children, in 1980 to 1,253,000,

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Figure 20 Poverty rate, children under 18, by type of family, 1980-91

or 19.6 per cent of all children under age 18, in 1984; it declined steadily to 934,000 or (14.5 per cent) in 1989, as unemployment steadily abated, and then rose again, to 1,013,000 (17.4 per cent) in 1990 and to 1,210,000 (18.3 per cent) in 1991, as a result of the recession. Overall averages can be deceiving, in that they can mask major differences between groups. There was a steady and significant fall in the number and percentage of poor children in two-parent families between 1984 (774,000, or 13.9 per cent, were poor) and 1989 (523,000, or 9.4 per cent, were poor), which represents a sizeable 32.4 per cent fall in both numbers and poverty rate. The poverty rate for children living in one-parent families led by women also dropped considerably between 1984 (411,000, or 67.4 per cent, were poor) and 1989 (361,000, or 57.5 per cent), but the decline was smaller (12.2 per cent in numbers, 14.7 per cent in rate), and their risk of poverty remained appallingly high in all years. The current recession has hurt two-parent as well as one-parent families. The number of children in low-income, two-parent families increased from 523,000 (9.4 per cent) in 1989 to 657,000 (11.7 per cent) in 1991. The number of children in one-parent families headed by women rose from 361,000, or 57.5 per cent in 1989 to 496,000, or 65.8 per cent, in 1991. The risk of child poverty varies considerably by province. Prince Edward Island and British Columbia had the lowest rates of child poverty in 1991, at 14.5 per cent each, which is bad enough, albeit substantially below the national

168 Canadian Social Welfare Policy rate of 18.3 per cent. The other provincial child poverty rates, in ascending order, were Ontario (17.0 per cent), New Brunswick (18.1 per cent), Alberta (18.7 per cent), Quebec (19.7 per cent), Nova Scotia (20.2 per cent), Newfoundland (20.3 per cent), Saskatchewan (21.0 per cent), and Manitoba (26.9 per cent). The fact that Ontario has the second-lowest rate does not mean that its child poverty problem is no cause for concern. For one thing, a rate of 17.0 per cent means that one in six Ontario children is being raised in low-income families - a terrible figure. For another, a large segment of Canada's poor children - 408,000 out of the 1,210,000, total, or one in three - live in Ontario. The ranks of low-income families with children showed the familiar updown-up pattern from 1980 to 1991. In 1980, there were 480,700 lowincome families with children, or 14.1 per cent of all families with children. These figures rose to 617,400, or 18.4 per cent, in 1984, fell to 471,100, or 13.7 per cent, by 1989, and then climbed with the current recession to 604,300, or 17.4 per cent, in 1991. The roller-coaster pattern is the same for two-parent families headed by persons under 65: 285,600, or 9.4 per cent, had low incomes in 1980; the figure went up to 369,800, or 12.6 per cent in 1984, back down to 254,500, or 8.5 per cent, in 1989, and back up to 317,900, or 10.7 per cent, in 1991. The picture is grimmer for one-parent families. The number and percentage of low-income one-parent families headed by women rose from 183,200 (57.7 per cent) in 1980 to 233,300 (62.8 per cent) in 1984, fell to 207,500 (52.9 per cent) in 1989, and then jumped to 272,100 (61.9 per cent) in 1991. The current economic downturn has produced a sharp increase in both the number and the percentage of low-income families with children, although the poverty rates in 1991 for two-parent and one-parent families led by women were not as high as they had been in 1984 (although they may well have increased even more in 1992). One of the strangest poverty myths is the notion that children constitute the largest group of Canada's poor. I suspect that this misconception arose from Transitions, the report (1988) of the the Ontario Social Assistance Review Committee, which observed that children were the single largest category of Ontario's social assistance beneficiaries in 1987 - 3^.0 per cent followed by disabled recipients at 17.2 per cent, 'others' at 16.2 per cent, sole-support parents at 16.0 per cent, and employables at 13.6 per cent.3 Perpetrators of the myth about the poor young would appear to have generalized from data on one group of the poor (welfare recipients) in one province (Ontario) in one year (1987) to all low-income Canadians now - and perhaps for ever?

Poverty: Myths, Misconceptions, and Half-truths 169 Unfortunately, national welfare statistics may unwittingly perpetuate this myth. Of the estimated 2,282,200 social assistance recipients as of March 1991, the largest single group was children (863,600, or 37.8 per cent), followed by single persons (710,000, or 31.1 per cent), single parents (349,400, or 15.3 per cent), couples with children (234,400, or 10.3 per cent), and childless couples (124,800, or 5.5 per cent).4 Again, the facts speak otherwise. In 1991, children under 18 represented just over one-quarter of low-income Canadians (28.6 per cent); the majority (57.4 per cent) of Canada's poor are adults aged 16 to 64, while 14.0 per cent are 65 or older. Children are only slightly over-represented among the poor; they constituted 28.6 per cent of low-income Canadians and 25.0 per cent of all Canadians in 1991. Another common misconception about child poverty stems from confusion between the incidence and the distribution of poverty. Because this confusion lies at the heart of several poverty myths - including the feminization of poverty - it is worth taking a brief stop at the lexicon of poverty analysis. The 'incidence' (or 'rate') of poverty indicates the percentage of families or unattached individuals in any given category with low incomes; it is calculated by dividing the number with low incomes by the total number (i.e. poor and non-poor together). The rate or incidence of poverty measures a particular group's risk of poverty - the higher the poverty rate, the higher the risk of being poor. By contrast, the 'distribution' (or 'share') of poverty measures the makeup of the low-income population; it indicates the percentage of the low-income population made up different categories - by women as opposed to men, families as opposed to unattached individuals, young as opposed to middle-aged and elderly, and so on. Some people misconstrue the much higher poverty rate for children living in single-parent families led by women - 65.8 per cent in 1991, as opposed to 11.7 per cent of children in two-parent families - as meaning that most poor children are being raised by single parents, which is patently untrue. More than half (54.3 per cent) of poor children are in two-parent families, and 41.0 per cent are in single-parent families headed by women. However, poor children are much more likely to live in a one-parent family than are non-poor children: while 41.0 per cent of poor children were in one-parent families led by women in 1991, only 4.8 per cent of non-poor children were in female-led, single-parent households. And a larger proportion of poor children - as with children in general - live with one parent than in years past. In 1980, 62.2 per cent of low-income children had two parents, and only 32.5 per cent were being raised by single-parent mothers (because of sample size limitations, data on children with single-parent fathers are not available). By 1991, the proportion of poor children in two-parent families

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had fallen to 54.3 per cent, while those with single mothers had increased to 41.0 per cent. WHY POVERTY MYTHS PERSIST, AND WHAT WE CAN DO ABOUT THEM

The above discussion of poverty myths offers some clues as to why they provide an unwanted element of continuity in social policy discourse. There are additional reasons that I think help explain why public understanding of poverty continues to be so limited and distorted, even while research into the subject has improved considerably. A prime source of misconceptions is confusion between poverty rates and poverty distributions. For instance, the fact that families led by women have a much higher rate of poverty than families headed by men is often taken to mean that most poor families are led by women, when in fact the opposite is the case. Comparisons between groups are an important tool of analysis, but they can spawn myths and misunderstandings. For example, unattached women run a higher risk of poverty than unattached men. However, there have been important changes in poverty. Both sexes have seen a substantial decline in their poverty rates since the 19605, but unattached women have seen a larger proportionate decline in their risk of poverty, so the poverty gap between unattached women and men has narrowed somewhat. To confuse matters further, the poverty gap between low- and high-risk groups can widen while at the same time a vulnerable group can still experience a reduction in its risk of poverty. For example, one-parent families led by women were 5 times more likely to be poor than two-parent families in 1984; even though single mothers' poverty rate fell from 62.8 per cent in 1984 to 52.9 per cent in 1989 (a 15.8 per cent decline), the poverty-gap ratio increased to 6.2 in 1989, because the poverty rate for two-parent families fell further in relative terms (from 12.6 per cent in 1984 to 8.5 per cent in 1989, a decline of 32.5 per cent). The gap then narrowed to 5.8 by 1991, even though the poverty rate for single mothers increased (by 17.0 per cent) to 61.9 per cent in 1991, because two-parent families experienced a proportionately larger rise in their risk of poverty (their poverty rate went from 8.5 per cent in 1989 to 10.7 per cent in 1991, which amounts to a 25.9 per cent rise). Some poverty myths stem from out-dated information, which many people - some academics included - seem quite happy to continue using, even though more up-to-date data are available. Competing poverty lines also cause confusion. Federal officials continued to use the outmoded 1978-base low-income cut-offs from Statistics Canada until well into the late 19805.

Poverty: Myths, Misconceptions, and Half-truths 171 The only reason that I can see for their clinging to old poverty lines after introduction of updated lines in 1986 is that the 1978-base cut-offs produce lower estimates of poverty. The '1.6 million poor children' figure that some people still cite is not only outdated - it applied in 1986 - but is also based on the Canadian Council on Social Development's low-income lines, which virtually no one uses. To add to the confusion, Statistics Canada has begun publishing yet another set of poverty lines - 'Low Income Measures' (LIMS) - based on a simpler, purely relative definition of poverty (one-half of median family income, adjusted for family size). LIMS are easier to understand and avoid the problem of periodic blips in poverty estimates that result from recalibrating the existing low-income cut-offs (LICOS). Statistics Canada says that it will test users' reaction to the new lowincome measures and may conduct another round of consultations and refinements before deciding whether or not to replace LICOS with LIMS. Until that decision is taken, let us all sing from the same songsheet (i.e. the 1986base low-income cut-offs). So much for myths and misconceptions that stem from outdated or misconstrued poverty statistics. There are other factors at work that have nothing to do with poverty data or how they are misinterpreted. One factor is the enduring power of mythology. Once established, myths and misconceptions seem to take on a life of their own, gaining strength and staying power with repetition and longevity. Another problem is that clearly written information on poverty is not widely disseminated on a regular basis. Statistics Canada's annual report on incomes, which includes low-income data, is invaluable to researchers; but it is also, of necessity, dry and largely statistical fare that is known only to a small group of researchers. While the poverty reports issued periodically by the National Council of Welfare and the Canadian Council on Social Development are valuable studies that make a valiant effort to communicate to a varied and non-specialist readership, they must present a lot of statistics, tables, and graphs that probably 'turn off many potential readers who want a much shorter and simpler primer or factsheet on basic poverty statistics. Another reason for the muddled state of public knowledge of poverty is that many people - reporters, anti-poverty activists, and social policy types included - indiscriminately equate different indicators of disadvantage. They read about the growth of food banks and conclude that poverty is increasing. While it may seem logical that food banks will deplete their stocks faster and serve more users during a period of rising poverty, it is just as conceivable that food banks can encounter rising demand even when poverty is on the decline, which in fact was the trend from 1983 to 1989. Food banks meet a

