The following document was discussed, amended, and passed by the comrades of Fightback/La Riposte socialiste at the recent national congress. It’s an important analysis of the class struggle in Canada and the way forward to socialism. We hope everyone will read it and discuss its contents with us.
COVID-19 has exacerbated all of the contradictions of capitalist society and has created a situation unparalleled in world history. The economic collapse triggered by the pandemic is without precedent in magnitude and scope, the consequences of which have not fully set in. All of this has been added to the mix of a world characterized by social volatility and political polarization. Revolutionary implications are inherent in the entire situation.
COVID-19 has exacerbated all of the contradictions of capitalist society and has created a situation unparalleled in world history. The economic collapse triggered by the pandemic is without precedent in magnitude and scope, the consequences of which have not fully set in. All of this has been added to the mix of a world characterized by social volatility and political polarization. Revolutionary implications are inherent in the entire situation.
Faced with this, the capitalist class has turned to the state to save capitalism. They have opened the money taps to prop up the system, prevent total collapse, and mitigate the worst class contradictions. At Davos, the strategists of capital have all become converts to state expenditure and a so-called “Great Reset” to establish a new social contract to avoid revolution. In Canada, the Trudeau Liberals have unleashed a bailout program of unparalleled proportions.
However, even if the bourgeois are able to temporarily stabilize the economic situation, which is in no way guaranteed, there is plenty of combustible material in society. One spark could set it all alight. The hypocrisy of the rich during the pandemic and the massive increase in inequality creates a situation in which class hatred can easily boil over into open class war. Added to this is the fact that government spending is no permanent solution to the crisis of capitalism and only delays the inevitable, ultimately making the situation worse by adding all sorts of distortions with inflation and massive debt.
The purpose of this document is twofold. First, we seek to lay out the general trends in Canadian society, both political and economic, to provide activists with a general framework to understand the epoch we are living in. Secondly, we aim to arm activists with the arguments necessary to win the working class to the program of socialist revolution as the only way to overcome the current crisis.
We are not all in this together
COVID-19 will have effects that will last a generation, and it would have had a serious impact on any society at any point of history. But the virus did not strike any society. It struck weak and ailing capitalism in its period of senile decay. It struck a society where class polarization is developing and where there is a growing socialist consciousness among wide layers of workers and youth. The way that the capitalists have dealt with the pandemic will leave a mark on the consciousness of working class people for generations to come.
The propagandists of capitalism like to say, “we are all in this together”. We are certainly all in this, but definitely not all together. In country after country, the poorer and racialized segments of the population have faced the brunt of infection and deaths and job losses. In particular, 70% of those who lost their jobs at the start of the pandemic were working class women. Similar statistics of the disproportionate impact of the pandemic on particularly oppressed segments of the working class can be drawn at a whim. Meanwhile, the ruling class can quite safely collect their profits from the comfort of their mansions without the need to interact with normal working class people who make and deliver the things the rich enjoy.
While the capitalists and most higher paid white collar professionals can safely limit their exposure, poorer working class people do not have that luxury. All the factors of racism and poverty serve to compound the pandemic. Firstly, being forced into “essential” manufacturing, warehousing, service sector, and transport work, with insufficient PPE and social distancing, increases infection. Low pay means workers have to carpool or cram onto public transit, increasing infection. Shift work and insufficient hours force workers to get two or three jobs, which spreads the infection. Low pay also means cramped housing, with many people living in small spaces in high-rise apartments with no ability to physically distance in elevators. The refusal of bosses and governments to provide paid sick leave also forces workers to choose between potentially spreading the virus, or staying home and not having the money to pay the rent.
While the social conditions of capitalism force increased infection rates on workers, immigrants, and people of colour, they also increase the lethality of the virus. Poverty, racism, bad housing, shift work, and precarious conditions lead to poor nutrition, irregular sleeping patterns, and a general reduction in health. In turn, this leads to a compromised immune system. Here we see how capitalism literally kills.
Scandalously, some right-wing politicians resisting the call for public health measures have had the gall to blame the “cultural practices” of some ethnic populations with “large families”. These racist dog whistles have been largely rejected by the population, but similar attacks have not been without consequences. British Columbia has seen a massive uptick of anti-Asian hate crimes, which in Vancouver increased by 717 per cent from 2019 to 2020, along with 1,100 anti-Asian attacks across Canada in the same period. This trend will continue as the crisis deepens and the ruling class looks to further scapegoat minorities.
In the first wave of the pandemic there were massive shortages of staff and PPE. This was particularly acute in long-term care, where unions had identified the need to hire more workers at higher pay and full-time hours. Thousands died. There were also several significant workplace outbreaks such as at the Cargill meat plant and amongst temporary foreign farm workers. After the first wave, the virus subsided in the summer and there was a clear opportunity to take the measures to stop the second wave. But due to the profiteering of the capitalists, and the penny-pinching of their governments, nothing was done!
The deaths in the second and third waves are the clear responsibility of every corporation, politician, and media mouthpiece that prioritized profits over health. Scandalously, in Ontario, even more elderly people died in long-term care in the second wave, despite crystal clear guidelines of what needed to be done. Instead of increasing wages and hiring more workers, they passed laws to protect private owners from prosecution. In the workplace there has been systematic resistance to anything that would limit profits and protect workers. Every action has been too little and far too late.
But this was all prepared in advance. Canada, just like every other western imperialist country, has been defunding social services since the 1970s. Canada has enacted decades of cuts to healthcare and public health despite clear warnings that a pandemic was inevitable. Even the fact that Canada was a centre of infection for the SARS epidemic did not lead to increased preparedness. Such short-sightedness is symptomatic of a decrepit and decaying system, a ruling class who has no hope in the future, and no hope in itself.
Instead of investing in a better society for the betterment of all, the capitalist class has demanded that everything that makes life half-livable be torn down in favour of “naked cash-payment”. Half a century of austerity in one form or another has seen a massive transfer of wealth from the poor to the rich. The cuts to healthcare have been particularly detrimental in the pandemic, but everything else has also been on the chopping block. Privatization cuts social services and gives a new avenue for profiteering and union busting. This has the effect of decimating the social wage of the working class. In exchange, tax cuts are gifted to the rich and the corporations.
People could perhaps forgive the bourgeois for their short sightedness and lack of preparation prior to the crisis if they subsequently took the steps to solve the unfolding catastrophe. But yet again, short term profits were placed ahead of human lives. However, this time there could be no excuse of ignorance.
The parasitism of the bourgeoisie
Another result of this has been an incredible concentration of wealth while the majority suffer. The top one per cent now control over 25% of wealth, a figure not seen since 1929. But contrary to 1929, when inequality lessened in the crisis, today the rich are profiting from the catastrophe! After the Great Depression and the Second World War, the top one per cent’s wealth share fell to approximately 10%. But today we hear stories of Jeff Bezos and Elon Musk’s wealth ballooning by billions in the pandemic. The Canadian billionaire class is also making a killing at the same time as people die due to failed public health measures that prioritize profits.
