(The bulk of this article was originally written just prior to Albertans voting on Monday, 23rd April. We have attached a postscript, which covers the actual election results, as well.)
The economic crisis of 2008–2009 had a profound impact on the consciousness of all classes. The increasing economic pressure has intensified the divisions within the classes and the tempo of the class struggle in general, increasingly polarizing society into its bourgeois and proletarian wings. This polarization is reflected in the collapse of the “centre” and the demise of the Liberal Party federally — the working class increasingly coalescing around the NDP on the one hand, and on the other, the forces of capital, the ruling class, and its appendages, gravitating towards the Conservative Party. Between the working class and the capitalist class, there is no longer any room for the middle road.
This political realignment has meant political shock after political shock from one end of the country to the other. We have seen the collapse of the Bloc and the massive student movement in Quebec; Dalton McGuinty’s minority government faces a budget crisis in Ontario; and the stage is set for a major shift in B.C. politics.
And in Alberta, we stand on the threshold of a major change, of a major transformation in provincial and federal politics. After ruling the province for 41 years, the provincial Progressive Conservatives may be facing electoral defeat with the rise of the Wildrose Party.
It may be surprising to hear that while the victory of Wildrose would mark a significant development, a major shift first took place some five years ago when the Stelmach/Redford wing came to dominate the Tories. This first marked a significant development in the battle within the ruling class for the direction of the province, primarily centred on the question of the state, and above all, on the question of oil.
Thus, while a Wildrose victory or even a close defeat will mean a major shift in the objective situation in the province, it is also the direct continuation of a decades-long struggle within the Conservative Party, with oil as kingmaker.
While the Tories may have appeared a powerful monolithic block from the outside, they were, in reality, far from united. There was a deep divide between the urban, cosmopolitan bourgeois and petit bourgeois elements in the cities, and the rural bourgeois — the landowners, ranchers, and corporate farming interests in the countryside. What united them in the PC party is the same thing that drove their eventual split — the crushing dominance of the oil industry.
The Alberta economy is entirely dependent on oil. All other sectors of the economy live and die by the tempo in the oil patch — literally. This drove the various wings of the bourgeois into the Tory party in the early 1970s, through which the oil industry has more or less directly ruled the province ever since. These divisions were minor, and often relegated to behind-the-scenes faction fights and back-room politics in the party. If things were good in the patch, things were good for everyone. If things were bad in the patch, things were bad for everyone, or so went the reasoning from the point of view of the bourgeois. Although crude, this is the essence of Alberta politics for the past 40 years. On the basis of a boom it was easy for the different wings of the bourgeois to agree on policies because whatever benefitted oil indirectly or directly benefitted them. This perspective, given the weakness of the mass organizations of the working class, has also had an undeniably strong pull on all classes in Alberta, which helps to partially explain why the post tends to shift so far to the right in Alberta.
This meant the politics of Alberta, certainly for the past 25 years at least, has been the politics of “oil before butter”. These policies of oil before all else have not always looked the same, but they have always been subservient to the interests of the oil industry.
While the oil industry, and to a broader extent, the majority of the ruling class, now abhors the very idea of taxation, royalties, and state involvement on any level in the economy, the oil industry in Alberta itself was nurtured and developed by the state, relying rather heavily on state funding in its early days.
In the past, during the long capitalist upswing following the Second World War that lasted from the mid-1940s until the mid-1970s, the capitalists were more or less very happy to use the state as a tool in the development of the productive forces. Buoyed by the decades of near continuous growth, the bourgeois still had confidence in society, confidence in their economy, and confidence in their role in production. Thus, they were not afraid to invest in and develop the productive forces, thereby advancing society. This is the source of the historically progressive role of the bourgeoisie — developing the productive forces and creating the basis for a new society, a role which has now turned into its opposite.
The first Tory government was elected on the basis of a program of modernization. Social Credit, a right-wing populist party with deep religious roots in rural areas, had ruled the province for some 35 years. During that time, Alberta had developed from a primarily agricultural economy into a modern industrialized economy on the cusp of a massive oil and development boom.
