Download Canadian Political Economy: A Critique

Ray Schmidt
Canadian
Political Economy:
A Critique
Introduction
The most striking feature of the literature pertaining to the political
economy of Canadian development written in the last decade from a
Marxian perspective is the continuity which it exhibits with earlier bourgeois interpretations. What is perhaps more remarkable is the fact that a
large segment of Marxist or, perhaps more accurately, nee-Marxist
contributions
to Canadian political economy consciously conceive of
their work as the logical culmination of the conclusions already implicit in
bourgeois Canadian political economy.
This stress on the essential continuity of thought is the principal theme
of the extensive bibliographic essay by Drache appropriately entitled
"Rediscovering
Canadian Political Economy." 1 Drache discusses the
"new" political economy of Canada as an outgrowth of the old. Naylor,
whose work can justifiably be ranked as the foremost recent contribution
to a Canadian Marxian political economy of development,
humbly
acknowledges his debt in the following terms:
All I really did was to attempt to spell out rigorously what was already
inherent in some of the best Canadian historical literature, to try to impose
some order upon it, and attempt to draw some conclusions regarding the
relations between Canadian capital and the capitalist elite of the various
metropolitan economies. It was, in brief, an attempt to stand Creighton on
his feet J
Studies in Political Economy, No.6, Autumn, 1981
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Naylor's phraseology is, of course, reminiscent of Marx's assessment
of the relationship of his work to Hegel's. The deference to bourgeois
political economy is perhaps appropriate
to the extent that early
Canadian political economy stands in a relationship to neo-classical
economics which is in some ways analogous to the relationship of the
classical political economy of Smith and Ricardo to the marginalist
economics which succeeded it. It seems clear, however, that Marx did not
simply systematize and draw out conclusions already contained in either
Hegel or classical political economy. Rather, he posed a new revolutionary problematic.'
Contemporary Marxian Canadian political economy,
on the other hand, is an eclectic melding of at least three major intellectual influences: (I) bourgeois political economy nationalist themes and
issues, (2) third-worldist/dependency
theory concepts, and (3) classical
Marxist language.
In this paper I shall argue that the exercise of rethinking the bourgeois
problematic and establishing a distinctly Marxian problematic has not
occurred. This failure has had serious implications for the scientificmaterialist character of the neo-Marxian problematic in that it remains
permeated with the ideological baggage of its various origins. I shall
attempt to illustrate this by tracing the major aspects of its origins and
evolution" I will conclude with some suggestions for the establishment of
a new starting point.
Bourgeois Canadian Political Economy
If we specify the minimum requirements for the title "political
economy" as, (a) a focus on the totality of social, political and economic
structures which are (b) specified in a determinant hierarchy, then it is
apparent that political economy in Canada has a tradition which precedes
Marxian influence by some three decades. The foremost representatives
of this intellectual current were Innis and Creighton.'
Canadian political economy was cognizant of the contradictions
resulting for peripheral development within the expansion of a world
capitalist system. It was distinctive since its starting points of analysis
were the international character of the market economy and the international division of labour. It insisted on the specificity of historical circumstances in the understanding of development, rejecting for the most part
the abstract normative assumptions of modern economics. In this sense it
posited the necessity for the recognition of the specificity of Canadian
capitalism and Canadian capitalist development.
Development
world capitalist
is most explicit
such as Lower."
66
was seen as a process of integration into the expanding
system. The essentially diffusionist element of this theme
in the concept of metropolitanism identified with writers
It is interpreted by Innis as the inexorable "Penetrative
Ray Schmidt/POLITICAL
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Power of the Price System' '7 and by Creighton as the expansion of British
liberal ideals. To Innis the mechanism for this diffusion was the
expansion of the market to the periphery in search of staple commodities
and the concommitant adoption of capitalist technology to cheapen costs.
With the wheat economy in the late 19th and early 20th Century "Canada
came under the full swing of modern capitalism with its primary problem
of reducing overhead costs."! Creighton's emphasis was on the role of
the merchant princes of Montreal as the outpost of the British ideals he
admired so much:
In the commercial group was concentrated a great proportion of economic power - the wealth, the energy and ability of the colony ... It was a
re-enactment, upon a distant and insignificant stage, of the classic WestEuropean struggle - the struggle between insurgent commercial capitalism
and a decadent and desperately resisting feudal and absolutist state.?
The merchants were, in effect, the "class medium"
progressive ideals were transmitted to Canada.
by which these
It should be pointed out however that the diffusionist perspective in
this analysis bears little resemblance to more recent diffusionist schools of
bourgeois development theory. First, Creighton's work at least contains
some recognition of the importance of class and class struggle. Secondly,
development is not seen as an automatic process of "becoming." There is
the recognition that the process of development was inherently uneven,
and also that it was not automatically equilibriating. Both Creighton and
Innis appear to identify a "fatal flaw" which inhibited the ultimate
realization of this process in a fully developed form. The "flaw" was
however situated primarily in "natural" environmental and/or economic
disadvantages.
Creighton believed that the heroic attempt of the Montreal merchants
to create a continental empire was stymied by environmental and geographic obstacles - the imperfections of the St. Lawrence as a transportation system. Their successes are counted as major victories of visionary
men; their failures as the legacy of an intractable environment, and the
weaknesses and obstinacy of lesser men who failed to share their dreams.
Progressive commercial capitalism is juxtaposed to the supposedly reactionary and parochial values of French Canada. In this sense his work is
in large part a justification of conquest and a dismissal of the aspirations
and historical role of French Canada after the conquest. Creighton's
works are a legitimation of the creation and consolidation of a continental Canadian commercial state as a complete identification with the
"national interest." His problematic can thus be seen to originate in large
part in internal national conflicts between the French and English.
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Studies in Political Economy
The staple approach taken by Innis also attributed the problems of
Canadian development to the environment - that is, the character and
availability of resources. As with Creighton however, the development of
the social structure is a dominant theme. The staple was an all
encompassing notion. It left an indelible stamp upon the entire social
structure:
Concentration
on the production of staples for export to more highly
industrial areas of Europe and later in the United States has had broad
implications for the Canadian economic, political and social structure.
Each staple in its turn left its stamp, and the shift to new staples invariably
produced periods of crisis in which adjustments in the old social structure
were painfully made and a new pattern created in relation to a new staple. 10
In essence his theory embodied a unique combination of technological
and environmental determinism. According to Innis, cheap water transportation favoured the rapid exploitation of staples and dependence on
more highly industrial countries for finished products. It favoured the
position of Canada as an exporter of staples to more highly industrialized
areas ... 11 At a later stage of development the need for an efficient mode
of transportation was seen as the crucial determinant of the formation of
a highly centralized state because the staple economy necessitated
infrastructure extension at a scale beyond the capacity of the private
sector. Such a single focused commitment to one sector of the economy
accentuated the severity of cyclical crises, and through the one-sided
development of the economic, political and social structure, limited the
flexibility to adapt to other types of production.
Like Creighton, however, the core of Innis' concern was national
unity, and not a critique of Canadian society or the capitalist economy
per se. The concluding chapter to The Fur Trade in Canada is perhaps
Innis's clearest statement of a staple theory of development. His final
remarks return to the question of whether this development entailed long
term national unity.
The present boundaries were a result of the dominance of furs ... The
geographic unity of Canada which resulted from the fur trade became less
noticeable with the introduction
of capitalism and the railroads. Her
economic development has been one of gradual adjustment of machine
industry to the framework incidental to the fur trade.l?
