Critique of the Limited Aim (Solution)–Decent Wages–of a Radical Social Democrat: The Case of the Toronto Radical, John Clarke: Part One

Introduction

There are some people among the social-democratic left whom I can respect more than others. John Clarke, former leader of the Ontario Coalition Against Poverty (OCAP), is one of them. Here is what one reads on Wikipedia about him:

John Clarke is an anti-poverty activist who lives in TorontoOntarioCanada. As of 2019, he was teaching at York University.

Activism

A native of Britain, he moved to Toronto, Ontario and became an organizer there.[1] He was a leading figure of the Ontario Coalition Against Poverty (OCAP) group until he retired from it in January 2019.[2] The Globe and Mail reported in the year 2000 that Clarke’s “guerrilla activism has pitted him against police countless times during the past decade.”[3]

Clarke was arrested with three other activists and charged with inciting a riot for his role in an OCAP protest at Queen’s park in June 2000. Clarke appealed his restrictive bail conditions in August 2000.[3] In 2003, a judge stayed the charges and Clarke walked free.[4]

The Sudbury Star described Clarke in 2016 as “a 25-year veteran of activism.”[1] In 2019, he announced an online fundraiser asking people to contribute $25,000 for his retirement.[5]

Teaching

In 2019, Clarke took on the post of Packer Visitor in Social Justice in the faculty of Liberal Arts and Professional Studies at York University. The position is for two years.[2]

References

  1. Jump up to:ab Keenan Kusan, Workers being held down, activist says in SudburySudbury Star (March 26, 2016).
  2. Jump up to:ab Levy, Sue-Ann (26 November 2019). “Poverty warrior teaching Activism 101 at York University”Toronto Sun. Retrieved 21 March 2020.
  3. Jump up to:ab Margaret Philp, Activist to fight bail termsGlobe & Mail (August 10, 2000).
  4. ^ Clarke, John (28 October 2003). “RIOT CHARGES AGAINST OCAP ORGANIZER STAYED BY TRIAL JUDGE – Statement by John Clarke, OCAP Organizer”OCAP. Archived from the original on 1 June 2005. Retrieved 21 March 2020.
  5. ^ Levy, Sue-Ann (28 January 2019). “Poverty activist John Clarke wants help funding retirement”Toronto Sun. Retrieved 21 March 2020.

Although I can admire not only Mr. Clarke’s activist stance but his willingness to engage in civil disobedience despite the possible consequences for himself, his writings persistently fall short of a socialist stance. This limitation is evident in his aims (which are, generally, solutions to specific problems). 

The Aim or Goal of His Intervention 

What is the aim or goal of his intervention? What is he seeking to achieve?

On Mr. Clarke’s blog, on June 15, 2021, he has written a post titled “A Basic Income in Waiting?” (https://johnclarkeblog.com/node/65). 

Surprisingly, Mr. Clarke’s goals are very similar if not identical to those of  Simran Dhunna and David Bush’s views.  He writes:

During the pandemic, struggles have broken out across the world, from Minneapolis to New Delhi to East Jerusalem. As the global health crisis subsides, there will be a strong determination to fight for something better. As we challenge, not just the ‘economic scarring’ left by the pandemic, but the impact of decades of austerity, we shouldn’t settle for a commodified form of social provision that makes its peace with the neoliberal order. We need to fight employers to win decent wages and to take to the streets to demand massively expanded social housing, greatly improved public healthcare, free public transit, universal child care and much else beside.

His reference to “much else beside” is in reference to an article written by Ms. Dhunna and Mr. Bush (if you click on the the “else beside,” you will be taken to their article). The “much else beside” probably refers to the following list (the social-democratic or reformist left frequently have a grocery list of demands that rarely if ever are realized in practice since they lack the power to realize them):

  1. free dental care
  2. strengthening and regularizing the new changes to EI (employment insurance–which I still call unemployment insurance)
  3. raising social assistance rates
  4. status for all (meaning presumably that immigrants and “illegal” migrants would have the same legal rights as Canadian citizens)
  5. paid sick days
  6. improving tenants’ rights
  7. universal public services.

Of course, I support such efforts, but such efforts hardly make a socialist society since they are likely compatible with some form of capitalism and not with its abolition and with the abolition of all classes; they seek to humanize capitalism and not abolish it. Those who advocate such policies are anti-neoliberal but not necessarily anti-capitalist. To be anti-capitalist, such policies would have to be linked to other policies that push beyond what is acceptable to a capitalist society–such as a radical or robust basic income–which Mr. Clarke opposes. 

I have criticized Dhunna and Bush’s article in several posts on this blog (see for example A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is SocialistThe Strawman of a Minimal Universal Basic Income by the Social-democratic Left in Toronto or  A Robust or Ambitious Universal Basic Income: An Impossible Dream for Some Among the Social-democratic Left), and Mr. Clarke’s uncritical reference to it is indicative of Mr. Clarke’s lack of critical distancing from his social-democratic compatriots; his rubber stamping of other social democrats’ position is quite typical of social democrats in general, it would seem (see Exposing the Intolerance and Censorship of Social Democracy, Part Two: Critique of the Standard of Canadians and Landed Immigrants Working for an Employer). 

The way in which Ms. Dhunna and Mr. Bush refer to articles written by others on the subject of basic income, for instance, gives the impression that the authors of some of the articles to which they refer find basic income to be impractical–whereas it is often the case that it is only certain forms of basic income that such authors find impractical; other forms they find feasible–but Ms. Dhunna and Mr. Bush (and Mr Clarke) neglect to acknowledge this. By referring to the article Dhunna and Bush wrote without further ado, Mr. Clarke in effect rubber stamps uncritically their own distortion of the views of others. This is hardly what the working class needs today. Mr. Clarke, despite his apparent anti-capitalist rhetoric, is anti-neoliberal but not anti-capitalist. 

Let us, however, see what Mr. Clarke himself actually proposes as an alternative–what his aims are.  The following is almost a verbatim report of the third section of Mr. Clarke’s presentation on YouTube, presented on June 21, 2021, titled Basic Income Is a Neoliberal Trap  (https://www.youtube.com/watch?v=r40D6fU760s&t=4s):

Alternative Directions

The alternative is to rejuvenate our unions and fight for decent wages, to fight to increase minimum wages, to fight for workers’ rights–rather than extend the cash benefits and extend the reach of the marketplace. It is far better to put considerable effort into the struggle for public services.

Now, Mr. Clarke fully acknowledges that there are income-support programs that are vital and needed, and we cannot let these supports become a kind of poor cousin. We need unemployment insurance that provides adequate coverage and secure coverage. We need the disgusting attack on injured workers that has taken place to be reversed and decent benefits be provided. We need a fight to ensure that disability benefits are adequate and meet people’s needs and that they are secure. We need to challenge the intrusion and moral policing that goes on within these systems.

But to extend the cash benefit widely out into the workforce is a huge mistake. And we could do so much better. Rather than try to get what in practice would be a meager cash benefit, it would be so much better to struggle to challenge the commodification of housing, the neoliberal city, the blighting of urban space with this agenda of greed by fighting for a massive extension of social housing. So that’s a benefit that goes to working-class people and does not go into the pocket of landlords. There’s a need to fight for increases in the adequacy of healthcare. The pandemic has made that absolutely clear. We need pharmacare, dental care, a unviersal childcare program that is not an empty perennial liberal promise. We need post-secondary education to be free; we need free public transport systems. On all of these fronts, we need to take up a fight.

But people will say: We have suffered defeats. We cannot win these things. Mr. Clarke argues that the left has for a very long time forced on the defensive. The class struggle has not gone in our favour for a considerable period of time. But there is no alternative but to rebuild and to fight back and to win what we can. And to challenge this society but to fight for a different society. That’s absolutely indispensable. There in fact is not some social policy ruse that can just put things right.

Basic income is not going to solve the problem. Our lack of strength, our lack of ability to fight in the way we need to fight is the problem we have to address. We need to build that movement now more than ever. In this situation of global crisis we need more than ever to fight back, and we can do so much better in focusing our struggles than to fight for the commodification of social provision and basic income.

There is little difference between Dhunna and Bush’s call for a refurbished welfare state and Mr. Clarke’s vision of a “different society.” The society he envisions is an improved version of the welfare state established after the Second World War; it is hardly a vision of a society without classes, without exploitation and without oppression. 

I will, however, restrict my criticism of Mr. Clarke’s position in this post to his reference to decent wages–and will continue with my criticism of Mr. Clarke’s views on economic coercion–the first part of his presentation in the YouTube video in another post by referring to his apparent acknowledgement that economic coercion forms an essential element of a capitalist society–all the while ignoring the significance of that for formulating policies to counter such economic coercion.  

Decent Wages and Exploitation 

Mr. Clarke does not subject the concept of decent wages to any critical scrutiny. Ironically, Mr. Clarke often refers to exploitation as an essential aspect of a society dominated by a class of employers (and I agree with him on this view), as a basis for criticizing the impracticality of a proposal for universal basic income (see his Youtube presentation)–which I will address in relation to basic income in another post), but he isolates the concept of “decent wages” from any consideration of exploitation. 

The concept of “decent wages” in effect justifies the exploitation of workers and their continued economic coercion. That does not mean, of course, that I would criticize workers for seeking to increase their wages–increasing the standard of living does have the potentiality of improving the quality of life for those who work for employers, and I also have sought to increase my wages or salary to improve my quality of life. However, seeking to increase wages does not make the wages “decent”–given exploitation. 

By referring to “decent wages,” Mr. Clarke, despite his references to exploitation, implicitly uses the standard of working for an employer as a standard for determining what is decent work. This limitation of the left has been noted by others. Kathleen Millar (2017) has argued just that in her critique of the isolation of a set of individuals as the “precariat”. From “Toward a critical Politics of Precarity,” Sociology Compass, Volume 11,  pages 6-7: 

At the same time, translating the concept of precarity to different parts of the world has also meant recognizing that precarity is originary to capitalism. The very condition of having to depend on a wage to sustain one’s life is what makes a worker precarious—not just the specific structures of this or that job (Barchiesi, 2012a; Denning, 2010). From this perspective, precarity is capitalism’s norm, not its exception, and is shared by all workers whether employed or unemployed. We usually think of the worker with a stable, full‐time job as the model of capitalist labor—against which the numerous unemployed, informal, or wageless workers (largely in the global South) are compared. But the latter
reveal the latent precarity of all workers who must sell their labor‐power for a living. This means that the precarity of labor, far from being the exception in capitalism, is the necessary condition for the creation of capital.

To see insecurity at the heart of wage labor (rather than a condition of its absence) is to complicate the current denunciatory discourse of precarity. Critiques of precarity—whether explicitly or as another element of what Thorkelson (2016) describes as its political unconscious—uphold full‐time, wage‐labor employment as an ideal. One problem with this politics of precarity is that it ignores how wage labor can itself be an experience of insecurity, degradation, exploitation, and abuse. For example, Franco Barchiesi (2011) makes this argument through his study of wage labor as a technique of governance in both colonial and postcolonial South Africa. He shows how colonial administrators emphasized the “dignity of work” as a way to use wage labor to discipline African populations seen as “uncivilized” and “unruly.” Many African workers refused waged employment, instead opting for various forms of
subsistence labor or self‐employment that, while insecure, allowed them to avoid the discipline and indignity experienced when working in factories and mines. In this historical context, Barchiesi argues, “precarious employment was not a condition of disadvantage but enabled opposition to the labor‐centered citizenship of Western modernity” (15). Barchiesi goes on to show how today, the continued emphasis on “decent jobs” and “job creation” in postapartheid South Africa fuels the precariousness of workers by continuing to link social citizenship to full‐time wage labor at
the same time that stable employment is increasingly scarce (see also Barchiesi, 2012b). The emphasis on decent jobs also reinforces forms of masculinity, nationalism, and inequality that a social order structured around wage labor produced. In short, the demand for decent jobs, as a solution to precarity, generates a conservative politics attached to the valorization of wage labor. It also precludes the “political potentials of precarity” (Barchiesi, 2012b, 248) or what I have described elsewhere as the possibility that forms of work beyond wage labor might open up other ways of fashioning work and life (Millar, 2014).

This brings me back to the question that began this article: what are we holding onto through the ubiquitous, denunciatory discourse of precarity? One answer to this question is certainly wage labor. Or more precisely, many critiques of precarity remain attached to what Kathi Weeks (2011) has described as the taken‐for‐granted valorization of waged work as an economic necessity, social duty, and moral practice. This attachment to waged work is part of a broader response to precarity that has reaffirmed normative modes of life. For example, Lauren Berlant (2011) argues that conditions of precarity have led to deepened aspirations for and reinvestments in the normative good life—a
stable job, middle‐class home, guaranteed rewards for hard work, and the promise of upward mobility. These forms of attachment, she suggests, paradoxically become obstacles to fulfilling the very desires that are wrapped up with the aspiration for a good life. This produces what Berlant calls a “relation of cruel optimism” (170).

Alternatively, we could see the denunciation of precarity through the lens of “left melancholy.” Drawing on Walter Benjamin’s use of this term, Wendy Brown (1999) reflects on the ways leftist politics remains mournfully committed to ideals, categories, and movements that have been lost, preventing the possibility of radical change in the here and now.4 To cling to the ideal of full employment and decent jobs, rather than to question waged work as a social and economic requirement, could certainly be an example of left melancholy. But Brown is less interested in specifying the objects of attachment than in showing how the very state of melancholia replaces a political commitment to disruption with an unacknowledged pernicious traditionalism. In other words, perhaps it matters less what one is holding onto, just that one is holding on. Or as Dorothy Day (1952) insisted in her decades‐old article on precarity, “The thing to do is not to hold on to anything.”

Mr. Clarke, like so many social-democratic or social-reformist leftists, implicitly clings to working for an employer as the standard for his own goals. 

This implicit standard is kept separate from Mr. Clarke’s rhetorical references to exploitation, which serve to hide his social-democratic or social-reformist political position. 

Let me make a categorical statement: There is no such thing as a decent wage. To work for an employer is in itself degrading, exploitative and oppressive. The concept of a decent wage serves to hide this exploitative situation (see The Money Circuit of Capital). 

Mr. Clarke, apparently, only aims at refurbishing the welfare state rather than abolishing exploitation. Like Mr. Bush’s own references to exploitation, Mr. Clarke uses the concept as a rhetorical flourish (in his case, to criticize a radical policy of basic income) while conveniently “forgetting” the concept when it comes to the issue of whether wages can ever be decent.

Thus, on Mr. Clarke’s blog, on March 7, 2021, in a post titled http://WHEN YOUR ENEMY’S ENEMY IS NOT A FRIEND we read: 

  In a world based on exploitation and oppression, resistance is ever present. … 

 The US and its junior partners compete with their major rivals and pose a terrible threat to the poor and oppressed countries they seek to dominate and exploit. However, we can’t forget that those countries are themselves class divided societies and that not all the exploitation and oppression that their populations face comes out of Washington. Domestic capitalists are also the enemy and the governments of those countries, even where they clash with US objectives, still represent the interests of these home grown exploiters. [my emphases]

Despite his reference to exploitation, Mr. Clarke conveniently forgets the concept when it comes to referring to a “decent wage.” Nowhere does Mr. Clarke justify his view that there is such a thing as a decent wage. There are undoubtedly better wages and worse wages, but how any wage is decent is something that Mr. Clarke merely assumes rather than demonstrates.

The reference to “decent wages” is a social-democratic trick to hide the fact that there is no such thing as “decent wages” in a society dominated by a class of employers. How can any wage be decent when it involves at a minimum economic coercion and oppression of workers by treating them as things or means for purposes not defined by them (see The Money Circuit of Capital  and  Employers as Dictators, Part One)  but by a minority and, in addition, exploitation that involves producing a surplus (see for example  The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One )?

Furthermore, in the case of workers in the private sector, in the case of both oppression and exploitation, the results of the previous labour of workers is used to further oppress and exploit the workers by means of previous acts of oppression and exploitation–an intensified form of oppression and exploitation (something Mr. Clarke entirely ignores). Mr. Clarke simply ignores this additional feature of exploitation and oppression.

Mr. Clarke thus uses the concept of exploitation for social-democratic purposes–an anti-neoliberal purpose and not an anti-capitalist purpose. Advocating for decent wages while using the word “exploitation” is contradictory–but exploitation is really just a word for Mr. Clarke. Alternatively, Mr. Clarke believes that workers are exploited–but that such exploitation cannot be abolished. He certainly never advocates the abolition of exploitation, and his aim of achieving decent wages simply ignores the issue. 

What I wrote in another post relation to Ms. Dhunna and Mr. Bush’s political position applies as much to Mr. Clarke:

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

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

Wages, Exploitation and the Accumulation of Capital 

This  becomes even more evident when we consider, not only the immediate exchange between workers and employers and the subsequent exploitation but also the antecedent processes of exploitation. When we consider the process of exploitation and oppression of workers as a process, the immediate exchange between workers and employers (whether through collective or individual bargaining) is actually the use of surplus value (symbolized by “s” produced by workers in earlier rounds of exploitation to further exploit them. I referred to this process in my critique of Dhunna and Bush’s conservative use of Marx’s theory of exploitation. From Karl Marx, Capital: A Critique of Political Economy, volume 1, pages 727-730:

Let us now return to our example. It is the old story: Abraham begat Isaac, Isaac begat Jacob and so on. The original capital of £10,000 brings in a surplus-value of £2,000, which is capitalized. The new capital of £2,000 brings in a surplus-value of £400, and this too is capitalized, transformed into a second additional capital, which in its turn produces a further surplus-value of £80. And the process continues in this way.

We leave out of account here the portion of the surplus-value consumed by the capitalist. We are also not interested, for the moment, in whether the additional capital is joined on to the original capital, or separated from it so that it can valorize itself independently. Nor are we concerned whether the same capitalist employs it who originally accumulated it, or whether he hands it over to others. All we must remember is this: by the side of the newly formed capital, the original capital continues to reproduce itself and to produce surplus-value, and this is true of all accumulated capital in relation to the additional capital engendered by it.

The original capital was formed by the advance of £10,000. Where did its owner get it from? ‘From his own labour and that of his forefathers’, is the unanimous answer of the spokesmen of political economy. And, in fact, their assumption appears to be the only one consonant with the laws of commodity production.

But it is quite otherwise with regard to the additional capital of £2,000. We know perfectly well how that originated. There is not one single atom of its value that does not owe its existence to unpaid labour. The means of production with which the additional labour-power is incorporated, as well as the necessaries with which the workers are sustained, are nothing but component parts of the surplus product, parts of the tribute annually exacted from the working class by the capitalist class. Even if the latter uses a portion of that tribute to purchase the additional labour-power at its full price, so that equivalent is exchanged for equivalent, the whole thing still remains the age-old activity of the conqueror, who buys commodities from the conquered with the money he has stolen from them.

If the additional capital employs the person who produced it, this producer must not only continue to valorize the value of the original capital, but must buy back the fruits of his previous labour with more labour than they cost. If we view this as a transaction between the capitalist class and the working class, it makes no difference that additional workers are employed by means of the unpaid labour of the previously employed workers. The capitalist may even convert the additional capital into a machine that throws the producers of that capital out of work, and replaces them with a few children. In every case, the working class creates by the surplus labour of one year the capital destined to employ additional labour in the following year.5 And this is what is called creating capital out of capital.

The accumulation of the first additional capital of £2,000 presupposes that a value of £10,000 exists, advanced by the capitalist, and belonging to him by virtue of his ‘original labour’. The second additional capital of £400 presupposes, on the contrary, only the prior accumulation of the £2,000, of which the £400 is the capitalized surplus-value. The ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist has accumulated, the more is he able to accumulate.

The surplus-value that makes up additional capital no. 1 is the result of the purchase of labour-power with part of the original capital, a purchase which conformed to the laws of commodity exchange and which, from a legal standpoint, presupposes nothing beyond the worker’s power to dispose freely of his own capacities, and the money-owner’s or commodity-owner’s power to dispose freely of the values that belong to him; equally, additional capital no. 2 is merely the result of additional capital no. 1, and is therefore a consequence of the relations described above; hence each individual transaction continues to conform to the laws of commodity exchange, with the capitalist always buying labour power and the worker always selling it at what we shall assume is its real value. It is quite evident from this that the laws of appropriation or of private property, laws based on the production and circulation of commodities, become changed into their direct opposite through their own internal and inexorable dialectic. The exchange of equivalents, the original operation with which we started, is now turned round in such a way that there is only an apparent exchange, since, firstly, the capital which is exchanged for labour-power is itself merely a portion of the product of the labour of others which has been appropriated without an equivalent; and, secondly, this capital must not only be replaced by its producer, the worker, but replaced together with an added surplus. The relation of exchange between capitalist and worker becomes a mere semblance belonging only to the process of circulation, it becomes a mere form, which is alien to the content of the transaction itself, and merely mystifies it. The constant sale and purchase of labour power is the form; the content is the constant appropriation by the capitalist, without equivalent, of a portion of the labour of others which has already been objectified, and his repeated exchange of this labour for a greater quantity of the living labour of others.

The immediate exchange between workers and employers is an exchange of equivalents, so that workers receive the value of their cost of production. However, when considering the larger context of previous production, then the immediate exchange between employer and workers is a semblance . The employer uses a part of the surplus produced by the workers in a previous round as means of production (machines, raw material, buildings, etc.) and another part (socially as money and physically as means of consumption, such as food, clothing, shelter) to further employ them (in addition to the initial investment). 

If this is the case, how can anyone who believes in the existence of class exploitation refer to wages as decent wages? There is no such thing. Wages used to control the working class and to exploit them in the present, when conceived in the continuous process of production and exchange, are derived from surplus value produced in antecedent rounds of production so that the wage they receive today is the result of past exploitation and oppression.

The present domination of workers at work by employers is a consequence of past accumulation of surplus value and its investment in the further exploitation of workers.  How anyone who is anti-capitalist could refer to wages as “decent” is beyond me–unless they are really only anti-neoliberal (a particular form of capitalism but not capitalism as such) and not anti-capitalist, despite the rhetoric to the contrary. 

