From Poulantzas to Leo Panitch and the Question of Canada

Abstract

Reading Nicos Poulantzas's Political Power and Social Classes in a study group this fall gave me an opportunity to pursue a longstanding interest in his debate with Ralph Miliband over the capitalist state and its significance for Leo Panitch's work in Canadian political economy. I trace the disagreements among Poulantzas, Miliband and Ernesto Laclau, particularly their accounts of the state's relationship to class power and the political formation of national identities. Panitch's criticism of Canadian dependency theory provides a historically specific perspective on these debates, showing how Canadian governments and capitalists participated in building the country's economic integration with the United States. I also return to George Grant's Lament for a Nation, whose philosophical criticism of continental integration offers another understanding of what may be lost when sovereignty is reduced to formal independence. Against this history, I examine Mark Carney's appeals to Canadian national unity during the trade conflict with Washington and consider whether his government's investment-led programme can strengthen democratic control over economic development or leave the existing distribution of economic power largely intact.

This fall, I joined a study group on Nicos Poulantzas's Political Power and Social Classes, organized by Daniel Tutt and Mathilde Chevalier.¹ I had wanted to read it for some time, drawn especially by Poulantzas's debate with Ralph Miliband over the nature of the capitalist state and its significance for Leo Panitch's work in Canadian political economy. I was also interested in Ernesto Laclau's intervention, having encountered his work through his later association with Slavoj Žižek, whom he helped introduce to English-speaking readers. What drew me to these intellectual relationships was the opportunity to better understand how Marxist political theory had developed through disagreements over the state, social classes and political power, and how those arguments might illuminate the historical development of Canadian capitalism.

Panitch provided an especially important connection between these debates and the Canadian political tradition. Having studied with Miliband at the London School of Economics, he returned to Canada and developed an account of the state that engaged the controversies within Marxist political theory while remaining attentive to the country's distinctive historical circumstances. His contribution to The Canadian State: Political Economy and Political Power, published in 1977, examined the role Canadian governments had played in organizing capitalist development, including their participation in constructing the economic dependence upon the United States that Canadian nationalists had long criticized. Panitch subsequently challenged interpretations that treated this dependence primarily as a consequence of American domination, arguing that Canadian capitalists had themselves pursued continental integration in accordance with their economic interests. His work thus brought the controversy over capitalist state power into the history of Canadian economic development, where questions of national sovereignty were inseparable from the political institutions and class interests through which that development had been organized.

The renewed conflict between Canada and the United States has made these arguments particularly relevant. Mark Carney has made appeals to Canadian sovereignty and national solidarity central to his government's response to Washington's trade policies, drawing upon growing dissatisfaction with an international economic order whose institutions he has long helped administer.² Yet his programme for national renewal continues to depend heavily upon attracting international investment, expanding commercial relationships and committing public resources alongside private capital. Diversifying trade and developing Canadian industries may reduce the country's vulnerability to decisions made in Washington, but the history examined by Panitch suggests that an expanded economic role for the state does not necessarily alter the interests that shape its priorities or determine who benefits from its policies. Revisiting the Miliband–Poulantzas debate, Laclau's subsequent intervention and Panitch's contribution to Canadian political economy provides a way of examining the relationship between Carney's appeals to national independence and the economic programme through which his government proposes to achieve it.

The Intellectual Origins of a Debate

Poulantzas and European Marxism

Poulantzas was born in Athens in 1936 and initially studied law before continuing his education in Germany and France. His intellectual formation reflected the distinctive philosophical climate of postwar Europe, when existentialism, phenomenology, Marxism and structuralism were engaged in a sustained argument about history, human agency and social organization. His early doctoral research in Paris was strongly influenced by Jean-Paul Sartre, whose existentialist philosophy emphasized human freedom, historical circumstances and the practical activity through which people make their lives. Poulantzas's first major work, a study of law and the relationship between facts and values published in 1965, belonged to this earlier philosophical orientation.³

His subsequent development took him increasingly toward Antonio Gramsci and Louis Althusser. Gramsci, the Italian Communist imprisoned under Mussolini, had examined how dominant social groups maintained political leadership through a combination of institutional power, cultural authority and consent. Althusser, a prominent Marxist philosopher teaching in Paris, challenged interpretations that treated history primarily as the realization of human intentions or the unfolding consciousness of a privileged historical subject. For Althusser, capitalist societies had to be understood through the complex relationships among economic, political and ideological structures. Poulantzas drew on these different intellectual traditions without remaining permanently within any one of them. From Gramsci, he developed an interest in how a dominant class establishes political leadership, while Althusser encouraged him to consider the institutional relationships through which a social order is reproduced beyond the intentions of any single group. Poulantzas's own account of the capitalist state would take shape through his effort to understand how those relationships were contested in political struggle.

These philosophical disputes unfolded amid political upheaval. Greece experienced a military coup in 1967, followed by seven years of dictatorship, while France became the centre of the extraordinary student and worker mobilizations of May 1968. Across Western Europe, communist and socialist parties confronted disagreements over revolutionary strategy, parliamentary democracy and the legacy of Soviet communism. The postwar settlement had substantially expanded the economic and social responsibilities of governments, yet political equality coexisted with enormous inequalities in ownership, employment and social power. For Marxist intellectuals dissatisfied with the established alternatives, understanding the state was becoming inseparable from reconsidering the prospects for socialism itself.

