Macdonald Commission Report a Most Important Study
January 1, 1986 -
Released in September 1985, the three-volume report of the Royal Commission on the Economic Union and Development Prospects for Canada is a veritable mine of information that deserves our careful attention.
The main reportsome 1,900 pagesis complemented by 72 book-length studies. (The cost of the complete set of publications is about $1,200.) Appointed in November 1982, the Macdonald Commission (as it is better known) was given the mandate to study every facet of the Canadian economy and its interrelationship with the state. Its report is a helpful repository of contemporary thinking about the most significant economic and political issues confronting the Canadian people, and it sets the stage for a wide-ranging public debate.
The Commission was determined to avoid recommending either the extreme of a planned society or that of an entirely laissez-faire one. It adopted a free market orientation moderated by the recognition that the state does have a vigorous role to play in the economy. The Commission argued that the role of the state is (a) to provide an infrastructure that is conducive to a competitive and productive economy, and (b) to provide a social safety net to ensure that no one is deprived of the basic necessities of life. It provides this defence of the free market:
Free markets, like democratic states, are crucial institutional arrangements, not only for the achievement of economic goals but also for their contribution to human freedom and dignity. Both logic and history confirm that political democracy and individual freedoms are sustained by a significant degree of autonomy in a private economic sector, and that they are incompatible with an economy in which such autonomy is non-existent. (State, Society and Economy; An Introduction to the Report, p. 30).
The Commission's recommendations include freer trade with the United States, overhauling the income security system via a universal income security program (in effect a guaranteed annual income), strengthening the role of Parliament, reforming the Senate, tightening unemployment insurance while creating greater labour market flexibility, and improving regulatory trade and investment policies. The recommendation for freer trade with the United States has met with strong criticism, particularly from the major Canadian trade unions, the New Democratic Party, and others who favour a socialist society.
Dennis McDermott, president of the Canadian Labour Congress, has described the Macdonald Report as "nothing more than a rear-view mirror to 19th-century views on the primacy of uncontrolled market forces and a minimal role for government" (Canadian Labour, October 1985, p. 7). GATT-Fly, an inter-church task force on economic issues, has also rejected the Commission's recommendations. GATT-Fly believes that Canada should work towards economic self-reliance and adopt a new income policy based on a planned economy.
ln a similar vein, The Other Macdonald Report accuses the Macdonald Commission of selling out to the interests of big business. Edited by economists Daniel Drache and Duncan Cameron, this book is a collection of twenty submissions originally presented to the Macdonald Commission by trade unions, churches, native organizations, women's groups, and those who claim to speak for the uenployed and the poor. Like the pronouncements of the Canadian Labour Congress, most of this "popular consensus contribution" is marked by a tone of self-righteous indignation, an anti-business outlook, and a simple-minded view of what ails the world. A rigid commitment to a socialist, that is, planned society characterizes their proffered solutions. This kind of contribution avoids any serious exploration of our economy's real problems or of workable solutions. It takes a great deal of faith to continue to believe in the socialist solution when we see nothing but failed promises wherever that solution has been implemented.
Does this mean that the Macdonald Report should be adopted uncritically? Far from it; hard and critical questions ought to be raised, particularly with respect to its underlying concept of "values" and the tendency to think of government's task in social engineering terms. (For example, the Commissioners write that governments are involved in "micro-social engineering" and that they "manage society as well as the economy.") This brief article 1n no way pretends to be an adequate treatment of this massive document. But to allow left-wing rhetoric to cut off honest debate at the outset is unfair to the Macdonald Commission and a disservice to the Canadian people. It is sad that even some churches have joined this campaign to discredit the Macdonald Report as part of a capitalist conspiracy.
Whether we agree or disagree with the perspective and the recommendations of the Macdonald Commission, it deserves our respectful attention as a significant challenge to all who want to think seriously about the weighty issues confronting the Canadian nation. How we together decide to resolve the problems and challenges as outlined by the Macdonald Commission (especially those of a structural kind) will have far-reaching consequences for the future of this privileged country.