FacebookTwitterGoogle+RedditEmail

Is Capitalism Preparing to Bury Itself?

Where is Henry Ford when you need him?

You may remember Henry — the ruthless industrialist who nonetheless refused to be hobbled by suicidal ideology when it came to doing business. He realized as his workers cranked thousands of new cars off the assembly line that none of those workers would likely ever own one, because he didn’t pay them enough. So he dramatically increased their wages. It was such a good idea that most industrialists followed suit and his practical approach was dubbed Fordism. It was the foundation of a high-wage economy, it lasted a very long time and it produced incredible real wealth for decades.

Until something called neo-liberalism decided to kill the goose that laid the golden eggs. And the perpetrators of this ideology — and the catastrophic damage it has done to the global economy, nations, communities and workers — are so wedded to it that they seem determined to pursue its goals and accept its preposterous assumptions until the ship truly does go down.

The new set of goals and assumptions of neo-liberalism mandated that workers’ wages and salaries had to be constantly driven down in a new global system of competition for high share prices. Not a competition to achieve growing companies, or economic stability, or balanced growth, or even profits, but share prices.

Now, the vast majority of working people in Canada are up to their eyeballs in debt, hundreds of thousands have no jobs, families are hunkering down in survival mode and not buying much of anything beyond food and clothing, and everyone is waiting for the inevitable bursting of the housing bubble — the only thing keeping the rusting, rudderless hulk afloat. Someone should tell Canada’s finance ministers that consumers account for 60 per cent of our GDP. Choke the consumers (by choking their wages) and you choke the economy.

Last fall, the Canadian Payroll Association reported that 59 per cent of Canadians “said they would face financial difficulty if their pay cheque was delayed by even just one week.” Twenty-seven per cent of working Canadians aren’t saving at all.

The faux “financial economy” where nothing needs to be produced, has devastated the real economy but the same policies are still being pursued: fight wage increases, eliminate or down-size pensions, lay off workers to enhance.. you got it, the share price. Insanity: doing the same thing over and over again and expecting different results.

Today, the five-thousand-ton chickens are coming home to roost. Chicken number one is already home. Working people, whose real (after inflation) increase in pay between 1980 and 2005 was $51, maintained their middle class lifestyle (and corporate profits) by going into debt. In June, household debt hit a record $1.5 trillion. Averaging it out means a two-child household owes about $176,461, including mortgages.

Cheap goods produced by off-shoring manufacturing helped keep the working family afloat, too. But of course the trade-off was the loss of the best private sector jobs in the country. Now Canada boasts the second highest percentage of low paid jobs in the OECD. And with labor costs in China rising, those cheap goods will get more expensive.

Corporate Canada had a lot of help in keeping wages and salaries flat. Starting in earnest with Paul Martin’s finance regime, the federal government — followed by the provinces — has ruthlessly implemented what it euphemistically calls a “labor flexibility” policy. Vicious cuts to EI eligibility, the slashing of welfare rates, the virtual abandonment of labor standards enforcement — all in the service of corporations. Where working people once had an option of quitting a bad employer (one that, say, demands you work overtime for nothing to prove you want the job), that option has now all but disappeared. It’s an employer free-for-all in denying workers’ rights.

Too bad all the geniuses now occupying the dismal science haven’t figured out that a cheap labor economy ultimately means a low consumption economy.

Yet we are still burdened by the gross incompetence of Conservative Finance Minister Jim Flaherty. He wants to pursue a deficit reduction strategy, taking even more money out of the pockets of Canadians at exactly the time that the economy’s survival depends on a core of stable jobs. Just when the economy is desperately looking for demand, Flaherty will be taking $11 billion off the table.

Even worse, Flaherty insisted before and throughout the last election on moving ahead with another unconscionable round of corporate tax cuts — resulting in a $6 billion increase per year in the deficit. The rationale? It will stimulate investment.

Who will save us from this incompetence? In the first quarter of 2011, corporations were sitting on $471 billion of capital — awash in cash they have no idea what to do with. Why? Because they and their political flunkies in Ottawa and the provinces have screwed the worker/consumer so badly that demand has flatlined. No CEO in his right mind invests just on the basis of lower income taxes. There have to be customers with money to spend. Henry Ford would be shaking his head.

The Washington Consensus — the name given to neo-liberalism and its agenda of privatization, deregulation, free trade, cuts to social spending and huge tax cuts for the wealthy — was not just a call to moderate state intervention in the economy. It was determined to gut it, to return to that period where the economy (by which they always mean capital) was somehow hived off from society and government and allowed to run without regulation or direction. Thirty years of amazing growth and prosperity based on a complex system of mutual dependence between state and capital was tossed aside. It was a sort of revenge of the nerds — we’ll show those uppity workers.

But now the evidence is in. More chickens are coming, and they will be even more gargantuan. Still no one in authority or the business press gets it. No one is listening. But Will Hutton, writing in the Observer, said it succinctly in an article headlined “Our Capitalist System Is Near Meltdown.” “Markets are beset by mood swings and uncertainty which, if not offset by government action, lead to violent oscillations. Capitalism without responsibility or proportionality degrades into racketeering and exploitation. The prospect of limitless pay is an open invitation to bad, or even criminal, behavior. Good capitalism cannot happen without referees to blow the whistle or robust frameworks in which markets can function.”