The logic of Canadian unity, predicated upon an east-west commercial
system centered on Montreal and oriented to western Europe, became
increasingly tenuous as economic ties were restructured in a north-south
direction. In another work, Innis was to characterize this process as a
devolution from "colony to nation to colony. "13
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Therefore, it can be seen that Innis and Creighton established the
of the origins of Canadian society within a highly dependent
commercial capitalist system. The notion of dependency
and the
weakness of Canadian capitalism are, of course, the reasons these writers
have been adopted as intellectual mentors by contemporary left-nationalists. How adaptable is their framework to a Marxian analysis?
theme
It must be stressed again that their discussion of the nature of
Canadian capitalism was largely incidental to their principal theme which
was the question of the logic of a unified Canadian nation-state. They
asserted, in contrast to many who wrote before and after, that Canada
was not an historical accident. There was a real material basis for the
origins and maintenance of a distinct Canadian state. The determinant of
this unity was located in the nature of the early Canadian continental
commercial economy, structurally tied by the simple import/export base
of its economy across an entire continent to western Europe. Their
economic determinism is an implicit suggestion of a determinant hierarchy of relationships between economic and social structures, and that is
what distinguishes their approach as political economy.
However, it is a political economy of a different variety from
Marxism. It is not, as many left-nationalists would like to think, that their
ideological dispositions did not allow them to draw the "logical" conclusions inherent in their work. Rather, the specification of their problematic
itself establishes definite limits to any potential social critique. That is, the
dynamic of capitalist development is seen essentially as a market response
to natural environmental imperatives. It is a fatalistic and mechanical
conception of social development in which, at most, the human and class
agency in the making of history is limited to the facility with which
"objective"
opportunities are recognized and exploited. Classes can be
defined in terms of their behavioural characteristics with respect to these
opportunities, but not in relation to other classes. Thus, class analysis
takes the form of a judgement as to the more or less progressive nature of
particular social groups in relationship to the achievement of some
existential national goal. A debate as to the relative progressiveness of
particular social groups is the limit to which the discussion of class is
capable of moving within the bourgeois problematic.
In large measure, the neo-Marxian reformulation is based upon the
further exposition of the bourgeois problematic in terms of the behavioural characteristics of the dominant social classes. Neo-Marxian interpretations were to a large degree anticipated in Watkins' 1963 reformulation of staples theory.
A Staples Theory of Economic Growth
Despite its suggestive nature, Innis' work really contains no coherent
and systematic
exposition
of a theory of economic
growth or
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Studies in Political Economy
development. Watkins formalized many of the concepts implicit in Innis'
work in terms of contemporary development theory and theories of international trade. 14 Through Watkins, staples theory was transformed from
a specific interpretation of Canadian development to a general theory of
the development of white settler colonies within a world market system.
In broad terms, staples theory can be summarized as follows: in a
frontier economy where both capital and labour are scarce relative to
resources,
the staple, as a saleable commodity
pursued by the
metropolitan economy, provides the impetus for the incorporation of the
periphery, and is the sole initial basis of the economy. The speed and
extent to which integration occurs is contingent upon: (1) international
demand for the staple, (2) the current stage of development of the
technology requisite for the staple's production,
(3) the mobility of
productive factors, and (4) the character and availability of the staple
supply.
If variables one, two and three are held constant, the extent of
development will be totally determined by the specific character and
supply of the staple that is exploited. The associated production function
of the staple, which can be assumed to be given at anyone point in time
and level of production, will then determine the specific coefficients by
which factors are combined in the production process; that is, the extent
to which the migration of factors is induced and the spin-offs to related
sectors. The greater these spin-offs or linkages, the greater the possibility
that the economy will transcend its purely staple base.
The production function associated with staples such as fur or lumber
generated few spin-offs of significance because of low capital investment
and labour demand, while the wheat economy has been viewed as providing a sufficiently secure base to generate the backward, forward and final
demand linkages requisite for a modern economic structure. Thus, there
are both "good" and "bad" staples. The developmental result is dependent upon the good fortune to be blessed with an abundance of a •'good"
staple. It is purely a question of having the proper resource base at the
right point in time, at least so far as economic theory is concerned.
Watkins also develops a more sociological argument. "Objective"
economic opportunities may not be exploited internally due to unfavourable political, ideological and institutional factors. This social environment may, in fact, be the historical legacy of earlier staples production.
For example, backward economic linkages such as a transportation
system are mechanically determined necessities if production is to occur at
all. On the other hand, forward and final demand linkages are largely
behavioural
decisions. If the requisite entrepreneurship
is lacking,
effective demand might be satisfied through imports.
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In other words, geographical areas enter the world capitalist system on
the basis of a relatively few commodities required by the expanding
metropolitan core of the system. However, in this process the social
structure of the periphery takes a particular form most conducive to the
production of that particular staple. For instance, the same conditions of
international demand which produced plantation agriculture and slavery
in the Caribbean in search of sugar, resulted in petty commodity
production of the wheat staple in Canada. The dynamic is one of
maximizing the efficiency of production,
the assumption being that
slavery and petty commodity production were the most efficient forms of
producing sugar and wheat respectively, given the current stage of technology and the availability of factors. The point is that each resulting
social structure had radically different implications for the future development of these geographic areas. The problem is in part due to the
structure of institutions and a potential source of entreprenteurial talent,
and in part due to the precise nature of the socio-economic hierarchy of
the respective areas.
The legacy of a slave system is an aristocratic elite on the one side, and
the mass of the population living at a bare subsistence level on the other.
Under these conditions, demand for manufactured items may be limited
primarily to luxury goods which can be most easily satisfied through
imports. Petty commodity production on the other hand presents the
possibility of a substantial internal market and local manufacturing.
In other words, if economic linkages are not captured, because of
either entrepreneurial failure or a bimodal income structure which limits
the consumption potential of the internal market, then the legacy of the
staple will be continued dependency and underdevelopment.
It is noteworthy that this conclusion can be formulated entirely within the
parameters of bourgeois social science. Subsequent reformulations of this
thesis in the language of Marxism add little to its essential thrust.
Dependency
Theory and Canadian
Political Economy
Marxism has been introduced to the revision of Canadian political
economy by way of dependency theory. The borrowing of concepts was
to some degree direct, through writers such as Levitt who did much of her
earlier work in the Caribbean. Levitt's analysis explicity compared the
structure of the Canadian social formation to that of an underdeveloped
country, freely utilizing the concepts developed by the Latin American
structuralists. Nevertheless, she credits Innis' work as "the chronological
antecedent
of the Latin American
economists
in developing a
'metropolis-periphery'
approach ... "15
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There can be no doubt that the parallels suggested by Levitt do exist.!"
and subsequent revisions of the structuralist theory by neo-Marxists such
as Frank have their Canadian counterparts.
Watkins simply endorsed
Frank's
hierarchical model of surplus extraction as applicable to
Canada.!? Other writers, such as Naylor, followed a similar route, but
through the revision of Canadian historiography and historical study of
the Canadian social formation. The dependency rhetoric was a handy
crutch, given the relatively unsophisticated· development of Marxist
theory in the late 1960s and early 1970s in Canada. Nevertheless, it was as
much a process of convergence as it was one of simple borrowing. Many
of the ideas propounded by dependency theory already had a broad
popular currency in Canada. For instance, the notion of Canadians as
"hewers of wood and drawers of water" is an implicit statement of
denigration of the Canadian position in a world division of labour. The
attraction of dependency theory then was that it articulated a radical
nationalist sentiment, systematizing it into a critical abstract descriptive
model of the operation of the world market and the position of Canada in
that market.
