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The coronavirus crisis: Wake-up call for an economic paradigm shift¹

April 17, 2020

4-minute read

This article was originally posted on National Newswatch

The Trudeau government recently signed an agreement with Amazon to distribute essential medical supplies across Canada in partnership with publicly owned Canada Post and Purolator. Its dependence on Amazon at time of crisis—a corporation with dangerously unsafe workplaces, and an aggressive anti-union history—is troubling. In the last few days, it has fired workers who have spoken out.

Also troubling, Canadian railway giant CP has dragged its feet on the safety of its workers during the crisis. Despite a federal government health requirement that workers returning from travel abroad should self-isolate, CP continued to demand that these workers show up for work. It was only under pressure from the union that CP was forced to "reinterpret" the federal health order and allow its workers to stay home without penalty. Unlike Amazon, CP has a strong union to advocate on behalf of the workers.

This revelation coincided with CP’s announcement it paid its six top executives $800,000 in so-called safety bonuses in 2019, despite the fact that six of its employees were killed in accidents in the last two years. Employee cynicism regarding CP’s claim that safety is its number one priority, is understandable in the face of such casual greed.

These examples of corporate behaviour reflect an era in which the "free market" or neoliberal paradigm has dominated the economic policy landscape over the last four decades.  

Its essence is captured in President Reagan's famous maxim: "government is not the solution to our problem, government is the problem." What is the solution: unleash market forces; get government off the back of wealth creators. How to accomplish it: through deregulation, privatization, austerity, and untrammelled corporate globalization.

Singularly motivated by costs and shareholder value, devoid of ethical underpinnings, the paradigm has compromised the safety of workers and communities, leading in extreme cases to industrial disasters such as Lac-Mégantic, Westray Mine, listeriosis and Walkerton.

It has funnelled income and wealth upward to the few, spreading insecurity, poverty and suffering amongst the many.  It has eroded democracy and thrown the planet into a climate emergency. 

The product of corporate hegemony—a corporate coup d’état in slow motion as described by Canadian philosopher John Ralston Saul—government’s countervailing power as custodian of the public good was systematically eroded.

Public institutions were diminished, their resources and regulatory powers stripped.  Crown corporations—energy, telecom, transportation, etc.—were privatized and deregulated. 

Long-term care facilities—where shocking numbers of residents have died of COVID-19— were privatized and deregulated by the provinces. Publicly owned Connaught Laboratories, which pioneered treatment for diabetes and played a prominent role in smallpox and polio vaccines, was sold off to a French pharmaceutical multinational, its Canadian remnant deprived of its former research capacity.

The Trudeau government’s recently created public infrastructure bank has morphed into a public-private partnership with Wall Street financiers, increasing costs to taxpayers and the risk of public infrastructure falling into private hands.

The pandemic has dramatically shifted the terrain, suspending for now the neoliberal framework. Criticism of massive fiscal stimulus has practically disappeared from policy discourse, as has the Bank of Canada’s unprecedented engagement in quantitative easing. Government is firmly in control, mobilizing resources to stem the spread of the virus; ensuring essential medical equipment for patients and protection for front-line workers; shoring up a tanking economy; and supporting workers and businesses facing financial collapse.  

Reagan’s aphorism has been inverted: "Government is not the problem; it is the solution to our problem."

While the corporate practices have been marginally reined in during this pandemic, their DNA remains unchanged. Corporate power and the architecture of persuasion that sustains it, will still be in place when the crisis ends. Big Business will not cede its place willingly. Contrary to expectations, the dominant paradigm weathered 2008 financial crisis unscathed. 

Already, there is evidence of corporate jockeying to maintain its ideological hegemony going forward. A secret memo to federal government ministers from the Canadian Association of Petroleum Producers— leaked to Environmental Defense—reveals the oil and gas industry is seizing advantage of the crisis to pressure government to grant it exemptions from safety and environmental laws and regulations. Its proposed rollbacks would put Canadians’ health and safety at risk, and guarantee Canada’s inability to meet its climate change targets. This cynical ploy echoes right-wing economist Milton Friedman’s famous dictum: “never let a good crisis go to waste.”

There are three possible scenarios going forward: status quo ante, marginal adjustments, or transformation to a new model for managing our economy—one that integrates values of empathy, equality, democracy and sustainability; that rebalances public and corporate power and the ideology that perpetuates it.  

The first two scenarios will play out at our peril. In the words of Leonard Cohen: “I've seen the future, brother. It is murder. ” The next crisis barrelling down upon us is the climate catastrophe, which unlike coronavirus, will end with either the extinction of the human species, or our collective survival by transitioning to carbon-free world.

Which of these possible futures will prevail? 

The coronavirus crisis is having a profound consciousness-raising effect on our society in terms of the urgency of addressing global threats. The notion of community and collective action has come to the forefront. Canadians have a long history of supporting public enterprise, publicly funded services, and regulating markets. Public trust in government leadership, blemished in recent times, is being restored, especially when compared with the disastrous scenario playing out south of the border. 

Will Canadian governments take the lead in forging an economic paradigm shift going forward? Not without a major push from its citizenry.

The immediacy of the pandemic—in contrast to a “down the road” climate crisis, which allows deniers to sow doubt and delay—could be the wake-up call that gives rise to broad-based popular movements that will demand our governments rise to the challenge.

Therein lies hope!!

¹ The notion of "paradigm shift,” pioneered by scientist Thomas Kuhn, refers to a fundamental change in the basic concepts and practices of a scientific discipline when incompatible with new realities.

Bruce Campbell is adjunct professor, York University, Faculty of Environmental StudiesSenior fellow, Ryerson University Centre for Free Expression; author of: The Lac-Mégantic Rail Disaster: Public Betrayal Justice Denied, James Lorimer, 2018; former Executive Director of the Canadian Centre for Policy Alternatives.

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