John Loxley: Radical Academic Activist

In 2014, John Loxley was called as an expert witness for the plaintiffs in a legal case filed in 2007 by the First Nations Child and Family Caring Society (Caring Society) and the Assembly of First Nations (AFN) against the Government of Canada. The case alleged that the Canadian government's choice to underfund child welfare and other children's services on First Nations reserves and in the Yukon amounted to racial discrimination. Loxley's expertise, in that context, derived from a 2005 report (Blackstock et al., 2005) that he had co-authored which found that, despite their higher needs, First Nations children were being funded at a rate 30 per cent lower than other children in Canada. The report proposed a detailed, needs-based funding approach developed with First Nations experts and informed by a survey of all First Nations child and family service agencies. Importantly, the proposed approach reflected best practices in First Nations child welfare and included data collection to better calibrate the funding approach over time. In an attempt to discredit Loxley's work, the Government of Canada hired the accounting firm KPMG to perform a forensic audit of Loxley's costing work, only to find that KPMG's calculations came within 0.025 per cent of his calculations. The KMPG report was filed as evidence for the plaintiffs. Loxley's testimony and his report, coupled with the testimony of First Nations experts, resulted in a landmark 2016 decision by the Canadian Human Rights Tribunal ordering Canada to immediately cease its discriminatory treatment.1 This anecdote, recounted by Cindy Blackstock (herself a tireless advocate for First Nations children), neatly encapsulates what John Loxley was about. Loxley was an outstanding academic, but he was also a brilliant and committed activist ‘who devoted his life to teaching and research directed to changing lives for the better wherever he was’ (Lawrence, 2020: 469). His life's work reflected an extraordinary combination of world-class scholarship and consistent engagement with progressive movements and campaigns. He was just as likely to be working in the community as in a classroom. Ever the pragmatist, he studied and taught how to design real-life policies to improve the lives of those who are left behind by the status quo. As a heterodox economist, he deeply understood capitalism's many deficiencies and contradictions and, wherever and whenever possible, placed his expertise at the service of marginalized groups and individuals to help them challenge, and sometimes overcome, those aspects of the system that left them powerless and unheard. John Loxley's contributions to research, policy and community-based initiatives, include unique and enduring contributions to community economic development (CED), pivotal contributions to the initiation and development of the community-based ‘Alternative Budgeting’ movement in Canada, the study (and critique) of public‒private partnerships (PPPs) and social impact bonds (SIBs) and, throughout his academic career, a leadership role in a vigorous but informed and measured critique (from the left) of the international financial institutions (IFIs) (the World Bank and International Monetary Fund) and, in particular, their role in Africa. But his impact as an activist went well beyond these endeavours. Loxley's values aligned best with those fighting for social justice on the streets and picket lines, but he did not shy away from corporate boardrooms. At the same time that he was working on the board of the grassroots, non-profit group Ogijiita Pimatiswin Kinamatwin (OPK), an Indigenous organization supporting marginalized Indigenous young adults and their families, he sat on the board of the large, multi-billion-dollar Manitoba Hydro crown corporation. John Loxley's unique gift was to bring together a progressive vision of society, rooted in left-wing and social justice perspectives that sought to advance the agendas of workers, the poor and the marginalized, with a pragmatism that enabled him to work with those that did not necessarily share his ideology. John Loxley grew up in working class Sheffield, England, the son of a mother who raised 12 children and a father who worked in the local steel mill and died relatively young of work-related lung disease. From his early years on a council estate, Loxley moved on to grammar school and then to the University of Leeds — the first in his family to do so. Loxley's individual ability enabled him to defy the odds as one of a very small minority of children growing up on a council estate to graduate from university. However, his accomplishments were made possible by the post-World War II Labour Government's implementation of a welfare state with the ambitious platform to address the five giants: ignorance — through universal secondary and post-secondary education; want — through social insurance and income security; disease — through a universal healthcare system based on need not wealth; squalor — through social housing and urban renewal; and idleness — through a policy of full employment. Loxley's subsequent scholarship, in terms of his self-identification as a Marxist and his preference for more radical approaches to economic problems, was strongly influenced by his understanding of class and social stratification, and a belief that the state had the ability and obligation to create a more just society. If the circumstances of his birth and upbringing in Sheffield shaped his perspective on the world and his preference for more radical approaches, by his own admission (Loxley, 2010a), Loxley's experience in Africa, and especially his experience in Nyerere's Tanzania, was central in shaping his understanding of how the world worked and what he could do, both as an academic and an activist, to advance the cause of the disadvantaged, the disempowered and the dispossessed, wherever