Introduction

Prior to the 1920's, Canadian politics took place within the confines of the recognized political establishment: the Crown; the ruling party; the opposition; government bureaucracy; and accepted political channels. During the 1930's however, radical political alternatives stood in sharp contrast to the political establishment, and these contrasts were highlighted by one organization in particular: the League for Social Reconstruction (LSR). While other alternatives attempted to update government policy via the existing system, the LSR sought to alter not just policy but the very institutions that produced policy. In an environment dominated by big parties and political officialdom, what prompted development of the LSR?

The Great Depression. Economic crisis swept across Canada and left mass unemployment in its wake. The economy had boomed during the late 1920's, and showed no sign of weakness, let alone Depression. What had gone wrong? For the LSR, the problem was plain: laissez-faire capitalism and governance. The "free" market was anything but. Politicians worked closely with business, securing interest-free loans, developing tariffs, and managing labour disputes; in short: manipulating markets. A small group of political businessmen controlled public policy and economic development, and guided the centralization of finance and power into private hands. Mass unemployment marked the Depression, and underscored financial inequity. In the eyes of the LSR, the problem facing Canada was not the Depression, it was a corrupt political economy.

Faced with the suffering wrought by a profiteering political establishment, a group of men and women were united in their resolve that this could not stand. Three key influences stood out among the members of this group: religious affiliation, maturation in an environ of war and urbanization, and intellectual cultivation in the university environment. These characteristics defined the group's ideals, and set them apart from other social groups as a new elite; an exclusive group of righteous intellectual radicals. These were the founding members of the LSR.

Believing the existing system was not practicable, the League set about establishing a new system. The solution to end this and all depressions was social planning, and the transformation of Canada from a royal commonwealth into a socialist commonwealth. To achieve this transformation, the League would perform research, and apply the results toward public education and public policy. However, because the system was not only corrupt but corruptive, the League would lay their foundations beyond politics. Public education would take the form of books and lectures, and influence over policy would be achieved through the institutionalization of expert intellectuals. Politicians would call upon the League's extra-political organization to perform research, and recommend policy. In this way, the League hoped to minimize partisanship, and influence government policy writ large. However, the ideals of the LSR found them working closest with one political party in particular, the avowedly socialist Co-operative Commonwealth Federation, or CCF.

This paper will focus on the political and economic conditions that precipitated formation of the LSR, examine the moral and intellectual aspects that contributed to their radicalism, and survey the group's influence.

Political Economy and the Great Depression

The Depression resulted in a protracted period of mass unemployment, and it was the impact unemployment had on Canadians that motivated the LSR into action. National unemployment peaked in the first half of 1933 at 32%; but 32% was only the average, in some towns unemployment reached nearly 50%. The LSR were roused, as they faced the ravages of unemployment in their classrooms, churches, and offices; "Everywhere hopelessness. A country without a purpose ... An industrious and intelligent people going to waste in idleness and despair."

For the LSR, the Depression was the inexorable result of laissez-faire philosophy. This philosophy had spread since the Act of Union in 1841, which began a transition from power structures that favoured aristocracy to structures that favoured business. Responsible government arrived shortly after the union, and shifted influence from the governor to ministers. Power had previously been focused in the governor, but was now divided among ministers. No meaningful administrative structures were implemented to ensure that ministers remained responsive to the public, and ministers aligned themselves with capitalists. Free market governance became the consort of free market capitalization. Legislation regulating conflicts of interest did not exist, and politicians worked openly with business. One former Prime Minister made the marriage of business with politics strikingly clear when he stated "my politics are railroads." The developmental history of Canada's political economy was central in the analysis of the LSR, and they later observed that "[m]onopolies are not an unlucky accident in our economic system, they are our economic system."

Previous market fluctuations had not created the need for federal unemployment programs. Policy and tradition dictated that assistance was a local issue, because traditionally it had been locally tractable. Under the British North America Act of 1867 (BNA), government received most revenue collection powers, and provinces became responsible for social relief, education, and health care. However, 60 years had passed since the BNA, and this was a different economy. The National Policy dramatically increased prairie populations, and when Depression hit, the prairies in particular could not manage social relief, and asked for federal aid. Federal politicians believed free markets would rebalance themselves, and refused assistance. Liberal Prime Minister William Lyon Mackenzie King refused to attempt relief, claiming it would endanger the national budget. Conservative Prime Minister Richard Bedford Bennett declared that provinces should reduce wasteful spending. Laissez-faire ideology underpinned the policies of Liberals and Conservatives alike. Provinces became disgruntled, relationships with Ottawa became strained, and so it was that the crisis of capitalism triggered a crisis of federalism. "Here was the proof that the system built by the businessman and the old party politician was defective. The men who had presided over the construction of a complex modern civilization apparently did not know how to keep it running smoothly."

