Category Archives: Economics

Using the Bank for the Public Good

The Harper government is about to attack the most vulnerable Canadians, the elderly, with a draconian series of government spending cuts. At the same time, they’re only too happy to subsidize the oil and gas sector, and to pour money into wasteful, murderous wars.

It doesn’t have to be that way, and not a single law needs to change. The Federal Government has the authority, under the Bank of Canada Act to fund government operations by creating interest-free bank money (credit or debt) through the Bank of Canada. See Article 18, Section C.

The Bank of Canada is held in trust for the people of Canada by the Finance Minister, Jim Flaherty, who will not use the Bank as intended by the Prime Minister who nationalized it, MacKenzie King. No finance minster since Jean Chretien has used the bank as intended – to create public credit at zero interest – and our massive national debt, more than 90% of which is compounded interest, is the result.

Likewise, here in Toronto, the public is being told “there’s no money.” What’s true is that the private banks refuse to create it without costly interest. The private banks are only interested in their own profits, which they make by virtue of having an immoral monopoly on the creation of bank credit, and through speculative investments. These generate massive windfall profits and bonuses for top management, but they only add costs to the real, productive economy, which  banks around the world are throwing under the bus, along with democracy itself. One only has to examine conditions in Greece and Italy, where two democratic governments have been replaced by unelected “technocrats” or those in many US cities, which are under the rule of  unelected”Emergency Managers” empowered to cut spending, even if people lose their homes, starve and die. This could soon be the City of Toronto’s situation, if we do not act together.

We don’t need the private banks to create our money. We must bring finance under democratic, public control. That means reclaiming the power to issue currency, to manage the size of the money supply, and to direct newly created credit towards public purposes, and away from speculation on the prices of financial and other assets. Until we take back this power, any other victories we win will be hollow.

Occupy the state

From X-Ray Magazine # 36...

In the two months since Occupy Wall Street began its experiment in direct, democratic dissent, “democracy” of the liberal kind has revealed its bankruptcy to the whole world.

In the last sixty days the neo-liberal, let’s call it the “post-democratic” state, its various organs cooperating across jurisdictions and across national borders, launched a coordinated attack upon our rights to freely assemble, associate and speak.

In Oakland as at UC Davis, the radical violence of the cops was inflicted upon hundreds of the innocent and unarmed, and in Toronto and New York the radical violence of the law proved that under post-democracy, flimsy legal reasoning can be a powerful tool of oppression only so long as we continue to respect liberal, post-democratic legalisms.

We have seen two elected national governments, Greek and Italian, close up shop, transferring business to a new proprietor—the so-called “Troika” of the International Monetary Fund, the European Commission, and the European Central Bank.

The abortive decision, quickly reversed, to hold a Greek referendum on the savage austerity measures being imposed upon Greek workers and Greek democracy was a disaster—for the markets.

A military coup was being prepared to prevent it if necessary. But it was not. Greek liberals and social democrats combined to carry out a coup against themselves. No sooner had Papandreou fired the commanding officers of the Greek Army, Navy and Air Force, he himself ran away.

The new Italian Prime Minister, Mario Monti, named an entire Cabinet with not a single elected representative in it. Bankers, business owners and technocrats were simply parachuted into the government of a “democracy.”

No elections were held to make these two transfers of state power legitimate. In a very real sense, the Italian and Greek states are now under the direct control of central bankers, the people be damned.

But these “technocratic governments” are not a novelty. They merely formalize and bring out into the light of day the longstanding relationships of power. Now we can really see who calls the shots.

In the United States the powers of the US Congress have been devolved to a “Super-Congress” of twelve people with deep connections to the US corporate establishment.

We are witnessing something unprecedented.

Both the 1% and the 99% are realizing that liberal “democracy” holds nothing more for them. They are reaching the same conclusion, albeit based upon two entirely opposite political perspectives, and conflicting sets of interests.

For the 1%, even the largely pantomime rituals of our “democratic” elections, with all their stage-management and scripting are too risky to their continued accumulation of super-profits to be allowed to continue.

They have come to rely on a guaranteed and ever-increasing flow of wealth into their own pockets, from us, to them. Since neoliberal, structural adjustment “reforms” were imposed upon the world in the 1970s, at the insistence of the corporations, the wages and benefits accruing to the 99% have stopped growing, and the 1% have monopolized the financial wealth and income generated by a growing economy.

The crisis for both the 1% and the rest of us arises in part, from the fact that the economy can no longer continue to grow in absolute size on a finite planet featuring a shrinking common stock of natural capital.

Growth cannot continue on a planet where there is no place left unexploited and nowhere that is not already full of our waste, or full of us. The ongoing orgy of financial speculation—of trillions of dollars of bets on essentially phony “assets” – was the last-ditch attempt of the 1% to both delay the onset of the final crisis, and to transform “crisis into opportunity.”

To accommodate an ever more predatory capitalism, liberal “democracy” first had to be structurally adjusted, along with the economy. Then it had to be abandoned altogether. Elections had to be rigged, political parties hijacked. False flag terror attacks had to be staged, the predetermined victims blamed.

Nations had to be invaded on false pretexts, the bodies buried. Inalienable civil rights had to be made alienable. Millions had to die. A vomitous river of lies had to be told, and sold. All to keep the capitalist balls in the air, all to keep the system limping along.

The capitalism system should have collapsed in 2008. Its life was extended by means of a central bank trick: the creation of an immense amount of new fictitious “wealth” in the form of bank created credit.

But this only made the inevitable reckoning that much more catastrophic. Instead of being used to facilitate production, which would have made the credit economically useful, this credit was used to backstop the insolvent speculators and their derivative bets.

As of 2011 and 2012 the mask is falling away.

If the 1% are abandoning liberal democracy because it no longer provides iron-clad guarantees of free profits from their debt slaves, the 99% are looking for new, more participatory democracy because the old, “liberal” kind can no longer protect them from the rapacious greed of the 1%.

It is a very difficult conclusion for many people in liberal “democracies.” It is often a conclusion reached only with extreme reluctance. Rarely is it embraced. But it is no less true for that.

We, especially those of us in the English-speaking world, have been educated our whole lives to equate the existing constitutional set-up with democracy.

We have been taught – wrongly – that a system of preference elections, political parties (with a combined membership of less than 2% of the population) and professional politicians is tantamount to democracy.

We are taught – wrongly – that our constitution, our courts of law guarantee our freedoms. In fact, only our disobedience of the law, of what Erich Fromm called “irrational authority”, guarantees our freedom.

As the former US President once put it, a constitution is nothing but “a goddamned piece of paper” – at least when those entrusted with enforcing it no longer hold its fundamental principles dear.

We are living in that time, when our own governments have created the apparatus of a police state to maintain their political control. Liberal “democracy” is a sham.

It’s not just me.

That’s what Ronald Regan’s former Assistant Treasury Secretary calls it. Paul Craig Roberts writes:

“Every day that passes adds to the fraudulent image of Western Democracy…  it turns out that ‘we have freedom and democracy’ is not supposed to be taken literally. It is merely a propagandistic slogan behind which people are ruled through back-room deals decided by powerful private interests.” He’s right.

The Guardian’s Peter Beaumont declares: “democracy itself is failing.” He’s right.

Cenk Uygur of the Young Turks declares liberal democracy kaput when lobbyists can openly buy American laws they want drafted. He’s right too.

Linda McQuaig notes: “democracy has become a hollow shell.” She’s right.

Glen Greenwald, commenting on the brutal police attack on peaceful passively resisting student protestors at UC Davis, as well as the inhumane treatment of Bradley Manning, describes American “democracy” as “a police state in pure form.” He’s right, and his insight is worthy of further scrutiny:

“The intent and effect of such abuse is that it renders those guaranteed freedoms meaningless. If a population becomes bullied or intimidated out of exercising rights offered on paper, those rights effectively cease to exist. Every time the citizenry watches peaceful protesters getting pepper-sprayed—or hears that an Occupy protester suffered brain damage and almost died after being shot in the skull with a rubber bullet—many become increasingly fearful of participating in this citizen movement, and also become fearful in general of exercising their rights in a way that is bothersome or threatening to those in power. That’s a natural response, and it’s exactly what the climate of fear imposed by all abusive police state actions is intended to achieve: to coerce citizens to “decide” on their own to be passive and compliant—to refrain from exercising their rights—out of fear of what will happen if they don’t.”

It reminds me of Fromm’s insight that freedom to think and speak only has meaning if one actually has original, self-generated thoughts of one’s own to speak. Freedom to merely repeat the received nostrums of authority, what Fromm calls “heteronomous obedience” is the freedom of a slave to love his chains. Real freedom means the capacity to disobey irrational, external authority.

But the debt slaves are beginning not to fear. Some of us are taking our freedom. The violent, illogical response of the authorities reveals their illegitimacy.

With the occupation camps mostly dismantled, the question arises as to what next. This is where it gets interesting, and where the limitations of the reformists and of liberal democracy to contain the hopes and dreams of Occupy become clear.

The Toronto Star recently ran an opinion piece by the seasoned journalist Olivia Ward with the title, “Will Occupy movement find a place in history?” She offers several potential routes toward such a place.

We can “educate, build a social network, co-opt authority (fat chance of that!), speak to power, agitate for proportional representation (too little too late) and spread the message.” But to what end?

Though her article begins with a story about the beginning of the revolution in Serbia, nowhere does she admit to the possibility that a revolution is what we require here in liberal “democracies.” Nor could she be reasonably expected to openly voice such sentiments in The Star.

But a complete revolution, a complete takeover and dismantling of the Canadian state, and of every other liberal “democracy”, is exactly what we require. We need to have a real democratic revolution.

The democratic revolution is not going to be confined to nation states. It’s going to be both global, and local. The revolution is global because it speaks to the universal need of humanity for freedom, autonomy and independence. It will be local as those universal values find their expression in each community, in its own way.

