Stop paying the rich; Increase investments in social programs!
A new Throne Speech will be delivered on September 23 as federal and provincial governments “reopen” the economy after strict COVID-19 shutdowns. They are guided by a “business as usual” pay-the-rich approach despite the fact that the large number of COVID-19 deaths and the damage done to the economy is the result of this “business as usual” approach. The more it goes, the more schemes are unfurled to step up paying the rich in the name of achieving prosperity. The approach denies the most important element required to activate the human factor/social consciousness which is to recognize the polity and take up social responsibilities and duties to it and its members.
The time is now to demand governments stop paying the rich and increase investments in public social programs and public services built and owned through public enterprise with the working people in control. This is the challenge the working people face at this time.
The modern economy of industrial mass production is more than capable of providing enough public revenue to meet the needs of society and its members. The dominant social force in control of the economy and state obstructs the new value workers produce from meeting the needs of the people and society. The way forward is opened to the extent the workers are able to put the social wealth they are producing under their control so that it serves the people.
The control of the financial oligarchy and their oligopolies over the state’s decision-making power hands over the productive forces to the rich and diverts the social wealth into the hands of narrowest private interests. This drags the people into the adventures of the oligarchs for domination over all others, no matter where they be.
For workers to take control and provide a new direction for the economy is feasible and necessary. They have shown once again during the COVID-19 pandemic that they are the essential factor of production and of society maintaining itself at all times, including times of crisis. The situation reveals that through their deeds, thinking and concerns, this feature of being essential can lead to a new direction that looks after the well being of all and provides the rights of all with a guarantee by making sure decision-making is in their hands, not those who represent narrow private interests.
What to expect
Pay-the-rich schemes by borrowing money from private sources
Reports say another $100 billion will be added to the deficit in the Throne Speech, which is already approaching $400 billion. If this is the case, then the $500 billion deficit will be nearly 25 per cent of Canada’s GDP. This amount is borrowed by the Government of Canada from private lenders of the financial oligarchy. It further concentrates wealth, power and control in fewer hands.
This is a feature of state imperialism, that the financial oligarchy, the state and its agencies, including governments, defend and extend into every cell of the economy and society, the power, wealth and control of the oligopolies.
The federal, Quebec, provincial and territorial governments collectively owed the global financial oligarchy around $1.3 trillion prior to the pandemic. This amount has risen dramatically with public borrowing from private lenders during the present crisis. The question has to be posed forcefully: Why do governments borrow from private lenders?
Much of the borrowed money is channeled back to the private lenders in interest and guaranteed payments as well as bailouts to their companies and in big government funded infrastructure projects, many of which are public-private partnerships, in almost every sector, such as the service sectors of education and health care, and the various levels of the police and military.
Public health care is nowadays inextricably linked to making sure the financial oligarchy profits from much of the sector through selling pharmaceuticals and supplying, at a hefty price, whatever material hospitals require to function, including the buildings.
The question should be posed: if the oligarchs have all this available cash to lend to governments, why do they need bailouts and why do they not invest the money they control directly into their own or other businesses and the economy?
Increased government debt
Government debt is mostly held by the private institutions of the financial oligarchy. In lending money to governments, the dominant oligarchs of the ruling elite benefit in several ways.
The rich can park their money in a safe haven for a short or long term and even receive interest for doing so. This is particularly important for the rich during crises such as the current COVID-19 pandemic when other investments are risky or they have pulled money out of the stock market and have excess cash on hand.
The government in turn provides bailouts and buys company paper securities that are not saleable at a particular time to private buyers because of the risk involved. The oligarchs have it numerous ways! This is the public-private partnership in action to serve the rich.
The government receives money from this private borrowing that it then uses in pay-the-rich schemes as handouts to the financial oligarchy and its businesses. Examples are the handouts to large corporations during the pandemic or the federal government’s $4.5 billion buyout of the Trans Mountain pipeline and the Alberta government’s $7 billion injection of funds into the Keystone XL pipeline project. Neither of those projects could raise private investment funds. Government money is routinely used to finance large infrastructure projects in which the biggest private construction and management companies participate and gain guaranteed profits.
