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Louis Pauly on Clarkson’s Great Transformation

Lou Pauly

The following is a contribution in the blog series on the exceptional contribution of Stephen Clarkson to Canada.  Stephen Clarkson died in 2016.

This piece is by Louis W. Pauly who is the J. Stefan Dupré Distinguished Professor of Political Economy at the University of Toronto. He is cross-appointed to the faculty of the Munk School of Global Affairs.   His publications include twelve books with his most influential work focusing on the politics of global finance, economic crisis management, and multinational corporate structure and strategy.

Stephen Clarkson’s Great Transformation
Louis W. Pauly

From Innisland to Polanyi

Stephen had a complicated relationship with a country that had changed dramatically during his lifetime. He was a 68er, who came from what would have accurately been described as the elite of his generation in what used to be called Upper Canada. Even if they hardly appreciated it at the time, the members of that group had inherited the rapidly expanding Canadian political economy of the post-war years. That economy was somewhere between Innis’ commodity-based dominion of the British Empire and the emerging continental production system of our own time. Stephen learned to like neither—despite being a prime beneficiary of both. Like Abe Rotstein, Mel Watkins, and his friend Daniel Drache, he yearned for a relatively more autonomous, prosperous, and egalitarian country—a country different from the late-imperial one that had benefited him at Upper Canada College, Trinity College, and Rhodes’ Oxford.

Needless to say, the nationalism born of that yearning, that aspiration, was complex.
The frustration created by the gap between aspiration and reality defined Stephen and his generation. That generation truly lived through a great transformation. No wonder they were inspired by Polanyi! They were born in Innis-land. They grew old in the land of the continental supply-chain, a land that seemed destined to be ever more deeply integrated into a financial and innovation system grounded in political structures south of the border. The best of both worlds? Some say so. But Stephen rejected that rosy view. He saw only a transfer of colonial allegiance. In the days of Trump, who can plausibly argue that he was wrong to hope for something better, something more noble.

Personally, I’m glad that Stephen did not have to witness the abomination currently unfolding in the USA. He might have liked it too much. It would have taken away more of the shades of gray that lie in between the urge for Canadian autonomy and the reality of deepening social and economic integration. It would not have led him to optimism.
The Legacy of ’68 and Stephen’s Elite Past

One thing, though, always did leave a smile on Stephen’s face. He loved his students, and he loved teaching them about Canada in a changing world. Of course, he had some unfair advantages. At the end of every year, he would visit the undergraduate office in the Political Science Department. There he would find out who were the top undergraduates finishing third year. He would gather their names and addresses, and over the course of the summer he would write personal letters to them. The letters invited them to register in his famous fourth-year political economy seminar. Ah, despite the legacy of ‘68, the old instincts persisted! He wanted to work with the best, he wanted to shape the leaders of the next generation, albeit now a truly multicultural generation. And he did work with them. During his last decade, he found ways to take his seminar-students—the survivors of a rigorous selection process—abroad. Every year, he led them on serious research missions, which would always lead to a collaborative publication. And despite his stated disdain for the glittering prizes of his own elite past, he would quietly but exceedingly diligently work very hard to help the brightest of his students win Rhodes, Commonwealth and other prestigious graduate scholarships.

For present purposes, it is quite interesting to note the research theme that his students and he pursued in those seminars during his last years. It was the same theme that continued to win him distinguished research grants in Canada and Germany—so much for the idea of retirement, which he detested! The theme was comparative continentalism. It was not exactly clear where that research was going, but let me take some guesses and put it into the longer term context of contemporary political economy.
Stephen’s doctoral dissertation dabbled in Marxist thought. In retrospect, it can be hard to distinguished from a critique of hyper-liberalism: a global division of labour, the rise of boundary-spanning markets beyond the control of nation-states, the inherent value of labour inexorably usurped by capital, the inexorable rise of an impoverishing system that in the end would surely collapse. Alas, that nightmare abated in the post-war years and especially in the wake of rising nationalism in the 1960s. By the 1970s, the Vietnam War rendered the prospect of globalism seriously problematic, for here was a misguided venture opposed by national and international capital, the defense industry notwithstanding, but pursued to its hideous conclusion by a hegemonic state that could no longer calibrate its own fundamental interests but could indeed control markets.

Clarkson’s Pan Canadian Nationalism: One of His Red Lines

In its wake locally, though, came not Stephen’s dream of a new pan-Canadian nationalism, or Abe Rotstein’s and Mel Watkins’ infrastructure for an independent Canada. No, in its wake came the Auto Pact, the FTA and then NAFTA. And during the same era, Canada itself almost fell apart with the Quebec referenda of 1980 and 1995. Stephen was not happy. Eventually, his unhappiness found a focal point in the Investor-State Dispute Settlement Mechanism at the heart of NAFTA, a structure that seemed to lock Canada into a single continental economic system with an accountability flaw at its heart. The US Congress still held the ultimate whip-hand, but Canadians had no representatives in that ultimate decision-making body. There is no doubt that had he survived to the present moment, his attention would have been riveted on this particular, and particularly ironic, aspect of the NAFTA renegotiation demanded by Trump.

For Stephen, I think, whether one’s political economy priors have Marxist, liberal or even Gilpin-style realist roots, the resulting research questions today are three: was the North American experience of transformation and trauma in traditional authority relations happening elsewhere? If so, was the direction of change toward fragmentation or integration? And what were the most consequential political reactions locally?

Stephen’s research guided by these questions was still underway when he died, but a couple of books had come out along the way and many papers were in the pipeline. I do not know where his unfinished magnum opus would have landed on these questions. But my guess would be as follows.

The Terrible Spectre of a Contested Future

Continentalist ideologies remain ascendant in the real world of political economy. Who can doubt the existence of a US-centered North and South American economy—linked by finance, goods and services, drugs, labour mobility, and a US-defined rule of law? Who is not asking him or herself right now if that regional economy is being matched by a rapidly evolving German-centered Europe? (By the way, I’m sure Stephen did sense that during his last years; he was as attracted by German culture and by the post-war German idea of the social market economy. Note in this regard that by his own request half of his ashes are now buried in Germany.) And finally, who is not fascinated these days by the implications of China’s rise in Asia?

By the time he left us, though, I think Stephen was aware of the fragility at the core of each of these continental economies, the continuing, even deepening, linkages across them, and perhaps most importantly the ideological weakness of continentalism. Unlike most variants of nationalism, it seems not to call forth any potentially constructive passion. But around the world, it certainly does seem to inspire a spirit of passionate resistance. And thus might Stephen have concluded.

His students, though, could not stop there. For they had begun to see clearly the immensity of the challenges in front of their generation. The problems of collective action looming—from climate change to financial instability to refugee-generating conflicts around the world—could not be avoided. If the nation-state was no longer up to the task of problem-solving, if nascent continental polities were incoherent, if supranational institutions were absent or ineffective, that only serves to clarify things. If they remain inspired by Stephen Clarkson, they will take that clarity as a challenge, the starting point for new and urgent research.

If Stephen had lived long enough to be inspired by that next generation and to write yet another book of his own, he might have looked to his past work for an appropriate title. He might have called it “Canada and the Global Challenge.”

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