Again, the issues of exploitation and the accumulation of capital need to be linked together when determining whether there is such a thing as a decent wage. The following couple of long quotes by  Teinosuke Otani (2018) points to this need –a need that Mr. Clarke ignores by referring to decent wages as a primary aim without even engaging into inquiry into the nature of capitalist relations of production and exchange.

The first long quote has to do with what is called simple reproduction, where the private employer exploits workers by obliging them to work for more time than they themselves cost to produce, thereby enabling the private employer or capitalist to appropriate and then consume the entire surplus value (profit) produced. Since the entire surplus value (profit) is consumed, each year the same level of investment arises–simple reproduction. 

From  Teinosuke Otani (2018),  A Guide to Marxian Political Economy: What Kind of a Social System Is Capitalism?, pages 218-224 ( emphases in the original):   

8.4 Capital as the Materialisation of Unpaid Labour of Others

Under simple reproduction, it is assumed that the capitalist consumes the entirety of the surplus-value appropriated from the worker year after year. Now let’s assume that during a period of 5 years, a capital value of 1000 brings the capitalist a surplus-value of 200 every year and that the capitalist consumes this entire amount. At the end of the 5 years, he still has the 1000 in capital value that he possessed at the outset, but over the 5 years, he has appropriated 1000 in surplus-value from the worker and consumed this 1000 in value.

The capitalist would likely say: «It is precisely because I initially possessed 1000 in value, as the fruit of my own labour, that I was able to appropriate and consume 200 in value every year. The 1000 in value that I advance each year—no matter how many years this is repeated—is the initial value created by my labour».

The situation appears quite different, however, if we carefully observe the process as repeated reproduction.

Let’s take our capitalist at his word here and assume that the 1000 in value he started off with was appropriated through his own labour, so that it is the materialisation of his own labour.

During the 5-year period, the capitalist consumes a sum of value equal to the value he initially possessed. Yet after the 5 years, he is still in possession of a sum of value equal to what he started off with. Why? What is clear is that it is precisely because the capitalist has received the 1000 in surplus value for free that he can still have 1000 in value despite having consumed that amount. The 1000 that he holds after 5 years is thus the result of the 1000 in surplus-value appropriated during the 5 years, merely representing the total sum of 1000 in surplus-value obtained for free. This point can be well understood if we consider what would happen to the capitalist, who consumes 200 in value every year, if he did not appropriate any surplus-value during those years. In such a case, even if he had 1000 the first year, he would have no alternative but to consume 200 every year, reducing by that amount the sum of money that could be advanced as capital. After 5 years, the sum would reach zero and he would cease to be a capitalist. The fact that he is able to still exist as a capitalist at the end of 5 years, with 1000 in capital, is clearly the outcome of appropriating 200 surplus-value every year over the course of that period.

The capitalist in our example has appropriated the materialisation of 1000 in value from another person’s labour during a 5-year period. Since the capitalist is still in possession of 1000 in value after 5 years, having lived by consuming 200 per year, his 1000 is nothing but the materialisation of the labour of others. Even if the capital value the capitalist initially possessed was the materialisation of his own labour, the capital value he is now in possession of after 5 years is the materialisation of the worker’s surplus-value, which is to say, thematerialisation of the labour of others. Starting from the sixth year, the capitalist appropriates further surplus-value that is the materialisation of others’ labour by means of capital value that is also purely the materialisation of the labour of others. 

8.5 Reproduction of Capital-ownership Through Appropriating the Labour
of Others

At first glance, the capital relation, which is the relation of production between capitalists and workers, seems to continue to exist, as is, year after year. In particular, it seems that the pivot of this continuity is the capitalist’s continued possession of capital, which he owned from the outset. In fact, however, as noted in the previous section, the capital relation is not an inorganic entity like a cornerstone, which cannot collapse once put in place unless some outside force is applied, but rather is maintained by being constantly reproduced and formed through the labour of labouring individuals within the production process. This is similar to how the human body is maintained by the infinite number of cells that compose it being replaced every day by newly created ones.

… 

Now let’s imagine that a person with no money borrows 1000 in value from someone (assuming that the loan is free of interest) and makes it function as capital for a 5-year period, during which he appropriates 200 in surplus-value every year and that after 5 years he repays the 1000. Once the loan had been repaid, he would return to his penniless state and cease to be a capitalist. In this case, the fact that he was able to exist as a capitalist for 5 years was not because he held on to 1000 in value during the 5 years. Indeed, if the 1000 had not functioned as capital, he would have consumed the 1000 during the 5 years, leaving him with nothing but the debt for that amount. The reason the capitalist is instead able to still have 1000, and was able to consume 200 in value every year, is that during those 5 years, he made the 1000 in value function as capital and was thus able to appropriate 200 in surplus-value from workers each year. It is precisely because of appropriating this unpaid labour that the capitalist is able to exist as a capitalist for a period of 5 years.

Even if, during the 5-year period, he had been able to live without consuming the 200 of surplus-value or had somehow been able to procure a separate consumption fund to last the 5 years, so that even after repaying the 1000 by the end of that period he would have a total of 1000 in value appropriated from workers, it would still be clear that this value is the mass of surplus-value appropriated from the workers.

In short, the capital value owned by the capitalist must sooner or later, through the progression of reproduction, be transformed into the materialisation of the appropriated labour of others, so that the ownership of capital value by the capitalist (even if initially the result of his own labour) is transformed into the outcome of the appropriation of others’ labour, i.e. transformed into the outcome of exploitation carried out in the production process.

In simple reproduction, it is assumed that the original investment came from the labour of the purchaser of the labour power of workers and of the means of production (machinery (such as computers), buildings, raw material, and other such products), but on the basis of that assumption the preservation of the same initial investment arises through the constant exploitation of workers.

In simple reproduction the preservation of the original value of the investment year after year, therefore, is due to the continued exploitation of workers year after year. Can the wages the workers receive then be considered in any way decent under such circumstances? Let Mr. Clarke and other social democrats explain this. 

When we consider the real accumulation of capital, where part of the surplus value (profit) produced for free by workers and appropriated by private employers (capitalists) for no equivalent is not consumed but ploughed back into further investments, not only is the original value of original capital preserved through the continued exploitation of workers but the relation between the original capital invested and the new capital invested due to the exploitation of workers increasingly becomes smaller and smaller relatively as the accumulation of capital and the continuous exploitation of workers proceed. From Otani, pages 228-234:  

Our assumption here again will be that a capitalist has advanced 1000 in value and then appropriates 200 in surplus-value, all of which is subsequently advanced as additional capital.

Where does the capitalist get this 1000 in capital? The capitalists and the economists who defend their interests respond in unison that this capital was the fruit of the capitalists’ own labour or that of their forbearers. But we have already seen that, even seen from the perspective of simple reproduction, all capital is transformed into a mass of unpaid labour of others through the recurrence of reproduction and that capital-ownership is also reproduced through the appropriation of unpaid labour. But, for now, let us accept the capitalist’s view of the situation.

… commodity holders in the sphere of commodity exchange recognise each other as private owners, but in so doing, they do not concern themselves with how the other person came to possess his commodity. Instead, they can only assume that this other person obtained it through his own labour. This socially accepted assumption that a private owner’s property title stems from own labour is the property laws of commodity production.

When the capitalist initially appears on the market with 1000 and purchases means of production and labour-power at their value, those involved in the commodity and labour markets do not care how he came into possession of the 1000 in value, provided he is the proper owner of that sum. Those involved in the transaction all assume with regard to each other that commodities and money were obtained through their own labour, with each quite content to declare: «I worked to save up this 1000» or «It was obtained through my parents’ hard work». And it seems that this is the only assumption that could be made, according to the property laws of commodity production.

The situation is completely different, however, in the case of the 200 that the capitalist seeks to advance as additional capital. We are perfectly familiar with the process that generates this sum of value, knowing that it was originally surplus-value. This means that the 200 in its entirety is the objectification [materialisation] of the unpaid labour of others. The additional means of production and additional labour power purchased with this sum are nothing more than a new form taken by this value qua [as] objectification of unpaid labour.

Viewed as a transaction between the capitalist class and working class, we have a situation where the working class, through its surplus-labour in the current year, creates the new capital that becomes the additional means of production and additional labour-power the following year.

Now let us assume that the 200 is advanced in the second year as additional capital and yields 40 in surplus-value [the same rate of profit as the initial investment of 1000 with a surplus value of 200: 200/1000=40/200=1/5=20 percent]. Since the original capital also generates 200 in surplus-value in the second year, by the third year, there is 440 (in addition to the 1000) that can be advanced as capital [First year: 200s from the initial exploitation of workers+ second year, an additional 200s  from the 1000 again invested and used to exploit the workers +the 40s produced in the second year by the workers and used for further investment in the third year=440]. Not only is 400 unmistakably the objectification of unpaid labour, 40 is the objectification of unpaid labour appropriated through the additional capital, which itself is the objectification of unpaid labour. If this process of accumulating all the surplus-value is repeated for the subsequent 4 years, by the end of that period the capitalist will have—in addition to his original capital of 1000, which we could call the «parent»—the surplus-value appropriated through the parent capital during the 4 years… Together this forms an «offspring» of 1074. So if the capitalist advances the aggregate capital in the fifth year, there will be 2074 of capital («parent» and «offspring») in operation that year. [The capitalist is assumed to exploit workers to the extent of 20 percent per unit. At the end of the first year, 1000×1.2=1,200; this is invested in the second year, and at the end of the second year, 1,200×1.2=1,440; this is invested at the beginning of the third year, and at the end of the third year, 1,440×1.2=1,728; this is invested at the beginning of the fourth year, and at the end of the fourth year, 1,728×1.2=2074, which again can be invested at the beginning of the fifth year…]. 

Even if we assume that the capitalist possessed the 1000 of the 2074 to begin with, he certainly cannot claim that the remaining 1074 in value was created through his own labour. As long as it is recognised that the 200 in surplus-value appropriated every year from the 1000 in capital is the objectification
of surplus-labour, then this 1074 in value is, from top to bottom, the surplus-value transformed back into capital and thus the objectification of labour of others. … In other words, we are dealing with a mass of surplus-labour appropriated through a mass of surplus-labour.

The more the reproduction of capital is repeated, the smaller the original capital advanced, until it becomes an infinitesimal amount. The surplus-value transformed back into capital, whether it is made to function as capital in the hands of the person who accumulated it or in the hands of someone else, comes to represent the overwhelming part of the capital that currently exists.

The capitalist every year buys the means of production and labour-power on the commodity market and labour market in accordance with the property laws of commodity production in order to repeatedly carry out production. The result of this is that the capitalist appropriates unpaid living
labour on an increasingly large scale by making the unpaid surplus-labour of others function as capital. Marx refers to the capitalist’s appropriation of unpaid labour in this manner as the laws of capitalist appropriation.

In the market, which is the surface layer of capitalist production, the property law of commodity production operates. But if we consider the production of capital that underlies this in terms of social reproduction, it becomes clear that the law of capitalist appropriation is in operation. Where the capital relation exists, the law of capitalist appropriation is the necessary consequence of the property laws of commodity production. Marx expresses this reality by referring to the inversion of the property laws of commodity production in the laws of capitalist appropriation.

The surplus-value qua ]as] objectification of the surplus-labour of another person, which the capitalist appropriates in the production process, is turned into capital; and the ownership of this capital value is thus the result of the appropriation of surplus-value in the production process. The capitalist’s
appropriation of surplus-value in the production process precedes, and brings about, his ownership of capital. Here it is precisely the production of surplus-value by the labouring individuals first. Rather, it is precisely the behaviour of the labouring individuals within the production process that is always generating the ownership of the means of production by the capitalist within the production process that generates capital ownership.

At first glance, there seemed to be a vicious circle with regard to capitalist ownership of the means of production by the capitalist and his appropriation of surplus-value, wherein the latter is only possible through the former, but the latter always generates the former. However, within this relation,
the active determining moment that continues capitalist production as such is the constant reproduction of products within the production process by the labouring individuals and the constant production of surplus-value. Labouring individuals are the active subject of continual production,
regardless of the form of society, but under capitalist production, we have a situation where labouring individuals completely separated from the conditions of labour come into contact with the means of production in the production process as things belonging to others, which means that the resulting
surplus-labour always belongs to others as well, and through this there is the continual reproduction of capital and wage-labour and the relation between them. Thus, in terms of the
capitalist ownership of the means of production, and the capitalists’ appropriation of surplus-value, it cannot be said that the former is the immovable premise or even that it is a vicious circle where it cannot be said which of the two comes first. Rather, it is precisely the behaviour of the labouring individuals within the production process that is always generating the ownership of the means of production by the capitalist.

When conceived as a continuous process of exploitation and accumulation of capital, the idea of “decent wages” sounds and is hollow. The idea of “decent wages” completely ignores the whole process of exploitation founded on previous exploitation. Mr. Clarke, practically, by referring to “decent wages,” converts his references to exploitation into mere words, emptied of content. 

What is necessary is to criticize the claims of capitalist society’s own ideologues. From Elena Lange (2021),  Value without Fetish: Uno Kōzō’s Theory of ‘Pure Capitalism’ in Light of Marx’s Critique of Political Economy, page 33: 

… Marx was less interested in contrasting the capitalist mode of production with the utopias of socialism, but in contrasting the bourgeois mode of production with its own claims.

Mr. Clarke, despite his nod towards Marx’s theory of exploitation, seems to have little interest in critiquing the claims of the ideologues of employers when he refers to decent wages. 

The Parallel of Decent Work and Decent Wages: The Case of the Social-Democratic International Labour Organization (ILO) 

Mr. Clarke has more in common with the social-democratic rhetoric of the International Labour Organization (ILO) than with any Marxian critique of capitalist society. The ILO talks about “decent work” and the like, and it claims that labour should not be treated as a commodity–but workers need to treat themselves necessarily as commodities, and euphemisms about “decent wages” and “decent work” serve to hide that fact. From Gerry Rodgers, Eddy Lee, Lee Swepston and Jasmien Van Daele (2009),  The International Labour Organization and the Quest for Social Justice, 1919–2009, page 7: 

Key passages from these documents are reproduced in Appendix II. Together, they identify the principles, issues and means of governance that lie at the heart of the ILO ’s work.

Five basic principles can be distinguished in these texts.

  • Lasting peace cannot be achieved unless it is based on social justice, grounded in freedom, dignity, economic security and equal opportunity.
  • Labour should not be regarded merely as a commodity or an article of commerce.
  • There should be freedom of association, for both workers and employers, along with freedom of expression, and the right to collective bargaining.
  • These principles are fully applicable to all human beings, irrespective of race, creed or sex.
  • Poverty anywhere constitutes a danger to prosperity everywhere, and must be addressed through both national and international action.

These moral and political principles guide the action of the ILO , and provide the cognitive framework for its work – the spectacles through which the ILO sees the world. The first of these, that peace must be based on social justice, has been considered above. It lays out the overriding reason for the existence of the Organization. The second provides the fundamental principle guiding its action. It expresses the dignity of labour and the recognition of its value, in contrast to the Marxian notion that, under capitalism, labour becomes a commodity. In the ILO ’s vision, all forms of work can, if they are adequately regulated and organized, be a source of personal well-being and social integration. Of course, labour is bought and sold, but market mechanisms are subordinate to higher goals. The original 1919 Constitution states that “labour should not be regarded merely as a commodity”. By the time of the Declaration of Philadelphia, the same idea is expressed more strongly: “Labour is not a commodity.”

Labour in Marxian economics is certainly not a commodity, but labour power is–the capacity to work or to use means of production to produce a product. The ILO simply denies that it labour (power) should be a commodity–all the while denying the reality that it is in fact a commodity and must be a commodity if capitalist society is to emerge and to continue to exist. (Of course, unfree forms of labour (so that workers cannot freely choose a particular employer) can exist side by side with free labour–but the existence of free labour power as a commodity is still necessary. It may not be very pleasant to think about the social implications of the necessary existence of labour power as a commodity, but it is necessary to do in order to enable the working class to formulate policies that will more likely enable them to control their own lives by abolishing all class relations. 

Just as the ILO places a veil over the eyes of workers by arguing that labour (power) should not be a commodity–whereas it is necessarily a commodity in a society dominated by a class of employers, with the associated economic, social and political structures–so too do Mr. Clarke’s references to decent wages place a veil over our eyes by implicitly denying that workers are necessarily and continuously exploited. 

I would like to know what Mr. Clarke means by decent wages. Are the wages received by the unionized workers for Magna International, Air Canada, Rogers Communication, Suncor Energy or Telus decent wages? (see various posts that attempt to calculate the rate of exploitation for these unionized workers). If so, how does Mr. Clarke square such a view with the fact of exploitation? If not, then the concept of decent wages has no relevance for workers other than as an ideological cloak for their continued exploitation.

Or are the wages that I received as a brewery worker in the early 1980s decent wages? For example, at the brewery where I worked in Calgary, Alberta, Canada, in the collective agreement between the Brewery Employers Industrial Relations Association (BEIRA) (for Carling O’Keefe) and the Western Union of Brewery, Beverage, Winery and Distillery Workers, Local 287, dated April 1, 1980 to March 31, 1983, bottling operators received a base wage of $13.20 on April 1, 1982. Sick pay was 12 days per year, a guaranteed wage plan, life insurance up to $20,000, a long-term disability plan, paid basic Alberta Health Care Insurance Plan, hospital expenses to a maximum, major medical expenses (with a yearly deductible of $10 for an individual and $20 for a family)), a dental plan, etc. In fact, many of the benefits specified by Mr. Clarke in his reference to Dhunna and Bush’s article (“much else beside”) are included in the collective agreement. ,

(I ended up operating a machine, at first part of the soaker from the end where the cleaned bottles come out of the soaker as well as the EBI (electric bottle inspector), and then when there was technological change, just the EBI unit (and maintaining the line going into the filler free of glass).

Did I receive a decent wage? What of the surplus value that had been used in previous rounds of accumulation that were used to further exploit us? Should not these facts be  taken into account when judging whether there is anything like a decent wage? Apparently not. 

Conclusion

Mr. Clarke refers to exploitation and capitalism often enough, but he then conveniently forgets about it when he refers to “decent wages.” Mr. Clarke is anti-neoliberal but not really anti-capitalist–despite the rhetoric to the contrary. A real anti-capitalist perspective would never refer to any wage as decent–or for that matter any work that involves working for an employer as decent work. 

In a follow-up post, I will critically analyze Mr. Clarke’s references to “economic coercion.” I may or may not integrate such  an analysis with a critique of Mr. Clarke’s criticisms of a basic income. 

 

The Rate of Exploitation of Telus Workers , One of the Largest Private Employers in Toronto, Ontario, and Vancouver, British Columbia

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  Vancouver according to revenue (see A Short List of the Largest Employers in Vancouver, British Columbia, Canada, Mainly Based on Revenue). Telus is on both lists.

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, the Canadian Imperial Bank of Commerce (CIBC) workers, Rogers Communications, Toronto Dominion (TD) Bank and Suncor Energy. 

The Nature of the Rate of Exploitation

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

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

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

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

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

Conclusions First

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

The rate of exploitation or the rate of surplus value=s/v=2485.3/4258.7=58%.

That means that for every hour worked that produces her/his wage, a worker at Telus works around an additional 35 minutes for free for Telus. Alternatively, in terms of money, a regular Telus worker who receives $1 of wage or salary produces $0.58 surplus value or profit for free. 

Assuming either a 7.5 hour working day  or an 8 hour working day: 

  1. In a 7.5- hour working day (450 minutes), a Telus worker produces her/his wage in about 285 minutes (4 hours 45 minutes) and works 165 minutes ( 2 hours 45 minutes) for free for Telus. 
  2. In an 8-hour working day (480 minutes), a Telus worker produces her/his wage in about 304 minutes (5  hours 4 minutes) and works 176 minutes (2 hours 56 minutes) for free for Telus. 

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).

Let us look at the management rights clause of the collective agreement between Telus and United Steel Workers (USW) Local 1944 (Telecommunications Workers Union Local 1944), for the period between November 27, 2016 and December 31, 2021.

From page 6 of the collective agreement:

ARTICLE 8 – MANAGEMENT RIGHTS
8.01  Unless otherwise explicitly agreed to in this Agreement, management retains the
exclusive right to manage its operations in all respects including the direction of the
working forces. The Company agrees that any exercise of these rights shall not
contravene the provisions of this Agreement.

8.02  Management and excluded employees shall not normally do bargaining unit work, unless
such work has traditionally been performed by management and excluded employees.

8.03  Although not normal operating practice, occasions may arise when management and
excluded employees may perform bargaining unit work for reasons of training, on-going
familiarization, emergency, other unforeseeable or unpreventable circumstances, or the
correction of minor deficiencies on a customer’s premises which can be completed within
fifteen (15) minutes in the normal course of management performing quality inspections.
No Regular employees will lose their employment as a result of management and
excluded employees performing bargaining unit work for the aforementioned reasons.

8.04  While managers will attempt as far as possible to assign an employee to work for which
the employee has been trained, no part of this Agreement shall be construed as meaning
that an employee shall do only work of the classification for which they are employed, nor
shall any part of this Agreement be construed as meaning that certain work shall be
performed by only certain classified employees.

This management rights clause at least sets explicit limits on the right of management to engage in certain kinds of work reserved for union members–a superior managements rights clause that workers could be used to harass management under certain circumstances (as we did in the brewery in Calgary where I worked–the collective agreement had a similar limiting clause that enabled us to monitor the actions of foremen if they pressured us too much).

Nonetheless, despite the explicit limits on the right of management, the general power of management to direct operations as it sees fit and thus to use workers for purposes over which workers have little say remains intact.

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

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

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

Data on Which the Calculation Is Based

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

I first give revenue and expenses figures according to the Telus Annual Report (2020), and then indicate some needed adjustments so that they accord more with Marxian economics. Amounts are in millions of Canadian dollars, unless otherwise indicated.

