Donald Gutstein

Burnaby author Donald Gutstein has spent the past 40 years tracking the rise of neoliberal ideology. Over lunch at Tangent Café on Commercial Drive, the adjunct SFU communication professor says that after all these years, many people are confused about what this term means because it’s rarely defined. So he decided to write a book about it, using Prime Minister Stephen Harper as a case study.

In Harperism: How Stephen Har­per and His Think Tank Colleagues Have Transformed Canada (James Lorimer & Company Ltd.), Gutstein makes the case that neoliberalism is far more sinister than simply having a desire for smaller government. A central tenet of his new book is that Harper is undermining democracy by marshalling the power of government to create and enforce markets where they’ve never existed before.

“He’s gradually moving the country from one that’s based on democracy to one that’s based on the market, which means that the decisions are not made by our duly elected representatives through the laws that they pass and the regulations that they enact,” Gutstein says.

When asked for an example, the bearded intellectual mentions the temporary-foreign-worker program. That’s because it advances the notion that employers, and not the government, should determine who immigrates to Canada under a market-based system.

Another example is free-market environmentalism, which was developed by the neoliberal Pacific Research Institute in San Francisco and has been embraced by the Vancouver-based Fraser Institute.

According to Gutstein, the objective of FME is to have environmental issues addressed by markets rather than through government regulation.

This is accomplished by placing a dollar value on environmental assets, which then can be leveraged for loans or securitized and sold off by investment dealers. As an example, TD Economics recently estimated that the Lower Mainland’s urban forests are worth $224 million in annual economic and environmental benefits and have a replacement value of $35 billion.

“So it’s a step in that direction,” Gutstein says. “If you can put a value on it, then someone can own it.”

Now in his mid-70s, the trim academic argues that Harper’s policies are rooted in the neoliberal belief that “economic freedom” trumps other societal objectives. The Fraser Institute defines the “four cornerstones” of economic freedom as “personal choice, voluntary exchange coordinated by markets, freedom to enter and compete in markets, and protection of persons and their property from aggression by others”.

With astonishing intellectual dexterity, Gutstein demonstrates in his book how Harper’s overarching mission to promote economic freedom through the imposition of markets is reflected in Conservative government policies.

This explains the zealous desire to dismantle environmental regulations, muzzle government scientists, and scrap the long-form census. The faith in markets also underlies Harper’s blindness to rising income inequality and his eagerness to undermine the Canadian Wheat Board.

In addition, it provides a theoretical framework behind efforts to persuade First Nations to abandon collective ownership of their land in favour of a fee-simple system. Neoliberal ideology also manifests itself in Harper galloping around the world to sign free-trade agreements, which limit municipal and provincial governments’ ability to introduce regulations or procure locally produced goods and services.

Gutstein argues that Harper is radically re-forming the Canadian state but it’s largely gone unnoticed because he’s doing it gradually and with considerable stealth.

“When you take an incremental approach, it doesn’t look like a revolution,” the professor says with a smile.

The neoliberals’ ultimate prize would be to enshrine property rights in the Constitution. Gutstein shows how this, too, is being done incrementally by focusing on Section 43 of the Constitution Act, 1982, as a means to get this implemented in Ontario first. From there, it could spread across the country.

If that happens, it will become more difficult for governments to introduce environmental regulations because companies could launch court challenges, arguing that their charter rights are being violated.

“Neoliberalism is a utopian project,” Gutstein explains. “It will never be totally accomplished. That’s why there’s always more to do.”

So where did neoliberal ideology come from? Gutstein’s book highlights the importance of the little-known Mont Pelerin Society, which was created in 1947 by neoliberal economists Friedrich Hayek and Milton Friedman. They had a long-term goal of disseminating ideas to counter social democracy by relying on what Hayek called “second-hand dealers”.

Second-hand dealers include various newspaper columnists and editorial writers across Canada who parrot reports by neoliberal think tanks such as the Fraser Institute, Macdonald-Laurier Institute, Frontier Centre for Public Policy, Montreal Economic Institute, and Atlantic Institute for Market Studies. Second-hand dealers can also be teachers, church ministers, artists, playwrights, and filmmakers—anybody who can put neoliberal ideas in a form that can be understood by audiences.

“They’re crucial,” Gutstein emphasizes. “Nothing would happen without them.”

In Gutstein’s eyes, another second-hand dealer was novelist Michael Crichton, a climate-change denier whose State of Fear characterized environmentalists as mass murderers.

In Harperism, Gutstein shows how the creation of the Mont Pelerin Society and its associated neoliberal think tanks led directly to the rise of British prime minister Margaret Thatcher, U.S. president Ronald Reagan, and Harper.

“Harper was introduced to Hayek as a graduate student at the University of Calgary in the 1980s; Hayek seems to have guided Harper’s thinking since then,” Gutstein writes in the book. “The debt Harper owes these neoliberals, their ideology, and their network of affiliated think tanks is just as enormous as that owed by Thatcher and Reagan.”

