Top 10 ways we can build a better economic system

26 Aug

For the numerous readers who asked: “But what can we do?” after reading my Top 10 Reasons to Hate Capitalism:

  1. We can elect governments that represent people rather than corporations. This will require serious electoral reform and include laws to make it clear corporations are not people and therefore cannot participate in the political process. A government representing all the people would regulate corporations to ensure socially responsible behaviour and transform psychopathic capitalist monstrosities into democratic, social enterprises that benefit all.
  2. We can build communities and organizations that encourage solidarity, compassion and altruism. These will include worker, consumer, housing and producer cooperatives, as well as institutions of government. People must always remain vigilant, especially while capitalism continues to exist, about the pervasive power of greed to destroy these communities and organizations.
  3. We can promote and build a democratic economy in which social ownership replaces private ownership of communities’ means of livelihood. The people who work in them and the communities in which they are located should control economic enterprises.
  4. Since authentic freedom for any of us can only come when all of us are free we must create enterprises, communities, forms of governance and institutions that respect the rights of everyone and encourage the creativity of all. Socially useful individual enterprise should be encouraged but everywhere people work together we must create effective forms of democratic decision-making to promote creative input from all involved.
  5. Everywhere we work we can organize in ways that become the building blocks of a new, democratic economy. Sometimes this will be through existing unions but often we will create new organizations that defend our day-to-day interests while self-consciously preparing to replace capitalist minority rule with democratic social control of all enterprises.
  6. We can work to undermine capitalist, consumerist propaganda whether it masquerades as news, entertainment or advertising. We can create forms of newsgathering and information-exchange that challenge capitalism while building the self-confidence of people everywhere to democratically manage our economy. Rather than spend countless empty hours consuming mindless advertising-driven ‘entertainment’ we can relearn the myriad forms of healthy social interaction that brought joy and solidarity to generations past. Millions of us can discover the fun in making a better world.
  7. We can rebuild a progressive taxation system in which people with extreme incomes pay very high levels of taxes. We can promote a one person, one vote system of decision-making everywhere we work together, whether in the political, social or economic realm. The means of bringing about such fundamental change may, in part, come through existing political structures, but will also include diverse forms of mobilization as workers, residents, concerned citizens, producers and human beings supporting a healthy planet.
  8. We can speak up for our planet as one community with intertwined interests that can only be satisfied through mutual respect and cooperation. We can learn from indigenous communities to respect the earth. We can act on the principle that an injury to one anywhere and everywhere is an injury to all. At a minimum this requires an end to war and environmental destruction of every sort. We can work together in enterprises and organizations that exist in local communities, but which also connect with like-minded regional, national and international groups to accomplish the changes we need.
  9. Through our words and actions we can demonstrate that the realistic alternative to capitalism is an expansion of democracy. In order to build the peaceful, ecologically sane world we desire, our tactics are non-violent, but we understand that people under attack have a right to self-defence.
  10. We can replace capitalism with a system based on social ownership, equal human entitlement and workplace democracy. Building an economic democracy is the key to human survival. We can exist in harmony with our environment if we get rid of capitalism and promote respect for nature and understanding the interdependence of all forms of life.

Gary Engler

Capitalism a leech on publicly funded research

23 Aug

Prevailing neo-liberal dogma holds that private capital is responsible for most economic innovation and that governments stand in the way. In The Entrepreneurial State: Debunking Public vs, Private Sector Myths, Mariana Mazzucato points out that most research is funded by governments and that current anti-government policies not only widen disparities but threaten future innovation, especially the mobilization of resources necessary to rapidly shift away from dependence on carbon-spewing fossil fuels.   

Mazzucato—professor of The Economics of Innovation at Sussex University in the UK—argues that capitalists are not the visionary risk-takers that free-market economists, the corporate media and politicians would have us believe.  Their focus on maximizing profits actually makes capitalists risk-averse.

Governments fund and organize research and development precisely because they do not have to answer to shareholders. They can have broader goals—future well being, new employment, reduced disparities, or environmental integrity.  And in fact, even in the U.S. the federal government funds two-thirds of the country’s research and development: private business funds less than twenty percent.

Neo-liberal ideology aside, capital has long depended on governments to fund research. In earlier times, governments funded research on canon fire and ocean shipping. They funded construction of railways, telegraph then telephone lines, and funded research on aerodynamics and jet engines. After government funding has made production profitable private business takes charge.

Today, military-industrial corporations continue to rely on publicly funded research to develop weapons and equipment. They then sell the results to governments at cost plus inflated profits. Pharmaceutical corporations do the same. Most new drugs are developed in publicly funded labs.  These are then modified slightly, patented and sold to government-funded health care systems at hundreds of times the production cost.

Contrary to public opinion, neither Steve Jobs nor Apple had a critical role in the development of the Internet  or iPhones.  Hard disk drives were developed by the U.S. Defense Advanced Research Projects Agency. The Internet was constructed by U.S. federal agencies working with publicly funded universities. The Hypertext Transfer Protocol (HTTP) and the World Wide Web were conceived by U.K. government-funded scientists.

Touch screen technology was developed in government labs in the U.S. and U.K.  GPS was developed by the U.S. military and continues to be funded by the U.S. Air Force. Lithium Ion batteries were developed by U.S. Department of Energy scientists. Liquid Crystal Display (LCD) and Thin Film Transistors (TFT) were developed in government-funded labs. So were SIRI, an artificial intelligence program, and the critical Web Search algorithm.

Steve Jobs and Apple can be credited with stylishly rounded edges on computers and iPhones. Eye-catching design and effective marketing allowed their shareholders to make billions from the socialization of research and the privatization of profits.

Future innovation in the U.S., U.K. and Canada, Mazzucato argues, is threatened by current anti-government policies. A few—wealthy capitalists—have unquestionably benefited from neo-liberal policies. Corporations have been freed to move technical and professional employment as well as jobs in manufacturing and services to places where wages are lower, where enforcement of labor and environmental regulations is lax. Meanwhile, cuts to taxes and government spending have widened disparities, aggravated market stagnation, and by reducing funds available for research are prolonging dependence on fossil fuels.

If carbon-induced global warming is to be reversed, massive sums will have to be invested. Widely coordinated action will be required to rapidly replace dependence on fossil fuels with solar, wind, tidal, wave, and geothermal power. Existing capital is locked into profits from fossil fuels; private capital cannot be expected to take the lead. Only the public can mobilize the resources required.

Where measures have been taken, public authorities have taken the initiatives. Denmark is a leader in the technology of wind power.  China has massively increased its production of wind and solar power.  Germany has installed solar panels that can produce as much electricity as 24 nuclear power plants. Wider action is blocked by corporate lobbying anti-government ideology. Denying carbon-fueled climate change is no longer credible; still so long as governments are denied the means to act, corporations and their shareholders can continue to make massive profits from fossil fuels.

Concerted public action is urgently required to develop low-cost electricity storage, to construct the smart grids and digitized energy distribution systems needed to “optimize the flexibility, performance, and efficiency” of wind and solar power.  Concerted public action is also required to rapidly reduce consumer waste and industrial and agricultural pollution.  National, regional and local governments could gain the resources needed if taxes were raised on corporations and top incomes as well as on financial transactions, wealth, and inheritance. Increasing taxes on capital would socialize some profits. Most of the costs of innovation have already been socialized.

Al Engler

 

Top 10 reasons to hate capitalism

13 Aug
  1. Capitalist corporations suffer from a personality disorder characterized by enduring antisocial behavior, diminished empathy and remorse, and are rewarded by shareholders for acting that way. If corporations could be sent to a criminal psychologist’s office they’d be diagnosed as psychopaths and locked away forever.
  2. Capitalism encourages greed. But greed is only good for capitalists. For normal people it is anti-social and soul destroying, not to mention very bad for our communities, which rely on altruism, compassion and a generalized concern for others.
  3. Capitalism is a system of minority privilege and class rule based on the private ownership of means of livelihood. This gives a few rich people the power to buy and sell jobs, which means they can build or destroy entire communities that depend on those jobs.
  4. Capitalists praise freedom and individualism, but they destroy freedom and individualism for everyone but themselves. The vast majority of us who work for a living are daily asked to uncritically follow orders, to act as if we are machines, and limit our creativity to what profits our bosses.
  5. Capitalists denigrate cooperation and collectivism, but create mass production processes that rely on both from workers. Their system requires us to be cogs in a giant profit-making machine, but because they fear the power this gives us we are told working together for our own interests is illegitimate and bad. Thus capitalists undermine unions and other organizations that encourage workers to cooperate with each other and act collectively.
  6. Capitalism requires the largest propaganda system the world has ever known to convince us it is the only system possible. It turns people into consumers through advertising, marketing, entertainment and even so-called news. Millions around the world are employed to use their creativity to twist our feelings of love, desire, human solidarity and fairness into tools of manipulation, so that ever more profits can flow into the hands of a tiny minority.
  7. Capitalism is a system in which the principle of one dollar, one vote, dominates that of one person, one vote. Those who own the most shares (bought with their dollars) control giant corporations, many of which are more powerful than all but a few governments. Rich people also use their money to dominate the elections that are supposed to give us all one, equal vote. Under capitalism those with the most money are entitled to the most goods and services as well as the most say in directing our governments and our economy.
  8. Capitalism proclaims the virtue of naked self-interest, but self-interest without regard for morality, ecology or common sense leads to environmental degradation, destruction of indigenous communities, colonialism, war and other forms of mass destruction. Self-interest leads capitalists to seek profit absolutely everywhere, regardless of the damage done to other people and the health of the planet’s ecosystem. Self-interest leads capitalists to destroy any rival economic system or way of thinking (such as indigenous communal land use and respect for nature) that can be a barrier to their endless quest for profit.
  9. Capitalism is not a friend to democracy but ultimately its enemy. When pushed, capitalists choose capitalism over democracy. If people use democracy to weaken the power of capitalists the rich and powerful turn to various forms of fascism in order to keep their privileges.
  10. Capitalism is a cancer taking over our planet. Capitalists make profits from global warming, from destroying our oceans, from pumping ever more chemicals into the atmosphere and from patenting everything they can, including life itself. Only by getting rid of capitalism can we rescue our environment

Gary Engler

Explaining Gaza to my 7-year old granddaughter

29 Jul

“Grandpa, why are they killing kids in Gaza?”

A deep breath to compose my thoughts.

“You said most people were good, but I think only bad people could drop bombs on little kids. There was a boy crying on TV. He lost his whole family.”

“Most people are good but sometimes they do bad things,” I answered.

Back came the inevitable: “Why?”

“Because of greed and bad ideas. Those are the two main reasons people do bad stuff.”

Her expectant stare caused a moment of panic. She needed an explanation. She needed the truth. But the dilemma in explaining war to a seven year old is that simple answers — “these are the good guys and those are the bad guys” — are part of the problem. Simple answers limit critical thinking and enable those who profit from war to manipulate people. How could I explain a complicated subject in a simple enough manner that helped my granddaughter learn to think for herself? I had to try.

“You know what Israel is?”

“It’s a country. My friend Sarah went there for a holiday.”

“It’s a country that was started with some bad ideas that seemed like good ideas at the time. It’s a country the greediest people in the world give bombs, airplanes and other weapons to, because these greedy people have the bad idea that they’ll make lots of money and keep their power by doing it.”

The look on her face proved this was far too complicated. Start over.

“Do you know what religion is?”

“It’s like when people believe in god and go to church and stuff.”

“Yes. One religion is called Judaism and the people who belong to it are called Jews. It’s very old and a little bit different from other religions because some people still call themselves Jews even if they don’t believe in god or follow any of the Jewish rules. Through most of their history Jews have lived in places where there was another, more powerful religion and many times the bigger religion picked on Jews. You know, like kids picking on someone just because they’re different.”

“I know. Papa explained that to me.”

“Well in Europe picking on Jews grew and grew until a very bad man named Hitler took over in Germany and during a war his armies killed millions of Jews, including mommas, papas, grandmas, grandpas and little kids. That was called the Holocaust.”

“Millions?”

“Yes. It was very horrible and after the war the world felt so bad about the Holocaust that the governments of the most powerful countries said the Jews could have a country of their own where they could run things for themselves. Sort of like giving the kids who have been picked on their own playground.”

“Their own playground far away from the bullies?”

“Exactly, but the problem was that the land which the powerful countries gave to the Jews belonged to other people.”

“How could they give away land that belonged to other people?”

“Well, unfortunately that used to happen a lot. Like right here in Canada when the British and the French fought over land that belonged to the First Nations. Mama and Papa have explained colonialism to you, right?”

She nodded. “That was very bad.”

“This country given to the Jews was called Israel and some people thought it would be the perfect thing to end all the bullying that had happened in Europe, but others were not so sure. Some people said that if you gave land that belonged to other people the only way Jews would be able to keep it would be by becoming bullies themselves.”

“Why?”

“Because the people who lived there, the Palestinians, wouldn’t just give up their homes. Why should they? Palestinians weren’t the ones who had killed the Jews so why should they be punished for bad things Europeans had done? People predicted that the Jews would have to fight the Palestinians for the land and that’s exactly what happened, over and over again. And it’s still happening today.”

“They fight to take the Palestinian land?”

“At the root of it yes.”

“Are the Jews bullies now?”

“Jews are the same as everyone. Some are bad, but most are nice. Most don’t even live in Israel.”

“But taking people’s homes is not nice. Dropping bombs is not nice.”

“You’re right. But are you a bad person when you pick on your sister or have a temper tantrum? No, you’re a nice person doing something bad. It’s the government of Israel, its army, one of the largest in the world, and the police who are bullies. They’re always picking on Palestinians, especially the ones who still live on the land that the right-wing Israelis want for themselves, but that the governments of the world say belongs to Palestine. Of course this makes the Palestinians very mad and they try to fight back anyway they can. When they do, the Israeli government puts them in jail or tears down their houses or drops bombs on them and kills lots of little kids. Then Israel and its supporters says they can’t possibly be nice to Palestinians because all they ever do is fight.”

“I think the Israelis are mean.”

“I do too. But the real question is how do we stop it?”

“I don’t know.”

