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Representative Economic Democracy and the Problem of Policy Influence: The Case of Canadian Co-operatives*

Published online by Cambridge University Press:  10 November 2009

David Laycock
David Laycock
Affiliation:
Simon Fraser University
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Abstract

This article discusses interest representation by Canadian co-operative business associations, as a way of exploring difficulties faced by democratically structured group interests in influencing federal government policy. Several dimensions of co-operatives’ problems in this regard are examined: their internal structures of democratic representation, their reform ideology, their influence by two conflicting logics of collective action and selected aspects of federal policy development. The article concludes by contending that the problem of democratic representation by economic group interests in the policy process should be taken more seriously by Canadian political scientists.

Résumé

Cet article traite de la représentation d'intérêts par les coopératives canadiennes regroupant les associations d'affaires; il explore par ce moyen, les difficultiés auxquelles font face ces groupes de structure démocratique lorsqu'ils tentent d'influencer la politique du gouvernement fédéral. À cet égard, cet article se livre à l'examen de plusieurs des nombreuses facettes de ces problèmes: leurs structures internes de representation démocratique, leur idéologic de réforme, leur influence par deux logiques conflictuelles d'action collective, et de certains aspects de la politique fédérate de développement. En conclusion, cet article affirme que les politiologues canadiens devraient prendre plus au sérieux le problème de la représentation démocratique par des groupes d'intérêts économiques dans le processus d'adoption des politiques.

Type
Research Article
Information
Canadian Journal of Political Science/Revue canadienne de science politique , Volume 22 , Issue 4 , December 1989 , pp. 765 - 792
Copyright
Copyright © Canadian Political Science Association (l'Association canadienne de science politique) and/et la Société québécoise de science politique 1989

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References

1 The Co-operative Union of Canada (CUC) amalgamated with the Co-operative College of Canada in September of 1987 to become the Canadian Co-operative Association (CCA).

2 While the case of large francophone co-operatives in Quebec is relevant to my analysis, I shall not be referring to them. I should note here, however, that the larger of such co-operatives—especially those in the Désjardins group—provide the most obvious prima facie counter-examples to the general proposition I am advancing about the relatively limited policy influence of democratic businesses in Canada. The counter-examples carry less force when one considers how highly centralized and management-dominated the Désjardins system is. For a recent account of the relationship between the Quebec government and Quebec co-operatives, see Lévesque, Benoit, “Les relations État-Coopératives (1960–1987): Anciens et nouveau compromis,” Coopératives et Développement 20 (1988–1989), 159–91.Google Scholar

3 Representative of this general approach is the issue of Canadian Public Administration 25 (1982) devoted to the theme “Governing under Pressure: The Special Interest Groups.” Press's, PaulGroup Politics and Public Policy (Toronto: Oxford University Press, 1986Google Scholar) is more complex than this, but does not depart substantially from this tradition. Neither in his discussion of “mandate” and “organization” on the “interior life of groups” (chap. 8), nor in his concluding analysis “towards equality in representation,” does Press do much to acknowledge the prevailing lack of correspondence between patterns of governance in the political and organized economic interest spheres.

4 For a valuable review of three prominent additions to this literature, see Coleman, William D., “Interest Groups and Democracy in Canada,” Canadian Public Administration 30 (1987), 610–22.CrossRefGoogle Scholar

5 Paltiel, Khayyam Z., “The Changing Environment and Role of Special Interest Groups,” Canadian Public Administration 25 (1982), 209–10.CrossRefGoogle Scholar

6 See especially Macpherson, C. B., The Life and Times of Liberal Democracy (Oxford: Oxford University Press, 1977)Google Scholar, chap. 4; and Macpherson's essay on “Pluralism, Individualism and Participation,” in Macpherson, C. B., The Rise and Fall of Economic Justice and Other Essays (Toronto: Oxford University Press, 1987), 92–100.Google Scholar

7 Macpherson, The Rise and Fall of Economic Justice, 99.

8 Offe, Claus, “Two Logics of Collective Action,” in Offe, Claus, Disorganized Capitalism, ed. by Keane, John (Oxford: MIT Press, 1985Google Scholar), chap. 7.

9 Ibid.

10 Michels, Robert, Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy, ed. by Lipset, S. M., trans, by Eden, and Paul, Cedar (New York: Macmillan, 1968).Google Scholar

11 Schumpeter, Joseph A., Capitalism, Socialism and Democracy (New York: Harper and Row, 1942).Google Scholar

12 See Coleman, William D., “Canadian Business and the State,” in Banting, Keith (ed.), The State and Economic Interests, Research Study for the Royal Commission on the Economic Union and Development Prospects for Canada, vol. 32 (Toronto: University of Toronto Press for Supply and Services Canada, 1986), 245–89Google Scholar; and Doern, G. Bruce and Phidd, Richard W., Canadian Public Policy (Toronto: Methuen, 1983)Google Scholar, chap. 3.

