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     Neo-conservatism and the Disempowerment of Labor in British Columbia

                                                                              By Johnny Reb

May 2009                               

The Campbell Government's Assault on Unions and the Working Class: Bill 29

First, I’d like to tell a very disturbing personal story about a venomous neo-conservative assault on labor. In my home province of British Columbia the ruling party for the past several years has been the Liberal Party which became populated by retreads from the defunct provincial Social Credit Party and federal Reform Party in the early 1990s when it went from lowly third party status to winning the election of 2001. Both the Social Credit and Reform parties were big business corporatist parties of the extreme right, not “liberal” in any traditional sense. One of the first legislative acts by the most infamous alcoholic in Victoria, Gordon Campbell, the provincial Liberal party leader and subsequent Premier of the province, was to invoke Bill 29, an anti-labor union bashing legislative assault on working people. Among many other injustices, the original Bill 29 gave the Campbell government the right to tear up signed collective agreements and paved the way for the wholesale privatization of key health care support services like housekeeping and food services.

Bill 29 would have made Adolph Hitler proud (declaring Unions illegal was Hitler’s first act after gaining absolute power) and has been several years in the courts under challenge by several unions in British Columbia and was recently declared a violation of the Canadian Bill of Rights by the Supreme Court of Canada. The cost to the taxpayers of Canada for this process was $350,000,000. For the thousands of people who lost their union jobs, their careers destroyed and their lives thoughtlessly dislocated as a result they will receive little consolation or compensation. Welcome to the Fourth Reich.

My sister-in-law was victimized shortly after Bill 29 became law when one morning she and other employees of the Senior Citizen Care Center in Prince George where she worked for over 25 years were told that their union job was gone and they could sign back on for $9 an hour with no benefits. She was earning about $17 an hour at the time with a few benefits. None of the embittered and embattled employees were so bottomed out in self-esteem to accept the slave wages. To add to the humiliation, when my sister-in-law received her severance check, it bounced. Then a year or so after that her paltry pension was mismanaged while at the same time stock markets before the current meltdown were surging ahead to new highs – a time when a chimp could have made money in the stock market her pension was cut in half. As I have already mentioned, the Union went to court over the legality of Bill 29 and it ultimately went to the Supreme Court of Canada where it was declared unconstitutional and a violation of the Canadian Charter of Rights. The case went to the Supreme Court of Canada because the corrupt neo-conservative Big Business biased Supreme Court of British Columbia refused to deal with it. 

Thanks a lot Gordon Adolph Campbell - Hail to the Chief! Sieg Heil! But the humiliation and insensitivity continues unabated. All this while taxpayers are bailing our criminal banks and financial institutions -  and as I write this the  management of the bankrupt insurance conglomerate AIG, the recipient of billions in taxpayer bailout money, are getting $165 million in bonuses for driving the company into the ground. Go figure. What planet is this?

I just received an email from my brother this morning:

Hi John    You remember the famous Bill 29 when Alice lost her job? Anyway it has been on-going for over 5 years now and the union has been fighting it in the courts. It first went to the Supreme Court of B.C and since they could not or would not deal with it, off it went to the Supreme Court of Canada and the union wins big and Alice was awarded a settlement check of about $17,000 but now they want her to pay back the EI-UIC she got about five years ago .......so now the union is going to appeal this again in court. I cannot believe all this crap that is going on with both of our governments, the cost of this so far has been over $350 million of our tax dollars for court costs and the lawyers alone....... Just thought I would let you know what we are dealing with and I guess we are in for another round.......I will try and keep you informed    Love Don

Bill 29 – how can I forget it? But our right wing media however has done a brilliant hatchet job in obliterating any trace of it from our collective memories.  The Supreme Court of British Columbia is an open sewer of corruption and cronyism and, as I have intimated,  that’s likely why this case was sent to the Supreme Court of Canada. So if your sole source of information is the Vancouver Sun, The National Post or any of monopolist anwest Global news media, you likely have never heard of it. The right wing corporatist media has been giving the corrupt Herr Campbell a free ride for the past eight years – and the boot on the working class neck continues unabated as he continues to refuse to budge on the minimum wage of $8 per hour. If a business cannot pay an employee a livable wage it ought not to be in business in the first place.