“How do you stop someone being mean on the playground?”

“By telling the teacher.”

“Sure, but sometimes that doesn’t work. And in the case of Israel telling the teacher is like telling the most powerful country in the world, which is the USA. But the USA keeps on giving Israel all the bombs and other weapons it wants. It suits the interests of the rich people who run the USA to keep everyone in the different countries around Israel fighting amongst themselves.”

She looked perplexed.

“So what do you do if the teacher doesn’t stop someone who is being mean?”

“Stop playing with them?”

“Exactly. If you can’t get a teacher or an adult to stop a bully, you stop playing with them. You avoid them. You tell your friends and everyone you know to stop playing with them, to avoid them. If no one plays with a mean person, if everyone avoids a bully, they just might learn that only way to have friends is by being nice to people. Right?”

She nodded.

“Well that’s what we need to do to Israel. We need to boycott it until it stops being mean to Palestinians, until it allows them to have their own country. That’s the only non-violent way of fixing things. Does that make sense?”

She nodded. “Sometimes when I’m bad, Mama makes me have a timeout.”

“That’s right, Israel needs a timeout. You remember when I took you to the candy store and bought you some but you wanted more. And I made the mistake of listening to you and buying you more? And that still wasn’t enough? You wanted even more? Then you threw a temper tantrum. You hit your sister because she wouldn’t give you her lollipop, even though you’d already eaten yours?””

“Mama said it was because of the sugar.”

“Exactly.”

“Is that what Israel is like?”

“Pretty close.”

She thought about it for a few seconds and then asked: “Grandpa, can you read me a book?”

Gary Engler

The new Capital — a review

24 Jun

Thomas Piketty’s, Capital in the Twenty-First Century, is a sensation—an economics textbook, translated from the French, that has been on the New York Times best-seller list. It is an important work. If you ignore more than one hundred pages of notes, it is still a long but easy read.

Piketty, a prominent French economist and social scientist, uses rigorous logic and reputable statistics to dismiss the mainstream claim that capitalist markets are based on individual equality, and that great wealth is a fair reward for individual contributions to general wellbeing. He shows that capitalism in its logic and observable practice actually widens disparities between the super rich and everyone else.

The title of the book conjures images of Karl Marx’s Capital. But Piketty says he is not a Marxist; he does not call for the abolition of capitalism. He is a social democrat who explicitly rejects the top-down centralized state ownership of the twentieth century USSR. He looks to a more democratic alternative, arguing that economics, which he prefers to call political economy, should refocus on how best to meet human needs. He looks to cooperatives, community ownership, and more democratic control of workplaces.

The two Capitals have distinct starting points. Marx began with the commodity. He makes the case that exchange value is determined by labor time embodied in commodities, and that the wealth and power of capital come at the expense of labor. Although Marx grumpily dismissed campaigns to abolish market exchange as utopian, his focus on the commodity convinced many of his readers that opposing capitalism meant opposing commodity exchange.

Piketty’s analysis is focused on the distribution of income and wealth. He begins with a logically indisputable proposition: when the rate of return on capital is greater than the rate of economic growth, capital increases its share of total income. He then tests this hypothesis with historical statistics. These show that national growth rates usually range from one to two percent; the return on capital is usually around five percent. Without deliberate public intervention the share of income going to capital must grow.

Piketty’s focus on income distribution is a more direct and convincing critique of capitalism. To be fair, Marx was writing in the 1860s. Credible income statistics did not become available until governments adopted income taxes to pay for World War I. Marx’s critique was necessarily more abstract, more a criticism of capitalist market theory than of capitalist practice.

Piketty, born in 1971, knows that twentieth-century attempts to replace market exchange with top-down state direction required unacceptably heavy and intrusive repression. The USSR’s disadvantages have been well documented, but capitalism is hardly the utopia of equal opportunity its supporters claim. In France, the U.K., and the U.S., the share of total income currently appropriated by capital is thirty percent. The top 0.1 percent of income earners own twenty percent of wealth. The top one percent own 40 percent. The top ten percent own 80 to 90 percent. The bottom 50 percent own a mere five percent of wealth.

Mainstream economics justifies great fortunes in a few hands by claiming these are just rewards for successful work, innovation, and merit. In fact sixty percent of great fortunes are inherited. Piketty shows that capitalism continues to be a system of patrimonial wealth. Even for those few wealthy individuals who are or were innovators, it does not take long before the income earned from their past capital exceeds the income from their work. For countries with reliable statistics, annual income from capital now accounts for thirty percent of total income. Privately-held wealth equals 600 per cent of annual national income.

Nonetheless, governments, electoral parties, and the corporate media insist that the main problem facing economies is public debt. Actually public debt in most countries ranges between thirty and seventy percent of GDP. In the nineteenth and twentieth centuries, the governments of major capitalist countries had debts that reached 200 percent of their GDP. Past governments reduced debt by cutting public spending, by allowing inflation to rise, and by increasing taxes.

Austerity is the most damaging way to reduce public debt. Government cutbacks increase unemployment, reduce working-class income and consumer purchasing power, aggravating market stagnation. Inflation does reduce the real value of debt, but largely at the expense of the investments of middle income pensioners. The most benign way to reduce public debt is to increase taxes on great wealth and on the highest top incomes.

Piketty argues that marginal tax rates on income over $500,000 could reasonably be raised to 80 percent and that progressive inheritance taxes should be instituted or raised. In addition, he calls for an annual tax on all private wealth including real property, stocks, bonds, bank balances, and assets held abroad. This annual wealth tax could be one percent on wealth from $1 to $5million; two percent on wealth over $5 million; and 5 to 10 percent on wealth over $1 billion.

Piketty concedes that such taxes in the present political climate appear utopian and could lead to capital flight, if not coordinated among numerous countries. Still people should begin discussing such taxes. Once widely implemented by the international community, public debt could be quickly eliminated. Public spending to meet human needs and to sustain consumer markets could be increased. The tendency of capitalists to appropriate more and more income would be reversed. Democracy would be strengthened as information on private wealth become more transparent. Such taxes could also provide the public with the means to respond to climate change. Massive investments are required to move away from dependence on fossil fuels: if private capital does not take the initiative, taxes on wealth could provide the public with the revenues needed.

Al Engler

Capital in the Twenty-First Century, Thomas Piketty, The Belknap Press of Harvard University, 2014, 685 pages

Corporate organized crime

23 Jun

“I’m gonna make him an offer he can’t refuse,” is one of the most famous lines in cinematic history. It is the set-up for the scene in Godfather where a big shot Hollywood producer wakes up with a bloody horse’s head in his bed.

In less than 10 words it also perfectly sums up how the rich and powerful get their way. Use of the tactic has certainly never been limited to Mafiosi.

In fact, countries possessing military might have made “offers they can’t refuse” all through history to less powerful nations or regions.

But today’s ultimate practitioners are giant corporations that dominate the world economy. The 0.1% wealthiest people on the planet use their control of these corporations to impose their will on the rest of us.

Their “offers we can’t refuse” go something like this:

“Cut pensions, chop government jobs, privatize everything you can, or we will start a run on your currency and sink your entire economy.”

“Sign this ‘free trade agreement’ or we will pull all our investments from your country and move them to places that have agreed to everything we want.”

“Cut our taxes or we will fund a political party that will.”

“Build this pipeline if you want jobs.”

“We don’t care about democracy, satisfying us is more important that satisfying the will of the majority.”

“Weaken unions, or we’ll take our money and run.”

“Ignore global warming, or we’ll make sure you regret it.”

“If we don’t like your response or you protest too much, maybe even at all, we will use the violence at our disposal, including that of the governments we own, to crush you.”

But it’s not just threats. Like Don Corleone, the corporations also have politicians, judges, journalists, academics, lobbyists, personalities and many others on their payroll to lie, obfuscate, corrupt, manipulate and who knows what else in order to get their way. Both the wise Mafia Don and the effective corporate CEO understand that power comes in many forms. The use of violence needs to be minimized. Better to save it for when there is no other way to impose your will, or it loses its effectiveness. And too much looks bad. (Witness Iraq and Afghanistan.)

But here’s the thing with both organized crime and our economic system in general. There’s always some competitor — be it a long established rival or neighbourhood punk/upstart capitalist — willing to employ whatever means necessary to steal your territory. If you get soft you risk losing everything. If your profit margins are less than your competitors their power will grow while yours stagnates.

As the movie (and its sequels) vividly shows, there can be no Mr. Nice Guy Mafia Don. The logic of organized crime makes it impossible. To be successful — to survive — lying, cheating, bribing and ultimately violence is necessary.

The same is true of our wider economic system. While violence is usually confined to governments that the corporations control, in both worlds hands get dirty doing whatever it takes to succeed because the system demands it.

This is why environmentalists who look for capitalist solutions to global warming are either extremely naïve or in the pay of corporations. This is why union leaders who fail to see the fundamental contradiction between workers’ and capitalists’ interests often sell out to the bosses. This is why in the long run there can be no capitalism with a human face.

If the 0.1% who own and control most of our economy want to keep their power they will act as capitalists have always acted. They will grab as much profit for themselves as they can and pass the environmental costs onto the rest of us while doing so. They will try to reduce wages to increase their profits. They will manipulate democracy to get their way. They will attempt to overthrow democracy if it threatens their existence. They have no choice. Greed, self-interest and a relentless drive to increase profits are the foundations upon which the capitalist economic system is built.

Only when the vast majority of us, the 90% who work for a living, come together to use our collective power to create a new democratic economic system will anything change.

Only greater power can overcome the might of the Mafia Don or the corporate CEO: The power of the people who actually do all the work that makes up our economy.

Gary Engler

Piketty’s book important, but should go one step further

2 Jun

Is Thomas Piketty’s Capital in the 21st Century a left-wing book?

Yes and no. It depends on how you define left wing.

If you believe the litmus test of being “left” is opposition to capitalism then the book may be interesting and important, but it is not left wing. If, on the other hand, you believe capitalism is a dynamic economic system worth preserving, but in need of a tune-up, you would likely have a different answer. In the range of political/economic opinion allowed in the corporate North American media the book is certainly at the left end of the spectrum.

But perhaps there is another more important question to consider. Is the book useful, including to those who think an alternative to capitalism is both desirable and necessary? And the answer is an unequivocal yes.

Strangely, it’s not primarily for the reason you may think, if all you know about the work is what you have read or heard in the mainstream media.

While most of the commentary has been about the book’s take on inequality and the author’s prescription (a tax on capital) for controlling the problem, the really unique and useful aspects of Piketty’s work are his insistence on what might be called “reality-based” economics and his straightforward, easy-to-read language.

Unlike the obscurant writing and “fairy-tale” premises that typify most works of economics, Piketty bases his arguments in actual data and sets out to explain them in a style that is accessible to a broad range of readers.

Imagine that! Economics for everyone, including those of us who insist that theories should be tested in the real world! Refreshing, almost scientific.

If Piketty can do it we should hold all economists to these standards. Imagine no more theories of perfect competition where all buyers know everything about all sellers, but instead explanations of what really happens when individuals suffering from a lifetime of brainwashing come up against the might of multinational corporations. Imagine economics that explained the world as lived by ordinary people in a fashion that most of us can understand.

This threat of a good example explains much of the “emperor does so have clothes” reaction of orthodox academic economists and their fellow travellers in the business press to Piketty’s book. Then you add in the overwhelming evidence presented in Capital that inequality does exist, has grown over the past three decades of neoliberal reform, and is likely to grow much greater  — and yes sir those apostles of greed sure are angry.

So, the book is important and you should read it, but … let’s just say one should be aware of its limitations.

Contrary to what you might assume based on the attacks from certain quarters, the author does not advocate socialism — unless you believe socialism can be defined as simply trying to be nice to everyone and sometimes using the government to override the power that capitalism gives rich people.

Piketty is firmly in the camp of those who would save capitalism from itself. While he does argue too much inequality is bad because it threatens democracy and leads to revolution, or at least economic nationalism, there is no question he supports the system. He frequently and explicitly praises capitalism as the best economic system because it produces the most growth. There is no mention of an environmental crisis and its link to inequality and an economic system that values greed above all else until the very end, almost as an afterthought. He does not deal with environmental limits to growth.

Still, the book provides all sorts of useful information about the last 200 years of actually existing capitalism. Its offers a glimpse of what the study of economics should be. Piketty seems to be on the side of ordinary people and even makes mention of economic democracy.

Go and buy Capital in the 21st Century from your local bookstore, but read it with this thought in mind: Rather than tinkering with capitalism, can’t we come up with a better system? One that democratizes economic decision making while rescuing our environment from the ravages of unchecked greed, also known as the fallacy of unlimited growth?

Gary Engler

An impertinent question

21 May

Do people exist to serve the economy or does the economy exist to serve people?

This question came to me as the left side of my brain was reading Thomas Piketty’s important new book Capital in the 21st Century while the right side of my brain watched the news.

There was an item about the B.C. government chopping money from university arts’ programs to fund apprenticeships because it would produce more taxpayers, which would be good for the economy, followed by a commercial touting the Northern Gateway pipeline, which also would be good the economy. As my right brain soaked in the TV images my left brain was digesting statistics that demonstrated conclusively most wealth is owned by a few people and this inequality is growing.

Do people exist to serve the economy or does the economy exist to serve people?

When the two sides of my brain began acting together I realized this is not merely a rhetorical question. Rather, even raising the issue is subversive, or at least impertinent to those who maintain the status quo.

At its most basic level the economy is the sum total of the things people do to provide themselves food, shelter and other things that enhance life, such as recreation, healthcare, entertainment and art. So, the answer to our question should be clear-cut: The point of an economy is to serve people.

But the reality for most of us is exactly the opposite.

We are told the economy demands this or that as if it were some sort of primitive deity to be appeased.

Raising the minimum wage is bad for the economy. Expanding the tar sands and building pipelines to ship bitumen around the world is good. Public daycare or increased pensions are not affordable. Mass layoffs and wage rollbacks are necessary. But consume anyways (the more disposable the better), because that’s what makes the economy go round and round.

Politicians, corporate executives and the media all send us the message that our lives only attain meaning in so far as we contribute to the economy as consumers or taxpayers.

