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Reviews / Comptes Rendus

Jamie Brownlee, Ruling Canada: Corporate Cohesion and Democracy (Halifax: Fernwood Publishing 2005)

NEOLIBERALISM in Canada began 30 years ago with the Bank of Canada's adoption of monetarism and Trudeau's use of wage and price controls to defeat an insurgent labour movement. While these policies were defended at the time as short-term necessities, they came to represent components of a more general restructuring process. Indeed, neoliberalism has been much more than a conjunctural economic fix or policy adjustment; rather, it has consisted of a systematic transformation of political, economic, and social relationships both within Canada and around the world.

Most social science has interpreted neoliberalism in one of two ways. For neoclassical economists, neoliberalism unshackles the market from Keynesian regulations. According to this perspective, neoliberalism realizes the inherent potential of capitalist markets and thus promises benefits for everyone. For Weberian or institutionalist researchers, neoliberalism is the outcome of technological developments that allowed for the globalization of investment and the restructuring of production processes. These technological and economic transformations occurred outside of the nation-state and thus contributed to the global power imbalances that exist today among capital, governments, and citizens.

Jamie Brownlee's new book, Ruling Canada: Corporate Cohesion and Democracy, offers a different conceptualization of neoliberalism and its effects on democracy, citizenship, and the state. For Brownlee, neoliberalism emerged not from naturalistic market processes or technological developments, but from a deliberate and well-organized effort of the economic elite to radically alter the political economy of Canada. Class struggle in the economy and at the level of the state was central to the neoliberal revolution. To defend this argument, Brownlee focuses on the economic and political processes by which Canada's economic elite — its leading capitalists, corporate executives and directors, and their ideological and political supporters — advanced neoliberalism as a class program. Two questions guide the analysis: what economic basis allowed the Canadian elite to unite and mobilize around a neoliberal agenda? And what political mechanisms were utilized for achieving this end?

Answers to these questions are developed in three sections which integrate empirical data and theoretical interpretations. In Section One, Brownlee covers sociological debates on the unity and political capacities of the economic elite. He first reviews and critiques the theories of pluralists and structural Marxists and then develops his "instrumental Marxist" or "unity theory" approach. He insists that divisions amongst the elite are usually more tactical than strategic, and that "powerful unifying mechanisms" exist to facilitate political consensus and solidarity. (19) Sections Two and Three demonstrate how the Canadian elite unified around a neoliberal strategy and how they used their resources and connections to implement this strategy.

For example, Chapter Two analyses the concentration and centralization of capital in Canada and the ways in which this creates a "corporate structure that is conducive to elite cohesion." (53) The Canadian elite used mergers and acquisitions as well as diversification strategies to consolidate its control over the domestic market and to become more competitive globally. As an example, Brownlee reveals how Canadian conglomerates now "employ one-third of the Canadian workforce and account for one-half of total business revenue." (36) It is this growing intercorporate ownership that provided the elite with a structural basis for developing a class-wide strategy around neoliberalism.

Chapter Three continues the economic analysis of elite unity by focusing on interlocking directorships in the Canadian economy. Brownlee makes five important points. First, Canadian capital is constituted by an elite network of directors who sit on the boards of the most concentrated industries. Second, these interlocks have integrated the circuits of industrial and money capital to such an extent that they now constitute "finance capital." (59) Third, Canadian finance capital is a "well-integrated and dense network of nationally based interlocking directorates" (66); that is, it is established by an East-West or pan-Canadian structure of corporate power. Fourth, "Foreign controlled corporations have only marginal interlocking status and are much more likely than domestic firms to be isolated from the network." (66) In other words, the top units of capital in Canada are Canadian-owned and operate independently from foreign interests. Finally, the development of finance capital provided the impetus for the internationalization of Canadian capital. Brownlee summarizes this argument with a quote by William Carroll, who writes that "transnational finance capital has radiated from Canada in a way that has not disorganized the national network, but has embedded it more extensively in a circuity of global accumulation." (68) According to Brownlee, the development of Canadian finance capital through the concentration and centralization of capital and through interlocking directorships provided the structural potential for elite cohesion. In Section Three, which deals with the "policy formation network," Brownlee reveals how the Canadian elite developed a common political program in the form of neoliberalism, and how it organized to implement this program through the state.

For example, in Chapter Four , Brownlee examines intersectoral policy organizations such as the Canadian Council of Chief Executives, the Canadian Chamber of Commerce, Canadian Manufacturers and Exporters, and the Canadian Federation of Independent Business. These organizations create forums for corporate leaders to discuss and articulate long-term, class-wide strategies. Brownlee reveals how these policy organizations advanced neoliberalism through their close financial and political relationships to the Liberal and Conservative parties and to the corporate media. He also shows the decisive interventions made by these organizations around free trade, the Multilateral Agreement on Investment, debt reduction, military and foreign policies, and the Canadian Health and Social Transfer.

