In the 1940s, following decades of booms, busts, unemployment, disorder, wars and destruction, rigid free market policies were abandoned. Governments began to deliberately act to maintain employment and market demand. This shift was identified with J.M. Keynes, a prominent British economist and government adviser who had made the case that classical economics was wrong. Depressions, he wrote, were not caused by a decline in the supply of capital but by a fall in demand caused by declining wages and rising unemployment.
During Keynesian times, until the late 1970s, economies and employment grew steadily. Democracy came to mean that governments had a responsibility to protect and advance the interests of common people. Keynesian policies, including increased access to higher education, public health care and income support were funded by taxes on those with the means to pay. The marginal tax rate on the highest income was 80 per cent. Taxes on corporate income were 50 per cent and higher.
Humankind now faces global crises. Widening disparities in income, opportunities and control are provoking disorders, militarism and wars. Emissions of carbon dioxide from fossil fuels threaten the climates on which human well-being depends. Private capital, focused on short-term profits, systemically aggravates these problems. Prevailing ideology is now aggressively hostile to government action. Tax cuts for corporations and the super rich have reduced the public funds required.
Since 1980 taxes paid by corporations and the rich have been methodically reduced. During Keynesian times, the richest one per cent got ten per cent of total income. The richest one percent now gets twice as much, twenty percent. Ten per cent of total income has been transferred from public revenues to private capital.
Neoconservatives like Margaret Thatcher and Ronald Reagan claimed that giving capitalists more money and freeing corporations to maximize profits would be generally beneficial, trickling down to the masses. Instead disparities widened. Tax cuts not only provided private capital with more funds to invest; it gave the super rich more money to manipulate political agendas. Regulations on corporate finance and industry were weakened. Union rights were curtailed. Corporations were freed to move capital to countries with lower taxes, and jobs to places with lower wages. Real wages fell. Unemployment rose.
With consumer markets stagnant, investors awash in funds turned to speculation in stocks, bonds, futures and real estate, to derivatives, index funds, credit default swaps and collateralized debt obligations. Capital markets became casinos, adding little to real production. Gains for a few came out of the losses of many others.
Meanwhile as taxes on capital were reduced, public deficits and debt increased. Concerned that capital would lose value, the rich demanded austerity. Although governments were more than willing to spend more on prisons, intrusive surveillance, militarism and war, social programs and infrastructure spending were frozen and cut. Public assets were privatized. Here in Canada, while courts were confirming rights of indigenous people, governments used deficits as an excuse to disregard Treaty obligations.
Meanwhile, carbon emissions from the burning of fossil fuels continued to rise. In 1995 countries meeting at the Kyoto Conference agreed to voluntarily reduce carbon emissions. Science had concluded that carbon dioxide levels had to be kept below 350 parts per million. But corporate capitalism preoccupied with profits from existing industry did not act. Declining public revenues and corporate opposition prevented government action.
By 2014 carbon dioxide levels exceeded 400 parts per million. If green energy had replaced two percent of fossil fuel energy each year since 1995, as the Kyoto Accord proposed, carbon emissions would already have been reduced by half. Instead, corporate capitalism responded by spending hundreds of millions to deny that carbon dioxide emissions were a problem. Hundreds of billions were spent to develop, produce and transport more fossil fuels.
Everyone not blinded by capitalist dogma or the prospects of immense profits now knows that fossil fuel emissions are melting polar ice caps and glaciers, raising sea levels, flooding coastal communities, acidifying oceans, and generating more frequent and more destructive weather events.
Now that denying climate change is no longer credible, capital simply disregards the threat, claiming that there is no technologically realistic alternative to energy from fossil fuels. Yes, the technology to efficiently store and distribute alternate energy on the scale required has yet to be developed. But the needed technologies would already be available if solar, wind, wave and geothermal power had received the investments, tax breaks and subsidies provided for offshore drilling, fracking, tar sands and oil pipelines.
Technology is not the problem. With relatively small expenditures Denmark in 2014 got 40 percent of its electricity from wind power. Renewable energy, mostly solar, is providing Germany with 25 percent of its electricity. Solar power is providing China, India, Brazil, and African countries with expanding shares of electricity.
Capitalism is the problem. So long as major shareholders and top corporate executives are entitled to make major economic decisions in their private interests, capitalist profits will continue to trump employment, labor income and public services. Environmental costs will continue to be externalized—passed off to communities and future generations. Replacing capitalist title with human entitlement begins with deliberately transferring income from private capital to the public.
In his Capital in the Twenty-First Century, Thomas Piketty makes the case that corporation taxes should return to 1950s levels. Marginal tax rates on personal incomes over $500,000 should be raised to 80 percent. He proposes an annual tax of 0.1 percent of private wealth over half a million dollars rising in steps perhaps to 2 percent on wealth over three or five million dollars. Homes are already taxed annually. Why should stocks, bonds, and other wealth be excluded? Piketty adds a progressive estate tax on inheritances over one million dollars and a tax of 0.1 percent on financial transactions. He argues that more transparency in income records and better statistics gathering would make it practical for countries to cooperate in preventing income and wealth from being hidden in offshore accounts.
Of course, the super rich will aggressively object. But nearly everyone else would gain. Taxing capital could provide local governments with funds to reduce disparities and expand social services. Public spending on green infrastructure would provide more employment and increase market demand. Public spending to reconfigure cities could make it practical for people to live their daily lives without cars. Public spending on solar, wind, wave and geothermal power and public transit would reduce carbon emissions and generate more jobs.
Al Engler
Unions should lead the fight against global warming
4 DecWhat 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
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Tags: economic democracy, environment, global warming, socialism, unions