Breaking the cycle of exploitation

Even when times are bad, capitalist states pursue policies that benefit capitalist profit.

There has been a tremendous outpouring of anger and resentment since Newfoundland and Labrador’s provincial budget was announced on April 14. As predicted, the Liberal Government has introduced a budget that amounts to a punishment of the working class of the province: higher taxes, special levies, and cuts to numerous important social services, with many more likely on the way later this year.

As if the cost of living in this land was not already too high, now Newfoundlanders and Labradorians are being asked to contribute even more to bail out economic problems not of their own creation. Not only will we have to pay more through these levies and fees, but we must also deal with more school closures, cancelled or endlessly delayed hospital construction, and progressively worse roads. And if you think it’s bad on the island, just think about how little funding ends up in Labrador. Thus, people have turned out by the hundreds to demonstrations in various communities in the province to denounce the austerity budget, and still other actions are being planned.

Most of us are just working to make a living and had no hand in the economic decision-making, and the new budget makes a mockery of the previous government’s population growth “plan”; why would anyone want to move to this province under such conditions? There have already been numerous people writing on social media and on local news complaining about how hard it is to get by even on an “average” income. And for others, prospects for the future are bleaker than ever. 

Consider my own situation. I am a teacher by profession. Even when I completed my Bachelor of Education a few years ago, it was exceedingly difficult to find full-time positions anywhere here. All of my professional teaching experience has been overseas or in isolated Arctic communities. When I lived in St. John’s recently, I was either working minimum wage or collecting EI from my previous teaching stint. Even as I write this article, I am working in the north again. Newfoundland is my home and I want to be working there, but is there any hope? Schools are being closed, full-time positions cut, and classes are getting bigger. All I can say to that is a big “nope”.

Bigger forces at work

So, people are angry, and justly so. But where should this anger be directed? There are, for example, the surface-level frustrations with the parties. The Liberals campaigned on the promise of a “stronger tomorrow” and their budget is undeniably a refutation of that vague commitment. Meanwhile the “Progressive” Conservatives that previously governed the province put forward many of the policies which put the province in its current fiscal state in the first place. When former Premier Paul Davis attempted to address the crowd at an anti-budget rally in front of Confederation Building on April 21, he could scarcely be heard over the booing and jeering. I say complaining about the ruling parties is a “surface-level” complaint because it does not get to the heart of the way our economic system fundamentally works. 

People complain about “bad government” quite often. They have a point: we regularly elect governments that make decisions that often hurt working people in the long run. And we get angry, we get frustrated. We send letters to MHAs demanding this or that policy be reversed, or that someone resign over whatever scandal or because of unpopular policies. But it keeps happening. And it keeps happening because governments in this country aren’t really there to benefit the majority of people. Capitalist states pursue policies that benefit capitalist profit. Even when times are bad, they are not bad for the capitalist class. They may downsize their operations in some way, but that keeps them in wealth while the workers are left to fend for themselves. When you have a government made up mostly of business owners and their supporters, it should not come as a surprise that they make decisions that will keep a few people wealthy while the rest of us are asked to make sacrifices.

The paper mill in Corner Brook is a good practical example. The mill’s owner, Kruger Inc. of Montreal, has made demands of the workers there to accept reduced benefits, and there have periodically been layoffs along with decreased production. Why? The declining value of newsprint means less profit. Workers at the mill are asked to live with less while Joseph Kruger II still has his riches. He does not possess that wealth because he somehow “works harder”. Rather, the wealth is generated by the workers he employs and benefits from simply because he is the owner.

Instead of demanding that perhaps Mr. Kruger should accept less, the previous government preferred to loan tens of millions of dollars to his company — public funds essentially being used as a bribe to persuade Kruger to keep the Corner Brook mill in operation. Keep in mind, it is not that the mill’s products are useless; it’s just not always making the amount of money Kruger would like. The less his company has to pay to keep running it, the better for him. And if the government is led by people who subscribe to the same capitalist worldview, which it invariably is virtually everywhere in this country, he will benefit still more. Kruger is just the tip of the iceberg.

