Reflections on the Public Good (1999)

by Bob Rae [1]

Thank you very much. Thank you for the warmth of your welcome. I found lately that the warmth of the welcomes that I receive around the provinces is in inverse proportion to my proximity to power.

<laughter>

Where the hell were you people when I needed you all?

<laughter & applause >

Well, I partly agree and disagree with what's been said and hope that we can have a bit of a dialog about that. But I thought I'd start with a quotation from Disraeli's novel Sybil. Disraeli, as you know, is a conservative in the 19th century who wrote books ... <laughter> ... I won't say anymore; I don't think I have to.

His novel was not called Mr. Silly - it was called Sybil. In which there's a conversation between the young editor who's name was Stephen Morley - he's talking to the idealist Charles Egremont. Who was, of course, one of the heroes of the book.

Egremont was boasting that Queen Victoria, and I'm quoting now, "reigns over the greatest nation that ever existed," and Morely then asked, "Which nation?" and he went on to say, because there are "two nations; between whom there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts, and feelings as if they were dwellers in different zones, or inhabitants of different planets; who were formed by a different breeding, are fed by a different food, are ordered by different manners and are not governed by the same laws." I speak of course of the two nations the rich and the poor.

What I think we've heard from Linda and from Jim is, quite rightly, a description of how, in a sense, the struggles of the 19th century have a very real parallel in our own.

It's important to remember that when Disraeli was writing, the industrial revolution was at its height. That there was a growing awareness, a dramatic awareness, among all classes of people in England that something dramatic had taken place. That wealth, to use the words of the poet Oliver Goldsmith, wealth was accumulating and men were decaying; that the wealth itself was not being fairly distributed.

You had a chartist movement which was insisting on the value of citizenship; the value of what ordinary people could contribute to the public commonwealth. You had a growing labor movement that, in the middle of the last century, began to argue and campaign for, as Jim has described - first of all the 10 hour day, and then the 9 hour day, and then the 8 hour day. And you also had a political movement which grew up. Which took various forms in various countries. Which insisted that government itself had to reflect common values. That there was a need for a greater fairness in society; there was a need for a balance in society.

Now sometimes these political movements, as we saw in the emergence of marxist and communist movements in the 19th and 20th centuries, took the form of saying there was some other civilization that was going to be created in which the public government - the state itself - would initially own all the essential means of production, and then in which we would be heralded into some great new civilization in which there would be no scarcity, and there would no problems, and that the people would be able to work in the morning and fish in the afternoon and it would be an idyllic communist world which would emerge.

The mainstream of folks, I think, following the disasters of the bolshevik revolution and the disastrous experience of the state dominated command economies, have struggled with a middle ground and in the post war era, which one has heard a lot about today, there was a determination to find a balance. A balance between the obvious advantages of an economy which was efficient; which was enterprising; which was dynamic; which was capable of change and of innovation - and which also gave some considerable space to private lives and private advantages -- and the need to balance that with a sense of what citizenship could mean and what citizenship could do.

Now this has been described, I think, rather idyllically by Jim and by Linda because - let's not forget that yes, indeed incomes did become more equal and to use John Kennedy's phrase, the rising tide did lift all boats. But it's important to remember that we did not have universal healthcare in Canada until the late 1960s, that women were not working in the workforce in any large numbers in the 1950s and early 1960s, and that there were huge and significant social problems in that time and in those years which Canadians were attempting to address.

But what's clear, I think today, and why Disraeli's comments resonate with us, is that in this era of the global economy we are far less certain and optimistic than we were 25 and 30 years ago that all is right with the world and that the balance is as it should be.

Now I can't resist referring to my book - which I would urge you to buy.

<laughter>

I don't really care whether you read it or not as long as you buy it.

<laughter>

Because the first question is, "If I am not for myself then who is for me?"[2]

<laughter>

I try to talk about the fact, and this makes some people unhappy, but ironically, listening carefully to what Jim and Linda have said, I don't know whether there's a dramatic disagreement or not.

But I do believe it's important for progressive people to come to terms with the fact that some kind of market economy

that this world is not in and of itself an evil place.