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need that doubtless always existed and will continue to exist; once they become established and known, it is hardly surprising that more and more working poor and welfare poor Canadians will turn to them to help stretch their inadequate incomes. Food bank statistics are not a good indicator of poverty in general. By the same token, welfare rolls can remain large - or even grow - at the same time as the overall poverty figures decrease. The welfare population grew by i per cent between 1983 (1,833,000) and 1989 (1,856,000), while the total low-income population fell by 15 per cent during the same period (from 4,122,000 in 1983 to 3,487,000 in 1989). Yet another cause of some poverty myths I characterize as the 'chicken little syndrome/ Some poverty fighters and social reformers seem to think that, unless they can cite statistics showing that poverty and inequality are ever-increasing, they cannot make as strong a case for their concerns and proposals to combat poverty. Well, most poor Canadians probably think that the sky has already fallen on them. The social policy community has ample information to document the glaring social, economic, and health inequalities that continue to plague this country. Some activists in the women's movement and social policy community believe that the considerable damage done to social programs by the federal government since 1985 surely must result in rising poverty. Certainly cuts to social programs and the rising tax burden are hurting a lot of lowerincome Canadians, but their impact on poverty statistics is insignificant compared to that of unemployment. Finally, some people will always believe what they want to, evidence to the contrary notwithstanding. Journalists, politicians, social activists, and even researchers (who, of all groups, should know better) are sometimes guilty of this head-in-the-sand mentality. Political correctness, suspicion of statistics, just plain stubbornness - I reckon that all these factors come into play. The role of the media warrants more attention than I have the space to devote to here. One problem is that few reporters are assigned a regular social issues beat and so are unable to develop any expertise, depth, or context in the area. Most items on poverty are of the sad-story, human interest variety. Social policy - a term that probably means little to most Canadians - does not seem to lend itself to television or radio. Perhaps we need more people like Solange Denis, who shouted down the prime minister for attempting to deindex the old age pension. Stories break fast and have to be covered quickly and, all too often, superficially. What can we do to increase public knowledge about poverty? Social policy

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analysts and research organizations should pay more attention to marketing their wares in a range of formats to different audiences, including more popular factsheet-style versions. We probably should spend more time talking to reporters and helping them with their stories. By the same token, they can give us advice on how to package more effectively our research and information. We also should do a better job of educating readers on how to read and interpret statistics, although that is easier said than done. There is a worthwhile job to be done in marketing social information to schools, community colleges, and universities. I am thinking not just of the traditional social problems textbooks but also of more interesting and innovative presentations of poverty and social policy materials and the use of other media such as videos, computer software, and interactive media. We now have plenty of data on poverty and social programs and powerful tools for analysing and presenting information and for developing and costing policy options. The challenge now is to become more proficient at marketing our wares. NOTES

1 This chapter is an edited version of a longer conference paper, which included detailed analysis of trends in income distribution. 2 The low-income statistics come from Statistics Canada's annual Survey of Consumer Finances, which excludes people living on reserves, in institutions, and north of the 6oth parallel; as a result, they underestimate the extent of poverty in Canada. Low-income statistics for years from 1980 on were calculated using the 1986-base low-income cut-offs; poverty estimates for the 19608 and 19/os use applicable, earlier low income cut-offs. 3 Ontario Social Assistance Review Committee Transitions (Toronto 1988) 31. 4 Health and Welfare Canada 'Social Assistance Data for Canada, Estimated Number of Cases and Recipients, by Family Type, March 1987, 1988, 1989, and 1990' Ottawa 1991.

10 Rhetoric and Reality: Health Care Cutbacks in Three Provinces LESLIE BELLA During the 1980$, several provincial governments in Canada used neo-conservative rhetoric to support dramatic cutbacks to public services. These earlier examples of restraint are more significant today because more recent cutbacks by Brian Mulroney's neo-conservative federal government have squeezed all the provinces. As Ottawa attempts to reduce its own debt by limiting transfers to the provinces, all the latter, regardless of ideology, face limits to their own spending. In particular, Clyde Wells's Liberal government faced a fiscal crisis in Newfoundland in 1991, as Mulroney reduced equalization payments and transfers under the Established Programs Financing Act, a crisis that continues with collapse of the cod fishery. New Democratic governments in British Columbia, Saskatchewan, and Ontario also face financial pressures and may decide to moderate or curb public expenditures. The issue addressed here, therefore, is the relationship between a governing party's ideology, as expressed in the rhetoric of its leaders, and the realities of that government's spending and cutback policies. Do cutbacks always reflect a neo-conservative program, regardless of the ideology of the party in power? Do federal government policies produce 'continuities' in policy in the less powerful provinces? Can provinces' decisions on cuts still reflect a more progressive ideology, even when forced by Ottawa's neoconservative budget? The three examples reviewed here are BC Social Credit under Bill Bennett in 1983; Grant Devine's Progressive Conservatives in Saskatchewan in 1987; and Clyde Wells's Liberals in Newfoundland in 1991. The relationship between rhetoric and budget realities is analysed through reviews of cuts in health care undertaken by these three governments. The Canadian health care system already combines socialized medicine (in terms of source of funding and patients' access) with entrepreneurial medi-

Rhetoric and Reality: Health Care Cutbacks 175 cine (for most physicians, hospitals, and pharmacies). Under these programs, provincial governments pay fees for services to entrepreneurial physicians and also pay the costs of care in a variety of non-profit and private hospitals. This funding structure encourages physicians to provide more services and to provide them themselves, even when other, less expensive health care practitioners could do the job effectively. The combination of an entrepreneurial medical profession with a fee-for-service universal medicare program has pushed ,up costs and stretched federal and provincial resources. Because of these funding arrangements, the system continues to be hospitalbased, even when expanded public health and home-based services could ensure a better level of health and well-being.1 Until 1977, Ottawa paid half the cost of provincial hospitals (through the Hospital and Diagnostic Insurance Act of 1957) and physicians (through the Medicare Act of 1966). In 1977, it introduced Established Programs Financing (EPF), tying transfer payments for health and secondary education to economic growth. By 1983, Ottawa paid an average of 28 per cent of provincial health costs, ranging from 33 per cent in Newfoundland and Prince Edward Island to 25 per cent in Alberta. This left Newfoundland vulnerable to federal reductions. In 1989, the federal government froze EPF transfers for two years, and in 1991 it extended this freeze for a further three years. These limitations squeezed provincial governments, resulting in various attempts to control health care and other costs. Solutions offered for reducing cost pressures on medicare reflect the ideological bias of their proponents. Neo-conservatives propose to increase privatization of medicare, and those on the left suggest completing its socialization. Neo-conservatives would allow physicians to 'opt out' of medicare and permit the charging of user fees and extra billing. They would also charge premiums for medicare coverage, so that the program would become more like private insurance. Ultimately, they might privatize the resultant insurance corporations. Those on the left in Canada want the health care system to approach a more socialized form of delivery by eliminating all charges to users of medical services. They would eliminate for-profit hospitals and nursing homes, put more physicians on salary, and use a wider range of salaried health care professionals. They would promote community health programs, controlled by community members, which emphasize maintenance of health and prevention of illness. Programs that counter the effects of poverty, hunger, and social isolation would also be strengthened to promote health.2 Those on the left favour state planning and delivery of both illness treatment and public health services.

176 Canadian Social Welfare Policy Canada's medicare system is sacred to both patients and the electorate and was energetically supported by Friends of Medicare in the debate leading up to the Canada Health Act in 1984.3 Most Canadians want a system that is universally accessible for consumers, regardless of ability to pay. Governments of any ideological stripe may recognize this popular support and choose to reduce costs without jeopardizing universality. They may bring down the number of doctors,4 reduce or close medical schools, limit access to billing numbers (which doctors need to invoice the province), lower the number of acute-care beds and thereby restrict admitting privileges, and cap payments to physicians. The universal nature of medicare is preserved, and the upward pressure resulting from a fee-for-service medical profession is moderated without the privatized or entrepreneurial nature of that profession being changed. Among them, the three provinces examined here have used most of these strategies. RECESSION, RESTRAINT, AND CUTS IN HEALTH CARE

British Columbia, Saskatchewan, and Newfoundland all have the characteristics of hinterlands. With a base in natural resources, they have fragile and cyclical economies. World recessions may reduce demand for their resources, or prices may collapse from oversupply, or supply itself may fail, following overproduction or environmental stress. These periodic recessions leave provinces without funds to maintain existing programs and with the choice of either restraint or increased debt. British Columbia faced this problem in 1983, Saskatchewan in 1987, and Newfoundland since 1991. Federal policies further squeezed them, particularly in the attempts to reduce inflation in the early 19808 and in the deficit-reduction policies of Brian Mulroney late in the decade. Each province tried to reduce its cyclical vulnerability by developing other manufacturing industries, such as hydro development, pulp and paper manufacturing, oil refining, and fish packing. However, none has been able to insulate itself against recession, whether related to cycles in the market for a particular resource or to wider national or international pressures. British Columbia was in 'deep recession' in the North American recession of 1983.5 By 1987, when other economies had recovered, Saskatchewan was in a drought, with low wheat prices and a slump in the potash market. In the recession of the early 1990$, Newfoundland faces its own particular difficulties. Squeezed by a shortage of fish and by Ottawa's limits on transfer payments, the province faces a public debt crisis. The three governments used similar strategies. All three decided to reduce

Rhetoric and Reality: Health Care Cutbacks 177 public expenditures, and all three decreased the size of the public service. All three challenged labour. Premier Bennett used legislation intended to weaken public-sector unions and was partially successful. Grant Devine used layoffs, firings, early retirements, and privatization to shrink the public sector and reduce the power of its unions. Clyde Wells rolled backed the gains made in legitimate collective bargaining and laid off enough workers to approach a balanced budget. With opposition to these policies inevitable, all three governments began cutting back early in their mandates. Bill Bennett had been re-elected in 1983, with 35 of 57 seats and 50 per cent of the vote;6 Grant Devine in 1986, with less of the vote (44.8 per cent) than the NDP (45.06 per cent) but 38 seats compared to the NDP'S 25;7 and Clyde Wells in 1989, in a landslide following Brian Peckford's resignation. All three claimed widespread public support and had full mandates ahead in which they hoped the public might forget the pain and bask in subsequent prosperity. Each of the three governments also claimed a fiscal crisis - Bennett's in 1983, Devine's in 1987, and Wells's beginning in 1991. However, Bennett's crisis was illusory. He was able to continue to increase both current spending and his province's deficit. The 'fiscal crisis' was an opportunity for him to divert funds from public services to incentives for private economic development. Devine had a more real crisis, for although the rest of the country was in recovery, Saskatchewan's wheat economy was still in recession. Within these limits, though, he was still able to shrink his public sector and divert funding from community services and advocacy groups into other, higherpriority areas. Wells also faced a very real crisis and responded with acrossthe-board cuts. Thus far, these three governments appear to have responded similarly to comparable stresses - to exemplify continuities in provincial and federal policies. However, there were also differences. Bennett imposed a massive package of legislation with his cutbacks, attracting major public protest. Devine made his cutbacks before opening the legislature or tabling a budget, leaving people fearful and demoralized. Opposition was heated but sporadic. Wells gave advance warning of the cuts, in 1991 and again in 1992, and attempted to involve public servants in determination of specific cuts in their programs. Opposition focused on specific cuts, but most appeared to accept the additional hardship as inevitable. Wells also sounded different. While neo-conservative rhetoric dominated in British Columbia and Saskatchewan, the public statements of Wells's government sounded more pragmatic than ideological and blamed Ottawa rather than the unions. This suggests that Wells's budget cutting differed from that of his neo-

