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Kissinger’s Plan: “Use Economics to Build a World Political Structure”

Kissinger’s Plan: “Use Economics to Build a World Political Structure”

Power Politics and the Empire of Economics, Part 1

By: Andrew Gavin Marshall

1 June 2015

The following is an excerpt of the introductory chapter to my book. Read the full chapter here. 

Check out my Kickstarter campaign here

The President sat and listened to his closest adviser as they plotted a strategy to maintain Western domination of the world economy. The challenge was immense: divisions between industrial countries were growing as the poor nations of the world were becoming increasingly united in opposition to the Western world order. From Africa, across the Middle East, to Asia and Latin America, the poor (or ‘developing’) countries were calling for the establishment of a ‘New International Economic Order,’ one which would not simply serve the interests of the United States, Western Europe, and the other rich, industrial nations, but the world as a whole. It was on the 24th of May 1975 when President Gerald Ford was meeting with his Secretary of State and National Security Adviser, Henry Kissinger, easily the two most powerful political officials in the world at the time. Kissinger told the President: “The trick in the world now is to use economics to build a world political structure.”[1]

10 Jan 1974, Near Vladivostok, USSR --- In the dining car on the train from Vladivostok to the airport on November 23, 1974, President Gerald Ford discusses progress on the S.A.L.T. agreement with Secretary of State Henry Kissinger. President Ford and Kissinger spent two days in talks with Soviet leaders. --- Image by © Bettmann/CORBIS

10 Jan 1974, Near Vladivostok, USSR — In the dining car on the train from Vladivostok to the airport on November 23, 1974, President Gerald Ford discusses progress on the S.A.L.T. agreement with Secretary of State Henry Kissinger. President Ford and Kissinger spent two days in talks with Soviet leaders. — Image by © Bettmann/CORBIS

Ford and Kissinger agreed that the United States could not accept a new ‘economic order’ that would undermine American and Western power throughout the world. Uprisings, revolutions and liberation movements across Africa, Asia and beyond had largely thrown off the shackles of European colonial domination, establishing themselves as independent political nation-states with their own interests and objectives. Chief among those goals was for economic independence to follow political independence, to take control of their own resources and economies from the Europeans and Americans, to determine their own economic policies and help to redistribute global wealth along equal and just lines.

The problem for the Western and industrial nations, with the United States at the center, was that formal colonial domination was no longer considered acceptable. In previous decades and centuries, the rich and powerful nations would directly colonize and control foreign societies, establishing puppet governments and protectorates, extracting resources, exploiting labour and expanding their own national power and international prestige. Following the end of World War II, such practices were no longer politically or publicly acceptable. The era of decolonization had taken hold, and the people of the world were failing to remain passive and obedient in the face of great injustices and inequality. War had become a bad word, colonialism was no longer en vogue, and belligerent political bullying by the rich countries increasingly risked a major backlash, threatening to unite the entire world against the West.

A new strategy for global domination had to be constructed. The West could not afford a direct political or ideological confrontation with the developing world, with many top American officials, including Henry Kissinger, acknowledging that if they were to pursue such a strategy they would be isolated and lost, with even the Europeans and Japanese abandoning them. Foreign ministers and heads of state could not appear to be attacking or seeking to dominate the developing world.

It was decided that the war would have to be waged largely in the world of economics and finance, where the conversation would change from that of colonialism and imperialism to the technical details of economic policy. The imperial interests and objectives of the powerful nations that had existed for centuries could no longer be articulated in a direct way. But those same interests and objectives would not vanish. Instead, they would be hidden behind bland, vague and technical rhetoric. The language of economics provides the appearance of impartiality, backed up by pseudo-scientific-sounding studies and ideologies, accessible only to those with the proper training, education and experience, otherwise inaccessible and incomprehensible to the general public. Empire was a thing of the past. In its place rose a new global economy, built by banks not bombs, expanding the reach of corporations not colonies, managing debt not dominions.

The “world political structure” which Kissinger described would not, however, make militaries and foreign ministers and diplomats irrelevant. They would still have a role to play in maintaining and expanding empire, though never calling it by its proper name, instead using words like ‘democracy’, ‘freedom’ and ‘markets’. But the role of such officials would often become secondary to that of the financial and economic diplomats, who would increasingly become the first line of offense in constructing the “world political structure,” the Empire of Economics.

Two days after Kissinger articulated this strategy to President Ford, another meeting was held at the White House with several more high-level cabinet officials. The discussion was a follow-up on the U.S. strategy to construct such a system. Stressing that political diplomats and foreign ministers could not take on the developing world directly, Kissinger told the assembled officials, “it is better to have the Finance Ministers be bastards, that’s where I want it.”[2]

This book is the story of how financial diplomats, politicians, bankers, billionaires, family dynasties and powerful nations have used economics to build a “world political structure,” engaging in a constant game of power politics with and against each other and the rest of the world to construct and maintain their Empire of Economics for the benefit of a small ruling class, the global Mafiocracy: a super-rich, often criminal cartel of global oligarchs and family dynasties.

It is a brutal, vicious world of secret meetings, behind-the-scenes intrigue, financial warfare and coup d’états, economic colonization and debt domination. It is the unforgiving world of empire, an immense concentration of global wealth and power, a parasitic system of world domination built on the impoverishment and exploitation of billions. And it is a world obscured and hidden behind the dry, dull and seemingly empty rhetoric of economics. It is a language in need of translation, a reality in need of elucidation, and an empire in need of opposition.