The democratic revolution has the potential to become the fulfillment of the promise of the Western Enlightenment; the creation of a rational, self-directed society of independent producer-citizens in free association, and a return, ad fontes, towards the ancient sources of participatory democracy. There are encouraging signs that this is happening.

In Greece and Italy and Egypt, in New York, Toronto, and in all of the Occupy protest camps, the direct democracy of the Assembly was put into practice to make decisions. Rule of a simple majority – or of minority parties claiming to represent a majority – was rejected as anti-democratic.

In essence, these assemblies are an open rejection of the fundamental premise of representative, liberal “democracy.”

It’s a dual premise: that assembly democracy is not practical, and that it is not desirable because the people are not fit to rule the state. The Enlightenment critique of classical democracy is where the ruling class mythology of “the mob” arises. The Occupy experience, and the experience of months of revolution in Egypt, have put paid to that lie.

The liberal state was designed in an age just emerging from domination by the landed gentry. Most people were still illiterate when our representative institutions were created. But today we enjoy universal literacy and widespread higher education.

As Jefferson put it, “we might as well require a man to wear the suit of clothes which fitted him as a boy, than society to remain under the regimen of its barbarous ancestors.”  We have grown up. Our system of government remains a spoiled child.

In Iceland, that other great democratic device, of selection of political offices not by election, but by lottery has produced a new constitution. In 2009, one thousand Icelanders were randomly selected from the voter’s list and met in an assembly called the Thjodfundur, the National Assembly.

The Assembly drafted an outline of the guiding principles of a new constitution. The following year a constitutional committee was elected from candidates nominated by the citizens to draft the new constitution. Citizen participation was encouraged through the Internet, where the constitution was essentially crowd sourced.

The participatory nature of Iceland’s renewed democracy is a step in the right direction. The citizen body is taking on the role of legislator.

While not a revolution by itself, the Icelandic constitution is certainly a giant step away from the 18th century liberalism of the US Founders and of the conservatism of Edmund Burke, the two schools of thought to whom Anglo-Saxon “democratic” institutions owe their current forms.

Those forms have reached the end of their useful existence, for both rulers and ruled. A democratic revolution is coming. Participate! (X)

Greece says No!

Greek Prime Minister George Papandreou is either very stupid, very smart, or perhaps very frightened. My bet is some combination of the first two, and definitely frightened.

His decision today to submit the European bailout package – a euphemism for suicide to ordinary Greeks who would be crushed by its immense weight – to a referendum of the Greek people is likely a gambit designed to give the embattled PM a viable exit strategy from the death grip of Berlin, while diffusing power of the Greek street. No doubt Papandreou is thinking seriously about the fate of previous rulers of Greece, who were unseated by smaller demonstrations than the ones which marched through Athens last week. Such mass action brought his father to power, and could as well usher him into a prison cell. He must also be thinking about the fate of his eponymous grandfather, deposed by Greece’s last king, and imprisoned by a military dictatorship. The European right wing is musing about a new military Junta for Greece that could “push through reforms.” The choice is clear: democracy, or the bankers.

The question is already being framed, or rather befogged, by the Greek government, with the help of the Guardian, which writes,

“The Greek finance minister, Evangelos Venizelos, said the popular vote – the second to be held since democracy was restored to the country after the collapse of military rule in 1974 – would ultimately boil down to two choices. “Do Greeks want to remain in Europe, with the euro, in a country that belongs to the developed world, or do they want to return to the 60s? Do they think it is good to owe €100bn to the banks or do they not think it is good to live with such debt?””

Perhaps because the Greek people didn’t rack up the debt, they think they should not have to pay for it! Their charlatan government offers them a false choice.

Iceland told the bondholders where to put their busy hands. Are Icelanders starving? Not at all. Even Bloomberg’s wire service admits that Iceland did the right thing!

With that affirmation, with that democratic act of disobedience akin to the one which began human history in the Greek myth of Prometheus, a new democracy is now being born. Iceland is re-writing a brand new constitution, crafted by the people themselves, a marvel of democracy. Iceland had a choice, become the “Cuba of the north” by defaulting, or the “Haiti of the north” by agreeing to pay odious debts. Anyone who doubts the rightness of the choice should look up the Charles X Ransom.

The horror with which the European governments and the EU bureaucracy regard the democratic rights of the Greeks – who gave democracy to the world – is revealing. Their palpable fear and loathing is transmitted through the framing of the story.

From the Guardian:

“Sony Kapoor, managing director of Re-Define, an economic thinktank, said: “With the scale of adjustment being asked of Greek citizens, a referendum would be good for democracy and legitimacy, but it’s very hard to see how it can possibly be won.””

That’s right. “Democracy and legitimacy” are hesitantly endorsed, but only insofar as they confer “legitimacy” to decisions already taken, and which are actually opposed by at least 60% of Greeks. The tone suggests that democracy is in the way.

Greece is called once again to show the world that democracy is the way.

is this what democracy looks like?

From this week’s X-Ray Magazine

When I was fifteen, I stopped going to church, and told my mother I was an atheist. Needless to say she didn’t understand right away.

In an effort to explain myself, I played her one of my favourite songs, Panic, by The Smiths. Readers of my vintage, those who were teens in the 80s, may remember the refrain: “Hang, the blessed DJ, because the music they constantly play, it says nothing to me about my life…hang the DJ hang the DJ hang the DJ…” I felt that way about the church in 1986. Today millions feel that way, and then some, about all of society’s official institutions.

When it comes to our collective loss of faith in official politics and the occupation of Toronto’s St. James Park, that great affirmation of faith in ourselves, the Toronto Star’s Chantal Hebert and Thomas Walkom remind me of well-intentioned but bewildered parents wondering aloud why their charges won’t come to heel, and why they stay out all night.

Writing in the Tuesday, October 18, 2011 edition, Hebert has some advice for protestors occupying public spaces in major cities across the country: go home, wait four years, and then vote.

“Hit the ballot box instead of the streets” is her formula for making “real change.”

We’ve done that. It doesn’t work. No political party or politician is offering meaningful change. And certainly none will do so unless they feel an immense amount of organized pressure from below.

Hebert’s suggestion, if implemented, would prevent real change. It would demobilize a movement with the potential to become a real threat to the powers that be in this country. There can be no real change without a real threat to those powers, as Chris Hedges puts it.

Hebert’s suggested option for “change”—voting in our shambolic elections—is based upon a faulty assumption: that a mere change in government from one of the three mainstream electoral parties to another will deliver a change in the way this country works, and for whom it works.

Recent US and Canadian political experience proves that something new needs to be created.

As Emma Goldman once put it, “if voting changed anything, they’d make it illegal.” While the liberal media remains focused on the political Kabuki theatre that is official Ottawa, a large section of the public, notably some of our most idealistic young people, have moved on.

During the first week of the occupation, Thomas Walkom spent a day looking for policy wonks in St James Park, didn’t find any, and came away with the impression that Canadians had no domestic reason to be on the streets, and the Occupation had no clear message.

It’s an understandable misunderstanding, as he consigns history, recent and not, to the memory hole. He claims Canada didn’t bail out its banks. Not so. Ottawa provided $125 billion to Canadian banks between 2008 and 2009 through the CMHC, as Murray Dobbin points out.

Is Walkom paying attention to the stories printed in his own paper? Canadian Chartered banks also took advantage of $111 billion in relief from the US Federal Reserve, as they now operate in the United States. TD Bank is now one of the largest banks on the US East Coast, with a branch at #2 Wall Street, which can be seen in many OWS protest videos.

Nobody’s bailing us out. Our social programs are being cut, our best jobs contracted out.

Walkom’s latest accusation against the movement is “simplistic thinking” and “scapegoating” the 1 percent, the super-rich. Not so. It’s Walkom’s own simplistic and anti-historical over-generalization, walking tall as an “analysis” which is at fault. It’s incredibly superficial.

Here’s what he’s missing. For the past 30 years, Canadian society has grown more unequal, and less just. Wages have stagnated, while corporate profits and the income of the super-rich have grown like cancerous tumours on society’s vital organs.

While GDP has gone up, the actual wellbeing of Canadians has declined. The reasons are well known, if seldom ever publicly discussed. Beginning in the mid 1970s the entire political establishment began to dismantle the progressive social and economic reforms of the post-war era.

The phenomenon occurred simultaneously in the United States, Canada and Great Britain. The formerly radical economic notions of Milton Freidman and Friedrich von Hayek became normalized through the influence wielded by a multitude of corporate funded think tanks such as the Fraser Institute, the Canadian Taxpayers Federation, the Canadian Council of Chief Executives, the National Citizens Coalition, and others.

As the infamous Powell Memo details, it was all rather intentionally and consciously done, because the corporate CEOs of the day were threatened by new demands for an economic, social democracy thrown up by that last great movement of the 60’s. Our Prime Minister owes his current job to this new Thirty Years War to enthrone corporations, and defeat democracy.

The Occupation is democracy fighting back, because our elected representatives have fled the battlefield, or else run off with the arms merchants. Young people don’t vote, precisely because they are, as Hebert admits, “strikingly more progressive” than their elders.

The Occupation Movement speaks directly to them, and to older activists such as the author, who have been waiting a decade or more for this moment. Check out this short documentary about Occupy Wall Street.

It speaks to the highest ideals of humanity, making even the late Jack Layton’s appeal for hope and optimism look like the prelude to a great symphonic movement, not its denouement. If it doesn’t make you weep for joy, where is your soul? Who wants to talk to policy wonks when we can talk together about transforming everything?

Young people want to participate, and they want to make sacrifices for their ideals. No political party is able to mobilize them, precisely because the liberal political representative system was designed to limit participation and control mobilizations from below by forcing them into electioneering.

What is there for political party members at large to do outside election season? Walkom and Hebert are like parents telling their children “You’ll never amount to anything!” when those children tell their parents that they are going to strike out on their own, independent path.

