As the CBC bends over backwards to be fair and balanced they gave the top 1% the opportunity to respond to the Occupy Movement. I will not bother with the all the detail of the rather detail-less criticism of the panellists vis-a-vis the Occupation. What I want to take scientific issue with is Terry Campbell’s, the head of the Canadian Bankers Association, claim that we all have lobbyists furthering our interests. It is a widely adventurous and false claim. We do not all have paid lobbyists working for us. Indeed the claim is so evidently false on its face that it does not need refutation. But let me just do the work-out.
Not only do I have extensive experience in political campaigns. Not only did I do three degrees in Political Science. But I have from time to time moonlighted as a lobbyist. From both practical and theoretical experience I can tell you none believe that we all have lobbyists working for us. So what gives?
In philosophy they teach us to take the weak arguments of our opponents and give them the strongest possible formulation we can. As near as I can tell Terry got his education in an epoch in which simple pluralist interpretations of liberal democracies were in a certain vogue. I am thinking of David Easton here. It is nice idea but to make long story short the pluralist theory of liberal democratic practice could not stand the intensity of day light (that is, serious empirical investigation). No serious investigator into liberal democratic practice accepts the pluralist theory.
What is the pluralist theory? The pluralist theory holds that society is composed of individuals (a rather trivial observation). It also holds that in liberal democratic societies we subscribe to the formal rule of law and the formal equality between citizens (a significant improvement over feudal societies to be sure (I wonder if Terry is anti monarchist?). This is all true, so what is the problem?
The problem is of course that substantially (in reality) we are not all equal. We may all enjoy the equal right to vote but we do not all enjoy the same ability to influence (lobby) the government. Terry seemingly has confused two separate issues: the right to speak and the means to make yourself heard.
Terry will go on in the interview to stress the degree to which the policy process is open and transparent in Canada. Compared to the US I think he has point here. But what he is recognising is that in Canada it is relatively easy for organized groups to at least get an airing with the government of the day on policy. And this is where things get interesting. What we know is that the major banks had been pushing for consolidation through mergers so that they could become to big to fail banks and go big into the US market and compete toe to toe with their American counterparts. What we also know is that in the context of a domestic audience that was deeply sceptical of mergers that no minority government would do a giveme to the industry. Mainline economists crowed about the irrationality of public policy being driven by a populist distrust of big banks; prestigious think tanks representing the interests of major Canadian capitalists like the C.D. Howe pushed for bank mergers and at the end of the day failed. BUT they failed not because politicians were weak but because the massive lobbying campaign for mergers came to halt in 2007-2008 because it was clear that the American banking model was nothing more than a ponzi scheme for which the average American would be forced to bail out. That is to say had the crisis occurred two years later and had the conservatives had a majority you can bet the family silver our banks would be in the same bog that American banks are.
Indeed the very prudence that the conservatives now stand tall on was forced on them by the reality of a Canadian public that would not swallow the logic of mergers between the big banks. It is thus that Terry, in his particular role as the chief advocate (lobbyist) for the big banks can go on the national broadcaster and claim we are all equal. The reality is of course that had it not been for the “irrational” distrust on the part of the electorate of big banks we would be in some facsimile of the big shitty south of the boarder.
But truth be told had the American banks not done such a spectacular job at the old pump and dump Canadian banks would have been, in their mega merged form, right there along for the ride. What Terry is thus really lamenting is that in one of the rare instances where the big banks did not simply get to write the rules, Canadians were spared an opportunity to get totally fleeced like their American counterparts.
BUT all that was a product of minority governments and timing. Had it been business as usual we would have had to endure the spectacle of Terry explaining to the Canadian public why the group he lobbies for is worthy of a tax payer bailout.
Note to readers: The C.D. Howe has become so embarrassed at the paper they sponsored on behalf of of banking mergers that they have put it in the memory hole. Thanks to the internet gods the document can be found here.