What Is to Be Done? And Do We Have Any Choice?

What Is to Be Done? And Do We Have Any Choice?The Nonprofit Sector in Canada: Roles and Relationships by Keith G. Banting; Room toManoeuvre? Globalization and Policy Convergence by Thomas J. Courchene; RestructuringSocieties: Insights from the Social Sciences by David B. Knight; Alun E. JosephReview by: Michael SmithThe Canadian Journal of Sociology / Cahiers canadiens de sociologie, Vol. 25, No. 2 (Spring,2000), pp. 239-251Published by: Canadian Journal of SociologyStable URL: http://www.jstor.org/stable/3341825 .

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Review Essay/Essai rendu

What Is To Be Done? And Do We Have Any Choice?

A review of Keith G. Banting, editor, The Nonprofit Sector in Canada: Roles and Relationships. Kingston, School of Policy Studies, Queen's University, 2000; Thomas J. Courchene, editor, Room to Manoeuvre? Globalization and Policy Convergence, Montreal and Kingston, School of Policy Studies, Queen's University and McGill-Queen's University Press, 1999; David B. Knight and Alun E. Joseph, editors, Restructuring Societies: Insights from the Social Sciences, Ottawa: Carleton University Press, 1999.

All three of the edited collections under review here are informed by the idea that the environment of Canadian public policy has changed in important ways. The elements of change are globalization, technology, and the political emergence of something called "the new right." These changes in the environment have led to "restructuring" and may lead to even more. This raises several questions. First, given globalization and changes in technology, do governments have choices with respect to policies? If there is a choice, what policies should be chosen? Finally, might it be sensible to select policies the consequence of which is to limit future choices? This latter issue is often central in discussions with respect to the desirability of free trade treaties.

Room to Manoeuvre? is a set of careful examinations of the effects of globalization and technology on Canadian policy options. It contains the most direct consideration of the issue of constraint on policy. The editors' in- troduction to Restructuring Societies asserts the importance of globalization. It is followed by a set of essays that vary considerably in their attention to globalization but several of which seem to be unsympathetic to the "new right." The Nonprofit Sector assumes changes in the policy environment that have led both to a growth in importance of the sector and changes in its organization. In what follows I will consider each collection separately and then, briefly, return to the broader questions sketched above.

Writing the introductory essay to their collection must have been something of a challenge to Knight and Joseph. The contents of the essays are all over the place. Bob Rae seeks inspiration in Edmund Burke and George Orwell. Each, it turns out, was opposed to extremism. Neither, he thinks, would have been enthused by the "libertarian excesses" (p. 30) of the new

Canadian Journal of Sociology/Cahicrs canadicns dc sociologie 25(2) 2(XX) 239



240 Canadian Journal of Sociology

right as embodied in the current Progressive Conservative government of Ontario. Moran attempts to draw lessons for Canada from the new right- inspired changes that began in New Zealand in the 1980s. While "according to most macroeconomic criteria, the reforrns would be considered a success" (p. 51), Moran seems to think that this would be less the case in terms of the satisfaction of health care and education employees (p. 53). Barling assembles a set of conventional indicators (working hours, the incidence of involuntary part time work and self-employment, duration of unemployment, a sense of ambient insecurity) to make a case to the effect that there has been a decrease in the quality of employment relations in Canada. He further claims that the rise in insecurity has been bad for profits and productivity. Leach and Winson show that most workers who were laid off when their plants closed were subsequently worse off. The collection finishes with two essays on aboriginals (Dickason, Wolfe-Keddie) that are quite interesting but have little to do with the other essays.

Knight and Joseph are a bit ambiguous on the issue of choice. On one hand they argue that "a new form of capitalism characterized by the increased mobility of capital and the rise of transnational corporations, facilitated by the rapid evolution of world-wide digital communications technology" holds "increasing sway" and "presents a challenge to states" (p. 3)- which rather suggests increasing constraint. On the other hand, "there is no single path along which states are being forced or led" (p. 4). The premise behind several of the essays seems to be that the (more or less) "new right" policy choices that have been made were a mistake. But they are generally not very specific in identifying feasible alternatives.