178 Canadian Social Welfare Policy conservative peers in British Columbia and Saskatchewan. While pressured by Ottawa's neo-conservative policies, Wells may have been able to design a distinctively Liberal approach to restraint. Further analysis of each province's cutbacks to specific programs and services could reveal more substantive differences. To identify the extent to which their cutbacks followed neoconservative principles, the remainder of this chapter focuses on each of the three provinces in more detail, reviewing the circumstances surrounding the need for restraint in each and analysing the cutbacks. When the three governments constructed their 'restraint' budgets, they claimed to be committed to maintaining Canada's health care system. However, they all made cuts in health care that reduced services. Their budget decisions included many of the approaches outlined above as associated with various ideological positions. Based on their rhetoric, Bennett and Devine might have been expected to choose neo-conservative solutions. Wells, however, is a Liberal whose rhetoric emphasizes logical principles. He admires Pierre Trudeau, and emulates his rationality. He might have been expected to be more concerned with the integrity of Canada's public health system and to seek budget cuts that would not reduce accessibility. Like Trudeau and Pearson before him, he might be interested more in developing the socialized aspect of Canadian medicine than in increasing privatization. BRITISH COLUMBIA

British Columbia originated as a resource-based economy, but reliance on primary resources declined from 50 per cent of gross domestic product in 1880 to less than 11 per cent in 1980, while the service sector had increased to over 70 per cent.8 In 1983, the North American recession was exacerbated in British Columbia by sagging demand for the province's natural resources (particularly timber, metals, and tourism).9 The Social Credit government claimed that a massive deficit was impending and used this to justify a draconian cutback program. However, 'restraint' was illusory. The budget rose by 12.3 per cent, and the nominal deficit was placed at an unprecedented $1.6 billion. While Bill Bennett spouted rhetoric of restraint, the government increased and restructured provincial spending, transferring expenditures on human services to manufacturing incentives and weakening avenues of appeal and opposition.10 Bennett was enamoured of the Fraser Institute, which favoured a competitive market free from government intervention. Fraser Institute spokesman Michael Walker claimed proudly: 'We told them what they should do in very specific terms, based on our work of the past ten years.'11 On the

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institute's advice, Bennett introduced 26 bills, five of them undermining collective bargaining. Bill 2 allowed government employees to negotiate only wages. Bill 3 allowed public employers to fire workers on expiration of a collective agreement. Bill 11 extended public-sector wage controls, limiting bargaining to 5 per cent.12 Reductions in school financing eliminated 1,000 jobs, and other reductions laid off 1,600 civil servants.13 Bennett acted without guile or subtlety in a politically polarized province that has a strong (if divided) labour movement and had a New Democratic opposition. The 26 bills affected many British Columbians, and opposition was massive. In the legislature, the New Democrats were so expressive that their leader, Dave Barrett, was thrown out. Community and labour organizations brought 25,000 people to a demonstration in Victoria in July/4 and the wider 'Solidarity Coalition' brought 60,000 out to a rally in October. The teachers went on strike, and a general strike seemed possible. The government eventually negotiated with the British Columbia Government Employees' Unions (BCGEU) to kill Bill 2 and modify Bill 3 as the price of peace, much to the anger and frustration of many labour activists. Bennett had most of what he sought in the other 24 bills, but the process had been politically costly, both for him and for his opposition. Bennett promised to preserve the health system, even through the 'fiscal crisis' of 1983. His minister of finance also described his government's commitment to health care as 'absolute/ The government did to some extent buffer health care during the economic downturn of the early i98os/5 with a 2 per cent increase in the 1983-4 budget. Actual spending on health increased from $1.940 billion in 1981-2, to $2.270 billion in 1982-3 and $2.395 billion in 1983-4. However, the health minister showed that costs had risen over six years from 24.2 per cent to 29 per cent of the provincial budget and claimed that they should be curbed. Costs were already very high, because of an oversupply of physicians (further increased by expansion of medical schools in the late 1970$), and the relatively high fees paid to those physicians. The government tackled this problem in several ways. First, it tried to reduce payments to physicians, refusing billing numbers, required for compensation, to new practitioners unless they went to underserved areas. This policy appears to interfere with the open market so favoured by neo-conservatives and was inconsistent with Social Credit ideology and rhetoric. The government also gave no increases to physicians in 1983-4 and 1984-5. Second, the province sought to reduce the cost of hospital services and refused to pay the $84-million deficits accumulated by hospitals as a result of government cutbacks. Acute-care hospitals closed 1,228 beds and eliminated over 3,000 positions, and many introduced charges for non-emergency use

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of emergency wards.16 Third, the BC government attempted to blame Ottawa for the consequences of the cuts. It introduced the Health Care Maintenance Tax Act in 1984 in response to what it described as 'federal underfunding/ However, there was no assurance that this additional revenue would go to health. In spite of these cuts, health care economist Robert Evans claims that BC health care has been largely sacrosanct. He claims that most cuts were levelled at the physicians whose fees were seen as absorbing a disproportionate amount of the health-care dollar. However, some of the cuts were more consistent with neo-conservative rhetoric. For example, per diem hospital charges were maintained, with the argument that this provided 'some incentive to individuals to economize in their use of health services/ This policy was largely symbolic and was continued even after the Canada Health Act made it unprofitable for the province.17 Also, community health clinics in Vancouver and Victoria were cut by nearly 30 per cent, and funding for community-oriented services such as Planned Parenthood and the Vancouver Women's Health Collective was eliminated altogether. The government claimed to protect health care services from cutbacks, and although it limited payments to physicians and hospitals, major health care institutions were not as vulnerable as either social services or education. Community-based services, in contrast, which have a major role in health maintenance and prevention and are preferred by those on the left, were not protected. Bennett's rhetoric was neo-conservative in all but health care, but his budgets reveal that he applied neo-conservatism to health care as well. SASKATCHEWAN

Saskatchewan still remains more dependent than British Columbia on natural resources. Agriculture is its largest single industry, with oil, potash, and uranium also significant. Together these generated 23 per cent of the gross domestic product in 1986.l8 The province is vulnerable to cycles in wheat prices and to periodic droughts. An agricultural crisis and a collapse in the potash market in 1986-7 gave Premier Devine the opportunity to 'downsize' his government and (like Social Credit in British Columbia) to transfer some funds as incentives to expand manufacturing (including $10 million to Peter Pocklington). While sharing Bennett's ideological commitment to the new right, Devine had more guile and better timing. He moved early in 1987, when the legislature was not sitting, and without new legislation and a new budget. He used privatization and public-service reduction to shrink his government, point-

Rhetoric and Reality: Health Care Cutbacks 181 ing to the financial necessity of restraint. The government offered early retirement to 1,100 civil servants (most hired under the CCF/NDP). By May this offer had been oversubscribed, and eleven people who refused were laid off.1' Unlike the BC 'restraint' budget of 1983-4, in which increased spending led to a growing deficit, Saskatchewan's budget of 1987-8 included an absolute decline in spending of nearly 5 per cent, and more than halved the provincial deficit.20 However, as in British Columbia, the new budget restructured spending. In 1985, Devine had proposed 'a stronger tomorrow/ emphasizing programs in education, employment, agriculture and health.21 His 'restraint' budget of 1987-8 included an 11 per cent increase for education, an extra 1.5 per cent for health, a four-fold increase for 'human resources, labour and employment,' but lower funding for agriculture. Privatization initiatives, including major crown corporations and a variety of government services, removed workers from public-sector unions. Many were rehired at lower wages by unorganized 'privatized' companies and agencies. Saskatchewan Government Employees Union opposed privatization but saved only liquor outlets. As in British Columbia in 1983, specific programs and organizations were targeted for reduction or elimination. University of Regina units employing faculty who had challenged the government were singled out for 'vertical cuts.' The university's president claimed autonomy, but its growing deficit limited his bargaining power. Non-profit social service organizations concerned with advocacy (and therefore critical of government) were slashed, but most of those providing services were maintained, on reduced budgets. Many cuts and lay-offs became public only through the media, and so rumours abounded. Many people justifiably feared that public criticism would cost them their jobs. Community opposition was sporadic, without the collective energy evident in British Columbia. Devine delayed opening of the legislature to June, and the budget debate to midsummer, when most residents were thinking of other things.22 With the legislature closed, the New Democrats were not visible. When it opened, the opposition had little left to do but posture. One would expect socialized medicine to be fiercely protected in Saskatchewan, the cradle of medicare. Even though he had identified health as a priority in his 'stronger tomorrow' program, Devine granted only a 1.5 per cent increase to health in 1987-8. This forced a decrease in the number of acute treatment hospital beds, which also reduced physicians' hospital privileges. A two-year freeze on operating grants for hospitals produced bed closures, longer waiting lists, and staff lay-offs. The University of Saskatch-

182 Canadian Social Welfare Policy ewan in Regina dropped 33 medical teaching positions, reducing the capacity of the province's medical school. The lower number of acute hospital beds increased pressure on community health agencies and extended care facilities. However, funding for non-governmental health organizations and for home care was also frozen, and construction of a new nursing home was cancelled.23 Devine also took a number of budget initiatives in health care that reflected his neo-conservative outlook. First, the province introduced or increased user charges for health care services not covered by the Canada Health Act. Nursing homes' fees were increased by 15 per cent, home care fees by 66 per cent, and ambulance charges by 15-20 per cent. The province's free drug plan was also restructured so that families had to pay for the first $125 of drugs and 20 per cent of the cost thereafter. Finally, and most overtly symbolic of his neo-conservatism, Devine cancelled the province's school-based denticare program, firing the (predominantly female) dental therapists who provided care to children.24 In response to community opposition, Devine reinstated coverage of dental care for children between 5 and 13 in rural areas, but only when provided by dentists. This replaced a socialized dental care program staffed by salaried women with a privatized one staffed primarily by entrepreneurial men. Like Bennett, Devine claimed to give priority to health services, suggesting that he would shelter them from his cutback program. However, he targeted the CCF/NDP'S flagship for change. New or increased user fees for many services, including prescription drugs, and elimination of the children's dental program were all consistent with his neo-conservative rhetoric. His rhetoric was consistent with the reality that he created. NEWFOUNDLAND

