The most insidious triumph of neoliberalism has been its ability to limit our imaginations. Not only has it convinced decision makers—in the private and public sectors alike—that unfettered markets, low taxes, privatization, and deregulation are good and natural but it seems to have also blinkered our collective ability to believe in the plausibility of any alternative.
The late historian Tony Judt described the challenge as an inability to think and talk any longer about the big questions of justice and fairness. We have become mired and disillusioned in what is efficient and cost-effective and wedded to serving those “creating wealth”.
This straight jacket on our sense of what’s possible and its dampening of our expectations has been all the more constraining for those who came of age in the neoliberal era and have known nothing else. There are now several generations for whom access to a pension, or to affordable housing, or even to having one’s work fall under basic employment standard protection seems far-fetched.
For decades, Canadian elites across the political spectrum sought to downplay the very existence of “neo-liberalism”, dismissing it as some sort of academic abstraction or fever dream. Since then, the ground has shifted.
In the wake of the 2008 financial crisis, and through the cascading polycrises (climate chaos, exploding inequality and household debt, Western-backed wars) many of neoliberalism’s core projects—free trade and mobile capital at all costs, deregulated labour markets, the gutting of government’s fiscal and public administration capacities—have become deeply unpopular.
Globally, a litany of books, both scholarly and commercial, were written that tell the story of neoliberalism: its origins, its struggles, its ascendance, its fracturing and finally, the ever growing wreckage it leaves in its wake.
The Canadian story has been less clear, only fragments told sporadically in think tank reports and in varying academic mediums. That is until now.
In October 2024, Lorimer Press published two important books that bring the story of neoliberalism and its devastating consequences in Canada to a general audience: Breaking Free of Neoliberalism: Canada’s Challenge by former Clerk of the Privy Council, Alex Himelfarb and The Scandalous Rise of Inequality by eminent economist and Dalhousie Professor, Lars Osberg.
The two authors have granted us authoritative diagnoses of what ails us and with their longer view of Canadian politics, the needed reassurance that we can, if we choose to, combat vested interests and fight for something better.
Neoliberalism against democracy, Canada-style
Breaking Free of Neoliberalism is a compelling political and social history of the neoliberal project in the broader anglosphere and here in Canada. Very few could have produced such a book, one that moves readers from economics to sociology, political theory to history, anecdote to macro trend, with readability and command.
Invoking the work of historian Gary Gerstle, Himelfarb tells the story of neoliberalism’s birth and describes how wealthy interests mobilized resources across national and transnational networks to capture elites over decades, eventually entrenching their ideas into a “political order.” Neoliberal thinking, through their concerted and well-funded efforts, came to be the conventional wisdom animating background beliefs of decision makers and the masses alike.
A key insight the book brings forward is neoliberalism’s anti-democratic ethos. Unions, human rights-based movements, social services, public control of markets through regulation and planning? These are all considered dangerous threats to capital and capitalism, nuisances to be rolled back. While this hostility used to be spoken about more openly by its proponents, neoliberalism adapted and transformed invoking the language of modernization, innovation, economic dynamism, and consumer freedom. On its journey, it was adopted by centre-left parties enthusiastically across the global north.
Ever the shape shifter, neoliberalism continues to evolve. Today it lurks beneath the faux economic populism of leaders like Pierre Poilievre and Donald Trump. Himelfarb argues that neoliberalism made Trump possible.
Trump is “peak neoliberalism, the perfect expression of the disdain for democracy, worship at the altar of competitiveness, the economization of everything, life as a zero sum game of winners and losers and villains and victims,” he says.
Himelfarb’s story of neoliberalism is told not only from the perch of a deeply engaged public intellectual and concerned citizen, but also from Canada’s former top senior civil servant who lived through and participated in the neoliberal transformation of the Canadian state. And it is here that the book offers its most enticing reflections and commentary.
In addition to a general history of Canada’s journey through free-trade, austerity, and de-regulation from Mulroney to Harper and in between, Himelfarb takes us to the global meetings convened by Tony Blair and New Labour (where he acted as Prime Minister Chretien’s lead at global conferences). Here we get an upfront view of the so-called “Third Way” in action as labour, workers and progressive parties across the global north abandoned class, redistribution and the social democratic consensus around low unemployment and social rights. Instead they exchanged them for a new brand of pro-growth policies focused on global competitiveness, balanced budgets, privatization; and undergirded by a ruthless economization of everything.
“Neoliberalism encourages a short-term transactional approach to the world. By making government less relevant to our everyday lives, an instrument of control rather than public enterprise,” he writes. “We shouldn’t be surprised if the result is antipathy or apathy or loss in the belief we can do great things together or even that we are in this together.”
Himelfarb describes the arrival of the New Public Management (NPM) approach to the Canadian public service, a project to bring private sector principles (cost-benefit analysis, risk management, technocratic rather than values based deliberation) to the public service. “[NPM] put efficiency and service to customers – rather than citizens and the common good– at the centre of the administrative state.”