It is important to situate Canadian neo-Marxism within the historical
and social context in which it arose. It was primarily a result of an effort
to mediate between orthodox Marxist interpretations,
and the eclectic
left-nationalist movement of the 1960s and early 1970s. The latter was
most fully represented politically by the Canadian Waffle.
As a heterogeneous left-wing tendency within the social democratic
New Democratic Party (NDP), the Waffle officially articulated the
position of a nationalist movement aimed at the repatriation of the
Canadian productive sector from foreign control through parliamentary
means." To that extent, the Waffle program failed to break with social
democracy. The expulsion and disintegration of the Waffle marked the
definitive defeat of its strategy and, on the part of some elements at least,
a profound disenchantment
with social democracy and
explicit
attempt to establish their analysis within a Marxian perspective. 19
an
In the polemical enthusiasm of this criticism and self-criticism, Marxist
theory served more as an appeal to authority than as a method for
analysis. For instance, the muckraking character of some of this work
involved little more than the use of class categories as pejorative epithets
describing the anti-nationalist
character of the Canadian bourgeoisie.t?
Similarly, concepts such as that of the' 'bourgeois state" served to justify
the claim of the futility of utilizing bourgeois institutions to carry out
popular objectives." Above all it is necessary to note that the original
nationalist questions and concerns were not themselves reformulated or
posed from the perspective of a Marxian socialist position. The primary
thrust was directed at illustrating the primacy in Canada of a nationalist
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focus, and its consistency with a Marxist perspective. Naylor's work
remains the most systematic reinterpretation
of Canadian development
from a left-nationalist perspective. Since it is in many ways paradigmatic,
much of the remainder of this essay will be devoted to the discussion of
Naylor's contribution.
Mercantilism and Underdevelopment
A simple precis of Naylor is not a straightforward task since he has
retreated from his initial theoretical statement without systematically
advancing an altemative.F My statement of his theory is, therefore,
"teased" out of his book and several articles."
According to Naylor, the primary significance of the staple economy
has been the over development of the Canadian commercial classes. The
reason is that historically, the extractive resource extensive form of production tended to minimize capital in production relative to capital in
circulation, thus restricting indigenous capital accumulation and concommitantly, the development of a national bourgeoisie with an autonomous
economic base. The dominant fraction of the Canadian bourgeoisie was
therefore based in the international circulation of commodities.
Initially these commercial groups were mere agents of foreign capital,
often linked directly through mercantile companies. As the international
capitalist economy advanced to its imperialist stage, and the local
economy grew more sophisticated, alternate opportunities became manifest. That these opportunities were not seized or, rather, were developed
in a particular way, is interpreted in terms of the mode of operation of
mercantile capital. According to Naylor, it was not simply a lack of
entrepreneurship,
as Levitt and many left-nationalists suggested, but the
dominance of a particular type of entrepreneurship.P
Naylor attempted
to specify this in materialist terms as a fundamental
contradiction
between productive
and non-productive
capital between the
"industrial-capitalist
entrepreneur"
and the "mercantile-financial
entrepreneur".
The first operates in the sphere of production, the second in distribution. Thus, maximization
of the mercantile surplus will minimize the
industrial surplus. Furthermore, industrial capital is typified by a high ratio
of fixed to circulating capital and is concommitantly
long-term and often
high-risk, while mercantile capital is typified by a low ratio of fixed to
circulating capital and is directed towards short-term,
relatively safe
investment outlets.s>
Naylor suggests that, because of the historical dominance of merchant
capital in Canada, this contradiction was transposed to the level of the
state. Thus, the form which Canadian development took was guided, not
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by the realization of "natural" economic advantages, but by a mercantile
state philosophy which conceived of the accumulation of national wealth
as the maximization of the inflow of factors of production (capital and
labour) and the minimization of their outflow. That philosophy is
opposed to the mode of operation of industrial capital - the accumulation of surplus value through production. The merchant-financial
fraction clung to their mercantile position as intermediaries and, therefore,
participated fully in the import of capital and the alienation of the productive sector to foreign control. By so doing, they perpetuated foreign
dependency. Since industrialization possibilities were limited to a strategy
of coercing branch plant transference to a tariff protected market - that
is, import substitution - economic specialization in a smaller range of
products in which Canada had a natural advantage was inhibited.i"
Naylor's work has been the target of a prolonged and often bitter
debate which has raised both theoretical and empirical objections." The
validity of the assumption of a universal contradiction between productive and non-productive capital has been the primary theoretical issue. I
shall refrain from a detailed review of this aspect of the debate since
Naylor has retracted somewhat in his emphasis upon this contradiction:
"Undoubtedly
...
I exaggerated the point and inadvertantly caused
some confusion. What is at issue ... (is) ... the relative strength of
commercial and industrial capital in Canadian society.r'P
Thus, he appears to have remained intransigent in his insistence upon
the necessity of recognizing Canadian economic problems in the commercial origins of the dominant fraction of Canadian capital and in the commercial origins of the Canadian state: "the predisposition of the Canadian economy towards staple extraction for export to a metropolitan
economy is the consequence of the historically determined power of
commercial
interests in conjunction
with metropolitan
capital. "29
Naylor's retreat from an attempt at a materialist explanation centering
around a competition for surplus value serves to intensify the reliance of
his explanation on the behavioural characteristics of capitalist fractions in
the reproduction of dependency.
Commercial capitalists, it would appear, have an overwhelming predisposition to commercial activity. It is precisely this assertion which has
been challenged on empirical grounds. Critics have suggested that far
from opposing industrial capitalist development, the National Policy
tariffs represented the unified program of Canadian capital as a whole.P
Others have claimed that the boundaries between commercial and
industrial capitalists were in any case not distinct." Examples of commercial ventures in the productive sphere include railway investments and
large scale industrial ventures such as textiles, sugar refining and steel
production.
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A sterile legacy of this exchange has been the rather esoteric debate
regarding what is a commercial capitalist and what is an industrial
capitalist. I do not believe it is fruitful to engage further in this intellectual
exercise. In any case, Naylor's work has evolved beyond the "merchants
against industry" thesis. Rather, he suggests instead that
There are two principal routes, with some minor variants, that an
economy can follow on the road to industrialization. Manufacturing industry can grow up 'naturally' from a small scale, even artisanal mode of
production when capital accumulation is a largely internal phenomenon
based on the reinvestment of a firm's own profits. A second path implies
direct development to large-scale oligopolistic enterprise where outside
capital is invested to facilitate its expansion and where the state takes an
active, direct role in its growth. The first path, if successfully followed,
would lead to the emergence of a flourishing and independent national
entrepreneurial class. The second mayor may not; it may simply reproduce
the conservatism of commercial capitalism in a new guise .. )2
It seems clear that Naylor was correct in his suggestion that Canadian
industrial development was guided by a state policy oriented primarily to
import substitution. It is also quite clear that this has had certain negative
effects upon the flexibility of the Canadian economy, and that this
problem has to some extent been cumulative. However, that interpretation in itself is not unique to Naylor. What is unique in Naylor's thesis is
the suggestion that this strategy was the deliberate reconstruction of a
dependency relationship in a new form by Canadian commercial capital.
Despite the qualifications to his earliest formulations, that aspect of his
thesis is retained.
Every 'small' capitalist economy is susceptible to a degree of outside
direction of its development process. However the degree to which the
Canadian capitalist class not only has bowed to pressures from abroad but
has deliberately and earnestly set out to induce those very pressures to
which it has bowed results in a difference in kind in its external relations,
rather than just in degree.r'
The problem is that once the centrality of the productive versus nonproductive contradiction is dismissed, the materialist basis of the analysis
is also undermined. In the end, Naylor fails to transcend the "entrepreneurial-failure" thesis of writers such as Levitt, but merely postulates it in
a different form. Still, to simply dismiss Naylor's work as a deluge of
invectives heaped upon Canadian capitalists for their lack of a laissezfaire entrepreneurial ethic does not do justice to the significance of his
contribution,
and fails to grasp the reasons for the limitations of a
dependency analysis.
