The Rate of Exploitation of Workers of Suncor Energy, One of the Largest Private Employers in Canada

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit). The largest employer, in terms of employment, is the Canadian Imperial Bank of Commerce.

I have tried to calculate the rate of exploitation of workers of Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them. We have the following:

The rate of exploitation or the rate of surplus value=s/v=5,396/3,641=148%.

That means that for every hour worked that produces her/his wage, a worker at works around an additional 89 minutes or 1 hour 29 minutes for free for Suncor Energy. Alternatively, in terms of money, a regular Suncor Energy worker who receives $1 of wage or salary produces $1.48 surplus value or profit for free. 

Assuming either an 8-hour shift or a 12-hour shift:

  1. In an 8- hour work day (480 minutes), a Suncor worker produces her/his wage in about 194 minutes (3 hours 14 minutes) and works 286 minutes (4 hours 46 minutes) for free for Suncor Energy.
  2. In a 12-hour work day (720 minutes), a Suncor worker produces her/his wage in about 290 minutes (4 hours 50 minutes) and works 430 minutes (7 hours 10 minutes) for free for Suncor Energy.

Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected?

Let us look at the management rights clause of the collective agreement between Suncor Energy Products Partnership and Unifor Local 27, for the period between april 1, 2016 and March 31, 2019.

From pages 4-5 of the collective agreement:

ARTICLE FIVE – MANAGEMENT RIGHTS

5.01 The Union recognizes and acknowledges that management of the operations and direction of the working force are fixed exclusively in the Employer and without restricting the generality of the  foregoing, the Union agrees and acknowledges:

(a) The Employer has, retains and shall possess and exercise all rights and functions, powers, privileges and authority that the Employer possessed prior to the signing of a contract with the Union, excepting only those that are clearly and specifically relinquished or restricted in this Agreement.

(b) That it is the exclusive function of the Employer to maintain order, discipline and efficiency and in connection therewith to make, alter and enforce from time to time reasonable rules and regulations, policies and practices to be observed by its employees.

(c) The Employer’s right to determine the number of employees to be  employed and the right to hire, transfer, assign, promote, demote, retire at age 65, schedule and classify, layoff or recall employees, discipline, suspend or discharge employees for just cause, and the right to plan, direct and control its operations;

(d) The Employer’s right to determine the location and extent of its operations and their commencement, expansion, curtailment or discontinuance; the work to be done; the services to be rendered; to subcontract or transfer work; to establish, change or abolish job classification; to shut down permanently or by day or week or for any other periods; to determine

Not only does the collective agreement give management the right to direct workers’ lives in many, many ways in such a fashion that they produce more value than they themselves cost, leading to the workers working for free for a certain period of time, but even during the time when they produce the value of their own wage, they are subject to the dictates of management (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation).

Ideologues of unions and social democrats or social reformers simply ignore this double situation of workers–of having to work for free and having to work throughout the day under the power of unelected managers (see Employers as Dictators, Part One).

Given this conclusion, how can any collective agreement express in any way the cliches used by many ideologues of unions–such as “fair contracts,” or “decent work?” Is it possible for a collective agreement to be fair from the workers’ point of view? It is certainly possible to be fairer, of course, but no collective agreement questions the right of employers and their representatives (management) to exploit workers and to use them for purposes foreign to their own lives.

Data on Which the Calculation is Based 

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

I first give revenue and expenses figures according to the Suncor Annual Report (2019), and then indicate some needed adjustments so that they accord more with Marxian economics. Amounts are in millions of Canadian dollars, unless otherwise indicated.

Revenues and Other Income (millions of $)

Gross revenues 39 866
Less: Royalties (1 522)
Operating revenues, net of royalties 38 344 [subtracting 1522 from 39 866 gives: 38 344]
Other income (loss) 645
Total revenues 38 989

Expenses
Purchases of crude oil and products 12 562
Operating, selling and general 11 244
Transportation 1 442
Depreciation, depletion, amortization and impairment 10 572
Exploration 256
(Gain) loss on asset exchange and disposal of assets (253)
Financing expenses 633

Total expenses 36 456 [sums up to this when adding all expenses]

(Loss) earnings before Income Taxes 2 533 [add this to 36 456 gives you 38 989, which is unadjusted total revenues]

At the level of expenses, it is necessary to further break down expenses. The second category in Total Expenses, “Operating, selling and general,” needs to be broken down further:

Operating, Selling and General OperatingExpenses

Contract services 4 380
Employee costs 3 641
Materials 869
Energy 1 129
Equipment rentals and leases 345
Travel, marketing and other 880
Total Operating, Selling and General Operating Expenses 11 244

The category “Contract services,” without further information, will be accepted as is–an expense different from “Employee costs.”

On the Suncor website, it does indicate the following: https://www.suncor.com/en-ca/contractors-suppliers-carriers

At Suncor, the term “contractor,” “supplier” and “carrier” refer to any organization, company or individual who provides goods and/or services to Suncor. We use the term “contractor” to indicate a supplier that provides services at one of our sites.

Contractors, suppliers and carriers play a critical role in helping us achieve our business objectives. To work with us, you must pre-qualify prior to performing work or providing services to Suncor.

Some contract services may in fact be a form of employment contract. For example, I worked temporarily for an oil company in Calgary in the late 1980s, labeling and organizing files–and was categorized as an independent contractor , undoubtedly, in order to reduce the costs to the employer since employers do not have to pay unemployment insurance premiums, etc. for independent contractors. However, without further, more detailed information, it is impossible to determine who is a real contractor and who is an employee.

The category of “Employee costs” is key since it represents, on the one hand, the wage costs to the employer and, on the other hand, the value added by Suncor workers to the commodities they produce that is equivalent to their wage. It also represents variable capital, which is used to calculate the rate of exploitation of workers and is related to total surplus value, thereby enabling us to calculate the rate of exploitation.

The category “marketing” cannot be practically separated from “travel” and “other” and therefore is not used to make any adjustments. If “marketing” were a completely separate category, though, both the wages paid for marketing and the constant capital used in marketing would be added to the surplus value produced by Suncor workers. Work performed in the sector that transforms already produced commodities into money (and money into capital) does not produce surplus value (though it may well involve the performance of surplus labour). Since, for the purpose of the particular calculation of the rate of exploitation of Suncor the issue of how to treat marketing is irrelevant since there is insufficient information, I place a short discussion of a possible way to treat marketing in Marxian terms as an appendix for those who are interested in such matters (and such matters may be relevant for other firms with data with more refined categories, such as a separate marketing account).

So far, we have:

(Loss) earnings before Income Taxes 2 533
Employee costs 3 641

Adjustments

Adjustments must be made both at the level of total revenue and at the level of total expenses.

n Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

Total Revenue Adjustments

At the level of total revenue, the payment of royalties, from the point of view of the individual employer, is an expense (like taxes), but the source for payment of such royalties is the workers directly exploited. It says in the annual report:

Suncor is subject to royalties and taxes imposed by governments in numerous jurisdictions

Consequently, I use the initial “Gross revenues.”

Adjusted total revenue $40,511, or

Gross revenues 39,866 +
Other income (loss) 645.

Accordingly,

Adjusted Earnings before Income Taxes $4,055 (=2,533+1522)

I have accepted “Other income (loss)” as is since there is nothing explicitly obvious that would require adjustments. If someone has further information that would justify making adjustments on the basis of this category (or any category) for that matter, feel free to make suggestions or comments.

Other income (loss)
Risk management and trading activities 155
(Losses) gains on valuation of inventory held for trading purposes (7)
Investment and interest income 89
Insurance proceeds 431
Other (23)
645 [this is the sum of the above.]

The adjusted earnings constitute surplus value, or the value produced by Suncor workers without any equivalent in return. It represents the additional value the workers produce for free.

“Earnings before Income Taxes” will still undergo an adjustment, but to do so, it will be necessary to consider expenses. The amount of calculated surplus value is often not just specified from the adjusted total revenue side; the calculation of total surplus value is also often a function of making adjustments to the calculation of total expenses.

Total Expenses Adjustments

Some adjustments still need to made, based on the subcategory “Financing expenses” under the category “Expenses” (see above).

The category “Financing expenses” is broken down as follows:

Financing expenses
Interest on debt 825
Interest on lease liabilities 172
Capitalized interest at 5.3% (122)
Interest expense 875 [this is calculated by summing first two and subtracting the last one: 825+172-122]
Interest on partnership liability 55
Interest on pension and other post-retirement benefits 59
Accretion 270
Foreign exchange (gain) loss on U.S. dollar denominated debt (624)
Operational foreign exchange and other (2)
633 [=875+55+59+270-624+2]

As explained in another post, interest in many instances can be treated as part of the surplus value produced and therefore added to net income since, although from the point of view of the individual capitalist it is an expense, from the capitalist economy as a whole it is derived from the production of surplus value. The same could be said of all the other categories of interest, with the exception of “capitalized interest,” which I subtract (and which I will explain below).

If we add up the interest considered to be an expense but derived from the surplus value produced by Suncor workers, we have the following:

Interest Charges
Interest on debt 825
Interest on lease liabilities 172
Interest on partnership liability 55
Interest on pension and other post-retirement benefits 59
Total interest charges 1,111

These interest expenses, since they are only expenses from the point of view of Suncor Energy but in reality are paid out from the surplus value produced by Suncor workers, must be added to “Adjusted Earnings before Income Taxes.”

Despite the use of the term “interest” in the term “Capitalized interest,” this category needs to be considered in more detail.

In relation to the category “Capitalized interest,” as I explained in my post on the rate of exploitation of Air Canada workers and Rogers Communications workers:

Some explanation of “interest capitalized” is in order. I have had difficulty in understanding the nature of “Interest capitalized.” As far as I can tell, interest that is normally paid and is an expense for the particular employer is treated, in Marxian economics, as part of surplus value because, at the macro level, it comes from the surplus value produced by the workers.

Interest capitalized seems to be different since the interest charged on money borrowed for the purpose of the construction of fixed assets (with a specific interest rate attached to it) is “capitalized,” or not considered part of interest expenses until the construction is finished and the fixed asset is ready to use. This accounting distinction, however, from the macro point of view, is irrelevant since both interest expenses and interest capitalized are derived from the surplus value produced by workers (or appropriated from them in another industry). Accordingly, both interest expenses and interest capitalized should be added to the amount of “Income before income taxes” category.

In the case of Air Canada, capitalized interest was positive (not in parentheses), and I therefore added it to the amount of surplus value produced by the workers. In the case of Rogers Communication, it is negative (since it is in parentheses). Accordingly, I have subtracted it.  

Accordingly, like Rogers Communication, I treat “Capitalized interest” (as the accountants have done) as an expense for the purposes of calculation because it is negative (in paretheses).

As for the category “Accretion,” I treat it also as a real expense. Accretion is defined (from Wikipedia):

In accounting, an accretion expense is a periodic expense recognized when updating the present value of a balance sheet liability, which has arisen from a company’s obligation to perform a duty in the future, and is being measured by using a discounted cash flows (“DCF”) approach.

I treat the remaining categories as real expenses, but I leave it to others to criticize this (and any other calculation) if it is incorrect.

A word should also be said about the category “Foreign exchange (gain) loss on US dollar denominated debt.” There is no explanation in the annual report for this category.

Searching the Web, I found the following general explanation:

What is a Foreign Exchange Gain/Loss?

A foreign exchange gain/loss occurs when a company buys and/or sells goods and services in a foreign currency, and that currency fluctuates relative to their home currency. It can create differences in value in the monetary assets and liabilities, which must be recognized periodically until they are ultimately settled.

The basic idea seems to be that, due to the changes in exchange rates between the Canadian dollar and the US dollar, there was actually a gain for 2019 (it is in parentheses–if it were a loss, it would not be).

Accordingly, the adjusted “Financing expenses” is:

Capitalized interest (122) (to be treated as an expense)
Accretion 270
Foreign exchange (gain) loss on U.S. dollar denominated debt (624) (to be treated as a gain this is a gain since it is in parentheses and hence a “negative expense”)
Operational foreign exchange and other (2)
Total Adjusted Financing Expenses: -230 (122+270-624+2)

Yes–a negative $230 million. That means that the indicated expenses are actually a gain. It is easier to understand this by personalizing it (when possible). Imagine you have various expenses and a bank account in US dollars. Let us say you are calculating your expenses. Let us say that you have $500 US dollars and $600 in Canadian expenses. If the US dollar increases in value by one half (exaggerating, of course, to make the calculation easier), then you have a net expense of negative $150 Canadian since $500 US dollars=$750 Canadian dollars (500×1.5=750). $600-750=-150.

This result means that there were not, in fact, any real financing expenses in 2019 after interest is treated as surplus value and after taking into account the gain in foreign exchange dominated in US dollar denominated debt. The $230 million, in addition to the $1,111 million in interest, need to be subtracted from “Total expenses” $36 456 million. and added to “Adjusted Earnings before Income Taxes” $4,055 million.

Accordingly,

Adjusted Total Revenue $40,511
Adjusted Total Expenses $35,115 (=36,456-1111-230)

So, with the adjustments in place:

Final Adjusted Earnings before Income Taxes: s=$5,396 million or $5.396 billion
Employee costs: v=$3, 641 million or $3.641 million

The Rate of Exploitation

The rate of exploitation or the rate of surplus value=s/v=5,396/3,641=148%.

That means that for every hour worked that produces her/his wage, a worker at works around an additional 89 minutes or 1 hour 29 minutes for free for Suncor Energy. Alternatively, in terms of money, a regular Suncor Energy worker who receives $1 of wage or salary produces $1.48 surplus value or profit for free. 

The length of the working day at Suncor Energy varies somewhat, but probably less so than for some other employers. According to one collective agreement. the average work week is 40 hours, but it does not specify how that is distributed over the week. From COLLECTIVE AGREEMENT
BETWEEN: SUNCOR ENERGY PRODUCTS PARTNERSHIP and Unifor Local 27. APRIL 1, 2016 TO MARCH 31, 2019, page 15:

ARTICLE FIFTEEN- HOURS OF WORK/OVERTIME/PREMIUM PAY
15.01 The regular work week shall not consist of more than forty-hours (40) per week.

