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

Illegal in Canada, but tax-supported in Israel?

22 Oct

In Canada it is illegal to restrict the sale of property to certain ethnic or religious groups but many of our business people and politicians promote an organization that does exactly that in Israel.
Into the 1950s restrictive land covenants in many exclusive neighbourhoods and communities across Canada made it impossible for Jews, blacks, Chinese, Aboriginals and others deemed to be non-“white” to buy property. It was not until after World War II that these policies began to be successfully challenged in court.
In 1948 Annie Noble decided to sell a cottage in the exclusive Beach O’ Pines subdivision on Lake Huron to Bernie Wolf, who was Jewish. During the sale Wolf’s lawyer realized that the original deed for the property contained the following clause: “The lands and premises herein described shall never be sold, assigned, transferred, leased, rented or in any manner whatsoever alienated to, and shall never be occupied or used in any manner whatsoever by any person of the Jewish, Negro or coloured race or blood, it being the intention and purpose of the Grantor, to restrict the ownership, use, occupation and enjoyment of the said recreational development, including the lands and premises herein described, to persons of the white or Caucasian race.”
Noble and Wolf tried to get the court to declare the restriction invalid, but they were opposed by the Beach O’ Pines Protective Association. Both a Toronto court and the Ontario Court of Appeal refused to invalidate the racist covenant. But, Noble pursued the case — with assistance from the Canadian Jewish Congress — to the Supreme Court of Canada. In a 6-to-1 decision the highest court reversed the lower court’s ruling and allowed Noble to purchase the property.
The publicity surrounding the case prompted Ontario to pass a law voiding racist land covenants and in 2009 the Conservative government defined the Noble and Wolf v. Alley Supreme Court case “an event of national historic significance” in the battle “for human rights and against discrimination on racial and religious grounds in Canada.”
Six decades after the Supreme Court delivered this blow to racist property covenants, a Canadian charity that discriminates in land use continues to receive significant public support. Ottawa provides financial and political support to the Jewish National Fund, which owns 13 percent of Israel’s land and has significant influence over most of the rest. Established internationally in 1901 and nine years later in Canada, the JNF’s bylaws and lease documents contain a restrictive covenant stating its property will not be leased to non-Jews.
A 1998 United Nations Human Rights Council report found that the JNF systematically discriminates against Palestinian citizens of Israel, who make up about 20 percent of the country’s population. According to the UN report, JNF lands are “chartered to benefit Jews exclusively,” which has led to an “institutionalized form of discrimination.” Similarly, after an Arab Israeli couple was blocked from leasing a house in the mid-1990s, they took their case to Israel’s High Court, and in 2005 the court found that the JNF systematically excluded Palestinian citizens of Israel from leasing its property.
More recently, the U.S. State Department’s 2012 Country Reports on Human Rights Practices detailed “institutional and societal discrimination” in Israel. The report noted, “Approximately 93 percent of land was in the public domain, including approximately 12.5 percent owned by the NGO Jewish National Fund (JNF), whose statutes prohibit sale or lease of land to non-Jews.”
For their part, JNF Canada officials are relatively open about the discriminatory character of the organization. In May 2002, JNF Canada’s executive director for eastern Canada, Mark Mendelson, explained: “We are trustees between world Jewry and the land of Israel.” JNF Canada’s head Frank A. Wilson echoed this statement in July 2009: “JNF are the caretakers of the Land of Israel on behalf of its owners, who are the Jewish people everywhere around the world.”
The JNF’s bylaws and operations clearly are incompatible with Canada’s legal rejection of racist property covenants. Yet JNF Canada, which raises about $8 million annually, is a registered charity in this country. As such, it can provide tax credits for donations, meaning that up to 40% of its budget effectively comes from public coffers.
On top of its charitable status, JNF Canada has received various other forms of official support. Alberta and Manitoba, for instance, have signed multimillion dollar accords with the JNF, while Harper’s Conservatives are strong supporters of the organization. Over the past sixteen months ministers Jason Kenney and John Baird have spoken at JNF galas, while Peter Kent toured southern Israel with officials from the organization. On December 1, Prime Minister Stephen Harper is set to be honoured at the JNF Negev Dinner in Toronto, which will be the first time a sitting Canadian prime minister has spoken to a JNF gala in the organization’s 100-year history.
Does Harper support the JNF’s racist land use policies?
Independent Jewish Voices has launched a campaign to have the JNF’s charitable status revoked for racist land use policies and playing a role in dispossessing Palestinians. On December 1 Harper will be greeted by protesters in Toronto, while a protest is also planned for the JNF gala in Ottawa on October 29.
In 2011, Stop the JNF in England pushed Prime Minister David Cameron to withdraw his patron status from the JNF. Additionally, at least 68 members of the U.K. parliament have endorsed a call to revoke the organization’s charitable status because “the JNF’s constitution is explicitly discriminatory by stating that land and property will never be rented, leased or sold to non-Jews.”
Here in Canada it would be nice to see progressive politicians such as NDP MP Libby Davies or Green Party leader Elizabeth May circulate a similar call to their colleagues in the House of Commons. At least some federal politicians must oppose Canada subsidizing racist property restrictions.

Yves Engler

Economic democracy is the solution to global warming

18 Oct

Why are greenhouse gas emissions not being drastically curtailed? As carbon dioxide levels rise, temperatures rise, oceans become more acidic, polar ice caps melt, sea levels rise, the atmosphere absorbs more water. Floods, hurricanes and droughts become more frequent and more destructive.

Science makes it clear that global warming is caused by the burning of fossil fuels—coal, oil, natural gas—and biofuels.

In September 2013 scientists on the UN Intergovernmental Panel on Climate Change released their conclusion: the burning of fossil fuels at current levels will lead to devastating warming within this century. In 2012, the Berkeley Earth Surface Temperature Study reached the same conclusion. This was a surprise since it had been financed by Charles Koch and led by Richard Muller, one of the few reputable scientists who had remained a global warming sceptic. Shortly after the release of the Berkeley study, the U.S. association of meteorologists, who had not taken a position on global warming, announced that they accepted the science.

In the face of the scientific consensus and worsening natural disasters, corporate capitalism responds by investing billions in fracking, tar sands, deep sea petroleum development, and expanding pipelines.

Although some individual capitalists are alarmed by global warming, capitalists as capitalists focus on maximizing profits. In theory, green industry could be just as profitable, but profits are made on existing corporations. In resource extraction, materials processing, agribusiness, manufacturing, international trade, communications, and finance, profits are based on cheap energy from fossil fuels.

Supporters of the system claim that capitalism empowers individuals. Capitalism has actually pushed individual enterprise to the fringes of economies. No more than ten percent of populations are self-employed. In Canada and the U.S. ninety percent depend on wage and salary work. Although capitalism gives individual capitalists title to means of livelihood—title that is bought and sold for private profit—wage and salary workers are actually engaged in cooperative, coordinated social labor.

Corporations, capitalism’s dominant institutions, are minority-owned collectives that dominate markets, monopolize supplies, and control technologies. The twenty largest transnational corporations have more revenues than most governments.

Corporate governance is neither democratic nor egalitarian. Those with the most shares have the most votes. Less than one in four own any corporate shares. Most corporate shares are owned by less than five per cent of populations. Major shareholders and top executives, who combined are less than 0.1 percent of populations, control most corporations.

Under capitalism, the productivity of social labor has substantially increased. Aided by technology and expanding markets, humankind can now deforest entire continents, level mountains, dam major rivers, deplete mineral reserves, and fish sea life to extinction. Meanwhile, private title allows corporations to give priority to profits and to externalize environmental costs, to pass these on to communities, workers, future generations, and other species.

In the 1970s, neo-conservatives like Margaret Thatcher and Ronald Reagan initiated what are now called neo-liberal policies. Taxes paid by corporations and the wealthy were cut. Laws and regulations were changed to make it more difficult for unions to organize and to make gains in collective bargaining. Public utilities and services were privatized. Capital was freed to move abroad in pursuit of cheaper labor, lower taxes and weaker environmental standards. As capitalists got richer, they gained more capacity to dominate political agendas and to manipulate the media and the outcome of elections.

So long as capital-owning minorities are entitled to direct economic and political activity in their private interests, private profit will take precedence over human wellbeing. The alternative is economic democracy. With economic democracy, community ownership would replace corporate ownership. Everyone—wage and salary workers, the self-employed, the unemployed, students, and the retired—would have a right to a voice and equal vote in their communities’ economic decisions. Workplace democracy would replace master-servant relations.

When everyone is equally entitled, communities will focus on meeting human needs, on providing employment and social services, on sustaining and improving the quality of present and future life. Instead of focusing on what is the most profitable, communities—responsible to all equally—would aim to balance employment opportunities with available labor. Public revenues would be balanced with needed social services. Imports would be balanced with exports. Industrial activity would be deliberately limited to the carrying capacity of environments.

Humankind cannot afford to delay action until the system changes. We must act now to cut greenhouse gas emissions. As individuals we can walk instead of driving, live in smaller residences, travel fewer air miles, eat less meat and choose produce grown organically. But so long as capitalists are entitled to direct economies in their private interests, corporations will continue to externalize environmental costs. The corporate media will continue to identify happiness with consuming more. Most employment will continue to depend on capitalist profit.

Isolated individual action has little impact, but human activity does transform the natural environment for good and ill. Capitalists can pass on environmental costs; humankind cannot.

We can begin by acting together to reduce damage to the environment. Some action—far too little—is already being taken to cut dependence on fossil fuels. Cities can be reconfigured so that most people can walk or bike to work, to school, to entertainment and recreation.

Investment in public transit can reduce dependence on private automobiles. With current technology, wind and solar energy could be much more widely used. Geothermal and waste heat networks would further reduce fossil fuel emissions. Governments could speed up development of cheap, safe, plentiful sources of energy. Public investment—freed from nuclear weapons interests—could determine whether breeder reactors would eliminate radioactive waste, and whether thorium reactors would eliminate the danger of meltdowns.

International agreement to raise average tariffs from the current five percent to thirty percent (as in the 1950s and 60s) would increase local production in agriculture and manufacturing, replacing fossil fuels with human energy. The revenues raised would help provide governments with the funds needed to redirect social labor to more sustainable ways of meeting human needs. Substantially increasing taxes on corporations and the highest incomes would further increase public revenues and would have the added benefit of reducing the money available to promote narrow capitalist agendas.

Communities can act now to assert their right to veto damaging industrial activity. Parties and coalitions can be formed to give priority to human wellbeing. Campaigns for electoral reform can make governments more transparent and responsible to general human interest. Expanding social entitlements, the right to food, housing, education, health care, employment and basic income would reduce dependence on capitalist profit.

Al Engler

What we want for ourselves, we wish for others in foreign policy

16 Oct

Should the “right” of a foreign corporation to make a profit trump governments’ attempts to create local jobs, improve environmental regulations or establish laws that raise royalty rates?

Most Canadians would say no.

But that’s what the Conservative government is pushing poor countries to accept if they want Canadian investment.

Barely noticed in the media, Canada recently concluded negotiations on a foreign investment promotion and protection agreement (FIPA) with the West African country of Côte d’Ivoire. In a press release Minister for La Francophonie Christian Paradis said: “The investment agreement announced today will provide better protection for Canadian companies operating in Côte d’Ivoire.”

Since the start of the year Ottawa has signed similar agreements with Tanzania, Nigeria, Benin, Cameroon and Zambia while over the past few years Canada has concluded FIPAs with Madagascar, Mali and Senegal. Ottawa is currently engaged in FIPA negotiations with Ghana, Guinea, Tunisia and Burkina Faso and plans are likely afoot to pursue bilateral investment treaties with other African countries.

According to the government, “A FIPA is a treaty designed to promote and protect Canadian investment abroad through legally binding provisions and to promote foreign investment in Canada. By ensuring greater protection against discriminatory and arbitrary practices, and by enhancing the predictability of a market’s policy framework, a FIPA gives businesses greater confidence in investing.”

These treaties give corporations the right to sue governments — in private, investor-friendly tribunals — for pursuing policies that interfere with their profit making. They are modelled after NAFTA’s notorious Chapter 11.

The FIPAs signed with African countries are largely motivated by Canada’s mining industry. Over the past two decades Canadian mining investment in Africa has grown over 100 fold from $250 million in 1989 to $6 billion in 2005 and $31 billion in 2011.

The owners of Canada’s mining industry have greatly benefited from three decades of neoliberal reforms in Africa, notably the privatization of state-run mining companies, loosening restrictions on foreign investment and reductions in resource royalty rates. As an early advocate of International Monetary Fund/World Bank structural adjustment programs, Ottawa has channeled hundreds of millions in “aid” dollars to supporting economic liberalization efforts in Africa. The Conservative government’s current FIPA push represents a bid to entrench some of these neoliberal policies.

Canadian mining companies that have benefited from privatizations and loosened restrictions on foreign investment in Africa fear a reversal of these policies. Their concerns can be somewhat alleviated by gaining the ability to sue a government if it expropriates a concession, changes investment rules or requires value added production take place in the country.

The ability to sue — or threaten a suit — is particularly valuable to mining companies facing local opposition to their projects. As the Council of Canadians points out, “Canadian mining companies are using FIPAs with developing countries to claim damages from community opposition to unwanted mega-projects.”

Last week Infinito Gold sued Costa Rica for $1-billion under a Canadian bilateral investment treaty with that country when the government failed to approve a controversial gold mine. The Calgary-based company launched this suit even though polls show that more than 75 percent of Costa Ricans oppose its proposed Crucitas mine and the Supreme Court of Costa Rica denied Infinito permission to proceed with the project on three occasions.

Many Canadian-owned mining sites across Africa are bitterly resisted by local communities and there’s been a great deal of social upheaval around the mines. Canadian mines have spurred war in the Congo, killings in Tanzania and environmental devastation from Kenya to Ghana.
Of course, the dominant media has largely ignored the conflict wrought by Canadian mining companies. Much the same can be said of their role in buying up Africa’s natural resources or Ottawa’s role in facilitating it. The dominant media prefers to focus on how Chinese companies are buying up the continent even though on a per capita basis Canadian corporations have taken control of a great deal more of Africa’s natural resources than China’s.