After speaking with my sister-in-law on the telephone she informed me that the court costs to the taxpayer for the long litigation over the legality of Gordon Campbell’s Bill 29 that went to the Canada’s highest court were not $3 million as my brother had said in his original email, but $350 million. Reflect on that obscene amount in consideration of what the Province of BC paid out as compensation to the thousands of people who lost their jobs and had their lives ruined by Bill 29 - $85 million. There has been absolutely no coverage of this sickening scandal that ought to be a front page exclusive in any of our corporate right wing media if they had any integrity or pretense to impartiality – which of course they do not? But this is not unusual since the right wing corporate media, including the Vancouver Sun and other right wing newspapers and television stations have given Campbell a free ride since 2001. The distortions, lies and deliberate acts of omission are no surprise to me at least. It’s one of the primary reasons why newspapers all over North America are going bankrupt. I just heard today that one of Seattle’s major newspapers, The Post Intelligencer, went belly up and published its last edition. Canwest Global, Canada’s Zionist right wing media conglomerate is basically insolvent and their stock trades in the pennies (30 cents on my last check) on the TSE. Good on them I say. I actually made a few bucks shorting their stock when it was $9. No loss to the world of journalism. The media company is nothing more than a platform and mouthpiece for the Conservative Party of Canada and source of propaganda for the Fraser Institute. Because the media is controlled by a half dozen neo-conservative mega-corporations, real investigative journalism is a rotting corpse all over North America and has been for decades. News on the disturbing story of Bill 29 - Vancouver Sun: nada. Globe and Mail: nada. National Post: less than nada. If the NDP had devised something as unjust, obscene and costly as this outrage our corporatist newspapers would have argued “off to the guillotine with them.” They have protected that useless disingenuous waste of skin piss tank Gordon Campbell through every sickening scandal starting with the drunken Maui escapade. At the very least Herr Campbell should have been compelled to resign over this Bill 29 issue which is something out of the Dark Ages of the Spanish Inquisition. But he ought to have resigned over a half-dozen other disgraceful incidents as well.

During the recent election Gordon Campbell was preaching to the bewildered herd that he would deliver us from the economic disaster and quagmire we are burdened with and buried under. He blames the disastrous economic meltdown to "global economic forces beyond his control" but when the BC economy was booming primarily due to a rabid bull market in commodities and a real estate bubble, it was his economic strategies that were instrumental in the boom. Does anyone fall for this hogwash? Obviously they do.

Now that the BC election is over and the neo-conservative ideologue Gordon Campbell with the same mind-set of Bush Republicans who caused the current economic depression is in for a third term, we can expect more of the same. Two of Campbell's disgraced cabinet ministers ( both held the post of Solicitor General - the top legal post in the province) John Les of the Fraser Valley Mennonite Mafia and the incompetent nincompoop John Van Dongen were both re-elected despite the scandals. John Les, who belongs in prison, resigned over a scandal that exposed his dealings when he was in Municipal politics in the Fraser Valley, using his political influence to facilitate and swing real estate deals and development by re-zoning agricultural land for residential and industrial purposes. He was replaced by Van Dongen who a week before the election declared how honest he was by admitting that he had incurred nine speeding tickets in the past year or so. Consequently he resigned in disgrace as well. Both of these rascals were re-elected. Go figure. The turnout in the election was below 50% and the lowest in BC history, demonstrating that the apathy and capitulation of the hoi polloi over the fact that democracy is a sham, facade and rotting corpse. Even the sickening scandal over the privatization and sale of BC Rail, a profitable public company created by Social Credit Premier W. A. C. Bennett several decades ago, a conservative who would in today's world be deemed a socialist, could not discourage voters from re-electing these thugs. The BC Legislature was raided by the RCMP back in 2003 to obtain evidence over suspicions of bribery and under the table dealings of politicians in the Campbell government and the corporations bidding forBC Rail. Under a shroud of suspicion it eventually was sold to Canadian National Railway and the case has yet to go to trial, the process having been continually stonewalled by the BC Liberals.

Is the regime of Neo-Conservatism over?