British Marxism and Ralph Miliband

Poulantzas had already begun engaging with British Marxist political theory before the publication of Political Power and Social Classes. In 1967, New Left Review published his essay “Marxist Political Theory in Britain,” which examined a controversy involving Perry Anderson, Tom Nairn and the Marxist historian E. P. Thompson.⁴ Anderson and Nairn had argued that Britain's historical development had produced an unusually conservative political order, marked by the persistence of aristocratic institutions and a working class unable to establish independent political leadership. Thompson challenged their interpretation, objecting to what he regarded as its theoretical rigidity and questionable treatment of English history. Poulantzas entered the discussion by examining the concepts underlying the disagreement, particularly the relationship between social classes, political institutions and ideology.

The exchange exposed a disagreement that would recur in the Miliband–Poulantzas debate: the relationship between theoretical explanation and close historical investigation. The editors and contributors of New Left Review were attempting to introduce and develop continental European Marxism within British political debate, while other socialist intellectuals were suspicious of theories they believed placed excessive distance between scholarly abstraction and historical experience. These disagreements were connected with competing assessments of the Labour Party, the British working class and the possibilities for socialist change. They also formed part of the intellectual environment in which Ralph Miliband had established his reputation.

Miliband's own political formation was profoundly shaped by the Second World War. Born in Brussels in 1924 to a Polish Jewish family, he fled Belgium on foot with his father as the German army invaded in May 1940, reached England, and in 1941 entered the London School of Economics, which had been evacuated to Cambridge for the duration of the war. There he encountered Harold Laski, the influential socialist political theorist and Labour Party intellectual whose teaching left a lasting impression on the young refugee. Laski had spent much of his career examining political authority, pluralism, sovereignty and the relationship between democratic institutions and economic inequality. Through the considerable changes in his thought, he held to the conviction that democracy could not be understood without addressing the economic organization of society.

Miliband later recalled Laski's extraordinary generosity toward students and the seriousness with which he approached their intellectual development.⁵ That relationship is especially revealing because it places Miliband within an older socialist tradition concerned with the limits of liberal democracy and the practical problems of political reform. Miliband would become a considerably more systematic Marxist critic of capitalist power than his teacher, but their shared interest in the relationship between class, state institutions and democratic possibility remained significant. The line of intellectual development from Laski to Miliband would eventually extend, through the same institution, to Leo Panitch.

The Miliband–Poulantzas Debate

Miliband's first major contribution, Parliamentary Socialism (1961), examined the political history of the British Labour Party. His argument challenged the assumption that socialist transformation could be achieved simply by electing a Labour government committed to progressive reforms. The party's leadership, parliamentary practices and institutional commitments had repeatedly moderated the demands of the movements that sustained it. Miliband was especially concerned with the tendency of Labour leaders to treat the management of existing political and economic institutions as the principal objective of socialist politics, even when doing so limited the possibility of more fundamental change. These concerns would inform The State in Capitalist Society, published in 1969, in which he sought to develop a broader account of the relationship between capitalist economic power and liberal-democratic institutions.⁶

Miliband's approach was historical and sociological, and it began with people: he investigated the composition of political and administrative elites, their relationships with business interests, and the ways in which economic inequalities shaped the exercise of governmental authority. The state, in his account, was not identical with the government of the day. It comprised a much wider complex of institutions, including administrative departments, courts, the military, public corporations and other bodies whose activities extended beyond electoral politics. The social backgrounds, professional relationships and ideological assumptions of those occupying positions of authority mattered because they helped explain the reproduction of established patterns of power. Yet Miliband did not believe that capitalists personally directed every political decision. The problem was to understand how institutions operating within capitalist societies tended to preserve existing economic relationships even when governments pursued reforms or resisted the immediate demands of particular business interests.

State Power and Relative Autonomy

Poulantzas welcomed Miliband's book but considered its theoretical foundations inadequate. In a review published in New Left Review toward the end of 1969, he argued that the capitalist character of the state could not be established primarily through the personal connections, class origins or ideological commitments of political officials.⁷ What mattered was the position occupied by the state within the wider organization of capitalist society. A government staffed by people who had no direct connection to the capitalist class could nevertheless reproduce capitalist relations of production. Indeed, the capacity of political institutions to act independently of particular business interests might be essential to their role in organizing the long-term political interests of dominant classes.

The resulting controversy is usually remembered as a debate between instrumental and structural theories of the state. Miliband supposedly understood political institutions as instruments manipulated by capitalist elites, while Poulantzas treated their activities as determined by the structural requirements of capitalism. This characterization captures part of their disagreement, but it becomes misleading when treated as a complete description of either position. Miliband recognized the institutional and economic constraints upon political action, while Poulantzas understood political power as involving conflicts among social classes and competing interests within the dominant class itself. Their real disagreement concerned how these relationships should be explained and how theoretical concepts ought to be connected with historical investigation.

Much of the disagreement turned on the notion of relative autonomy, which begins from the observation that capitalist classes are not internally unified and that the immediate interests of particular firms, industries or financial groups may conflict with the wider conditions required for profitable accumulation. Political institutions can consequently act against some capitalist interests while helping preserve the broader social order upon which their power depends. Government regulation, social legislation and public investment may therefore serve several purposes at once, including the resolution of economic conflicts, the maintenance of political legitimacy and the reproduction of capitalist social relationships. For Poulantzas, the state played an important role in organizing competing fractions of the dominant class into a power bloc while simultaneously contributing to the political fragmentation of subordinate classes. The problem was how those relationships became institutionalized and how they might be transformed through political struggle.