Unfortunately, the Left has sometimes reflected (and perpetuated) this type of thinking. While a number of independent journalists and small collectives have exposed the destruction wrought by Canadian mining projects, there’s been little opposition to these African FIPAs. On the other hand, there’s been significant opposition to the FIPA Canada recently signed with China.

A recent Leadnow.ca callout to raise money for the Hupacasath First Nation’s legal challenge to the Canada-China FIPA provides an example of this ignorance/indifference towards African FIPAs’. The e-mail has a picture of a woman holding a “Stop FIPA” sign and calls on members to send a note to Conservative MPs to tell them “they will pay a steep political price if they try to pass FIPA.” While Leadnow’s opposition to the China FIPA is to be commended, it need not be done in denial/opposition of the fact that the Conservatives’ have passed a slew of FIPAs’ recently.

One reason the China FIPA has received more attention is that Chinese companies have invested significant sums in Canada while most of Canada’s other FIPA partners have not. In terms of the African FIPAs the investment flow is unidirectional with Canadian companies overwhelmingly dominant.

All too often, criticism of bilateral investment treaties and free ‘trade’ agreements take a nationalistic tone with opposition focused on the ways in which the accords strengthen the rights of multinational corporations in this country. Since African companies have little invested in Canada there’s few short to medium term consequences for Canadians with the African FIPAs and thus little opposition expressed.

But this is short-term thinking. The past 25 years of neoliberalism has demonstrated quite clearly that these policies are being pursued in lockstep globally and that they exacerbate inequality and ecological destruction everywhere.

If we oppose “investor-rights” agreements in Canada we must oppose them everywhere.

Yves Engler

Taking responsibility at work requires taking power

15 Oct

Something about the Canucks versus Canadiens hockey game Saturday night has stayed with me, producing a mental itch that won’t go away.

It wasn’t Dan Hamhuis scoring on his own net on a whiffed pass, double ricochet off Roberto Luongo , although that will haunt the Canuck defenceman for the rest of his career.

It was in a break from the action when my TV screen filled with beautiful images of crystal clear streams, healthy salmon and pristine British Columbia back country. A kind and gentle voice praised the incredible environment that Mother Nature has bestowed on this province. One felt a sense of soothing comfort, tinged with pride at having chosen to live in this part of the world.

It was a commercial promoting the proposed Northern Gateway pipeline. An ad for a project that is an essential part of what one could argue is the greatest single environmental threat currently facing the planet.

After the initial shock at the over-the-top doublespeak of using our love for nature to promote a pipeline proposal to transport some of the most carbon intensive oil on the planet, I began to wonder who would sell their soul, along with their creative energy, to create a piece of propaganda that would have amazed George Orwell himself.

Somewhere, a group of artists, or at least reasonably creative women and men, had sat in an office discussing how best to convince a skeptical public (polls have shown well over 60 per cent of B.C. residents opposed) on the merits of building a pipeline from the Alberta tar sands to the west coast.

Imagine these human beings, not much different from you or me, pitching proposals, exchanging ideas and debating the merits of various creative approaches to ignoring climate science, disregarding the likelihood of breaks in any pipeline, discounting the well-reasoned fear of shipping accidents and completely overlooking the opposition of First Nations whose land the pipeline must cross.

“Let’s sell them on a pipeline by showing pretty pictures of nature,” one of them says. “And use a voice that people trust to brand the pipeline as environmentally friendly.”

“That’s it,” says another. “That’s it exactly. It’s the same as selling beer. If we can convince young men that getting drunk makes them more attractive to women, we can easily use people’s love of nature to sell a pipeline.”

“Exploit the very thing that the pipeline will destroy to sell it, that’s hardcore,” says yet another. “Deviously wicked.”

“I love it,” says the client.

And not one of them feels the least bit guilty for helping to destroy the livability of our planet. Why? Because they are just doing their jobs.

So the commercial is written, produced, directed, location scouted, lighted, costumed, filmed, acted in, edited, catered, etc. and not one of the dozens of people making it feel the least bit guilty for contributing to global warming, because after all, they too are just doing their jobs. Likewise the sales rep at the TV station, the traffic person, the director, master control operator and every other worker from Calgary to Fort Mac to Vancouver who take no responsibility — all are also just doing their jobs.

Am I the only one who is bothered by this? “Just doing my job,” sounds eerily similar to “just following orders,” a soldier’s excuse for committing a war crime. Is this where our economic system’s pursuit of ever-greater profits has led us? The sum of our individual actions is creating an environmental disaster but none of us are responsible?

I’m pretty certain most who work in Fort McMurray understand how destructive what they do is to the environment. I feel confident that the vast majority of creative people involved in selling products that are bad for us understand what they are doing. Most may prefer not to think about it, but they do understand. They believe there’s no choice. Acting like you don’t care is simply what it takes to successfully earn a living.

This is the attitude of people who feel powerless. It is the attitude of a soldier who has learned the negative consequences of ever questioning an order.

Our economic system gives the power to decide most things to a small number of people motivated by greed. Most of us must follow orders if we are to succeed. Our ability to choose is confined to decisions like Coke versus Pepsi. We feel powerless because that is our reality.

To take responsibility requires taking power.

This is the mental itch that won’t go away: How do people who feel powerless take power and build a world with a democratic economic system where we collectively decide what to produce and how, rather than let the profit motive decide all?

We better quickly figure out an answer because all the science tells us it will soon be too late.

Gary Engler

The NDP should move to the left on foreign policy

12 Oct

Is the NDP the solution or part of the problem for those us who promote a Canadian foreign policy that favours ordinary people around the world?

While pushing arms control measures and oversight of Canadian mining companies, this ‘Left’ party generally backs the military and a Western pro-capitalist outlook to global affairs.

In 2011 the party supported two House of Commons votes endorsing the bombing of Libya. The party’s most recent election platform called for maintaining the highest level of military spending since World War II. In a more recent display of militarism NDP veterans affairs critic Peter Stoffer joined some veterans in criticizing an agreement between retailer Target and the Royal Canadian Legion allowing red poppies to be sold outside the company’s stores. “We agreed that outside the front doors would be ideal and obviously if the weather is inclement or they prefer they are welcome to stand inside the double doors as well,” said Target spokesperson Lisa Gibson at the end of last month.

But this wasn’t good enough for many red poppy sellers who want to set up inside. So Stoffer demanded that Target “let these veterans into their stores, set up their tables and sell the poppies” and called on the company “to allow them [red poppy sellers] to come into the store at all times.”

Remembrance Day Poppies commemorate Canadians who have died at war. Not being commemorated are the Afghans or Libyans killed by Canadians in recent years or the Iraqis killed two decades ago or the Koreans killed in the early 1950s or the Russians, South Africans, Sudanese and others killed before that. By focusing exclusively on ‘our’ side Remembrance Day poppies reinforce a sense that Canada’s cause is righteous, a sentiment often used to promote wars.

One wonders if the NDP is willing to call on Target to allow peace organizations to set up tables and sell anti-war white poppies?

The same day Stoffer criticized Target, Michael Byers, a former NDP candidate and Thomas Mulcair leadership campaigner, co-authored aNational Post opinion piece titled “Putting Politics Before Soldiers”. Based on a report Byers co-authored for the Rideau Institute and Canadian Centre for Policy Alternatives, the article argued that Harper’s Conservatives are spending $2 billion to buy tanks that are no longer necessary since the US military has shifted its counterinsurgency tactics. The article glowingly cited the Petraeus Doctrine, which is named after General David Petraeus who was in charge of US forces in Iraq and Afghanistan. “The doctrine calls for soldiers to engage with and support local people so as to erode any incentive they might have to side with insurgents.”

The article said nothing about the thousands of Iraqis and Afghans killed by the US-led forces implementing the Petraeus Doctrine. Nor does Byers’ report call for a reduction in Canada’s high-level of military spending.

While promoting US counterinsurgency tactics and red poppy sellers, the NDP was quiet on the recent visit to Toronto by Africa’s most blood-stained leader, Rwanda’s Paul Kagame. Nor have they said much about Ottawa’s support for the Egyptian military’s ongoing repression or foreign minister John Baird’s anti-Iran efforts with the Gulf Cooperation Council monarchies.
It wasn’t always this bad.

A new biography about one of the NDP’s more courageous MPs touches on the party’s tendency to support the foreign policy establishment. In a published excerpt of Svend Robinson: A Life in Politics, Vancouver NDP MP Libby Davies told the book’s author: “Some people are concerned that we’ll slide, especially on foreign affairs. He [Robinson] was an outstanding voice on foreign affairs when he was critic for so many years. He never shied away from things… People wanted it. They wanted a party that actually had a real, critical position on foreign affairs — that wasn’t the Time magazine version … and that’s, I fear, what we’ve come around more to now.”

Robinson was willing to aggressively and creatively challenge the foreign-policy establishment. He was a founder of the Canadian wing of Parliamentarians for East Timor and questioned Canada’s role in the 2004 overthrow of Haiti’s elected government. In a particularly principled action, Robinson responded to Israel’s effort to seal off Palestinian Authority President Yasser Arafat in Ramallah by trying to travel there in October 2002. This act of solidarity unleashed a media storm, prompting NDP leader Alexa McDonough to strip Robinson of his role as foreign affairs critic.

Robinson’s time as foreign critic represents a shining moment for the party’s international policy (It should be noted, however, that Robinson backed the 1999 bombing of the former Yugoslavia, only turning critical over a month after it began.). His term also highlights the tension within the party between those who support a critical approach and those basically willing to go a long with the Canadian foreign policy establishment. Unfortunately, the latter group has generally determined the NDP’s international policy.

At its 1949 convention the CCF, the NDP’s predecessor, passed a resolution supporting the North Atlantic Treaty Organization (NATO). Even worse, the party also expelled two elected legislators who were critical of NATO.

While officially the West’s response to an aggressive Soviet Union, in fact NATO was established to blunt the European Left and extend North American/European power in light of the de-colonization taking place in Asia and the Middle East. NATO planners feared a weakening of self-confidence among Western Europe’s elite and the widely held belief that communism was the wave of the future. External Minister Lester Pearson was fairly open about NATO’s purpose telling the House of Commons in March 1949: “The power of the communists, wherever that power flourishes, depends upon their ability to suppress and destroy the free institutions that stand against them. They pick them off one by one: the political parties, the trade unions, the churches, the schools, the universities, the trade associations, even the sporting clubs and the kindergartens. The North Atlantic Treaty Organization is meant to be a declaration to the world that this kind of conquest from within will not in the future take place amongst us.” Tens of thousands of North American troops were stationed in Western Europe to deter any “conquest from within”.

The other major motivating factor for the North American elite was a desire to rule the world. For Canadian officials the north Atlantic pact justified European/North American dominance across the globe. As part of the parliamentary debate over NATO Pearson said: “There is no better way of ensuring the security of the Pacific Ocean at this particular moment than by working out, between the great democratic powers, a security arrangement the effects of which will be felt all over the world, including the Pacific area.”

In the eyes of Pearson and the US leadership NATO’s first major test took place far from the north Atlantic in Korea. After the Communists took control of China in 1949 the US tried to encircle the country. They supported Chiang Kai-shek in Taiwan, built military bases in Japan, backed a right-wing dictator in Thailand and tried to establish a pro-Western state in Vietnam. The success of China’s nationalist revolution also spurred the 1950-1953 Korean War in which eight Canadian warships and 27,000 Canadian troops participated. The war left as many as four million dead.

The 1950 CCF convention endorsed Canada’s decision to join the US-led (though UN sanctioned) war in Korea. It wasn’t until huge numbers had died and China entered the war that the CCF started questioning Ottawa’s military posture.

In the early 1950s Iranians pushed to gain greater benefit from their huge oil reserves. But the British had different plans. As one of the earliest sources of Middle Eastern oil, the Anglo-Iranian Oil Company (British Petroleum’s predecessor) had generated immense wealth for British investors since 1915.

With Anglo-Iranian refusing to concede any of their immense profits, Iran moved to nationalize the country’s oil industry. It was a historic move that made Iran the first former colony to reclaim its oil.

Despite calling for the nationalization of numerous sectors of the Canadian economy, the leader of the CCF criticized Iran’s move. On October 22 1951 M.J. Coldwell told the House of Commons: “What happened recently in Iran [the nationalization of oil] and is now taking place in Egypt [abrogation of a treaty that allowed British forces to occupy the Suez Canal region] is an attempt on the part of these reactionary interests to use the understandable desire of the great masses of the people for improvements in their condition as an excuse to obtain control of the resources of these countries and to continue to exploit the common people in these regions.” The CCF leader then called on the federal government to “give every possible aid to the United Kingdom in the present crisis.”

Mohammad Mossadegh’s move to nationalize Iran’s oil would lead the US and UK to orchestrate his overthrow in 1953. The CCF failed (or at least it’s not recorded in the Hansard parliamentary debate) to criticize Ottawa for backing the overthrow of Iran’s first popularly elected Prime Minister.

No issue better reflects international policy tensions within the party than Israel/Zionism. Initially the CCF opposed the nationalism and imperialism associated with Zionism. In 1938 CCF leader J.S. Woodsworth, stated: “It was easy for Canadians, Americans and the British to agree to a Jewish colony, as long as it was somewhere else. Why ‘pick on the Arabs’ other than for ‘strategic’ and ‘imperialistic’ consideration.” At its 1942 convention the CCF condemned Nazi anti-Semitism but refused to endorse Zionism. “The Jewish problem can be solved only in a socialist and democratic society, which recognized no racial or class differences,” explained a party resolution.