Revenue

Operating revenues and other income $ 15,463 million or $15.463 billion

Income before income taxes $1,711 million, or $1.711 billion

Operating expenses

Goods and services purchased 6,268
Employee benefits expense 3,701
Depreciation 2,107
Amortization of intangible assets 905

Total operating expenses=12,981


[Operating Income (Operating revenues and other income – operating expenses)=2482]
Financing costs 771
Income Before Income Taxes 1,711 [2482-771=1711]

Adjustments

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

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.

Total Expenses Adjustments

Adjustment of Total Labour Costs (Expenses) 

There seems to be an inconsistency in the calculation of purchasing the capacity to work (labour power) of workers at Telus. Above, the category “Employee benefits expense” is $3.701 billion. However, the annual report also states the following, in more detail: 

Employee benefits expense – gross
Wages and salaries $ 3,668 
Share-based compensation 173 
Pensions – defined benefit 102
Pensions – defined contribution  94 
Restructuring costs 49 
Employee health and other benefits 190 
4,276

We can reconcile these numbers by looking at the category “Capitalized internal labour costs, net”:

Capitalized internal labour costs, net

Contract acquisition costs

Capitalized (74) 
Amortized 55

Contract fulfilment costs

Capitalized (2) 
Amortized 4

Property, plant and equipment (350) 
Intangible assets subject to amortization (208)

(575)

Numbers in parentheses need to be subtracted, and numbers without parentheses are added. The subtracting and adding results in a negative 575. If we subtract 575 from 4,276, we obtain 3,701. 

Let us look at the category “Capitalized internal labour costs, net.” The category refers to the following (  https://smallbusiness.chron.com/accounting-rules-internal-capitalization-labor-37119.html): 

Capitalizing Labor Costs

The IRS and standardized accounting rules allow for the cost of putting property and equipment into service to be added to the direct cost of purchasing the property and equipment for the purpose of capitalization. After all, the equipment is not usable until it is properly set up and in working order. Common labor costs that you can capitalize include the cost of assembly, construction and architecture.

The key to including the labor as part of the fixed asset cost is that the labor must be directly related to putting the property or equipment into service, and the labor costs are tracked separately from any other work that may be done by the employee or contracted labor personnel.

The difference seems to have to do with the purchase of turn-key machinery and equipment versus in-house production (including setting up and physical adjustments to ensure proper working order) versus in-house production (although it is unclear what is meant by “Property, plant and equipment.” Are these purchased externally or produced in-house? 

However, I will ignore these adjustments in the annual report since the nature of the category “Capitalized internal labour costs” in effect excludes Telus workers who perform work directly for Telus.

Therefore, I treat the whole category of “Capitalized internal labour cost” as a cost for the employment of Telus workers and hence include it in the calculation of variable capital. This does not change anything in terms of total operating expenses, as far as I can tell, since I assume that capitalized labour costs are included in the category “Goods and services purchased.” There is a shift in the internal distribution of operating expenses but no change in the absolute amount of operating expenses in this case.

The two adjusted operating expense categories would be, for now: 

Goods and services purchased 5,693
Employee benefits expense 3,701

There is another category that at least needs some possible explanation: 

Employee-related information
Total salaries and benefits6 (millions) $ 4,200

I have been unable to account for this except in the following manner: the difference between 4,276 and 4,200 is 76. If we subtract capitalized “Contract acquisition costs” (74) and capitalized “Contract fulfilment costs” (2) from 4,276, we obtain 4,200. However, I still use 4,276 for variable capital for the same reasons as I used 4,276 rather than 3,701. 

On the other hand, an adjustment needs to be made in total labour costs or expenses due to “Share-based compensation.” In other posts, I have generally treated some of this as a form of surplus value since some share-based compensation is compensation due to managers being able to meet or exceed specified targets and thus is a function of exploiting other workers. I have conservatively used 10% of share-based compensation as a basis for calculating the amount of surplus value obtained through exploiting other workers. That this is a conservative amount can be seen when we look at the subcategories of the category: 

Restricted share units $131
Employee share purchase plan $33
Share option awards $9
Total: $173 

Restricted share units seems to be a function of how well targets are met: 

(b) Restricted share units
General
We use restricted share units as a form of retention and incentive compensation. 

We also award restricted share units that largely have the same features as our general restricted share units, but have a variable payout (0%–200%) that depends upon the achievement of our total customer connections performance condition.

The distribution of share units according only to performing certain services versus meeting performance (target) conditions is as follows: 

Number of non-vested restricted share units as at December 31

Restricted share units without market performance conditions

Restricted share units with only service conditions 5,718,328
Notional subset affected by total customer connections performance condition 298,957

Subtotal: 6,017,285

Restricted share units with market performance conditions

Notional subset affected by relative total shareholder return performance condition 896,870 

Total: 6,914,155

“Total customer connections performance condition” seems to refer to the absolute number of customers (although I am unsure of this). In any case, if we only include the “restricted share units with market performance conditions” as originated from the exploitation of other workers, we have 896,870/6,914,155=13%. Hence, my use of 10 percent as an estimate of the percentage of share-based compensation that really has its source in surplus value is conservative, but I use it to be consistent with other posts. Ten percent of 173 is 17.3. This amount is added to the categories “Operating revenues and other income” and  “Income before income taxes” and subtracted from “Total labour costs.” 

We now have the following: 

Temporarily adjusted Income before income taxes (surplus value (s) $1728.3 million or $1.7283 billion 
Final adjusted total labour costs (variable capital (v) $4258.7

Adjustments of financing costs or expenses 

As explained in another post, interest in many instances can be treated as part of the surplus value produced and therefore added to net income since, although from the point of view of the individual capitalist it is an expense, from the capitalist economy as a whole it is derived from the production of surplus value. 

Let us look at more detail at financial expenses. 

Financing costs or expenses 

Interest on long-term debt, excluding lease liabilities – gross 676
Interest on long-term debt, excluding lease liabilities – capitalized (37)
Interest on lease liabilities 70
Interest on short-term borrowings and other 5
Interest accretion on provisions 16
Long-term debt prepayment premium 18

Total Interest expense 748 (adding all the above and subtracting 37)
Employee defined benefit plans net interest 16
Foreign exchange losses 14
Interest income (7)

Financing costs 771 [748+16+14-7]

In relation to the category “Interest on long-term debt, excluding lease liabilities–capitalized,” (that is to say, “Capitalized interest”) as I explained in my post on the rate of exploitation of Air Canada workers and Rogers Communications workers:

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

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

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

Accordingly, like Rogers Communication, I treat “Interest on long-term debt, excluding lease liabilities–capitalized,” (as the accountants have done) as a real expense for the purposes of calculation because it is negative (in parentheses).

As for the category “Interest accretion on provisions,” as I wrote in another post, the category of “accretion” means the following, according to Wikipedia:

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

I treated accretion as a real expense; however ,”interest on accretion on provisions” seems to be a different category. From the Internet: 

Accreted Interest means Interest accrued on a Loan that is added to the principal amount of such Loan instead of being paid as it accrues.

Accrued interest seems to form part of the surplus value at the macro or aggregate level and hence is treated accordingly. 

I had some initial problems when dealing with the category “Employee defined benefit plans net interest.” I debated whether it should form part of variable capital (wages, if you like) since presumably it was used to fund Telus workers’ pension, or whether it should form part of surplus value produced since it presumably was interest paid on meeting pension fund liabilities. I opted for treating it as part of surplus value rather than variable capital. I used an analogy: if a capitalist borrowed money to pay wages and salaries, and had to pay interest, then the interest paid would be derived from surplus value produced. 

I treat the category “Foreign exchange losses” as a real expense. If there are reasons for treating it as part of surplus value, feel free to provide such reasons. I certainly would like to make the calculations of the rate of exploitation as accurate as possible.

In relation to the category “Interest income,” in the annual report, is accurately depicted as income (and hence is not really an expense) and is therefore in parentheses (it is subtracted from financing costs or expenses, or reduces the level of expenses). Hence, this way of presenting interest income is identical to the way it really is at the macro level–as income. Accordingly, I treat it as part of surplus value and actually add it to the other forms of interest.

Interest charges considered part of surplus value

Interest on long-term debt, excluding lease liabilities – gross 676
Interest on lease liabilities 70
Interest on short-term borrowings and other 5
Interest accretion on provisions 16
Long-term debt prepayment premium 18
Employee defined benefit plans net interest 16
Interest income 7
Total: 808

With these adjustments, real financing costs are as follows:

Adjudged Financing costs or expenses 

Interest on long-term debt, excluding lease liabilities – capitalized (37)
Foreign exchange losses 14

Total adjusted financing costs or expenses 51

If we subtract 51 from 808, we obtain 757, which is considered additional surplus value

Total Revenue Adjustments and Final Adjustment 

The adjustments in financing costs or expenses to 757 (808-51=757) means that this amount is shifted to the category “Temporarily adjusted income before income taxes.” Accordingly, we have the following final amounts that are relevant for establishing the rate of exploitation of Telus workers:

Final adjusted Income before income taxes (surplus value (s) $2485.3 million or $2.4853 billion 
Final adjusted total labour costs (variable capital (v) $4258.7

The Rate of Exploitation 

The rate of exploitation or the rate of surplus value=s/v=2485.3/4258.7=58%.

That means that for every hour worked that produces her/his wage, a worker at Telus works around an additional 35 minutes for free for Telus. Alternatively, in terms of money, a regular Telus worker who receives $1 of wage or salary produces $0.58 surplus value or profit for free. 

The length of the working day at Telus varies somewhat, but less so than for some other employers. According to one collective agreement, the basic working day is 7.5 hours and the working week is 37.5 hours: 

Basic Hours of Work

A5.03 (a) (i)

The basic hours of work per day for a Regular full-time employee will be 7.5 hours. The basic hours of work per week for a Regular full-time employee will be 37.5 hours over one (1) week or 75 hours over two (2) weeks provided that in any given calendar week, basic hours of work will be assigned on consecutive days, unless another arrangement is mutually agreed to by the employee and management. Notwithstanding the above, in any given calendar week, up to 20% of the Regular full-time employees in an appropriate work group may be assigned to a work week in which the basic hours are not scheduled on consecutive days. 

Searching on the Internet, I also found the following:

They are good, but capped at 37.5 hrs/week which is entirely reasonable.

Flexible 9-5

Assuming either a 7.5 hour working day  or an 8 hour working day: 

  1. In a 7.5- hour working day (450 minutes), a Telus worker produces her/his wage in about 285 minutes (4 hours 45 minutes) and works 165 minutes ( 2 hours 45 minutes) for free for Telus. 
  2. In an 8-hour working day (480 minutes), a Telus worker produces her/his wage in about 304 minutes (5  hours 4 minutes) and works 176 minutes (2 hours 56 minutes) for free for Telus. 

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).

Let us look at the management rights clause of the collective agreement between Telus and United Steel Workers (USW) Local 1944 (Telecommunications Workers Union Local 1944), for the period between November 27, 2016 and December 31, 2021.

From page 6 of the collective agreement:

ARTICLE 8 – MANAGEMENT RIGHTS
8.01  Unless otherwise explicitly agreed to in this Agreement, management retains the
exclusive right to manage its operations in all respects including the direction of the
working forces. The Company agrees that any exercise of these rights shall not
contravene the provisions of this Agreement.

8.02  Management and excluded employees shall not normally do bargaining unit work, unless
such work has traditionally been performed by management and excluded employees.

8.03  Although not normal operating practice, occasions may arise when management and
excluded employees may perform bargaining unit work for reasons of training, on-going
familiarization, emergency, other unforeseeable or unpreventable circumstances, or the
correction of minor deficiencies on a customer’s premises which can be completed within
fifteen (15) minutes in the normal course of management performing quality inspections.
No Regular employees will lose their employment as a result of management and
excluded employees performing bargaining unit work for the aforementioned reasons.

8.04  While managers will attempt as far as possible to assign an employee to work for which
the employee has been trained, no part of this Agreement shall be construed as meaning
that an employee shall do only work of the classification for which they are employed, nor
shall any part of this Agreement be construed as meaning that certain work shall be
performed by only certain classified employees.

This management rights clause at least sets explicit limits on the right of management to engage in certain kinds of work reserved for union members–a superior managements rights clause that workers could be used to harass management under certain circumstances (as we did in the brewery in Calgary where I worked–the collective agreement had a similar limiting clause that enabled us to monitor the actions of foremen if they pressured us too much).

Nonetheless, despite the explicit limits on the right of management, the general power of management to direct operations as it sees fit and thus to use workers for purposes over which workers have little say remains intact.

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

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

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

A Robust or Ambitious Universal Basic Income: An Impossible Dream for Some Among the Social-democratic Left

Introduction

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

In a previous post (The Strawman of a Minimal Universal Basic Income by the Social-democratic Left in Toronto), I pointed out how unethical and dishonest Dhunna and Bush were in their critique of a policy of universal basic income (UBI) since they, for the most part, assume that such a UBI would involve at best a minimum and definitely inadequate level of income for Canadian citizens. There is, however, one exception.

The International Labour Organization and the Principle of a Universal Basic Income (UBI)

There is one situation in which they acknowledge a possible more generous UBI–when they refer to the costs of such a program in relation to GDP analyzed by the International Labour Organization (ILO). Thus, they write:

If our demand consists of a UBI of $24,000 per year for Canadians aged 18 and over, we are looking at a front-loaded cost of $696 billion every year. This is roughly double the current national deficit (approximately $350 billion), or put another way, 40% of Canada’s GDP (for reference, the country’s overall health spending makes up 11.6% of our GDP). A UBI at a lower level of $1,000 per year for people aged 18 and over comes with a more modest $29 billion price tag — roughly 14 percent of the entire federal budget pre-pandemic. On the other hand, a targeted basic income through a negative income tax set at $21,810 (if you are earning below that amount, you would receive a cheque that boosts you to that level) would, according to one study, cost roughly $177 billion a year (the latest Basic Income Canada Network study puts the cost somewhere between $134 to $187 billion). 

In 2018, a study published by the International Labour Organization calculated the costs of a UBI in 130 countries that would raise everyone above the poverty line, and concluded it would on average cost between 20 to 30 percent of GDP. This is a staggering annual cost for one program that, in many countries, is near or even greater than all other government expenditures combined in many countries. 

Let us take a look at the 2018 International Labour Organization report (the ILO itself is a social-democratic organization and hence is itself a reformist organization that assumes the legitimacy of the employer-employee relation–but that only in passing). From Isabel Ortiz et al (2018)., Universal Basic Income Proposals in Light of ILO Standards: Key Issues and Global Costing, page 18:

A meaningful amount of UBI benefits is generally found to be fiscally infeasible (OECD, 2017a; Tanner, 2015; Van Parijs and Vanderborght, 2017). Thus, if governments were to consider the introduction of a UBI at adequate UBI benefit levels that could have a significant impact on the reduction of poverty and inequality, they would need to explore new financing sources.

Proposals include an increase in existing taxes, for example, income, inheritance, capital, corporate, or value added taxes, or the imposition of new taxes on natural resource revenues, financial transactions or robots (Reed and Lansley, 2016). Others have proposed the abolishment of existing tax-free allowances or the taxation of the UBI alongside other incomes to reduce the cost and make it more targeted to low income earners (see OECD, 2017a); such a tax claw back approach would have similar effects to a negative income tax model 13 – care should be taken with the diminished redistributive effect of some financing proposals.

Given that UBI is proposed to redress growing inequalities caused by corporate globalization and new forms of work, it should be redistributive. UBI should not be financed by regressive methods such as taxing households or depriving them from other social benefits, as this UBI policy would give to households with one hand what it would take away with the other.

The ILO discusses three possible scenarios. Page 22:

Scenario 1 assumes the introduction of a UBI set at the level of the poverty line. 

Here social assistance funds are generally replaced by UBI; social insurance schemes are slightly reduced as UBI compensates for a small percentage of this category. Private insurance schemes (for example, private pensions) remain the same. Employers’ contributions do not decrease in this scenario. The conclusion (page 23): 

… the main winners are the majority of citizens in a country. … the majority of the population – are the net winners, a reason why this UBI scenario would reduce inequality.

The second scenario (page 23)

sketches out the introduction of UBI in exchange for cuts in employers’ contributions to social security systems.

Here the conclusion is different: 

 The net losers would be the large majority of people in formal employment who would lose the
higher levels of protection of public social security systems, including low and the middle classes. … From the point of view of financing, the net winners would be corporations….

The third scenario (the scenario generally assumed by Dhunna and Bush) 

presents the most radical neoliberal proposal, the introduction of UBI with the complete abolition of public social insurance.

The conclusion is even more negative than that of the second scenario (page 24): 

In this scenario virtually everybody is a net loser; the poorest will not receive anymore social assistance at the poverty line level; the low and middle classes, before covered by a better social protection system, now they will lose their accumulated social protection benefits.

Unlike Dhunna and Bush, the general conclusion of the ILO is–it all depends on the specific scenario proposed whether UBI will reduce inequality (in income) and benefit more most citizens than currently (page 26):

As outlined earlier, some UBI proposals are in accordance with ILO Conventions and Recommendations, and others are not.

Some scenarios could function to reduce levels of income inequality: 

Indeed, UBI could be the most radical form of the income component of a national social protection floor, an important tool for the advancement of inclusive development and social justice. UBI on its own cannot be considered a panacea to existing and future income security and social protection challenges, but can potentially help to close coverage gaps and provide a basic level of income security.

As I argued in a previous post (A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is Socialist), there is no reason why we should not struggle simultaneously for a robust UBI and an expanded welfare state.

It should be noted, however, that Dhunna and Bush, despite their own distorted presentation of the ILO’s position on the UBI, implicitly use the ILO as a standard for their own social-democratic and reformist aims; why else do they reference the ILO study to justify their conclusions?

They do not, however, question the ILO standards. ILO, though, assumes the legitimacy of the continued existence of a market for workers and hence fails to consider how a struggle for achieving a universal basic income could constitute a means by which to initiate the undermining of a market for workers. Thus, the ILO states (page 29):

Effective labour market institutions are necessary to ensure decent work for all in a
rapidly changing environment.

Since “labour market institutions” involve working for an employer, and working for an employer involves being treated as a thing or means for obtaining more money (the private sector) or as a means for purposes over which workers have little say in their daily lives in the public sector (see The Money Circuit of Capital), the ILO does not consider a scenario where workers seek a UBI, in addition to other social insurance schemes, that threatens the existence of the market for workers or “labour market institutions.” The exclusion of such a scenario reflects the social-democratic nature of the ILO. 

The Public Service International (PSI) and the Principle of a Universal Basic Income (UBI)

Dhunna and Bush refer to a 2019 report by the Public Services Alliance:

In 2019, Public Service International (PSI) released a wide-ranging report assessing UBI pilots and experiments globally, as well as academic literature. The report concluded that, “making cash payments to individuals to increase their purchasing power in a free-market economy is not a viable route to solving problems caused or exacerbated by neoliberal market economics.”

That document contains, ironically, to the following principle (page 3):

At the heart of the critique of UBIs contained in this brief is the failure of the most basic principle of progressive tax and expenditure, which can be summarised as “from each according to their ability, to each according to their need”.

This interpretation of the principle is typical of the social-democratic view: it looks at the problem from the point of view of distribution and consumption of already produced commodities and not according to the process by which such commodities were produced (see A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is Socialist). Employers can exploit and oppress workers, and then, for social democrats, employers can be taxed and some of the revenue can be shifted to those who either cannot find employment with a particular employer or are incapable of working for a particular employer. It is more like a compensatory model than a model that permits people to control their own lives in the totality of their lives: production, distribution and income. 

Let us take a look at this document in more detail. Anna Coote and Edanur Yazici, the authors of this report, refer to the ILO report outlined above in relation to costs, implying that it would cost too much (pages 8-9). However, as has been shown, the ILO concludes that a more robust (though by no means sufficient) UBI could be viable even within a capitalist setting, depending on how it was financed.

On page 10, the authors conclude:

It is a lazy utopian remedy that fails to address issues of class, economic ownership and the productive capacity of the economy.

If a robust UBI begins to question the legitimacy of the market for workers and therefore the legitimacy of the class power of employers, it does indeed address the issues of “class, economic ownership and the productive capacity of the economy.” The authors, however, nowhere question the legitimacy of the class power of employers; they assume its continued existence. 

On pages 11-12, they make the following assertion:

UBI alone cannot build long-term economic self-sufficiency. Small injections of cash, even if regular and unconditional, will not be enough. People must also be able to control what happens to them, to have structures for shared decision-making and access to essential resources.

Since the nature of the kind of society in which we live is that workers and the unemployed are not ‘economically self-sufficient’–if they were, there would not be a market for workers (a so-called labour market). As for ‘people having to be able to control what happens to them,” working for an employer, whether in a unionized setting or not necessarily involves a loss of “control” over “what happens to them” (see for example The Radical Left Needs to Call into Question Existing Social Institutions at Every Opportunity, Part One or Employers as Dictators, Part One and , more generally, The Money Circuit of Capital ).

Although unions limit somewhat the power of employers and hence are to be supported as defensive organizations, they also often function as ideologues of employers by claiming to create conditions of fairness at work when that work is characterized by exploitation and oppression (see Reform Versus Abolition of the Police, Part Six: Unions and the Police). Management rights clauses in Canadian collective agreements, furthermore, explicitly express the lack of control of workers over their work and working conditions (see, for example, Management Rights, Part One: Private Sector Collective Agreement, British Columbia), and even when such a clause does not exist in a collective agreement, it is implied. 

On page 12, Coote and Yazici write: 

If emancipation is the goal, not just ‘inclusion’ or reduction of poverty, UBI is not the answer. If cash payments become the preferred tool for social protection, there is a serious risk of crowding out efforts to build collaborative, sustainable services and infrastructure – and setting a pattern for future development that promotes commodification rather than emancipation.

