finance capital

Bank of Canada’s Poloz might be spooked by an unnatural economy: Don Pittis – Business – CBC News

~ Roger JG Albert

Many Canadians with high debt loads fear the potential impact of interest rate hikes. Given some strange factors in the economy, it’s difficult to predict when the next hike might come.

Source: Bank of Canada’s Poloz might be spooked by an unnatural economy: Don Pittis – Business – CBC News

This is a pretty bizarre story. Pettis reports that Stephen Poloz, the Bank of Canada chief, says his usual models for figuring out what’s going on in the Canadian economy aren’t doing the job anymore. The economy, he argues, is behaving strangely.

Well, I don’t think ‘the economy’ is behaving strangely at all. In fact there is no such thing as the self-contained ‘Canadian Economy’ any more that there is such a thing as exclusive Canadian weather. The problem Poloz is having is that his models have never worked and will not work in the future either. His models are based on the country, Canada, as the basic unit of analysis when in fact, global finance capital should be considered the basic unit of analysis.

Not all of them, but most countries are beholden to global finance capital. Veblen would call politicians and the likes of Stephen Poloz “Guardians of the Vested Interests”. There is very little left of national sovereignty. Harold Innis argued in the late 1940s that Canada only had sovereignty for about 6 months in 1926 when the British and American empires were almost equally influential north of the 49th parallel. Since then it’s been downhill.

More important, the shift to globally based production makes a mockery out of the notion of ‘Canadian’ manufacturing.  Corporations based in the West have transformed Chinese society (and many others in the so-called Third World)  by moving most of their productive capacity there. The Chinese have gotten jobs, certainly, but also killer pollution. We, in fact, have exported jobs and pollution. We should be proud of ourselves. Of course, it could be no other way and we, as ordinary citizens, are not to blame. It’s almost impossible to figure out what’s really going on out there but we get the odd hint now and again from the mainstream media, although they are focussed on scandal and misbehaviour like tax evasion rather than on the real story.

The course of history is pretty much fixed: globalization has been in the works for centuries and will end with the complete integration of the globe’s economic power. It’s getting to the point where national governments are becoming a major fetter to the process of the expansion of finance capital and will be soon in a position where they won’t even be able to pretend that they have any control over their own economic lives. Their currencies are objects of speculation with traders making billions guessing on which currency will go up relative to others. Their ‘trading’ relations are increasingly governed by international bodies like the World Bank, the World Trade Organization and other multinational agreements. One example of how silly the situation: when General Motors moves a  car from Brampton, Ontario to some place in Michigan, the economists call that international trade. Who’s leading who around by the nose here?

Of course Canada has stagnant wages and low inflation. There is a growing divide between labour’s productive capacity, including knowledge and training, and the needs of business and industry. Labour is not ready for the new global economy and, frankly, governments don’t give a shit because if corporations need cheap labour they know where to find it, and it won’t be in Canada. Jobs in Canada are increasingly precarious, often short term, without benefits and job security. There are a few people driving around in Mercedes’ and BMWs, but most people are sucking air driving their Toyotas they bought on credit over 7 years, and just hanging in there hoping things don’t change too radically, too quickly.

People are strung out on personal debt. Yet Poloz says the economy is doing just great. Poloz and his counterparts all over the world need new economic models, ones that are global is scope and focussed on capital accumulation and concentration if they want to understand anything about what’s going on. Statistics Canada, like all national statistical agencies, is seriously behind the times too, collecting national statistics. A long time ago Harold Innis told a gathering of his colleagues that it was about time that they (e.g., social scientists, economists, political economists, and historians as well as the statisticians at Stats Can) ceased allowing national governments to lead them around by the nose. I’m not holding my breath waiting for this to happen. There are some good international agencies collecting statistics, but unfortunately they have to rely on national agencies like Stats Canada. We need a real, global agency that can follow the bouncing buck wherever it leads.

So Poloz should go trick or treating. A big bag of Nestlé’s chocolates might tell him more about what’s going on than his outdated models of how the world works.

Of course, the situation is not as simple as I’ve laid it out here. The complexity of the global economy has got to challenge the best computer modelling software that exists.This is just a teaser. I haven’t even mentioned export processing zones. Fortunately, there are scholars out there trying to figure things out. Bill Carroll at UVic is one of them. He’s working on corporate supply chains. We need more Bill Carrolls. Enough for now.

 

Now, back to writing. Do you have any themes you’d like me to address here?