But before Israel’s creation the CCF officially endorsed the establishment of a Jewish state in Palestine. In September 1945 new CCF leader M. J. Coldwell said the Zionist record in Palestine “in terms of both social and economic justice” spoke for itself. Three decades later, in 1975, NDP MP and former leader Tommy Douglas told Israel’s racist Histadrut labour federation, “The main enmity against Israel is that she has been an affront to those nations who do not treat their people and their workers as well as Israel has treated hers.” This speech was made eight years into Israel’s occupation of the West Bank, Golan Heights and Gaza Strip and a quarter century after 800,000 Palestinians were ethnically cleansed during the 1948 war.

While better today, this extreme deference to Israel has yet to be expunged from the party. In May 2008 the soon-to-be NDP leader, Thomas Mulcair, was quoted in the Canadian Jewish News saying, “I am an ardent supporter of Israel in all situations and in all circumstances.”

The NDP ought to shake off its history of supporting the Canadian foreign policy establishment. Beyond the moral imperative, sticking to mild and safe criticisms may be a losing electoral strategy.

Forceful and creative criticism of the Conservatives’ foreign policy could be a way to pushback against Jason Kenney’s successful outreach with immigrant communities (more than 20% of Canadians are born outside the country). The Conservatives have played off the fact that immigrant communities are generally more socially conservative. While this may be true, individuals with a strong connection to another country would also tend to be less supportive of Western domination, which the Conservatives have strongly pushed.

Additionally, Harper’s foreign policy has been designed to please the most reactionary sectors of the party’s base — evangelical Christians, right-wing Jews, Islamophobes, the military-industrial-complex as well as mining and oil executives. To a certain extent the Conservatives view international policy as a relatively low political cost way to please the party’s right wing base (the clearest example of them taking a more extreme position on foreign policy is the Conservatives’ refusal to give Canadian aid to projects abroad that include abortions — even for rape victims — but Harper strongly opposes efforts to challenge abortion domestically).

Could this same thinking not work for the NDP? Is there not a counter block of individuals and organizations focused on issues ranging from international climate negotiations to Palestine, global peace to mining justice? Wouldn’t a forceful and principled NDP position on these issues help galvanize party activists?

With average Canadians more knowledgeable and interested in international affairs than ever before, it is likely. But party strategists fear that the dominant media will lambaste the NDP for expressing forthright criticism on many international issues. The media would. But the growth of online news and global television stations makes it easier than ever — if the party cared to try — to defend critical positions on issues such as the recent coup in Egypt or Canada’s indifference to Paul Kagame’s murderous escapades in the East of the Congo.

Ultimately, the options for the NDP is reasonably straightforward: work to create an electoral strategy that significantly improves Canadian foreign policy or continue to make opportunistic appeals to veterans, the military and those who believe a “Time Magazine version” of international affairs. The latter option is tantamount to being complicit with current policies and — if elected — becoming the agent of a pro-corporate/pro-empire Canadian foreign policy.

Yves Engler

Why would any young person support capitalism?

11 Oct

They say you get more conservative, nostalgic for the past and critical of young people as you age. In my case it’s true, but maybe not in the same way most people expect.

This 60-year-old grandfather’s conservatism is reflected in a growing respect for the institutions, programs and social services that previous generations of ordinary working people built through organizing and struggle. I believe in preserving these institution, programs and social services despite the onslaught of right-wing choppers and cutters who proclaim “progress” when in fact people’s lives are being made worse.

My nostalgia for the past is reflected in fond memories of huge anti-war demonstrations, picket lines packed with people determined to get a good union contract and the feeling of being one among millions who believed another world was possible.

And I do sometimes ask myself what’s up with young people today. Mostly I’m just amazed they’re not out in the streets making a revolution.

I mean, they’ve got a hell of a lot of good reasons. Aside from the ongoing crap —war, the latest empire trying to dominate the world, poor people being screwed, aboriginal people being screwed, racism, sexism, other forms of discrimination — the economic system has put a huge bulls-eye on young people’s backs and the environment is about to collapse.

University and college costs at least six times more than it did when I was young and this at a time when you need a graduate degree just to get an unpaid internship. Youth unemployment is high and rising. And the jobs that are available? Suck-up service jobs. Smile and say, “have a good day,” or you won’t get a tip, if you’re lucky enough to have a job where you get tips. More likely you don’t have any incentive to smile except fear of a pathetic power-deprived supervisor who will ream you out for telling a customer your true feelings.

But let’s say you do get a decent job working for the government or making things in a factory or working in an office, the current economic system says you’re worth less than your parents and you damn sure don’t have a right to a decent pension and benefits. All that stuff is being cut back because the system can’t afford it, or so the people running things say.

A steady job? That’s not how it works anymore. Retire at 65? Sorry no, if you’re under 40 you’ll have to work years longer than your parents to qualify for any sort of pension. And all those good union jobs that people once enjoyed? Forget about it, the system has decided to crush unions. Or in the unlikely event you do find a union job, the new reality is lower wages for new hires.

Since the era of Ronald Reagan and Maggie Thatcher the system has gone out of its way to screw young people. Since the stupid capitalists took power the system says it can no longer afford the wages, benefits, social services and rights that the smart capitalists managed to provide in the 1950s, ’60s and ’70s. (But it can afford war and bailouts for banks.) Ever since the rise of neo-conservatism (also called neoliberalism) in the 1970s the cheerleaders of capitalism on crack have been up front about attacking unions, pensions, public education, healthcare and social services — all stuff that people over 50 got to benefit from, but which young people are told they can’t have.

Then to top off all this shit, people under 40 and their kids are the ones who will really feel the effects of global warming.

So, what’s with a generation that accepts punch after punch and then insults on top of the beating, barely raising a peep in protest? How could anyone under 40 support capitalism? Why aren’t they organizing, striking, picketing and marching?

Sure they have more distractions than we had: video games, the Internet, texting, Tweeting, Facebooking etc, But most of these could be put to good use rabble rousing the revolution, if the dream was there.

Most likely young people are so brainwashed by the system that they simply can’t imagine another world is possible. Consumerism and its evil twin individualism are the most likely culprits. Both have been pushed down the throats of young people the past four decades like bird parents stuff regurgitated food into the beaks of their babies. Buy, buy, buy. Me, me, me. Both these isms lead to ill health, alienation, and social paralysis. Inaction is the result.

And who is responsible for pushing individualism and consumerism? People my age. The me generation. Hippies. The turn on, tune in and drop out crowd. The feel-gooders through substance abuse. Individualism and consumerism were their bag.

Teach Your Children was the name of a famous 1970 song. We did, but now we can only hope that they are wise enough to unlearn much of what they were taught.

Take some advice from a grandfather: Dream of a better world with a democratic economic and social system. A system that lives in harmony with the environment rather than one that wrecks our planet. Get involved to make it happen. Take action, especially collective action. You’ll have the time of your life.

And teach your children well.

Gary Engler

Capitalism or a healthy environment — time to choose

4 Oct

If all you care about is making more stuff, capitalism may be the best system ever. But if you want to save the planet from environmental catastrophe our current economic system is a dead end.

I remember in my socialist youth often being told: “Your ideas sound good but that’s just not how things work in real life.”

Today, in my socialist sixties, these same words seem appropriate as an analysis of mainstream environmentalism.

Here is the harsh reality:

Capitalists make huge profits from destroying the planet. The capitalist drive to maximize profits explains the externalizing of environmental costs. Capitalism allows small minorities to profit 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.

Worse, capitalism requires constant growth because it always needs more profit. Making ever more profit is what motivates people to make investments. But what happens when the environment needs a smaller human footprint? When, at least in wealthier countries, we must learn to live with much less stuff?

All the evidence shows capitalism is really lousy at dealing with declining markets. Every time the economy shrinks for a sustained period capitalism goes into crisis. Banks crash, unemployment rises and wars are often necessary to get capitalism out of its crisis.

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 and in fact go even further. The business pages are full of stories quoting the captains of the carbon-industrial complex telling us what amounts to: “You must choose between economic prosperity and what is good for the environment, because you can’t have both.”

If we continue with capitalism they are correct.

Yes, some so-called environmentalists do look to capitalism for solutions, but that’s like asking the fox to fix the henhouse. You can’t be a serious environmentalist and support capitalism. A sustainable economy is incompatible with a system that constantly demands more profit.

Now that the human population has passed seven billion, it should be obvious that we inhabit a planet of finite resources. But population growth is not the problem. Human energy remains our most precious and underutilized resource. Once basic material needs for food, clothing, housing and healthcare have been met, human wellbeing depends less on consumption than on opportunities for education, employment, social participation and social recognition.

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 weight of evidence and the urgency of the problem, capitalism rests on the expansion of fossil fuel production and use.

Around the planet trillions of dollars are being spent to develop massive deposits of shale oil and gas. In Canada capitalist investment is focused on expanding oil production from tar sands. The promoters claim that these developments will create jobs. But the funds required to extract and transport that fuel will create far fewer jobs than would be produced if equivalent amounts were spent on the development of solar, wind and geothermal power. Far more jobs could be produced with investments in the production and distribution of local agriculture, clothing, shoes and communications products. More jobs would be created by investments in childcare, elder care, social housing, public transit and other green infrastructure.

But capitalism prefers investments in fossil fuels because corporate profits now largely depend on cheap fuel. Equivalent profits cannot be made meeting actual human needs.

So, we have some important choices to make: Support capitalism or support the environment. Build a different sort of economic system that can prosper in harmony with the environment or fiddle with capitalism as our planet burns.

Gary Engler

The roots of terror in Kenya

28 Sep

There are no shades of grey, no nuance or even cause and effect in the simplistic world view proclaimed by the current Canadian government.

The Conservatives’ response to the horrific attack in Nairobi’s Westgate Mall has been to thump their chests and proclaim their anti-terror bona fides.

The fight against international terrorism is the great struggle of our generation, and we need to continue with the resolve to fight this,” bellowed Foreign Minister John Baird. For his part, Stephen Harper boasted that “our government is the government that listed al-Shabab as a terrorist entity.”

But the prime minister has ignored the fact that his government also played a small role in the growth and radicalization of the organization responsible for this terrible crime in Kenya.
After the failed US invasion of Somalia in the early 1990s (Black Hawk Down) American forces once again attacked that country in December 2006.

After the Islamic Courts Union won control of Mogadishu and the south of the country from an assortment of warlords, American forces launched air attacks and 50,000 Ethiopian troops invaded Somalia. According to a cable released by Wikileaks, the US under secretary of state for Africa, Jendayi Frazer, pressed Ethiopia’s Prime Minister Meles Zenawi to intervene.

Ottawa supported this aggression in which as many as 20,000 Somalis were killed and hundreds of thousands displaced. Throughout 2007 and 2008 when the US launched periodic airstrikes and Ethiopian troops occupied Somalia, Ottawa added its military presence.

At various points during 2008, HMCS Calgary, HMCS Iroquois, HMCS Charlottetown, HMCS Protecteur, HMCS Toronto and HMCS Ville de Québec all patrolled off the coast of Somalia. In the summer of 2008 Canada took command of NATO’s Task Force 150 that worked off the coast of Somalia.

The Conservatives’ public comments on Somalia broadly supported Ethiopian/US actions. They made no criticism of the US bombings and when prominent Somali-Canadian journalist Ali Iman Sharmarke was assassinated in Mogadishu in August 2007 then foreign minister Peter Mackay only condemned “the violence” in the country. He never mentioned that the assassins were pro-government militia members with ties to Ethiopian troops.

The Conservatives backed a February 2007 UN Security Council resolution that called for an international force in Somalia. They also endorsed the Ethiopia-installed Somali government, which had operated in exile. A February 2007 Foreign Affairs release noted: “We welcome Somali President Abdullahi Yusuf Ahmed’s announcement to urgently convene a national reconciliation congress involving all stakeholders, including political, clan and religious leaders, and representatives of civil society.” In April 2009 the Somali transitional government’s minister of diaspora affairs and ambassador to Kenya were feted in Ottawa.

Supported by outsiders, the transitional government had little backing among Somalis. AnOxfam report explained: “The TFG [transitional federal government] is not accepted as legitimate by much of the population. Unelected and widely perceived as externally imposed through a process that sidelined sub-national authorities and wider civil society, the transitional federal institutions face strong allegations of corruption and aid diversion.”

In maybe the strongest signal of Canadian support for the outside intervention, Ottawa did not make its aid to Ethiopia contingent on its withdrawal from Somalia. Instead they increased assistance to this strategic ally that borders Sudan and Somalia. Among CIDA’s largest recipients, Ethiopia received about $150 million annually in Canadian aid from 2008 to 2011.

Aid to Ethiopia was controversial and not only because that country invaded and occupied its neighbour. An October 2010 Globe and Mail headline noted: “Ethiopia using Canadian aid as a political weapon, rights group says.”

In early 2009 Ethiopian troops withdrew from Somalia (they reinvaded in late 2011 and some 8,000 Ethiopian troops continue to occupy parts of the country). The Conservatives helped the multi-country African Union force that replaced the Ethiopian troops. “Canada is an active observer in the (African Union) and provides both direct and indirect support to the [Somalia] mission,” explained a heavily censored June 2012 government briefing obtained by The Canadian Press under the Access to Information Act.

In 2011 Ottawa contributed $5.8 million US towards logistical support for the African Union Mission in Somalia (AMISOM) while in February 2012 Canada announced a $10 million contribution for the deployment of a Ugandan Formed Police Unit to Somalia. “Indirectly, Canada is engaged in training initiatives through (Directorate of Military Training and Co-operation) to enable (African Union) troop contributing nations through the provision of staff and peace support operations,” noted the above-mentioned internal briefing.

The US paid, trained and armed most of AMISOM. In July 2012 the Los Angeles Times reported: “The U.S. has been quietly equipping and training thousands of African soldiers to wage a widening proxy war against the Shabaab. … Officially, the troops are under the auspices of the African Union. But in truth … the 15,000-strong force pulled from five African countries is largely a creation of the State Department and Pentagon, trained and supplied by the U.S. government and guided by dozens of retired foreign military personnel hired through private contractors.”