Room to Manoeuvre? is generally better in this respect. Notwithstanding the fact that the term "globalization" features in the title, two of the essays focus on the effects of technology. The CRTC has attempted to use taxes on networks and infrastructure providers to fund the production of Canadian programming, and content regulations to force broadcasters to include the programming produced. But, Waverman argues, with the possibility of deliver- ing signals over the internet that originate outside the country, taxing becomes much more difficult, as does content regulation. Technological change has rendered ineffective the current policy instruments wielded by the CRTC.

Banking has been a highly integrated activity. Banks create their own mutual funds and market them through their retail outlets. Branches both take deposits and make loans. Integration has advantages. For example, the com- bination of deposits and loans in the same branch banking networks frees depositors from the obligation to monitor the performance of the loans their funds finance; and, since borrowers will often come from the pool of branch depositors, it increases the information on credit-worthiness at the disposal of the loan-maker. But information technology allows processing large amounts



Review Essay/Essai rendu 241

of information very quickly. It makes possible the use of credit scoring, which involves "comparing the characteristics of the credit applicant with similar data accumulated over time for other borrowers to predict the borrower's probability of default" (p. 412), or asset-based lending, which uses quantitative data on the value of the assets being financed to determine the security of the loan. This reduces the value of the branch bank as a concentrated location of expertise on loan quality. Now packages of loans can be bought and sold between financial institutions because the packages come with good quantitative information on risk attached to them. This, along with other disintegrating effects of information technology, heralds, Chant suggests, major changes in the organization of the financial system and the capacity of the government to regulate it. For example, prudential regulation targets the characteristics of the loan portfolios that customer deposits finance, requiring a suitable proportion of lower risk instruments. But, if information technology makes it possible to separate deposits and loans into different organizations, prudential regulation will become much harder to implement.

So both treatments of technology in the book suggest that it limits government options, in the sense that current policies are or may cease to be feasible. The assessments of the effects of globalization in a range of specific areas suggest more latitude.

Pauley situates an analysis of national characteristics of multinational corporations within the broader question of national systems of innovation. He argues that the United States, Germany, and Japan have all preserved distinct systems of innovation. Their governments pursue different policies with respect to funding R&D (e.g., U.S. policy has been more oriented to military applications along with basic research, as compared to German policy which is directed to industrial development and diffusion - p. 95). At the same time, these countries' MNCs differ in terms of governance, financing, corporate R&D policy, and their choices of form of technology trade (e.g. licensing versus strategic alliances with foreign firms). This leaves open the question of whether or not there is the same room for divergence for small countries with respect to their principal trading partners. Pauley thinks there is, but does not systematically deal with the issue.

The existence of the World Trade Organization, Wolfe argues, does not imply that national policies must converge. WTO rules recognize the right of states to distinct national objectives on health, safety, and culture; they simply require that the decisions that follow from the distinct objectives be "based on objective and transparent criteria" (p. 210). Governments can and do adapt to this constraint by implementing policy convergence in various ways and to vary- ing degrees, from voluntary adherence to "best practices" (e.g. forestry) to complete harmonization (a number of measures in the European Union). Thus, in telecommunications the 1997 General Agreement on Trade in Services




(GATS) is, Wolfe says, "remarkably imprecise" (p. 225) on issues such as what would constitute "anti-competitive cross-subsidization" (where a national monopoly telecommunications provider uses revenues on a service not subject to competition to keep prices down on a service subject to competition, thereby effectively preventing the entry of foreign suppliers into the domestic market). The implication is that, through GATS, the WTO "operates at the margins" of telecommunications regulation (p. 226), merely nudging states in the direction of greater openness, neither mandating particular policy instruments to secure that openness nor even precluding policies that diverge according to democratic preferences.