The existence of government debts is used for propaganda purposes to reduce spending in social programs that directly benefit the people. Governments and their mouthpieces in the media screamed that they needed $60 billion yearly to service the public debt held by the financial oligarchy, which constrains and even contracts spending in social programs. It is a self-serving farce for which the people are made to pay because the decision-making power is not in their hands.
The necessity to borrow from private interests is presented as the only alternative for governments to raise money as the financial oligarchy considers taxation of the value its workers produce within its private business interests as detrimental to the economy. A compliant media it controls do widespread propaganda for this regressive view.
The first demand for the workers to put forward is Stop Paying the Rich; Increase Funding for Social Programs!
Who pays for public infrastructure
The financial oligarchy refuses to pay for the public infrastructure it uses that benefit its business activities, such as public highways, bridges, public education and health care and mass transit, amongst others including research and development. The building of the infrastructure makes huge profits for big business while much of the payment for these necessary investments in a modern economy falls to the public purse without revenue returning to the governments from the economic activity they engender and the value they produce.
The issue is never broached by the rulers or their media and education system that government debt to private interests is completely unnecessary, wasteful and harmful. The state could borrow from itself and repay the debt from the added-value workers create in an expanding and stable economy.
If the government used the money borrowed from itself to invest in public enterprise then the increased value and income from those enterprises would quickly repay the debt and more, making the increased value available for investments in social programs as well as providing stable employment for workers.
Governments usurped by the oligopolies use the public revenue they have collected to pay the rich to build, maintain and manage all manner of public infrastructure including public roads, bridges, mass transit, housing, hospitals, educational institutions etc.
Once public infrastructure is built and up and running, the private enterprises of the imperialist oligarchy refuse to realize (pay for) the full amount of the infrastructure they consume in the course of operating their businesses. A problem posed for the people to resolve is to ensure that when public or private enterprises consume public infrastructure during the course of their business as means of production, the amount consumed and transferred into the value of their production must be realized and accounted for in a transparent, complete and direct manner.
Public infrastructure must be seen in their true form as public means of production essential for all economic sectors and enterprises, and not as articles of consumption for which individuals must pay.
Private conglomerates nowadays operate as global cartels and coalitions which maraud with impunity to control the socialized economies and seize whatever benefits they deem fit in the moment. Those who control the cartels and coalitions have the aim to seize maximum profits under all conditions and circumstances. Anyone who claims they can be moderate or socially responsible is in denial for their own self-serving interests.
The striving of the cartels and coalitions is to control the productive forces. If they fail to control them, then they destroy them. The cut-throat competition over control clashes inexorably with the striving of the working people to mobilize the modern interconnected economy and all its parts to meet their needs and organize it to function seamlessly and collectively without crises.
The problem posed for the working class is to begin by declaring that there is an alternative to the present crisis-ridden and destructive policy which pays the rich. The alternative begins by insisting that governments must be duty-bound to provide Canada with a modern aim which serves the people and society. The economy can be organized so that each part supports each other and complements the whole under the control and direction of the actual producers.
The issue of public revenue
A modern society requires enormous public revenue to meet the needs of itself and its members. Only one source of public revenue exists and that is the economic base of the society and the new value working people produce.
The modern economy of industrial mass production is more than capable of providing enough public revenue to meet the needs of society and its members. However, a dominant social force in control of the economy and state obstructs the new value workers produce from meeting the needs of the people and society. The ruling elite in control do this in the following ways amongst others.
A global imperialist oligarchy has seized control of the basic sectors of the economy and the social product workers produce depriving society and its members of this much needed value. The problems of needed investments can be sorted out once the people gain control of the basic sectors of the economy with public enterprise and bring the social product workers produce under the control of the society and its members within relations of production that are human-centred.
A modern society is more than capable of using the new value workers produce to meet the needs of the people and solve problems in ways the actual producers and others in society decide.