Laissez-faire individualism had proven fatal. Business could not provide stability, and government would not try. The injustice of this political economy was of primary importance to the founding members of the LSR, who perceived a role for government far different from the one it had thus far assumed, and an important role for themselves that did not yet exist.

Moralism, Intellectualism, and Elitism : The Foundation of the LSR

In November 1930, the problems of political economy were the focus of discussion for a group of "radically minded" professors, organized by University of Toronto Historian Frank Underhill. At the same time in Montreal, McGill University Law Professor F.R. Scott was preparing a book examining the same problems. In August of 1931, the two men met and discovered they had developed a similar analysis; instability and depression were born of a capitalistic political economy, and any permanent solution would be born of socialism. Underhill proposed the formation of a research organization, styled after the British Fabians, modified to suit Canada. The organization's ideas would be spread in two ways; directly into the public mind through local associations and literature; and directly into government through an institution of intellectual elites, that politicians could requisition to perform research and recommend policy. Scott agreed. Underhill also believed a socialist political party would shortly appear, and that there "should be a group of intellectuals that could provide the new party with a coherent platform." The men returned home, and Underhill established a group in Toronto while Scott did the same in Montreal.

These groups shared one important belief; that the objective study of social science yielded an inescapable conclusion: scientific socialism. Theirs was a scholarly disposition, and shared intellectualism aroused an elitist camaraderie. Educational distinction provided the group with a sense they were distinguished from the public and public servants; that amongst all reformists, they alone possessed the expertise necessary to develop corrective policies. The result was a highly principled and elitist political reformism, however this reformism was not solely rationalistic in origin.

The twin inclinations of intellectual solidarity and moral solidarity motivated these academics. They were endowed not only with higher education, but also higher purpose. Moralism was important to the group, and had been engendered through lifelong religious association. Though not all members remained religious in adulthood, most had been influenced by religion since youth. A partial survey of the League's leading members reveals the following; Frank Underhill: Flavelle scholar, raised a Presbyterian; F.R. Scott: Rhodes scholar, son of an archdeacon; Eugene Forsey: Rhodes scholar, son of a methodist clergyman; Eric Havelock: respected economist, Christian Socialist; David Lewis: Rhodes scholar, man of the Social Gospel.

We are thus presented with three important commonalities among the LSR's founding members. Religion imbued an indelible morality; war and urbanization prompted sober reflection on suffering and reform; and modern education in the social sciences produced a propensity for rational analysis and a deterministic bent. This was a group of men and women who understood the Depression as no other.

Scott and Underhill's groups exchanged drafts for a manifesto, attempting to strike a balance between pragmatism and radicalism. Their goal was to motivate all Canadians to critically examine Canada's political economy, and the group did not want radicalism scaring potential members away. This was no small order, and drafts were exchanged for many months. Eventually, a meeting was scheduled in Toronto, for February 23, 1932. Seventy-five men and women attended the meeting, ratified the manifesto, and discussed the selection of a name. The Montreal group suggested the "League for Economic Democracy", however the winning moniker came from the Torontonians, and when proceedings concluded the League for Social Reconstruction was born.

Thus organized, the League set about the task at hand. "Convinced that the present economic system [was] unjust and inefficient," the LSR "set themselves to discover the necessary measures of reconstruction and to formulate them into a policy that would fit Canadian conditions."

Social Planning: The CCF and The Royal Commission

Later that year, the socialist party Underhill predicted materialized as the CCF. The CCF were social democrats, and held the same ideas as the LSR regarding state theory, and hence the CCF were the LSR's best option for access to parliament. The CCF was also the best option for another reason: J.S. Woodsworth, honorary president of the LSR, was also leader of the CCF. Because the LSR had been established outside the political system, the question was how to structure the relationship between the League and the CCF.