Rather than serving us, “the economy” has become an excuse to treat many people badly, to create unhealthy products, to damage our environment, to justify exploitation, to steal from other people and even to wage war.

Why?

The primary reason is that too much of the economy is run by and for a small minority of people. As Picketty’s statistics show, actual existing capitalism (as opposed to the phoney idealized system taught in school) concentrates ownership of wealth in the hands of a few people. This wealth produces both income and power, so much of which has gone to the richest 1% that any effective democracy is threatened.

Many of us feel powerless in the face of this inequality. Our unions have been undermined and delegitimized. The system tells us our only valid participation in the economy is as consumers, but getting to choose between Coke and Pepsi hardly inspires a sense of engagement.

We certainly get no vote in directing the economy, unless we are shareholders, and in that realm decisions are made by one-dollar-one vote, so billionaires hold sway. Moreover, for at least the past 30 years, the prevailing wisdom has been that governments are incompetent and therefore must keep their hands off the economy. We are told any sort of democratic control is bad because it creates distortions in the natural working of the system, as if there was some divine order that was being interfered with.

But it is not god’s will that is being challenged when democratic control is asserted. Rather it is the will of the 1% who currently own a vast proportion of the economy and direct it (and us) in their self-interest. There are no mysterious natural forces deciding what gets built, what gets shut down, who loses their jobs, how much to invest in green energy versus the tar sands; there are only very wealthy people and the managers who work for them.

Given that, it is really no surprise that the economy seldom serves the interests of the majority — it serves other masters. The economy follows the orders of the people who own it. And it gives the biggest rewards to the ones among them who are the greediest, the most willing to grab huge profits for themselves while making the rest of us pay for the pollution, ill health and other forms of destruction their industry causes. Then they spend some of those vast profits to buy politicians, think tanks and media pundits who work to convince us that this form of minority rule is good for us — the natural order — and trying to create a better system is hopeless.

But what if, despite all that, we demanded an economy that served all of us? What would we do?

Piketty argues for a tax on wealth and that might be a good starting point, but if we really want to fix this we must go further. When the problem is too much power in the hands of a few the obvious solution is to distribute that power more widely.

We should take away control of the economy from the greedy minority and share it amongst all of us. A good name for such a system is economic democracy.

The exact form such a system might take would probably depend on a country’s history, culture and level of development. But essential elements would be: one-person-one-vote instead of one-dollar-one-vote decision making in all aspects of the economy; workplace democracy instead of master-servant relations and community control instead of corporate control.

If we want an economy that serves all people we must create a system of democratic governance to ensure that happens.

 Gary Engler

Global warming is caused by capitalist greed

30 Apr

Humans have caused climate change by pumping ever more carbon dioxide into the atmosphere and we must quickly cut these emissions.

True, but what has this got to do with unions?

Well, at their core unions are organizations that bring people together to fight for the common good. This essential truth is reflected in the structure, philosophy and history of most unions.

But exactly whose “common good” a union is fighting for can vary widely.

Is it narrowly defined as immediate job interests of local union members? Is it the common good of all those working in a particular trade? All union members in one industry?

Or is it more widely defined as the common good of every union member? Every worker in a particular country? Of all Canadians? All the workers of the world? Every person in the world? Or even wider as the common good of all life on the planet?

The truth is every thoughtful union member, and especially every union leader, must consider the common good from many different perspectives. Everyone has more than one self-interest and therefore more than one common good.

No one is solely a pipefitter, nurse, front desk clerk; or employee of General Motors; we are also children, parents, residents of a city or town, citizens of a country, inhabitants of a planet who are dependent on a common environment, and much more besides.

But unions often find it easiest to fight for the narrowest common good, the immediate self-interest of workers in a particular trade, industry, or company. Higher pay, improved benefits, better job security — members almost always cheer if a union achieves these things. Fighting for all life on the planet or against inequality is a bit more complicated.

But there is another reason as well why unions find it easiest to fight for the narrowest common good. “Looking after No. 1” is what capitalism tells people to do. You are a consumer. Buying more is what life is all about.

In fact, proponents of capitalism argue there is no such thing as the common good, that we are all simply individual consumers and therefore unions are an illegitimate intrusion into the free market. Still, if workers are going to unite for any purpose it had better be limited to stuff like higher pay, something that allows people to buy more and does not challenge capitalism.

So, here’s the reality we face: In so far as a union, its leadership and members have bought into capitalism, the greater the likelihood that union will choose to focus on a very narrow self-interest and ignore such issues as climate change or inequality. Some unions do buy into capitalism despite the fact it does not like workers joining together to fight for any common good, whether narrowly or broadly defined. If it were up to capitalists there would be no unions at all. Capitalists — the bosses — are not our friends. The more people buy into their system the weaker unions are.

And the opposite is also true. The more people come together to fight for the common good, the stronger unions are. The more unions fight for the widest common good, the more people will be on our side and the stronger unions will be. The more unions fight the existing system the stronger unions are.

History shows that the periods of greatest growth in unions were times when capitalism faced widespread challenges and the periods when unions have shrunk, like during the past 20 years, were times when opposition to capitalism was weak.

History also shows that unions have been willing to fight for the widest common good despite opposition from the rich and powerful. Unions were part of the struggle to end slavery and child labour; unions helped win universal voting rights, public education, equal rights, Old Age Pensions, Medicare, the 40-hour work week, paid vacations and numerous other social programs that have benefited society as a whole.

It won’t be easy to stop global warming. Many brothers and sisters earn their living extracting oil, building private automobiles and mining coal, industries that must shrink or disappear to save our planet. Of course this raises difficulties inside the labour movement because it pits narrow self-interest against the wider common good.

But progressive unions were not deterred by similar internal problems in the struggle for civil rights or against sexism and homophobia. As in those battles we must do what is necessary and right. We must demand jobs that do not harm the environment. We must not shy away from battling climate change because there is no more important common good than the health of our environment. We must learn from and work with environmentalists.

But environmental activists must also learn an important lesson from the long history of the labour movement: Capitalism is the problem and certainly not the solution.

The capitalist drive to maximize profits explains the externalizing of environmental costs. Capitalism is a system of small minorities profiting at the expense of others. Private ownership of what are social means of livelihood allows capitalists to make decisions that pass the real costs of industry to communities, workers, future generations and other species.

Capitalism requires growth. But what happens when the environment needs a smaller human footprint? When, at least in wealthier countries, we must learn to live with less stuff?

If a capitalist economy shrinks for a sustained period the system goes into a crisis. Banks crash, unemployment rises and wars suddenly make sense to rich people in order to get their system growing again.

Supporters of capitalism claim the system is based on freedom and choice, but when it comes to the environment for many people this amounts to the freedom to choose between destroying the planet or having a job. The promoters of tar sands, fracking, coal mining and pipelines are explicit about this. The business pages are full of stories quoting the captains of the carbon-industrial complex as telling us: “You must choose between economic prosperity and what is good for the environment, because you can’t have both.”

With capitalism they are correct.

Yet someenvironmentalists, as well as some union members, look to capitalism for solutions. That’s like expecting Toronto Mayor Rob Ford to tell the truth. A sustainable, democratic economy is incompatible with a system run in the interests of a tiny minority that constantly demands more profit.

Science leaves little reasonable doubt that the burning of currently known reserves of coal, oil and natural gas will push atmospheric carbon dioxide levels past a tipping point, after which rising global temperatures will irreversibly undermine the conditions on which human life as we know it depends.

Despite the evidence, today’s capitalism rests on the expansion of fossil fuel production and use.

In Canada capitalist investment is focused on expanding tar sands production. The promoters claim that these developments will create jobs. But every analysis shows more jobs would be produced if equivalent investments were made in solar, wind and geothermal power. Far more jobs could be produced by investing in domestic employment for domestic markets, in the production and distribution of sustainable local agriculture, clothing, etc. Even more jobs would be created by investments in childcare, elder care, social housing, public transit and other green infrastructure.

More jobs but less profit. Capitalists invest in fossil fuels because corporate profits now largely depend on cheap fuel. Equivalent profits cannot be made meeting actual human needs.

So, unions and environmentalists share a common enemy: an economic system run by and for the wealthiest people in the world.

Together we can fight for a different sort of economic system that will prosper in harmony with the environment. Or apart we can fiddle with capitalism as our planet burns.

Gary Engler

From a speech given on the weekend at the Peoples’ Social Forum Assembly on Climate and Oil & Gas in B.C.

‘The Sixth Extinction’ and our looming catastrophe

24 Apr

Carbon dioxide from the burning of fossil fuels is warming the planet, melting glaciers and polar ice caps, raising sea levels, causing more destructive hurricanes, floods, and droughts and increasing ocean acidity. So far corporations, governments, electoral parties and the media are largely indifferent.

When presented with the evidence, profit-seekers may concede that perhaps something should be done. The claim that climate change is just a theory is used to justify inaction: no particular storm, hurricane or flood can be directly blamed on the burning of fossil fuels; perhaps the sun or tides or other natural cycles are to blame. Anyway, the threat is in the distant future — long beyond normal quarterly or annual financial reports, beyond the four or six year terms of most governing parties.

In The Sixth Extinction: An Unnatural History, Elizabeth Kolbert points to a direct, indisputable connection between rising atmospheric carbon dioxide levels and the increasing acidity of oceans.

A third of carbon dioxide added to the atmosphere rains into seas. Carbon dioxide dissolved in water becomes carbonic acid. As aquatic acidity rises, the shells of crustaceans weaken and dissolve. Billions of micro-organisms along with lobsters, oysters and coral reefs can no longer survive. As crustaceans disappear so do the creatures that depend on them as food sources, fishes and land animals like human beings.

Kolbert is a staff writer for The New Yorker who earlier published, Field Notes from a Catastrophe: Man, Nature, and Climate Change. As its title indicates, The Sixth Extinctionfocuses on epochal species extinctions. Current science records six major extinctions. The Fifth Extinction, the most widely known, wiped out dinosaurs 65 million years ago. It is attributed to a massive meteor strike off Yucatan. The immediate shock wave caused wide destruction. Clouds of dust then enveloped the planet, altering climates and vegetation.

Scientists call the current extinction, the Sixth, the Anthropocene, the human-caused extinction. The capacity of human beings to alter environments can be traced back at least 11,000 years when large animals, like mammoths, began to disappear. Since then, humans have leveled great forests, altered and blocked the flow of major rivers.

For the last 500 years global exchange and industrial capitalism have dramatically transformed flora, fauna and micro-organisms everywhere. Humans have added massive amounts of chemical fertilizers, herbicides and pesticides to soils and waterways. Our dependence on fossil fuel energy has increased carbon dioxide in the atmosphere to levels not seen in millions of years.

How much of a threat is rising carbon dioxide levels? The past may give us a glimpse of what could happen.

The Third Extinction, the End-Permian, 250 million years ago, was triggered by a massive release of carbon dioxide — from causes not yet understood. Temperatures soared. The chemistry of the oceans changed dramatically. As waters acidified, reefs collapsed; dissolved oxygen levels fell; aquatic organisms that relied on oxygen suffocated. They were replaced by others that used sulfur as an energy source. These gave off hydrogen sulfide, a toxin to most organisms on land and sea. “Glassy purple seas released poisonous bubbles that rose to a pale green sky.” Ninety per cent of land and ocean species disappeared.

Today rising carbon dioxide levels are measurably increasing the acidity of oceans. Coral reefs are shrinking in the Caribbean, off Australia and elsewhere. Other sea life is already under threat. In early 2014, Vancouver Island scallop producers reported that ten million scallops had failed to mature. British Columbia oyster stocks have also declined dramatically.

The Sixth Extinction leaves no doubt that carbon dioxide emissions are a looming catastrophe, far more serious than the profit-seeking establishment would have us believe. The problem is capitalism, a system that entitles major shareholders and top corporate executives to direct economies in their private interests. Capitalist competition drives corporations to maximize profits. Corporate control of the media makes people believe that profits are more important than employment, decent wages and the environment.

The Sixth Extinction makes it clear that action to cut reliance on fossil fuel energy is needed urgently. It is also a popularly written sketch of the evolution of scientific revolutions. Its many anecdotal asides make it an easy read.

Al Engler

The Sixth Extinction: An Unnatural History
 by Elizabeth Kolbert
(Henry Holt and Co.,
 2014; $28.00)

 

Rebuilding the commons through economic democracy

5 Apr

Who runs your workplace?

For most of us the answer is a boss, who reports to a higher boss, who reports to an even higher boss, who reports to a … all the way up to the “owner” of the enterprise. This is called a chain of command.

The words “chain” and “command” are both suggestive of a fundamental truth: Today’s rules about the power of bosses and workers evolved from a time of masters, servants and slaves. While many norms and expectations have changed over the years the fundamental truth that bosses give orders and workers are required to obey remains the same.

This explains the use of the term “wage slavery” by some who oppose capitalism. It suggests that working for wages is similar to being a slave. The Wikipedia entry on wage slavery offers a good introduction to the subject, pointing out the concept is much older than capitalism and that even ancient Romans argued accepting wages for work put one into a slave-like position. The idea that giving up your free will for any reason or length of time makes you a slave is as old as wage work itself.

Interestingly, the usage of the term wage slavery has diminished as a greater and greater proportion of us work for wages. The notion that most of us are effectively slaves is probably too uncomfortable to contemplate. And, of course, not talking about this serves the interests of those who profit from our labour.

But I’d like to suggest there’s another reason as well.

As more and more of us work for wages it becomes more and more normal and we lose the sense of an alternative. I was reminded of this while reading Peter Linebaugh’s stimulating new book Stop, Thief!: The Commons, Enclosures, and Resistance, a series of 15 essays “written against enclosure, the process of privatization, closing off, and fencing in.”

Contrary to the mythology of a modern, progressive and democratic capitalism replacing backward feudalism, most ordinary people had more say in their day-to-day work life before our current economic system came along. In fact, the rights and privileges of “commoners” (the majority of people, whose independent livelihood depended on the shared commons) were destroyed as part of capitalist expansion. To this day, everywhere capitalism goesthe rights and privileges of indigenous people disappear as the commons are enclosed (become private property) so that rich people can steal their profits.