 Capitalist states pursue policies that benefit capitalist profit. Even when times are bad, they are not bad for the capitalist class.

One may look at virtually any industry to see the same trend of workers being forced to into hard times just because a private owner wants to save money in times when market prices threaten to harm profit margins. Miners in Labrador are all too used to the cycles of boom and bust. The iron ore mines in Wabush were shut down and several hundred workers laid off not because there is no more iron ore to obtain but because the mine’s owners felt that the cost of extraction combined with lower prices for ore was no longer worth it. The provincial government let it happen, though it did insist that Cliffs Natural Resources have a plan in place for terminated employees. Even then, pensioners are worried about reduced incomes along with other lost benefits as Cliffs goes through bankruptcy proceedings. The company may have lost money in Labrador, but it is unlikely that Cliffs Chairman Lourenco Goncalves is hurting for a dollar. 

Nalcor is another company on many people’s minds these days. Nalcor is a Crown corporation, and such entities are generally meant to rely on public funds to provide a useful service. And yet it is not unusual for a Crown corporation to be expected to behave like any other private business. Billions have been sunk into the Lower Churchill project. It is over budget and behind schedule, and a good part of the extra cost and wasted time comes from contracting out the actual work to private construction companies. Once again, it is public money being used for private gain. And it is not like this project was developed in a democratic fashion. We are expected to accept the narrative that the new facility and transmission lines are going to be great, as if there are no alternatives to flooding vast areas of land and potentially poisoning the local environment. Labradorians, especially Innu and Inuit, have rightly voiced such concerns and they appear to be falling on ears that are deaf at best, racist at worse.

Politics and capitalism go hand in hand in this country. True, not all MHAs and MPs are business owners, but many are, or have connections, or otherwise endorse the economic status quo. It is quite common for our premiers and prime ministers to have been quite wealthy individuals owning various assets before and after holding office. Danny Williams is a prominent recent example, and of course Dwight Ball is himself a wealthy business owner; questions are already being asked about how his real estate assets may benefit from conditions created by the new budget.

Fortunately, there is a growing number of people in Newfoundland and Labrador who are now doing more than criticizing the parties, and instead calling for such things as “getting money out of politics” and “smashing the cycles of boom and bust”. How is that to be done? Readers may know me as the Communist Party candidate in St. John’s East in the 2015 federal election. Of course our party advocates for socialism — that our resources and industries need to be publicly owned and democratically controlled. A better future means we need many things. Schools and hospitals must be expanded, not closed or cancelled. Wages need to be higher, unions need to be stronger. We need food security. We need a more diverse economy. We need to get away from relying on fossil fuels. We need not only better roads, but a comprehensive publicly-owned transportation system to reduce the use of cars and short-haul flights. We need to have comprehensive health care. We need accessible, comprehensive public day care. We need to end the gender pay gap. We need affordable housing. So many socially useful things could be done if our economy was actually in our own hands. 

Building solidarity

We are seeing the seeds of resistance growing as more people demonstrate against this budget. Labour forces such as NAPE have taken a strong oppositional stance, and there are loud voices of social justice standing up in many communities. There is also a call for a common front of labour, community, and social justice forces. We must welcome united action to build more protest, and more powerful struggle. 

The Liberal budget is nothing less than an attack on working people in this province. If the House will not rescind the budget, a new election must be held. But mass action should continue after that, otherwise we would still be left with the same government system and the same old problems will return sooner or later even with a less austere budget. The House of Assembly and elections are not the culmination of political activity. We need new, democratic politics built from grassroots. Our legislatures have their uses, but fundamental change must flow from the working class taking action in defence of its own interests. Working people did not make this crisis, and we will not pay for it!

Sean Burton was born and raised in Corner Brook. He has been a member of the Communist Party of Canada since his high school years. Receiving degrees from MUN and McMaster University, Sean spent several years teaching in South Korea and currently teaches high school in Nunavut.

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