Thursday, May 19, 2011

Walter Gordon and the Rise of Canadian Nationalism (1999)

Stephen Azzi, Walter Gordon & the Rise of Canadian Nationalism, Montreal: McGill-Queen’s University Press, 1999.

Written as both a biography and a description of the development of Canadian Nationalism between the late 1950s and the 1980s, Walter Gordon & the Rise of Canadian Nationalism, begins by describing Gordon's early life, his education, and his start as an accountant in his father's Toronto accounting firm. However, Stephen Azzi also uses the first chapter of the text to point to the roots of Gordon's life-long anti-American views and his understanding that Canada should maintain close political, social, and economic ties (the three often being interconnected) with Britain while developing a strong, Canadian-directed economy. An economic conservative, Azzi also shows the origins of Gordon's strong support for government social welfare programs and his socially liberal views.

As the author explains, Gordon grew up in affluence during the Great Depression and was keenly aware that the unemployed and homeless whom he saw daily were largely victims of the failures of the economic system and the government's lack of social assistance measures. Having been interested by the promises of communism as a youth, by the mid-1930s Gordon had become interested in the more democratic ideas of the left and was even a co-owner of the Canadian Forum, the articles of which were often dedicated to discussing left-leaning policies and the problems associated with uncontrolled American influence over Canadian society, its politics, and economy. Furthermore, he and his wife were close friends with several members of the League for Social Reconstruction, including Graham Spry. Azzi also shows how Gordon's work for Eaton's before the Commons Committee on Price Spreads and the Tariff Board during the 1930s convinced Gordon of the dangers posed by free trade with the United States for the Canadian economy. Furthermore, his work for the federal government during the war on the Foreign Exchange Control Board, as chair of the Royal Commission on Administrative Classifications in the Public Service, and as special assistant to Clifford Clark, the deputy minister of finance, convinced Gordon of the importance of Ottawa's new departures from classical government financial management. Especially under Clark he was able to see the role that government could play in both helping the less fortunate and intervening in the economy so as to advance national interests. However, his war time work for the federal government also showed that Gordon lacked a full understanding of macro-economics, preferred action over worrying about the details of complex economic issues, and often allowed his personal ideas and theories concerning the national economy to override the opinions and interests of the government.

Gordon's work for the Ontario and federal governments continued after the war, using the expertise of his business consulting firm (a partial off-shoot of the accounting firm he had inherited from his father) to advise on the efficient organization/reorganization of various government departments, agencies, and overall civil services. He also helped start Canadian Corporate Management Co., a business management firm which Gordon claimed was at least partially established to try and encourage Canadian companies not to sell out to American competitors, but rather, sell to a Canadian holding company which would restructure the company and keep it in Canadian hands.

It was also during the post war years that Gordon developed what he believed was a close friendship with Lester B. Pearson. The two had met while working for the federal government in the 1930s, and it was Gordon who ensured that Pearson would be financially secure enough to enter political life in 1948 when he became Minister of State for External Affairs. Gordon was also responsible for reorganizing the Liberal Party following the defeat of 1958 when Pearson became leader.