Newfoundland is the poorest province in Canada, with transfer payments from the federal government constituting 43 per cent of provincial revenue in 1990-1, and therefore the most likely of the three provinces to be forced into 'continuity' with federal neo-conservatives. Newfoundland earns about 20 per cent of its gross domestic product from natural resources, primarily forestry, mining, and fishing.25 Governments have attempted major projects in their search for prosperity. The Sprung cucumber greenhouse is just one of many failures, but hope springs eternal with Hibernia. Clyde Wells's government, elected in 1989, preferred the 'Small Is Beautiful' solutions reflected in the 1986 report of the province's Royal Commission on Employment and Unemployment26 to the Fraser Institute, dictums that inspired

Rhetoric and Reality: Health Care Cutbacks 183 Bennett and Devine. Wells funded an Economic Recovery Commission chaired by the author of the 1986 report. On election in 1989, Wells promised the voters a bright and prosperous world under his leadership. However, optimism evaporated within months of his landslide victory. By 1990, Newfoundland was caught in the North American recession and with declining fish stocks and restricted quotas. By July 1990, his finance minister said, 'Oh God, its been devastation for us! /27 A $io-million surplus had already turned into a deficit of $40 to $50 million. The provincial gross domestic product declined by 0.4 per cent, and the accumulated deficit increased to $9,000 per capita. The government blamed the fiscal crisis on lower-than-expected equalization payments (which are tied to economic performance in the wealthier provinces), on the federal freeze on transfers under Established Programs Financing,28 on high interest rates, and on a decline in income from the provincial retail sales tax.29 By September, it was projecting a $i2o-million shortfall.30 A larger deficit would reduce the province to a B credit rating and further raise borrowing costs. Some immediate cutbacks were announced, and unions were warned that current wage increases would produce more lay-offs the next year. The government decided to hold 1991-2 costs to 1990-1 levels, reducing services to meet any increases in wages and other costs. Health, education, and social services would all be affected.31 In early December 1990, government departments and other publicly funded institutions (such as hospitals, school boards, and the university) received a 'Christmas Present/ All were given 'to Friday' to propose cuts, so that overall spending in 1991-2 could be kept to $3.3 billion (the same as the revised expenditure for 1990-1).32 Rumours abounded as departments sought ways to reduce costs. Those in public-sector employment, generally considered the most secure work in Newfoundland, were justifiably anxious. Lay-offs and program cuts appeared inevitable everywhere, including health care. It was rumoured that earlier proposals for rationalization would be implemented, the government closing whole services in some St John's hospitals33 and either closing or turning into nursing homes 12 to 14 rural hospitals.34 However, the neo-conservative rhetoric dominant in British Columbia and Saskatchewan was notably absent here. The government had warned that salary increases awarded in 1990 would result in lay-offs in 1991 but had avoided antagonistic comments about public-sector unions or their leadership. The premier also eschewed rhetoric about 'small government/ speaking instead of a temporary fiscal crisis to be followed by service expansion in better times. Unlike Devine and Bennett, he consulted with public servants on the form that cuts should take. He also appeared to have no covert, ideologically predetermined agenda.

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Therefore Newfoundlanders expected budget cuts, but as an economic necessity rather than as a neo-conservative initiative. Wells had given early warning of cutbacks, resulting from the decline in federal transfer payments. However, because Newfoundland is very dependent on these payments, the cutback budget was not tabled until after the federal budget of February 1991. On 7 March, the minister of finance introduced one piece of legislation - a bill to freeze public-sector wages, cancelling 1991-2 increases won with painful and costly strikes in 1990 and postponing funding for employment equity for women working in the public sector.35 His budget also eliminated around 2,500 government jobs36 and probably as many again in school boards, hospitals, and municipalities. In the budget of 1991, Wells got as close to the previous year's budget as he could - an increase of only 1.5 per cent. As requested, most departments came in close to their budget for the previous year. Decreases were notable in Forestry, Agriculture, Mining and Energy, and small increases went to Education and Health. While both Bennett and Devine had used 'restraint' to restructure public spending, to transfer spending on public services to support of economic development, Wells had not. Spending cuts in Newfoundland were real and painful, but the premier did not use them to complete a broad neo-conservative plan. There was opposition to the cuts, but not ideologically charged or as widespread as the response to Bennett and Devine. Some labour organizations accused Wells of having a 'right wing Thatcherite agenda' and warned that 'Newfoundlanders will rise up/37 However, the premier was more sanguine. Polls reported public support at 60 per cent (in the province's postMeech Lake euphoria),38 and he still had 'faith in the intelligence of the average citizen,' even though 'vested interests tried to drum up a hue and cry/39 Leaders on the left (they are few) also described the budget as 'neoconservative' but blamed Brian Mulroney rather than Wells. The visible and energetic 'Clyde lied' campaign attracted attention, but the premier remained unshaken and most Newfoundlanders seem convinced of the need for cutbacks. Most opposition was not ideological or partisan but focused on specific cuts - elimination of Memorial University's Extension Service, closure of a hospital in one community, and reduction of ferry service in another. Newfoundlanders seemed to accept the overall budget as another inevitable hardship, rather than an ideological initiative. As might be expected from its poverty, Newfoundland already had significantly lower expenditures on health care than other provinces (88 per cent of the national average). There are fewer physicians (60 per cent), less use of physicians (70 per cent), fewer hospital beds (92 per cent) and lower

Rhetoric and Reality: Health Care Cutbacks 185 hospital use (78 per cent). Health care emerged from a cottage hospital system using salaried physicians to serve rural areas and developed fully only after the advent of medicare in 1966 and with construction of roads to isolated coastal communities. Spending on health care in the province increased five-fold between 1972 and 1984, from 19 per cent to 23 per cent of provincial expenditures. Given increasing budget requests from hospitals, and a 'greying' population, it was expected that costs would continue to rise towards national averages. By the early 19805, the province was already having difficulty meeting existing costs. A royal commission studying health care costs concluded that more staff, 30 per cent more physicians, and higher salaries together accounted for the increase since 1976.4° However, use of hospitals was declining, with more out-patient services being offered. The commission recommended reduction in the number of acute-care beds and an increase in both nursing home beds and community care. This report is still seen as a 'blueprint' for rationalized delivery of health care in Newfoundland. With budget cuts impending in 1991, these earlier proposals were resurrected. Rumours suggested amalgamation of the denominational hospitals in St John's, and many people expected rural hospitals to be turned into nursing homes. The 1991 throne speech confirmed these expectations, referring to 'a need to rationalize health care expenditures to reflect demographic and technological developments.'41 The subsequent budget presented more detail and claimed consistency with the 1984 recommendations - lowering the number of acute-care beds, increasing numbers of nursing-home beds, and extending community health care. Significant restructuring of health care services has begun. First, 360 acutecare beds were closed, and 78 converted to long-term nursing care. Six rural hospitals were modified for chronic care and three converted into community health centres, with diagnostic services, outpatient services, and several short-term acute beds. Services of the two denominational hospitals and one general hospital in St John's have been 'rationalized,' with some services being offered at only one institution (thoracic surgery, orthopaedics, and respiratory medicine, for example) and others at only two (obstetrics, neonatology, gynaecology, and psychiatry, for example). Decisions to close under-used acute beds in rural areas, to increase nursing-home beds, and to develop community health care are all consistent with the 1984 proposals and with the ideas of more progressive health care economists.42 Payments to physicians have also been capped at 1990-1 levels, and some specialists may find their admitting privileges reduced by bed closures. Also, the budget of the Medical School at Memorial University has been reduced.

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If these proposals had been supported by substantial funding to community and public health, then the initiatives would more closely approximate a left-wing agenda. However, Wells's rational restructuring of health care was more rhetoric rather than reality. Detailed analysis of budget proposals shows that funding for long-term care actually declined as a proportion of health care expenditures and still makes up only about 12 per cent of the health care budget. Expenditure on public and community health declined both absolutely and proportionally and remains only 3 per cent of the health care budget. Apparently the capital cost of hospital construction, and of renovating hospitals that are to become nursing homes or community health facilities, has absorbed any of the 1991-2 savings from closures of acute-care beds. Although Clyde Wells generally avoided neo-conservative rhetoric, the 1991-2 health care budget also introduced some elements more typically neo-conservative. It brought in new user charges and/or reduced coverage for vision, drug and dental programs. The reduction in acute-care beds has necessitated lay-offs and transfers of staff. Many Newfoundlanders have to travel further now for health care. Health care workers tell me informally that shortages of staff and equipment in hospitals that remain open, uncertainty leading to low morale, and patient overflow from regions where hospitals have been closed, all threaten to bring deterioration to an already underfunded system. The subsequent budget for 1992-3 continued the public-sector wage freeze and implemented further service cuts across provincial departments. Then the cod moratorium was announced, and a federal mini-budget in the fall of 1992 was followed by another provincial budget. Costs were squeezed further, again across departments, but employees were promised that collective bargaining would begin again in the 1992-3 fiscal year. However, even in the province's desperate economic circumstances in 1992, the government continued to develop regional health boards to deliver the community services needed as a result of closings of hospitals and beds. The integrity of the 1984 plan has been maintained, although it has been implemented more slowly than many would like. NEO-CONSERVATIVE RHETORIC AND REALITIES

Bill Bennett and Grant Devine both expressed neo-conservative rhetoric, while Clyde Wells and his government made less overtly ideological public pronouncements. As I have shown, Bennett and Devine also had a neoconservative agenda that they intended to translate into reality. That frame-

Rhetoric and Reality: Health Care Cutbacks 187 work was reflected in their health care initiatives, as well as in social services and economic development. While Bennett claimed to protect health care from the major cutbacks implemented in other areas, in reality he eliminated funding to several community-based and preventive programs that might have been part of any progressive agenda. Devine's health care initiatives were more overtly neo-conservative, as he dismantled key prescription drug and dental programs initiated by the CCF/NDP. Is there 'continuity' between the neo-conservative policies of federal and provincial governments and that of WehVs government, or are Newfoundland's budget cutbacks really any different? All three governments attempted to control health care costs that absorbed around 30 per cent of their budgets. Each controlled physicians' incomes and closed beds in acute-care hospitals. All three introduced or increased user charges for health care services not covered by medicare. All three laid off public servants, in health and other areas, and capped the salaries of remaining public servants. Each curtailed the power of organized labour. To this extent, the cutbacks in Newfoundland look very much like those implemented by neo-conservatives in British Columbia and Saskatchewan. However, there are marginal differences. First, while Bennett and Devine cut human services to release funds for economic development, Wells's budget cuts were distributed more broadly. Human services were not robbed to purchase enticements for developers. Second, while Wells rolled back wage increases earned in collective bargaining, froze all public-sector salaries, and postponed employment equity payments, he has not enacted regressive labour legislation. He has not tried to curtail permanently the power of unions. Third, when Wells cut back services and programs, public servants and officials were invited to study their own programs and make proposals. In hospitals, school boards, departments, and regional offices, people were asked to identify ways in which money could be saved and to develop proposals that would achieve needed reductions. Unlike Bennett and Devine, Wells worked with his public service rather than considering it part of his problem. Fourth, in health care, Wells is pursuing rationalization, seeking more efficient distribution of health care resources. Denominational hospitals in St John's, rural acute-care hospitals, nursing homes, and community care are all implicated in a plan that was first recommended by a royal commission in 1984. Fifth, while Bennett and Devine cut community-based programs essential to maintaining health and preventing illness (and ultimately to reducing costs of treating illness), Wells claims to be moving towards better community care and public health. The Newfoundland estimates for 1991-2