The state under the control of oligopolies uses much of the public revenue it amasses to pay the rich in various ways and defend the privilege, wealth and power of the oligarchs and serve their narrow private interests. Taxes on individuals and borrowing from the oligarchs are a major source of public revenue in the present. These methods of obtaining public revenue are counterproductive and abusive to the working people who produce all value.
A crucial demand at this time is for governments to stop using public revenue to pay the rich, stop taxing individuals, and stop borrowing from the global imperialist oligarchy.
Public revenue should come directly from the enterprises where workers produce new value and be used to increase investments in social programs to guarantee the well-being of the people and for extended reproduction of the economy.
How to bring this direction into being starts with the demand to stop paying the rich and increase investment in social programs. This is a worthy project for the people to take up at this time.
The need for modern definitions
One of the major problems Canada has faced in the past 20 to 30 years is the issue of cutbacks to social spending which takes place because the rich use the political power to advance their own narrow private interests. It is clear that working people cannot make headway on this question unless they tackle the problem on the basis of modern definitions, guided by the aim of giving rise to a modern society. As long as the battle is waged within the narrow confines of the bourgeois notions of society in which everything must be subordinated to the profit-making aim of the economically powerful, the direction of the economy will not be turned around in a manner which favours the people.
It is not a matter that things went well in the past and are not doing so well in the present. The Canadian state has never provided health care or education or any other requirements of modern life by virtue of recognizing fundamental and inviolable human rights. In Canada, social spending has always been determined by the needs of the capitalist ruling circles. Providing for the needs of the people is really incidental to the needs of the capitalist economy. This is why the conception of rights can just as easily be extended as taken away.
To open the path for progress, health care and education, employment and a livelihood, must be recognized as human rights. It is by providing these rights with a guarantee that progress is made from one stage to the next to the next.
In the course of creating the conditions for its own emancipation, the working class – as the most revolutionary and productive force – fights for a society which recognizes that all individuals are born to society and as a consequence have rights which are inviolable. The working class also fights for legislation that will enable the people to exercise these rights. This is the orientation which can enable all those who are under attack to advance their aims.
Discussion of the pay-the-rich economy and how to overcome it
The aim of the working class movement
In the rush of governments to “reopen the economy” on behalf of the ruling elite, dictatorial measures are being imposed to stop workers from implementing the lessons learned during the fight against the pandemic. The ruling oligarchs demand a return to business as usual even though the status quo has proved unsustainable in practice. Working people have discovered that if a society fit for human existence is to be built, then business as usual within the old status quo must be rejected. The experience of the people before and in particular during the pandemic leads inexorably to such a conclusion.
The defining moment we are passing through today is the collective recognition that economic, political and social affairs as constituted do not allow members of society to solve the problems they face and to build a new pro-social way of life that favours them. The militant and responsible stand of the workers and their organizations not only affirms the growing movement against the decades-old anti-social offensive, it poses the issue of what aim the movement should have. The working class has the social responsibility to define clearly its aim to create a society fit for human beings and to lead the entire people to achieve the aim as a nation-building project they embrace as their own. Such a society of necessity respects the rights of all by virtue of all being bona fide full and equal members of the polity and meets their needs at a level of existence achieved through the development of the modern productive forces and scientific technique.
The fulfilment of the aim of the movement to build the New requires working people themselves finding solutions to the problems life is posing:
– to defend themselves against the current attacks on their rights and their well-being and on society itself;
– to work out practical ways which mobilize the broad section of workers to hold governments and employers to account so as to attain control over the decisions that affect their lives;
– to hold forums where workers speak in their own name and establish reference points which serve to provide them with orientation;
– to ensure the state and governments fulfil their responsibilities to meet the needs of the people; and
– to put forward their own agenda to humanize the social and natural environment and ensure its realization.
The ruling oligarchy has descended into a clique of the global rich that runs roughshod not only over the working people of Canada but over those they dominate in alliance with the oligarchs from the United States of North American Monopolies. They dominate the world they control with an economy based on a mode of production to pay tribute to the rich and serve their political power and privilege. The current mode of production to pay the rich gives rise to recurring economic crises and war.