Another collective agreement implies 8-hour and 12-hour work days. From Collective Agreement
Between Suncor Energy Products Partnership, Sarnia Refinery and Sunoco Employees’ Bargaining Association, March 1, 2017 to February 28, 2021, page 22:

Permanent shift changes will not be made which will result in an employee working more than ten (10) consecutive calendar days while on 8-hour shifts or more than six (6) consecutive calendar days while on 12-hour shifts.

According to the Suncor Energy website:

Most unionized jobs at Suncor also result in shift work. The most common shift pattern is a 12-hour shift, working three days and three nights, followed by six days off.

Assuming either an 8-hour shift or a 12-hour shift:

  1. In an 8- hour work day (480 minutes), a Suncor worker produces her/his wage in about 194 minutes (3 hours 14 minutes) and works 286 minutes (4 hours 46 minutes) for free for Suncor Energy.
  2. In a 12-hour work day (720 minutes), a Suncor worker produces her/his wage in about 290 minutes (4 hours 50 minutes) and works 430 minutes (7 hours 10 minutes) for free for Suncor Energy.

Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected?

Let us look at the management rights clause of the collective agreement between Suncor Energy Products Partnership and Unifor Local 27, for the period between april 1, 2016 and March 31, 2019.

From pages 4-5 of the collective agreement:

ARTICLE FIVE – MANAGEMENT RIGHTS

5.01 The Union recognizes and acknowledges that management of the operations and direction of the working force are fixed exclusively in the Employer and without restricting the generality of the  foregoing, the Union agrees and acknowledges:

(a) The Employer has, retains and shall possess and exercise all rights and functions, powers, privileges and authority that the Employer possessed prior to the signing of a contract with the Union, excepting only those that are clearly and specifically relinquished or restricted in this Agreement.

(b) That it is the exclusive function of the Employer to maintain order, discipline and efficiency and in connection therewith to make, alter and enforce from time to time reasonable rules and regulations, policies and practices to be observed by its employees.

(c) The Employer’s right to determine the number of employees to be  employed and the right to hire, transfer, assign, promote, demote, retire at age 65, schedule and classify, layoff or recall employees, discipline, suspend or discharge employees for just cause, and the right to plan, direct and control its operations;

(d) The Employer’s right to determine the location and extent of its operations and their commencement, expansion, curtailment or discontinuance; the work to be done; the services to be rendered; to subcontract or transfer work; to establish, change or abolish job classification; to shut down permanently or by day or week or for any other periods; to determine

Not only does the collective agreement give management the right to direct workers’ lives in many, many ways in such a fashion that they produce more value than they themselves cost, leading to the workers working for free for a certain period of time, but even during the time when they produce the value of their own wage, they are subject to the dictates of management (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation).

Ideologues of unions and social democrats or social reformers simply ignore this double situation of workers–of having to work for free and having to work throughout the day under the power of unelected managers (see Employers as Dictators, Part One).

Given this conclusion, how can any collective agreement express in any way the cliches used by many ideologues of unions–such as “fair contracts,” or “decent work?” Is it possible for a collective agreement to be fair from the workers’ point of view? It is certainly possible to be fairer, of course, but no collective agreement questions the right of employers and their representatives (management) to exploit workers and to use them for purposes foreign to their own lives.

Appendix

The issue of how to treat marketing workers (sales work in wholesale and retail trade) and the machines, buildings and equipment they use is relevant to calculating the rate of exploitation of workers who produce surplus value (such as Suncor workers), because it complicates the calculation.

From Fred Moseley (1997), “The Rate of Profit and the Future of Capitalism,” pages 23-41, in Review of Radical Political Economics, Volume 29, Number 4, pages 26-27:

Circulation labor is labor related to the exchange of commodities and money, including such functions as buying and selling, accounting, check processing, advertising, debt-credit relations, insurance, legal counsel, and securities exchange. Marx argued that circulation labor does not produce value and surplus-value because exchange is essentially the exchange of equivalent values. Circulation labor only transforms a given amount of value from commodities to money, or vice versa. …

Capitalist enterprises must of course pay unproductive labor to carry out these necessary functions, even though, according to Marx’s theory, these functions do not produce value and surplus-value. Therefore, the costs of this unproductive labor cannot be recovered out of value which it produces. Instead, these unproductive costs are recovered out of the surplus-value produced by productive labor employed in capitalist production.

This means that the source of the money to pay for the workers in marketing is, ultimately, the surplus value produced by Suncor workers (and other workers who produce surplus value). This does not mean that workers in marketing are not exploited; they too undoubtedly perform surplus labour as well–but they do not produce surplus value, which is the surplus performed and transformed into money form by means of the process of buying and selling (whether that occurs simultaneously with the activity as in the case of services or subsequently as, for example, in the production of beer).

The means of trade or selling and buying used in marketing also would probably be calculated as part of surplus value since, although they are a cost from the point of view of the individual capitalist, they are paid out of value produced by Suncor workers and other workers who produce surplus value. From Moseley (1997), page 27:

The rate of profit being analyzed here is by definition equal to the ratio of the amount of profit (P) to the total stock of capital invested (K). According to Marx’ theory, profit, the numerator in the rate of profit, is the difference between the annual flow of surplus-value (S) and the annual flow of unproductive costs (Uf) (almost entirely the wages of unproductive labor, but also includes a small part (about 5%) of the costs of materials and the depreciation costs of buildings, machinery, etc. used in unproductive functions): (1) P = S – Uf.

Or again, in the work by Anwar Shaikh and E. Ahmet Tonak (1994), Measuring the Wealth of Nations: The Political Economy of National Accounts, pages 45-46, when discussing a hypothetical total production of value of $2000, with c=$400, v=$200 and s=$1400, they assume that the total value of $2000 is sold to wholesalers for a price of $1000, and the wholesalers (and, eventually, retailers), mark up the price to consumers to the level of total value of $2000:

From the Marxian point of view, nothing has changed in the production process, so that constant capital C*, variable capital V*, and surplus value S* are unchanged. But whereas the total surplus value S* = $1400 previously accrued entirely to the production sector as profits, it is now divided between the profits of the production sector (Pp = $400) and the trading margin of the trade sector
(TM = Mt + Wt + Pt = $1000).

where TM=trade margin, Mt=intermediate inputs (c for trade, such as building rentals or purchases, sales counters, registers, forklifts, storage facilities, etc.), Wt=wages for trading activities and Pt=profit for trading activities. The value of inputs (c+v) for the sector that produces value is 600, with the distribution between c and v and s as follows: c=400, v=200, s=1400. However, since it is sold only for 1000, the actual s received for the sector that produces surplus value is 400. For the trade sector (indicated by t in parentheses), the distribution of the $1000 in s is c(t)=200, v(t)=400 and s(t)=400.

Note, however, that c(t) and v(t), though expenses from the point of view of the individual trading employer, is paid from the surplus value produced by workers in the production sector.

A Worker’s Resistance to the Capitalist Government or State and Its Representatives, Part Six: The Stick and the Carrot Tactic

This is a continuation of a previous post that illustrates how politically biased the capitalist government or state and its representatives (such as social-democratic social workers) are when it comes to determining real situations–especially when a person self-declares as a Marxist.

Just a recap of part of the last post: I filed a complaint with the Manitoba Institute of Registered Workers against a social worker who had written a court-ordered assessment concerning my wife at the time, myself and my daughter, Francesca Alexandra Romani (ne Harris). I am using the initials S.W. for the social worker. Mr. S.W., claimed that my claim that the mother of my daughter was using a belt and a wooden stick to physically abuse her, was “somewhat ridiculous.” Mr. S.W. was much less concerned about determining the truth of this claim (which is in fact true) than with my so-called indoctrination of my daughter in my “Marxist ideology.”

Since the civil trial in April 1999, my daughter complained of the following  (as of February 18, 2000): 1. Her mother was using a wooden stick on her buttocks; 2. Her mother used a belt to spank her on the same area; 3. Her mother grabbed Francesca and forced her into the apartment building; 4. Her mother had grabbed Francesca’s throat in the elevator and warned her not to tell me that her mother had hit her; 5. Her mother shoved Francesca to the floor on two separate occasions; 6. Her mother hit Francesca on the head with a book; 7. Her mother pulled Francesca’s hair; 8. Her mother scratched Francesca with a comb.

This contrasts with Mr. S.W.’s allegation, as noted in the last post, that ” Mr. Harris’ explanation for contacting the Agency [Winnipeg Child and Family Services] was somewhat ridiculous. He said that the child had made some vague indications that she may have been spanked.”

Mr. S.W. was much less concerned about the truthfulness of Mr. Harris’ claim (which is true) than with Mr. Harris’ Marxists ideas.

This is the last part of the series in relation to my complaint against the social worker who wrote the court-ordered assessment–but not the end of the series since the saga continued afterwards in other forms.

Mr. S.W. characterized my accusations of physical abuse (and various other accusations) as ridiculous–and false. It could therefore be concluded that not only were my accusations false but also not genuine. How did he characterize the following accusations made by Ms. Harris?

In April, 1996, during a mediation meeting between Mr. Harris and Ms. Harris, Ms. Harris (falsely) accused Mr. Harris of sexually abusing Francesca; apparently, Winnipeg Child and Family Services obliged Ms. Harris to accuse Mr. Harris of this. In November, 1997, again through Winnipeg Child and Family Services, Ms. Harris accused (falsely) Mr. Harris of sexually abusing Francesca.

In 1998, Mr. Harris obtained telephone access rights (in addition, Francesca could sleep over once a week, on the weekend). Ms. Harris, on June 8, 1998, had her lawyer send a letter to Mr. Harris’ lawyer, “explaining” why she refused telephone access–because Mr. Harris had sexually abused Francesca once again.

She refused telephone access–but not physical access. A rather curious fact–but Mr. S.W. omitted the June 8, 1998 letter in his list of documents used. Mr. Harris showed Mr. S.W. Judge Diamond’s order indicating that he had the right to have telephone access every Wednesday.

Note that Mr. S.W.  first interviewed Mr. Harris on August 4, 1998. Ms. Harris had not complied with the court order for over two months. Mr. Harris informed Mr. S.W. of this. Is there any mention of this in his assessment? Why the suppression of relevant evidence? Did he query Ms. Harris? Coupled with the letter dated June 8, surely, Mr. S.W., if he had been unbiased, should have inquired further. A parent who does not deny physical access but denies telephone access–how genuine could an accusation of sexual abuse be? Any rational person would have suspected that Ms. Harris’ accusation of sexual abuse was not genuine. What was Mr. S.W’s interpretation of the situation?

From pages 20-21 of Mr. S.W’s court-ordered assessment:

Her [Ms. Harris’] concerns about the possible sexual abuse of her daughter appeared to be genuine. She was able, however, to accept this writer’s opinion that there did not appear to be any evidence of sexual misconduct on the part of Mr. Harris. Ms. Harris was very reasonable when discussing this writer’s opinion on custody, and she was obviously trying to act in the best interests of Francesca. She indicated that she simply wanted the legal issues with Mr. Harris settled so that she can get on with her life.

So, my accusations of physical abuse, according to Mr. S.W., were “ridiculous” and obviously not genuine; they were both false and not genuine. On the other hand, according to Mr. S.W., Ms. Harris’ accusation of sexual abuse (with the help of the Winnipeg Child and Family Services in two instances) was genuine but false.

Here is the carrot to get me to accept the assessment. Despite all the lies and distortions contained in the assessment, the accusation of sexual abuse would be put to rest–and I would gain greater access to see Francesca (and I would be able to take Francesca to Calgary to see her grandmother).

Unfortunately for Mr. S.W., Ms. Harris’ subsequent actions provided further evidence of the biased nature of his assessment. When I read the assessment, I could not believe the number of lies, distortions and omissions contained in the document. Instead of containing an objective inquiry, it expressed the political bias of Mr. S.W. I was faced with either accepting these lies, distortions and omissions, or never seeing Francesca again. I called my lawyer to see if I could have another assessment. He replied that no social worker would contradict what Mr. S.W. wrote. I subsequently called Ms. Harris, indicating that I would never see Francesca again.

However, I did not last very long since I loved Francesca. I called my lawyer, indicating to him what I had said to Ms. Harris. He stated that I should call her back, indicating that I had not abandoned my access rights. I did so. I subsequently went to Ms. Harris’ townhouse to pick up Francesca for her overnight stay over. Ms. Harris refused me access. I went to the police, but since I did not have the court order, they did nothing.

The following week, I had the court order, but Ms. Harris still refused, apparently indicating that the reason why she refused access was because I was a Marxist (so I was told by the police. She probably showed them the assessment by Mr. S.W.). I spent around three hours in the back of the police car while the police tried to gain access. They failed. Ms. Harris was arrested, I believe, for failing to comply with the court order, but there was no further action. She refused access for around three months, until February, 1999, when a judge found her guilty of contempt of court. I then gained access to see Francesca again.

Mr. S.W.’s suppression of the document accusing me of sexual abuse is in itself evidence of Mr. S.W’s bias. If we take into account his claim that Ms. Harris’s accusation was genuine though false, his bias becomes even more evident.  His further claim that Ms. Harris wanted to only resolve the legal issues and put them behind her and that she was obviously looking out for the best interests of Francesca is further evidence of his bias. Ms. Harris’ subsequent refusal to provide Mr. Harris with access to Francesca provides even further evidence of the biased nature of the court-ordered assessment.

Given that the refusal of access by Ms. Harris contradicted so blatantly the court-ordered assessment written by Mr. S.W., my lawyer was able to set up a meeting with Mr. S.W. and myself. we were to have another observation of Francesca with me after I had gained access in February. Of course, I knew by then that I had to avoid any political education. I even shook his hand at the end of our meeting (I had to fake it since I felt extreme disdain at deferring to his “authority.”)

The subsequent observation went well, according to him.

However, I was afraid that it would not go well. When Francesca finally saw me again (before the second assessment), she was evidently angry and asked me why I did not want to see her. She also started punching me and acting violently. I did not connect up Francesca’s violent behaviour and what she told me later on because I did not, at the time, believe her (I will explain in another post why I did not initially believe her).