And sometimes when I say this, and some people say "Are you just saying this because you're now working as a lawyer?", and there are a couple of people who are here who were with me in government - they'll say, "No, he was talking about this all the time; even in cabinet meetings; all the time." The world of the economy is not a place of great evil and great conspiracy. There are significant advantages to it because it responds to some very real human needs and because it does allow for innovation, and change, and improvement.

And unless you're one of those people who believes that there is a completely different kind of economic and social order which is both conceivable and desirable, and I am not one of those, then I think that one has to, in a sense, come to terms with this world.

That doesn't mean give in to it. It doesn't mean resign yourself to it. It doesn't mean that you declare your own impotence. It means that you recognize that you are not omnipotent; and that there are indeed limits to what can be done and those limits are not so much set my some evil cabal of international financiers, but they are set by the competing needs and demands and desires that all of us have.

The significant difference between today and the 19th century is really two-fold. First of all because the pace and degree of integration, and the pace and degree of change is even more dramatic than it was in the 19th century. The information and digital revolution is even more revolutionary, if you like, than the industrial revolution.

The other significant difference is, as opposed to the 19th century, is that we are living in democratic societies in the western world. In which people do have votes. In which people do consider themselves to be consumers and producers and tax payers and citizens. And that their attachment to each of these definitions, and each of these roles will vary from time to time and from place to place.

And of course the other significant difference is - let's not forget - the enormous change that we have wrought in the nature of our modern social democracy. Let's not pretend that, unlike in the 19th century, when people paid hardly any taxation. And when there was hardly any contributions to the public good. Where there were no universal social services. Where there was scarcely any public education before the late 19th century. When there was no public provision of health care. There is a very significant and dramatic difference in the nature of the modern state.

Today, somewhere, depending on which country you're living in, somewhere between 30, 31, 32 and just over 50 percent of the economies of our countries are made up of and contributed by what we as tax payers contribute to the public sector, and what the public sector borrows if it cannot raise it from taxation.

So this argument that somehow the state has no role to play or, the state has no power or, the state has no ability, or the state has now become irrelevant or governments have flung themselves on the sidelines is frankly rhetorical ... exaggeration. How's that?

<laughter>

It isn't quite the case.

But, we do have a challenge and this, I think, is where there is substantial, certainly agreement on my part, with what has been said and what has been suggested in terms of the challenge that we face.

Where I differ slightly is that the people we have to convince of the challenge and of the solutions are not the rich and powerful, because there really aren't that many of those folks if you define them in a certain way; the people we have to convince are the people who live next door and that's much harder because they're not cartoon figures. They're not people we simply see on television and can ascribe qualities to them of almost super human nature. They're our neighbors who may not want to pay as much taxes as we think is going to be required to provide the services that we need.

Who may feel strongly about the arrival of immigrants from other countries. Who may have differing views on all sorts, and ranges, of political and social issues of the day. Who have their own private needs and demands. And who are often appealed to for a variety of reasons on a variety of subjects and which take them in very different political directions from our own.

Those are the people we have to convince. Those are the people that elected Mike Harris. Mike Harris wasn't elected or appointed by a committee of the bourgeoise. Mike Harris was elected by our neighbors. In some cases he might have been elected by some of you. I dunno. I didn't vote for him.

<laughter>

And so the issues are joined by the 2nd question, because we cannot just be for ourselves. There is a call for solidarity and community which this modern drive to neo-conservatism and neo-liberal kind of thinking ignores and diminishes and this is having a dramatic effect on our communities.

Where does government spend its money?

That's the vast majority of where government spends its money. If you were to read some organs of communication you would say that most of the money that goes from taxes goes to pay for members of parliament salaries, trips; various other abuses of the public purse.

But that isn't the case. Most of the money that we raise, most of the money that is spent, goes to providing services for ourselves and our neighbors. The critical question is, "Are we prepared to pay for it"?

What is it that happened in the mid 1970s that caused deficits to grow so substantially and carried through until the mid 1990s? And I don't think deficits are a matter either of hysteria, or a matter of totally ignoring. Deficits are something that have to be dealt with. Debt is not a religious issue. It's not a theological question. It's a practical question.