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did not show any increased commitment in either community care or public health, but with some of the capital costs of renovating hospitals for new uses met, a new regional public health initiative was begun in the 1992-3 budget. Those who watch incoming New Democratic provincial governments struggle with the deficits inherited from their predecessors, and exacerbated by the fiscal strategies of a neo-conservative central government, may have some reason for hope. The neo-conservative 'continuities' in provincial restraint are not absolute. Not all cutbacks need be totally regressive. Bennett and Devine's were clearly neo-conservative, with a consistency between rhetoric and reality. Wells avoided the rhetoric of neo-conservatism, choosing instead the language of rationality. Newfoundland's poverty, and its dependence on Ottawa necessitated a budget that included some elements very similar to Bennett and Devine's. However, Wells has used the crisis to restructure significantly the province's health care system, using proposals put forward under a previous government. He may even succeed in his commitment to secure the health of Newfoundlanders by developing an alternative to institutionalized treatment. Provincial governments' responses to fiscal crisis must always have some commonalities, particularly when those provinces have vulnerable, resource based economies and when provincial fiscal resources depend on Ottawa's policies. Money must be found and costs cut, whatever the government's ideological position. Services may be reduced, the public service cut, and wages limited. The results look neo-conservative. Wells's experience shows, however, that there is also room for marginally distinctive policies. If Wells, as a Liberal premier of Canada's poorest province, can use federally induced fiscal crisis to restructure his health care system towards some 'rational' ends, then the New Democratic governments of British Columbia and Saskatchewan may have similar opportunities at the margins to achieve more progressive ends, in spite of the neo-conservative policies of a federal government seeking to reduce its own debt by lowering payments to the provinces. There is necessarily some 'continuity,' but Newfoundland shows that difference (if not 'discontinuity') is also possible. NOTES

1 M. Rachlis and C. Kushner Second Opinion: What's Wrong with Canada's Health Care System and How to Fix It (Toronto 1989). 2 J. DeMarco and D. Heughan 'Community Health Care' in W. Magnusson ed. After Bennett (Vancouver 1986) 313-24.

3 M. Begin Medicare: Canada's Right to Health (Ottawa 1988).

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4 Rachlis and Kushner Second Opinion. 5 A. Redish and W. Schworm 'Cyclical and Structural Elements in the Current Recession' in R.C. Allen and G. Rosenbluth eds. Restraining the Economy (Vancouver 1986) 43-64. 6 B.D. Palmer Solidarity: The Rise and Fall of an Opposition in British Columbia (Vancouver 1987) 22. 7 J.M. Pitsula and K. Rasmussen Privatizing a Province: The New Right in Saskatchewan (Vancouver 1990) 116. 8 R.C. Allen The B.C. Economy: Past, Present, Future' in Allen and Rosenbluth eds. Restraining the Economy 9-42. 9 P. Marchak The New Economic Reality: Substance and Rhetoric' in W. Magnusson et al. eds. The New Reality (Vancouver 1984) 22-40. 10 J. Malcolmson The Hidden Agenda of Restraint' in Magnusson et al. eds. The New Reality 75-81. 11 Palmer Solidarity 52. 12 Ibid. 22. 13 Ibid. 56. 14 Ibid. 33. 15 R.G. Evans 'Restraining Health Care: New Realities and Old Verities' in Allen and Rosenbluth eds. Restraining the Economy 170-95. 16 W. Carrol, C. Day, and Noel Shacter 'Medicare at Risk' in Magnusson et al. eds. The New Reality 214-26. 17 R.G. Evans 'Restraining Health Care: New Realities and Old Verities' in Allen and Rosenbluth eds. Restraining the Economy 178. 18 N. Ward 'Saskatchewan' The Canadian Encyclopedia (Edmonton 1988) 1930-8. 19 SARU (Social Administration Research Unit) 'Government Cutbacks in Saskatchewan 1986-1987' Regina, 3 June 1987. 20 Government of Saskatchewan Economic and Financial Position (Regina 1991 and 1987). 21 Saskatchewan Partnership for Progress: Working Together to Build a Stronger Tomorrow (Regina 1985). 22 Pitsula and Rasmussen Privatizing a Province 122. 23 SARU, 'Government Cutbacks.' 24 Pitsula and Rasmussen Privatizing a Province 129. 25 W.F. Summers in The Canadian Encyclopedia 1482-91. 26 D. House et al. Building on Our Strengths (St John's 1986). 27 P. Gullage 'Bad News for Province in First Quarter Results: Baker' Sunday Express, St. John's (22 July, 1990) 1-12. 28 Government of Newfoundland and Labrador Budget (St John's 7 March 1991). 29 Gullage 'Bad News.'

190 Canadian Social Welfare Policy 30 'Walking the Fiscal Plank' Sunday Express, St John's (23 September 1990). 31 'Health and Education Ministers Warn Groups of Harsh Cuts Next Year' Sunday Express, St John's (14 October 1990). 32 Government of Newfoundland and Labrador Estimates 1991-92 (St John's 1991) x. 33 'St Clare's May Phase out Obstetrical Services to Avoid Abortion Dilemma' Sunday Express (13 January 1991). 34 J. Gushue 'Health Minister Says 12 to 14 Hospitals Could Be Shut Down: Nursing Homes More Efficient in Spending Funds, Decker Suggests' Sunday Express, St John's (2 December 1991). 35 The bill cancelled pay equity adjustments for women, thus costing women in the province $24 million. Telegram, St John's (20 April 1991). The province has now begun to phase in these adjustments over five years. 36 Government of Newfoundland and Labrador Budget (St John's 1991). 37 J. Gushue 'Health Cuts Could Topple Wells Administration: March' Sunday Express, St John's (2 December 1990). 38 S. Norman, 'Wells Still Flying High in Public Opinion, Poll Says' Sunday Express, St. John's (21 October 1990). 39 J. Gushue, 'Most Voters Will Accept Cost Cutting Premier Says' Sunday Express, St John's (23 December 1990). 40 Government of Newfoundland and Labrador Report of the Royal Commission on Hospital and Nursing Home Costs to the Government of Newfoundland and Labrador (St John's 1984). 41 Government of Newfoundland and Labrador Throne Speech (St John's 28 February 1991) 7. 42 See, for example, Rachlis and Kushner Second Opinion.

11 Social Assistance and 'Employability' for Single Mothers in Nova Scotia STELLA LORD

Consistent with traditional assumptions about women's dependent status and proper role as mothers, social assistance jurisdictions tended after the Second World War to treat single mothers as potentially long-term or 'unemployable' recipients of social assistance. While this arrangement protected single mothers somewhat from the requirement that 'able bodied' recipients seek employment, social assistance authorities exercised other forms of social control, based on prevailing moral assumptions about women's sexual conduct and child-caring role. The meagre level of assistance and the 'man in the house' rule assumed that help from the state was only a substitute for women's financial dependence on male support in the family. They also meant that jurisdictions made little effort to address women's employment aspirations or needs.1 Since the 19705, because of changes in gender relations and in the family, the proportion of single mothers in the general population has risen, and although many such mothers are employed in the labour market, achievement of financial self-sufficiency remains difficult. There are significantly more single mothers who are poor and on social assistance.2 By the mid-1980s, most jurisdictions had begun to question the need for long-term assistance and had jettisoned the 'unemployable' assumption. Most had established voluntary programs that promoted transition to employment through counselling and career planning.3 Some, such as British Columbia and Alberta, were introducing regulations obliging single mothers on social assistance to start the transition to employment. More recently, Ontario has begun social assistance reform of a similar type. Benign neglect was gradually giving way to the assumption that single mothers should no longer be protected from the necessity to look for employment.4 The shift from a voluntary to a more mandatory concept of 'employabil-

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ity/ however, has been uneven and has not occurred in all provinces. In Nova Scotia, for example, obligation to seek work has not been universally assumed, and the concept of 'employability' for single mothers, and the infrastructure to support it have been relatively underdeveloped. As positive as some of the changes that addressed women's employment needs may appear, and while they do in some respects reflect women's own changing expectations about domestic labour and the possibility of combining work with child care, the move to mandatory 'employability' takes away any choice. The change has probably been motivated by desire to reduce social assistance caseloads and costs produced by neo-conservative economic and social policies at the federal and provincial levels. Since the mid-1980s, Ottawa has attempted to reduce social spending in welfare, health, education, and training by 'offloading' costs to the provinces, thus creating fiscal pressure on provincial governments to contain social assistance costs.5 There has also been another kind of federal stimulus to extend and broaden the concept of employability. A joint federal-provincial 'employability enhancement initiative' launched in 1985 committed both levels of government to work to 'remove key obstacles' to the employability of social assistance recipients. This initiative allowed some changes to the Canada Assistance Plan (CAP) to enable both levels to use CAP funds for employability programming and job training for social assistance recipients.6 I argue in this chapter that this program is helping to promote and stimulate employability for single mothers in jurisdictions such as Nova Scotia, where it had previously not been universally or broadly applied. However, in a poor province such as Nova Scotia, continuing pressure to reduce or contain social spending will inhibit development of such a concept in ways that could adequately support women's needs and aspirations or ensure their self-sufficiency. Despite these problems, I argue, the program is leading to institutionalization of the employability concept within Nova Scotia's social assistance system. This chapter, therefore, examines the scope and purpose of the federal-provincial employability enhancement initiative and, in the context of current conditions for women on assistance, looks at how the program is being applied and its likely implications for single mothers on assistance. The research for the chapter is part of a larger project and is based on an examination of federal and provincial policy documents, interviews with personnel in Employment and Immigration Canada (EIC) and Nova Scotia's Department of Community Services who are implementing the program, as well as a series of seven focus-group interviews with single mothers on social assistance and individual interviews with employment counsellors,