And what a path! What we are witnessing is nothing less than the birth of a new, participatory stage of democracy where passive, electoral parties are obsolete. It’s a return to democracy’s 2500-year-old roots.

I’ve been attending the Occupation on weekends and have stood through two General Assemblies. It’s inspiring that young people are willing to spend hours standing in the cold and rain and in mud with freezing feet, democratically discussing not only the tremendous logistical problems of maintaining their society in miniature, but also higher, political questions.

Their completely open process forces people to listen to each other, and yes, it’s very slow, and the group has the combined flaws of its participants. Yes, occasionally a psychiatric survivor hogs the mike.

The people tolerate it for a minute then urge the speaker to wrap it up, not by shouting him or her down, but with a silent hand signal. Everyone is patient and respectful. Some rather half-baked, pet theories are trotted out, to the same general reaction.

Spoken word poetry of a rather middling sort is occasionally imposed upon the Assembly. Some speakers have great difficulty getting to the point, and others don’t have one at all. But these are the exceptions.

The use of the “people’s mike” forces speakers to be concise, and a two minute time limit forces them to be brief. But there are also passionate, articulate and tremendously intelligent voices in the Assembly, and these have mostly carried the day, but often only after hours of seemingly endless discussion. This is not the politics of sound bites, but its antidote.

I also talked to randomly selected people at the Occupy Toronto demonstration on October 15th. What I found was that people think that we need governments that actually listen to the people, and to do what we tell them to do. It’s an idea definitely at odds with the liberal “democratic” notion that the representative is elected to do what the party whip tells them to do.

The people I spoke with thought the job of an MP is to be our servant, our cipher, not to play the kind of backroom, brokerage politics that is the bankrupt bequest of liberal “democracy” to the present generation. Brokerage politics is considered the only fit subject for official journalism. But it’s missing the biggest story going.

If the desired role for an MP is essentially that of a delegate with very conditional authority directly transmitted from the people, what does their party affiliation matter? Do Liberals or Tories or NDPers have a monopoly on active listening? The people who were kind enough to speak to me also want an economic, material democracy. Are they going to get that by voting NDP?

To be clear, Occupy Toronto is definitely NOT a murder of revolutionary crows. There are certainly a few revolutionary activists dotting the landscape, but they mostly disagree about means and ends.

The point is that if this movement grows, that growth will force all of these questions into the world of practical politics, where it will suddenly become clear that for “everything” to change, something’s gotta give. And that something is the entirety of the existing political and economic system, perhaps even the very shape of the state itself.

The demand change everything cannot be met within a system that can’t change a single thing.

So expecting salvation from Ottawa is simply risible. When capital wants to move across borders, the borders come down.

When revolutionary ideas threaten to leap across borders, Canada becomes a “different country.” But no border can stop Canadians from questioning the fundamentals of our “democracy.”

Postscript: A quarter century later my mother no longer goes to church. (X)

democratic fallacies part 1a – Canada

In Canada, where the author lives, 1% of the total population controls 32% of the national income. (5) CEO pay is more than 155 times the pay of the average worker. (6)

Canada is thus a society characterized by a vast inequality of wealth between the rich and the poor. As documented by the Canadian Centre for Policy Alternatives, this disparity is growing ever wider, ever faster.

But who controls the government? A defender of the axiomatic notion of “liberal democracy” would claim that because the Canadian government is popularly elected, Canada is a democracy, and the people control the government.

The recent Conservative government of Stephen Harper was a minority government. (At the time of writing, this government has just been defeated in a vote of non-confidence.) Twice elected, in 2006 and 2009, the government received first 36% and then again 36% of the vote. However, because only 64% of eligible voters participated in 2006, and only 64% in 2008, this government actually only ever enjoyed the confidence of 24% of ALL VOTERS. Put another way, a greater percentage (36%) of the people chose not to vote than voted for the government. We may take a decision not to vote as a vote of non-confidence in Canadian “democracy.” (7)

So we can say in Canada that the majority of the people, – 76% – for the last five years at least, have not controlled “their” government. We have a system which permits minority rule, both in terms of parliamentary seats and in terms of an absolute minority of total votes cast and of all voters. We can say that we have rule by 24% of the people…and the police.

In the 2006 election, the Royal Canadian Mounted Police chief Giuliano Zacardelli personally insisted on leaking to the press the existence of an RCMP investigation into insider trading within the office of the then Liberal Finance Minister, creating an impression of Ministerial criminality that helped push votes toward the Harper Conservatives. The RCMP refused to cooperate with a subsequent public investigation into the matter. The interference of the national police force in a Federal Election was unprecedented.

Equally unprecedented was the defeat of the current government, the only time in Canadian history in which a government has been declared “in contempt of parliament.”

The citation for contempt arose out of the government’s refusal to reveal the cost of several very expensive spending plans; the purchase of new stealth attack fighter jets (they are not for defense purposes) and the building of massive new prisons, despite the declining crime rate. In the Westminster system, no government may spend money without the consent of Parliament. Thus votes on spending bills are considered “confidence motions” – if the opposition votes against the budget, the government must resign. The Harper government refused to reveal the cost of these budget line items, prompting the contempt ruling of the speaker. In this case the opposition parties voted for a Liberal Party non-confidence motion before the budget was presented, and the government called an election.

Who else voted for the previous government? Mostly the rich and upper middle class, as well as the least educated workers. Rich people have a tendency to vote for rightist parties, who mobilize the fears of the public. In Canada the Conservative Party is the choice of the richest people, as the Party protects their interests over those of the poor, many of whom vote for the social democratic NDP. (8)

The Conservative Party used to be a mass party. However like all mainstream parties, its base has shrunk, and now exists as a kind of elite vanguard organization.

The Conservative Party machine does not seem to be an organization rooted in the “common people” according to at least one academic, Mr. Farney, who writes “The organizational history of the Canadian right since the Reform Party was transformed into the Canadian Alliance suggests that strong competitive pressure for Canadian parties to be organized in a cadre manner that minimizes the involvement of ordinary members. Both the Canadian Alliance and Conservative Party of Canada represent steps away from the attempt to emphasize direct public engagement in the name of garnering sufficient public support to win office.” And Further, Mr. Farney observes that “ Power — and policy direction — in the party is extremely centralized, as Stephen Harper has successfully implemented party discipline that is extremely strong even by Canadian standards. This discipline, moreover, seems to be applied not only to the party’s MPs and staff, but also down to the constituency level.” (9) Farney’s observations have been widely noted by the popular press and other scholars. In the current governing party, elected by 24% of the people, we have a picture of top-down control, not “bottom up” democracy.

This top down organization of power has also been reflected in the operation of the Canadian state.

The recently defeated government felt entitled to use the vast resources of the Canadian state to promote the Conservative Party. This is illegal, but the government felt empowered to break its own laws, because it could. When handing out stimulus cheques in 2009, the Conservative government had oversized cheques printed prominently featuring Conservative Party insignia, not Government of Canada insignia. (10) During the so-called “in and out” election financing scandal of 2006, the local candidates used the resources of the national Party to subsidize local Conservative Party electioneering, despite the fact that the national party was approaching its legal spending limits. (11) Minister of Immigration Jason Kenney has been caught using the resources of his constituency office to subsidize fundraising for the Conservative Party, which is also an illegal use of taxpayers’ money. (12) He has also steadfastly refused to release Tamil detainees, despite repeated orders from Canadian courts. His department just ignores them. Kenny also interfered in the Canada Customs and Border Inspection Agency for political purposes when he ensured the refusal of the British MP George Galloway from the country at the request of the Israeli state, and also likely when his department offered Libyan leader Muammar Gadaffi a tourist visa, instead of the type routinely issued to a Head of State. The Canadian government refuses to publish details of its spending, earning it a rebuke from the Speaker of Parliament that it is in contempt. One of its Ministers, Bev Oda, has submitted forged documents to Parliament and lied about it. She is protected by the Government because she obeys orders. And the latest development of such abuse, the government has now instructed all federal agencies (the bureaucracy) to cease to refer to the “Government of Canada” in intra-departmental and public communications, and instead refer to “the Harper Government.” If we live in a democracy, it’s one that conflates the Party with the State, in a manner which resembles the operation of the Chinese Communist Party.

This was most dramatically expressed on two occasions, in December of 2008 and then again a year later when the Conservatives used the Royal Prerogative to “prorogue” or in plain English, suspend Parliament. The first prorogation was in response to an attempt by the Opposition to form a coalition government, something perfectly legal and legitimate. However Prime Minister Harper launched a public relations campaign, casting it as an attempt at treason because the separatist Bloc Quebecquois had agreed to support the Liberal NDP government on supply and confidence motions, despite the fact that Harper himself had similarly cooperated with the NDP and the Bloc in a failed attempt to bring down a previous Liberal government in 2004. Harper deliberately mischaracterized the Bloc as a participant in the new government, when it was not, playing upon common prejudice in Anglophone Canada. The common smear against the Bloc as “traitors” in English Canada is simply a gross lie, as all of its Federal MPs have sworn an oath to HRH The Queen in order to sit in the House of Commons.  Once more a threat to the Conservative Party was conflated with a threat to the state.

Even more interesting in the coalition affair was the role of the federal Liberal Party. The Liberals under Stephane Dion, signed the coalition accord with the NDP, though Dion was scheduled to be replaced as Liberal leader in a party convention the following May. Despite this, the two main candidates to replace Dion, Bob Rae and Michael Ignatieff, signed the coalition accord as members of the Liberal Caucus, and came out publicly in support of it. And then something funny happened…

Ignatieff suddenly broke the coalition deal. Without notifying the NDP, he staged a press conference, and threw buckets of cold water over the whole idea to which he had subscribed. Why?

The answer was only revealed posthumously.