In October 2011 thousands of Kenyan troops invaded Somalia and they remain in the country under AMISOM. “Kenya, in many ways, was simply carrying out the West’s bidding,” noted a recent Globe and Mail editorial.

Al Shabab claims its killing of shoppers and mall workers in Nairobi was a response to Kenya’s military invasion of Somalia. Since the Ethiopia/US invasion in late 2006 the group has waged a violent campaign against the foreign forces in the country and Somalia’s transitional government. During this period al Shabab has grown from being the relatively small youth wing of the Islamic Courts Union to the leading oppositional force in the country. It has also radicalized. Rob Wise, a researcher at the Center for Strategic and International Studies in Washington, notes that Ethiopia’s occupation of Somalia transformed al Shabab into, “the most powerful and radical armed faction in the country.”
Al Shabab has turned from being a national organization towards increasing ties to Al Qaeda. In July 2010 the group pulled off its first major international attack when it killed 74 in Kampala in response to Uganda’s occupation of Somalia.

Canada’s support for foreign intervention in Somalia has not gone unnoticed. When a group calling themselves Mujahedin of Somalia abducted a Canadian and Australian in October 2008 they accused Canada and Australia of “taking part in the destruction of Somalia.” They demanded a change in policy from these two countries. Similarly, in October 2011 an al Shabaab official cited Canada as one of a handful of countries that deserved to be attacked.

Portrayed by Washington and Ottawa as simply a struggle against Islamic terrorism, the intervention in Somalia was driven by geopolitical and economic considerations. A significant amount of the world’s goods, notably oil from the Persian Gulf, pass along the country’s 1,000-mile coastline and whoever controls this territory is well placed to exert influence over this shipping.

There are also oil deposits in the country. A February 2012 Observer headline noted: “Why defeat of Al Shabaab could mean an oil bonanza for western firms in Somalia.” With plans to invest more than $50 million, Vancouver-based Africa Oil began drilling an exploratory well in northern Somalia’s semi-autonomous Puntland region at the start of 2012. This was the first significant oil drilling in Somalia in two decades. The Canadian company didn’t escape the eye of Al Shabaab. A Twitter post from the group’s press office called Africa Oil’s contracts “non-binding”. “Western companies must be fully aware that all exploration rights and drilling contracts in N. Eastern Somalia are now permanently nullified”, the group’s spokesperson wrote. In an interview with Maclean’s Africa Oil CEO Keith Hill acknowledged the “significant” security risks and costs for their operations in Somalia but he noted the rarity of a “billion-barrel oil field.”

The 2006 US/Ethiopia invasion of Somalia has spiraled into ever more foreign intervention/local radicalization, which has caused a great deal of human suffering. This destructive cycle needs to be broken.

If the Conservatives have any concern for the people of Somalia — and neighbouring countries — they’d stop their anti-terror chest thumping and end their contributions to this violent cycle.

Yves Engler

Capitalist entitlement is the EU problem

21 Sep

The movement to occupy on behalf of the ninety-nine percent has flagged, but the wealthiest one percent have not relented in their campaigns to enrich themselves at the expense of others. This was made clear in the 2012 World Economic Forum, in Davos, Switzerland. The tone was set by Canada’s Conservative Prime Minister, Stephen Harper. He blamed Europe’s social entitlements for current government debt problems, and then came back home to call for cuts in Canada’s pension entitlements.

Europe and Canada are facing crises of unsustainable entitlements, but social programs are not to blame. In Europe the countries with the most comprehensive social programs — Norway, Sweden, Denmark, Finland, Germany, and the Netherlands — are not facing severe deficit crises. The countries that are — Greece, Spain, Portugal, Ireland, and the U.K. — have far less generous social programs.

Rapidly expanding capitalist entitlement began in the 1980s with the election of neo-conservatives Margaret Thatcher, Ronald Reagan, and Brian Mulroney. Their governments rejected government intervention to maintain employment and consumer demand, substituting what they called supply-side policies, claiming that putting more money in the hands of the rich would increase the supply of money available for investments and employment.

Since then, the governments of most countries have adopted supply-side policies. Taxes on higher incomes, on corporations, on capital gains and dividends have been methodically lowered. In the 1950s and 1960s the effective tax rates on the highest incomes in Canada and the U.S. were 70 percent. In the early years of this century, these had fallen to 30 percent, much the same rate as paid by median income earners. (A smaller number — who may earn millions a year from capital gains and dividends — pay as little as fifteen per cent of their income as taxes.) As the tax on upper incomes fell, government revenues as a proportion of total income fell, even though governments increased sales taxes, value-added and payroll taxes.

Putting more money in the pockets of the rich did not lead to more investment. In fact, the rate of growth in private and public investments was higher in the 1950s an 60s than in the 1980s to the present in North America and Europe. The super rich do have money to spend on luxuries, private jets, yachts, and mansions. As money was available for financial speculation, share prices grew faster than the real economy, increasing capitalist claims on existing means of livelihood. To sustain and increase profit margins, corporations turned to places with cheaper labour, further reducing domestic employment. As disparities between rich and poor widened, governments with shrinking revenues were faced with expanding needs for social programs.

In Europe the most prosperous countries were shielded from the most damaging consequences of neo-conservative policies by more comprehensive social entitlements—pensions, unemployment insurance, retraining, and childcare. Poorer countries have not been as fortunate. Europe’s problem is not overgenerous social programs, but the failure to harmonize social conditions.

The European Union began with the Treaty of Rome in 1957, a time when most governments accepted the responsibility to maintain employment and improve living standards. Initially signed by Belgium, France, Italy, Luxembourg, Netherlands, and West Germany, the Treaty of Rome envisioned a Europe with a common market for goods, workers, services, with common transport and agricultural policies, and with a European social fund that would help harmonize social conditions in all countries.

As it now exists, the European Union began with a treaty signed in Maastricht, Holland in 1992. By this time, most of the continent’s major political parties had come to adhere to the Washington Consensus, a set of policies promoted by the International Monetary Fund, the World Bank and the World Economic Forum. Its ten points can be summarized as holding that governments should give transnational corporate interests precedence over domestic employment and enterprise, and give creditors’ interests priority over social programs.

In harmony with the Washington Consensus, the Maastricht Treaty provided for a common currency, common interest rates, and agreement to limit government deficit and debt levels. The idea of a social fund was dropped and no effort was made to harmonize wages or living standards.

For a time, the economies of poorer countries like Ireland, Greece, Portugal, and Spain did grow substantially. Their lower wages did attract investment until countries with even lower wages like the Czech Republic, Hungary, Latvia, Lithuania, Poland, and Slovenia joined the EU. As the continent’s major corporations moved more operations east in pursuit of cheaper labour, workers’ income declined; markets stagnated.

Before the financial crash of 2007-08, the decline in employment and markets was masked by bubble economies — European versions of the U.S. sub-prime mortgage crisis. Interest rates of one per cent and lower in Japan and the U.S. allowed German, French, and U.K. banks to borrow abroad and to lend these funds at three or four per cent to countries desperate for investment. As it became obvious that debts were unsustainable, interest rates jumped to six and seven per cent and to double digits. As more public revenues were diverted to pay creditors, governments cut spending and employment. In the U.K., Portugal, Spain, Italy, and Greece unemployment rose to ten per cent and higher. Youth unemployment rose to 20 per cent, 30 per cent, and even fifty per cent. Nonetheless governments focused on creditors’ interests continue to promote spending cuts which will increase unemployment and reduce consumer demand.

Stephen Harper in Davos encouraged further attacks on social entitlements. He then came home to call for reduction in future pension entitlements here. Why? Old Age Security and the Guaranteed Income Supplement for seniors currently costs less than three percent of Canada’s national income. Factoring in the expected growth of the population of seniors, the cost will rise to around four percent. In Italy, public pensions cost fourteen percent of national income. The current conservative coalition insists that Italy will have no problem meeting these obligations.

Yes, prolonged public deficits can lead to future problems. Costs of borrowing may rise. The value of a currency may erode. Taxes may have to be raised. For minorities preoccupied with maximizing capitalist profits, these are concerns. For majorities who depend on income from labour and social entitlements, declining wages, and reduced benefits are far more serious problems.

Deficits would not be problems for governments focused on the interests of the vast majority. Unsustainable debts would be written off, reduced, and rescheduled. What remains would be paid at fixed low interest rates. Where financial institutions that engaged in reckless lending practices must be bailed out to sustain credit markets, public funds would become public equity. Publicly owned financial institutions, transparently and democratically regulated, would focus on providing access to credits for community-owned, cooperative, and owner-operated enterprises.

To weaken the power of transnational corporations, governments would actively expand social entitlements, institute guaranteed annual income legislation, expand access to pensions, health care, post-secondary education, and public child care. The public revenues required could be raised through steeply graduated income taxes on the highest incomes. Tobin taxes on financial transactions and international agreement to raise tariffs enough to encourage domestic production for domestic markets everywhere would generate further public revenues.

Instead of giving priority to the interests of capital-owning minorities, governments would focus on policies that sustain employment, working-class income, and social entitlements. They would promote and support initiatives the are intended to provide everyone with a voice and equal vote in their communities and employment.

Al Engler

Interview with Gary Engler

18 Sep

In our final installment of the Unifor Interview Series with union leaders, staff, and rank-and-file members, we speak with Gary Engler, Vice-President of Unifor Local 2000, the Media Union of BC. Gary also recently penned two articles at Rabble.ca, “Thoughts on Labour Day” and “Unifor and the potential rebirth of militant union activism.” He recently co-authored “The New Commune-ist Manifesto: Workers of the World It Really Is Time To Unite“.

Listen here.

Canada’s chemical weapons problem: credibility

16 Sep

Somewhere in the Lester B. Pearson Building, Canada’s foreign affairs headquarters, must be a meeting room with the inscription “The World Should Do as We Say, Not As We Do” or perhaps “Hypocrites ‘R Us.”

With the Obama administration beating the war drums, Canadian officials are demanding a response to the Syrian regime’s alleged use of the chemical weapon sarin.

Last week Prime Minister Stephen Harper claimed “if it is not countered, it will constitute a precedent that we think is very dangerous for humanity in the long term” while for his part Foreign Affairs Minister John Baird declared: “If it doesn’t get a response it’s an open invitation for people, for Assad in Syria, or elsewhere to use these types of weapons that they’ve by and large refrained from doing since the First World War.” The Conservatives also signed Canada onto a White House statement claiming: “The international norm against the use of chemical weapons is longstanding and universal.”

While one may wish this were the case, it’s not. In fact, Canada has repeatedly been complicit with the use of chemical weapons.

During the war in Afghanistan, Canadian troops used white phosphorus, which is a chemical agent that can cause deep tissue burning and death when inhaled or ingested in significant amounts. In an October 2008 letter to theToronto Star, Corporal Paul Demetrick, a Canadian reservist, claimed Canadian forces used white phosphorus as a weapon against “enemy-occupied” vineyards. General Rick Hillier, former chief of the Canadian defence staff, confirmed the use of this defoliant. Discussing the difficulties of fighting the Taliban in areas with 10-foot tall marijuana plants, the general said: “We tried burning them with white phosphorous — it didn’t work.” After accusations surfaced of western forces (and the Taliban) harming civilians with white phosphorus munitions the Afghan government launched an investigation.

In a much more aggressive use of this chemical, Israeli forces fired white phosphorus shells during its January 2009 Operation Cast Lead that left some 1,400 Palestinians dead. Ottawa cheered on this 22-day onslaught against Gaza and the Conservatives have failed to criticize Israel for refusing to ratify the Chemical Weapons Convention and Biological Weapons Convention.

For decades the massive Suffield Base in Alberta was one of the largest chemical and biological weapons research centres in the world. A 1989 Peace Magazine article explained, “For almost 50 years, scientists from the Department of National Defence have been as busy as beavers expanding their knowledge of, and testing agents for, chemical and biological warfare (CBW) in southern Alberta.”

Initially led by Canadian and British scientists/soldiers, gradually the US military played a bigger role in the chemical weapons research at Suffield. A chemical warfare school began there in 1942 and it came to light that in 1966 US Air Force jets sprayed biological weapons simulants over Suffield to figure out how best to spray potentially fatal diseases on people. Until at least 1989 there were significant quantities of toxins, including sarin, stockpiled at the Alberta base. In 2006 former Canadian soldiers who claim to have been poisoned at Suffield launched a class action lawsuit against the Department of National Defense.

During the war in Vietnam, the US tested agents orange, blue, and purple at CFB Gagetown. A 1968 U.S. Army memorandum titled “defoliation tests in 1966 at base Gagetown, New Brunswick, Canada” explained: “The department of the army, Fort Detrick, Maryland, has been charged with finding effective chemical agents that will cause rapid defoliation of woody and Herbaceous vegetation. To further develop these objectives, large areas similar in density to those of interest in South East Asia were needed. In March 1965, the Canadian ministry of defense offered Crops Division large areas of densely forested land for experimental tests of defoliant chemicals. This land, located at Canadian forces base Gagetown, Oromocto, New Brunswick, was suitable in size and density and was free from hazards and adjacent cropland. The test site selected contained a mixture of conifers and deciduous broad leaf species in a dense undisturbed forest cover that would provide similar vegetation densities to those of temperate and tropical areas such as South East Asia.”

Between 1962 and 1971 US forces sprayed some 75,000,000 litres of material containing chemical herbicides and defoliants in Vietnam, Laos and Cambodia. One aim was to deprive the guerrillas of cover by defoliating forests and rural land. Another goal of these defoliation efforts was to drive peasants from the countryside to the US dominated cities, which would deprive the national resistance forces of their food supply and rural support.

In addition to assisting chemical warfare by testing Agent Orange, during the Vietnam war Canadian manufacturers sold the US military “polystyrene, a major component in napalm,” according to the book Snow Job. A chemical agent that can cause deadly burns, Napalm was widely deployed by US forces in their war against Southeast Asia.