What then is the answer if the aim is the abolition of the class power of employers and classes in general? How are we to question the power of employers without taking risks? Of course, employers could try to use UBI to dismantle public services–and to counter such a move would require organization and class struggle–as would the maintenance of public services. However, fighting for a robust universal basic income that breaks the link between needs and work does point towards a new kind of society–a society where access to expanded basic needs (since what is basic is itself variable as our capacity to produce our lives changes) do not require us to subordinate our lives to the power of any particular employer. 

The authors do not take seriously the goal of emancipation. If they did, they would at least mention the goal of abolishing the power of employers as a class. Indeed, they implicitly reject such a goal since they advocate for an enhanced welfare state or enhanced welfare capitalism–like Dhunna and Bush. From page 13 :

It is necessary and possible to raise funds to bring greater security, opportunity and power to all people, but the money needed to pay for an adequate UBI scheme would be better spent on reforming social protection systems, and building more and better quality public services.

There is little here that addresses challenging the class power of employers and the abolition of classes; it is a question of reforming capitalism in order “to bring greater security, opportunity and power to all people”–an impossible goal since the general nature of capitalism is to bring insecurity to many while providing security to a dwindling minority–by exploiting and oppressing workers, citizens and migrants. 

The priority for Coote and Yazici is to focus their energies on reforming the class power of employers, not abolishing it (page 13):

The campaign for UBI threatens to divert political energies – as well as funds – from more important causes.

It is necessary and possible to raise funds to bring greater security, opportunity and power to all people, but the money needed to pay for an adequate UBI scheme would be better spent on reforming social protection systems, and building more and better quality public services.

I guess that emancipation from the power of employers is not a very important cause–for social democrats. Indeed, it is likely that for for Dhunna and Bush, for the ILO, for Coote and Yazici and for Public Services International, the goal is not really socialism or the abolition of classes but a humanized form of capitalism, or enhanced welfare capitalism, or capitalism with a human face (see  A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is Socialist ). 

Paying Lip-Service to a Radical Position

There is a very slight recognition of more radical positions that support the idea of a UBI, such as the late David Graeber’s advocacy of such a proposal. They write (page 20): 

Contemporary political theorists such as David Graeber see UBI allowing people to escape from ‘bullshit jobs

They then have a brief section that refers to “radical transformation” (page 21): 

RADICAL TRANSFORMATION

For some of its progressive advocates, UBI is part of a vision of a new social settlement where poverty is eliminated, where everyone has a secure income, where unpaid work is valued on par with paid work, and where inequalities are history. For UK Green Party leaders Jonathan Bartley and Caroline Lucas, it is an “exciting idea because it will help us form a clearer idea of what constitutes welfare, good work and human flourishing, and it would help us towards a more balanced economy which acknowledges what is truly ‘productive’ in its broader sense’”.11 UBI is rarely seen as the only lever to achieve these goals: it is usually envisaged as running alongside a range of progressive reforms as well as more and better public services.

The UK Green Party’s aim in adopting a UBI is not, however, to challenge the existence of the power of employers as a class but at best to restrict such power. Thus, on page 51 of the UK Green Party Manifesto (2019), we read:

Reviewing current employment law to close loopholes that allow employers in the gig economy (where workers are offered freelance work or short-term contracts only) to deny gig workers key rights. We will ensure that gig economy workers always receive at least the current minimum wage, and have job security, sick leave, holiday pay and pension provision.

On the same page, we read further: 

Requiring all employers, no matter their size, to legally recognise any union chosen by their workforce to represent them.

On page 52:

We will support employers to explore four day working weeks in their workplace, driving up productivity as well as boosting the wellbeing of staff.

There is no evidence in the UK Green Party’s manifesto that it propose using the UBI as a means by which to challenge the power of employers as a class; it, like the British Labour Party, seeks to reform the employer-employee relation and not overturn it. Hence, Coote’s and Yazici’s reference to the UK Green Party as radical is similar to some social democrats here in Toronto, who refer to social reforms that do not involve challenging the basic social relations characteristic of a society dominated by a class of employers (such as a market for workers, or a “labour market.”) (see the seven-part series of critiques, beginning with What’s Left, Toronto? Part One).

Coote and Yazici’s extremely brief mention of David Graeber’s Bullshit Jobs: A Theory fails to even address Graeber’s critique of the employer-employee relation as such. From that work:

The modern morality of “You’re on my time; I’m not paying you to lounge around” is very different. It is the indignity of a man who feels he’s being robbed. A worker’s time is not his own; it belongs to the person who bought it. Insofar as an employee is not working, she is stealing something for which the employer paid good money (or, anyway, has promised to pay good money for at the end of the week). By this moral logic, it’s not that idleness is dangerous. Idleness is theft.

This is important to underline because the idea that one person’s time can belong to someone else is actually quite peculiar. Most human societies that have ever existed would never have conceived of such a thing. As the great classicist Moses Finley pointed out: if an ancient Greek or Roman saw a potter, he could imagine buying his pots. He could also imagine buying the potter—slavery was a familiar institution in the ancient world. But he would have simply been baffled by the notion that he might buy the potter’s time. As Finley observes, any such notion would have to involve two conceptual leaps which even the most sophisticated Roman legal theorists found difficult: First, to think of the potter’s capacity to work, his “labor-power,” as a thing that was distinct from the potter himself, and second, to devise some way to pour that capacity out, as it were, into uniform temporal containers—hours, days, work shifts—that could then be purchased, using cash.17 To the average Athenian or Roman, such ideas would have likely seemed weird, exotic, even mystical. How could you buy time? Time is an abstraction!18 The closest he would have likely been able to come would be the idea of renting the potter as a slave for a certain limited time period —a day, for instance—during which time the potter would, like any slave, be obliged to do whatever his master ordered. But for this very reason, he would probably find it impossible to locate a potter willing to enter into such an arrangement. To be a slave, to be forced to surrender one’s free will and become the mere instrument of another, even temporarily, was considered the most degrading thing that could possibly befall a human being.19

As a result, the overwhelming majority of examples of wage labor that we do encounter in the ancient world are of people who are already slaves: a slave potter might indeed arrange with his master to work in a ceramics factory, sending half the wages to his master and keeping the rest for himself.20 Slaves might occasionally do free contract work as well—say, working as porters at the docks. Free men and women would not. And this remained true until fairly recently: wage labor, when it did occur in the Middle Ages, was typical of commercial port cities such as Venice, or Malacca, or Zanzibar, where it was carried out almost entirely by unfree labor.21

So how did we get to the situation we see today, where it’s considered perfectly natural for free citizens of democratic countries to rent themselves out in this way, or for a boss to become indignant if employees are not working every moment of “his” time?

Like Dhunna and Bush, Coote and Yazici do not question how we got to that situation today, nor do they question what can be done about abolishing such a situation and having workers control their own lives again. What both assume is that–the employer-employee relation is eternal and must always be regulated–but not abolished.

Their reference to class struggle, by contrast, does not have as its aim the abolition of the class power of employers and with it the working class as a class and therefore the abolition of all classes; their aim, rather, is to perpetuate class struggle–a never ending process that perpetuates a more humanized but still nevertheless capitalist society.

Their critique of UBI is, then, motivated by their implicit assumption that a socialist society is not really achievable. They do not say that, but they imply it. Alternatively, they define socialism as merely capitalism with an enhanced welfare state and protective measures. Thus, it is interesting to note that Dhunna and Bush refer to labour laws without criticizing their adequacy (whereas they do criticize the inadequacy of a minimalist UBI–almost the only form of UBI they recognize):

We stand to lose much more than we have to gain under a basic income regime doled out by the ruling class. Our energy and money is better spent waging struggle directly to strengthen labour laws and access to unionization for all, to build more power at the point of production — the source of worker power. 

Labour laws that protect workers or extend certain rights certainly should be supported and struggled for, but they are defensive in nature, not offensive. What of labour laws that protect managerial rights? (See for example Management Rights, Part Nine: Is A Collective Agreement that Involves Management Rights and the Exploitation of Workers a Fair Contract?). Can labour laws defend the interests of workers to oppose the very existence of the class of employers? Can labour laws eliminate the exploitation of workers? (For an example of the calculation of the rate of exploitation of workers, see The Rate of Exploitation of the Workers of Rogers Communications Inc., One of the Largest Private Employers in Toronto).   Can they eliminate the oppression of workers? (For discussion of the oppression of workers both during the general time when they work for employers, see Employers as Dictators, Part One and The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation). 

Conclusion

This is the last post that critically looks at the specific article written by Dhunna and Bush. In the series, I have shown that the writers assume that only a minimum basic income is what is possible under existing conditions–an incorrect assumption. Furthermore, I have also shown that they often distort the references that they use by claiming that their references show that a basic income is unfeasible–when in fact their references show that only certain kinds of basic income are unfeasible whereas other kinds are feasible. 

Ultimately, Dhunna and Bush aim for an enhanced welfare state–with regulation of employers rather than the abolition of employers–and the related economic, social and political structures. 

Their criticism of universal basic income is invalid.

I will take up in future posts further criticisms of a social democrat who defend welfare reforms while simultaneously opposing basic income. Specifically, my future target will be the radical social democrat here in Toronto, John Clarke. 

Reform Versus Abolition of the Police, Part 8: The Police and the Political Economy of Capitalism

Introduction 

The following provides many quotes from Mark Neocleous’s book The Fabrication of Social Order:A Critical Theory of Police Power (2000), with short comments. The author argues that there is an inherent connection between the emergence of the modern police and the emergence of a society dominated by a class of employers.

The issue of the abolition of the police is thus intimately connected to the issue of the abolition of a society dominated by a class of employers–along with the associated economic, political and social structures.

The Primary Function of the Police is to Maintain Order–Within a Society Dominated by a Class of Employers

According to Neocleous, the primary function of the police is to maintain order (not to serve the law but to use the law after the fact to justify actions to maintain order)–and the order which the police maintain is essentially a society where people produce their lives by working for an employer via an implicit or explicit contract (whether the contract is individual or collective in the form of a collective agreement).

In his book, Neocleous refers to two authors—the German philosopher G.W.F. Hegel and Patrick Colquhoun. Both implicitly or explicitly criticized Adam Smith’s characterization of the emerging capitalist society as a society guided by the hidden or invisible hand of the market, with individual interest leading to the satisfaction of social interest.

Hegel and Colquhoon on the Police in Modern Class Society

Hegel saw modern capitalist market society as insecure and thus required the intervention of “the police” (which for him did not just mean the modern police but also welfare functions) to maintain the security of property against the necessary existence of those who lose out in the market system—the poor or the rabble. Colquhoon also saw the issue of security of a particular kind of property—capitalist property–to be central to the modern functioning of police. Page 44:

As the working class were gradually incorporated into the body politic so the question of security became a class issue. I shall develop this argument by pushing to its limits Marx’s suggestion that security is the supreme concept of class society. The recognition of the insecurity of the class system of private property meant that security came to be thought of as something to be achieved rather than merely conflated with liberty and property and left at that. Writers who recognized this, such as G.W.F. Hegel and Patrick Colquhoun, did so because they understood that security is imposed on civil society by the state through the exercise of police power. In some fundamental sense then, security is the concept of police, as Marx puts it. Security is part of the rationale for the fabrication of order. In terms of the demand for order in civil society, it is under the banner of ‘security’ that police most often marches.

Colquhoun in particular argued that the problem of crime—and therefore insecurity of property—was intimately connected to the issue of working for an employer—he saw crime and insecurity as mainly a function of not working for an employer. Those who did not work for an employer were suspect since they were on the margin, suspiciously teetering into committing acts of crime. The modern police were to ensure that those who were the working poor did not fall into the indigent (idlers and those incapable of working for an employer). Page 45:

The insight made by Hegel, but developed more fully by Colquhoun, is that ‘police’ must be understood in the context of wider questions concerning property and commerce on the one hand and poverty and indigence on the other. Put simply: a massive and intensive police operation on the part of the state is
a necessary feature of civil (i.e. class) society for the simple reason that the class of poverty and the indigent rabble generated by civil society in turn pose a threat to private property and commerce, rendering civil society insecure. Civil society therefore needs to be policed – to be made secure –
by the state.

Hegel on Poverty, Wealth and the Police

What Hegel called civil society is capitalist society—the society where workers sell their capacity to work to employers, and employers purchase that capacity for impersonal purposes not defined by the workers themselves. In other words, civil society is a society of markets (purchase and sale, buying and selling) and a society of production for employers (subordination of workers to the class structure dominated by employers in general and, in the first instance, subordination of workers to a particular employer). Workers work for both a particular employer and, indirectly, the class of employers (I elaborate somewhat in the posts Do Workers Work for a Particular Employer or for the Class of Employers? Part One: A Limitation of Some Radical Left Critiques of Capitalist Relations of Production and Exchange (A.K.A. Capitalism) and Do Workers Work for a Particular Employer or for the Class of Employers? Part Two: Critique of Unions and the Social-Reformist or Social-Democratic Left).

This society necessarily generates poverty (since wealth is concentrated at the opposite pole). Poverty is not some accidental feature of capitalist society; it forms a necessary feature of such a society and cannot be eliminated without abolishing the class power of the class of employers. Page 48:

The background to this is Hegel’s understanding of the insecurity brought about by the existence of a class of poverty, which is a necessary condition of civil society. ‘The emergence of poverty is in general a consequence of civil society, and on the whole it arises necessarily out of it.’ As such, there is no solution to it:‘The important question of how poverty can be remedied is one which agitates and torments modern societies especially.’

The problem, however, is not poverty per se, but the fact that from the class of poverty a further, more dangerous ‘class’ can emerge.

Poverty as such, from the point of view of the wealthy and powerful, is no problem. The problem with poverty is the potential threat such poverty may lead to—a threat to the security of the property and lives of the ruling class. Hegel had this to say on the topic: Pages 48-49:

When a large mass of people sinks below the level of a certain standard of living…that feeling of right, integrity, and honour which comes from supporting oneself by one’s own activity and work is lost. This leads to the creation of a rabble … Poverty in itself does not reduce people to a rabble; a rabble is created only by the disposition associated with poverty, by inward rebellion against the rich, against society, the government, etc.’

While charity may offer some help, it is no solution. The state’s police power is the main mechanism for overseeing poverty. But the crucial point here is this: the police is equally no solution. Since it cannot abolish poverty,because to do so would abolish civil society, all the police can do is to prevent the poverty-stricken class from becoming a criminalized and pauperized rabble. It is at this point that the work of Patrick Colquhoun becomes pertinent.”

Colquhoun On the Poor Working Class and the Police as an Organization of Order and Security for the Class of Employers

The idea that the police mainly function to enforce laws (such as it is) is an ideology—it has some truth, but overall it hides the real nature of the police. As asserted above, the real nature of the modern police system is the maintenance of a particular kind of social order. Page 51:

Colquhoun’s emphases are significant here. Like Hegel, Colquhoun sees civil society as something to be ordered, and this is the project of police. ‘The Criminal Police’ is one aspect or branch of this project. It is essentially this aspect or branch (or something like it) which became institutionalized as the police from 1829.

Colquhoun categorized the poor into different subgroups in order to identify those who would most likely commit crime (as defined by the property system based on the employer-employee relation), and the function of police was to ensure that the poor, as far as possible, maintained its status as wage workers: police and political economy were wedded to each other. Page 51:

Given the five classes of the poor identified by Colquhoun–useful poor, vagrant poor, indigent poor, aged and infirm, and poor infants– the ‘great art’ is to establish a system whereby those verging on indigence may be kept in the class of useful labour and those who are able but not willing to work (vagrants) be compelled to do so. At this stage in his work then, Colquhoun’s criticism that in the present system ‘the Police…has provided no place of industry in which those who were disposed to reform might find subsistence in return for labour. 

The problem for Colquhoun was not poverty as such; his distinction between poverty and indigence pointed the way to his approach in defining the political economic/police problem. Poverty is not a problem since it is by being poor that people seek to work for employers. What is a problem is indigence—not working for an employer. Page 52:

…he [Colquhoun] begins to recognize the importance of labour to the production of wealth, and thus the importance of poverty, and starts to separate poverty from indigence. ‘Labour is absolutely requisite to the existence of all Governments; and it is from the Poor only that labour can be expected…It is not Povertytherefore, that is itself an evil.’ Instead ‘the evil is to be found only in Indigence, where the strength fails, where disease, age, or infancy, deprive the individual of the means of subsistence, or where he knows not how to find employment when willing and able to work.

More explicitly, Colquhoun links poverty and working for an employer, on the one hand, and indigence and crime on the other. Page 53:

Poverty is that state and condition in society where the individual has no surplus labour in store, and, consequently, no property but what is derived from the constant exercise of industry in the various occupations of life; or, in other words, it is the state of every one who must labour for subsistence. Poverty is therefore a most necessary and indispensable ingredient of society, without which nations and communities could not exist in a state of civilization. It is the lot of man – it is the source of wealth, since without labour there would be no riches, no refinement, no comfort, and no benefit to those who may be possessed of wealth. Indigence therefore, and not poverty , is the evil…It is the state of any one who is destitute of the means of subsistence, and is unable to labour to procure it to the extent nature requires. The natural source of subsistence is the labour of the individual; while that remains with him he is denominated poor; when it fails in whole or in part he becomes indigent.

Modern police function to maintain workers, citizens, immigrants and migrants in a state of poverty–not in the sense of a level of consumption below a defined poverty line, but in terms of a state of dependence on having to work for a class of employers. Those who form the edges of this kind of poverty–who are almost teetering into indigence–are particular targets of the modern police since they represent a more likely direct threat to the premises of that state of poverty and dependence on employers.

Already within the capitalist factory, idleness was being dealt with through disciplinary measures of the owner and managers and through the division of labour. Page 55: 

For Colquhoun, then, the major police problem is the tendency to idleness, immorality and depravity among the indigent working class. This problem was already being overcome inside the factory through the discipline brought about by the division of labour and specialization.

Idleness outside the factory was to be dealt with by the police. Page 55: 

Colquhoun’s interest lay in the problem of idleness outside the factory. The task of police is to employ a whole panoply of measures and techniques to manage idleness, extending well beyond the administration of relief into the morality, profligacy and propriety of the working class. The working class need to be taught the morality of work and thus the immorality of idleness and related activities such as drinking, gambling, cohabitation, prostitution, political subversion, trade unionism and, a point which will become important in the following chapter, appropriation of property from the workplace, as well as ‘crime’ more generally.

Ultimately, the indigent need to be put to work for an employer, and the police are there to prevent them from engaging in activities that make them independent of that dependence. Pages 55-56: 

The general idea, then, is to put the poor to labour, to make the working class work. ‘Indigence’ is merely coda for any attempt to avoid wage labour, to refuse exploitation. As Peter Linebaugh has noted, if a single individual could be said to have been the planner and theorist of class struggle in the metropolis it would be Colquhoun.

The accumulation of wealth requires the security of property, and the security of property requires the police. Page 57: 

Since for Colquhoun the acceleration of wealth can only be achieved ‘by establishing a correct system of police’, political economy must concern itself with this. Yet the science of wealth has failed to grasp this point. ‘In all the branches of the Science of Political Oeconomy, there is none which requires so much skill and knowledge of men and manners, as that which relates to this particular object [the poor].’ Thus the main concern of his proposal for a Pauper Police Institution and a Board of General Internal Police should be seen as his contribution to the political economy of the wealth of nations, and the set of measures which Colquhoun subsumes under the police idea should also be seen as, in a roundabout way, his contribution to the science of political economy, but in the form of a science of police. This in turn consists in showing not just the necessity of police to the prevention of indigence and thus crime, but to the security of property: ‘where Property is exposed, a preventive Police must be resorted to, in order to be secure’. Far from the discourse of police being displaced by the discourse of political economy and the system of natural liberty, in Colquhoun’s work ‘police’ and ‘political economy’ are two sides of the same discursive coin. Police is a complement to the political economy of commercial society, rather than its opposite.

The police arise to secure what is inherently insecure–a society of “free” contract, where some will win at the expense of others–and therefore there will be losers–potential and actual–who threaten the system of property and the accumulation of capital. Page 59: 

…because the foundation of the modern system of liberty is itself insecure it requires state
power. On this reading the police of the poor is a mechanism for securing the insecure.

The insecurity of capitalist property is inherent in its very nature since it is founded on the dependence–and hence the lack of security–of the working class. Page 61: 

The history of security is a history of the state seeking an impossible security from the terror of the death of civil society. Civil society, after all, generates its own enemies; the bourgeoisie produces its own gravediggers. In class terms this means that police is necessary because capital, as the modern master, is forever at risk of losing control of the class of which it is master. The economic inactivity of the class of poverty is the heart of the insecurity of the system, the resistance of this class to the social domination of private property is its next step, and the political mobilization of the class its highest form. Thus security involves not just the prevention and detection of crime but, more importantly, the imposition of a form of social police. The history of police as a security project is a history of private
property’s fear of its most radical ‘other’.

The police has to assist in making a working class that corresponds to the needs of the class of employers. Page 69: 

The forms of policing being traced here were a political force for the making of the working
class in that the ultimate aim of the police project was the commodification of labour through the consolidation of the wage form. As such, the project of social police has historically been central to the function of political administration in fashioning the market.

Thus, traditionally workers appropriated all kinds of “left-over” products related to work despite working for an employer–such as spare wood or scraps of iron that carpenters and metal workers used to take home. The criminalization of such activities went hand in hand with the increasing exclusion of workers from obtaining their means of livelihood except through the wage–and the police were there to prevent and enforce such “crimes.” Page 72: 

The increasingly dominant bourgeois class felt that the customary rights in question jarred with
the fundamental purpose of labour, which was to earn a wage, and raised a fundamental question: are those who labour entitled to appropriate the products of their own labour, other than through the wage received? The answer given by capital was increasingly a firm ‘no’. What had previously been seen as custom was gradually being reconceptualized as crime.

Theft was redefined in order to accommodate the employers’ definition of absolute private property: ownership of the means for workers to produce their own lives (ownership of such produced things as spinning machines, power looms, furnaces and so forth) was to go hand in hand with ownership of the commodities produced by workers (as when I worked at a brewery in Calgary, where the beer that we produced was owned by the owners of, at first, Carling O’Keefe and then Molson). 

