Working for an Employer May Be Dangerous to Your Health, Part Seven: The National Day of Mourning in Canada and the Social Causes of Injury, Disease and Death

On April 28 is the National Day of Mourning  in Canada to commemorate those workers who have suffered disease, injury or death at work. However, unions rarely if ever raise the issue of how effective such a day of mourning is for addressing the health and safety problems that  workers experience. Why do more or less 1,000 workers die every year at work and around 600,000 experience injuries or disease (Bob Barneston (2010), The Political Economy of Workplace Injury in Canada).

For example, I listened to the “Welcome to the Toronto & York Region Labour Council’s Day of Mourning ceremonies” for 2021 (https://www.youtube.com/watch?v=zl-7e8Ta-H8&list=LL&index=14). In none of the presentations do the presenters attribute problems of health and safety to the structural situation of the persistent need to accumulate capital at the expense of workers’ health and safety.

One of the ways in which the health and safety of workers who work for an employer has been jeopardized is the administrative shift in the capitalist government’s definition of the causes of dangers to health and safety. Government or state representatives defined health and safety problems in purely technical terms, ignoring the social causes of dangers to the health and safety of workers.

From Tom Dwyer (1991), Life and Death at Work: Industrial Accidents as a Case of Socially Produced Error, page 26:

Conflict over the weakness of safety laws proceeded [in England], especially from the 1870s when workers were able to achieve greater parliamentary representation. Through an examination of the content of regulations, we can see that workers’ social demands were largely ignored as, increasingly, solutions to problems emerged in important political compromises that were channeled technically. … The vision that the state lent to the prevention of accidents was overwhelmingly based on the development of technical criteria, while social criteria were, with some notable exceptions, given little attention.

The shift from defining health and safety dangers from social causes to technical causes led to the increasingly bureaucratic or administrative definition and treatment of the problem; this in turn contributed to the fragmentation of workers’ organization and struggle of the workers in relation to the social power of the class of employers.

From Tom Dwyer, Life and Death at Work: Industrial Accidents as a Case of Socially Produced Error, page 27:

The attention of unions was increasingly channeled away from the worksite and toward legislative change to be conquered through the efforts of members of Parliament sympathetic to the workers’ cause. The power of the bureaucracy grew as industrial problems became increasingly subject to political control through their transformation into administrative questions.

This view of the shift towards governmental administration of problems and away from class organization and class struggle is consistent with the view of a more general shift towards a capitalist government that administers laws–public administration.

From Mark Neocleous (1996), Administering Civil Society: Towards a Theory of State Power, pages 106-107:

In fact, the theoretical ‘problem’ over the relationship between struggle and
structure only arises by separating them and thus being faced with the necessity of syncretically syncretic • \sincretic=characterized or brought about by a combination of different forms of belief or practice] drawing them together again, or at least positing a causal relationship. But, as Werner Bonefeld [a Marxist theoretician] writes, structures are a mode of class antagonism and thus both the result and premise of class struggle. This is true of the capitalist state generally and specific institutional developments of that state. For the other moment of the making of the English working class was the (re)making of the modern state. Far from being supine [which means: failing to act or protest as a result of moral weakness or laziness], in the process of struggle the working class forced the emergence of new state structures – of political administration- and through these a reordering, far more fundamental than that forced by the bourgeoisie in its struggle, of the relation between state and civil society [capitalist society apart from the government or state]. The British state, faced with struggling classes, pre-empted revolutionary change by subsuming class struggle under the state through the development of administrative structures and mechanisms. The development of the state can be traced to the incorporation of working-class struggle into its very structures, as increasing elements of civil society found themselves structured, restructured and submerged. With typical flexibility and a seemingly endless ability to adapt itself, the British state responded by creating a space within itself for this purpose. Thus, although the working class was constituted by the state, the state itself was constituted through class struggle. The working class was both constituted by and constitutive of the structures of political administration and state power. (To put this another way: we need a conception of the working class not only as subjected, but also as subject.) The only way to incorporate the English working class was for the state to be altered accordingly, new (administrative) forms emerging which could then be used against the working class. Political administration, then, acts as the fulcrum around which both the working class and the modern state were ordered. Just as humans ‘by their own toil keep in existence a reality which enslaves them in ever greater degree’, so the working class in its struggles produce the real structures which then enslave it. Poulantzas [a Marxist political theoretician] rightly claims that ‘struggles are inscribed in the institutional materiality of the state, even though they are not concluded in it; it is a materiality that carries the traces of these muted and multiform struggles.’

This insight can be strengthened and tightened by positing political administration as a specific form of working class struggle, by following Adorno [a Marxist critical theorist] in arguing that administration acts as a process of subsumption, a mechanism for ordering and covering over. ‘Administration’ has feudal origins referring to the management of the estates of the dead; hence ‘the administration of wills’.67 I am arguing that we think of political administration as state management of the struggles of the working class. By subsuming struggle, political administration is ‘working-class power post festum [after the fact]; working-class political victories captured and formalized at their moment of triumph.’68 In these administrative structures the state appropriates and nullifies the struggle of the working class; as such they are the fossilized remnants of class struggle; they are the subsumption [meaning: of including under another, usually something more general] of struggle – working-class struggle abolished and preserved. Born of the struggle of the working class these structures are then left with the task of administering that same class, a task performed in relation to both collective organizations of the working class and its decomposed elements known as ‘citizens’. It is therefore through the very process of struggle that the working class, and not its ‘aristocratic’ elements, now most definitely of civil society, also finds its struggles incorporated into the state, transformed into administrative structures and turned against it. Thus in its struggle to become a class of civil society, the class discovers itself also to be a class of the state.

The administration of the health and safety of workers by the capitalist government or state channeled workers’ struggles in this area into a redefinition of the nature of the causes of health and safety issues, away from social causes–such as the very nature of the power of the class of employers and how they, directly or indirectly, use workers for purposes over which workers have no control (see The Money Circuit of Capital) and which is inherently connected to the possibility of disease, injury and death.

If the capitalist government is adept or skillful at channeling worker discontent into new administrative forms, then issues must be addressed in such a way that the capitalist government cannot accommodate them (see, for instance, my argument for a generous universal basic income that erodes the market for the hiring and firing of workers, A Radical Basic Income as a Radical Reform).

In relation to health and safety issues, strong workers’ organizations at the local level (not just unions and union reps), coupled with increasing links between workers’ organizations across industries, would be a necessary step in preparing workers to resist forms of class struggle that include legislative changes that define problems as non-social and, correspondingly, shift solutions to the redefined problems by means of administrative means.

To achieve this, would it not be necessary to abandon all talk of “fair compensation,” “fair wages,” “fair contract,” “Fair labour laws save lives,” “decent work,” and so forth? Such phrases paper over the real and persistent threat of disease, injury and death that workers face.  Opposition to such phrases, of course, is hardly sufficient. Is not opposition to such cliches necessary, though, if workers are going to initiate a movement dedicated to addressing the social causes of their own sufferings.

Exposing the Intolerance and Censorship of Social Democracy, Part Four: Critique of the Idealization of Publicly Owned Infrastructure, Etc.

Introduction

This is the final post of a four-part series of posts. For the context of where the following fits into my participation and withdrawal from the organization Social Housing Green Deal, see the first part Exposing the Intolerance and Censorship of Social Democracy, Part One: The Working Class, Housing and the Police.

People’s Pandemic Shutdown

I sent the following email to Ms. Jessup at 816 a.m. (Toronto time), May 23, 2021, the same day that we were to have a general zoom meeting:

Hello Anna,
 
Attached are some questions I have about the Draft Action outline of the People’s Pandemic Shutdown. I would appreciate it if you would circultate it to others.
 
Thanks.
 
Fred

No one, as far as I am aware, ever discussed my questions and concerns. Such is the nature of the “progressive left” here in Toronto, Ontario, Canada (and undoubtedly in many other parts of the world).

The following is my inquiry and critique:

People’s Pandemic Shutdown

We Demand Everything

(Draft Action Outline)

Long Term Objective

Politically compel a wealth transfer, from police, military, and big business, into stabilizing, publicly owned infrastructure, capable of responsibly managing disease, and ensuring genuinely healthy and safe living conditions for all on Turtle Island.

Immediate Objective

Embolden communities in Tkaronto, with the moral imperative, to occupy public space, and interrupt commerce, to achieve this long term objective.

Build solidarity, by highlighting the connections among peoples’ struggles.

 

  1. Questions about “Long Term Objective”:

    a. To what are they referring when they speak of Turtle Island?

  2. What do they mean by “publicly owned infrastructure?” Current public infrastructure, such as schools and welfare services, are oppressive in many ways. Should the left be demanding the transfer of power to such oppressive structures? Or should it be demanding the simultaneous transfer to and restructuring of public infrastructure? Will this need to restructure oppressive publicly owned infrastructure be addressed?

  3. For safe living conditions for all, it would be necessary to abolish the power of employers, would it not? Is there any such demand in this document? Could such an objective be immediately achieved? Or would it require years if not decades of organization, discussion and critique?

Strategy

  • Meet with abolitionist and anti-capitalist allies to develop comprehensive demands and an outline of what our social infrastructure must look like.
  • Mutually supportive promotion of the event and of each others struggles
  • Emphasise our commitment to publicly gather, with distancing and masks, to get the infrastructure we need, for all of us to be really and truly safe.

Infrastructure/programs to Consider in our Demands

  • Health care
  • Long Term Care Homes
  • Public Education 
  • Harm Reduction 
  • Food Security
  • Social Housing
  • Disability support programs
  • Paid sick days 
  • Free Transit
  • Recreation, parks
  • Equity Based Social Work 

Questions for the “Strategy”:

  1. Who are these abolitionist allies? Anti-capitalist allies?

  2. Would not the formulation of comprehensive demands require a critique of current demands that not only fall short of comprehensive demands but include arguments or references to less comprehensive demands as fair or just, such as the phrase “$15 and Fairness?” Or “fair” contracts or collective agreements? Or “decent work” and other such phrases? Will the need to engage in critique of other, reformist positions form part of the discussion?

  3. “To get the infrastructure that we need, for all of us to be really and truly safe,” will require years and indeed decades of struggle, discussion and critique for all of us to be really and truly safe. For example, I was diagnosed twice with cancer (invasive bladder cancer, and then a few years later rectal cancer—with subsequent metastatic liver cancer). When I asked the doctor why I had cancer again despite taking measures (such as healthier eating habits), his response was: “Bad luck.” Furthermore, as the documentary “Pink Ribbons Inc.” indicates, funding for most cancer research focuses on treating cancers once they arise rather than preventing cancer in the first place. Safety at work and in the community requires us to take control over producing our lives—and that requires abolishing the class power of employers. Will that be addressed?

  4. Re Infrastructure/programs: How are these demands to be met unless we control our life process? And how are we to control our life process without abolitioning the class power of employers? Will such abolition be front and centre of the strategy?

  5. Re Health care: Is it really possible to care, not just technically, but socially and emotionally, for those in need of health care in a health-care system characterized by, on the one hand, a hierarchical division of labour of nurses’ aides, nurses and doctors and, on the other, budget restraints dictated by the overall need to ensure that there is a constant flow of profit and accumulation of capital? Furthermore, the health-care workers work for a wage. What implication does this have for providing, not health services, but health care? Will these issues be addressed?

  6. Re: Public education: Is it likely that there will be any proposal for abolishing grades or marks or notes that oppress children and adolescents? Will there be any proposal for restructuring the curriculum such that it becomes meaningful for most children and adolescents? For example, John Dewey proposed and put into practice a curriculum that centred on the common needs of most human needs—for food, clothing and shelter. Learning to read, write and to develop and understanding of science emerged through engagements with actually reproducing various forms of human lifestyles in history. In that school, there were also no grades, marks or notes. Assessment occurred, but it was for the purpose of aiding children and adolescents to improve the quality of their work and not to compare one student’s achievements with the achievements of other students.