Gutstein emphasizes that Hayek, who died in 1992, and Friedman, who died in 2006, didn’t invent this approach to changing the political climate. Rather, he argues that they were merely copying Britain’s Fabian Society, which used similar methods to advance socialism and the welfare state.

In Canada, two of the most influential Mont Pelerin Society members have been the Fraser Institute’s former executive director, Michael Walker, and Brian Lee Crowley, founder of the Macdonald-Laurier Institute and former president of the Atlantic Institute for Market Studies.

When asked how important Walker has been in the evolution of the Canadian state, Gutstein simply replied, “Really important.”

For a while, Crowley was a senior economic adviser to the federal finance ministry.

Crowley’s Fearful Symmetry: The Fall and Rise of Canada’s Founding Values (Key Porter Books, 2009) describes how “traditional” Canadian values, such as a commitment to family and a solid work ethic, were undermined by the baby-boom generation and the rise of Quebec’s separatist movement. But he claimed that this is changing.

“Already with our early welfare reform in the nineties, we began to shift away from an unhelpful focus on ‘poverty-as-victimization’ to seeing poverty as much more an outcome of the behaviours of the poor themselves,” Crowley wrote. “In this we are rejoining the mainstream of thinking in the Western world. We see poverty, in other words, more and more as a matter of character.”

Postmedia columnist and weekly CBC TV commentator Andrew Coyne attended the London School of Economics with Crowley, an ardent Hayekian. Coyne has called Fearful Symmetry a “profoundly important book” for its analysis of the impact of a shrinking labour market.

“It will mean cutting taxes, to provide incentives,” Coyne wrote in the introduction to Fearful Symmetry. “It will mean opening ourselves further to international trade, to make better use of the productive talents of workers in other countries. It will mean having more children, which will in turn require policies that buttress the family unit—or at least do not discourage it.”

Gutstein writes that Coyne is much more than a second-hand dealer of Hayekian ideas because he “occupies the interface between think tanks and media, crucial territory in the neoliberal war of ideas”. This is why Coyne receives far more attention than any other Canadian journalist in Harperism.

“As of this writing in mid-2014, a tightly knit, smoothly operating neo-liberal propaganda system has been installed in Canada,” Gutstein claims in his book.

To further their success, neoliberals have paid great attention to the use of language in selling their ideas to the public. Gutstein notes in his book that Conservative politicians repeatedly claim to support “sound science” and condemn “radical environmentalists” even as they’re preventing government scientists from being interviewed by reporters.

Gutstein explains that Harperism really has three key ingredients. First and foremost, it promotes neoliberalism. Secondly, it’s gradual. And thirdly, it involves fundamentally redefining Canada as a great nation with a glorious military past. He argues that this is why the Canadian citizenship guide was rewritten.

“The word ‘war’ doesn’t appear in the Chrétien-Martin guide, but is used fifty-five times in the Harper version,” Gutstein writes.

If neoliberal ideologues have an Achilles’ heel, Gutstein says, it’s their refusal to acknowledge how their policies increase inequality. Citing statistics from the Paris-based Organisation for Economic Co-operation and Development, Gutstein points out that income inequality is at its highest point in 50 years among the 34 most developed countries in the world.

According to the OECD, increased income inequality is linked to declining union membership, minimum wages not rising with inflation, lower employment standards, and reduced length and generosity of unemployment benefits. However, Gutstein notes that Hayek associated income inequality with economic progress.

“Consequently, Hayek asserts, we must live with inequality because government intervention to reduce it will make things worse,” Gutstein writes.

Not everyone agrees with Hayek on this issue. British epidemiologists Richard Wilkinson and Kate Pickett demonstrated in The Spirit Level: Why Equality Is Better for Everyone (Bloomsbury Publishing PLC, 2010) that income inequality generates worse health outcomes for all of society, including the rich. Moreover, their data showed that higher inequality reduces everyone’s life expectancy.

Meanwhile, Hong Kong consistently ranks first in the Fraser Institute’s annual ranking of economic freedom, even though it has the greatest income inequality in the developed world.

Gutstein reports in Harperism that the Fraser Institute’s Fred McMahon condemned the Hong Kong government for introducing a minimum wage because it “interferes with voluntary arrangements between hirers and employees”.

McMahon said this even though the employers were often billionaires. His comment reflected Hayek’s general opposition to central planning.

When asked why neoliberals have these views, Gutstein says that it’s rooted in their belief that governments will always screw things up and only the market can be trusted to make the right decisions.

“I wouldn’t say it’s a cult,” he says. “It’s a brotherhood. It’s a worldwide network.”

Donald Gutstein will hold a book launch for Harperism: How Stephen Harper and His Think Tank Colleagues Have Transformed Canada at 5:30 p.m. on Wednesday (October 8) at SFU Harbour Centre.