The Bank of Canada is busily handing out money to buoy the Canadianfinancial system, resorting to purchase, and re-purchase agreements whichallow financial institutions time to find more funds to satisfy theirneed for liquidity aka cash. Note that public money is readily availableto banks with shortfalls, but not for the homeless.

Watching the waves of speculative transnational finance crash around theworld economy, shaking faith in not only sub-prime mortgage funds, butnational currencies, and banks as well, brings to mind the importantintellectual legacy of the German philosopher, economist, journalist andpolitical activist Karl Marx: his theory of history.

While the reputation of Marx as a thinker has been besmirched by thepolitical idolatry accorded him by his would-be followers, his analysis ofthe dynamics of public affairs has never been refuted.

Marx developed a theory of prices that could not be made operational. Hemistakenly thought gold was all there was to money. And his thinking abouthow to achieve political change was “over-determined” by the proximity ofthe French revolution. Nonetheless, there is more than a kernel of truthin Marx 101 about how the world is transformed.

Marx started with material production, how people went about their dailylives. He showed that a society created forces of production: the abilityto produce for use and exchange. Technology, science, infrastructure, andabove all skilled human beings working and living together, produced andre-produced the material conditions of existence.

Marx then showed how forces of production were bound up within particularsocial relations, feudalism for instance, where serfs were tied to themanor, and then obeyed their Lord and master; and capitalism, wheresalaried workers did the bidding of employers.

His crucial insight was that the forces of production were eventuallyconstrained by the social relations of production. An out-dated,repressive social regime inhibited the potential development of society.When the social relations of production could no longer contain the forcesof production, these forces would then burst the old social order apart,and propel society in a new direction.

Feudalism, for instance, was the eventual victim of industrial capitalism,but it began to give way when independent agriculture, and cottageindustry flourished outside the walls of the manor.

Today, speculative transnational capitalism is just such a fetter, notjust on the development of human potential — the forces of production —but on ecological sanity as well. A few thousand financiers acquire richesmeasured in billions, while the reproduction of material existence isthreatened by money lending, and credit creation to produce destructivegoods, and over-exploit natural resources.

The Alberta tar sands is a good example of money gone mad. The tar sandshold an estimated 174 billion barrels of oil, and production is forecastto quadruple by 2015. Over $100 billion has been invested to recoup heavyoil. It takes three barrels of water to produce one barrel of oil, drying upthe Athabasca river; heavy oil production produces toxic waste, and acidrain effects are felt all the way to Quebec. Most of the production isslated to feed the enormous American appetite for yet more waste, andenvironmental destruction.

Social classes are the active element in the Marxian analysis, and the onethat creates the most controversy. For Marx, classes are created throughproduction, and constitute its social relations. A rising class candevelop a mind of its own, as did the bourgeois, for example, in 18thcentury France, leading to the overthrow of the feudal Lords.

The followers of Marx predicted an awakening, and then rise of theindustrial proletariat, which we await still today. In the former SovietUnion and its dependent territories, a satanic tyranny known as Stalinismruled, and killed, in the name of Marx.

Meanwhile, in the capitalist West, instead of the falling rate of profitpushing workers to revolt, huge leaps forward in productive capacity havebeen turned into waste of every sort imaginable: militarism, environmentaldestruction, and useless consumption, while basic human needs go unmet inmuch of the world.

In defence of economic and social rights, citizens groups have emergedthat together constitute a democracy movement; not a class as such, butcertainly a cottage industry political force.

The exponential growth of transnational finance is predicated on theability of productive forces to deliver revenue through economic growth.But, growth of productive forces now consigns the earth to global warming,and environmental calamities yet to be detected.

The citizens’ democracy movement must take dead aim at the speculative formof financial capitalism, and insist on returning control over moneylending and credit to local and public institutions. The increase inproductivity should be funding citizenâe(TM)s incomes, not a rentier class.Democratically regulated, and supervised financial institutions have to bethe norm, not the wildly out of control markets for financial derivatives.Instead of the Bank of Canada directing our money into the pockets offinanciers, we need a democratic infrastructure to promote equality,social justice, and environmental sanity.

Duncan Cameron

Duncan Cameron

Born in Victoria B.C. in 1944, Duncan now lives in Vancouver. Following graduation from the University of Alberta he joined the Department of Finance (Ottawa) in 1966 and was financial advisor to the...