    Or will such proposals for change merely be “add-ons” to existing oppressive public educational structures, such as those proposed by the Chicago Teachers’ Union in their document Schools Chicago’s Students Deserve?

  7. Re Social housing: As I pointed out in my email concerning 33 Gabian Way, when 23 police showed up, the situation involved social housing—which can be just as oppressive as market housing. Will the oppressive nature of such housing be addressed?

  8. Re: Paid sick days: This demand assumes the continued existence of a class of employers, does it not? It may function as a tactical demand, but it is hardly on the same level as abolitionist demands, which are strategic. Is there any indication—or will there be—that even if there are paid sick days, this will hardly be sufficient since workers as a class will still be exposed to dangers at work over which they have no or little control since it is the employers who have power over the purchase of equipment and the organization of work?

  9. Re: Equity-based social work: What does this mean? Can social work really be equity-based in the context of the class power of employers?

 

Workers’ Demands to Build Upon

  • Status for all workers
  • Paid sick days for all
  • Genuinely safe and healthy working conditions for all
  • Livable wage for all

Questions for “Workers’ Demands to Build Upon”

  1. Re: Genuinely safe and healthy working conditions for all: to achieve this objective would require the abolition of the class power of employers. If this is the case, will such a demand be raised? If so, does not such a demand oppose many among the left who seek only reform and not fundamental structural changes? Would it not be necessary to engage in criticism of those who seek only to reform the class structure rather than abolish it?

 

Foreign Policy Demands to Build Upon

  • Cease all participation in illegal wars
  • Cease all monetary support to state governments known to commit war crimes or participate in illegal occupation, including Saudia Arabia and Israel

Questions for “Foreign Policy Demands to Build Upon”:

  1. Is there such a thing as a legal war? Why the reference to illegal at all? Why the reference to “law” at all? Does not the legal system oppress us in one way or another? Will this issue be raised and discussed?

  2. Re “illegal occupation”: Is there then such a thing as a legal occupation? Same questions as in 1.

 

Draft Itinerary for Day of Action (June Xth)

  • Defunding of oppressive corporations
  • Defunding oppressive police and military

1PM Toronto Police HQ 40 College Street

-Occupy the street, banners of connected struggles, chants

-Physically distant, masks

1:30PM Walk to Bay and College

-Occupy the intersection

-We Demand Everything: speakers connect the struggles and demands

Questions for “Draft Itinerary for Day of Action”:

  1. Re: “Defunding of oppressive corporations”: If all corporations are oppressive, then is the demand really the abolition of the existence of corporations? Or does the demand just mean: “Defund particular corporations that are particularly oppressive?” There is a world of difference between the two kinds of demand. Furthermore, what does it mean to “defund” a corporation? Nationalize it? But nationalization has hardly meant democratization. Nationalized corporations can be just as oppressive and exploitative as private corporations. ‘

  2. Re: “Defunding oppressive police and military”: Does that mean that all police and military are oppressive and should be defunded? Or just particularly oppressive forms of police and military structures? If all police and military are to be abolished—would that not require the abolition of the class power of employers as well since the main function of the police is to maintain the existing social order, with its class, patriarchal and racist structures, internally? And the military’s main function is, at a minimum, to maintain the existing social order externally? (and to extend the power of the government territoriality sometimes, if need be, in order to maintain social order)? Will such a demand be forthcoming? If so, will there be simultaneous critiques of those who seek merely to reform the class power of employers but not abolish such power since those who seek only reforms themselves would oppose such an abolitionist stance?

The meeting was supposed to be at 3:00 p.m. I expected, as usual, an email zoom link to be sent before the meeting started. I did not receive any such email.

I waited until 4:38, at which time I sent the following email to Miss Jessup:

Frederick Harris
Sun 2021-05-23 4:38 PM
To:

  •  Anna Jessup
 
Hello Anna,
 
I will no longer be attending the zoom meetings.
 
Fred
 

I did not think about looking on the organization’s Facebook page since the custom since February was for Ms. Jessup to send the zoom link by email.

I was curious. Was this just a mistake in not informing me that the zoom link would be on the Facebook page? I did look at the Facebook page–and then saw that the meeting was still being held–from 3:00 p.m. until 7:00 p.m.–a double session. I was not informed about the change in zoom link location, and I was not informed about the substantial extension in the length of the zoom meeting? Why was that? There started to exist evidence that this was a conscious effort to exclude me from participating:

Screenshot (6)

Political Implications

The social-democratic or reformist left are a clique; they refuse to engage in serious inquiry about the demands they raise. If there is such criticism, they refuse to consider them, and they may even resort to censorship in order to avoid reconsidering their approach.

The Rhetoric of Unions and Social Democrats or Social Reformers

I read the following on Facebook.

It is quite typical of social-democratic or reformist unions and social democrats or social reformers in general: The use of rhetoric to justify their activities without engaging in any form of discussion or debate. All bolded words or phrases are my emphases:

Support OPSEU Local 5119 ON STRIKE at LifeLabs!

 

After organizing to join OPSEU in 2020, 150 couriers and mailroom workers at LifeLabs have run into a brick wall trying to bargain a fair first contract. Why? Because the bosses at this billion-dollar-a-year private corporation refuse to negotiate decent wages and benefits for these workers, who earn an average of just $35,000 a year.

 

That’s why since March 14 Local 5119 members have been on strike to achieve fair working conditions and a living wage. And they need our help to get LifeLabs back to the table with a fair offer!

 

Showing Our Solidarity:
Two Ways You and Your Local Can Help!

 

1) Join the Strike Rally for a Living Wage
Thursday, March 24, 10 a.m.
LifeLabs Head Office, 100 International Blvd, Etobicoke
(West of Hwy 27, South of Dixon Road)
Bring your OPSEU flags & noisemakers!
Join, like & share the Event on Facebook
For info contact Local 5119 President Mahmood Alawneh, 647-333-5555, raneentrading@gmail.com

 

2) Donate to the Local 5119 Strike Fund
As a brand-new local, L5119 doesn’t have a reserve fund to support their members during the strike. So, OPSEU has put out a call to other locals to show our solidarity by donating to the Local 5119 strike fund.
For info and to donate, contact Local 5119 Treasurer Maria Calingaon at maria_calingaon@yahoo.ca
I certainly support such striking workers, but the rhetoric needs to be constantly criticized.  I replied: 
 
Fred Harris

 

What are “decent wages and benefits?” This phrase is simply rhetoric used by the social-democratic or social-reformist leftists without thinking about the meaning of the phrase. For example, does not working for an employer involve agreeing to be used by the employer for purposes or ends that the workers do not define? If so, what wage and benefit can convert this situation into “decent?”

 

The same could be said about the rhetorical phrase “fair working conditions.” To work for an employer in the public o private sector is inherently unfair, so why the rhetoric of “fair working conditions?” This is an uncritical and unthinking phrase bandied about by the social-democratic or social-reformist left without any thought or discussion about whether it is true or can be true in the context of a society dominated by the class power of employers.

 

The same could be said about a “fair offer.”

 

On my blog, I have already showed how the rhetoric of “fair contracts” or “fair collective agreements” is consistently expressed by the largest unions in Canada: CUPE, Unifor and NUPGE. They are ideologues for employers–not against them. To claim that any employment contract is somehow fair when workers are faced with the “management rights” is simple nonsense–and many workers know it (even if they do not want to admit it). That is one reason why unions are losing ground–because they cannot face up to the limitations of collective agreements and collective bargaining–and a realistic assessment of their limitations is a first step in achieving real fairness, not rhetorical fairness that contributes to the perpetuation of unfair working conditions–the unfair working conditions of having to work for an employer (not a particular employer) in the first place.
To which the sender and anyone else who read the post responded: Nothing. The silence of the social-democratic or reformist left concerning the meaning of “fair wages,” “decent work,” and similar rhetoric is deafening. Why do they insist on using such rhetoric? Are they bullshitting the workers? If not, why do they not elaborate on what they mean by fair first contract etc.? What makes it fair? What would an unfair contract involve? How does a fair contract exist when workers face management rights implicitly or explicitly (I have provided explicit management rights clauses from various collective agreements on this blog (see for example Management Rights, Part One: Private Sector Collective Agreement, British Columbia .I eventually incorporated  them with into a post where I calculated the rate of exploitation. See for example 
 
In another post, I challenged the social-reformist left to justify their continual use of the rhetorical phrases that they use. See Management Rights, Part Nine: Is A Collective Agreement that Involves Management Rights and the Exploitation and Oppression of Workers a Fair Contract?
 
Are union reps bullshitting workers by using such phrases? If so, should their rhetoric not be challenged? 

Law (the Legal System) and the Coercive Power of Employers as a Class

Introduction

It is interesting how little discussion arises over the nature of the legal system and how it contributes to the exploitation, oppression and economic coercion of billions of workers throughout the world. Unions rarely if ever discuss such issues–it is considered to be utopian at best–whereas unions dealing with the “real” problems that workers face every day. Representatives of unions really need to justify their lack of interest in, on the one hand, addressing such issues and, on the other hand, in failing to incorporate a critique of the legal system into trade-union education.

All Corporations as Criminals–Not Just Some, Or: Definition of the Problem

Below is a set of quotes, along with some commentary, from Professor Harry Glasbeek’s (2018) book Capitalism: A Crime Story. Glassbeek points out in various ways that the employment contract, whether individual or collective, involves coercion:

Every contract of employment, supposedly voluntarily entered into by workers, imposes a legally enforceable duty on workers to obey, a duty to exercise reasonable skill and care, a duty of good faith and loyalty. The worker is not to talk back, let alone rebel; the worker’s only goal is to serve her employer and its goals. This is deeply embedded in our supposedly liberal legal system. As Otto Kahn-Freund put it, the lawyer acknowledges that the hallmark of employment relationships is the element of subordination to which one party, the employee, is said to agree. Canada’s Task Force on Labour Relations baldly stated that a superior-inferior nexus is the distinguishing characteristic of the employment relationship.46 Even when workers can protect themselves better by having won the right to engage in collective bargaining (obviously a departure from the individual contract model), workers are required to obey all reasonable orders the employers issue. The notionally sovereign, autonomous workers are repeatedly and expressly told that the workplace is not a debating society. Coercion of individuals and appropriation of their product remain salient features of legally enforceable contracts of employment, even when laws are passed to alleviate the burdens imposed by its judicially developed doctrines.48

Force and taking—it is the norm. It is not hard to see this if law’s pretenses are unmasked. Take our illustrative mugger who threatens a person with force: the law is sanguine. He is a criminal. The employer who threatens a worker with wage loss if she insists on having clean lungs is treated, by means of a legal pretense, as merely negotiating terms and conditions of a contract (including those of safety at work) with another equally sovereign party. This is a momentous and absurd assumption. Yet, all occupational health and safety regulation begins with this premise, that is, with the initial thought that, whenever possible, safety at work should be left to bargaining between private (if unequal) actors. I will come back to this issue, but the implications are dire for workers. For the moment, I return to my claim that it is patently false to assert that workers enter voluntarily into contracts of employment. Workers have no choice about whether to sell their labour power [their capacity to work or to use the means of production, such as computers and other machines and tools]; if they are lucky they can choose among some purchasing capitalists. They must sell parts of themselves. That is their only freedom, a freedom that is best described as a freedom they are forced to exercise, an oxymoronic idea if there ever was one.

This coercive economic system and its indirectly coercive political and legal system can have deadly consequences, to which legislators have to pay lip service (as the Westray mining murders illustrate:

Legislators may have to overcome stiff opposition from the dominant class’s opinion moulders, but will act to still the palpable public unrest. They feel under pressure to reassure the non-capitalist public that politicians, policy-makers, and the law do truly care about life and the social values by which non-capitalists want, and expect, to live.