Does the current economic crisis spell the end of neo-liberalism/neo-conservatism? I suppose it depends on what you mean by neo-liberalism. My perception of the neo-conservative movement, that had its genesis with the Reagan-Thatcher-Mulroney years, is a class project, masked by a lot of quasi-liberal rhetoric about individual freedom, liberty, personal responsibility, privatization and the free market. These were means, however, towards the restoration and consolidation of oppressive class power paired with a brutal frontal attack on unions and the working classes. It’s a project that has been tremendously successful so far.

Neo-liberalism and neo-conservatism are essentially synonymous labels for free market libertarians - capitalists on cocaine who were transmogrified from traditional liberalism and conservatism. Europeans tend to prefer the former while North Americans prefer the latter label. Many such as Alan Greenspan are “objectivists”, an innocuous sounding term for acolytes of Ayn Rand’s bankrupt philosophy of narcissism and greed. One of Rand’s books was given the self-contradictory title The Virtue of Selfishness. I read most of Rand’s works back in the 1960s and 70s when she was all the rage. There is little doubt about Rand’s brilliance and her top notch intellect. She was a hard-nosed atheist right to her death in 1982 and I have little problem with her metaphysical and epistemological stances. Her hard-assed free market ethical theories are another matter. There are some interesting postings of interviews with Rand that have been uploaded to Youtube if you are interested.

The objectivists are the precursors to the neo-conservatives that brought you unfettered global capitalism and massive Bushwhacks on unions and the working classes that have ended in our current economic demise and hopefully the self-destruction a rabid carnivorous brand of capitalism with the fox guarding the henhouse - all this in conjunction with militarism, huge deficits and costly immoral imperialistic wars.

How the free for all gluttony lasted this long without imploding remains a mystery. It never fails to amaze me that the working classes can tolerate someone’s boot on their neck for thirty years or more. Like hopeless masochists, they even go so far as to vote against their interests and for the political parties who are the pimps for these self-serving feudal lords. So what has happened to the unions and the labor movement in general over the past three decades?

When you look at what happened to workers over the last 30-40 years, they have got almost nothing out of this neo-conservative program. In the decades after the Second World War when we had huge economic growth and the best GDP rates we have had in a century paired with strong unions and healthy increases in wages and working conditions for ordinary workers. But during the 1960s and early 70s the ruling financial and corporate oligarchy became concerned about the “labor problem” – its increasing influence and power. At the time there were scarcities of labor both in Europe and the US and labor was well organized, with political clout. How did the conservative elites deal with this problem? There were a number of solutions to the arrogance of the working classes having the audacity to want even a small piece of the economic pie. So how can capital get access to cheaper and more docile labor supplies?

One was to encourage more immigration. In the United States there was a major revision of the immigration laws in 1965 that in effect allowed the US access to the global surplus population (before that only Europeans and Caucasians were privileged). In the late 1960s the French government was subsidizing the import of Arabic labor, the Germans were bringing in the Turks, the Swedes were bringing in the Yugoslavs and the British were drawing upon their empire. So a pro-immigration policy emerged which was one attempt to deal with the labor problem.

The second strategy is accelerated technological advancement which throws people out of work and if that failed then there were ruthless politicians like Reagan, Mulroney, Thatcher and Pinochet to crush organized labor. And finally capital goes to where the surplus labor is by off-shoring, and this was facilitated by two things. First technical reorganization of the transport systems: one of the biggest revolutions that happened during this period is containerized shipping which allowed corporations to make auto parts in Brazil and ship them for very low cost to Detroit or wherever. Second, the new communications systems allowed the tight organization of commodity chain production across the global space.

The free trade agreements such as NAFTA and GATT were simply additional power added to the big multinational corporations that enabled them to move to parts of the world where non-union cheap labor along with little or no worker rights and environmental standards prevailed. Corporations were even granted the right to sue governments if their profits were compromised. Most of these strategies against labor and for capital accumulation were thus solved, so by about 1985 capital no longer had a “labor problem”. It may have specific problems in particular areas but globally it has plenty of labor available to it. The collapse of the Soviet Union and the transformation of much of China added something like 2 billion people to a cheap source of docile workers in 20 years - thus the incredible shrinking paycheck that many of us have experienced in the past 20-30 years.