Claiming that Gordon's ideas about the threats posed to Canada by American economic hegemony were set before he entered public life, Azzi dedicates his second to sixth chapters to discussing Gordon's public life between 1955 and 1968. The second chapter examines Gordon's involvement in the Royal Commission on Canada's Economic Prospects, which he chaired from 1956-1957 at the request of Louis St. Laurent. The commission was charged with investigating the nature of the Canadian economy and to make recommendations on how it could be altered to best benefit Canadians. Gordon, still concerned about American influence over the Canadian economy, and thus Canadian sovereignty, recommended that Canadian resources and other business interests should not be unquestioningly sold to foreign interests. The third chapter deals with Gordon's restructuring of the Liberal Party following the party's 1958 defeat to the Tories. His policies on protecting Canadian economic sovereignty would influence Liberal economic policy during the 1960s and 1970s, although his ideas concerning the curbing of foreign investment would not form the basis of Liberal economic policy until the 1970s. The fourth chapter discusses Gordon's election to parliament in 1962, his gaining the position of Minister of Finance following the 1963 election, and finally his unsuccessful first budget, which contained the proposal to tax the take over of Canadian businesses by foreign companies. As is explained in chapters five and six, although Gordon's ideas about protecting Canada's economic sovereignty were generally popular among members of the Liberal Party and the electorate, his ideas about restricting foreign investment were less popular among Liberals. He was replaced by Mitchell Sharp as Minister of Finance in 1965 but was returned to cabinet in 1967 as president of the Privy Council. In this position he oversaw the creation of the Task Force on Foreign Ownership and the Structure of Canadian Investment, headed by Mel Watkins, which recommended close control of foreign investment in Canada, particularly in cases involving the purchase of Canadian resources and businesses by foreign interests.  Although Gordon left the parliament in 1968 due to a lack of confidence in the experience and tact of Pierre Trudeau, he did support Trudeau, who eventually implemented the many of the recommendations of the Watkins Report through the creation of the Canada Development Corporation and the Foreign Investment Review Agency.

An early critic of American influence upon Canada, Gordon’s views concerning American investment, as well as related concerns over American political, military, and cultural influence, gained support during the 1960s. Those interested in military sovereignty pointed to the North American Treaty Organization and argued that it was simply a tool by which the United States influenced smaller powers to further its military, political, and economic interests. Cultural nationalists argued that Canada's universities were too heavily staffed by American graduates and that Canadian media was either indistinguishable from American media or could not compete with large budget American publishing, television, and movie productions without government assistance or regulation. However, Azzi claims that the most prominent warnings of, what came to be called "the new nationalism" by the late 1960s, were economic nationalists including Walter Gordon, Mel Watkins, and Abraham Rotstein. However, unlike Gordon, other economic new nationalists, such as Kari Levitt and Eric Kierans, argued that while Canadian enterprise needed to be protected from American direct investment, tariffs should be reduced, if not eliminated, so as to encourage expansion of Canadian business and sales to the United States. However, while concerned about the threat of American economic influence, Azzi notes that Gordon did not see Canada as being threatened by American culture, other than by the way that the importation of American cultural products drained money from Canada. He never had any great interest in culture or the role it played in Canadian society. Rather, nationality for Gordon was only defined in political and economic terms.

While many economists did not strongly support Gordon's ideas concerning control over foreign investment, others, including Watkins and James Laxer, members of the NDP Waffle, went much further than Gordon had suggested, arguing that nationalisation, not the regulation of foreign investment, was the only way to protect key industries and remove any risk that they could be sold to foreign interests. In response to the call for the nationalisation of Canadian businesses, Gordon, along with other economic nationalists including Rotstein and Peter C. Newman, formed the Committee for an Independent Canada, an organization designed to lobby the government to increase government intervention in the Canadian economy.

As a book which is dedicated to outlining the life and achievements of a Canadian businessman who was not particularly interested in culture and his connections to the new nationalism of the 1960s and 1970s, it is not surprising that Azzi focuses upon the economic strain of the new nationalism. However, it is fairly inaccurate for Azzi to claim, as he does at the beginning of his seventh chapter, that cultural nationalism was never of as much concern to Canadians as economic nationalism. He argues that cultural nationalists both failed to attract the same interest as economic nationalism and that there were no cultural nationalists of equal stature or appeal as Gordon and others who acted as spokesmen for the cultural nationalist cause. This position is contrary to that offered by Ryan Edwardson in Canadian Content, that some of the same new nationalists discussed by Azzi, such as Jack  McClelland, Mel Hurtig, and Peter C. Newman also spoke out against American domination of the Canadian cultural market, and not solely in economic terms. Furthermore, highly prominent new nationalist artists, such as Margaret Atwood, were clearly more concerned about the cultural implications of American domination than the economic repercussions.

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