13 Offe, “Two Logics of Collective Action.” To avoid potential misunderstanding, I should add here that I am not suggesting that logics of collective action in co-operative and private sector organizations are nearly as distinctive as those of capitalist business associations and trade unions. Offe's account is, however, quite suggestive of how different organized interests within the market—including co-operatives—must be understood as more than simple variations on the same interest group theme in the “liberal” literature, since they may possess significantly different relations to the biases, internal logics of power and overarching social goals of the capitalist market.

14 As Leslie Pal has pointed out to me, readers may presume that I believe answers to this question can be applied to co-operatives’ representations to provincial governments. I should emphasize, therefore, that this is not the case: major co-operatives—especially agricultural and financial—regularly have lobbying success with several provincial governments, including those of Quebec, Saskatchewan, Manitoba and British Columbia.

15 For a discussion of the bias within the party system that adversely affects Canadian co-operatives, see David Laycock, “Political Neutrality and the Problem of Interest Representation: Co-operatives and Partisan Politics in Canada,” in Murray Fulton (ed.), Co-operative Organizations and Canadian Society: Popular Institutions and the Dilemmas of Change (Toronto: University of Toronto Press, forthcoming).

16 See Macpherson, Ian, Each for All: A History of the Co-operative Movement in English Canada, 1900–1945 (Toronto: Macmillan, 1979Google Scholar).

17 For details in this regard, see Laycock, David, Co-operative-Government Relations in Canada: Lobbying, Public Policy Development and the Changing Co-operative System (Saskatoon: Centre for the Study of Co-operatives, Monograph Series, 1987Google Scholar).

18 The impact of this heterogeneity on private sector business associational politics and “policy capability” has been comprehensively explored by Coleman, William D. in Business and Politics: A Study of Collective Action (Kingston: McGill-Queen's University Press, 1988Google Scholar).

19 One such issue has been taxation of patronage dividends to co-operative members, which affects all co-operatives adversely. See Holland, Douglas, “The Co-operative Movement and Taxation: A Case Study in Canadian Public Policy” (unpublished M.A. thesis, Faculty of Environmental Studies, York University, 1981Google Scholar).

20 Offe, “Two Logics of Collective Action,” esp. 184–91.

21 Good illustrations of this can be found within Federated Co-operatives Limited. This consumer wholesale co-operative is a member of the Canadian Grocery Distributers’ Institute, the Prairie Petroleum Association, the Crop Protection Institute of Canada (distributors and manufacturers of herbicides and pesticides, including all the major chemical companies) and the Farm Equipment Manufacturers’ Association of Canada, to name only the most diverse organizations to which FCL belongs.

22 To quote Claus Offe somewhat out of contest, but still tellingly, “none of these dilemmas applies with comparable seriousness to business and employers’ organizations, for the reason that they do not depend on internal democracy, collective identity, or the willingness to engage in solidary action, because of the fact that they are already in a structural power position which renders complications such as these avoidable” (Offe, “Two Logics of Collective Action,” 187–88; emphasis in the original).

23 The Saskatchewan case was different until the 1960s, but is now much the same as the rest of Canada.

24 See Fairbairn, Brett, Building a Dream: The Co-operative Retailing System in Western Canada, 1928–88 (Saskatoon: Western Producer Prairie Books, 1989Google Scholar), and Laycock, David, Populism and Democratic Thought in the Canadian Prairies, 1910–1945 (Toronto: University of Toronto Press, 1989Google Scholar).

25 Hirschman, Albert O., Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States (Cambridge: Harvard University Press, 1970Google Scholar).

26 Ibid.

27 Ibid., 43.

28 One clear exception to this pattern is in the position taken by Co-op Atlantic, the wholesaler for co-operative retails in the Atlantic provinces. Co-op Atlantic released a critical position paper in November 1987 entitled “Fair Trade, not Free Trade,” and sent copies to all MPs and MLAs from the region, as well as all daily and weekly newspapers in the region. The paper was “commissioned” as a result of resolutions at Co-op Atlantic's 1987 annual meeting.