Prior to the pandemic, there was the scandal of Canadian corporations sitting on billions of dollars of uninvested cash. Mark Carney, when he was governor of the Bank of Canada, raised this issue in 2012 and mused about incentivizing the bosses to invest in production. Back then, Canadian dead money was a paltry half-a-trillion dollars. After that, Carney was told to shut up and the corporate media collaborated in forgetting the scandal. But while they continued in their willful ignorance, research by www.marxist.ca showed that the hoard continued growing until it reached $1-trillion in 2019.
The existence of such a cash hoard puts the lie to every statement that “there is no money” for free education, pharmacare, childcare, social housing, clean water on reserve, pensions, or any of the other needs of workers. The money exists, but the capitalist system demands it be locked in a vault far away from working class people.
However, 2020 was a year like no other. In the midst of the pandemic when there was allegedly no money for PPE, no money for test and trace, no money for long-term care staffing and wages, when thousands of workers were literally dying while the bosses collected their profits in comfort, they threw an unprecedented half-a-trillion dollars on the dead money pile. Corporate Canada’s money hoard rocketed up at more than five times the previously scandalous rate from $1-trillion dollars to over $1.5-trillion in a single year.
Corporate apologists protest, saying that these businesses are just being prudent and looking after their private interest. Why would they invest in production when there is no market for that production? This is exactly the point! Their actions are the logical consequence of a system built for private profit and not the common good. We are not simply critiquing the selfish actions of each individual capitalist, we are denouncing the system that allows this to happen in the first place. Any semblance of justification of capitalism has been erased in the current catastrophe.
We are witnessing an unprecedented political situation that defies analogies. In what era of human history was there a generalized social, political, economic, and health crisis while the ruling elite increased their hoard of wealth? We leave this question to the historians. But the results of such a glaring contradiction are sure to be revolutionary.
Delaying the inevitable
The farsighted bourgeois strategists are keenly aware of the precariousness of the situation. This was demonstrated at the World Economic Forum in January this year. Acting as a sort of hivemind for the international bourgeoisie, the World Economic Forum is attended by heads of government and CEOs from major multinational corporations. Normally a paragon of free market ideology, this year’s forum was notable by the complete embrace of Keynesian policies, previously considered taboo.
In the words of Darren Walker, President of the Ford Foundation, “If capitalism is to be sustained, we must put a nail in the ideology propagated by Milton Friedman.” While this certainly is the trend in every major capitalist country, it couldn’t be more clear in Canada where the government is racking up debt at the level of 20% of GDP per year. However, the belief that this will somehow “save the system,” is wishful thinking.
Previously we characterized the underlying cause of the crisis as a combination of overproduction and debt. Overproduction can be resolved in two ways—either by growing the market, or by cutting productive capacity. Today, annual GDP is significantly below its peak in 2019 and even the most optimistic projections do not have it returning to 2019 levels until 2022 or 2023. Even getting back to the level of 2019 will not solve the crisis, as the market will still be behind where it should be in terms of normal growth and population expansion. To avoid catastrophe GDP levels would have to reach a level equivalent to approximately two per cent growth for every year after 2019. Therefore there is little hope that increased demand will immediately solve the crisis.
How about the supply side of the equation? There is no evidence that productive capacity has been cut in any appreciable way. To do this there would have to be wholesale factory closures. Perversely, due to corporate bailouts by the government, the bankruptcy rate has actually gone down in the pandemic. This is because corporations are hoping against hope for more government handouts that will let them weather the storm and return to profitability. But the reality is that a large number of these companies are already dead, but are refusing to die. So-called “zombie corporations” exist on paper and suck up billions of dollars from the state, but are guaranteed to flatline once the welfare cheques stop being mailed.
Therefore the only conclusion we can come to is that potential supply is far in excess of actual demand. This means that the general trajectory going forward will not be investment and increased employment, but dis-investment and increased unemployment. Three million jobs were lost between February and April 2020, but the recovery from the first wave peaked at 500,000 jobs below February and subsequently returned to a downward trajectory. The worst is not behind us, the worst is ahead. And we have yet to consider the exacerbating effect of debt.
The dead weight of debt
All concerns about debt have been thrown out of the window in the present catastrophe. The federal government is set to post a budget deficit of around $400-billion in 2020, adding almost 20% to the debt to GDP ratio. But such massive expenditures cannot be continued indefinitely and they are just delaying the inevitable.
Much noise has been made by the corporate media and right wing about the CERB/CRB emergency payments to unemployed workers, but the reality is that 80-90% of the handouts have gone to business. The total dollar figure for CERB is under $100 billion, while between $700-800 billion has been made available as gifts to corporations. Nailing down the exact figures on these measures has been difficult as the government has refused to give a full accounting and some of these funds are even deliberately secret to avoid political embarrassment. Scandalously, many corporations sucked up government largesse such as the wage subsidy while also laying off workers and paying dividends and executive bonuses.
As seen by the phenomenon of zombie corporations, the billions in corporate welfare do not solve the underlying contradiction. Of the companies receiving handouts in the form of wage subsidies, rent subsidies, interest free and forgivable loans, and other back-door secret grants, half of them do not need the support and are pocketing the money, while the other half are zombies waiting to die.
This deficit financing is not even Keynesian, as little of it is going to public investment. No roads and bridges are being built. No hospitals or recreation centres. There isn’t even any significant expenditure on maintenance. Direct corporate handouts do nothing to improve the productivity of labour after the pandemic. Instead, all we get is a hoard of unproductive dead money.
They are implementing these unprecedented state financing measures on the heels of massive government indebtedness. For decades prior to the financial crash, governments around the globe had already resorted to measures to inflate the bubble: either directly through deficit financing and state aid; or indirectly through low interest rates and quantitative easing. Even the meagre growth seen prior to the 2008-09 recession was only possible on the basis of using the tools that the ruling class would normally only use to get out of a crisis.
The result is that, today, faced with this new, even-deeper crisis, the ruling class has run out of ammo; their arsenal is now empty. Hence the politicians and policy makers have been forced to resort to extremely desperate measures to save their system.
The fact that mainstream bourgeois politicians are flirting with things like Modern Monetary Theory tells you how desperate they are. MMT supporters assert that debt is all an illusion that can be overcome if only the “political will” exists. They suggest that governments, via central banks, should simply continue to print money to fund public expenditure and stop worrying about debts altogether.
But basic economic theory states that if you print money—as the Bank of Canada is doing to the tune of $5-billion of “quantitative easing” per week—then you dilute the value of money and cause inflation. Low interest rates and stimulus spending are supposed to have a similar effect. Additionally, deficit financing leads to increasing debt servicing costs. But the proponents of Modern Monetary Theory and those who wish to defy the economic laws of gravity point out that there has been little inflation, and that debt servicing has actually gone down in the pandemic. How do we explain this?
The lack of inflation is in fact another example of the crisis of overproduction. During the first period of the Great Depression, 1929-33, there was massive deflation. Governments had a laissez-faire approach and did not intervene. The collapse in demand resulted in a 10% reduction in prices each year. Today’s lack of inflation in the face of massive government stimulus appears to be the conflicting forces of low demand vs. the reduced value of money cancelling each other out. Eventually, as supply comes back into balance with demand the inflationary pressures will assert themselves. It is a case of bad things coming to those who wait. Although, while general inflation has been depressed, the bailouts and quantitative easing have led to massive inflation in the prices of stocks and property, increasing the wealth of the rich, while there is sectoral inflation in food prices, decreasing the wealth of the poor.