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social workers, and job trainers delivering the employ ability enhancement (or Social Assistance Recipients) program in the metropolitan HalifaxDartmouth and North Shore regions of the province. INITIATIVE: PURPOSE AND SCOPE The employability enhancement initiative was developed through federalprovincial negotiation in 1984-5 in the aftermath of the 1981-3 recession and in the immediate context of higher social assistance caseloads and costs. As well, Ottawa was seeking to assist economic restructuring by developing policies that would help Canadians adjust to higher rates of unemployment and ensure responsiveness to the 'demands' of the labour market.7 To make the income security system more compatible with current 'realities,' the Royal Commission on Economic Union and Development Prospects for Canada (Macdonald Commission) had in 1985 proposed amalgamation of several income security and personal tax benefit programs in order to provide a minimum income for all, which could be supplemented by earnings or social assistance benefits. The proposals included a financial incentive for increasing income from wages but were unlikely to result in higher benefits.8 The recommendation appeared to suggest little more than incentives to social assistance recipients in a low-wage economy to supplement benefits by working.9 Although the commission's recommendations were not implemented as they stood, their philosophy and direction signalled guidelines for future social and economic policy.10 In 1984, the new Conservative government established the Neilson Task Force on Program Reform to examine efficiency in government expenditure. One part of its mandate was to identify ways and means of making social assistance expenditures more efficient. Provinces, however, feared that any radical changes could affect the existing cost-shared arrangements under CAP and would probably lead to 'offloading' of more costs to them. Some had related higher social assistance caseloads to Ottawa's economic and labour market policies and wanted federal response to this problem." The task force's report therefore backed away from recommending radical reform but suggested job creation programs directed to 'employable' social assistance recipients as a means of reducing the costs and reinforcing work-oriented goals. Demonstration projects could include 'new incentive provisions' to encourage employment, which would entail changes to cost-sharing policies under CAP.12 By 1985, employment policy had changed. The new Canadian Jobs Strategy (cjs) posited more direct matching of human resources to current labour

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market needs and demands. Ottawa privatized much of the funding previously chanelled through provincial governments and delivered through public institutions such as community colleges.13 In September 1985, the federal, provincial and territorial governments committed themselves to 'make maximum use of the Canadian Jobs Strategy, the Canada Assistance Plan, and other employment and training programs, to assist social assistance recipients attain and retain employment/ The initiative removed regulatory and bureaucratic obstacles and disincentives to employment for social assistance recipients. Job training was to become more accessible and governments were to harmonize policies and regulatory practices. An innovative 'four cornered approach' encouraged cooperation among federal and provincial governments and their bureaucracies involved with employment, training, and welfare.14 However, the program would draw on existing program funding. Cost-shared funding from CAP that 'would have been spent on social assistance payments in the absence of employability programming' would be diverted to the initiative,15 because governments could shorten the length of time for which recipients were on social assistance and in the long run save money. As well, the cjs would offer more training. The underlying assumption was that the social assistance caseload could be reduced without new financial resources being added.16 'Four cornered' implementation was to take place at the provincial level.17 Three-year (1986-9) bilateral agreements were negotiated with each province in the following two years. Targets were also set for the participation of social assistance recipients in designated federal cjs job training and fixed the amount of cost-shared (diverted) funding under CAP that would be spent on provincially and federally administered job training for them. The program was extended annually until 1991, and new five-year agreements now continue the arrangement. Although the Neilson Report had noted more single mothers receiving assistance and background documents to the initiative cited long-term dependence, the initiative targeted no particular group of recipients. Moreover, it did not consider the specific transitional needs of single mothers or of any other client group on social assistance. BARRIERS TO EMPLOYMENT AND NOVA SCOTIA'S SOCIAL ASSISTANCE SYSTEM

As Brigitte Kitchen has pointed out, economic restructuring and growing numbers of low-paid, part-time jobs have made the route to self-sufficiency through employment even more precarious and difficult for women seeking entry into the labour market.18 Despite women's increased participation in

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the work-force and their need for a wage sufficient to support dependants, most women are unable to earn a 'family wage/ Gender inequality is compounded by inequalities based on class and race.19 As Patricia Connelly has shown, the structural conditions for women's position in the labour market have been created through women's relationship to work in the household and their financial dependence on male support. This relationship has marginalized their labour and has made them vulnerable to part-time or casual work in low-waged sectors and jobs.20 Women who depend on social assistance are especially vulnerable to treatment as part of an 'industrial reserve army of labour/ Single mothers moving to the labour market face other significant barriers. Social assistance recipients and employment counsellors say that the social assistance system itself creates or deepens such individual problems as low self-esteem and lack of confidence as well as inability to plan for the future, as do the severe constaints imposed by the regulatory and benefit structure and by transitional resources and support in childcare, educational upgrading, and job training.21 Nova Scotia's two-tier system of social assistance divides responsibility between municipalities and the province. On a cost-shared basis with the province, 67 municipalities administer short-term general assistance, mainly for the 'able bodied unemployed' who are required to demonstrate a job search.22 The province administers benefits for long-term recipients - the disabled and single mothers. The standardized formula for family benefits is, as in other provinces, often inadequate to ensure basic needs.23 Single mothers and other recipients are assumed to be in need of longterm assistance, but legislation does not assume them to be 'unemployable/ A built-in financial 'incentive' subsidizes benefits through employment, but the director of social assistance can decide employability on the basis of 'the best interests' of the applicant and the availability of work. The discretion of the director extends as well to participation in a career planning program established in 1983.24 If they are working or participating in approved transitional programming, recipients on family benefits are eligible for up to $200 a month for expenses such as transportation and childcare. But actual childcare expenses are not deducted from gross income in calculating benefits. Employed recipients may also deduct 25 per cent of their gross earnings before caculating eligibility.25 Focus group interviews reveal almost insurmountable barriers facing women. Inadequate human resources for counselling and practical counselling that easily becomes undue interference about choices and type of pro-

196 Canadian Social Welfare Policy gram appeared as major drawbacks. Community colleges offered little by way of educational upgrading, post-secondary education, and job training. There was little financial assistance to cover essential fees and books. There was only a low level (or in some municipalities a total absence) of financial assistance to pursue appropriate education and training, and many recipients fear the burden of debt that student loans create.26 Moreover, for women with young children, the $2Oo-a-month 'incentive' to cover work or educational expenses barely pays for the additional expenses of subsidized childcare, which is in any case already virtually rationed and subject to long waiting lists.2? I M P L E M E N T I N G THE P R O G R A M

Nova Scotia's government put off signing the bilateral agreement until November 1987 because the minister of community services and some senior policy advisers feared that the initiative might erode some of the principles in the Canada Assistance Plan as it stood and hence lead to 'offloading' of more of the costs of social assistance to the province.28 The agreement set a target level of 25 per cent for participation of social assistance recipients in regular Job Development and Job Entry/Re-entry programs of the Canadian Jobs Strategy (cjs) and committed each level of government to spending $5.0 million on cost-shared job training for 1988-9. It also stipulated voluntary participation.29 The bilateral agreements committed both governments to collaborate in programming and to exchange information for implementation and delivery.30 The program has been managed jointly by representatives of Employment and Immigration Canada (EIC) and of the provincial departments of Community Services and of Education (formerly Adult Education and Job Training). The joint management committee was to establish 'mutually acceptable methods of financial control,' exchange information to ensure effective management, and set criteria for and approve funding for all job training programs and projects covered by the agreeement. It was also to review assessment and selection processes for referral of social assistance recipients to programs and monitor programs to ensure achievement of participation targets.31 The committee accordingly set up an operations subcommittee for day-to-day management and monitoring of provincially funded projects and those federal projects that operated with diverted funds under the cjs. Cooperation between the three departments and two levels of government was intended to assist in program delivery and facilitate joint financial management of the program.

Social Assistance and 'Employability' 197 Local liaison committees exchanged information between local representatives of EIC and those of the province. They recommended projects for funding and advised the management committee on the viability of projects, based on information about local labour markets and trainers and availability of suitable clients. The management committee could monitor the practices of the provincial social assistance and the federal employment bureaucracy in relation to any disincentives and obstacles arising from regulations or practices. The intention was to iron out regulatory disincentives to employment for clients who had 'a foot in at least two major bureaucratic systems operated by two orders of government/ Sharing of information could also encourage efficiency.32 JOB TRAINING

The cjs's Job Development and Re-entry programs were Ottawa's means of delivering training. The Re-entry program was targeted to women; Job Development provided direct subsidies to employers for individual on-the-job training. Both programs offered project funding to private companies, educational institutions, and voluntary organizations and municipalities to deliver on a contractual basis employability programming or job training partly skills training in the classroom and on the job training. The province established and administered a similar program. Both of the cjs programs allowed for up to 52 weeks of training. However, an examination in the first year showed that actual training averaged between 22 and 26 weeks.33 Training sponsors can be refused funding for future projects if they prove to be consistently 'unsuccessful' in delivering 'employability/ The criterion for a successful project is a certain number of participants employed at the end of the project. Trainers therefore focus on employment during all aspects of training. But federal government data, based on surveys of participants three and twelve months after completion of training, show that only 50 per cent of social assistance recipients were employed full or part time after twelve months. However, little information about the quality of the employment in terms of wages or working conditions appears to have been collected.34 Moreover, at the end of 1991, the province had not yet completed an official evaluation and was relying on information from the monitoring process to evaluate particular projects.35 Evaluation based on numbers employed encourages inclusion of a job search component in training. Participants may experience pressure to take

198 Canadian Social Welfare Policy whatever job becomes available, because of fear of failure or of having to return to social assistance, or from the expectation that, despite low starting wages, a job could be a 'foot in the door' to a better life.36 Because of low rates of employability, projects were required after the first year to include 'life skills/37 Interviews with employment counsellors, trainers, and life skills 'coaches' suggest that the approach to life skills depends on the philosophy of the 'coach/ Some trainers appear to emphasize building of self-esteem and confidence, while others concentrate on budgeting, financial management, and job search skills. Focus group participants in one training project believed the latter emphasis to be one of the most useful aspects of the program. The short duration of most funded projects and the emphasis on jobspecific skills or experience have also ensured little room for educational upgrading or pre-employment transitional programming. The skills component of training has been predominantly in low-waged, clerical or service occupations, where women have traditionally been concentrated.38 Jobs that paid wages barely above the legal minimum - about $5 an hour - were not uncommon for trainees who obtained jobs in the early phase of the program. After paying expenses for working, women with dependants were probably worse off, even though they could be 'topped up' by social assistance.39 Recognizing that poor wages probably explained the low 'success' rate for social assistance recipients, as compared with other training participants, by 1991, officials at CEIC and Community Services were claiming to base their funding of projects on the expectation of trainees getting jobs at about $7.50 an hour.40 Social assistance recipients and employment counsellors estimated that a single mother with dependants would need from $9 to $15 an hour to be self-sufficient. While some trainers who had good contacts with employers claimed that some participants could earn wages within this range after training, by far the majority of partipants could expect to earn no more than $7.50 an hour.41 INCENTIVES TO PARTICIPATE IN TRAINING

Interviews with employment counsellors and trainers indicated that most do not refer or accept a client into training unless childcare is in place. But because of the shortage of subsidized childcare spaces and the difficulty of obtaining subsidized space on short notice, trainees have often had to make their own private childcare arrangements at short notice. Even though subsidized childcare can be cost-shared under CAP, the demise of a proposed na-

Social Assistance and 'Employability'

199

tional childcare program shortly after the agreement was signed and increasing limits on transfer payments to the provinces have made the province reluctant to increase the number of childcare spaces using its own limited resources.42 By the end of 1992, for instance, only 163 subsidized childcare spaces had been added since i98/.43 Unlike in cjs, the training wage for provincially administered projects was set according to the going rate in the local labour market for the entry-level job in the area of training - rarely much more than the minimum wage. The training 'wage' therefore must usually be 'topped up' by social assistance, so that apart from the $200 for childcare and work-related expenses there is little built in financial incentive for women on family benefits to participate.44 Depending on the level of benefit eligibility, there can, however, be a financial incentive for some to participate in a federally funded project, which pays a training allowance and an allowance for childcare, applied according to cjs regulations.45 These higher allowances cover expenses and allow retention of 25 per cent of earnings or, in some cases, transfer away from social assistance altogether. Some trainees received more from participating in training than they were likely to be able to earn from a job46 - a disincentive to employability. Early in the program, participants ineligible for social assistance (because of the level of the training allowance) experienced bureaucratic problems getting unemployment insurance or transferring back to provincial family benefits when they were unable to find a job at the end of training.47 In keeping with the program's goal of removing obstacles and disincentives to employment, however, in the second year such penalties were resolved. Participants are now able to return to family benefits, rather than having to apply first for municipal assistance, if they lose their jobs (but not if they quit) within a year of completing training. Delays in paying training allowances or unemployment insurance benefits to participants have also been eliminated,48 as were some financial disincentives for making a transition to a job after training. For example, eligible trainees can maintain some social assistance benefits for the first month on the job. While these reforms ease some immediate financial disincentives, they are minor in comparison to structural and systemic barriers to employment. They facilitate short-term training or movement in and out of low-waged work and social assistance. However, the program itself and the reforms leave untouched most of the conditions that marginalize women, and they fail to provide childcare and other educational and job training alternatives that women seek.