So labor availability is no problem now and the result of that is that labor has been disempowered for the last 30 years. But when labor is disempowered it gets low wages, and if you engage in regressive wage repression this limits markets. So capital was beginning to face problems with its market, and there were two things which happened. Here is how one writer on the internet explained it:

“The first was the gap between what labor was earning and what it was spending was covered by the rise of the credit card industry and increasing indebtedness of households. So in the US in 1980 you would find that the average household would owe around $40,000 in debts now it’s about $130,000 for every household, including mortgages. So household debt sky-rockets and that brings you to financialization, and that was about getting the financial institutions to support the household debts of working class people whose earnings are not increasing. And you start with the respectable working class, but by the time you get to the year 2000 you start to find these sub-prime mortgages circulating. You are looking to create a market. And so finance starts to support the debt-financing of people who have almost no income. But if you hadn’t done that what would have happened to the property developers who are building the houses? So you try and stabilize the market by funding that indebtedness.

The second thing which happened was that from the 1980s onwards the rich are getting far richer because of that wage repression. The story we are told is that they will invest in new activity but they don’t; most of them start to invest in assets, i.e. they put money in the stock market, the stock market goes up so they think it is a good investment so they put more money in the stock market, so you get these stock market bubbles. It is a ponzi-like system without the Madoff’s organizing it. The rich bid up asset values, including stocks, property, and leisure property as well as the art market. These investments involve financialisation. But as you bid up asset values this carries over to the whole economy, so to live in Manhattan became all but impossible unless you went incredibly into debt, and everyone is caught in this inflation of asset values, including the working classes whose incomes are not rising. And now we’ve got a collapse of asset values; the housing market is down, the stock market is down.

There has always been the problem of the relationship between representation and reality. Debt is about the assumed future value of goods and services, so it assumes the economy is going to continue to grow over the next 20 or 30 years. It always involves a guess, which is then set by the interest rate, discounting into the future. This growth of the financial area after the 1970s has a lot to do with what I think is another key problem: what I would call the capitalist surplus absorption problem. As surplus theory tells us, capitalists produce a surplus, which they then have to take a part of, recapitalize it, and reinvest it in expansion - which means they always have to find somewhere else to expand into. In the last 30 years an immense amount of the capital surplus has been absorbed into urbanization: urban restructuring, expansion and speculation. Every city I go to is a huge building site for capitalist surplus absorption. Now, of course, many of these projects stand unfinished.

This way of absorbing capital surpluses has got more and more problematic over time. In 1750 the value of the total output of goods and services was around $135 billion, in constant values. By 1950, it’s $4 trillion. By 2000, it’s $40 trillion. It’s now around $50 trillion. And if Gordon Brown is right it’s going to double over the next 20 years, to $100 trillion by 2030.

Throughout the history of capitalism, the general rate of growth has been close to 2.5% per annum, compound basis. That would mean that in 2030 you’d need to find profitable outlets for $2.5 trillion dollars. That’s a very tall order. I think there has been a serious problem, particularly since 1970, about how to absorb greater and greater amounts of surplus in real production. Less and less of it is going into real production, and more and more into speculation on asset values, which accounts for the increasing frequency and depth of the financial crises we’ve been having since 1975 or so; they are all crises of asset value.

My argument would be that if we come out of this crisis right now, and there’s going to be capital accumulation at 3% rate of growth, we’ve got a hell of a lot of problems on our hands. Capitalism is running into serious environmental constraints, as well as market constraints, profitability constraints. The recent turn to financialisation is a turn of necessity, as a way of dealing with the surplus absorption problem; but one that cannot possibly work without periodic devaluations. That’s what’s happening now, with the losses of several trillion dollars of asset value.

The term ‘national bailout’ is therefore inaccurate, because they’re not bailing out the whole of the existing financial system – they’re bailing out the banks, the capitalist class, forgiving them their debts, their transgressions, and only theirs. The money goes to the banks but not to the homeowners who’ve been foreclosed on, which is beginning to create anger. And the banks are using the money not to lend to anybody but to buy other banks. They are consolidating their class power.

The collapse of credit for the working class spells the end of financialisation as the solution for the crisis of the market. As a consequence of this we will see a major crisis of unemployment and the collapse of many industries unless there is effective action to change that. Now this is where you get the current discussion about returning to a Keynesian economic model, and Obama’s plan is to invest in a vast public works and investment in green technologies, in a sense going back to a New Deal type of solution. I am skeptical of his ability to do this.