Debt servicing costs have gone down on a larger total debt precisely due to quantitative easing (QE) and the crisis in the real economy. The central bank administers QE by buying debt, pushing down interest rates. Additionally, the lack of opportunities for productive investment means that buying debt on the bond market is one of the only ways to make money. But this in turn pushes down interest rates further. There are even reports of negative interest rates where the creditor gets a penalty for loaning money and the debtor a benefit! The capitalist maelstrom has surely turned everything on its head. But eventually when all comes back into balance the ship will turn right side up again, leaving the furniture and crew strewn about.
The ruling class is split over how to reduce these debts. The Keynesians argue that “growth” via stimulus will solve the problem. But they are looking back nostalgically at the postwar boom for reference. But such a perspective is ruled out, as none of the conditions for such an upswing are present.
The proponents of MMT essentially argue that debts don’t matter while more traditional conservative sections warn about the unwieldiness of these debt levels and appeal for austerity. But none of these options will solve the problem. MMT only creates other distortions in the market which eventually leads to hyperinflation which is simply another way of increasing the cost of living for the working class. Meanwhile, austerity measures falling on the working class would simultaneously weaken consumer demand while upsetting the delicate political equilibrium that they are so desperately trying to correct.
This is because at the end of the day, it is the contradiction of overproduction with the huge levels of excess capacity worldwide that lies behind today’s continuing slump. No matter what measures the capitalists implement, they are only delaying the inevitable.
Will there be a boom?
While none of the measures that the capitalists are putting in place are a solution to the crisis of the system, it would be incorrect for us to rule out any form of economic boom. While the general trend is downwards, small periods of growth cannot be ruled out. On this topic, there has been considerable discussion in the media and among economists on the question of the economic recovery in the aftermath of the pandemic. The optimistic bourgeois commentators believe that there will be a “V-shaped” recovery on the basis of pent-up demand.
It is true that while millions have been impoverished as a result of the pandemic, there is also a middle-class layer that has been able to do quite well for themselves during the pandemic. They have been largely working at home, and in Canada at least, have had their income topped up through Trudeau’s government supports. They have been unable to spend as much money as they normally would on restaurants, nights out going to the cinema or the bar, and taking holidays abroad, etc. When the pandemic is finally over, they will be looking forward to resuming these activities and spending this money. This could result in an uptick in the economy, even a sharp one, together with the massive injections of money from the state.
However, it is important to understand that even such an uptick will not restore the equilibrium that capitalism has lost. Even a modest recovery in the economic activity and a slight fall in unemployment would have the immediate effect of reactivating the economic struggle, as workers strive to win back everything they have lost in the previous period. Additionally, the increased spending by the top part of society that has saved money in the pandemic will promote inflation that will impact the bottom part of society that faced the worst effects of the crisis. We will discuss more on the potential for class struggle later in this document.
This is where an understanding of capitalism’s boom-slump cycle becomes important. As Trotsky explained at the Third World Congress of the Comintern:
“Crisis and boom blend with all the transitional phases to constitute a cycle or one of the great circles of industrial development. Each cycle lasts from 8 to 9 or 10 to 11 years. By force of its internal contradictions capitalism thus develops not along a straight line but in a zigzag manner, through ups and downs. This is what provides the ground for the following claim of the apologists of capitalism, namely: Since we observe after the war a succession of boom and crisis it follows that all things are working together for the best in this best of all capitalist worlds. It is otherwise in reality. The fact that capitalism continues to oscillate cyclically after the war merely signifies that capitalism is not yet dead, that we are not dealing with a corpse. So long as capitalism is not overthrown by the proletarian revolution, it will continue to live in cycles, swinging up and down. Crises and booms were inherent in capitalism at its very birth; they will accompany it to its grave. But to determine capitalism’s age and its general condition – to establish whether it is still developing or whether it has matured or whether it is in decline – one must diagnose the character of the cycles. In much the same manner the state of the human organism can be diagnosed by whether the breathing is regular or spasmodic, deep or superficial, and so on.”
It is remarkable how applicable these lines are to the current situation today. Of course, the COVID-19 pandemic is not the same as World War I. The pandemic has not brought about the immense destruction of Europe or resulted in a death toll as high as World War I. Yet, there is a certain analogy between the War and the pandemic. The pandemic has deepened a crisis that was already underway and has resulted in considerable economic dislocation on many levels, which will have a lasting impact for some time to come. Similar to the period following World War I, the apologists of capitalism today assure us that because the boom-slump cycle will continue after the lockdowns, etc., that capitalism has “recovered” and we are once again living in the best of all capitalist worlds.
Using the character of the boom-slump cycle from the previous period into the present one, we can determine the overall condition of the health of capitalism. Capitalism experiences three distinct types of periods of development: periods of growth and upswing, periods of stagnation, and periods of decline and crisis. In periods of upswing, the crises are brief and superficial in nature, while the booms are long-lasting and thorough. In periods of capitalist decline, the crises are prolonged and deep while the booms are shallow, superficial and largely speculative in nature. In periods of stagnation the booms and the slumps will occur with the same general depth and intensity, and tend to cancel one another out, leaving the curve of capitalist development flat.
What period of development does capitalism find itself in now? If we look at the boom-slump cycle we can see that capitalism is developing laboured breathing. It may even be experiencing the onset of death rattles. One thing is for certain: capitalism is no longer breathing robustly as it did during the post-war upswing from 1948-1974. It has very clearly entered a period of decline
The booms in the early 2000s preceding the Great Recession of 2008 were rather shallow and approximated population growth. The 2008 recession represented the biggest economic crisis since the Great Depression up to that point. The so-called recovery following the 2008 recession was internationally the longest in history, but it was also extraordinarily weak, and can hardly even be called a boom. The reality of the situation is that capitalism has been in a slump since 2008. And following this “recovery”, capitalism has now entered another crisis, this one even greater and deeper than the crisis of 2008.
If capitalism is lurching from extreme crisis to extreme crisis with only shallow and superficial “recoveries” in between these crises, then we can say with certainty that capitalism has entered an organic crisis and a period of sharp decline. Going forward, we can expect the booms in the coming period to be largely short and shallow, and the slumps to be deep and severe. In that sense, the coming period will be more similar to the crisis between the World Wars (1914-1945) than the historic post-war upswing following the Second World War (1948-1974).
The fact of the matter is, the present crisis is inseparably entangled with the coronavirus pandemic, making any sort of concrete predictions impossible. For this reason, the forecasts of the various economists and experts are really only guesswork. The only certainty is that all the main indicators, from the productivity of labour to capacity utilization and so on, point towards an overall downwards trend.
Does this mean that a boom or recovery of some sort is completely ruled out? An economic recovery following the pandemic cannot be ruled out. In fact at a certain point, some sort of recovery is inevitable. The capitalist system has always moved in booms and slumps and, sooner or later, if it is not overthrown by the working class, a way out of this situation will also be found. But what type of recovery will this be? Will it be the beginning of a long period of growth and prosperity such as the post-war upswing, or will it only be a temporary interlude between one crisis and the next, similar to the 1920s and 1930s?
