Chapter 2: Capitalism in Canada
Contents
What is Capitalism?
The economic system in which we live is capitalism. Under this system the means of production are predominantly privately owned; the capitalists operate their factories, banks and offices, mines, forest operations, transport and service industries in order to extract profits. The source of profit and accumulation of capital is the exploitation of the working class – all those who work by hand and brain. Human labour, in combination with nature, is the source of all material wealth and cultural values.
Under capitalism, the workers own no means of production. Having no principal source of income other than their capacity to work, they must sell their labour power for a wage to the capitalists in order to live. The working class is the vast majority of the population of capitalist countries such as Canada. It includes workers employed in all sectors of the economy, both organized and unorganized, as well as the unemployed and under-employed, and their families.
Workers today are encouraged to invest in stocks and bonds, and workers’ pension funds have become an important pool of capital for investment and speculation on the stock and money markets. This increases the capitalists’ access to additional funds for investment, while creating the illusion that workers have some “say” in economic decisions and corporate policy. In reality however, “people’s capitalism” is a ruse; the capitalist class retains exclusive control.
The basic conflict between capital and labour is inherent to the capitalist system. The capitalists, who control the main means of production, employ wage-workers only so long as their labour produces profits for them. They hold down wages to the lowest possible level so as to squeeze greater profits out of the exploitation of the workers. The workers fight to maintain and increase their wages, improve their living and working conditions, and extend their economic, social and political rights. This is the heart of the class struggle under capitalism which affects the whole of society, and which at a certain stage impels the working class to revolutionary struggle aimed at changing the social system itself.
Under capitalism, the labour process is carried on by the joint effort of large numbers of workers in factories, plants and offices. But while labour and the production process are social, its fruits are privately appropriated by the owners of the means of production. This basic contradiction – between the social character of production and the private capitalist appropriation of the commodities produced – lies at the root of all the evils of capitalism: unemployment, economic and social insecurity, mass poverty, economic crisis and the drive to war.
At the same time, capitalism also creates its own gravediggers – the working class.
The Development of Capitalism in Canada
Capitalist relations in Canada date back to the earliest days of European colonization and the subjugation of the Indigenous peoples. Colonial structures were violently imposed on the basis of early mercantile capitalism, based on trade – primarily fish, fur and timber – between the colonies and France and Britain. As the settlements expanded, and as capital accumulated, the first small capitalist enterprises began to appear. Gradually, larger-scale operations, especially in forestry and shipbuilding, were started.
By the time of Confederation in 1867, industrial expansion was well under way, aided by the development of shipping and railways, and by the introduction of steam-power and other technological advances.
As a dependent colony, Canada was under the domination of British capital. Early in the 20th century however, trade and debt dependence on Britain was gradually replaced with an even more debilitating dependence on U.S. capital and technology. U.S.-based capital gained control of the key sectors of the Canadian economy, particularly manufacturing and natural resources. This process resulted in Canada becoming more integrated into and more dependent on the U.S. economy than any other developed capitalist country. This in turn has deepened distortions in the structure of the Canadian economy. The growing presence of U.S. and other transnationals increased pressures for the exploitation of Canadian natural resources. It has also led to a massive and growing outflow of profits, interest, fees, and other transfers, stifling new development, jobs, and research, and easing the political and cultural penetration of U.S. imperialism.
Capitalism in Canada Today
Capitalism concentrates wealth and the ownership of the means of production into fewer and fewer hands. In Canada, as elsewhere, small producers, traders and farmers are pushed to the wall by bigger capitalist firms. Out of and alongside the cut-throat competition of early capitalism, monopolies began to emerge. A few huge concerns, in which banking and industrial capital are merged and which are manipulated by a handful of finance-capitalist tycoons, came to dominate the entire economy. This is the stage of monopoly capitalism, the economic basis of imperialism: the highest and final stage of capitalist development.
Finance capital, the fusion of bank and industrial capital, has become the dominant form of capital in Canada. Finance capital – both Canadian and foreign-based – controls giant transnational companies and banks which operate around the world increasingly in disregard of national interests.
The most significant feature of present-day monopoly capitalism is the dominant place of transnational corporations (TNCs). Rapidly expanding flows of international finance capital for investment and speculation are destabilizing national and regional markets, and the global capitalist system as a whole. The struggle for global supremacy among a small number of giant TNCs – many wielding greater economic power than national governments and economies – is rapidly accelerating both the concentration of wealth (through corporate mergers, acquisitions and partnerships) and the growth of impoverishment on a world scale. Uneven development, an inherent feature of all stages of capitalism, is reaching unprecedented dimensions under the impact of capitalist globalization.
Despite its current economic and ideological power, monopoly capitalism is gripped by a profound, systemic crisis from which ultimately it cannot extricate itself – an all-pervading economic, political, and cultural crisis, which it seeks to solve through intensified exploitation, aggression and war.