Power Politics and Empire

It was the largest and most powerful empire the world had ever known. It spanned the globe, across oceans and seas, countries and continents, enveloping much of the known world – and the people throughout it – within the domineering shadows of its political, economic, social, cultural and financial institutions and ideologies. Those who ruled were the wealthy and war-like family dynasties, individual oligarchs, kings of coin, titans of industry, and a religious priesthood of proselytizing propagandists. These rulers would engage in a constant game of ‘power politics’ with and against each other in the quest to gain title, money and influence.

They lie, cheat, steal, kill and conquer; they plant their flags and preach their gospels, serve their interests and those of their unknown (or sometimes) masters. It requires a constant cunning, managing an endless lack of trust for all those around you, fearful that on your way up, others might seek to cut you down. To play the game of power politics in the age of empires is to be pragmatic, strategic and ruthless; it requires no less, but frequently more. It is a practice passed down through families, institutions and ideologies. No, this is not ‘Game of Thrones’, but rather, the Game of Globalization in the Empire of Economics: power politics of the 21st century.

But the game itself has been with humanity as long as empire, and was always seen at the center of the system of power within every empire. Human systems – that is, what we call ‘civilization’ and ‘society’ – are, ultimately, human creations with humans in control. Thus, power – at its center – is always dependent upon the interactions, relationships and emotions of the few individuals and families who rule. When such people get angry or throw a tantrum – because the neighbor boy stole his toy (or Russia annexed Crimea, for example) – wars are waged, and the poor are sent to go murder or be murdered, cities burn to the ground, nations crumble into dust.

The game is not known to many, save for those who play it. The masses are left with simple images, rumours and speculation, if anything at all. A public persona of the more visible rulers must be carefully constructed so as to legitimize their authority. The people must be satisfied to the bare minimum, so that they do not rise up in resentment and fury against the few who live in the most obscene opulence and imperial impunity. If the consent of the population is not maintained, a ruler must seek to control them in other ways, which generally means seeking to crush them, to punish them into submission and subservience. Kill and conquer at home and you can kill and conquer abroad.

Control is based upon a mixture of consent and coercion. The people must be either willing to let the rulers rule, to accept their position in society without question, or they must be made to fear the reach and wrath of the rulers, to be punished and persecuted, segregated and isolated, beaten, raped and murdered. The rulers must be vicious, but appear virtuous. If, however, a choice must be made between acting ruthless and appearing righteous, it is better for the rulers to be wretched and murderous, for the game of power politics is never won by virtue alone, but being vicious can get you far enough without assistance.

Niccolo Machiavelli wrote his book The Prince more than 500 years ago as an examination of power politics and methods through which one can achieve and maintain power within the old warring Italian city-states. Having long served as an adviser and strategist to various rulers, including princes, popes and dynasties, Machiavelli asserted that “it is desirable to be both loved and feared; but it is difficult to be both and, if one of them has to be lacking, it is much safer to be feared than loved.” He explained that this was so because “love is sustained by a bond of gratitude which, because men are excessively self-interested, is broken whenever they see a chance to benefit themselves.” On the other hand, “fear is sustained by a dread of punishment that is always effective.”[3] Machiavelli has long been accused of being a cynic or pessimist in his interpretations of human nature, but this misses the point.

prince

Machiavelli’s work was examining the attitudes, nature and actions of those who wielded significant power, which was always a small minority of the population. Indeed, far from a cynical interpretation, The Prince is rather a pragmatic and accurate interpretation of a deeply cynical world where every institution and individual wielding significant influence engages in a constant game of power politics designed to benefit themselves, maintaining or expanding their own power, often at the expense of others. It is a world where every relationship, title, position and even marriage holds strategic significance. For those individuals and families who rule, every decision must be made as a calculated attempt to preserve and expand their power. If this is not done, they will not remain rulers long, for this is how the game is played and won, and if one does not play by the rules, others will. Thus, the more cunning and ruthless a strategist, the more likely they are to elevate through the hierarchy because they will do what others will not, acting without hesitation to manipulate or crush others in order to rise higher.

It is a game – like that of all empires past – in which the few compete and cooperate with one another in the advancement of their own individual, familial, national or global interests, expanding their empires. It is a game in which the vast majority of humanity are – as they have long been – left to suffer the consequences, fight the wars, drown in debt, poverty, hunger and misery. On occasion, and increasingly often, groups of people – segments of the population – rise up in resistance, riot, revolt or even revolution. This is when the people are able to engage more directly in the game of power politics, because they change the game. Suddenly, all the key players at the top notice the building fury of the masses and so the game itself is put at risk. The key players will almost always – even in spite of their frequent competition and opposition to each other – work together if it means protecting the game itself.

A useful comparison is that of a Mafia crime network, in which the various heads of families may sit at the same table though they often feud with one another, working together to mutual benefit when possible, though occasionally whacking one another off when the competition grows fierce. It is a delicate balancing act of competition and cooperation, but when the criminal network is itself threatened, perhaps through the efforts of an ambitious district attorney or crackdown on organized crime, the various families will seek to unite in their efforts to protect the racket which benefits them all. If they remain divided in the face of growing opposition and potential external threats, they increase the risk that they will be conquered. When the game is threatened, the players must stand together or fall apart.

For successful rulers, the balance of competition and cooperation – vicious and virtuous – is present both in their relationships with other rulers, and with the larger populations. And so the rulers themselves – the oligarchs and dynasties – span both private and public realms: they are presidents and prime ministers, kings, queens and sultans, corporate chiefs, billionaires and bankers, consultants and advisers, academics and intellectuals, technocratic tyrants and plutocratic princelings. Their world is not our world. But it rules, wrecks and ravages our world and the people and life within it. It is a game that steers humanity toward certain extinction resulting from excessive environmental devastation, guided by that ever-present drive within those who have the most for more, more, more.