Conservative Minister of Natural Resources Lisa Raitt was secretly taped by her assistant, a certain Ms. McDonnell, the daughter of a politically connected Liberal. While driving around Victoria, Minster Raitt described how on the weekend that the Coalition deal was negotiated, Michael Ignatieff was reminded who really runs this country,

“They did it at the Canadian Council of (Chief) Executives, there was three presidents of major banks who stood up in the room — and this is not from cabinet so I can talk about it — stood up and said, ‘Ignatieff, don’t you even think about bringing us to an election,’” said Ms. Raitt.

According to her, the Bankers told Iggy, “’We don’t need this. We have no interest in this. And we will never fund your party again.’ That was very powerful. So he heard it from very powerful people in the industry. He was definitely muzzled.” (13)

Despite the wishes of a majority of voters who backed the coalition parties, and despite the massive demonstrations which sprung up across the country, Canada’s top bankers vetoed the coalition agreement. Their motto is vote early, and often, and they vote with dollars.

The second prorogation was an attempt to prevent a Parliamentary committee from hearing evidence that Prime Minister Harper and some of his ministers and Generals are war criminals, based on the testimony of a whistleblower in the Canadian diplomatic service who testified that Canadian forces transferred captured Afghans to the US and local forces where they were tortured, and that successive governments knew all about it but did nothing.

Does the Canadian government do the will of the people, or even of 24% of the people, or does the formulation of policy come from an even smaller layer?

In Canada less than 2% of Canadians are members of a political party of any description. Yet it is within political parties, and within think tanks and institutes which report to and which are aligned with political parties that government policy is crafted, and within which our laws are drafted. Put another way, at least 98% of Canadians are entirely outside this process. Lippmann’s idea of elite “democracy” is certainly in operation in Canada.

Among the influencers of the current government are right-wing think tanks such as the Fraser Institute, the C.D. Howe Institute, the Canadian Council of Chief Executives, the MacDonald Laurier Institute, the Institute for Competitiveness and Prosperity and other groups which attempt to influence public policy to benefit private capital: the rich. The rich and corporations have, in the last two decades, convinced successive governments, both Conservative and Liberal to impose spending and tax policies which have shifted the burden of taxation off of corporations and the rich, and onto the poor and the working poor. And it’s worked. The rich are getting richer, and the poor poorer.

The average Canadian household is now $100,000.00 in debt. (14) Debt has been a tool used by the rich creditor to control the poor since the beginnings of human civilization. In fact, the Athenian democracy began as a revolt by poor indebted farmers who demanded the cancellation of their debts. Athenian democracy begins with Solon’s cancellation of these debts. In contrast, indebtedness of average Canadian households is increasing. The average household in Canada only saves $2500 in after-tax income per year. In 1990 the average was $8000. This is a direct result of policies enacted in the last 20 years by governments both Liberal and Conservative which have cut corporate taxes and raised consumption taxes which impact ordinary Canadians disproportionately.

These Canadian Governments have also been busy attacking the democratic rights of the Canadian people.

In 2001 the Canadian Liberal government passed an Anti-terrorism Act which made provisions for secret trials, indefinite and preemptive detention of terrorism suspects, and expanded powers to spy on ordinary citizens. Immediately these new powers were abused. The Canadian government passed information to the US government which caused Maher Arar to be arrested and flown to Syria where he was tortured. The government also detained five men for unproven “links” to so-called “terrorist groups.” These became known as the Secret Trial Five. The anti-terror laws allowed their indefinite detention, and prevented them and their lawyers from knowing the government’s case against them. In 2007 the Canadian Supreme Court declared the method by which they had been detained – the so-called security certificate system by which the say so of a government Minister was all that was required to subject a person to this parallel justice system – unconstitutional. Faced with a public relations disaster, the Canadian government moved the detainees to a kind of Orwellian house arrest, featuring constant video surveillance in their own homes and forced wearing of an electronic tracking bracelet. They are followed by the secret police wherever they go. Three remain in this condition, while two have been released, proving that the entire original case against the men never existed. If it had, they would have been tried in a court of law, found guilty of a crime and sentenced to prison. The Secret Trial system was created to bypass the law itself, by a “democratic” government, and is maintained by a “democratic” government.

Given the fundamental contempt shown by the Canadian government for basic principles of the English Common Law such as Habeas Corpus and due process, the separation of party from the state, there is no need to discuss the contempt of the “Harper Government” for the finer points of abortion rights, women’s rights or gay rights, which it adamantly opposes. As Paul Craig Roberts has pointed out in the related case of US government contempt for the law, it’s beside the point. If basic concepts of distributive justice and democracy are flouted, the finer points are under threat by definition.

We might ask that if Canada is a democracy, characterized by “people power” where the “poor control the government” why the poor have chosen to deliberately impoverish themselves, and to elevate an elite group so far above them in both wealth and public influence? Or have these decisions been taken despite the opposition of 76% of the people? If instead we have the rule of experts, are they ruling in the interests of the people at large, or for the benefit of a much smaller elite grouping, which includes themselves?

Notes

(5)  Canadian Centre for Policy Alternatives, The Rise of Canada’s Richest 1%, by Armine Yalnizyan, available at: http://www.policyalternatives.ca/publications/reports/rise-canadas-richest-1

(6)  Canadian Centre for Policy Alternatives, Recession Proof, Canada’s 100 best paid CEOs, available at: http://www.policyalternatives.ca/publications/reports/recession-proof

(7)  For 2006 Federal Election Results see: http://en.wikipedia.org/wiki/Canadian_federal_election,_2006

For 2009 Federal Election Results see: http://en.wikipedia.org/wiki/Canadian_federal_election,_2008

(8)  http://thetyee.ca/Election/Battleground/2005/04/05/BigIncomeGap/

(9)   Farney, James. Conservative Party Organization and the Democratic Deficit. Queens University. Available at http://www.cpsa-acsp.ca/papers-2010/Farney.pdf

(10)   http://www.thestar.com/news/canada/stimulus/article/712449–logo-cheques-about-tory-war-chest-liberals-say

(11)  http://www.theglobeandmail.com/news/opinions/aftermath-of-an-in-and-out-election-scheme/article1929312/

(12)   http://www.cbc.ca/news/politics/story/2011/03/03/pol-kenney-letter.html

(13)  Topp, Brian. How we almost gave the Tories the Boot, pg 167

(14) Vanier Institute of the Family, State of the Canadian Family Finances, Annual Report 2011, at http://www.vifamily.ca/node/796

democratic fallacies part 1

A word is not a crystal, transparent and unchanging, it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and time in which it is used.

Oliver Wendell Holmes

The assumption that “we live in a democracy” is the ground upon which western socialists, liberals and reactionaries stand. It’s taken to be axiomatic, that is it’s a premise automatically accepted without recourse to proof. But what would happen if we tried to prove it?

To some the question will seem absurd; to others, offensive. For some, the democratic nature of the liberal state must not be questioned. Its rituals have acquired the status of holy offices, its constitutions, that of holy writ, its idea of “democracy” revealed truth.

I am questioning this received idea in all of my work, including my film work.

What if one could prove, through the examination of the historical development of our idea of democracy that in point of fact, we do not live in a democracy as that term has been understood for 95% of its existence, and that we never have, and that contentions to the contrary – that we do – are most often supported by the most basic logical fallacies, and little supporting evidence?

What if one could show that the accepted notion of democracy has been completely altered over the course of the last 120 years, and that what we now take for “democracy” was in fact taken for its opposite until very recently? What if ancient notions of democracy could be shown to have new relevance today, when our supposedly “democratic” societies are monopolized by a tiny caste of wealthy men who are attacking our rights? Does this attack not make such a reexamination urgent?

If this point could be proven, and our argument here is that it can be, then a radical reexamination of the idea of democracy would be as much in order as it would be timely. The implications would be revolutionary; that we are called upon to establish a true democracy where we have had heretofore only an imaginary one.

In this essay, Part 1, we will take up the history of our notion of democracy in its development, and examine three societies which today claim to be democracies; Canada, the United States and Great Britain to determine if any of these societies can be proven to be a democracy. In Part II we will examine in detail how the notion of democracy evolved from 1789 to the present day, and why. In Part III we will consider possible alternatives.

DEMOCRACY – WHAT IS IT?

Let us examine the accepted definition of the Cambridge English Dictionary, which defines democracy as

“the belief in freedom and equality between people, or a system of government based on this belief, in which power is either held by elected representatives or directly by the people themselves, a country in which power is held by elected representatives”

The first part of the definition is surprising. Democracy is here defined not as a material relation between people, but merely a “belief” in such a relation, or a government founded upon such a belief. It’s weak.

Webster’s Dictionary definition is stronger, describing democracy rather as an existing material relation between people:

government by the people; especially : rule of the majority b : a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections.

b) a political unit that has a democratic government

c) the common people especially when constituting the source of political authority

d) the absence of hereditary or arbitrary distinctions or privileges

The term democracy has evolved in meaning over time. It did not always mean “a government with periodic free elections” or that the common people were merely “the source” of political authority, with power wielded by representatives. In fact, if we examine how this word has been used in the last 2500 years, we shall find that its meaning has been radically altered only in the last hundred years or so. In the 2400 years previous, it meant something altogether different than what it has come to mean today.

Walter Lippmann, writing in the 1920s, attacked the technical ability of ordinary people to manage a democracy directly. For Lippmann there were insiders, the technical managers, and outsiders, everybody else. “Only the insider can make decisions, not because he is inherently better, but because he is so placed that he can understand and can act. The outsider is necessarily ignorant, usually irrelevant and often meddlesome.” (1) Lippmann’s thought is the culmination of a reactionary attack on classical notions of democracy which oddly enough mirrors the classical anti-democratic arguments of Socrates and Plato: that government is work for trained specialists.

But as F.I. Finley points out, Lippmann’s, and Plato’s attack assumes an equivalency between technical and political problems. Behind the assumption of technical competence by specialists there is a great deal of room to disguise anti-democratic ends, cloaked by means we accept because we believe that the technical specialists are acting in our best interests. This is a process by which decisions taken by the few are legitimized, but is it democracy?