The oil industry, dynamic and growing, gathered the modernizing forces in the bourgeois behind it in the Tories. However, it was still in its nascent stage, and needed the state to assist in the development of the patch. The state was used to develop the cities, expand the highway system, build roads, hospitals, and schools, and generally provide the infrastructure required for the growth of the patch.
While there were occasional battles between the state and the oil companies over this or that increase or decrease in royalty and tax rates, there was broad agreement that the state should be used to protect and develop the industry by absorbing losses and insulating the oil companies from investment risks. It was the oil industry that leaned on the state via the Tories to transform Alberta from a backwoods rural outpost to a major energy centre and power. The Heritage Fund was even established during this period. Initially, 30% of oil royalty revenue was placed into this fund for the purpose of investing in special development and capital investment projects. At this time, before the world economic crisis of the 1970s, the bourgeois of Alberta were still confident enough in capitalism that it was making plans for the future. Whereas they used to plan years and even decades ahead, they now have no plans and simply chase profits.
Now in the period of its senile decline, the capitalist class no longer has confidence in society. From investing in society and developing the means of production, the capitalists are now a reactionary parasitic force, plundering state resources and profiting from robbing society blind of its resources and engaging in a general dismantling of the productive forces. In Alberta, this is symbolized in the changes made to the Heritage Fund. Royalty money is no longer funnelled into the savings fund but is funnelled directly into the government’s revenue stream. There is no saving for the future, because there is no confidence in the future. Thus, it’s spend now and pursue immediate profits; it’s oil before butter.
In many ways, the bourgeois in Alberta have been at the forefront of this shift in the consciousness of the ruling class. Alberta is the heartland of the Canadian right wing, whose ascendency and eventual rise to power via the Harper Conservatives more or less mirrors the rising dominance of the oil industry, the decline of manufacturing in Ontario and Quebec, and a shift in economic and political power from the East to the West as a result.
While the heart of the Harper Tories is from Alberta, the “blues” have essentially lost the very party from which they sprang. Indeed, the chief Wildrose strategists and aides are Harper’s chief strategists and aides, who ran his campaign for leadership of the Conservative Party and his recent electoral campaigns. There is a direct link between the rise of the Conservatives federally, the shift in dominance to the West and oil in the Canadian economy and politics, and the probable demise of the Liberals federally and the PCs in Alberta.
The reasons for the collapse of the federal Liberals and the Alberta Tories are the same. Firstly, they are in the process of being abandoned by the ruling class. The economic crisis means that the bourgeois can no longer afford the reforms of the past — but what’s more, the recent shocks to the world economy compel the bourgeois to prepare an even more ferocious assault on the working class as they continue to gut the state, attack living and working conditions, and prepare for a major struggle with the working class. The bourgeois abandons the centre not only because it can no longer afford its platform, but also because it needs strong political representatives who can take on the working class and ram through deep austerity packages.
When the Stelmach/Reford wing came to dominate the Tories, the oil industry lost partial control of the party that had been its vehicle of choice for 40 years. The needs of oil had utterly dominated politics for years, virtually unopposed. They enjoyed generously low taxes and massive tax breaks. Alberta’s natural resource royalties were amongst some of the lowest in the world and they had an aggressive right-wing government that attacked the conditions of the working class mercilessly.
The Stelmach/Reford governments began to subtly reverse the policies of the Ralph Klein years. While still generally delivering cuts in the form of infrastructural reorganization, some cash was injected into social programs and infrastructure and money was funnelled towards the teachers’ pension liability. Some cuts to education were also reversed. This wing, above all, seeks stability, and were attempting to balance between the classes to put out the most acute social fires which could become flash-points for broader struggle.
The government also began to enact legislation increasing its power to expropriate and dictate development of private land, which launched a bitter struggle with the party’s rural base.
This is where Wildrose finds its beginnings — in the revolt of the reactionary rural populists in the Tory party. This element eventually grouped around two right-wing parties on the fringe of the Alberta politics — the Alberta Alliance Party and the Wildrose Party of Alberta, who eventually merged to form the Wildrose Alliance Party, as it is officially registered.