The function of the modern police as agents of security or order is of course security and order based on wage labour and not security or order in general. Page 74:

The net effect of the first preventive police system was thus not just a defence of property, but the
creation of a social order founded on private property via the consolidation of the money wage and
commodification of labour. This pattern was followed in the development of policing elsewhere in the nineteenth century. It is clear from Philips’s study of crime in the Black Country that there was a concerted effort on the part of industrial capital, police and magistrates to impose the money wage on the worker class, while in Liverpool merchants complained of the way the ‘secondary economy of the streets’ threatened the power of private property and money, not just in creating alternative points of sale but also in draining the wages and time of those who should more properly be engaged in wage labour.

Any Movement for the Abolition of the Police Requires Integration of the Working Class 

For those who aim to abolish the police (or even defund it), it is necessary to take into consideration that the police are a central component in the formation and maintenance of a working class dependent on the class of employers. Resistance by the class of employers and their representatives to the abolition of the police (or just partial defunding) will be fierce; it is vital that the working class form part of the movement for the abolition of the police and not be unrelated or tangential to it. If the working class does not form part of such a movement, it is highly unlikely that such a movement will achieve its goals since the police and the class interests of employers are intimately related. Pages 75-76: 

one should see the street powers granted to the police as an expression of the state’s contribution
to class formation as well as class domination. The new forms of police operation coming into existence were fundamental to the imposition of the money wage as a means of making the working class, and thus need to be seen in the broader context of the role of police in the fabrication of
a new, bourgeois, order. The attack on the non-monetary form of the wage and its transformation into a fully-fledged money form meant criminalizing a range of traditional working-class activities, bringing them into the orbit of police power and thus legitimizing their oppression, a project
designed to stamp the authority of private property over the living conditions of the majority of the population and confirm the power of capital as the new master. In other words, the order of the new industrial workplace was brought about in part by the ordering power of police.

Any movement that seeks to abolish the police must take into account the close relation between the maintenance of a class of workers dependent on a wage or salary–wage or salary labour–and the function of the police to maintain security of absolute private property grounded in the market in general and the market for workers in particular. Page 77: 

The problem is thus not just to use the police to prevent crime, but that crime is committed as a means of earning a living without succumbing to wage labour. The way to prevent crime is thus to enforce wage labour.

The police function of maintaining order should not be seen in the narrow sense of preventing overt acts of behaviour newly defined as criminal but of producing acceptance of the new form of absolute private property, where workers produced commodities but no longer owned anything except through the mediation of the wage form. Page 78: 

When writers talk about the fact that the new police emerged as a means of maintaining
‘public order’, the argument generally rests on a narrow and somewhat misleading vision of disorder (the typical example is riots). ‘Order’ should be understood not just as the absence of riots or generalized peace and quiet on the streets, but as the acceptance of the capital–labour relation, the domination of capital over the working class.

The maintenance of such order cannot usually be effected through military means on a permanent basis–hence the police function and its penetration into “civil society” or the market system. 

The function of forming and maintaining order of a special kind–employer order–involves separating off working for an employer from those who obtain their means of subsistence otherwise. Those who obtain their livelihood otherwise are, in turn, classified as either criminals or the indigent (claimants). Page 79: 

In this sense discussions of ‘crime’ are frequently barely veiled discussions of disorder, a point to which we shall return in the following chapter. It was only with the development of the new police and bourgeois order that ‘crime’ acquired the kind of meaning which it had only dimly possessed in the eighteenth century but which it has possessed ever since. One of the major historical achievements of the bourgeois class was to simultaneously incorporate the working class as part of the new bourgeois conception of order and impose an ideological separation on the class by distinguishing the working class from the ‘criminal class’ on the one hand and ‘claimant class’ on the other.

Before, many obtained their subsistence through various means: theft, working on their own, working for an employer for a time, or begging. However, as the new class of employers and the new working class emerged, crime and the indigent became identified as the “other” of wage labour. Page 81: 

But the key issue in each case is how the distinction in question is related to the working class. Both criminal and claimant are understood as engaged in the refusal of wage labour – the criminal steals and the claimant claims in order to avoid work – and both claimant and criminal are viewed through the lens of idleness. This is a constant feature of bourgeois order…. But both criminal and claimant became one of the mechanisms of power by virtue of being an ideological by-product of the wage as a mechanism of power. The making of the working class was simultaneously the making of a claimant class and making of a criminal class. Both claimant and criminal have failed to achieve the dizzy heights of respectability by failing to be a bona fide proletarian; as such, they fall outside of the social pact. In both cases, the threat to the order of property is apparent; and for much of the time, the bourgeois class cannot even distinguish between the two ‘threats’.

The distinction between the citizens who accepted their status as wage worker and those who did not became increasingly characteristic of police work. Page 81:

Yet the distinction between a ‘criminal class’ on the one hand and the rest of the population on the other became increasingly commonplace in the nineteenth century. Indeed, the distinction as it developed focused almost entirely on separating the ‘criminal class’ out from the ‘poor but respectable’ working class.

Once the distinction arose and became somewhat fixed, though, the category of “criminal class” became reflected back onto the working class as potentially falling into the criminal class and hence suspect. Page 82: 

But such differentiation has a paradoxical effect. As Gertrude Himmelfarb has noted, the sharper the differentiation between the subgroup and the larger group and the more dramatic the image of the former in contrast to the latter, the more inevitable it is that the dramatic image will be transposed to the larger group. The image of ‘pauperization’ and ‘criminalization’ was so dramatic that it spilled over to the image of poverty itself, and thus the image of the working class. In the case of pauperism, the poor become saddled with the worst attributes of the pauper; as such they are always potentially
the pauper-claimant. In the case of criminality, the working class get saddled with the worst attributes of the criminal; as such they are always potentially criminal. It is for this reason that discussions of crime are often barely veiled discussions of class. The point is not that any particular group is police
property, however true that may be, but that because it is workers who are always seen to be on the verge of becoming criminal or claimant (or both), it is the working class which is the object of police power. The military metaphors within which both criminal and claimant are conceptualized within the bourgeois mentality – the perpetual ‘war on crime’ mirrored in the equally perpetual ‘war on scroungers’ – disguise the social characteristics of the enemy in question, which if revealed would show the battle to be no more than coda for the permanent low-intensity warfare against the working class. And it should be added that this is a war which the state cannot win, for to win it would mean abolishing the condition of private property that gives rise to it, and thus abolishing itself as a state.

I will end this post with this assertion by Neocleous–since the issue of the lack of criminal proceedings against the class of employers deserves more detailed treatment. Pages 83-84: 

In fact, one could argue that the institutions of the criminal justice system are geared to conceal rather than reveal the crimes of the powerful, and this despite the much higher cost, in both human and financial terms, of corporate crime. Such ‘costing’ would have to take into account the following: first, the phenomenal scale of income tax fraud compared to the fraud perpetrated by social security benefit claimants. Taking one year as an example, ‘there were only 17 prosecutions for false income-tax returns (as against some 80,000 cases settled without prosecution). But there were 12,000 prosecutions over that period by the Department of Health and Social Security for fraudulent claims by its (largely working-class) clients. The amount recovered in these 12,000 cases amounted to less than 15 per cent of the amount recovered by the Inland Revenue in its seventeen income tax prosecutions.’ Second, the deliberate cost-cutting measures ignoring health and safety standards at work, resulting in the injuries and deaths – some in ‘accidents’, some over a prolonged period of poisoning –of countless numbers of workers. As Engels commented in 1845, a social order which allows companies to place workers in such a position that they inevitably meet an early and unnatural death should be considered to have committed the deed of murder just as much as murder may be the
deed of the individual – ‘disguised, malicious murder against which none can defend himself, which does not seem what it is, because no man sees the murderer, because the death of the victim seems a natural one, since the offence is more one of omission than of commission. But murder it remains.’ And third, the placing of products on the market which are known to be dangerous. To give but one example: in 1970 Ford released their new Pinto car, which tests had shown would explode from a rear-end collision. A cost–benefit analysis told them that installing the appropriate safety measures would cost $135 million, while prospective law-suits resulting from fatalities and injuries would be unlikely to top $50 million. It is estimated that between 500 and 900 people lost their lives as a result. The indictment for reckless homicide in 1978 failed.

By treating corporate ‘crime’ as mere failure to follow regulations and procedures and thus not ‘crime’ at all, the ruling class has defined itself as beyond incrimination. Those with social power by definition cannot be members of the criminal class. Being for the order of private property, the ruling class is by definition on the right side of the law.

Academic Narrow-mindedness: A Reason for Starting a Blog, Part Two

Introduction

This is a continuation of a previous post. In a previous post, I criticized the first reviewer’s assessment of an article I had written on collective bargaining and the situation of teachers in Nova Scotia.

Before I started this blog, I had sent an article critical of the implied concept of “free collective bargaining.” The article was rejected for publication. Given that the reasons for rejecting the article seemed absurd, I decided to skip the academic process and post directly my views. This seemed all the more necessary since the journal that rejected my article is called Critical Education.

Since I believe in the politics of exposure (exposing the real nature of social processes and not the rhetoric of such processes), I thought it would be appropriate to post my proposed article, the criticisms of my article by the reviewers and my commentary on their criticisms.

The proposed article is found in the Publications and Writings link on my blog, entitled “Critique of Collective Bargaining Models in Canada.” (There is a slight difference between the article submitted to Critical Education and the one found at the link: the article submitted to Critical Education contains an abstract, which I include below, and the title of the proposed article was changed to: “A Critique of an Implicit Model of Collective Bargaining: The Nova Scotia Teachers’ Strike and a Fair Contract.” 

My Abstract or Summary of My Article

Abstract

This paper looks at Brian Forbes’ presentation of the recent Nova Scotia teachers’ strike in order to analyze critically the nature of collective bargaining in a capitalist context. Forbes shows the underhanded nature of the McNeil government’s supposed negotiations, but he implies (like many trade unionists) that collective bargaining, in its normal form, results in a fair contract. The paper argues against this view. It does so in two ways. Firstly, it looks at Jane McAlevey’s alternative method of collective bargaining. Secondly, it looks at the limitations of her method in terms of the capitalist economic structure—especially as am exploitative and oppressive structure that transforms workers into means for others’ ends. A humanist view, by contrast, requires that human beings need to be treated as ends in themselves in a democratic fashion at work. Such a view, however, is rarely discussed precisely because the rhetoric of a fair (collective) contract in the context of the collective power of employers prevents such discussion from occurring.

Key words: teachers, collective bargaining, capitalism, exploitation, oppression, strikes, justice, fairness, Nova Scotia, Jane McAlevey

The decision to reject the article as is, as well as the second review are given below along with my comments on the second review. I put the reviewer’s evaluation in quotation marks:

We have reached a decision regarding your submission to Critical Education, “A Critique of an implicit model of collective bargaining: The Nova Scotia teachers’ strike and a fair contract”. Our decision is to: Decline submission.

Three external reviewers supplied reports (see below); I have also attached the file with the marginal comments of Reviewer C.

All three reviewers see potential in the manuscript and each recommends major revisions are necessary before the manuscript is ready for publication. The comments are the reviewers are quite detailed, but in short I believe it’s fair to say they all agreed that further theorizing and deepened/more sustained analysis of events are necessary.

I hope you find the feedback from the readers helpful as continue to work on this project.

Yours truly,

E Wayne Ross
Co-Editor, Critical Education
University of British Columbia
wayne.ross@ubc.ca

Reviewer B’s Assessment and My Comments

Reviewer B:

“This manuscript makes a convincing argument that there is no such thing as a good contract because in a capitalist economy, some portion of workers’ labor will, inevitably, be appropriated by capitalists.”

That is hardly what is argued in my article. The author is probably thinking of Marx’s theory of surplus value, in a capitalist economy, where the value produced by workers is greater than the value that they receive—necessarily–if the capitalist economy is to continue to exist.

How this reviewer concludes that I make a “convincing argument” of the inadequacy of a contract due to “some portion of workers’ labor will inevitably be appropriated by capitalists” is beyond me. I explicitly wrote: ‘Of course, the purpose of the whole process is to obtain more money at the end of the process than at the beginning. The whole process would have no purpose if the money that the capitalist receives at the end of the process were the same quantity as at the beginning of the process; the capitalist system would not last very long. The continued existence of the capitalist system, then, requires that the money at the end of the process, generally, be greater than at the beginning. Where the surplus money comes from does not concern us in this essay, though.’

I did not want to discuss Marx’s theory of surplus value as such since that theory, though very important in understanding the dynamics of capitalist production, exchange and accumulation, is not the only basis for criticizing the employer-employee relation. Employees of the government (state workers) do not produce a surplus value—but they are still used as means for purposes foreign to them (see The Money Circuit of Capital). This is anti-democratic and in fact dictatorial. It treats human beings as mere things who have no or little say in the determination of the purposes of their action as employees.

The point of the presentation of the money circuit of capital is to show that human beings are means to purposes external to them in order to criticize such use in the first place. It is implicitly a criticism of such union attitudes as expressed by John Urkevich, union rep for the Association of Employees Supporting Education Services (AESES) (see Comments from John Urkevich, AESES-UM Business Agent, to my Critique of the Grievance and Arbitration Procedure: Letter to the Editor, Inside The Association of Employees Supporting Educational Services (AESES), Vol. 17, No. 4, May 1994)–a public sector union. According to Mr. Urkevich: “After all the employer only has control over the how, what, and when, it does not have the right to treat employees in an unjust or undignified manner. Employees are not chattel.” See my criticism of such a view in ( Critique of the Grievance and Arbitration Procedure: Letter to the Editor, Inside The Association of Employees Supporting Educational Services (AESES), Vol. 17, No. 4, May 1994).

The reviewer obviously missed the point of presenting the money circuit of capital and imposed his/her own assumed view of Marxian theory onto the money circuit.

“That said, issues in the manuscript start with the title: labor relations in Nova Scotia are a pretext for the text rather than its subject, and the critique is not of an implicit model of collective bargaining but of collective bargaining itself.”

True and false. It is a critique of Brian Forbes’ implicit model of collective bargaining—which is the typical model of union reps (whether explicit or implicit). A critique of such an implicit model is simultaneously a critique of the typical model. Apparently, it is too much to expect academics to understand this.

Consequently, the first clause “labor relations in Nova Scotia are a pretext for the text rather than its subject” is true, but the next clause “and the critique is not of an implicit model of collective bargaining but of collective bargaining itself” is false since the implicit model is Brian Forbes’ model, which provides an exemplar for collective bargaining itself. Variations in collective bargaining, such as Jane McAlevey’s model, although innovative in some respects, still fall within the limits of the same collective-bargaining model since her model idealizes collective agreements as well. Furthermore, her wholly inadequate solution to the problem of agency and social structure by identifying the two at the micro level of the plant level or the specific institution level leads her to idealize such contracts rather than criticizing them as completely inadequate expressions of the interests of workers (even if it is the best that can be achieved under given power relations).

“Although the title is a minor problem, it returns in the abstract., which opens with a critique of the Nova Scotia contract rather than what it is a case  and then announces something like a review of McAlevey.  At a minimum, a clearer sense of, and focus on, what the manuscript is about–the limits of even more democratic forms of collective bargaining, with much of the evidence from the author’s own experience- needs to be clear throughout.”

Let us take a look at my abstract. It reads:

‘This paper looks at Brian Forbes’ presentation of the recent Nova Scotia teachers’ strike in order to analyze critically the nature of collective bargaining in a capitalist context. Forbes shows the underhanded nature of the McNeil government’s supposed negotiations, but he implies (like many trade unionists) that collective bargaining, in its normal form, results in a fair contract. The paper argues against this view. It does so in two ways. Firstly, it looks at Jane McAlevey’s alternative method of collective bargaining. Secondly, it looks at the limitations of her method in terms of the capitalist economic structure—especially as am exploitative and oppressive structure that transforms workers into means for others’ ends. A humanist view, by contrast, requires that human beings need to be treated as ends in themselves in a democratic fashion at work. Such a view, however, is rarely discussed precisely because the rhetoric of a fair (collective) contract in the context of the collective power of employers prevents such discussion from occurring.’

The structure of my proposed article is:

Introduction (not an explicit section with that title, but it is implied)

The Resistance of Teachers to the High-handed Methods of the McNeil Government and of the Provincial Executive

Jane McAlevey’s Alternative Approach to Collective Bargaining

The Limitations of McAlevey’s Approach to Collective Bargaining

Practical Considerations

Theoretical Considerations: Limited Standards of Fairness versus Human Standards of Fairness

Conclusion

I organized the presentation in an ascending order of forms of collective bargaining, from the least positive form of collective bargaining (the McNeil Government’s underhanded method of collective bargaining) to more adequate forms of collective bargaining (Brian Forbes’ implicit model, which is the typical model), to Jane McAlevey’s innovative model, in order to show, on the one hand, that there are indeed better and worse ways of engaging in collective bargaining from the point of view of the working class—but that collective bargaining even in the form of McAlevey’s model is wholly inadequate. The inadequacy of even McAlevey’s approach to collective bargaining is broken up into practical limitations and theoretical considerations. The practical considerations involved a comparison of a collective agreement under which I worked as a brewery worker in the early 1980s with the idealized collective agreement that Ms. McAlevey negotiated. Her persistent reference to the collective agreement as a “good contract” is typical of social-reformist leftists, and this is the implicit target of the article. The idealization of unions and collective bargaining needs to be criticized, and this reviewer generally fails to understand that.

As for my personal experiences—I intersperse them throughout the article as occasion and relevance arises. The underhanded way in which the McNeil Nova Scotia (located in Canada) government tried to subvert the traditional collective-bargaining process was similar to Winnipeg’s (Manitoba, Canada) mayor Susan Thompson attempt to subvert the traditional collective-bargaining process. My reference to Paul Moist, one time head of the Canadian Union of Public Employees union outside workers in Winnipeg (and, eventually, the national head of that union—one of the largest unions in Canada) d his use of the cliché “A contract is a contract” is meant to highlight how union reps assume that the basis for relations between humans must be in the form of a contract.

It never ceases to amaze me how little thought is given by academics (and others) about the legitimacy of the employer-employee relation. I have found, personally, that unions are necessary but by no means sufficient for expressing my own interests. I have belonged to several unions in my life, and all of them have assumed the legitimacy of that relation in one way or another. That academics fail, theoretically or practically (or both) to seek to go beyond such relations by creating all kinds of subterfuges should no longer be surprising, however. Most lack any burning desire to have exploitation really stop. They may pay lip-service to the abolition of exploitation, but their own practices (and often their own writings) belie such lip-service.

Is there really any wonder why I stopped trying to write for so-called peer-reviewed journals and started this blog? Often, for an article to be accepted it is necessary to alter substantially the content of an article to accord with the demands of the academic reviewers. There is no point in trying to please such reviewers—to do so is not in the interests of the working class. Quite to the contrary. Reviewers are unlikely to be concerned with such interests and thus to fail to understand the point of an article that addresses such needs. It is in the interests of the working class to oppose being used as means for the employers’ ends, but unions have no intention of pursuing such opposition. The limitations of collective bargaining and collective agreements express the limitations of unions in relation to the working class, but it is highly unlikely that academic reviewers will understand that.

“The manuscript does a nice job analyzing elements of McAlevey’s argument and acknowledging the benefits of a more empowered rank and file, but at crucial junctures the manuscript was not persuasive. The author makes a brief and, in my view, inadequate case for the essential similarity of private and public sector workers. After rightly acknowledges that capitalism sets limits on the contract because pay has to be less than the value of what is produced,”

Again, this is an imposition of the reviewer’s reading on what I wrote. I specifically wrote the following:

‘If we ignore the exchange process, we have the following: M1 … P … M2. Here, it is clearly seen that the production process is a means for obtaining more money. Since workers are part of the production process, they too are means for obtaining more money—even if they are organized collectively and act militantly. Being used as a means so that others can obtain more money is not an expression of a just and moral society, where human beings are agents of their own social structures and relations. Rather, it expresses a society that treats human beings as things to be used for the benefit of others obtaining more money.’

The issue is the context of criticizing McAlevey’s claim that the relation between agency and structure is solved when the whole set of workers is organized—structure then melds into agency and agency into structure. The money circuit of capital shows that this is a wholly inadequate solution to the problem; agency must address the macro level if the workers are going to become agents of their own lives. The issue of whether the “pay has to be less than the value of what is produced” is not addressed at all. More money (M2) than M1 is characteristic of capitalist relations, but then so too is the use of workers as means to obtaining more money. The issue of exploitation is a related but separate issue. If, for example, M1 and M2 were the same, workers would still be used as means—but in this instance the employer would have no incentive to do so.

“the author then treats teachers as deserving unlimited resources.”

What nonsense. This reading illustrates once again the limited nature of academic reviews. Where did I imply that ‘teachers deserve’ “unlimited resources?”

“A much more developed theory and analysis of schooling in of the capitalist state is needed.”

I agree with this assertion. Two points can serve as a response. Firstly, peer-reviewed journals limit necessarily the extent to which authors can elaborate on certain points through a limitation on the number of words that an author can compose. In the case of the journal Critical Education,the limit: “Critical Education typically reviews manuscripts that are between 4,000 and 8,000 words in length.” To enter directly into the question of the “theory and analysis of schooling in the capitalist state” when the issue is the limitations of collective bargaining would be impossible.

Peer reviewers can thus use the impossibility of addressing all relevant issues as an excuse for criticizing what would be needed in a more well-rounded and fuller discussion.

Secondly, it is obvious that Marx’s theory of capital is the beginning of such an analysis and requires elaboration in relation to the specifically capitalist state. I mention taxes in relation to the capitalist state and imply that a further analysis of the capitalist state would benefit from a consideration of taxes. Jack Barbalet refers to the relevance of taxes, the state debt and finance capital for Marx’s theory of the capitalist state in his Marx’s Construction of Social Theory as does Ingo Stützle in Staatsverschuldung als Kategorie der Kritik der politischen Ökonomie. Eine Forschungsnotiz. However, I definitely do not have the theoretical background as yet (if ever) to discuss adequately the nature of the capitalist state and its relation to schooling.