How much of a mortgage can we sustain? How much of a mortgage is wise for us to build up? What is the cost of servicing this debt? And if the cost of servicing this debt becomes too great, what other programs are crowded out? How do we raise the taxes that are required to pay for it?

This is what it's all about. Not that debt is bad - debt isn't bad - debt is a neutral thing. We're all in debt in some way shape or form, we all have mortgages. The question is, and i think this is where I'd really want to focus, my concluding remarks is "Are we prepared to pay"?

And it's not just, "Are we prepared to force somebody else to pay"?

Because that's easy. Make the rich pay.

OK ... Done.

Now what? Because that isn't going to be enough.

And let's bring in a fairer taxation system; and let's deal with the issues of corporate taxation; and let's deal with those questions of the disappearing taxpayer; and let's look at what you do to make sure that you're able to raise the funds necessary from those who are in the best position to pay.

The fact of the matter is - the income tax system is relatively progressive. And all the statements about how much people are making - they all have to pay taxes somewhere - pay taxes in canada, maybe not as much as they should but it has to be paid. But that's the easy part. The harder part is how much are you prepared to pay - and how much can we persuade neighbors to pay. And that's where it becomes difficult, not impossible, but a little bit more difficult.

And particularly it becomes more difficult ... I can tell you from slight practical experience ... in a time of no inflation. What happened for years throughout the 70s and 80s, taxes went up and inflation went up. People bore the burden, they didn't ... there wasn't this nascent tax revolt, but this has emerged in the 1990s? Why?

In my view probably, as much as anything, because inflation disappeared - and all of a sudden a tax increase introduced by a government at a time when there is no inflation suddenly affects the standard of living of a whole lot of people.

And they suddenly see that their paycheck has gone down. And let me tell you - they tend to remember the name of the person who was in office at the time that the income went down as a result of the tax increase ... from my personal experience

<laughter>

... and reading the occasional bumper sticker.

<laughter>

And this is really the challenge that we face today, I believe. We do see a deterioration in the quality of public services. It's preposterous that our education and health services are being as dramatically affected as they are. It is ridiculous for governments to apply some absurd formula to the precise number of square inches per child in a school.

<applause>

The question is, and the practical issue is, what precisely is the agenda that we're prepared to put forward that, in fact, is going to make sense to the majority of people; and that they're going to support; and that they're gonna feel good about; and that, in fact, can be done; that doesn't raise expectations beyond where we go.

Well, I think there is such an agenda. The agenda has to be international, national, provincial, regional and local. It has to cover that full gamut of where we are. Because we can't simply pass a series of national regulations to control global capital if other countries are not also doing the same. We have to strengthen the capacity of governments to deal with these questions and recognize that, for example, what's happening today in Russia is not because of too much government - it's because there isn't enough government; and there isn't the right kind of government. There aren't rules, and the rule of law, and transparency, and social insurance, and fairness for people that we expect.

What's terrifying and tragic about what's taking place in Asia, and we should - all of us - reflect on this for a moment, is that those workers are being displaced; and those countries are being devastated and effected; and those families are being devastated and effected; and there is no universal provision of social insurance to help people deal with the effects of change as there has been, and is still, in Canada - which is very robust in comparison to what we see in other countries.

And so we need that sense of an international global perspective and agenda. We need a national agenda as well that, in particular, says that if we have finally put ourselves - put the federal government - in a position where it is in surplus let us use that surplus to ensure, once again, that the services we value as Canadians are provided on a relatively equal basis right across the country. Which is what our constitution is supposed to provide.

And finally the provincial and local agenda needs to be in place. And I'm not going to address that in any great detail today because I've spent a good part of my public life doing just that, with varying results, and now there are others in the field doing just the same.

[1] : Bob Rae's new political site is http://www.bobrae.ca

[2] : This lecture draws much from his book "Three Questions: Prosperity And The Public Good", available from amazon.com and amazon.ca.

Transcribed by Gordon Fischer