Miliband's criticism was that such an account risked establishing the class character of the state through theoretical definitions rather than demonstrating it historically. Treating political institutions as reproducing capitalist domination regardless of their personnel or the consequences of their decisions, he argued, risked making the theory immune to contrary historical evidence. Poulantzas, meanwhile, worried that Miliband's emphasis on the social composition of elites and their institutional connections could mistake the visible personnel of political power for the structural relationships that gave it their particular character. Their disagreement concerned the relationship between explanation and evidence, but it also raised practical questions about the extent to which electoral victories, institutional reforms or changes in political leadership could transform the organization of capitalist society.⁸

Ernesto Laclau and the Politics of Class

The exchange continued during the early 1970s, drawing in other scholars and generating increasingly elaborate disagreements. Among its most consequential participants was Ernesto Laclau, born in Buenos Aires in 1935, whose intellectual development had taken place within the turbulent political culture of Argentina. Laclau studied history at the University of Buenos Aires and became active in the socialist and nationalist controversies of the 1960s, including debates surrounding Peronism and the mobilization of popular political movements. The British Marxist historian Eric Hobsbawm subsequently helped him obtain a scholarship for postgraduate research at Oxford, bringing another intellectual lineage into the increasingly international discussion. Laclau later established his academic career at the University of Essex, where his work on political identity, ideology and populism would become enormously influential.

Laclau's intervention in the Miliband–Poulantzas controversy, published in 1975, was in the first instance a criticism of method. Miliband's studies of elites seemed to him to assemble evidence without the theoretical concepts needed to explain it, while Poulantzas, for all his insistence on the specificity of the political, treated it as one structural level among others and still bound it too closely to class position.⁹ The more lasting contribution came two years later, when Laclau carried that criticism into an essay on populism. Drawing on the Argentine experience of Peronism and on the history of European fascism, he argued that appeals to “the people” and to the nation have no necessary class belonging. They arise from antagonisms between popular sectors and an established power bloc, and they acquire their political meaning only as competing classes and movements articulate them with their own aims, which is why the same national-popular language could serve a socialist movement, a populist leader or an authoritarian regime. Laclau's later work with Chantal Mouffe, and his subsequent study of populist reason, developed these concerns into a broader theory of hegemony in which collective identities are constructed politically rather than given in advance by economic position. That argument helped shape later debates over left populism and political strategy, and it bears directly on the way national pride is now being mobilized in Canada.

Poulantzas replied to Miliband and Laclau in 1976, revisiting the original controversy while acknowledging important limitations in his earlier theoretical approach. The exchange was therefore more than a disagreement between scholars defending permanently established positions. Poulantzas's thinking continued to develop through his investigations of fascism, dictatorship, social classes and the strategic problems confronting European communist movements. By the time he published State, Power, Socialism in 1978, he was increasingly concerned with how the state might be understood as a terrain of social struggle rather than a unified apparatus standing outside political conflict. The democratic road to socialism, in his later account, required the transformation of existing institutions alongside the development of popular democratic movements capable of sustaining political change.¹⁰

Through journals, university seminars and socialist organizations, these arguments reached scholars concerned with how capitalist state power took shape under very different national conditions. In Canada, Leo Panitch drew on the controversy to examine the institutions through which governments had encouraged economic development while drawing the country into increasingly dependent relations with American capital.

Leo Panitch and Canadian Political Economy

From Winnipeg to the London School of Economics

Panitch was born in Winnipeg in 1945 and grew up within the city's Jewish, working-class and socialist communities. His family background gave him an early familiarity with labour politics, social democracy and the institutions through which working people organized their collective lives. At the University of Manitoba, he studied with the political economist Cy Gonick, founder of Canadian Dimension, whose teaching left a strong impression on Panitch and on other students of that generation. After graduating in 1967, Panitch travelled to Britain on a Commonwealth scholarship, entering the London School of Economics during a period of intense political and intellectual activity. It was there that he studied with Ralph Miliband, who later supervised the doctorate he completed in 1974 and whose work on parliamentary socialism and capitalist state power would become a lasting influence.¹¹

The relationship between Panitch and Miliband is especially important for understanding the development of Canadian Marxist political economy. Panitch did not encounter the debate over the capitalist state simply as an external body of European theory to be applied to Canadian circumstances. His intellectual formation was directly connected with the British socialist milieu in which the controversy developed. Miliband was an influential teacher, but also a participant in a political and scholarly tradition concerned with the practical limitations of social-democratic reform. The annual Socialist Register, founded by Miliband and John Saville in 1964, provided an important forum for historically informed Marxist scholarship and political argument. Panitch would eventually become one of its editors, continuing a relationship between intellectual research, socialist politics and public education that extended across several generations.¹²

Upon returning to Canada, Panitch joined Carleton University's Department of Political Science in 1972. His early research concerned the relationship between social democracy, industrial militancy and political institutions, particularly through his study of the British Labour Party and labour movement. These interests were closely related to those of Miliband, but Panitch was also increasingly concerned with the distinctive development of Canadian capitalism. Canada possessed a substantial tradition of political-economic scholarship, associated with figures such as Harold Innis and C. B. Macpherson, whose investigations had challenged narrow disciplinary approaches to understanding economic development and political institutions. At the same time, the expanding role of American capital, the uneven development of Canada's regions, and the limitations of Canadian social democracy were generating renewed interest in the historical character of the Canadian state.