Nationalism, Ideology and the Left-Nationalist Problematic
A full understanding
of Naylor must recognize his work for what it is:
an internal critique of the original bourgeois problematic. As such it fails
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to transcend the original ideological concepts and develop an opposing
theoretical problematic. Here I shall not recapitulate the exercise of
"setting Naylor straight" by revealing the inconsistency of his framework
with received doctrine. I am concerned primarily with the manner in
which his work has come to form the central core of the left-nationalist
problematic and the stultifying effect this has had on the development of
a revolutionary problematic.l"
As we have seen, bourgeois Canadian political economy is not so
much a critique as a confession to fatalism - a justification for
remaining failures in the achievement of national political and economic
sovereignty and the failure to transcend the internal national problem.
Naylor's response was to take this theory and, in his own words with
respect to Creighton, to "stand it on its feet." The process of standing
Creighton on his feet essentially consisted of a reversal of Creighton's
eulogy to the progressiveness of the dominant Canadian commercial class
fraction, while retaining the notion that they were the driving force in
Canadian development or perhaps more accurately, underdevelopment.
Naylor correctly assesses the fatalistic interpretation of bourgeois theories
of development as an ideological apologetic. He concludes instead that,
far from representing a progressive force that epitomized national
aspirations, it was not in the class interest of the Canadian bourgeoisie to
pursue distinctly independent interests. Thus his analysis is aimed
essentially at debunking the myth of the validity and integrity of
Canadian bourgeois national leadership.
In itself, this is an important ideological task. However, it is merely a
first step. If we leave the matter here we are simply substituting for the
bourgeois apologetic a trite and moralistic apportionment of blame.
Continued theoretical development is limited by the extent to which
nationalist ideological concepts are retained.
No simple equation between a national focus and ideology should be
made. By nationalist ideology I mean a process of reification through
which the nation assumes a validity and integrity, and is attributed with a
will and goals which are independent of the particular social and class
interests of which it is composed. An analysis is nationalist insofar as it
poses its question in terms of national leadership. It is ideological insofar
as the crisis of national leadership is seen as fundamentally a crisis of
unfulfilled national aspirations rather than as an inability to sustain
accumulation in the face of foreign oppression. The notion common to
both Canadian left-nationalists and bourgeois nationalists is that
manufacturing is synonymous with development - that a manufacturing
economy is the natural goal of national development.
Ray Schmidt/POLITICAL
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There is a logical fallacy here and it is very close to the stages theory of
vulgar Marxism. The implication is that the struggle for class hegemony is
based on the need to accomplish some teleologically defined goal which
proceeds through discrete stages. As such, the analysis is fundamentally
idealist.
In political terms the conclusion appears to be that if we desire
independent industrial development, then socialism is the only alternative
since it is not in the class interests of the Canadian bourgeoisie to pursue
distinctly independent interests. Perhaps so, but such radical rhetoric falls
far short of a materialist analysis. Rather, it appears as a slight of hand by
which socialism is substituted for liberalism as an alternate route to the
same national goal - a goal which appears to exist in an ideal world in
search of a class bearer.
However, if the structural relations of the world economy have not
relegated such a role to Canadian capital, in what sense can it be said that
this role has been displaced to the exploited classes? Here we are left in a
complete theoretical vacuum. According to Naylor, "the dominant class
is directly dependent on the metropole; other classes, in contrast, are
defined by their productive relationships with the dominant class and thus
are related only indirectly to the metropolitan class structure. "35 Thus the
entire question of the nature of the subordinate classes and class struggle
is left in abeyance.
It is not simply a matter of filling in the gaps, of adding class categories
to the dependency framework.
Classes exist in dependency theory
formulations, but as passive categories defined in relation to a transcendent structure or, at best, as categories whose precise status and role is left
undefined.
Naylor, for instance, suggests that "while the internal
dialectics of class and of capital accumulation may determine the nature
of metropolitan
expansion, the social structure and the structure of
capital in the hinterland cannot be regarded as independent of the
metropole.' '36 The issue here is not the dogmatic assertion of the primacy
of internal over external social forces, but the problem of conceptualizing
class struggle at all within a dependency framework.
The difficulty can be illustrated through an examination of the basic
concepts which define dependency theory. For example, underdevelopment is not a theoretical concept, but is always a descriptive category
defined in comparative terms to development. In the Canadian case, a
similar binary focus is apparent in the categories of staples versus
industrial production.
As opposite poles in a structural unity, these
categories are critical abstract representations of a condition, of a failure
to achieve a goal. It is not a social process and a social relation which is
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the object of the critique. That is, the problematic remains bounded by
the empirical bourgeois categories of "efficiency" and "rationalization"
rather than the social analytical concepts suggested by the notion of class
exploitation and class domination / subordination. Therefore, the radical
rhetoric notwithstanding, the nature of the debate is restricted to a debate
over policy alternatives.
This conclusion is, of course, circumvented by the imposition of the
Marxist concept of class struggle on the basic model, but the ad hoc
character of this appendage is clear. For instance, the commercial classes
become class enemies but they become so by virtue of their identification
with the structure of dependency and their position as impediments to
economic rationalization.
Class struggle then emerges as a conscious
response to a perceived social malaise. It is not a constant and driving
force of historical development.
It is necessary to repeat that the critique of dependency theory must
not be based on the assertion of the primacy of internal class dynamics
over external relations." That is pure ideological dogma. The problem is
the difficulty of finding any central place for the notion of class struggle
at all within a dependency framework. It is not that classes are not
referred to - much bourgeois analysis does as much. Where Marxism
differs is in the specification of classes as they arise within struggle. As
such they are analytical concepts rather than descriptive categories. It is
this dynamism which is missing from dependency formulations, and it is
this which marks the origins of the theory within a policy debate rather
than within a class struggle perspective.
External Control,
Capital Accumulation
and Class Structure
Let us be clear on one thing - Naylor's work and that of his
counterparts concerning third world development should have long since
rid us of analytical frameworks in which Euro-centered models of class
development are dogmatically transposed to the periphery. In their polemical confrontations with the ideologues of both the right and the left,
they have been instrumental in undermining both orthodoxies. I believe
that we all owe them a tremendous debt. Their very real accomplishment
has been the assertion of the specificity of capitalist development in
peripheral social formations, It is necessary to take seriously the core of
Naylor's analysis in so far as it suggests that the central dynamic of
capitalist accumulation in countries such as Canada did not conform to
the classical Marxist model of class formation.
Classical Marxist theory suggests that development is synonymous
with self-sustained capitalist accumulation - the extended reproduction
of the capital/wage labour relationship. The theory requires the existence
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of generalized commodity production and, through the alienation of the
means of production from the direct producers and its concentration in
the hands of the few, the division of society into two fundamental classes
of capital and wage labour. The result of this "primitive accumulation" is
that both classes are then dependent for their existence on the sale of
commodities/labour
power in a competitive market.