What is far more likely than a “V-shaped” recovery is a “K-shaped” recovery following the pandemic, which will be a continuation of the same trend we have seen develop during the COVID crisis: the rich will continue to get richer, and the poor will continue to get poorer. Such a “recovery” is a recipe for continued social and economic crisis, not the basis for a period of growth and upswing.
Capitalism has fundamentally lost its equilibrium and a K-shaped recovery will not allow capitalism to restore it. At the moment, the capitalists are concerned with maintaining social equilibrium. They are attempting to prevent a social explosion from below with a massive injection of cash from the state. This explains the bailouts by the Trudeau government and the $12 trillion pumped into the system worldwide via the state.
Developments in the productive forces are contradictory and stagnant. New technologies do not raise the general standard of living or improve working conditions. In fact they tend to make things worse. What’s more, there is an entire host of new technologies which are perpetually “on the horizon”, such as automation and artificial intelligence. These new technologies are not implemented in a widespread manner and their development is actually held back because the capitalists intuitively understand that society will not be able to deal with the mass unemployment it would entail. They also have an understanding that replacing workers with machines also shrinks demand, limiting the market and leading to falling investment and ultimately overproduction.
The COVID crisis has accelerated processes that were already underway, and which will only increase after the pandemic has ended. The rise of protectionism and the breakdown of global supply chains; automation and the threat of ‘technological unemployment’; growing inequality and the concentration of wealth in the hands of the Big Tech bosses: all of these tendencies were clearly observable before 2020, and will continue to develop in the years ahead.
The fundamental question is not whether there will be a boom or slump after the pandemic ends. There will inevitably be booms and slumps going forward as long as capitalism continues to exist. But the booms will be shallow and weak and the slumps deep and severe. The general curve of capitalist development will trend downwards for some time in the coming period.
The fundamental question is whether capitalism will be capable of developing the productive forces. What is clear is that, having entered a period of organic decline, capitalism can no longer develop the productive forces as it did in the past. This is one of the fundamental aspects of the crisis and points to the terminal decline of the system as a whole.
The private ownership of the means of production and the nation state are the fundamental barriers to the development of the productive forces. In the post-war upswing, capitalism was able to find various means of partially and temporarily overcoming these fetters. This was done largely through the massive expansion of world trade and to a lesser extent through the mechanism of state and deficit financing.
In the period following the post-war upswing, capitalism was able to find various outlets to delay abject crisis: the introduction of capitalism in China played a major role in this, but so too did various speculative bubbles (the Dot-com bubble, the housing bubble, the speculative booms in the Asian Tiger and BRICS countries, etc.). With the crisis generalized and all countries in deep economic crisis, these options are no longer available as viable outlets for the system.
The central question remains: who pays? In the final analysis, this must mean that either the working class will shoulder the burden, through austerity and attacks on living standards; or the capitalist class, who will resist tooth-and-nail any attempts to bite into their profits.
The attempt to maintain social equilibrium is driving up debt levels to unprecedented levels, which is upsetting the economic equilibrium even further. This in turn upsets the social equilibrium in a dialectical feedback loop. At a certain stage, the bourgeoisie and their political representatives will be forced to try to restore the economic equilibrium. They will have to do something about all the debt that has been racked up – this will mean the end of corporate welfare and the clawing back of pandemic supports such as the CRB. This will mean attacks on wages and social services. A shift from Keynesian-inspired spending to cold austerity by the capitalists is a recipe for a social explosion. We need look no further than Alberta to see this.
The reality of the situation is that no matter what the capitalists do, they will be unable to restore the economic and social equilibrium of capitalist society. What’s more, any measures they take will simply create further disequilibrium.
The full extent of the crisis is also not currently known. State financing has partially masked the full economic fallout of the crisis. According to capitalist ideology, profits are supposed to be a reward for investing and developing the productive forces of society and the state is supposed to stay out of the way. But as there are no productive profits to be had the state is guaranteeing profits by means of corporate welfare and printing money to the tune of $5-billion a week. Capitalism stands condemned by its own criteria.
The result of removing state support will not be a thorough boom, but economic chaos. The only result of this will be a downward spiral of rising unemployment, the continued collapse in demand, and falling investment. In the end, the ruling class will try to make the workers pay for the handouts given to the bosses, and the result will be explosive – ultimately leading to revolution.
The capitalists will do their best to put the burden of paying for the pandemic onto those who fared the worst in the pandemic. Modest growth may even give workers more confidence to fight. The fact that the top quarter of income earners have enjoyed higher pay and employment in the pandemic, while the bottom three quarters have faced wage cuts and increased unemployment, will only add to the resentment. This is a recipe for explosions of the class struggle.
And yet there are those who believe that the question of who pays can be avoided. Some of these people even call themselves socialists. Proponents of Modern Monetary Theory (MMT) and Universal Basic Income (UBI) try to ignore the laws of physics and the class struggle that flows from them. Material wealth cannot be conjured out of thin air. Items that satisfy human needs must be made of real matter, and people making those items or supplying services must be fed with real food. Money in itself is not wealth or value. You cannot eat money, you can’t live in it, and it wont keep you warm on a cold day. Money is just the measurement of value. Printing more money creates no more wealth than moving from inches to centimeters produces more length, or Celsius to Fahrenheit more heat, or hours to minutes more time.
Generally speaking, it is the sections of the left who have become demoralized over the prospect of winning the class struggle who have adopted the call for universal basic income (UBI). Even the Liberals flirted with the idea last fall before dropping it. The mass implementation of the $2000 per month CERB/CRB payments have popularized the issue. But UBI also does not eradicate the question of the class struggle and who pays.
Firstly, we must make clear that while we were not in favour of CERB as the method of supporting workers during lockdown, we are also not in favour of removing it from workers who are now relying on it to survive. We cannot fall for the right-wing propaganda that is desperately concerned about every penny that goes to the workers while totally ambivalent about the fact that ten times more is going to corporations.
Our demand in the lockdown is full pay to all laid off workers, paid for by the boss, double pay for essential workers, also paid for by the boss, and workers’ control to determine what work is and is not essential. Any capitalist who says they cannot afford it must be forced to open the books, as many of them seem to have no problem paying executive bonuses, paying dividends, and hoarding half-a-trillion dollars last year. If they genuinely cannot pay, then they should be expropriated to save jobs and essential production.
However, some think that giving $25,000 to every Canadian would solve the crisis of capitalism and is the best issue for workers to focus on. It will not, and it is not. Right-wing supporters of UBI say you can pay for it by slashing social programs and giving people a cash handout. This results in workers being poorer as the value of social services free at the point of use is far higher than the cash given. User fees for private services would quickly eradicate the UBI cheque, leaving workers poorer than before.
Left-wing supporters of UBI say it should be paid for by taxing the rich. But they present this as if it is a simple administrative act of budgeting rather than the effect of vociferous class struggle. They ignore the experience of social democratic governments like Bob Rae’s NDP who tried to implement mild reforms and taxes only to be forced into attacking the workers by the resistance of the capitalists. By putting forward a policy that explicitly downplays the class struggle, regardless of whether some academic policy paper that nobody reads says it will be financed via taxes, prepares the way for the neoliberal version of UBI.
