Nestor and Bill,
Let me reiterate my main point which I take you both would either
agree with or at least accept as a reasonable argument. The first
world war consolidated industrial capitalism in Canada and the
governing elite was firmly under control of industrial capital which
no longer had a dependence on British finance which it previously
had. The interwar period did not increase dependence on foreign
capital in part because three quarters of it was marked by
depression. The main investment was in railways in the late
twenties over half of which was publicly owned.
The reliance (dependence) on foreign capital, now from the US,
came after the 2nd WW in the form of resource based investment
and branch plant. Because of the alarming increase in foreign
control of the economy and the negative economic results of this
increase, (Watkins report, Grey report, etc.) Canada introduced the
Foreign investment Review Agency which restricted foreign
investment where there were no direct benefit demonstrated. Along
with the national energy program, this had the effect of decreasing
the proportion of foreign investment. With the conservatives in
power in the 80s, these national interest restrictions were lifted and
eventually abolished with C-USFTA and NAFTA and almost
immediately, the proportion of foreign ownership began again to
rise. However, Canadian foreign ownership also expanded
representing the fact that Canada is, in its own way, a junior in the
economic imperialism game though most of the non-resource
investment has been in the United States and frequently in sectors
that were originally in Canada state protected and organized
industries (e.g. CPR and CNR railway investments).
On the issue of dependency, my definition of dependency is quite
different than yours and is not in the early Frank model. I define
dependency in terms of two or three major parametres -- the
direction of causation, the balance of economic power and the
expropriation of surplus. To illustrate, the early Canadian fur trade.
Fur was important to Canada but was miniscule to the British
economy such that changes in fashion in hats in Europe had little
major impact on the European economies but they could boom or
bust the Canadian commerical economy of the day. Changes in
Canadian supply, however, had little or no effect on the British
economy. Canadian policy, such as it was, was determined by the
London council of the HBC and the British crown which granted the
monopoly charter. Finally, the profits accrued to the headquarters
of the HBC in Britain, almost none of which was reinvested in
Canada. This was a classic case of staple dependency which
characterized the early economic 'development' of Canada.
Does that same dependence exist today? Yes, though to a lesser
extent. Investment in Canada is largely determined by US demand
whereas Investment in the US is minimally affected by Canadian
demand. Trade in Canada is a macroeconomic issue, in the US
more of a microeconomic issue. Research and Development,
technological change, etc. is in most advanced industries,
determined by foreign companies and is generally poorly developed
(except in the state sector). Canada's economic laws are dictated
by the US or its international client agencies, the WTO, IMF, WB,
NAFTA etc. e.g. the pharmaceutical patent legislation that was
introduced to conform to US demands which has led to an
enormous increase in drug costs in Canada which threatens to
collapse the medicare system. Canada has a huge, and growing,
net deficit in services and in payments of interest, dividends and
profits. Almost all of the increase in foreign ownership in Canada is
financed either from retained profits of existing investment or from
borrowings of Canadian savings from Canadian banks.
It is for this reason or in this context that I say the Canadian
economy is dependent. And I agree that this is a very different
form of dependency that Frank argues for Latin and South America
which is, following Baran, based on an alliance between imperial
capital and a local landed ('feudal") and military elite who retain
control over the domestic political spoils and block the emergence
of a truly national-bourgeois political state.
Nas vidinje,
Paul
Paul Phillips,
Economics,
University of Manitoba
From: "Nestor Miguel Gorojovsky"
<[EMAIL PROTECTED]>
To: [EMAIL PROTECTED]
Date sent: Sat, 9 Sep 2000 11:46:48 -0300
Subject: [PEN-L:1545] Re: Re: Canada, Australia, Argentina
Priority: normal
Send reply to: [EMAIL PROTECTED]
> En relaci�n a [PEN-L:1490] Re: Canada, Australia, Argentina,
> el 8 Sep 00, a las 10:22, Bill Burgess dijo:
>
> >
> > However, by the mid 1980s the US-controlled share of all non-financial
> > industres in Canada declined to levels below the post-WW2 buildup (the
> > US share has risen slightly since then, as has foreign control in all
> > countries).
> >
> > I consider this 'repatriation' partial evidence that Canadian capital
> > never lost _overal_ control of the domestic economy, which they
> > originally gained, as I think Paul agrees, by around WW1. Just as a
> > 'national bourgeoisie' was able to develop while formally still a
> > British colony, it was able to survive and even gain relative strength
> > despite extensive US ownership and control in _some_ industrial
> > sectors. I don't think the Argentine bourgeoisie ever developed this
> > kind of hegemony over the economy and state.
>
> The Argentine bourgeoisie doesn't even have a consciousness of its
> own existence as such bourgeoisie. What we have here is an oligarchy,
> a capitalist BUT NOT BOURGEOIS ruling class, which thrives under
> imperialist control of the country and in alliance with imperialism.
> This class is ORGANICALLY against any transformation of our economic
> structure that puts in danger the chain of dependency. And the
> constitution of a self-centered bourgeoisie such as happened in
> Canada was for decades the greatest threat to its domain. Thus
> trapped between a huge working class and the imperialist-oligarchic
> "rosca" our domestic bourgeoisie is a caricature of a bourgeoisie.
> During the same 1980s that saw the Canadian bourgeoisie regain some
> degree of control of their own economy, the Argentinian bourgeoisie
> was either physiclly destroyed (Gelbard and Broner, two of the
> mainstays of Per�n's national-bourgeois government after 1973 -both
> were of Marxist intelectual origin, by the way, and Gelbard, Peron's
> Minister of Economy, a secret affiliate to the Communist Party-, were
> deprived of Arg. citizenship and had to take the road of exile;
> others, like arts patron and editorial owner Vogelius, were
> kidnapped, tortured, and killed due to alleged connections with
> terrorist cells, and so on), socially degraded (it is easy to find
> taxi drivers in Buenos Aires today who have been, for example, owners
> of a small industry), transformed into managers of foreign concerns
> or turned rentiers after they closed plants or sold them (and thus
> coopted into the oligarchy), etc.
>
> [...]
>
> >
> > Where we differ is that Paul interprets this as Canadian and
> > Australian dependence a la Frank. This would be appropriate for
> > Argentina, but Canada and Australia are in the qualitatively different
> > position of secondary imperialist countries. They get bullied by the
> > US as do other secondary imperialist countries (e.g. in Europe, by the
> > US and Japan, Germany, UK, etc.) but the politics of this relationship
> > are very different than the politics of Frankian-like dependency.
> >
> > Sorry to harp on this issue but I think the failure to distinguish
> > between the two kinds of relations with bigger-power imperialism has
> > long been a key failing of socialism in Canada (and I think the same
> > applies to Australia and New Zealand).
>
>
> I am afraid that on this issue I would agree with Bill. Whoever wants
> to discover the difference between a minor imperialist power (that
> is, a cub of shark) and a wealthy semicolony (that is, a fat tuna),
> should compare Argentina with Australia or Canada, say, by the 40s or
> 50s.
>
> A hug to all,
>
> N�stor Miguel Gorojovsky
> [EMAIL PROTECTED]
>
