The Bank of Canada: In Crisis and Beyond

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A Socialist Project e-bulletin ... No. 2110 ... June 2, 2020

The Bank of Canada: In Crisis and Beyond

Scott Aquanno

Viewing the COVID-19 pandemic as a purely exogenous shock, Canadian economists and policymakers have tended to predict a quick return to economic growth once health restrictions are lifted. As an account of current events, this turns a blind eye to the uneven forms of adjustment produced by years of neoliberal cutbacks and how these both make a quick recovery unlikely and impose the burden of loss on care workers, racialized populations, and the working class more generally. Moreover, such framing of events warns of a new age of hyper-austerity when the health crisis abates, as governments either use debt to justify rollbacks or passively embrace financial discipline. The further erosion of public planning and investment this would entail makes avoiding another lost decade and addressing the environmental crisis ever more difficult to imagine. And yet, while many progressive commentators have called out these contradictions, not enough has been done to rethink the operation of key neoliberal institutions and put forward practical reforms that ultimately challenge... their class constitution.

This reflects above all in the reluctance to see the Bank of Canada (BoC) as anything more than a neutral arbiter of the nation’s financial and monetary stability. Despite the bank’s obvious economic power and the key role it continues to play backstopping fiscal intervention during the pandemic, there has been very limited debate about its evolving responsibilities and the opportunities and limits these pose for democratic reform and just transition. At work here is the assumption that the bank is a relatively static and purely technocratic institution with limited political capabilities. Starting from this position, we can be easily fooled into ignoring the bank’s institutional adaptability and political saliency, and into thinking it can be magically reborn as a progressive institution.

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