State-Monopoly Capitalism
Finance capital subordinates the Canadian State more and more directly to its interests and control. State-monopoly capitalism – the integration or merging of the interests of finance capital with the state – is a new stage in the extension of corporate control to all sectors of economic and political life. The government, while seemingly independent of specific corporate interests, has become predominantly the political instrument of a small group comprising the top monopoly capitalists for exercising control over the rest of society. Finance capital uses the state to provide orders, capital and subsidies, and to secure foreign markets and investments. Monopoly capital supports the expansion of the state sector – both services and enterprises – when that serves its interests, and at other times it uses the state to cut back and privatize. The state is also used to redistribute income and wealth in favour of monopoly interests through the tax system, and through legislation to drive down wages and weaken the trade union movement.
State-monopoly capitalism undermines the basis of traditional bourgeois democracy. The subordination of the state to the interests of finance capital erodes the already limited role of elected government bodies, federal, provincial and local. Big business openly intervenes in the electoral process on its own behalf, and also indirectly through a network of pro-corporate institutes and think tanks. It uses its control of mass media to influence the ideas and attitudes of the people, and to blatantly influence election results. It corrupts the democratic process through the buying of politicians and officials. It tramples on the political right of the Canadian people to exercise any meaningful choice, thereby promoting widespread public alienation and cynicism about the electoral process.
In the current conditions of capitalist globalization, international finance capital also requires institutions of regulation ratified and supported by the imperialist states to protect and advance their interests. It has amplified the role of existing international capitalist institutions – the World Trade Organization (WTO), the International Monetary Fund (IMF), and World Bank – to enforce its global hegemony, as well as numerous regional economic blocs to protect the interests of the respective imperialist centres. These powerful international structures undermine national and state sovereignty, thus giving rise to new conflicts and contradictions in the system of monopoly capitalist regulation.
Regardless of its forms, the principal aims of the modern monopoly capitalist state are the preservation of the capitalist system and especially the enrichment of the monopolies. This demands the suppression of the working-class movement and its revolutionary vanguard, and the crushing of the remaining socialist countries and national liberation struggles around the world. The resurgence of fascist and white supremacist parties and movements is a testament to the capitalist system’s sharpening contradictions as it moves to destroy any opposition to its voracious aims.
Canadian Capital and the TNCs
Canada is an imperialist country – a highly developed monopoly capitalist state. Canada has the highest level of foreign ownership amongst the imperialist countries, but it is neither a colony nor a semi-colony. Canadian-based transnationals participate in the exploitation of working people in other countries, and Canada is subject to the intrinsic contradictions of global capitalism.
Canadian finance capital is today largely interlocked with U.S. transnationals, and international finance capital in general. The imposition of neoliberal policies – especially so-called free trade agreements – has intensified this process of capitalist integration under U.S. domination. Canadian monopoly groupings control many sectors of the economy and control the Canadian state, but international finance capital – primarily U.S.-based TNCs – control substantial parts of the resource, manufacturing and service industries. These high levels of foreign ownership have deepened the structural distortion and regional inequality of the Canadian economy. U.S. domination undermines the ability of Canada and the other countries of the Americas to control their respective national economies. Important decisions on investment policy, technological change, plant closures and layoffs are made outside our borders. No sector of Canada’s economy is free from U.S. and other transnational influence.
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At the same time, there has been a rapid centralization of wealth, in the Canadian-owned sector of the economy, into the hands of an extremely small group of conglomerates and TNCs. As a result, the Canadian economy is highly monopolized, even in comparison with other imperialist countries. Canadian capital is now being exported at a growing rate. Canadian monopoly is more than a junior partner of U.S. imperialism; it is an integral part of the world imperialist system. Canadian monopoly interests are interwoven with those of U.S. capital and increasingly with capital from the EU and Japan.
The collaboration between the most reactionary sections of U.S. and Canadian monopoly is clearly revealed in foreign policy. The deliberate subordination of Canada to U.S. imperialism commits Canada to the U.S. war policy through NATO and a network of other “defence” agreements. The line of economic and military integration pursued by the dominant section of finance capital has made Canada into a military launching pad for the U.S. military-industrial complex and an active participant in US and NATO wars of aggression.
Canadian monopoly has its own independent interests to protect and advance. However, the dominant trend within Canadian monopoly circles today is toward economic integration and political collaboration with U.S. imperialism, and with international finance capital in general. In pursuit of maximizing profit, Canadian monopoly is prepared to sacrifice the country’s economic and political sovereignty, so long as it can maintain a reasonable share of the plunder of Canada’s natural resources and domestic market, while expanding access to larger U.S., hemispheric, and global markets.
Canada’s dependent relation to U.S. imperialism has exacted a high price in terms of our country’s development. It has accelerated the depletion of Canada’s natural resources; it has weakened our self-sufficiency in the production of food and other basic commodities; it has worsened the problem of Canada’s uneven development; it has sharply curtailed research and development; and it has eliminated jobs in virtually every sector of the economy.
