Nick Driedger looks back at how unions behaved, and workers fared, when social democrats unexpectedly won an election in Alberta.
Image credit: Don Voaklander, Flickr
With Bernie Sanders again having a believable shot at sitting in the White House and Jeremy Corbyn presiding over a more active and mobilized Labour Party than has been seen in decades, actually existing reformism is something everyone in the English-speaking world is, and should be, talking about. It’s also worth talking about the high and low points of reformism in as honest and clear-eyed a manner as possible from the perspective of revolutionary unionism. Not for cheap points-scoring, but because we shouldn’t attach ourselves to a movement simply because it seems to have a lot of momentum. We need to actually discuss what we can expect and how we should react to these situations, and for that we should look to relevant history.
One example worth looking at closely is the phenomenal rise and fall of the New Democratic Party in Alberta. This story is as clear an example of a swing to the left as one can imagine. The Progressive Conservatives had been in power for 43 years, and no social democrats had formed the government since the 1930s.
The NDP from 2015-2019 has been called Alberta’s accidental government. It’s pretty naïve to say there is such a thing as an accident in politics but there is also no doubt that the government was thoroughly unexpected — the party had not had more than ten members in the 87-seat legislature in over twenty years. In the lead-up to the 2015 provincial election, the New Democratic Party held only four out of eighty-seven seats. They had functioning constituency associations in only a handful of ridings (electoral districts) and almost no organizational presence outside of Edmonton, the provincial capital. While they had strong backing from the public sector unions, the unions themselves had the lowest density of any province in Canada.
How the NDP won the election
Then the price of oil began to plunge. By election day, the price of oil in Alberta was about 50% of what it had been a year prior. Layoffs started, and Progressive Conservative (PC) Alberta Premier Jim Prentice began to talk about austerity measures, with the Wildrose Party coming at him from the right saying they didn’t go nearly far enough.
The election itself was marked by gaffe after gaffe by career politicians like Prentice, making them easy marks for the NDP. Every statement they made had them coming off like arrogant buffoons instead of the unbeatable political machine they had been for decades. Prentice was not doing anything different from previous governments when he said “I know math is difficult” to NDP leader Rachel Notley in a leaders’ debate. But whereas before a comment like that would have come off as folksy from a patriarch who had earned his position, this time it just came off as sexist and mean. Circumstances had changed.
As the NDP started polling higher, corporate leaders in Alberta became more desperate, threatening to stop donating to the Stollery Children’s Hospital, and warning that there could be dire consequences for the University of Alberta. These threats made the PCs look worse, though, and with every one, their support tanked and support for the NDP increased. The leaders debate between the contenders for Premier was a major turning point. Notley performed well, channelling the rage of out-of-work oil workers and anxious staff in the public sector. The vast majority of NDP candidates ran campaigns that centered on her, but the fact that so few of them were seasoned politicians also worked in their favor for an electorate wanting change. For the first time in almost half a century, it looked like there was a chance to change the linens and so Alberta did.
The NDP also managed to exploit a split in the right wing between the the populist and largely rural Wildrose Party, and the more urban, big-business-oriented governing Conservatives. This alliance between rural populism, strongly rooted in small-town churches and social conservatism, and urban capitalists, largely based in the oil industry, held a government together for a period of time that would make many dictatorships blush.
This kind of alliance is not uncommon in places like Alberta. Upton Sinclair’s novel Oil and the movie based on that book, There Will Be Blood, deal with the subject. An alliance between evangelical conservatives and business interests is also the foundation of the Republican Party in the USA. Alberta was always seen as the unassailable fortress of conservative politics in Canada (somewhat like southern US states) and the fact that the NDP took power there proves that conservatives are not invincible anywhere.
However, what happened while the NDP were in government and how that affected their ability to carry out their mission of social justice is even more important, especially from the point of view of labor.
The relationship between the NDP and the Alberta Federation of Labour
Any analysis of the Alberta New Democratic Party in government needs to include an analysis of the labor movement in Alberta. Not just because the NDP enjoys a lot of support from unions in Alberta, but because the relationship goes much deeper than that.
Labor is an institutional part of the party. According to the NDP Constitution, the Alberta Federation of Labour (AFL) has seats at NDP convention alongside other delegates, as do individual unions if they are affiliated to the party (Article IV Representation, 4.02); the Labour Caucus gets to elect two vice presidents to the Party Executive as Table Officers (Article 6.01 b); and the AFL enjoys representation at the Provincial Council (7.01). This is much more like the Labour Party in the United Kingdom and less like the Sanders or Warren campaigns in the United States where candidates enjoy support from unions but do not have them as a structural component of the party they intend to run.