Fortunately, she did not act like that when Mr. S.W. observed our interactions.

Mr. S.W.’s characterization of Ms. Harris as being”very reasonable when discussing this writer’s opinion on custody, and she was obviously trying to act in the best interests of Francesca. She indicated that she simply wanted the legal issues with Mr. Harris settled so that she can get on with her life” was in shambles not only because of Ms. Harris’ refusal to permit access but also because she now insisted that there be a civil trial and that she wanted reduced and supervised access.

The civil trial, held in April 1999 (on the insistence of Francesca’s mother, who now used Mr. S.W.’s initial assessment as a weapon to justify refusing me access and proceeding to civil trial) displayed further just how bias and inaccurate the assessment was.

I was the first to testify under oath. I saw Francesca that night. Ms. Harris testified the following day. She testified, under oath, that I had sexually abused Francesca the day before–the day that I testified. I allegedly had Francesca masturbate me (a fourth false accusation of sexual abuse).

Even Judge Diamond had to recognize that Ms. Harris was lying. She indicated to Ms. Harris’ lawyer that she was lucky that she still would have custody of Francesca.

Mr. S.W.’s assessment of the situation was in shambles–and yet his initial assessment formed part of the “evidence” used to justify Ms. Harris’ continued custody of Francesca. I gained greater access–provided that I took an anger management course (not Ms. Harris) and could take Francesca to Calgary so that she could see her grandmother and that her grandmother could “see” her (my mother was legally blind at the time).

The issue of the physical abuse of Francesca was buried by this political bigot.

Let us now listen to a “radical” leftist here in Toronto, Herman Rosenfeld, about the law in a society dominated by a class of employers:

In reality, though, bourgeois democratic institutions are not simply a façade for a bloody and murderous dictatorship over the poor and colonized. Yes, there are instances of state acts of murder and even terrorism. The liberal democratic state and institutions facilitate private capital accumulation and are structured in ways which seek to repress, diffuse and co-opt alternative political and social movements, but these are mediated by the necessities of legitimating capitalism. The relative power, political ideology and organization of the working class and colonized Indigenous peoples also affect the character of liberal democracy (and in the subordinate strata, there are forms of class differences and other contradictions that also matter).

Apart from the extremely vague nature of this paragraph, its reference to the need for “legitimating capitalism” does not even recognize that part of the nature of legitimating capitalism is, firstly, hiding the real nature of the “liberal democratic state and institutions.” Yes, I obtained some of my goals–preventing Francesca’s mother from ever falsely accusing me of sexually abusing Francesca ever again, gaining greater access to see Francesca and having the right for Francesca and her grandmother to see each other.

But at what cost? Francesca’s mother continued to abuse her physically–and the assessment was used to justify doing nothing about it. The façade of “justice” being done was maintained. Many of the “left”(such as Mr. Rosenfeld)  here in Toronto (and undoubtedly elsewhere) persistently idealize the capitalist government or state. The oppressive nature of the capitalist government is subsequently captured by the right, who at least recognize that people often experience the government as oppressive.

Mr. Rosenfeld and similar leftists, however, present such oppression as “instances” rather than as a regular part of the situation of those have dealings with the government.

The Manitoba Registered Institute of Social Workers “inquired” into the situation (the complaint was double spaced and amounted to around 100 pages, with supporting documentation).

They interviewed me, and their questions centered around whether Mr. S.W. had raised his voice towards me or showed any signs of physical threats. The issue of the systematic abuse and bias contained in the court-ordered assessment was never discussed. The Institute rejected my complaint–without any justification other than indicating that Mr. S.W. did not contravene the Institute’s ethical principles.

Such are the ethics of social-democratic social workers and their institutions.

This post ends direct references to my complaint about the court-ordered assessment to the Manitoba Institute of Registered Social Workers. However, after having been convinced of the farcical nature of the legal system and farcical nature of the Manitoba Institute of Registered Social Workers and their ethical principles, I proceeded to file a complaint against the Winnipeg Child and Family Services with the Ombudsman’s office.

Let us see what this office did–or did not do.

A Short List of the Largest Swedish Employers by the Number of Employees, Profits and the Profits per Worker

The following provides a few statistics about the number of employees, the profit produced by the Swedish workers and the profit produced per worker of the largest employers in Sweden–often one of the idealized countries of the social-democratic left, where free public services are more extensive than in many other developed capitalist countries. 

It can be found at the following site: The Twenty Largest Swedish Employers by the Number of Employees, Profit and Turnover (Revenue).

Please note that the specific employers, the order of employers and the statistics may be different from those indicated below since the website is occasionally updated. Between the time I  started to work on this post and its posting, some of the employers had changed and so too had the numbers; I had to add some employers’ names and delete others as well as recalculate everything,

I will start with conclusions first and then proceed to the statistics and calculations on which the conclusions are based.

Conclusions First

The above workers in the last table, then, on average, produced $62,893 free of charge to the Swedish employers in one year. Sweden, despite greater access to free public services, is characterized by systemic exploitation of the working class. Furthermore, it is characterized by oppression of these workers even when workers are producing the equivalent of their own wage rather than producing a profit (or surplus value) for the employer (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation).  

The purpose of the above is mainly to highlight that the social-democratic heaven of Sweden is hardly the heaven painted by social democrats or social reformers. In Sweden, like other capitalist countries, workers are used as means to obtain more money (see The Money Circuit of Capital). They are both exploited (perform more work than is necessary to produce the equivalent of their own wage), and they are oppressed (subject to the dictates of their employer–both when they produce the equivalent of their wage and when they produce a surplus value for free for the employer (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation). 

The expansion of free public services and systematic exploitation of workers can go hand in hand. Social democrats, however, often present the expansion of free public services as the solution to the social problems that we face (see, for example, A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is Socialist). However, the expansion of free public services could form part of the solution–if it is linked to a movement for the abolition of the power of the class of employers and not just as the solution to the problems we face. 

Data on Swedish Employers

The Largest Employers in Sweden According to the Number of Employees

 
  Company       Number of employees  
 

1

Securitas AB   302 055 ChangeValue
 

2

H & M Hennes & Mauritz AB   126 376 ChangeValue
 

3

Ericsson, Telefon AB LM     94 503 ChangeValue
4 Volvo, AB   93 731 ChangeValue
5 Assa Abloy AB   48 992 ChangeValue
6 Electrolux, AB   48 652 ChangeValue
7 Scania CV AB     47 489 ChangeValue
8 Scania AB     47 489 ChangeValue
9 Essity AB   45 980 ChangeValue
10 SKF, AB   41 559 ChangeValue
11 Volvo Car AB     41 517 ChangeValue
12 Sandvik AB   41 120 ChangeValue
13 Atlas Copco AB     37 805 ChangeValue
14 Skanska AB   34 756 ChangeValue
15 Carl Bennet AB     28 825 ChangeValue
16 PostNord AB   28 627 ChangeValue
17 Loomis AB   24 895 ChangeValue
18 ICA Gruppen AB     23 125 ChangeValue
19 Trelleborg AB   22 952 ChangeValue
20 Axel Johnson Holding AB   22 291 ChangeValue

Some explanations are in order since some of the companies seem to be repeated.

  1. From Wikipedia: “The heavy truck and construction equipment conglomerate AB Volvo and Volvo Cars have been independent companies since AB Volvo sold Volvo Cars to the Ford Motor Company in 1999.”
  2. According to Prospectus Scania (1999): “The principal subsidiary of Scania AB is Scania CV AB. It is a wholly-owned subsidiary of Scania AB and comprises all Scania operations outside Latin America.” Hence, it would seem that for the purposes of the statistics Scania CV AB and Scania AB are identical. That is why I included 21 companies–they ar

A further measure is according to profit on the same webpage: I modify it somewhat to make it more meaningful for Canadian workers.

The Largest Employers in Sweden According to the Amount of Profit

 
  Company       Net profit (×1000) SEK (SEK is the Swedish Krona or unit of money,  around $0.14 Canadian, $0.11 US,  $0.10 Euro-, 0.08 pounds, -so roughly divide by 7, 9, 10, or  12.5, respectively, to get a Canadian, US, Euro or pound  equivalent), Net profit, billions of Canadian dollars  (dividing net profit in kronas by 7 and x 1000)
 

1

Investor AB   102 650 000 $14.664286ChangeValue
 

2

Volvo, AB   46 832 000 ChangeValue$6.6690286
 

3

AstraZeneca AB   37 436 000 ChangeValue$5.348000
4 Industrivärden, AB   29 930 000 $4.275714ChangeValue
5 L E Lundbergföretagen AB   23 335 000 ChangeValue$3.333571
6 Kinnevik AB   21 573 000 ChangeValue$3.081857
7 Atlas Copco AB     21 572 000 ChangeValue$3.081714
8 Melker Schörling AB   20 013 000 ChangeValue$2.859000
9 Melker Schörling Tjänste AB   20 013 000 $2.859000ChangeValue
10 SCA, Svenska Cellulosa AB   19 539 000 ChangeValue$2.791286
11 Lundin Energy AB   18 885 500 ChangeValue$2.697929
12 Arrow AB   18 725 220 ChangeValue$2.675031
13 Vattenfall AB     18 322 000 ChangeValue$2.617429
14 H & M Hennes & Mauritz AB   17 391 000 ChangeValue$2.484429
15 Scania CV AB     16 476 000 ChangeValue$2.353714
16 Scania AB     16 476 000 ChangeValue$2.353714
17 Erik Selin Fastigheter AB     16 289 589 ChangeValue$2.327084
18 Assa Abloy AB   13 571 000 ChangeValue$1.938714
19 Volvo Car AB     13 168 000 ChangeValue$1.881143
20 Essity AB   13 040 000 $1.862857ChangeValue
 

If we combine the two tables and add some readily available data from the website that is not indicated in the two tables above–that is to say, look at companies where information is readily available both for the number of employees and for the net profit (some of the companies lack data for both the number of employees and the amount of net profit)–we can get an idea of the extent of exploitation in terms of the amount of profit generated per worker for each company as well the average amount of net profit produced (or appropriated) per worker.

I address some objections to this calculation after the tables. I calculated the Canadian equivalent (far right).

The Largest Employers According to Profit Produced or Appropriated Per Worker in Sweden

 
  Company Net profit (×1000) SEK   Number of employees Net Profit per worker SEK  Net Profit per worker (in Canadian dollars) (dividing net profit in Kronas by 7)
 

1

Investor AB 102 650 000 15,560 6,597,000ChangeValue ChangeValue$942,429
 

2

AstraZeneca AB 37 436 000 6,150 6,087,000ChangeValue ChangeValue$869,571
 

3

SCA, Svenska Cellulosa AB 19,539,000 4,253 4,594,000ChangeValue ChangeValue$656,286
4 Vattenfall AB 18,322,000 19.997 916,000ChangeValue ChangeValue$130,857
5 Atlas Copco AB 21,572,000 37,805  571,000ChangeValue ChangeValue$81,571
6 Volvo, AB 46,832,000 93,731 500,000ChangeValue ChangeValue$71,429
7  Scania CV AB 16,476,000   47,489 347,000 ChangeValue$49,571
8 Volvo Car AB 13,168,000 41,517  317,000ChangeValue ChangeValue$45,286
9  Sandvik AB 12,150,000 41,120 295,000ChangeValue ChangeValue$42,143
10 Essity AB 13,040,000 45,980 284,000ChangeValue ChangeValue$40,571
11 Assa Abloy AB 13,571,000  48,992  277,000ChangeValue ChangeValue$39,571
12  Skanska AB 7,340,000 34,756 211,000ChangeValue ChangeValue$30,143
13  SKF, AB 8,469,000   41,559 204,000ChangeValue ChangeValue$29,143
14 ICA Gruppen AB 4,402,000 23,125 190,000ChangeValue ChangeValue$27,143
15 Carl Bennet AB 5,,124,000   28,825 178,000ChangeValue ChangeValue$25,429
16 H & M Hennes & Mauritz AB 17,391,000    126,376 138,000ChangeValue ChangeValue$19,714
17 Axel Johnson Holding AB 2,237,000 22,291 100,000 ChangeValue$14,286ChangeValue
18 Ericsson, Telefon AB LM 8,762,000 94,503 93,000ChangeValue ChangeValue$13,286
19 Loomis AB 2,210,000   24,895

89,000

ChangeValue

ChangeValue$12,714
20 Electrolux, AB 2,456,000 48,651  50,000 ChangeValue$7,143

In terms of total profit per worker for all the above workers, if we sum up total profits and total employees and divide total profits by total employees, we obtain: 

Total profit: 373,147,000×1000 SEK; /7=$53.306714290 billion Canadian dollars 
Total #Employees: 847,575
Total profit per worker: 53.30671429/847,575=$62,893 per worker. The above workers in the last table, then, on average, produced $62,893 free of charge to the Swedish employers in one year. Sweden, despite greater access to free public services, is characterized by systemic exploitation of the working class. Furthermore, it is characterized by oppression of these workers even when workers are producing the equivalent of their own wage rather than producing a profit (or surplus value) for the employer (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation).  

Some Marxists will claim that this is unscientific since many factors are excluded from consideration(such as the difference between values and prices of production, a difference that I addressed, in a preliminary way, in my comment to the post The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada. Given the large difference in profit per worker in the first and twentieth company, divergences may be great, but without further data (the level of investment in means of production, raw materials, auxiliary materials and the like), any further refinement is impossible.

Objections to the limited nature of the data are valid.

However, my answer to its limited nature is; it is better to estimate profit per worker than not provide anything. If more accurate calculations are then provided later on, all the better. But in the meantime, at least we have an idea of the extent of exploitation of workers. Calculation of the rate of exploitation, which involves profit divided by wage, of course, would require data on wages in these companies. More accurate statistics and more refined analyses would be most welcome.