This so-called “elite theory” of democracy as elaborated by Schumpeter and his school, by Seymour Martin Lipset and others is the “democracy” that we know today. The role of the citizen is now merely to choose between a small group of leader – specialists placed before the public by political parties. In this respect, the people are removed from their previous role as the political authority to a secondary role as its source.  It’s a curious notion, that the source of authority could be more powerful than the authority itself. But it’s one we’ve come to accept without question. Political authority, and hence coercive power, is thus delegated to specialists. We take the means by which this power is delegated, preference elections, to be the acid test of democracy.

Thus the idea and practice of democracy has been transformed into something completely unrecognizable to previous generations. In his Funeral Oration, the Athenian statesman Pericles famously remarked that anyone who did not participate in politics, the ideotes (from this word we derive our own term ‘idiot’) was “useless.” Our system encourages such political passivity. Ours is an idiocy generating machine.

**

Dr. Samuel Johnson’s 1755 Dictionary, the first in the English language, defined democracy as “sovereign power lodged in the collective body of the people.” In Johnson’s definition, the common people were the authority.

In the middle of the 18th century, when Johnson wrote there were no states claiming to be democracies. Democracy was not even considered a desirable form of government. Johnson had as his basis only his understanding of classical Athenian democracy, based on ancient Greek sources.

Democracy is derived from two ancient Greek words, demos, meaning the people, and kratos, meaning power, or might. So democracy might translate as “people power.” Its etymological meaning is seldom referred to, in fact has been erased.

We might turn to Aristotle for help in broadening our idea of people power, or democracy. Since Aristotle lived in a culture which had known democracy for 180 years, whereas western states have barely known democracy for 90 years, and arguably far fewer if recent gains for women and racial minorities are taken into full account, perhaps his ideas are worthy of review. They are especially so in light of the fact that the founders of western liberalism, the framers of the US Constitution and the 19th and early 20th century formulators of elite democracy, addressed themselves directly to Aristotle’s thought on this subject.

Aristotle in the Politics makes several attempts to define what democracy is. His was the first systematic examination of political science. He based his analysis on an empirical study of the constitutions and ways of life in Greek city states, and collected their constitutional documents.

He notes that “democracy exists wherever the free-born are sovereign, and that oligarchy exists wherever the rich are sovereign,” (1290a30) and “There is democracy wherever the free-born and poor control the government, being at the same time a majority, and similarly there is oligarchy when the rich and better-born control the government, being at the same time a minority.” (1290b7)

The Greeks knew few elections, which are merely one means (of several) to the end, (democracy) not the end in itself. The aspect common to both ancient and modern notions of democracy seems to be a certain type of “class rule” that is rule by “the common people.” How that rule is exercised may vary.

The critical question is this: do the means we use today – preference elections –produce the end –“people power” or rule by the majority, by “the common people” or by the poor?

Moderns have chosen preference voting in contested elections. Or rather we’ve agreed to be included in this means to the  democratic end, which was originally a means to a far different end. The Athenians had a different means to the end, ruling themselves in person in the Eklessia, the famous Assembly, and also in the choice of representatives by lottery, as we still choose our jurors today.

Aristotle considered preference voting a feature of oligarchical forms of government, not of a democracy. He wrote, “in the appointment of magistrates, the use of the lot is regarded as democratic, and the use of the vote as oligarchical. Again, it is considered democratic that a property qualification should not be required, and oligarchical that it should be.” (1294a30)

The words which follow more accurately describe the kind of “democracy” we know today. “The method appropriate to an aristocracy or a ‘constitutional government’ is to take one element from one form of constitution and another from the other – that is to say, to take from oligarchy the practice of choosing office-holders by voting, and from democracy the practice of requiring no property qualification.” (1294a30)

Modern liberal democratic states also feature “free elections” and no formal property qualifications, although in many countries the act of running for office requires monetary resources only available to the very wealthy. Is this not an informal, but very significant property qualification in our system?

Aristotle was not a great advocate of democracy, where the poor control the government. He writes, “it seems impossible that there should be good government in a city which is ruled by the poorer sort,” (1294a1) and on the other hand that “of all the perversions from a true constitution… democracy is the most moderate, and so the least bad.” (1289a38)

The ancient elites, and most of their philosophers both feared and hated democracy. Plato and Socrates were sworn anti-democrats who thought the common people did not possess the wisdom to govern themselves or others. In contrast, the “Sophists” (the aristocrat’s term of abuse which has come down to us uncritically) such as Protagoras asserted that every man possesses politike techne, the ability to form political judgments about his best interests. If we believe in democracy today, we would have to agree with Protagoras, and not with Plato that every human being has the innate capacity for political judgment.  This is a curious thing, because our “democratic” system is based on Lippmann’s Neo-Platonic absolute denial of the proposition that the ordinary person is fit to govern herself. Whereas our system encourages mass political passivity, on the philosophical ground that the ordinary person is inexpert, the Athenian system trained citizens for political participation from an early age, and so they developed political skills to a greater or lesser degree. To borrow a common Athenian metaphor, just as an athlete develops not only his body but also his inner physical capacity, his endurance and strength, through the active and consciously directed exercise of those capacities in training, so too may humans develop and strengthen their capacity for political judgment by means of a conscious practice. Use it, or loose it. We have sadly lost it. We have been led into this debilitated condition by an elite misreading of Aristotle.

**

In Aristotle’s system of thought, democracy was a perverted form of constitution, not something desirable, if it could be avoided.

Aristotle classifies three “right forms” of political system, or constitution.

Monarchy is the rule of one man or a king. Aristocracy is the rule of the best people in society, or the aristoi. By “best” Aristotle means the most virtuous and also the most skilled, but he also recognizes that this term will be perverted so that “the best” become equal with the wealthy, as in an oligarchy. (We shall return to this point.) The third type he calls polity, or “constitutional government”, which is a mix or balance between Monarchy, Aristocracy and Democracy.

In fact, this is the very type of mixed constitution – polity – which all modern liberal “democracies” now possess. We do not live in a democracy in any sense in which that word may be correctly understood.

The United States famously claims for itself a “constitutional” government, featuring a separation of powers between an indirectly elected President (monarchy), a bicameral legislative branch featuring the House of Representatives (democracy) and the Senate (aristocracy). This is how the Founders of the American republic thought of their second Constitution (we often forget there was a first one), and argued explicitly for and against it in the Federalist and Anti-Federalist Papers based on classical political thought. According to Lippmann, it was Jefferson who first conflated the mixed, republican system of the United States with democracy, though as we shall see the two were conflated earlier and by others such as Edmund Burke. The conflation serves elite interests.

The English government viewed, and still continues to view its constitution as a mixed one. Judge Blackstone, in his massive work On the Laws of England which is still cited by jurists today, describes the English constitution of King, Lords and Commons as embodying the ideal mix between the three “right forms” of government, citing Aristotle, Cicero and Tacitus to back him up. (2)

The 18th century elite view of democracy can be clearly seen in the following cartoon. Here the mixed constitution of Great Britain sails the stormy seas betwixt the rock of democracy, represented by the Phrygian Cap (another ancient symbol from the classical world) of the French Revolution, and the whirlpool of tyranny.

Blackstone would have been horrified, as would have been James Madison, Benjamin Disraeli and others to imagine that we have confused this system with “democracy.”

They would have been quite a bit less horrified once they had appreciated that this very confusion has perpetuated the mixed constitutions and the hidden rule of the rich that they defended. Lord Jack Russell, who in 1832 first granted voting rights to English 10 pound householders declared that his reform “would not one jot advance democracy.” (3) Did he know something we have forgotten? We will fully explore this history in future posts.

It seems that the contradiction between modern and ancient notions of democracy revolves around the means by which it might be organized, around the method by which “magistrates” or in our case “representatives” are chosen. We recognize that the Greek role of “magistrate” and the modern “representative” are not co-equal, as the Athenians had no representatives per se, but represented themselves, and moderns elect representatives from whom magistrates (executive offices in the state which in our system are divided between professional bureaucrats and elected officials) are chosen. The ancient meaning and the modern one both include rule by the common people. Thus we must take as the acid test of democracy whether or not the common people hold real, substantive political power in a given society. The means by which that power is obtained is secondary. The means exist to further the end. If the end is absent, the means are no use.

The modern citizen assumes that because a society holds “free and fair elections” that it’s a democracy. The idea has become axiomatic since the early 20th century. An axiom is a proposition that is taken for granted, and which is not required to be proven. This may be a mistake in this case, for it involves a conflation of the means by which the “power is vested in the people” with the end itself, the just exercise of that power to create the good society. The axiomatic reasoning also can lead into attributing the qualities of a part to the whole. Just because a society holds elections doesn’t mean it’s a democracy. Such is obviously the case in Haiti, where “free and fair elections” have been held, but without the Lavallas Party which represents 90% of the population. The fallacy that attributes the quality of the part to that of the whole serves to confuse the issue.

It’s a mistake that Enlightenment thinkers clearly identified. Thomas Paine, in his Rights of Man, which inspired the beginning of the struggle for a reformed English Parliament and the right to vote, was very clear. His book is a defense of the French Revolution and its radical democracy, against Edmund Burke’s attack on that revolution. In it Paine accuses Burke that he “confounds representation and democracy together.” Paine’s other critics at the time also acknowledged that a system of political representation is not concomitant with democracy. In an attack on Paine’s writings presented to the members of his book club, a Royalist gentleman (who wished to remain anonymous to history) wondered at Paine’s admiration for “the new representative system which has become engrafted upon democracy.” (4) Here our Royalist gets it wrong. When we examine the case further, we shall see that in point of fact, it is rather that a representative system has since been engrafted upon a mixed constitution to give it more of a democratic appearance.

If we could distill Lippmann’s and Schumpeter’s idea of democracy, we might describe it as “the rule of the expert, for the common people, for their own good.” This may also be called polyarchy, a term of modern social theorists.

