Which Way for Quebec: Green Capitalism or Ecosocialism?

October 24, 2009

Climate and Capitalism previously published one section of Marc Bonhomme’s speaking notes for a presentation he made to the Association de défense des droits sociaux du Montréal métropolitain on October 13, on “Which Way Out Of the Crisis?” Thanks to Richard Fidler, we now have a translation of his notes for the entire talk.

A. BACK TO NEOLIBERALISM

This option means going back to pure competition, company against company, country against country.

At the company level, minimizing costs, essentially wages.

Minimizing companies’ and wealthy individuals’ taxation, hence decreasing governments’ social spending.

The Economist, the leading magazine of global neoliberal capitalism, advocates a return to the old regime though correcting the phenomenal current account imbalance between the USA and China:

“But instead of relapsing into the global imbalances that prevailed before the crisis, a new modus vivendi is possible: America could offset the inflow of capital from foreign central banks with an outflow of capital of its own. It can borrow ’short’ from emerging countries, satisfying their demand for safe, liquid securities, even as it invests ‘long’ in riskier but more rewarding assets overseas. … Given that its households are saving again, it will have more capital to provide. … This suggests an alternative to industrial policies in both the rich and the poor world. … Moreover, greater outflows of capital from America would weaken the dollar, allowing America’s trade balance to improve.” (A special report on the world economy. Economist, 3/10/09)

In other words, to solve the crisis of neoliberal capitalism, still more neoliberal capitalism is needed… seasoned with a still more spicy sauce of American imperialism (But I must be mistaken, since its Commander in chief has just received the Nobel prize for peace!) How cynical can you get?

B. THE SWEDISH SOLUTION, OR THE ILLUSION OF INDUSTRIAL CAPITALISM

The Scandinavian model, especially the Swedish one, is only an apparent exception. Its social spending is oriented towards increasing the productivity of labour. Everything else is simply cut back. The Swedish exception was possible only because of an institutionalization of class collaboration in 1938 preceded by an intense class struggle between the two world wars and accompanied by a major accumulation of industrial capital during these wars, especially the second one thanks to a pro-Nazi neutrality followed, in the Cold War era, by a pro-NATO neutrality.

“Following the war, Sweden took advantage of an intact industrial base, social stability and its natural resources to expand its industry to supply the rebuilding of Europe. … Social democrats imposed corporatist policies: favouring big capitalist corporations and big unions…” (Wikipedia)

The Swedish model began to decline in the 1970s, and went into a deep crisis in the early 1990s following a major financial crisis which started in real estate, with drastic consequences on the economy. This crisis led to many privatizations, including a major part of the public transport system and the post office, and also to competition within the healthcare system between public and private hospitals, as well as individual vouchers allowing families to choose private instead of public schools. As Canada became part of NAFTA, Sweden became part of the European Union, both free trade areas. Public spending fell as sharply as it did in Canada, and for the same reasons: an investment strike and capital flight followed by the foreign takeover of many icons of Swedish capital. Today, the decrease in growth of GDP, the unemployment rate and the growth in the public deficit are more or less the same as they are in Canada.

Sweden and Canada are both subordinated imperialist countries within their respective free trade areas, which they joined once they had their backs to the wall. This increases the sensitivity of both countries to the “free” capital movements of a handful of financial and industrial foreign and national transnationals that are relatively less dependant on their respective national markets. However, the smaller size of their national markets allows them, if need be, a quick adjustment of their exchange and interest rates to absorb an abrupt change of capital flows, without an immediate response by the great powers. Monetary policy thus gives more time for budgetary, fiscal and structural adjustment – but requires that the bourgeoisie confront any mass movement in opposition to cutbacks while giving international financial centres guarantees of greater commercial and financial access.

The dead end of the Swedish model poses an underlying question: Is it possible to save the (capitalist) economy against finance? To answer this question, the role of finance must be properly understood and certain distinctions must be made:

The reverse is true. Higher profits from lower wages and reduced taxation of corporations and high incomes cannot be invested at the average profit rate for lack of sufficient purchasing power of the proletariat and governments. Profits are then converted into loans to companies (leveraged buy-outs are especially perverse because they transfer to the purchased company the loan used to buy it); to governments (which become even poorer and more politically dependant on capital because of the service of the debt); or to the workers themselves – who also become poorer and more dependant.

Finance is as necessary to capitalism as the sun and rain are to agriculture.

A choice between a “good” capitalism which invests in production and a “bad” financial capitalism that speculates is no choice at all.

C. GREEN OR VIRTUOUS CAPITALISM (THE SWEDISH MODEL REVISITED)

A foretaste: the “green” pricing announced by the Quebec Liberal government:

These rates and taxes are in fact regressive indirect taxation because they are all the same irrespective of one’s income, notwithstanding that low-income workers spend a higher proportion of their income on consumption, especially of food.