he encountered them. Loxley's commitment to CED (and his advancement of convergence theory in that regard) can be traced back to his experience in Tanzania. His promotion and leadership of the alternative budget process and his abiding concern with the role of the Bretton Woods Institutions in shaping the development outcomes of developing countries also found their impetus in a set of experiences deriving from that Tanzanian connection. In 1965, Loxley arrived in Africa to complete his doctoral research on the East African monetary and financial system, under Walter Newyln (who was then Director of Economic Research at the East African Institute of Social Research in Uganda). Loxley received his doctorate in 1966 (from University of Leeds), but he remained in Africa for another eight years. In his first two years in Africa, he taught at Uganda's Makerere University. However, from 1967 to 1974 he worked in various capacities in the Tanzanian public sector — first as Chief Economist of the (newly established and publicly owned) National Bank of Commerce (1967–69), then as Senior Lecturer in Economics at Dar es Salaam University (1969–72), and later as Director, and then Head of the Department of Economics, at the Institute of Finance Management in Dar es Salaam (1972–74). These were all remarkably consequential positions for a young man in his late 20s and early 30s. With these jobs came board membership of some of the other newly nationalized ‘parastatals’ (resulting from the proclamation of the Arusha Declaration in 1967) and, given his training in economic planning, participation in the first attempts at socialist economic planning in the Tanzanian context. In the process, he also worked intimately with the Tanzanian leadership and several foreign advisors, many of whom would become lifelong friends and prominent academics and thinkers in their own right. That group includes: Reginald Green, Gerald Helleiner, Lars Osberg, Cranford Pratt, John Saul and Ann Seidman. In these capacities, Loxley had both a ground-floor view of, and active involvement in, a newly independent developing country's attempt at tackling the tripartite challenges of overcoming the legacies of colonialism, engendering growth and development, and constructing the essential elements of a socialist economy. Even when he moved to Manitoba in 1975 Loxley remained, through his former students and associates, deeply connected to the political and economic activities in Tanzania for some time. The fervour, the successes (however transient) and the painful failures attendant with the Tanzanian experience, stayed with Loxley and informed almost every facet of his academic and activist work thereafter. This broad range of first-hand experiences of ‘development in action’ are reflected in Loxley's writing from the late 1960s and the 1970s. He writes about money and banking, of course, and describes the successes derived from the nationalization of the financial system in Tanzania (and its further development) in terms of both increased efficiency and the ability of the new system to redirect the local surplus, that had previously been transferred to London by the colonial banking system, to local use (Loxley, 1972, 1973, 1978). He describes, more broadly, the planning and the organization of financial resources to successfully effect development plans for a socialist Tanzania, the challenges of developing that system of planning, the limitations in terms of human resources, data and institutions and the difficulty of incorporating the parastatal sector into such a planning framework (Loxley, 1972, 1973; Loxley and Saul, 1975). In our view, it was Loxley's experience of the success of public initiatives and the expansion of possibilities that it portended in Tanzania (which, of course, reinforced the role that the British public sector had played earlier in his life) that informed, later on, his distrust of initiatives such as PPPs and SIBs — ideologically motivated devices that sought, in different ways, to provide profit opportunities for the private sector and, in the process, dilute that vital and potentially transformative role of the public sector. While Loxley expressed admiration for Tanzania's formal commitment to socialism and self-reliance, as expressed in the Arusha Declaration of 1967, and its healthy suspicion of imperialism, he pointed out the failure of the governing party (TANU) to articulate ‘a theory of imperialism’ that involved a clear exposition of the nature and causes of underdevelopment and a well-defined national development strategy for achieving said socialism and self-reliance (Loxley and Saul, 1975: 62). In ‘Monetary Institutions and Class Struggle in Tanzania’ (Loxley, 1978), he pointed out that, while public ownership of the financial sector allowed Tanzania to function more efficiently within the inherited economic framework, it had not reduced the relationship of dependence between Tanzania and international capitalism but, instead, increased it. In his words: ‘There has therefore been little change in the economic structure of Tanzania since 1967 as far as its external ties are concerned. Neither has the country's industrialization policy contributed towards an “auto-centered” (Amin) or “convergence” (Thomas) type of growth around strategic basic industries catering for the consumption needs of the people’ (ibid.: 81).2 Loxley's observation of the tenacity of the relationship of dependence in the absence of direct confrontation would inform his later work in CED. In that context, he ultimately chose C.Y. Thomas's ‘convergence’ approach over Samir Amin's ‘auto-centred’ approach in prescribing a path to greater self-reliance at the community level. However, Loxley's most poignant experience relating to Tanzania would occur after his relocation to Canada. In 1981, he was asked to join a group of fellow economists (consisting of