The Western Socialist
Canada and the United States are both capitalist nations. Much has been written to
portray the unique friendliness that exists between the two countries. With a 3000-mile border line, nothing in the way of an armed forces is employed to constrain a
neighborly approach. Each tends to its own business of peacefully stripping its
workers of every ounce of values they produce in its domain. It’s a pretty picture.
Vol. 30 - No. 231
No. 1, 1963
True, the social ethos has been disturbed by petty imponderables that lurked on the
trail. Some years ago the Alaska Boundary question evoked raucous voices in
Congress and the House of Commons. A commission of three Americans, two
Canadians, and one British was appointed to solve the knotty problem.
The British member – Lord Alverstone – mindful of which side of his toast the
poached egg was on, voted with the Americans, and left the southern section of
Alaska as what appears on the map to be a huge chunk carved out of Northern British
In more recent years other tendentious items stirred a degree of hostility scarcely in
keeping with the tranquil social atmosphere created and maintained.
One of these was Canada’s insistence on doing business with Communist China.
Washington contended that this was not a decorous attitude for a friendly partner. The
U. S. solons used their expertise to dissuade recognition of China on the part of
Canada, due to the gospel of hate and revenge current in Peking.
Canada’s answer to this charge was tailor made. We do not now recognize, nor do we
intend to recognize Red China. We are just engaged in doing business with the
Chinese. From Canadian Officialdom’s viewpoint there is no such place as China.
It is as if they were dumping wheat on some cosmic wharf or railway platform in
outer space, getting their payments from some ethereal phantoms, and then coming
back to repeat the process.
This rationalization policy was acquired from mother Britain, who built up a mighty
empire through profitable deals with cannibals, headhunters, assegai hurlers, and
ruthless pirates, closing their eyes on the morals and ethics of their customers so long
as profits materialized in the trade.
Again, in the Alliance for Progress, an organization formed by the U. S., through
which $20 billion was to be dumped into the Latin republics to the south, so as to
prop up their economies, and siphon the juice of “democracy” into their reactionary
political institutions, Canadian and American attitudes were wide apart.
President Kennedy paid a special visit to Ottawa to seek Canadian cooperation in
fiscal contributions and commercial practice. Particularly did he denigrate Canada’s
continued trade with Cuba, an alien and angry land, loaded with Soviet missiles, and
only 90 miles from the U. S. shore.
Prime Minister Diefenbaker reminded him, in diplomatic terminology of course, that
while the U. S. and Canada were old and very dear friends, they both made a living in
the same exploiting manner, and the two of them were keen competitors as well as
boon companions. He could see nothing unethical in doing all the business they can
with Cuba, so long as they are not contributing directly to the enlargement of the
Birds of a feather
While these quondam differences might seem to dampen the relationship between the
two countries, their unanimity in practicing and supporting the capitalist code cannot
Both are firm adherents of private ownership of the means of production. Each clings
to the theory that the class that holds the money bags, and controls the citadels of
political power, is entitled to all the dividends, interest, and profits that can be
squeezed out of their legitimate investments.
Both are convinced that the great majority of the population should be robbed of the
wealth they produce, and should cheerfully endure the ordeal so that this form of
ownership, and the mode of law and order apposite to it, may be maintained.
The rulers of the two countries realize that fear and ignorance are potent weapons in
holding the masses in subjection, and both build and foster institutions to keep their
vassals attuned to the interest of their masters.
In hock to U.S.
The U. S. has attained the apogee in controlling North American economy. Canadian
resources are virtually in hock to the Wall Street financial bandits. No modern nation
is so obviously the pawn of foreign capital as Canada is today.
The cause for this condition is seen by a glance at history. Primitive accumulation
capital is a primary requirement for performing the role of a capitalist nation. The
early agricultural economy of Canada, where subsistence farming with its narrow
differential between production and consumption militated against the acquisition of
native capital, and made imperative a reliance on outside sources.
These were at hand. Britain, at the time, the greatest world power, eagerly sought
fields for fiscal expansion. British capital was poured into Canada in what was then
regarded as colossal amounts.
Closer by, was the rapidly developing U. S. economy, equally anxious to find
favorable means of extension. Canada offered the appropriate receptacle in which
American dollars could move and grow.
As Britain declined in commercial and financial standing on the world scene, and the
U. S. succeeded in its aspiration to wealth and greatness, there was a continual and
marked reduction in British investment and corresponding increase in the flow of
American capital into the industrial centers of Canada. Foreign capital had invaded
During the year 1962, the Canadian economy, often before in the exigency of
support, suffered a severe relapse. First, there was what was labeled the “Dollar
Crisis” and later the adoption of the “Austerity” program. The putative causes for
these economic diseases have been diagnosed in various ways, but like all other
phenomena they can be explained only when understood.