The fact that UBI is being promoted by the right wing of the NDP and the left wing of the Liberals should be enough to tell us it is not a solution. If the crisis gets big enough the capitalists are sure to dig this policy out of the trash can in order to distract everyone. Rather than pretend that there is a way forward without struggle, it is better to state clearly that struggle is the only way forward. And if the workers are to win that struggle, it will not be for abstract policy formulas, or money printing schemes. It should be for clear socialist demands that directly transfer wealth from the bosses to the workers. Pay higher than inflation. Union rights. Sick pay. Free education. Pharmacare. Universal housing. Childcare. Pensions. Etc. All paid for by expropriating the top 150 corporations that control over 80% of the Canadian economy.
Those supporting UBI think it is an easier option than struggle. It isn’t an easy option, it’s a panacea, while struggle is unavoidable. A socialist government resulting from sustained struggle would not implement a cash handout while leaving the bosses free to enforce poverty wages. The law of the market says that wages tend towards subsistence. If half of that subsistence is provided by the government the bosses will merely cut wages in half. Instead we would rip up the current property rights of the parasitic billionaire class that does not invest, and ensure there is full employment and decent wages for the majority.
Sooner or later a turning point will be reached. The CRB payments and corporate welfare cannot be indefinitely financed out of budget deficits amounting to 20% of GDP every year. Inflation and interest rates will begin to rise, thereby increasing debt payments. It can take a few years for this moment to be reached, as the social implications of cutting families and businesses off their supports will be politically unpalatable to whichever government is in power.
Not only is this unpalatable, but the removal of these supports could easily lead to a mass social explosion. This is especially true about the CRB program which is more expansive than similar programs in other western countries. As Milton Friedman said “Nothing is so permanent as a temporary government program.” With a million poor people still on this program, any attempt to take it away could easily unleash a mass movement. This is the main reason why the Trudeau government continues to kick the can down the road, extending the program again and again. However, these supports must be removed at some point. The longer this turning point is delayed, the worse the crisis will be.
How will the anger express itself?
The point of Marxists analyzing economics is not to act like we have a crystal ball, or to speculate on the increasingly irrational gyrations of the stock market. We don’t recommend that workers use the Robinhood trading app to achieve their personal emancipation. The point of analyzing economics is to understand the effect on the consciousness of the classes and the ability of the system to grant reforms. Lenin and Trotsky both explained in the early 1920s that if it is not overthrown the capitalist system will always find a new equilibrium. But this equilibrium will in itself prepare the conditions for future and bigger catastrophes.
Revolutionaries should not have a mechanical view of the relationship between economic conditions and class struggle. The simplistic view that collapse equals revolution can lead to demoralization if a collapse does not immediately lead to revolution, or if there are short intervals of upswing in a larger period of decline. As we previously stated, there is no precedent for the current crisis and all perspectives are conditional. Political and subjective factors, including the role played by particular individuals, can often be decisive and overrule economic and objective factors.
What we can say is that we do not know how the capitalists can get out of the current crisis and neither do they. The general economic trend downwards means that reforms will be rare and attacks on the workers frequent. Even when the workers face political setbacks due to poor leadership, the bosses will not be able to consolidate their position with economic advances. A prolonged period of revolution, counter-revolution, wars and instability is ahead of us. Indeed we are already in this period. The main barrier to ending this impasse is the leadership of the workers’ organizations.
The union bureaucracy, safely working from home with pay far higher than the workers they represent, has actively resisted any talk of work refusals. There have been waves of spontaneous refusals amongst teachers, transit, construction, and postal workers, but they have overwhelmingly been independent of the union structures. Often the bureaucracy unites with management to get workers back into an unsafe workplace while relegating the concerns to a committee that will take months to act.
Due to pressure from below, union leaders are belatedly coming to support demands for mass testing, increased physical distancing, sick days, and other reforms. But what is notable by its absence is any support for militant actions that could successfully achieve these reforms. The Canadian labour movement finds itself behind US labor where there have been teachers’ strikes against unsafe school openings and a wave of other disputes. In Britain, the teachers threatened to strike and forced the government into a humiliating climbdown.
This failure to support direct action has absolutely nothing to do with a supposed low level of class consciousness amongst the workers. The workers are increasingly angry and willing to act. But this is hard to do while any mobilization is suppressed by the leadership. In the pandemic there has been a notable increase in class consciousness amongst the working class. Union density is up for the first time in a generation. This is partially due to the fact that lay-offs have been more pronounced in non-union workplaces, but there is also anecdotal evidence of union drives being more successful. The successful Toronto Aquarium drive is one example of this trend. During this drive management launched a textbook anti-union intimidation campaign. Usually this results in workers being scared into voting no, but this time it angered the workers so that more of them voted yes than signed union cards. Workers are more and more likely to want to join a union given the opportunity.
This pressure from below is sure to lead to an explosion in the labour movement, but for the present time the bureaucracy is doing everything it can to tighten the screws on the pressure cooker of the class struggle.
A key feature of the epoch we live in is polarization. This phenomenon is more or less pronounced in every country. Canada has not yet reached the levels of polarization of Britain and the USA for example, but it is on the same path.
Academics, liberals, and reformists bemoan the so-called “rise of the far right”, but they do not see the entire picture. A more accurate characterization of polarization is not the “rise of the far right”, but the collapse of the middle. The crisis in society discredits the representatives of the status-quo, as the status-quo is clearly failing the majority of the population. This process cannot be understood by academics and liberals because it is precisely their system and their politics that are being rejected for very good material reasons. The reformists, in as much as they act as the left face of the liberal status quo, are also rejected.
In the face of the crisis of the “middle”, people look to anti-establishment solutions. These can be anti-establishment ideas of the right or of the left. The right blames immigrants, or refugees, or some kind of “other”. The left blame the rich and those who actually have power. Liberals and reformists like to focus on the right side of polarization because this helps them to neutralize the left. The reality is that polarization is never of equal weight, and frequently leans left. For example, in the USA 54% of the entire population supported burning down the Minneapolis police precinct after the murder of George Floyd, while 45% of Republicans supported the storming of the Capitol building on January 6th 2021. These opinions are both “insurrectionary” from the left and the right, but the right side of anti-establishment polarization only represents 21% of the population vs 54% for the left. Similar numbers are seen with regard to participation in mass demonstrations.
It is wrong to downplay the real existence of far-right individuals and organizations, but it is even more wrong to overstate their power and support in society. The fascists are not about to come to power in Canada, the USA, or anywhere else in the near future. The January 6 “insurrection” on Capitol Hill was more a symptom of the weakness of the far right than its strength. The American ruling class has no interest in going down that road at this stage and is doing everything it can to crack down on Trumpism. The far right and Trump are opposed by the capitalists because they do more to radicalize the majority of the workers than to terrorize people.
Workers’ organizations need to organize defence against the far right, but those who shout “the fascists are coming” unwittingly (or wittingly) serve to promote the status quo. The result of such seemingly left anti-fascism is to downplay the power of anti-establishment ideas on the left, while scaring the left to unite with the liberal status quo. “Vote Biden to stop Trump’s fascism”, etc. Ironically, such popular front unity with liberals is the only policy that is guaranteed to assist the rise of the far right. In a situation where the liberal middle is collapsing, and the majority are looking for radical alternatives, if the left aligns itself with the status quo, the only anti-establishment alternative will be the far right.