The purpose of the above is mainly to highlight that the social-democratic heaven of Sweden is hardly the heaven painted by social democrats or social reformers. In Sweden, like other capitalist countries, workers are used as means to obtain more money (see The Money Circuit of Capital). They are both exploited (perform more work than is necessary to produce the equivalent of their own wage), and they are oppressed (subject to the dictates of their employer–both when they produce the equivalent of their wage and when they produce a surplus value for free for the employer (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation). 

The expansion of free public services and systematic exploitation of workers can go hand in hand. Social democrats, however, often present the expansion of free public services as the solution to the social problems that we face (see, for example, A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is Socialist). However, the expansion of free public services could form part of the solution–if it is linked to a movement for the abolition of the power of the class of employers and not just as the solution to the problems we face. 

The Leap Manifesto as a Social-Democratic Document: Climate Change, Environmental Degradation, Indigenous Rights and the Perpetuation of the Dominance of a Class of Employers

Written before the coronavirus pandemic, The Leap Manifesto: A Call for Canada
Based on Caring for the Earth and One Another, produced by various authors in 2015, ranging from scientist David Suzuki to the former head of the Canadian Union of Public Employees (CUPE), Paul Moist, focuses on the need for the transition to a new kind of economy–a green economy. I will only address certain aspects of the Manifesto. If I should address further aspects in another post in the future, I will

It states:

We start from the premise that Canada is facing the deepest crisis in recent memory.

The Truth and Reconciliation Commission has acknowledged shocking details about
the violence of Canada’s near past. Deepening poverty and inequality are a scar on the country’s present. And our record on climate change is a crime against humanity’s future.

The Truth and Reconciliation Commission’s mandate was:

The TRC is a component of the Indian Residential Schools Settlement Agreement. Its mandate is to inform all Canadians about what happened in Indian Residential Schools (IRS). The Commission will document the truth of survivors, families, communities and anyone personally affected by the IRS experience.

Direct and Indirect Violence in Modern Society

The violence perpetrated by the Canadian government on Aboriginal peoples certainly needs to be addressed. However, violence has taken many forms in Canada’s past, such as the direct or indirect violence of the creation of a market for workers, who need to sell themselves to employers. The continued existence of a market for workers in Canada expresses the continued existence of such violence.

Direct violence in a society characterized by a class of workers who must sell their capacity to work on a market via a labour contract (whether individually or collectively) is reserved for a special institution: the modern government or the modern state. From Geoffrey Kay and James Mott (1982 ), Political Order and the Law of Labour, page 83:

One crucial presupposition of modern contract, which it then reproduces, is that both parties arc deprived of the right to act violently in defence of their own interests, or even to pardon those who harm them. In a society of equivalents relating to each other through contract, politics is abstracted out of the relations of production, and order becomes the task of a specialised body — the state.

The modern state or government ensures that the contractual relations of the workers and employers are met and that the property of each is respected. Since workers acquire property, generally, in means of consumption (food, clothing, rental of apartments or houses, buying of condos or houses, cars or other means of transport, entertainment, books, balls and games for their children, and so forth), they generally lack means for their own continued existence (such as business computers, buildings, machine and so forth. It is the employers who own these and not the workers.

Since workers in such a society (and Canada is such a society) are means to the ends defined by employers (see The Money Circuit of Capital), and treating human beings as a means rather than their own ends (think of children and what most people say about treating children’s development as an end in itself–and then apply the same idea to adults) is a violent act, then employers’ treatment of workers as means is a continuously violent act, and the modern government or state protects such violence and indeed monopolizes the use of direct violence and thereby perpetuates the violence of employers.

Does the Manifesto have anything to say on this score? Following the above citation from The Leap Manifesto, it says:

These facts are all the more jarring because they depart so dramatically from our stated values: respect for Indigenous rights, internationalism, human rights, diversity, and environmental stewardship.

These may be the stated values, but Canadian reality has consistently contradicted such stated values. In general, such stated values are hypocritical. Consider human rights. Human rights in Canada are consistent with treating workers as things by employers (see Employers as Dictators, Part One). I will address the issue of “environmental stewardship” briefly in the following section.

Goals of The Leap Manifesto

What is the goal of The Leap Manifesto?

Canada is not this place today — but it could be. We could live in a country powered entirely by truly just renewable energy, woven together by accessible public transit, in which the jobs and opportunities of this transition are designed to systematically eliminate racial and gender inequality. Caring for one another and caring for the planet could be the economy’s fastest growing sectors. Many more people could have higher wage jobs with fewer work hours, leaving us ample time to enjoy our loved ones and flourish in our communities.

There are several points here:
1. truly just renewable energy
2. accessible public transit
3. jobs that systematically eliminate
a. racial inequality
b. gender inequality
4. Caring for the planet
5. Caring for one another
6. Higher wage jobs
7. Work fewer hours
8. Time to enjoy our loved ones
9. Time to flourish in our communities.

Some of these demands seem reasonable. Who would not want higher wage jobs?  (I will come back to this.) Who would not want to work fewer hours while having the time (and money) to enjoy our lives with family, friends and flourish within a community? Who among the left at least would not want the elimination of racial and gender inequality?

Environmental Degradation a Necessary Feature of a Society Dominated by a Class of Employers

This is contradictory list. Even on the assumption that racial and gender inequality could be eliminated, as I have already indicated, a caring planet and a capitalist economy are mutually exclusive (see  The British Labour Party’s 2019 Manifesto: More Social Democracy and More Social Reformism, Part One). Of course, there is room for improving the current environmental situation through changes to more renewable resources, but the infinite nature of the capitalist economy contradicts any real solution to the problem of environmental degradation. The idea of “environmental stewardship” within a capitalist society is an illusion.

How urgent is the need for addressing climate change and environmental degradation, according to the Manifesto?

We know that the time for this great transition is short. Climate scientists have told us that this is the decade to take decisive action to prevent catastrophic global warming. That means small steps will no longer get us where we need to go.

This plea for rapid change, of course, will now be put on the back burner because of the coronavirus pandemic and the ensuing economic crisis that will flow from it.

The Manifesto outlines the following timeline:

…we want energy sources that will last for time immemorial and never run out or poison the land. Technological breakthroughs have brought this dream within reach. The latest research shows it is feasible for Canada to get 100% of its electricity from renewable resources within two decades: by 2050 we could have a 100% clean economy.

Even on the assumption that Canada can shift to 100% clean energy by the year 2050, as the Manifesto claims, environmental degradation will continue since it will always be necessary to expand the economy infinitely. Climate change may be addressed (although, in addition to the problems associated with the coronavirus pandemic, there are powerful capitalist interests in the fossil-fuel industry), but not environmental degradation due to the nature of the capitalist economy. The Manifesto simply ignores this problem.

Unless the social relations that characterize an economy that moves towards infinity is addressed, caring for the planet is simply a will-o’-the-wisp.

Indigenous Rights and the Modern Government or the Modern State

The Leap claims:

So we need to leap.

This leap must begin by respecting the inherent rights and title of the original caretakers of this land. Indigenous communities have been at the forefront of protecting rivers, coasts, forests and lands from out-of-control industrial activity. We can bolster this role, and reset our relationship, by fully implementing the United Nations Declaration on the Rights of Indigenous Peoples.

Moved by the treaties that form the legal basis of this country and bind us to share
the land “for as long as the sun shines, the grass grows and the rivers flow,”

Although, as Mark Franke (2007) argues, in “Self-determination Versus the Determination of Self: A Critical Reading of the Colonial Ethics Inherent to the United Nations Declaration on the Rights of Indigenous Peoples,” in Journal of Global Ethics, Volume 3, issue 3, pages 359-379, that the adoption of the Declaration undoubtedly aids in the recognition of indigenous grievances, he also argues that the definition of self permitted through the Declaration would limit indigenous peoples to definitions of self characteristic of liberal societies. Such enabling and constraining features are characteristic of many liberal capitalist states (Francesca Merlan (2009), “Indigeneity: Global and Local,” in the journal Current Anthropology, Volume 50, Number 3, pages 303-333). As Franke remarks (page 375):

The human rights discourse of the UN itself is based inmaking a division between, on the one hand, those peoples who are seen as peace-loving social units willing and capable of supporting a specific vision of human need and rights and willing and capable of supporting the state as the necessary mechanism through which these needs and rights may gain address and, on the other hand, those who are unwilling or incapable of either. The whole notion of self privileged in the UN’s vision of self-determination is predicated on its contrast to a class of groups who do not seek identity with the human self idealised within its ethic. As Farid Samir Benavides Vanegas contends, the globalisation of rights remains deeply trapped in a colonial outlook (Vanegas 2004). As a result, peoples in the world who seek to determine themselves in ways that do not accord with the UN vision of peace, security, and human rights are not even eligible for recognition as selves. They could not be seen to identify with the human self valorised within the UN project; they can be only different from the self.

If it is the case, then, that any indigenous peoples wish to engage in processes of self-determination that questions the validity of the state as the fundamental organising
principle for their lives and the lives of all other peoples on earth, on the basis of the Declaration, there is no room for them to be recognised as groups deserving of the rights set out in the document or as groups that may be recognised as selves in the world. Under the basis of this document and the ethic of self that propels it, indigenous peoples have no opportunity to be identified as peoples with genuine moral claims on the states and international organisations of this world, if they choose to express their interests in ways outside of the modern political vision of self, which is itself a product of colonialism.

The Manifesto assumes the legitimacy of the modern state or government, and such an acceptance often goes hand in hand with acceptance of the continued existence of a class of employers. (For a critique of the nature of the modern government or state, see for example, The Poverty of Academic Leftism, Part Seven: The Idealization of the Nation State or the National Government and Nationalization in the Wake of the Coronavirus Pandemic, Part Two, or  Socialism, Police and the Government or State, Part One).

The Leap’s Assumption of the Continued Existence of a Class of Employers

In addition to ignoring the direct and indirect violence of modern class society, the necessary degradation of the environment in a capitalist context, and the necessary limitations imposed on Aboriginal self-determination, the Leap Manifesto fails to criticize the essential nature of the economy in which we live. It states, as noted above:

Many more people could have higher wage jobs with fewer work hours….

Higher wages–rather than the abolition of a system based on wages, with the class of employers abolished in the process–this is one of the goals of the Manifesto.

It may seem that the Manifesto goes further. It says:

As an alternative to the profit-gouging of private companies and the remote
bureaucracy of some centralized state ones, we can create innovative ownership
structures: democratically run, paying living wages and keeping much-needed revenue in communities.

However, in another part of the Manifesto, it states:

We call for an end to all trade deals that interfere with our attempts to rebuild local
economies, regulate corporations [my emphasis] and stop damaging extractive projects.

Companies can only be regulated if they exist–and presumably such companies will still involve a class of employers. There is simply no direct expression of the need to eliminate the class of employers and the associated economic, political and social structures.

It may also appear that the Manifesto, by proposing a universal basic income, is advocating the abolition of classes:

Since so much of the labour of caretaking – whether of people or the planet – is currentlyunpaid, we call for a vigorous debate about the introduction of a universal basic annual income. Pioneered in Manitoba in the 1970’s, this sturdy safety net could help ensure that no one is forced to take work that threatens their children’s tomorrow, just to feed those children today.

I too have advocated for a universal basic income (see, for example,  A Radical Basic Income as a Radical Reform). However, it is not to be part of a “sturdy safety net” but to breach a hole in the need for working for an employer in general–a threat to the power of employers as a class; such a breach would require widespread class struggle–something which the Leap Manifesto simply ignores. Economic coercion is necessary in a capitalist society–as John Clarke, a former activist in the organization Ontario Coalition Against Poverty admitted (see  “Capitalism needs economic coercion for its job market to function” (Ontario Coalition Against Poverty: OCAP). 

The document is a hodge-podge of proposals, some of which may be attained within a system dominated by a class of employers (such as higher wages, self-determination by Aborginal peoples as defined by nation states and even, perhaps, “clean energy” (although that is debatable). Other proposals cannot be realized within the modern class system–abolition of the direct violence of the modern state and the indirect violence of the dictatorship of employers; environmental degradation; and the definition of self-determination that goes beyond the limits of the modern state.

The proposal of a basic income could be accommodated within the capitalist system, or it could be more radical, threatening the existence of a market for workers. Since the Manifesto nowhere explicitly opposes the class power of employers, it is likely that it proposes some form of basic income that is consistent with the continued existence of a market for workers, where workers are hired and fired by employers.

Another piece of evidence that the proposal of basic income is likely consistent with the continued existence of a market for workers is who signed it: Paul Moist. As I pointed out above, he was former national president of the Canadian Union of Public Employees (CUPE); he retired in 2015–the same year as the publication of the Manifesto.

I met, I believe, Mr. Moist in 1996, in Winnipeg, Manitoba, Canada. The issue of “fair collective bargaining” had come up. Susan Thompson, who was mayor of Calgary at the time, wanted to break the collective agreement between the city and CUPE local 500; she  tried to have Gary Filmon (premier of Manitoba, Canada) support her attempt to breach the collective agreement. Paul Moist, at the time head of CUPE local 500 outside workers in Winnipeg, called out the slogan “A contract is a contract,” in opposition to Susan Thompson’s underhanded attempt; it was a wise tactical move on Moist‘s part since people supported him in what they perceived was an unfair act by Susan Thompson.. At the time, I belonged to a leftist group called New Directions. Mr. Moist came to one of the meetings, and I asked him whether he considered the slogan to be a tactical move or whether he believed in it. His response was that the foundation of our society is contracts; he evidently believed in the slogan.

Furthermore, Mr. Moist is a supporter of the New Democratic Party–a social-democratic party whose aim is to reform capitalist society, making it more of a welfare state than the current neoliberal model.

All in all, then, the Leap Manifesto falls far short of any real call for change. Its “leap’ is indeed a leap–at a frog’s pace rather than at a human pace. It is a social-democratic or social-reformist document.

Management Rights, Part Nine: Is A Collective Agreement that Involves Management Rights and the Exploitation and Oppression of Workers a Fair Contract?

In the previous post, I calculated the rate of exploitation of workers who work for Rogers Communication (see The Rate of Exploitation of the Workers of Rogers Communications Inc., One of the Largest Private Employers in Toronto). Below you will find the management rights clause of a collective agreement between Rogers Communications and Metro Cable TV Maintenance and Service Employees Association.