Individual capitals are, therefore, forced into competition with one
another in the sale of commodities. The form that this competition takes
is to cheapen the value of the commodity through reducing the value of
labour power; either absolutely, by lowering the level of subsistence of the
working class, work intensification or lengthening the working day or
relatively, by increasing the organic composition of capital and thus
increasing productivity per worker. When the working class has achieved
a sufficient level of organization to defend wage levels or further increases
in the absolute exploitation of the labour force are blocked, competition
between capitals in the sale of commodities will increasingly be forced to
take the form of innovation and investment of capital to raise the
productivity of labour. Thus capital comes to rely on relative surplus
value as a normal means of competing with other capitals. It is this built
in imperative to accumulate and constantly increase productivity which
Marx saw as unique to the capitalist mode of production, and it is this
which constitutes its "progressive face."
This classical formulation, with its insistence upon (I) the centrality of
class production relations for the understanding of development and
(2) the understanding
of development
as the establishment
of the
expropriation
of relative surplus value as a normal condition,
is
rigorously asserted in a recent article by Brenner" as a critique of neoMarxist interpretations of capitalist development and underdevelopment.
Brenner's contribution has been both valuable and timely. Nevertheless, I
believe that the basis for the achievement of condition (2) requires some
rethinking with respect to Canada.
Some years ago, Emmanuel'? advanced the revisonist thesis that,
under capitalism, it is consumption that fuels production. That is, those
areas of the world which began with a relatively high standard of living
maintained an inherent advantage in that capitalist production was
stimulated by the prospects of the internal market. In this simplistic form,
the idea has rightly been rejected by Marxists because it seemed to place
the emphasis on the sphere of exchange rather than the relations of
production as the driving force of development.w Nevertheless, I believe
that Emmanuel does identify a real exception with respect to white settler
colonies and this exception can be explained in terms of the development
of the relations of production.
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Fundamentally, the understanding of the peculiarities of the Canadian
development pattern entails the reconceptualization
of the role of
independent commodity production. Under certain conditions pertaining
to white colonial settlement, namely, where commodity exchange on a
world market is an immediate and absolute necessity for survival, there is
reason to believe that competition between independent commodity
producers in the sale of commodities provides an imperative to accumulate in the interests of increased productivity which is analogous to the
innovative
imperative generally attributed
solely to the capitalist
production process." The family farm in North America has been the
most outstanding example of the viability and persistence of independent
commodity
production.
The a priori notion that the independent
ownership of the means of production allows escape from the market
imperative through recourse to a natural or subsistence economy is valid
in an abstract sense, but that was certainly an ultimate resort." The level
of subsistence already accepted as normal by immigrants, along with
integration into a world commodity exchange system, implies social needs
for both producer and consumer goods and the continual creation and recreation of these needs on an expanding scale. A retreat to natural
economy was as socially unacceptable as would be any reduction in the
historically and socially defined subsistence level of a wage labour force.
It must be remembered that the form of legal ownership of the means
of production and the relatively progressive political system allowed the
benefits of innovation to accrue in large measure to the individual. Independent commodity producers, in this situation, could and did compete
by raising their own surplus through technological innovation, thus
sustaining and increasing their real income.
A mode of production constitutes a separate mode of production
insofar as it is governed by a distinctive developmental dynamic. Independent commodity production
in North America was not simply
dominated by the capitalist mode of production, but was governed by a
similar dynamic imperative. The theoretical elaboration of this thesis is
beyond the scope of the present work. However, some preliminary observations can be made.
In the North American situation, characterized by a fairly constantly
expanding agricultural frontier, concentration
of ownership over the
principal means of production, land, was not always feasible or realistic.
First, such concentration did not necessarily guarantee access to a cheap
and plentiful supply of labour since it did not entail the dispossession of
direct producers. The principal regions where concentration did occur at
an early stage were associated with slavery rather than a free wage labour
force. Secondly, independent commodity producers were far from being
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a mute political force. Certainly they occupied the first line of resistance
to either the imposition of slavery or a Wakefieldian solution. Their
political strength was in part due to a cultural tradition of independence
and a democratic legacy inherited from Britain. Ultimately however, the
relative abundance of cheap land and the difficulty of limiting access to it
were the crucial factors tipping the balance in favour of independent commodity production as opposed to a capitalist production process.
With perhaps some noteable exceptions, such as the virtually destitute
Irish, the opportunity existed for the immigrant to choose between wage
labour and independent commodity production. A statement by a British
trade unionist in 1875 reflects this expectation: "Farm labour for hire is in
Canada only a transient avocation, there being in this country no large
body of men who expect to devote their lives to working for wages, as
every healthy and sober man can easily become a landholder. "43
However unduly optimistic this assertion might be,44 the point is that
"in a situation where the bulk of the agricultural work force was made up
of owners of land rather than landless farm labourers, incomes were tied
securely to agricultural productivity.t'<
The existence of this relatively
progressive and high income alternative to wage employment, provided
an upwardly buoyant pressure on the general level of wages. The phenomenon of a comparatively high wage economy in turn determined that, if
the capitalist production process was to take place at all, it had to be
relatively capital intensive.
Potential industrial capitalists existed in the form of enterprising
independent commodity producers as well as merchant and financial capitalists. However, a potential wage labour force awaited mass immigration from Europe and the closing of the agricultural frontier.
The social relations of production established in North America presented few barriers and a positive incentive to the development of
sustained technological innovation. There was nothing inherently backward about North American commercial capitalists or the dominant production process. This cannot be attributed simply to the enterprising progressive culture of the North-western European immigrant. Neither was it
purely the result of a high living standard guaranteeing a secure internal
market. While market factors are important,
the point is that the
successful defence of an historically established subsistence level provides
a barrier to increasing the extraction of surplus labour through the
absolute immiseration of the direct producers. The process of innovation
and accumulation, therefore, can be seen as a social process and a social
imperative and not an entrepreneurial instinct. The relative speed with
which the capitalist production process was established was not the result
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Studies in Political Economy
of the will or the entrepreneurial orientation
determined by the balance of class power.
of the ruling elite, but was
A further note should be made concerning the question of market size
or, more precisely, the importance of securing a captive market. The
establishment of a capitalist production process faced serious obstacles in
terms of competition with better established foreign producers. As we
have seen, the option of competing against more technically sophisticated
foreign capital by the super-exploitation of a low wage labour force was
severely restricted. Therefore, a logical option was to by-pass that route in
favour of large scale production. In practice, it is difficult to conceive of
how such an abrupt leap could have been accomplished without tariff
protection of the internal market and technological and capital borrowing. Some industrialization was and might have continued to occur in any
case: for example, manufacturing based upon uniquely North American
market needs such as certain sophisticated farm equipment, or industry
based upon particularly rich or unique resource endowments. However,
in basic producer goods sectors such as steel, and for many consumer
goods such as textiles, innovations in transportation
technology and
economies of scale in mass production had by the second half of the
nineteenth century already begun to undermine the viability of small scale
industry oriented towards geographically sheltered local markets."
Seen in this light, Naylor's thesis pertaining to the two major routes to
capitalist development strikes close to the mark, although he has
misconstrued the fundamental forces at work. The first route is, in fact,
that described by the classical Marxist model of primitive accumulation,
and is probably most fully applicable to Britain, the first country to
industrialize. The Canadian variant of the second route cannot be
explained simply as a process of merchants "reaching back" to control
production. The point is that industrialization,
as the culmination of a
lengthy process of primitive accumulation, was in large measure blocked;
not by the conservatism of merchant capital, but by the strength and
viability of independent commodity production. It was not the dependency of Canadian capital which determined the persistence of commercial capital as a dominant fraction of capital, but the inability of capital to
exert effective control internally over the means of production or, more
to the point, the impossibility of excluding the majority of the population
from ownership of the means of production.f
Therefore, while both processes of capitalist development were in
evidence, as Naylor suggests, Canadian industrialization was characterized by a comparatively rapid adoption of large scale, relatively capital
intensive industry, and this did represent something of a disjuncture.