In this sense the main threat from the far right is not in their ability to terrorize the working class into submission, but to terrorize the reformist leaders of the workers’ organizations into a closer alliance with the representatives of the liberal status quo. One example of this is the federal NDP successfully calling for the Proud Boys to be added to the terrorism watch list. On the one side it is a positive symptom that the presence of the far right is being taken seriously. But it is important that they be fought in the correct way. To ask the state to police the fascists, while the police have been enabling them and their leaders have been revealed to be police informants, is the height of naivety. The terrorism watch list of the Canadian state shouldn’t be expanded, it should be abolished. Now that these repressive state forces have been legitimized by representatives of the workers movement it makes it far easier to use them against the left, trade unions, BLM, and Indigenous activists. But while the Proud Boys will be given all the discretion of a sympathetic state, the full weight of oppression will fall on the heads of those fighting capital.
The Trump movement isn’t going anywhere because the crisis of capitalism is not ending and therefore polarization to the left and the right is here to stay. The workers’ movement needs to organize independently from the liberals and the state in order to defend oppressed communities from the far right. But we also need to lay the blame for the social catastrophe that creates polarization firmly in the lap of the defenders of the liberal status quo. Defence against the far right must be combined with a socialist perspective that explains the capitalist roots of the crisis. Only in this way can we win over those looking for an answer to the impasse in society. Given the protracted nature of the crisis this will be an ongoing debate. Either weakly oppose the right by supporting a failing middle, or resolutely fight the right while explaining the failure of the middle.
The bankruptcy of reformism
The social catastrophe is guaranteed to be protracted precisely due to the bankruptcy of the leadership of the workers’ organizations. This is true both in terms of electoral politics and in the trade unions. In the pandemic the unions and the NDP have been almost totally silent, and have just presented themselves as the left wing of the government.
In the first days of the pandemic the NDP was consistently one or two weeks ahead of what the Liberals were going to implement anyway. Instead of making the bosses pay, they proposed the insufficient CERB payment. What is worse, the NDP was the first to propose the corporate wage subsidy. They even bragged about this fact. The wage subsidy has been the main conduit for corporate welfare with large corporations receiving hundreds of millions of dollars at the same time as giving similar amounts in dividends and executive bonuses, all while laying off workers.
When the Liberals suffered a collapse in popularity due to the WE charity scandal it was the NDP that propped them up for a very minor reform to maintain CERB at its old level. It is highly likely that the Liberals played the NDP by pretending to reduce the benefit only to give the NDP something to claim victory for. They also “won” a very minor concession to extend CRB for two weeks to those with COVID and they called this “sick pay”. But subsequently, this non-sick pay non-reform has been a convenient excuse for right-wing provincial governments to refuse to give actual employer paid sick pay. Not just right wing governments, but also the provincial NDP government in BC.
The NDP has been near silent about the billions being gifted to the corporations in bailouts. Instead they propose minor “tax the rich” plans that are calculated to be so modest that they make no real difference. Even when they propose something good, like taking long-term care facilities into public ownership, they delay its implementation for a decade. This will be of little help to the thousands of elderly people facing significantly higher death rates in private homes right now.
Sometimes the NDP appears to have even more confidence in the Liberals than the Liberals have in themselves. They say things like, “the Liberals say the right things, but you need us to keep them honest”. While the Liberals attempt to engineer their own defeat to trigger an election, the NDP struggles pathetically to keep them in power. Absent is any socialist alternative to Liberal corporate welfare. No talk about expropriating the ill-gotten gains of the pandemic profiteers. Without this socialist perspective it is not surprising that the NDP has little different to say from the Liberals.
The capitulation of the reformists is an inevitable consequence of their refusal to break with capitalism. Reformism cannot stand in a period where capitalism cannot afford reforms. But in a situation where capitalism cannot provide profits the only option is between corporate bailouts and nationalization. If the reformists reject nationalization and production for need, they have no choice other than guaranteeing corporate profits out of state funds.
It is therefore unsurprising that the NDP garners little enthusiasm amongst class conscious workers and radical youth. While the party still retains its organic link to the trade unions, it is not likely to be a conduit for struggle in the short term. This lack of enthusiasm is reinforced by the actions of the party bureaucracy that does everything to suppress any organized expression of the left. Pro-Palestinian candidates have been systematically blocked from running for the party. The bureaucracy also took full advantage of a minor error by left-wing MP Niki Ashton visiting her sick grandmother, and they removed her from all caucus responsibilities. It is notable that Ashton was trying to push public ownership and opposition to airline bailouts from her shadow cabinet position. Initially Ashton did not fight back and stayed silent in the face of this attack. Weakness only invited further aggression and the bureaucracy proceeded to stick the knife in when the National Post began a slander campaign mobilizing false allegations of antisemitism. With nothing left to lose Ashton began fighting back. This is an encouraging development which has rallied the NDP left. The April 2021 federal NDP convention was a barometer of the class struggle within the NDP. The bureaucracy was able to maintain its domination with Singh receiving an 87% confidence vote. The apparatus used their control to stifle debate and infuriate the left. But the left is not dead. The party brass were incapable of keeping the Palestine solidarity resolution off the agenda, which went on to get 80% support. Socialist candidate Jessa McLean also received 33% of the vote for party president, which is probably the most accurate measure of the balance of forces within the party.
Nature abhors a vacuum and the pressure for a political expression of social discontent is building constantly. Typically the NDP would be such a conduit, but if this outlet is blocked the energy will seek other avenues. One interesting symptomatic event was the near victory of ecosocialist Dimitri Lascaris in the Green party leadership contest. The Greens are not an environment typically friendly to socialism. The party establishment is traditionally allied with the Liberals while being hostile to the NDP and unions. Green voters are often more petit bourgeois pro small business, and opinion polls reveal they have social sentiments to the right of both NDP and Liberal voters. The general purpose of the party is to split the anti-establishment vote that may allow the NDP to win more seats.
However, despite lacking the working class base of the NDP the ecosocialists managed to gather 45% of the vote on the final ballot. This success did not happen because the Greens are a good conduit for the class struggle, precisely the opposite. It happened because other more traditional outlets of struggle were blocked. At the time we advised Lascaris’ ecosocialists to unite with socialists in the NDP, in the unions, and unaligned socialists, to fight for a common socialist platform in all these venues. Unfortunately for now it appears that he has decided to keep his activity within the Greens with the idea of building a loyal left opposition to the right wing leadership. This seems to be a poor terrain of struggle going forward, and the Green bureaucracy may soon move to purge the left using fake allegations of antisemitism. But regardless of where Lascaris’ supporters end up, and what role they may play in future developments, the Green leadership election has incredible symptomatic importance. It shows that there is a growing desire for socialist politics that is desperately searching for an expression, in whatever form.
In Quebec, the Quebec solidaire leadership fell in the trap of “national unity” during the beginning of the pandemic, essentially acting as unpaid ministers of the CAQ government. They offered no opposition whatsoever as Quebec was the worst-hit of all the provinces. This approach taken by the QS leadership has undoubtedly contributed to the high levels of popularity of the Legault government.
