Uncanny Resemblance

Historians are loathe to use the past to describe the present. But sometimes similarities between past and present are sufficiently striking that they may well offer up some useful lessons for today. The parallels between Jason Kenney’s United Conservative Party (UCP) government and William “Bible Bill” Aberhart’s Social Credit government of the 1930s, for example, are nothing short of uncanny. Each arose during a profound economic downturn, made unrealistic promises based on improbable solutions to win power, traded heavily in conspiracy theories and featured worryingly authoritarian tendencies.

While Albertans remember Social Credit’s 36-year reign, particularly during the province’s postwar oil boom, the party’s origins in the darkest days of the Great Depression are largely forgotten. Aberhart’s Social Credit swept to power in the summer of 1935, taking 56 out of 63 seats in the legislature, representing 54 per cent of the vote. At that time, Albertans had weathered five long years of dramatically falling grain prices and rapidly growing unemployment. Neither the federal nor the provincial governments had any practical way to raise the price of wheat or solve the unemployment crisis. Albertans’ turn to Social Credit was based as much on frustration as on Aberhart’s insistence that he had the right formula to fix Alberta’s economic woes.

Similarly, the UCP swept to power in the spring of 2019, taking 63 out of 87 seats in the legislature and 55 per cent of the vote. The 2014 oil-price collapse had halved the value of a barrel of oil and led to massive industry layoffs. And despite pursuing various policies to mitigate the worst effects of a sputtering oil patch, neither the governing New Democrats in Alberta nor the federal government in Ottawa had any practical means of raising the price of oil. Albertans’ turn to the UCP flowed as much from frustration at the inability of both the provincial NDP and the federal Liberals to bring back the province’s boom years as it did from UCP leader Kenney’s insistence that he had the formula to fix Alberta’s economic woes.

In both instances, Albertans had become receptive to political change after five years of economic crisis. In both instances, Albertans’ frustration was real and palpable. In each instance, a strong leader—high school principal and part-time radio preacher William Aberhart, and career politician Jason Kenney, respectively—managed to parlay that frustration into electoral success. And in each instance, neither leader actually had the ability to fix Alberta’s economy. Their respective parties’ successes at the polls were based on improbable, simplistic and naïve “quick-fix” promises undergirded by fundamental misapprehensions of the causes that lay beneath economic problems.

Each leader arose during an economic downturn, made unrealistic promises, traded heavily in conspiracy theories and featured worryingly authoritarian tendencies.

Social Credit Theory was a complex business that purported to solve the paradoxical Depression-era problem of “poverty in the midst of plenty.” What accounted for the long and growing queues of Albertans in bread lines and soup kitchens? It was, Social Credit theory explained, down to a disconnect between consumers’ purchasing power and the prices of consumer goods. Industrial production required fewer workers to make manufactured goods. This in turn lowered wages to the point where workers simply could not afford to purchase the very goods they produced. The economy, as a result, collapsed.

Enter Social Credit. Maclean’s writer W.A. Irwin in 1937 explained how Social Credit promised to solve the problem: “Basically, it is a method of financing consumption through the issue by the State of debt-free credit; that is, created credit carrying no interest and not repayable.” The originator of the theory, British engineer Major C.H. Douglas, offered up a less concise explanation: “Social Credit, in its essence, is a correct estimate of the productive capacity of a given unit, based upon that which is the real social credit of the unit. You have something which we call financial credit, which can also be made to be the reflection of this real social credit, and that, I should say, can be defined as the power of monetizing, to any extent desirable, the real wealth of the unit so it can be freely exchanged.”

The incomprehensible, convoluted and ultimately incoherent theory behind Social Credit didn’t bother Albertans too much. What voters really responded to was Aberhart’s promise of a monthly $25 dividend payment to every citizen, as part of  Social Credit’s plan to increase individual purchasing power. The basic idea was that, money in hand, Albertans would literally spend the province’s way out of the Depression. Countless Albertans voted for the party in the summer of 1935 fully expecting that, within days, the new government would dole out their first monthly instalment of $25 (about $475 today).

Their successes were based on improbable, simplistic and naïve “quick-fix” promises undergirded by fundamental misapprehensions of the causes of economic problems.