The Canadian State as a Collective Intellectual Project

In February 1975, Panitch delivered a lecture on the Canadian state to the Marxist Institute in Toronto. Two years later, a substantially developed version appeared as the opening chapter of The Canadian State: Political Economy and Political Power, an edited collection published by the University of Toronto Press. Panitch's preface explains that the volume emerged through the collaboration of several overlapping intellectual communities, including the Studies in the Political Economy of Canada group and an interdisciplinary seminar at Carleton University. Contributors circulated manuscripts, discussed one another's arguments and revised their work in response to criticism. The collection was conceived as a contribution to a developing Canadian Marxist political economy, but its participants did not attempt to impose a single theoretical interpretation upon the historical problems they examined.¹³

The Role and Nature of the Canadian State

In the collection's opening chapter, “The Role and Nature of the Canadian State,” Panitch put the international state-theory controversy to work on the history of Canadian capitalism. Its initial discussion of Marxist theory was deliberately accessible, beginning with a humorous caricature of the notion that wealthy businessmen simply issued instructions to the prime minister. The point was to establish that capitalist power could not be adequately explained through personal command over elected officials. Drawing on Miliband, Panitch distinguished between the state acting on behalf of dominant economic interests and acting at their immediate behest. The distinction mattered because capitalist classes contained competing interests, while political institutions needed a degree of independence to organize the wider conditions required for economic development and social stability.

Panitch nevertheless believed that the extent of this autonomy had to be investigated through historical evidence. He was particularly critical of theoretical approaches that appeared to establish the relationship between the state and the capitalist class in advance of empirical inquiry. His chapter therefore identified three major requirements for a Marxist theory of the state: an adequate understanding of the institutions comprising the state, a concrete investigation of their relationships with social classes, and an account of the functions performed by political authority within capitalist society. Drawing on the American political economist James O'Connor, Panitch distinguished between the state's responsibilities for capital accumulation and political legitimation while making coercion an explicit third function. The relative importance and organization of these functions, he argued, could be understood only through the historically specific circumstances of particular societies.¹⁴

Capitalism, Federalism and Sovereignty

Canada mattered to the controversy because its governments had never been merely reluctant participants in economic development. From Confederation onward, the state played an extensive role in organizing the conditions of capitalist accumulation, including the construction of railways, the development of transportation infrastructure, the provision of public utilities, and policies governing land, immigration and investment. Panitch challenged interpretations that treated the growth of public enterprise as evidence of an inherently socialist tendency within Canadian political life. Public ownership could serve the requirements of private accumulation, particularly where business interests depended upon infrastructure or services that were too expensive or risky for individual firms to provide. The expansion of state activity was therefore compatible with the continued domination of capitalist social relationships.¹⁵

Canada's federal structure complicated the analysis further, since provincial governments possessed substantial powers and operated within regional economies characterized by different patterns of ownership, production and investment. The relationship between Ottawa and the provinces consequently reflected more than a constitutional division of responsibilities. It involved conflicts among economic sectors, regional capitalist interests and political institutions that could not always be reconciled within a single national development strategy. Panitch's analysis of federalism was particularly attentive to the capacity of provincial governments to organize competing economic interests and the difficulties this presented for both national economic policy and democratic political organization.

The most consequential problem, however, concerned Canada's relationship with the United States. Panitch was writing amid growing concern over foreign investment, American ownership and the dependence of Canadian industrial development upon external capital. His argument was that Canadian governments had actively promoted forms of economic development that simultaneously strengthened the country's productive capacity and deepened its dependence upon American capitalism. This was not simply a contradiction imposed upon Canada from outside. It emerged partly from the political and economic choices made by Canadian institutions themselves.

The resulting question concerned the substance of national sovereignty. Canada possessed the formal attributes of an independent state and exercised considerable authority over economic development, yet the organization of investment and production increasingly depended upon interests and decisions situated beyond its borders. The existence of a powerful Canadian state did not necessarily establish the capacity of Canadians to determine the purposes of their national economy. Panitch's analysis thus extended the Miliband–Poulantzas controversy into a historically specific investigation of political power, economic dependence and the limitations of democratic authority.¹⁶

He pressed the argument further in 1981, in an essay on dependency and class in Canadian political economy. Much of the left-nationalist scholarship of the preceding decade, including the influential work of R. T. Naylor and Wallace Clement, had adapted Latin American theories of dependency to Canada and portrayed its capitalist class as essentially mercantile, more at home in commerce, finance and transportation than in industry and therefore content to leave manufacturing to American branch plants. Panitch did not deny the reality of foreign control, and he kept the language of dependency, but he insisted that it be understood through class analysis rather than as the condition of a nation dominated from outside. Canadian capitalism, in his account, was an industrial capitalism in its own right, and its integration with American capital had been shaped by Canadian firms and Canadian governments pursuing interests of their own. What made the country distinctive was a kind of rich dependency, in which a working class whose wages approached American levels coexisted with an economy organized to an unusual degree around foreign investment and continental markets. The argument implied that national independence could not be recovered simply by uniting Canadians against American ownership. If important sections of Canadian capital had made continental integration their own strategy, the question was never only how to bring the economy home, but which social forces would control whatever national economy was built and whom it would serve.¹⁶

Although Panitch's emphasis on class and capitalist development clarified the state's role in organizing economic life, it left important aspects of Canadian history insufficiently examined, particularly the country's formation through settler colonialism, the political authority of Indigenous nations, and the ways race and gender shaped its institutions. Nor could the economic circumstances of the mid-1970s provide a sufficient explanation of the increasingly internationalized capitalism that would emerge in subsequent decades. Panitch's own scholarship would undergo significant development, culminating in his work with Sam Gindin on the relationship between American state power and the international organization of capitalism.

The lasting importance of Panitch's Canadian work lay partly in its refusal to treat Canada as a mere illustration of theories developed elsewhere. It demonstrated that the political organization of capitalist societies could assume different historical forms and that theoretical claims about the state had to confront the institutions and conflicts through which those forms developed. In this respect his contribution belonged to a wider Canadian intellectual tradition concerned with national development, political independence and economic power, even as he resisted the nationalist conclusions that much of that tradition had drawn.

