Canadian Capitalism

The Western Socialist
Vol. 30 - No. 231
No. 1, 1963
pages 13-16

Canada and the United States are both capitalist nations. Much has been written to portray the unique friendliness that exists between the two countries. With a 3000-mile border line, nothing in the way of an armed forces is employed to constrain a neighborly approach. Each tends to its own business of peacefully stripping its workers of every ounce of values they produce in its domain. It’s a pretty picture.

True, the social ethos has been disturbed by petty imponderables that lurked on the trail. Some years ago the Alaska Boundary question evoked raucous voices in Congress and the House of Commons. A commission of three Americans, two Canadians, and one British was appointed to solve the knotty problem.

The British member – Lord Alverstone – mindful of which side of his toast the poached egg was on, voted with the Americans, and left the southern section of Alaska as what appears on the map to be a huge chunk carved out of Northern British Columbia.

In more recent years other tendentious items stirred a degree of hostility scarcely in keeping with the tranquil social atmosphere created and maintained.

Conflicting policies

One of these was Canada’s insistence on doing business with Communist China. Washington contended that this was not a decorous attitude for a friendly partner. The U. S. solons used their expertise to dissuade recognition of China on the part of Canada, due to the gospel of hate and revenge current in Peking.

Canada’s answer to this charge was tailor made. We do not now recognize, nor do we intend to recognize Red China. We are just engaged in doing business with the Chinese. From Canadian Officialdom’s viewpoint there is no such place as China.

It is as if they were dumping wheat on some cosmic wharf or railway platform in outer space, getting their payments from some ethereal phantoms, and then coming back to repeat the process.

This rationalization policy was acquired from mother Britain, who built up a mighty empire through profitable deals with cannibals, headhunters, assegai hurlers, and ruthless pirates, closing their eyes on the morals and ethics of their customers so long as profits materialized in the trade.

Again, in the Alliance for Progress, an organization formed by the U. S., through which $20 billion was to be dumped into the Latin republics to the south, so as to prop up their economies, and siphon the juice of “democracy” into their reactionary political institutions, Canadian and American attitudes were wide apart.

President Kennedy paid a special visit to Ottawa to seek Canadian cooperation in fiscal contributions and commercial practice. Particularly did he denigrate Canada’s continued trade with Cuba, an alien and angry land, loaded with Soviet missiles, and only 90 miles from the U. S. shore.

Prime Minister Diefenbaker reminded him, in diplomatic terminology of course, that while the U. S. and Canada were old and very dear friends, they both made a living in the same exploiting manner, and the two of them were keen competitors as well as boon companions. He could see nothing unethical in doing all the business they can with Cuba, so long as they are not contributing directly to the enlargement of the missile pile.

Birds of a feather

While these quondam differences might seem to dampen the relationship between the two countries, their unanimity in practicing and supporting the capitalist code cannot be impugned.

Both are firm adherents of private ownership of the means of production. Each clings to the theory that the class that holds the money bags, and controls the citadels of political power, is entitled to all the dividends, interest, and profits that can be squeezed out of their legitimate investments.

Both are convinced that the great majority of the population should be robbed of the wealth they produce, and should cheerfully endure the ordeal so that this form of ownership, and the mode of law and order apposite to it, may be maintained.

The rulers of the two countries realize that fear and ignorance are potent weapons in holding the masses in subjection, and both build and foster institutions to keep their vassals attuned to the interest of their masters.

In hock to U.S.

The U. S. has attained the apogee in controlling North American economy. Canadian resources are virtually in hock to the Wall Street financial bandits. No modern nation is so obviously the pawn of foreign capital as Canada is today.

The cause for this condition is seen by a glance at history. Primitive accumulation capital is a primary requirement for performing the role of a capitalist nation. The early agricultural economy of Canada, where subsistence farming with its narrow differential between production and consumption militated against the acquisition of native capital, and made imperative a reliance on outside sources.

These were at hand. Britain, at the time, the greatest world power, eagerly sought fields for fiscal expansion. British capital was poured into Canada in what was then regarded as colossal amounts.

Closer by, was the rapidly developing U. S. economy, equally anxious to find favorable means of extension. Canada offered the appropriate receptacle in which American dollars could move and grow.

As Britain declined in commercial and financial standing on the world scene, and the U. S. succeeded in its aspiration to wealth and greatness, there was a continual and marked reduction in British investment and corresponding increase in the flow of American capital into the industrial centers of Canada. Foreign capital had invaded and conquered.

Economic relapse

During the year 1962, the Canadian economy, often before in the exigency of support, suffered a severe relapse. First, there was what was labeled the “Dollar Crisis” and later the adoption of the “Austerity” program. The putative causes for these economic diseases have been diagnosed in various ways, but like all other phenomena they can be explained only when understood.

