The people in Canada who are intelligent, open-minded, and not ideologically conservative would probably number at least a million. But if only one in twenty of them—50,000—were to read Joyce Nelson’s latest book—Bypassing Dystopia: Hope-filled Challenges to Corporate Rule—the outcome could be a grassroots uprising that would free Canada from the corrosive clutches of neoliberalism.
Canada would become the idyllic country of economic, social, and environmental well-being that our corporate and political leaders hypocritically boast it already is.
For anyone who hasn’t read this book and doesn’t intend to do so, my prediction of its revolutionary effects may seem impossibly grandiose. Most of those who do read it, however, will almost certainly share my enthusiasm. Its stunning exposure of how neoliberalism has worsened poverty and inequality, while supplanting democracy with plutocracy, will both infuriate and motivate readers not yet aware of these and many other “free market” iniquities.
A brief review, no matter how descriptive, can never do justice to the substance of so influential a book. So I’ll just touch on a few of the highlights—especially the forgotten vital role of the Bank of Canada—if only to whet your appetite for the complete tome.
Bypassing Dystopia is the sequel to Joyce Nelson’s previous book, Beyond Banksters: Resisting the New Feudalism, published in 2016. It would be beneficial to have read that book, but by no means essential, since Joyce provides a helpful summary in her introduction to the sequel.
To give you some idea of the book’s scope, I’ll list the twelve harmful aspects of neoliberalism that it succinctly lists. Nelson appropriately calls them “the Dirty Dozen.”
1. Unlimited economic growth
2. Privatization of public assets
4. Free trade (corporate rights deals)
5. Smaller government
6. Tax cuts for multinational corporations
7. Austerity budgets
9. Open borders for capital
10. Tax havens
11. Privatization of the money-creating function
12. Central bank “independence”
One by one, Nelson methodically exposes the baneful effects of these infamous neoliberal policies, as well as a few others not specifically on the ‘Dirty Dozen’ list, such as the housing crisis and threats to Canada’s water and farmland.
Lacking space to delve into Nelson’s meticulous analysis of all these neoliberal atrocities, I’ll focus on examples of the surprising optimism she expresses in her chosen subtitle: ‘Hope-filled challenges to corporate rule.’ Although I’m not putting quotation marks around the following extracts, all but the bracketed words are based on the book’s text.
Divestment from fossil fuels
[While Canada’s federal and most provincial governments continue to push for more pipelines] The rest of the world seems poised to move away from tar sands investment. Norway’s central bank, which runs that country’s $1 trillion sovereign wealth fund, has recommended that the Norwegian government fully divest from oil and gas companies and sell off some US$35 billion of shares in that sector.
Last year, 83 economists released an open letter, “Declaration on Climate Finance,” which called on “global economic actors to fully embrace safe and renewable energies and phase out fossil fuels “by no longer investing in them.” The Guardian later reported that, across the planet, more than 800 institutions, with total investments valued at $6 trillion, have committed to divest from fossil fuels.”
Opposition to ISDS
The investor-state dispute settlement (ISDS) clause in NAFTA, and other trade deals such as CETA that Canada has signed, allows foreign companies to challenge domestic laws that threaten their profitability. [Since 2010, according to the CCPA, Canada has been sued under NAFTA twice as often as the U.S. and Mexico combined, with claims from corporations often targeting environmental protection, public health, and resource management decisions by Canadian governments. On top of the $219 million Ottawa has paid out in awards and settlements, it has also spent more than $95 million in legal fees defending these lawsuits.]
In a scathing editorial titled “The Arbitration Game,” The Economist noted: “If you want to convince the public that international trade agreements are a way to let multinational companies get rich at the expense of ordinary people, this is what you would do: give foreign firms a special right to apply to a secretive tribunal of highly paid corporate lawyers for compensation whenever a government passes a law to, say, discourage smoking, protect the environment, or prevent a nuclear catastrophe. Yet that is precisely what trade and investment treaties have done, through a process known as ‘investor-state dispute settlement,’ or ISDS.”
[U.S. President Trump has proposed scrapping the ISDS clause in NAFTA, and Canadian negotiators reportedly were willing to follow suit.] But Prime Minister Trudeau stubbornly insists that ISDS be maintained in both NAFTA and the CETA, despite Canada’s poor track record and the costly, unreasonable threat ISDS poses to democratic policy-making.
An ongoing and robust public opposition to ISDS has grown massively since 2012 [especially in Europe and Central and South America]. But in Canada, the Trudeau government is a notable exception to the anti-ISDS movement. When asked to explain this anomaly, Celia Olivet, head of the Economic Justice Program at the Netherlands-based Transnational Institute, responded: “In my view, the only way to explain the Canadian government pushing for ISDS is because it is defending the privileges and interests of Canadian multinational corporations that could benefit from the system.”