Why the Left Is Returning to State Theory

Socialist Strategy After 2008

The financial crisis of 2008 gave renewed force to the problems Panitch and his contemporaries had investigated, as governments demonstrated an extraordinary capacity to stabilize financial institutions while the subsequent politics of austerity revealed whose interests those interventions tended to protect. The experiences of Syriza in Greece, Podemos in Spain, the Labour left associated with Jeremy Corbyn in Britain and democratic-socialist movements in the United States kept the same problem alive under different political conditions: electoral mobilization could transform the prospects of parties and movements without necessarily changing the institutions and economic relationships through which public power was exercised.

Contemporary Thinkers and Intellectual Communities

The study group offered one setting in which these older arguments were being revisited alongside contemporary problems of socialist strategy. Tutt has been developing a broader investigation of class theory, and his recent collaboration with C. Derick Varn, The People Are Not One: Socialist Strategy After Left Populism, critically examines the organizational assumptions underlying contemporary left-populist politics.¹⁷ Tutt and Varn return to a difficulty already visible in Poulantzas and Laclau: movements must bring people with different class positions and political commitments into forms of organization capable of enduring beyond the appeal of a leader or the momentum of an election. That problem helps explain why the older debate continues to matter to contemporary socialist strategy.

Bob Jessop came to the same tradition through a longer engagement with Poulantzas himself. His extensive scholarship helped establish a more historically sensitive interpretation of Poulantzas, one that emphasizes the development of his thought beyond the familiar instrumentalism-versus-structuralism controversy. Jessop's work is particularly important because it examines the state as a system of institutions whose organization makes some political strategies more effective than others, while remaining subject to conflicts and transformations generated through social struggle.³ Such interpretations complicate the idea that Poulantzas offered a closed structural theory in which political action had little significance.

Matthew McManus has kept Panitch's later work in conversation with these questions from a different angle. In a 2022 review for Historical Materialism of Panitch and Colin Leys's Searching for Socialism, which traces the Labour new left from Tony Benn to Jeremy Corbyn, McManus admired the authors' close attention to concrete political events while arguing that they understated the importance of parliamentary politics. He also thought they gave too little weight to the divisions that helped defeat the Corbyn project, including Corbyn's ambivalence over Brexit and the widening gap between working-class voters in the north of England and progressive voters in the cities, and he suggested that their commitment to a classical materialist analysis made those divisions harder to see. The review illustrates the continuing relevance of Panitch's scholarship to disagreements over the relationship between working-class organization, parliamentary politics and the conditions necessary for socialist change.¹⁸

In Canada, a new volume titled The Canadian State, edited by Heather Whiteside and Stephen McBride, returns explicitly to Panitch's 1977 collection while examining the transformed circumstances of Canadian capitalism. Its chapters move from extraction, energy and land to finance, employment and public services, and from the caring work of the state to its settler-colonial foundations, so that the older arguments about accumulation, legitimation and coercion are set within a wider account of how the Canadian state has organized both economic life and colonial authority. Their work preserves what remains useful in the earlier framework while drawing attention to dimensions of Canadian capitalism that much of the older scholarship treated inadequately.¹⁹

The Question of Canada Today

The return to state theory matters for Canada's present precisely because capitalism has changed since the 1970s. Panitch's later work with Sam Gindin traced a central transformation: globalization did not displace the state but depended upon states, above all the United States, organizing the conditions for capital to operate across borders. In The Making of Global Capitalism, they argued that public institutions helped construct and sustain the international relationships often presented as external forces to which governments had little choice but to adapt.²⁰

That argument changes how Canada's dependence under the Carney government should be understood. The economic dependence that Panitch examined in 1977 cannot simply be projected unchanged onto the present, but the trade war has exposed vulnerabilities within an economic relationship whose integration was long celebrated as a source of stability and prosperity. In 2025, the United States still accounted for 71.7 per cent of Canadian merchandise exports. Although this represented a significant decline from the previous year, it also demonstrated the scale of Canada's continued reliance upon the American market.²¹ The tariffs imposed by Washington have made that dependence a matter of immediate political concern, affecting important industries and prompting Ottawa to seek alternative markets, strengthen domestic production, and reconsider the conditions under which Canada participates in international trade.

Carney's response to the trade war has moved between diplomatic resistance and a renewed search for market access, all under the banner of Canadian sovereignty. After suspending negotiations with Washington in August 2026 rather than accept late American terms that his government called unfair and that, he said, would compromise Canadian sovereignty and undermine key industries, he reported further discussions by early November, although there was still no confirmed date for resuming formal talks. The federal budget meanwhile reaffirmed the goal of a mutually beneficial agreement with the United States, even as Ottawa sought additional trading partners and pledged support for infrastructure, industrial development and strategic investment. These measures go beyond restoring the previous trade relationship, but they remain aimed at improving Canada's position within international capitalism rather than confronting the underlying relations of investment and ownership.²²

The proposed Canada Strong Fund makes the tension between public capacity and private control especially visible. Announced as a sovereign wealth fund with an initial federal commitment of $25 billion, it is intended to invest alongside private investors in strategically important Canadian enterprises and projects while seeking commercial returns. Such investment may strengthen productive capacity and reduce vulnerability to foreign decisions. Yet minority public stakes and commercial-return requirements do not, by themselves, determine who sets industrial priorities, controls strategic assets or receives the benefits. Panitch's historical analysis directs attention to precisely these institutional arrangements: the state can expand its economic role while leaving established relationships of capitalist power intact.²³

The question of what greater national independence would mean for Canadian life takes me back to George Grant. In Lament for a Nation, published in 1965, Grant approached the country's relationship with American power through a philosophical criticism of technological civilization and Canada's integration into a wider continental order. His concerns differed considerably from Panitch's Marxist political economy, both in their theoretical foundations and political implications. Grant worried that the erosion of Canadian independence involved more than the transfer of economic control or the negotiation of favourable commercial arrangements, although he was clear-eyed about that transfer too, recognizing that the survival of a small country could not rest on the patriotism of a business class whose interests increasingly lay with the continental economy.²⁴ The deeper loss reflected the growing identification of Canadian political and cultural life with a civilization whose guiding assumptions appeared increasingly inseparable from American power.

