From Keynesian Consensus to Neo-Liberalism to the Green New Deal

75 years of income inequality in Canada
March 2, 2021
587.01 KB40 pages

This report tracks Canadian income inequality through 75 years of growth and recessions and speculates about the post-COVID-19 future. It emphasizes the importance of the economic paradigms informing the public policies which have shaped, and will shape, inequality and how the problems that one paradigm could not solve have informed the emergence of the next paradigm.

Although the Keynesian consensus on the importance of full employment to balanced growth and social stability enabled growing real wages and stable inequality, it was replaced, after a surge in inflation in the 1970s, by Neo-Liberal policies that emphasized budget balance and low inflation. But slowing growth and the concentration of income gains at the top produced widening income gaps, increasing discontent and political instability—even before COVID-19 hit. In the post-COVID-19 era, the Green New Deal emphasizes social and environmental sustainability, and is reflective of the economic policy changes that likely lie ahead.