Canada’s further integration with U.S. imperialism comes into sharp conflict with the expressed desire of the vast majority of the people of Canada to defend the country’s sovereignty and independence. The struggle against U.S. domination and for genuine Canadian independence and an independent foreign policy is part of the worldwide struggle against capitalist globalization, imperialist aggression and war.
The fight for democracy and sovereignty is a necessary and integral component of the Canadian revolutionary process. This requires a concerted struggle against the main enemy of the Canadian people – finance capital, both Canadian and international. To carry through this struggle, the working class will have to play the leading role.
Finance Capital and the Canadian People
The ever-increasing concentration, centralization and internationalization of capital has created a staggering divide between monopoly and the mass of the Canadian people.
The idea that the capitalist world is an affluent consumer society, that it has outlived economic crisis and can provide full employment and continuously rising living standards, is false. The idea that economic growth and job creation can be achieved by increasing productivity and international competitiveness is equally false. Under all conditions capitalism works against the interests of the working class. Because the system is based on the exploitation of labour by capital for profit, there can be no real security for the working people. The insatiable drive of capital for profit and its ever-increasing exploitation and speed-up tend to undermine whatever wage gains are won through struggle. At the same time, monopoly capital extracts huge profits from wage-earners, and working people in general, by its manipulation of the money and credit system, and by government taxation policy which redistributes the national income in favour of the wealthy.
Canadian capitalism confirms Karl Marx’s general law of accumulation – that capitalism everywhere creates more private wealth, but also drives more people into wage labour (proletarianization), into unemployment and poverty. A growing segment of the working class is forced into precarious employment without job security or benefits.
State-monopoly capitalism also benefits from dividing the working class through the systematic oppression of women, youth, Indigenous and racialized peoples, 2S/LGBTiQ (Two spirit, Lesbian, Gay, Bi-sexual, Transgender, intersex, Queer) people, people with disabilities, and those living in poverty. It is a system that strips people of human dignity.
Monopoly and the transnationals perpetuate the super-exploitation of women as workers, and the sexist oppression of women and girls in society. The offensive of finance capital against living standards and social rights hits women hardest. Women are denied equal pay for work of equal value, and their wages and incomes continue to lag behind those of men. Women in this country, especially racialized women, trans women and Indigenous women, face higher unemployment rates. Many women remain in the low-wage service industry, which is predominantly women from marginalized communities. As well, many women remain in home-based paid and unpaid work, where it is very difficult to organize.
Monopoly capital places obstacles to women’s professional advancement, the establishment of childcare facilities, fully paid parental leave, the right to reproductive choice and women’s full participation in political life. Women are also hit hardest by cutbacks to social services, and by the attacks on the poor.
Violence against women remains widespread. Particularly impacted are Indigenous women, racialized women, rural women, trans women, and sex workers. Public funding is being cut back for women’s shelters, rape crisis centres, and other crucial facilities, despite the widespread physical and psychological abuse and dehumanization of women.
Gendered oppression that causes poverty, violence, and discrimination is an integral part of capitalism. While patriarchy existed before capitalism, this economic system transformed and embedded it for the profit of the capitalist class. Furthermore, the suppression of gender identities and expression outside the gender binary and non-heterosexual relationships and identities is also integral to the patriarchal capitalist system, to ensure that the nuclear family is preserved, guaranteeing the reproduction of new labourers to be exploited by the capitalist class.
As well as forming almost half the paid workforce in Canada, women still do the bulk of unpaid domestic labour in our society and around the world. While such unpaid labour is not directly part of the cycle of capitalist exploitation, it plays a key role in the process of raising each new generation of workers. This double burden is one of the most important forms of oppression of women under capitalism.
Monopoly capitalism denies Canadian youth a life with a future. More and more young men and women are faced with unemployment and underemployment. Cuts to public education are creating a two-tier system, opening the door to the wholesale privatization of education. College and university students face higher tuition and crushing debts as post-secondary education becomes increasingly inaccessible to youth from working class and middle strata backgrounds.
Monopoly breeds systematic racism which it uses to generate super-profits and to create scapegoats to deflect the struggle for jobs, public health and education and higher living standards. Canadian capital has a long history of racism. Racist theories of white supremacy were used to justify the brutal plunder and looting of the Indigenous peoples. Racism, xenophobia, regionalism, sexism and anti-Semitism, and other forms of discrimination – including discrimination against gays, lesbians, bisexuals and transgendered people; against oppressed nations and national minorities, against immigrant, cultural and minority religious groups and atheists; against older workers, pensioners and people with disabilities, as well as discrimination based on sexual orientation and gender identity and expression – are being used to divide the working class and undermine the unity of the people’s struggles.