Institutionally, no other group enjoys greater clout and a larger single share of the decision-making process in the NDP than the labor movement. One important consideration, though, is that there is really no mechanism to make caucus, who are elected by their constituents, do what the party wants. So, labor may play a large role setting policy, determining strategy, and running the party itself, but in government (and to a lesser degree, in opposition), caucus largely runs itself. Elected officials have their own processes and their own priorities.
Still, certain unions did have a lot of influence over caucus, but it was not through democratic control on the conference floor. As some of the largest fundraisers in the NDP, many high-profile candidates, like Derron Bilous, who became Minister of Economic Development and Trade, were largely bankrolled by unions like the United Food and Commercial Workers (UFCW) local 401. It would be naïve to assume that this kind of funding did not translate into the union’s perspective being well-represented.
It has been said that the NDP needs to be “pushed” by labor – labor needs to mobilize in order to pressure the system from the left and counteract the pressure from the right that comes from business interests. This isn’t the role that labor played inside the party, though. Many of the labor affiliates pushed from the right of the party.
In one case, the UFCW expressed concerns that an increase in the minimum wage to 15$/hour would make employers less likely to negotiate other things like benefits. While the NDP held the line on this policy, it’s worth noting the pressure from the unions was not always towards the most ambitious demands even when it came to labor issues.
Some unions that had nothing to do with pipelines actively pressured the NDP and the Alberta Federation of Labour to toe the industry line that pipelines create jobs even though all of the independent research they conducted prior to forming the government indicated this was simply not the case.
In fact, much of the NDP’s change in position on pipelines (more on this below) comes back to the unions, who pressured the NDP to support any and all pipelines in the interest of jobs. Some of these unions were not even building trades unions who stood to gain short-term work from the construction projects, but unions with members far away from those projects. The reason for this position wasn’t “pro-jobs” trade unionism or a bread-and-butter perspective, it was that they were concerned with the NDP’s electoral prospects in 2019, and felt that silence on pipelines, let alone opposition to them, would be extremely unpopular.
This came to a head after January 31st, 2016 when Gil McGowan, president of the Alberta Federation of Labour, publicly criticized the NDP — for the last time. McGowan challenged the outcome of the NDP’s “Royalty Review,” which was meant to reevaluate how much the industry pays for the oil it extracts… but then agreed to maintain the revenue structure established under the Conservatives. After this point, a few affiliates effectively muzzled the AFL,
In summary, labor did not push the NDP to the left; in fact they acted as the NDP’s enforcers on matters of policy. This not only happened in the official channels where the party made formal decisions, but through the influence certain unions had over members of caucus because of the money and labor power they provided to their election campaigns.
The NDP and the unions at the bargaining table
Creating the pressure to push anyone to the left requires that members be mobilized. One of the best times to mobilize members is during bargaining: bargaining puts demands on the table and asks members to do things to back up those demands.
In 2017, the collective agreements of 180,000 public sector workers in Alberta were set to expire. Instead of the NDP government being an opportunity to negotiate better deals for public sector workers, public sector unions worked with the government to preside over a wage freeze.
The first union to settle, the Alberta Teachers Association, agreed to a “me too” clause that said any wage increases agreed to by other public sector bargaining units would be applied to them, effectively putting the pressure and stakes of a strike off onto other workers. The United Nurses of Alberta and the Health Sciences Association of Alberta then agreed to wage freezes.
These unions did this not because of bread-and-butter unionism or trade union demands but because they were thinking about maintaining the NDP’s electoral power, and in turn their own influence over the government. By taking responsibility for the government’s ability to balance the budget, these public sector unions put themselves in a position where they had to accept the wage freeze. This decision made it almost impossible to mobilize their own members right at the point when members are most tuned in to what their unions have to say and most willing to move when their unions ask them to. Side deals cut with management rob unions of their leverage, and while union leaders like to pretend they have power and influence by virtue of their constituency, they really only have power insofar as they can exercise it independently of those they are bargaining with.
An exception to this arrangement was in the post-secondary education sector (universities and colleges), where very few of the unions have any relationship with the NDP or the Alberta Federation of Labour — some because they see themselves as “apolitical” or politically independent, and others because they are more conservative than the NDP. Also these unions, due to a unique set of labor laws, are all very small organizations with a few hundred to a few thousand members.