The game is little more, at its core, than basic gangsterism, its players little more than petty tyrants. Such personalities, egos and interests populate all sectors of society, all institutions, frequently appearing in inter-personal relationships. The more power they have, the greater the repercussions of the game. At the top of the global power structure are the personalities and families of immense wealth, political influence and prestige. With the same basic principles of a Mafia structure, the individuals and institutions that play the game of power politics in the age of globalization – in the Empire of Economics – are perhaps best understood as a global Mafiocracy. It makes no difference whether a nation is ruled by a monarchy, a dictatorship or democracy: the Mafiocracy is ever-present, and ever-expanding in its wretched reach.

The State of Empire

The world is defined and dominated largely by institutions, individuals and ideologies. The institution of the nation-state is perhaps the most obvious example, best represented by the world’s most powerful country, the United States of America. The government of the United States is composed of three separate branches (or institutions): the executive (President and Cabinet), legislative (Congress/Senate) and judiciary (the Supreme Court). The executive leads the government, while the role of the legislative and judiciary is (theoretically) designed to keep a check on executive power, preventing it from accumulating too much authority in one branch, threatening the potential for tyranny.

Since World War II, the executive branch has accumulated increased powers within the U.S. government, with a wide mandate to manage foreign and economic policies specifically, with little oversight and few checks from the legislative and judiciary branches. The executive is composed of a wide array of institutions itself, each with their own specific mandates, interests, and varying degrees of influence. These include the many cabinet departments, such as the Treasury Department, Defense Department (Pentagon), State Department, CIA, National Security Council (NSC), Department of Homeland Security, and many more. In addition, since 1913, the Federal Reserve has functioned as the central bank of the United States, operating with a large degree of independence from the other branches of government, including political independence from the executive branch (apart from the President’s ability to appoint the Chairman and Board of Governors), and no oversight from Congress (though the Fed chairman will occasionally testify to Congress).

Individually and collectively, these government departments and institutions manage hundreds of billions and even trillions of dollars in assets and funds, making them individually larger than most multinational corporations and banks in the world. These departments within the U.S. government are largely responsible for the maintenance and expansion of the American imperial system. Since the time of ancient Nubia and Egypt thousands of years ago, much of the world has been dominated by empires, rising, expanding and collapsing over centuries and millennia, running through ancient Greece, Rome, China, Aztec and Inca, Persian, Ottoman, and in the past five hundred years with the rise and demise of the European empires whose reach expanded the globe. For the most part, imperial systems have been dominated by families, often called royalty, sultanates, emperors or emirs. The essential interest and priority of all empires has been to protect and expand their empire, largely for the benefit of its ruling class or groups, with the imperial family at the center of power.

It is only a phenomenon of the post-World War II period that denial of the existence of empire is commonplace. Through the two World Wars of the 20th century, empires collapsed and faded into history. World War I led to the collapse of the German, Russian, Austro-Hungarian and Ottoman empires. World War II led to the collapse of the Japanese and Nazi empires, and its aftermath resulted in the erosion of European colonial domination, as the British, French, and other European colonial powers had to adjust to a new global order under American hegemony. It was in the post-World War II period that the United States had achieved unprecedented economic and political power. With just over 5 percent of the world’s population, the U.S. controlled roughly half the world’s wealth. Citing this very statistic, the U.S. State Department (responsible for managing diplomacy and foreign policy) published a policy paper in which top officials acknowledged that the global inequality that existed between the U.S. and the rest of the world would lead to “envy and resentment.” The “real task” of the United States was “to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security,” doing away with “the luxury of altruism and world-benefaction.”[4]

Europe was devastated by the war, and the United States occupied the West with the Soviet Union occupying the East of the continent. The European empires were crumbling, and the process of decolonization had begun to take the world by storm, with the U.S. attempting to manage the process on behalf of its Western European allies. In its strategy for world domination, the United States sought to rebuild its former war-time enemies – Germany and Japan – into economic powerhouses, with West Germany acting as the locomotive for European integration (into what is now the European Union) and Japan acting as a counterweight to the spread of Communism in East Asia. Western Europe, Japan and other allies depended upon the United States military to protect their ‘security’ interests around the world, arming favorable dictators, supporting coups, fuelling civil wars, undertaking large occupations and counter-insurgency operations targeting independence, anti-colonial and revolutionary movements around the world.

Despite the imperial realities of this system, there was an overwhelming tendency within the United States and its industrial allies to deny the existence of imperialism altogether. Instead, these nations were merely economically and technologically advanced democracies who sought to protect ‘freedom’ and ‘democracy’ around the world in a largely ideological confrontation with the Soviet Union, which presented itself as the image of socialism and communism in a struggle against the capitalist imperial powers of the West. The Soviet Union’s influence was dominant in Eastern Europe, with a few close allies scattered across the Middle East, Africa and Latin America. The United States and its Western allies, however, were the dominant powers across much of the rest of the Middle East, Asia, Africa and Latin America. The only real sense in which the Soviet Union presented a challenge for the United States was in its military and nuclear capabilities. This was the period known as the ‘Cold War’, though despite its confrontational rhetoric dividing East and West, communist states from capitalist democracies, it was largely a struggle waged against the rest of the world, the ‘Third World’, otherwise known as the developing world or ‘Global South’. It was in the poor, colonized nations and regions of the world where the majority of the world’s resources were located, and thus, where the Western imperial powers needed to maintain control.

While the United States rebuilt Germany and Japan into economic locomotives, becoming the second and third richest countries in the world, American economic power experienced a relative decline. This created strong allies for the United States, and while they remained militarily dependent upon their imperial patron, their growing economic power gave them increased leverage. With their increased economic power came increased potential to act independently of the U.S. and other rich nations. Competition between the great powers increased during the same period that newly independent nations of the developing world were increasingly uniting in opposition to a Western-dominated world order.