This deadly chemical agent was also used during the Korean War, which saw 27,000 Canadian troops go to battle. A New York Times reporter, George Barrett, described the scene in a North Korean village after it was captured by US-led forces in February 1951: “A napalm raid hit the village three or four days ago when the Chinese were holding up the advance, and nowhere in the village have they buried the dead because there is nobody left to do so. This correspondent came across one old women, the only one who seemed to be left alive, dazedly hanging up some clothes in a blackened courtyard filled with the bodies of four members of her family.

“The inhabitants throughout the village and in the fields were caught and killed and kept the exact postures they had held when the napalm struck — a man about to get on his bicycle, fifty boys and girls playing in an orphanage, a housewife strangely unmarked, holding in her hand a page torn from a Sears Roebuck catalogue crayoned at Mail Order No. 3,811,294 for a $2.98 ‘bewitching bed jacket — coral.’ There must be almost two hundred dead in the tiny hamlet.”

This NYT story captured the attention of Canadian External Affairs Minister Lester Pearson. In a letter to the Canadian ambassador in Washington, Hume Wrong, he wondered how it might affect public opinion and complained about it passing US media censors. “[Nothing could more clearly indicate] the dangerous possibilities of United States and United Nations action in Korea on Asian opinion than a military episode of this kind, and the way it was reported. Such military action was possibly ‘inevitable’ but surely we do not have to give publicity to such things all over the world. Wouldn’t you think the censorship which is now in force could stop this kind of reporting?”

No one denies that tens of thousands of liters of napalm were employed by UN forces in Korea. The use of biological weapons is a different story.

After the outbreak of a series of diseases at the start of 1952, China and North Korea accused the US of using biological weapons. Though the claims have neither been conclusively substantiated or disproven — some internal documents are still restricted — in Orienting Canada, John Price details the Canadian external minister’s highly disingenuous and authoritarian response to the accusations, which were echoed by some Canadian peace groups. While publicly highlighting a report that exonerated the US, Pearson concealed a more informed External Affairs analysis suggesting biological weapons could have been used. Additionally, when the Ottawa Citizen revealed that British, Canadian, and US military scientists had recently met in Ottawa to discuss biological warfare, Pearson wrote the paper’s owner to complain. Invoking national security, External Affairs “had it [the story] killed in the Ottawa Journal and over the CP [Canadian Press] wires.”

Price summarizes: “Even without full documentation, it is clear that the Canadian government was deeply involved in developing offensive weapons of mass destruction, including biological warfare, and that Parliament was misled by Lester Pearson at the time the accusations of biological warfare in Korea were first raised. We know also that the US military was stepping up preparations for deployment and use of biological weapons in late 1951 and that Canadian officials were well aware of this and actively supported it. To avoid revealing the nature of the biological warfare program and Canadian collaboration, which would have lent credence to the charges leveled by the Chinese and Korean governments, the Canadian government attempted to discredit the peace movement.”

International efforts to ban chemical weapons and to draw a “red line” over their use are a step forward for humanity. But this effort must include an accounting and opposition to Canada and its allies’ use of these inhumane weapons.

To have any credibility a country preaching against the use of chemical weapons must be able to declare: “Do as I do.”

Yves Engler

The case for much higher taxes on the rich

10 Sep

High government deficits are being used to justify cuts to public employment and social programs. It is not a surprise that transnational finance, the corporate media and right-wing political parties demand that returns on investments be given priority over employment, workers’ income, and the well-being of the marginalized. Having aggressively supported cuts to business and income taxes, they have reason to worry about the real returns on government bonds.

It is also not a surprise that unions and students in Europe have mobilized millions against these cuts. Unions, public sector workers, pensioners, immigrants and the poor are not to blame. Government deficits are a direct result of tax cuts, capitalist speculation, the 2008 financial crash, government bailouts, and the resulting loss of employment, income and government revenues.

If public deficits were the real problem—not just a pretext—military spending particularly in the U.S. would be drastically cut. Taxes would be raised. Of course, tax increases have consequences. Higher sales and value-added taxes reduce consumer purchasing power, further weakening markets in times of recession. Taxes on enterprise revenues can reduce expenditures for plant and equipment and lead to the failure of more businesses.

Steeply graduated income taxes would upset the super-rich but are otherwise benign. Taxing income over $200,000 a year at rates of 75 per cent, and over $500,000 at 90 per cent would substantially increase government revenues without reducing markets for most goods and services. Taxing profits on the buying and selling of stocks, bonds, real estate, and currencies could raise additional revenues. International agreement to raise tariffs to 15 to 25 per cent from the current average of five to ten per cent would raise more. Although the profits of transnational corporations would be squeezed, the resulting growth in local production for local consumption would expand employment, income, and public revenues everywhere.

Increasing taxes on capitalist income is anathema to the supply-side economists who have dominated government policy for thirty years. They claim that increasing taxes on the wealthy reduces the supply of funds available for private investment, causing job loss, reduced real incomes, and economic decline. Supply-side economics was a wealth-holders’ reaction to Keynesian demand-side policies.

The Keynesian period—from World War II through the 1970s—had been a response to destructive twentieth century wars, financial crashes, prolonged economic declines, and rising support for militant unionism, socialism, and communism. To counter growing opposition to capitalism, to stimulate consumer demand and to revive opportunities for profitable investments, governments increased spending on pensions, unemployment insurance, education, healthcare and income support. Laws were changed to make it easier for unions to organize and to bargain collectively.

Much of the cost of stimulating demand was covered by steeply graduated income taxes. In Canada, the U.S., and the U.K. the highest incomes were taxed at marginal rates up to 90 per cent during the war and after. Although lowered in the 1960s, income taxes remained steeply graduated through the 1970s. The share of total income going to capital as profits, dividends, interest payments, and rent did decline. Nonetheless, investments in machinery, equipment, buildings, infrastructure (bridges, roads, schools, hospitals, public transit), and housing stock rose steadily.

By the 1970s many of the very rich and corporate oligarchs had concluded that the welfare state was not in their interests. Unions were in decline. Communism was clearly not outperforming capitalism economically or militarily. At the end of the decade, neoconservatives like Margaret Thatcher and Ronald Reagan were winning political office claiming that Keynesian policies had increased demand at the expense of the supply of capital for investments. The result, they said, was not growth, but inflation and stagnation.

In fact, the Keynesian period was a time of steady, impressive growth in investment and consumer income. Inflation rates did reach double digits in the 1970s. Neoconservatives blamed this on rising social spending and government deficits. A more obvious explanation was the combination of rising oil prices and massive inflows of capital from abroad. Oil prices had risen from under $3 to over $30 a barrel, increasing the price of nearly all goods and services. Suddenly awash in revenues, the rulers of oil exporting countries invested billions in the U.S., U.K, Europe and Canada. Governments that were already cutting taxes paid by the rich and accumulating deficits, responded by borrowing more. U.S. government decisions to finance war in Indochina with borrowed money, not tax increases, compounded the problem.

In the 1980s, after supply-side policies became the economic orthodoxy, taxes on corporations and upper incomes were methodically lowered. Industries were deregulated. Laws were changed to make it more difficult for unions to organize and to engage in effective collective bargaining. Public utilities and services were privatized.

The rich did get richer—the super-rich substantially richer—but economies did not flourish as supply-siders had predicted. The quality of public services declined. Social infrastructure was allowed to decay. Employment in manufacturing and service industries fell. The real income of wage and salary workers stopped growing. Markets for consumer goods stagnated.

Supply-side theorists ignored the evidence. Instead, they turned phrases from Adam Smith into a mantra. More income for capitalists, they intoned, meant more savings, more investment, more economic growth. But Smith was not talking of twentieth century corporate oligarchs when he equated capitalist income with savings and investment. He was describing a middle class of prosperous farmers, shopkeepers, and merchants, whose frugality he contrasted with the aristocracy’s fondness for luxury. The middle class, he said, turned their surplus income into savings for investment in the future; aristocrats spent and borrowed for their current pleasure.

Today’s super-rich are more like eighteenth-century aristocrats than the middle classes of Smith’s day. They are mega and giga-consumers who transform revenues from productive assets and social labour into personal wealth—into mansions, yachts, beachfront condos, and winter retreats. As a class, they are obsessed with maximizing returns on their wealth, but they have little interest in productive investment. For them, innovation means new more profitable investment instruments: futures, derivatives, dubious mortgages packaged as collatoralized debt obligations, and credit default swaps (bankruptcy insurance).
Even when pyramid scams and outright fraud are not involved, nothing is added to means of livelihood when one capitalist buys and another sells stocks. Financial entitlements are merely shuffled from one to another. When the rich do invest in actual plant and equipment this is likely to be abroad where labour is cheaper and profits are higher.

The economic argument

Steeply graduated income taxes would make public debt manageable. Unlike taxes on consumption, taxes on the highest incomes would not dampen markets for consumer goods. Additional public revenues could be used to improve education, healthcare, social housing, income support, public transit. As employment and markets expand, enterprises would be encouraged to invest more.

Undistributed corporate profits are the main source of investment in research, development, plant, and equipment. By discouraging the distribution of profits as dividends, executive salaries, and bonuses, confiscatory tax rates on the highest incomes would give enterprises more reason to retain earnings, increasing the funds available for investment in real means of livelihood.

With far higher taxes on capitalist income, the super-rich will have to make do with less sumptuous homes, fewer and less luxurious automobiles, yachts, and vacation spots. For everyone else, the cost of keeping up with the Joneses will be less. People in all income groups are likely to save more, making more funds available for investment in housing and local enterprises.

The democratic argument

Capitalism claims to be a system of individual opportunities. Increasing the revenues for education, healthcare, pensions, and income-support would expand opportunities. Steeply graduated income taxes would transfer control of social surpluses from a corporate oligarchy to elected national, regional, and local governments.

Can governments and elected representatives be trusted to act in the common interest? With steeply graduated income tax, a small self-serving minority would have less money to influence legislation and corrupt politicians. Billionaires, like the Koch brothers—two of the wealthiest men in the U.S. who have bankrolled the U.S. Tea Party—would have less spare cash to dominate and manipulate political agendas in their narrow class interests.

Steeply graduated income taxes alone would not end capitalist entitlement, but as elected governments gain more revenues to expand social entitlements and public employment, people will demand to have a voice in economic decisions. The right of wealth-holding minorities to impose their immediate interests will be replaced with the transparent, democratic right of people to direct economic life in the common interest, in the interests of human and environmental well-being.

The environmental argument

The wealthiest one per cent presently claim twenty per cent and more of total income. If their share were reduced to five per cent, extravagant consumption and the accompanying waste of resources would be greatly reduced.

Governments would have the funds needed to replace dependence on private automobiles with fast, accessible public transportation. Federal, regional, and local governments could be provided with the funds to construct public heating and cooling systems that require less fossil fuels. Investments could be made in local agriculture for local markets. Environmental protection agencies could employ enough inspectors to investigate complaints and to act against corporate damage to ecosystems.

As control of social surpluses passes from the hands of wealth-holding minorities to elected governments, people will mobilize to demand that national, regional, and local communities provide more employment and goods and services as human rights. Fewer people will come to depend on the profitability of capital in general and of transnational corporations in particular. More people will be free to oppose environmentally destructive industrial activity.

As communities replace private corporations as the institutions making economic decisions, industrial and service workers, professionals, the retired, homemakers, students, farmers, mushroom pickers, loggers, and ecologists will all have the right to a voice and equal vote. The interests of major shareholders and top corporate executives will no longer take precedence over the income and employment of common people, or over the carrying capacity of environments.

Al Engler

More for the greedy few!

4 Sep

If the Harper government were honest about its policies, it would proclaim for all to hear: “Our goal is to make the rich richer.”

Many Canadians would agree that has been the effect of Conservative domestic policies, but may be surprised to learn it is also true in international affairs.

“Austerity should not be abandoned, says Canada’s finance minister,” blared a headline in London’s Financial Times earlier this month. Before recent G7 meetings Jim Flaherty told the international business paper he was worried that some officials were “pulling back” from slashing public spending and pursuing deficit targets.

“What I worry about is those that suggest that austerity should be abandoned,” noted Canada’s long-serving finance minister. “I think that’s the road to ruin quite frankly.”

Flaherty’s comment was a response to growing challenges to austerity, notably the European Commission’s move to give France and Spain more time to meet EU-mandated deficit targets. It was also a reminder of the Conservatives’ banker-friendly response to the worst economic crisis in Europe since the Second World War.

Even with youth unemployment rates in a number of countries at 25 to 50 per cent or higher, Ottawa has repeatedly supported the German-led push for European governments to cut social spending.

The Conservatives have backed this thinly veiled ruling-class effort to weaken labour’s bargaining position and roll back the European welfare state.

During a June 2011 visit to Athens Harper forcefully backed austerity measures bitterly resisted by much of the Greek population.

“I certainly admire the determination of Prime Minister Papandreou, and the very difficult actions he’s had to undertake in response to problems his government did not create. So we are very much all on his side.”

When German Chancellor Angela Merkel visited Ottawa in August of last year Harper reiterated his support for austerity measures. “There are additional things that have to be done” by European governments to end the continent’s economic troubles, he said.

“One of the things I appreciate about Chancellor Merkel’s leadership is the willingness, including at times of urgency and stress, to not just find any solution but to find correct and good solutions,” Harper added.

While supporting austerity measures, the Conservatives have publicly opposed efforts to tax and regulate the banks largely responsible for the economic collapse.

The Conservatives denounced efforts to better regulate speculation in international financial markets. In November 2009 British Prime Minister Gordon Brown proposed a tiny (ranging from .005 per cent to one per cent) tax on international financial transactions. Worried about the plight of investment bankers, Flaherty immediately dismissed the idea of a global ‘Tobin Tax’.

“That’s not something that we would want to do. We’re not in the business of raising taxes,” said Flaherty.