To understand the current situation we need to go beyond what goes on in the labor process and production to the complex of relationships around the state and finance. We need to understand how the national debt and credit system have from the beginning been major vehicles for primitive accumulation, or what I now call accumulation by dispossession – as you can see from the building industry. If you look at how capitalism was revived in second empire Paris, the state along with the bankers put together a new nexus of state-finance capital, to rebuild Paris. That provided full employment and the boulevards, the water systems and sewage systems, new transport systems, and it was through those types of mechanisms that the Suez Canal was built. A lot of this was debt financed. Now that state-finance nexus has undergone a massive transformation since the 1970s; it’s become far more international, it’s opened itself to all types of financial innovations including derivative markets and speculative markets etc. A new financial architecture has been designed. What I think is happening at the moment is that they are now looking for a new financial set-up which can solve the problem not for working people but for the capitalist class. I think they are going to find a solution for the capitalist class and if the rest of us get screwed, too bad. The only thing they would care about is if we rose up in revolt. And until we rise up in revolt they are going to redesign the system according to their own class interests. I don’t know what this new financial architecture will look like. If we look closely at what happened during the New York fiscal crisis I don’t think the bankers or the financiers knew what to do at all, now what they did was bit by bit arrive at a ‘bricolage’; they pieced it together in a new way and eventually they come up with a new construction. But whatever solution they may arrive at, it will suit them unless we get in there and start saying that we want something that is suitable for us. There’s a crucial role for people like us to raise the questions and challenge the legitimacy of the decisions being made at present, and to have very clear analyses of what the nature of the problem has been, and what the possible exits are.

The banking system should serve the people, not live off the people. And the only way in which we are really going to be able to exert the right to the city is to take command of the capitalist surplus absorption problem. We have to socialize the capital surplus, and to get out of the problem of 3% accumulation forever. We are now at a point where 3% growth rate forever is going to exert such tremendous environmental costs, and such tremendous pressure on social situations that we are going to go from one financial crisis to another.

The core problem is how you are going to absorb capitalist surpluses in a productive and profitable way. My view is that social movement must coalesce around the idea that they want more control over the surplus product. And while I don’t support a return to the Keynesian model of the sort we had in the 1960s, I do think there was much greater social and political control over the production, utilization and distribution of the surplus then. The circulating surplus was put into building schools, hospitals and infrastructure. This was what upset the capitalist class and caused a counter movement toward the end of the 1960s – that they were not getting enough control over the surplus. However, if you look at the data the proportion of the surplus which is being absorbed by the state has not shifted very much since 1970, so what the capitalist class did was to stop the further socialization of the surplus. They also managed to transform the word government into the word ‘governance’, making governmental and corporate activities porous, which enables the situation we have in Iraq where private contractors milked the possibilities ruthlessly for easy profit.

I think we are headed into a legitimization crisis. Over the past thirty years we have been told, to quote Margaret Thatcher, “there is no alternative” to a neo-liberal free market, privatized world, and that if we didn’t succeed in that world it’s our own fault. I think it’s very difficult to say that when faced with a foreclosure crisis you support the banks but not the people who are being foreclosed upon. You can accuse the people being foreclosed upon of irresponsibility, and in the US there is a strong racist element in this argument. When the first wave of foreclosures hit places like Cleveland and Ohio they were devastating to the black communities there but some peoples’ response was ‘well what do you expect, black people are irresponsible.’ We are seeing right-wing explanations of the crisis which explain it in terms of personal greed, both in Wall Street and those who borrowed money to buy houses. So they attempt to blame the crisis on the victims. One of our tasks must be to say ‘no, you absolutely cannot do that’ and to try and create a consolidated explanation of this crisis as a class event in which a certain structure of exploitation broke down and is about to be displaced by an even deeper structure of exploitation. It’s very important this alternative explanation of the crisis is discussed and conveyed publicly.

One of the big ideological configurations we are going to have is what is going to be the role of home ownership in the future once we start saying things like you’ve got to socialize much more of the housing stock, as since the 1930s we have had huge pressures towards individualized home ownership as in a way of securing people’s rights and position.. We’ve got to socialize and recapitalize public education and health care long with housing provision. These sectors of the economy have to be socialized along with the banks.                                                    

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