On May 1, 1974, the vast majority of the world’s nations voted in favour of the U.N. Declaration on the Establishment of a New International Economic Order (NIEO), proclaiming that “the greatest and most significant achievement during the last decades has been the independence from colonial and alien domination of a large number of peoples and nations which has enabled them to become members of the community of free people.” Among the ‘principles’ adopted in forming the NIEO were “equality of States, self-determination of all peoples,” and the outlawing of war, seeking “the broadest co-operation” of all nations of the world in banishing the “prevailing disparities” and securing “prosperity for all.”[5]

Final Phase Digital

Each nation of the world would have the right “to adopt the economic and social system that it deems the most appropriate for its own development,” and establish control over their own natural resources. The people who continued to live under colonial domination, racial oppression and foreign occupation had a right “to achieve their liberation and the regain effective control over their natural resources and economic activities.” In 1974, this would include Israeli-occupied Palestine, South African apartheid, and U.S.-occupied Vietnam. The last line in the document stated that the Declaration should “be one of the most important bases of economic relations between all peoples and all nations.”[6]

But Henry Kissinger had other plans. As Secretary of State and National Security Adviser, Kissinger was the chief imperial strategist in the United States, and remains one of the most influential foreign policy strategists in the nearly four decades since he left office. Kissinger’s “trick” to use economics in building a “world political structure” would largely be pursued through the finance ministries, central banks and international organizations (such as the IMF and World Bank) which are controlled by the rich and powerful nations. In the face of a growing threat, the rich nations banded together in various forums, conferences and diplomatic gatherings, the most notable of which came to be known as the Group of Seven, bringing together the U.S., Germany, Japan, the United Kingdom, France, Italy and Canada. Through these various institutions and initiatives, a “world political structure” would be incrementally constructed as the Empire of Economics.

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada. 

Notes

[1]       Memorandum of Conversation, 24 May 1975: Foreign Relations of the United States, 1973-1976, Vol. XXXI, Foreign Economic Policy, Document 292:

http://history.state.gov/historicaldocuments/frus1969-76v31/d292

[2]       Memorandum of Conversation, 26 May 1975: Foreign Relations of the United States, 1973-1976, Vol. XXXI, Foreign Economic Policy, Document 294:
http://history.state.gov/historicaldocuments/frus1969-76v31/d294

[3]       Niccolo Machiavelli, The Prince (Cambridge University Press, 1988), page 59.

[4]       Memo by George Kennan, Head of the US State Department Policy Planning Staff. Written February 28, 1948, Declassified June 17, 1974. George Kennan, “Review of Current Trends, U.S. Foreign Policy, Policy Planning Staff, PPS No. 23. Top Secret. Included in the U.S. Department of State, Foreign Relations of the United States, 1948, volume 1, part 2 (Washington DC Government Printing Office, 1976), 509-529:

http://en.wikisource.org/wiki/Memo_PPS23_by_George_Kennan

[5]       General Assembly, “Declaration on the Establishment of a New International Economic Order,” Resolution adopted by the General Assembly, United Nations, Resolution 3201 (S-VI), 1 May 1974:

http://www.un-documents.net/s6r3201.htm

[6]       General Assembly, “Declaration on the Establishment of a New International Economic Order,” Resolution adopted by the General Assembly, United Nations, Resolution 3201 (S-VI), 1 May 1974:

http://www.un-documents.net/s6r3201.htm

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Meet Canada’s Ruling Oligarchy: Parasites-a-Plenty!

Meet Canada’s Ruling Oligarchy: Parasites-a-Plenty!

Class War and the College Crisis, Part 7

By: Andrew Gavin Marshall

Paul Desmarais Sr. (left), Nicolas Sarkozy (centre), and Quebec Premier Jean Charest (right)

Part 1: The “Crisis of Democracy” and the Attack on Education

Part 2: The Purpose of Education: Social Uplift or Social Control?

Part 3: Of Prophets, Power, and the Purpose of Intellectuals

Part 4: Student Strikes, Debt Domination, and Class War in Canada

Part 5: Canada’s Economic Collapse and Social Crisis

Part 6: The Québec Student Strike: From ‘Maple Spring’ to Summer Rebellion?

As hundreds of thousands of students in the province of Québec continue to strike into their 13th week against tuition increases, as the provincial government continues to employ legal repression and state violence against the youth, as Canadian families are over $100,000 in debt, as a looming housing crisis begins to rear its ugly head, as youth unemployment increases, student debt explodes, jobs vanish, poverty deepens, and oppression increases, it’s time to meet those responsible, those who are doing better than ever, those who are making record profits, sitting comfortably in their estates which are larger than the entire island of Manhattan, who travel by helicopter and private jet, who co-mingle with the Rockefellers, Rothschilds, Spanish royalty, presidents and prime ministers at home and abroad: meet Canada’s ruling oligarchy.

As this series, “Class War and the College Crisis,” is more focused on the issue of education, I will focus here on the composition of the oligarchy in terms of how they control our educational system. This part in the series will be part article and part research annex. First, I will introduce the reader to Canada’s most powerful family, our version of the Rockefeller’s south of the border, or the Rothschilds in Europe, and of course, all these families are close in both business and social circles. Such is the nature of being an elite in a globalized world. The Desmarais family, located in the province of Québec, are without question the most influential and powerful family in the country, and it’s no wonder, considering their power is vested in an investment company known as Power Corporation.

Why is Power Corporation important?