Canada’s Westray mining tragedy provides an easy illustration. Before the mine blew up, there had been fifty-two violations of mining safety regulations detected by the inspectorate, none of them leading to punishment. In the aftermath of the deaths of twenty-six workers (no employers or managers, of course), a public inquiry was established. The findings were that the operators had been incompetent at best and, at worst, heedless of human life. Note here that, while the violations of the regulations provided evidence for such findings, it was not the lack of obedience to the resultant orders for breaches of those
standards that got everyone angry. It was the business plan and the daily modus operandi of the mine owners that was seen as repellent, as worthy of criminalization. This was explicitly supported by the authoritative commission of inquiry. Its recommendation was that, if the law did not allow for criminal prosecution of corporations and of their senior operators for this kind of conduct, it should be reformed. After a lengthy battle (capitalists, their corporations, and their ideological defenders did not like this turn of events), legislation was enacted. It makes it possible to criminalize the omission to take action when it is reasonable for some senior officers to believe that it is likely that there will be a
failure to take adequate care (calibrated by regulations or general legal principles). This gradual realization that the usual exceptional legal treatment of capitalists and their corporations needs to be reined in from time to time is not jurisdictionally specific. Analogous legal reforms have been initiated in some Australian jurisdictions and a somewhat less sweeping statute was enacted in the U.K.

These recognitions that heedless risk-creation and risk-shifting, so natural, so routine to for-profit corporations, is potentially criminal in nature and might be so treated go against the grain, go against the starting premise that capitalism’s normal workings involve virtuous actors, using innocent substances and methods that may occasionally lead to unfortunate “accidents” and “spills.” The resistance mounted by capitalists and their corporations’ cheerleaders has been forceful and, thus far, has blunted the impact of the new criminal law reforms. In Canada, after ten years of operation, there has only been one prosecution in respect of fatalities at work per year, even though the number of fatalities has remained constant. The calculation is that there is a 0.1 per cent chance that a prosecution will be launched after a workplace death. That this was always going to be true can be gleaned from the fact that all these reforms took ages to put on the statute books (in Canada close to eleven years; the Australian Commonwealth statute took a similar twelve years to be given life), despite officialdom’s caterwauling about the tragic nature of the results that had led to them.

The powers-that-be continue to believe in their internalized make-believe view that it is not unethical, not criminal, for practising capitalists to undertake actions that they know, or should know, will lead to a certainty of death or other unacceptable outcomes. Thus, when confronted by policy-makers under pressure to confirm that we still live in a liberal democratic society and should punish capitalists as if they were ordinary folk, they ask everyone not to be romantic. Pragmatism is to rule. Principle is a luxury. The liberal spirit of law must be bent to allow capitalists and their corporations (and thereby all of us) to flourish. It is not a very convincing argument on which to base a legal system. At best, it is
amoral; it asks that we should be willing to suspend our ethical goals for the sake of expediency. In any event, this demand, based as it is on the notion that the suspension of our adherence to our shared values and norms is a practical response to real-world circumstances, is not backed by any sound evidence. What is certain, however, is that the tolerance for amorality, or worse, for ethical and moral failures, does nothing for the social cohesion that any society must have to flourish.

Some Proposed Solutions to the Criminal Nature of Corporations–and the Probable Resistance of Social Democrats to Such Solutions

Academics, like Professor Glasbeek, who are critical of the legal system and are aware of its class biases sometimes naively believe that those who claim to be opposed to capitalism are in fact opposed to it. For example,  Professor Glasbeek argues the following:

It would be politically useful to shift the nature of the debate. It should become a debate about whether corporate capitalism actually delivers the good it promises and that this permits it to justify asking society to bear the occasional “malfunctioning” of the system. If this can be done, anti-capitalist activists might find themselves on a more favourable terrain of struggle. Pro–corporate capitalism advocates will have to show that the material wealth capitalists and their corporations produce outweighs the dysfunctionalities generated by their ceaseless drive for more. The uneven distribution of wealth and power, the many physical and psychic injuries inflicted by the chase for profits, the rending of the values and norms by which people other than capitalists believe they should live, all can be listed and elaborated to offset the satisfaction we are supposed to evince because, in the aggregate, monetary wealth is growing ever so nicely. Making this a focus of the attack on capitalists and their corporations can reveal that their reliance on the argument that “the most wickedest of men [doing] the wickedest of things” is a proper means to deliver the “bounty” of economic growth that we supposedly need and crave is inane, perhaps even insane. An argument that their calculation of wealth does not speak of a kind of wealth that meets the aspirations of human beings who want to live in a more altruistic, more compassionate, more ecologically nurturing society can be put on the agenda.

I fail to see how such an agenda is really being promoted here in Toronto by the so-called progressive left. The progressive left talk about “fair contracts,” “good jobs,” and the like. Indeed, it is interesting how social democrats, ultimately, idealize law and the legal system. Thus, trade unionists here in Toronto, such as Tracy McMaster (union steward, organizer, former vice president, Ontario Public Service Employees Union (OPSEU) local 561 and Wayne Dealy (executive director, Canadian Union of Public Employees (CUPE) local 3902), who refer to a fair contract, indirectly idealize the legal system. They assume that there can be such a thing as a fair contract (including, of course, a collective agreement). The legal system, however, is not only “imperfect” (to use one of Ms. McMaster’s euphemistic terms) but riveted with biases against workers and the working class.

What are Wayne Dealys, Tracy McMasters of the world  doing to enlighten workers about the unfairness of contracts and the unfairness of a society characterized by the power of a class of employers? Or are they more concerned with idealizing collective agreements and minimizing the imperfections in collective agreements and the legal system of which collective agreements form a part?

What would the Dealy’s and McMaster’s say, not rhetorically but practically, about Professor Glasbeek’s following assertion:

This led to legislative interventions to “even up” the bargaining game. We now allow some unionization; we now provide some legislated standards if workers cannot win socially acceptable terms by their own free and voluntary dealmaking. The scope and kind of these protections wax and wane as political and economic fortunes change. When wins are recorded, they are significant worker friendly add-ons to what unmodified employer favouring law offers. But because they are add-ons, many of the legislative gains made by the working class are impermanent. The essentially coercive nature of employment remains intact. Still, the fact that there have been many reforms, that is, many interferences with free contract-making, may suggest to some that the continued significance of the ideological and instrumental impacts of the individual contract of
employment is overstated in the argument presented here. To many observers, the contention that workers are making autonomous choices when entering employment contracts holds up because, in the advanced economies where Anglo-American laws rule, many of us (after 180 or so years of fierce struggles) have some protections against the legalized right of employers to use their wealth as a bludgeon. It is fair to say that the modernized employment relationship looks more benign than it did, but this may only mean that its coercive nature is more insidious, less easily seen. This may make matters
worse….

The fact is that law maintains the basis for a deeply unequal relationship between employers and workers, even when this is sugar-coated by contingent gains made by the working class.

Social reformists and social democrats not only would likely ignore Professor Glasbeek’s analysis of the problem, but they would likely reject out of hand his proposed solutions. For instance, consider Professor Glasbeek’s following proposal:

The characterization of corporations as sovereign individuals with their own agendas is not defensible and should be confronted constantly. Conceptually and materially, they are collectives endowed with disproportionate economic and political powers that benefit the contributors of capital to their coffers. Corporations are instruments designed to satisfy capitalists’ drive for more. Their misbehaviours should be attributed to capitalism as a system and capitalists as people. Anti-capitalist activists and critics should not permit themselves to be distracted by legal proposals to reform corporations or by engaging with movements designed to persuade corporations to be more socially responsible. If, as argued here, capitalism is criminal in nature, it follows that, when they flout ethical and moral norms embedded in law or violate legally mandated standards, corporations are doing what comes naturally to red-blooded human capitalists and what they want their corporations to do. Given the frailty of the legal reasoning that bestows legal personality on an artificial being and that limits fiscal liability and removes legal responsibility from those who hide behind the novel legal person, anti-capitalist activists and critics would do well to argue for the abolition of corporations and hold their controllers’ feet to the fire. An extended and cogent argument to this effect has been made by Steve Tombs and David Whyte in their recent work, The Corporate Criminal.

Conclusion

I know of no social-democratic leftist individual in Toronto who seriously is working towards the abolition of corporations. They consider such talk to be absurd–in practice, although in theory they may pay lip-service to it. They certainly do not teach the decidedly opposite interests of workers and employers. Quite to the contrary. They often paper over such opposition by the use of such phrases as “fair contracts,” “fair collective agreements,” “fair wages,” “decent jobs” and the like.

I invite social reformists or social democrats to engage seriously in creating a movement for the abolition of corporations, in Toronto and elsewhere. Relying ultimately on the legal system to defend us is bound to end up in limited gains and the continued coercion, exploitation and oppression of millions upon millions of workers.

Of course, given my own experiences with social reformers or social democrats, I suspect that they will continue to ignore the systemic real experiences of class oppression, class exploitation and class coercion. In such circumstances, they need to be criticized constantly.

The Rate of Exploitation of Workers at Bell Canada Enterprises (BCE), 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.

Adjusted Net Income: 5587.3=s
Adjusted Total labour Costs: 5611.7=v

The rate of exploitation or the rate of surplus value=s/v=5587.3/5611.7=100% (after rounding).

That means that for every hour worked that produces her/his wage, a worker at BCE works around an additional hour for free for BCE. Alternatively, in terms of money, $1 of wage or salary of a regular BCE worker produces around $1 surplus value or profit for free. 

In terms of varying lengths of the working day: 

  1. In a 7.5-hour work day (450 minutes), the worker produces her/his wage in 225 minutes (3 hours  45 minutes) and works 225 minutes (3 hours 45 minutes) for free for BCE.
  2. In an 8-hour work day (480 minutes), the worker producer her/his wage in 240 minutes (4 hours) and works 240 minutes (4 hours) for free for BCE.
  3. In a 10-hour work day (600 minutes), the worker producers her/his wage in 300 minutes (5 hours) and works 300 minutes (5 hours) for free for BCE.
  4. In a 12-hour work day (720 minutes), the worker produces her/his wage in 360 minutes (6 hours) and works 360 minutes (6 hours) for free for BCE.

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? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT
BETWEEN
UNIFOR
AND
BELL CANADA

CRAFT AND SERVICES EMPLOYEES
EFFECTIVE FEBRUARY 23, 2017 

ARTICLE 8 – MANAGEMENT RIGHTS

8.01 The Company has the exclusive right and power to manage its operations in all respects and in accordance with its commitments and responsibilities to the public, to conduct its business efficiently and to direct the working forces and without limiting the generality of the foregoing, it has the exclusive right and power to hire, promote, transfer, demote or lay-off employees, and to suspend, dismiss or otherwise discipline employees.

8.02 The Company agrees that any exercise of these rights and powers shall not contravene the provisions of this Agreement.

Should workers not be discussing why management has these rights? Should workers not be discussing whether an unelected management should have such rights? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing any union rep who claims that a collective agreement somehow expresses a “fair contract?” A “good contract?” All other such platitudes? 

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:

Page 113:

Operating revenues 23,964

Costs
Operating costs 13,858
Severance, acquisition and other costs 114
Depreciation 3,496
Amortization 902
Finance costs
Interest expense 1,132
Interest on post-employment benefit obligations 63
Other expense 13
Total costs: 19,578

Net income: 4386 [23,964-19,578=4386] [the 3253 is after taxes; if you add taxes, you get 4386 as well]

Operating costs need to be broken down further since costs for maintaining workers as wage workers form one of the two considerations for the calculation of the rate of exploitation.