So-called “good” capitalism was bad enough and only marginally good to the extent that organized resistance forced it to be. That resistance, in combination with the specter of Soviet communism, kept capitalism a bit circumspect regarding notions of social responsibility. It is no coincidence that “bad” capitalism really took off with the collapse of the USSR. With the communist “competitor” out of play, all restraints were off. Former Soviet premier Nikita Khrushchev famously predicted that communism would bury capitalism. But instead, that job is now in the hands of capitalists themselves — in the hands of madmen who, insanely, keep doing the same thing over and over even though the same grim results accrue. I would happily cheer the demise of that capitalism. But it would be a really ugly death. And we need to be talking about what would replace it.

MURRAY DOBBIN, now living in B.C., has been a journalist, broadcaster, author and social activist for over forty years. He d now writes a bi-weekly column for the on-line journals the Tyee and rabble.ca. andcontributes guest editorials to Canadian dailies anHe is a board member of the Canadian Centre for Policy Alternatives. See  www.murraydobbin.ca He can be reached at mdobbin@telus.net

More articles by:

MURRAY DOBBIN, now living in Powell River, BC has been a journalist, broadcaster, author and social activist for over forty years.  He can be reached at murraydobbin@shaw.ca

December 11, 2018
Eric Draitser
AFRICOM: A Neocolonial Occupation Force?
Sheldon Richman
War Over Ukraine?
Louis Proyect
Why World War II, Not the New Deal, Ended the Great Depression
Howard Lisnoff
Police Violence and Mass Policing in the U.S.
Mark Ashwill
A “Patriotic” Education Study Abroad Program in Viet Nam: God Bless America, Right or Wrong!
Laura Flanders
HUD Official to Move into Public Housing?
Nino Pagliccia
Resistance is Not Terrorism
Matthew Johnson
See No Evil, See No Good: The Truth Is Not Black and White
Maria Paez Victor
How Reuters Slandered Venezuela’s Social Benefits Card
December 10, 2018
Jacques R. Pauwels
Foreign Interventions in Revolutionary Russia
Richard Klin
The Disasters of War
Katie Fite
Rebranding Bundy
Gary Olson
A Few Thoughts on Politics and Personal Identity
Patrick Cockburn
Brexit Britain’s Crisis of Self-Confidence Will Only End in Tears and Rising Nationalism
Andrew Moss
Undocumented Citizen
Dean Baker
Trump and China: Going With Patent Holders Against Workers
Lawrence Wittner
Reviving the Nuclear Disarmament Movement: a Practical Proposal
Dan Siegel
Thoughts on the 2018 Elections and Beyond
Thomas Knapp
Election 2020: I Can Smell the Dumpster Fires Already
Weekend Edition
December 07, 2018
Friday - Sunday
Steve Hendricks
What If We Just Buy Off Big Fossil Fuel? A Novel Plan to Mitigate the Climate Calamity
Jeffrey St. Clair
Cancer as Weapon: Poppy Bush’s Radioactive War on Iraq
Paul Street
The McCain and Bush Death Tours: Establishment Rituals in How to be a Proper Ruler
Jason Hirthler
Laws of the Jungle: The Free Market and the Continuity of Change
Ajamu Baraka
The Universal Declaration of Human Rights at 70: Time to De-Colonize Human Rights!
Andrew Levine
Thoughts on Strategy for a Left Opposition
Jennifer Matsui
Dead of Night Redux: A Zombie Rises, A Spook Falls
Rob Urie
Degrowth: Toward a Green Revolution
Binoy Kampmark
The Bomb that Did Not Detonate: Julian Assange, Manafort and The Guardian
Robert Hunziker
The Deathly Insect Dilemma
Robert Fisk
Spare Me the American Tears for the Murder of Jamal Khashoggi
Joseph Natoli
Tribal Justice
Ron Jacobs
Getting Pushed Off the Capitalist Cliff
Macdonald Stainsby
Unist’ot’en Camp is Under Threat in Northern Canada
Senator Tom Harkin
Questions for Vice-President Bush on Posada Carriles
W. T. Whitney
Two Years and Colombia’s Peace Agreement is in Shreds
Ron Jacobs
Getting Pushed Off the Capitalist Cliff
Ramzy Baroud
The Conspiracy Against Refugees
David Rosen
The Swamp Stinks: Trump & Washington’s Rot
Raouf Halaby
Wall-to-Wall Whitewashing
Daniel Falcone
Noam Chomsky Turns 90
Dean Baker
An Inverted Bond Yield Curve: Is a Recession Coming?
Nick Pemberton
The Case For Chuck Mertz (Not Noam Chomsky) as America’s Leading Intellectual
Ralph Nader
New Book about Ethics and Whistleblowing for Engineers Affects Us All!
Dan Kovalik
The Return of the Nicaraguan Contras, and the Rise of the Pro-Contra Left
Jeremy Kuzmarov
Exposing the Crimes of the CIAs Fair-Haired Boy, Paul Kagame, and the Rwandan Patriotic Front
FacebookTwitterGoogle+RedditEmail