Not surprisingly, in the days following the election, Albertans were bitterly disappointed to learn they wouldn’t see the promised money anytime soon. Unfortunately, the newly elected Aberhart explained, the provincial treasury was empty. There wasn’t sufficient cash to cover basic operating costs, let alone finding $25 for all of the province’s 425,000 adult citizens every month. Aberhart’s solution was to issue $25 “prosperity certificates,” a sort of imaginary money replacement backed by thin air. But because Aberhart’s prosperity certificates weren’t real currency, retailers (even government ones) refused to accept them. And because banking and finance legislation falls under federal, not provincial, jurisdiction, the province’s lieutenant-governor refused to sign Social Credit banking bills into law. The Supreme Court agreed, and ruled against the practice in 1938.

In contrast to Social Credit, modern neoliberalism isn’t all that complex. Its champions, including Kenney’s UCP, have followed familiar patterns: reduce government spending, deregulate and privatize. The consequences are well known to any student of Reaganomics or Thatcherism. Privatization of public services tends to enhance the wealth of private interests at the expense of public services. Deregulation tends to increase risks to public health and safety. Government spending reductions tend to undermine the effectiveness of public services. Austerity hurts society’s most vulnerable, even while enhancing the wealth of the already wealthy. Here in Alberta it took 10 long years before the economy clawed its way out of Ralph Klein’s disastrous neoliberal policies in the early 1990s.

Clearly none of this bothered sufficient numbers of Albertans in the spring of 2019. What Albertans really responded to was Kenney’s promise to “get Albertans working again.” The basic idea was that simultaneously giving corporations a permanent tax holiday and making deep cuts to the public sector would somehow fuel massive job creation.

In the months following Alberta’s 2019 election, growing numbers of Albertans watched with alarm as the new UCP government proceeded to make brutal cuts to public services and dole out huge tax cuts to corporations even while the province’s public and private labour markets continued to shed jobs. The UCP’s late-October budget made access to post-secondary education more expensive at precisely the moment when thousands of Albertans require retraining or educational upgrading. The budget cut infrastructure spending at precisely the moment when infrastructure projects were most affordable and jobs were needed most. And in myriad and pernicious ways the budget took more money out of the pockets of Albertans with children and those caring for aging parents and disabled family members at precisely the moment when those Albertans could afford it least.

As for the corporate tax cut as job-creator, perhaps Husky Energy CEO Rob Peabody said it best: “We really appreciate it …our strategy still has all of our production growth in Western Canada coming from Saskatchewan.” Meantime, energy giant Encana Corp. took its tax cut, changed its name to Ovintiv, and promptly moved its headquarters from Calgary to Denver, Colorado.

The UCP’s corporate tax cut has done little to deal with Alberta’s economic woes, neither stemming job losses nor creating jobs. As of February 2020, the UCP’s promise that large corporate tax cuts would lead to the creation of 55,000 jobs had not materialized. Many of the large, multinational corporations that benefited most from the tax cut took their savings and invested them where they expected the highest returns, mostly outside of Alberta. That’s how global capitalism works. Another problem is that by simultaneously making deep cuts to the public service, the 2019 Alberta budget reduced the number of public sector jobs—and the revenue those jobs produce through regular employment taxation. That’s how underfunding the public sector works.

Setting aside the idea that simply printing money and pumping it into the economy does nothing but trigger inflation, Social Credit theory simply made no sense. Douglas himself didn’t help matters with his internally inconsistent, often obscure explanations of how it was all supposed to work. Lurking deeper beneath Douglas’s churning Social Credit waters was a fanatical anti-Semitism. For Douglas and his followers (including the so-called Douglasite wing of Alberta’s Social Credit party), Jewish “financiers” worldwide were the principal architects and beneficiaries of the dysfunctional economic order.

When Social Credit made its way to this province in the 1930s, its anti-Semitic elements found a home in the Alberta Social Credit Board, the government agency Aberhart established to implement his party’s economic theory. While no evidence suggests that either Aberhart or his chief lieutenant (and future premier) Ernest Manning were anti-Semitic, both Social Credit leaders were well aware of this dark strain coursing through the movement they had created. And neither did much to remove it from the party until, that is, the Holocaust exposed the horror of anti-Semitism.