Labour costs
Wages, salaries and related taxes and benefits 4,303
Post-employment benefit plans service cost (net of capitalized amounts) 247
Other labour costs 1,005
Less:
Capitalized labour 1,032
Total labour costs: 4,523

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 Total Labour Costs

Capitalized Labour

It is necessary to consider the category “Capitalized labour” since it is not treated as a labour cost by BCE whereas here it will be so treated. Capitalized labour involves the following:

CAPITALIZED LABOR means all direct costs of labor that can be identified or associated with and are properly allocable to the construction, modification, or installation of specific items of capital assets and, as such, can thereby be written down over time via a depreciation or amortization schedule as capitalized. 

I have chosen to treat capitalized labour as part of labour costs since it is current labour that is involved in the operations of BCE; the work performed by workers in installing and assembling machinery includes surplus value.

Temporarily Adjusted Total labour Costs: 5555

Severance, acquisition and other costs

It is necessary to make adjustments for this category since part of the money expended relates to costs destined to be received by workers. To take this into account, it is necessary to break the category down further.

Severance 63
Acquisition and other 51
Total severance, acquisition and other costs 114

I assume that “Acquisition and other” are non-labour expenses.
In a note, it states:

Severance costs consist of charges related to involuntary and voluntary employee terminations. In 2018, severance costs include a 4% reduction in management workforce across BCE.

Given that the severance package for management is likely to be much higher than for regular employees, the 4 percent reduction in the management workforce likely results in a higher percentage of severance pay to that 4 percent. It is impossible to determine with precision how much higher. I will assume 10 percent. The reason for taking into consideration such a difference is that the severance for management is likely to be a function of its exploitation of other workers and not its own exploitation.

Ten percent of 63 is 6.3; therefore, this 6.3 needs to be added to net income and subtracted from 63.
Temporarily adjusted Net income: 4392.3

This shift from considering part of severance pay from a cost to a part of net income also changes the total costs by reducing it by 6.3. Therefore:

Temporarily adjusted Total Costs: 19,571.7

The remaining severance is 56.7. This needs to be added to the category “Post-employment benefit plans service cost” since it forms part of the income of workers and costs for BCE. Accordingly:
Adjusted Total labour Costs: 5611.7

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 benefit obligations,” from the point of view of BCE, it is an expense or cost because, presumably, BCE 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.

Accordingly, both “Interest expense” and “Interest on post-employment benefit obligations” are deducted from “Total costs” and added to “Net income,” and “Total costs” are therefore also adjusted.

Operating revenues 23,964
Adjusted Total Costs: 19,571.7- 1,132 – 63=18,376.7
Adjusted Net Income: 5587.3=s
Adjusted Total labour Costs: 5611.7=v

The Rate of Exploitation

The rate of exploitation or the rate of surplus value=s/v=5587.3/5611.7=100% (after rounding).

That means that for every hour worked that produces her/his wage, a worker at BCE works around an additional hour for free for BCE. Alternatively, in terms of money, $1 of wage or salary of a regular BCE worker produces around $1 surplus value or profit for free. 

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

I worked, on average, twelve hours a day.
I worked about 8 hours a day on the average.
10 hours per and about 50 hours weekly and was paid for only 37.5 weekly.

The collective agreement between Bell Canada and Unifor Atlantic CommunicationLocals (Unifor ACL) states: 

(c) Employees whose standard hours of work are eighty (80) hours in a scheduling period, will normally work either ten (10) scheduled tours of eight (8) hours. Employees whose standard hours of work are seventy-five (75) hours in a scheduling period, will normally work ten (10) scheduled tours of seven and one-half (7.5) hours. …

(d) Tours can be scheduled for a maximum of ten (10) hours with mutual agreement between the employee and their direct supervisor.

(e) Longer tours, to a maximum of twelve (12) hours per tour, may be scheduled with the mutual agreement of the employee(s), their direct supervisor, Labour Relations and the Council. Such special
arrangements must be committed to in writing and signed by the parties prior to implementing. These arrangements can be cancelled by any party with eight (8) weeks notice.

Since Bell workers are exploited 100 percent, the calculation of the number of hours they work to produce the equivalent value of their wage and the number of hours they work for free for Bell is relatively easy.

  1. In a 7.5-hour work day (450 minutes), the worker produces her/his wage in 225 minutes (3 hours  45 minutes) and works 225 minutes (3 hours 45 minutes) for free for BCE.
  2. In an 8-hour work day (480 minutes), the worker producer her/his wage in 240 minutes (4 hours) and works 240 minutes (4 hours) for free for BCE.
  3. In a 10-hour work day (600 minutes), the worker producers her/his wage in 300 minutes (5 hours) and works 300 minutes (5 hours) for free for BCE.
  4. In a 12-hour work day (720 minutes), the worker produces her/his wage in 360 minutes (6 hours) and works 360 minutes (6 hours) for free for BCE.


Economics for Social Democrats–but not for the Working Class, Part Three: The Health and Safety of Workers and an Economy Dominated by a Class of Employers Are at Loggerheads

Introduction

I was going to continue my next post in this series with a continuation of my critique of Mr. Stanford’s definition of money as “purchasing power,” but I came across a more directly political issue that should be addressed. 

I have already had occasion to take a critical look at both Jim Stanford’s views (see Economics for Social Democrats–but Not for the Working Class, Part One: Critique of Jim Stanford’s One-Sided View of Job Creation in a Capitalist Society and Economics for Social Democrats–but Not for the Working Class, Part Two: Critique of the Social Democrat Jim Stanford’s Theory of Money, Part One). I will further engage in critical analysis of his views by looking at a Webcast posted on YouTube titled Economics After COVID: The Need for National Reconstruction Planning (https://www.youtube.com/watch?v=XUSIxXvk8BE). The webcast has Mr. Stanford referring to the relationship between health and the “real economy.” 

The webcast is supposed to be an analysis of what the economy should be after COVID. Mr. Stanford’s analysis, however, fails to grasp the specific historical nature of the present economy, which is dominated by a class of employers. 

Mr. Stanford’s Continued Ahistorical Characterization of an Economy Dominated by a Class of Employers

I pointed out in another post (part one on the theory of money) how Mr. Stanford tends to identify production in general throughout history with the current economy, which is an economy whose primary aim is accumulating more and more money by means of exploiting workers (and by revolutionizing technological conditions). 

Since workers in such an economy are mere means for the increase of money (see The Money Circuit of Capital ), there is often a contradiction between the health of workers and the interests of employers (as I have often pointed out in my posts. See for example, Working for an Employer May Be Dangerous to Your Health, Part One, part of a series of posts on how the health of workers is often sacrificed for the benefit of employers). 

Mr. Stanford, however, treats the real economy as if it were some sort of pure labour process in general, producing use values that people need for their lives, or alternatively that the economy in the present is actually or really a socialist economy, where the purpose of work is to satisfy the needs of workers and others. Thus, Stanford says: 

The economy is not a thing in and of itself. The economy is what we refer to as the work that people do to produce goods and services and then how those goods and services are distributed and used.

This way of looking at the economy reminds me of an academic leftist, Jeff Noonan, who argued the following (copied from my post The Poverty of Academic Leftism, Part Eight: Class Harmony):

Instead, all members of the institution– faculty, librarians, learning specialists, lab technicians, students, support workers, and administration have the same goal—the advance of human knowledge and creativity in the widest and most comprehensive sense. If that claim is true, then it should follow that all the groups who together make up the university ought to cooperate (not without respectful disagreement) in the determination of the budgets, policies, rules, and goals that guide the institution’s mission. The best ideas emerge through deliberative and democratic argument—no one group knows best just because of the position they occupy in the hierarchy.

To which I responded:

This view is ideology in the worst sense of the term. In a society dominated by employers–including public-sector employers like universities, it is highly unlikely that such workers as “lab technicians, students and support workers” have the same goal–“the advance of human knowledge and creativity in the widest and most comprehensive sense.” Such a view may apply in a socialist organization, but to assume such a situation in universities, which function in a capitalist context, is bound to lead to inadequate policies and theories.

Consider support workers. I worked twice at a university library, once doing my practicum to obtain a library and information technology diploma from the Southern Alberta Institute of Technology (SAIT) at the University of Calgary main library, in the cataloguing department. At the University of Calgary, I noted that the work situation was characterized by a very hierarchical, top-down power structure. One worker commented that she would prefer a benevolent dictator to a mean one; of course, but why have a dictator at all? At least this worker recognized that there was a dictator–unlike Professor Noonan.

Stanford, like Professor Noonan, simply ignores the hierarchical and dictatorial nature of relations at work–as if that hierarchical and dictatorial structure did not form an integral part of the present economy.

A Real Trade-off Between the Health of Workers and the Health of an Economy Dominated by a Class of Employers 

As a consequence of his characterization (actually reduction) of the present economy to a pure labour process of producing social use values, he incorrectly claims that there is no contradiction between the health of workers, citizens, immigrants and migrant workers and the economy:

So, you can’t have an economy that is healthy if people aren’t healthy, and this false trade-off between the economy and public health was a giant self-inflicted wound in our response to Covid.

It is hardly a “false trade-off between the economy and public health”–because the current economy includes the sacrifice of workers for the benefit of the class of employers. 

Ironically, it is Stanford and not the conservatives whom he criticizes who fails to understand the real nature of the present economy. He states:

Doug Ford [premier or head of the provincial Progressive Conservative government of Ontario] , Jason Kenny [premier or head of the United Conservative provincial government of Alberta] and Erin O’Toole [leader of the official opposition party the Conservative Party of Canada] themselves implied that there was some kind of trade-off between public health and the economy.

For representatives of employers–and unfortunately for workers as well–there is definitely a trade-off between “the economy” (which workers do not control but, quite the contrary, the economy controls the workers) and the health of workers. The health of workers is secondary to the drive for accumulation of more and more profit and more and more money. 

Diverse governments of countries dominated by a class of employers have responded differently to the pandemic, in part at least, because of their divergent assessments of the impact reducing the employment of workers will have on the pandemic in the country. Obviously, the kind and extent of workers’ responses to the pandemic also have influenced governments’ responses. However, before the pandemic emerged, governments (and employers) were already involved in making decisions that jeopardized the future health of workers, citizens, immigrants and migrant workers. 

In a previous post (Working and Living in a Society Dominated by a Class of Employers May Be Dangerous to Your Health), I quoted Mike Davis in his work (2020) The Monster Enters: COVID-19, Avian Flu and the Plagues of Capitalism

But this time around there was little mystery about the identity of the microbe—SARS-CoV-2 was sequenced almost overnight in January—or the steps necessary to fight it. Since the discovery of the HIV virus in 1983 and the recognition that it had jumped from apes to humans, science has been on high alert against the appearance of deadly new diseases with pandemic potential that have crossed over from wild fauna. This new age of plagues, like previous pandemic epochs, is directly the result of economic globalization. … Today, as was the case when I wrote Monster fifteen years ago, multinational capital has been the driver of disease evolution through the burning or logging out of tropical forests, the proliferation of factory farming, the explosive growth of slums and concomitantly of “informal employment,” and the failure of the pharmaceutical industry to find profit in mass producing lifeline antivirals, new-generation antibiotics, and universal vaccines.

Forest destruction, whether by multinationals or desperate subsistence farmers, eliminates the barrier between human populations and the reclusive wild viruses endemic to birds, bats, and mammals. Factory farms and giant feedlots act as huge incubators of novel viruses while appalling sanitary conditions in slums produce populations that are both densely packed and immune compromised. The inability of global capitalism to create jobs in the so-called “developing world” means that a billion or more subsistence workers (the “informal proletariat”) lack an employer link to healthcare or the income to purchase treatment from the private sector, leaving them dependent upon collapsing public hospitals systems, if they even exist. Permanent bio-protection against new plagues, accordingly, would require more than vaccines. It would need the suppression of these
“structures of disease emergence” through revolutionary reforms in agriculture and urban living that no large capitalist or state-capitalist country would ever willingly undertake.

