Class combat, Canadian style

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The late Ralph Miliband, renowned Marxist political scientist (and father of British Labour Foreign Minister David) liked to point out how class warfare was waged against working people from above, by political parties allied with capitalists.

We saw an example of this last week in Ottawa. Stephen Harper denounced the NDP-Liberal coalition-in-waiting as socialist (it was also framed as lining up with the Bloc - the supposed threat to Canada). He suspended parliament to stop it. On the weekend, Liberal John Manley attacked his party for agreeing to a deal with the NDP. His call for his party leader to step down came straight from the boardroom.

In Canada regional differences are exaggerated by the first-past-the-post electoral system. Parties with regional grievances, real or imagined, can win seats because their voting support can be concentrated regionally. Mainstream commentators, helped by political scientists who should know better, are always ready to transform substantive debates, such as what to do about the deepening economic troubles, into differences between the Liberals and the Conservatives on issues of region and national unity. How more exciting does it get than to pit east against west, Quebec against Canada, with the future of the country at stake?

Well, how about the collapse of American financial capitalism, and its worldwide ramifications for Canada? Apparently that is not exciting enough for Don Newman and Jeffrey Simpson, let alone Canwest Global. Yet that is the menace that brought Gilles Duceppe to say he would not vote out of power a coalition NDP-Liberal government, and that is what brought Jack Layton and Stephane Dion to conclude a monumental agreement in the first place.

The Canadian capitalist class is hoping the economic crisis can be contained, thanks to our monopoly banking system. Business does not want to give up all the gains made in the last 30 years at the expense of working people, because Dion and Layton think the crisis is
already a real one, hitting not just auto workers, and forestry workers, but communities across Canada. Thus the Liberal move to force Dion out the door, and bring in Ignatieff.

The coalition-in-waiting wanted government to re-institute some welfare state measure, and, maybe even practice Keynesian economics aka deficit-financing. Business liberals, a good part of the Liberal party, aided by the mainstream commentators, want nothing to do with social spending, let alone government strings on investment spending.

Ironically, Canada's leading capitalist, Stephen Jarislowsky, the pension fund guru, does understand what is going on, perhaps because he is old enough to remember the 1930s. He says the two per cent of GDP stimulus commitment (about $30 billion) by Canada to the G7 is not enough, and much more spending will be needed. That would be the same two per cent commitment Harper, Jim Flaherty, the Finance Department and the Privy Council Office managed to forget when drawing up the economic outlook that precipitated the loss of confidence in the Conservative government.

Leading Liberals have not yet called for restraint, as did Flaherty, but Liberal finance critic John McCallum did not want to talk about what a coalition government would do about the $30 billion G7 commitment.

There is stimulus and stimulus, money for business, or money for people and public services, tax cuts or increases in income support, bombs or hospital beds.

What we are living is the class war. The coalition would have at least debated how to proceed with stimulus. The move by the Liberals to dump Dion, and force Ignatieff on the party as leader is a way of dropping the accord reached by the NDP, and the Liberals, and supported by the Bloc. In this scenario the Liberals position themselves - for the moment when the Conservatives fall - as the party to bail out business, and the rich. The Liberals then become the alternative for those who voted Conservative.

The media writes about Ontario and Quebec ganging up on the West, or Quebec separatists getting a veto over Canada, but the real story is what do we do to fend off recession, and who will benefit from the stimulus? Understanding the class interests at stake in the crisis of financial capitalism is the sensible way to analyze the debate over stimulus.

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