In a previous post, I also posted several quotes by the largest union in Canada, the Canadian Union of Public Employees (CUPE) that assert, without proof, that the collective agreements of CUPE locals are fair contracts (see Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One).

I will continue to provide occasional posts with management rights clauses from collective agreements from different provinces to show that the management rights clause is something that unionized workers face throughout Canada–and which deserve to be often discussed among union members to see whether such clauses express in any way a democratic way of living or a dictatorial way of living (for the dictatorship of employers, see for example, Employers as Dictators, Part One).

However, I will also include collective agreements that relate to my other posts on the rate of exploitation of workers who work for a particular employer. I will, in future, post both the management rights clause (if there is an explicit one since arbitrators recognize management rights even if there is no such clause in the collective agreement) from the collective agreement and simultaneously my calculation of the rate of exploitation of the particular employer in another post (when possible).

A question for those who consider collective agreements to be fair and to provide conditions for decent work to be performed: Does the following management rights clause express the freedom of the unionized workers or their lack of freedom to determine their own lives at work? If it expresses a lack of freedom, how is the collective agreement fair? How is the work performed an expression of decent work (another cliche expression used by union reps)?

I have found it interesting that, despite my posts that refer to the management rights clauses of collective agreements and my criticisms of such clauses, there have been no explicit criticisms of such posts by defenders of union reps. I suspect that unions reps, like their social-democratic counterparts, simply want to avoid the issue since it is an Achilles heel for their claim to produce “fair contracts”

From page 9:

COLLECTIVE AGREEMENT BETWEEN
ROGERS COMMUNICATIONS PARTNERSHIP
AND
METRO CABLE TV MAINTENANCE AND SERVICE EMPLOYEES ASSOCIATION
SEPTEMBER 1, 2014 TO AUGUST 31, 2019

Section 3 – Management Rights

3.01 The Association acknowledges that the Company retains the right to manage its operations in all respects in accordance with its commitments and its obligations and responsibilities, to direct the working force and to hire, promote, transfer, demote or lay off employees and to suspend, discharge or otherwise discipline employees for just cause, the right to decide on the number of employees needed by the employer at any time in accordance with the provisions of Company and Association seniority, the right to use modem methods, technology and equipment, and jurisdiction over all operations, buildings and equipment are solely and exclusively the responsibility of the employer; provided that any exercise of these rights by the Company which conflict with any provisions of this agreement shall be subject to the grievance procedure set out in Section 11. The employer also has the right to make, alter and enforce rules and regulations to be observed by the employees provided such rules and regulations are not inconsistent with the terms of this agreement.

3.02 The Company and Association agree that no employee shall in any manner be discriminated against or coerced, restrained or influenced on account of membership or non-membership in any labour organization or by reason of activity or lack of activity in any labour organization.

3.03 Supervisory/Managerial personnel will not perform bargaining unit work unless an explanation acceptable to both parties is provided for the performance of such work.

The Rate of Exploitation of the Workers of Rogers Communications Inc., One of the Largest Private Employers in Toronto

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit). 

I have tried to calculate the rate of exploitation of workers of Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto. I also calculated the rate of exploitation for Air Canada workers and the Canadian Imperial Bank of Commerce (CIBC) workers. 

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

Income before income tax expense s=$3.773 billion or $3773.5 million and
Employee salaries, benefits, and stock-based compensation v=$1.8045 billion or $1804.5 million

The rate of exploitation or the rate of surplus value=s/v=3773.5/1804.5=209%.

That means that for every hour worked that produces her/his wage, a worker at Rogers Communications works around an additional 125 minutes or 2 hours 5 minutes for free for Rogers Communications. Alternatively, in terms of money, $1 of wage or salary of a regular Rogers Communications worker produces $2.09 surplus value or profit for free. 

  1. In a 4.5-hour work day (270 minutes), the worker produces her/his wage in about 87 minutes (1 hour 27 minutes) and works 183 minutes (3 hours 3 minutes) for free for Rogers Communication.
  2. In a 7.5-hour work day (450 minutes), the worker produces her/his wage in about 146 minutes (2 hours 26 minutes) and works 304 minutes (5 hours 4 minutes) for free for Rogers Communications.
  3. In an 8-hour work day (480 minutes). the worker produces her/his wage in about 155 minutes (2 hours 35 minutes) and works 325 minutes (5 hours 25 minutes) for free for Rogers Communications.
  4. In an 10-hour work day (600 minutes). the worker produces her/his wage in about 194 minutes (3 hours 14 minutes) and works 406 minutes (6 hours 46 minutes) for free for Rogers Communications.

Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

Now, the calculation:

In millions of Canadian dollars:

The data are taken from Rogers Communications Inc. Annual Report.

Total revenue 15,073

Operating Expenses

Operating Costs

Cost of equipment sales 2,254
Merchandise for resale 242
Other external purchases 4,360
Employee salaries, benefits, and stock-based compensation 2,005

Total operating costs 8,861
Depreciation and amortization 2,488
Restructuring, acquisition and other 139

Total operating expenses 11,488
Finance costs 840

Interest on borrowings  746
Interest on post-employment benefits liability  11
Interest on lease liabilities  61
Capitalized interest (19)
Loss on repayment of long-term debt 19
(Gain) loss on foreign exchange (79)
Change in fair value of derivative instruments 80
Other 21

Total finance costs 840
Other income  (10)
Income before income tax expense 2,755

Total revenue therefore=11,488+840-10+12,318+2,755=15,073 (as above)

To calculate the rate of surplus value, the key categories are “Employee salaries, benefits, and stock-based compensation,” which is equivalent to wages/salaries (=v) and “Income before income tax expense” (surplus value (s) or profit).

Adjustments

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

Adjustment of Stock-Based Compensation

The subcategory “stock-based compensation” in the category “Employee salaries, benefits, and stock-based compensation” includes two further subcategories (sub-sub categories, so to speak): 1. Options to purchase Class B Non-Voting Shares on a one-for-one basis (granted to employees, directors, and officers) and 2. Performance options (granted to certain key executives). It may seem unnecessary to adjust for the second sub-sub category since there were ” nil performance-based options” in 2019. However, there are at least two reasons for making adjustments. Firstly, payment for some of the stock-based compensation is due to stock-based compensation acquired in previous years: “These options vest on a graded basis over four years provided that certain targeted stock prices are met on or after each anniversary date. As at December 31, 2019, we had 1,068,776 performance options outstanding.”

Secondly, some of the stock options  in the first sub-sub category are based on “performance-based options” on the part of middle and senior management: “We granted 180,896 performance-based RSUs [restricted share units] to certain key executives in 2019.” 

I use the following logic from my post on the rate of exploitation of Canadian Imperial Bank of Commerce Workers to justify shifting 10 percent of the amount from the category ” (I change the wording slightly to make the quote apply to Rogers Communications workers): 

Most employees, whether executive or not, seem to be eligible to some support of bonus as a function of performance. However, the gap between executive pay and the pay of regular employees has widened over the years, so it is reasonable to infer that the category “Stock-based compensation” is divided into two parts: one part is a function of the number of hours worked as well as the intensity of that work by regular employees; the other is based on the extent to which managers and senior executives are successful in exploiting those regular employees. 

It is impossible to determine the proportion of stock options that form part of salaries and bonuses that represent the exploitation of Rogers Communications regular workers. 

It is probably reasonable to assume that a minimum of 10 percent of the “Stock-based compensation” comes from the exploitation by middle and senior Rogers Communications executives of regular workers.

It would be necessary to have more detailed information to determine whether more or less of the money obtained in this category were distributed between regular bank workers and management executives. If regular bank workers received more, then the rate of exploitation would be less than the rate calculated below. If management executives received more, then the rate of exploitation would be more than the rate calculated below.

On the assumption of 10 percent, this means that 10 percent of the total “Stock-based compensation is reduced by 10 percent, or $200.5 million dollars, and that amount is added to “Income before income tax expense.” This gives, so far: 

Employee salaries, benefits, and stock-based compensation $1804.5 billion
Income before income tax expense $2955.5 billion

Adjustment of Finance Costs

Another adjustment relates to interest. As I indicated in my post about the rate of exploitation of workers at Magna International:

An adjustment should probably be the treatment of the payment of interest: despite being an expense from the point of view of the individual capitalist, it probably forms part of the surplus value. It should be added to “Income before income tax expense.”

As for the category “Interest on post-employment benefits liability,” from the point of view of Rogers Communications, it is an expense or cost because, presumably, Rogers Communications had to borrow money (and pay interest) to meet its financial obligations to its retired workers; this interest comes from the surplus value produced by the workers and is therefore included as part of profit.

I treat the category “Interest on lease liabilities” like other interest categories: it is paid out of the surplus value produced by Rogers Communications workers.

The interest charges so far that must be subtracted from “Finance costs” and added to “Income before income tax expense” is $818 million. 

That leaves $22 million for Finance Costs so far. 

As I explained on my post on the rate of exploitation of Air Canada workers:

Some explanation of “interest capitalized” is in order. I have had difficulty in understanding the nature of “Interest capitalized.” As far as I can tell, interest that is normally paid and is an expense for the particular employer is treated, in Marxian economics, as part of surplus value because, at the macro level, it comes from the surplus value produced by the workers.

Interest capitalized seems to be different since the interest charged on money borrowed for the purpose of the construction of fixed assets (with a specific interest rate attached to it) is “capitalized,” or not considered part of interest expenses until the construction is finished and the fixed asset is ready to use. This accounting distinction, however, from the macro point of view, is irrelevant since both interest expenses and interest capitalized are derived from the surplus value produced by workers (or appropriated from them in another industry). Accordingly, both interest expenses and interest capitalized should be added to the amount of “Income before income taxes” category.

In the case of Air Canada, capitalized interest was positive (not in parentheses), and I therefore added it to the amount of surplus value produced by the workers. In the case of Rogers Communication, it is negative (since it is in parentheses). Accordingly, I have subtracted it from “Finance Costs” (as the accountants have done). Whether that it is legitimate I will leave for those who more adequately understand modern accounting principles and their relation to Marxian economics. I have found no guidance in the literature so far to aid me in dealing with such issues. 

The three categories, “Loss on repayment of long-term debt,” “(Gain) loss on foreign exchange,” and
“Change in fair value of derivative instruments” seem to have nothing directly to do with interest payments and therefore I leave them as part of “Finance Costs.”

Since the category “Other” remains unspecified, I also leave it as part of “Finance Costs.”

Accordingly, adjusted Finance Costs are:

Adjusted Finance Costs

Loss on repayment of long-term debt 19
(Gain) loss on foreign exchange (79)
Change in fair value of derivative instruments 80
Capitalized interest (19)
Other 21

Total finance costs 22

The category “Other income” is somewhat misleading since, in a note, the category is really “Other (income) expense.” The subcategories are as follows: 

Losses from associates and joint ventures 18 
Other investment income (35) 
Total other income (10)

The $10 million is actually additional investment income, but since it is placed in an expense category, it is put into parentheses. Normally, when an amount is placed in parentheses, it is subtracted, but since it is additional income rather than an expense, it is added. It therefore is already accounted for in the original “Income before income tax expense,” it is already accounted for. 

The remaining 818 in so-called finance costs (which are hidden surplus value) are transferred to the adjusted “Income before income tax expense” category, so that the adjustment for the total of the category is 2,955.5.+818=3773.5. 

So, with the adjustments in place:

Income before income tax expense s=$3.773 billion or $3773.5 million and
Employee salaries, benefits, and stock-based compensation v=$1.8045 billion or $1804.5 million

The Rate of Exploitation

The rate of exploitation or the rate of surplus value=s/v=3773.5/1804.5=209%.

That means that for every hour worked that produces her/his wage, a worker at Rogers Communications works around an additional 125 minutes or 2 hours 5 minutes for free for Rogers Communications. Alternatively, in terms of money, $1 of wage or salary of a regular Rogers Communications worker produces $2.09 surplus value or profit for free. 

The length of the working day at Rogers Communications, like most places, varies. Here are a sample of working days from the Internet:

  1. 7 days a week. 32 hours a week.
  2. Varying 8hr shifts depending on dept. two paid 15 minutes break and 30mins unpaid lunch
  3. 37.5 a week
  4. 7.5 to 8 hrs
  5. 8 – 10 hours per day depending on projects etc. There is a great deal of flexibility in how you work
  1. In a 4.5-hour work day (270 minutes), the worker produces her/his wage in about 87 minutes (1 hour 27 minutes) and works 183 minutes (3 hours 3 minutes) for free for Rogers Communication.
  2. In a 7.5-hour work day (450 minutes), the worker produces her/his wage in about 146 minutes (2 hours 26 minutes) and works 304 minutes (5 hours 4 minutes) for free for Rogers Communications.
  3. In an 8-hour work day (480 minutes). the worker produces her/his wage in about 155 minutes (2 hours 35 minutes) and works 325 minutes (5 hours 25 minutes) for free for Rogers Communications.
  4. In an 10-hour work day (600 minutes). the worker produces her/his wage in about 194 minutes (3 hours 14 minutes) and works 406 minutes (6 hours 46 minutes) for free for Rogers Communications.

Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is Socialist

Introduction

Simran Dhunna and David Bush have written an article that criticizes moves towards a universal basic income (see https://springmag.ca/against-the-market-we-can-do-better-than-basic-income).

The Aim or Goal of Their Intervention

The first question to ask is: What is the aim or goal of their intervention? What are they seeking to achieve?

They write:

But those committed to principled class struggle should strive for the decommodification of public services. Compared with universal basic income, universal basic services cost less, meaningfully improve the material realities of working class and oppressed people, and affirm the power of publicly owned and operated infrastructure. That’s our bread and butter.

They seek to achieve three things, it seems:

  1. “meaningfully improve the material realities of working-class and oppressed people”
  2. affirm the power of publicly owned and operated infrastructure
  3. achieve points 1 ad 2 at minimal cost.

In this post, I will critically look at the first point.

In another post, I will look at the second point, and in a final post I will address the issue of costs–and how they create a strawman of a minimal basic income.