Prior to the NDP being in power, these unions were also not allowed to strike. Instead, disputes were settled by binding arbitration, according to the law. This arrangement was struck down by a Supreme Court decision shortly before the NDP took power, constitutionalizing the right to strike, so the NDP set about rewriting the rules for settling a bargaining impasse. In a series of meetings, such as a meeting on September 26th, 2016 with Minister of Advanced Education Marlin Schmidt, faculty associations were assured there would be a transition period between the previous arbitration system and the system of strikes and lockouts. The unions had made this request to the government so that they could build up strike funds and educate their members as to what a strike would entail.
However, the following spring, on April 17th 2017, Bill 7 was tabled, putting the unions under a strike or lockout system without any time to prepare. This was especially damaging as some bargaining units were already negotiating and the legislation was written to be retroactive. Employers were basically free to mount a lockout without the unions having made any arrangements to weather such a thing. When asked about why they moved so quickly, David Shepherd, an MLA from Edmonton, said: “We know compulsory arbitration in the past has at times tended to result in higher wage increases. That’s something that is not sustainable.”
In essence, the NDP capitalized on an opportunity to enforce lower wages on unions that they could not broker a side deal with.
One exception to the wage freeze agreement was the Alberta Union of Provincial Employees (AUPE), who are also not members of the Alberta Federation of Labour, but rather their own standalone union. They are also the largest union in Alberta. They did not appear to agree to subordinating their members’ interests to the provincial budget so easily.
The government’s response to having less pull with AUPE was to hire AUPE’s chief negotiator, Kevin Davidiuk, and have him negotiate on behalf of the government.
Davidiuk’s move from AUPE to the government had a demoralizing effect on the union, but that was not the only advantage for the employer: he knew all the state secrets, the splits in their ranks, the exact state of their ability to mount a strike, and which issues were actually very important to them.
While much of the labor movement was cordial with the government, AUPE’s relationship was tense. In the end, they fell in line with the wage-freeze. It was not through collaboration, but rather because they saw the writing on the wall with the rest of the public sector capitulating, and their own compromised position with their negotiator switching sides.
In summary, there were basically three different approaches to unions and bargaining when the NDP was in government: the first was to simply cut a deal with them on political terms — this led to some modest gains in contract language but wage settlements that amounted to an austerity program. This was mostly applied to large unions inside the Alberta Federation of Labour.
The second approach was to cripple them at the bargaining table by coopting key personalities; again this put the unions in a difficult position, especially when so much of the labor movement relies heavily on key negotiators who “know the game.” This was the approach with AUPE. The end result of this was modest gains on language but essentially an austerity program when it comes to wages.
The third approach, for unions where the NDP had very little political relationship and a very new bargaining relationship in the post-secondary education sector, was outright duplicity and rigging the rules in the middle of bargaining so that the unions could not achieve anything other than their wage freeze and in some cases modest gains in language. A strike was put on the table for these unions because the government knew they had no infrastructure to mount one and were unable to prepare for a lockout.
Overall, the NDP achieved what previous conservative governments had failed to for decades with Alberta’s public sector unions: wage containment and strike avoidance. Far from engaging class warfare for the underdog, the NDP very successfully managed their role as employer and undermined their own union supporters, sometimes with those supporters’ enthusiastic help.
The idea that the labor movement exists to push left-wing candidates is fine in theory, but in Alberta the actual practice was that the labor movement was a junior partner in the governing power structure and mostly existed to manufacture consent for government policies. Some were enthusiastic participants in this process, and for the rest, the NDP used its unique relationship with labor to marginalize and isolate critics.
Strikes
The labor activists who entered the NDP government were proud of their track record of comparative class peace during their time in charge. However, the NDP’s goals were also helped by the economic state of the province. As the chart below from the Alberta Labour Relations Board shows, the amount of time lost to strikes was actually declining in 2014, a full year before the NDP took power.
These numbers also coincide with the drop in the price of oil and the downturn in Alberta’s economy. In 2014, the price of oil went from a high of $86.54 USD per barrel in June to a low of $43.18 in December – cut in half in just six months. This drop in a key part of the economy made the financial situation harder for a lot of people and meant that they were less likely to have a second income to rely on if they went on strike, and that jobs were harder to come by if things went badly during the strike.
