There is more to good economic policy than protecting the interests of employers

But you wouldn’t know it if you listened to the message that the BC Liberals have been sending in this provincial election campaign. Instead of discussing the merits of his party’s proposed economic recovery policy, the incumbent Premier prefers to tell British Columbians that responsible economic stewardship involves keeping the business sector happy and anything that goes against the interests of “employers” (such as increasing the minimum wage, for example) is bad policy. The BC Liberals’ tactic seems to be to market themselves as friends of businesses while portraying the BC NDP as the business sector worst enemy.

This tactic was used in the televised leaders’ debate last weekend, when Mr Campbell remarked:

“When you’re talking about the economy, I think it’s fair to ask the question: Why is there not one major employer group in British Columbia – in mining, in tourism, in forestry – that actually supports the New Democrats’ policies?”

Like most other over-simplified messages, this one is also incorrect. Good economic policy does not mean pandering to business-based interest groups. Yes, lowering business taxes and relaxing workers’ rights makes it easier for firms to reap higher profits, which encourages them to set up locally, creating jobs for the local population and increasing economic growth. However, economic growth alone is not a guarantee that everyone (or even most people) would benefit from the increased prosperity. In BC, we’ve seen this clearly over the last 25 years, when economic growth was strong yet poverty remained largely unchanged and income inequality increased substantially.

Where does this leave us? We need to keep in mind that the whole point of having a strong economy is to benefit society by improving the standard of living of people. We cannot continue to ignore our social and environmental problems in the name of having a strong economy. We need to balance the need of businesses to keep their costs low with the needs of workers to earn enough so that they are able to afford the basics like housing, child care, education to make sure we’re all set on the right path in life.

This does not mean that we have to completely ignore the interests of the business sector. Policy-making in a recession involves some trade offs for sure, but it’s not the all-or-nothing proposition that the BC Liberals are trying to make it.

US President Obama summed it up well on March 10th, when he revealed the first details of his education plan (quoted widely in the media, for example here):

I know there are some who believe we can only handle one challenge at a time [but] we don’t have the luxury of choosing between getting our economy moving now and rebuilding it over the long term.

It’s time for our policy-makers to recognize that tax dollars are not simply a drain of resources from individuals or businesses but can and should be used for productive investments that would make the economy stronger and more sustainable in the future. These investments include building up physical infrastructure, as the current government is doing, but they also include making this infrastructure “green,” which they are not doing (as Marc explains here), as well as building up the social infrastructure we require to ensure that our children are well-educated and prepared to face the challenges of tomorrow.

The current US Administration is doing it. Let’s make sure that those we elect next week in BC do the same.


  • The contempt to workers is well expressed by the team of lawyers who prepared ‘Insult to Injury’. Nothing expresses your a cog then no MLA’s showing up on the Day of Mourning. Employers can continue to rejoice.

    “Families and employers are under the impression that the WCB premiums they pay actually offer some kind of protection, but sadly, that protection is almost non-existent. When will British Columbians have had enough? I think the resounding answer to that question will come on May 12, 2009.”

  • that was an excellent post – it is not one over the other but what works best for people – it’s a straw horse that Campbell is creating and hopes that people don’t see that – the market should work for people.

  • The Liberals are following a script that was adroitly dissected in 1942/43 by Michal Kalecki in his lecture/article, “The Political Aspects of Full Employment”. They offer bad ‘economic arguments’ for positions that are politically motivated. It’s literally a ‘confidence game.’

    Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment). This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis. But once the government learns the trick of increasing employment by its own purchases, this powerful controlling device loses its effectiveness.

    Employers don’t want full employment.

    The reasons for the opposition of the ‘industrial leaders’ to full employment achieved by government spending may be subdivided into three categories: (i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending (public investment and subsidizing consumption); (iii) dislike of the social and political changes resulting from the maintenance of full employment.

    So much for Liberal posturing about their “responsible economic stewardship.” Unfortunately, NDP leader Carole James doesn’t seem to be interested in articulating a clear critique and alternative to the ‘obstinate ignorance’ of the Liberals. I heard her this morning on CBC stringing together platitudes, including “making a difference” at least twice. Exactly what kind of difference? Is it really that much different to have an NDP government ‘reluctantly’ playing the confidence game with finance and big business that the Liberals pursue with glee?

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