To treat the “economy” in its present structure as if it were some pure structure that satisfies human needs, over which some kind of superficial or artificial “superstructure” is imposed, as Stanford does, surely distorts the real nature of the economy in which we live. That social structure has led to immense gains in the productivity of labour–while simultaneously reducing humans and the rest of the natural world to mere means for the ever-increasing accumulation of money (and means of production). Furthermore, if that ever-increasing accumulation of money stops due to an economic crisis (itself a result of the development of a capitalist economy–as Michael Roberts (2009), in his book The Great Recession Profit cycles, economic crisis A Marxist view, argues), then millions workers are thrown out of work and the production of many commodities is reduced. 

Covid and the Trade-Off Between the Health of Workers and the Health of an Economy Dominated by a Class of Employers

Stanford’s words continue to ring hollow as he tries, in vain, to separate ‘the pure, good economy’ from the ‘bad, capitalist economy’–within the capitalist economy:

The best thing to do for the economy is clearly to keep people healthy and stop the pandemic and then rebuild and that means protection and that means income support and that means a plan to rebuild once we can back to work. It doesn’t mean sacrificing ourselves for “the” economy, which actually means just sacrificing ourselves for our employers and to even cut their pay.

Some representatives of employers surely did not know what was best for the capitalist economy–whether to shut down for as long as necessary until the number of deaths and infections were reduced, to leave parts of the economy (in addition to essential economic structures, such as food, hand sanitizer and mask production) functioning or to leave most of the economy dominated by a class of employers functioning. But “sacrificing ourselves for our employers” even in normal times is run of the mill. Why is it that there are, on average, over 1,000 deaths officially at work per year and more than 600,000 injuries in Canada (and many more deaths when unofficial deaths are included (see Working and Living in a Society Dominated by a Class of Employers May Be Dangerous to Your Health). 

Stanford reminds me of another social reformist or social democrat–an author whom Marx criticized long ago-Pierre-Joesph Proudhon. 

From Karl Marx, Capital: A Critique of Political Economy, volume 1, page 181, note 4: 

From this we may form an estimate of the craftiness of petty-bourgeois socialism [such as Proudhon’s], which wants to perpetuate the production of commodities while simultaneously abolishing the ‘antagonism between money and commodities’, i.e. abolishing money itself, since money only exists in and through this antagonism. One might just as well abolish the Pope while leaving Catholicism in existence.

Proudhon treated the market, exchange, commodities and money as permanent features of our lives, but he wanted to eliminate the contradictions that flowed from these social conditions. He generally treated exchange of commodities and money and money and commodities as if they could be treated independently of the class relation of employers and workers. 

Stanford, similarly, treats the production of use values within a society dominated by a class of employers as independent of or isolatable from the social contradictions that flow from their production as both commodities and as capital. This production of use values for our needs is somehow the “real economy” and is not subject to overproduction, underproduction, sudden surges of employment and sudden surges of unemployment–not subject to crises. Nor is it subject to exploitation and oppression; otherwise, it would be necessary to admit that the health of workers and the maintenance of an economy dominated by a class of employers are necessarily at odds with each other.  

But wait. When workers produce use values in a society dominated by employers, are they not subject to the power of the representatives of the employer (whether private or public)? Are not workers in such situations oppressed and, in the case of the private sector at least, exploited? (The question of whether workers in the state sector are exploited I leave open). It is illegitimate to treat work in a society dominated by a class of employers as if it were not–and that is what Mr. Stanford does.

Stanford seeks to ignore the integrated nature of exchange of commodities for money and money for commodities with the exploitation and oppression of workers, who are treated as mere means for the ever increasing accumulation of money (see  The Money Circuit of Capital).

By the way, informally I have been following the statistics on the number of infections and deaths on the website Worldometer for some time  (https://www.worldometers.info/coronavirus/). In general, on the weekends, when there are fewer workers at work, the number of infections and deaths decrease, and as the working week proceeds, the number of infections and deaths increase. Undoubtedly there are other factors at work here, but surely one of the factors is, on the one hand, the requirement by employers that their employees work and, on the other, the need for non-essential workers to obtain a wage or salary by working for an employer.  

Stanford’s denial that there is a trade-off between the economy and the health of workers, therefore, rings hollow. Before the pandemic, there was a trade-off, and during the pandemic there has been a trade-off. The health of workers is necessarily put in jeopardy if an economy dependent on a class of employers and the attendant economic, political and social structures is to continue to exist and expand. (The same could be said of the natural world in which we live and the response of social democrats or social reformers–see The Money Circuit of Capital, The British Labour Party’s 2019 Manifesto: More Social Democracy and More Social Reformism, Part One and Socialism and Central Planning: Mr. Gindin’s Analysis of The Political Situation of Workers in General, Part One.)

Further Evidence that the Health of Workers and the Health of an Economy Dominated by a Class of Employers Are at Loggerheads

Protecting Oneself from a Tornado Versus Having to Work for an Employer to Obtain Money

The seriousness of Mr. Stanford’s denial that there is a trade-off between the economy and the health of workers can be seen from a relatively recent event in the United States: the tornado that hit Mayfield, Kentucky. From the website  https://www.nbcnews.com/news/us-news/kentucky-tornado-factory-workers-threatened-firing-left-tornado-employ-rcna8581?cid=sm_npd_nn_fb_ma&fbclid=IwAR2oyQiJ3BH2KPYvP0NOPavpJwZw2W-zuoB7R2YEnOd2ES8TtBANVPvIjWM

MAYFIELD, Ky. — As a catastrophic tornado approached this city Friday, employees of a candle factory — which would later be destroyed — heard the warning sirens and wanted to leave the building. But at least five workers said supervisors warned employees that they would be fired if they left their shifts early.

For hours, as word of the coming storm spread, as many as 15 workers beseeched managers to let them take shelter at their own homes, only to have their requests rebuffed, the workers said.

Fearing for their safety, some left during their shifts regardless of the repercussions.

At least eight people died in the Mayfield Consumer Products factory, which makes scented candles. The facility was leveled, and all that is left is rubble. Photos and videos of its widespread mangled remains have become symbols of the enormous destructive power of Friday’s tornado system.

Kentucky Gov. Andy Beshear said Monday that 74 people were confirmed dead in the state.

McKayla Emery, 21, said in an interview from her hospital bed that workers first asked to leave shortly after tornado sirens sounded outside the factory around 5:30 p.m.

Image: Satellite images show the Mayfield Consumer Products candle factory and other nearby buildings before, on Jan. 28, 2017, and after, Dec. 11, 2021, the tornado struck.
Satellite images show the Mayfield Consumer Products candle factory and nearby buildings before, on Jan. 28, 2017, and after, on Saturday.MAXAR Technologies via Reuters

Employees congregated in bathrooms and inside hallways, but the real tornado wouldn’t arrive for several more hours. After employees decided that the immediate danger had passed, several began asking to go home, the workers said.

“People had questioned if they could leave or go home,” said Emery, who preferred to stay at work and make extra money. Overtime pay was available, but it wasn’t clear whether those who stayed were offered additional pay.

Supervisors and team leaders told employees that leaving would probably jeopardize their jobs, the employees said.

“If you leave, you’re more than likely to be fired,” Emery said she overheard managers tell four workers standing near her who wanted to leave. “I heard that with my own ears.”

About 15 people asked to go home during the night shift shortly after the first emergency alarm sounded outside the facility, said another employee, Haley Conder, 29.

There was a three- to four-hour window between the first and second emergency alarms when workers should have been allowed to go home, she said.

Initially, Conder said, team leaders told her they wouldn’t let workers leave because of safety precautions, so they kept everyone in the hallways and the bathrooms. Once they mistakenly thought the tornado was no longer a danger, they sent everyone back to work, employees said.

Anyone who wanted to leave should have been allowed to, Conder said.

Elijah Johnson, 20, was working in the back of the building when several employees wanting to head home walked in to speak with supervisors. He joined in on the request.

“I asked to leave and they told me I’d be fired,” Johnson said. “Even with the weather like this, you’re still going to fire me?” he asked.

“Yes,” a manager responded, Johnson told NBC News.

Johnson said managers went so far as to take a roll call in hopes of finding out who had left work.

Company officials denied the allegations.

Image: A rescue worker and a cadaver dog arrive at the Mayfield Consumer Products candle factory in Mayfield, Ky., on Dec. 11, 2021.
A rescue worker and a cadaver dog arrive at the Mayfield Consumer Products candle factory Saturday in Mayfield, Ky.John Amis / AFP via Getty Images

“It’s absolutely untrue,” said Bob Ferguson, a spokesman for Mayfield Consumer Products. “We’ve had a policy in place since Covid began. Employees can leave any time they want to leave and they can come back the next day.”

He also denied that managers told employees that leaving their shifts meant risking their jobs. Ferguson said managers and team leaders undergo a series of emergency drills that follow guidelines of the Federal Emergency Management Agency and the Occupational Safety and Health Administration.

“Those protocols are in place and were followed,” he said.

A 24-hour hotline is available as of Monday for employees to call about hazard pay, grief counseling and other assistance, he said.

Autumn Kirks, a team lead at the factory who was working that night, denied Monday afternoon on MSNBC that people’s jobs were threatened if they didn’t go in.

But another employee, Latavia Halliburton, said she witnessed workers’ being threatened with termination if they left.

“Some people asked if they could leave,” but managers told them they would be fired if they did, she said.

The first tornado warning passed without any damage, but several hours later, another warning was issued. Once the second tornado siren sounded sometime after 9 p.m. Friday, Conder and a group of others approached three managers asking to go home.

“‘You can’t leave. You can’t leave. You have to stay here,’” Conder said the managers told her. “The situation was bad. Everyone was uncomfortable.”

Mark Saxton, 37, a forklift operator, said that he would have preferred to leave but that he wasn’t given the option.

“That’s the thing. We should have been able to leave,” Saxton said. “The first warning came, and they just had us go in the hallway. After the warning, they had us go back to work. They never offered us to go home.”

As the storm moved forward after the second siren, the employees took shelter. The lights in the building started to flicker.

Moments later, Emery, who was standing near the candle wax and fragrance room, was struck in the head by a piece of concrete.

“I kid you not, I heard a loud noise and the next thing I know, I was stuck under a cement wall,” she said. “I couldn’t move anything. I couldn’t push anything. I was stuck.”

Emery, who was trapped for six hours, had several chemical burn marks on her legs, her buttocks and her forehead from the candle wax. She also sustained kidney damage, her urine is black, and she still can’t move her legs because of the swelling and from having been motionless for so long.

Employees who wanted to go home early said they were mistreated.

“It hurts, ’cause I feel like we were neglected,” Saxton said.

Mr. Stanford’s conclusion that there is no trade-off between the economy and the health of workers flies in the face of such tragedies. 

Protecting Oneself from Dangerous Working Conditions Versus Having to Work for an Employer to Obtain Money

The same could be said of the Westray Mine deaths (really mass murder) in Nova Scotia, Canada, in 1992. What was the Westray Mine Mass Murder? From Tom Sandborn (2016), Hell’s History: 
The USW’s Fight to Prevent Workplace Deaths and Injuries from the 1992 Westray Mine Disaster Through 2016. page 23: 

… the lethal disaster had been made inevitable by Westray management negligence, corner cutting and speed-up, as well as by company decisions to ignore and/ or disable crucial safety equipment. One of the disabled sensors, attached to a machine called a “continuous miner” in the mine’s Southwest 2 tunnel, was supposed to detect methane levels
as the explosive gas was released from the coal face by the machine’s excavation. Instead, the unmonitored level of methane reached a critical level and a spark from the machinery ignited it. The methane explosion drove fine particles of highly flammable coal dust (which should have been regularly ventilated out of the mine and/or “stone dusted” with ground rock to make it less volatile, but was neither properly ventilated nor stone dusted), into the air and created a secondary explosion that drove a fireball through the mine’s tunnels, killing the 26 men on the night shift in less than a minute.