The name says it all: it has Power. Founded in 1925, Power Corporation of Canada is an investment company involved in communications, business, and especially finance. Power Corporation was founded by A.J. Nesbitt and P.A. Thomson, two partners in the Montreal investment firm, Nesbitt, Thomson and Company, who wanted to consolidate Canada’s power sector, and established Power Corporation as a ‘holding company,’ meaning, it owns other corporations. In the 1960s, the company began to invest in energy, finance, industry, and real estate. In 1968, financier Paul Desmarais took over the leadership of Power Corporation, and rapidly expanded the assets held by the company, including by the 1970s: Canada Steamship Lines (transportation); Consolidated Bathurst (pulp and paper); Investors Group, Great-West Life, Montreal Trust (financial services); and Gesca (communications). Power Corporation expanded across Canada, Europe, and into China. Paul Desmarais stepped aside as Chairman and CEO in 1996, though remaining as the controlling shareholder, and had his two sons, Paul Jr. and André, become Chairman and President and Co-CEOs. Power Corporation owns Gesca, a communications company which in turn owns La Presse as well as six other daily newspapers in Quebec.

The Desmarais family, wrote Christa d’Souza for the London Telegraph, are “Canada’s equivalent of the Rockefellers or Vanderbilts.”[1] Indeed, it would appear that the Desmarais are very much akin to the Rockefellers, the most powerful family in the United States, and one of the most powerful families in the world (perhaps only challenged by the older European-based Rothschild banking family). The Rockefeller family developed the Standard Oil empire, which branched off into several different oil companies, including Exxon and Chevron; founded the Rockefeller Foundation as an engine of social engineering, founded the University of Chicago, became a dominant force in global banking (through Citibank and JP Morgan Chase), highly influential in politics (Vice President Nelson Rockefeller and Senator Jay Rockefeller), and of course, remain a dominant influence in think tanks, such as the Council on Foreign Relations, the Bilderberg Group, and the Trilateral Commission, which ultimately play a major role in shaping policies of industrial nations.

The Desmarais family, while not as powerful in a global sense as the Rockefellers, have nevertheless made themselves a powerful name in the global oligarchy, and most certainly the most powerful family in Canada. Paul Desmarais Sr. is one of Canada’s richest individuals, which is, of course, no surprise, and as Konrad Yakabuski wrote for the Globe and Mail, “Desmarais has been personally consulted by prime ministers on every major federal economic and constitutional initiative since the 1970s. Most of the time, they’ve taken his advice.” Power Corporation has taken large stakes in major European companies such as Bertelsmann, Total and Suez. Peter Munk, a friend of Paul Desmarais and the CEO of Barrick Gold Corporation (a major mining company profiting off of genocide in the Congo), said that, “Paul built that business with an enormous capability for networking that no one in Canadian history has ever matched. And the boys got introduced to his contacts. They were educated well, they married well. And they’ve behaved.” In the mid-1960s, a protégé of Desmarais was a young Montreal lawyer named Brian Mulroney, who would later become Canada’s Prime Minister. Paul Sr. groomed his sons, and especially André, who is now perhaps the most well-known Canadian businessman in China. André also married the daughter of another Canadian Prime Minister, Jean Chrétien. Desmarais Sr. also got involved in French banking through Paribas, and later, Pargesa, which handled investments in a wide range of European corporations, and shot Desmarais into the accepted ranks of French nobility and the old-monied European elite. Paul Desmarais Jr. is close friends with the recent French President Nicolas Sarkozy, and socializes with Spanish royalty, the Rothschilds, and other European oligarchs.[2]

The Desmarais family have strong connections to Canada’s four major political parties: the Liberals, Conservatives, Bloc Quebecois, and the NDP. This has included close ties to Lucien Bouchard, former leader of the Parti Québecois and Premier of Quebec, Jean Chrétien, former Canadian Prime Minister; Brian Mulroney, former Canadian Prime Minister who worked for Power Corporation; Bob Rae, an NDP leader, and Paul Martin, another Liberal Prime Minister who worked for Power Corporation. When André Pratte, the chief editorialist of the Desmerais-owned paper La Presse, wrote in 1994 that, “Power Corp. controls everything, everyone knows that. Chrétien, [then Quebec premier Daniel] Johnson, it’s Power Corp,” Paul Desmarais Sr. intervened directly with the paper to ensure that Pratte was demoted. Claude Masson, the deputy publisher of La Presse at the time, stated that, “When you bite the hand that feeds you, there are consequences.”[3] Indeed, the hand bites back.

The Desmarais’ also have close connections with James Wolfensohn, the former President of the World Bank, who has extensive ties to the Rockefeller family. Paul Jr. married Hélene Blouin, the “founder and CEO of le Centre d’entreprises et d’innovation de Montréal, an incubator for tech businesses; a director of the Montreal Board of Trade; chairman of HEC Montréal; and a co-founder of the Montreal Economic Institute, a think tank that has become Quebec’s leading policy advocate on the non-partisan right.” André married France Chrétien, daughter of Jean Chrétien, and he even served as a press secretary to Jean Chrétien while he was Minister of Justice in the Pierre Trudeau government. In the 1990s, the international advisory board of Power Corporation included former Prime Ministers Brian Mulroney and Pierre Trudeau. Brian Mulroney was sure to create friendly ties between the Desmarais family and soon-to-be Canadian Prime Minister Stephen Harper, who put two Desmarais-connected politicians in his cabinet, Peter Mackay and Maxime Bernier.[4]