When commons were common, through tens of thousands of years, people mostly developed technology and systems of usage that respected the land, ocean, river, forest, grassland and creatures that lived there. They did this because it was in their collective self-interest to do so. This was reflected in their religions and how their societies were organized, including the ways people thought of themselves.

Mutual respect, independence, collective responsibility, reciprocity, community and what we would now call a sense of ecology were encouraged because all served a society that held its resources in common.

As Linebaugh points out in Stop Thief, 200 years ago poets bemoaned the loss of these values as well as the ugliness created when capitalism enclosed the land and resources that people depended on for their livelihood. Capitalism waged war on the rights, privileges and ideology of commoners. Enclosure of the rest of the world (colonialism) was the logical next step. That war has continued ever since, with today’s military interventions, as well as the mass marketing of never-ending consumption and individualism just the latest in a long line of assaults.

But this is not just interesting history. People who work for wages today can learn important lessons from those who resisted, and continue to resist,the enclosure of the commons.

We should learn that:

  • Every enclosure of the commons is an assault on the environment. The point of capitalism is to exploit nature and other human beings for private profit.
  • Our strength is always collective; it flows from the commons. As individuals we are weak and defeated.
  • We must insist that everywhere people work together be transformed into a commons. The factories, the shops, the distribution systems, all the places of our employment — the entire means of production — are a commons enclosed by capitalists in order to profit at our expense.
  • To create an environmentally sustainable, healthy, nurturing economy requires we no longer accept being wage slaves. We must take responsibility for what we do. We must understand that our world is a commons, not private property, and begin to act collectively to protect the resources that belong to all of us.
  • We must re-learn the values of mutual respect, independence, collective responsibility, reciprocity, community and living in harmony with the environment that were once the hallmarks of commoners.

During most moments of sudden, great change in human history people have been motivated by rights that were lost, insisting they be restored.

To accomplish the great change necessary today let us demand that which requires social labour be recognized for what it is, the common property of all. Let us rebuild the ways of thinking, the social relations, as well as the rights and responsibilities that were lost when our commons were enclosed.

The term that best describes what we would be fighting for is economic democracy. The commons was always an economic democracy.

The term also helps explain a key flaw in our current so-called democracy — power flows from control of the economy, which is “owned” by a tiny minority.

The most successful social movements in the past two centuries have all pushed for an expansion of democracy. The fight for economic democracy would be a continuation of these movements.

Let’s build an economic democracy to rebuild the commons!

Gary Engler

Understanding the intellectual whores of capitalism

28 Mar

There’s nothing worse than ignorant and opinionated.

You know the type: Most mainstream newspapers have at least one; they dominate radio talk shows and certain TV “news” networks.

Loud supporters of the existing economic system who deny inequality is a problem or even claim it doesn’t exist.

Business leaders/columnists/celebrities/media hacks and the “think tanks” they come from who also deny climate change is a problem or even claim it doesn’t exist.

Apostles of greed who claim to be “conservative”, defend chemical-laden, genetics-manipulating industrial food production, ignore all the ways corporations poison our environment, ridicule anyone who points out there must be some limit to the exploitation of the earth’s resources, promote the use of private automobiles, hobble public transportation (and every other public good) by promoting tax cuts, love pipelines and usually claim to speak on behalf of the “middle class” or even the “little guy.”

How should we respond to these defenders of the status quo who frequently pretend to rail against a mythical left-wing media agenda?

Argue with them? Quietly loathe them? Ridicule them? Ignore them?

I’d like to make the case for understanding and pity as the most appropriate reactions.

First, to understand them we must examine the role they play, the first step of which is to recognize whose interests they represent, which is another way of asking: Who would pay them to say/write the things they do?

The answer is, of course, the people who profit most from pipelines, tax cuts, unlimited growth, a private automobile dominated landscape, industrial food production, chemicals poisoning the environment, pipelines, global warming and an acceptance of income inequality.

But why would the billionaires and mere multi-millionaires whose fortunes depend on the continued flow of profits from oil, agribusiness, automobiles, chemical, real estate, media and capitalism in general think it worth their while to handsomely reward thousands of cheerleaders who endlessly repeat a few shallow ideas on the sidelines of capitalism?

Because it is necessary. The wealthy 0.01% minority who rule over the 90% majority understands that the future of their system depends on convincing or paying off 9.99% of the population who become the opinion leaders, the managers, the foremen, the supervisors, the small businessmen and the other shock troops of the system. The rich are like the pathetic men who frequent red-light districts — they must pay for it — and the right wing columnists/celebrities/media hacks/researchers do it for money, often working in the political equivalent of brothels, called think tanks.

The choices offered young writers, journalists and academics who aspire to earn a decent living at their craft are not great today. There are many more opportunities to voice opinions supporting the system than to criticize it. If you do get a job in a shrinking newsroom or social science department the best way to get ahead is always to support the existing power structure, not oppose it. Arguing in favour of the rich and powerful certainly pays better.

And in a time when the Left seldom confronts capitalism, confining its criticisms to tinkering around the edges, rather than offering a vision of an alternative system, should it be a surprise that the easiest route to intellectual success is selling out to the highest bidder?

Media whores are not that much different than the women and a few men who earn a living from selling their bodies. (And I do apologize to every sex-trade worker who is offended by the comparison to Rush Limbaugh.) They too are just trying to survive; they are typically people who don’t have many alternatives; they are often victims of abuse by a system that penalizes intellectual non-conformity (amazing the number of conservative pundits who claim a left-wing background); the ones who do really well at it typically claim they actually enjoy it.

Given the similarities between these two forms prostitution doesn’t it make sense that we respond to both the same way?

We don’t hate streetwalkers or harangue them; we mostly pity them because of our understanding that they are products of sexism and other forms of oppression.

So too should we pity the sycophants of the rich and powerful because we understand they are nothing more than the intellectual prostitutes of an economic system that attempts to buy, sell and profit from everything we do.

Gary Engler

Book reveals real Rwanda story: Imperialism at work

19 Mar

The Rwandan genocide — think you know the story?

Deep-seated ethic enmity erupted in a 100-day genocidal rampage by Hutus killing Tutsis, which was only stopped by the Rwandan Patriotic Front (RPF). A noble Canadian general tried to end the bloodletting but a dysfunctional UN refused resources. Washington was caught off guard by the slaughter, but it has apologized for failing to intervene and has committed to never again avoid its responsibility to protect.

In Rwanda and the new scramble for Africa Robin Philpot demolishes this version of history.

Philpot points out that while the official story begins April 6, 1994, any serious investigation must go back to at least October 1, 1990. On that day an army of mostly exiled Tutsi elite invaded Rwanda. The Ugandan government claimed 4,000 of its troops “deserted” to invade (including the defence minister and head of intelligence). This unbelievable explanation has largely been accepted since Washington and London backed Uganda’s aggression.

More than 90 per cent Tutsi, the RPF could never have gained power democratically in a country where only 15 per cent of the population was Tutsi. Even military victory looked difficult until International Monetary Fund economic adjustments and Western-promoted political reforms weakened the Rwandan government.

The RPF also benefited from the United Nations Assistance Mission For Rwanda (UNAMIR) dispatched to keep the peace. According to Gilbert Ngijo, political assistant to the civilian commander of UNAMIR, “He [UNAMIR commander General Romeo Dallaire] let the RPF get arms. He allowed UNAMIR troops to train RPF soldiers. United Nations troops provided the logistics for the RPF. They even fed them.”

On April 6, 1994, the plane carrying Rwandan Hutu President Juvénal Habyarimana and Burundian Hutu President Cyprien Ntaryamira was shot down. A French judge pointed the finger at Paul Kagame and the RPF. But the head of the International Criminal Tribunal for Rwanda (ICTR), Canadian Louise Arbour refused to investigate evidence implicating the RPF. When the ICTR prosecutor who took over from Arbour, Carla del Ponte, did look at the RPF’s role in shooting down Habyarimana’s plane the British and Americans had her removed.

Habyarimana’s assassination sparked mass killings (but no planned genocide, according to the ICTR). Five days after Habyarimana’s death an internal US memorandum warned of “hundreds of thousands of deaths,” but Philpot notes, “even though they knew that the massacres would occur and that millions would flee to other countries, the Americans devoted all their efforts to forcing the United Nations to withdraw its UNAMIR troops.”

UNAMIR would have blocked the RPF from capturing Kigali, something Washington supported to undermine French influence and to improve the prospects of North American companies in the nearby mineral-rich eastern Congo.

Rarely heard in Canada, Philpot’s version of events aligns with that of former UN head Boutros Boutros-Ghali, civilian head of UNAMIR Jacques-Roger Booh Booh and many French investigators. Presumably, many Rwandans’ also agree but it’s hard to know as Paul Kagame ruthlessly suppresses opponents, regularly labeling them génocidaire.

Ottawa has supported this witch-hunt. Philpot points to the example of a former Rwandan prime minister denied a Canadian visa: “The Prime Minister of the government that supposedly ended the genocide had now become a génocidaire. Canada had already received Prime Minister Faustin Twagiramngu with all honours in December 1994 when he was looking for funding to rebuild Rwanda under the RPF. Either Canada’s institutional memory is short and selective or, more likely, the country has a policy of supporting the RPF government at all costs.”

This book is an invaluable resource for understanding the Rwandan tragedy and countering those who cite it to justify Western military interventions.

Yves Engler

Does death by car not count?

11 Mar

When a plane carrying 239 people disappears and everyone is presumed dead, the world’s TV networks devote hours of coverage to the tragedy. Newspapers run long and detailed stories. Experts are interviewed to discuss probable causes and remedies.

Government safety boards investigate and produce reports. There seems a genuine attempt to learn from what happened in order to prevent the same death and destruction from ever occurring again.

Contrast that to the reaction of death by automobile.

The latest year for which we have statistics (2010) 1,240,000 people died in vehicle crashes across the globe. That’s 3,397 people per day or 142 per hour. Vehicles kill more people every two hours of every single day than died in the Malaysian Airlines crash. And that’s only counting so-called accidents.

Hundreds of thousands more are felled by cancers and other ailments linked to automobile emissions. According to an MIT study, in the US alone 53,000 people die every year from illness attributed to automobile pollutants.

The greenhouse gases emitted by vehicles have also put millions at risk from diseases, disasters and droughts tied to climate disturbances. The Climate Vulnerability Monitor estimates that climate change is responsible for some 400,000 deaths per year, a number expected to hit one million by 2030.

But the deadliest feature of an automobile-dependent transportation system is the resulting sedentary lifestyle. The World Health Organization calculates physical inactivity is the fourth-leading risk factor for global mortality, causing an estimated 3.2 million deaths annually.

Researchers at St. Michael’s Hospital recently concluded that diabetes and obesity rates are up to 33 per cent higher in suburban areas of Toronto with poor “walkability”. Another study published in Diabetes Care found that new immigrants who moved to a neighborhood with poorly connected streets, low residential density and few stores close by were 50 percent more likely to develop diabetes than long-term residents of walkable areas.

The rise of the private car has greatly undermined active forms of transport. At the start of the 1900s the typical US resident walked three miles a day; today the average is less than a quarter mile. As a result, most adults fail to meet the minimum recommended levels of physical activity (30 min. of light activity five days a week).

The major reason for the reduction in walking is that the private car’s insatiable appetite for space has splintered the landscape. Distances between living spaces, work and commerce have simply become too far to make walking or biking practical.

But there is another reason people have stopped walking: Cars have made us lazy. The more we use them the more we cannot fathom traveling without them. One survey suggests the extent of psychological dependence is extreme. An average American is only willing to walk about a quarter mile and in some instances (such as errands) only 400 feet. Otherwise, the people private vehicles have created, let’s call them Homo Automotivis, take the car.

The true extent of auto-dependence is revealed by drivers willing to wait five minutes for the closest parking spot to where they are going rather than park a block away and walk. The car has produced a state of mind where walking a few extra feet is a defeat.

It has also produced a paranoid state of mind, particularly among those caring for the young. A recent British study of four generations of eight-year-old children in Sheffield found a drastic decline in the average child’s freedom to roam. In 1926 an eight-year-old in the Thomas family was allowed to go six miles from his home unaccompanied, while today’s child, notes The Daily Mail, “is driven the few minutes to school, is taken by car to a safe place to ride his bike and can roam no more than 300 yards from home.”

Canadian children are much less likely to walk to school than their parents’ generation. According to Active Healthy Kids Canada, 58 per cent of today’s parents walked to school when they were young while only 28 per cent of their children do. Partly as a result, only 5 per cent of Canadian children get the recommended 60 minutes of physical activity a day.

Driving children to school is an outgrowth of the greater distances that have come with automotive focused urban planning. But it is not only children living far from school who aren’t walking. One US study found that 87 percent of students living within a mile of school walked in 1969 while today only a third make the same trek.

It is less that children cannot walk to school and more that Homo Automotivis parents, fearing for their children’s safety, prefer to drive them. The most commonly cited fear? Not bullying or kidnapping. The major reason cited by parents for restricting unaccompanied travel: traffic danger.

But when parents use cars to protect their children from other cars, it results in notoriously dangerous schoolyard pickup areas and the very justification for driving their kids to school: a deadly vicious circle.

How have we gotten ourselves into this auto-produced mess? More important, how do we escape?

A  start might be taking death by car as seriously as we take plane crashes.

Yves Engler

Sustainability and capitalism: Can we have it all?

30 Jan

From a speech given at the One World Week Forum at the University of Warwick on January 30, 2014.

Can capitalism solve the problems of global warming and growing inequality?

It seems to me this is like discussing the issue of inappropriate hyper-sexual imagery bombarding 11-year olds and then asking: Can Justin Bieber or Lady Gaga fix the problem?

Real capitalism, not the theoretical version taught in school, is a system of minority rule in which a few people profit at the expense of others.

Real capitalists are always trying to cut their costs and increase their profits, which leads to unemployment, falling wages, rising economic disparity and not paying for the environmental damage they cause.

Private ownership of what are social means of livelihood produces incentives for capitalists to pass along the real costs of industry to communities, workers, future generations and other species.