Grant developed these concerns further in his 1967 essay “Canadian Fate and Imperialism,” recently republished by Canadian Dimension. He continued to defend the practical importance of preserving Canadian sovereignty, including the possibility of exercising greater control over national resources and adopting a more independent foreign policy. Yet he also insisted that political independence had to be understood within a wider historical and philosophical context. A country might preserve important constitutional and diplomatic freedoms while remaining profoundly shaped by the economic, technological and cultural assumptions of the dominant international order. Grant did not offer a straightforward programme for severing Canada's commercial relationships with the United States; his argument concerned the conditions under which Canadian independence could possess substantive political and civilizational meaning.²⁵

Read together, Grant and Panitch converge on a point that much nationalist rhetoric prefers to avoid: Canada's continental integration was carried forward by Canadians who found their interests in it, and not simply imposed by the United States. Their explanations of that fact, and the conclusions they drew from it, could hardly be further apart. Grant wrote as a conservative and a Christian philosopher, mourning the loss of an inheritance that had allowed Canadians to imagine an order of the common good distinct from the American faith in progress. He understood the absorption of Canada as the expression of a technological civilization that no national policy could reverse, and his lament was in that sense an acknowledgement of necessity. Panitch wrote as a socialist for whom the same history was the outcome of class interests and state strategies, and therefore open to political contestation. For him the continentalism of Canadian capitalists was less a failure of patriotism than a class strategy, one that could be explained historically and opposed politically. Each also exposes a limit in the other. Panitch's political economy has relatively little to say about what a society should want once it has gained greater control over its economic life, which is the question Grant never stopped asking, while Grant's conservatism offered no political agency capable of resisting the forces he described, which is where Panitch's attention to class and the state begins. Their disagreements are considerable, but neither allows sovereignty to be reduced to a favourable trade agreement or to the expansion of national economic capacity alone.

Canadian Nationalism for Whom?

Carney's mobilization of national pride during the trade conflict brings us back to the questions that divided Miliband and Poulantzas nearly sixty years ago. His government presents the trade war as an opportunity to reduce Canada's dependence upon the United States and restore greater national control over its economic development. Yet its programme remains substantially organized around attracting private investment, strengthening international commercial relationships, and using public resources to encourage capital accumulation. There is something revealing about a former Brookfield executive delivering an acclaimed defence of Canadian sovereignty at the World Economic Forum in Davos, then returning home to promote a programme that places international investment at the centre of national renewal. The language of economic independence has changed, but the underlying relationship between public authority and private capital remains strikingly familiar.²⁶

A Miliband-inspired investigation would begin by examining the people and institutions through which these policies are developed and implemented. Carney's professional background, the circulation of personnel between government and finance, the composition of investment boards, and the interests represented in economic decision-making all warrant serious attention. A Poulantzas-inspired investigation would extend that inquiry to the wider organization of state power. The central problem is not simply whether Carney's financial background predisposes him toward particular policies, but why governments operating within capitalist economies repeatedly find themselves organizing public investment around the requirements of private accumulation. Even governments whose political leaders have little personal connection with the capitalist class must contend with the mobility of investment, international competition, and the institutional pressures that make economic growth dependent upon the decisions of private capital.

Panitch's 1977 analysis also occupies an interesting position within this controversy. He followed Miliband in insisting that the relationship between political institutions and capitalist power had to be demonstrated through concrete historical investigation, criticizing Poulantzas for sometimes appearing to establish that relationship through theoretical definition. Yet his own account of the Canadian state also emphasized the systemic functions of political authority in promoting accumulation, maintaining legitimacy, and organizing class relationships. In his later reflections on Miliband, Panitch explicitly challenged the familiar division between instrumentalist and structuralist theories, arguing that their differences should not obscure their shared concern with the conditions and limits of state autonomy. The disagreement remained important because the degree and character of that autonomy could vary historically, opening possibilities for political action while imposing constraints upon what governments could accomplish without challenging established economic interests.¹²

Laclau's later work on populism also helps explain how Carney's appeals to national unity can bring groups with divergent economic interests under a common political identity. The significance of that appeal depends on the programme it serves, particularly when the interests of workers and communities are presented as inseparable from those of domestic and international investors.⁹

Carney's programme may produce real gains through trade diversification, new industries and greater freedom of action toward Washington, but the arguments developed here suggest that those achievements must be judged by the extent to which Canadians acquire greater control over the direction of economic life. For Panitch, the decisive consideration was how state institutions organized capitalist development and whose interests they served; Grant's criticism of technological civilization pressed further into the purposes for which national independence might be exercised. The difficulty with Carney's programme is that its promised renewal depends so heavily on international investors that a change in Canada's trading relationships could leave the distribution of economic power substantially undisturbed.