For his part, Harper admitted to blocking the G20’s bid for an international banking tax.

“Whether it’s taking strong and clear positions, for instance, at the G20 on something like a global financial regulation and a banking tax, we don’t just say, ‘Well, a consensus is developing for that. We’ll go along with it.’ It was not in our interest. It actually happens to be bad policy as well,” the prime minister was quoted as saying in the July 2011 issue of Maclean’s.

The Conservatives also spoke out against Washington’s late 2011 move to restrict some of the high-risk/high-return banking activities that led to the 2008 economic collapse (the so-called “Volcker rule”). Flaherty and Bank of Canada governor Mark Carney both sent letters to U.S. decision-makers criticizing the reforms.

“I am writing to express my concerns regarding the proposed Volcker rule, which could have material adverse effects on Canadian financial institutions and markets,” wrote Flaherty in February 2012.

Flaherty and Carney intervened following a bid by U.S. bankers to spark international opposition to the reforms. That combined with Canadian banks owning major assets in the United States helps explain the Conservatives’ position.

The Harper government has consistently supported Canada’s banks and the global-investor class. In fact, their entire foreign policy is largely designed around the question: How can we make the world’s richest 0.1 per cent even richer?

 Yves Engler

What free market? A review

3 Sep

The University of Chicago has long been the center of opposition to government economic intervention and support for the claim that free markets best serve general interests. It is a surprise to find Bernard E. Harcourt—professor of law and political science at the University of Chicago—challenging neo-conservative market extremism.

In The Illusion of Free Markets: Punishment and the Myth of Natural Order, Harcourt holds that markets will be regulated by governments or by the rich on behalf of themselves.  Few markets are actually unregulated. He goes on to make the case that markets directed by dominant players in their private interest result not in greater freedom but in heavier repression.

Harcourt begins by examining the Chicago Board of Trade and the New York Stock Exchange. These exchanges are widely viewed as epitomes of the free market, but they are actually self-regulated private monopolies protected by legislation. Their rules are made by member firms and policed by internal committees that determine the methods and time of trading as well as who may participate. As should be expected, the rules favor those who make them.

The Chicago Board of Trade forbids outsiders from engaging in after-hours trading.  However, the insiders who control the Board, when they agree among themselves, can modify the rules, giving themselves opportunities for exceptionally profitable trades. The Chicago Board of Trade and the New York Stock Exchange allow brokerage firms to restrict retail buyers (outsiders) from reselling for periods of thirty to ninety days. “But the same brokerage firms may allow large institutions to dump their stock in the after-market at any time.”  In New York, “members of the stock exchange may get together and fix the commission rates on stock transactions of less than $500,000,” but they can “freely negotiate commissions for larger stock transactions”—which they dominate.

In Chicago, when parties are in dispute, the Board’s Office of Investigation and Audits may investigate. Where its decisions are challenged, the Commodity Futures Trading Commission may get involved. If disputes are unresolved, the U.S. Attorney’s office can initiate civil or criminal actions. The point is that these “free markets” are minutely regulated, first by the dominant insiders and then by civil and criminal law.

Stock exchanges are not exceptions. Markets from the local to the global are dominated by firms with the largest market share, who typically have privileged access to supplies, technologies, marketing networks, and credit.

It is no revelation to point out that when a few are allowed to make the rules, they will direct markets in their own interests. Nonetheless, in mainstream opinion it is now taken for granted that markets regulated by dominant players are preferable to government regulation. This was not always so.

Before the rise of industrial capitalism, industries were self-regulated—by Guilds that were usually dominated by wealthy merchants. Seeing this, political thinkers from the Scholastics to the Enlightenment generally held that governments had a responsibility to intervene to curb speculation, price gouging, and hoarding, to keep the prices of necessities low, to police the quality of goods and services, and to maintain public hygiene.

Mainstream economists now teach that support for free markets can be traced back to Adam Smith in the late eighteenth century and Jeremy Bentham in the early nineteenth. Harcourt notes that Smith and Bentham did view self-interest in the market as generally beneficial, but he points out both also wrote of circumstances in which government intervention was clearly required to curb the self-interested power of great merchants and masters.

Harcourt also questions the prevailing view that the late nineteenth century was a time of laissez faire policies.  While industrial production did expand dramatically, governments played critical roles in the accumulation of capitalist wealth. To expand their countries’ shares of global trade, governments organized and financed shipyards and railway construction. They spent lavishly on navies and armies and colonial wars. Each empire restricted access to captive markets through imperial preferences and tariff walls.

However, the claim that control of markets should be left to the rich has an historical precedent.  Harcourt draws our attention to France before the 1789 revolution and the Physiocrats—so called because they advocated rule by natural laws. Most economic histories now dismiss Physiocrats  for having insisted that land alone is the source of exchange value. In France in their time, that was not so controversial: land still was the main source of great wealth. In their time, what distinguished the Physiocrats was the claim that private property and unregulated markets were in accord with laws of nature and that the role of government was to vigorously repress criminal acts against this natural order.

Physiocrats held that absolute monarchy, by placing government in the hands of the largest landowners, was the natural form of government. Leading Physiocrats—Francois Quesnay, Samuel Du Pont de Nemours, and Le Mercier de la Riviere—were prominent in the Court of Louis XV. For them it was natural to oppose government restriction on profit-making. They likewise viewed it as natural to advocate repressive policing and onerous penalties for thieves, the idle, the disorderly and anyone else who could interfere with their natural order. Le Mercier, as governor of Martinique—then one of the wealthiest French slave colonies—gained notoriety for his heavy-handed policing which even plantation owners came to believe was provoking disorder among the slave population.

Although slavery, landed aristocracies, and absolute monarchies have largely passed into history, the ideology of natural order, freedom for the rich and powerful, and repression for the dispossessed and disaffected still resonates with the very rich and their supporters. That is at the root of the current neo-conservative reaction.

Beginning in the 1940s, University of Chicago economists Milton Friedman and Friedrich Hayek, began campaigning to replace liberal-social democratic welfare state policies with old ruling class verities. By the 1970s, they had a powerful constituency: the super-rich.  Long hostile to Keynesian policies, and frustrated that domestic profit-making opportunities were decreasing, the wealthy heirs of great family fortunes were smitten by arguments that economic rewards and decisions are best left to the very rich.  By the early 1980s, the policies promoted by Chicago School economists and generously financed by corporations and the foundations of wealthy families were adopted by the newly elected conservative governments of Margaret Thatcher in the U.K., Ronald Reagan in the U.S., and Brian Mulroney in Canada.

By the late 1980s a Washington Consensus called for the deregulation of markets, cuts to the taxes paid by corporations and the wealthy, privatization of public utilities and cuts to social services. Although some of the advocates of unregulated markets call themselves libertarians, the widening disparities that followed anti-Keynesian policies were accompanied by more repressive state power.

Freeing the rich to do as they choose in the markets they dominate, obviously allows them to appropriate more of total income. Among the masses, some may benefit from a trickle down. Of those who are left with less income and employment, some will find comfort in knowing that at least a few have gained more wealth than they can imagine. Others will go on strike, organize boycotts, or participate in unauthorized protests.  A few will engage in petty criminality. In countries that have been impoverished, some may lash out with any weapons available. In response or in anticipation, the privileged will demand more aggressive policing, more onerous criminal sanctions and more punitive military actions abroad.

Neo-conservatives view repressive violence as a required response to domestic and international criminality. Harcourt makes the case that crime rates are actually related to entitlements, employment opportunities, and income disparities. For him, this is not purely academic. Earlier in his career, he had practiced law in Birmingham, Alabama, representing prisoners facing capital punishment. He continues to act pro bono as an attorney for prisoners on death row. In his 2001 book, The Illusion of Order: The False Promise of Broken-windows Policing, Harcourt had made the case that more aggressive policing had no significant impact on crime rates in New York.  These, however, are closely related to changing social conditions.

Al Engler

The Illusion of Free Markets
Punishment and the Myth of Natural Order
By Bernard E. Harcourt
Publisher: Harvard University Press, 2011
Paperback, 328 pages
ISBN-10: 0674057260
ISBN-13: 978-0674057265

We need to demand more than simply more

2 Sep

Why is there so much attention paid to people as consumers, but so little to people as workers?

Is it because the mere mention of our rights as workers brings up all kinds of uncomfortable truths that threaten the very ideological foundations of the current economic system?

As we celebrate Labour Day these are important questions to ponder.

The vast majority of us are wageworkers. Wages are our primary source of income. Or we collect a pension because we and/or our spouse were once workers. Or we are dependents of workers.

In fact a huge proportion of the money spent by consumers in our economy comes directly or indirectly from our wages as workers.

Despite this obvious reality, while the media is jam-packed with material about consumer rights, consumer choice, ads claiming the best price for consumers, stories about politicians claiming “to do what’s best for consumers” and much more focused on consumption, there is almost nothing about work or workers’ rights. Typically what little there is concerns strikes or other “disruptions” to the economy. It’s as if workers are just cogs in a giant machine, only worth discussing when a breakdown occurs. There’s certainly no money to be made promoting workers’ rights; in fact we are seen primarily as a cost that reduces profit.

Yes, there is some lip service given to workers as a resource; words to the effect that “we’re all in this together” might be spoken, but real examples of workplace democracy are few and very far between. If workers were truly valued as people “all in this together” wouldn’t there be at least some semblance of democracy at work?

Instead, under our current economic system, the master-servant relationship is the legal framework that dominates workplaces.

Reality for most workers, which means most people, is a fundamental lack of respect at work. That’s why “the system” prefers to focus on us as consumers rather than as workers.

So what, one might ask? What’s the big deal if we must give up being treated as an equal human being at work, so long as we are well paid? The object of work is to make enough money so that we can consume what we want and enjoy the good life, nothing more.

Aside from the fact many of us are not well paid, the answer to the question “so what?” is that work is an essential element of human identity. When asked at a party, “what do you do?” not many of us answer: “I shop.” And if we did, what would that say about us?

What we do — work — is what defines us, what makes us human. We want a job that is a source of lasting satisfaction, not simply consumption. When the system does not provide that sense of satisfaction at work alienation is the result. This leads to stress, addictions and other forms of ill health.

Even some unions become complicit in this alienation, focusing exclusively on getting more money, which is another way of agreeing with right wing supporters of the existing system that its members are just consumers.

These right wingers want us to only care about more money. They want us to consume more. Smart capitalists are Keynesians. They want workers to demand more and to spend more. But we’ve reached the limit of Keynesianism in two senses: Capitalists have abandoned it en masse so appeals for them to return to some golden era of Keynes is a pathetic dead end. And even if the capitalists were willing to give us more, more has become an environmental dead end.

Instead workers and their unions must learn to dream bigger.

We must learn to demand more than simply more.

Gary Engler

Conservatives isolate Canada

30 Aug

Foreign Affairs Minister John Baird’s recent mission to Latin America cannot mask Canada’s unprecedented diplomatic isolation in the hemisphere. Despite shifting ‘aid’ to the region and claiming to have made Latin America a priority, Ottawa is increasingly offside with a region breaking free from centuries of Western imperialism.

On July 9 the Organization of American States (OAS) held a meeting to discuss four European countries’ refusal to let Bolivia’s presidential plane enter their airspace. Six days earlier Evo Morales was returning from a meeting in Moscow where he said Bolivia could be open to giving political asylum to former CIA contractor Edward J. Snowden, who is wanted by Washington on espionage charges.

The US apparently suspected that Snowden, who was then stuck in the Moscow Airport, was on Morales’ plane. As such, the Obama administration pressed France, Portugal, Spain and Italy to block Morales’ plane in a bid to capture the whistleblower or to deliver a warning to other governments thinking about granting Snowden asylum.

Dubbed a “hostile act” by Bolivia, the OAS condemned the European countries’ “actions that violate the basic rules and principles of international law such as the inviolability of Heads of State.” All 34 OAS members backed the resolution except the US and Canada, which both added an appendix to the resolution saying they didn’t support it.

Harper’s Conservatives have repeatedly sided with Washington’s unpopular policies in the region. They’ve ramped up Canada’s contribution to fighting the ‘war on drugs’ at the same time as Latin America has backed away from this repressive model. Recently, Uruguay legalized marijuana and more and more officials in the region are publicly questioning a policy framework that has left tens of thousands dead and done little to stop the flow of illicit product. In May the OAS released a study advocating a re-think of the war on drugs, including a proposal to abandon the fight entirely.

A briefing note prepared for Diane Ablonczy, then-minister of state for the Americas, outlines Ottawa’s response to these shifting attitudes. “One of the objectives in our engagement in the Americas is to combat transnational crime and our programming investments demonstrate our commitment to this issue,” read the note obtained by Postmedia for a meeting Ablonczy had with Latin American ambassadors in November. “Canada looks forward to robust engagement in this process and sharing our domestic experience in addressing illicit drugs.”

Interestingly, the note was prepared by the Defence Department, which reflects the Canadian military’s growing role in the ‘war on drugs’. In recent months the military has deployed surveillance aircraft, naval vessels and submarines to the Caribbean and East Pacific as part of US drug interdiction missions. According to National Defence, the total cost of operations in the region has increased from $25.3 million in 2008-09 to $282.2 million this year.

Additionally, the Department of Foreign Affairs, Trade and Development has contributed millions of dollars to train police and promote other anti-drug initiatives.

Over the past quarter-century Washington has used the ‘war on drugs’ as a pretext to intervene in the region. For their part Latin America’s traditional elite have generally supported the militarization of society that accompanies the ‘war on drugs’ in order to undercut progressive social change.

Another means by which Washington and the elite have blocked reform efforts in the region is by removing governments that challenge their interests.