29 The official Canadian Co-operative Association explanation of this silence can be found in their December 14, 1987, pre-budget submission to then Minister of State for Finance Thomas Hockin: “The Canadian Co-operative Association has not taken a position on this proposed agreement. Some of our member organizations have. The achievement of a consensus in a democratic movement such as ours need not be an overly lengthy process, assuming that sufficient information is available. We have concluded, however, that the process we have been asked to accept and to participate in has neither provided sufficient information, nor a reasonable period of time for consideration and thoughtful, open discussion. This is most disappointing” (“A Presentation to the Honourable Tom Hockin, Minister of State, Finance,” 9). Presumably this critique of the government's strategy in structuring the free trade debate would be of interest to the members of the CCA's co-operatives. To my knowledge, co-operative leaders have done nothing to draw members’ attention to their position. It is hard to escape the conclusion that the CCA's fear of offending government officials is, in this case, detrimental to the long-run interests of its member organizations.

30 Offe, “Two Logics of Collective Action,” 207.

31 See Bachrach, Peter and Baratz, Morton S., “Two Faces of Power,” American Political Science Review 56 (1962), 947–52CrossRefGoogle Scholar; and Bachrach, Peter and Baratz, Morton S., “Decisions and Non-decisions: An Analytical Framework,” American Political Science Review 57 (1963), 632–42.CrossRefGoogle Scholar

32 See especially Coleman, William D., “The Emergence of Business Interest Associations in Canada: An Historical Overview,” paper presented to the annual meetings of the Canadian Political Science Association, Montreal, 1985Google Scholar; Coleman, William D., “Analysing the Associative Action of Business: Policy Advocacy and Policy Participation,” Canadian Public Administration 28 (1985), 413–33CrossRefGoogle Scholar; Coleman, “Canadian Business and the State”; and Coleman, Business and Politics.

33 This does not imply that the groups employing this strategy are not “institutional,” or that they are not members of the relevant “policy community,” to use Pross's terminology.

34 For more detail, see Laycock, Co-operative-Government Relations in Canada.

35 Coleman, “Analysing the Associative Action of Business,” 419.

36 Pross, Group Politics and Public Policy, 236–37.

37 This is what occurred in the “National Task Force on Co-operative Development,” which issued A Co-operative Development Strategy for Canada in 1984.

38 Coleman, “Analysing the Associative Action of Business”; Pross, Group Politics and Public Policy.

39 This was the nature of CUC presentations to the Royal Commission on Corporate Concentration and the Royal Commission on the Economic Union and Development Prospects for Canada.

40 See Miller, David, “Market Neutrality and the Failure of Co-operatives,” British Journal of Political Science 11 (1981), 309–29.CrossRefGoogle Scholar Miller shows that the market is not neutral between capitalist and other forms of business enterprise, contrary to the neo-conservative/libertarian defence of the capitalist political economy as being consistent with basic liberal premises regarding equality of opportunity. His argument rests on a careful empirical and theoretical examination of the experience of worker co-operatives in Britain. While there is much that distinguishes these co-operatives from, say, the Saskatchewan Wheat Pool or Co-op Atlantic, their need for some kind of exemption from the full force of capitalist market competition (if only regulation of the marketplace in grain trading or grocery retailing) is shared with the British worker co-operatives Miller considers.

41 See especially Fowke, Vernon, The National Policy and the Wheat Economy (Toronto: University of Toronto Press, 1957Google Scholar).

42 See Laycock, Co-operative-Government Relations in Canada.

43 This point is made strongly by Salisbury, Robert, “Interest Representation: The Dominance of Institutions,” American Political Science Review 78 (1987), 64–76.CrossRefGoogle Scholar

44 Paul Pross is especially insistent on this in Group Politics and Public Policy; see, in particular, his discussion of “consensus management” (235–46).

45 See especially Coleman, Business and Politics, chap. 13.

46 Olsen, Dennis, The State Elite (Toronto: McClelland and Stewart, 1980Google Scholar), chap. 4.

47 Presthus, Robert, Elite Accommodation in Canada (Toronto: Macmillan, 1973Google Scholar).

48 Doern and Phidd, Canadian Public Policy, chaps. 2, 14, 15.

49 For a clear rebuttal to this line of argument, based on recent surveys and interviews of federal bureaucrats, see Michael M. Atkinson and Coleman, William D., “Is There a Crisis in Business-Government Relations?” Canadian Journal of Administrative Science 4 (1987), 321–40.Google Scholar

50 Ornstein, Michael, “The Political Ideology of the Canadian Capitalist Class,” Canadian Review of Sociology and Anthropology 23 (1986), 194, 196Google Scholar, Tables 2 and 3.