Underhill advocated affiliation, however Scott and Woodsworth had reservations. Scott felt that until the League developed its own character, it should focus on research. His concern was that affiliation would politicize the organization, and ward off those drawn to the League by its official non-partisanship, especially civil servants. People had joined based on the stated goal of education, and it was not clear they would stay if the LSR became the organ of a political party. Woodsworth proposed a solution for members of the LSR who desired affiliation -- CCF Clubs. Club membership brought affiliation, and LSR members could thus affiliate with the CCF independently of affiliation with the LSR. The LSR could now move forward as an independent research organization.

To promote and improve their ideas, the League discussed political economy with intellectuals and politicians across the nation. The LSR believed that because the Depression was national, its solution would be national as well, and they found sympathetic analyses amongst the intellectual community. Intellectuals concerned with social reform began to contemplate national reform. Common ground between the LSR and intellectual elites provided a program for action. Intellectuals needed to convince Canadians that government should assume an interventionist role; financial and social policies should be implemented at the national level, and stability would flow top downwards. Such an arrangement was not however possible under the BNA -- the constitution would require modification.

By the mid-1930's, modern intellectuals found work in government, and political bodies began to seek advice from extra-parliamentary intellectuals. In 1935, intellectual elites were included in a national conference on Dominion-provincial relations, however the conference's primary purpose was to stop the flow of federal money to provinces -- not quite what intellectuals had in mind. The initiatives put into place after the conference proved unproductive, and the movement was transmuted into the Royal Commission on Dominion-Provincial Relations. The Commission was placed under the control of modern social scientists, including LSR member Frank Scott, and was instructed to provide recommendations for securing the economy and the federation. In 1940, the Commission reported that the Depression resulted from problems in the definition of the Canadian Dominion; the BNA had developed in the context of a wheat-timber-fish economy, and could not support Canada's mixed and industrializing economy. Industrial growth had increased the complication of economic activity, but the political system had not made corresponding advancements. To solve the Depression, the taxation powers and fiscal responsibilities of the federal and provincial governments required readjustment. The government should control all unemployment insurance programs, assume all provincial debts, collect all income taxes, and make equalization payments to needy provinces.

Premiers met the Prime Minister in 1941 to discuss the recommendations, and with war raging in Europe, the Premiers agreed to the Commission's proposals. After the war, Prime Minister King was eager to preserve the government's new powers, and a separate agreement was reached with the provinces, making the Commission's recommendations into permanent policy. Politicians of all stripes recognized the utility of central planning in mitigating against the problems experienced after World War One. Reflecting on the Commission, historian Doug Owram noted that the report "was not so much the product of the public hearings as ... of the intellectual network of the 1930's ... Indeed, the results of the study had been conceived even before its appointment." The report itself became a vehicle for shaping data in such a fashion that it supported the conclusions of the intellectuals who wrote it, with an eye towards converting its readers into advocates of centralization.

Less than ten years after their formation, the ideas of the LSR had proven instrumental in introducing successful social planning measures into government. Disenchantment with socialism however had grown as World War Two approached, and the LSR itself was reduced to the point of dissolution. With CCF related activities expanding, the League finally disbanded in 1942.

Conclusion

Industrialization, urbanization, war, and the Great Depression led to formation of the LSR. Industrialization promoted urbanization, and the creation of elaborate bureaucratic systems, and for the LSR, here began the problem. The complexities of economy and society had grown, but because government was infused with laissez-faire ideology, it did not regulate finance or industry -- at least not in the public interest. Canada's political economy permitted war and Depression to devastate Canadians, and the very existence of poverty in the midst of plenty was proof positive of capitalism's self-destructive nature.

Rationalistic moralism led the League to believe their expertise could stop the suffering of fellow Canadians, and rationalistic elitism led the League to believe they were best situated to unpack the intricacies of modern society. The League felt they should provide expert advice to government, but socialist ideology led the League to believe that Canadian government was debauched. Hence, in order to guide Canadians toward socialism, the LSR would institutionalize expert intellectual advice in an extra-political organization, and act as an independent adjunct to public policy formation.

Promoting socialism, and working beyond politics, the LSR was able to transcend party alliances, and worked with both intellectuals and politicians to quell the Depression through fiscal centralization and national social assistance. The significance of the League then was its role as a concentrated group of intellectual elites who left a moral imprint on government, and made social planning relevant to Canada.