~ Roger JG Albert ~ 2 Comments

Time to get back to writing. Several ideas have come to mind as themes for blog posts. One is mapping. In the 1980s and 90s I taught mind mapping, a note making method created by Tony Buzan, and that spurred me to research mapping in general as a means of understanding the world using line and metaphor. That, in turn, motivated me to look into language, semantics and semiotics. That led me to the work of Alfred Korzybski and especially his book, Science and Sanity (I have a copy). He coined the famous phrase: The Map is not the Territory. It is one of the most complex books I have ever read on mapping and metaphor and destroys the myths we have about sanity, insanity, science and reality. It also dissects the idea of science. I also discovered many books by the likes of Umberto Eco (The Theory of Semiotics), Mark Johnson and George Lakoff. Lakoff and Johnson wrote one of my favourite books. It’s called Metaphors We Live By. I used all of these books – and hundreds of others, of course – extensively in my lectures. Words are metaphorical by their very nature as are maps and all representations. Dictionaries are essentially closed systems of metaphors. There’s lots more to be said on this subject, making it a strong candidate for future blog posts.

 

Another theme, one that I’ve already addressed quite a lot, is the relationship of nationalism and capitalism, especially as they relate to the rise of global finance capital and what we call globalization. The rise of global finance capital was bound to produce the kinds of backlash among the working classes of the world as labour becomes an increasingly smaller component of capitalist production. The general public tends to cling to the notion that the nation-state is a means of controlling and promoting economic production and jobs in the face of growing finance capitalist expansion. People don’t think using highfalutin terms like I use here. They do, however, know that their world of work has become more and more precarious, tenuous and fragile. They know that little by little jobs ‘Canadian’ jobs are being eliminated by automation and exportation. They don’t know that there are no “Canadian’ jobs, just jobs in the capitalist world. They have also been convinced that having a job is the way to happiness. Anyone in their right mind knows that ‘work’ is not often a means of acquiring happiness, whatever that means.

Employment is alienating, no matter how we cut it. Work, however, is a different thing and humans by their very nature are producers of goods, makers of things (homo faber).

As we get squeezed between the need to pay our rents and mortgages and the increasingly insecure labour market, something has to give. The tension brought on by ‘austerity programs’ and ‘structural adjustment programs’ imposed on debtor countries by the World Bank and other transnational organizations in cahoots with national governments will be released somehow. Can you say ‘open rebellion’ and ‘violence in the streets’? Trump’s disaffected followers are just the spark that could ignite and then fan the flames of violence in America. People will find scapegoats upon which to heap their fears because they have no idea who their real enemy is.

Part of this theme revolves around the nature of capital and the evolution of social, economic and cultural systems. This form of evolution has been a major theme in my teaching practice.

I just might pick up this theme again in future blogs.

How could I leave out sex? Of course I will deal with sex and its role in our lives in future blog posts, but I want to also consider aspects of our language around sexuality and the pornography industry in particular. Why do we so often refer to sex as dirty? And what do we make of the fact that we are born between shit and piss? How do we  culturally and psychologically address the mess that happens in labour with the wonderfulness of babies and their eventual and necessary deaths?

Contradictions abound in our cultural creations around sex and sexuality. We love the act of sex and lovemaking, but we are supposed to do it in very prescribed ways between approved partners. Tell that to teenagers with sex pheromones bleeding out of every pore of their bodies and it becomes ludicrous. Bodies will trump social rules more often than we would like to consider. Of course, sexual mores have become increasingly lax over the last few decades, but that doesn’t mean that they’ve completely vanished.

What is the Significance of the UK leaving the EU?

~ Roger JG Albert

What is the Significance of Britain leaving the EU?

 

Not much in the long term. In the short term, there will be some consequences, but probably not many for ordinary folks. Nobody’s going to war over this one although the political map may see some ‘adjustments’. One might argue that this is just a slight correction, a reminder to the 1% and to finance capital that globalization will not be an easy, carefree ride into a glorious future of one world for the benefit of capital accumulation. There will be push back by the people negatively affected by globalization, especially the poor and those workers who can easily be replaced by automated machines.

 

The European Union is just one of several political structures that, at least in political and financial terms, override countries and their sovereignty. But there is a whole new level of organizations like the World Bank and the World Trade Organization that has been messing with national sovereignty for decades in the name of securing the free flow of capital and labour in increasingly global markets. When the World Bank can impose austerity measures and structural adjustment programs on countries who have borrowed money from the WB and are having trouble paying it back, you know that national sovereignty is on borrowed time.