Private ownership makes growing inequality inevitable. A system can proclaim itself democratic, but if a minority holds most of the economic, and therefore social and political power, that minority will inevitably reward itself, its power will grow and ever-expanding inequality will be the result.

Capitalism is sociopathic. Its ideologues, like the late Margaret Thatcher, reject the social, claiming only individuals exist. Yet capitalism has driven individual producers to the fringes of economies. Most people, ninety per cent in the U.K., depend on wages or salary, working with others in cooperative, coordinated labour — social labour, but directed by wealthy minorities for their own profit.

Capitalism promotes greed. It boasts of this. So why would we be surprised when a small minority with most of the power looks after itself, in effect telling the rest of us: “Screw you and the planet you live on! We don’t care about global warming because we have the money to buy a nice place regardless of how high the oceans rise.”

Capitalism requires constant growth to satisfy its need for more profit. But what happens when the environment needs a smaller human footprint? When, at least in wealthier countries, we must learn to live with less stuff?

History shows capitalism reacts badly to declining markets. When the economy shrinks for a sustained period the system goes into crisis. Banks crash, unemployment grows and capitalists often turn to war to get their profits rising again.

The truth is a sustainable economy is incompatible with a system that constantly demands more profit.

To quote the greatest living English political philosopher, Russell Brand: “I know what the fucking system shouldn’t do. It shouldn’t destroy the planet and shouldn’t create massive economic disparity.”

Like Russell we know what we don’t like. That’s the easy part. But how can we get rid of capitalism and what is the alternative?

To answer we must go back to the issue of power and how to distribute it in a way that promotes the common good, a key element of which is a healthy environment. The best way is through more democracy. REAL democracy. Economic democracy.

Do you want an equitable, sustainable economy? Then help overthrow capitalism and create an economic democracy.

What exactly does this mean?

Let me give you an example: With the one pound one vote system that governs corporate capitalism, Richard Branson, with a net worth of 3.5 billion pounds get 3.5 billion votes. In comparison you (pointing) get 147 and you get 58. Most of you poor buggers owe more than you own so you get no votes at all. Economic democracy means giving everyone the right to a voice and an equal vote in their communities’ economic decisions. When everyone has an equal right in decision-making, economies will be motivated by general wellbeing, not private profit. Economic democracy means eliminating the divide between workers and owners by making everyone an owner. Economic democracy means multiple owning communities  — local, regional, national, international — so that power does not become concentrated in the hands of a single central state. It means that wherever social labour occurs a system of democracy manages the enterprise.

Imagine companies that are democratically run by workers together with a local, regional, national or international government, whichever is appropriate to that enterprise; companies whose mandate it is to promote the common good, rather than the narrow self-interest of rich shareholders; companies that no longer have incentives to destroy the planet, but rather face real penalties for harming the environment.

Now, I know what at least some of you are thinking. This is not realistic. Your ideas are just pie in the sky. But the truth is capitalism has already created what one might call “objective conditions” that do indeed make economic democracy possible. Most people in most countries already depend on social labor. Most of you, if you find paid employment, will be salaried or wage workers. If we choose to fight for it, we can expand one-person, one-vote decision-making into every area where people work collectively, which is most of our economy. If we elect governments committed to it we could pass laws that limit private property to what is truly private and doesn’t give an individual power over others. We could create a system of social ownership with multiple democratic owning communities.

If we accomplish these three things — replacing corporate ownership with social ownership, replacing capitalist entitlement with equal human entitlement and replacing master-servant relations with workplace democracy — the system that drives enterprises to maximize profits, regardless of the consequences, would no longer exist.

Capitalism and sustainability, can you have it all? No. But there is a much better alternative: Economic democracy, a system that will offer authentic jobs, a nourishing work-life balance, your fair share of power and a healthy environment. This sounds like the essentials of a good life to me.

Gary Engler

Video: Understanding Capitalism — Idiocy

5 Jan

Capitalism uses unemployment to keep workers in line

1 Jan

A just society should provide everyone with access to a job yet nearly 2 million Canadians can’t find work.

Officially 6.9 per cent of the Canadian workforce is unemployed. But this number rises to 10.3 per cent when those who’ve given up searching for work are included. Counting “discouraged workers”, about 1.8 million Canadians can’t find a job.

Looked at from a different perspective, StatsCan announced last week that there were six job-seekers for every job available in September. Counting “discouraged workers” that number increases 50 percent.

Incredibly, some consider Canada’s unemployment rate a success. In his October throne speech Stephen Harper misleadingly declared that “Canada now has the best job creation record in the G-7 — one million net new jobs since the depths of the recession.”

This isn’t simply self-promotional rhetoric. Policy moves suggest the government is little concerned by the large number of Canadians out of work. Over the past two years they’ve curtailed Employment Insurance benefits, increased the age at which people can receive Old Age Assistance and slashed public-sector employment.

While the government would never say as much publicly, some among the corporate-funded think tanks argue that having over 1 in 10 Canadian workers out of a job is actually too few. “Canada’s unemployment rate dangerously low” was the title of an April Financial Post article by Philip Cross, Research Coordinator for the Macdonald-Laurier Institute.

Hostility to anything approaching full employment reflects the growth of neoconservative policies. Over the last three decades the idea that everyone should have access to a job has largely disappeared from political discourse. But it used to be fairly common.

In the 1963 election Liberal leader Lester Pearson ran on a “Sixty days of decision” platform that included a pledge of full employment and during his time as Prime Minister Canada’s official unemployment rate dropped below 3%. Similarly, the UN’s International Covenant on Economic, Social and Cultural Rights, which was adopted in 1966 and signed by Canada in 1976, called for the right to employment. It recognizes that “Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.”

Instead of focusing on peoples’ right to employment, policymakers today emphasize property rights. In effect, this has meant extending patents, easing safety/environmental regulations on corporations and enabling investors to move to low-wage jurisdictions.

While these policies certainly benefit some, few of us gain our income from owning property. The vast majority of Canadians are wageworkers, their dependents or retired wageworkers. And without a job it’s difficult to get by.

But a job is not only about paying the bills. What one does is generally an important part of a person’s identity and most people want to feel like they are contributing to society. Persistent unemployment can be psychologically damaging for individuals.

It’s also socially damaging. Mass unemployment is a waste of peoples’ energy and ingenuity. Imagine what the 1.8 million Canadians out of work could accomplish if they were mobilized to develop green energy sources or to expand mass transit and childcare services.

But how do we mobilize all this latent human energy. One socially useful way to stimulate employment would be to have the government significantly expand its role in mass transit and childcare. Another would be to push Corporate Canada, which is sitting on over $575 billion in cash, to invest in renewable energy.

It’s time to rekindle the idea that all adults have the right to a job. There are 1.8 million Canadians waiting to better contribute to their society.

Yves Engler

Workers suffer while rich profit from oil sands fever

27 Dec

A clear diagnosis of the Oil Sands fever variant of Dutch Disease may be just what the doctor ordered to rally Canadian workers in the fight against global warming.

A rapid increase in natural resource investment and revenue usually drives up a nation’s currency. This generally makes other industries less competitive and can greatly weaken a country’s manufacturing base.

Widely known as the “Dutch Disease” (named after a period of rapid expansion of the natural gas industry in the Netherlands), this well established economic paradox has become a taboo subject in this country. Canada’s highly class-conscious elite is worried that manufacturing workers might make common cause with environmental groups and even some business sectors to challenge the carbon/profit bomb known as the tar sands.

A recent Pembina Institute/Equiterre report titled Booms, Busts and Bitumen argues that Canada’s economy is facing “Oil Sands fever”. The study points out that the Bank of Canada believes one-third of the Canadian manufacturing sector’s decline has been caused by a more expensive dollar, which rose alongside the price of oil from $.61 US in 2002 to $1.10 US in 2007 (and has hovered near par since). The study concludes that 40% to 75% of the currency increase has been caused by rising commodity prices, principally oil.

The higher price has led to a boom in production and export. Between 2002 and 2012 energy grew from less than 13% of total Canadian exports to over 25%. And if plans to double tar sands production over the next decade are realized, this dependence will increase.

A February Canadian Centre for Policy Alternatives study gives a sense of the jobs impact of Oil Sands fever. The Bitumen Cliff notes: “The forestry sector lost close to 30,000 positions. And the manufacturing industry, of course, haemorrhaged nearly a half-million positions. For every new job created in the petroleum sector during the past decade, 30 have been lost in manufac­turing. Across all of the export-oriented goods industries… net employment declined by almost 520,000 jobs in the past decade.”

While the precise job toll is debatable, the rapid growth in tar sands exports has undoubtedly hurt manufacturers.

Despite the obvious link between tar sands expansion, a higher dollar and a decline in manufacturing, corporate sycophants denounce any politician or established organization that draws attention to the relationship.

Federal Leader of the Opposition Tom Mulcair was aggressively attacked for raising the issue as was former Ontario Premier Dalton McGuinty. In response to the Pembina/Equiterre report Financial Post editor Terence Corcoran called the mainstream Pembina Institute “off-kilter … fomenter of oil sands phobia … keen on triggering a nation-splitting debate over the oil sands.” For his part, Sun Media’s Lorne Gunter wrote: “Left-wing environmentalists should just come clean: they hate the oil industry, they hate profits and love big government.”

Both Corcoran and Gunter cited a recent Canadian Manufacturers and Exporters (CME) study lauding the tar sands. It notes: “In recent years, much of the discussion linking the oil sands with manufacturing has included so-called ‘Dutch disease,’ with any supposed relationship being characterized as inherently negative. While the effect of the rising dollar has impacted the competitiveness of the Canadian manufacturing sector, especially exports, the underlying problem was poor labour productivity, lack of diversity among customers, and lower rates of overall capital investment. While increased investment in the oil sands may have strengthened the Canadian dollar, it is by no means the root cause of the challenges faced by Canadian manufacturing. Rather than having a negative impact on Canadian industry, the oil sands are providing a customer base for manufacturers.”

While most sane people would argue it makes little sense for the lobbying arm of Canada’s export-oriented manufacturers to dismiss oil-fuelled currency increases that have added 5, 10 or 30 percent to their costs, the CME is a highly ideological institution. When environmental or labour regulations add a few percentage points to their costs it goes berserk. For instance, before Parliament ratified the Kyoto Protocol in 2002 the CME claimed that reducing greenhouse gas emissions 6% from 1990 levels by 2012 would cost the country 450,000 manufacturing jobs. (Perhaps CME researchers should check to see if they didn’t mistake a minus sign for a plus symbol since the trashing of Canada’s Kyoto commitments through tar sands expansion has contributed to significant job losses in manufacturing.)

The CME tends to represent the voice of its biggest members, many of whom have plants in other countries. They can shift operations to lower-cost jurisdictions or use the threat of moving jobs to force wage and benefit cuts.

But that’s only part of the explanation for the CME’s pro tar sands position. That organization is in fact a mouthpiece for capitalists who are more widely invested than ever before and thus less wedded to particular firms. Without too much difficulty they can move their capital from lower margin to higher profit industries. It’s all about chasing profits and damn the negative consequences for workers.

In recent years the tar sands have been a major source of profit making. The Parkland Institute estimates that oil sands operators realized pre-tax profits of $260 billion between 1986 and 2011 (the public owners of these resources received less than 10 per cent of that sum). Over the past decade Canadian resource companies’ profit margins have nearly doubled the service, manufacturing and “nonfinancial” sectors of the economy. According to a late 2011 calculation, the market capitalization of fossil fuel companies on the Toronto Stock Exchange topped $379 billion.

The boom in tar sands profits and stock prices clearly benefits leading Canadian capitalists. A recent Canadian Business magazine profile of the “100 richest Canadians” explains: “Collectively, the individuals on the Rich 100 are worth $230 billion, more than the total gross domestic product of many countries in the world, including New Zealand, Ireland and Portugal. And this year has been one of their best ever. Their combined net worth surged by more than 15% … While the actual economies of Canada and the U.S. aren’t faring particularly well, so long as the U.S. Federal Reserve maintains its stimulus program, stock markets will tick higher.”

The “100 richest Canadians” – and the rest of the 0.01% of top shareholders who control most corporations – dominate corporate lobbying associations such as the CME and they also have significant influence with many think tanks, university departments and news outlets. Like their wealthy patrons, these institutions tend to back whatever generates the most profit (that’s the point of capitalism after all). As a result, there’s little interest in discussing the deleterious job impacts of Oil Sands fever.

But environmentalists and union activists should be making common cause by explaining how tar sands profits that go to the rich and powerful cost Canadian workers hundreds of thousands of jobs. Expansion of the tar sands and the resulting bouts of Oil Sands fever may be good for capitalists but it will further weaken the job market and do great harm to Canadian workers.

 Yves Engler

Workers and their unions must fight climate change

24 Dec

For those of us in the labour movement, tis the season to ponder what good our unions can do in the upcoming year and to renew our commitment to a key principle: What we desire for ourselves we wish for all.

At this time of year, while many of us focus on gifts, it is easy to desire the latest gadget, that new car or even a remodelled bathroom. But, most of us would agree, in the grand scheme of human priorities, certain fundamentals are more important than simply acquiring more things.

For example, decent housing, nutritious food, public education, a safe and loving atmosphere to nurture every child and access to quality healthcare would all be understood by most union members as essential, rather than as simply “stuff” that would be nice to possess. In other words, when we come together in a union we acknowledge certain basic social priorities. Thus the first unions fought for a living wage, the eight-hour day, public schools, pensions etc., not simply more money. Without the basics of life, being able to buy more things is meaningless.

And that’s how we need to think about our environment and especially global warming.

There is nothing more important than a healthy environment. Without that, all the other fundamentals — food, housing, education, family, leisure, pensions etc. — are at risk. If human activity, in the pursuit of accumulating more stuff, destroys the liveability of our planet, we will have done a great wrong to all creatures, including ourselves.

And the best evidence we have is as categorical as science gets. Humans have caused climate change by pumping ever more carbon dioxide into the atmosphere and we must quickly cut these emissions.

