Polarized economy, polarized politics
TheStar.com – opinion/editorialopinion
Published On Sat Sep 17 2011. David Herle
The Canadian middle-class dream is disappearing. There is more income inequality than ever before, and fewer people find themselves with the trappings traditionally associated with middle-class life — security in retirement, a little bit of savings to help your kids through school, the ability to splurge on a vacation from time to time.
Relentless global competition has destroyed the compact Canada had with its citizens — “work hard, play by the rules and you will have the wherewithal to own a house and raise a family.” This is all increasingly well documented. What is less well documented is the impact this is having, and will continue to have, on our politics. It is strange that this issue is so much more prominently found in the business and economic pages than in political discourse.
Years of grinding away at middle-class lifestyles, and years of accumulating debt to try to maintain those lifestyles, have taken their toll on the core optimism and hope that characterized the middle-class outlook and informed its political judgments. Few people now believe their children will lead better lives than they have, in a complete reversal from the ethic that built this country. Most people are more afraid of falling further behind than they are excited by the prospects of getting ahead.
These changes in the middle-class circumstance means that fear has become a much stronger motivator than hope. The polarization of economic outcomes will lead to a polarization of political choice. From “a rising tide will lift all boats,” we are moving to a zero-sum game.
People who do not believe that they or their children can move up the ladder turn from hope to resentment. Instead of supporting economic growth policies that might advance their standard of living, they will demand tax and social policies that redistribute income.
On the other hand, most relatively affluent Canadians have always seen themselves as just the top end of the middle class. They tended to identify with middle-class values and to support similar policies. They felt part of a collective experience with the middle class. In a polarized world, they are part of a minority of affluence that needs to protect what it has against the desires of others to take it.
In this kind of politics, public services previously taken for granted — health care and primary and secondary education — become highly controversial. The affluent want to pay their own way for the best possible service. They send their kids to private schools and lose interest in paying for good public schools. Medicare goes from being one of the most unifying ideas in Canadian history to a divisive idea based on socio-economic class membership. The affluent demand the right to pay for immediate, best-in-class service and increasingly refuse to pay the taxes required to keep the public system at that level. When a country loses the middle class, it loses its point of consensus.
In this kind of politics, it becomes difficult to build broad agreement around big actions because there is less of a sense of collective interest. It was possible to forge a consensus around eliminating the deficit in the mid-1990s because most thought it was in their interest. In a more polarized environment there would be more intransigence and less compromise on the part of affluent and poor alike. People accepted change that was not in their short-term interest (such as spending cuts or tax increases) because they believed it would work to everybody’s long-term interest.
This is one of the driving forces behind the restructuring of Canada’s party system. In the last election the Liberals tried to address these middle-class issues. However, their unwillingness to veer from conservative economic orthodoxy meant they could not propose any measures that would have a meaningful impact on the circumstances of people clinging to their middle-class lifestyles Once the middle has shrunk sufficiently that there are really only two groups in society — economic winners and economic losers — there will only be a need for two parties, one to represent each group.
If our politics cannot find the prescription for saving the middle class, increasing disparity in Canada is going to make politics and life more divisive and more confrontational.
David Herle is a former campaign chair for the Liberal party and a partner in the research and consulting firm The Gandalf Group.
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