Capitalism Generates Crises
Despite its capacity to generate immense wealth, the modern capitalist system in Canada suffers from a deepening, all-sided crisis. There are many component parts to this systemic crisis: cyclical economic recession, structural mass unemployment, and agricultural, environmental and social crises, among others. Finance capital uses its abundant resources, including the Canadian state, to attempt to manage this crisis and protect its class rule. But it is unable to solve the fundamental, inherent contradictions from which capitalism’s systemic crisis springs.
The capitalist economy operates in cycles of boom, crisis, depression and recovery. Periodically, expansion is followed by a glut of goods on the market. Plants close down, workers are thrown on the street – not because people have no need for what industry can produce, but because goods do not sell in quantities and at prices that would ensure a level of profit satisfactory to the capitalists. Productive capacity comes into conflict with the restricted purchasing power of the masses of the people. A slow recovery takes place and once more the cycle commences, again to lead to its crisis phase. Such periodic crises of relative over-production are a built-in feature of capitalism. The capitalists try to thrust the burden of such crises on the backs of working people, who are compelled to fight back.
State regulation of the economy is itself in crisis. Keynesianism – a bourgeois reformist policy utilizing limited state intervention – was widely implemented during the prolonged post-W.W.II economic boom to stabilize capitalist economies, weaken and deflect the militancy and internationalism of working class movements and weaken the powerful attraction of the socialist alternative. Keynesian prescriptions helped capitalist governments to temporarily ease the worst effects of cyclical crises but ultimately failed to prevent them. They harmed the profit interests of finance capital by enlarging the state sector and extending limited wage and income protections for working people – the so-called “welfare state” – thus hampering the accumulation and centralization of capital. The interests of the transnational corporations, in particular, came into sharper conflict with Keynesian state-regulation policies, which tended to inhibit international capital flows and TNC activity in general. Keynesian policies also submerged the capitalist state in staggering public debt, the servicing costs of which were borne primarily by working people.
By the mid-1970s, the deepening crisis compelled finance capital to turn away from Keynesian economic policies towards neoliberalism. Under the slogan of a “return to the free market,” capitalist governments in Canada and elsewhere began to impose a vicious, pro-corporate and anti-people agenda which included liberalized or “free” trade, deregulation and privatization, corporate tax cuts, an intensified assault on labour and democratic rights, and various measures to drive down real incomes and living standards of working people to the benefit of the banks and monopolies.
This substantive shift toward neoliberal policy was very successful in temporarily halting and reversing the decline in the rate of profit, and accelerated the accumulation and concentration of wealth in the hands of the ruling capitalist elite. But these policies also forced a decline in the purchasing power of the vast majority of the people, and the only way to maintain aggregate demand for commodities and services was by extending cheap credit which over time substantially increased the debt load borne by households and governments alike.
By the early 2000s, this ‘debt bubble’ had swollen to unsustainable levels, eventually exploding in the “great economic meltdown” of 2007-08 – the largest, most widespread and protracted capitalist crisis since the Great Depression of the 1930s. Production and international trade collapsed, and mass unemployment and poverty soared in the U.S., Europe, and elsewhere around the world. The ruinous consequences of neoliberalism stood fully exposed.
The ruling circles of finance capital and their governments, however, refused to change course in the wake of the crisis. Instead, they used state treasuries to bail out corporate losses to the tune of tens of trillions, and imposed further austerity measures and wage cuts on the working class and working people generally. As a result, real economic growth in GDP has remained stagnant, while government and household indebtedness have grown even larger than 2007-08 levels, setting the stage for another, even more devastating capitalist crisis.
Neoliberalism, which remains the prevailing policy of finance capital today, constitutes a ruthless attack on working people. But there is no salvation for the working class in a return to the failed policy of Keynesianism. Whether in the form of the velvet glove of “welfare state” reformism or the mailed fist of neoliberal reaction, the policies of finance capital and its state have merely created new contradictions.
Neither set of bourgeois policies can rid the capitalist economy of its organic disproportions and economic crises; neither can assure rapid and non-inflationary economic advance and full and effective employment of labour power and capital. Economic growth inevitably results in overheating the economy, producing excessive tensions and unevenness of development, and monetary and financial crisis. All these show that state-monopoly capitalism cannot eliminate economic insecurity, cyclical crises and chronic mass unemployment. However, it can significantly worsen economic and social conditions for the working class, creating the political conditions for the growth of reaction and the emergence of fascist movements.
For all its state and international regulation, monopoly capitalism basically remains an anarchic market economy. Indeed, state regulation and planned development of the economy are fundamentally incompatible with capitalist relations of private ownership and the spontaneous forces of the capitalist market.
Only a democratic, anti-corporate alternative which puts the interests of people before profit can advance the interests of the working people of Canada, and open the path to genuine people’s power, to socialism.