51 See Holland, The Co-operative Movement and Taxation.

52 The most recent and systematic research on these linkages is that of Michael Ornstein, William Carroll and John Fox, as reported in Ornstein, Michael and Fox, John “The Canadian State and Corporate Elites in the Post-War Period,” Canadian Review of Sociology and Anthropology 23 (1986), 480–506.Google Scholar Their data were gathered in 1977; it might be argued that the interpenetration of corporate and state elites has increased significantly since that time.

53 This advisory committee was intended to be the co-operative sector's counterpart to the interdepartmental committee, with an accurate representation of the types and interests of co-operatives across the country.

54 I discuss these recommendations and developments in Laycock, Co-operative-Government Relations in Canada, and in Laycock, David, “The Politics of Co-operative Development in English Canada,” Coopératives el développement 20 (1988–1989), 91–120Google Scholar

55 The departments and agencies represented on this committee include Health and Welfare; Labour; Employment and Immigration; Consumer and Corporate Affairs; Agriculture; Energy, Mines and Resources; Fisheries and Oceans; Regional Economic Expansion; External Affairs; Indian Affairs and Northern Development; Secretary of State; and Finance, as well as the Treasury Board, Canada Mortgage and Housing Corporation, Canadian Wheat Board, Atlantic Canada Opportunities Agency and Western Diversification Office.

56 Whether it is accurate to include the free trade agreement in this category of mechanisms unleashing “free market” competitive forces is quite debatable. As Eric Kierans has argued, the agreement seems more likely to consolidate the strength of oligopolistic multinational conglomerates within the North American economy. See Kierans, Eric, “A Cruel Joke,” Policy Options 9 (January/February 1988), 21–23.Google Scholar

57 Consider, for example, the Saskatchewan Wheat Pool's fight against elimination of the Crow rate which was justified partly on the grounds that if the farmers of Saskatchewan had to pay a substantially greater proportion of grain transportation costs, many would go out of business and would drag the rural organizational foundation of the Wheat Pool's success down with them. To the extent that the Wheat Pool needs the type of regulation and subsidy involved in the old Crow benefit, it is a good example of Miller's contention that co-operatives require some measure of “enclave” existence in relation to the operation of an unrestricted capitalist market.

58 The “bailouts” involved United Co-operatives of Ontario, Co-operative Implements Ltd., and United Maritime Fishermen, all since 1979.

59 Co-Enerco was established in 1982, and is jointly owned by the federal government and a consortium of the largest Canadian co-operatives; the New-Grade Heavy Oil Upgrader in Regina was established in 1986 and is a $650 million energy project jointly owned by the Saskatchewan government and Federated Co-operatives Ltd., with substantial loan guarantees from the federal government.

60 Paltiel, “The Changing Environment and Role of Special Interest Groups.”

61 This is reminiscent, of course, of the dilemma faced by the Canadian labour movement in the mid-1970s over the prospect of tripartism. See Keith Banting, “The State and Economic Interests: An Introduction,” in Banting, The State and Economic Interests, 8, 15.

62 Macpherson, The Rise and Fall of Economic Justice, 99.

63 See Coleman, Business and Politics, chap. 5.

64 Cawson, Alan, “Functional Representation and Democratic Politics: Towards a Corporatist Democracy?” in Duncan, Graeme (ed.), Democratic Theory and Practice (London: Cambridge University Press, 1983), 182.Google Scholar Cawson recently concluded that “groups constituted on the basis of a shared value position cannot become corporate groups… and will always exist in the pluralist [that is, highly competitive and relatively disadvantaged] sphere of the polity.” See Cawson, Alan, Corporatism and Political Theory (Oxford: Basil Blackwell, 1986), 37.Google Scholar

65 Pross, in Group Politics and Public Policy, is closest of this group to arguing that there are significant corporatist tendencies in federal policy-making initiatives (see 216–26). It is interesting to compare Pross's speculations in this regard to Cawson's distinction between “meso-corporatism” and “macro-corporatism.” See also Paltiel, “The Changing Environment and Role of Special Interest Groups,” Coleman, “Canadian Business and the State,” and Banting, “The State and Economic Interests.”

66 Coleman, “Canadian Business and the State.”

67 For a brief account of this as it applies to the prospects of corporatism, see Pross, Group Politics and Public Policy, chap. 9.

68 Dahl, Robert, A Preface to Economic Democracy (Berkeley: University of California Press, 1985Google Scholar).

69 Macpherson, The Life and Times of Liberal Democracy, chap. 4.

70 William Coleman with his Business and Politics has made the most stimulating contribution in this area to date.