Starting our 18th year - Comments - Brief Article - Editorial

Community Action, August 19, 2002 by Leon Kumove

This issue starts our 18th year of publishing news and information about community services in Canada. Looking back, we recognize that Canadians have been involved in world-wide debate on the nature of state and society. The conflict is about the character of free-market societies--the American and the European. Canada, in its usual way, is caught up somewhere between these two models.

Since we began publishing in 1985, we have observed two opposing models of economic and social policy emerge in Europe and the United States, and these differences continue to grow. Both Europe and America have reduced their controls on the market economy, but they have differed in their ideas about social policy.

The Americans have weakened their public services in almost every area, relegating as much as possible to the private sector, limiting government to the job of Picking up the pieces when the market system fails. The Europeans continued to maintain and improve their public services in the areas of health care, income security, environment, and culture. They collaborated on efforts to improve the quality of life for their have-not members--Greece, Ireland, and Spain.

Public expenditure in European countries is high and so are the taxes. Have the large public sector and the high taxes had an impact on the economy? The countries of the European Union form a thriving market economy with high levels of productivity and are competitive in the world economy.

The United States moved in another direction. The role of the state in areas of social concern, never great to start with, has been reduced even more in favor of entrepreneurial services. Tax reductions have been a high priority and the search for more cuts in public services and lower taxes continues.

The U.S. economy has also flourished but at what price? The United States has far higher levels of poverty than Europe, around 20% in the United States compared to 8% in the European Union. In other words, the American boom of the 1990's was good for some but not for others. For those with their eye on the bottom line, U.S. rates of productivity have fallen behind those in Europe.

The differences in approach to state and society are in competition throughout the world, especially in Eastern Europe, Asia, and Canada. The International Monetary Fund is dominated by the U.S. influence. Its aid to economically troubled countries is contingent upon the adoption of the U.S. model, whether appropriate to local conditions or not. (Former Finance Minister Paul Martin often justified his tough economic measures by arguing that it kept Canada from falling into the clutches of the IMF.)

Canada for its part, has long struggled with these two opposing influences. After World War II, Canada adopted universal income security programs. These have all been reformed to limit universality, bringing them closer to the American model, but still they are more generous. Our rates of poverty stand somewhere between European and American rates.

The current debate in Canada over health care programs is part of this conflict of ideas about state and society. Canada took a different turn from the U.S. in the 1960's when it adopted its national health care system, providing all residents everywhere in the country with access to the same services. Canada went further than the Europeans when it eliminated the two-tier system and extra billing by physicians and hospitals. Now, Canadians are being told by a plethora of media commentators that the system is "unsustainable," meaning that some people do not want to pay the taxes needed to support a universal medicare system and instead want American style health care insurances.

Canada has something to contribute to the debate between Europe and America. This country's approach to health care provision is not the only unique feature. Canada, like the British, makes considerable use of and encourages voluntary, non-governmental organizations as part of our publicly supported health and social services. The Europeans are now slowly picking up this idea. Canada has something to contribute to the debate and should do so with greater confidence than it has shown to date.

In our years of publishing Community Action, we have consistently supported the idea of a strong public sector in social policy and programs. The market system works imperfectly. It produces goods and services efficiently, but at the cost of major inequalities, health problems, and disturbances to families and communities. We continue with this stand into our 18th year.