Meaningfully Improving the Material Realities of Working-Class and Oppressed People

Part of the title of their article claims that they are against the market–apparently against the market providing certain services; their alternative is having the government provide those services (hence the term “decommodification”–the conversion of services from services or commodities that are purchased on the market via money to the offering of such services without the direct mediation of money). This idea of supporting the working class by means of state services rather than through the capitalist market is supposed to “meaningfully improve the material realities of working-class and oppressed people.”

They write:

At the cost of $29 billion annually, we could have free transit in major cities ($10 billion), clean drinking water for every First Nation ($4.5 billion), eliminate tuition fees at all universities ($11 billion), and end homelessness ($4.5 billion). If we are spending $177 billion dollars a year (the cost of a negative income tax model to raise people to $21,810), we could have all of the above plus a universal pharmacare program, universal childcare, universal dental care, and begin to implement a robust public housing policy.  

It may not appear that they are social democrats since they evidently state that class struggle from below will be necessary to realize the provision of such services:

But those committed to principled class struggle should strive for the decommodification of public services.

The state is supposed to be forced to provide such services through class struggle (I will address the adequacy of the term “decommodification” later in this post). Now, I certainly agree with the need to engage in class struggle in order to provide as many services as possible without the direct mediation of the market. The realization of free tuition, for example, would have saved me the need to work for an employer in order to pay off students loans that I had needed three times in my adult life. Struggles to achieve such services furnished by the state rather than directly through the market should therefore be supported.

One of the questions to be asked is: What is the purpose or aim of shift from the provision of services provided by the market to the provision of services provided by the state or public services? Is it to move towards the elimination of the power of employers as a class? Towards the elimination of corresponding oppressive and exploitation structures at work in the private sector (see for example a general outline of such oppressive and exploitative structures in Employers as Dictators, Part One)? Towards the elimination of oppressive structures of the government as a public power (the oppressive structures of the government in relation to citizens and residents internally and military structures externally)? Towards the oppressive and exploitative relations of the government as an employer? (See the post referenced above as well as The Money Circuit of Capital). It would seem not.

Rather, the main aim is to “meaningfully improve the material realities of working-class and oppressed people” in order, ultimately, to eliminate “the level of poverty and inequality”–presumably measured according to the level of income. The focus is on the elimination of poverty and inequality (defined according to level of income):

Some of the appeal of UBI comes from the wishful idea that it can solve all of our problems at once, lifting people out of poverty and making education and public services accessible. But the basic costs show that UBI is, by any measure, a terrible use of resources to address inequality and poverty. As the CCPA’s David MacDonald noted in his study, the $29 billion spent on such a UBI scheme would achieve — at best — less than a 2 percent reduction in the poverty rate, which would “be quite wasteful” when considering the amount of money spent.

The first aim of the authors, then, is limited to an enhanced welfare state–something like what John Cartwright, president of Toronto and York Labour District Council, called for (see my critique in The Limitations of Social-Democracy in the Face of the Coronavirus). Mr. Cartwright wrote:

Reinvestment in our public services and social safety net is the right thing to do – not only now, during COVID-19, but permanently in Canadian society.

The Feasibility of Their Goal

Are such reforms feasible? There is evidence that their proposals could indeed be achievable within the existing social structure and social relations, and such reforms should be supported–all the while criticizing any attempt to limit the class struggle to such goals.

I have pointed out in another post how free transit has already been implemented in various capitalist countries (see What’s Left, Toronto? Part Four). Free tuition at the undergraduate level is available in Germany.

Homelessness has been addressed without changing the basic class structure by combining the aim of eliminating it with other measures that facilitate achieving that aim. In the northern Italian city of Trieste, for example, homelessness was reduced by providing supports for those with mental health problems since around half of those homeless have mental health issues (https://www.theguardian.com/cities/2019/dec/10/homelessness-is-not-inevitable-and-can-be-solved-these-cities-show-us-how). Helsinki, the capital of Finland, by contrast, addressed the issue of homelessness by providing access to housing while providing other social supports through the Housing First program. From https://borgenproject.org/homelessness-in-helsinki/:

In Helsinki, homelessness decreased to 35 percent, with 1,345 people now off the streets. Rough sleeping is almost non-existent, and there is only one 50-bed night shelter remaining. This is good news for street sleepers who have endured deadly winter temperatures as low as -7C° (19F°). “If you’re sleeping outside [in the middle of winter], you might die,” said Thomas Salmi, a tenant at a housing facility in Helsinki. Deputy Mayor Sanna Vesikansa, who witnessed a large number of homeless people in Helsinki as a child, said, “We hardly have that any more [sic]. Street sleeping is very rare now.”

Since 2008, Housing First has spent over 250 million euros in creating new homes and hiring staff. Meanwhile, Helsinki has seen savings upward of 15,000 euros a year in emergency healthcare, social services and the justice system. In 2018, some tenants moved out of Rukilla, able to live independent lives. The benefits outweigh the cost.

Eradicating homelessness in Helsinki is far from complete. However, the major reduction in long-term homelessness must be applauded. Helsinki has proven when authorities are fully committed, positive change can occur.

There is therefore room for reform in various social domains within societies dominated by the class of employers. Such reforms undoubtedly improve the lives of some of the workers and community members, and as a consequence they should be praised and fought for.

Limitations of Their Goal

I fail to see anything wrong with aiming to improve the material well being of workers and oppressed peoples. The problem arises when the advocates of such proposals simultaneously limit the goals of workers and oppressed peoples by ignoring their problems or by criticizing alternative proposals that address such problems.

It is my contention that their opposition to basic income does just that: it limits the aspirations of workers and oppressed peoples to a society that continues to be dominated by a class of employers despite calls for class struggle and material well-being. They oppose a policy of basic income in part because it might free workers from the need to work for an employer–which they implicitly identify falsely with the need to work:

Basic income would have the effect of distancing workers’ labour from their wages. Instead of being paid directly for their work, part of the wage of workers would come from their own tax dollars in the form of basic income. 

Dhunna and Bush object to aiming for the goal of “distancing workers labour from their wages.” There is, however, a tradition of aiming for the goal of separating or distancing labour from the needs of workers and others.

Distancing workers’ labour from their wages” is itself a worthy socialist goal. From Marx’s Critique of the Gotha Programme:

In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-round development of the individual, and all the springs of cooperative wealth flow more abundantly- only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs.

By focusing mainly on consumption, income level, the standard of living and poverty rates as defined by the level of income, Dhunnah’s and Bush’s goal, ultimately, is social democratic despite the reference to class struggle; many social democrats in the past have referred to class struggle without really aiming for the abolition of the power of the class of employer nor the abolition of classes–such as the German Social Democratic Party in the late nineteenth and early twentieth century (see Reform Versus Abolition of Police, Part Three).

From Moritz Muller (2019), “Of (Anti-)Capitalism, Countermovements, and Social-democratic Bedtime Stories. A Review of Recent Literature on Polanyi,” pages 135-148, Culture, Practice & Europeanization, Volume 4, Number 1, page 136:

… social democracy’s concept of socialism centers around the idea that private ownership should be replaced by public and/or cooperative ownership, together with the state’s acceptance of its role as the responsible institution for social welfare.

Dhunna and Bush, like Cartwright, only look, one-sidedly, at the problem since their focus is on poverty rates, standard of living (defined by consumption) and level of income. Their implied emphasis on distribution and consumption as opposed to production and employment fails to consider that production, distribution and consumption are interrelated since human beings produce their own social lives. Distribution and consumption are two aspects of this process, but they are part of a process of socially reproducing our live through the use of means of production (machines, buildings, tools, land, raw material, auxiliary material and so forth). There is no reference to employers and their power at work in their article at all, however.

Indeed, their focus is exclusively on issues of distribution of income and consumption; they neglect to include in the concept of “the Material Realities of Working-Class and Oppressed People” material interests of workers in controlling their own lives as they produce those lives over time. The “material realities” or workers include being oppressed and being exploited–which they never address (see for example The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One and The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation).

Their article reflects Marx’s characterization of the liberal reformist John Stuart Mill. From Grundrisse: Foundations of the Critique of Political Economy, page 87:

The aim is, rather, to present production – see e.g. Mill – as distinct from distribution etc., as encased in eternal natural laws independent of history, at which opportunity bourgeois relations
are then quietly smuggled in as the inviolable natural laws on which society in the abstract is founded.

Here is what the reformist John Stuart Mill wrote (quoted from Judith Janoska, Martin Bondeli, Konrad Kindle and Marc Hofer, page 104, The Chapter on Method of Karl Marx: An Historical and Systematic Commentary (in German, but the quote is in English):

The laws and conditions of the production of wealth partake of the character of physical truths [they cannot be changed–they are natural and eternal]. There is nothing optional or arbitrary in them. … It is not so with the Distribution of wealth. That is a matter of human institutions solely.

I have criticized the definition of poverty mainly according to level of income (the poverty rate) (and the corresponding standard of living) in another post since the definition fails to capture the continuing lack of freedom characteristic of work relations characterized by a market for workers (see “Capitalism needs economic coercion for its job market to function” (Ontario Coalition Against Poverty: OCAP)). I also criticized, in two other posts, Mr Bush’s inconsistent views (see Basic Income: A Critique of the Social-Reformist Left’s Assumptions and Analysis: Part One and Basic Income: A Critique of the Social-Reformist Left’s Assumptions and Analysis: Part Two). At least in his earlier writing, he tried to link production to distribution (though inadequately). Now he has abandoned all pretense of being concerned about the working lives of worker–despite the rhetoric of “class struggle.”

The push for a shift of many services from the private sector to the public sector will meet substantial opposition when it begins to affect the market for workers since the market for workers is a basic condition for the continued power and existence of employers as a class. Of course, the fact that there will be determined resistance and violence by employers and the government to ensure a ready supply of workers does not mean that such a policy should not be pursued. The authors do indeed imply that class struggle will be necessary to achieve their limited aims, but their form of class struggle works well within the limits of the continued existence of the class power of employers. However ironic it may sound, their form of class struggle is a reformist class struggle. Its aim is not the abolition of classes and therefore the class struggle, but rather the permanence of class struggle.

Their aim, in other words, is to humanize the class power of employers through class struggle rather than abolishing that class power. Their concept of socialism is really an enhanced welfare state–not the abolition of the class power of employers.

Struggles for an Expansion of Public Services and Socialism

There is no necessary connection between struggles for the expansion of free public services (free in terms of the consumer of such services not having to pay personally for such services and everyone having access to such services) and socialism. Should socialists, though, ignore such struggles? Of course not. The expansion of free public services can indeed enhance the life of workers and oppressed peoples, and it can, perhaps, permit a great possibility for the creation of a socialist society (I say perhaps for all the reasons above–the expansion of free public services often becomes a substitute for the creation of a socialist society–a society without the existence of a class of employers).

Socialists should support the expansion of free public services while simultaneously criticizing the limitations of such proposals. As Daniel Ankarloo (2009) writes, “The Swedish Welfare Model: A Road Ahead? A Road to Socialism? Or a Dead End?,” Rethinking Marxism Conference:

the first presupposition for the Left of coming out of this impasse in welfare policies is the abandonment of ‘the social policy road to socialism’ [the kind of socialism advocated by Dhunna and Bush]. And in its place embrace the seeming paradox – that even if the welfare state model in Sweden is not socialism, not even a road to socialism, as a precondition for socialism, it is vital to fight for.

Socialists must strive to integrate the present and future rather than separating them–which is typical of both social democrats and the extreme left:

as regards the welfare state, the Left in Sweden has for the most part … been unable to deal adequately with the relation of ‘welfare’ to socialism. Some in the Left – having found out that ‘welfare’ is not socialism – have denounced previous welfare achievements and current popular welfare struggles in Sweden altogether. This has left the playing field open for social democrats to
lead the movement on issues of ‘welfare’ and subsequently ‘the social policy road to
socialism’ has largely remained unchallenged. More prevalent, however, has been to try to
overcome this impasse by balancing the ‘reformist’ policies of ‘welfare’ with the
‘revolutionary’ goal of ‘socialism’ as the overthrow of capitalist relations.

Unfortunately within the Swedish Left this has almost exclusively led to a de-habilitating
gap between theory and practice, between today and tomorrow. Just as historical social
democracy in Sweden in the 1940s tried to overcome its contradictions between the Marxian
vision of socialism and ‘Functional Socialism’, … by ‘pushing socialism ahead in time’, the Left in Sweden has inherited the same problematic. Hence, for this Left, socialism is always something that happens ‘in the future’ or ‘somewhere else’ – but it is never something existing in Sweden here and now. From this perspective, at best, all we can do is to support the ‘reformist’ Swedish welfare
model, in wait for socialism. In theory the Left has adhered to ‘revolutionary socialism’, but
since this is never an immediate presence, and only happens ‘tomorrow’, in practice one is at
best ‘reformist’ in welfare issues, i.e. exponents of ‘the social policy road to socialism’.

But, the challenge of the Left today is to break with ‘the social policy road to socialism’,
with the realization that although the Swedish welfare model is not socialism, not even a road
to socialism, there is indeed an alternative way to connect welfare struggles to socialism.

We have seen the issue of how the social-democratic or reformist left break the link between the present and future before (see Reform Versus Abolition of Police, Part Three and Reform Versus Abolition of the Police, Part Five: More Philosophical Considerations).

Fighting for welfare reforms that enhance the immediate lives of workers and oppressed peoples–the “bread and butter issues” to which Dhunna and Bush refer–while striving for socialism in the present–this is what is needed (and this is what this blog is for).

Returning to the issue of basic income–there is no reason for socialists to see welfare reforms that enhance the lives of workers and oppressed peoples and the proposal for a robust basic income as mutually exclusive; we should struggle for both. However, the struggle for a robust basic income is more fundamental since it has greater potentiality for questioning the power of employers as a class at work than the distributional struggles over what is produced.

Both a robust basic income and the expansion of public services, however, are means to the end of the creation of a socialist society and not ends in themselves.