both Tanzanian and foreign advisors) in preparing an alternative to the structural adjustment programme being demanded by the International Monetary Fund (IMF), but found wholly unpalatable by the Tanzanian government. Unfortunately, despite the country's dire economic situation, that alternative programme was also not accepted by the Tanzanian government. The ensuing impasse resulted in five years of economic and social hardship, especially for the poor (as Tanzania was forced to adjust without external support), before the IMF offered an adjustment programme that was felt to be palatable. These years of suffering destroyed domestic support for the government and, ultimately, marked the beginning of the end of Nyerere's socialist project. This was a revealing and distressing experience for Loxley. Revealing in the sense that he was alerted to the power and ubiquity of the IMF and World Bank in delimiting the economic experience of developing countries, for better or, more often, worse. Distressing because he recognized the failure of these institutions, when imposing conditionalities and choosing the level and nature of financial assistance, to take adequate cognizance of differing structural features across developing countries, the distributive impacts of these programmes, or the rights of these countries to choose paths that did not preserve the inherited condition of dependence. As he would attest in his acceptance of the John Kenneth Galbraith Prize in Economics in 2010 (Loxley, 2010a),3 almost all his work in development economics, since that time, sought to address, in some form, the role of IFIs in development. Additionally, his experience in the development of an alternative structural adjustment programme (which he later generalized beyond Tanzania's specific challenges) inspired his later work on the Alternative Budgets in Canada (ibid.). John Loxley's reputation outside of Canada largely rested on his academic and policy contributions as a development economist. However, within Canada, Loxley was better known for his pre-eminent contributions in the areas of CED, the alternative federal budget and, particularly in the last decade, his work on PPPs and SIBs. We will cover Loxley's contributions in those areas (drawing largely on the recollections of his colleagues and co-researchers) and end this section with his work in development economics. Loxley moved from Tanzania to Winnipeg (capital of the province of Manitoba in Canada), lured by the prospect of working with the first social democratic government elected in the province. In 1975, one of his primary responsibilities was to lead the Resources and Economic Development (RED) Committee of Manitoba's New Democratic Party (NDP) cabinet, where he quickly identified parallels between the conditions in Africa and the poorer, more remote, more Indigenous areas of the province. The Northern Manitoba that this government inherited was particularly rife with the contradictions of a peripheral economy. On the one hand, abundant natural resources (minerals, forestry and hydroelectric power) generated considerable wealth. However, the surplus from these extractive industries was transferred outside the region. Nickel, copper, zinc and lumber were exported for processing elsewhere. High-voltage power lines served the mines and larger towns in Northern Manitoba, Southern Manitoba, Ontario, Saskatchewan and the United States, bypassing local communities almost entirely. Most of the jobs were filled by whites, mainly recent migrants from Southern Manitoba and other places. As a result, remote and sparsely populated Indigenous communities in the region suffered high rates of poverty, unemployment and social deprivation. Successive governments and industry had reinforced underdevelopment in Northern Manitoba. They painted it as a poor region and a drag on public resources, despite the considerable wealth exported from the region. Predictably, their ‘blaming the victim’ posture was rooted in racist premises (Loxley, 1981: 154). Loxley's development strategy for Manitoba's northern region was ambitiously named ‘The Great Northern Plan’ (Loxley, 1981). The plan itself, though never implemented, represents an important juncture in Loxley's own development as an economist and an activist. It was his first substantive foray into CED and laid the foundation for more than a generation of progressive praxis. Moreover, in this plan, Loxley made a deliberate attempt to actualize what he argued had been missing in Tanzanian development planning. The Great Northern Plan leads off with an effort to theorize ‘on the causes of underdevelopment’ in the north and then goes on to ‘select a development strategy consistent with this analysis’ (Loxley, 2010b: 109). In trying to unearth the cause of Northern Manitoba's underdevelopment, Loxley rejected the explanations proffered by orthodox theories such as dualism, vicious cycles and what he called the ‘subtraction approach’.4 Opting, instead, for a Marxist analysis, he found greater resonance in Mel Watkins's Marxist interpretation of the staple theory, which explains Indigenous dispossession as essential for providing industrial capital with the clear rights that are considered vital for modern resource-extracting industries (Watkins, 1977). Moreover, the institutional apparatus involved (treaties, the Indian Act also the basic of Indigenous to in economic address underdevelopment in that context, Loxley found a of the ‘convergence’ approach proposed by C.Y. to be particularly Thomas's strategy on the belief that development, as a process of economic and social on the convergence of the needs with the of In this context, it important to that beyond economic the need for better and other social and a as well as the need for jobs and The Great Northern Plan out a strategy for ‘a economic and social development for the northern of the province at the conditions