Here’s how one leading climate change expert put it earlier this month:

“We need a radical plan for cutting emissions to avoid the radical repercussions of climate change,” said professor Kevin Anderson, deputy director of the Tyndall Centre, based at the University of Manchester in England. “To do this, industrial countries have to cut energy use by around 8-10% each year or 60-70% over the decade, and we have to start now.

“Low-carbon supply and incremental reductions are no longer sufficient to avoid dangerous climate change. We have to have early, rapid and deep reductions in emissions and this can only be achieved in the short term through reductions in energy use.”

Will corporations that dominate the world economy provide us with the “rapid and deep reductions in emissions” that scientists tell us must happen soon to avoid environmental catastrophe? No.

Rather than cutting back on emissions we see corporations invest billions in the tar sands, fracking, offshore drilling and digging up more coal, because all are profitable.

Our current economic system requires ever expanding profit. As a result, if corporations were people they would be diagnosed as psychopaths. They are ruthless in the single-minded pursuit of profit. Psychopaths feel no empathy for their victims. They do not care if the consequences of their actions could soon be the overheating of our planet to the degree that our grandchildren no longer have a habitable environment.

So who will fight to protect our planet?

For 175 years unions have fought for justice, democracy and to make life better for all. We helped end child labour and slavery. We fought for universal franchise and equal rights for all. These battles required enormous sacrifices to overcome opposition of the rich and powerful.

Sacrifices will be necessary as well to stop global warming. Many brothers and sisters earn their living extracting oil, building cars and mining coal, industries that must shrink or disappear to save our planet. This raises difficulties inside the labour movement.

But progressive unions were not deterred by similar contradictions in the struggle for civil rights or against sexism and homophobia. Similarly we must not shy away from battling climate change.

Unions must defend our common interests. There is no more important common interest than the health of our environment.

Gary Engler

Canada serves corporate interests around the world

22 Dec

Should the primary purpose of Canadian foreign policy be the promotion of corporate interests?

Canada’s business class certainly seems to think so. And with little political or ideological opposition to this naked self-interest, Harper’s Conservatives seem only too happy to put the full weight of government behind the promotion of private profits.

Recently, the Conservatives announced that “economic diplomacy” will be “the driving force behind the Government of Canada’s activities through its international diplomatic network.” According to their Global Markets Action Plan (GMAP), “All diplomatic assets of the Government of Canada will be marshalled on behalf of the private sector to increase success in doing business abroad.”

The release of GMAP is a crass confirmation of the Conservatives’ pro-corporate foreign policy. In recent years the Conservatives’ have spent tens of millions of dollars to lobby US and European officials on behalf of tar sands interests; expanded arms sales to Middle East monarchies and other leading human rights abusers; strengthened the ties between aid policy and a Canadian mining industry responsible for innumerable abuses.

While some commentators have suggested that GMAP is a “modern” response to China’s international policy, it actually represents a return to a time many consider the high point of unfettered capitalism. Often in the late 1800s wealthy individuals not employed by Ottawa conducted Canadian diplomacy. The owner of the Toronto Globe, George Brown, for instance, negotiated a draft treaty with the U.S. in 1874, while Sandford Fleming, the surveyor of the Canadian Pacific Railway, represented Canada at the 1887 Colonial Conference in London.

From its inception the Canadian foreign service reflected a bias towards economic concerns. There were trade commissioners, for instance, long before ambassadors. By 1907 there were 12 Canadian trade commissions staffed by “commercial agents” located in Sydney, Capetown, Mexico City, Yokohama and numerous European and U.S. cities.

Despite this historic precedent, in the 21st century it should be controversial for a government to openly state that economic considerations drive international policy. Yet criticism of GMAP has been fairly muted, which may reflect how many progressives feel overwhelmed by the Conservatives right-wing aggressiveness in every policy area.

Or perhaps there’s a more fundamental explanation. The mainstream political/media establishment basically agrees with the idea that corporate interests should dominate foreign policy.

In response to GMAP, Postmedia ran a debate between John Manley, head of the Canadian Council of Chief Executives and a member of the advisory panel that helped draw up the Conservatives’ plan, and former foreign minister and leading proponent of the Responsibility to Protect doctrine, Lloyd Axworthy. While Manley lauded the Conservatives’ move, Axworthy criticized it as “bad trade policy. The best way to enlarge your trade prospects and to develop a willingness for agreements and to improve economic exchange is to have a number of contacts to show other countries that you are a willing and co-operative player on matters of security, on matters of human rights, and on matters of development.”

Axworthy did not express principled criticism of the Conservatives’ move; he simply said that “trade prospects” — a euphemism for corporate interests — are best advanced through a multifaceted foreign-policy. Widely lauded by the liberal intelligentsia, Axworthy reflects the critical end of the dominant discussion, which largely takes its cues from the corporate class. And Canada’s business class is more internationally focused than any other G8 country.

Heavily dependent on “free trade” Canadian companies are also major global investors. The world’s largest privately owned security company, GardaWorld, has 45,000 employees operating across the globe while another Montréal-based company, SNC Lavalin, has engineering projects in 100 countries. Corporate Canada’s most powerful sector is also a global force. The big five banks, which all rank among the top 65 in the world, now do a majority of their business outside of this country. Scotiabank, for example, operates in 50 countries.

The mining sector provides the best example of Canadian capital’s international prominence. Three quarters of the world’s mining companies are based in Canada or listed on Canadian stock exchanges. Present in almost every country, Canadian corporations operate thousands of mineral projects abroad.

With $711.6 billion in foreign direct investments last year, Canadian companies push for (and benefit from) Ottawa’s diplomatic, aid and military support. As their international footprint has grown, they’ve put ever more pressure on the government to serve their interests. There is simply no countervailing force calling on the government to advance international climate negotiations, arms control measures or to place constraints on mining companies.

There’s also limited ideological opposition to neoliberalism. Few in Canada promote any alternative to capitalism. Until unions, social groups and activists put forward an alternative economic and social vision it’s hard to imagine that Canadian foreign policy will do much more than promote private corporate interests.

Yves Engler

Remaking Mexico’s oil industry on behalf of the 0.1%

16 Dec

MEXICO CITY  — Are we living in a time when ordinary people have forgotten their history, when all those who fail to remember the past will be condemned to relive its harsh reality?

I thought of this as two Canadian tourists marched with thousands along the Paseo de la Reforma last week to demonstrate opposition to the energy “reform” bill being debated by Mexican legislators. The new law would allow foreign oil giants into the country for the first time in 75 years.

Certainly the people who had come from every corner of the country to form a human chain around the Mexican Senate and Chamber of Deputies were well aware of history and cited it on their signs, in their chants, speeches and songs that began in the early morning and continued until late at night. (The noise, traffic jams and thousands of riot police were scaring off tourists and locals alike.) For the students and others banging on the metal barricades surrounding government buildings changing the constitution to allow foreign multinational companies to exploit the country’s oil and natural gas resources is a return to the bad old pre-1930s era when Mexico’s government exercised less real power than the foreign corporations that controlled its vital energy sector. Posters taped to the barricades harkened to history. One read: “The Spanish came to steal the yellow gold for trinkets. The gringos are coming for the black gold … Are you going to stay silent?”

In fact, the 1938 expropriation of the world’s second largest oil industry, which was the first nationalization by a capitalist country, and the creation of government-owned Pemex are celebrated throughout Mexico and their significance in transforming the country is taught in schools.  Kids learn how oil profits that once went to foreign investors remained in the country to build schools, roads and provide social services. The moderately leftish president, Lázaro Cárdenas, who confronted and defeated the British and American oil giants of the day, is honoured with streets, parks, schools and other buildings named after him and is generally considered one of the founders of modern Mexico.

Ironically it is the party that Cardenas was instrumental in creating, the ruling PRI, together with the more overtly right-wing PAN, that over rode the constitution with a two-thirds vote in both the Senate (95-28 on Tuesday) and lower house (353-134 on Thursday). All that is left for the bill to become law is approval by 17 of the 31 state legislatures, most of which are controlled by the PRI and PAN.

Given the statues and school curriculum, it is difficult to argue that ordinary Mexicans are unaware of the history of their country’s oil industry and the excellent reasons to retain “the peoples” ownership of this vital resource. Indeed, a survey published in June, before the legislation was introduced, showed 65 percent of Mexicans opposed foreign investment in the oil industry. Most clearly believe that the oil belongs to the people and profits should be invested in the country’s future rather than fatten the bottom line of ExxonMobil, Shell, BP or Chevron.

In reality the problem confronting Mexico is not the lack of historical memory. It is the lack of real democracy. It is the power of the ruling class, both international and Mexican, to get their way. The people who will benefit from an influx of foreign capital and a reintroduction of “free enterprise” into the oil industry know full well that this legislation will ultimately be bad for most Mexicans, but they don’t care. Their primary concern is how to enrich themselves.

The cheerleaders for capitalism proclaim loudly for all to hear “greed is good” and yet we act surprised when capitalists act in their own self-interest, ignoring the common good.

Mexican capitalists will destroy government-owned Pemex (as they have been trying to do for decades) because for them any economic activity that does not produce private profits is useless — worse than useless, because it may offer an example of an alternative economic system.

What is happening to the Mexican oil industry is another in a long line of international rollbacks of anything that limits the power of the 0.1% richest people around the world, who take the vast bulk of profits from the capitalist system.

Until we, the 90% who work for a living and have the power to take over, rise up and challenge this minority rule of the 0.1%, things will continue to get worse. More social programs will be chopped, more nationalized industries will be sold off to private interests and our so-called capitalist democracy will continue to prove itself no more than a system of one dollar, one vote.

The sellout of the Mexican oil industry is just the latest example of where capitalism is taking us.

Gary Engler

Do we have enough time to fix global warming?

13 Dec

Even Vladimir Lenin was surprised when the Russian Revolution began in 1917.

Is this just an interesting historical tidbit or a profound example of how fast seemingly stable political, social and economic systems can collapse?

The subject of how long lasting our current system really is comes up frequently in discussions about global warming and what we can do about it.

Usually the conversation goes something like this:

“Scientists tell us we’re getting close to the point of no return. We don’t have much time left to drastically cut our carbon emissions.”

“Yes, but corporation keep investing billions in the tarsands, in coal, in building ever more private automobiles. The oil sector, that’s where the money and jobs are.”

“Even the people who understand global warming is a problem need jobs.”

“Governments pay lip service to combating global warming, but in reality they follow the money too. Big corporations buy them off. They run everything.”

“The problem is capitalism. Capitalists require ever-expanding profits and will do anything to keep them flowing. That’s just the way the system is.”

“So what can we do about it?”

“Get rid of capitalism.”

“How likely is that?”

“I guess it depends on how many people come to the same conclusion and are willing to do what it takes to change the system.”

“In other words, it’s hopeless.”

“Why do you say that?”

“Look around, people don’t care. They’re too busy shopping or worrying about their own private problems. People are too scared to join a union, let alone overthrow capitalism.”

“Things can change, very quickly.”

And that’s where the story about how the Russian Revolution surprised everyone comes up.

For those of us who understand the importance of acting quickly to reduce carbon emissions and that capitalism is incapable of dealing with this urgent problem, the question of how fast we could build a new, environmentally friendly economic system is critically important.

Is there time or are we cooked? Literally.

The answer depends, in large part, on one’s views about how “revolution” occurs.

If you believe that major change only happens after long years of organizing by dedicated, professional revolutionaries building a party that can lead the masses into a brave new future, then human beings today are probably like a lobster in a pot just before the chef turns on the burner: “I don’t know what all the fuss is about. This water seems quite comfortable to me.” It’s doubtful if we have the time to develop the cadre necessary for taking over a system as complex and all-encompassing as world capitalism.

On the other hand, if you believe in the power and ability of ordinary people to rise up when confronted by a crisis that affects us all, then it is possible to be optimistic. If the system you want to build begins with working people around the world taking over the reins of the economy and replacing capitalist minority rule with economic democracy, then that could happen relatively quickly. Yes, it still requires “leaders” working hard, talking and organizing, but history offers many examples of ideas spreading quickly and then people acting upon them.

The critical element — the “objective conditions” — already exists. Capitalism itself has created an economy overwhelmingly dominated by social labour. This gives the working class the potential power to take over almost every part of the economy in the vast majority of major economies around the world.

Most people in most countries are workers. If we chose to do so, we could easily expand one-person, one-vote decision-making into every area where people work collectively, which is most of our economy. We could limit private property to what is truly private and doesn’t give an individual power over others. We could move to a system of social ownership where multiple democratic owning communities based on the appropriate level of government — local, state/provincial, national, international — replaced corporations. If we did these three things the system of greed that propels capitalists to earn profits, regardless of the consequences to our environment, would no longer exist.

Saving the planet from global warming and ensuring a future for our grandchildren are powerful incentives for billions of working people to participate in this necessary global movement.

Can it happen quickly enough? Yes.

Will it happen quickly enough? That is up to us.

Gary Engler 

The truth is Canada supported apartheid

10 Dec

It’s enough to make one who knows even a little history gag.

The death of Nelson Mandela has led to an outpouring of vapid commentary about Canada’s supposed role in defeating South African Apartheid. “Canada helped lead international fight against Apartheid”, noted a Toronto Star headline while a National Post piece declared, “Canada’s stance against apartheid helped bring freedom to South Africa.”

Notwithstanding this self-congratulatory revisionism, Canada mostly supported apartheid in South Africa. First, by providing it with a model. South Africa patterned its policy towards Blacks after Canadian policy towards First Nations. Ambiguous Champion explains, “South African officials regularly came to Canada to examine reserves set aside for First Nations, following colleagues who had studied residential schools in earlier parts of the century.”

Canada also supported South African apartheid through a duplicitous policy of publicly opposing the country’s racist system yet continuing to do business as usual with this former British Dominion. It’s true that in 1961 John Diefenbaker’s Conservative government called for South Africa to be expelled from the British Commonwealth. But this position was not a moral rebuke of apartheid. “Nothing has been more constant in Diefenbaker’s approach than his search for a tolerable way of averting South Africa’s withdrawal,” commented an External Affairs official at the 1961 Commonwealth meeting where South Africa left the organization. Diefenbaker pushed for South Africa’s exclusion in an attempt to save the Commonwealth. The former British colonies — notably in South Asia and Africa — threatened to leave the Commonwealth if South Africa stayed. This would have been the death of the British Empire’s Commonwealth. Diefenbaker’s lack of principled opposition to apartheid helps explain his refusal to cancel the 1932 Canada-South Africa trade agreement.

