Every three months the quarterly profits of the largest companies
appear on newscasts, and Canadians gasp and sigh and really do not
know what it all means.
Big profits are usually reported as good, and low profits are
said to be bad and an indication of trouble brewing in the future
for that particular company. The ramifications of these profits on
other sectors of the economy is rarely discussed. The impression
left with the viewer is that these profits exist in isolation to
other companies, the economy and people as a whole, and even apart
from the Canadians who work for the particular monopoly. Usually
the overall slant of the news is that hefty profits for the big
companies means the economy is in good shape.
Since 1992, the announced profits of the auto companies, the
five big banks and certain other monopolies have been the subject
of much admiration on the part of some and ire on the part of
others. The announced profits in these cases have been enormous in
all aspects: the total mass; in relation to invested capital; and,
in growth. The curious thing is that the current news also contains
items that say bankruptcies of businesses and individuals are at an
all time high, that unemployment has "stabilized" at ten percent,
more jobs are being lost than created, the absolute numbers of
Canadians living in poverty is at its highest levels ever with one
in four children socially abused through want, over twenty percent
unemployment in Montreal, and the number of people on welfare and
unemployment insurance benefits -Canadians paid minimal amounts not
to work - has climbed to several million. British Columbia, which
many argue is probably the single richest region for quantity and
variety of natural resources in the entire world, has over nine
percent unemployment and pockets of terrible poverty. Its forest
industry is in crisis and the NDP government is openly speaking of
cutbacks and massive layoffs of government workers in the style of
the former NDP government of Ontario. Enormous profits exist hand
in hand with high unemployment and increasing poverty and cutbacks
of social services.
Those industries most suitable, well-placed or wealthy enough
to utilize the new digital technology have done so with speed and
enthusiasm. The use of computers and machines operated by computers
has increased tremendously since 1990. This coincides with the
latest serious recession. From 1989 to 1991 over 100,000
manufacturing workers were laid-off in Ontario. Production
plummeted. The auto monopoly Chrysler was even said to be in
financial trouble. Since 1991, digital technology has been heavily
introduced into the manufacturing sector and overall production now
surpasses the level of 1989. Yet, only one-fifth of the
manufacturing workers have been recalled and even they are in
danger of being let go. For example, the recent collective
agreement between the CAW union and GM calls for the elimination of
4,100 jobs in the near future.
Production levels have increased but with the use of less
living labor. Production per worker has gone up, which everyone
knows is called increased productivity. But something else has also
gone up: the mass of invested capital. The amount invested in
expensive robotic, computerized machinery has risen.
The big banks, through use of computers and other means, have
eliminated tens of thousands of workers from their ranks but have
greatly increased their control of the bookkeeping and financial
services of individuals and business throughout Canada. The ratio
between living labor employed in production, to dead labor
congealed in buildings, machinery and raw materials has changed
considerably. There is less living labor producing the same amount
or even an increased amount of goods and services. There have been
other changes as well, such as the manner in which work is
organized. Outsourcing, contract work, part-time work, use of
overtime and move intense labor have all contributed to less
living labor in relation to what is produced. The increased
exploitation of labor and use of modern technology have led to the
phenomenon of the "jobless recovery."
The quality and quantity of labor has been reduced but
production has remained the same or even increased. This has
produced, as well, a very real sense of insecurity resulting in a
lower standard of living for the working class. But something else
has appeared that is extremely dangerous if not squarely dealt with
by the working class and people: the centralization and
concentration of capital in fewer and fewer hands. The control over
the national economy that is now in the hands of giant monopolies
is leading to an economic disaster and war. The basic contradiction
between social production and private ownership is at a breaking
point. The huge monopolies such as GM and the banks, which are
interested only in amassing more capital, use that immense socially
produced value in ways that suit their private interests. This is
the basic underlying cause of the economic, political and social
crisis the country and the world is facing.
Examine just the issue of the large profits of the auto
industry and the financial institutions. These monopolies employ
less living labor per unit of production than even six years ago.
The law of value dictates that this phenomenon should result in a
drop in the value of each unit of production and a fall in the rate
of profit. This should have put downward pressure on the market
price of the product. The high profits should have attracted other
competing capital resulting in more production in those sectors and
lower prices.
The law of the "average" rate of profit throughout the
capitalist economy demands that high profits in one sector are
offset with increased production and competition, and a subsequent
lowering of the market price for goods and services of that sector
and therefore a levelling of the high profits. In the nineteenth
century the competition of the marketplace meant rapid movement of
capital from areas of low profit to areas of high profit resulting
in overproduction in those areas, inability to sell goods, a
collapse of prices and production, ruination of some capitalists
and a rapid lowering of profits to the "average." The areas of low
profit saw a decrease in invested capital and a higher market price
and therefore a rise in profits to the "average." The differences
in natural profitability of different sectors, for example the low
"natural" profits of heavy industry, where large amounts of capital
are required, were offset by the law of the equalization of profit
to the "average": the market price of commodities varied around
their real value (the amount of labor time required to produce
them) by the formula - market price equals the cost of production,
the cost of dead and living labor, plus the "average" amount of
profit. In the nineteenth century this law was enforced with
drastic consequences for both labor and capital giving rise to
alternate periods of terrible recession and extraordinary growth.
Growing Isolation of Israel
The Israeli government warned the European Union last Wednesday
that its delegation will not be welcomed in Tel Aviv if it visits
the Palestinian Authority at its Orient House Headquarters in
Jerusalem.
"The government has stated its position. It will not agree to
foreign visitors to the Palestinian headquarters at Orient House,"
Israel's ambassador to Ireland, Zvi Gabay, said. "We believe that
the Palestinians have a right to act politically in the territories
under their control, but not in Jerusalem.... The (Palestinian)
headquarters is in Gaza. Anyone who wants to visit them should go
to Gaza," Gabay told Irish radio after the Dublin government, which
holds the current European Union presidency, announced a visit to
the region. Irish Foreign Minister Dick Spring and colleagues from
Portugal and the Netherlands are set to leave within the next 10
days.
The Israeli ambassador's position was condemned by Palestinian
President Yasser Arafat, who stated: "Is he giving orders to the
European Union? It's unbelievable. How can this be accepted? I
don't think the Israelis have the right to give orders to the EU."
The visit by the EU will be the second visit by European
leaders in one month that have challenged the authority of the
Israelis and to some extent U.S. imperialism. In October, President
Jacques Chirac of France, on a tour of the Middle East to boost
French influence and sell military equipment, angered the Israeli
government by his statements of warmth towards Iraq and the
President of Syria, Hafez Assad. Chirac was also the first
"Western" leader to address the Palestinian Legislative Council,
while he refused to speak in the Israeli Knesset. He also called
for a Palestinian state and the return of the Golan Heights to
Syria, raising the ire of the Israeli government, but receiving
warm praise throughout the mass media in the Arab world.
Both Israel and the U.S. are fierce competitors of France and
other European countries in the worldwide arms trade. The no war-no
peace situation in the Middle East makes for fertile ground for
military sales and there is intense competition amongst the
imperialists. The abundant oil reserves are another contentious
issue. The people of the area must be very wary of the manoeuvring
of the big powers and solve their problems by themselves. With
imperialist meddling and control of the Middle East, there has been
one war after another at terrible cost to the people. The people of
Israel must act quickly to overthrow their state that is a product
and tool of imperialism. Only then will they be in a position to
negotiate a peaceful resolution of the historic injustices
committed against the Palestinian people and bring genuine peace to
the region.
Shawgi Tell
University at Buffalo
Graduate School of Education
[EMAIL PROTECTED]