There is nothing particularly unique in this aspect of the Canadian
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experience. In fact, to the extent that the National Policy can be seen as
an industrialization policy, it was a conscious effort to emulate the earlier
economic protectionism of the United States whose industrial development was also financed by Britain.
Whether the first route was a possibility is speculative. The real point
is that once the world economy reached a certain stage of sophistication
and integration, the pace of technological advancement and capital accumulation became increasingly governed by competition between the
production units of various nation-states for the sale of commodities on
indigenous and world markets. Given the tremendous disadvantages of
late-comers to the scene, technological and capital borrowing may appear
as an attractive political alternative to increasing the absolute immiseration of the population to socially and/or politically unacceptable levels.
Thus, capital accumulation becomes more and more guided by conscious
political decisions.
Third world states, in alliance with foreign capital, have adopted the
route of technological borrowing and the development of sectors whose
growth is based on relative surplus value rather than pre-capitalist forms
of production and/or absolute surplus value, despite the fact that a wage
labour/capitalist
relationship may be poorly developed internally. We
would be hard put to identify a primitive accumulation process in these
countries analogous to that of Britain. Yet, it is capitalism that is being
developed in any case.
Given the possibility of the development of capitalism in this manner,
the question arises as to the extent to which this form of capitalism retains
its progressive face - that is, a self-sustained accumulation dynamic. In
contrast to the bleak prognostications
of dependency theory, I do not
believe that a definitive a priori statement can be made. The precise
nature of the development route taken, and the period and conditions
under which it is taken, have serious implications for subsequent
development. Ultimately it is always necessary to refer to the specific
balance of class forces within each social formation.
An import substitution model such as Canada followed can lead to
technological dependence, vertical integration across national boundaries
and,
consequently,
continued
economic
and perhaps
political
dependence. Yet, there is as much to distinguish Canadian development
from a third world development model as there is to link it. The
advantage that Canada enjoyed compared to third world countries was a
particular balance of class forces capable of maintaining high wage levels
and a relatively viable internal market. Even so, without protectionism
and the existence of a captive market in the form of the Canadian west,
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Studies in Political Economy
the high income of the internal market may not have been enough. In any
case, the combination of these factors determined that the accumulation
dynamic was not dependent solely on external forces, but was also
internally induced.
Class Formation
and Class Struggle
The most glaring weakness of the left-nationalist problematic is its
inability to add much of substance regarding the specificity of class
struggle in Canada. In seeking to illuminate external relationships, the
normal conflicts pertaining to a working class/capitalist relationship are
simply assumed. Despite the fact that the capitalist production process
belatedly came to dominate in Canada, the history of its development
undoubtedly had a profound influence, not only on the character of the
ruling class, but on the distinctive character of the Canadian working
class - its ideology and its political and economic organization. A few
speculative points can be drawn from the preceding analysis.
(1) The particular balance of class forces in Canada made the assertion of an independent working class political position extremely difficult. On one level, the persistence of an agrarian economy meant that the
Canadian working class, even defined as all those who work for wages,
constituted a numerical minority of the population until well into the
twentieth century." When a political party with a significant working
class mass base was finally formed in the 1930's, its viability necessitated
an alliance with radical agrarian elements. This political alliance, articulated by the Cooperative Commonwealth Federation, was a reflection of
the real weakness of the working class within what was still largely an
agrarian economy.
In an earlier period, the working class was frequently driven into a
collaborative electoral strategy with the bourgeoisie against low tariff
agrarian interests, in defence of the indigenous industrial development
fostered by the National Policy.s? While the support of organized labour
for such a policy was far from universal, there remained an uneasy
tension, never decisively resolved, between those labour leaders who
threw in their lot with one or another of the major bourgeois parties, and
those who sought to assert an independent labour interest. The difficulty
was that an independent labour interest was far from being clear within a
political economy as apparently artificial as Canada's. The Canadian
route to industrialization
allowed the ruling class to more effectively
represent itself as the embodiment of a corporate national interest.
At least until the 1930's and possibly beyond, the uneven nature of the
expansion of capitalism in Canada determined that it was independent
commodity producers rather than the working class which often offered
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the strongest political opposition to Canadian capitalists. The effect was
to blur the distinctiveness of class political positions on a variety of issues.
"A triadic class structure has a unique complexity resulting from the possibility of co-operation in conflict, the more so since there seemed on
practically every issue of significance to be grounds to unite class interests
as well as to divide them. "50 The lack of a long history of distinctive class
struggle oriented political organizations
is a legacy to which the
contemporary Canadian working class is heir.
(2) Numerical strength is important, but it is not necessarily a decisive
variable in the development of independent political organization. I have
argued that the general level of incomes was determined partially extraneously to the capitalist production process. In contrast to Europe,
independent commodity production in Canada provided an upwardly
buoyant pressure on the general level of wage income. A purely mechanical transposition from this thesis would suggest that high incomes made
more cohesive forms of mass organization
somewhat superfluous.
However, the idea that the intensity of class struggle is an automatic
response to the level of absolute immiseration is not tenable. It is not
necessary to succumb to the frontier myth of a uniquely North American
individualism to appreciate the significance of high incomes on the
development of working class organization.
The transition from absolute surplus value to relative surplus value in
Europe ultimately necessitated the intervention of the state to counter the
worst abuses of an unrestrained capitalist accumulation process which
was, quite literally, in danger of killing off its own labour force. State
intervention was carried out partly as a result of working class pressure,
and partly through the foresight of more progressive allies drawn from
within the ruling class itself. The point is that, in capitalist social
formations, it has generally been the state itself which has provided the
locus for political organization - through the legitimation of political
parties and/or through fostering the development of corporatist political
forms.
The electoral weakness of the Canadian working class meant that the
party option was scarcely viable. On the other hand, the objective basis
did not exist for the development of corporate structures either.
Corporatist forms of class collaboration have utility for capital as a whole
only as a vehicle for ensuring the stability of wage levels and the
uniformity of the rate of exploitation of labour power in the production
process. Corporatism is as much a guarantee against "cheating"
by
competing capitals by way of reducing the level of established labour
conditions, as it is a means of easing working class militancy. Its political
attractiveness to capital is in periods of crises of accumulation.
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Studies in Political Economy
In some European contexts the establishment of at least a minimum
level of uniformity in the conditions of labour was in the long term
interests of the reproduction of capital as a whole on the basis of relative
surplus value. The Canadian ruling class, despite its .official corporatist
ideology, bitterly resisted any real working class input in terms of the
establishment of actual organizational
structures. Even the minimum
guarantee of the right to collective bargaining was not achieved by the
Canadian working class until the middle of the Second World War. The
fact was that Canadian capital had nothing to gain from corporatism
beyond the assurance of a reduction in working class militancy something which the working class had no interest in offering and the
labour leadership would have no power to ensure.
That the conflictual process between labour and capital took place
largely outside of the mediation of firmly established and formalized state
structures meant that the ability to sustain mass organizational forms of
the working class was correspondingly reduced. There was simply no
common ground upon which they could obtain legitimacy over an extended period. The Canadian pattern was not simply an indication of the
greater strength of Canadian capital relative to its working class, and it
was not a question of the size of the latter per se. The specific contradictions of capitalist accumulation necessitate the organization and integration of the work force to varying degrees and in particular structures
by the state which, as the organizational locus of capital as a whole, is
also the organizational locus of class conflict. In Canada, the particular
problems of capital accumulation allowed a policy of systematic exclusion
of the working class and, thus, the continued failure to establish the
legitimacy of its separate organization.