Sentenced to life in prison in 1964, Mandela, joined 1,500 black political activists languishing in South African jails. In June 1964 NDP leader Tommy Douglas told the House of Commons: “Nelson Mandela and seven of his associates have been found guilty of contravening the apartheid laws … [I] ask the Prime Minister if he will make vigorous representation to the government of South Africa urging that they exercise clemency in this case”? Lester Pearson responded that the “eight defendants … have been found guilty on charges of sabotage and conspiracy … While the matter is still sub judice [before the courts] it would, I believe, be improper for the government to make any public statement on the verdict or on the possible sentences.” This author found no follow up comment by Pearson regarding Mandela.

Widely viewed as a progressive internationalist, Pierre Trudeau’s government (1968-1984) sympathized with the apartheid regime not the black liberation movement or nascent Canadian solidarity groups. Throughout Trudeau’s time in office, Canadian companies were heavily invested in South Africa, enjoying the benefits of cheap black labour.  In October 1982 the Trudeau government delivered 4.91 percent of the votes that enabled Western powers to gain a slim 51.9 percent majority in support of South Africa’s application for a billion-dollar IMF credit. Sixty-eight IMF members opposed the loan as did 121 countries in a nonbinding vote at the U.N. General Assembly. Five IMF executive directors said South Africa did not meet the standards of conditionality imposed on other borrowers. The Canadian minister of finance justified support for the IMF loan claiming that “the IMF must be careful … not to be accused of meddling in the internal affairs of sovereign states.” A few months later, Ottawa opposed IMF funding for Vietnam because of its occupation of Cambodia (largely to stop the Khmer Rouge’s killing).

Officially, the Trudeau government supported the international arms embargo against South Africa. But his government mostly failed to enforce it. As late as 1978 Canadian-government financed weapons continued to make their way to South Africa. Canadair (at the time a Crown company) sold the apartheid regime amphibious water bombers, which according to the manufacturer, were useful “particularly in internal troop-lift operations.” (The official buyer was the South African forestry department.) In the early 1970s the Montréal Gazette discovered that the RCMP trained South African police in “some sort of liaison or intelligence gathering” instruction.

Supporters of apartheid would say anything to slow opposition to this cruel system. At a 1977 Commonwealth meeting, Trudeau dodged press questions on post-Soweto South Africa suggesting that Idi Amin’s brutal regime in Uganda should be discussed along with southern Africa. For its part, the Globe and Mail argued in 1982 that “disinvestment would be unwittingly an ally of apartheid” since foreign investment brought progressive ideas.

After decades of protest by Canadian unions, churches, students and others, Brian Mulroney’s Conservative government finally implemented economic sanctions on South Africa in 1986. The Conservatives only moved after numerous other countries had already done so. “The record clearly shows”, notes Ambiguous Champion, “that the Canadian government followed rather than led the sanctions campaign.” Unlike Canada, countries such as Norway, Denmark New Zealand, Brazil and Argentina also cut off diplomatic ties to South Africa. Even U.S. sanctions, due to an activist Congress, were tougher than those implemented by Ottawa.

From October 1986 to September 1993, the period in which economic sanctions were in effect, Canada’s two-way trade with South Africa totaled $1.6 billion — 44 percent of the comparable period before sanctions (1979-1985). Canadian imports from South Africa averaged $122 million a year during the sanctions period.

Canada did business with the apartheid regime and opposed the liberation movements. Ottawa’s relationship with the African National Congress (ANC) was initially one of hostility and then ambivalence.

Canada failed to recognize the ANC until July 1984 and then worked to moderate their direction. In an August 1987 letter to the Toronto Star, Foreign Affairs Minister Joe Clark explained the government’s thinking: “Canada has been able to develop a relationship of trust with the … African National Congress that it is hoped has helped to strengthen the hand of black moderates.”

With apartheid’s end on the horizon, Ottawa wanted to guarantee that an ANC government would follow pro-capitalist policy, contrary to the wishes of many of its supporters. The man in charge of External Affairs’ South African Taskforce said that Ottawa wanted an early IMF planning mission to the country to ensure that the post-apartheid government would “get things right” from the start. One author noted: “The Canadian state has entered fully in the drive to open South Africa to global forces and to promote the interests of the private sector.”

Ottawa’s policy towards apartheid South Africa was controversial among Canadians. There was an active solidarity movement that opposed Canadian support for the racist regime and to the extent that Canadian politicians played a role in challenging South African apartheid it was largely due to their efforts.

Yves Engler

CEO fat cats purring all the way to their Swiss banks

5 Dec

Last week in Switzerland big money staved off an important challenge to big paychecks. But the sentiment that spurred a Swiss effort to tie executive compensation to common workers’ wages will not be defeated so easily.

A Sunday ago Swiss voters said no to a referendum question that would have capped executive compensation at 12 times the lowest paid worker in the firm. After gaining over 130,000 signatures to put the question to voters, proponents of the initiative were overwhelmed by a flood of money claiming a “yes” vote would drive companies away. Early polls found 46% of the Swiss public opposed to the 12:1 pay measure but with opponents spending up to 50 times more than the “yes” campaign, 65% ultimately voted “no.”

According to supporters of the measure, the average Swiss CEO made 43 times the average wage in 2011, up from six times in 1984. A number of top Swiss CEOs make more than 200 times their employees’ wage.

But Switzerland’s CEO-to-worker pay differential appears socialistic compared to North America’s. After the U.S., Canada has the second highest CEO-to-worker pay ratio. Last year, for instance, the CEO of BCE, George Cope, received $11.1-million in compensation. This staggering sum is nearly 200 times more than what a Bell Canada technician in Toronto makes and 2,000 times the pay of an Indian call-centre worker who responds to Bell customers.

Despite making 200 times the average industrial wage, Cope was not the best-paid executive in Canada. According to the Canadian Centre for Policy Alternatives’ summary of Canada’s 100 highest paid CEOs in 2011, the $11.1 million Cope made in 2012 would have placed him just off the top 15. Incredibly, the CEO of Canadian Pacific, Hunter Harrison, took home four and a half times Cope’s pay.

In recent years the difference between regular employees’ pay and CEO compensation has grown rapidly. A recent Globe and Mail survey found that ratio has reached 122-1 at Canada’s biggest firms, up from an average of 84-1 a decade ago. Using a different set of data, the CCPA and AFL-CIO put the Canadian CEO-to-worker pay ratio significantly higher.

As a flagrant symbol of growing inequality, executive pay is increasingly facing political challenge. While the 12:1 initiative was defeated, in March more than two-thirds of Swiss voters supported a referendum question requiring companies to give shareholders a binding annual vote on executives’ pay, while outlawing bonuses to executives joining or leaving a business or as part of a takeover. Similarly, some EU officials have suggested that shareholders should be given the right to vote on the ratio between a company’s best and worst paid workers.

The French government took office last year saying it would limit executive salaries at state-controlled companies to a maximum of 20 times that of the lowest-paid employees and on Wednesday, Ontario New Democrat leader Andrea Horwath called for the salaries of CEO’s at the province’s hospitals, electrical utilities and other public sector agencies to be capped at $418,000, twice the premier’s annual salary.

Politicians should legislate a maximum pay differential between the best and worst paid workers in all companies. How about a ratio of 20 times that’s steadily reduced over time?

It may be difficult, but I’m sure CEOs like Bell’s George Cope could learn to cope on a million bucks a year.

Yves Engler

Unions should lead the fight against global warming

4 Dec

What is working class culture?

This question arose as part of a conversation about convincing members of Canada’s newest union, Unifor, to make saving the planet from climate change a priority.

“You’ll run up against working class culture,” said a friend who considers himself an anarchist.

“What do you mean?” I responded.

“Consumerism. High paying jobs with lots of overtime to buy ever more stuff, two cars, a big house in the suburbs with NASCAR and hockey on the two big screens in the basement, plus Housewives of Vancouver on the TV in the kitchen,” he said. “And how many thousands of your members build cars, dig up the tarsands and work in oil refineries? How can people with jobs like that ever be environmentalists?”

The first response I thought of was: “Are you saying soldiers never turn against war? Because history proves they do,” which spun the argument in another direction.

But the subject of working class culture lingered. Is there one and is it defined by consumerism? Or are there many, including ones opposed to the “culture” that TV tries to convince us is how we all live?

And regardless if there is only one, or many, where does it/they come from? Does culture simply happen or is it imposed upon us? Is it something that we can consciously build?

Certainly working class movements in the past have sought to educate themselves in an attempt to create an explicitly anti-capitalist culture. Many social democratic, anarchist and communist groups, including unions, grew into mass movements precisely by challenging the dominant ideology and suggesting an attractive, believable alternative. Rather than bemoan, but accept, the culture that rulers imposed on the working class, social democrats, anarchists and communists instead talked and listened to their fellow workers, convincing them that an alternative to capitalism was desirable, possible and necessary.

Those of us who understand that capitalism is environmentally unsustainable must do the same work today. We must inform people about the importance of immediate action to slow global warming and fix other ecological rifts that threaten human existence on our planet. We must challenge the notion that capitalists will solve environmental problems when in fact they are the ones who profit from mining the tarsands and building the pipelines which threaten our children’s and grandchildren’s future. We must point out that constant economic growth (unsustainable on a finite planet) is at the core of capitalism. But most important of all, we must offer a vision of an alternative to capitalism. This system must be environmentally sustainable, more democratic, provide a comfortable life and be fun to build.

One such alternative to capitalism is economic democracy. This means replacing master-servant relations with workplace democracy, replacing capitalist title with equal human entitlement and replacing corporate ownership with social ownership. The essential ideas of economic democracy are: Expanding one-person, one-vote decision-making into every area where people work collectively, which is the vast majority of our economy; Limiting private property to what is truly private and doesn’t give an individual power over others; Replacing corporations with multiple democratic owning communities based on the appropriate level of government, local, state/provincial, national or international.

In an economic democracy individual greed could not overrule the collective good, which would be determined by democratic means. When the majority of people understand the causes and dangers of global warming, their governments and collective enterprises would become agents of change rather than barriers. Entrenched interests who profit from spewing ever more carbon into the atmosphere would not control them. If workers and communities ran industries, such as the automobile and oil sectors that must change or disappear if we are to make the necessary drastic cuts in carbon emissions, they would be a lot less likely than profit-addicted corporations to blackmail society into supporting private interests that damage the environment. Worker and community owned enterprises would support just transition strategies to move jobs from polluting to sustainable industries. They would also be much more likely to promote an alternative culture of artistic leisure over mindless consumerism.

Environmentalists in and outside the union movement should not cite “working class culture” as an excuse to avoid raising critical issues about the jobs we do. Hundreds of millions of workers have proved capable over the past two centuries of managing the contradiction of opposing capitalism while seemingly dependent on capitalists for their jobs. Pointing out how capitalists use jobs to blackmail us into supporting their interests helps people understand why capitalism is the problem, not the solution. Rather than being a barrier to environmental understanding the fact that capitalism cannot do what is necessary to repair the damage it has already done, is a powerful argument in favour of building a working class alternative to the current system.

Strong, democratic, environmentally conscious, militant unions are one of the keys to success in this project. Such unions do not shy away from difficult but necessary discussions.

Gary Engler

Workers are not anti-trade, but oppose more for the rich

15 Nov

Since announcing the Comprehensive Economic and Trade Agreement (CETA) three weeks ago, Stephen Harper’s Conservatives have repeatedly labelled those questioning the deal as “anti-trade.” But this Canada-European Union accord is one part trade and four parts corporate bill of rights.

While the government has promoted the part of the agreement that would eliminate 98 per cent of all tariffs, this masks the fact that these are already low (or non-existent) on most goods traded between Canada and the EU. A Royal Bank report released last week notes that mining, oil and gas products represent 45 per cent of Canada’s exports to the EU and most of these materials already enter the EU duty free.

On combined bilateral trade of $85 billion a year, EU exporters currently pay $670 million in tariffs while Canadian producers pay only $225 million in duties. To put this sum into perspective, eliminating all current Canada-EU tariff payments will barely cover the increased drug costs caused by another part of the agreement. The extension of Canadian patents under CETA is expected to drive up already high pharmaceutical drug costs in this country by between $850 million and $1.65 billion a year, according to a Canadian Centre for Policy Alternatives study. In other words, Harper’s Conservatives are proposing to add a billion dollars or more to the cost of our health care system, in return for a cut of less than $900 million in tariffs, most of which will benefit European producers. Is this really a good deal for ordinary Canadians?

And, one might ask, what does extending patents have to do with free trade? In fact, as a type of monopoly, patents stifle competition, which is supposed to be a pillar of free trade ideology. Of course the powerful brand-name drugmakers pushing the patent extension are more interested in increasing their profits than economic theory.

Another part of CETA that has little to do with expanding free trade is the investor state dispute settlement process. Modelled after the North American Free Trade Agreement’s Chapter 11, this aspect of the accord will give corporations based in Canada and the EU the ability to bypass domestic courts and sue governments for pursuing policies that interfere with their profit making. The Conservatives pushed for an investor state dispute process in CETA even though there’s been a growing international backlash to these type of accords and under NAFTA’s investor dispute process Canada currently faces more than $2 billion in lawsuits.

A number of other CETA provisions also strengthen investors’ rights to the detriment of democracy. For example, the agreement gives multinational corporations unprecedented rights to bid on public contracts. This will weaken provincial and municipal agencies ability to buy local and pursue other environmental and socially minded policies.

Concurrently, the accord makes it more difficult to set up new publicly operated social services. For instance, a municipality unhappy with private water delivery could face a suit if they tried to remunicipalize (or de-privatize) this service.