The Diefenbaker Government, in name and motive, was viciously assailed by the opposition parties, for keeping secret from the people the true state of affairs. That they did without information and lead the electorate to believe that all was in tiptop shape is certain, but Liberals, New Democrats, and Social Credit parties were equally guilty in this respect.

All the political groups were aware of the general economic conditions that existed at the time, for the hand-writing on the wall was so legible that none of them could possibly be the possessor of a degree of dumbness sufficient to evade the obvious.

The reaction of the Communist Party of Canada is an interesting item. In April of 1962, the Communist Party presented a submission to the Royal Commission on Banking and Finance, in which they advised the Canadian ruling class as to just how the disease could be remedied in the interest of those who own.

The Party solution was to “nationalize the U. S. controlled monopolies in Canada, nationalize banking and credit, develop a balanced manufacturing industry, and adopt a new international trade policy for Canada’s independent development, so that we may become masters in our own house”.

This profound solution for all economic ills was submitted and signed by Leslie Morris, General secretary, and Jim Berck, Chairman of the C. P. of Canada.

If Prime Minister Diefenbaker wanted to prove himself an alert and brilliant statesman he should immediately establish two additional cabinet posts, making one of the Communist Officials “Minister of Confusion”, and the other “Minister of Delusion”. The two commissars would surely adorn a cabinet already pretty well confused and deluded.

“Mysterious” money

The dancing dollar is supposed to be mysterious but the one element it lacks most is mystery. The jittery actions of the dollar derive from the nature of commodity exchange.

The capitalists of each national entity sell their surplus supply of goods to other countries. If this were done through the medium of gold payment, gold being the world money, and of equal standing in all nations, there would be no exchange problem. It would be a cash transaction and the ledger would be closed.

But international buying and selling is a more complicated affair. It involves the use of paper instead of gold. It, too, has a history to consider.

About the turn of the century U. S. companies bought up millions of acres of Canadian oil, mineral, and timber land. These were allowed to remain fallow so long as they had home resources to develop. Came the day when exhaustion of native resources caused the U. S. mergers and combines to turn their attention to the Canadian reserves.

To dig wells, operate mines, install machinery, build smelters and refineries to process the products, construct pipelines and railway spurs to throw them into circulation, meant a lot of new U. S. capital flowing into Canada.

In the last few years, due to the factors noted, large quantities of U. S. goods were dumped on the Canadian market. These were met to an extent by Canadian goods, but there was a marked disparity between the two amounts.

The differential manifested itself in bills of exchange. These bills are created to represent goods and for all practical purposes they do. The profit system uses them as commodities that are bought and sold. Their lifetime is generally a period of 90 days, but extensions are possible in each case.

Once on the market, they are offered and sold for what they will bring. They are bartered about at less than face value and this financial delinquency expresses itself in the supposed superiority of one dollar over the other. It is a problem of circulation and governed by the law of supply and demand. Too much paper circulated by one group of capitalists reflects itself in a premium dollar of the other.

When the big drive in oil, timber and mineral equipment eased up, the financial gears were thrown into reverse. The Canadian economy could maintain its surface appearance of health and vigor so long as U. S. capital was riveted on the scene. But portentous smoke rings had long indicated disaster, and 1962 became the year of decision.

American capital had realized its possibilities in Canadian investment. It was now found to be more profitable to take out than to put in. A stronger odor of profits impelled the capitalist olfactory organs to sniff in another direction. New nations established in Africa and Asia promised bigger returns, and the Ottawa administration was left holding the bag.

The 92-cent dollar offers some hope for the Canadian exporters of commodities. It supplies little consolation for Canadian workers, but it was not devised for their economic enhancement.

Whose austerity?

To ease the pangs of the present financial dilemma, Canadian capitalists have inaugurated a new “Austerity” program. It has many of the features of the old austerity proclamations. The fiscal belt must be tightened another notch or two. Interest rates must be raised, imports curbed, exports increased, and Canadian workers must acquire the habit of working harder so as to produce wealth cheaper and enable their employers to sell more effectively on the world market.

The standard of living, nothing to rave about at present, must descend to a lower level. Less must be spent on the necessities of life so that more can be devoted to the worthy cause of capitalist survival.

Prime Minister Diefenbaker has already set a noble example for his people to follow. He has ordered his grocery budget to be reduced by $300.00 a year. But this illusory sacrifice when examined will leave little opportunity for the opposition in Parliament to point him as a victim of undernourishment and malnutrition in his own regime.

Even after this material reduction, his grocery bill is well in excess of $5,000.00 per year. Any working class family would be glad to emulate the Prime Minister’s example if they only had his original grocery fund to prompt the gesture.

Thus does capitalism tinker with its social problems.

J. A. MacDonald