These new so-called “green” taxes are a foretaste of the larger carbon taxes, already existing in Sweden, British Columbia and elsewhere: that is, taxing products and services in proportion to the hydrocarbon content used either directly or indirectly to produce them. Note that the so-called carbon or “pollution rights” market plays exactly the same role but by bypassing the State budget, although state intervention is sorely needed in order to fix quotas and establish legal mechanisms of surveillance and sanction.

This new fiscal pressure on working consumers, especially the most vulnerable, will be compensated by a tax decrease on individual income, profits and capital in the name of the neoliberal dogma of fiscal neutrality, that is, maintaining the taxation pressure at a constant level proportional to GDP.

Capitalism cannot be social and green: it is accumulation without end.

A monopoly – because of a unique technology, a network hard to match, a natural resource deposit with a very low extraction cost, protection by the State – may for a time isolate itself from the law of competition. But these monopoly profits, in fact a combination of an average profit and of a rent, are made by lowering the average profit of the non-monopolistic companies.

Some companies might be somewhat attracted by ecology because it could reduce their energy bill while others might turn toward ecology to respond to a profitable demand for green products.

For never-ending capital accumulation, there must be a never-ending annual increase in green energy, which will create more and more pollution; too much of a good thing becomes a bad thing – and eventually reaches some limits.

The ecological crisis imposes the urgent need to begin right now to reduce greenhouse gas emissions in the atmosphere in order to attain the 1990 level by 2015 (the Kyoto accord required the imperialist countries to do a lot better but the USA, Canada, Japan and Australia simply did not care).

Priority must be given overwhelmingly to energy conservation and efficiency:

The reduction in the production of energy and cars which would result from these policies runs counter to the accumulation dynamic of capital.

D. ECOSOCIALISM

To avert an ecological crisis, the United Nations says, a country like Canada must, by 2020, reduce its greenhouse gas emissions by 40% from their 1990 level, and by 90% by 2050. Quebec’s emissions in 2007 (the latest statistics) were 5% above the 1990 level, and Canada’s 20%.

A turnabout like this must go far beyond changes in individuals’ behaviour, which in any case are quite limited by the social structures. (How can one do without a car when one lives in a suburban bungalow – the only way a family can be adequately housed at a price that is affordable even if the bank has us by the throat and the public transit system is more than deficient?)

The ecological revolution, if it is to succeed, must be combined with a revolution in social justice and democracy which in any event is a goal in itself. This combination is called ecosocialism.

The economic crisis makes a large number of workers, equipment, machinery, and buildings available, albeit involuntarily, for major ecological construction projects.

The governments’ response to save finance showed that there were tons of money available for requisition.

Independence would allow this money to be mobilized through the democratically controlled Bank of Quebec, once the banks and other financial institutions situated in Quebec had been expropriated. It would mean that:

An ecosocialist Quebec is a Quebec of full-time jobs for all, with decent wages and working conditions, and quality, free universal public services and social programs with no wait lists. Poverty could be reduced to zero.

The minimum wage should be set at 50% above the Statistics Canada low-income threshold, at $18 an hour for a single person in a major city based on a 35-hour week; a guaranteed minimum income should be indexed to the StatsCan low-income threshold level (e.g. $1800 per month for a single person in a major city); and expenditures on public services and social insurance programs should be increased immediately by at least $10 billion per year.

A five-year mandatory program of ecological infrastructures costing $100 billion or more, to be completed by 2020.

Is this realistic?

In the dead of night a lad is searching for a diamond in the grass under a street light. A passerby offers to help him. He replies, “No need to help me. I lost it 100 metres from here.”

Taken aback, the passerby asks “So why are you looking here?”

“Because there is some light.”

That’s the approach of the supporters of green and social capitalism.

Ernesto “Che” Guevara used to say: “Let’s be realists and demand the impossible.” Realist means sufficient to fulfill our social needs, including democracy. Impossible means impossible under capitalism.

At this point, in Quebec, neither the trade unions, nor the national coalitions of students, women, environmentalists or popular movements, etc., or the political parties – not even the Green Party or Québec solidaire – are realists.

Preston Manning, the founder of the reactionary Reform Party, urged the members of his tiny Alberta party, which everyone was laughing at, to “think big”. Today this party, having swallowed the Conservative Party, is the leading party in Canada and may be in the process of replacing the Liberals as the “normal” party of the bourgeoisie.

Let us dare to “think big” … on the left.

We will get there through Estates General of the popular movement to organize a mass-action response that could lead to a general strike;

the major confrontation shaping up for 2010-2011 between the government and the public sector unions is an opportunity.

Toward an ecosocialist independence.

Comments

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One Response to “Which Way for Quebec: Green Capitalism or Ecosocialism?”

  1. Joseph Dubonnet on October 31st, 2009 12:10 am

    love the idea of an eco-socialist society by 2011!

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