Quebec author Robin Philpot wrote a scathing critique of the power of the Desmarais family several years ago, suggesting that, “Over the last several years, [Paul Desmarais Sr.] has spun his web to such an extent that it now enables him to call the shots,” especially in promoting his right-wing economic vision, with “a disproportionate influence on politics and the economy in Quebec and Canada.” Of course, it’s not only Canadian politicians with whom Desmarais is close, but French and American politicians as well, including Sarkozy, George H.W. Bush, and Bill Clinton. Desmarais owns seven of the ten French-language newspapers in Quebec, and has been close to nearly every Quebec premier, apart from Parti Québécois leaders Jacques Parizeau and Bernard Landry. Philpot alleged that Desmarais “has a lot of influence on Premier Jean Charest,” who is the current premier imposing tuition increases. When Desmarais received the French Légion d’honneur (Legion of Honour) from Nicolas Sarkozy, Jean Charest was in attendance, of which Philpot stated, “He took him along like a poodle.” Philpot added, “It’s a very unhealthy situation for a government to be indebted to a businessman that has his own interest at heart. They get their hands tied.”[5]

Jean-François Lisée, the director of the Center for International Studies and Research at the University of Montreal stated that, “They are in a class all by themselves… There’s the Desmaraises, then there’s everyone else.” However, as one man close to the family said, in regards to their influence in politics, “We live in a village in Canada, and there are a lot of circumstances which come together which make it appear as if there’s some great manipulation… These are the coincidences of life. It might be more notorious than substantial.”[6] Indeed, the elite live in “a village,” and that’s the whole point, which is, I might add, “substantial.”

In rural Quebec, the Desmarais family has an estate the size of Manhattan, with a private golf course and pheasant shooting range, as well as a music pavilion where opera is performed. This is the home of Paul Desmarais Sr. Guests, such as former U.S. Presidents George H.W. Bush and Bill Clinton, come play golf on this vast estate, and are flown in on helicopters belonging either to Power Corporation or Desmarais personally. As one of Canada’s richest billionaires, this is a simple matter. Power Corporation, which owns a controlling share in Power Financial Corporation, an insurance giant, has established ties with one of Belgium’s richest men, Albert Frere, with whom they have been in business for decades, and together hold significant shares of Total SA (the third largest oil company in Europe), Lafarge SA (the world’s largest cement maker), and GDF Suez SA (the world’s second largest utility company).[7]

The Desmarais family has even had the internationally renowned Cirque du Soleil perform on their massive 15,000-acre estate. King Juan Carlos of Spain has even been a guest from time to time. André Desmarais is himself a member of the Trilateral Commission, founded by David Rockefeller, and is also on the International Advisory Board of David Rockefeller’s former bank, JP Morgan Chase, alongside other notables such as former British Prime Minister Tony Blair. Both brothers have regularly attended meetings of the Bilderberg Group, of which David Rockefeller is a top official (founded in 1954 as an elite think tank linking Western Europe and North America). The Desmarais also hold a major international meeting of elites in Montreal every year, the Conference de Montreal, drawing in thousands of top policy-makers, industrialists, bankers, strategists, and international elites from the major nations of the world. A son of Paul Desmarais Jr., Paul Desmarais III, is a banker with Goldman Sachs. At times, the influence of the family is shyly acknowledged. As French President Sarkozy stated upon awarding Paul Desmarais Sr. with the French Legion of Honour, “If I am the president of France today, it is thanks in part to the advice, the friendship and the loyalty of Paul Desmarais.”[8]

So while Quebec students are being asked to pay double their current tuition to reduce public spending, the Desmarais family is hob-nobbing around with a top public-sector individual responsible for investing $150 billion in Quebecers’ public-sector pension and insurance plans, Michael Sabia. Though apparently a weekend stay at the Desmarais estate by Sabia did not involve business discussions, it was merely “friendly.” No doubt. Meanwhile, Power Financial profits rose 37% in March of 2012, earning the company $533 million, while Power Corporation itself earned $314 million in the same amount of time, with its profits also increasing by 37%.[9]

The Canadian Oligarchy Assaults Democracy

In the 1970s, just as the United States elite were organizing for their assault on the democratic advances brought about by the activism and popular mobilizations of the 1960s, so too was Canada. With the Powell Memo and the Trilateral Commission’s “Crisis of Democracy” report in the early and mid 1970s, we saw the emergence of a vast array of right-wing pro-business think tanks which sought to – and successfully did – promote neoliberalism and thus, created enormous repercussions for universities and education. Canada was not to be left behind in the elitist assault on democracy.

As William Carroll and Murray Shaw wrote in the journal Canadian Public Policy: “Integral to the rise and consolidation of neoliberal hegemony were the emergence of new centres of class-wide business activism and the retooling of established policy institutes along neoliberal lines.” A few major think tanks and policy institutes were integral to this approach for Canada. The Conference Board of Canada was founded in 1954 when the New York Conference Board opened an office in Montreal, later moved to Ottawa, and now one of the largest think tanks in Canada, linking academia, government and corporate elites. The Private Planning Association of Canada (PPAC) was founded in 1958 by members of the Canadian American Committee (CAC), “a group of business and labour leaders from Canada and the US” who were seeking closer and deeper ties between Canada and the United States, specifically in relation to trade. When the PPAC merged with the C.D. Howe Memorial Foundation in 1973, the C.D. Howe Institute was formed. The C.D. Howe Institute became a major force pushing for free trade agreements such as NAFTA, and by the mid-1990s, was portraying social programs as a major source of Canada’s economic problems.[10]

