Dominion of Capital: The Politics of Big Business and the Crisis of the Canadian Bourgeoisie, 1914-1947 by Don Nerbas (review)

Through the biographies of five businessmen, Don Nerbas addresses the response of the Canadian bourgeoisie to the “crisis of capitalism” following World War I. An introduction lays out a useful context for the analysis and a brief concluding chapter pulls together the main findings.

The biographies are well chosen. Howard P. Robinson’s control of the media, utilities, and the pulp and paper industry in New Brunswick underscores the unique economic development of the province and conjures up images of the modern-day Irving empire. The enigmatic Charles Dunning’s transition from champion of cooperative marketing of prairie wheat to the Dominion minister of finance in the 1930 is as perplexing as Nerbas’ account in insightful. Edward Beatty’s troubled tenure as head of the Canadian Pacific Railway highlights the central role of railways in Canadian economic history and their transformation in the inter-war period. Sam McLaughlin’s exploitation of the peculiarities of the Canadian tariff structure and imperial preferences allowed him to build the prototypical branch-plant automobile assembly operation that would come to characterize manufacturing in Ontario. Finally, C.D. Howe, often invoked as the poster-boy for state-managed capitalism in the post-World War II period, receives thoughtful treatment that transcends many previous, simplistic depictions.

This was a masculine, “Anglo-Celtic,” club. Little more than passing comment is necessary to account for the absence of women on the list. In contrast, why no French Canadians are relevant to the story deserves a fuller explanation. Indeed, a case study of how a nascent French-Canadian entrepreneur was excluded from the club might reveal as much or more about the machinations of the Canadian capitalist class.

Nerbas accepts the view that, in the National Policy period, Canada’s economic and political structure was geared to western settlement and the export of staple products to Europe. The end of the wheat boom followed by the collapse of export markets during the Great Depression exposed the fragility, if not the illusion, of the national economy. What ensued was a not just a crisis in accumulation, but a “crisis in legitimacy.” The search for solutions is largely an account of the failure of capitalists to act as a coherent class. Despite a shared “mentalité,” interlocking corporate directorships, and the social networks of the Mount Royal or St. James Club, they lacked the capacity to act collectively in order to establish the conditions for a new regime of accumulation. Robinson’s deeply conservative ideology prevented him from perceiving a broader role of the state in supporting private capital; Dunning, as minister of finance, proved incapable of responding to the collapse in aggregate demand and was only reluctantly cajoled into presenting Canada’s first Keynesian-inspired budget in 1939; Beatty did not supersede the earlier identification of state action with support of the railways, nor did he comprehend the need to redefine the role of transportation infrastructure in a rearranged economy; and McLaughlin’s parochialism and paternalism, exhibited in his resistance of industrial unionism, contributed to the historic 1937 auto-workers’ strike.

Canadian capitalists, however, were not alone in the failure to grasp the underlying causes of, or find solutions to, the Great Depression. Three Royal Commissions were indicative of both the extent of the crisis and the reliance of Canadian capitalists on the state to sort out the mess. The Macmillan Commission led to the establishment of the Bank of Canada in 1932; the Royal Commission on Railways in 1931–32 addressed the folly of over-expansion in the industry and led to the creation of the publicly owned Canadian National Railway out of the assets of the bankrupt private ventures; and the Royal Commission on Dominion-Provincial Relations (1937–38) sought to reform an antiquated system of public finance. Yet prior to absorbing the lessons of Keynes’ General Theory, Canadian economists – Underhill’s garage mechanics of capitalism...