For its part, Aberhart’s version of Social Credit was no stranger to conspiracies. But rather than casting an international cabal of Jews as a cause behind the Depression, Aberhart focused his attention on a vaguely defined group he called “the financiers,” mostly made up of the banks and the financial establishment. Like most conspiracy theories, this one collapsed under closer inspection. The Great Depression wasn’t caused by “financiers.” It was the result of a complex series of interrelated factors involving the infamous stock-market crash on Wall Street in 1929, ensuing investment losses and panic, followed by sharp declines in investment and consumer spending, and exacerbated by, in retrospect, wrong-headed state policies of austerity and retrenchment. Making a terrible situation even more terrible, of course, was the nearly total lack of welfare-state machinery to mitigate the Depression’s worst effects.

Conspiracy theories take root in such tough climates. Since 2010, nutritionist and blogger Vivian Krause has been “following the money behind environmental and political activism.” Without getting too deep into the weeds, Ms. Krause’s basic position is that powerful American environmental interests have embarked on an organized campaign aimed at shutting down Alberta’s oil sands. Essentially, Krause maintains, they’re using anti-Alberta oil propaganda to sabotage the local industry. Or, in the alternative, powerful US oil interests are trying to shut down Alberta’s oil sands to eliminate Canadian competition to US-produced oil. Or perhaps it’s both.

In any event, Krause’s notion seemed destined to join the lost chorus of fringe conspiracy theories, keeping company with the moon-landing doubters, the sasquatch searchers and the second shooter on the grassy knoll crowd. But her ideas were enthusiastically picked up by a right-wing movement hungry for someone to be angry at. Before long, supposedly “legitimate” conservative voices such as Kenney were celebrating Krause’s work. “Glad to see the intrepid Vivian Krause finally starting to get mainstream media attention for her research into the foreign-funded campaign to landlock Canadian energy,” Kenney wrote on his Facebook page in November 2018.

Much like Douglas’s international financier conspiracy in the 1930s, Krause’s US environmental/oil conspiracy falls apart on close inspection. In an exhaustive October 2019 investigatory piece, National Observer writer and former Crown prosecutor Sandy Garossino used facts and clear-headed logical argument to thoroughly and effectively dismantle the basis of the entire “conspiracy.” Alberta’s oil is not being held hostage by well-funded anti-oil environmental activists, and it’s not being smeared by a secret cabal of American oil interests. Instead, Alberta’s oil and gas industry has simply felt the effects of falling worldwide demand for oil, ample supplies of cheaper and more accessible oil from places other than Alberta, and lower prices for oil overall.

The conspiracy, however, has lately taken on a more expansive life in Alberta. Kenney’s version of Aberhart’s “financiers” now seems to include the federal government, the governments and people of BC and Quebec, the federal equalization formula and transfer payments, the courts, “Laurentian elites,” and anyone who doesn’t offer full-throated support for the province’s oil sands, including many Albertans themselves.

In the end, simplistic and fundamentally untrue conspiracy narratives that fashion menacing cabals out of shadows do everyone a serious disservice and solve nothing. Increasingly, people from all walks of life around the world are legitimately worried about the fate of our planet, and see the positive possibilities of a post-oil future. Their views are fully part of an ongoing conversation about the very real and negative effects of a changing climate. And they don’t require a secret windfall of US money to advocate for a post-oil future any more than the 1930s required a secret international cabal of financiers to drive the world into economic depression.

Before his big splash on Alberta’s political scene in 1935, William Aberhart had already developed a reputation for his energetic approach to public life. But he was also infamous for having an authoritarian streak and an unwillingness to see others’ points of view. He was nearly fired from his job as principal at Calgary’s Crescent Heights High School after staff complained about his tendency to micromanage. Similar clashes at Calgary’s Grace Presbyterian Church, and leadership and theological differences with Calgary’s Methodists ended his relationships with those denominations. And Baptist leaders tried to remove him as unofficial minister at the Westbourne Baptist Church in Calgary after he started to introduce “charismatic practices” and “biblical prophecy” to his work there.

Aberhart carried these traits with him into the political sphere. In a 1933 tract explaining his understanding of Social Credit, Aberhart argued that the state required near-total control of the economy and broader society, including regulatory authority over personal bank accounts and personal spending behaviours. “Bona fide citizens” would be taught “profitable occupations” and directed in their use of leisure time.

Aberhart’s ideas got even more authoritarian once Social Credit formed government. In exchange for their monthly “prosperity certificates,” for example, Albertans were forced to sign “registration covenants” pledging allegiance to the Social Credit government. If Albertans wished to travel outside the province for more than a month at a time, they’d need to apply to the Social Credit government for permission. And in response to hostile press coverage, Aberhart’s government passed the Accurate News and Information Act, requiring all media outlets to print government propaganda and to reveal the names and addresses of all sources in their news reports. Failure to comply could result in daily fines of $1,000 and a prohibition on further operations. It was a stunning blow to the principle and practice of free speech, and was eventually disallowed by the Supreme Court. It turns out that freedom of the press and free expression are cornerstones of any democracy.