Finally, there are taxes. Hostility to globalization is often based on the claim that open borders force governments to compete against each other in the provision of the most favourable environment to mobile factors of production and that this necessarily implies a downward spiral of taxes and public services since the tax level is what is critical in determining the relative congeniality of alternative investment locations. Olewiler performs a signal service in assembling data that bears directly on this issue. She does so by comparing tax rates from the late 1970s to the mid 1990s across a subset of OECD countries. She finds the following: i) there was no overall change in the marginal tax rate for high-income earners; ii) while young single people will normally be the most mobile, marginal tax rates for them rose in 12 of 15 countries; iii) on average, the tax burden on middle-income employees in the G7 countries rose; iv) corporate tax rates have fluctuated but were on average about as high in 1997 as they were in 1983; v) the standard deviation of corporate tax rates across countries rose across the period; vi) in 1995 there was quite wide variation (ranging from about 32% in Japan to below 20% in the U.K.) in effective tax rates - that is rates adjusted for various allowances including, for example, research and development expenditures; vii) by industry, effective tax rates on large business are radically different in Canada and the U.S.; viii) taxes as a percentage of GDP rose in Canada, the United States, a sample of European countries, and in the OECD as a whole. On the other hand, she does find some evidence of a shift in tax incidence from more to less mobile factors, perhaps best exemplified in the increase in importance of value added taxes. In aggregate, however, Olewiler's observations suggest neither a decrease nor a convergence of tax rates as a result of globalization.

So the studies of detailed areas of economic activity provide little evidence for a globalization-sweeps-all-national-differences-before-it hypothesis. Interestingly, however, in his more general treatment Arthurs finds strong reasons to expect policy convergence towards the U.S. within Canada, though for reasons that are only partly related to globalization. I return to these shortly. Before getting to that, consider the Banting collection.




The term the "new right" does not feature in The Nonprofit Sector. But the introductory essay by Hall and Banting underlines the importance of the nonprofit sector with the observation that governments have combined a with- drawal from the direct provision of a number of services with "a call for communities to do more on their own through voluntary action" (p. 2). Fur- thermore, the policy shifts initiated by the Harris government constitute something of a lowering presence in either the foreground or background of several of the essays. The additional premises are that the nonprofit sector is quantitatively important and that little is known about it.

"Knowing" things about the nonprofit sector is complicated by its heterogeneity. Much of it (e.g., universities, hospitals) is substantially funded by the government. Many nonprofits deliver services for a fee (e.g., YMCA health clubs and sports facilities). A further variant of this is nonprofits that offer services for a fee to make a profit, but divert the profits to fund a broader "social mission" (e.g. the sale of girl guide cookies, the renting of conference facilities by universities). To this mix can be added charitable organizations that provide welfare services of various kinds, and religious organizations. Nonprofits do so many things in so many different ways that the idea of the production of a general analysis may be a chimera. This collection certainly does not provide such an analysis. But it does offer interesting insights into parts of the system.

First, the nonprofit sector appears to be quantitatively important. Canadian charities alone had a revenue of over $90 billion in 1994 (Hall and Banting, p. 13). Brown, Troutt, and Boame uncovered "at least 7,506 active nonprofits" in Manitoba (p. 195), of which over 4,000 were registered charities. Second, a very large amount of its funding comes from government - at the national level almost 60% of the revenues of charities come from the government. In Manitoba, in the more general category of nonprofits, about 34% come from that source. Third, some governments - in particular the government of Ontario - have shifted funding from a grant to a contract basis, allowing the possibility of private sector competition for contracts. This poses major problems for a set of agencies unaccustomed to the entrepreneurialism for which the contracting process calls (nicely illustrated in Dart and Zimmer- man's paper). Fourth, much of the voluntary sector is complementary to services provided by the government. For example, voluntary agencies supply people to accompany the elderly to hospital appointments. This means that the effectiveness of service provision depends on the institutional links between government and voluntary agencies. The paper by Jenson and Phillips ex- amines the bases for effective service delivery by contrasting Quebec with Ontario. Fifth, a less sympathetic environment both encourages nonprofits to seek efficiency improvements by working collaboratively and requires a




clearer demonstration of effective use of funds. But, as Phillips and Graham show, collaboration complicates the process of demonstrating adequacy of performance. Finally, even in a relatively secular environment, religious organizations provide a wide range of services, primarily to people who are not members of their congregations (Handy and Cnaan). The case for the importance and interest of nonprofits is well made by this collection.

Combined, what might these three collections tell us about constraint and choice? It might be that choices are particularly difficult at present because of the pace and magnitude of change. The premise of Knight and Joseph's collection is indeed that something new and distinct is going on: "rapid and far-reaching economic and social change amounting to a "changing of the rules" under which people experience society" (Knight and Joseph, p. 1). But there are problems with this line of reasoning. First, if the claim is that the pace and magnitude of current changes are unusually large we would need a bit more evidence that allows that conclusion. Second, if the claim is that the current rate of change is historically unprecedented, it is probably simply wrong.

