Canadian Politics/Labour the Postwar Period

Canadian Politics/Labour

The postwar period represented an important challenge for the theorists as well the practitioners in the economic field. There have been wide debates on the actual structure that should be formed in order to cater for the needs of the economies throughout the world. Certain theories emerged that tried to take into account the necessities of each country as well as the necessities of a growing world economy. However, not all states were successful enough to consider all the aspects of their national economies. In this sense, some failed, while others gained increasing control over their own industrial potential and the regional one as well.

The postwar development of Canada tried to take a different approach. This is not necessarily due to the different type of theory adopted but rather to the consideration of the actual specificities of the region.

It has often been argued that in fact the post war era had to focus on a new set of principles which would underline the need for an industrial economy as a trademark of evolution. In this sense, "Keynes, great contribution (...) was to adapt economics to the changing institutional structure of modern society. (...) Up to 1936, when the General Theory was first published, accepted economics in general belonged much more to the vanished age of competition, of capital deficiencies, of full employment or transitional unemployment, and the like, than to the twentieth-century economy which tolerated and, to some extent encouraged, monopolies, rigidities, excessive savings, deficiency of demand, and unemployment. (...) Keynes indeed offers government a larger degree of control over the economic process and a larger degree of operation than the old-fashioned classical economist." This was one of the most important aspects that characterized the Canadian economy after the end of the war.

A crucial aspect however was taken into account in order to adapt the Keynesian theory. In order to exercise a certain control on the Canadian economy, there was a need for the reconsideration of Canada and its federal form of administration. In this sense, the government was unable to take full control of all the Canadian potential without creating serious criticism. In general terms at the moment the Canadian government was based more on the potential natural resources offered by the natural potential of the country. At the same time, it was impossible for a central authority to exercise its full control on an economy based on a regional paradigm with open markets.

According to specialists the period of the traditional approach of the Keynes model is considered to be of British influence. This is one of the reasons for which the practice underlined the need for increased taxes and important restructuring in the industry in order to create a central power that would enable a full control of the industry. Thus, "With wide acceptance of state intervention in the economy after the Second World War, almost every field of economics elaborated itself into policy applications. Public finance seemed to encompass the whole of the discipline"

The second period of the development of the Canadian economy used influences from the American system of economics. In this sense, there were changes that took place according to the system exported by the United States through the Canadian perspective. Thus, it "integrated itself into an emerging, common, North American discourse, that nationalists, opposed to 'American domination', aligned themselves with, or made common cause with, socialists, opposed to both national and international capitalist organization"

The important changes that took place however at the level of the economy represented the openness towards private investment and foreign assistance. Indeed, much of it was viewed by the nationalists as a means of controlling the economy by foreigners and in particular U.S. traders. Still, this shift in perspective was largely due to the new political leadership in power. More precisely, the fact that politically speaking there was a change in perspective, from an economic point-of-view the change was also felt. This is the connection most analysts try to make concerning the transformation of Canada. In this sense, "the new Canadian political economy strives for transformation in the double sense- social change within society and changes to political economy itself as it develops as a tradition." However, as the authors tend to point out there is a wide concern regarding the possibility of Canada to shift from a regional economy created in the early years following the war to a global one. The major issues are related to the financing sector as well as the actual means of transformation of the economy.