(3) The development of a class' distinctive sense of itself is forged in a
specific history of struggle. The working class of each social formation
has a specific history, tradition, and, if not a culture, at least a popular
ideology which defines it in varying degrees as distinctive from, and in
opposition to, the dominant class forces. This approach to working class
formation
has only recently begun to receive serious attention in
Canada.!'
There is no lack of a militant and often radical working class history in
Canada. Workers do not adjust passively to their role as wage labourers,
and nothing in the preceding analysis should be taken to suggest that
capital did not attempt to reduce the value of labour power to the
minimum possible level. Nevertheless, the lack of a consistent and
systematic historical process of primitive accumulation in Canada has
undoubtedly had serious consequences in terms of the development of a
more general sense of class consciousness and class solidarity.
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Primitive accumulation entails not only the alienation of property, but
the usurptation of what are considered to be fundamental and vested
human rights. The "trauma"
of dispossession appears .to have been
crucial in the welding of a sense of solidarity and common resistence in
the early stages of class formation. The uneven development of capitalism
in Canada meant that this process was experienced to varying degrees and
at different times by elements and sectors of the Canadian working class.
There has evidently been a lack of a shared tradition of struggle and a
common struggle to preserve and extend a specific tradition of independence such as was shared by, for instance, the British working class.
To be sure, similar types of processes can be seen at work at various
times. For example, there were the individual traditions of the various
skilled crafts which stubbornly resisted large scale industry and its attack
on their control of the labour process." It is just such a common response
to a common process which can be seen to be the basis of unity. However,
the effect of immigration on the uniformity of experience of such a
process was far reaching and, ultimately, it was through immigration that
the Canadian working class was constituted.
1fhe divisions within the working class created by language and
ethnicity were one source of disunity, as was the ability to create wage
competition between immigrants and the more established work force.
More to the point however, immigration created a series of disjunctures
within a common history of the development of the class struggle. Each
wave of immigration corresponded to a distinct stage of accumulation,
and immigrants were incorporated in a specific manner and through
specific struggles - regionally and sector ally, depending on the periodand within the class hierarchy as skilled or unskilled, as independent
commodity producers or wage labourers.
Conclusions
The dominant neo-Marxian interpretation of Canadian development
has evolved out of a revision of bourgeois historiography
with the
addition of concepts adopted from dependency theory. To a large extent,
this has limited its scope to a polemical confrontation
with bourgeois
interpretations and strategies of development. Its focus has been on the
behavioural characteristics of the dominant fraction of Canadian capital
and this has limited its ability to formulate a class analysis.
On the other hand, an entire body of class analysis, both from an
earlier Marxist tradition-" and subsequently'< has either rejected or
ignored the left-nationalist contribution. This is justified in so far as the
notion of Canadian capitalists as a "degenerate"
form of capital is
scarcely a useful analytical starting point. Nevertheless, the features of
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Canadian development which left-nationalists have identified as unique,
however obscured their understanding of these features might be, do have
important implications for our understanding of class formation and the
future of Canadian development.
First, the comparative weakness of Canadian capital historically or
more precisely, its long standing inability to transcend independent
commodity production, led to a prolonged commercial orientation and a
greater dependence upon foreign capital and foreign technology when
industrialization
did occur. The circumstances which led to Canadian
industrialization by way of an import substitution model have had long
term consequences in terms of foreign ownership and the branch plant
nature of the Canadian productive sector. That fact cannot be ignored by
socialists. The future of the Canadian economy cannot be predicted
through the use of traditional Marxist concepts defining the existence or
non-existence of a national bourgeoisie. The Canadian bourgeoisie
occupies a structural position in the world economy which is qualitatively
different from that of a national bourgeoisie, although it is certainly not
simply comprador.P Pertinent to this debate is the question of what role
Canada will come to assume in the present restructuring of the world
economy. 56 A dependency framework, however, has limited utility in the
further analysis of this question and in particular, in the development of a
socialist strategy. The future of capitalist accumulation in Canada is not a
question that can be resolved through an analysis of the entrepreneurial
orientation of the Canadian elite. The present restructuring of the labour
process and the social division of labour in Canada is part of a global
restructuring of capitalism and must be analysed on that level. The
resolution of this process will not be determined by the willingness or
unwillingness of Canadian capitalists to "sell-out."
The concentration on but one side of the development of the capitalist
relationship has obscured the appreciation of the importance of class
struggle in this process. In part, what is lost is the recognition that
capitalism is not just capitalists. The importance of an internally induced
process of accumulation should not be overlooked.
I have attempted to illustrate the specificity of Canadian class formation, particularly in terms of the centrality historically of independent
commodity production. In doing so, I have attempted to establish some
links between the development process and the particular ideological and
political character of the Canadian working class. The failure to develop
distinctive and lasting ideological and organizational forms similar to
those in Europe has often been interpreted as a sign of the relative
weakness of the working class in Canada. However, I have argued that
North American "exceptionalism"
arises largely from the differences in
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the accumulation
imperative in the respective continents. While its
historical and cultural heritage is important, the future volatility of the
Canadian working class cannot be predicted by its present conservatism.
Finally, I have attempted to show that the question of Canadian class
formation cannot be reduced to a Naylor versus Ryerson dichotomy. As
much as we might strive to assert the universality of class struggle of a
particular form, or to disguise our impotence through polemics aimed at
our capitalist elite, we are continually forced to face reality and the
infinite complexity of that reality.
NOTES
See Daniel Drache, "Rediscovering Canadian Political Economy." Journal of
Canadian Studies, 9:3 (1976).
2 R.T. Naylor, "Setting Naylor's Critics Straight," Canadian Dimension (1974),
63; emphasis added.
3 For example, the Marxist theory of value is fundamentally different from that
of classical political economy. It involves a conceptual leap from the notion of
"labour"
to that of "labour power." It is not the moralistic conclusion that,
since labour is the source of wealth, it should derive the benefits of its creation.
No such leap is evident in Canadian neo-Marxism. Rather, I shall attempt to
show that its conclusions are primarly moralistically based.
4 I have attempted to isolate only those who I hold to be absolutely key figures.
For a much more extensive bibliographic
review, see Drache, "Rediscovering.' ,
5 To a lesser extent we might add Lower and MacIntosh to this group. However,
they have been less influential in terms of left-nationalist thinking.
6 A.R.M. Lower, Great Britain's Woodyard: British America and the Timber
Trade, 1763-1867 (Toronto 1973), xiii.
7 Harold A. Innis, Essays in Canaian Economic History, ed., Mary Q. Innis
(Toronto 1956), 252-72.
8 Ibid., 399.
9 Donald G. Creighton, The Empire of the St. Lawrence (Toronto 1956), 40.
10 Harold A. Innis, The Fur Trade in Canada: An Introduction to Canadian
Economic History (Toronto 1956), 5.
II Ibid., 74.
12 Ibid., 401-2.
13 Innis, Essays, 405.
14 Mel Watkins, "A Staple Theory of Economic Growth," Canadian Journal of
Economics and Political Science, 29:2 (1963).
15 Kari Levitt, Silent Surrender: The Multinational Corporation in Canada
(Toronto 1970), 46.
16 Like the ECLA economists, Canadian political economists such as Innis
viewed the international capitalist system as an interdependent structure based
on a world division of labour. Advantages and disadvantages are related to the
character of the commodities specialized in. Both, therefore, reject the notion
of a natural equilibrating dynamic assumed by the comparative advantage
theory of international trade.
17 Mel Watkins, "Resources
and Underdevelopment"
in Robert Laxer, ed.,
Canada Limited: The Political Economy of Dependence (Toronto 1973).