Watson's paper in Room to Manoeuvre?, while couched in the light tone of an after dinner speech, has some instructive things to say on this matter. Both for tone and content it is worth a short quotation (p. 261).

In 1851, it cost U.S. $5 per word - per word - to send a cable from New York to London. That's U.S. $51 in today's currency, which is, what?, three or four thousand Canadian. Just a few years later, the rate was a hundredth of that - a decline in price that rivals the late-twentieth century decline in the price of computation. In the 1850s, it cost ?100 and took several months to get a letter from Winnipeg to Montreal (which is at least two weeks longer than it takes now). A quarter-century later, once the telegraph went in, communication was virtually instantaneous. That's future shock.

Watson goes on to point out that, in the nineteenth century, trade grew "by a factor of 25 in the last century, much more than in this," that there were very large population movements into and out of Canada, and that direct foreign investment (from the U.K.) was enormous.

The case that, in either magnitude or pace, current change is any larger than past change is, at best, not proven. Is it, nonetheless, so distinctly constraining that governments are unprecedentedly hemmed in?

As we saw above, the two essays dealing with technology in Room to Manoeuvre? do suggest that technological change is in the process of forcing the Canadian government to modify its policies. Content regulations, Waverman argued, will not work in the environment of the internet. However, he also argues that if the objective of protecting Canadian culture is maintained, it would be possible to fund Canadian production by, among other things, taxing consumers through television licence fees. Innovation in communications technology, then, precludes current policy instruments but




does not preclude pursuing the same objectives with other ones. Whether the same is true of bank regulation is not clear; but the possibility should not be ruled out. With respect to globalization, the detailed studies of taxes, research and development, and service provision in Room to Manoeuvre? suggest considerable policy latitude.

An interesting light is cast on the issue in the long essay by Arthurs that opens the collection. It is a lament. Current policy debate and implementation in Canada is shaped by the spirit of TINA - the idea that "there is no alternative" to the choice of policies with a distinctively (and, for Arthurs, disturbingly) new right cast to them. The tyranny of TINA is all the more effective because it takes two forms. The first TINA says that only new right policies are sensible. The second says that Canada's location in North America and interdependence with the U.S. of necessity shapes and limits policy choice. These two TINAs "are mutually reinforcing" (p. 19). Each, in practice, implies similar sorts of policies.

Contiguity with respect to the U.S. is a constraining factor. But, Arthurs argues, the most binding constraint on policy comes from the tendency to con- stitutionalize the choices associated with each TINA. He has a very general definition of the term "constitution." It is not just a legal document. It is, rather, the set of premises that set the limits to the menu of policy choices. A power written into a legal text may effectively disappear from a constitution if never used. Arthurs cites the federal power to disallow provincial legislation as an example. Alternatively, legal provisions may be extended by an activist judiciary. Thus: "the fantastical and self-serving inflation by courts of their own independence and reviewing powers and their immunity from Charter standards and the financial tribulations which afflict the rest of us. Hence the ability of the Supreme Court by a process of divination and conjury to "find" standards of legality and legitimacy governing Quebec secession in a constitution which is admittedly silent on the point" (p. 23). More generally still, "social relations, culture and politics" - all of which now have, as we will see, a transnational dimension - limit government choice and can be subsumed within a concept of constitution, properly conceived (pp. 62-63).

So what, exactly, are the elements of the emerging Canadian "constitution," in this very general sense? There are, to start with, the provisions of NAFTA (and, behind that, the broader global integration implied in the WTO). But it is not just the provisions themselves. The North American economic integration that follows from it creates economic and social links on the basis of which interest groups form who then press for measures that imply further integration. Important agents in this process are transnational corporations. Their reach and influence has been enhanced by the liberalization implied by consecutive trade treaties. They, in turn, resolutely turn their face to the world and away from Canada. So, many MNCs nominally based in Canada are ef-




fectively shells, with executives with a negligible concern for specifically Canadian issues. As a result, "We will have lost the capacity for meaningful dialogue between Canadian governments and important actors in the private sector" (p. 40).