Productivity, Unemployment and the Working Class
Technological innovation under monopoly capitalist conditions is responsible for major structural changes, unevenness between different spheres of production and overall distortion of the economy both within each country and on a world scale. International finance capital uses its technological monopoly to plunder the developing countries.
The accelerating pace of scientific and technological advance and its rapid application in all spheres of life has qualitatively transformed the productive forces – the tools, the raw materials and most importantly, labour itself. The character and substance of workers’ labour in the process of production is constantly changing, and this is affecting both the composition of the working class and its relation to other classes and strata of the population. Finance capital, in the constant drive to increase profit, uses technology to lower production costs by replacing human labour with machines and other labour-saving processes. Scientific and technological progress has become the source of increased exploitation and alienation of the working class.
The introduction of new technology has not changed the essence of capitalism and will not emancipate the working class. On the contrary, new technology displaces workers and increases the rate of exploitation thus accelerating the antagonism of the two classes. While the development of the industrial working class intensifies in other capitalist sectors, workers in manufacturing (with the exception of auto assembly) have been reorganized into smaller hi-tech production units where smaller groups of precariously employed workers are isolated from the mainstream of organized workers. This has broken up the collectivization of what has been the most militant and organized portion of the industrial working class. The labour movement has yet to address this problem which when coupled with de-industrialization has resulted in a serious decline of density of private sector unionization. The more technological progress there is, the higher the productivity rate, the higher the rate of exploitation, and the higher the intensity of labour, deepening the gulf between finance capital and working people. The longer hours and increased physical and mental stress demanded of the individual worker has a negative effect on the health and safety of all workers.
There is a growing shift towards hiring employees on a short-term, temporary basis, without fixed hours, wages or benefits, often coordinated through digital platforms. This trend represents a sharp attack on the rights and conditions of workers, who are classified as “independent contractors” to allow employers to avoid the obligations of a traditional employment relationship. Terms and conditions of work are often controlled from other geographic jurisdictions, beyond the reach of labour standards legislation or guidelines, subject to change without consultation. Presented as “technological progress,” this is actually a capitalist strategy to intensity the exploitation of the working class, and to hinder the ability of workers to organize, since they are often placed in competition with each other and may never meet in person.
Scientific advances in the field of Artificial Intelligence (AI), and its application to the production process, are rapidly sharpening the contradictions inherent under capitalism. AI has the potential to enhance the health and quality of life for all humanity, to facilitate scientific breakthroughs to reverse environmental destruction and climate change, and to sharply reduce necessary labour-time, increase leisure time, etc. But under capitalist relations, AI research is instead directed to enhance the profits of employers by eliminating whole categories of human-based labor, at the expense of workers, their families and communities, and toward military applications (such as lethal autonomous weapon systems) which could threaten all humanity. Unless reversed, this path will lead to the widespread marginalization and pauperization of the working class, to the further degradation of labour and democratic rights, and to aggression and war.
The revolution in science and technology has intensified the anarchy of production and the unevenness of capitalist development. The fierce competition between rival transnationals and financial groups drives each corporation to introduce cost-saving technology. But technological innovation is extremely expensive, and its application in the workplace intensifies the tendency for the rate of profit to fall. Finance capital, in turn, tries to offset this tendency of declining rate of profit by: (1) driving down its labour costs through wage cuts, benefits cuts, pension cuts, speed-ups, lengthening the work day, contract work, redundancies, plant shutdowns, and other forms of corporate restructuring; (2) absorbing or merging with its competitors; (3) redistributing income from the working people to the capitalist class through taxation policies; (4) privatizing parts of the public sector and turning them into new sources of profit; and (5) forcing open access to new markets through trade and investment agreements and, where necessary, through military aggression.
Advances in information technology are a key factor in the globalization and standardization of many areas of production. Within a general context of increasing mobility for capital, there is an enhanced transportability of production in particular. In expanding numbers and types of industries, capital can respond to strikes or workers’ demands by quickly – and almost seamlessly – relocating entire production processes on a permanent or temporary basis. As with all previous technological revolutions, these changes in production are reflected in the composition and structure of the working class and require the labour movement to reorganize and develop new tactics and new forms of struggle to meet the challenge, including increasing international cooperation and joint action by the international working class movement.
Although at times monopoly capital will delay and even suppress scientific and technical breakthroughs in its own interests, the predominant trend is to introduce new technology to increase productivity and lower production costs to secure more profits from a smaller work force. The domination of advanced technology by U.S. transnationals is used to further undermine Canadian independence and sovereignty, inhibiting research and development and reducing the availability of skilled and high tech jobs to Canadian workers.
The extremely high cost of modernizing the economy with the latest technology is being financed by exorbitant profits sweated out of the working class in the advanced capitalist countries, capital bled from the most exploited and impoverished countries by the transnational corporations, and through vast government handouts to commerce and industry paid for by the taxes of the working people.