Faced with anger and pressure from below, the QS leadership has changed tune and has come out more strongly against the government and even admitted that their previous approach was perhaps mistaken. They propose what they call an “anti-austerity shield”, which is a series of measures including taxing the rich and the big companies to fund public services. Other measures include hiring 100,000 new public sector workers, notably in healthcare. While these proposals are more bold than anything else proposed in other provinces, QS implies that the capitalists should accept to pay for the crisis and that we merely need “political courage” to enact such measures. It is possible that by focusing on these measures, QS could become a pole of attraction among the layers of workers and youth radicalized by the economic crisis. In such a context, we would have to patiently explain how the capitalists will do everything to sabotage QS’ plans, and that a mighty class struggle will be necessary to make the bosses’ pay.
Situation ripe for social explosions
Unlike the USA and Britain, Canada has not recently witnessed mass uprisings or mass left wing movements. With one or two exceptions, the class struggle has been mostly subdued in the recent period. The $2000 per month CERB payment also played a role in lessening the most acute impacts of the crisis. But the capitalists would be foolish in the extreme to see this as an example of ongoing stability in Canada.
As we explained above, the question of “who pays” looms over all developments. But even before this question comes to a head there is plenty of combustible material in society. The Black Lives Matter movement in the USA had its reflection in Canada with tens of thousands protesting in solidarity. The Indigenous struggle has repeatedly blown up, with Wet’suwet’en and the Mi’kmaq fisheries dispute. We have analyzed both the struggle against racism and Indigenous oppression at length in previous documents, so we will not repeat that analysis here. But it is important to point out that a recurring feature of these struggles against oppression is an increased class consciousness and class solidarity.
One particularly inspiring example of solidarity was shown amongst mine workers in Baffinland, Nunavut. In response to the negative effects of expanding the mine the local Inuit blockaded the airstrip in this fly-in community, leaving 700 mine workers stranded. Instead of hostility to the Inuit, the workers penned an impressive letter of support, stating:
“We firmly believe that the company should listen to your demands and give you what you want, though even that will likely not be enough. With the horrible history that has taken place in this country, and the ways in which your voices were silenced in the process, what could be enough?”
Class solidarity such as this is the way to defeat the bosses and their state, and it is increasingly on the rise.
There is palpable anger rising up from below that could burst out at any fracture point. There is a growing evictions and homelessness crisis with tent cities becoming a common feature in cities large and small. No sick pay and unsafe work in the pandemic itself could lead to an explosion. Racist police violence is a perpetual issue. Schools and universities continue to be unsafe, while students are forced to pay full tuition. There are increasing workplace closures and layoffs, while bosses get bailouts and bonuses. Union drives amongst highly exploited sectors also have potential. Municipal budget shortfalls could spark fights with city workers. And even if governments delay austerity, corporations may use the pandemic to degrade union contracts, such as seen in the Molson brewery lockout. While CRB/CERB has mitigated the struggle, the cancellation of the program could itself cause an explosion. It is impossible to predict if these or other issues will lead to an eruption, but there are so many weak links in the chain that literally anything could spark off a mass conflict.
While the Trudeau Liberals are trying everything to forestall a social explosion, there is often a different dynamic provincially. The most glaring example of this is in Alberta where the United Conservatives under Jason Kenney have done absolutely everything possible to antagonize the working class and have been criminally negligent in the pandemic. A January 2021 poll revealed that only 27% of Albertans were satisfied with the government’s handling of the pandemic, the worst in the country by 30 points!
Instead of investing in healthcare and reducing class sizes, the Alberta government is laying off healthcare workers and attacking teachers. This has provoked calls for a general strike and even led to limited wildcat walkouts by healthcare workers. The union leaders are trying to keep a lid on things, and the right-wing Rachel Notley ANDP is trying to disassociate itself from the unions, but this may not be enough to hold back the anger of the workers.
Kenney and the UCP are stuck in a time-warp to the old rural Alberta with undeveloped class relations and endless oil profits. His oil-boss backers think they can dictate to the workers like Ralph Klein, with the backing of a solid reactionary voting block. But that Alberta has gone the way of the dinosaurs. Marx explained that social conditions determine social consciousness, and Alberta is no longer a land of cattle and crude. Instead Alberta has an advanced and cosmopolitan working class with a developed class consciousness. The character of the province was irrevocably altered with the victory of the NDP in 2015 and it is telling that despite the betrayals of the Notley NDP government that the party still received 33% in the 2019 election.
The only thing remaining from the “old” Alberta is the angry determination of the people to fight. If the ruling class does not jettison Kenney and embark on a policy of concessions then it seems like a decisive conflict is inevitable. It is possible that it is too late for concessions to calm things down, as even partial victories would increase the confidence of the workers to fight to regain what has been lost. As they say, appetite comes with eating. Those in the east of Canada who have elitist ideas about “backwards, red-neck Albertans” are about to have a big shock as Alberta becomes the front line of the fight against austerity. It is imperative that the forces of Marxism in Alberta grow and prepare themselves politically for this conflict.
Support in the polls for provincial leaders has generally been tied to performance during pandemic with Kenney coming in dead last. However, the situation in Quebec seems to defy all logic. Rightwing premier François Legault has, by any measure, completely bungled the management of the pandemic. However, he remains the most popular premier in the country.
There are a few things that can help us to explain this. First, the CAQ is a new party. For decades the two establishment parties traded power back and forth while workers’ living conditions suffered. Both the Liberals and the PQ imposed austerity measures and attacked the unions while the CAQ for all of their faults, have not yet decisively attacked the working class as a whole. In addition to this, the Liberals, and to a lesser extent the PQ are still largely remembered as being tarnished with corruption scandals which people are not happy to go back to.
Moreover, the arrival of the CAQ breaks with the sterile dichotomy between federalists and sovereigntists which has marked Quebec for nearly 50 years, which is a welcome development for many. This is reflected in the fact that CAQ voters are as divided on independence as Quebecers are in general. While 35% of CAQ supporters would vote for independence and 51% against, 32% of Quebecers in general support independence, while 56% are against.
However, this doesn’t mean that the national question is buried. In fact, Legault is a staunch nationalist and his manipulation of nationalist sentiments among the Francophone population is precisely the reason for his rise to power. He has temporarily succeeded in recreating a right-wing, identity-based nationalism similar to what existed under despot Maurice Duplessis during the Great Darkness.
More importantly, over the 15 years since its creation, Quebec solidaire has plotted a steady trajectory rightwards, moderating its criticism of the capitalist parties. This was clearly seen during the pandemic where, as we already mentioned above, the party simply joined hands in an unholy national unity with the three main capitalist parties and muted almost all critique of the government’s management of the pandemic. This has also been complimented by a drift in a more nationalist direction which led the party to be unable to fully oppose such reactionary laws as the CAQ’s Islamophobic law 21. The unions have so far also failed to mount a serious opposition to the Legault government. All of these factors combine to explain the contradictory situation in Quebec.
However, it would be incorrect to think that Legault’s seemingly impenetrable levels of support can last forever. Quebec has historically swung from moments of national unity to vociferous class struggle in the blink of an eye. The Quebec bourgeois have a vested interest in placing a veil of nationalist fog over the eyes of the workers and youth so they forget that their main enemy is at home. But this has its limits. The provincial debt has expanded beyond all control and Legault, sooner or later, will attempt to pass the bill onto the workers. Any little crack in the situation can reignite the flames of class struggle in Quebec.