The Business Council on National Issues (BCNI) – now known as the Canadian Council of Chief Executives (CCCE) – was founded to create consensus on policy issues among Canada’s top 150 CEOs, making it less of a think tank, and more of a “shadow government.” Founded in 1976 in order to bring together the corporate elite of Canada into forming a more long-term strategic position with the government, directly lobbying the state. The mandate of the Council is “to ensure that Canadian chief executives play an influential role in the international financial, trade, investment, environmental and foreign affairs domains.” Since the era of the Trudeau Liberals, politicians have come and gone from power, but the Council, “the voice and organizational embodiment of corporate rule, is a permanent presence.” Another major player is the Fraser Institute (FI), dedicated to mythical “free market” policies and neoliberalism, founded in 1973 with money from fifteen different mining executives, and is essentially a replica of the American Enterprise Institute in the United States. The Fraser Institute is perhaps the most quoted institution in the Canadian media, ensuring that its neoliberal ideology is firmly entrenched in popular ‘information’ (i.e., propaganda). One study from 1998 showed that over the course of a year, the left-wing think tank, the Canadian Centre for Policy Alternatives was quoted in business news stories 16 times, while the Fraser Institute was quoted in over 140 stories.[11]

Today, Hélène Desmarais, wife of Paul Desmarais Jr., is on the board of the C.D. Howe Institute, alongside top officials from GE Canada, Manulife Canada, HSBC Canada, Enbridge, Barrick Gold, BMO Financial Group, and a number of other top financial and industrial corporations. Power Corporation is listed among the C.D. Howe Institute’s supporters, alongside other notable entities such as: Astral Media (a major media conglomerate), Bank of America Merrill Lynch, Barrick Gold Corporation, BMO Financial Group, Bombardier, Canadian Bankers Association, Canadian Chamber of Commerce, CIBC, Canadian Pacific Railway, Canadian Oil Sands Limited, Cargill Limited, CN, Deloitte & Touche LLP, Desjardins Group, Deutsche Bank, Enbridge, Encana, Ford Motor Company, HSBC, Google, Imperial Tobacco, JP Morgan, National Bank of Canada, Pfizer, Procter & Gamble, RBC Financial Group, Rio Tinto Alcan, Scotiabank, Shell Canada, SNC Lavalin, Standard Life Financial, Swiss Bankers Association, TD Bank Group, and many others. The C.D. Howe Institute also gets a good deal of financial support from several Canadian universities, including Carelton, HEC Montréal, Laval, McMaster, Queen’s, Ryerson, Calgary, Lethbridge, Western Ontario, Université de Sherbrooke, U. of Alberta, UBC, Ottawa, Saskatchewan, U of T, and Wilfred Laurier University.[12]

Looking at Power

The board of directors of Power Corporation includes: Pierre Beaudoin, President and CEO of Bombardier; Marcel R. Coutu, President and CEO of Canadian Oil Sands Limited and Chairman of Syncrude Canada, director of Great-West Lifeco (owned by Power Corporation), and is a member of the Canadian Council of Chief Executives; Laurent Dassault, Vice President of Groupe Industriel Marcel Dassault (a Paris-based investment and financing company), and a director of a number of European companies, including SITA, Generali France, Kudelski, and the Banque Privée Edmond de Rothschild Europe (a major banking house owned by the Rothschild family); Guy Fortin, Vice Chairman of Sanpalo Investments, former senior partner at Ogilvy Renault, Chairman of the Canadian Tax Foundation; Anthony R. Graham, President of Wittington Investments, formerly with National Bank Financial Inc., Chairman of President’s Choice Bank, on the board of Power Financial, Loblaw Companies, George Weston Limited, Brown Thomas Group Ltd, Holt Renfrew & Co., the Canadian Institute for Advanced Research, Council for Business and the Arts in Canada, and is a member of the Canadian Council of Chief Executives; Robert Gratton, former Chairman and CEO of Montreal Trust, director of Power Financial, member of the Harvard Business School Canadian Advisory Board, the Conference Board of Canada, the C.D. Howe Institute, and the Trilateral Commission; Isabelle Marcoux, Vice Chair of the board of Transcontinental Inc., on the boards of George Weston Ltd., Rogers Communications, the Board of Trade of Metropolitan Montreal; Donald Mazankowski, director of Power Financial, former member of the Canadian House of Commons and member of Parliament for 25 years, former Canadian Minister of Transport, Deputy Prime Minister, President of the Queen’s Privy Council, and Government House Leader, and is a former member of the board of governors of the University of Alberta.

