Editorial Comment

Dan Goldstick

As this is being written, good-paying unionized manufacturing jobs in Canada are being lost, the international devaluation of the United States dollar continues, and stock market prices are bouncing up and down – mostly down. A couple of Quebec financial institutions have taken a heavy beating in last summer’s “sub-prime” mortgage smashup on Wall Street, and so has the Canadian Imperial Bank of Commerce and the Bank of Montreal, among many others. Only a fool would attempt to prophesy with any confidence about the shorter-term economic consequences, but it certainly underlines the instability inherent in even monopolized “free market” capitalism.

It was a financial newsletter issued by the same CIBC from which Jason Mann quoted in the July People’s Voice, just prior to the latest business shocks. Writing in the June 15, 2007 issue of StrategEcon (published by CIBC World Markets Inc.), Jeff Rubin and Warren Lovely told their readers:

“The Bank of Canada, eying an economy operating above its non-inflationary speed limit, will welcome the dampening influence of an even stronger currency on both economic growth and inflation. A couple hundred thousand additional factory job losses, while far from derailing domestic economic growth, might be a route to opening up a bit of slack in today’s ultra-tight labour market, forestalling a more serious wage threat.”

Got that? Forestalling a serious wage threat. Who is it that would be threatened? Not wage workers. Which leaves their capitalist employers, then, as the ones menaced by the prospect of having to pay higher wages.

This was not just some imaginative theorizing in the heads of two business writers. It continues to be the official stated – but not loudly stated – government policy in Canada and other capitalist states even in so-called good times to keep up enough unemployment to make workers replaceable so that they won’t get too far out of line when it comes to pay.

But are not high wages inflationary! How so? Inflation is rising prices. If capitalists are not to reap less profit, they must raise the prices of what they sell whenever their labour costs go up. And so they do. They don’t have to go on strike and negotiate with consumers in order to do it. They simply do it.

(Well, to be sure, sometimes they can’t do it, or can’t do it fully. Sometimes they would lose more in lost sales than they’d gain by charging more in each sale. In such cases the wage gains made aren’t inflationary.)

But then again, improved workers’ wages could be inflationary by putting more money in their pockets than there are things to buy – provided, of course, that there can’t be any cut in production to meet the capitalists’ personal and business requirements. These are the generally accepted conceptions of bourgeois economics. It isn’t that these ideas are all wrong. What’s devilish is the extent to which they’re right!

Economics classes from one end of the country to the other are taught that to guard against inflation interest rates have to be made high enough to ensure some “slack” –unused human and other resources – in the national economy as a whole. The poor economy must not get [“overstretched”] “overheated” – that is: everybody working at a job with good pay.

What a system! For business to prosper some Canadians have to be kept unemployed and poor. That is the way it works. In a rational economy, so long as people have unmet needs, and there are resources in the ground capable of meeting those needs and workers available with sufficient skills to turn those resources into the products needed, those workers will be employed producing those products to satisfy those needs. But that is socialism. For that, working people need to take over the economy and run it themselves, hiring (as capitalist owners do) any expert managers they require. Who needs capitalist bosses anyway?

Meanwhile, back in the economy which we have, the Canadian Centre for Policy Alternatives reported in March 2007 that workers’ real wages (corrected for inflation) have remained static for the past thirty years despite economic growth and gains in per-worker productivity – which increased by 51% during that time (www.growinggap.ca).

So what, then, happened to the increased output that workers’ static wages weren’t enough to buy? Canadian capitalists’ personal consumption certainly didn’t go up that much. What working-class families consumed they bought by taking on greatly increased debt. And some Canadian profits were sent back home by foreign-owned businesses. Some profits, again, were spent on expanding Canadian businesses here and abroad. A lot of money was used to expand the Canadian military and military production. And a really big chunk of cash was pushed speculatively into stocks and bonds and laid out on mergers and acquisitions without actually producing anything more. No wonder economic “instability” is now being experienced.

What economic “instability” means is that you could lose your job and you could lose your home. Under capitalism the working class cannot stop the inevitable “business cycle”; but unity and militancy can shift some of its effects off our backs. So it is time now to roll our sleeves up for the fight ahead.

One thing Communists claim they help the people’s struggle by contributing is Marxist science, with a rational society-wide view of the stakes, the forces, and the possibilities. But scientific insight into social reality doesn’t fall from the sky. It comes out of the actual experience of struggles – but then also it comes from study and criticism.

All science, we know, is dependent on study and critical discussion. That is why the theory of art too is a subject that revolutionaries can be better equipped for their job by understanding, for art too is part of social reality. Science’s need for criticism exists because it is never humanly possible to possess all the answers.

In his article “The Nature of the State Under Bush and Harper” Stephen Von Sychowski continues the debate on the extent to which what we already have here now is disguised fascism. He quotes former U.S. Communist leader William Z. Foster noting in effect that, though in World War II the USA was locked in a life-and-death struggle against foreign fascist dictatorships, real conditions back home fell far short of full democracy even then. And today the situation is worse. Cuban leader Fidel Castro has commented that the U.S. [The present U.S. Communist leader Sam Webb says his state] practises fascism abroad but, so far, something partially different domestically. Do we Canadians live in a democracy? Yes, to a degree, but not when it comes to controlling Canada’s economy. And you might well wonder how democratic the social life you experience is, for instance, if you belong to a racialized minority.

Or to an Aboriginal community. We are honoured to have a Spark! discussion contribution in this issue from Indian nationalist Ray Bobb, who makes a case for fighting oppression by uniting together with the working class movement and the left and, furthermore, by resisting the treaty process, which (he argues) weakens the Aboriginals by disuniting them into a large number of “first nations”. A point on which the Communist Party at present disagrees with him is his view that Aboriginals – or non-Inuit non-M├ętis at any rate – today form a single nation, rather than a group of peoples and nations who face a common oppression. It’s up to them, of course, to determine the forms and strategies their resistance will have, but their collective consciousness and united struggle has so far not taken the one-nation form Bobb favours. From developing events, from united action, and from respectful discussion we all should be able to learn a great deal.

Lastly, are the present-day economy and state in China essentially socialist-tending or capitalist-tending? The answer for which C. J. Atkins in general terms argues in “The Leninist Heritage of the Socialist Market Economy” will certainly not end the ongoing debate about that, which continues within China as well. The Soviet example warns us that revolutionary gains can be lost all too easily if the working class, for whatever reasons, is not up to defending its rights and interests. Like other classes, working classes too need leaders and parties; but it isn’t good enough simply to back them and trust them. This applies also to our Party. Democratic leadership is not about trust, in the main. What even the most progressive leaders can achieve for people will largely depend on the active, intelligent militancy of the people themselves.

Spark 20, Summer 2007