If we could distill Aristotle’s thoughts on democracy and oligarchy then we could derive an alternative axiom which might help us see our own situation more clearly; that democracy is the rule of the poor, and oligarchy of the rich. He said exactly this, so no distillation is really needed. This type of oligarchy has also been referred to as plutocracy.

Using these terms of reference above, we can ask the following questions about three countries which claim to be democracies:

  1. In whose interests do “political experts” rule in practice, as opposed to in theory?
  2. How have experts protected democratic rights?
  3. Are the rich or the poor in control of the state and of the economy?
  4. Do the common people experience rule by experts as beneficial, or would they prefer participatory democratic reforms?

Further, if we take the common terms between the Cambridge and Webster definitions, that of “majority rule” and either a “belief in” or a really existing “freedom and equality between people” and the notion of “free elections” we could ask these additional questions:

  1. Does the ruling group represent a majority of voters and of citizens in each country?
  2. Does the ruling group uphold freedom and equality between people?
  3. Are elections free or rigged?
  4. Can voters radically change the direction of their country by means of the election of a different political party or leader, or do political parties represent merely the appearance of choice?

Unfortunately when we examine the evidence, we can find a great deal to support the notion that in fact so-called “democracies” are really disguised oligarchies where the few rule the many, for the benefit of a few, under the disguise of the mixed constitution.

In the next installments, we shall examine Canada, the USA, and the UK in detail against the questions above. In future posts we shall explore how these three countries developed their mixed constitutional systems under the false label “democracy” and how the people came to accept this state of affairs. Stay tuned.

Notes:

(1)  Walter Lippmann, The Phantom Public, pg 140

(2)  Blackstone, On the Laws of England, Book 1, Chapter 2.

(3) Lord “Finality” Jack Russell. Hansard. British House of Commons, March 22nd, 1831.

(4)  A Protest Against Paine’s “Rights of Man” Addressed to the Members of a Book Society” T. Longman, Paternoster Row, London, 1792/

canadians head to the polls

I’ve been busy the past few months working away on a book project related directly to some of the subjects I’ve taken on in this blog: democracy, corporate power and how our representative political system thwarts the former, and nourishes the later.

I’ve also taken up making films in order to deliver the same message.

This is the first in a series of short “newsreels” that I’ll be posting in the coming weeks as we go through a federal election. In the future I’ll be bringing you more film, several essays about the history of police power, a major study on democracy in Canada, the United States and the UK, a short feature about working and commuting to work, and two feature-length documentaries about policing and the evolution of our modern (and phony) notion of democracy.

I hope you find this film amusing, enraging and enlightening. More to come. And of course the voice of the “cranky American journalist” I assume in this newsreel is a persona I’ve taken on for dramatic effect, in case you were wondering!

thermal images from Fukushima raise serious questions

Today some thermal images of the Fukushima disaster site were released. I’m afraid they are being misinterpreted, or not fully understood because not enough information is known to correctly interpret the images.

How would I know? Good question.

For the past six years my day-job has been in the solar thermal energy business. I work with the top people in the Canadian solar thermal industry, and we have used thermal cameras to analyze the performance of aging solar thermal systems in municipal buildings.

So, I’m not an expert in thermography by any means, but I have used the technology before, and I know something about it. If what I’m about to say is incorrect, I hope somebody will please correct me.

On this Zero Hedge story, you can see two thermal images (presumably from an airplane or satellite?) of the Fukushima nuclear plant.

The author inserts the following comment:

“Next, a picture from Die Welt, emphasizing Reactor 3 and confirming that previous lies that all temperatures at Reactors 1 through 4, were under 100 degrees Celsius, were nothing but. Note the area indicating 128 oC Celsius. We would assume that is the reactor core area (which refutes the lie). If, instead, that is the spent fuel rod area, then we have some very big problems, even if TEPCO is telling the truth for once.”

I don’t dispute any of the above.

But the problems are probably bigger than the author imagines, for the following reasons.

Thermography estimates only the surface temperature of objects. It’s not a magical X-Ray machine that can see the reactor core temperature, or the temperature of any object behind the surface of another object.

So, for the surface of some object (nobody I know can say exactly what we’re looking at here) to be 128C, the interior of whatever that object is, or what’s behind it, is likely a good deal hotter. And remember that if it’s the reactor, then it’s radiating energy to produce that surface temperature through many inches of solid steel and several feet of concrete and who knows what else that may be on top of it now.

(Just for reference, 62C is the temperature of the hot water inside your domestic hot water tank. 128C is scalding hot, and would be intolerable to the touch even for an instant.)

We also need to remember two other factors which influence the interpretation of this thermograhic data.

The reactor is supposedly being actively cooled by dousing it with water. When exactly was this picture taken, and what active cooling effects were being implemented on the hot spot when the thermal scan was taken? If the reactor was being actively cooled during the scan, then without active cooling the surface temperature of that object would likely have been a lot higher, as would the surface temperatures of surrounding objects.

If no active cooling was taking place, we still need to take the passive cooling effect of the wind into account. Just like when you blow across the surface of a hot spoonful of soup to take heat away, a cold wind blowing across the surface of this hot object will dissipate heat from it, and reduce its surface temperature somewhat. The greater the “delta T” or the temperature difference between the hot object and the ambient temperature of the wind or the water that’s carrying the heat away from it, then the greater is the amount of energy taken away, and the lower the temperature of the hot, emissive object will be. If you take away the flow of wind or water over the hot, energy emitting object, the hotter it will be. That’s why the Japanese are frantically pouring cold water over these objects!

If we understand that these are merely surface temperatures, then the situation is likely very much worse than we’re being told by the Japanese authorities.

Take a look at the shot of the roof of building #2 in the NHK image. The whole roof of the building is glowing, which likely (not certainly) indicates energy being emitted from the spent fuel rods, a process which has heated up the roof of the building, through whatever insulation is on that roof. Because there’s no temperature scale for this image, it’s impossible to say anything other than that it’s radiating a lot of heat to the ambient air through the roof. Because there was likely no power in this building (electric or thermal) when the image was taken (still to be confirmed) that emission of energy could only be coming from the spent fuel rod pool and or the reactor. Yikes!  I actually find this image more disturbing than the others, partly because I question when it was taken.

Reactor number 2 exploded on March 15th. When was the NHK image taken?

If the temperature of that roof is even close to the temperature at building #4, which is 42C, (this guess is based on my interpretation of the colour scale) then something is either really wrong inside that building, or the Japanese built this roof without any insulation whatsoever in a climate that experiences cold winters. It remains to be determined what’s really going on with this image.

Again, I acknowledge that I could be wrong about some of this. I have done some interpreting (breaking my own rule) but given my work experience I feel confident in doing so, with the caveats I’ve stated. Knowing what I know about thermography (a bit) and being able to reason logically (tell me if I’m wrong!) I think it’s warranted to share my educated layman’s interpretation, in the hopes of reaching an understanding of what’s really going on at Fukushima, for myself and for others.

against the attack on Libya

The “Harper Government” decision to send CF18 fighter planes to patrol Libya is a crime and a bungled one, whatever the UN Security Council may have said about it. Today the governments of the UK and the United States declared that the goal of the mission is now “regime change” despite the contradictory statements of their generals.

The Harper government’s participation in the bombing of Libya and the killing of civilians is also an act of gross hypocrisy, as I pointed out in a letter published in today’s Sunday Star. (1)

Canada’s participation is motivated by profit and self-interest, and it continues what has been up to now a bungled policy towards Libya. Unfortunately space on The Star’s Letters page allowed only an explanation of the hypocrisy.

In my letter I described how the western powers are protecting the Khalifa royal family of Bahrain, who have engaged Saudi mercenaries, chemical weapons and British bullets to “kill their own people” and suppress democracy, just as Gaddafi has done. The difference between Khalifa and Gaddafi? Khalifa allows the US 5th fleet access to a massive base in Bahrain, whereas Gaddafi has been an “unreliable partner” in the development of Libya’s oil fields. In Libya, the west can gain more secure access to the oil by supporting something we call “democracy” but in Bahrain our interests in the naval base are served by continued dictatorship, and silence in the face of oppression. Its’ doubtful a democratic government in Bahrain would allow the 5th Fleet to continue to be based on the tiny island. So we say nothing while the man who crowned himself King a la Napoleon uses nerve gas on his own people. Or we say, as did Hillary Clinton to Iran, that they should not interfere.

And it’s not just Bahrain. Our governments hesitated to support the Egyptian democratic forces until the country was on the knife-edge of revolution. We are today ignoring the people of Yemen, even as trained snipers blow their brains out.

The situation in Libya is plainly very different from that in Egypt, Tunisia, Yemen and Bahrain. In these countries, there is a politically organized youth movement for democracy across the whole society. Nothing of the sort exists in Libya. In Libya the divisions are tribal and territorial, despite the attempts of western media, and even of al-Jazeera to paint them otherwise.

The rebels of Benghazi are largely of the Senussi tribe, and their flag, that of the deposed King Idris is the Senussi flag. What will the Warfallas, the Gaddafis or the al Magrahis think of being ruled by the Senussi? Oh, but we haven’t thought that far ahead, have we?

And yet we feel we have the right to step into the situation in Libya, armed with a kind of Coles Notes guide to the tribal relationships there (or perhaps not) in the form of “intelligence briefings” from our all-powerful spy agencies in a role akin to that of the Greco-Roman gods… intervening in the lives of mere mortals, who exist to be manipulated to produce the outcomes we desire. What use is Minerva’s wisdom when we have Jupiter’s thunderbolts?