But the major question that drove the split, and the rise of Wildrose, was the question of oil money. The Stelmach government, reflecting the aspirations of the slightly more enlightened wing of the bourgeois, announced $2-billion in funding for carbon capture technology in the oil industry. This plan was eventually re-proposed by Redford, who announced a $3-billion package to promote research and development, with a future plan to transform Alberta into the leading international centre of advanced technology and research. This measure was furiously opposed by the oil industry, who have no interest in investing in research, development, or in the future in any way, as best expressed by Wildrose.
The final straw for the oil industry, and eventually many Tories with the closest ties to the industry, was when the Stelmach government announced a review of oil revenues. The move was popular with the workers and farmers in the province, who were increasingly aware of the massive contradiction between the increasing poverty, decades of deep social cuts, and collapsing infrastructure in the province, and the billions in wealth being generated by oil and gas alone. Other oil rich areas, such as Norway, had benefited from its oil wealth, and after years of being told “there is no money” for social services or investment in infrastructure, the people began to question how that could be following 20 years of boom.
The oil industry, and its allies primarily in the countryside and small towns, were ferociously opposed. The American oil industry looked on with concern as there were whispers about the “Chavez of the North”. Despite the fact that Alberta had some of the lowest oil royalties in the world and some of the lowest corporate taxes in North America, this extremely timid move on the part of the Stelmach government was met with feverish opposition.
In the end, although Stelmach rejected most of the review’s recommendations, which acknowledged that Alberta was being shortchanged by the oil companies, he did increase royalties by approximately 20%. The boardrooms in Calgary would not stand for this, and thus they abandoned the “big government” Tories and began to seek another political vehicle.
The conditions were set for the rise of Wildrose. With the rural base and old Klein rump in the Tories alienated by the “big government” approach of the Stelmach/Redford wing, and with oil now actively seeking a new political representative, the money began to flow into party coffers and the party had found its base. While the Alberta Alliance Party had received just $97,000 in contributions in 2007 in the year prior to the formation of the Wildrose, it was able to basically double its funding every year — to more than $230,000 in 2008, $700,000 in 2009, and reaching $1.8-million in 2010. The most recent figures show that the party was able to raise $2.7-million last year, nearly as much as the Tory power machine. While some of this money comes from individual members, the primary source is from the patch and the boardrooms in Calgary.
This process was accelerated by the Great Recession of 2008-9. All the old contradictions that had been accumulating in the party for decades burst through to the surface as a result of the economic crisis. It wasn’t long after Stelmach increased royalties that the banking crisis of 2008 hit, causing a massive fluctuation in oil prices that sent the Alberta economy into a tailspin. In April 2008, Stelmach’s Finance minister forecast a surplus of $1.6-billion for 2008-9. By August, this had been revised to $8.5-billion on the basis of surging oil prices. The estimate in April was based on an average price of $78 per barrel, but massive increases in the price pushed the average estimated price to $119.25. Everything was good and the future looked bright.
Then, like a bolt from the clear blue sky, the bottom fell out of the world economy and with oil prices now falling to $55 per barrel, the government surplus was revised down to $2-billion. With the economic crisis spiralling out of control, by the start of next year the government was projected to run a $1-billion deficit. With the economic situation still worsening, the budget for 2009-10 anticipated a deficit of $4.6-billion — the first deficit in over a decade and the largest in the province’s history. To give an idea of how hard the crisis impacted the province, there was a record high of $20.7-billion invested in the oil sands alone in 2008, but investment fell by 50%, to just $10.6-billion, in 2009.
Everything had suddenly turned into its opposite — oil, long the source of stability for the province, the economy, and the government, was now the primary source of instability. The “Alberta Advantage” — the massive dependence of the province on the price of oil, whether in terms of economic performance in general or in terms of the government budget — was suddenly a major disadvantage.