Such work, as Hegel once pointed out, requires time, as a new theory or principle needs to be worked out in detail.

In any case, although it is true that, for a fully developed criticism of the capitalist state and schooling, it would be necessary to delve into and analyse the capitalist state and its relation to schooling, for the purposes of the essay, such a demand is absurd given the imposed limitations of the journal itself. 

“Moreover, the focus on class size (rather than, say, wages) suggests that teachers’ self-interest will inevitably align with children’s or public interest.”

This is absurd. I chose class size to illustrate—the limitations and inadequacy of collective bargaining in relation to the working conditions of teachers. Here is what I wrote:

‘In relation to teachers as employees, the purpose of a teacher’s work, just like the work of nurses and other public-sector workers, is not defined by those teachers. Teachers certainly can choose how they teach in many ways (pedagogy has come a long way), but there are many areas in their work that can be addressed only to a limited extent, if at all, at the level of collective bargaining. For example, the issue of class size can be and has been addressed at the level of collective bargaining. Can the results of collective bargaining over this issue adequately address the needs of increasingly diversified student populations?

It is useful to compare a fairly homogenous student population–the students in the Dewey School in Chicago between 1896 and 1904—with this situation. After three years of functioning, as an experimental school, the School had 125 students, with fifteen full-time staff and 16 assistants (the assistants’ hours varied from half an hour to three hours a day (Camp & Mayhew, 1936/1966). If we take the average number of hours of these assistants, based on the minimum and maximum number of hours they worked per day, they worked an average 1.75 hours per day (.5+3)/2=1.75). If we assume a work day of 5.25 hours per day, then roughly there were five full-time equivalent assistants per day. Consequently, there were 21 adults working with 125 students—an average of about six children per adult; class size was definitely limited. Has any collective agreement in Canada for public teachers come close to such a class size?

Rather than addressing the need to reduce class size to a level required to address adequately the needs of individual students, teachers are expected to differentiate instruction. Of course, trying to address the needs of 20 or 30 children or adolescents based on differentiated instruction increases the workload of teachers. If class size decreases to a limited extent due to collective bargaining, often enough, the workload increases in other areas in order to compensate for such a reduced class size.’

I compared the typical class size of teachers in public schools with the class size in the Dewey School, where the class size in relation to the number of adults was substantially lower. I pointed out that collective bargaining over class size has not been able to limit the class size to the extent found in the Dewey School. I imply that children’s learning needs require a relatively high adult-to-pupil ratio, but collective bargaining has never been able to address this issue adequately. That teachers are interested in class size and yet cannot address adequately that working condition within  the confines of collective bargaining provides an illustration of the limitations of collective bargaining.

By the way, the reviewer’s concept of “public interest” is pure abstraction—as if there were some independent public interest that can be identified independently of class relations.

“In this, the manuscript treats kids more or less like the hops in the beer the author made.”

This is not only absurd, but it is insulting. How do I treat kids “more or less like the hops in the beer the author made?” Where do I do this? I guess it is treating “kids more or less like the hops in the beer the author made” to imply that collective bargaining cannot address adequately a reduced class size—and that is one of the conditions that children require to learn adequately—not just “differentiated instruction.”

I did not bring the salaries or wages of teachers into the picture because I wanted to illustrate the limitations of collective bargaining. Teachers’ salaries are relatively high absolutely when compared to the salaries or wages of lower-level workers (I was earning, gross, around $85,000 a year), but what would have to at least be factored in is the number of hours that teachers actually work and not the number of hours they officially work. From my own experience, I know that teachers work much longer than the official number of hours. I used to get to school around 7:15 in the morning (classes started at 9:00). My lunch hour had students in the classroom while I ate. I often stayed until 4:30 or 5:00 in the afternoon and worked at home afterwards. The higher salaries reflect in part, the longer working day of teachers. Undoubtedly other factors may also partially explain the relatively higher salary of teachers , but the focus on salary would detract from the limitations of collective bargaining in relation to the working lives of teachers as teacher-employees.

“Or to put it slightly differently, one would not, I think, say that the police controlling all conditions of their work in the colonized communities of the poor is self-evidently good.  Teachers have often been among those advocating corporal punishment in schools and the removal of difficult children. Why does teachers’ control of their work equate with the greater good?”

Note how the reviewer now shifts to an isolationist or micro position in order to argue against worker control (including teacher control) of their work. My assumption was that in a socialist society worker control would extend across the public and private sectors; such a situation would prevent teachers from being used as mere means for purposes foreign to their own lives. Motivations for engaging in teaching would likely change, and advocacy for corporal punishment would likely diminish substantially. If the children in schools were adequately cared for, so-called “difficult children” would be diminished.

The reviewer tries to engage in moral superiority. Obviously, this reviewer claims to disagree with corporal punishment—in schools. What does the reviewer do in relation to the corporal punishment characterized by parents? S/he fails to mention this at all and the role courts have played in perpetuating the physical abuse of children (see my own personal experience in, for example, the following post  A Worker’s Resistance to the Capitalist Government or State and its Representatives, Part One) as well as the summary of some of the physical abuse experienced by my daughter by her mother in the second part under the same name–part two). S/he also fails to address the impact on the behaviour of adults towards children of a kind of society where there is a market for workers—and that includes teachers. S/he also fails to address the imposition of a modern curriculum at the elementary level that focuses on symbolic learning (reading and writing) at the expense of children’s active interest in the world around them (including social life). My reference to Dewey was hardly accidental; Dewey criticized severely the lack of consideration of the specificity of children and their existence as living beings in schools. The Dewey School was meant to address many of these inadequacies by focusing on the production and reproduction of the common needs of human beings from a geographical and historical angle—and the accompanying intellectual development that that entails.

As for the reference to the police–I hardly idealize the police (see my post Socialism, Police and the Government or State, Part One).

The reviewer’s implied concern for children may or may not be true, but to try to impose her/his own agenda without any real basis further weakens the objectivity of her/his own review.

If work were organized democratically, the work would also change. The concept of “difficult children” might well vanish.

Of course, under existing conditions, some teachers do advocate for corporal punishment and want to have difficult children removed from their class. And? The reviewer is trying to argue from a position where teachers lack control over their own working lives in general in conjunction with all other workers.

I hardly idealize the current social situation in the proposed article, nor do I idealize teachers. Quite to the contrary. In other articles that I have written, I have implied that teachers largely accept the curriculum as specified by departments of education and fail to criticize the content and structure of the curriculum (see some of my articles in the Publications and Writings link). Furthermore, having been the chair of the Equity and Social Justice Committee for Lakeshore Teachers Association, I tried to widen the issue to include the employer-employee relation as such (among other issues). I tried to generate discussion among the other chairs of Equity and Social Justice Committees, but the only response was an insult, where one chair called my views asinine since, according to him, I was claiming that teachers did not address social-justice issues in the classroom. Of course, I was trying to have the teachers redefine what was meant by social justice—a redefinition that would involve the wider issue of the kind of society in which we live and work. Other than that response, the chairs remained silent over what I wrote. I am well aware of the limitations of teachers’ points of view.

“One could answer this question in a number of ways; one way or another, it is a question that needs addressing.  If they had the freedom to do so, teachers, the author seems to suggest, would reject their role as part of the ideological state apparatus.  Why?”

Why would I want to address this issue in this article? Are there not many issues in the world that need to be addressed? I was not addressing the issue of “teachers” only since the freedom of control over our working lives is hardly limited to teachers, and the limitations of collective bargaining and the collective agreement are hardly limited to teacher unions.

“Similarly, the relationship of teachers’ workplace concerns to those of the working class as a whole.”

I was trying to address this issue indirectly by showing the inadequacy of collective bargaining in general. My reference to class-size and the inadequate way in which collective-bargaining addresses the issue points in this direction—but the reviewer, rather than recognizing this, accuses me of idealizing teachers. Such is the nature of reviewing and an underhanded way of rejecting articles that contradict the point of view of the reviewer,

“The author makes many points which seem to me valid: no doubt unions generally do not educate members and collective bargaining has its limits. I am not suggesting different conclusions in the essay. Rather, the stances the author takes need more development.”

My view is that, on the one hand, many of the the reviewer”s criticisms are invalid and, on the other, when her/his views are valid, s/he is asking for the impossible—to deal adequately with everything brought up would go far beyond the limits specified by the journal Critical Education. According to the journal: ‘Critical Education typically reviews manuscripts that are between 4,000 and 8,000 words in length.’

“On p. 14 the analysis of different pay scales was a bit confusing.”

Perhaps, but without further elaboration, it is impossible to determine why the reviewer believes that.

Conclusion

When a writer submits an article for possible publication, it is to be expected that revision will likely be necessary. There is, however, a difference between the need for revision and the requirement that the writer submit to the point of view and experiences of the reviewer.

I have had several articles published (see Publications and Writings section of this blog). I have had to revise each submission, and I have learned to accept this as a normal part of the publication of articles. However, I found the criticisms of the reviewers to go far beyond what the role of reviewers should be. As a consequence, I started this blog as a way of expressing my own point of view–without censorship.

Writing articles in peer-reviewed journals are inadequate for expressing issues of concern to the working class.

I will be posting, in the future, a final post concerning Reviewer C’s review of my submbitted article.

The Rate of Exploitation of the Workers of the Royal Bank of Canada (RBC), One of the Largest Private Employers in Toronto and in Canada

Introduction

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

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 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 ), among others.

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

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 RBC workers is s/v; therefore, s/v is 16,903/13,611=124 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.24 cn surplus value or profit for free (calculated on the basis of the procedure outlined in the post on the rate of exploitation of CIBC bank workers). Alternatively, for every hour worked, a Royal Bank of Canada worker works 74 minutes (or 1 hour 14 minutes) for free for RBC.

It also means the following:

  1. For a 5.75- hour working day (345 minutes), RBC workers spend 154 minutes (2 hours 34 minutes) to obtain their wage for the day, and they spend 191 minutes (3 hours 11 minutes) in obtaining a surplus value or profit for CIBC.
  2. For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, RBC workers spend 161 minutes to obtain their wage for the day, and they spend 199 minutes in obtaining a surplus value or profit for RBC.
  3. 7-hour working day: 420 minutes:i n a 7-hour working day, RBC workers spend 188 minutes to obtain their wage for the day, and they spend 232 minutes in obtaining a surplus value or profit for RBC.
  4. 7.5-hour working day: 450 minutes: in a 7,5-hour working day, RBC workers spend 201 minutes to obtain their wage for the day, and they spend 249 minutes in obtaining a surplus value or profit for RBC.
  5. 8-hour working day: 480 minutes: in an 8-hour working day, RBC workers spend 214 minutes to obtain their wage for the day, and they spend 266 minutes in obtaining a surplus value or profit for RBC.
  6. 10-hour working day: 600 minutes: in a 10-hour working day, RBC workers spend 268 minutes to obtain their wage for the day, and they spend 332 minutes in obtaining a surplus value or profit for RBC.

As in the post for the determination of the rate of exploitation of workers at Canadian Imperial Bank of Commerce, I have the same questions for social democrats.

Royal Bank workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract,” “decent wages,” 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,” “decent wages” 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

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 by has undoubtedly reinforced social-reformist tendencies.

In millions of Canadian dollars:

Total revenue $ 46,002
Provision for credit losses (PCL) 1,864
Insurance policyholder benefits, claims and acquisition expense (PBCAE) 4,085
Non-interest expense 24,139 [add the first three: 1,864+4,085+24,139=30,088; subtract this from 46,002 gives you 15,914)
Income before income taxes 15,914

Provision for credit losses is explained in Investopedia (James Chen (2019) as:

The provision for credit losses (PCL) is an estimation of potential losses that a company might experience due to credit risk. The provision for credit losses is treated as an expense on the company’s financial statements. They are expected losses from delinquent and bad debt or other credit that is likely to default or become unrecoverable. If, for example, the company calculates that accounts over 90 days past due have a recovery rate of 40%, it will make a provision for credit losses based on 40% of the balance of these accounts.

It is an expense in the sense that loans and other financial services may lead to defaults, or it may be due to the decreased value of collateral for such loans and it is an estimate of the loss of revenue due to defaults. It is therefore subtracted from total (or gross) revenue.

RBC issues insurance in various areas, and the category of “PBCAE” reflects expenses associated with fulfilling its obligations in paying out for insurance policies. It too is subtracted from total revenue.

In the annual report, the category of “Non-interest expenses” is subtracted from total revenue, to yield the category “Income before income taxes.” 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 (before adjustments)

(Millions of Canadian dollars)
Human resources $ 14,600
Salaries $ 6,600
Variable compensation 5,706
Benefits and retention compensation 1,876
Share-based compensation 418
Equipment 1,777
Occupancy 1,635
Communications 1,090
Professional fees 1,305
Amortization of other intangibles 1,197
Other 2,535
Total non-interest expense $ 24,139

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 issues are related to the category “Human resources.” The category “Variable compensation” is difficult to determine. Should it be categorized as part of salaries or as part of surplus value? Without more information, it is impossible to tell how much is received due to exploitation of regular bank workers and how much is due to being exploited by management. It can, however, be assumed that some of the compensation is due to the exploitation ow regular bank workers. For example, in the proxy circular of the RBC, it is stated (page 52):

A significant portion of variable compensation (at least 70% for the CEO, at least 65% for members of group executive and at least 40% for other material risk takers) is deferred with a vesting period of three or four years, consistent with our compensation principles and relevant regulatory guidelines.

The guidelines used are based on the Financial Stability Board standards (FSB standards). On page 3 of FSB Principles for Sound Compensation Practices: Implementation Standards (2009), it is stated:

Subdued or negative financial performance of the firm should generally lead to a considerable contraction of the firm’s total variable compensation, taking into account both current compensation and reductions in payouts of amounts previously earned…

Accordingly, as in the case of another Canadian bank (CIBC), I have decided to allocate 10 percent of such variable compensation to surplus value or profit and the rest to wages and benefits.

Of course, I may be wrong. Variable compensation for bank workers could be directly tied to the number of hours worked (just as the level of income varies for workers who work by the piece is tied to the number of hours worked and to the intensity of the work). However, counterarguments (and, perhaps, further data) would have to be provided to justify including it as part of “Human resources.”

On the other hand, the category “Benefits and Retention Compensation” is probably, for the most part, costs for employing bank workers and therefore should be included in calculating variable capital. Benefits include such items as

medical; prescription drug; dental; life and accident insurance; and short-term and long-term
income protection. Employees also have access to a number of health and wellness initiatives including our Employee Care program, which provides 24 hour a day access to information and confidential consultation on a wide range of work/life issues.

The category “Share-based compensation” is limited “to certain key employees and to our non-employee directors.” These are probably not “salaries” as payment for working at RBC but form part of compensation for exploiting the rest of the workers at RBC. Unlike the “Performance-based compensation” category in the case of the Canadian Imperial Bank of Commerce (CIBC), this category seems independent of work-based compensation. Hence, I include “Share-based compensation” as part of surplus value (s).

Treating share-based compensation purely as surplus value increases the total “Income before income taxes” results in a greater level of adjustment than was the case for the calculations for CIBC and TD Bank workers, but it perhaps reflects a more accurate calculation of surplus value obtained since it involves a somewhat more detailed categorization of the distribution of compensation.

I accept the other categories without adjustments (unless someone can provide reasons for adjusting them).

Ten percent of the amount in the category “Variable compensation”(ten percent of 5,706=571)) and “Share-based compensation” (418) are added to the revenue category “Income before income taxes,” (15,914) to yield the following accounts:

Adjusted Results

Income before income taxes (surplus value or s): 16,903

Human resources (total variable capital, or total v) $ 13, 611
Salaries $ 6,600
Variable compensation 5, 135
Benefits and retention compensation 1,876

The Rate of Exploitation of RBC Workers

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 16,903/13,611=124 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.24 cn surplus value or profit for free (calculated on the basis of the procedure outlined in the post on the rate of exploitation of CIBC bank workers). Alternatively, for every hour worked, a Royal Bank of Canada worker works 74 minutes (or 1 hour 14 minutes) for free for RBC.

To translate this into the number of hours RBC workers work free for RBC and how many hours they would have produced an equivalent value to their own cost of production (if they worked in a sector that produced value rather than just transferred it), to it would be necessary to know the length of time that they work per day, or the length of the working day. Unfortunately, I was unable to find that information. Consequently, I used the information I found on the length of the working day for the workers at the Canadian Imperial Bank of Commerce (CIBC).

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

8 hours a day

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

They vary – just like it does anywhere.

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

8-10 hours

I work 7.5 hours each day.

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

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 5.75- hour working day (345 minutes), RBC workers spend 154 minutes (2 hours 34 minutes) to obtain their wage for the day, and they spend 191 minutes (3 hours 11 minutes) in obtaining a surplus value or profit for RBC.
  2. For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, RBC workers spend 161 minutes to obtain their wage for the day, and they spend 199 minutes in obtaining a surplus value or profit for RBC.
  3. 7-hour working day: 420 minutes: in a 7-hour working day, RBC workers spend 188 minutes to obtain their wage for the day, and they spend 232 minutes in obtaining a surplus value or profit for RBC.
  4. 7.5-hour working day: 450 minutes: in a 7,5-hour working day, RBC workers spend 201 minutes to obtain their wage for the day, and they spend 249 minutes in obtaining a surplus value or profit for RBC.
  5. 8-hour working day: 480 minutes: in an 8-hour working day, RBC workers spend 214 minutes to obtain their wage for the day, and they spend 266 minutes in obtaining a surplus value or profit for RBC.
  6. 10-hour working day: 600 minutes: in a 10-hour working day, RBC workers spend 268 minutes to obtain their wage for the day, and they spend 332 minutes in obtaining a surplus value or profit for RBC.

It should be noted that I have used the verb “obtain” rather than “produce.” In Marxian economics, bank workers, as well as sales workers do not produce surplus value but rather transfer the surplus value already produced. This does not mean that these workers are not exploited capitalistically; they are used impersonally by the employer to obtain surplus value and a profit. Furthermore, things produced by others are used by employers such as CIBC to control their working lives in order to obtain surplus value or profit.

As in the post for the determination of the rate of exploitation of workers at Canadian Imperial Bank of Commerce, I have the same questions for social democrats.

RBC workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract,” “decent wages” 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,” “decent wages” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.



A Private Employer’s “Humanism” in Sweden: The Dream of Social Democrats Everywhere

As I pointed out in my critique of Jane McAlevey’s reference to Sweden’s so-called ‘leveling of the playing field for children’s opportunity for success from birth onward,” (see   Review of Jane McAlevey’s “A Collective Bargain: Unions, Organizing, and the Fight for Democracy”: Two Steps Backward and One Step Forward, Part Two), social democrats tend to idealize the Scandinavian countries. I began to more directly debunk this social-democratic myth in the post  A Short List of the Largest Swedish Employers by the Number of Employees, Profits and the Profits per Worker ).

Let us look at the behaviour of one private employer in Sweden, which supposedly instituted humanistic methods for helping workers to become more healthy: the private employer Scania, a multinational capitalist manufacturing firm (from page 140, Christian Maravelias, Torkild Thanem, Mikael Holmqvist. “March Meets Marx: The Politics of Exploitation and Exploration in the Management of Life and Labour”. Published online: 2012; pages 129-159):

Scania is an internationally leading manufacturer of heavy trucks, buses and coaches, and industrial and marine engines. It operates in some 100 countries with approximately 34,000 employees [in another source, it says 45,235].. Scania was founded in the late nineteenth century and has built and delivered more than 1,500,000 trucks, buses and engines.

Scania is well known both for its products and for its stable and long-term strategic focus. It has grown organically, primarily through internal financing, and it has remained in the same product category for more than 80 years. This conservatism has been successful, yielding annual profits for more than seven consecutive decades and helped avoid regular lay-offs since the 1940s. Today Scania is regarded a stable and attractive employer known for combining continuous improvement in production with safe and professionally stimulating working conditions.

Workers in Scania were subject to a scientific management system, with a top-down management style. As a consequence, (page 145):

the previous system was associated with high levels of personnel turnover (30%) and illness absenteeism (25%),

To deal with this problem, the union pressured for the development of a lean production model in the style of Toyota (pages 145-146):

the union was able to exercise considerable bargaining power, almost forcing the firm to accept a version of lean production that was aligned with principles of health and well-being.

However, Scanian management turned the situation to its advantage by coopting the process of a move towards  so-called health and wellness:

Like many lean production initiatives, Scania’s turn to this kind of system in the 1990s implied an emphasis on self-managing teams, continuous improvement and individual responsibility (see, e.g. Adler, 1993; Adler, Goldoftas, & Levine, 1999; Delbridge, 1995; Delbridge, Turnbull, & Wilkinson, 1992). Despite an emerging concern with well-being, the most apparent aspect of this related to the objective dimension of exploiting labour. As new tasks and responsibilities were added to all factory jobs, Scania was able to extract more value from the salary they paid workers. Making workers take individual responsibility for constantly improving the production process intensified work, as it meant that they had to do more for the same salary: in addition to take responsibility for executing predefined tasks, workers in self-managing teams were expected to set goals and find ways of reaching these goals.

This meant that each team member had dual roles: both as an operator and as a reflective practitioner. As operators, team members carried out more or less pre-defined tasks according to standard operating procedures. As reflective practitioners, they stepped out of these same processes and observed them from a distance to identify opportunities for improvement.

As reported through previous studies of lean production (e.g. Delbridge, 1995; Delbridge et al., 1992; Parker & Slaughter, 1990), the enhanced exploitation of labour and consequent work intensification was deeply related to speed, posing production speed in a tight relationship to production error.