200 Canadian Social Welfare Policy DELIVERING EMPLOYABILITY THROUGH COUNSELLING

Because the system of social assistance is two-tiered municipal involvement in the program was essential. Municipalities were asked to cooperate and to consider applying for funds to sponsor job training projects. Some, such as Halifax and Halifax County, were particularly interested, because they had high social assistance expenditures in relation to the province's funding formula.49 Most other municipalities showed little interest in sponsoring training.50 Nonetheless, several sponsored job training or other employability projects from the start. Some have trained recipients (mainly women) as child- and homecare workers. Funding has also been used to hire life skills counsellors or coordinates for social assistance recipients, who organize training placements in the community. With financial assitance from the program, several municipalities have developed their own job-referral, employment-resource, or support centres. The employability enhancement program has therefore helped to develop a local infrastructure based on means other than training.51 Although centres vary, they offer job-readiness assessment, counselling, job-finding clubs, and referral to other social services, education, training programs, and job openings. At Halifax's Employment Resource Centre, an employment counsellor assists single mothers.52 However, as interviews with staff members at one centre revealed, resources are limited, and members of staff can, as trained counsellors, feel caught between serving clients' needs and pressure to cut the social assistance caseload.53 While 'able-bodied unemployed' on municipal assistance (mostly single males) are required to prove a job search, single mothers do not. Nevertheless, as the Employability Resource Network of the Halifax City and Halifax County employment resource/support centres has found, success has been judged mainly in terms of cuts to social assistance costs.54 As services to single mothers on social assistance become incorporated into the centres' counselling and employability planning, pressure to get clients off assistance may begin to override other concerns. DELIVERING EMPLOYABILITY

With funding from the initiative, the province is developing a computerized inventory of family benefits clients so as to facilitate the identification of recipients for referral to training.55 When a project is funded, recipients who have expressed interest in training and seem suitable for a particular project can be referred to the project for interview. A task previously carried out on an informal, ad hoc basis between training managers and social workers. The

Social Assistance and 'Employability'

201

local liaison committees exchange information about prospective sponsors for training and about availability of social assistance clients. Development of the inventory, and liaison between the Department of Community Services and EIC project managers, are also leading to a more proactive process, intended to fit funding of training projects to training needs identified through client assessment.56 At the time of writing, possibly because of the small number of available training spaces and the large numbers of participants, the system remains voluntary. But it is unclear whether it will remain so once this referral system is in place. Administrators in the separate Family Benefits employability enhancement program and the single-parent career-planning program are also beginning to share information about training options and coordinating assessment of clients. Similar cooperation is occurring between the career planning program and the municipally operated employment support or resource centres, so that clients who transfer from municipal to family benefits do not need to go through two assessment processes.57 While rationalization of counselling and assessment practices probably helps already over-bureaucratized recipients, it raises the issue of how information about clients is collected and transmitted and how such data might be used as clients proceed in the counselling process and transfer from one system to another. The small degree of flexibility that currently exists in the counselling process could be jeopardized if transitional planning for clients becomes overly rationalized and bureaucratized. Development of an infrastructure based on counselling, assessment, and computerized information about recipients may mean that the risk of appearing to be 'uncooperative' will in future place a greater onus on 'suitable' recipients to participate in employability programming. SUMMARY AND CONCLUSIONS

Because the political goal of the employability enhancement initiative was to reduce social assistance costs, 'success' has been measured in terms of reduced reliance on social assistance rather than in terms of individual selfsufficiency. Even if some participants end up in full-time jobs and marginally off social assistance, many others are probably supplementing assistance with part-time work. An evaluation of the whole initiative (now being undertaken by the province) is unlikely to use as a yardstick the financial position of single mothers rather than reduction of costs and caseloads. While job training can marginally improve the financial position of individual participants, the available evidence suggests that the skill component

2O2

Canadian Social Welfare Policy

of training is for low-waged occupations and of too short duration to enable most women to enter jobs at wages that would meet the basic needs of their families. Few training projects offer educational upgrading, despite evidence that recipients need this as a bridge to further training. There are thus few prospects for the kind of upward mobility that could eventually lead women out of poverty. Despite these limitations, Nova Scotia's initiative is serving to institutionalize the employability concept for single mothers within municipal and provincial family benefits systems. Moreover, it has established cooperation and collaborative bureaucratic structures and practices among the governments and departments administering or delivering the program. It has helped to create a local infrastructure of assessment, counselling, and referral processes and centres and is fostering cooperation and coordination of counselling practices between the municipalities and the provincial family benefits system. Bureaucratic and organizational structures are being developed to collect and disseminate information in order to match employability programs with eligible clients. These changes, therefore, help to fulfil the specified 'employability' goals of the initiative. For clients, the program has allowed removal of some financial disincentives to participate in training. An assessment, information, and referral infrastructure may also give some hope to those eager to get off social assistance at any cost. But this new infrastructure may enable the system to apply a flawed concept of employablity. While some of the changes may help to dispell the assumption within the system that single mothers are necessarily long-term dependants on assistance, they do little on their own to improve women's position in relation to the labour market. Nor do they address some of the more pressing concerns of women on social assistance, such as the need for more financial assistance, subsidized childcare, and better access to educational and training alternatives. Nova Scotia's government has insisted that participation in employability counselling or training programs is voluntary, and it has made no formal changes in regulations in this matter since the program was introduced. But as the infrastructure and bureaucratic collaboration become more sophisticated, 'employability' will become institutionalized. It will be more difficult for 'suitable' clients to 'choose' not to participate in employability programming. In a continuing climate of fiscal restraint and financial pressure on benefits, advice or persuasion may give way to expectation or even pressure. It may even lead to a more universal application of 'employability' through regulation changes or 'reform.' If so, this will entail a new kind of social control built not on the 'necessity' of social assistance dependence but on women's vulnerability to marginalized employment.

Social Assistance and 'Employability'

203

NOTES

1 M. Porter and J. Gullen 'Sexism in Policy Relating to Welfare Fraud' in J. McCalla Vickers ed. Taking Sex into Account (Ottawa 1984). 2 It is estimated that single mothers represented between 20 per cent and 42 per cent of provincial social assistance caseloads in 1986. Estimates of caseload growth are problematic because of the lack of data and the differences between provincial benefit systems. See National Council of Welfare Women and Proverty Revisited (Ottawa 1990) 78. 3 P.M. Evans and E. Mclntyre 'Welfare, Work Incentives and the Single Mother' in J. Ismael ed. The Canadian Welfare State (Toronto 1990) 101-25. 4 Ibid. 101. 5 G. Riches 'Welfare Reform and Social Work Practice: Political Objectives and Ethical Dilemmas' in G. Riches and G. Ternowetsky eds. Unemployment and Welfare: Social Work Policy and the Work of Social Work (Toronto 1990) 108. 6 Canada, Department of Employment and Immigration, 'Agreement Regarding Enhancing the Employment Opportunities for Social Assistance Recipients' (Ottawa, 18 September 1985). 7 D. Guest 'Government and Market Responses to Unemployment' in Riches and Ternowetsky eds. Unemployment and Welfare 33-46. 8 Ibid. 108-13. 9 D. Macdonald Report: Royal Commission on Economic Union and Development Prospects for Canada n (Ottawa 1985) 769-805. 10 Riches 'Welfare Reform' no. n Canada, Department of Employment and Immigration The Social Assistance Recipients Initiative: Background and Outline (15 September 1985). 12 Canada, Supply and Services Report of the Task force on Program Review (Ottawa 1986) 15-18. 13 P. Daenzer 'Policy and Program Responses of 19905: The National Training Program and the Canadian Jobs Strategy' in Riches and Ternowetsky eds. Unemployment and Welfare 65-91. 14 Employment and Immigration Backgrond and Outline. 15 Ibid. 16 Ibid. 17 Ibid. 18 B. Kitchen 'Employment Strategies and the Sexual Division of Labour' in Riches and Ternowetsky eds. Unemployment and Welfare 141-60. 19 See S.J. Wilson Women, Families and Work (Toronto 1990) 86-109 and R. Ng, 'Immigrant Women and Institutionalized Racism' in S. Burt, L. Code, and L. Dorney eds. Changing Patterns: Women in Canada (Toronto 1988) 184-203. 20 P. Connelly Last Hired, First Fired (Toronto 1978).

204

Canadian Social Welfare Policy

21 For a fuller discussion of the findings from these interviews see S. Lord 'The Nova Scotia Employability Enhancement Program: Some Implications for Women on Social Assistance' paper to Canadian Society of Sociology and Anthropology, Queen's University, Kingston, Ontario, June 1991. 22 Single mothers with dependent children often must rely on municipal assistance until they obtain a court order for child maintenance, at which time they become eligible for provincial family benefits. Unless recipients can prove 'disability/ single mothers become ineligible for family benefits when dependants leave school or reach age 19. They must then transfer to municipal assistance, where benefits are usually lower and there may be overt pressure to look for work. 23 National Council of Welfare Welfare in Canada: The Tangled Safety Net (Ottawa 1987). 24 Subsections (i) and (2), section 13, schedule A, of the Family Benefits Act and Regulations, section 18, chap. 8, Statutes of Nova Scotia (Nova Scotia 1977). 25 B. Blouin Women and Children Last: Single Mothers on Welfare in Nova Scotia (Halifax 1989). 26 Some women had incurred substantial debts in trying to pursue post-secondary education or training. Several women stated that they had been forced to declare bankruptcy. 27 See also Blouin Women and Children Last 32-46 and Government of Nova Scotia Report of the Round Table on Day Care in Nova Scotia (Halifax, 25 April 1991). 28 One of the main concerns of the minister of community services was maintenance of CAP'S cost-sharing principles. But some senior policy advisers were also worried about the development of 'workfare/ Interviews with senior policy advisers, Department of Community Services, Halifax, November 1990; interview with Carmen Moir, former deputy minister, Halifax, July 1991. 29 Canada/Nova Scotia 'Letter of Understanding on Enhancing the Employability of Social Assistance Recipients' (November 1987). 30 Government of Nova Scotia 'Background Information on the Nova Scotia Agreement' (October 1987). 31 Ibid. 32 Ibid, and interviews with CEIC and Department of Community Services members on the local liaison committee, July 1991. 33 S. Lord, J. Brown-Hicks, and L. Roberts 'The Social Assistance Recipients (SAR) Agreement: A Critical Review by CCLOW, Nova Scotia' (Halifax, June 1989). 34 M. Prince Background Paper on Programs for Increasing the Employability of Social Assistance Recipients (Ottawa: Canadian Labour Market and Productivity Centre 1989).