The initial layoffs and anxiety about people’s livelihoods that propelled the NDP to power with rhetoric about class inequality and the problems with our economic system were the same root cause that made people less likely to strike. Many unions spent a lot of 2014 either openly or tacitly campaigning for the NDP and avoiding conflict that may, in their minds, negatively impact the election and their chances in swing ridings. All tactics were subordinate to the overall strategy of getting the NDP more seats (as they did not expect to win government). When the NDP was in power, many unions spent a lot of energy making sure their members did not consider striking as an option, in order to protect the government.
As we just saw, for its part, the NDP did what any employer would do in a time of economic downturn: they used the opportunity to lower the costs to the government treasury by bargaining wage freezes, which are effectively wage cuts when inflation is taken into account.
As the price of oil continued to drop and drag the economy with it, people turned away from the NDP.
While the NDP can’t take sole credit for labor peace, it is worth noting that this private sort of pride in preventing strikes stands in stark contrast to their rhetoric during the election, which was largely based on class resentment and being a champion of the underdog. Corbyn and Sanders are more strident than Notley was, but none of the three shied away from saying that there were sides to the conflicts that were playing out in society, and Notley definitely ran a campaign against the dominant business interests. The move to then start mediating this conflict once in power is not at all unusual for left-wing governments and should be expected, not reacted to with surprise.
Insofar as there were factors they could control, the NDP’s goal was largely one of mediating class conflict rather than engaging in it, and nowhere was that more clear than in their approach to labor legislation.
The NDP’s approach to labor legislation
On May 24th 2017, the NDP introduced changes to the Alberta Labour Relations Code, the legislation governing unionized workplaces in the province.
These changes sound impressive. They include first contract arbitration, card check certification, reduction on the limits placed on secondary picketing (due to being found unconstitutional in court), the removal of employers’ ability to suspend dues payments in the case of illegal strikes, automatic dues checkoff being required in collective agreements, increased access by union organizers to remote worksites, increased rights to unionization for some kinds of contractors, and various union-friendly reforms with regards to the powers of arbitrators in settling disputes.
However, much like their approach to government, where the goal was class peace, the NDP’s overriding goal in writing legislation governing unions was managing conflict. The NDP government’s changes to the Labour Relations Code mostly amounted to making it easier to get a union and easier to avoid a strike.
Premier Notley, prior to being a career politician, was a union-side labor lawyer, and the changes to the law definitely reflect that kind of sensibility. Recall that the Supreme Court had recently constitutionalized the right to strike, reinstating that for health care and other workers. Essential Services Agreements, run through the Labor Relations Board, were supposed to govern what parts of an operation could be struck so that no one being served would hurt or die because workers had walked off the job. Unions had often negotiated these types of agreements prior to the legal framework, with part of the incentive for them being that workplaces where these were in place effectively had a ban on scabs. The legal reform was touted as a huge gain for the unions but mostly created a gigantic quagmire that was legally complex and required tremendous resources to navigate. The extra workload often pushed the timeline back on being able to strike by months or even years. This allowed employers to delay the process while the Labour Relations Board thoughtfully reviewed every clause and phrase, ostensibly in the interest of good labor relations and public safety. In effect, unions were so bound up in red tape that striking swiftly and decisively when the time was right for action was basically impossible.
Similarly, first contract arbitration was a way to draw unions that may have had enough support to sign cards but not enough support to force a first contract into achieving an agreement imposed by an arbitrator. These kinds of agreements are often popular with business interests because negotiators can wash their hands of the decision (an arbitrator makes a legally binding order). By avoiding a vote on a contract, union negotiators can similarly wash their hands of it if it is a bad deal, and usually the arbitrators and lawyers involved make a pretty handsome profit.
The only people who often aren’t happy about these kinds of settlements are the workers involved, but their consent is neither needed nor desired for an agreement, so they aren’t really a factor. It is a labor relations professional’s dream: a union set up without input from the workers. For those who believe that unions should be fighting organizations democratically run by their members, there was really nothing to get excited about.
Two things that were very much wanted by the labor movement were anti-scab legislation and rules to address “double breasting,” a practice common in heavy industry and construction in Alberta where companies are allowed to simply set up a non-union business with the same owners and a different name to undermine a union at a given workplace. The NDP never delivered on these requests, instead opting for empowering the Labor Board with a legal mandate of conflict avoidance, and giving more power to arbitrators who neither have to work nor represent union members under the conditions they rule on.
