The Wealthy Need The Poor

Just a quick note to start off the day. The title says it all. The wealthy need the poor. In fact, it doesn’t matter who ends up poor, it just matters that many people do. I mean, who can know if someone is wealthy if there are no poor people around to compare them to? No, poor people are essential to the wealthy for many reasons. First, they make a great cautionary tale, as in, “see what can happen to you, my child if you don’t put your nose to the grindstone, work hard, aspire to the things that make us rich and believe in free entreprise, because mygawd it’s our way to glory and eternity.” Of course, in the same vein, they are also a great example of how not to live your life. “Those people have made a poor choice in parents. You’ve at least started life not making that mistake!” They are also a great source of cheap labour and can’t save any money so everything they make goes right back into the hands of business. What a great setup.

Actually, it’s  really quite simple. We live in a class society no matter how much we attempt to deny it. Wealth and poverty are a consequence of that, not the cause. So we have rich and poor people as an inevitable consequence of the way our society has evolved. Wealth is a major moral goal so poverty must be a major moral failure. So we merrily blame the poor for their circumstances and for all the ills of the world. We don’t have the good sense to see who and what are really to blame.

Strangely enough, there is no such thing as ‘capitalism’, which is a word that would describe a system of wealth accumulation that can be compared to the evil isms, socialism and communism. Capitalism is an a-historical concept that fails to take history into account. Capital accumulation and the rapid concentration of wealth in finance capital will come to an end. What will come after? I have some sense of that in very broad terms but that’s the subject of another post.

Trump and protectionism

This is just a short blog that is a reaction to a CBC radio interview this morning with a representative of the Canadian Manufacturers and Exporters Association (CMEA). The interviewer asked the rep from the CMEA how Trump’s presidency would affect Canadian manufacturers. His reply was that Canadian manufacturers are worried, but that Trump’s rhetoric is just that, rhetoric designed to appeal to particular gullible and self-interested audiences, and fact is something else. He said that if the US imposes tariffs on Canadian goods, then Canada should do the same with regard to American goods.

Problem is, there is a basic flaw in this perspective. Canada produces nothing. The US produces nothing. Corporations, sometimes registered in one country or another, produce things and services for sale. People produce things, not countries so why do economists and journalists still insist on using the country as their primary unit of analysis? When are they going to stop saying that Canada’s trade with the US is this and that, rather than focusing on the real situation which is that corporations are dominant and manipulate governments for their own interests? Ironically, many ‘Canadian’ manufacturers have their products produced in China or in other countries that provide them with tax breaks, lax labour and environmental laws, and cheap labour in export processing zones. And just because a corporation has a head office in Toronto and is technically a Canadian corporation that doesn’t mean that its prime motivator is to serve Canada as a country. No, its prime motivator is profit and as long as a Canadian head office serves its interests that’s fine, the moment it doesn’t do that anymore, its ‘loyalty’ will dissolve as quickly as salt in water and it will move its head office elsewhere. More to the point, of course, is that much of ‘Canadian’ manufacturing is controlled from abroad. That led Harold Innis (Google him) to note in the late 1940s that Canada is a country with its brains spread all over the globe.

Economists and journalists need to give their head a shake and stop letting corporate capital and its governmental lackeys lead them around by the nose.

 

Recent Developments in the Canadian Economy: Fall 2016

This Economic Insights article examines the extent to which the lifetime income of children is correlated with the lifetime income of their fathers—a topic known as intergenerational income mobility. The analysis uses data from Statistics Canada’s Intergenerational Income Database, which links together children and their parents using tax files. The data provides information that permits the comparison of the income of children to those of parents at a similar stage of the lifecycle.

Source: Recent Developments in the Canadian Economy: Fall 2016

This article by staff at StatsCan looks pretty straightforward at first glance. It tells the story of the ‘Canadian economy’ for the year leading up to this fall. However, the real story lies elsewhere. As I’ve noted a hundred times, Canada doesn’t trade, ‘it’ doesn’t produce goods. it doesn’t sell goods. Those activities are carried out by business, largely in the form of large multinational corporations. That’s where you have to look if you really want to figure out what’s going on in the world of ‘economics.’ More on this soon, although a search through my archives will yield a lot of writing on this topic.