The aim of the economy to pay the rich renders it incapable of mobilizing its tremendous productive powers to solve the problems the people and Mother Earth face. The working people are charged with the task of bringing into being a new mode of production with a new aim to serve the people, to humanize the social and natural environment, and to solve national and international problems without violence and war. The initial and crucial step in building the New is to organize the people to stop paying the rich, to increase investments in social programs and to constitute themselves as an anti-war government.
Objective conditions of paying the rich
The current mode of production holds within itself the objective conditions that drive those in control to pay the rich through an anti-social offensive and war. The mode of production came into being during the seventeenth and eighteenth centuries by developing the productive forces and depriving the ruling feudal aristocracy of their economic, political and social power. Those who rose to power in the economy and eventually in politics did so based on their control of private property in the form of money wealth, land and means of production. They out-produced the peasant farms and guilds of the feudal system of petty production and eventually rendered them extinct, leaving many without any means of subsistence, forcing them to move to the growing cities to find a means of living.
The owners of property mobilized their private wealth to buy workers’ capacity to work for use in their factories of industrial mass production, providing working people a means of subsistence, however precarious and rudimentary. The owners of property rapidly increased their wealth by mobilizing their control of political power to march armies abroad to steal the wealth and lives of others through colonial occupation and plunder, war and the slave trade.
The concentration of wealth in fewer hands
The mode of production that displaced the rural petty production of the landed aristocracy holds within it the inevitable concentration of wealth and power in fewer hands. The early years of what became known as laissez-faire capitalism immediately began to concentrate production in larger and larger factories and integrated combines of production and banking. By the end of the nineteenth century, the merging of banks and industries into giant socialized cartels constantly expanding around the world became known as monopoly capitalism, creating the objective conditions ripe for change to socialism.
The concentration of wealth and power continues, as starkly evident during the pandemic when the private wealth of the twelve richest oligarchs in the United States has doubled to over one trillion dollars. Such massive wealth, power and privilege have developed into the control of governments at all levels to pay the rich and serve their private interests through the seizure of ever greater amounts of the value working people produce, war, and the despoiling of Mother Earth.
The working class, whose members are the actual producers, has emerged as the essential human factor with the ability and aim to change the mode of production of the transition period to serve the well-being and rights of all and build the New. Only workers, by activating the human factor/social consciousness to provide a new pro-social aim to mobilize the massive productive powers of modern industrial mass production, can save human beings from the ruling elite that have fallen into despotism and destructive practices worse than those of the ruling aristocracy they displaced.
The trend of a falling rate of profit
The current mode of production, based on private ownership of the means of production and the aim to seize for private gain the added-value workers produce, holds within it the trend of a falling rate of profit arising from the application of science to methods of work and production called productivity.
The ratio between the total investment and the number of workers necessary during production determines in broad measure the rate of profit. The rate of profit under the current mode of production is constantly depressed by ever-increasing amounts of invested value necessary to activate workers.
As the number of workers in production falls with the development of the productive forces, such as with the use of robots and Artificial Intelligence (AI), the rate of profit from the total investment declines. This growth in productivity is a double-edged sword for the oligarchs. It allows them to compete and possibly wipe out their competitors but it brings with it a falling rate of profit.
The rate of profit is expressed as a ratio in social product between the old value to new value or more specifically between the added-value the current workers produce and the sum of their reproduced-value (wages, benefits and social programs) and the transferred-value from fixed value (buildings and machinery etc) and circulating value (consumed energy and material etc). Profit is derived from the new value workers produce, specifically the added-value. Profit does not come from the fixed and circulating value transferred into production from already produced value.
Phenomenal amounts of investment are needed to set in motion the workers who produce the new value the oligarchs crave. The rich have long sought ways to overcome this trend of a falling rate of profit. Instead of investing in the productive economy, they have gone increasingly into the parasitism and decay of selling and reselling already produced value, into stock markets and commodity markets, and into Ponzi-type schemes to bilk small investors of the wealth they hold.