These external constraints on the capacity to act of the federal government have been reinforced by the evolution of Canadian law. On the one hand, the Charter of Rights has been used by individuals to protect themselves against the discretionary activities of regulatory agencies. On the other hand, courts have been willing to assert a right to review administrative judgments with a view to protecting "the right to carry on one's business or profession, for example" (p. 51). This is sometimes accompanied by substantial damage awards against the government.

All of this has effectively disarmed the federal government. The melange of industrial policies and the welfare state that characterized the first half of the postwar period is becoming progressively less and less feasible. Arthurs' paper is a lament for the world of C.D. Howe (cf. p. 86).

In his comments on Arthurs' paper Schwanen notes that evidence of Cana- dian governments being prevented from doing things they wanted to do is fairly thin. I can certainly say that there is (alas) little evidence in Quebec of the loss of appetite to tax that Arthurs imputes to "virtually all Canadian governments" (p. 47). But suppose, for the sake of argument, that what Arthurs claims is broadly true. The general question is: Is there anything wrong with constraint?

As a free individual I could, I suppose, choose to hit myself in the head with a hammer, at least until someone brought in the psychiatrists. That is not a freedom that I particularly cherish. Still, at least in that case, my right to engage in self-destructive behaviour would be limited in the number of people it affected. Government freedom to do stupid things is quite another matter. I will return to this issue. First, however, it is useful to briefly consider the paper by Courchene in Room to Manoeuvre? that argues for the creation of a single North American currency area.

The value of the Canadian dollar is free to fluctuate with respect to the U.S. dollar. This has allowed federal governments to pursue policies that would have been precluded were there a fixed exchange rate. For example, it allowed Canadian governments to accumulate a level of debt much larger than most other OECD countries and, more particularly, than that of the U.S. (p. 277). The question is, of course, was it ever sensible for Canadian governments to accumulate that level of debt? A good case can be made that it was not. It was the macroeconomic equivalent of hitting oneself in the head with a hammer. It has implied the diversion of a substantial share of government revenues to interest payments; it implied higher interest rates to attract capital to finance the debt; and, since the accumulating deficit was ultimately




unsustainable, higher taxes to eliminate it. An outcome of the freedom of Canadian governments to accumulate debt was, then, the severity of the recession of the early 1990s. The effects of falling demand in the rest of the world were magnified by debt-mandated higher interest rates and taxes.

It is true that there is an important difference between the Canadian and the U.S. economies. The sale of natural resources is much more important to Canada. This implies, the argument goes, that the two countries' business cycles do not coincide. So, when natural resource prices fall, as they have done recently, the effects on employment can be mitigated by a fall in the value of the dollar which reinforces Canadian exports across the border. Conversely, the inflationary effects of a rise in natural resource prices can be reduced by a rise in the value of the Canadian dollar. This alone might be seen as warranting flexible exchange rates.

But, Courchene argues, other mechanisms for adjusting to a supply side shock - say, a substantial rise in commodity prices - are available, particularly in a context in which North-South trade is becoming increasingly important. First, prices can be allowed to rise. The effects of this on U.S. trade are limited because North-South trade flows mean that regions on both sides of the border will tend to be affected similarly. There is less of a misalignment of forest product prices on each side of the border, for example, because the effect of the supply shock on the U.S. Pacific North-west is more or less the same as the effect on British Columbia. The same would be true for the manufactured goods produced in Ontario and Quebec, on the one hand, and the Great Lakes region of the U.S., on the other. Second, fiscal stabiliza- tion is an option. Excess demand can be offset with higher taxes (providing Canada is not encumbered by a debt to GDP ratio much larger than that of -the U.S.). Third, where a shock is region-specific, "we already have in place mechanisms to deal with this - the national tax-transfer system, unemployment insurance, equalization, internal migration, and the like" (p. 31 1, emphasis in the original).

Fixing the value of the Canadian with respect to the U.S. dollar, Courchene argues, would limit policy autonomy but be desirable. There is the fact that it would prevent Canadian governments from accumulating unsustainable de- ficits (unless, of course, the U.S. chose to do so). To this can be added the possibility that allowing exchange rate depreciations to support exports has allowed Canadian producers to evade making the investments and changes in work practices that competitive operation require. And, finally, exchange rate stability with respect to our principal trading partner would reduce the transactions costs associated with cross-border trade (including the cost of hedging against changes in the value of the currencies).