The “real economy” (material production through concrete labour) was not separated from the process of pursuing profit, and workers well knew that: 

Alan Doyle has bitter memories about the dangerous practices encouraged at Westray.
“That mine was a place called hell,” he told me in 2016. “It was run through intimidation. The inspectors were led around by the nose and mainly ignored. Once an inspector caught them with a bulldozer underground with unshielded sparks coming off it. Once the inspector left the mine, the foreman ordered Robbie to take the dozer back underground ‘… if he wanted to keep his fucking job.’”

Workers, more or less consciously, understand that there is indeed a trade-off between the “economy” (dominated by a class of employers) and their own health; otherwise, they would not fear being fired for complaining. This is economic coercion (see my critique of John Clarke, a Toronto radical, who refers to economic coercion as a necessary feature of capitalism and then ignores this fact in his own definition of social problems and social solutions    “Capitalism needs economic coercion for its job market to function” (Ontario Coalition Against Poverty: OCAP)).

As I wrote in another post (The Issue of Health and Safety in the Workplace Dominated by a Class of Employers): 

…a study from a skills and employment survey in Britain (Fear at Work in Britain. Gallie, Feldstead, Green, & Inanc, 2013) found that workers’ feared job loss, unfair treatment and loss of job status; available historical statistics for the first two categories show that such fears have increased. In addition, when I took a health and safety course at the University of Manitoba in the early 1990s, the instructors (both government employees and trained in the science of occupational health and safety and inspectors themselves) implied that workers often would not complain because of the economic climate of high unemployment.

Mr. Stanford’s separation of the real economy from the actual economy is a figment of his own social-democratic imagination. His economics is–for social democrats and social reformers, not for workers.

I pointed this out when criticizing Stanford’s purely exchange theory of money, which involves no connection between the purchasing power of money (and the power of those who hold it) and the work or labour process (see Economics for Social Democrats–but Not for the Working Class, Part Two: Critique of the Social Democrat Jim Stanford’s Theory of Money, Part One). 

Marx’s dual theory of labour (concrete labour producing use values and abstract labour producing value, which needs to be exchanged for money in order to be or function as value) is much superior for workers to the “economics” offered by Mr. Stanford. Marx’s dual theory of labour connects abstract labour to value and hence money while also distinguishing this process from the concrete labour process of producing use values–but there is no separate existence of the two aspects of labour in a capitalist economy. The money economy and the labour process are necessarily related in a society dominated by a class of employers.

By denying that the economy dominated by the class of employers can be divorced from the “real economy” (concrete labour), Marxian economics acknowledges the experience of workers–that their health and safety and the economy are often at loggerheads. 

Conclusion

A pattern seems to be emerging of a social-democratic or social-reformist trick that covers up the real social world in which we live. Mr. Stanford flies to the “real economy” (a fantasy economy that does not exist in a society characterized by the domination of a class of employers and the associated economic, political and social structures and institutions) to hide the fact that workers’ health is often sacrificed for the benefit of both individual employers and for the benefit of the class of employers. There is a real trade-off between the health of workers and the “economy”–as an economy dominated by a class of employers. 

There is no such thing as a “real economy” separate from a class economy in a capitalist system. To view such a real economy as somehow existing now is to assume that we need not radically transform the economy at both the macro and micro levels. Why bother if the real economy somehow already exists? 

Since there is no such thing as a separable “real economy” in a capitalist economic and political system, unfortunately there is a definite trade-off between the health of workers and the health of an economy dominated by a class of employers. 

Of course, if the economy or the life process of workers producing their own lives were to be under their control, this trade-off would be abolished since the lives of workers would be the priority. The production of use values to satisfy the needs of workers-citizens would not then lead to such a trade-off. However, it is illegitimate to assume that such an economy exists in the present; by making such an assumption, Mr. Stanford, like his social-democratic or social reformist comrades, can then avoid the conclusion that the primary task is to abolish the conditions that prevent such an economy from arising.

This is a key trick or method of social democrats or social reformers everywhere. They assume a situation in which what ought to be the case in fact actually is the case. Stanford assumes that the “real economy” somehow purely occurs–as if how workers produce in this society independently of how they are oppressed and exploited and, similarly, how what they produce is distributed and consumed is independent of the capitalist market system. 

Of course, it should be the aim of a socialist movement to produce a society where what is produced, distributed and consumed assumes a form worthy of human beings. However, Stanford, by assuming that what may arise in the future exists in the present, eliminates any need for struggling for achieving that goal in the present. If a pure human (and humane) economy can somehow exist in the present, then why bother aiming for the realization of such an economy in the future (with action in the present to achieve such a goal)? 

Mr. Noonan, similarly, assumes illegitimately that the abolition of class relations at the university is already an accomplished fact.

This trick does a great disservice to the working class. 

The social-reformist or social-democratic left do not seem capable of dealing with the real lives of workers, where their health and welfare are often sacrificed for the benefit of employers. 

As Jack Nicholson said in the movie A Few Good Men–“You can’t handle the truth!” Mr. Stanford and his social-democratic or social-reformist followers cannot handle the truth.

 

A Short List of the Largest Employers Based in Calgary, Alberta, Canada, Based on the Number of Employees

When belonging to a leftist organization called the Toronto Labour Committee (Ontario, Canada), I worked on, in a minor position, on some statistics related to financial campaign contributions for the Toronto elections. Not being satisfied with this, I proposed that we start trying to develop a class analysis of Toronto. I indicated, though, that I did not really know how to proceed in this. I sent this over the Toronto Labour Committee listserve, and the response was–silence.

The following attempts to fill in, however inadequately, that silence, this time in relation to Calgary.

I thought it would be useful to provide a list of some of the largest employers in Canada. The reason why I think such a list would be useful is that it provides at least a somewhat concrete picture of who really has power in society and the extent of that power. Since most social-reformist leftists ignore the power of employers and assume such power as a background which they can assume as constant, they then consider their reformist policies without calling into question such power.

The following provides a list of the 20 largest employers with headquarters based in Calgary. This list is based on the number of employees. As I pointed out in another post, such lists can vary, depending on the criteria used (such as profit, the number of employees or assets).

It should be pointed out that the following does not refer to the number of employees employed in Calgary. Rather, it refers to the number of employees of the particular capitalist employer in question; it probably includes the number of employees in Calgary, in the rest of Canada and, perhaps, outside of Canada.

It is taken from Top Calgary-Based Employers Based on the Number of Employees.

Company                                                                     Number of Employees

  1. Canada Pacific Railway Inc.                          12,770
  2. Suncor Energy Inc.                                       12,080
  3. Enbridge Inc.                                                12,000
  4. WestJet Airlines Ltd.                                     11,624
  5. Shaw Communications Inc.                          10,000
  6. Canadian National Resources Ltd.                 9,709
  7. Ensign Energy Services Inc.                            7,160
  8. TransCanada Corp.                                         7,081
  9. ATCO Ltd.                                                        6,241
  10. Imperial Oil Ltd.                                              5,700
  11. Precision Drilling Corp.                                   5,471
  12. Husky Energy Inc.                                            5,157
  13. MNP LLP                                                          4,808
  14. Calfrac Well Services Ltd.                                 3,900
  15. Calgary Co-Operative Association Ltd.            3,800
  16. Parkland Fuel Corp.                                          3,051
  17. Stuart Olson Inc.                                               2,924
  18. NOVA Chemicals Corp.                                     2,900
  19. AltaGas Ltd.                                                       2,881
  20. Total Energy Services Inc.                                  2,314

Total Number of Employees                              131,571 

The social-democratic left have little to say about this situation. Probably, as long as these workers are unionized and have a collective agreement, then they have a “fair contract” and have “decent work.”

It is even difficult to say what they mean by “fair contract” and “decent work.” If the workers are not unionized but obtain a relatively higher wage or salary and benefits, is that then “decent work” and a “fair contract?”

What of the freedom of the workers? Do they really control their lives regardless of whether they are unionized or not? Twenty employers controlling over 130,000 people (with over 6500 workers per employer).  Do you find that an expression of freedom? Of democracy? Or should we call it–a dictatorship?

Do those who invest in such companies in more than a small scale (such as some workers do) have to work? Or can they live off the work of such workers through appropriating the profits that these workers produce?

The Rate of Exploitation of Workers at ScotiaBank (Bank of Nova Scotia)

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:

Adjusted Income before income taxes $11,724=s
Adjusted Total salaries and total benefits $7,989=v

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 11,724/7,989=147 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.47 Canadian dollars surplus value or profit for free. Alternatively, for every hour worked, a Scotiabank worker works 88 minutes (or 1 hour 28 minutes) for Scotiabank for free.

I will calculate the rate of exploitation or the rate of surplus value for each approximate variation of the length of the working day (a more detailed explanation of how to calculate the rate of exploitation is provided in the post  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).

  1. 7-hour work day: Scotiabank workers spend  170 minutes (2 hours 50 minutes)  to obtain their wage for the day, and they spend 250 minutes (4 hours 10 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  2. 7.5-hour work day: Scotiabank workers spend 182 minutes (3 hours 2 minutes) to obtain their wage for the day, and they spend 268 minutes (4 hours 28 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  3. 8-hour work day: Scotiabank workers spend 194 minutes (3 hours 14 minutes) to obtain their wage for the day, and they spend 286 minutes (4 hours 46 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  4. 9-hour work day: Scotiabank workers spend 219 minutes (3 hours 39 minutes) to obtain their wage for the day, and they spend 321 minutes (5 hours 21 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  5. 9.5 hour work day (to cover a 47.5 hour work week spread out in five days): Scotiabank workers spend 231 minutes (3 hours 51 minutes0 to obtain their wage for the day, and they spend 339 minutes (5 hours 39 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  6. 12-hour work day: Scotiabank workers spend 291 minutes (4 hours 51 minutes) to obtain their wage for the day, and they spend 429 minutes (7 hours 9 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  7. 15-hour work day: Scotiabank workers spend 364 minutes (6 hours 4 minutes) to obtain their wage for the day, and they spend 536 minutes (8 hours 56 minutes( in obtaining a surplus value or profit for free for Scotiabank.

Scotiabank 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:

2019

Revenue

Interest income

Loans $ 29,116
Securities 2,238
Securities purchased under resale agreements and securities borrowed 502
Deposits with financial institutions 928

Total interest income: 32,784

Expenses

Interest expense

Deposits $13,871
Subordinated debentures  294
Other 1,442

Total interest expense: 15,607

Net interest income 17,177

Non–interest income 

Card revenues 977
Banking services fees 1,812
Credit fees 1,316
Mutual funds 1,849
Brokerage fees 876
Investment management and trust 1,050
Underwriting and other advisory 497
Non-trading foreign exchange 667
Trading revenues 1,488
Net gain on sale of investment securities  351
Net income from investments in associated corporations 650
Insurance underwriting income, net of claims 676
Other fees and commissions 949
Other 699

Total non-interest income: 13,857
Total revenue 31,034

Provision for credit losses 3,027
[Net Revenue]: 28,007

Non-interest expenses

Salaries and employee benefits 8,443
Premises and technology 2,807
Depreciation and amortization 1,053
Communications 459
Advertising and business development 625
Professional 861
Business and capital taxes 515
Other 1,974

Total non-interest expenses: 16,737

Income before taxes 11,270

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.

In the category “Salaries and employee benefits,” there are the subcategories “Performance-based compensation” and “Share-based payments.”

Salaries and employee benefits
Salaries $ 4,939
Performance-based compensation 1,761
Share-based payments 278
Other employee benefits 1,465
$ 8,443

There is a table titled “Compensation of key management personnel” in the annual report that is relevant. This category covers the following employees:

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Bank, directly or indirectly, and comprise the directors of the Bank, the President and Chief Executive Officer, certain direct reports of the President and
Chief Executive Officer and Group Heads.