Conclusion

Dhunna and Bush’s first aim–to “meaningfully improve the material realities of working class and oppressed people”–sounds both practical and radical. It is actually conservative since its focus is entirely on distributional struggles rather than struggles over control of working conditions at both the micro and macro levels. Indeed, since this is their primary goal, they practically define a socialist society as an enhanced welfare state–capitalism with a more human face.

By focusing on distributional struggles, they imply, without ever saying it, that wider struggles to control working conditions are impractical and utopian. They, the realists, know what “bread and butter issues” are relevant for the working class, and such “bread and butter issues” are purely distributional struggles. Such a stance is conservative–its aim is not to end class rule, but to perpetuate it–though in a more humanized form than at present.

So much for Dhunna’s and Bush’s first aim. In a second post, I will address the second aim, probably more briefly–the aim of affirming the power of publicly owned and operated infrastructure.

The issue of basic income and costs and how Dhunna and Bush present mainly a straw basic income model, however, will be addressed only in the last post of this series.

The Rate of Exploitation of the Workers of the Canadian Imperial Bank of Commerce (CIBC), One of the Largest Private Employers in Toronto and in Canada

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit). The largest employer, in terms of employment, is the Canadian Imperial Bank of Commerce.

I have tried to calculate the rate of exploitation of workers of Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

We have the following:

Income before income taxes: $6,656=s
Employee compensation and benefits: $5,539=v

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 6,656/5,539=120 percent.

This means that, for every hour worked that enables her/his to obtain a wage, a CIBC worker works 72 minutes (or 1 hour 12 minutes) for free for CIBC. Alternatively, in terms of money, $1 of wage or salary of a regular bank worker results in $1.20  surplus value or profit for free.

  1. in a 5.75 hour working day, CIBC workers spend 157 minutes (2 hours 37 minutes) to obtain their wage for the day, and they spend 188 minutes (3 hours 8 minutes) in obtaining a surplus value or profit for CIBC.
  2. For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, CIBC workers spend 164 minutes to obtain their wage for the day, and they spend 196 minutes in obtaining a surplus value or profit for CIBC.
  3. 7-hour working day: 420 minutes: in a 7-hour working day, CIBC workers spend 191 minutes to obtain their wage for the day, and they spend 229 minutes in obtaining a surplus value or profit for CIBC.
  4. 7.5-hour working day: 450 minutes: in a 7,5-hour working day, CIBC workers spend 205 minutes to obtain their wage for the day, and they spend 245 minutes in obtaining a surplus value or profit for CIBC.
  5. 8-hour working day: 480 minutes: in an 8-hour working day, CIBC workers spend 218 minutes to obtain their wage for the day, and they spend 262 minutes in obtaining a surplus value or profit for CIBC.
  6. 10-hour working day: 600 minutes: in a 10-hour working day, CIBC workers spend 273 minutes to obtain their wage for the day, and they spend 327 minutes in obtaining a surplus value or profit for CIBC.

CIBC workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract” and “decent work?” I think not. Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.

Data on Which the Calculation Is Based

Now, the calculation:

In millions of Canadian dollars:

Revenue:  $18,611

Net interest income $ 10,551
Non-interest income $8,060

Provision for credit losses $1,286
Non-interest expenses $10,856

Employee Compensation and Benefits:

Salaries: $3,081
Performance-based compensation: $1,873
Benefits: $772

Total employee compensation: $5,726

Other expenses:

Occupancy costs:  $892
Computer, software and office equipment: $1,874
Communications: $303
Advertising and business development: $359
Professional fees: $226
Business and capital taxes: $110
Other: $1,366

Total other expenses: $5,130

Income before income taxes (Revenue minus provision for losses minus non-interest expenses): $6,469 ($18,611-$1,286-$10,856=$6,469).

Adjustments

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

It is necessary, however, to make adjustments on the revenue side; From  https://www.payscale.com/research/CA/Employer=Canadian_Imperial_Bank_of_Commerce_(CIBC)/Bonus :

How much does Canadian Imperial Bank of Commerce (CIBC) pay in bonuses?

Canadian Imperial Bank of Commerce (CIBC) pays an average of C$4,962 in annual employee bonuses. Bonus pay at Canadian Imperial Bank of Commerce (CIBC) ranges from C$1,014 to C$30,521 annually among employees who report receiving a bonus. Employees with the title Information Technology (IT) Director earn the highest bonuses with an average annual bonus of C$30,521. Employees with the title Customer Service Representative (CSR) earn the lowest bonuses with an average annual bonus of C$1,014.

Although there is no direct evidence to indicate whether such bonuses form part of “Performance-based compensation,” there is indirect evidence.

Bloomberg notes the following (https://www.bnnbloomberg.ca/canada-s-bankers-face-the-bleakest-bonus-year-in-almost-a-decade-1.1358606):

The Canadian banks pay bonuses based on performance, with most of the variable compensation going to capital-markets employees such as investment bankers, research analysts and those in sales and trading. …

Senior investment bankers will see a 10 per cent decline in compensation from last year, hurt by fewer financings and a decline in mergers-and-acquisitions activity, according to Vlaad & Co. Junior investment bankers will see little change in their payouts following three years of increases, while those in sales, trading and research will see compensation fall 15  per cent to 25  per cent, and fixed-income employees will face a similar decline, the firm said.

Most employees, whether executive or not, seem to be eligible to some support of bonus as a function of performance. However, the gap between executive pay and the pay of regular employees has widened over the years, so it is reasonable to infer that the category “Performance-based compensation” is divided into two parts: one part is a function of the number of hours worked by regular employees as well as the intensity of that work; the other is based on the extent to which bank managers and senior executives are successful in exploiting those regular employees. Evidence for such exploitation is indirect, via the level of compensation of some senior executives. For example, Victor Dodig, president and CEO,  received $9,017,000 in total compensation in 2019 (salary, $1,000,000; share-based awards, $4,806,420; option-based awards, $1,201,560; Non-equity GPS awards, $1,501,950; Pension value, $505,000; all other compensation, $2,250) (CIBC Proxy Circular 2020, page 79).

It is impossible to determine the proportion of bonuses that form part of salaries and bonuses that represent the exploitation of bank workers. Some facts may, however, be relevant. From   https://www.comparably.com/companies/cibc/executive-salaries:

The average CIBC executive compensation is $270,917 a year. The median estimated compensation for executives at CIBC including base salary and bonus is $253,828, or $122 per hour. At CIBC, the lowest compensated [executive] makes $52,000.

It is probable that even middle-level bank executives receive some surplus value or profit through the exploitation of regular bank workers. This means that part of their compensation is a function of how much work regular bank workers work for nothing or for free.

Given that the level of income for top executives is far beyond the level of income of even the lowest executive, as well as the fact that the average executive compensation is almost five times the level of the lowest executive (not even taking into account additional compensations for senior executives), it is probably reasonable to assume that a minimum of 10 percent of the “Performance-based compensation” comes from the exploitation by senior bank executives of regular workers.

It would be necessary to have more detailed information to determine whether more or less of the money obtained in this category were distributed between regular bank workers and management executives. If regular bank workers received more, then the rate of exploitation would be less than the rate calculated below. If management executives received more, then the rate of exploitation would be more than the rate calculated below.

On the assumption of 10 percent, though, this means that 10 percent of the total of “Performance-based compensation, ” is reduced by 10 percent, or $187,300,000, and that amount is added to “Income before income taxes.” As a consequence, we have the following:

Adjusted Results

Income before income taxes: $6,656=s
Employee compensation and benefits: $5,539=v

The Rate of Exploitation of CIBC Workers

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 6,656/5,539=120 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.20 cn surplus value or profit for free (calculated as follows–you can skip this calculation if not interested in how the result was obtained). Alternatively, for every hour worked, a CIBC worker works 72 minutes (or 1 hour 12 minutes) for free for CIBC.

  1. s/v=1.2
  2. multiplying  s/v and 1.2 by v (multiplying both sides by v does not change the equation), we have (s timesv)/v=1.2v;
  3. Dividing v by itself in the left-hand part of the equation in 2 above results in 1 (any number divided by itself except 0 is equal to 1, and any number multiplied by 1 is the same number), so we have: s=1.2v
  4. We can use this equation to calculate the division of the working day into time required to obtain the equivalent of the wage for workers at CIBC and the time they provide free of charge to obtain surplus value for CIBC.

According to a few people who have worked at CIBC, the length of the working day is:

8 hours a day

Work hours are manageable and flexible. The company is accommodating with every schedule.

They vary – just like it does anywhere.

8 hours in a day, 1 hour for break and lunch.

8-10 hours

I work 7.5 hours each day.

6 – 5.75 hours a day, 4 days a week. for the last 1.5 years

Evidently, the length of the working day varies for workers at CIBC. I will calculate the division of the working day from the shortest to the longest in the above quotes accordingly. I use minutes rather than hours. I provide more detail for the calculation for the first one so that others can more easily calculate similar rates in the cities where they live.

  1. A 5.75- hour working day: 345 minutes;
  2. We can use this information to create an equation:
  3. v+s=345;
  4. We also have the equation s=1.2v from above;
  5. We can therefore replace, in equation 3 above, s by 1.2v since they are the same.
  6. We now have: v+1.2v=345;
  7. From 6, we have 2.2v=345
  8. Dividing both sides by 2.2 does not change the equation, so the result is: v=345/2.2=157 minutes (rounded to the nearest minute).
  9. Since v+s=345, we have 157+s=345;
  10. Subtracting 157from both sides does not change the equation, so now we have s=345-157=188 minutes
  11. So, in a 5.75 hour working day, CIBC workers spend 157 minutes (2 hours 37 minutes) to obtain their wage for the day, and they spend 188 minutes (3 hours 8 minutes) in obtaining a surplus value or profit for CIBC.
  12. For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, CIBC workers spend 164 minutes to obtain their wage for the day, and they spend 196 minutes in obtaining a surplus value or profit for CIBC.
  13. 7-hour working day: 420 minutes:i n a 7-hour working day, CIBC workers spend 191 minutes to obtain their wage for the day, and they spend 229 minutes in obtaining a surplus value or profit for CIBC.
  14. 7.5-hour working day: 450 minutes: in a 7,5-hour working day, CIBC workers spend 205 minutes to obtain their wage for the day, and they spend 245 minutes in obtaining a surplus value or profit for CIBC.
  15. 8-hour working day: 480 minutes: in an 8-hour working day, CIBC workers spend 218 minutes to obtain their wage for the day, and they spend 262 minutes in obtaining a surplus value or profit for CIBC.
  16. 10-hour working day: 600 minutes: in a 10-hour working day, CIBC workers spend 273 minutes to obtain their wage for the day, and they spend 327 minutes in obtaining a surplus value or profit for CIBC.

It should be noted that I have used the verb “obtain” rather than “produce.” In Marxian economics, bank workers, as well as sales workers do not produce surplus value but rather transfer the surplus value already produced. This does not mean that these workers are not exploited capitalistically; they are used impersonally by the employer to obtain surplus value and a profit. Furthermore, things produced by others are used by employers such as CIBC to control their working lives in order to obtain surplus value or profit. (I leave the issue of how banks exploit workers as consumers to others more competent to deal with the issue; the point here is to focus on the exploitation of bank workers as workers and not as consumers.)

CIBC workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract” and “decent work?” I think not. Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.

Do Workers Work for a Particular Employer or for the Class of Employers? Part One: A Limitation of Some Radical Left Critiques of Capitalist Relations of Production and Exchange (A.K.A. Capitalism)

While doing some research for a post on this blog, I became aware of how many Marxists claim that workers really work for the capitalist class or the class of employers rather than a particular employer. I asked my wife, who worked in Guatemala as a saleswoman, whether she thought that she worked for a particular employer or for the class of employers. She replied that she worked for a particular employer.

Although this is true in one way, it is also false in another way (I will elaborate on this below). Nonetheless, from the point of view of the experience of workers, they generally conceive of the relation between their working lives and their employer as a particular relation and not as a class relation. Marxists often ignore this concrete experience of workers and, as a consequence, limit their capacity to communicate with workers and to organize them.

First, I would like to provide quotes from several radical socialist sources to show that they often ignore the concrete experience of workers in relation to employers. All words in boldface are my emphasis.

From Alexander Berkman (2003), What is Anarchism, page 11:

Are you not compelled to work for an employer? Your need compels you, just as the highwayman’s gun. You must live, and so must your wife and children. You can’t work for yourself; under the capitalist industrial system you must work for an employer. The factories, machinery, and tools belong to the employing cl ass, so you must hire yourself out to that class in order to work and live. Whatever you work at, whoever your employer may be, it always comes to the same: you must work for him. You can’t help yourself You are compelled.

In this way the whole working class is compelled to work for the capitalist class. In this manner the workers are compelled to give up all the wealth they produce. The employers keep that wealth as their profit, while the worker gets only a wage, just enough to live on, so he can go on producing more wealth for his employer. Is that not cheating, robbery?

Again: From Socialist Party of America, National Platform, Adopted by the Thirty-Sixth National Convention, University of Akron, Akron, Ohio, July 18-23, 1983, page 1:

Under capitalism, society is divided into two principal classes–the capitalist class and the working class. The capitalist class consists of the wealthy few who own the means of production and distribution. The working class consists of the vast majority who own no productive property and who must in order to live, seek to work for the capitalist class, or for the present government it controls.

Another example is from Great Britain (from the website Socialist Party of Great Britain):

Today, a world working class is forced to work for a wage or salary, and confronts a world capitalist class who live off unearned incomes from rent, interest and profit.

This one-sided emphasis on the capitalist class also can be seen in the following 1904 report by James Moroney, Report of the Australian Socialist League to the International Socialist Congress at Amsterdam:

The Working Class, in order to secure food, clothing, shelter and fuel, must sell their labor-power to the owning Capitalist Class — that is to say, they must work for the Capitalist Class [my emphasis]. The Working Class do all the useful work of Society, they are the producers of all the wealth of the world, while the Capitalist Class are the exploiters who live on the wealth produced by the Working Class.