The uncomfortable possibility is that Carney's appeals to national pride will help legitimize a programme that deepens Canada's historical dependence upon the international capitalist class rather than overcoming it. Canada still possesses substantial manufacturing industries, but their share of the economy has declined sharply, while the country has struggled to commercialize and retain ownership of intellectual property developed by its researchers and firms.²⁷ The long controversy over Dutch disease exposed one dimension of this weakness: resource booms may generate substantial export earnings while making domestic manufacturing less competitive, although the extent of that effect in Canada remains disputed.²⁸

Attracting foreign investment and selling more natural resources cannot, by themselves, rebuild a diversified Canadian industrial economy or ensure that Canadians own the technologies and enterprises through which future wealth will be created. Carney's government has announced measures to support industrial development, but their success must be judged by the productive capacity, Canadian ownership, and economic security they actually establish, rather than by investment flows alone. Otherwise, public resources may underwrite development whose strategic direction and financial returns are disproportionately controlled by international investors, while the promised benefits to Canadian workers and communities remain uncertain.

This is precisely where the Miliband–Poulantzas debate retains its significance: the relationship between those who govern, the institutions through which they exercise authority, and the economic interests that shape the purposes of the state. Panitch brought that controversy into Canadian political economy. Carney's government, and its mobilization of national pride in support of an investment-led economic programme, give us good reason to revisit this history and the debates that continue to shape Canada's political and economic future.