18 The Waffle's constituent elements were extremely diverse including a range
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19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
90
from committed Marxists to left-liberals to anti-nationalist
Trotskyist elements. Obviously, all left-nationalists
were not a part of the Waffle either.
For the first Marxist debate on the "National Question" see Gary Teeple ed.,
Capitalism and the National Question (Toronto
1972). Canada Limited
contains selections by the most prominent leaders of the Waffle.
For example, R.T. Naylor, "The History of Domestic and Foreign Capital in
Canada" in Canada Limited discusses the origins of Canadian capital as a
history of corruption and brigandry reminiscent of Gustavus Myers, A History
of Canadian Wealth (Toronto 1972) (original 1914).
The notion of the state as a "capitalist state" is interpreted in an instrumentalist manner by Naylor in his assertion that Canadian capitalists "created the
Canadian state in their own image" in "Domestic and Foreign Capital," 45.
The article in Gary Teeple ed., Capitalism and the National Question is the
first statement of his theory. Naylor's "Domestic and Foreign Capital" adds
little of substance theoretically;
The History of Canadian Business, 2 Vol.
(Toronto 1975), is more an empirical account of the operation of Canadian
commercial capital than a further development of theory. A subsequent,
"Dominion of Capital: Canada and International Investment" in A. Kontos
ed., Domination (Toronto 1975), appears to respond to some of the most
glaring points of controversy generated by his early work but the gist of it is
within a dependency framework.
The problem is that the "Naylor thesis" has subtly evolved over time. This
evolution is of interest in itself for it illustrates the difficulties of working
within a dependency framework. Ultimately, Naylor does not transcend his
initial theoretical inconsistencies.
R.T. Naylor, "The Rise and Fall of the Third Commercial Empire of the SI.
Lawrence," in Teeple ed., Capitalism and the National Question, 24. Naylor's
discussion of entrepreneurship
is actually based upon Schumpeter, ibid., 37n.
Naylor develops a notion of intra-capitalist
class conflict out of a
Schumpeterian analysis which discusses the divisions within capital in terms of
the five functions of capital, ibid., 3.
Ibid., 3.
The prime example of an industry which Naylor appears to suggest was
developing spontaneously was the agricultural implements industry.
The most important contributions to this debate are L.R. MacDonald, "Merchants Against Industry: An Idea and Its Origins,"
Canadian Historical
Review, 53 (1975); Stanley B. Ryerson, "Who's Looking After Business,"
This Magazine, 10 (Nov I Dec 1976); and Glen Williams, "The National Policy
Tariffs," Canadian Journal of Political Science, 12 (1979).
Naylor, "Critics Straight," 63.
Ibid., 63.
Williams, "National Policy Tariffs."
MacDonald, "Merchants Against Industry."
Naylor, "Dominion of Capital," 52.
Ibid., 67.
One aspect of this is the continuing one-sided focus on the precise nature of the
Canadian elite. See Wallace Clement, The Canadian Corporate Elite: An
Analysis of Economic Power (Toronto 1975); Continental Corporate Power:
Economic Elite Relations between Canada and the United States (Toronto
1977). While Clement's contribution to Marxist scholarship is certainly not
trivial, the failure to situate his analysis of the Canadian ruling class within the
dynamic of class struggle leaves the continuing impression of a capitalist class
acting unilaterally cognizant only of its "external relationships."
This poses
the question of how and where a socialist strategy might enter the analysis. On
the other hand, the contention that capitalism is propelled by a universal
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development dynamic, and that there is nothing particularly distinctive about
Canadian capitalism with respect to this dynamic, is scarcely enlightening. The
polarization of the interpretation of Canadian class formation between Stanley
Ryerson and Naylor has extended for too long. It is not a question of finding a
middle ground but of transcending both of them.
Naylor, "Rise and Fall," 2.
Ibid.
The worst examples of this have been in contemporary critiques of dependency
theory.
Robert Brenner, "The Origins of Capitalist Development,"
New Left Review,
104 (July/August
1977).
Arghiri Emmanuel, Unequal Exchange (New York 1972).
In Canada, with the possible exception of Glen Williams "Canada: The Case
of the Wealthiest Colony,"
This Magazine, 10 (Feb/Mar
1976), the "rich
colony" phenomenon has been ignored. Of course, Emmanuel's thesis did not
go greatly beyond Watkin's, "Staple Theory" article written a decade earlier.
Capitalist accumulation,
of course, has a specific meaning pertaining to the
extended reproduction of a capitalist relationship of exploitation. Here I am
obviously using the term more loosely to apply to any improvements or investments which increase the productivity of the producer.
"Backwaters,"
of course, did exist. However, they were the exception rather
than the rule. V. Fowke, The Nationa/ Policy and the Wheat Economy
(Toronto 1957), chap. 2, suggests that the notion of a subsistence agricultural
economy was largely mythical. "The pioneer settler relied continuously from
the time of his arrival upon the commercial and processing facilities which
formed the basic capital equipment of these non-agricultural
centres. The
hundreds of, urban communities which existed in Upper Canada in the late
1940s could not have become established in areas in which the settlers were selfsufficient,"
ibid., 2. More recent analysis suggests that, to the extent that
stagnation occurred, it was limited to those areas that were to prove decisively
inferior in an environmental
sense to the land subsequently settled in the
western interior, see D. McCallum, Unequal Beginnings (Toronto 1980).
McCallum, Unequal Beginnings, 97n.
While land may have been relatively cheap, it was seldom completely free.
Even when the possibility of homesteading or simply squatting existed, it was
some time before the settler could derive a livelihood from the land.
McCallum, Unequal Beginnings, 97.
For example, iron was probably smelted in Ontario as early as 1800 near
Gananoque and sporadic attempts to establish a blast furnace continued until
the mid-century. The last attempt, near Marmora in 1847, failed when "after
the construction of the St. Lawrence canals British iron could be brought up
the country and sold at a much lower rate, and Mr. VanNorman was compelled
to close his works with the loss of everything," Report of the Ontario Bureau
of Mines (1893),21.
It should also be noted that the period of most rapid industrial expansion in
Canada was based partly on the extension of independent commodity production in the opening of the Canadian west and, therefore, considerable commercial as well as industrial expansion.
Leo Johnson,
"The Development
of Class in Canada in the Twentieth
Century," in Teeple ed., Capitalism and the National Question.
P. Craven and T. Traves, "The Class Politics of the National Policy,
1872-1933," Journal of Canadian Studies, 14:3, (1979).
Ibid., 37.
B. Palmer, A Culture in Conflict: Skilled Workers and Industrial Capitalism in
Hamilton. Ontario, /860-/9/4 (Montreal 1979).
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Studies in Political Economy
52 Palmer, A Culture in Conflict; Greg Kealey, Toronto Workers Respond to
Industrial Capitalism, 1867-1982, (Toronto 1980).
53 S.B. Ryerson, Unequal Union: Roots of Crisis in the Canadas 1815-1873
(Toronto 1973).
54 Palmer, Culture in Conflict; Kealey, Workers Respond.
55 Nicos Poulantzas,
"Internationalization
of Capitalist Relations and the
Nation-state,"
Economy and Society (1974), has suggested the inapplicability
of the concept of the national bourgeoisie with respect to the analysis of the
present stage of imperialism
and the "internationalization
of capitalist
production relations" within advanced capitalist formations. In some respects,
Canada might be seen as a proto-type of the process Poulantzas describes in
Europe.
56 F. Caloren, M. Chossudovsky
and P. Gingrich, Is the Canadian Economy
Closing Down? (Montreal 1978).
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