Bill 6 on farmworkers’ rights
To many actors in the NDP, Bill 6 was their first big blunder and also their first big taste of what the right-wing looked like while in opposition. The government introduced legislation to protect staff on farms with some basic labor standards and access to worker’s compensation. Alberta was the last jurisdiction in Canada to lack these provisions and injury and death rates in Alberta were well above the national average.
The initial plan was to roll out the legislation like any other changes, but soon the protests started. While in the old days, 400-500 people protesting on the Legislature steps was not something the Conservatives would have paid attention to, many rural Members of the Legislative Assembly who were in the NDP began to report significant upset from the agricultural community.
As the NDP moved to do damage control, the Wildrose Party mobilized their rural populist base. The NDP would do town halls to try and sell the legislation and the Wildrose Party’s activists would stack the mics. Soon the NDP lost control of the message and misinformation was rampant about the intentions of the bill: the Wildrose Party successfully managed to spin this as a bunch of liberals in the city looking to destroy a rural way of life. The actual truth of it was that they were a bunch of urban liberal policy wonks who simply didn’t know anything about rural areas, agriculture or rural politics. Ignorance was spun as something far more sinister and soon things got out of hand.
At many events, it was not unusual to hear casual talk about assassinating the Premier. Some people showed up at the Town Halls standing ominously with a tied noose implying that a lynching was possible. The protests in the city may have been modest in size and had a folksy tone, but the outrage in the country was impossible to ignore and caucus was shaken.
During the election, a lack of functioning constituency associations in rural areas, and the inexperience of NDP MLA candidates were an asset and a sign that the party was not a political machine like the old Progressive Conservatives. However, without constituency associations with large numbers of activists and a base of volunteers to counter-mobilize against the opposition, the NDP was helpless anywhere outside Edmonton, but especially anywhere outside a city.
One place progressive forces did have a rural base was in the public sector unions, but they couldn’t mobilize members to press progressive demands and change the channel on discussion because the strategy with these unions was largely one of demobilization to support the government.
It is also worth noting that unions in general have written off Alberta as enemy territory. Large agricultural employers exist and farmworker unions have existed in many places, often before the law allowed for them. But without any independent voice to speak for agricultural workers, agricultural employers were free to speak on their behalf. After all, who would actually be dumb enough to say they liked the legislation when a sitting member of the government was facing death threats in a crowded, angry room for saying the same thing?
One place where there was potential for a more progressive vehicle for rural outrage was in Cold Lake. The Points West Living facility is a private senior care facility in rural northern Alberta largely funded by provincial grants. It refused to improve conditions for staff. The NDP ran on improving senior care in general, including by adding more public beds. But during contract negotiations, the government steadfastly stood behind the employer. AUPE repeatedly pointed out the government’s relationship with private care homes and the funding they provide, but every time, the NDP government distanced themselves from it. The labor dispute effectively became a proxy war between the government and the union. This meant the field was basically clear for the Wildrose Party to operate.
The direct-action campaign over Bill 6 by the populist right in rural communities was a setback the NDP never recovered from. A strong show of force from a grassroots movement who demonstrated they were willing to take action hamstrung the government, and any suggestion of a rural move to the left after this point was written off by referencing what happened with the farmworkers legislation. The Wildrose Party successfully marshaled most of this protest movement into the United Conservative Party – a merger of the Progressive Conservatives and Wildrose — in time for the next election.
Market populism and the price of oil
In the early days of the NDP there were reports of explicit threats being made to the NDP to take the “right” line on certain issues or face open economic warfare. These were a continuation of the threats made during the election campaign, but they became sharper and more specific once the NDP was in power.
One insider reported that these threats of capital strikes were explicitly discussed in caucus, and that certain cabinet ministers were singled out by the Canadian Association of Petroleum Producers for attack ads that were slated to run if the government did not step in line. Rumors aside, others were threatening the government in plain view. The day after the election, Kevin O’Leary, a prominent Canadian business commentator and former federal Conservative Party leadership hopeful, told investors in an op-ed in the National Post to “pull out” of Alberta and called for a capital strike in all but name. Even the CBC provided an hour-by-hour report on energy stocks, noting although Notley said she would “be reaching out to industry” and that they could “count on us to work collaboratively with them,” “energy stocks continue to trade down.”