Free trade agreements have resulted in de-industrialization and the export of hundreds of thousands of jobs, creating a large pool of unemployed people who are used to drive down wages and working conditions of the employed and organized workforce.
These Free Trade Agreements contain Investor State Dispute Settlement (ISDS) clauses, where a tribunal of corporate lawyers can overrule state domestic, health, environmental and financial legislation. A trans-national corporation that claims it has been denied current or future profits from the application of these laws can sue the state. These corporate appointed tribunals allow the lawyers to rotate between serving as “judges” and bringing cases for corporations against governments – a conflict of interest that should be illegal in law. Only corporations can sue the state. The state cannot sue corporations. This is a guaranteed win for corporations over state sovereignty and a threat to democracy.
These agreements also contribute to the super exploitation of workers in the destination countries. International working class unity and solidarity is the best way to counter the transnational corporations and their strategy to pit worker against worker in their drive for increased super-profits.
The state enacts the economic, organizational and administrative measures necessary to break resistance to the introduction of new technology. Thus there are increasing attacks on the very existence of trade unions and their ability to resist the anti-worker character of restructuring. This corporate assault is being carried out by weakening and undermining labour standards and such labour laws as the right to organize, to bargain collectively and to strike, as well as attacks on real wages and social programs.
The most acute social problem arising from the introduction of new science and technology is the growth of unemployment. While job creation during the scientific and technological revolution has tended to expand the engineering, research and hi-tech sector of workers, the rate of job formation has dipped below the rate of growth of the population as a whole. Higher levels of permanent unemployment and underemployment have become a mass phenomenon, independent of cyclical recovery and boom. Canada faces the tragic consequences of having a generation of young people, many of whom may never work full-time or never work at all. Unemployed workers labeled “older” by employers are discriminated against and being denied re-entry into the labour force because of inadequate skills and the unprofitability of retraining them for a relatively brief remaining work life.
This trend will continue and will sharpen social conflicts.
In conditions of high unemployment and a highly flexible production process, there has been a notable growth of part-time, temporary and contract work, particularly for women, racialized workers, and young workers. Regressive labour legislation often denies these workers minimum wage guarantees, job protection, social security benefits or the right to organize. This separates many part-time workers from the workforce as a whole and particularly from the trade union movement, a trend reinforced by the nature of precarious work and conditions of precarious workers.
The combination of unemployment and underemployment has produced a qualitatively new level of poverty reaching into new strata of the population. Unless combated by the working class and democratic-minded people, reaction and fascism will prey on the fears and insecurity of the permanently unemployed and marginalized people, impoverished farmers and ruined small business operators.
Structural unemployment is deepening divisions between the people who work, the unemployed and those permanently displaced from the labour market. The reserve army of the unemployed can be used not only to drive down wages but also to pit sections of working people against each other. This tactic of competition and stratification is used by state monopoly capitalism as a means to attack all working people. The working population, constantly forced to pay more direct and indirect taxes, is pitted against the poor and unemployed, who also pay direct and indirect taxes but whose plight becomes more desperate as social programs for their relief are consistently cut back.
Despite chronic unemployment, the working class continues to expand both relatively and absolutely. The historic movement from rural to urban is no longer the main source of growth of the working class. Its ranks now grow mainly from the tendency to collectivize and proletarianize professions, semi-professions, clerical, commercial and administrative sectors and from the increased participation of women and new immigrants in the paid workforce.
Immigration in particular is changing the face of Canada’s working class, with many more racialized people added to its ranks, creating an increasingly multi-ethnic and multi-lingual workforce, especially in the main urban centres. New immigrants often bring not only ethnic and cultural diversity into the working class, but also their experience, militancy and class consciousness developed through class struggles in their originating countries.
Significant changes have taken place in the sectoral composition of the working class. Historically, the working class was composed mostly of manual workers, particularly workers in factories, mines, and other large-scale enterprises whose labour was collective, disciplined and directly subordinate to the demands of capitalist accumulation. Important new sections of the working class have developed, notably in the public sector and service industries, where workers are mainly women. The current scientific, technological, and information revolution is also creating new industries and occupations while transforming older ones. Increasingly, workers in new mass technological industries, public institutions and large-scale service industries are playing a full and active role in the organized labour movement, alongside workers in traditional industries.
Some of the new sections of the workforce comprise younger workers who bring renewed militancy and dynamism into the labour movement. While many of these workers lack experience, their energy and determination to struggle have an overall positive impact on the development of the organized labour movement. However, the biggest impact on organized labour is the development of the public sector unions which now represent more than 60 per cent of organized labour and are comprised of a majority of women members. In all organized labour, women now represent more than 50 per cent of membership and have brought new dynamics and resurgence into the class struggle.