Courchene goes on to discuss particular arrangements for aligning currencies, from a Bank of Canada commitment to peg the Canadian to the U.S.




dollar to the adoption of the U.S. dollar as Canadian legal tender. But the point I want to emphasise here, without necessarily accepting his policy recommendation, is that his analysis indicates the potential advantages to constraint. Government liberty to do stupid things is, at best, a mixed blessing. Indeed, the capacity for governments to act stupidly and/or viciously is precisely why we have constitutions.

All of this is, of course, tied to one's policy preferences. The editors and some of the authors in Restructuring Societies observe a set of policies broadly associated with the "new right" and appear not to like them. Some of the authors in The Nonprofit Sector seem not to be enthused by the implica- tions of the particular forms embodied in the policies of the Harris Conserva- tives (e.g. Jenson and Phillips). Yet neither book provides any reason for rejecting so-called new right policies in general, or the particular forms of it in contemporary Ontario (unless one is persuaded by the fact that Bob Rae thinks that George Orwell and Edmund Burke would not have liked them!).

Consider the reforms in New Zealand. Moran reports that they reduced national debt, were accompanied by tax cuts, reduced inflation, seem to have led to "strong rates of growth" (p. 52), were followed by falling unemployment, and allowed the government to rid itself of a number of chronically money- losing state-owned enterprises. Moreover, the movement away from agri- cultural marketing boards and the attempt to privatize forests served the interests of at least some of the Maori population: in the latter case, the proposed change of status facilitated court action by the Maoris, from which they managed to extract a non trivial transfer of money. It is true that there were costs to the reforms: during the transition growth fell substantially and unemployment rose equally substantially. Still, it is probably reasonable to view as untenable the situation of New Zealand before the reforms. The costs can most sensibly be seen as the price to be paid for the silliness of previous governments.

Nor do the essays in The Nonprofit Sector provide warrant for a rejection of the Harris government's approach to volunteer activity. Jenson and Phillips show that Ontario and Quebec have two traditions of health care provision, each of which depends on volunteers. Broadly speaking, Ontario organizes home care services at a larger scale through regional Community Care Access Centres (CCACs) while Quebec has delivered them through Centres locals des services communautaires; (CLSCs). They show that it is difficult to compare the relative role of commercial competition in the provision of home care because the furnishing of lists of private care-givers by CLSCs is less transparent than is the case for the CCACs. Finally, they show that volunteers in Ontario complained that they had difficulty "connecting" with the CCAC, but that was less the case for the CLSCs. However, Jenson and Phillips acknowledge, the close relationships with the CLSCs might either be bad or good. All this is hardly an indictment of the common sense revolution.




Neither is Dart and Zimmerman's study of the effects of attempts at revenue generation by social service agencies in response to budget cuts. While there is no doubt that the budget cuts posed major problems of adaptation, it is not at all clear that was a bad thing. Charging for services did not discourage charitable giving because there had been little of it prior to the change; most of the agencies' revenues had come (and continued to come) from government grants. At the time of the research there had been no evidence of transfers of dollars raised from charity to fund the development of "commercial" services. Employees whose employment became insecure because of a loss of government grants appear to have worked harder to assure both continued commercial contracts and continued employment (p. 126). De- spite concerns about the possibility (because it is thought to be easier to charge for services to individuals than to society), neither agency shifted from a broad engagement with social issues to service provision to individuals. They could not do so because they had never done much other than provide services to individuals in the past. And there was some evidence that in the face of reduced means the agencies shifted their attentions to clients and issues where there was a higher probability that they might do something useful (pp. 139- 143). A reasonable conclusion would be that, in terms of the quality of service provision, for the two agencies studied, the harsher environment created by the Harris government had made almost nothing worse and may have made some things better.