On June 22 of last year the left-leaning president of Paraguay, Fernando Lugo, was ousted in what some called an “institutional coup”. Upset with Lugo for disrupting 61-years of one party rule, Paraguay’s traditional ruling elite claimed he was responsible for a murky incident that left 17 peasants and police dead and the senate voted to impeach the president. The vast majority of countries in the hemisphere refused to recognize the new government. The Union of South American Nations (UNASUR) suspended Paraguay’s membership after Lugo’s ouster, as did the MERCOSUR trading bloc. But Canada was one of only a handful of countries in the world that immediately recognized the new government.

A week after the coup Harper’s Conservatives participated in an OAS mission that many member countries opposed. Largely designed to undermine those countries calling for Paraguay’s suspension from the OAS, delegates from the US, Canada, Haiti, Honduras and Mexico traveled to Paraguay to investigate Lugo’s removal from office. The delegation concluded that the OAS should not suspend Paraguay, which displeased many South American countries.

In 2009 the Harper government tacitly supported an even more controversial coup when the Honduran military removed elected president Manuel Zelaya. In response, the OAS expelled Honduras and many countries broke off diplomatic ties. But Ottawa refused to even suspend its training program with the Honduran military and Canada was the only major donor to Honduras — the largest recipient of Canadian assistance in Central America — that failed to sever any aid to the military government. The World Bank, European Union and even the US suspended some of their planned assistance to Honduras after the coup.

Two years ago Canada’s diplomatic isolation was formalized. Founded in December 2011, the 33-member Community of Latin American and Caribbean States (CELAC) includes every country in the hemisphere except Canada and the US. Some hope this new body will eventually replace the Washington-based OAS and unlike that body Cuba is a member of CELAC. In explaining the need for CELAC Evo Morales said, “A union of Latin American countries is the weapon against imperialism. It is necessary to create a regional body that excludes the United States and Canada.”

By tying itself to Washington’s unpopular policies, Ottawa has found itself more isolated than ever in the region.

Yves Engler

New union offers promise of new direction

28 Aug

This Labour Day weekend promises to be an exciting time for the Canadian union movement and perhaps a spark for workers around the world.

The Canadian Auto Workers (CAW) and the Communication, Energy and Paperworkers (CEP) are merging to create Unifor, the largest primarily private sector union in Canada with about 300,000 members.

The new union offers the potential of something great for the future of unions and the Left. Many good things will happen if Unifor fulfills the promise of its new constitution. For example, Article 2 — 10 states: “Our goal is transformative. To reassert common interest over private interest. Our goal is to change our workplaces and our world. Our vision is compelling. It is to fundamentally change the economy, with equality and social justice, restore and strengthen our democracy and achieve an environmentally sustainable future. This is the basis of social unionism — a strong and progressive union culture and a commitment to work in common cause with other progressives in Canada and around the world.”

A union that is militant, outward looking, engaged politically and willing to work with progressive people outside the labour movement is exactly what we need to motivate a new generation of activists. The future of unions depends on harnessing the energy, enthusiasm and political sensibility of young people in and about to enter the workforce. To accomplish that unions must be involved with community struggles, seen to be battling injustice and willing to work with anyone who shares our common causes.

I remember being a student at the University of British Columbia in 1972 and walking my first picket line during a SORWUC (Canada’s first feminist union) strike at a Denny’s on Broadway St. in Vancouver. Walking the line was a way of showing support for women’s rights in general, as well as helping the few dozen people actually on strike. And it set in motion decades of further involvement in the union movement.

Unifor’s new constitution has many progressive features. It requires gender equality on the national executive. It commits 10 per cent of national dues to organizing. It calls for “community chapters” that “can help build strong communities and enhance our collective strength in the struggle for social and economic justice by opening our Union to workers who currently have no access to union membership, because they have no collective agreement, or job, or hold temporary contract or other precarious employment.”

The potential for building community chapters that attract a wide spectrum of activists is immense. Common cause could be made with environmentalists, students, open media supporters and many other potential allies, as well as workers in sectors that have so far proven extremely difficult to organize. Someone first attracted to Unifor through a community chapter could one day become a skilled union organizer. The support of community activists who have worked with one of our community chapters could be key to winning a particular strike.

Enemies of unions like to portray us, and our members, as self-interested, greedy and out to get more than our fair share. Of course this is ridiculous coming from supporters of an economic system that glorifies greed, but unfortunately this is exactly what some people believe about unions.

Unifor, through its political action and community chapters, could demonstrate that unions are an essential element of a progressive democracy. The new union has the potential to help build a better society while at the same time building a stronger union.

Of course, as in all unions that exist in an economic system where we are bombarded with messages glorifying individual rights and individual greed, some delegates to the founding convention of Unifor may resist social unionism. Some may argue against broadening the union’s reach through community chapters. Some may want the union to limit itself to simply looking after existing members. But that road is a dead end. History has proven that is a recipe for shrinking membership and ultimate irrelevancy.

The promise of Unifor is in a rebirth of militant union activism. That’s what this delegate is going to the convention to vote for.

Gary Engler

Rant: Sense, cents and sensibility

27 Aug

It makes no sense we blow billions buying bombs or bailing out banks, but can’t afford to end world hunger. It makes no sense we pay to see a movie and then are forced to sit through commercials before it starts.

“It makes no sense.” I’m using these words more and more often.

The tyranny of idiot capitalism has become so ridiculous that it must be a sign the system is in crisis. The outrageous lies and distortions told to defend it have got to mean capitalism is finally obfuscating on thin ice.

At a minimum, please tell me other people have noticed the same absurdities that make me feel like smacking every sycophantic shill for the ruling class across the side of the head and screaming: “You’ve got to be kidding me! This is the best system possible? This is the height of human achievement? What do you take us for? Utterly brainwashed fools?” (And then I think it takes one to know one.)

Capitalism means freedom. Really? For the ever-greater proportion of people working in precarious part-time jobs paying peanuts? For the 70-year olds behind counters selling Big Macs or greeting Wal-Mart shoppers? For the tens of millions who have had their pensions chopped? For the garment workers toiling in life-threatening conditions in Bangladesh or Haiti or Honduras to earn $5 per day? For the millions of suburbanites who spend a quarter of their income and their waking hours on and in the vehicle that takes them to their shitty job? For the tens of thousands who have been recently bombed into “our way of life” by the greatest or one of the lesser capitalist powers? For the generations to come who will face climate change caused by profits earned spewing ever more carbon into the atmosphere?

Don’t interfere with the free market. You mean the same “free” market that has destroyed millions of good working class (what the scared-of-the-socialist-bogeyman Americans call “middle class”) jobs in order to enable a few dozen multi-millionaires to become billionaires? The market that had to be saved by bailouts to the very companies that caused its crisis, but which can’t afford good free public education for all? The market that gives us ever more processed food made from genetically modified plants fed to animals that graze in slashed-and-burned rainforests then shipped ten thousand miles but can’t provide nutritious meals of locally grown real food for every child on the planet? The market that is so efficient it requires hundred of billions of dollars to be spent on advertising to convince us to buy its products? The market that gives us plenty of $80,000 cars and $10,000 watches but can’t give billions proper sewage and water systems? The market that enforces patents owned by huge corporations, instead of the right for all to access affordable life-saving medicines? A market free from government controls, which when you really think about it means a market whose rules are made by and for the rich instead of through democratic decision-making?

Yes, we live in an absurd world. A world all about making cents, not sense.

The apostles of greed claim competition and choice are the only rights worth fighting for, as if we are all only consumers. But the vast majority of us are workers too. What about our rights at work? They are ignored, trampled upon and denied because that is what the “free” market requires.

Yes, we live in an absurd world but it can’t possibly get any worse. Can it?

It will, if we don’t fight back.

It can and it will get worse unless millions of people join together behind a common vision of an alternative to this system of one dollar, one vote called capitalism.

Once upon a time we did have a vision of an alternative economic and social system. Once upon a time a movement of hundreds of millions of ordinary people with that vision was created to build a better world and it was successful in many places, winning the universal franchise, public education, the 8-hour day, pensions, health and safety legislation, public health programs, daycare, laws against discrimination and more. Pretty much every reform that was listed in the Communist Manifesto 165 years ago.

But the unions and political parties that came out of that movement never won the most important thing: equality of power, the right of everyone to participate in running both our economic and political system. It never fought for and won something best described as economic democracy.
It left power in the hands of tiny minorities who ultimately run the world in their self-interest. And now these self-serving minorities are rolling back the reforms our mothers and fathers struggled so long and hard to win.

Yes we live in an absurd world. And it will get worse unless we come together to change it. It’s time we showed some collective sensibility.

 Ernie Peshkov-Chow

Capitalism versus economic democracy

26 Aug

Capitalism is a system that gives major shareholders and top corporate executives—one per cent or less of populations—the right to direct means of livelihood in their private interests. The system’s dominant institutions are corporations. Deemed in law to be individual persons, corporations actually combine the capital of numerous shareholders with the intention of dominating markets.

Corporations are privately owned capitalist collectives. The largest control more revenues than most governments.  To maximize profits, corporations expand production and introduce labour saving machinery, cut wages, and move employment to places where labour is cheaper. A recurring result is that the income of majorities who depend on labour falls as production increases. With declining markets for consumer goods, capitalist investment turns to financial speculation. Market crashes follow. Production facilities are shut down. Unemployment worsens, more jobs are lost, wages are cut further. Individual lives are disrupted. Communities are impoverished.

To deal with disaffection, the system relies on repression, militarism, and war. Within countries, surveillance is expanded and tightened. The marginalized, the dispossessed, and the disorderly are racialized and demonized as criminals. More people are jailed for longer periods. Globally, people who actively oppose the system are demonized as terrorists; countries are bombed and occupied. Wars are highly profitable for well connected corporations and divert attention from domestic divisions. Wars also glorify the violent machismo that encourages the subjugation, abuse, and marginalization of women.

Military intervention in Iraq, Afghanistan, and Libya increased sales of B-52s, guided missiles, helicopter attack ships, aircraft carriers, and drones. In the invaded countries, life was made worse. Power and water plants, bridges, railways, communications systems, schools, neighborhoods and entire towns were destroyed. Tens of thousands have been killed. Millions have become refugees. Invading countries gain no tangible benefits, but for politically influential aircraft and munitions corporations like Raytheon, Lockheed Martin, and Boeing profits did rise substantially.

Supporters of military action abroad claim it is humanitarian intervention. In Haiti the aim of “the responsibility to protect” was to make the poorest people in the western hemisphere so desperate that they would work for even less. In 2004, the U.S., France, and Canada sent troops to remove Jean Bertrand Aristide, the elected and widely popular President. Haiti was occupied in the name of the UN Security Council. Haitian government and municipal institutions were dismantled. Public workers lost their employment. The minimum wage law was abolished; so was public transit. Education was turned over to foreign aid organizations. With no functioning public institutions, Haitians were left with no means to protect themselves from hurricanes or to rebuild after major earthquakes.

Capitalism is at the root of growing environmental crises. Private capitalist entitlement allows corporations to externalize environmental costs, to pass these on to communities, workers, future generations, and other species. Science has convincingly demonstrated that rising carbon dioxide emissions from the burning of fossil fuels disrupt weather patterns, melt glaciers and polar ice caps, and acidify oceans. Still, major transnational corporations continue to fund campaigns of denial.

When the supporters of capitalism concede the seriousness of carbon emissions, they propose profit-making schemes (scams) like cap and trade, or they insist that consumers are to blame and should pay. Here in BC, corporate business supported the Campbell government’s carbon tax—paid by final users of gasoline and heating oil. This ostensibly green policy fits neatly with neoconservative plans to shift the tax burden from business to working people. Meanwhile, the government increased tax-breaks and write-offs for oil and gas exploration and development.

In capitalist rhetoric, unions, public sector workers, and local communities are reactionary vested interests, opposed to change. From a human perspective, capitalists are the most socially and environmentally destructive vested interest. They shamelessly use their wealth and political influence to increase their wealth by impoverishing others and blocking changes that undermine the profits made from fossil-fueled production and trade.

The working-class alternative

The working class—everyone who depends on labour not capital for their income—has the capacity to challenge the right of capitalists to direct social labour for their private profit. The working class includes wage and salary workers and the self-employed—shopkeepers, owner operators, farmers, and self-employed professionals, all whom depend on income from their labour. Those without capitalist entitlements also include most artists, artisans, full time parents, pensioners, students, the unemployed, and those unable to work.

Being the overwhelming majority—everyone but the one per cent, 0.1 percent or 5 percent who control and live off capital—the working class frees itself only by freeing all. So long as some are exploited and oppressed, the wellbeing of everyone who depends on income from labor is threatened. A world of human equality requires the replacing of capitalist title with human entitlement, corporate ownership with social ownership, and master-servant relations with workplace democracy.

With equal human entitlement, residents of owning communities will replace shareholders as the legal beneficiaries of means of livelihood. Social labour will be motivated and directed not for private profit but for general wellbeing. When all inhabitants including people whose livelihood depends on tourism and organic agriculture, berry and mushroom pickers, scientists, educators, parents, and students as well as manufacturing and resource workers have a voice and equal vote in economic decisions, communities will limit industrial activity to the carrying capacity of environments.

With social ownership means of livelihood will no longer be bought and sold for private gain. Social ownership must be distinguished from state ownership. State ownership as it exists continues the top-down command structures of corporate capitalism.  Social ownership means ownership by towns, neighborhoods, cities, regions, nations, and perhaps international communities. Social ownership means democratic and transparent planning by inhabitants for their wellbeing.

With workplace democracy workers in all occupations—machine operators, clerical workers, trades people, administrators, professionals—will have a voice and equal vote in the direction of their labour time. All occupations will be self-regulated professions. Assembly line workers will have a voice and vote in the direction of assembly-line work. Skilled trades people, clerical workers, engineers, and administrators will democratically direct their labour time. General assemblies of workers in all occupations may elect managers; owning communities will elect or appoint auditors and perhaps the directors of enterprise boards.