The Diefenbaker Government, in name and motive, was viciously assailed by the
opposition parties, for keeping secret from the people the true state of affairs. That
they did without information and lead the electorate to believe that all was in tiptop
shape is certain, but Liberals, New Democrats, and Social Credit parties were equally
guilty in this respect.
All the political groups were aware of the general economic conditions that existed at
the time, for the hand-writing on the wall was so legible that none of them could
possibly be the possessor of a degree of dumbness sufficient to evade the obvious.
The reaction of the Communist Party of Canada is an interesting item. In April of
1962, the Communist Party presented a submission to the Royal Commission on
Banking and Finance, in which they advised the Canadian ruling class as to just how
the disease could be remedied in the interest of those who own.
The Party solution was to “nationalize the U. S. controlled monopolies in Canada,
nationalize banking and credit, develop a balanced manufacturing industry, and adopt
a new international trade policy for Canada’s independent development, so that we
may become masters in our own house”.
This profound solution for all economic ills was submitted and signed by Leslie
Morris, General secretary, and Jim Berck, Chairman of the C. P. of Canada.
If Prime Minister Diefenbaker wanted to prove himself an alert and brilliant
statesman he should immediately establish two additional cabinet posts, making one
of the Communist Officials “Minister of Confusion”, and the other “Minister of
Delusion”. The two commissars would surely adorn a cabinet already pretty well
confused and deluded.
The dancing dollar is supposed to be mysterious but the one element it lacks most is
mystery. The jittery actions of the dollar derive from the nature of commodity
The capitalists of each national entity sell their surplus supply of goods to other
countries. If this were done through the medium of gold payment, gold being the
world money, and of equal standing in all nations, there would be no exchange
problem. It would be a cash transaction and the ledger would be closed.
But international buying and selling is a more complicated affair. It involves the use
of paper instead of gold. It, too, has a history to consider.
About the turn of the century U. S. companies bought up millions of acres of
Canadian oil, mineral, and timber land. These were allowed to remain fallow so long
as they had home resources to develop. Came the day when exhaustion of native
resources caused the U. S. mergers and combines to turn their attention to the
To dig wells, operate mines, install machinery, build smelters and refineries to
process the products, construct pipelines and railway spurs to throw them into
circulation, meant a lot of new U. S. capital flowing into Canada.
In the last few years, due to the factors noted, large quantities of U. S. goods were
dumped on the Canadian market. These were met to an extent by Canadian goods, but
there was a marked disparity between the two amounts.
The differential manifested itself in bills of exchange. These bills are created to
represent goods and for all practical purposes they do. The profit system uses them as
commodities that are bought and sold. Their lifetime is generally a period of 90 days,
but extensions are possible in each case.
Once on the market, they are offered and sold for what they will bring. They are
bartered about at less than face value and this financial delinquency expresses itself in
the supposed superiority of one dollar over the other. It is a problem of circulation and
governed by the law of supply and demand. Too much paper circulated by one group
of capitalists reflects itself in a premium dollar of the other.
When the big drive in oil, timber and mineral equipment eased up, the financial gears
were thrown into reverse. The Canadian economy could maintain its surface
appearance of health and vigor so long as U. S. capital was riveted on the scene. But
portentous smoke rings had long indicated disaster, and 1962 became the year of
American capital had realized its possibilities in Canadian investment. It was now
found to be more profitable to take out than to put in. A stronger odor of profits
impelled the capitalist olfactory organs to sniff in another direction. New nations
established in Africa and Asia promised bigger returns, and the Ottawa administration
was left holding the bag.
The 92-cent dollar offers some hope for the Canadian exporters of commodities. It
supplies little consolation for Canadian workers, but it was not devised for their
To ease the pangs of the present financial dilemma, Canadian capitalists have
inaugurated a new “Austerity” program. It has many of the features of the old
austerity proclamations. The fiscal belt must be tightened another notch or two.
Interest rates must be raised, imports curbed, exports increased, and Canadian
workers must acquire the habit of working harder so as to produce wealth cheaper and
enable their employers to sell more effectively on the world market.
The standard of living, nothing to rave about at present, must descend to a lower
level. Less must be spent on the necessities of life so that more can be devoted to the
worthy cause of capitalist survival.
Prime Minister Diefenbaker has already set a noble example for his people to follow.
He has ordered his grocery budget to be reduced by $300.00 a year. But this illusory
sacrifice when examined will leave little opportunity for the opposition in Parliament
to point him as a victim of undernourishment and malnutrition in his own regime.
Even after this material reduction, his grocery bill is well in excess of $5,000.00 per
year. Any working class family would be glad to emulate the Prime Minister’s
example if they only had his original grocery fund to prompt the gesture.
Thus does capitalism tinker with its social problems.
J. A. MacDonald