Since the 1970s, there has been a growth in the number and proportion of self-employed persons in Canada. The capitalist media misrepresents this development to claim there has been a resurgence of capitalist enthusiasm and values in society. In reality, many of these new “entrepreneurs” are the result of subcontracting, layoffs, and poverty, with little independence, lower standards of living, and more in common with workers than with capitalists.
Despite these changes the working class remains a class composed of wage workers who do not own the means of production, distribution or exchange, who are forced to sell their labour power in order to live and who are directly or indirectly exploited by the capitalists. The irreconcilable conflict between labour and capital remains the main axis of social and political life.
Crisis in Rural Canada
State-monopoly capitalism is responsible for the crisis of Canadian agriculture. The historic decline of Canada’s farming population is mainly a result of capitalism’s tendency to concentrate wealth in fewer and fewer hands, in this case by squeezing out small farmers who cannot afford the higher costs of more productive machinery and other inputs. The pro-monopoly policies of governments have only reinforced this trend. The financial and industrial monopolies dominate agriculture, and farmers are compelled to pay high monopoly prices for seed, equipment and other inputs, while the prices they get for their produce are set by the powerful packing, milling, grain-handling and railway monopolies. Monopoly capital fleeces the farmers through control of markets, prices and credits. It is extending its domination over agriculture through agribusiness and the forced introduction of bio-technologies such as genetically-modified crops, the use of which is strictly controlled by the agri-monopolies.
Increasing monopoly control and ownership of land and capital resources imposes crushing debts on the family farm, accelerating bankruptcies and driving the farm population off the land in record numbers. The ruination of the family farmers or their transformation into agricultural labourers, their increasing proletarianization, and the growing use of highly exploited migrant labour, is a direct consequence of finance capital control of agriculture and the food processing and agricultural machinery industries.
A similar plight afflicts other primary producers, such as fishers and wood-lot owners, who rely on the maintenance of the renewable resources of the land and sea. Big business domination of these industries, and the introduction of high tech harvesting and processing equipment, is rapidly depleting the resource base, in some cases leading to environmental disaster. The small primary producers are also at the mercy of these big corporations, to which they must sell their harvest. Squeezed between increasing monopolization, higher operating costs and debt, lower wholesale prices, and dwindling resources, the incomes of these primary producers and their families are shrinking; thousands have been forced to abandon their livelihoods completely.
Technological restructuring and the depletion of Canada’s forestry and mineral resources are also impacting heavily on industrial workers, especially miners and woodworkers, who live and work in rural and isolated communities. Many thousands of well-paid, unionized jobs have been eliminated as a result of automation and/or resource exhaustion.
The crisis affecting family farmers and primary producers, miners and woodworkers is destroying the economic basis of many rural communities and small towns across Canada, ruining small-scale independent businesses, and increasing unemployment in the countryside.
Environmental Crisis
Under capitalism both labour and the natural environment are exploited for the capitalists’ overriding objective – private profit. As a system, capitalism can exist only by continually increasing the extent and intensity of its exploitation and impoverishment of labour and plunder of the environment.
The imperialist system is the fundamental cause of environmental degradation and resource-use inequality. Capitalism, as a mode of production and consumption, has raised the degradation of nature to historically unprecedented levels. Some examples in Canada include: the devastating social and health impacts of tar sands extraction on the Indigenous peoples of northern Alberta, the collapse of many East Coast and Pacific fish stocks, the threatened disappearance of Canada’s rainforest and old-growth forests due to clear-cutting practices, the worsening pollution of the Great Lake watershed, and the further deterioration of the urban environment in many cities.
The deepening contradiction between the capitalist mode of production and the global environment threatens the entire planet. The extent of capitalist expansion over the earth’s territory, the magnitude of resource and energy consumption and waste, and the proliferation of new forms and concentrations of toxic products and production has caused an unparalleled destruction and extinction of ecological systems and species. Referred to by many scientists as the Anthropocene, the sixth major wave in the Earth’s history of extinctions and loss of biological diversity is directly related to the impact of human economic activities, especially climate change and global warming caused by carbon emissions and the failure to sharply reduce fossil fuel use. Whole regions have been blanketed in air pollution, lake and river systems made toxic, ocean waters and shores despoiled, and soils degraded. The earth’s last major forests are under serious threat. Urban sprawl, traffic, and garbage problems proliferate, nuclear wastes accumulate, water tables are falling, and animal habitat loss continues. While no country is immune, the most severe elements of environmental degradation, such as rising ocean levels and droughts, are affecting the peoples of the global south, who are demanding climate reparations from the transnational corporations and the imperialist powers. Additionally, the working class is most affected by the catastrophic degradation of the environment, where the rich are shielded from the worst effects of pollution, natural disasters, and climate change. Racialized communities are particularly impacted by polluting industries and receive the least clean-up efforts. Environmental racism is embedded in resource extraction practices, lack of sustainable development, unequal access to arable land and clean drinking water, and the overall capitalist exploitation of the environment.
