Friday, May 15, 2009

Post-Election Analysis (1): It's the Economy, Stupid

Vaughn Palmer hit the nail on the head in his column of May 13: " Given the paramount importance of the economic issue, would any plausible strategy have won this election for the NDP? Probably not." But wait a minute--if the Liberals take credit when times are good, and are "the best stewards" when times are bad, isn't that a "heads I win, tails you lose" sort of proposition? It sure is.

There is a fundamentally un-level playing field in this province, as this year's election results remind us. And give Campbell credit--he succeeded in pressing his advantage. Besides doing everything he could to stimulate growth in the private sector, his U-turns on First Nations and the Environment prevented a Solidarity-like United Front of interest groups from forming behind the NDP.

But there was a time in this province--in the 1980s and early 1990s--when the NDP not only fronted such a broad coalition, but had an answer to the Right's economic policies. As you may recall, the Socreds were heavily criticized by the economics profession for making the last Great Recession worse than it needed to be by "Restraining the Economy", as the title of the book put out by UBC's Institute of Economic Policy put it. These economists also argued that the province ought to place greater emphasis on human capital and less on mega-projects. As the 1980s wore on, the NDP added another leg to its economic strategy, namely the idea that by drawing upon its roots in the labour and environmental movements , engaging in wide-ranging stakeholder discussions, ending the "war in the woods" and undertaking land-use planning and treaties with First Nations, the province could move forward toward sustainable and socially just economic prosperity. This bore some fruit until external conditions hit hard, just as external conditions are hitting hard right now.

There is plenty to criticize in Gordon Campbell's economic policies. Virtually none of them have achieved the results hoped for, and few have even come close. The so-called Heartland Strategy, TILMA, privatizing BC Rail, BC Ferries and BC Hydro, the tax cuts, the fish farms, the tax shift behind the carbon tax and the compromising of the Land Reserve, the "e-government initiative", and so on have not generated much employment or growth. The key to growth remains external markets, especially resource prices. That is why a different strategy focusing on human capital and environmental sustainability as a better way to capitalize on the potential generated by external factors is still a viable option.

I have a hunch that environmentalists and First Nations are going to feel disappointed--maybe even betrayed--by the next Campbell government. The NDP should aim not only to be a vehicle for their discontent and the discontent of other members of civil society, but to be an actually better vehicle for economic policy that is also attractive for small communities and middle-class voters as well. Let's get to it.

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