The pressures in the ruling class boiled over into a split amongst its political representatives as the crisis continued to solidify these divisions. The Redford wing, being slightly more far-sighted, recognized the danger that the gutted infrastructure represented in terms of social unrest and further instability. They also recognized the inherent danger of the over-reliance on the price of oil, and desired to, at least partially, develop the economy in order to find mechanisms to insulate the province from crises on oil markets, similar as to what was done in Norway, where the bourgeois have stashed away hundreds of billions in oil royalties and taxes. This wing of the bourgeois had awoken from the orgy of the boom and found that they had nothing, absolutely nothing, to show for the 20 years of oil boom — and found that it craved cash and investment. Faced with crumbling infrastructure and rising unemployment and inflation, this wing of the bourgeois can at least see the dangers to the very system inherent in the situation. Above all, they sought stability and wanted to hold the course, believing fully that capitalism can be managed and regulated. They are also not blind to the international situation, and recognize that the massive strikes taking place in Europe could easily erupt in Alberta given the intensity of the pressure on workers and farmers for the past 25 years or more.
But the majority of the bourgeois of Alberta, led by the oil industry as it mobilizes its populist rural base, abandoned this approach long ago. They are patently not interested in stability, but desire a wholesale assault on the workers and farmers of Alberta, in order to increase profits. The bourgeois during the senile decay of capitalism toboggan down the hill blind towards disaster, the but the oil companies in Alberta, supremely short-sighted and arrogant, willfully risk social and economic instability in their blind pursuit of profits. They no longer have confidence in society, and are not willing to invest. Whether naïve or cynical, they simply care about squeezing further profits out of the province. As the bourgeois abandoned the centre federally, so too will the Alberta Tories be ditched by the ruling class in favour of Wildrose, a party that much better represents its interests. The ruling class across Canada is preparing for a mighty battle; they have seen the mass strikes in Greece and Spain and fear what may occur here. This, in part, explains the Wildrose’s support for the establishment of a provincial police force, for example. Couched in the guise of the aspiration of the whole province, it is the ruling class preparing for the events to come. Just as “guns before butter” for Harper means increasing the military budget while slashing social spending, “oil before butter” for Wildrose means gutting social infrastructure and social services while spending millions on a police force that can better protect the interests of the oil boardrooms in the highrises of Calgary.
From the point of view of the left, the situation in Alberta may seem hopeless. While we may be able to rejoice in the possible defeat of the Tories and the end of their 41-year reign, we very quickly realize that what may replace them after the election is an even more right-wing party. This election battle between Wildrose and the Tories is essentially the continuation of the decades-old faction fight in the PCs. But it is more than that as well; the same class forces that drive the ruling class to abandon the centre and coalesce around the Harper Tories will drive a profound realignment in Alberta politics. Whether the Tories lose the election or not, they face an inevitable decline, similar to the defeat of the Liberals federally. It won’t be the Klein legacy that is finally soundly rejected should Wildrose win, but in fact it will be the Klein legacy and its policies that make a triumphant return in the form of a new party.
In either case, the victory of either the Tories or Wildrose will be disastrous for the workers and farmers of Alberta. Neither party can hope to implement their policies without either increasing oil royalties or tax revenue, something which is extremely unlikely, or implementing a deep austerity package with further cuts to services and infrastructure. Under conditions of economic crisis, any attempt to restore the economic equilibrium of Alberta can only lead to social instability, and any attempt to restore the old social equilibrium will only lead to further economic instability. As oil returns to political dominance, the other wings of the bourgeois will fall into line as the class struggle intensifies and the centre continues to collapse.
Any limited stability that could be achieved under a Tory or Wildrose government will depend on the price of oil remaining stable. Any instability in the oil industry or major shocks in the world economy will immediately mean economic and political instability in Alberta. In either case, whether a Wildrose, Tory, or some sort of minority government, in the event of further economic shocks or negative fluctuations in the price of oil, both parties would engage in an all out war on the working class with a series of massive cuts and attacks.
Regardless of the outcome of the election later this month, instability and turbulence are on the horizon for Alberta. The split in the Alberta PCs reveals a significant split in the ruling class, reflecting the deep social crisis being prepared. The class struggle is having a profound impact on the political institutions of the ruling class. The intensity of the class struggle has torn asunder the very symbol of Alberta’s stability, the PC party, once a powerful, monolithic tool in the hands of the ruling class of the province. This split, like the initial crack in a dam, will open the floodgates for the political expression of other social and economic pressures and class forces. The workers and farmers of Alberta, under the crushing dominance of the oil industry, have yet to have their say or express their will. They must break free from the crushing domination of the bourgeois parties. Events in Alberta will transform the organizations of the working class from top to bottom, just as they are now transforming the organizations of the ruling class. As the bourgeois realigns itself politically, a process through which the people of Alberta will learn hard lessons, the working class too will begin to seek a political expression, and coalesce around its traditional mass organizations, providing the NDP with a real opportunity to become the voice of workers and farmers and galvanize the struggle against capitalism and the years of “oil before butter”.