Canada has some of the largest resource bases and remaining environmental reserves in the world. Yet corporate environmental abuse, and government inaction to halt and reverse such devastation, threatens our lands, rivers and coastlines, the air we breathe, our flora and fauna, and the health of the people. Capitalism by its nature is incapable of resolving the environmental crisis since its inherent drive for profit tends to accelerate the expansion and intensification of resource extraction. Even the smallest reforms such as specific, limited moratoria on resource extraction are being met with stubborn resistance. The hunt for ever-increasing profits is being disguised as a concern for jobs.
Labour’s struggle for safety, health, and job security in the work environment is indivisible with the struggle to protect and restore the whole environment, and for a fundamental shift in thinking and economic relations with the environment. The greater scale of capitalist exploitation and crises means that environmental concerns are now inescapably linked to working-class living conditions, including in Canada. Parts of organized labour, particularly some resource-based unions, have bought into the corporate agenda that pits environmental protection against employment. Protecting the environment is a continuous process that will require a decisive, united, long-term effort on the part of all progressive forces against their common enemy, monopoly capitalism.
Environmental reforms alone cannot stop the general trend of environmental degradation. Many of the protections achieved are being weakened or destroyed by neoliberal deregulation and cutbacks. Capital has never fully accepted infringements on its private ownership and “right” to exploit. Neither the transnational corporations, nor capitalists as a whole are capable of solving the environmental crisis. The magnitude of accumulating environmental problems is so large, the urgency of implementing known solutions so great, and the growing crisis so rooted in the nature of capitalism, that a revolutionary democratic change against capitalism itself is necessary. Such a fundamental change can only be carried out by the organized political action of the working class together with its class allies.
Past socialist societies attempted with varying degrees of success to avoid the ecological destruction caused by capitalist resource exploitation. Several socialist countries also had to deal with the staggering environmental damage caused by imperialism’s extensive use of chemical and biological weapons during its wars of aggression against their countries and peoples. But forced to compete economically and militarily with the imperialist countries, they often made serious mistakes resulting in severe environmental damage. An important factor exacerbating this problem was the lack of full discussion and debate by a number of ruling communist parties, which negatively affected the possibilities of preventing or promptly correcting these errors, so that socialism could be built on an environmentally sustainable basis. Such abuses of the environment are not, however, inherent to socialism, because it is not a system governed by the drive for private profits. In fact, socialism has made it possible for Cuba and China to begin to address the environmental crisis on a comprehensive basis, such as a massive shift towards renewable energy.
Socialism puts the environment ahead of profit, thus providing the necessary pre-conditions for environmental sustainability and offering the only systemic alternative to avoid catastrophe through planned economic measures to dramatically reduce carbon emissions. Only with socialism will humanity be able to scientifically address the far-reaching impact of capitalism’s unplanned, anarchic destruction of the natural environment. Humanity’s knowledge and energy must be used to safeguard the earth for future generations.
The domination of finance capital, and the adoption of neoliberal policies by its governments, have aggravated social contradictions and societal problems of every sort.
Human and social rights – the right to meaningful employment, the rights to education and health care, the rights to adequate housing, and social security for the elderly, the right of women to full social and economic equality, the rights of immigrants and other minorities, workers’ rights, and the right to political dissent – are continually eroded and attacked, or denied altogether. There have been major advances in the recognition of the rights of 2S/LGBTiQ people. However, these are also being eroded, and there is a movement to deny those rights altogether.
Poverty, homelessness and social despair are becoming chronic for millions of Canadians. Health care, education, unemployment insurance, the pension and workers’ compensation systems, and other public programs and services, are being cut back and privatized. Social and public housing, including co-operative housing, is disappearing. The “social safety net,” which working people fought for decades to achieve, lies in tatters.
The social and cultural life of the country tends to deteriorate. Alienation gives rise to criminality, fascism, drug dependency, abuse and violence against women and children, and other forms of exploitative and anti-social behaviour. Avarice and selfishness, consumerism, apathy and indifference, and rampant individualism are encouraged. However, positive social values, such as cooperation, solidarity and community concern are also present and developing, representing the people’s fightback.
Monopoly capital, through its control of the economy, the state apparatus, science, the media and mass communications, education, culture, and entertainment, exerts steady psychological and ideological pressure on every aspect of people’s lives. It commodifies, distorts, and stifles the development of arts and sciences, and cultural life in general. It turns more and more scientists, artists and professionals into servants of the big corporations. It subjects the physical and mental health of the working people to constant and increasing strain. The alienation and exclusion capital perpetuates results in increasingly isolating individuals.
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The capitalist system has long since become parasitic, unable and unwilling to satisfy the growing needs of the people. Consequently, labour’s struggles for its own economic needs, and for democracy, sovereignty and independence, are actually struggles against finance capital – both Canadian and international.
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