of one of the of Canadian (Loxley, 1981: It was an radical plan, to the needs of a in the to socialism of the resources be to would provide lumber for and the need for in basic could be within a The plan set out all the elements to it ownership and participation were to that However, the plan was never implemented, to a combination of private sector and of political Even under the of a social democratic government such as Manitoba's the of from the in the and forestry and from the for in local economic and social development, was a such was left almost to the which was to and, in was not to involved in transformative development initiatives that it as the preserve of the private sector. it was the of development to the private sector that had this in the first many who to Loxley argued that the planning the economic and political (Loxley, 2010b: the and pragmatist, Loxley remained committed to First Nations and development. than to the of to the that would away the economic that dispossession and Loxley chose to up his and use his considerable to help bring about at some small in the for the and As an economist and academic, Loxley was committed to developing a theory of CED that would advance its study by academics and its by policy (Loxley, He was by an understanding of how CED could improve and In ‘The Loxley CED as the to change its economic and to provide for as many community as He that CED could two different a support for those who were to in a or a to to a new system that better wealth while the and human These very different of the of CED create a very from across the but also that are about different despite the same of Loxley's of CED was the of the by local community the economic process in a more direct and than one one of CED class and social and their power in an of a that not given the different economic of different It was these that made change especially because he understood the need for government to a CED strategy up and and the political challenges in such support (Loxley, 2010b: Loxley argued that was a because it made and important in lives and the of Loxley's of CED were a of his work on the Great Northern with its to C.Y. and to Mel Watkins's of the staple theory of Canadian economist Loxley a convergence strategy to the of from the community and them work community a range of in to as many of and as These also high growth income that as many jobs as possible are generated and the local (Loxley, of how convergence theory with economic be can be found in the of CED by the The of Economic Development the to power between and it the in the CED approach that it had into its policy development This government was the of several a back to the of government support of the of the government of the the understanding that some of whom had been Loxley's had about CED and its and a CED a of the Canadian CED the of supporting with CED, the of Manitoba funding to community groups by the services to communities were in eight towns and funding from the government to community support for social and for in a of (ibid.). Loxley was in an important in the relationship between CED and the While CED an state for its that very CED to the changing of different governments (Loxley, The CED framework did not its to the government in 2016 and funding for CED work was reduced or developed the some to through the institutions and that the of the CED and social sector From his Loxley was in providing CED in Manitoba with an academic and institutional as of the Manitoba Research a between academics and community funded by Social and Research of Canada The Loxley's commitment to not CED but it as The funding for the through the local of the Canadian for a research with of economic and the organization to the that research be and be at the service of, the local community by with community-based of these partnerships been with Indigenous communities the Assembly of Manitoba and other The also to Loxley's work in the north of the province by the role of CED in the northern of concern for Loxley was the role that northern First Nations and could further to that resources were and by those Nations and were to and First Nations and that the of CED, both in theory and in Manitoba can be traced back to John Loxley's leadership and the he in the the government and the Loxley's work on alternative in Winnipeg in the early as a of a progressive that on many progressive His to that was by his experience of budget in Tanzania and the development of an alternative to IMF structural adjustment programmes, but it was by the and of the late and in Canada (Loxley, This work in his of but was then up by progressive and across Canada and in other countries, in his Alternative at the United Loxley's expert to these alternative budget programmes, and the public which he (as a to the were But Loxley's was more than an understanding of the role that government could in to improve their It was more than a political understanding of how to the of and in the of In his commitment to a democratic process in developing these Loxley was about to the of who were most by the of the of this movement was to capacities to set their own and their own economic a process by experts progressive in his view, could not that This on — to those who were left out — was to how alternative were Loxley worked successfully to his own important and contributions to the while developing the and capacities of the He up this approach in an he for a on alternative for up the process to how are how are and to the that governments to work (Loxley, to and to that community and to their alternative This strategy allowed the to beyond a complete and alternative vision for the The strategy was in that to were — and in that community and could to budget the was at a level progressive groups an alternative budget for and for Canada as a

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