Social Assistance and 'Employability' 205 35 Interviews with research director, Department of Community Services, Halifax, July 1991 and November 1992. 36 Interview with former life skills counsellor, April 1991. 37 Interview with member of the SAR Operations Committee, Department of Community Services, November 1990. 38 Lord, Brown-Hicks, and Roberts '(SAR) Agreement/ 39 Ibid. 40 Interview with EIC representative on the local liaison committee, Halifax, July 1991. 41 This estimate is based on interviews with six training project managers in the Halifax area. The starting wage for trainees outside of the metropolitan area is likely to be less. 42 Interview with Carmen Moir. 43 Statistics obtained from Department of Community Services. To help alleviate the shortage of daycare spaces, the province is experimenting with family childcare and has at least two pilot projects ongoing. Interview with Carmen Moir. 44 Interviews with EIC and Department of Community Services members of the management committee, October-November 1990. 45 Interview with manager of EIC Re-entry program, Halifax, July 1991. 46 Two of the six training sponsors interviewed specifically mentioned this as a problem. Interviews with training sponsors, May and July 1991. 47 Focus group interview with social assistance recipients in Antigonish, Nova Scotia, June 1990. 48 Interview with director, Family Benefits Program, Department of Community Services, October 1991. 49 Government of Nova Scotia Report of the Task force on the Levels of Cost Sharing of Municipal Assistance (October 1988). 50 This can be attributed in part to concern that participation in the program could affect negotiations between the municipalities and the province on sharing costs of social assistance and the fear that a larger share of the costs of the program would eventually devolve upon the municipalities. Interview with Carmen Moir. 51 By mid-1991, there were at least six such centres in the province, and others may be developing. Interview with B. Webber, coordinator Employment Support Centres, Department of Social Services, Halifax County, July 1991. 52 This assessment of the scope of the centres is based on interviews with staff member at the Halifax Employment Support Centre and the Cole Harbour Employment Resource Centre and with the coordinator, Employment Resource Centres for Halifax County, September i99o-July 1991. 53 Interview with employment counsellor, Halifax, July 1991. 54 See Employability Resources Network Report on the Evaluation Study of the

2o6 Canadian Social Welfare Policy Halifax City Employment Support Centre (Ottawa, June 1991) and Report on the Evaluation Study of the Halifax County Employment Resource Centre (Ottawa, November 1990). 55 Interview with research director, Department of Community Services, Halifax, October 1990. 56 Interview with EIC representative on the local liaison committee, Halifax, July 1991. 57 Interview with the manager, single-parent career planning program, Department of Community Services, August 1991.

12

False Economies in Newfoundland's Social and Child Welfare Policies DOUGLAS DURST

Since joining Confederation in 1949, Newfoundland has experienced steady growth in its health, education, and social welfare programs. Under the umbrella of the Canada Assistance Plan (CAP), the province has maintained a continuity of social welfare services, but perhaps at the expense of congruency. Like other provinces, Newfoundland has recently followed Ottawa's lead and reduced and 'clawed back' social programs in health, education, and social welfare. Although the province has the highest unemployment rate in Canada, these reductions have resulted in the lowest per capita social assistance payments in the Atlantic region. Because children and women comprise the majority of social welfare recipients, neo-conservative social programming and trimming of public expenditures in social assistance have hurt this group most of all. Meanwhile, expenditures in child welfare have expanded. Public monies that might have provided prevention are being spent on intervention. Hence provincial spending may lack congruence with the goals and objectives that it is designed to address. This chapter reviews the topic of children entering the care of public officials in light of the issues of income and family structure, and it reports on an exploratory study of the reasons why children entered child welfare care and custody. It looks at recent provincial policy decisions and their impact on women and children and concludes with a discussion on the implications for policy decision-makers and social work practitioners. RESEARCH ON CHILD W E L F A R E

There is no lack of academic research into child welfare, but much of it has concentrated on abuse, both physical and sexual, and neglect of children. Fewer studies have examined the reasons for and the processes of children

208

Canadian Social Welfare Policy

entering the child welfare system.1 The literature consistently points out the harm caused by separation of the child from his/her natural family. The family structure is viewed as a fundamental and universal pattern of child rearing and care. According to Besharov, separation 'is a major intrusion on parental rights which often does more harm than good and should be limited to situations in which the need for intervention is supported by clear and sufficient evidence/2 Separation generates trauma, sense of loss, and feelings of loneliness, insecurity, anxiety, and anger for the child.3 Whenever possible, the child should stay in the home with his/her natural parents, who provide both significant biological and emotional ties.4 However, the literature argued that intervention that results in removal of the child from the home and into the child welfare system might on occassion be necessary. In these circumstances, the needs of the child are paramount.5 Unfortunately, who defines the 'best interests' of the child, and how these interests are defined, have been only rarely discussed. There is little agreement on what justifies intervention resulting in separation.6 The literature speaks in generalities, using vague concepts of neglect, which gives the practising social worker little help in determining the type and degree of intervention required in child welfare cases. Children enter child welfare for either 'parent-related' or 'child-related' reasons. 'Parent-related' included parents' alcohol abuse, negligent behaviour, abusive actions, and physical and mental health problems.7 'Child-related' included children's uncontrolled behaviour, truancy, and physical and mental health problems.8 Pelton stated that 'while the rationales and motives for separating children from parents have changed over time, a predominant characteristic of displaced children in this country has not changed: by and large they have continued to be poor children from impoverished families.'9 Jenkins and Sauber10 found that although financial difficulties were not noted as a separate factor, they were present in one form or another in all cases researched. The correlation between inadequate in-home care and economic deprivation has consistently been stated by social researchers.11 Researchers identified single parenting as another consistent variable.12 Cox and Cox13 offered a conservative estimate of 80-85 Per cent °f us foster children being from single-parent homes. In Newfoundland, Lawrence14 found that children in care from one-parent families were 'worse off financially than two-parent families, and female-headed single families were the most economically strained. Female single parents with three or more children were barely surviving.15

False Economies in Newfoundland 209 TABLE 1 Age of children entering care in Newfoundland Population

Sample Age (years)

N

%

N,

%

0-5 6-11 12-15

42 18 40

42.4 18.0 40.0

52,535 60,210 46,205

33.1 37.9 .29.1

Totals

100

100.0

158,950

100.1

Sources: Sample statistics from D. Durst and E. Crawford 'Kids in Care: Child Welfare Patterns in Newfoundland and Labrador' (School of Social Work, Memorial University, St John's, 1992) 8; population statistics from Statistics Canada, Census, 1986. x2 = 16.96, df=2, p < 0.001. THE SITUATION IN N E W F O U N D L A N D

Durst and Crawford16 examined secondary data collected by child welfare workers of Newfoundland and Labrador's Department of Social Services to find out why children enter the child welfare system. The dependent variable was 'entering care' through either a court order or in the form of voluntary care. The reasons for 'care/ comprised the independent variables. Over a two-year period (19878) 704 children between birth and 16 years of age entered care; a sample of 100 was randomly drawn. The variables relating to rural versus urban, sex, and legal status (court order versus voluntary care) were divided without statistical significance when compared to the provincial population. However, an anomaly surfaced in the age of children entering care (Table i). It is statistically significant (p < o.ooi) that children 6 to 11 years old are under-represented in the sample (18 per cent), as compared to the provincial population (37.9 per cent). These children are less likely to enter care than children both older and younger. It appears that parents with children from this age bracket can more easily find substitute care within their own resources, including friends and family members. As any parent knows, school-aged children require less care. Usually they are in school all day, and after school they can play with less supervision than younger infants. They help meet many of their own physical needs, such as feeding, dressing, grooming, and sleeping. Substitute care from friends and family members is less of an 'imposition/ and so these youngsters are less likely to enter formal care.

2io Canadian Social Welfare Policy TABLE 2 Primary reasons for entering care, by age Parent-related

Child-related

Total N

%

Age (years)

N

%

N

%

0-5 6-11 12-15

48 14 31

98.0 70.0 51.7

1 6 30

2.0 30.0 49.2

49 20 61

100.0 100.0 99.9

Total

93

71.5

37

28.5

130

100.0

Source: Durst and Crawford 'Kids in Care' 9. x2 = 29.68, df= 2, p< 0.001.

Would increased support to families reduce the need for care in the other categories as well? See Table 2. Parent-related reasons for children entering care include: physical and sexual abuse, neglect, parental illness or disability, desertion, alcohol or drug abuse, and a parent requesting care. Child-related reasons include: child behaviour, refusing to return home, physical or mental illness or disability. Except for the eldest children, where reasons are equally divided between parent and child, parent-related reasons are the primary cause and for the youngest children represent 98 per cent of all cases! Clearly, parents involved with child welfare authorities have few economic resources (Table 3). As confirmed by the literature, women are the most impoverished (level of significance between men and women: p < o.ooi). Low-income families have limited financial resources to care for their children and lack the economic supports to provide alternative types of care. In addition, personal pressures associated with a low and insecure income contribute to the overall stress and problems facing these families. Families with economic resources find other alternatives to deal with difficulties and avoid contact with child welfare authorities. The findings support the long-standing argument that families involved with child welfare authorities need financial and supportive services. Consistently, these families are poor, and many needed services are unavailable even for those on social assistance because of restrictive social assistance programs, such as educational tutors, school transportation, respite care, childcare, and homemaking services. The systems fail to meet the needs of poor, especially female-headed, single-parent families, and so children, especially the younger ones, enter care who could normally remain at home.

False Economies in Newfoundland 211 TABLE 3 Primary sources of income, by sex Female

N Social assistance 64 Unemployment insurance 6 Employment 6 Other 4 Total

80

Male %

Total

N

%

N

%

80.0

22

47.8

86

68.3

7.5 7.5 5.0

5 18 1

10.8 39.1 2.2

11 24 5

8.7 19.0 4.0

100.0

46

99.9

126

100.0

Source: Durst and Crawford 'Kids in Care' 10. *2 = 20.74, #=3,p