CETA also locks in reforms to the Telecommunications Act buried in last year’s 450-page omnibus budget. The Conservatives’ changes allow foreign-controlled corporations to buy a majority stake in telecommunications companies holding up to 10 per cent of the Canadian market (and then grow without limit from there). Under the banner of “free trade,” CETA will make it extremely difficult for a future Canadian government to reverse recent reforms to the Telecommunications Act. This is just one more example of the Conservatives sneaking through their ideological agenda without proper, transparent debate in Parliament.

Recently International Trade Minister Ed Fast told the House of Commons that “the NDP remains beholden, both financially and organizationally, to the big union bosses and anti-trade activist groups.” For his part, Harper told the press that “ideological opposition to free trade in Canada is really, today, part of a very small part of the political spectrum — a very small and extreme part — and for that reason I think you will find very few Canadians who are opposed in principle to having a free-trade agreement with Europe.”

Yes, few Canadians oppose trade with Europe “in principle,” but CETA is only partly about trade. The deal mostly benefits multinational corporations and it isn’t “anti-trade” to say so.

Yves Engler

If Canada was truly democratic

7 Nov

What would a trade agreement intended to benefit all Canadians look like?

This is of more than academic concern right now as the Harper Conservative government will eventually unveil the full details of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

From what we know about it now this agreement is little more than a ‘corporate bill of rights’. It gives corporations even more power to shift investment as they see fit and directly strengthens their interests in everything from public procurement to patent laws.

The one-sidedly pro-corporate nature of the agreement reflects the power that corporations yield over discussions of international trade. Despite the corporate world’s current stranglehold over international economic decisions, a here and now People’s Alternative to CETA is feasible.

To protect multinationals from the scourge of “discriminatory” government policies, CETA includes an investor-state dispute settlement process. This will give corporations based in Canada and the EU a new supranational tool to sue governments for pursuing policies that interfere with their profit making.

But rather than giving even more power to the top 0.1% richest people in the world, who are the investor class, an economic accord driven by a People’s Alternative would set up a labour-state dispute settlement process. In these tribunals workers could sue governments that fail to force employers to abide by labour law and International Labour Organization statutes.

CETA also gives multinational corporations unprecedented rights to bid on public contracts. In a bid to create a “level playing field” for multinationals in public procurement, the agreement will weaken provincial and municipal agencies ability to “buy local” and pursue other environmental and socially minded policies.

Instead of undermining public agencies’ ability to pursue ecological and social goals when tendering contracts, a progressive economic accord would prod firms to follow the highest ecological and social standards within the trading area. A People’s Alternative would give priority to firms that cut their carbon emissions in line with the stronger levels mandated by the EU. It would also prioritize companies that establish works councils, which give workers some formal voice in the operation of the firm and are common throughout Europe.

Under CETA Canada will lengthen the time drugs remain under patent, which is expected to drive up already high Canadian pharmaceutical drug costs by more than $850 million a year. Instead of extending Canadian patent laws to more closely reflect Europe’s rules, why not harmonize daycare programs to reflect the best of the trading area?

Most European countries provide public day care services, which have both costs and benefits to the economy. According to the logic that says trading partners are supposed to be on similar economic footing, it makes as much sense to standardize daycare systems as it does patent rules.

Another argument presented to justify extending patents is that it will lead to more research and development taking place in Canada. But, over the long-term, publicly funded day care would better accomplish this objective. Particularly beneficial to the intellectual development of poor kids, quality public day care increases the likelihood that disadvantaged children will be successful in school and contribute to future innovation.

With the corporate perspective so thoroughly dominating public debates on international trade it can be difficult for critics to do anything more than oppose the current policy direction. But when we disentangle the “economy” from what’s good for corporations a pro-people international economic accord is entirely feasible.

If we enjoyed real democracy, our governments would consult the people about their priorities in trade agreements.

If we lived in an economic system of one-person-one-vote, rather than the one-dollar-one-vote corporate system we have today, trade would flourish but trade agreements would look much different. They would be concerned with benefiting ordinary people, not just the already wealthy and powerful.

Yves Engler

Working for a living in an irrational economic system

1 Nov

Our economic system is pretty funny, eh.

I don’t mean of the belly laugh sort, but rather the ironic variety (although a decent argument could be made that many elements of modern work life have the humour quotient of a Three Stooges skit).

There was a rally Thursday to support unionized cleaners working in Cadillac Fairview buildings in downtown Vancouver who are paid in the $12 per hour range. Cadillac, self-described as “one of North America’s largest investors, owners and managers of commercial real estate” and owned by the Ontario Teachers’ Pension Plan, has given its former $12 per hour cleaning contract to another supposedly unionized company that pays its workers $10.50 per hour.

These hard working people, mostly immigrant women, clean the offices of financial analysts, brokers, accountants, lawyers, executives and others, mostly men, who are paid five to many hundred times more.

Among the many ironies in this sad situation is the realization that the harder and more important the job the worse it pays. The more pointless and socially unnecessary the work the more cash is thrown at the person.

Keeping buildings where we work clean is pretty important. Making the clothes everyone needs to wear, picking the vegetables and fruit that keep us healthy, making sure urban sewers don’t get blocked, or picking up garbage are all important and difficult jobs, but how much are people doing them paid?

Gambling, on the other hand, pays extremely well, if it’s the sort that rich people do. Of course we’re told that what they do on Wall Street or Bay Street is part of the real economy and only what happens on the Las Vegas Strip is gambling.

But it seems to me, real gambling is when you don’t understand what is going on. Think about it: If I bet my pension on whether or not the little ball is going to fall in a red slot or a black slot, at least I can see what happens. If I hand it over to a mutual fund, I don’t have a clue.

How many of us really understand how the stock market works? Sure, we nod in agreement when the analyst comes on the six o’clock news and says: ‘Bond prices rose six basis points and the Dow dropped 43 points today on news the September durable goods figures were higher than expected.’ Say what?

If I put my hundred on the table the least they can do is show me the cards to prove whether I won or lost. On a Las Vegas craps table I see the pit boss check the dice. Cameras cut down on cheating. On Wall Street? No pit boss, no cameras, not even some guys named Guido and Tony to take a cheater out in the alley. Two years after some company steals ten billion, the government starts a court case that lasts another 14 years with appeals and at the end of it all, five rich guys lose their trading privileges.

But I digress.

If you want to earn the really big dough in capitalism you get a job in one of those Cadillac Fairview-owned buildings buying and selling numbers, letters and symbols that only exist on a computer screen. They call this working in the financial sector, but is it that much different than gambling?

And even better paid than those doing the buying and selling are the guys who give advice about which numbers, letters and symbols — that only exist on a computer screen — to buy and sell. Best paid of all is the guy who hires all these people and then sits back and lets them do their job. He’s called a hedge fund manager and can pull down a pay cheque of two million per week or more if he’s really, really good at convincing other rich people to let him “invest” their money.

Sure, some of these number pushers are smart and even have a lot of education, but is what they do socially useful? Compared to cleaners or seamstresses or fruit pickers or garbage guys?

They “make” money, that’s all, something that is supremely valued in our current economic system, but which when judged by any sort of authentic human experience is nothing more than fantasy.

It’s as if the world were one gigantic cornfield, but instead of harvesting it for food, we build mazes because they fascinate the people with money. Cornfield owners can earn huge profits if they invest in mazes. Trillions of dollars change hands, with the really big bucks going to the experts who design them and those who help people find their way through the mazes. But the people who grow the cornfields are paid barely enough to live on.

The truth is, the cleaners of Cadillac Fairview buildings — like the people who grow the corn — perform easily identifiable useful work. The same cannot be said for many of the people who work in the buildings.

What does this reality say about our economic system?

Gary Engler

Has the NDP capitulated to the rich?

28 Oct

This past week may come to be seen as a watershed moment in the NDP’s capitulation to neoliberal capitalism. The nominally social democratic party effectively supported a major corporate ‘trade’ accord all the while opposing an International Monetary Fund call for a more progressive tax code.

Last week the NDP basically endorsed the Comprehensive Economic and Trade Agreement (CETA) the Harper Conservatives have negotiated with the European Union. The accord will greatly expand the power of multinational corporations. By extending Canada’s patent protections, CETA will drive up already high pharmaceutical drug costs. It also weakens provincial and municipal agencies ability to “buy local” by giving multinational corporations greater rights to bid on public contracts. Maybe most egregious, the accord gives corporations based in Canada and the EU the power to sue governments in special investor friendly tribunals if they feel public policy impedes their profit-making.

Despite these corporate giveaways, NDP Trade Critic Don Davies released a statement saying, “New Democrats welcome progress towards a comprehensive new trade agreement with the European Union.” To justify this position Davies pointed to the social democratic credentials of Western Europe. “The NDP has long maintained that Canada should have deeper economic relations with the European Union, democratic countries with some of the highest environmental and labour standards in the world.”

Interestingly, the NDP was less fixated on democratic standards when they voted for the Canada Jordan ‘free’ trade agreement at the end of last year. In that case they were desperate to point to a ‘free’ trade agreement they had supported so the party happily turned a blind eye to the lack of independent labour unions and elections in the country as well as the Jordanian monarchy’s prosecution of individuals for “extending one’s tongue” (having a big mouth) against the King.

In another sign of the NDP’s capitulation to rule by the rich, the International Monetary Fund is proposing a more progressive tax policy than Canada’s ‘Left’ party. Last week the usually neoliberal minded IMF released a paper that noted, “tax systems around the world have become steadily less progressive since the early 1980s.” To rectify this the Fund’s Fiscal Monitor presented an argument to increase income taxes on high earners to 60 to 70 per cent and even suggested a capital levy on wealthy households.

Long a proponent of socially devastating austerity policies, the IMF basically proposes a return to the income tax levels that were common three decades ago. At the start of the 1980s Canada’s top tax bracket was over 60%, which is some 15 percentage points higher than today’s rates. (In 1948 incomes over $2.4 million in 2013 money were taxed at 80%).

A social democratic party motivated by bettering society — rather than simply taking power — would have jumped on the IMF proposal. Instead, the NDP leader was busy repudiating the party’s Toronto Centre by-election candidate, Linda McQuaig, who previously argued that tax rates should be 70% on the rich.

“Be careful, she has never said anything different from party policy [since becoming a candidate],” Thomas Mulcair told the National Post. “She is a public intellectual who has written all kinds of things. But we’re the ones who have to put an offer before the Canadian public … Personal income tax increases are not on the table.”

At some point progressive minded party members will have to ask themselves how far down the neoliberal path they are willing to travel. In the meantime they should tell the NDP leadership they oppose CETA and want substantially increased taxes on the wealthy.

Yves Engler

Russell, the revolution’s name is economic democracy

26 Oct

In the match between comedian and journalist it was a straight sets victory for the funny guy at the Who Makes More Political Sense Grand Slam event near Wimbledon.

Hundreds of thousands have already watched the BBC’s Jeremy Paxman take on Russell Brand in an interview about the need for revolution, a sign that the subject is of more than passing interest.

While it should not be surprising that humour was more effective than earnestness, it was curious to watch how effective Brand’s self-acknowledged ignorance about politics was in scoring political points. Perhaps it was because it made him seem more like the vast majority of ordinary people who know that something is wrong with our economic and political system, but can’t articulate an alternative.

Brand hit an ace when challenged about how he would do things differently and responded by saying what the system shouldn’t do. It “shouldn’t destroy the planet and shouldn’t create massive economic disparity,” he said.

In those ten words he brought together the most important political issues facing humanity today. And they share common roots: Power. Or the lack there of.

Both growing income inequality and the inability to deal with our looming environmental crisis are a result of the concentration of economic and social power in the hands of fewer and fewer people.

In our one dollar, one vote economic system that power inevitably becomes political power. In every system throughout history economic and social power always became political power (then military power).

If left unrestrained, those with more economic, social and political power will use it to get themselves an even larger share of the economic pie, regardless of the effect on the environment or other people.  That’s how the system works.

So, money is power, but it is also a result of power. More money, more power, more money, more power — a virtuous cycle if you are among the wealthiest 1%, but a vicious cycle if you belong to the 99%.

This concentration of power in the hands of the few is the enemy of democracy, which is why so many people are concerned about rising income inequality. But it is also the source of the powerful resistance to dealing with global warming and other looming environmental catastrophes. Oil and coal, for example, make money for powerful people.

Once this reality is understood the question of what to do about the problem of growing income inequality and fixing our environment needs to be reframed as: What can we do to fix the inequality of power?

Answers in the past have included: High taxes on high incomes (up to 90% in many countries); Inheritance taxes on the wealthy; Taxes on all forms of property; Nationalizing sectors of the economy to bring them under “public” control; Encouraging the growth of unions. Most people call this package of policies Keynesianism.

All of these measures do reduce the power of the very rich and have in fact worked well for ordinary people in many countries. Prosperity was the result. The gap between rich and poor shrunk. And capitalism survived, despite protestations of the wealthy and their sycophants.

Capitalists survived so well that they eventually reversed many of these reforms. They demanded and won drastic cuts in their taxes, the privatization of nationalized industries and the destruction of unions. Even in most of the countries that once proclaimed themselves socialist or communist, capitalism has returned. New capitalist classes have emerged. The result has been growing inequality.

Is this return to the past proof that capitalism and inequality are inevitable? Just the way things are? That capitalism is natural or god-ordained? That we like it? That the economic elite is better than the rest of us and deserve what they get? Or is there a better explanation?

These are questions that I would have liked to hear Russell Brand answer. And here is my suggestion for what he should say:

Minority rule is what makes growing inequality inevitable. A system can proclaim itself democratic, but if a minority holds most of the economic and therefore social and political power the result will be the same: The minority will inevitably reward itself, its power will grow and ever-expanding inequality will result.

So we are back to the question of power and how to distribute it equally. The answer is more democracy. Real democracy. Economic democracy. Workplace democracy. Social democracy as it was originally conceived.

We need to experiment to find the best ways to have workers and communities democratically administer the economy, to look after our environment. We need multiple owning communities so that power doesn’t become concentrated in the hands of a central state. We need to eliminate the divide between workers and owners by making everyone an owner. Everyplace where social labour occurs — people working in coordination with others — must be governed by democratic principles. We must get rid of incentives to destroy the planet.

That’s the sort of revolution that I think Russell Brand was talking about.

Gary Engler

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