The government still has not shown that it understands the problems sufficiently to forget about tax cuts and to initiate other things such as grants, payments, increased
old age pensions, increased family allowances, or earlier retirements, as ways to stimulate the economy.
Increases in public expenditures are positive and direct, and the outcome can be predicted. We are now entering a slow growth period. I do not want to go into all the reasons we are in a slow growth period, but I think we will have to face the fact that we will not continue to grow at the same pace as we have. To some extent we should not deplore that. We grew too fast for too long, and very often we grew at the expense of humanity and the environment, and people no longer want to do that. We are becoming a more stable society, and we have to make the necessary adjustments.
There is far less demand today for traditional goods and far more demand for services. This is becoming quite obvious, and it has an effect. Much of the inflation we experience in our society is a direct consequence of the switch from the production of goods. Productivity figures are totally misleading because they do not take this factor into account. When we switch from the production of goods to the consumption of services, we have what amounts to a productivity drop, because in providing services we cannot use labour-saving devices and inventions to the same extent as we can in the production of goods. Therefore we have what looks like a productivity drop.
As people in the goods sector increase their incomes, usually in line with productivity increases, which cannot be matched by the service sector, and the service sector wants to catch up-it is about 60 per cent of our economy now-that catchup is inflationary. That may be fair and just, but it is inflationary. A permanent inflation is built into a society which is in the process of this kind of transition. We hear very little about the consequences of that and of what needs to be done.
I am proud that my colleagues have had an important role to play in the redistribution policies of the last 30 years. Looking back now, redistribution in those years was relatively painless because people's incomes were growing very rapidly, and the gross national product was increasing enormously. This enabled our society to improve the situation of virtually everyone, not on a relative basis, but on an absolute basis. In addition, those who had some of their money taken away did not find it too painful because they were still improving their situations, and therefore we were able to effect redistribution domestically as well as internationally. But, what happens when the gross national product does not rise at the same rate? We get a right-wing conservative reaction because, in order to redistribute, something must be taken away from somebody, and people do not like that.
The money cannot come out of the surplus any more. There really must be a redistribution of existing resources. Some people must be told that they cannot become as rich as they did before, because some of the wealth has to be set aside for those who are not as well off. Then we go through this painful experience of moving to the right because people start to feel the effects of redistribution.
October 19, 1978
I think that there are now two moves taking place. We all know that there is a move to the right. Those of us who are in politics experience that, but I think the results in Saskatchewan, and the election of an NDP federal member of parliament in Newfoundland, indicate that there is also a willingness on the part of the public to look at more progressive ideas, if they are articulated. We are hoping to have the kind of debate in which there is no room in the middle, where the Liberals find themselves. They are right in the middle, trying to be all things to all people, and I do not think that is possible any more. We must take a stance on these changes which are taking place in our society, and decide which way we want to go. Should we stand in the way of these changes, or move with them and make the transition to a different kind of society?
We can call this society anything we want. We can call it the conserver society, as some people have, the post-industrial society or, as the Prime Minister (Mr. Trudeau) did, the new society. One of the few times the Prime Minister has been right in the last four years was in a speech he made a couple of years ago when he said that our society is changing. The idea of a Liberal Prime Minister finding that he is on the right side of history is enough to shock him back to reality and to go back to where he was before. The Prime Minister could not take it for very long, but our world is in fact changing. A new world is coming, and it will be a reasonably good world, as long as we adjust to it.
The reason the government seems so helpless in the face of what is happening is that it is not taking the dramatic changes into account as we become a new society. The government is still trying to deal entirely with the society which is dying away.
What is clear when we talk about this new society-it is easy to talk about a new society-is that more and more people who are looking at it are saying that the market system is breaking down. It should be obvious that we are not talking, as I said earlier, about Adam Smith's small shopkeepers; we are talking about large scale multinational corporations that can set their own prices and that, in fact, are sometimes bigger than governments and act as if they were governments. We are talking about large combinations of workers, not workers acting in isolation, workers protected by trade unions whose decisions affect hundreds of thousands of people, not just one man, two men or half a dozen men and women. This is a different kind of world.
We are talking about the welfare state where people no longer want to live by the law of an economic jungle. It operates at both levels; domestically and internationally. To some extent the only market that is left is the international market, and again some interesting things are happening there. What is happening is that, as the result of the spread of technology around the world, we are competing with everyone and nobody has a comparative advantage any more except in a very few things. We are competing internationally.
Borrowing Authority Act
What is happening when we compete internationally? The very people who talk about competition in the domestic society are saying, "Protect us internationally. We do not want to compete with Taiwan, with Korea or with Singapore. We do not want to be thrown to the winds of international competition." The fact is that most of us are not and will not be.
A new kind of co-operative arrangement has to develop. In some ways a reverse colonialism is taking place. For centuries the west derived a net benefit from trade with the third world, with underdeveloped countries. We grew richer at the expense of the underdeveloped countries. Now the shoe is on the other foot. There is a real transfer of income from the western world to the third world. This is very obvious when you come to the oil producing countries; it is less obvious when you look at other countries. While this transfer of income does not show up as a per capita increase in wealth among the populations of those countries because their birth rate is so phenomenal, there is a real transfer of wealth from the west, and it is no longer in jute bags. Because of the multinationals and because of the foreign aid we have provided, we have given technology to many countries in the world.
We do not have much in the way of comparative advantage any more, nor does any other country have it. The Swedes and the Americans complain about it. It has to be faced that not only must we reorganize our internal economies to take into account the changes that are taking place, but we also have to do it internationally, otherwise there will be serious conflicts in that area as well.
What is the answer? No one is certain what the answer is beyond knowing that what they are doing now is not worth a darn, and what is being proposed by my friends on the right is no help either. For all practical purposes it does not represent any real kind of change. It seems to me that the problem is the same as it has always been, except that it is more acute, more urgent, more compelling, and we have to seek redistribution at two levels. Not just redistribution at the level of income. Certainly that will help, it is necessary, and it should be done. Now we are faced with the problem of redistribution of jobs as well. In his book entitled "Social Limits to Growth", Fred Hirsh talks about positional goods.
There are hundreds of thousands of bright young people coming out of university for whom there are no jobs. You can tell them to go pick apples or go pick tobacco-maybe there are jobs in those areas. But is this why we sent them to school? Is this why we told them to get an education? How can we ask people to do that? We can ask them to do it for a short period of time-and certainly it does not do anyone harm to do any kind of work because all work is worth-while-but the frustration of that kind of situation is becoming very obvious.
I think that much of the problem we have in the Post Office today arises from the fact that many of the people who work in the Post Office came out of school with a good education. They are not people who came out with just grade two or
October 19, 1978
grade three-these people are well educated. Now they are being asked to do hum-drum jobs, they are being asked not to share in decision-making. I think it is that level of personal frustration, that struggle for an assertion of the dignity to which they think they are entitled, that is creating problems in the Post Office and, I think, in many other occupations as well. That is very important.
There will have to be a sharing of power. A rise in the number of neighbourhood groups, of citizens' participation, is an indication of the fact that people want to share. They feel they need to have more than just goods alone. They need to have access to good positions, to stature, to where the power is. For instance, look at an MP's job. It is not a bad job in many ways, but it is not the greatest job in terms of how hard we have to work for the money we make in comparison with other jobs. Presumably if we did as my friend, the hon. member for Winnipeg North Centre, would have us do, that is, reduce our salaries below what they are now-
Topic: GOVERNMENT ORDERS
Subtopic: BORROWING AUTHORITY ACT, 1978-79-80 MEASURE TO GRANT SUPPLEMENTARY BORROWING POWER