The table is as follows:

Compensation of the Bank key management personnel

For the year ended October 31 ($ millions) 2019
Salaries and cash incentives  $17
Equity-based payment  $25
Pension and other benefits 5
Total $47

It should be noted that this table refers only to the end of October 31 as does all the information above since the fiscal year for Scotiabank ends on October 31.

This more detailed information does not influence my decision to include the whole category of “Share-based payments” to the category of surplus value rather than to “Salaries.”  The CEO of Scotiabank, Brain Porter, plus five other senior executives, received a total compensation of over $29 million. It is likely that “Share-based payments” are allocated according to the level of pressure on subordinates to perform (including organizational  and policy decisions to ensure such pressure is effective); such payments likely are received by senior and middle (and, perhaps, lower management) based on performance targets that they either set or force subordinates to achieve.

This situation is somewhat similar to the calculations I made for the Royal Bank of Canada workers.

This means that “Salaries and benefits” is reduced by $278 million and the category “Income before income taxes” is increased by $278 million.

I also assume that 10 percent of the amount of the category “Performance-based compensation” is actually surplus value and not salaries that are due to actual work. In other words, some of “performance-based compensation” is due to management obliging workers to work at a certain level (and some of it is due to the workers themselves working at a certain level of intensity in order to receive some form of performance compensation).

My logic is the same as my calculation in some other banks (such as the CIBC), where I wrote:

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. …

it is probably reasonable to assume that a minimum of 10 percent of the “Performance-based compensation” comes from the exploitation of 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.

It also means that this 10 percent ($176 million) is allocated to the category “Income before taxes.”

Adjusted Results

Adjusted Income before income taxes $11,724=s
Adjusted Total salaries and total benefits $7,989=v

The Rate of Exploitation of Scotiabank Workers

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 11,724/7,989=147 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.47 Canadian dollars surplus value or profit for free. Alternatively, for every hour worked, a Scotiabank worker works 88 minutes (or 1 hour 28 minutes) for Scotiabank for free.

The length of the working day varies. To the question: “On average, how many hours do you work a day at Scotiabank?,” the answers were:

  1. 8 to 9 hrs per day.
  2. 8 hours and 30 mins
  3. 8 hours a day from Monday to Friday with 1 hour for lunch
  4. 48 hours a week
  5. 9 Am to 6 pm
  6. Depends on department , some are typical 8:30-5 while others such require much longer hours,up to 12-15 hours per day
  7. 37.5 hrs per week

I will calculate the rate of exploitation or the rate of surplus value for each approximate variation of the length of the working day (a more detailed explanation of how to calculate the rate of exploitation is provided in the post 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).

  1. 7-hour work day: Scotiabank workers spend  170 minutes (2 hours 50 minutes)  to obtain their wage for the day, and they spend 250 minutes (4 hours 10 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  2. 7.5-hour work day: Scotiabank workers spend 182 minutes (3 hours 2 minutes) to obtain their wage for the day, and they spend 268 minutes (4 hours 28 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  3. 8-hour work day: Scotiabank workers spend 194 minutes (3 hours 14 minutes) to obtain their wage for the day, and they spend 286 minutes (4 hours 46 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  4. 9-hour work day: Scotiabank workers spend 219 minutes (3 hours 39 minutes) to obtain their wage for the day, and they spend 321 minutes (5 hours 21 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  5. 9.5 hour work day (to cover a 47.5 hour work week spread out in five days): Scotiabank workers spend 231 minutes (3 hours 51 minutes0 to obtain their wage for the day, and they spend 339 minutes (5 hours 39 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  6. 12-hour work day: Scotiabank workers spend 291 minutes (4 hours 51 minutes) to obtain their wage for the day, and they spend 429 minutes (7 hours 9 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  7. 15-hour work day: Scotiabank workers spend 364 minutes (6 hours 4 minutes) to obtain their wage for the day, and they spend 536 minutes (8 hours 56 minutes( in obtaining a surplus value or profit for free for Scotiabank.

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 Scotiabank to control their working lives in order to obtain surplus value or profit.

Scotiabank 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.

The Radical Left Underestimate the Ideological Power of Employers and Overestimate Their Own Ideological Struggle

Leftists frequently refer to themselves and others as the left. This is vague to the point of being useless. Often, what is meant by being left is being paying lip-service to being anti-capitalist–without in reality doing anything to oppose the power of the class of employers as such, either ideologically or in practice.

A good example is an article written by Tim Heffernan, Simon Schweitzer, and Bill Hopwood on July 8, 2020, in the social-democratic journal Canadian Dimension (COVID-19 and Mass Unemployment: the NDP and Beyond).   In that article, the writers make the following statement in relation to what kind of organizing efforts could be achieved in the face of the COVID-19 pandemic in Canada by the New Democratic Party (the social-democratic party in Canada):

Events like well-publicized video town halls, car caravans, or carefully marshalled physical protests/pickets would do a lot to shine a light on the shortcomings of the Liberal government and the capitalist system [my emphasis]. The NDP could be pushing now for public ownership of all long-term care homes, waiving of rent and mortgages during the pandemic, an end to evictions or foreclosures, and a universal public health system.

Trudeau may be popular, but he is also vulnerable, especially from the left. The NDP could start now building support for a jobs program to reconstruct the Canadian economy and society after the devastation of COVID-19 and a world economic depression. This program could combine tackling the climate crisis with providing jobs and building affordable homes–all vital for Canadians’ well-being. Restarting the economy will take major public investment–workers are short of money, and big business is continuing its refusal to invest just as before COVID-19.

There is almost a mystical quality about the claim that “the shortcomings of the capitalist system” will become evident by such short-term efforts. This overestimates vastly the efficacy of such efforts in driving home to working people and community members “the shortcomings of the capitalist system,” and vastly underestimates the staying power of the capitalist system despite such “shortcomings.”

This does not mean that there should be no efforts to address problems associated with the capitalist system or with specific problems that have emerged due to the pandemic in the context of a capitalist system characterized by the domination of a class of employers. However, let us not underestimate the tasks required to ensure that people do indeed believe that the capitalist system has shortcomings that require the elimination of the power of the class of employers and the economic, political and social structures and relations associated with that power.

The overestimation of what people actually believe can also be seen from the following:

An indication of the leftward shift in public attitudes is shown by the results of a recent survey conducted by Abacus Data in late May. Three-quarters of Canadians said they either strongly support (44 percent) or support (31 percent) a tax of one to two percent on the assets of Canada’s wealthiest to help pay for the country’s recovery. The survey also touched on the issue of government aid to corporations. Four-fifths of respondents (81 percent) said that companies receiving government assistance should be prohibited from using foreign tax havens or using the funds to pay for excessive executive salaries, to buy back shares, or hike dividends.

Belief in heavier taxation of the wealthy, or more strings attached to corporations that receive government assistance is hardly the same thing as a belief in the shortcomings of the capitalist system. Social democrats or leftist social reformers often talk of the need for corporations to pay their fair share of taxes, for example (see   Co-optation of Students at School Through We Day, Part Two: The Social-Democratic Left Share Some of We Day’s Assumptions). The concept of corporations paying their fair share of taxes does not express opposition to the class power of employer.

At the provincial level, the writers refer to the British Columbia NDP (British Columbia is the most western province in Canada) and its lack of criticism of the failings of the capitalist system:

BC’s New Democrats have acted as a moderate and competent government, better than is the case in several provinces, but they have not shown a commitment to working people and have propped up capitalism rather than challenging it. The NDP is missing an opportunity to show to the rest of Canada a bold alternative to the present failing system.

The NDP, federally and provincially, do not aim to end capitalism. Has it ever really done so? It is a social-democratic or social reformist party; that is its nature. The NDP would have to be a very different kind of party to be able to offer “a bold alternative to the present failing system.” Furthermore, most working people and community members do not really believe that the capitalist system is a failing system. Where is there evidence to the contrary?

Let us listen to one of the writer’s own lack of taking seriously the need to engage in sustained ideological struggles in order to ensure that workers and community members really believe that capitalism is a failing system: Tim Heffernan is a member of Socialist Alternative, the same political party as Kshama Sawant, an elected representative to the Seattle City Council. I had a debate with Mr. Heffernan sometime ago:

Fred raises some interesting points. However, I think he’s confusing social-democratic/reformist demands with transitional demands. There’s a difference which I can elaborate on if needed but the practical contrast between them can be seen in Seattle itself where I would argue that Rosenblum encapsulated an honest and militant social democratic approach while Kshama Sawant & Socialist Alternative (also militant and honest) pushed the movement to its limits by raising the demand for 15/taxing the rich to the need for a socialist transformation of society. But I will concede that there are some in the US left who label SA as reformist too.

Also, we need to look at the concrete not the abstract. The “15 movement” in North America has seen different manifestations and the slogans/demands put forward have varied in time and place. So in Seattle in 2013-14, it was “15 Now”, in other parts of the US it became “15 and a union” and in Ontario it was ” 15 & Fairness”. Fred objects to the term “fairness” presumably because of its association with the old trade union demand of “a fair day’s work for a fair day’s pay”. Engels dealt with this demand back in 1881 where he recognized the usefulness of it in the early stages of developing class consciousness of the British working class, in the first half of the 19th Century, but saw it as an impediment at the time he was writing.

To today and “15 and Fairness”. I think the addition of “fairness” to the straight “15” demand was an excellent move. Fairness wasn’t understood as an airy fairy, feel good notion but came to be seen as shorthand for a series of extra and linked demands that could mobilise low paid and exploited workers:
– paid sick days
– equal pay for equal work (full time vs part time)
– the right to a union
– the fight against racism and discrimination
and more

If the above be bullshit, so be it. I like to think that Engels, were he alive today, would have his criticisms of the limitations of 15 & Fairness but would be overwhelmingly positive about what it has achieved so far.

Tim

To which I responded:

Hello all,

Tim’s justification for “fairness” is that it is–somehow–a transitional demand. Let him elaborate on how it is in any way a “transitional” demand. I believe that that is simply bullshit.

He further argues the following:

“Fairness wasn’t understood as an airy fairy, feel good notion but came to be seen as shorthand for a series of extra and linked demands that could mobilise low paid and exploited workers:
– paid sick days
– equal pay for equal work (full time vs part time)
– the right to a union
– the fight against racism and discrimination
and more”

How does Tim draw such conclusions? It is a tautology (repetition of what is assumed to be true) to say that it is fair if “paid sick days, equal pay for equal work (full time vs part time), etc. is considered “fair.”

Why should these goals be tied to “fairness”? I had paid sick days at the brewery, I belonged to a union (there was, however, evident racism among some of the brewery workers and there was also a probationary six-month period before obtaining a full union-wage). Was that then a “fair” situation? I guess so–according to Tim’s logic. Why not then shut my mouth and not complain since I lived a “fair” life at the brewery? But, of course, I did not shut my mouth.

But does Tim believe that merely gaining “paid sick days, equal pay for equal work (full time vs part time), the right to a union, the fight against racism and discrimination and more” is fair? If he did, he would then presumably cease being a member of Socialist Alternative since he would have achieved his goals. However, he likely does not believe that it is fair. What he proposes, then, is to lie (bullshit) to workers by not revealing what he really believes as a “transitional” demand. He does not really believe that it is fair, but he believes that such rhetoric is a useful tool in developing a movement. Frankly, I believe that such a view is both dishonest and opportunistic. Workers deserve better–it is they who continue to be exploited despite “paid sick days,” etc. Receiving paid sick days is better than not receiving paid sick days, but all the demands obtained cannot constitute “fairness.” And yet workers who buy into the rhetoric (bullshit) of fairness may believe this fairy tale (it is, after all, a fairy tale presented by social democrats often enough, among others). Rather than enlightening the workers about their situation, such rhetoric serves to obscure it and to confuse workers–support for the Donald Trump’s of the world in the making.