And we have the morality that goes with such an arrogant, ignorant attitude. So our Leader Maximal, Stephen Harper can say with a straight face that “risks are inherent in helping protect Libya” and that “these are difficult situations” in which “one cannot promise that there will not be civilian casualties.” We’re intervening to prevent civilians from being killed, and the price to pay is civilians being killed. (2)

The publicly stated arguments for our violent intervention are not logically coherent, and so we must search elsewhere for a rational argument for intervention. We don’t have to look far for the argument that dare not speak its name, and it’s spelled o-i-l. Most of Libya’s oil and gas is exported, and so we turn to Libya’s customers for the rationale for the attack on Libya.

The areas around and to the west and south of Benghazi in the Sirte basin are the centers of Libyan oil production. In a world past its global peak of oil production, reliant on increasingly heavy Saudi crude, Libya’s 1.8 million barrels per day of light sweet crude represent not only the loss of the principal oil supply to former colonial master Italy. They also represent a major leak from the global supply “cushion” which allows the market to smooth over the very real tensions between limited supply despite flat-out production, and ever-growing demand. The day of reckoning, in the form of local shortages and hoarding, draws ever closer. This kind of a crisis could cost international corporations billions of dollars. Crude oil prices are up hard over-supply fears from the Libyan unrest, and a stable government would create a more predictable investment environment.

It would also be an opportunity to “kick the chessboard” to  “shake the kaleidoscope” for oil investors with effectively stranded investments in Libya, and so also a tremendous profit opportunity for the new “coalition of the willing,” the “coalition of the shilling,” or whatever you want to call the former and current imperial powers of France, England, Italy, Canada and the USA militant. It’s about profit.

As production of oil goes on in a given field, the lightest, “sweetest” or lowest sulfur content, and hence cheapest to refine and highest profit margin oils are extracted first. This comes naturally, as such light oil rises to the top of a field. Gasoline is made from this “light sweet” crude. Labour cost also determines profit margins. Libya’s oil fields, the largest in Africa, and the 9th largest in the world, are relatively underdeveloped, and have a cost of production of just one dollar per barrel in some cases. (3) So, with Brent Crude trading at around $110 per barrel, that’s $109 per barrel of profit for some lucky adventurer, or perhaps for British Petroleum (formerly the Anglo-Iranian Oil Corporation which helped overthrow the democratically elected Mossadegh government of Iran, and which gave the world the ongoing Deepwater Horizon disaster) Conoco-Phillips, Marathon Oil, Amarada Hess, Suncor, Occidental Petroleum, Spain’s Repsol, and Eni of Italy. (4) Oddly enough, it is the national governments of these companies (with the possible exception of Spain) who make up the war coalition against Libya. This is what we call a “clue.”

Libya had been demanding a greater share in its oil revenue over the past two years. In 2009, Gaddafi had been pressing foreign oil firms to increase shares of the profits to Libya, threatening nationalization of some projects. Experts declared that outcome unlikely, but nationalization is a word oil companies don’t like to hear.

The Canadian state owned Petro Canada (now owned by Suncor) in 2008 committed to invest $460 million dollars in oil exploration in the Sirte region, and pumped over 100,000 barrels of oil in that area. (5) Today they pump nothing. Sirte is the power base of the Gaddafi tribe, Mr. Gaddafi’s extended family. Does anybody seriously think that Petro Canada will be allowed to continue those operations there if Gaddafi remains in power?

On March 19th, The Street reported that, “Shukri Ghanim, who sets Libya’s oil policy as the head of the national oil company, said the country would honor its current commitments while trying to recover from a huge drop in production. As for future deals, “a friend in need is a friend indeed,” he told reporters in Tripoli. “If someone stood with you, you cannot tell him no.”” (6)

But the Harper Government has been working at cross purposes to Petro Canada’s interests in Libya for some time. This is where the bungle comes in.

In 2009, the ever petulant Harper Government rebuked Gaddafi for the celebrations which greeted the return home of the terminally ill Abdel Megrahi, the man convicted of the Lockerbie bombing (though Megrahi almost certainly is innocent, and the Harper government knows it.) (7) We know about this thanks to Wikileaks. Gaddafi was going to stop over in Newfoundland for a brief chat with the Canadian Foreign Minister on his way to the UN General Assembly. One American source in Libya cited by Wikileaks claimed that Canadian Immigration issued Gaddafi a tourist visa, instead of the type issued to a visiting Head of State. The insulted Gaddafi never visited, and retaliated by making life difficult for Canadians working in the Libyan oil industry. The relevant Wikileaks document can be found here, for now. Did Jason Kenney, the notorious Zionist and also Canada’s Minister of Immigration cook up this slight? It certainly seems plausible, given his record with George Galloway. Somebody needs to ask him, especially if Gaddafi wins.

In retaliation for this totally political and totally unnecessary row, Gaddafi halved Petro Canada’s and Suncor’s production rights, a 12% stake in what was a 100,000 BPD field, and threatened to nationalize the whole operation if the Canadian government didn’t apologize. The Harper government never forgives and never forgets, as its domestic enemies (count me in) know all too well.

Is Canada’s participation in the No Fly Zone escapade a quid pro quo to Suncor and Petro-Canada, who clearly were not helped by the partisan bungling of the Libya file by the self-styled “Harper Government” back in 2009? Is it “skin in the game” in hope of a bigger production stake from a potentially grateful future Libyan regime? Suncor’s Libyan investment represents only 9% of its total production, and the company has been trying to sell its operation due to the uncertainty created by the spat with the Gaddafi government. Suncor is the largest oil company in Canada, and politically well-connected with the Harper government.

The CBC reported one oil industry analyst as stating that “if Gaddafi is overthrown, it might actually ease some of the concerns oil companies have about working in Libya, especially after the government’s treatment of another Canadian oil and gas company, Verenex. When the China National Petroleum Corporation made a takeover bid for Verenex and its valuable Libyan operations, Libya intervened and nationalized the Canadian company for less than the Chinese offered.”(8)

Do we really think that Harper, the man who prorogued our own parliament twice, the man who spent hundreds of millions of dollars on police state measures at last year’s G20, and whose government has been found in contempt of Parliament, gives a damn about democracy in North Africa, when he doesn’t care about it in his own country?

Harper’s cronies have their eye on the prize, and the prize is a reward from the new, Senussi masters of a future “Free Libya” or whatever you want to call it, in the form of a share in the Sirte and other oil fields of greater than 12%, likely far greater. In the way of these things, no doubt the new overlords of “democratic” Libya will also get their cut.

Unfortunately the Senussi do not control Tripoli, and so if Gaddafi and the western Libyans put up a fight, and so far they are doing just that, the only solution to this crisis short of all-out bombing or ground war might be the effective partition of Libya into the oil rich east, and the oil poor west.

Let it be written that in what is hopefully the last week of his Prime Ministerial term, Stephen Harper was not content to wreck only a single country. He set out to destroy two.

(1) The letter occupied the lead spot in the print edition, as usual when the Star publishes my letters.

(2) http://www.thestar.com/news/world/article/956746–risks-inherent-in-helping-protect-libyans-in-conflict-harper-says?bn=1

(3) EIA data cited in:  http://www.energyandcapital.com/articles/libya-oil-price/640

(4) See: http://www.guardian.co.uk/world/2009/aug/18/british-energy-companies-investment-libya / and also : http://www.cnbc.com/id/29494495

(5) http://www.thestar.com/business/article/446372

(6) http://www.thestreet.com/story/11051982/1/libya-oil-deals-will-go-to-gadhafi-allies.html

(7) http://www.cbc.ca/news/world/story/2011/01/31/wikileaks-libya-petro-canada.html

(8) http://www.cbc.ca/news/world/story/2011/02/22/libya-suncor-operations.html?ref=rss

against corporate monopolies

The world’s largest mining company, BHP Billiton wants to control the world supply of fertilizer, and thus the world supply and price of food.

Fresh from deposing an elected Australian Prime Minister, BHP has launched a hostile takeover of Potash Corporation of Saskatchewan, “the world’s largest supplier of the three primary crop nutrients: potash, phosphate and nitrogen.”

The Toronto Star’s business columnist David Olive thinks the deal is “nearly perfect.”

I beg to differ, and to ask the key question Olive never seriously asks; for whom is it nearly perfect?

Certainly not for farmers or eaters. The deal is perfect for wannabe monopolists who style themselves by the now respectable term “investors.” These would love to have the world’s farmers and the world’s eaters over a barrel of fertilizer, composed of varying proportions of nitrogen, phosphorous and potash – NPK for short. They can and do make billions in profits per year selling NPK to a hungry world.

These three minerals are essential inputs, for which there are no practical substitutes at the present scale of production and consumption.

David Olive quotes a farmer in his story.

“They already got us right now, by the throat,” Michigan farmer Wes Exelby complained to Reuters Tuesday. “They control the markets and put the price where they want.”

But the farmer is just a set up for Olive’s one two punch. His reply to farmers and eaters?

“To which all one can say is: deal with it. A sizeable portion of our natural-resource bounty already is in foreign hands, thanks to the yard sale of celebrated Canadian assets amid a global bidding frenzy in 2008.”

Notice how Olive sidesteps the farmer’s objections to the takeover. The farmer didn’t question the nationality of the owners, but rather the monopoly capitalism which concentrates in a few private hands ownership of crucial resources that ought to be under public control. This kind of “analysis” is as good as it gets in the corporate press.

But let’s not be screwed by BHP Billiton, or lulled to sleep by Olive’s empty reassurances that everything’s OK. It’s not. A BHP Billiton takeover of Potash Corp. would not only be a threat to global food security, it would constitute a threat to democracy itself.

Olive declares that Saskatchewan Premier “Brad Wall and his government will suffer no decline in the Niagara of royalties generated by Potash Corp regardless of who owns it. Actually, a BHP-PotashCorp. combo is likely to boost Regina’s royalty haul from the province’s rich endowment of potash, nitrogen and phosphate, the prime building blocks of fertilizer.”

He doesn’t say why. Either Mr. Olive has not been paying attention, or he is fogging the issues.