The shift from strictly hierarchical managerial structures to more horizontal managerial structures (with, of course, the hierarchical managerial structure still prevailing “in the last instance”) led to the employer engaging in the exploration of new organizational structures to exploit its working force, a feature characteristic of capitalist firms as they are subject to the dual constraint of the need to exploit their working force while being subject to competitive rivalry from other capitalists (page 132):

The basic problem facing firms subject to increasing competitive pressures is to balance exploitation, which is incremental and may facilitate short-term competitiveness, with exploration, which is radical and might enable long-term competitiveness. The reason for this balancing act is that exploitative pursuits tend to undermine explorative pursuits.

This exploration of new ways of exploiting labour led to a focus on managing the health of workers (page 140):

To deal with problems of high costs and accident levels as well as high levels of production error, illness absenteeism and employee turnover, Scania decided to implement a lean production system inspired by the justin- time and total quality management principles of Toyotaism. This was later combined with investments in health promotion, and it is the emphasis on health in particular which makes this case distinct from previous studies of lean production.

The exploration of control over the health of the workers led, on the one hand, to attempts to control their subjectivity (their “mind set” or their “attitude”) (page 142):

Having the right job skills was only seen to constitute one part of this. Perhaps more reminiscent of previous research on service work (e.g. Callaghan & Thompson, 2002), high performance was just as much about having the right mind-set, that is having the motivation to be an active, committed and ambitious employee. It was acknowledged by managers and workers that this was not an easy task, because a partly new type of employee was required for the lean production system to work properly. Since working the production line was hard work, workers needed to be in
good shape. But since this also involved efforts to enhance output and quality, it required a particular person who was motivated and committed to change and improvement.

On the other hand, the attempt to control the subjectivity of the worker also led to attempts to control life after work through what programs that seemed to benefit workers (pages 142-143):

This approach blurred the boundaries between work and life. In the words of one team leader, ‘being active and motivated is not a capacity you can switch on and off, [y] it comes down to who you are and how you live your life’. Hence, workers were expected to go far in adapting to the system. But if Scania was to live up to its goal of being a ‘responsible and caring employer’ as well as a lean firm, this obliged them to make far-reaching adaptations, which go beyond what has been reported in previous studies (e.g. Adler, 1993; Adler et al., 1999; Delbridge, 1995; Delbridge et al., 1992). The mutual responsibilities of employees and employer were expressed through two company programmes known as the Employeeship and the 24 Hour Employee. These programmes were also pinnacles in the firm’s integration of lean production and health promotion, involving anything from safe machinery to helping employees lose weight.

These programs were not just window dressing; workers were conceived as resources in a similar fashion to the machines and buildings that Scania owned; workers were expected to take care of themselves outside work and inside work in order to increase the productivity of the company, and if they did not productivity would suffer (page 143):

Scania’s objective exploration of labour, which was aimed to enhance productivity, improve quality and increase profits, required them to re-socialise workers by subjectively exploring their lives, bodies and personalities and what potential they offered in terms of being exploited as labour. This was expressed in rather explicit expectations and norms concerning employee lifestyle. To be physically, mentally and technologically equipped to handle their work, one nurse emphasised that workers were expected to keep themselves in a ‘healthy workable condition’ and
show competence in ‘health-related things such as physical fitness [and] mental strength’.

Although there was no formal right for Scania to control the workers’ lives outside work, on a practical level the two programs did lead to pressure to conform to the requirements of Scania to exploit the workers (page 144):

Of course, Scania had no formal right to interfere with what workers did in their spare time, but when a worker’s private life started to impact
negatively on their work, the firm was able to intervene in the opposite
direction, subordinating life to labour. As argued by one line manager:

If one of my employees doesn’t get enough sleep because he plays poker all night, it is his own business – as long as it doesn’t affect his ability to work. But if it  does  […] – and most likely it will – it is not just his business but my business as  well.

Workers were somewhat ambivalent about how they experienced this. In the words of an IT specialist:

a couple of years ago I went through a divorce. I started drinking a little bit too            much and somehow my boss found out about this. At first, he didn’t say  anything,  but after some time he did, and he also explained that he had spoken to a counsellor at the Health Office who he wanted me to contact. I did, and the therapy helped. But it was somewhat creepy to see how my family problems  were turned into a work problem.

This worker’s life, then, was subjectively re-socialised and explored to fit the new organisation of production which Scania was objectively exploring in the interest of more intensely exploiting labour.

The far-reaching nature of the employer–employee contract, their shared responsibilities and the blurring of the objective exploration of labour contra the subjective exploration of life was further reflected in the 24 Hour Employee programme. More specifically, this involved a mutual sense of caring, where the programme aimed to show how much the firm cares for its employees, on and off the job, by helping them live healthier. However, this programme also emphasised how workers were expected to take care of themselves during and after working hours. Workers did not necessarily view this contract as consensual, and some workers called it ‘a give-and-take thing’. While Scania promised a safe work environment and helped workers take care of themselves, the firm was seen to expect ‘an awful lot’ in return – that workers ‘live in accordance with its standards’.

Lean production did result in some workers feeling stressed out, but rather than attributing the problem to lean production itself (and the nature of the capitalist firm as capitalist firm), the problem is identified as an individual problem (a similar approach is the current psychological fad called “mindfulness”–a variant of the ancient Stoical philosophy of disregarding the real objective social constraints on our lives); used by management, this led to manipulation (pages 148-149): 

Through a therapeutic and reflective approach, the Health School sought to help workers gain better self-knowledge, set limits and prioritise. Again, this was anchored in an emphasis on individual responsibility, where participants had to accept responsibility for their own life and work. This was important since many participants initially tended to associate stress with outside factors, such as their job being too demanding or managers expecting too much. Hence, the therapeutic process was embedded in a somewhat contested terrain where therapists and participants tried to allocate responsibility and blame in opposite directions. Although therapists sometimes relaxed the responsibilities and performance targets for individual workers in the short term, there was never any doubt that participants were required to adapt to the system should they continue to work for the firm. Indeed, therapy made most participants accept individual responsibility for adapting to the system, who thereby ended up subjectively participating in their own exploitation (cp. e.g. Burawoy, 1979; Delbridge, 1995; Thompson, 1989).

The first step in the therapeutic process was to establish a trustful atmosphere where participants were ready to accept and commit to ‘the fact’ that they have a problem with stress. The second step involved mapping out the daily routines of individual participants and their colleagues. Participants were then taught how to become more aware and reflective about their own behaviour and attitudes, and taught to think in more strategic terms about all parts of their lives. While the integration of lean production and health promotion blurred the work–life boundary, this particular task encouraged participants to make distinctions between work, self and private life, and to define goals for all three areas. According to one health coach, this mindset was pursued in the spirit of helping participants gain control over their lives and ‘feel that their lives were the result of their own conscious and informed choices’ rather than forces beyond their control.

Failing to cope, then, was seen as an outcome of limited self-management skills. Incidentally, life became just a bit more like work. Although this might be seen as an example of skill expansion, we would argue that this chimes less with Adler’s (2007) upgrading thesis than with Thompson’s (2007) argument that multi-skilling does not necessarily lead to up-skilling. Here, the subjective exploration of life did not unequivocally make work more varied, diverse and interesting; it also involved a division, simplification and management of life to make it more appropriate for work.

It should be evident now that working for Scania is a double-edged sword since workers’ health, which involves the whole life of workers and not just the working part of their lives, is used as a means for enhancing the company’s bottom line. Ultimately, Scania follows the same process of subordinating workers’ lives to the pursuit of  more money on an ever increasing scale (see The Money Circuit of Capital).

The idealization of the Scandinavian countries by Ms. McAlevey and other social democrats thus does not stand up to scrutiny. Even on the assumption that children have equal opportunity at birth (as Ms. McAlevey claims–without further evidence), when they grow up many become employees–and as employees, they are used by employers as things for obtaining more and more money.

Working lives may in some ways be better in Sweden but in many ways they also may be worse under the social-democratic approach that co-opts workers’ own subjectivity.

This case also illustrates the importance of ideological struggle since employers have many resources to co-opt workers into their own schemes. Organizational struggle in itself is insufficient; it is necessary to engage in a simultaneous struggle both organizationally and ideologically.

Exposing the Intolerance and Censorship of Social Democracy, Part One: The Working Class, Housing and the Police

Introduction

From around February 20 until May 23, 2021 I belonged to an organization in Toronto called Social Housing Green Deal. The organization came to my attention when one of my friends on Facebook invited me to join.

The reason why I joined is that it is involved in a movement for defunding (if not abolishing) the police. I thought that perhaps I could participate in such an organization and contribute by expressing my own point of view. I was wrong.

The following outlines how I actually started participating in the organization and how such participation led to the practical censorship of my views through both actual censorship and the possible manipulation of protocols used for general meetings.

My conclusions about the efforts of this group, at least in relation to defunding the police (and abolishing it) is: it will not be very effective. Its characteristic lack of critical spirit will result in an incapacity to determine what really is required to defund and abolish the police. Its lack of willingness to critically analyze other organizations’ statements will undoubtedly contribute to that incapacity. Finally, its probable use of control over protocols to silence others expresses as well an incapacity to engage in self-criticism–a basic condition for any political advance.

I wish I were wrong, but given their collapse of strategy into tactics and their lack of a critical spirit–my prediction will probably come true. In May 2022, it will be interesting to see whether the social-democratic left has managed to defund the police to any great extent in Toronto. I doubt it.

I believe that Meursault, the protagonist of the existential writer Albert Camus, in his book “L’Etranger (The Outsider in English) sums up my conclusions concerning this organization:

 J’avais eu raison, j’avais encore raison, j’avais toujours raison. [I had been right, I will still right, I was always right.

It is necessary to critique the social-democratic left from the outside since they will try to take measures to stifle dissent from their dogmas. I will elaborate on this assertion in a future post. 

Joining the Group

To join the group, it was necessary to answer why you wanted to join. Anna Jessup is the moderator and administrator. Ms. Jessup asked the following question on February 17, 2021:

Hi Frederick.  Before I add you to our group tell me a bit about yourself.  What made you want to join?
 
Anna

Here is how I responded on February 18, 2021:

Hello Anna,
 
  1. We have met before–at ETTO, I believe, and at Black Creek Community Farm, where, unfortunately, a list of things to be done were itemized but, as far as I know, nothing came of it.
  2. The question, perhaps, is meant to ensure that right-wing people do not attend.
  3. To answer the question properly would involve much personal information and history, and I am uninclined to share that at this time.
  4. I could, as well, ask what the purpose of the group is; I am somewhat reluctant to get involved in organizations that are purely reformist in nature.
  5. To be more specific: Why do I want to “participate?” Because the police are a central feature of a society dominated by a class of employers. They are central to the reproduction of a social order that treats human beings as things to be used by employers.
  6. I have a blog (the abolitonary.ca–although I do not think it is accessible only via that URL, but you made try if interested.) I have posted five posts with the title “Reform versus the Abolition of Police,” and I argue for the abolition of police.
  7. I will be posting a sixth post on Friday concerning the relation between police and unions (not police unions), where I use an article that tries to show that unions function to protect workers by limiting their exploitation (defensive mechanism) but simultaneously function as ideological organizations to integrate workers into the class system of employers.
  8. James Wilt, in Canadian Dimension, argued for the abolition of police whereas Herman Rosenfeld argued for their “transformation.” I criticize severely Mr. Rosenfeld’s view, arguing that his claim that Mr. Wilt engages in sloppy thinking in fact applies to him.
  9. I will be drafting a critique of Harry Kopyto’s critique of Mr. Rosenfeld’s claim that the police can somehow be reformed–and then concedes way too much by claiming that Mr. Rosenfeld is however correct to argue for “reforms” “in the meantime.” This is a social-democratic trick of putting off forever the aim of abolishing the police. Of course, the police cannot be abolished all at once, but the aim of such abolition should always be present–and accepting reforms for the moment when there is insufficient power but always pressing for the abolition of the police. 
  10. My purpose of “participating” in the zoom conference is really to listen–nothing more, for now (perhaps I can learn some things). I have experienced insults from “the left” here in Toronto–“condescending prick” from Wayne Dealy, executive director of CUPE 3902, and “insane” from Errol Young, of JFAAP. I am undoubtedly considered by some among the left as “sectarian”–but they do not seem to want to engage in any kind of debate on my blog concerning issues that I have raised. 
  11. I self-identify as a Marxist.

    Fred Harris

Ms. Jessup responded as follows, on February 20, 2021:

Yes Fred, I remember you.  I respect your Marxist analysis and certainly wish to apply such an analysis to on-the-ground work. 
 
One complication I ran into with our previous work, was that your posts ignited more discussion than I had the time or resources to moderate.  
 
Are you willing to avoid debate on this google group, and simply use it as a way to receive information about upcoming meetings and events?
 
Anna

I responded on the same day as follows:

Hello Anna,
 
I was going to participate at least to a  minimum degree at first, but given the email, I will not even do that. I will limit myself to listening and taking notes.
 
Fred

Being Drawn into Participation 

 
The same day I received the following message: 
 
The link to the meeting will come to you by email a few minutes before 3PM today.
Hope to see you all there.
 
Anna
The important point in the above message is that the zoom “link to the meeting will come to you by email before 3PM.” This is relevant for what happened on May 23, 2021.
 
On February 21, 2021, I wrote the following: 
 
Hello Anna,
 
I am copying below part of a post from my blog that may be relevant to the discussion yesterday–namely, the creation of protective teams, which I believe is a better approach than relying on pressuring council members to vote for defunding the police (until there is sufficient power on the ground).
 
Feel free to use part or all of it–or not.
 
Fred
What I sent Anna was a large part of the post on alternatives to policing (see  Reform versus Abolition of Police, Part Four: Possible Alternatives). 
 
Ms. Jessup’s response was: 
 
Wow, what a great read.
 
I will post it if that’s alright.  I’ll cut out the criticism of Herman as I don’t want to make my friends defensive. 
 
I will post it on our Facebook group. 
 
Very glad I read this.  Thank you.
Ms. Jessup then sent a quest to have what I wrote put up on the organization’s website–which it was.
 
Being drawn into the organization, I started sending recommendations for reading, and in the process expressed some of my own views. On March 10, 2021, for example, I sent the following:
Hello Anna,
 
Attached is another open text document file, this time relating the police to the emergence and maintenance of capitalism. It is, as I indicate in the text, a series of short comments followed by many quotes from the book by Mark Neocleous (2000), The Fabrication of Social Order: A Critical Theory of Police Power.  I will be posting this in the future on my blog. Again, feel free to do anything you want with part or all of it or anything at all.
 
Fred

Ms. Jessup’s response on March 11, 2021:

Thank you!

On April 3, 2021, I sent the following, along with the documents:

Hello Ana,
 
I am attaching two items. The first is a document recommended by SURJ  [Showing Up for Racial Justice] that I received recently, “Building the World We Want: A Roadmap to Police Free Futures,” assembled by Robyn Maynard, graphics by Sahra Soudi. In the document, there is much about defunding the police (much less about its abolition), and very little about the kind of society that the police protect. It is my view that unless the two are connected, it is highly unlikely that the police will be defunded/abolished on a permanent basis since, as I tried to show in the quotes from the book by Mark Neocleus (The Fabrication of Social Order: A Critical Theory of Police Power) and my short comments, the emergence of the modern police and the emergence of a society dominated by a class of employers went hand in hand. 

Hence, the second document is from my blog, quoting from Elizabeth Anderson’s book on the nature of employment relationship: what, in effect, the police protect, is a dictatorship.

Feel free to edit it any way you want.
 
Fred
Ms. Jessup, on April 5, 2021, responded (edited to omit personal information that I should respect): 
Thank you so much.  I’ll need time before I can get to it … But it is very nice to get an email about something positive!
The second document is from my blog:  Employers as Dictators, Part One.
 
On April 6, 2021, Ms. Jessup added: 
 
Good reading.  Thank you.  I have added the Maynard piece to our group’s resource folder.
 
Out of curiosity, in your piece, which I enjoyed, why did you characterize totalitarian aspects of our society as communist rather than simply as totalitarian?
To which I responded on the same day:
 
Hello Anna,
 
To answer your question concerning communist vs. totalitarian: It was not I but Elizabeth Anderson who made a parallel between the dictatorship at work and a communist dictatorship.
 
I believe it was an astute tactic on her part. Many Americans undoubtedly still equate the former Soviet dictatorship with communism. To make a parallel with this former dictatorship may shock many Americans (and undoubtedly many Canadians and Europeans), but it also resonates with their experiences at work. It may thereby create an opening–by creating a contradiction in the readers’ point of view–for discussing the issue of just how democratic the U.S., Canada, Europe, Australia, New Zealand, England, etc. are. Such discussions are sadly lacking in the labour movement in general and the union movement in particular.

 On my blog, I have systematically tried to exhibit the dictatorial nature of employers even in unionized settings via the implicit or explicit management rights that employers have. I have also tried to expose how unions not only fail to address the dictatorial power of employers but serve, through their rhetoric of “fair contracts” and the like, as ideologues of employers. For example, I searched for the expression “fair contract,” “fair deal,” and similar expressions on the Net for CUPE–the largest union in Canada. I quoted 10 different CUPE sources using such ideological rhetoric.

I will be posting, in the future, a similar post on the second largest union in Canada, this time in the private sector, Unifor. 
On April 6, 2021, I received an email indicating that we would have a zoom meeting the following day (April 7), with a zoom link (so that we could video conference). It was to be at 7:30 p.m. rather than the usual 3:00 p.m.: 
 
At that meeting, the eviction of a father with his children was discussed, with twenty-three police cars showing up in Toronto.  I suggested that we need to try to connect this incident with larger issues (the micro with the macro). Ms. Jessup suggested that I do that. I stated that I would do that if someone else would jointly work on it since I lacked the specific details. There was silence.
 
As a consequence, I decided to draft something on my own that would connect up the micro with the macro, starting with the micro and linking it up with wider and wider issues. I did some research to familiarize myself with some writings on the subject of housing as well as to gain a more concrete understanding of the specific incident.
 
As a result, I wrote to Ms. Jessup, on April 15, 2021, I sent the following to her, with the subject heading “Write up: A Critical Analysis of the Life Situation of the Working Class in Relation to Housing and the Police—and What To Do About It.” 
 
Hello Anna,
 
Attached is a draft on some thoughts about the relationship between left-wing activism and the situation of the working class and what can be done about it–by linking short-term problems with long-term goals. 
 
If you or anyone else has any criticisms or suggestions, feel free to make them. I am all ears.
 
Fred
The draft follows. It is quite long (13 pages in draft form). The last part I copied from the page from this blog The Money Circuit of Capital, so I will omit that part. 
 

A Critical Analysis of the Life Situation of the Working Class in Relation to Housing and the Police—and What To Do About It

Introduction

I have been accused, among union circles, of being condescending. However, if by condescending is meant questioning actions that do not lead to goals that I believe are worth pursuing, then I admit to be condescending.

Some may consider the following to be academic. However, I have had some experience with activism. For example, in the early 1980s, when I worked at a brewery in Calgary, I refused an order by supervisors and justified my refusal by stating that I had nothing but contempt for capitalists and their representatives. I was sent home on two consecutive nights. When the union president and the bottling manager met to discuss the issue, the bottling manager stated: “Do you know what that Marxist son of a bitch said?” We workers won this particular battle—the order was cancelled. That, of course, did not mean that we had won the war.

I would appreciate criticisms and suggestions for improvement in what follows, both in terms of accuracy and in terms of arguments.

Immediate Incident as an Occasion for Grassroots Activism

On Good Friday, April 2, 2021, 23 police cruisers showed up at 33 Gabian Way, which is a 19-story building owned by Vila Gaspar Corte Real Inc., or Villa Gaspar Corte Real Non-Profit Housing Inc. (there is some inconsistency in spelling the company).

The building is a combination of rental and social housing, built in 1993. There are 248 residential units. Apparently, the building is linked to Project Esperance, which is a non-profit registered charity. It services 111 units of from one- to three-bedroom units. Rents are geared to income.

According to the police, there were so many police present in order to remove a large number of protesters. The facts speak otherwise.

There were indeed protesters; they were protesting the eviction of Alex, a father of a one-year old and a six-year child. Alex had made arrangements with the landlord to pay rent arrears by March 29. Alex had managed to obtain the money to pay the rent, but a sheriff’s officer showed up to evict him on April 2, without warning. He left the apartment with his two children, but he returned to obtain his possessions. The police showed up and forced their way into the apartment.

The police denied that they were there to enforce the eviction—but if that were the case, why did they force their way into the apartment? Furthermore, one police officer claimed that the police had a court order for eviction and that they were there to evict Alex.

Due to the resistance of neighbours and supporters, Alex was not evicted.

This incident has several aspects to it. Firstly, immediate organized resistance to those with power and wealth can be effective in the short-term. Secondly, when there are supporters for those who are to be evicted, it is likely that the police will show up—in force.

Thirdly, and something that was not emphasized in references to the incident, it is sheriff’s who have the legal right to evict a tenant (with the assistance of police if the sheriff believes there will be trouble), and they need not inform the tenant when they are coming, as the website Steps to Justice: Your Guide to Law In Ontario points out (https://stepstojustice.ca/questions/housing-law/what-happens-if-theres-eviction-order-and-i-dont-move):

After the Landlord and Tenant Board makes an order to evict a tenant, a court official called the Sheriff is in charge of enforcing or carrying out the order.

If you have not moved out by the date the eviction order says you must move, the Sheriff can make you leave and let your landlord change the locks.

Only the Sheriff is allowed to physically evict you

The law does not let your landlord, a private bailiff, or a security guard physically evict you or lock you out. Only the Sheriff can do this. The police can’t evict you either but the Sheriff can ask the police for help if the Sheriff thinks there might be violence.

You can get evicted at any time of year

Many tenants believe that the law does not allow evictions in the winter. That is not true. The Sheriff can enforce eviction orders at any time of year.

The Sheriff does not have to tell you when they are coming to evict you

If you have an eviction order against you, the Sheriff could come to change your locks on any weekday after the date the Board ordered you to move out.”

The issue of the power of sheriffs to evict links up to the more general issue of the modern property system and the aims of those who engage in resistance to evictions (and other forms of resistance involving law-enforcement officers).

