IDEOLOGY, INTEREST GROUPS AND STATE INTERVENTION IN NORTH AMERICA: INCOME SECURITY AND INDUSTRIAL RELATIONS Robert Gregory Finbow The London School of Economics and Political Science LONDON Submitted to the University of London for the degree of Doctor of Philosophy May, 1990 c Robert Gregory Finbow, 1990 UMI Number: U044828 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U044828 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 F 6~7&& <£\\2>220ZZ Abstract This thesis compares the development of Canadian and American public policy in two important fields where transnational policy differences are evident - income security and industrial relations. These case studies provide evidence which challenges orthodox political culture explanations of North American policy differences, particularly the stereotype of greater Canadian ideological tolerance of state action. The thesis demonstrates that both nations have contained a wide range of attitudes towards the role of government in social and economic affairs. It reveals the similar reactions of interest groups in each country to proposed state intervention, based on class interest, not ideological tradition. Using a synthesis of neopluralism and the "new institutionalism", the thesis will demonstrate the need for a multi-causal approach to explain policy differences between these nations;' it will highlight the importance of differing political structures as sources of policy variation. The thesis details the responses of major national interest groups to federal level policy proposals in each field in selected cases from early century to the 1960s. Data was drawn from archival files, interest group journals, submissions to executive and legislative actors, publications, and major secondary studies. The method employed will approximate the Canadian tradition of political history, involving qualitative, rather than quantitative examination of historical data. The evidence presented reveals that both business and labour groups sought to manipulate state intervention to strengthen their position in industrial relations and labour negotiations; support for state action fluctuated depending on the negotiating strength of business and labour. In income security matters, business and medical professionals sought to forestall government programmes, and to keep those adopted as restrictive as possible. After an initial period of American labour voluntarism, unions in both countries sought to expand the scope and generosity of public income security programmes, to compensate for the inequalities of capitalism. Despite these similarities in attitudes, policy differences did emerge, in areas like health insurance. Greater Canadian intervention in these areas seems attributable to the flexibility of the parliamentary system in Canada, which was more conducive to third party development, allowed third parties to influence policy in minority governments, and permitted stronger executive direction of policy development. The inflexibility of America*s fragmented policy-making system delayed reforms which had earlier support in that country. Rejection of republican institutions was the significant legacy of Canada's founding tradition, not a collectivist preference for state intervention in social and economic affairs. Current Canadian efforts to emulate American institutions - particularly the introduction of an elected Senate - could reduce this flexibility in the system and hinder future interventionist initiatives. 2 Dedication This thesis is dedicated to my father, Wilfrid E. Finbow, whose inspiration and typing have been essential to the success of my studies. It is also dedicated to my mother, Viola C. Finbow, who gave so much support and understanding during my study travels. 3 TABLE OF CONTENTS Abstract 2 Dedication 3 I INTRODUCTION AND BACKGROUND 1 Introduction a) Summary 8 b) The Problem 8 c) Aims of the Thesis 10 d) A Synthesis of Perspectives 11 e) Framework of Analysis 12 f) Problems of Comparative Analysis 17 Notes 19 2 Ideology and Interest Groups in North America a) Formal Ideology: The Traditional Inheritance 23 b) Social Evolution and Interest Groups 27 c) Popular Ideology 28 d) Central Ideology 30 e) Public Ideology 34 Notes 39 II INCOME SECURITY CASE STUDIES 3 Early Income Security Policies a) Early British Influences 47 b) Early American Policy 48 c) Early Canadian Policy 49 d) Early Interest Group Attitudes 52 e) American Innovation and Canadian Policy 55 Notes 56 4 Emergence of Old