Economic Planning Is The Only Way To Overcome Climate Change
In recent weeks, we’ve looked at historical examples of breaks with the status quo that led to fundamentally different societies for weeks, years and even decades. But it’s also important to bring that perspective home instead of thinking this is just something that happens abroad.
A couple months ago, we discussed how public institutions used to play a much larger role in Canadian life, drawing from Linda McQuaig’s The Sport and Prey of Capitalists. McQuaig describes Canada’s approach to the Second World War, when the federal government created 28 new Crown corporations in service of the war effort.
Seth Klein builds on that example in his new book A Good War: Mobilizing Canada for the Climate Emergency. Klein sees the war mobilization as a model for how we should respond to the climate crisis, with the government taking the lead and reorienting the economy and society to be more sustainable and equitable.
There are several lessons to be learned from the war experience.
First, neoliberal politicians always want to wait for public opinion before acting on something, rarely making a case to the public for bold policy changes.
However, the public wasn’t initially sold on the Second World War. The economy wasn’t doing well, the sacrifices of the First World War were fresh on people’s minds and the Nazi threat to Canada wasn’t clear. Klein explains that Prime Minister Mackenzie King had to get the public onside, which included addressing concerns about conscription and war profiteering (as happened in the previous war). That led to the rationing system, which improved the diets of many poor Canadians, and to a range of new taxes, including on inheritances and excess profits.
Second, spending during the war exploded, as it has during the pandemic, but the political class wasn’t worried because they faced an existential threat. On top of the new taxes and Victory Bonds, the Canadian government simply borrowed from the Bank of Canada instead of from private banks and investors, exactly as it’s doing to fund pandemic spending.
But, third, the truly key thing was the Canadian government’s intervention in the economy to direct the war effort. As Klein explains, “Neither private sector actors nor the supply-and-demand price signals of the market were allowed to determine the allocation of scarce resources […] Rather, the state ensured that wartime production needs took priority, and supply chains were organized to meet those needs. Effectively, Canada’s wartime economy was a planned economy.”
The 28 Crown corporations made all manner of supplies for the war effort. If a private company couldn’t easily be found, a Crown corporation was formed. Klein also explains that it was beneficial for the government to have Crown corporations because it gave the Department knowledge of the supply chains. That way, if a private company submitted a bid to build planes or ships, for example, the Department would know if it was being ripped off.
To illustrate the efficiency of this planning, Klein quotes a 2005 paper written by historian Jack Granatstein where he explains that despite producing almost none of these things before the war, Canada had become a manufacturing powerhouse by 1943: “Each week, the newspaper noted, 900,000 Canadian workers, men and women, made at least six vessels, 80 aircraft, 4000 motor vehicles, 450 armoured fighting vehicles, 940 heavy guns, 13,000 smaller weapons, 525,000 artillery shells, 25 million cartridges, 10,000 tons of explosives, and at least $4 million worth of instruments and communications equipment.”
The Second World War example, like in some of the other examples we’ve looked at, shows us that Canadian society can rapidly change. If we’re to truly meet the scale of the challenge presented by the climate crisis, Klein makes a strong argument that we need to embrace economic planning once again and have a much greater role for the public sector, while also drawing from Indigenous knowledge and forging a new social settlement, like in the postwar years.
I will, however, note some disagreements with Klein.
The war effort required two economic and social transformations — for war production and for the return to peacetime — but Klein believes that responding to climate change will only require one permanent change. Yet, like the war, it seems like a climate mobilization will also require a period where there is intense production of renewables, public transit, building retrofits, public housing and more, then a second reorientation of society once much of that work is done to find a new normal.
Klein also desires a mixed economy with a larger public role, but where there are still private companies, like during the Second World War. Yet if the climate mobilization, like the war, will be carried out in two stages — one of intensive production to build a more sustainable society and a second where we figure out what life is like within that society — retaining a mixed economy leaves the door open for the private sector to reclaim its central role once the mobilization stage is over — in the same way that the Crown corporations were privatized after the war.
This newsletter focuses on public luxuries, socialism and futures that better serve the working class. Klein’s book illustrates that we have the capacity to radically alter Canadian society and lays out a solid climate and social justice program. But we should use that mobilization to not only build a more sustainable and just world, but also one where we permanently free ourselves of the tyranny of the market and embrace a more collective way of life.
Perspectives from around the world
Nora Loreto, Passage columnist, argues Conservative leader Erin O’Toole’s Labour Day message should worry the left.
Derrick O’Keefe, co-founder of Ricochet, breaks down a new report on how Canadian billionaires have profited during the pandemic.
Gordon Laxer, author of After the Sands: Energy and Ecological Security for Canadians, argues we need to reconnect cities with rural areas with trains and transit.
Patrick Condon, a professor at the University of British Columbia, explains how the Vancouver mayor’s new affordable housing plan will fuel land speculation.
Abdul Malik, an Edmonton-based writer and photographer, explains why calling out “authoritarian governance” in Canada covers up the real problems which stem from neoliberalism.
Sarah Lazare, web editor at In These Times, breaks down a new report that 92 per cent of historical carbon dioxide emissions that are fuelling the climate crisis were emitted by the Global North.
This week on Tech Won’t Save Us, I spoke to Jenny Chan, co-author of Dying for an iPhone, about Foxconn, its relationship with Apple, and the treatment of factory workers who produce many of our tech products. For Tribune, I wrote about why the policy of forcing tech giants to pay news publishers, which is being implemented in Australia and might soon in Canada, will only entrench the tech monopolies’ power.