A common description of Alberta on the left is that it is a “petro-state” and that with that comes a unique set of political conditions that are not typical of other economies. However, no one seems to say the same thing about other areas with powerful industry interests – no one calls Prince Edward Island a potato-state or Nevada a casino-state or Switzerland a bank-state. There is nothing particularly unique about Alberta; the simple fact is that where a certain industry is dominant, the dominant politics are going to be the politics of that industry.
A government can claim to be for the many and not the few but the reason why the few have a lot of power is not because they have well-thought-out positions. Power in politics is the ability to ruin lives when you don’t get your way and that is exactly what the oil industry and its allies did.
In Alberta, the consensus industry view is that the Albertan oil is at a disadvantage due to a “price differential.” Albertan Oil is mostly what is called “Western Canada Select;” it trades almost exclusively with the United States oil market. There is a price differential between Western Canada Select and West Texas Intermediate, another kind of oil that is often treated as comparable to Western Canada Select but is closer to international markets by virtue of being closer to an ocean port. The industry argument is that if WCS had the same access to markets that West Texas Intermediate has, then Western Canada Select would receive the same price for their product. This leads to the argument that pipelines need to be built, to bring Canadian oil to international markets more easily.
While no doubt the fact that Alberta oil has a limited number of markets and higher transportation costs is part of the factor, there is reason for skepticism that Alberta’s oil is simply suffering from a price differential. After all, oil prices in general are low and were very low for the entire time the NDP was in Government. While Alberta has an abundance of product, most of it is of a lower quality, very expensive to remove from the ground, and it has a very well-deserved reputation of being exceptionally destructive to mine.
In this video, a prominent labor-aligned economist, Jim Stanford, spells out that the result of more pipelines may just be to put more of a lower-priced product onto international markets and tank the price of oil even further. This speech was for the Alberta Federation of Labour and was held shortly after the NDP lost the 2019 election. Stanford is unique in that he is a high-profile economist who is on the payroll of a workers’ organization. What’s interesting is that Stanford’s position on the economics of oil is the opposite of what the NDP was saying when in power but does not contradict the NDP before they took power.
At the beginning of their term in government, the NDP had four pipelines on the table, and they promised to give some support to two: the Transmountain Expansion and the Energy East. Notley said with regards to the Northern Mountain and Keystone XL pipelines that industry would have to make the case themselves and that government was not there to lobby for business interests. She was also on the record as opposing a fifth pipeline, the Northern Gateway, at the start of her term.
By the end of just a few years, Notley was all but calling environmentalists traitors to Alberta at the federal NDP convention, praising Trump policies re-opening Keystone XL, and mounting a government-sponsored boycott of BC wines over their refusal to give oil pipelines an easier ride. A lot of this was cloaked in the same pro-worker rhetoric the oil industry used while laying off staff and blaming the government. Everyone was “thinking of the hard working staff in the oil patch” while they were lobbying to build better infrastructure to process Albertan oil overseas for cheaper. Like public sector unions with the rhetoric about public spending, the private sector unions were quickly brought on board with these plans, when the arguments that this would benefit their members were in fact pretty weak.
Many attributed these decisions on the part of the unions to bad strategy, bad hiring decisions in the senior staff, or a lack of radical perspectives (all of which the left has said of the Alberta NDP). But really it’s a matter of the raw power the oil industry has and the unique opportunity to turn run-of-the-mill and site layoffs into political events. Every pipeline that did not get built became a symbol of the NDP’s failure to support the industry and every move the NDP made to disprove this made them look like hypocrites given their initial positions on pipelines. By refusing to take on industry directly, the NDP put themselves in a corner: their compromises made them look weak and hypocritical, without actually shoring up their power base. You can’t be loved by business and also say the wealthy are out of touch and have it too good.
Doublethink is a natural outcome when those in power need to justify what they are doing in terms of something other than the interests they’re actually serving. By the time the NDP left government they had basically one option left — a very complicated argument that amounted to trickle-down economics: the pipelines need to be built so that the oil industry prospers so that some of their money can go to the people of Alberta.
Credit rating discipline
Another major factor in how the NDP approached various policy questions was the response of the major credit rating agencies. The NDP under Notley went from the highest credit rating possible (AAA) to a still very respectable credit rating by the end of their government. While the business press had a field day with these downgrades, they also had a material effect as they play a major role in determining what rate a government can borrow money at.