BHP Billiton must be feeling its strength right now, as it’s fresh from overthrowing the elected Prime Minister of Australia. [i]

Together with fellow mining giants Rio Tinto and Xstrata, BHP Billiton staged a coup d’etat against the elected government of Kevin Rudd in June of this year.

Rudd’s government was going to impose a 40% tax on the windfall profits being generated by these three mining giants in Australia. The mining companies deposed Rudd operating via the backrooms of the Labour Party and a $100 million dollar public relations campaign. Having got rid of Rudd, they installed Julia Gillard, their handpicked puppet who immediately caved in and allowed an industry committee to draft new mining tax legislation under the leadership of BHP’s former CEO, Don Argus.

If BHP Billiton comes to Saskatchewan, Brad Wall should watch his back. [ii]

The BHP bid for Potash Corp is also about the race to accumulate super profits for global capitalist corporations.

Potash Corp’s gross margin on Potash is 80%. Two thirds of Potash Corp’s 2008 $4.9 billion in profits came from the sale of potash.

But David Olive says don’t worry, be happy. “The $850 (U.S.) peak {in the price of potash SJK} of 2008, and the worldwide food crisis of that year, had everything to do with frenzied commodities speculation rather than a sudden increase in food demand. Which means agricultural producers are not looking at oligopoly-driven price hikes in one of their key inputs. If they were, the reliably activist U.S. Justice Department and European Commission anti-trust division would be stepping in to scupper this deal.”

Olive is dissembling. Sudden increases in food demand do not occur. Olive waves a Red Herring called “sudden increase in food demand” at the gentle reader. Rather food demand is consistently increasing along with global population. The quality of demand is also changing. The emerging middle classes of Asia are driving demand for mineral fertilizers produced by Potash Corp as their diet changes from the peasant diet of the past which was predominately grains, vegetables with a small amount of meat, to one featuring a higher percentage of meat. (These countries also have depleted soils, which require more fertilizer.) More meat means more mineral fertilizers, as grain which would previously have fed humans now feeds cattle. It takes approximately 7 pounds of grain to produce 1 pound of meat. Increased meat eating in Asia means more profits for the mineral fertilizer manufacturers. Potash Corp’s investor circular is mostly devoted to explaining these realities to profit seekers. [iii]

What occur suddenly are food supply crises at the margins of global production. It’s these crises at the margin that set prices for all. We have seen such phenomena this year.

Major agricultural areas of Pakistan are under water. Fires and drought have caused Russia to cease exports of wheat. The UG99 stem rust may emerge at any time to decimate the world wheat crop, and is slowly spreading tendrils of disease out of Africa towards Asia’s breadbasket in Pakistan, Iran and India. [iv]

To western consumers the global food supply system appears to be “just in time.” However, food is produced seasonally and stored until the following year’s harvest can replenish stockpiles. Global stockpiles of grain have fallen to their lowest level on record. [v]

It’s an understanding of these kinds of supply crises in the context of the reality of food production that moves food commodity markets. Speculators on commodity futures exchanges react to these market developments, buying call or put options which can and which will drive commodity prices far above or below their moving averages. It’s therefore disingenuous for Mr. Olive to claim that herd like speculators are completely disconnected from the realities of production and consumption, or that the food price spike of 2008 was a “one off.”

Has Mr. Olive been paying attention to the wheat markets this summer?

Given the crises in Russia and Pakistan, global wheat prices have surged by as much as 80% in the last two months. Currently fertilizer prices are relatively low, but they will likely surge by the time farmers in the northern hemisphere are fertilizing 2011’s spring wheat crop. Potash Corp stock has a seasonal pattern which tends to move the share price higher towards the beginning and end of a calendar year. [vi] Fertilizer demand increases in spring and fall.

No wonder Canada Potash Corp. management rejected the deal! Based on average historical share price movement, their shares stand to appreciate by 30% by this time next year. Yet Olive calls BHP’s offer “nearly perfect.” He writes, “… the deal’s fundamentals are sound. BHP will not end up wildly overpaying for assets at the top of the market, the hallmark of the 2008 buying mania.” He simply assumes Potash Corp’s shareholders will want to cash out at current prices. But if 2008 was not a buying mania but rather a preview of what’s to come, and it’s looking more likely than not that this is the case, then Potash Corp’s share price might soon rise far higher.

Other aspects of Olive’s reasoning are less than perfect, including his trust in the anti-trust regulations of western liberal states, which have not prevented the concentration of capitalist ownership of industry that Marx predicted. Olive also ignores the current industry trends.

If oligopoly driven food price hikes are not on the horizon, why is the global fertilizer industry consolidating into an oligopoly? Russia’s Uralkali is “seeking to buy stakes in rival companies to set up the world’s largest producer” informs RIA Novosti. Uralkali’s billionaire owner Suleiman Karimov is currently trying to take over competitor Silvinit. Once global fertilizer supplies are concentrated in just a few hands, what’s to prevent the private owners from holding the world to ransom? They certainly have shown no love for Australian democracy. Why should they respect the public interest elsewhere?

To give some perspective on the strategic power which control of fertilizer and food represents, consider this graph of worldwide fertilizer use since 1880, courtesy of Business Insider, which shows how mineral fertilizers have come to dominate global food production since the Green Revolution. [vii].

We have dumped more phosphate rock on farmland since 1950 than all other fertilizers combined since 1800.

Now consider a graph of the human population set against world rock phosphate production. [viii]

The second graph shows that as mineral fertilizer use has grown, human population has grown along with it. Almost half of the global population owes its very existence to the availability of rock phosphates (and nitrogen derived from natural gas, which is not shown) for fertilizer. Without these nutrients, the food crops that sustain 3 billion people would not exist, and so those 3 billion people would not exist.

It’s a point Olive refers to only obliquely.

“….world population is projected to rise from a current seven billion to 10.5 billion by mid-century, with a resulting steady increase in food and fertilizer demand.”

Sorry to break it to you David, but world population can’t grow to 10.5 billion by mid century, as there’s not enough arable land, which shrinks at 1% per year, and there’s not enough water, with fossil water in aquifers seriously depleted all over the world, glacial water melting at an unsustainable rate, and not enough fossil fuel energy to power all the machines, not enough natural gas to transform into nitrogen… It’s just not happening. The changing climate is proving to us the limitations of the atmosphere to act as a sink for our carbon emissions. Putting bets on which of these avenging angels will reap the human population down to a size commensurate with the carrying capacity of the earth is a mug’s game. One way or another, the human population will be limited by the scarcity of whichever indispensable resource peters out first. This is Liebig’s law of the minimum, from which we are not exempt, whatever an economist or the Toronto Star has to say about it. The human population will likely have crashed by 2050 to well under 3 billion, precisely due to humanity’s adherence to the same religion of endless growth in which David Olive plays the role of evangelist. But don’t worry, a few “investors” will have won a fortune by buying NPK fertilizer low and selling it high by 2050. Our whole society, and of course the Business section of the Toronto Star is organized around the sacred right of investors to profit from their private schemes, and to hell with everyone else.

Olive’s homily concludes thus: “As the third resource megadeal worldwide in the past year, this deal signals a welcome restored health, finally, in the global credit markets, and a wider prosperity in the offing. And there’s no changing the fact that investors have made a ton of money on Potash Corp. Its stock soared 1,021 per cent over the past decade. With a handsome capital gain for investors now in store, Potash Corp. takes its place in Bay Street annals as one of the greatest investor success stories in history.”

Celebrating the mega profits of Canada Potash is akin to a crack addict getting sentimental because his dealer had a record year.

The average reader of the Star’s Business section, confusing the “value” of money with sacred, real and living relations between humans, animals and plant life may share Olive’s ecstasy at the orgy of mega-billions which have been “made” by riding the fertilizer mega-bull market from lows to highs. We suspect that the over one billion people on the earth who are now hungry, and who will likely die of that hunger, are less than enthused.

As usual, a mega-deal “success story” for “global investors” has been a mega-disaster for everybody else.

AN ALTERNATIVE

Instead of allowing BHP Billiton to purchase Canada Potash, the NDP Government of Saskatchewan should seize Canada Potash without compensation and operate the company as a public utility under the motto “So that none shall hunger.”

Because of Saskatchewan’s low cost of production, a public fertilizer utility could sell at very low prices, which would do more to keep global fertilizer and food prices in check than would wishful thinking by David Olive. Modest profits could be invested by the Government of Saskatchewan to promote sustainable agricultural practices worldwide, to help farmers everywhere recover from mineral fertilizer dependency now perpetuated by corporate greed, and transition food production away from a linear model based on the consumption of finite mineral inputs back to a circular model in which crop, animal and human wastes are recycled back into the soil in a process powered by solar, instead of fossil fuel energy. The hour is late, but it’s not too late to act.

We need to literally throw the mineral fertilizer monopolists onto the dung heap of history.

Global investors will cringe, but Tommy Douglas would be proud.

UPDATE: As I was about to publish this story, Canada Potash management has soundly rejected the BHP takeover. Seems the deal wasn’t nearly perfect enough for Potash Corp’s management.


[i] The World Socialist Website has provided indispensible documentation and analysis of the corporate coup in Australia. See http://wsws.org/articles/2010/jul2010/pers-j15.shtml

[ii] Australian big business is not satisfied with overthrowing an elected Prime Minister. It wants more! http://www.theaustralian.com.au/business/lack-of-vision-leaves-businesses-fearing-the-worst/story-e6frg8zx-1225907976305

[iii] http://www.potashcorp.com/investors/investor_briefcase/

[iv] http://www.economist.com/node/16481593?story_id=16481593

[v] http://www.thestar.com/opinion/editorialopinion/article/845774–today-russia-tomorrow-the-world

[vi] http://www.timingthemarket.ca/techtalk/2010/07/29/tech-talk-for-thursday-july-29th-2010/

[vii] http://www.businessinsider.com/the-phosphorus-chris-2010-4#use-of-phosphorous-rock-has-increased-1100-since-ww2-3

[viii] http://energybulletin.net/node/33164