Fourthly: What was the aim of the supporters and neighbours? To prevent the eviction, evidently. It worked. It is a short-term victory, however. There will be other evictions, and other evictions, and other evictions. This issue can be looked at from a number of angles.

Strategy and Tactics

The left here in Toronto and elsewhere frequently collapse strategy and tactics, in effect advocating only tactics. This leads nowhere except the perpetuation of the problems and the constant need to resist and to struggle—without any realistic hope of resolving the conditions which constantly generate the problem. This does not mean that reforms should be thrown out of the window. It does mean, however, that activism that stays at the level of tactics will never address the more profound causes of the immediate problems. Robert Knox (2012) addresses this problem in his article titled “Strategy and Tactics.” in pages 193-229, The Finnish Yearbook of International Law, Volume 21, writes, p. 205:

only tactical interventions occur, which are then branded as strategic interventions, foreclosing the possibility of an actual strategic intervention.”

What is the difference between strategic interventions and tactical interventions? The difference has been specified in terms of war as follows (pages 197-198):

Carl von Clausewitz, one of the most influential exponents of modern military theory, defined strategy as:

[T]he use of the engagement to attain the object of the war … It must therefore give an aim to the whole military action. Its aim must be in accord with the object of the war. In other words, strategy develops the plan of the war, and to the aforesaid aim links the series of acts which are to lead to it; that is, it plans the separate campaigns and arranges the engagements to be fought in each of them.

Strategy is – in essence – how it is that one would fight and win a war: connecting the various individual battles together so as to achieve this broader objective. In contradistinction to this is tactics, which is concerned with smaller and shorter term matters. Tactics are concerned with how to win the individual battles and engagements of which the war is composed.

If we wish to translate this metaphor into more general terms, we might say that strategy concerns the manner in which we achieve and eventually fulfil our long term aims or objectives, whereas tactics concerns the methods through which we achieve our shorter term aims or objectives. The obvious conclusion here, and one that will be important to bear in mind throughout this article, is that when we talk of ‘pragmatism’ or ‘effectiveness’ it need not be referring to only the immediate situation. As will be explored more fully below, any tactical intervention will also have strategic consequences. This means that when thinking about effectiveness, it is necessary to understand the inherent relation between strategy and tactics. In so doing, the distinction allows us to consider how effective particular (seemingly ‘short term’) interventions might be in the longer term.

If evictions are going to be stopped permanently, then immediate forms of resistance and immediate actions need to be linked to that goal—not just to incidents of crisis as they arise.

Nothing Fails Like Success

This is a take on the title of chapter one of Jeremy Reiman’s and Paul Leighton (2017), in The Rich Get Richer and the Poor Get Prison: Ideology, Class, and Criminal Justice; that title is “Nothing Succeeds Like Failure.” They argue that the police and prisons fail to reduce crime rates and, in their failure, perpetuate their own need or existence. Page 45:

“Failure is, after all, in the eye of the beholder. Here lies the key to understanding our failing criminal justices ystem: The failure of policies and institutions can serve vested interests and thus amount to success for them!

If we look at the system as “wanting” to reduce crime, it is an abysmal failure that we cannot understand. If we look at it as not wanting to reduce crime, it’s a howling success, and all we need to understand is why the goal of the criminal justice system is to fail to reduce crime. If we can understand this, then the system’s “failure,” as well as its obstinate refusal to implement the policies that could remedy that “failure,” becomes perfectly understandable. In other words, we can make more sense out of criminal justice policy by assuming that its goal is to maintain crime than by assuming that its goal is to reduce crime!”

Leftist activism, similarly, but from the opposite end, by succeeding in short-term tactics, perpetuates its own constant need to engage in activism—activism for activism’s sake. It may make those who engage in such activism feel useful, but it fails to address the need to incorporate a strategic approach into activism. If activism succeeded in eliminating the need for activism, it would eliminate itself. This is one reason why strategy is collapsed into tactics—it permanently perpetuates the need for activism. Its short-term successes guarantee the continued need to engage in—short-term tactics.

The Bad Infinite

We can give this problem a philosophical turn. G.W.F. Hegel, a German philosopher, criticized the theoretical equivalent of this view in the following terms of the “bad infinite”–an infinite that never reaches an end (from The Encyclopaedia Logic, page 150:

“A limit is set, it is exceeded, then there is another limit, and so on without end. So we have nothing here but a superficial alternation, which stays forever within the sphere of the finite. If we suppose that we can liberate ourselves from the finite by stepping out into that infinitude, this is in fact only a liberation through flight. And the person who flees is not yet free, for in fleeing, he is still determined by the very thing from which he is fleeing. So if people then add that the infinite cannot be attained, what they say is quite correct….”

The bad infinite never reaches any end since it presupposes the general context that generates the particular or specific problems will continue to exist. To go beyond the bad infinite requires questioning that context—and hence developing a strategy designed to specify the problem at the general level while simultaneously addressing more immediate problems in such a way that successes feed into the resolution of the problem at the more general level.

Housing and Capitalism

Houses and housing form a central aspect of capitalist society. This has been noticed since the World Economic Crisis of 2007-2008. Wolfgang Streeck (2016), in his book How Will Capitalism End? Essays on a Failing System, argues that there have been four crises of democratic capitalism since the last world war:

“With the crash of privatized Keynesianism in 2008, the crisis of postwar democratic capitalism entered its fourth and latest stage, after the successive eras of inflation, public deficits and private indebtedness (Figure 2.5). With the global financial system poised to disintegrate, nation states sought to restore economic confidence by socializing the bad loans licensed in compensation for fiscal consolidation. Together with the fiscal expansion necessary to prevent a breakdown of the ‘real economy’, this resulted in a dramatic new increase in public deficits and public debt – a development that, it may be noted, was not at all due to frivolous overspending by opportunistic politicians or misconceived public institutions….”

Monetary instability (inflation), unemployment, public deficit spending and indebtedness followed by a shift to private indebtedness and deregulation of credit (and austerity measures) led to a bubble in housing prices and to speculative credit extended to those unlikely to be able to pay for mortgages once interest rates rose or they became unemployed. Of course, the crash of 2007-2008 increased public debt several fold and the pandemic has done the same.

Housing, Capitalism and the Police

Brendan Beck and Adam Goldstein (2017), in their article “Governing Through Police? Housing Market Reliance, Welfare Retrenchment, and Police Budgeting in an Era of Declining Crime, argue somewhat differently from Reiman and Leighton—though both arguments may complement each other.

They note, like Reiman and Leighton do, that crime rates have generally declined since the 1990s. On the other hand, police budgets have generally blossomed. They explain this general increase in municipal police budgets because of the increased centrality of real estate in the city economy. Page 1183:

“One key puzzle is why penal state growth continued unabated long after crime levels peaked in the early 1990s. We focus on local policing and consider the relationship between growing city-level law enforcement expenditures and two shifts: first, the move toward an economy increasingly organized around residential real estate; and second, city-level welfare retrenchment. We argue that increasing economic reliance on housing price appreciation during the late 1990s and the 2000s heightened demand for expanded law enforcement even as actual risks of crime victimization fell. At the same time, cities increasingly addressed social problems through criminal justice—rather than social service—capacities.

As homes became a vehicle for workers to not only live but also to obtain some security with rising house prices, their interests in maintaining the price of the house increased. This interest has spilled over into support for policing efforts (however ineffective) that contribute to the maintenance of the prices of housing and land. This spillover, in turn, has racist implications since concentrations of coloured and minorities are perceived by homeowners as threats to property prices—but there is counterevidence that in the case of the Latino population there is no such perceived threat. Page 1186:

Thus, the threat theory hypothesizes that investment in police forces (per capita force size and/or expenditure) will be positively associated with racial minorities’ share of the local population, net of crime rates. Studies have consistently found support for this hypothesis (e.g., Carmichael and Kent 2014; Jacobs and Carmichael 2001; Kent and Jacobs 2005; McCarty, Ren, and Zhao 2012; Sever 2003; Vargas and McHarris 2017). In fact, the percentage of black residents typically appears as one of the single most significant predictors in models of city police strength. However, recent studies find no evidence of a similar positive association between the percentage of Latino residents and police strength, neither cross-sectionally nor longitudinally (Holmes et al. 2008; Zhao, Ren, and Lovrich 2010).”

On the other hand, it is necessary also to consider competition between workers in working for an employer:

Two different studies, King and Wheelock (2007) and Stults and Baumer (2007), use geocoded survey data to probe the mechanisms underlying racial threat effects. Both found that the observed association between the percent of black residents and police size is driven substantially by whites’ perceived economicthreats in the labor market and in social service provision. Racial threat is driven to a lesser extent by whites’ fears of crime victimization (Stults and Baumer 2007).”

However, their study seems to use the threat of falling residential prices as a proxy or for economic threat. Page 1187:

In examining the use of police as a means of governing housing markets, we also consider how the ethno-racial makeup of cities might have interacted with shifting forms of economic threat. As we elaborate below, as urban economies came to be based more and more around real estate, perceived economic threats (and the racialized fears on which they draw) increasingly took the form of concerns about protecting housing prices. Previous research, using the Gini coefficient to measure economic threat, finds a positive effect on police department size (Carmichael and Kent 2014). We use measures of more specific economic threats: those around housing.

They mention other factors that influence the growth of police budgets, such as the structure of municipal politics (the degree to which it is subject to partisan politics), whether it is a mayoral election year and the previous year’s budget.

The Financialization of the Housing Market

Beck and Goldstein argue that, as crime rates declined in the 1990s, there was a simultaneous financialization of the housing industry. This compensated, at least in part, for the stagnation in wages and salaries. Page 1188:

Between 1992 and 2005, the median home price doubled and the amount of outstanding mortgage debt tripled (Census Bureau 2012; Federal Reserve Board 2016). Wages were stagnant during this time, but the proliferation of home equity loan instruments allowed homeowners to utilize their houses as income streams, making homeownerseconomic livelihoods predicated increasingly on continual housing price growth (Davis 2010). Home equity extraction made up 10 percent of householdsincome nationally and as much as 15 percent in places like California and Florida (Greenspan and Kennedy 2007; Irwin 2006). Home value was important for homeowners and for regional economies.

Homeowners, especially in the present, where heightened prices for homes takes up some of the slack for limited wage and salary increases, tend to support the police more than renters:

“Given linkages in popular narratives between crime rates and residential property values, we suspect that part of the explanation for continual expansion of policing can be found in the increasingly central role of housing markets in the economy, and politicians’ responsiveness to homeowners’ concerns about protecting property prices. As Simon has theorized, “the more a person’s future economic security depends on the value of his or her home, rather than earning capacity, the more we might expect this person to focus on factors like crime that could damage the value of the home” (2010, 195). Past research has shown that homeowners are more satisfied with and supportive of police than are renters (Reisig and Parks 2000; Schuck, Rosenbaum, and Hawkins 2008).

The shift from homes being a place primarily to live in and have a private life to a form of equity involves not just support for measures to reduce crime but other measures to ensure that the “public area” of the surrounding neighbourhood be protected from potential threats of disorder and not just crime:

Economists have long documented the negative effects of reported crime levels on housing prices, and this effect was especially pronounced during the 1990s (Hellman and Naroff 1979; Pope and Pope 2012; Schwartz, Susin, and Voicu 2003). The deleterious impact of crime on property values represents a salient social fact within the residential real estate field, one that is ubiquitously repeated in popular media and on real estate websites. Indeed, the reorientation toward real estate heightened the importance of guarding against not only crime, but also disorder, lifestyle nuisances, loitering, and anything else that might threaten property values. The salience of such economic fears may help explain the fact that the same exact majority of GSS respondents (57 percent) supported spending more public money on law enforcement in 2006 as they did in 1990, when crime rates were 50 percent higher.3 Even safe-feeling homeowners might have supported expanded policing to protect home values.”

It was no longer actual crime (however defined by the status quo) but the threat or possibility of disorder and crime that became a concern. Pages 1188-1189:

“…policing strategies that had police respond to perceived disorder, the expanded role for police went hand in hand with an expansion in the justificatory logics and motives to rationalize continued growth. For instance, a 2010 Department of Justice Community Oriented Policing Services report aimed at the law enforcement community argues that police agencies should reconceptualize their role and refocus their energies on combating fear of crime (rather than crime) because—among other things—it undermines residential property values (Cordner 2010).

At the same time, as governments retrenched on welfare services, the police were called upon to address problems normally handled by such services. The expansion of police services and the retrenchment of welfare services, however, should not lead the left to idealize welfare services. Welfare services have been oppressive in various ways such as supervising personal lives to ensuring that those who receive assistance are the “deserving poor.”

Furthermore, as the incident at 33 Gabian Way demonstrates, public housing can be quite oppressive. Evictions can occur in just as brutal fashion as in private housing. The left should not idealize the public sector—which they often do.

Housing, Police and the Working Class

The use of houses as equity among the working class has led to a split within the class in terms of immediate material interests. From Michael Berry, Housing Provision and Class Relations under Capitalism: Some Implications of Recent Marxist Class Analysis, pages 109-121, Housing Studies, Volume 1, Issue 2, pages 115-116:

Income differences are, as has been argued, also internalised within classes. In the case of the working class, for example, higher paid workers in primary jobs are doubly advantaged; they enjoy both higher and more secure wages and a higher probability of: (a) gaining access to owner-occupation; and (b) securing high capital gains from domestic property ownership. Conversely, workers in the secondary job market and those relegated to the reserve army of unemployed are more likely to be denied access to home ownership, or, if allowed access, concentrated in housing submarkets where property values remain relatively stable. Tenancy therefore evolves as a residual tenure category in a dual sense; not only can land supporting rental housing often be converted to more profitable non-residential uses, it evolves as ‘housing of last resort’ for less privileged sections of the working and nonworking population whose low incomes place strict limits on the rental returns to landlords, both factors leading to a degree of underprovision and homelessness.

In summary, working class disunity, associated with unequal access to and benefits from home ownership, and its political expression through various forms of struggle, is part of a wider system of inequality and exploitation. Both forms of advantage to higher paid workers privileged position in the workplace, over and against the immediate interests of other workers. depend on their being able to maintain their privileged position in the workplace, over and against the immediate interests of other workers.

Bad Infinity Again, or the Labour of Sisyphus—Unless We Begin to Link Strategy and Tactics

The upshot of all this is that unless activists begin to linking the immediate issues to larger issues, it is highly likely that they will achieve only fleeting success. The split in the working class means that there will be substantial resistance by a substantial section of the population to efforts to defund the police or to abolish it unless measures are taken to address the wider concerns and issues.

How to Link Strategy and Tactics

How can this be done? One possibility is to divide those who do have relatively secure positions, with relatively well-paid jobs (frequently the unionized sector) into two or three age groups as well as dividing each group into homeowners and those who do not own homes (condos, townshomes, houses, life leases or other forms of home ownership).

Those who are nearing retirement are unlikely to want to threaten their own security, both in terms of their pensions and in terms of their home ownership (for the importance of security for identifying working-class consciousness, see Marc Mulholland (2010), ‘Its Patrimony, its Unique Wealth!’ Labour-Power, Working Class Consciousness and Crises: An Outline Consideration. Pages 375-417, In Critique: Journal of Socialist Theory, Volume 38, Issue 3—although I believe he fails to include other aspects that motivate workers, such as the fight for their freedom and justice). Older workers also do not also have a whole life ahead of them to work for an employer. It is likely that only if their livelihood were threatened in some way (such as redefining the age of retirement) would they be prone to engage in serious battles with the aim of changing the economic and political structure. Older unionized workers would more likely support the police and less likely support a movement for defunding the police or in abolishing the police (empirical studies are needed here. Are there any?)

Some middle-aged workers, on the other hand, may still have to pay off their mortgage and still have to subordinate their will to the power of an employer for some time; others, of course, may approach older unionized workers in having a secure life. Some middle-aged workers may thus be more prone to oppose the police whereas others may be more prone to support them. It all depends on their life circumstances.

Younger unionized workers may have inherited housing from their parents, so they may be more prone to support the police. On the other hand, they more likely have a lifetime of having to work for an employer (although some may aspire to owning their own businesses, of course). These workers may be more susceptible to opposing police funding and the existence of the police because of their life situation.

To combat some of the unionized workers’ tendency to support the police, it would be necessary to show them the nature of their situation for the foreseeable future and to criticize alternative views that present their lives as somehow being fair. On the one hand, it would be necessary to show that their life working for an employer in hopes of owning a home entails a substantial part of their lives being used as means for employers’ ends over which they have little control. On the other hand, it would be necessary to criticize union rhetoric that presents collective bargaining and collective agreements as somehow fair.

To provide such criticisms, it is necessary to show that workers are used as means for other person’s ends. To that end, I reproduce the page on my blog on the money circuit of capital (it is fairly detailed, but it is necessary in order to oppose the rosy picture presented by union and business rhetoric about the future life of workers—especially younger workers) (if anyone has alternative means for exposing the limitations of union rhetoric, feel free to criticize this writing, including what follows, or if they can simplify it in any way).

… 

Conclusion: Using All Opportunities for Criticizing the Treatment of Human Beings as Means for Other People’s Ends

If a movement for defunding the police is to gain ground, it is necessary to use every opportunity that arises to criticize the economic and political structure in the wider sense and not just engage in activist actions at the micro level. The micro (where tactical decisions must be made) and the macro (where strategic decisions must be made) need to be linked constantly. How to do that is the central question.

In the movement for a fight for $15, for example, for whatever reason, the fight in Canada (not in the United States) has been paired with the concept of “fairness.” This provides the more radical left with an opportunity to challenge such rhetoric.

The same could be same with union rhetoric. For example, I compiled a list of 10 statements by CUPE on the fairness of collective agreements, put them up on my blog and queried how collective agreements, which limit the power of employers (and hence are, generally, better than no collective agreements) are somehow fair.

I would like to hear from others on how to link strategy and tactics together in the case of defunding the police and abolishing the police. Alternatively, I would be interested in reading arguments that short-term tactics can solve long-term problems.

The Silence of the Social-Democratic Left 

On April 18, 2021, I received an email indicating another meeting was to take place on April 24 at 3:00 p.m.  However, on April 24 the meeting was postponed until the following week. I received an email on April 29, which contained a zoom link for the Sunday, May 2 meeting. 
 
I was already feeling frustrated by any lack of response to what I considered to be a request by Ms. Jessup as administrator and monitor of the organization for a linking of micro and macro issues. Ms. Jessup’s silence–and the possible lack of circulation of the draft that I had written to other members of the previous zoom meetings–seemed to indicate that my draft work may have been censored. I had agreed at the beginning of joining this organization not to participate in its meetings, and then I was invited to participate, which I did by drafting something that tried to link up issues on the ground with more general issues–only to be met with–silence and possible censorship. 
 
I wanted to place the issue on the agenda (it was not on the agenda), but I also wanted to avoid clashing with Ms. Jessup, so I did not say anything about it at the May 2 meeting. However, I did draft something else that was more immediately relevant to the meeting: On the agenda, there were two motions for support of statements made by other organizations; I made some comments on these statements. One was a statement made by an organization in Toronto called Justice for Immigrant Workers (J4MW). I sent it to Ms. Jessup on May 1, 2021. 
 
Ms. Jessup’s reply:
Great.  Looking forward to seeing you Sunday
I also sent her some comments on another motion for support of the statement made by “Suppress the Virus Now Coalition.” 
 
Since this post is already quite long, I will post the two drafts  in future posts and conclude this series by including my final writing to this group, on the People’s Pandemic Shutdown.
 
I will merely repeat what I wrote near the beginning of this post: The reason why I joined is that it is involved in a movement for defunding (if not abolishing) the police. I thought that perhaps I could participate in such an organization and contribute by expressing my own point of view. I was wrong.
 
My conclusions about the efforts of this group, at least in relation to defunding the police (and abolishing it) is: it will not be very effective. Its characteristic lack of critical spirit will result in an incapacity to determine what really is required to defund and abolish the police. Its lack of willingness to critically analyze other organizations’ statements will undoubtedly contribute to that incapacity. Finally, its probable use of control over protocols to silence others expresses as well an incapacity to engage in self-criticism–a basic condition for any political advance.
 
I wish I were wrong–even partial defunding of the police would improve our lives, but given the dogmatism of the social-democratic left and their lack of a critical spirit–my prediction will probably come true. In May 2022, it will be interesting to see whether the social-democratic left has managed to defund the police to any great extent in Toronto.
 
I believe that Meursault, the protagonist of the existential writer Albert Camus, in his book “L’Etranger (The Outsider in English) sums up my conclusions concerning this organization: 

J’avais eu raison, j’avais encore raison, j’avais toujours raison. [I had been right, I will still right, I was always right.

It is necessary to critique the social-democratic left from the outside since they will try to take measures to stifle dissent from their dogmas. 

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

Introduction

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

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

The Nature of the Rate of Exploitation

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

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

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

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

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

Conclusions First

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

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

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

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

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

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

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

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

From pages 4-5 of the collective agreement:

ARTICLE FIVE – MANAGEMENT RIGHTS

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

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

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

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

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

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

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

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

Data on Which the Calculation is Based 

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

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

Revenues and Other Income (millions of $)

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

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

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

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

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

Operating, Selling and General OperatingExpenses

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

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

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

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

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

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

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

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

So far, we have:

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

Adjustments

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

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

Total Revenue Adjustments

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

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

Consequently, I use the initial “Gross revenues.”

Adjusted total revenue $40,511, or

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

Accordingly,

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

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

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

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

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

Total Expenses Adjustments

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Searching the Web, I found the following general explanation:

What is a Foreign Exchange Gain/Loss?

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

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

Accordingly, the adjusted “Financing expenses” is:

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

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

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

Accordingly,

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

So, with the adjustments in place:

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

The Rate of Exploitation

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

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

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

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

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

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

According to the Suncor Energy website:

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

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

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

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

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

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

From pages 4-5 of the collective agreement:

ARTICLE FIVE – MANAGEMENT RIGHTS

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

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

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

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

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

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

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

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

Appendix

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The subsequent observation went well, according to him.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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