After the release of the informative Paradise Papers in 2017, the NGO Canadians for Tax Fairness (CTF) estimated that between $10 billion and $15 billion in taxes were not being collected annually from the massive amounts being stashed in tax havens by big corporations and wealthy individuals. The Conference Board of Canada’s estimate is even higher: a whopping $47 billion a year lost to overseas tax evasion.
The CTF stated that this forgone tax revenue would be enough to fund Pharmacare, universal child care, free university tuition, and infrastructure improvements in First Nations communities, all at the same time.
So the corporate sector overlords have been hiding trillions in tax havens to “starve the beast” of governments worldwide, forcing austerity measures, deregulation, privatizations, and further tax cuts for the rich.
The Toronto Star pointed out that “the Paradise Papers are doing nothing to soothe those who worry about the unseemly intertwining of money and power in politics, or about the extent to which the economy is being rigged by the few against the many. The government can do something about this. It can, for instance, close unfair loopholes and collect what’s owed.”
Both these changes, however, would need a loud, concerted, and immediate push from the Canadian public. In other words, this is no time for either apathy or cynicism.
The Bank of Canada—for 35 years the “People’s Bank”
The Bank of Canada Act gives our publicly-owned central bank the power to make near-zero interest loans to our federal, provincial, (and potentially, municipal) governments for infrastructure and health care spending. The BoC successfully did this for 35 years, from 1938 to 1973 [funding the St. Lawrence Seaway, the Trans-Canada Highway, construction of coastal ports and airports, and many other public building ventures], and without incurring debts to private lenders and without creating inflation problems.
In 1974, however, the Bank for International Settlements, the World Bank, the International Monetary Fund, and a variety of corporate think-tanks persuaded most countries, including Canada, to stop their central banks from making interest-free loans [and have governments do most of their borrowing from the private banks instead]. Since then, the neoliberal economic agenda has created environmental destruction and massive wealth inequality across the planet. Canada’s federal debt has skyrocketed and we have paid about $1.5 trillion in interest to the private banks [most of which could have been saved if our federal government had continued to borrow from the Bank of Canada.]
For the past seven years, the Toronto-based Committee on Monetary and Economic Reform (COMER) has been pursuing a lawsuit against the federal government’s refusal to reactivate the Bank of Canada’s original mandate of funding public projects. In May of 2017, however, the Supreme Court of Canada refused to hear COMER’s lawsuit. The Court never gives a reason for refusing a case, but the government’s lawyers contended that the Bank of Canada issue is “not for the courts, but for the electorate” to decide.
[Given Justin Trudeau’s decision to bypass the Bank of Canada and set up a Canada Infrastructure Bank that intends to spend $180 billion over the next decade—derived mostly from private sector investors who will be paid millions in interest—it’s obvious he will never voluntarily resume borrowing from the Bank of Canada.]
Last year, while Trudeau was speaking to a town hall meeting in Peterborough, Ont., on the country’s economic problems, COMER’s Herb Wiseman shouted out: “Use your central bank!” To which Trudeau promptly responded: “That doesn’t work.” It was a stunning remark, blithely ignoring and denying 35 years of Canadian history. Moreover, Ecuador has proven over the last several years that using the central bank actually does work to put money into the real economy without taking on expensive debt to private banksters or causing an inflationary spiral.
[Another country that has continued major borrowing from its central bank is Japan.] As Ellen Brown has pointed out, “While the U.S. government (along with Canada’s government) has been driving up its ‘sovereign’ debt and the interest owed on it, Japan has been cancelling its debt at the rate of $720 billion per year. How? By selling its debt to its own central bank, which returns the interest to the government. An interest-free debt owed to oneself that is rolled over from year to year is
That strategy by Japan’s central bank sounds very familiar to what COMER has been advocating for Canada.
COMER has not been discouraged by the Bank of Canada’s refusal to hear its case. Its leaders and supporters have decided to increase their educational outreach to the public. Their goal is to make the restoration of the Bank of Canada’s role as the main funder of government projects a key issue in the next federal election.
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I estimated at the start of this review that Bypassing Dystopia could have as many as 50,000 intelligent and open-minded readers. Since Watershed Sentinel Books is a relatively small publisher, however, without the financial means to widely promote their books, that estimate may be overly optimistic.
But maybe not. If every reader becomes as impressed and enthused by Bypassing Dystopia as I am, and if each of them commits to persuading ten or more of their relatives, friends and co-workers to read it as well, that 50,000 readership level might actually be reached.
And then, if these many thousands of readers become politically active during next year’s election campaign, the Bank of Canada’s “resurrection” as the prime funder of public projects could indeed win overwhelming voter support.
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Copies of Bypassing Dystopia can be obtained from its publisher, Watershed Sentinel Books at: https://watershedsentinel.ca/bypassing-dystopia
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