How to fight the crisis
Again and again and again the crisis of society comes up against the capitalist system of production for profit. Under capitalism everything must produce a profit. But the profit motive forms an absolute barrier to resolving the pandemic and resolving the economic needs of society.
The profit motive delayed the necessary lockdowns to manage the pandemic. The profit motive stopped the necessary investment in staffing and PPE in long term care. The profit motive kept non-essential businesses unsafely open, as closure means bankruptcy. The profit motive enforces intellectual property and production bottlenecks in vaccine production. In the final analysis, the short-term profit motive damages long term profits by prolonging the pandemic.
A society that produces for need would not face any of these problems. Bars and restaurants facing necessary shut down orders wouldn’t need to generate profit and could simply reopen when safe. Workers in these sectors would have their wages guaranteed, and could be retrained as contact tracers during the crisis. Workers’ control of genuinely essential production would assure that all the necessary safety measures are followed, instead of shortcuts in the interest of profit. One year into the pandemic there are routine violations of basic health and safety regulations causing mass outbreaks and death.
But apart from the pandemic, the profit motive is also an absolute barrier to the development of the means of production. Capitalism is based upon a fundamental contradiction in that it develops the means of production as if there were no limits, while also imposing limits by pushing down the power of the workers to consume. Capital must always accumulate, and therefore must always yield profits, but it cannot yield profits if the workers cannot buy back the products they have just created. Capitalism creates a crisis of overproduction at the same time as it creates unemployment and poverty. There is too much wealth for the continued production of profit, but not enough wealth for the meeting of human needs.
The stagnant productive forces of society can only be unleashed by freeing them from the fetters of the profit motive. This reality also explains the total bankruptcy of the reformists who are not willing to break from capitalism. In a social, economic, and health crisis of this depth the only alternative to nationalization, workers’ control, and socialist production for need, is corporate welfare. If the capitalist system cannot produce profits itself then it must turn to the state to gift them to it. The fact that this violates all the laws of capitalism is neither here nor there. All that matters is that the bosses continue making profits, even if they have abandoned productive investment.
Eventually the contradiction between a failing profit motive propped up by corporate welfare, and the needs of the people will explode. Why should these corporations be bailed out while they lay off workers? Why should they give executive bonuses and share dividends while they refuse to invest? Why is the value of corporate bailouts greater than the market price to nationalize essential production?
The contradictions in the means of production by necessity bring forth the consciousness of the socialist solutions. The failure of the profit motive brings forth the idea of production for need. Eventually the call for nationalization, workers’ control, and a democratic socialist plan of production will be seen as the only solution. The reformist leaders who have no solutions beyond corporate welfare will be pushed aside in favour of those calling for nationalization. But it is the task of the revolutionary wing of the movement to make conscious the unconscious strivings of the workers. That is the task for the coming period.
The need for revolutionary leadership
The situation is truly without precedent. Never in the history of the capitalist system has there been such a huge crisis on every level combined with a near complete absence of leadership of the working class.
If revolutionary socialists led the mass organizations of the working class, Canada would currently be in a pre-revolutionary situation. The scandal of trillions of dollars of hoarded dead money, massive bailouts for the rich, executive bonuses and dividend payments, while there are layoffs and workers dying due to profiteering, is enough in itself to cause a pitchfork rebellion. But it needs organization to educate the workers of these facts and provide a structure where the class anger can be expressed.
Not only is there a lack of leadership helping to make conscious the partially formed desires of the workers, the leadership that does exist is doing everything in its power to hold the workers back. They call off every struggle before it has begun and tell the workers that they are weak and not strong. The workers’ leaders are the main proponents of corporate welfare instead of nationalization, workers’ control and socialism. Therefore, the process of radicalization will be prolonged and arduous, and the barriers to struggle will be high. Leadership and organization really matter.
There is a huge contradiction between the objective crisis and necessary tasks needed to escape the catastrophe, and the subjective strength of the revolutionary leadership of the workers and the oppressed. The crisis of capitalism will force the workers into struggle, but bad leadership will mean that most of these struggles will go down to defeat. However, the continuation of the crisis will not allow the capitalists to stabilize the system and the cycle will repeat with new outbursts of struggle.
Some academics tell us that the working class no longer exists. These are the people comfortably working from home during the pandemic while essential workers, many of whom are people of colour, deliver items to their door. The irony is sickening. The reality is that the working class has never been so strong. The strength of the working class is another element limiting the power of the ruling class to instill a reactionary social equilibrium. The old class base of rural reaction has been significantly diminished. But many of those who have accepted the ideology of erasure of the workers are the workers’ leaders themselves. The workers are materially strong while being ideologically weak.
This contradiction between objective and subjective factors, between tasks and ideology, between potential strength and lack of organization, will not last forever. An idea becomes a material force when it grips the consciousness of the masses. Increasingly, by a series of progressive approximations, this contradiction shall be resolved. Old leaders unwilling to fight will be replaced by new representatives more reflective of the wishes of the mass. In turn these individuals will be surpassed by the radicalizing movement and replaced. Old left wingers used to preaching in the wilderness will suddenly be surprised that thousands want to hear their ideas. Even some former right wingers may be shocked at the popularity of more militant politics and will be pushed further to the left. This is the story of Tony Benn, the leader of the British left in the 1970s and 80s.
The above process will be significantly facilitated by the action of Marxists. An individual Marxist in a workplace whose ideas were ignored in the past will find all their co-workers coming to them for answers. The task is to train worker-revolutionaries in the years before such events so they have the ability to answer those questions. Revolutionaries need to skillfully learn the lessons of past struggles in order to gain the ear of the mass, and earn the right to lead. Using united front tactics to further the struggle, the Marxists will fight hand in hand with militant workers and learn from them. Transitional demands will be a necessary bridge between the present consciousness, and the present preoccupations of the working class, and the necessity for socialist revolution and Marxist organization. Each individual injustice is a concrete manifestation of the generalized crisis of capitalism as a whole. Revolutionaries need to learn how to connect with the concrete issue that brings people into struggle and politicizes them, and then walk them across the bridge to understand the general processes. These skills do not come automatically and are inseparable with the common endeavor of building a revolutionary organization.
Until we can build a revolutionary organization that is seen by the working class, the disequilibrium in society will continue. The circular process of revolt, defeat, and new revolt will continue. The capitalist system will continue destroying the lives of working class people, promoting racism, gender oppression, war, environmental destruction, and every other evil imaginable. We cannot allow this to continue, we must build an organization that can help the workers overthrow this rotten system.
In Canada and internationally the International Marxist Tendency has been advancing with great leaps forward. More and more workers and youth are coming to understand that isolated struggles are no longer sufficient and are seeing the need to unite in a common revolutionary organization armed with the ideas of Marxism. Sooner than we think, Marxists can begin to become a factor in the equation of the class struggle. But only if we work now to train the revolutionaries that can connect the finished program of Marxism with the unfinished and unconscious strivings of the masses. Our task is to overthrow capitalism, and to build a movement that will change the course of human history.