Such low standards. Rather than calling into question the power of employers to direct their lives by control over the products of their own labour, it implicitly assumes the legitimacy of such power. Ask many of those who refer to the fight for $15 and Fairness–are they opposed in any way to the power of employers as a class? Not just verbally, but practically? Or do they believe that we need employers? That we need to have our work directed by them? That working for an employer is an inevitable part of daily life? That there is no alternative? That working for an employer is not really all that bad?

When working at the brewery, I took a course at the University of Calgary. The professor was interested in doing solidarity work for the Polish organization Solidarity at the time. I told him that I felt like I was being raped at the brewery. He looked at me with disgust–how could I equate being raped (sexually assaulted) with working for an employer? I find that radicals these days really do not seem to consider working for an employer to be all that bad. If they did, they probably would use the same logic as their opposition to sexual assault. Sexual assault in itself is bad, but there are, of course, different degrees of sexual assault. Those who sexually assault a person may do so more violently or less violently; in that sense, those who sexually assault a person less violently are “better” than those who are more violent. However, sexual assault is in itself bad, so any talk of “fairness” in sexually assaulting someone is absurd. Similarly, any talk of fairness in exploiting someone is absurd. But not for the “radical” left these days, it would seem.

Fred

Engels, Marx’s best friend and political ally, criticized the opportunist sacrifice of the long-term interests of workers for possibly short-term gains–and this is what the so-called radical left do often enough (and Mr. Heffernan’s defense of linking the fight for improved wages and working conditions with “fairness” . Quoted from From Christoph Henning (2014), Philosophy After Marx: 100 Years of Misreadings and the Normative Turn in Political Philosophy, page 37, note 86:

This forgetting of the great, the principal considerations for the momentary interests of the day, this struggling and striving for the success of the moment regardless of later consequences, this sacrifice of the future of the movement for its present, may be “honestly” meant, but it is and remains opportunism, and “honest” opportunism is perhaps the most dangerous of all!

Let us now discuss Mr. Heffernan’s acceptance of the slogan “Fairness” alongside the fight for a minimum wage of $15 an hour, on the one hand, and the reference to shedding light on the “shortcomings of the capitalist system” on the other. Surely one of the shortcomings of the capitalist system is its unfairness. Having millions of workers working every day for an unelected manager or managers (as representatives of employers) is unfair. Losing your job through no fault of your own (because management decides it is best for the company or department) is unfair. Being treated as a means for the benefit of employers is unfair (see The Money Circuit of Capital).

There is an apparent clash here between the acceptance of the slogan “$15 and Fairness”  and the apparent claim that it is necessary to shed light “on the shortcomings of the capitalist system.” This contradiction is, however, merely apparent. Mr. Heffernan does not take seriously the need to engage, systematically and persistently, in pointing out “the shortcomings of the capitalist system.”

Or does he? He claims that the slogan “Fight for $15 and Fairness” is a transitional demand. Does he have evidence that it indeed has served to change the aims of workers from fighting for reforms within a system characterized by a class of employers to an aim of fighting to abolish their class power? I am still waiting for Mr. Heffernan to provide such evidence.

In fact, it is very difficult to shed light “on the shortcomings of the capitalist system” in such a way that working people and community members will take seriously such shortcomings and act upon such a belief. Frequently, what happens is that one aspect of the capitalist system is criticized whereas the system as such is simply assumed to be unchangeable. This is in fact the assumption of the slogan “Fight for $15 and Fairness.”

Mr.Heffernan’s evident acceptance of the ideology of “Fight for $15 Fairness and Fairness” goes hand in hand with substantial underestimation of the need for and difficulty of sustained ideological criticism of the “shortcomings of the capitalist system.”

Imagine a substantial number of of Canadian believing that the capitalist system has such short comings that they are willing to organize and struggle to overcome such a system. In other words, they would have to have similar aims. How far are we from achieving such common aims among millions of workers and community members? The distance between where we are and where we need to be is great, and Mr. Heffernan’s acceptance of the slogan “Fight for $15 and Fairness” does nothing to bridge the gap; to the contrary, it contributes to the maintenance of such a gap. References to shedding light on “the shortcomings of the capitalist system” ring hollow.

Mr. Heffernan, like many other self-styled radical leftists, does not really aim to shed light on “the shortcomings of the capitalist system.” If they did, they would persistently engage in exposing such shortcomings. Furthermore, they would distinguish shortcomings that arise from shortcomings of the capitalist system as such and shortcomings that arise from a specific form of capitalism. Shortcomings arising from capitalism as such cannot be reformed whereas shortcomings arising from a specific form of capitalism can be reformed without changing the basic nature of capitalism. Admittedly, it is sometimes difficult to distinguish the two, but we need to make an effort at distinguishing them so that we can distinguish between actions that question the very foundation of the class power of employers and actions which that class power can co-opt.

We need to realize that aiming for a socialist society will require much ideological struggle in order to clarify our aims and to move, collectively, towards the common aim of abolishing the class power of employers and its associated economic, political and social structures.

There is no such movement here in Toronto. It needs to be created. I suspect the creation of such a movement is also required in many parts of the world since it is mainly social democrats who dominate the left these days–despite their radical-sounding phrases.

The Rate of Exploitation of the Workers of the Bank of Montreal (BMO), 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).

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 as well as the rate of exploitation of workers at the Canadian Imperial Bank of Commerce (CIBC) (see ???).

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 if they are available in order to calculate the rate of exploitation at a more local level.

The lack of any attempt to determine the rate of exploitation at the city level by has undoubtedly reinforced social-reformist tendencies.

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.

The rate of exploitation or the rate of surplus value of Bank of Montreal workers is s/v; therefore, s/v is 7,533/8,162=92 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $0.92 cn surplus value or profit for free (calculated on the basis of the procedure outlined in the post on the rate of exploitation of Canadian Imperial Bank of Commerce bank workers). Alternatively, for every hour worked, a Bank of Montreal worker works 55 minutes for free for the Bank of Montreal.

It also means the following:

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.

In millions of Canadian dollars:

Page 18:

Summary Income Statement
Income
Net interest income $12,888
Non-interest revenue $12,595
Revenue $25,483 [add the first two]
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) $2,709
Revenue, net of CCPB $22,774 [subtract $25 483 by $2 709]

Expenses
Provision for (recovery of) credit losses on impaired loans $751
Provision for (recovery of) credit losses on performing loans $121
Total provision for credit losses $872 [add the last two]
Non-interest expense $14,630
Total expenses $15,502

Net income $7272 ($22,774-$15,502)

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.

In the annual report, the category of “Non-interest expense” is subtracted from total revenue, to yield the category “Net income.” However, to calculate the rate of exploitation according to the principles of Marxian economics, it is necessary to make certain adjustments. To that end, we need to look in more detail at the category “Non-interest expense.”

Non-Interest Expense
(Canadian $ in millions)
Employee compensation
Salaries $4,762
Performance-based compensation $2,610
Employee benefits $1,051
Total employee compensation 8,423
Premises and equipment 2,988
Other 2,665
Amortization of intangible assets 554
Total non-interest expense 14,630

As in other posts on the rate of exploitation in Canadian banks, the category “Performance-based compensation” causes some problems, which requires adjustments. It appears that most employees receive some kind of bonus based on performance. One site indicates the following:

BMO – Bank of Montreal pays an average of C$4,459 in annual employee bonuses. Bonus pay at BMO – Bank of Montreal ranges from C$993 to C$9,500 annually among employees who report receiving a bonus. Employees with the title Branch Manager, Banking earn the highest bonuses with an average annual bonus of C$9,500. Employees with the title Customer Service Representative (CSR) earn the lowest bonuses with an average annual bonus of C$993.

On the other hand, according to the Bank of Montreal Proxy Circular, all executives receive short-term incentives based on performance, senior executives receive mid-term incentives based on performance, and senior vice-presidents and above receive long-term incentives based on performance.

As I argued in my post about the rate of exploitation of Canadian Imperial Bank of Commerce workers:

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. …

it is probably reasonable to assume that a minimum of 10 percent of the “Performance-based compensation” comes from the exploitation of 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.

Adjusted Results

This 10 percent reduction in Performance-based compensation results in a reduction in total employee compensation” by $261,000,000 and an increase in net income by the same amount. This adjustment yields the following accounts:

Adjusted net income $7,533 (this represents surplus value or s)
Adjusted total employee compensation $8,162 (this represents variable capital or v)

The Rate of Exploitation of Bank of Montreal Workers

The rate of exploitation or the rate of surplus value of Bank of Montreal workers is s/v; therefore, s/v is 7,533/8,162=92 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $0.92 cn surplus value or profit for free (calculated on the basis of the procedure outlined in the post on the rate of exploitation of Canadian Imperial Bank of Commerce bank workers). Alternatively, for every hour worked, a Bank of Montreal worker works 55 minutes for free for the Bank of Montreal.

According to a few people who have worked at the Bank of Montreal, the length of the working day is the following (it is unclear whether lunch is included and unpaid or not]:

  • Eight thirty to four thirty [8-hour working day]
  • Working hours are steady. 8:45-5:15 everyday Monday to Friday [8.5-hour working day]
  • The bank has a 7.5 hours work day and is a 9am – 5pm environment. However, the bank has flexibility to accommodate your commuting schedule. [8-hour working day]
  • At that time i think they were M-W 10-3, T&F 10-8 and Sat. 10-4 [average of 410 minutes, or 6 hours 50 minutes, or 6.8 hours]
  • The Hours of what I work is 8:00am to 4:30pm [8.5 hours]
  • 9 hours, sometimes up to 12, but hours can be cut any time
  • 9.5 but paid for 7.5 often losing breaks due to lose of break time as others underperformed and I had to pick up the slack… regularly.
  • 7.5 hours per day
  • The hours were fixed at 8 hours a day. However, working days were flexible along with more shifts.

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.

  1. For a 6.8-hour working day (410 minutes), BMO workers spend 214 minutes (3 hours 34 minutes) to obtain their wage for the day, and they spend 196 minutes (3 hours 16 minutes) in obtaining a surplus value or profit for BMO.
  2. For a 7.5-hour working day (450 minutes), BMO workers spend 234 minutes (3 hours 54 minutes) to obtain their wage for the day, and they spend 216 minutes (3 hours 36 minutes) in obtaining a surplus value or profit for BMO.
  3. For an 8-hour working day (480 minutes), BMO workers spend 250 minutes (4 hours 10 minutes) to obtain their wage for the day, and they spend 230 minutes (3 hours 50 minutes) in obtaining a surplus value or profit for BMO.
  4. For an 8.5- hour working day (510 minutes), BMO workers spend 266 minutes (4 hours 26 minutes) to obtain their wage for the day, and they spend 244 minutes (4 hours 4 minutes) in obtaining a surplus value or profit for BMO.
  5. For a 9-hour working day (540 minutes), BMO workers spend 281 minutes (4 hours 41 minutes) to obtain their wage for the day, and they spend 259 minutes (4 hours 19 minutes) in obtaining a surplus value or profit for BMO.
  6. For a 9.5-hour working day (570 minutes), BMO workers spend 297 minutes (4 hours 57 minutes) to obtain their wage for the day, and they spend 273 minutes (4 hours 33 minutes) in obtaining a surplus value or profit for BMO.
  7. For a 12-hour working day (720 minutes), BMO workers spend 375 minutes (6 hours 15 minutes) to obtain their wage for the day, and they spend 345 minutes (5 hours 45 minutes) in obtaining a surplus value or profit for BMO.

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 Bank of Montreal to control their working lives in order to obtain surplus value or profit.

Bank of Montreal 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.