The other dominant way is to have governments pay the rich through public investments in their enterprises or through contracts for social product at inflated prices. No major investment in the economy of any type occurs without governments participating through handouts, tax exemptions, the use of public infrastructure for the big enterprises at preferred rates and other pay-the-rich schemes, such as public-private partnerships, buyouts similar to the Trudeau government purchase of the Trans Mountain pipeline from the monopoly Kinder Morgan or other schemes.
The concentration of wealth and power in fewer hands and their control of governments, coupled with the trend of a falling rate of profit, have meant that the mode of production has become one of paying the rich. All major investments include payments to the rich from the collective wealth held by the state. No investment of any size proceeds without government guarantees of state payments to the rich. No decision in politics or economic affairs is made without the consideration of the rich oligarchs in control.
Objectively, this situation indicates that the rich oligarchs have become superfluous and have no reason to be involved in the economy. The economy is socialized. The actual producers, the working class, must become the owners and directors of the already socialized and interrelated economy so that the power of its productive forces can be organized and unleashed to build the nation and serve the people and society without interruption, crises and war.
The current mode of production based on private property has run its course and must give way to the New where the actual producers, the working class and its allies who produce the wealth, are in control and set their own aim for the economy and society in conformity with the already socialized economy and its needs and those of the people.
A new direction for the economy
If the issue of the method or means of subsistence is not understood, the workers’ movement and its aim remain vague without sharpness and a confident direction. This final stage of the transition from petty to industrial mass production is not the same as before in the early period of the transition with what was called laissez-faire capitalism. Similarities exist but the situation has changed considerably. As long as this pay-the-rich means of creating a subsistence for people is not radically challenged, nothing can be solved and no forward progress for the workers’ movement and society can be sustained.
Within this discussion, workers should think about what they would establish as the means of subsistence. The starting point is to stop paying the rich and increase investments in social programs to guarantee the rights of all, to have the collective will of the society expressed in the form of socialist planning and control by the working people over those affairs that affect their lives. Collectively, the society would march forward and in the way of the old proverb would learn warfare through warfare.
Within the situation, the workers put forward their own demands. The demands are to stop paying the rich, to stop all public borrowing from private lenders, to stop handouts to the rich and their enterprises, and to increase investments in social programs in education, health, welfare, culture and recreation in particular for the youth. With this start, a rupture with the Old can be made and a new direction embraced. The immense social product available from the modern means of production can be put to use to solve society’s problems and guarantee the well-being and rights of the people and the extended reproduction of the economy. Without the starting point to stop paying the rich, no change in the direction of the economy can be sustained.
Whenever a crisis occurs, as is the case at the present time, it becomes clear that either the working people move towards creating a higher form of society, or they continue to face one disaster after another. Workers have to demand a radical rupture from the past and that rupture is presented in the slogan “Stop Paying the Rich!”
While all of this points to the necessity for the working class to establish its own political aim, the attempt is made, once again, to keep it chained to the political aim of this or that party with aims to serve private interests. This capitulation to the parties of the rich flies in the face of the experience of all Canadians, which is that whether a party’s agenda is touted as right-wing or left-wing, it serves the corporate elite and old status quo.
The struggle today is between the forces of the New and the forces of the Old. The working class must resolutely take up its own political aim to end the situation whereby the rich marginalize it by diverting its struggle into electing this or that so-called representative and party of the rich oligarchs, no matter what they may call themselves.
As the Communist Party of Canada (Marxist-Leninist) steps up its work, its members and allies are firmly convinced that an alternative to the current direction of paying the rich can be found. Activists are confident that by consciously participating in building workers’ forums to exchange views, analyze unfolding events and set their own orientation to defend the rights of all, the program to stop paying the rich and to increase investments in social programs will lead to the establishment of an alternative and open society’s path to progress.
Join the movement for the New!
TML Weekly Information Project, September 12, 2020 – No. 34
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Discussion on the Economy
– K.C. Adams –