More than 80 years later, Alberta appears to have elected a similarly conspiratorial-minded government with an authoritarian streak to match Aberhart’s. In June 2019 CBC News reported on Kenney’s plans to “counter what he calls lies spread by opponents of oil and gas development.” The so-called “war room” is based in Calgary, was given an initial budget of $30-million, and is meant to churn out “correctives” to critics’ “myths and lies” about Alberta’s oil industry. The war room is also mandated to “fund lawsuits against offending environmentalists.”

It’s as though Kenney has taken the spirit of Aberhart’s Accurate News and Information Act and injected it with rocket fuel. In July 2019 the UCP government took matters in even weirder directions by launching what it called “a public inquiry, under the Public Inquiries Act, into the anti-Alberta energy campaigns that are supported by foreign organizations.” It invited anyone with information “relevant to the Inquiry” to share that information with the inquiry commissioner. Oh, and the inquiry itself is secret, explicitly not subject to any freedom of information requests.

By the autumn of 2019 the government had embarked on a power-centralizing drive that would have made even Aberhart blush. Legislation and assorted regulations introduced in October and November dismantle previously negotiated city charters, undermine public sector workers’ collective bargaining rights, and move public sector pensions under government control. On November 9 Kenney pushed his centralizing tendencies even further, announcing what he called a “Fair Deal Panel” to look into: withdrawing from the Canada Pension Plan and replacing it with a provincial plan; establishing a provincial revenue agency to collect provincial taxes directly; requiring provincial government approval for any public body to enter into agreements with the federal government; establishing a formalized provincial constitution; appointing a chief firearms officer; and instituting a provincial police force to replace Alberta’s long-standing agreement with the RCMP. Kenney and the UCP seem to believe the federal government itself is a foreign entity.

A year into the UCP mandate the government has shown no signs of slowing its efforts to quash dissent, sow division or gin up and root out imagined enemies. Perhaps most notoriously, the UCP’s first legislative proposal of 2020—the Critical Infrastructure Defence Act—gives the government the power to fine and arrest without warrant anyone who “without lawful right” enters “essential infrastructure.” The bill’s ostensible purpose is to shield rail lines and roadways from disruptions by those opposed to government actions. But the bill leaves to the provincial cabinet the power to define critical infrastructure, and, by extension, what activities carried on there are legal or illegal. This is an eye-popping power that would extend to the Premier’s Office the ability to declare any otherwise legitimate and democratic exercise of dissent “unlawful” and subject to fine or imprisonment.

In the 1930s none of Aberhart’s Social Credit ideas improved Alberta’s fortunes or lifted the province out of the Depression. It took the Second World War and the creation of the modern welfare state (something Kenney has long seemed determined to dismantle) to do that. In 2020 no UCP proposals or legislative changes are likely to improve the fortunes of Alberta’s oil and gas sector. To the contrary, and as University of Calgary economist Trevor Tombe has noted, taken together UCP policies are more likely to cost Alberta taxpayers more. And these policies were created before the Saudi/Russian oil price war or the onset of the COVID-19 pandemic.

Meanwhile, Kenney’s efforts to control free speech and interfere in other aspects of modern democracy ought to worry all Albertans. In the 1930s, incompetent legislative drafting, a lieutenant governor sufficiently courageous to refuse to sign unconstitutional Social Credit legislation into law, and the Supreme Court’s confirmation of the British North America Act’s division of powers checked the worst of Aberhart’s authoritarian impulses. And although Major Douglas urged Alberta to create a “social credit” police force to enforce allegiance to Social Credit doctrine, this went too far even for Aberhart. The UCP government’s legislative agenda by contrast has thus far centralized power in the Premier’s Office.

Crises come and go. So too do accompanying widespread feelings of anxiety, frustration and powerlessness. The rise of knee-jerk, off-the-wall explanations for crises is normal. But these need to be quickly discarded in favour of clear-eyed, rational explanations that can actually help us address problems. Turning full-bore toward shadowy causes and making use of authoritarian tools is always a mistake. As history shows, that approach never ends well.