Acre Pensions in America a) Emergence of the Old Age Pension Issue 60 b) Evolution of Union Attitudes 61 c) Business Community Resistance 64 d) Depression Era Pension Debates 68 e) The Social Security Act, 1935 71 Notes 74 5 Canadian Old Age Pensions a) Early Canadian Voluntarism 82 b) The Emergence of Old Age Pensions, 1927 85 c) Reforms and Debates in the 1950s 88 d) Reforms and Debates in the 1960s 94 Notes 96 6 American Unemployment Insurance a) Early Consideration of Unemployment Insurance 106 b) Union Voluntarism and Unemployment Insurance 107 c) Early Business Responses 108 4 d) Debates in the Great Depression 109 e) Union Conversion 113 f) Unemployment Insurance in Economic Security Act 115 Notes 120 7 Canadian Unemployment Insurance a) Early Unemployment Relief Policy 132 b) Early Interest Group Positions 134 c) Great Depression and Union Agitation 135 d) Business Concerns 137 e) The Bennett New Deal 138 f) The Adoption of Unemployment Insurance 141 Notes 146 8 Health Insurance Debates in the United States a) Early Interest in Health Insurance 154 b) Professional, Business and Union Opposition 155 c) Depression-Era Problems and Debates 157 d) Truman Administration and Health Insurance 159 e) The Compromise of Medicare 164 Notes 166 9 The Evolution of Canadian Health Insurance a) Early Resistance to Health Insurance 182 b) Union and Professional Advocacy in the Depression 183 c) The Professions Retreat 184 d) Business and Professional Voluntarism 186 e) Movement Towards Government Action 188 f) Business and Professional Resistance 190 g) Establishment of National Health Insurance 19 2 Notes 196 III INDUSTRIAL RELATIONS CASE STUDIES 10 Earlv Policy and Attitudes a) Common Law and Frontier Conditions 205 b) Judicial Intervention in America 205 c) Canadian Judicial Intervention 207 d) Early Canadian Legislation 209 e) Early Union Responses to the State 210 f) Early Business Attitudes 212 g) The Imperative of Policy 213 Notes 213 11 Canadian Industrial Disputes Investigation Act, 1907 a) The Emergence of the Act 216 b) Initial Union Response 217 c) Evolution of Labour Attitudes 219 d) Business Responses to the IDIA 221 e) Impact of the Act on Industrial Relations 223 f) Public Sector Attitudes and American Influences 224 g) American Reaction to the IDIA 226 Notes 228 5 12 U.S. Railway Labour Legislation a) Early Congressional Action 234 b) Union Responses to Federal Policy 235 c) Business Responses 237 d) Evolution of Group Attitudes 238 e) Government Control and Labour Advances in WWI 240 f) Transportation Act, 1920 240 g) The Railway Labor Disputes Act, 1926 241 h) The Emergence of American Interventionism 243 Notes 245 13 Depression and New Deal in the United States a) Employer Resistance to Union Organization 251 b) National Industrial Recovery Act, 1933 251 c) Development of the Wagner Act 255 d) Union Response 256 e) Employer Opposition 258 f) Evolution of Attitudes and Policy 259 Notes 263 14 War and Cold War American Policy a) Wartime Policy Innovations 271 b) Business Assault on the Wagner Act 272 c) The Taft-Hartley Act, 1947 274 d) Union Criticism 276 e) The Impact of Taft-Hartley 278 f) Business Demands for Stricter Regulation 280 g) Labour Vacillation and Opposition 281 h) Labor Management Reporting and Disclosure Act 282 Notes 284 15 Canadian Wartime Labour Policy a) Labour Demands for Protection 299 b) Wartime Labour Demands 300 c) Canadian Business Conservatism 302 d) Government Policy Evolution 305 e) Labour Response to Privy Council Order 1003 306 f) Business Response to Privy Council Order 1003 308 g) Evolution of Interest Group Attitudes 310 Notes 310 16 Post-War Canadian Labour Policy a) Post-War Policy Debates 322 b) Labour Reaction to Bill 338 322 c) Business Reaction to Bill 338 325 d) Industrial Relations Disputes Investigation Act 329 e) The Search for a National Labour Code 330 f) The Evolution of Interest Group Attitudes 333 Notes 335 6 IV ASSESSMENT AND CONCLUSIONS 17 Industrial Relations Assessment a) Summary of Policy Development 343 b) Summary of Group Attitudes 344 c) Policy Differences and Ideological Traditions 346 d) Political Institutions and Policy Development 349 Notes 350 18 Income Security Assessment a) Summary of Group Attitudes 352 b) Summary of Policy Development 354 c) Policy and Ideology in Income Security 356 d) Political Institutions and Policy Development 357 Notes 359 19 Are Public Corporations an Exception? a) A "Public Enterprise Culture"? 360 b) Pragmatic Basis of Canadian Public Corporations