After decades of cost-cutting, outsourcing, and fiscal restraint, there is little mystery in why our governments are so anemic in meeting the monumental challenges of our polycrises, notwithstanding the catastrophic threat of climate change. To Himelfarb, even the “Real Change” agenda of Trudeau 2.0 since 2015, and the important advances on child care and social transfers, can be understood as having “coloured within the lines” of neoliberalism.
Because of its sweeping remit, the book glides over major turning points in the history of the Canadian left that might have led us down a different path. For example, while he touches briefly on the Waffle movement, the historical role of the federal NDP goes under analyzed. With his rightful insistence on the vital role unions have and must play in shaping the emergence of a different political order, readers may wish for Himelfarb’s account of why the federal NDP, with its roots in and ties to trade unions, ultimately failed to form government federally where it might have further entrenched social and economic rights and constrained the power of global capital by resisting damaging free trade agreement terms.
An optimist of the will, if pessimist of the mind, Himelfarb concludes the book with his take on the antidote to this moribund ideology and its seemingly unshakeable grip on our lives. His is a whole-hearted defense of deeper democracy, economic equality and the return of class politics. Importantly, he also calls for solidarity and coordination across various rights and justice based struggles.
The hard work of knitting particular struggles together into a broader fight lies ahead of us.
A new political order that weds solidarity and diversity won’t come about through the elite-driven means that neoliberalism has. It is a counter-revolution that must leverage grassroots movements to create a new mass politics of cooperation, mutuality, and equality.
The explosion of inequality in Canada
Lars Osberg is a familiar name to anyone who studies inequality in Canada. His rigorous comparative work over decades has illuminated the myriad dimensions of economic inequality in Canada, particularly the explosion in income and wealth of the top 1% and 0.1%. Though the average reader may not know his name, his work has shaped public discourse around inequality, particularly in progressive circles where his regular research contributions have been published by the Canadian Centre for Policy Alternatives.
This latest book is the fruit of decades of work after an accomplished career and lifetime of research into the forces accelerating inequality and into the policy tools we have at our disposal to stop it. If Himelfarb’s book offers an expansive view of neoliberalism, Osberg offers a comprehensive account of the exploding economic inequality it has unleashed here in Canada and how it threatens instability, democracy decline and the decay of our very social fabric.
Like Himelfarb, his enduring message is that what prevails today is neither natural nor inevitable.
Osberg shares that writing the book was prompted by the stark lessons born from the pandemic. The sudden need for robust income and other social transfers during the economic shutdowns saw new programs designed and delivered at breakneck speed. Here was proof positive that the right public policies can reverse decades long trends in poverty and inequality and address gaps in our social safety net. When there is political will that is. This suite of pandemic era programs would be ruthlessly dismantled (and have since been nearly forgotten by the public) in short order.
Mapping the dimensions of inequality
The Scandalous Rise of Inequality leaves the complex math to the endnotes, and instead focuses on offering lay readers a detailed account of the most important trends that make up Canada’s inequality story: the explosion of wealth and income at the top, the stagnation of incomes for those in the middle class, and the brutalizing dimensions of poverty for those at the bottom.
The trends are troublesome. The top 0.1% is pulling away from even those in the top 1% with almost unfathomable expansion to their income and wealth accumulation. As Osberg details, the uber rich lead entirely different lives from the rest of us, consuming luxury goods and enjoying lifestyles that are increasingly remote from that of ordinary people. This lifestyle is advertised to the masses “manufacturing discontent” and increasing “materialism and envy”. More insidiously, wealthy elites use their outstretched economic resources to further enrich themselves and to fund the think tanks and media outlets that peddle the neoliberal solutions that further protect their private interests.
The picture in the middle is grim as well. Osberg describes the pervasive mood of pessimism and economic insecurity caused by a growing gap between expectations and reality. From 1946 to 1981, income inequality was relatively stable. The Canadian middle class experienced rising living standards. As the economy grew, wages increased, and the welfare state and progressive taxation helped ensure balanced growth. Between 1980 and 2000, the growth in real wages of the middle class came to a sudden halt and has seen only tepid growth since. Those in the middle reasonably expect that their children will be worse off than they are.
At the bottom, things are much more dire. Stagnant incomes from poorly paid work, millions of Canadians living below the poverty line, however one measures it. Rising homelessness and growing housing and food insecurity. Stingy, demeaning, means tested social assistance programs and fewer redistributive measures to share the explosion of wealth at the top with those that need it.
Osberg ends with a detailed suite of attainable policy proposals that could change the inequality game in Canada: inheritance taxes; macroeconomic policy focused on full employment; some form (or forms) of basic income; fair taxation and redistribution; and a high wage strategy.
The upshot, from both Osberg and Himelfarb, is the need for a renewed social democratic agenda, that is focused on restoring economic security and democratic control and a baseline of social and economic rights necessary to be free and flourish.
Simple? Yes. But an agenda that remains unreachable so long as neoliberalism continues to carry the day.