When capitalism is replaced with economic democracy, social labour and economies will no longer be directed in the interests of capitalist profit. When everyone is equally entitled to participate in economic decisions, communities will aim to provide acceptable employment opportunities for all available labour. No longer pressed to give priority to private profit, communities will be freed to balance industrial activity with the carrying capacity of environments.  The financial costs of social services will be balanced with revenues generated in exchange. The cost of needed imports will be balanced with exports.

Capitalism is based on market exchange, but capitalism should not be confused with the latter. Markets flourished long before capitalism. Ending capitalism does not mean abolishing market exchange. The working class has an obvious interest in democratic control of means of livelihood and labour time.  Majorities have an equally obvious interest in expanding social entitlements—employment at decent wages, education, food, housing, health care, child care,  leisure. However, people who depend on wages and salaries cannot reasonably be expected to support the abolition of market exchange. Half and more of working people are employed in the production and distribution of goods and services for exchange.

The right of individuals and communities to freely exchange goods and services with others—subject to democratically agreed taxes and regulations—is and will remain a basic human right. The widest practical access to supplies and markets is a major source of material wellbeing. Perhaps when capitalist entitlement has become a distant memory, exchange values and market forces will be anachronisms. Until then, communities from the local to the international will aim to base trade on the exchange of equivalents in labour time.

Three twentieth century dogmas have obscured the working-class alternative. The first narrowly defined the working class as blue-collar industrial workers. The second held that the alternative to competitive capitalism is centralized state control. The third is that ending capitalism requires armed revolution to seize state power.

Factory workers have a vital role in production and in mass movements against the system, but production workers alone do not provide an alternative to capitalism. The working class is far broader. It includes blue collar, pink collar and white collar wage and salary workers—service providers, skilled trades people, clerical workers, and professionals as well as assembly line workers. When the self-employed are included, the class of people without capitalist entitlement unquestionably does everything necessary to initiate, plan, produce, transport, distribute, and sustain the production of goods and services required for human wellbeing.

In the twentieth century, top-down centralized state control was generally viewed as the alternative. The collapse of the Soviet Union and China’s adoption of capitalist policies, did embolden corporate oligarchies. From a working-class perspective the demise of what was called actually existing socialism was not entirely negative. We no longer have to answer for external alternatives that divide people. We can look for the alternative within, in the working class, in the collective capacities and human aspirations of overwhelming majorities everywhere.

The twentieth century identification of fundamental social change with armed revolution did not inspire working-class opposition to capitalism. Violence and disorder damage immediate and long-term working-class interests, undermining employment, democracy, and human rights. Young men are maimed and killed. Women and children are victimized, terrorized, and killed.  An anti-capitalist working class will look not to armed struggle but to strategies and tactics that rely on the energy, spirit, and knowledge of men and women, on workplace organization, political action, and community mobilizations

Extremists among wealth-holding minorities may initiate or provoke violence to protect and advance their privileges. While people have an inherent human right to defend themselves and their interests, the working-class response is to look to mass support and to winning soldiers and police—who are themselves wage and salary workers—to the side of working-class majorities. Venezuela, Bolivia, Egypt, and Tunisia provide recent evidence that police, soldiers and officers can be won to the side of majorities.

From gross production to human wellbeing

So long as capitalism is unopposed, the working class appears dependent on capital, but it is capital that depends on labour. Capitalists as capitalists are drones; their function is to appropriate values produced by others. Every activity required for human wellbeing is now done by the working class—including the self-employed, as well as wage and salary workers. What the working class lacks is the understanding that capitalism is a house of paper entitlements that rests on the acquiescence of majorities.

Ideally, people who depend on labour for their livelihood would overwhelmingly refuse to accept rule by, and in, the narrow interests of a wealthy minority. Everyone would continue doing the work they now do, but instead of submitting to master-servant relations, people in all occupations—production, transportation, distribution, and sales people, professionals, managers, day care workers, service providers, teachers, accountants, nurses, and doctors—would democratically direct their labour time. Instead of working for the profit of shareholders, they would work in the interests of their communities.

Realistically, so long as capital is dominant substantial numbers will believe that their relative wellbeing and status depend on capitalism. Many will ignore capitalist privilege and see the enemy as the state, big government, foreign countries, unions, the poor, minorities, immigrants, liberals, Ivy League elites, feminists, older white men, communists, anarchists, criminals, Jews, Christians, Muslims, Hindus.

Seeing human equality, cooperation, and democracy as a realistic alternative will encourage the disaffected to look to human solidarity, to respect diversity and each other. It will deepen opposition to a system that gives the interests of wealthy minorities priority over human and environmental wellbeing. It will encourage community mobilizations, workplace organization, and political action for gains and reforms that weaken capitalist title and strengthen human entitlement. As such gains are made, more men and women will be inspired to mobilize against the system.

In the second half of the twentieth century, a time of virulent anti-communism, Keynesian reforms that improved living conditions did dampen opposition to capitalism.  When motivated by visions of economic democracy, movements for reforms that improve the quality of life can convince more people that opposition to capitalism is practical.

The exact issues that will inspire mass mobilization against the system cannot be predicted. We can start by campaigning for steeply graduated income taxes. Rates of 75 per cent or higher on incomes over $250,000 a year could increase government revenues by an equivalent of five per cent or more of gross national income. The revenues raised would eliminate government deficits and provide needed funding for social services, health care, education, public transit, and renewal of needed public infrastructure.  Higher wealth and inheritance taxes can be similarly beneficial. Tobin taxes on financial transactions and the re-regulation of international currency and interest rates would reduce the negative impact of financial speculation and raise more public revenues. Increasing tariffs enough to encourage domestic production would further increase government revenues and weaken the power of transnational capital over markets.

Supporters of the system claim that attempts to increase taxes on the rich inevitably backfire because capital will move elsewhere. In fact, capitalists invest where it is profitable. Capital does move in response to marginal changes in profitability, but wherever we are, we are not alone. Raising taxes on capital can inspire similar movements elsewhere, potentially limiting the threat of capital flight and weakening the power of capital to play regions and countries against others for their private benefit.

Public ownership of banks would direct savings away from speculative manias to socially useful investments. Reversing privatizations, renewing public ownership of utilities, transportation and communications systems, and natural resources could methodically weaken the power of capital and strengthen democratic control of means of livelihood.  Reforming political campaign finance rules, lobbying regulations, electoral laws would reduce the control capital now has over political agendas.

Local communities can take initiatives to set up cooperatives and community owned financial institutions, social housing, electrical power and communications utilities. Public support for local food production can make people less dependent on the vagaries of capitalist markets.  Environmental action can help ensure a better human future. Local, national, and international mobilizations can help reduce dependence on fossil fuel and replace automobiles with public transit and bicycles. Cities can be reconfigured so that walking once again is a pleasant, healthy mode of daily transportation.

Community and workplace mobilizations in solidarity with First Nations, racialized minorities, the marginalized, women, and immigrants will build human bonds and help expose the mean-spirited divisiveness of wealth-holders’ privilege. Support for policies that are intended to reduce disparities increase global human cooperation. These include the right of people to democratically direct their domestic markets as well as international funding with no strings attached for education, housing, health care, and infrastructure. Development should be directed not by foreign agencies but people themselves. The aim is to help provide people with capacity to help themselves.

The capacity of capitalists to use violence against working-class gains can be reduced. Vocally supporting the work police do in protecting persons and property, while exposing covert politically motivated policing, demanding public accountability of the criminal justice system, and mobilizing against police assaults on opponents of the system can help win police to the side of the people. Supporting soldiers in the sacrifices they make while opposing militarism and war can expose capitalist profiteering at the expense of soldiers as well as of people abroad.

Unions will have critical roles in movements against capitalism. Workers not represented by unions have no means to formulate their workplace interests independent of capitalists.  Unions were organizing centres of campaigns for freedom of assembly, association, speech, and the press, as well as the right to vote for men and women. Unions are largely responsible for the wages and working conditions that allow capitalism to claim it provides rising living standards. Now in a time when capitalist interests are eroding collective bargaining rights, unions have been preoccupied with conserving past gains. Still unions have provided critical support for First Nations, racialized minorities, women, gays and lesbians, and immigrants.

Revived opposition to capitalism may begin with the unemployed, marginalized, dispossessed minorities, immigrants, or students. Wherever it begins, rising opposition to capitalism will encourage workers already organized for collective bargaining to join in solidarity. As opposition to capitalism grows, more wage and salary workers will demand collective bargaining rights. Revived unionism will convince more people that a working-class alternative is practical.

Mass protests over the past few years in Brazil, Egypt, Tunisia, Wisconsin, Greece, and Israel show that people will rally against repression, privatizations, public sector layoffs, cuts to social programs, rising food costs and the high cost of for-profit housing.  Immediate results may be disappointing, but as people come to see that they are not alone in opposition to a system directed by and for super-wealthy minorities, mass protests can turn into general strikes and workplace occupations as well as into electoral gains for democracy and equality.

Al Engler

Capitalism’s complicated relationship with public debt

25 Aug

Most political parties, central banks and the corporate media insist that public debt is the most pressing problem facing governments. Meanwhile, real wages in the U.S., UK and Canada, and much of the EU continue to fall. Disparities widen. Rates of chronic unemployment are rising.  Unemployment levels for young people are at historic highs, over fifty per cent in Greece, Spain and Portugal. But capitalists—whose income comes from profits, dividends, interest, rent and capital gains—are preoccupied with public debt.

For centuries, public debt has been a driver of capitalist growth. By increasing financial reserves, government bonds and treasury bills add to the credit available to business. Most of the interest on public debt is paid to financial institutions and wealthy individuals.  Capitalists clearly benefited from the trillions in the additions to public debt to bailout financial institutions after the 2007-08 sub-prime mortgage crash.

For capitalists the only real problem with public debt is that it might not be repaid. In a time of declining government revenues, creditors have reason to worry. But additional revenues could be raised with little damage to most markets by restoring taxes on corporations and top incomes to earlier levels. This is not happening because it would be contrary to entrenched supply-side policies that have dominated political agendas for more than thirty years.

In the 1970s neo-conservatives, liberally funded by the super rich, began to stridently demand an end to Keynesian demand-side policies. They claimed that rising real wages and expanding social entitlements were lowering the income of capital, reducing the supply of funds for investment, leading to stagnation and inflation. They demanded that governments cut spending on social services, weaken unions, reduce regulations on business, and leave economic priorities to the marketplace.

The Keynesian period that preceded the neo-conservative reaction was no utopia. It was a time of paranoid anti-Communism, institutionalized racism, discrimination against women, homophobia, and genocidal imperialist wars. But in many countries laws were passed to make it easier for unions to organize and engage in collective bargaining.  Common people gained rights to public pensions, unemployment insurance, family allowances and post-secondary education. Governments made major investments in transportation infrastructure, electrical utilities, schools and hospitals. Capital movements, currency values and interest rates were regulated. International trade was encouraged, but reciprocal tariffs were kept high enough to protect domestic production for domestic markets.

To pay down heavy war debts and to increase spending on social services and public infrastructure, taxes on corporate income were 50 per cent and higher; taxes on top personal incomes were 70 and 90 percent. Although the share of total income appropriated by the richest two percent fell during Keynesian times, corporate investment rose steadily, as did markets and real wages.

The first major neo-conservative victories were the elections of Margaret Thatcher in the UK in 1979 and Ronald Reagan in the US in 1980. Taxes on capitalist income and corporations were cut. So were social programs. Regulations on corporations were eased and eliminated.  Laws were changed to make it more difficult for unions to organize and bargain successfully.  Neo-conservatives claimed that increasing the after-tax income of the rich and freeing corporations to maximize profits would increase the supply of funds for investment. They said  employment would increase, as would the supply of goods and services.

The top two per cent of income earners did double their share of total income to twenty percent. However, the rate of investment did not increase. Real wages declined. Chronic unemployment increased. Growth in markets for consumer goods slowed.

Supply-side policies—now more often called neo-liberalism or the Washington consensus—have a fundamental flaw. Individual capitalist investment has little impact on real economies. Most private investment in machinery, equipment, buildings, land, resources, and on research and development comes out of depreciation and depletion allowances and other pre-tax corporate revenues.

In a recent study commissioned by the UK government, prominent economist John Kay reported that the total capital raised by British companies in equity markets is actually negative. He concluded that financial markets serve the narrow interests of financial institutions and wealthy investors who can make quick profits by buying and selling shares, taking control of companies and stripping assets.  “In a paradoxical way, the function of equity markets today is not to enable savers to put money into companies. It’s to enable them to get it out.”

When capitalists do invest in real means of livelihood, they look to places where labor is cheaper. As more jobs move abroad, overall wage income falls, further weakening markets. Private domestic investment focuses on speculation in real estate, high tech start-ups, futures markets, derivatives, and to mergers, acquisitions and takeovers. Few of these investments add anything to real means of livelihood. In casino capitalism, excess capital drives up share prices, overvaluing assets. Financial booms are followed by busts, capital evaporates, credit dries up, real enterprises go bankrupt, more people lose employment.

Instead of the frugal savers in Adam Smith’s free market, today’s capitalists are self-indulgent gamblers. They spend extravagantly on lavish mansions, luxury condos, private jets and yachts.  They have more than enough left over to fund the political campaigns and lobbying that give them effective control of political agendas.

Letting the market decide may sound benign. In practice it means giving a wealthy minority–major shareholders and top corporate executives—free rein to direct economies for their private short-term profit. Meanwhile, tax cuts for corporations and the super rich have reduced the capacity of governments to limit the damage done by capitalist self-interest. In Canada, in the last decade, total government revenues have fallen from 43 percent of GDP to less than 38 percent.

When current governments do intervene they do so to defend capitalist interests. Public services are frozen and cut, public employment is reduced. Yes, austerity policies, by assuring creditors that they will be paid, help keep capital markets booming, but cuts to employment and consumer income weaken most other markets, discouraging investment in real means of livelihood, increasing unemployment and poverty. As disparities within and among countries widen, capitalist minorities turn to more internal repression, more surveillance, more public spending on weapons of mass destruction and foreign military intervention.

Al Engler

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