To be sure, there is recognition that the workers do work for a particular employer. From James O. Moroney (1904), the Australian Socialist League. Report of the Australian Socialist League to the International Socialist Congress at Amsterdam:

In most of the Australian States the railways, and in some the tramways, are owned and managed by the government on strictly commercial principles. In other directions the State has extended its functions and employs labor direct. But the worker remains in Australia, whether employed by the State government or the individual private employer, and exploited wage slave, as is his exploited fellow wage slave in other countries.

These two views are often not integrated in a coherent manner. Workers do both. The reality of working for a particular employer in the private sector hits home when the private employer closes shop for whatever reason–as the workers working for GM in Oshawa, Ontario, relatively recently experienced; around 2,500 direct workers were out of work due to the shutting down of the GM auto plant in Oshawa in December, 2019.

Workers who work in the public sector may also experience severance from their particular employer as government departments are down-scaled or reorganized. They do not just work for “the government,” but in a particular field, department or political division.

This experience of working for a particular employer needs to be recognized when radicals write and give speeches. Marx recognized that the form in which workers work for the class of employers, which constitutes their immediately lived experience,  needs to be taken into account. From the notebooks Marx drafted in 1857-1858 called the Grundrisse (Outlines), in the Collected Works of Marx and Engels (Marx’s best friend and comrade), Volume 28, pages 392-393):

To start with, the first presupposition is the transcendence of the relation of slavery or serfdom. Living labour capacity belongs to itself and disposes by means of exchange over the application of its own energy. The two sides confront each other as persons. Formally, their relation is that of equal and free exchangers. That this form is mere appearance, and deceptive appearance at that, appears, as far as the juridical relationship is concerned, as an external matter. What the free worker sells is always only a particular, specific measure of the application of his energy. Above every specific application of energy stands labour capacity as a totality. The worker sells the specific application of his energy to a specific capitalist, whom he confronts independently as a single individual. Clearly, this is not his [real] relationship to the existence of capital as capital, i.e. to the class of capitalists. Nevertheless, as far as the individual, real person is concerned, a wide field of choice, caprice and therefore of formal freedom is left to him. In the relation of slavery, he belongs to the individual, specific owner, and is his labouring machine. As the totality of the application of his energy, as labour capacity, he is a thing belonging to another, and hence does not relate as a subject to the specific application of his energy, or to the living act of labour. In the relation of serfdom, he appears as an integral element of landed property itself; he is an appurtenance of the soil, just like draught-cattle. In the relation of slavery, the worker is nothing but a living labouring machine, which therefore has a value for others, or rather is a value. Labour capacity in its totality appears to the free worker as his own property, one of his own moments, over which he as subject exercises control, and which he maintains by selling it. [my emphasis] 

John Sitton draws out the effect of the immediate experience of working for a particular employer on individual members of the working class. From John Sitton, editor, (2010), Marx Today Selected Works and Recent Debates,  pages 19-20:

Since the wage-laborer must sell his or her labor to someone in the class of employers, Marx often states that this “freedom” is an illusion. “The Roman slave was held by chains; the wage-laborer is bound to his owner by invisible threads. The appearance of independence is maintained by a constant change in the person of the individual employer, and by the legal fiction of a contract.” But Marx himself admits that this “appearance” of individual freedom is reinforced by the fact that the worker, unlike the slave, is also an autonomous consumer. “It is the worker himself who converts the money into whatever use-values he desires; it is he who buys commodities as he wishes and, as the owner of money, as the buyer of goods, he stands in precisely the same relationship to the sellers of goods as any other buyer. Of course, the conditions of his existence—and the limited amount of money he can earn—compel him to make his purchases from a fairly restricted selection of goods. But some variation is possible as we can see from the fact that newspapers, for example, form part of the essential purchases of the urban English worker. He can save or hoard a little. Or else he can squander his money on drink. But even so he acts as a free agent; he must pay his own way; he is responsible to himself for the way he spends his wages.” Given this reality, Marx did not anticipate how class identity could be effaced by the status of consumer. The status of independent— although severely constrained—owner of the commodity labor-power, and of owner of money who can spend it as he or she pleases, makes it easy to see how in people’s minds class differences come to be considered as merely differences in income.

This “appearance” of freedom is bolstered in an additional way. As Marx acknowledges, although class situation greatly reduces the range, there are some differences in individual wages depending on skill. For a worker, there is therefore “an incentive to develop his own labor-power” so as to increase his or her wages. “[T]here is scope for variation (within narrow limits) to allow for the worker’s individuality, so that partly as between different trades, partly in the same one, we find that wages vary depending on the diligence, skill or strength of the worker, and to some extent on his actual personal achievement. Thus the size of his wage packet appears to vary in keeping with the results of his own work and its individual quality. . . . Certain though it be that the mass of work must be performed by more or less unskilled labor, so that the vast majority of wages are determined by the value of simple labor-power, it nevertheless remains open to individuals to raise themselves to higher spheres by exhibiting a particular talent or energy.” Marx is not explicit, but, combined with the possibility of changing one’s employer, this opens up the prospect of some, although small, measure of social mobility. Marx is correct that this does not abolish the essential nature of wage-labor as oppression. However, Marx greatly underappreciated the effects that even these limited opportunities have on an individual’s perception of life under capitalism and the sense of belonging to a class.

The possibility of advancing one’s economic situation by developing one’s individual talents or simply through greater “diligence” encourages many members of the working class to believe that one can “make it” through hard work. It is no surprise that many people believe that an individual’s prospects are not determined by class structure but by individual virtues or the lack thereof. These facts of working class existence, raised by Marx himself, make the class analysis of capitalism, whatever its broader theoretical cogency, less convincing to great numbers.

In the Manifesto, Marx asks, “Does it require deep intuition to comprehend that man’s ideas, views and conceptions, in one word, man’s consciousness, changes with every change in the conditions of his material existence, in his social relations and in his social life?” What Marx failed to understand is that freedom to choose employers, the equal autonomy of consumers, the limited but real possibilities for individual and generational advancement, and the limited but real political possibilities of democratically managing the economy are the lived experiences of individuals under capitalism. These shape how people today perceive their lives and how they perceive the legitimacy of the existing order. For the Marxian tradition to find a larger audience, it must be able to connect its broad theory of capitalism as a class-structured society with the actual experiences of individuals in capitalist society, rather than dismissing those freedoms as illusory. Workers do not experience them as illusory, and this makes it plausible for them to blame their economic situation on themselves, rather than on a class structure.

It is not only Marx who underestimated the importance of the lived experiences of individuals under capitalism. The radical left here in Toronto (and probably elsewhere) fail to take into account the importance of the often ideological nature of that experience and how it must be subject to criticism when any opportunity arises. The radical left here do not engage in any systematic recognition of the limited nature of the lived experiences of workers and the need to engage in criticism of such experience in order to connect up systematically the lived experiences of workers critically with the class structure. Often they call for revolution–without considering the need to engage systematically and in the long-term with the lived experiences of workers.

Alternatively, they indulge the beliefs of the workers (fearing to criticize them), practically becoming social democrats or social reformers, thereby failing to develop the critical capacity of workers and community members. Either way the lived experiences are not transformed but remain as they were before.

Indeed, social democrats and social reformers often limit themselves to focusing on the immediate exchange between workers and employers–as I pointed out in another post (see  Basic Income: A Critique of the Social-Reformist Left’s Assumptions and Analysis: Part Two). The social-democratic or social-reformist left often pay lip service to class relations and workers working for the class of employers, but they then commit the opposite mistake to those among the radical left who one-sidedly focus on working for the class of employers.

I will address the issue of the one-sided error of focusing mainly on individual employers or group of employers while not really addressing the issue of working for the class of employers in the next post.

The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada

The following applies to Air Canada workers before the COVID-19. The situation undoubtedly has changed since then since the airline industry has suffered disproportionately an economic crisis relative to some other industries (such as food production).

In another post, I presented the twenty largest employers in Canada according to level of profit (see A Short List of the Largest Private Employers in Canada, According to Profit). One of those employers is Air Canada, a privatized airline company (that used to be under public ownership).

I have tried to calculate the rate of exploitation of workers of Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

I am going to begin with a conclusion, and then explain what it means and how it is calculated so that the reader understands where I am headed in the calculations:

For every hour worked that produces her/his wage, a worker at Air Canada works around an additional 42 minutes for free for Air Canada.

In a 6-hour work day, the worker produces her/his wage in about 3.5 hours and works 2.5 hours for free for Air Canada. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is  also unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario and Employers as Dictators, Part One).

In an 8-hour work day, the worker produces her/his wage in about 5 hours 36 minutes and works for 2 hours and 24 minutes free for Air Canada.

In a 12-hour day, the worker produces her/his wage in about 8 hours 24 minutes and works for free for 3 hours 36 minutes for Air Canada.

Of course, social democrats refer to this situation, in one way or another, as “fair.” They do so by using such terms as “fair contract,” “free collective bargaining,” “fairness,” “economic justice,” “good contract,” “decent work,” “companies paying their fair share of taxes” and similar rhetoric. Such rhetoric, rather than enlightening workers about their situation, actually hide it. The working class deserves better than this ideology.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

How I Calculated the Rate of Exploitation of Air Canada Workers

I calculated the conclusion as follows:

The income statement is broken into the following categories for 2019 (in millions of Canadian  dollars) :

Total revenue: $19,131
Total operating expenses: $17,481

Wages, salaries and benefits: $3,184
Aircraft fuel: $3,862
Regional airlines expense:

Aircraft fuel: $485
Other: $1,95

Depreciation and amortization: $1,986

Aircraft maintenance: $1,004

Airport and navigation fees: $990

Sales and distribution costs: $874

Ground package costs: $627

Catering and onboard services: $445

Communications and information technology: $397

Other: $1,671

Operating income: $1,650
Non-operating income (expense) [if it is income according to standard accounting practices, it has no parentheses; if it is an expense, it is within parentheses and needs to be subtracted–but see below): $125

Foreign exchange gain (loss): $499
Interest income: $164
Interest expense: ($515)
Interest capitalized: $35
Net financing expense relating to employee benefits: ($39)
Gain (loss) on financial instruments recorded at fair value: $23
Gain on debt settlements and modifications: $6
Gain (loss) on disposal of assets: $13
Other: ($61)

Income before income taxes: $1,775 (adding operating income and non-operating income (expense) together)

Some explanation of “interest capitalized” is in order. I have had difficulty in understanding the nature of “Interest capitalized.” As far as I can tell, interest that is normally paid and is an expense for the particular employer is treated, in Marxian economics, as part of surplus value because, at the macro level, it comes from the surplus value produced by the workers. Interest capitalized seems to be different since the interest charged on money borrowed for the purpose of the construction of fixed assets (with a specific interest rate attached to it) is “capitalized,” or not considered part of interest expenses until the construction is finished and the fixed asset is ready to use. This accounting distinction, however, from the macro point of view, is irrelevant since both interest expenses and interest capitalized are derived from the surplus value produced by workers (or appropriated from them in another industry). Accordingly, both interest expenses and interest capitalized should be added to the amount of “Income before income taxes” category.

The adjusted “Income before income taxes” therefore is: ($1775 +$515)=$2,290 (interest capitalization has already been added to income so there is no need to add it here).

Another necessary adjustment relates to the category and amount “Net financing expense relating to employee benefits: ($39)”. Pension-related expenses should probably form part of wages and hence should be shifted to “operating expenses.” This shift does not change the surplus value produced nor the “Income before income taxes” category; it just changes the distribution of expenses, from “Non-operating income (expense) to “Total operating expenses” by way of increasing the category “Wages, salaries and benefits” by $39; the category “Wages, salaries and benefits” are therefore $3,223.

The final calculations with adjustments before determining the rate of surplus value are:

Total revenue: $19,131
Total operating expenses: $17,520
Operating income: $1611
Non-operating income: $640
Income before income taxes: $2251

To calculate the rate of surplus value, we need to relate “Income before income taxes” to “Wages, salaries and benefits.” So, with the adjustments in place:, s=2251; v=3223. The rate of exploitation or the rate of surplus value=s/v=2251/3223=70%.

That means that for every hour worked that produces her/his wage, a worker at Air Canada works around an additional 42 minutes for free for Air Canada.

In a 6-hour work day, the worker produces her/his wage in about 3.5 hours and works 2.5 hours for free for Air Canada. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One).

In an 8-hour work day, the worker produces her/his wage in about 5 hours 36 minutes and works for 2 hours and 24 minutes free for Air Canada.

In a 12-hour day, the worker produces her/his wage in about 8 hours 24 minutes and works for free for 3 hours 36 minutes for Air Canada.

I have used the lengths of the working day as 6, 8 and 12 because the length of the working day varies. According to one source:

As a customer service agent, you ll work from 3:00 am, 4:00 am and 5:00 am morning shifts, or 11:00 am, 12:00 pm, 2:00 pm. Afternoon shifts. Not sure about night shifts as I never work any of them. Part time is 6 hrs per day and full time can be 8-16 hrs. per day. You can exchange shifts, give away shifts, trade, pick or even parcial shifts. That part helps a lot when you need a day or 2 off.

Social-Democratic Rhetoric Neglects the Wider Context that Reveals the Exploitation of Workers

Of course, social democrats refer to this situation, in one way or another, as “fair.” They do so by using such terms as “fair contract,” “free collective bargaining,” “fairness,” “economic justice,” “good contract,” “decent work,” “companies paying their fair share of taxes” and similar rhetoric. Such rhetoric, rather than enlightening workers about their situation, actually hide it. The working class deserves better than this ideology.

By neglecting the fact of exploitation, other social democrats draw incorrect political conclusions. Thus, there are social democrats who try to claim that we need to reform the police rather than abolish it (see, for example, Reform versus Abolition of Police, Part Two) because workers have property. Some workers in the more developed capitalist countries do indeed have property (and fewer, of course, in the less developed capitalist countries), but they obtain that property by being exploited in the first place. If they understood that, would they support the police, whose main function is to protect the power of the employer to exploit them (and, only secondarily, to protect them and their own property)?

If the above calculations can be improved in any way, please comment on the above. I have been unable to find many guideposts about how to calculate the rate of exploitation or the rate of surplus value at the level of particular companies.