In the middle of a recession, especially with promises not to enact austerity, access to credit is essential for any government. The fact that the loans got more expensive (and credit rating agencies have political demands themselves that often include a push for austerity measures) means the government’s financial policies were often in a sort of tension with their stated goal of increasing the clout of the public sector, not laying off teachers and nurses, and maintaining a “fair” tax regime.
This is a fundamental problem for Keynesian economics in practice. To put it very simply, John Maynard Keynes advanced the idea that governments could help a market economy weather recessions by spending money during economic downturns in order to get people spending money again. His theories became very popular after World War II and they went alongside a post-war social compact with unions that promised a better standard of living for some parts of the working class in exchange for class peace. Social democracy built itself on this bedrock of working people (or at least certain sections of the class) seeing progress and improvement for their standard of living on one hand and a careful management of the free market economy on the other.
This trade-off, where unions buy into political stability by promising class peace, is much harder to manage today than in 1955, however. As explained above, in order to get the credit you need to stimulate spending, you need to borrow, and in order to borrow, various bodies that take their advice from the credit ratings agencies are going to have terms for you to borrow on. Those terms are going to require you to make sure public spending trends downward, which means negotiating with the public sector unions. Of course, this is less of a problem when the economy is doing well and stimulus spending is not required, but recession eventually comes, and if a government wants to borrow they either pay more money on the funds they borrow or they cut the compensation of the people they employ in the public sector.
The other effect that moves to downgrade a credit rating have is purely propaganda, the business press tends to go wild and the government in question is portrayed as a basket case. While there were no doubts difficulties in Alberta’s economy they also still had the lowest public debt of any jurisdiction in Canada (which did not enjoy corresponding credit downgrades).
All of these factors can effectively turn a political strategy by the unions to bring pressure on a government to act as a force for redistributing wealth on its head. The unions, who have bought into the government, want the government to survive re-election, so they have an interest in making the government look financially sound on terms set by the credit rating agencies. In turn, the unions, as a structural part of the government, agree to terms that will include an erosion of their salaries and a strategy to politically isolate unions that will not support this strategy, thus making the strikes by the outlier groups like the AUPE more difficult.
In addition to this, these kinds of governments tend to come in when people are upset and the economy is not doing well and often run on a promise to redistribute wealth. As we can see in Alberta, though, the actual effect is the opposite: the social democratic parties, through their relationships with the unions, actually sell austerity to the general public as a matter of pragmatic, hard-headed policy. Ultimately, the NDP achieved wage containment that the previous conservative parties could only dream of while at the same time having everyone believe that it would be worse under the Conservatives if the labor movement did anything to destabilize the relationship between the unions and governing party.
What is to be done?
The current rise of social democracy looks like new uncharted terrain, but many of these political approaches are actually well-worn paths from the post-war period. In all likelihood, more radical rhetoric from Corbyn and Sanders will be met with the same responses: the populist right exploiting the left’s total absence from rural areas; the credit that would be used to finance deficit spending being used to discipline and moderate governments who want to dabble in Keynesianism; governments with their back against the wall exploiting their close relationship with unions to get wage concessions that more conservative governments could never get them to agree to; and the overall fear of a right-wing backlash bringing everyone into line.
A lot of labor strategy these days is a bit like a Rube Goldberg machine. Many organizers believe that in order to accomplish anything, you need to line a bunch of other stuff up first: the starting-point for how to make our world a better place is policy. So you need to go about getting into the position of enacting policy. Which means you need to win an election. Which in turn means you need a series of compromises… which undermine your starting-point, which was very fine policy.
Industry does not need to think like this because they have power. They don’t need to write policy, they just make demands, and the people who write policy then write that policy for them. Sometimes that policy is written by a left-wing government, sometimes by a right-wing government, but industry simply does what it needs to do in order to get its demands met.
Labor has a lot of latent power. They have power in numbers and they have even more power in the fact that when they don’t work, they cost powerful people a lot of money. Other sectors of society have power when they are organized too. Labor and other sectors of the working class together can make demands and see them met in a similar way to what business interests do — if they are organized and know their own power. Winning an election does not give working people power, it just gives them a promotion: they go from simply doing the brute labor to playing an active role in their own exploitation. In order to win, working people need to stop looking up for some leader to help them and instead look around at their peers.
Nick Driedger is a former member, shop steward, Local Organizing Officer and National Organizing Coordinator for the Canadian Union of Postal Workers. He is currently the Executive Director of the Athabasca University Faculty Association and a member of the Industrial Workers of the World.