So where, finally, are we? What is to be done? And do we have any choice? These books suggest the following answers (sometimes despite themselves). Technical change and globalization imply constraint on policy options. But in some areas (telecommunications policy, cultural policy) they seem to require shifts in policy instruments rather than abandonment of particular policy objectives. Thus, if Canadians really wish to watch television programs produced in Canada, the government appears to be able to subsidize Canadian production out of funds from licences fees rather than from taxes on content providers, NAFTA notwithstanding. But I take it that the lesson of the Arthurs paper is that governments have chosen to constrain themselves in various ways. The federal government signed NAFTA. It has allowed the power to disallow provincial legislation to fall into desuetude. Rather than incur the legal costs it acquiesces in cumulatively constraining court awards in favour of plaintiffs against acts of administrative discretion on its part. The government is binding its own hands.

Of course, government policy choice in the 1990s was also constrained by the accumulated deficit. It led the federal government, in particular, to reduce the transfers to the provinces that funded health and education expenditures. And this leads to the next conclusion: constraints on governments are often a good thing. If one accepts the argument that the deficit accumulated by, say, 1990, was a result of a monumental policy error (and I am pretty much




convinced that is so) then, rather than harking back to the golden age of government discretion of C.D. Howe, we might more sensibly consider Courchene's proposal to tie the Canadian to the U.S. dollar, precisely because it would reduce the federal government discretion to do stupid things. So the answer to the question, what is to be done? is: Seek instruments that allow Canadian governments to pursue current or future policies that people want; but embrace constraints that stop future governments from doing things that have consequences that would not serve the interests of the population. I do not for a moment suggest that choosing such policies is an easy matter. But discussions of alternatives are likely to be less productive if they are framed by these two assumptions (crudely speaking): government discretion is good; constraint on government is bad.

Which brings me back to the new right. As far as I can tell, among sociologists in Canada there is little enthusiasm for it. We might treat some of the writings of Patricia Marchak as a model of sociological approaches to the new right, since she is about as credible a commentator on these issues as we have got. For example, her 1991 treatise on globalization (The Integrated Circus: The New Right and the Restructuring of Global Markets) is among other things, I think it is fair to say, a polemic against the new right. As such, it is filled with rather general objections (see pp. 267-268): e.g. "Adam Smith's little world has no analogue in this global economy. To invoke his dicta on the relationship between each man's pursuit of selfish interests and the magical achievement of the common good is to admit that in the twentieth century the science of economics has lost all sense of reality." The alternative prescriptions it provides are equally general: "The measure of any economic system is its effectiveness in providing for the sustenance of the earth and of human populations." This is all very well. But it does not much help us in deciding whether or not it is sensible, for example, for welfare agencies to compete for contracts with private providers or for government to continue to attempt to use content regulations to shape the content of television programs.

I do not suggest here that there is anything wrong with treatments couched at a very general level. Whether or not one agrees with the analysis, The Integrated Circus is a very stimulating book. What I do want to raise as a possibility is that, in its treatments of the new right and the policy choices associated with it, Canadian sociology has done little to go beyond general denunciations and has almost no record of detailed consideration of policy alternatives. It is all very well to condemn the naivete of Adam Smith (though probably wrong-headed) but most of those engaged in policy analysis will have heard that sort of thing before, if only as undergraduates. The credibility of the general judgment rests in the demonstration of its correctness through multiple detailed applications in particular areas. I would suggest that, within Canadian sociology, such detailed applications are distinctly thin on the




ground. The result is a relative absence of sociologists from useful policy discussion. There is some indication of that in the three books reviewed here. Together, they contain some 29 contributions (including the comments of discussants in Room to Manoeuvre?). The contributors are drawn from a number of disciplines, but only one essay was produced by (two) sociologists. And it was the one in Restructuring Society that provided us with the spectacularly obvious result that people who lost their jobs when their (rural) plants closed were worse off eighteen months later than they had been before.

I recognize the limits of this sample. Still, I want to raise the possibility that it reflects the relative marginalization of sociology with respect to policy choice. I want to further raise the possibility that this has something to do with the fact that most sociologists have, on the whole, been content to limit their involvement to rather ritualistic denunciations of anything thought to be associated with the "new right." And, finally, informed by the essays reviewed here I want to suggest that, when considered in detail, some of the policies associated with the new right might actually do little harm and might even do some good. That view might well constitute sociological heresy. But that, I suspect, is a problem of sociology rather than of the view.

McGill University Michael R. Smith



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What Is to Be Done? And Do We Have Any Choice?