Last week, Ottawa was humming with talk of a green plan. Now, spiking COVID numbers have turned the government’s attention back to healthcare and income support. No objection from us; the health of our citizens should be the government’s top priority. But while the plan is on pause, why not use the time to try and get it right?
In our view, the basic arguments are rock solid: climate change is urgent, we should use the recovery to “build back better,” and Canada can and should be a leader in a new sustainable economy. Still, the plan could go very wrong. Let us dig up a bit of history to show you how.
Bill Clinton and the “New Covenant”
In the early 1990s, free trade agreements were popping up everywhere, global supply chains were taking shape, and the “new economy” was roaring into existence. But while corporate profits soared, the news for working people was bad.
Factories were shutting down and millions of jobs were moving to Asia. According to the economists, globalization required this massive “restructuring,” but the payoff would come in the form of a new generation of “knowledge jobs.”
At the time, Bill Clinton was seeking the Democratic nomination for president and, in a now-famous speech to unemployed factory workers (brilliantly reenacted in the film Primary Colors), he did something remarkable, especially for a Democrat.
Clinton told his audience that, if elected, he couldn’t bring their jobs back. They’re gone forever, he declared. It’s a new world and a new economy and working people are going to have to adjust.
Though a life-long Democrat, Clinton criticized the “Old Left” for being too narrowly focused on redistributing wealth. He wanted to make the middleclass key players in the new economy – and he saw education as the way to do it.
Clinton promised the workers that, if elected, he would ensure that they had the right opportunities to re-educate themselves, but he also asked for something in return: they had to do the hard work of learning and re-skilling. In Clinton’s New Left philosophy, activist government was a two-way street where opportunity also entails responsibility.
The plan was cleverly framed as a new “covenant” between government and (middleclass) Americans – and they loved it. They felt hopeful and empowered.
The Relevance to Our Own Time
Calls for a green recovery plan rest on similar arguments. The sustainable economy will create new industries and new high-paying jobs. Countries who invest in the right ones and build the right knowledge and skills will take the lead.
As for Clinton’s argument, it is as relevant today as 30 years ago. The pandemic has ravaged sectors such as hospitality, transportation, and tourism; and they may never fully recover. Millions of workers need to reskill, and a green recovery could be the answer.
Canadians thus not only need a plan but, to borrow Clinton’s jargon, they need a covenant. And that’s where our history lesson comes in.
Clinton’s new covenant may have been a great idea but, as a plan, it was a failure. Indeed, the social and political costs of globalization have been devastating. Many American cities and towns never recovered – either the new jobs never came, or working people never got them. The same holds in Canada, the United Kingdom, France, and other European countries.
Worse, anger and resentment over the social costs of globalization have fueled rightwing populism, from Donald Trump’s MAGA to Brexit to France’s yellow-vesters, who have even gained a foothold in Canada. Why?
The globalization agenda was not the result of a new covenant between government and working people – American or otherwise. Middle class America wasn’t even at the table.
The agenda was set by powerful corporate interests who were largely indifferent to the social consequences of restructuring and did little to ease them. The middleclass is still reeling.
Clinton’s new covenant failed because it had no machinery around it – there was no process to manage the change. Elections were the only tool the public had to put pressure on government to listen to them, and that was never going to cut it. Elections, as Kim Campbell famously quipped, are no time to discuss serious issues.
The Lesson for the Recovery
So, what’s the moral here?
A sustainable economy is coming, and we need to retool, or we run the risk of falling permanently behind. But as we debate the transition, progressives should be mindful of Clinton’s story.
The pandemic has exposed weaknesses in the economy, but they differ from sector to sector and region to region. It is not enough just to say, as Clinton did, that education and training are the solution.
We need an ongoing conversation – a partnership – between government and the middleclass. People must be able to weigh in and say what is or is not working for them. And governments need to listen and act.
In this view, activist government is about more than redistributing wealth. It is about ensuring that working people have a meaningful say in shaping and implementing a transition plan. It is about listening to those who are on the front lines.
Such a partnership would not be heavy and bureaucratic. It would be nimble and sleek – but still provide reliable exchanges, up-to-date information, and reasonable accountability from all sides. We have thoughts on how this would work, but we must leave them for another day.
Building a new economy is a daunting task with few precedents; mistakes are inevitable. Still, given the high stakes, we owe it to ourselves – and each other – to get it right this time.
Dr. Don Lenihan is Senior Associate at the Institute on Governance and an internationally recognized expert on public engagement, governance, and policy development. For more, visit his website at: www.middlegroundengagement.com
Andrew Balfour is Managing Partner at Rubicon Strategy in Ottawa.