Chapter Five discusses advocacy think-tanks such as the Fraser Institute, the C.D. Howe Institute, and the Conference Board. These think-tanks are important actors in the elite network. Through their conferences, publications, submissions to parliamentary committees, and access to the corporate media, they "help business leaders to establish class cohesion and a common policy perspective, mainly by setting up regular meetings or roundtables between different sectors of the business community." (106) Brownlee argues that these think-tanks also provide a veneer of legitimacy to the neoliberal agenda.

Chapter Six examines actors within the policy formation process that are often overlooked, namely, free enterprise foundations. Brownlee reveals how corporate and family foundations interlock with policy groups and think-tanks and thus create another network through which the elite exercises power. He also implicates free enterprise foundations in the development of neoliberalism in Canada, for example, through their funding of particular research, their recruitment and training of future members of the elite, and their projection of an image of corporate philanthropy.

Brownlee's principal arguments, then, are two-fold: first, financial and institutional linkages among the Canadian economic elite facilitated forms of unity necessary for the development of neoliberalism. And second, this elite's economic power was translated into political power through its policy organizations, think-tanks, and free enterprise foundations as well as through its connections to the media, the Liberal and Conservative parties, and the civil service. These economic and political resources were used to advance neoliberalism as a conscious class strategy to restructure the Canadian state and economy.

Brownlee concludes Ruling Canada with one chapter on the nature of the state under neoliberalism and another chapter on alternatives to neoliberalism. Chapter Seven makes two important points: first, that the state is fully integrated with the logic of neoliberalism and thus functions to reproduce and intensify this logic; and second, that regardless of such structural processes, the economic elite maintains a strong grip on governance and administration, making the state a "vital power base and set of organizing tools" for capital. (127)

While Brownlee paints a picture of a very powerful and well-organized economic elite, he concludes on an optimistic note. "Corporate domination" can be challenged, he says, because it "is not the culmination of a natural, evolutionary process." (142) A "great deal of potential exists for citizens to alter current economic arrangements to realize the interests of the vast majority. Collective social action could change the public policy consensus." (13) According to Brownlee, such a political mobilization must engage the state — as it is clearly a terrain of intense class struggle. Social movements must defend existing state programs and create new forms of democratic administration in the process of curtailing corporate power: "At present, the state is the only institution large enough to act as a counterweight to corporate power; therefore, short-term goals should involve defending, even strengthening, those elements of the state that are accountable to public input (which are the ones constantly under attack by private power). Opening up the state to democratic participation and improving the effectiveness and accountability of state regulation are the most realistic interim strategies for dealing with the corporate threat and the practical problems of tomorrow — problems on which people's lives often depend. In the short-term, then, political activism that directly targets corporate power should be complemented by efforts to re-democratize the state and government. In the long-term, the inherent injustices of the centralized state system need to be challenged and ultimately dismantled." (152)

Ruling Canada provides a clear analysis of the Canadian economic elite and its ability to shape state policy. The text also does a good job of examining neoliberal-ism in the context of transformations occurring on a global scale. But the text could be strengthened in a number of crucial areas. For example, it should have included more political economy. While the text provides an excellent sociological description of the Canadian elite, it does not adequately conceptualize neoliberal-ism as a form of social power based upon the rule of finance capital (the coalescence of industrial and money capital as a result of concentration, centralization, and internationalization). The text discusses Canadian "finance capital," but it does not theorize it either in terms of capital's laws of motion or as a new configuration of social rule. Making such a theorization is crucially important for two reasons. The first is for understanding neoliberalism not simply as a class conspiracy, but as an expression of the workings of the capitalist mode of production. The second is for conceptualizing neoliberalism as a systematic form of social power, as a social logic organizing everything from macro- and micro-economic processes to governance and inter-state relations. The weakness of Brownlee's analysis is evident in his chapter on challenging corporate rule. His argument about engaging the state fails to comprehend how the state is fully implicated in the patterns of accumulation and social reproduction that characterize neoliberalism. For the Left to engage the state, then, it must develop a clear anti-capitalist strategy, one that builds workers' and oppressed people's capacities to overturn the "centralized state system" and its underlying capitalist relations. While Brownlee mentions anti-capitalist formations such as People's Global Action, he could have analyzed these formations in greater detail.

Lastly, Ruling Canada could have said more on globalization and imperialism. Given the Canadian elite's new push for "deep integration" with the United States, it would have been interesting for Brownlee to discuss the relationship between the Canadian state and the internationalization of Canadian capital. For example, how does the state facilitate the expansion of Canadian capital? And how does this expansion reinforce domestic neoliberalism? Unfortunately, in the short section on "deep integration," Brownlee ignores Canadian imperialism and looks solely at the threat of "assimilation" to Canadian "sovereignty" and "quality of life." (125-6)

Despite these weaknesses, Ruling Canada is an important contribution to the study of Canadian political economy. The book provides substantial empirical evidence to defend its principal claims and should be referenced and debated in current discussions on the nature of Canadian capital and the Canadian state. The book is highly readable and could also be used in upper-level undergraduate courses. Most importantly, the book demystifies neoliberalism by naming the economic elite which benefit from it. As such, it opens the door for political action to challenge neoliberalism. Brownlee should be commended for contributing to this much-needed process.


Jerome Klassen York University

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