 

That said, countries come and go. Nothing is permanent in our world. There was no Canada before 1867 and Newfoundland was a British colony until 1948 when it voted by a squeaker of a margin to join Canada. The UK used to have a vast empire spanning the globe. Not so much anymore. Now it seems Brits want to pull back into insularity but they can’t hope to get their empire back. Get their country back? Hardly, because they never actually had control of it. Parliament, voting, elections, politicians are there to draw attention away from the real action and that happens behind closed doors in corporate boardrooms everywhere. There is no democracy in finance. Money knows no borders. Democracy is for us, and is meant to give us the impression that we have some control over our lives. Of course, sometimes people take that impression very seriously and Brexit is a consequence of that. In the long term, Brexit won’t change anything. In the short term, things can get ugly especially with people like Boris Johnson and Donald Trump fanning the flames of popular discontent.

 

Obviously, the ‘leave’ side tapped into a well of discontent among voters. Globalization is changing everything for everybody and the changes are not always comfortable or beneficial to a majority of the population. Employment insecurity tops the long list of grievances that many ‘ordinary’ people feel when their jobs disappear and seem to reappear in China or somewhere else, given to workers who make a fraction of what British, European or North American workers made in the presumed glory days of rapid industrial expansion after World War II erasing important gains in worker safety and security won by unions everywhere. Ronald Reagan and Margaret Thatcher rode out of the West to change all of that to launch decades of austerity for workers in ‘developed’ countries. Voters are looking for people to blame for their waning fortunes and are finding them in visible minorities, immigrants, especially from the Middle East and former British colonies and everybody else that isn’t what some consider ‘purely’ British and, of course, China, India and other countries which are presumably ‘stealing’ good British jobs. The ‘other’ is blamed for just about everything. Don’t be surprised by that. Outraged maybe, surprised, not.

 

Discontent due to disenfranchisement can often lead to conflict and violence given the ‘right’ leadership. Britain has had its share of violence and public insurrection over the centuries. We could end up with more of the same.

 

The EU is a highly visible and present symbol of globalization and consolidation of power in the hands of global finance capital. What better target for popular hatred? It stands for everything older Brits seem to be feeling pissed off about, but globalization is not going away any time soon, nor is the creation of larger and larger political units like the EU and organizations of global management organizations like the World Bank and the World Trade Organization. Work will continue to be moved around the globe as corporations look for cheaper and cheaper sources of labour and resources. No, leaving the EU will not mean an end to globalization for the UK.

 

That said, human beings live in communities, not in global organizations and labour for most people means employment in local enterprises or government (education, health care, etc.). As I noted above, a consequence of globalization is the disappearance of steady, predictable, good paying jobs, especially for people whose jobs can easily be automated. When we see our communities attacked by austerity measures and global ‘structural adjustment programs’ we get angry. The EU, as a political unit, represents distance and is seen as anti-democratic and it is. The EU is a mechanism for securing the ascendency of finance capital, but it had better be careful not to piss off people who live locally and don’t think globally. It’s hard to convince a bloke who just saw his factory job of 20 years disappear and re-appear in China two months later that globalization is a good thing. For him or her, it’s not. So there is push back.

 

Part of the push back will be in the form of popular unrest and violence. At the political level, there will be lots of re-negotiating to do as the UK leaves the EU, but at the local level, there may be random acts of violence, but there are some promising developments that should at least get the attention of global capital and that’s the movement to greater and greater local autonomy and control over food supplies, power generation, waste management and social services. People may not get their countries back, but they may, over the long term, get more local control as technologies present opportunities for greater local autonomy.

 

We are in a period of transition when global capital has proven itself capable of exploiting every part of the globe. I think we are getting close to the end times of the glory days of capitalist expansion when profit margins inexorably diminish because there are no longer cheaper workers to be found or resources become too expensive to exploit and when markets are flooded with consumer products that are increasingly at the margins of utility and no longer producing the satisfaction we all seek in our lives.

 

That means the opportunities will abound for us in our communities to get creative in finding local solutions to some of our most pressing problems while we connect to the rest of the world on the internet and create communities there as well, communities of ideas and mutual help that don’t imply direct political involvement or control.

I think Brexit is a wakeup call for capital. That is certainly true, but we must find in it a resolve not to descend into xenophobia, racism, brutish nationalism and violence while seeking solutions to problems in our lives for ourselves, by ourselves, ironically using the tools global capital has so generously provided us. We must resist the urge to blame and scapegoat and instead turn our attention to our communities creating in them the means of living meaningful lives.