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Notes and References

1. Erik Haines, “A New Home for Old and New Ideas”, Integral [+] Facticity, October 27, 2026; Daniel Tutt, “Political Power and Social Classes”, August 28, 2026, announcing the study group with Mathilde Chevalier. All four recordings are available on Emancipations with Daniel Tutt: Session 1 — Political Power and Social Classes; Session 2 — The Capitalist State and Social Classes; Session 3 — Poulantzas on Ideology and the Power Bloc; Session 4 — Bonapartism and the Relative Autonomy of the Capitalist State. The essay draws on the published recordings and announcements, not on the private discussion of individual participants. ↩
2. Prime Minister of Canada, “Statement by Prime Minister Carney on Canada–U.S. Trade Negotiations”, August 21, 2026; “Prime Minister Carney delivers remarks on Canada-U.S. trade negotiations”, August 22, 2026, which appeals to Canadian unity and sovereignty and declares that “we are masters in our own home”; Government of Canada, Budget 2026: Masters of our destiny, November 5, 2026, which glosses its title as maîtres chez nous, especially Chapter 2, “A more competitive and connected Canada”. On the breakdown of the international order, see Prime Minister of Canada, “‘Principled and pragmatic: Canada's path’ Prime Minister Carney addresses the World Economic Forum Annual Meeting”, Davos, January 20, 2026. The relationship I draw between the government's nationalist rhetoric and its investment priorities is my interpretation. ↩
3. Bob Jessop, “On the Originality, Legacy, and Actuality of Nicos Poulantzas”, Studies in Political Economy 34 (1991): 75–107. Jessop reconstructs the development of Poulantzas's thought from Sartrean legal philosophy through Gramsci, Althusser and his later concern with democratic socialist strategy. ↩¹ ↩²
4. Nicos Poulantzas, “Marxist Political Theory in Britain”, New Left Review I/43 (May–June 1967). ↩
5. Ralph Miliband, “Harold Laski: An Exemplary Public Intellectual”, New Left Review I/200 (July–August 1993). ↩
6. Ralph Miliband, Parliamentary Socialism: A Study in the Politics of Labour (London: Allen & Unwin, 1961); The State in Capitalist Society (London: Weidenfeld & Nicolson, 1969). ↩
7. Nicos Poulantzas, “The Problem of the Capitalist State”, New Left Review I/58 (November–December 1969); Ralph Miliband, “The Capitalist State: Reply to N. Poulantzas”, New Left Review I/59 (January–February 1970). ↩
8. Ralph Miliband, “Poulantzas and the Capitalist State”, New Left Review I/82 (November–December 1973); Nicos Poulantzas, “The Capitalist State: A Reply to Miliband and Laclau”, New Left Review I/95 (January–February 1976). ↩
9. Ernesto Laclau, “The Specificity of the Political: The Poulantzas–Miliband Debate,” Economy and Society 4, no. 1 (1975): 87–110; Laclau, Politics and Ideology in Marxist Theory: Capitalism, Fascism, Populism (London: New Left Books, 1977), especially “Towards a Theory of Populism”; Ernesto Laclau and Chantal Mouffe, Hegemony and Socialist Strategy: Towards a Radical Democratic Politics (London: Verso, 1985); Laclau, On Populist Reason (London: Verso, 2005). ↩¹ ↩²
10. Nicos Poulantzas, State, Power, Socialism (London: New Left Books, 1978); “Towards a Democratic Socialism”, New Left Review I/109 (May–June 1978). ↩
11. Stefan Kipfer, “Remembering Leo Panitch (1945–2020),” Capitalism Nature Socialism 32, no. 1 (2021): 19–26; Alvin Finkel, “In Memoriam: Leo Panitch (1945–2020),” Alberta Labour History Institute, January 8, 2021, on Cy Gonick's influence on Manitoba undergraduates of their generation; Judy Stoffman, “Marxist intellectual Leo Panitch had a ‘big voice’ and ‘big mind’,” Globe and Mail, January 1, 2021, on his Commonwealth Scholarship and doctorate under Miliband; Reg Whitaker, “In Memoriam: Leo Panitch, 1945–2020,” Labour/Le Travail 88 (2021): 15–26. ↩
12. Leo Panitch, “Ralph Miliband, Socialist Intellectual, 1924–1994”, Socialist Register 31 (1995): 1–21, which also gives Panitch's later view of the Miliband–Poulantzas controversy, including his judgement that the familiar division between instrumentalism and structuralism is “especially misleading.” ↩¹ ↩²
13. Leo Panitch, “Editor's Preface,” in The Canadian State: Political Economy and Political Power, ed. Leo Panitch (Toronto: University of Toronto Press, 1977), vii–xi, on the 1975 lecture and the collaborative preparation of the volume. ↩
14. Leo Panitch, “The Role and Nature of the Canadian State,” in The Canadian State (1977), 3–9, for the chapter's theoretical framework, its discussion of Miliband and Poulantzas, and its account of the accumulation, legitimation and coercive functions of the state. See also James O'Connor, The Fiscal Crisis of the State (New York: St. Martin's Press, 1973). ↩
15. Panitch, “The Role and Nature of the Canadian State,” 14–17, on state-supported capitalist development, drawing on H. V. Nelles's study of public utilities in Ontario. ↩
16. Panitch, “The Role and Nature of the Canadian State,” 17–23, on American investment, political sovereignty, labour relations, accumulation and legitimation; Leo Panitch, “Dependency and Class in Canadian Political Economy,” Studies in Political Economy 6 (1981): 7–33. For a summary of the 1981 argument, including its criticism of Naylor and Clement and its account of Canada's “rich dependency,” see Richard Fidler, “Remembering Leo Panitch,” MR Online, February 17, 2021. ↩¹ ↩²
17. Daniel Tutt and C. Derick Varn, The People Are Not One: Socialist Strategy After Left Populism (Revol Press, 2026); Tutt, “Political Power and Social Classes”, August 28, 2026. ↩
18. Matthew McManus, “Wherefore Art Thou Socialism?”, Historical Materialism, June 2, 2022, reviewing Leo Panitch and Colin Leys, Searching for Socialism: The Project of the Labour New Left from Benn to Corbyn (London: Verso, 2020). ↩
19. Heather Whiteside and Stephen McBride, eds., The Canadian State (Halifax and Winnipeg: Fernwood Publishing, 2025). On its relationship to Panitch's 1977 collection, see Zachary Dark's review in the Canadian Journal of Political Science 59, no. 1 (2026): 250–251. ↩
20. Leo Panitch and Sam Gindin, The Making of Global Capitalism: The Political Economy of American Empire (London: Verso, 2012). ↩
21. Statistics Canada, “Canadian International Merchandise Trade, December 2025”, The Daily, February 19, 2026. U.S. share of Canadian merchandise exports: 71.7% in 2025 versus 75.9% in 2024. ↩
22. Prime Minister of Canada, statement of August 21, 2026, which describes the late American terms as unfair and uneconomic, and remarks of August 22, 2026; Government of Canada, Budget 2026, Chapter 2, “A more competitive and connected Canada”, November 5, 2026. In early November the prime minister described renewed discussions with the United States without giving a date for the resumption of formal negotiations. ↩
23. Prime Minister of Canada, “Prime Minister Carney announces the Canada Strong Fund – Canada's first sovereign wealth fund”, April 27, 2026; Government of Canada, Budget 2026, Chapter 2, “A more competitive and connected Canada”, November 5, 2026, which provides an initial $25 billion over three years, sets a mandate to generate commercial returns through minority co-investment on terms that mirror those of private participants, and announces the government's intention to legislate the Fund as a standalone Crown corporation. ↩
24. Erik Haines, “Lament for a Nation: George Grant, Canadian Nationalism, & Religion in Canada”, Integral [+] Facticity, February 9, 2025; “Revisiting Lukács's Destruction of Reason: On Trumpism & the Future of Canadian Sovereignty”, Integral [+] Facticity, March 30, 2026, where I discuss John Ralston Saul's account of continental integration. George Grant, Lament for a Nation: The Defeat of Canadian Nationalism (Toronto: McClelland & Stewart, 1965). On Grant's theological and philosophical training and his later work at McMaster University, see “Grant, George Parkin,” Dictionary of Canadian Biography. ↩
25. George Grant, “Canadian Fate and Imperialism”, Canadian Dimension 4, no. 3 (March–April 1967), republished October 26, 2026. ↩
26. Prime Minister of Canada, “‘Principled and pragmatic: Canada's path’ Prime Minister Carney addresses the World Economic Forum Annual Meeting”, Davos, January 20, 2026; Government of Canada, Budget 2026, Chapter 2, November 5, 2026. The judgement about the political-economic orientation of Carney's programme is mine; it concerns the programme, not the personal motives of the prime minister or of his former colleagues. ↩
27. Innovation, Science and Economic Development Canada, Transition book – Deputy Minister Sony Perron, Economic Development (May 2024), whose economic snapshot gives manufacturing's share of GDP as 24 per cent in 1965 and 10 per cent in 2023, a measure of relative weight rather than of the disappearance of manufacturing. OECD, OECD Economic Surveys: Canada 2025, chapter 4, “Raising business sector productivity”, reports comparatively low business R&D and investment in intellectual property and observes that promising Canadian start-ups and intellectual property are often acquired and developed abroad. ↩
28. Michel Beine, Charles S. Bos and Serge Coulombe, “Does the Canadian Economy Suffer from Dutch Disease?” Resource and Energy Economics 34, no. 4 (2012): 468–492, which attributes between 33 and 39 per cent of the manufacturing employment loss associated with exchange-rate developments from 2002 to 2007 to Dutch disease, not that share of total manufacturing losses. For a different assessment, see Stephen Gordon, “The Canadian Manufacturing Sector, 2002–2008: Why Is It Called Dutch Disease?” SPP Research Papers 6 (School of Public Policy, University of Calgary, 2013). Mark Carney disputed the diagnosis as governor of the Bank of Canada in “Dutch Disease,” remarks to the Spruce Meadows Round Table, Calgary, September 7, 2012. ↩