Postscript: What the election results tell us
The Alberta election took place as this article was going to press. This allows us an opportunity to briefly analyze the results.
Contrary to all the polls and noise in the media, a Wildrose majority did not materialize. The Tories were able to retain their majority with Wildrose now as Official Opposition, tossing out the Liberals from the role they have long held in the province.
It would seem that a significant swing was underway over the weekend prior to the vote, with the PCs trailing Wildrose 41% to 32% on Saturday, still behind 38% to 36% on Sunday, and finally claiming a 44% to 34% advantage in Monday’s election.
With voter turnout slightly higher than in 2008, many had predicted that the undecided voters going into Monday’s election would vote Tory, making such a swing possible, with many predicting either a Tory or Wildrose minority, or slim majority. While the Tories picked up support with the undecideds, it would also seem that Wildrose support was weaker than expected as the Tories were able to make gains against them across the board — rising by around 10 points in the polls over the weekend in Calgary, Edmonton, and even in rural areas, pulling support from across all parties.
The initially high support Wildrose saw in the cities evaporated as the election neared. There was no small push in the province towards strategic voting, which explains some of the loss of support the NDP and Liberals suffered at the hands of the Tories. Alberta has seen a large influx of immigration over the past decades as people from across the country and the world move there in search of work. The workers and middle class elements in the cities, for the most part more cosmopolitan and enlightened than those in rural areas, were clearly turned off by the inflammatory homophobic and racist statements made by Wildrose candidates. While many probably voted Tory holding their noses (whether coming from the left or right), it seems that most preferred the devil they know in order to prevent the devil that scared them to death from winning.
There is a clear urban and rural divide in the province, with Edmonton and Calgary voting majority Tory, with four NDP seats in Edmonton, and the Liberals picking up two in Edmonton and a further three in Calgary. Wildrose was shut out of Edmonton and picked up only two seats in Calgary, winning 15 others primarily in rural southern Alberta.
While the NDP lost support over the weekend across the board, in Edmonton and Calgary and rural areas, support in terms of the popular vote was up slightly. The NDP seems to have suffered as a result of the strategic voting that took place. Far more indicative of the polarization in the province was the collapse in the Liberal vote, which collapsed from just over 26% in 2008 to just under 10% in this election, dropping from 16 seats in 2004 to nine in 2008, and now finally to five. The old dichotomy of the “centre” Liberals versus the “right” Tories has collapsed, as the Tories have shifted to the “centre” under the Red Tory leadership of Stelmach/Redford, and Wildrose has taken up the right.
While the Tories have maintained their majority, the election result and the rise of Wildrose mark a significant development in provincial and national politics, as well as in the class struggle. The Tories will find it difficult to maintain their support. While they have until now managed to pull off their balancing act, under the pressure of events, their electoral support will split on class lines. Each concession to the unions, each victory gained by the working class, such as minor injections of cash into social spending, will be intolerable to the bourgeoisie will increasing drive Tory support into the arms of Wildrose, waiting in the wings and all ready to march on the warpath against the working class.
On the other hand, while the Tories grabbed support of those in the cities on the basis of defeating Wildrose, it is still a party of capital, and as such, a Tory government will be forced to attack the working class, especially in the event of instability in the price of oil. The workers and farmers of Alberta, in particular those who voted Tory even as they held their noses out of fear of Wildrose majority, will be increasing forced to seek class solutions in the face of Tory attacks. With the bourgeois and reactionary rural elements coalescing around Wildrose, the working class and rural labour elements will be forced to abandon the Tories too, driving them into the arms of the NDP.
This will drive the continued realignment of Alberta politics as it has driven a realignment federally, leaving the NDP with an enormous opportunity to make serious gains in the “belly of the beast”.