Sunday, September 4, 2016

For The People? Early state ownership in Ontario

October 11 1910: Ontario Hydro power is switched on for Berlin (Kitchener) 

The "Laurier Boom" spanning the late 1890s to the immediate pre-war years was the onset of municipal ownership of utilities (telephone, water, gas, streetcars, electricity). In this period, Ontario also took enormous first steps towards state ownership of industry, most famously with the 1906 creation of Ontario Hydro, but also with the formation of what we now know as Ontario Northland in 1902.

Both the political left and right often portray state ownership as a form of socialism. What is striking about this early period of municipal and state ownership of utilities and infrastructure is the degree of clarity with which Ontario's political elites rejected the claim that state ownership was socialism.

When asked by a British journalist if Ontario Hydro was indicative of socialist behaviour by the Ontario Tories, Premier James Whitney replied, "It is indeed a ghastly joke to charge the Ontario government with being socialist, etc., when it is the bulwark in Canada by means of which such influences will be shattered."

In other words, socialism had no chance of taking hold in Ontario with state-owned hydro providing steady, affordable power across the province to sustain new industrial growth free from dependence on American coal. The result would be steady employment for Ontario workers, free from "coal famines", such as the one in 1902 caused by the massive West Virginia coal miners' strike.

Only a few years earlier in 1902, the Ontario Liberals created the state-owned Temiskaming & Northern Ontario Railway. This railway is now known as Ontario Northland, although it is being slowly starved and destroyed by the Ontario Liberals.

Was this socialism?

Historian Albert Tucker writes, "Ownership by a government Commission implied no socialist methods or goals. Rather the public character of the Commission was incidental to the basic ideology of capitalist enterprise."

The railway served the forestry and mining industries which, through deep ties with the two main parties and immense corruption, were allowed free rein by successive Ontario governments to exploit natural resources and trample on Indigenous territories.

The ruling class understood quite clearly what they were doing. State ownership was a means of pushing ahead with the types of modern infrastructure needed for accelerated capitalist accumulation. With hydro-electric power freeing much of manufacturing from a dependence on American coal, and guaranteed access to natural resources in Northern Ontario, Ontario could continue to compete with the industrial powerhouse south of the border and eliminate some of the backwardness plaguing the province's economic development.

At the same time, there was growing popular support in this period for state ownership of utilities, especially municipal ownership. Private monopolies were deeply unpopular for their notorious gouging of the public and inadequate services. It is understandable why there was a popular conflation of state ownership with socialism. There was a prosaic understanding that private ownership of crucial utilities was a recipe for greed, and that municipal ownership could at least be subject to electoral pressures and the source of greed purged from the equation.

This understanding continues to confuse and paralyze socialists both in terms of their analysis of the world, and their vision of socialism. For some socialists in this period, it was the class struggle itself which clarified the question of whether or not state ownership was in fact socialism.

When streetcar workers at the Lakehead (Thunder Bay) struck against the municipally-owned service in 1913 for union recognition, crowds took to the streets, derailing and stoning the streetcars operated by scabs. When one stone-thrower was arrested, a crowd of two thousand marched on the coal docks jail to free him, only to be fired upon by police. One protester was killed and others wounded. In a couple days, armed men arrived by train from Winnipeg's Thiel Detective Agency to guard the streetcars operated by strikebreakers. They were ordered to shoot anyone on site who interfered with the cars.

Normally, this would not have deterred strikers and their supporters. Streetcar strikes against private companies in Hamilton, London, Toronto and the following year in Saint John had marshalled huge popular support through militant crowd control of the streets. Often defeated through the use of the Riot Act, there was still huge public support for the streetcar workers.

However, the public was split in Port Arthur and Fort William. Whereas key sections of the local middle class had sided against the private utility monopolies in other cities, here they sided with the municipally-owned streetcar company against the workers. Their voting preferences had already demonstrated this before the strike when labour had organized an electoral bid to head off a streetcar strike by winning control of the streetcar's board. Labour and socialist candidates were defeated in this effort, with many middle class voters believing union recognition and higher wages would result in higher streetcar fares.

Even the workers' movement was split over the strike. After the shooting and arrival of strikebreakers, the two labour councils called for a general strike on two separate occasions, but both these strikes totally flopped with few unions walking out. As with the earlier election efforts, political and ethnic divisions among workers undermined solidarity for the strike. These were, of course, deeper problems than just the immediate tactics around the strike.

With the strike defeated, Cotton's Weekly, the largest circulation socialist paper in Canada at the time, commented: "at Port Arthur the workers found that under capitalism there is no difference between municipal ownership and private ownership."

Is state ownership for the people in a capitalist society? As consumers, perhaps. As owners and operators? No.

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