Other board members include: Raymond L. McFeetors, Vice Chairman of Power Financial and Chairman of Great-West Lifeco, a director of London Life, Canada Life Financial, Canada Life, Crown Life, IGM Financial, Investors Group, Mackenzie Financial, Putnam Investments; Jerry E. A. Nickerson, Chairman of Nickerson & Sons Ltd., director of several Power Corporation companies, honorary director of the Bank of Montreal; James R. Nininger, on the Board of Management of the Canada Revenue Agency (responsible for administering the tax laws of Canada and most of the provinces), on the board of Canadian Pacific Railway, former President and CEO of The Conference Board of Canada (a major research institute/think tank); R. Jeffrey Orr, President and CEO of Power Financial, a board member of several Power group subsidiaries, former Chairman and CEO of BMO Nesbitt Burns and Vice Chairman of the Bank of Montreal’s Investment Banking Group, and is a member of the Canadian Council of Chief Executives; Robert Parizeau, Chairman of Aon Parizeau, Inc., director of National Bank Life Insurance Company, former Chairman of Gaz Métro, former director of Van Houtte, and director of the National Bank of Canada for over 20 years, and is a director of the Institute of Corporate Directors; Michel Plessis-Bélair, Vice Chairman of Power Corporation, director of several Power group subsidiaries, and a director of Lallemand Inc., Université de Montréal, Hydro-Québec, and is a member of the International Advisory Board of École des hautes etudes commerciales (HEC) of Montréal (Business School of Montreal); John A. Rae, director of a number of Power subsidiaries, a director of Fednav Ltd, BNP Paribas (Canada), McGill University Health Centre Foundation, former Executive Assistant to Jean Chrétien, National Campaign Chairman for Jean Chrétien’s 1984 and 1990 leadership campaigns, and Coordinator of the National Campaign of the Liberal Party of Canada for the 1993, 1997, and 2000 elections, and is also Chair Emeritus of the Board of Trustees of Queen’s University; Henri-Paul Rousseau, a director of several Power group subsidiaries, board member of the Global Financial Markets Association, former President and CEO of the Caisse de depot et placement du Québec (which manages public pensions for the province of Quebec), former President and CEO of the Laurentian Bank of Canada, former CEO of Boréal Assurances Inc., and former Senior VP of the National Bank of Canada; T. Timothy Ryan, Jr., President and CEO of the Securities Industry and Financial Markets Association (SIFMA), the leading trade association representing global financial market participants, CEO of the Global Financial Markets Association (GFMA), a director of a number of Power subsidiaries, as well as a director of Lloyds Banking Group, Lloyds TSB Bank, HBOS, the Bank of Scotland, and the United States-Japan Foundation, formerly a top official with J.P. Morgan, is a private sector member of the Global Markets Advisory Committee for the U.S. National Intelligence Council (NIC), the Council which oversees all sixteen U.S. intelligence agencies; and Emoke J.E. Szathmary, President Emeritus of the University of Manitoba, former President and Vice Chancellor of the University of Manitoba, Provost and Vice President of McMaster University, and former Dean of the Faculty of Social Science of the University of Western Ontario, is currently a director of a number of Power subsidiaries, and is a director of the International Institute for Sustainable Development, the Pierre Elliott Trudeau Foundation, the Canadian Foundation for Innovation, and the Board of Governors of McMaster University.

And of course, we have the Desmarais family themselves, including Paul Desmarais Sr., Paul Desmarais Jr., who is not only a director of several Power subsidiaries, but is Vice Chairman of the Board and Executive Director of Pargesa, a director of Group Bruxelles Lambert, GDF Suez, Total, Lafarge, and is a member of the European Institute of Business Administration, Chairman of the Board of Governors of the International Economic Forum of the Americas, a trustee and Co-Chair of the International Advisory Council of the Brookings Institute, founder and member of the International Advisory Board of the McGill University Faculty of Management in Montreal, and the founder and member of the International Advisory Committee of HEC (business school) in Montreal. André Desmarais is not only on several Power subsidiaries, former Special Assistant to the Minister of Justice of Canada, a director of Pargesa in Europe, CITIC Pacific Ltd. in China, is a member of the Chairman’s International Advisory Council of the Americas Society (founded by David Rockefeller), and is Honorary Chairman of the Canada China Business Council.

As for Power Financial, while there is a great deal of overlap between the two boards, there are some unique names on the board of Power Financial. Among these are J. Brian Aune, President of Aldervest Inc., former Chairman of St. James Financial Corporation, is Governor Emeritus of Concordia University; V. Peter Harder, President of the Canada China Business Council, former Canadian Deputy Minister of Foreign Affairs, former Deputy Minister of the Treasury Board, Solicitor General, Citizenship and Immigration, and Industry Canada, and is a director of IGM Financial, TimberWest, Telesat Canada, Energizer Resources, Northland Power, Pinetree Capital Ltd, and is an independent advisor to the Auditor General of Canada.

The Oligarchy of Education

Canada’s universities, like all universities, are governed by bankers and corporate executives, foundation officials, and think tank presidents, media moguls and millionaires. Given the current situation in Quebec, where hundreds of thousands of students have been taking to the streets in a strike against tuition increases, with over 200 protests in Montreal over the past three months alone, I will focus here on the two major English-speaking universities in the province: Concordia and McGill. This is important to focus on, simply because throughout this crisis, the university administrations have been claiming to be “neutral,” though they have actively set themselves against the students, filing legal injunctions against picketing, hiring private security firms to patrol the schools, and even calling in riot police to disperse striking youth. The schools have claimed to be neutral on the issue of tuition increases, though they have not – in any way – applied pressure or lobbying efforts on the government to reverse its position. In fact, it has been the exact opposite. When we look at who actually sits on the boards of the school administrations, it becomes clear that these are the very same elite who, in their various other social positions, lobby the government to increase the tuition, who sit on the boards of the banks that hand out student loans and charge exorbitant interest rates, who profit off the debt and poverty of the masses.

So let’s start with my own school: Concordia University.

The Chancellor of Concordia is L. Jacques Ménard, the President of BMO Financial Group, one of Canada’s largest banks, a director of Claridge Inc., and a director of the Institute for Research on Public Policy (a think tank promoting elite interests). The Chairman of the Board of Governors of Concordia is Peter Kruyt, President and CEO of Victoria Square Ventures, a director of La Presse (the largest French-language newspaper in Quebec), a director of Picchio Pharma Inc., a director of CITIC Pacific Ltd., Chairman of the Canada China Business Council, and a Vice President of Power Corporation, a company he has been working for since 1980 when he was Executive Assistant to the CEO, Paul Desmarais.

Norman Hébert, Jr.: CEO of Group Park Avenue Inc., former board member of Hyrdo-Québec, Chairman of the Board of Société des Alcools du Québec (SAQ, a provincial crown corporation which sells liquor).

Hélène F. Fortin: a director of Larose Fortin CA Inc., member of the Institute of Corporate Directors, former Assistant to the Vice President of Quebecor Inc. (a major media conglomerate), and a former director of CBC and Hydro-Québec.

Brian Edwards: founder of BCE Emergis, one of North America’s largest electronic commerce companies, Chairman of the Board of Miranda Technologies and Biotonix 2010 Inc., and is on the boards of Camoplast Inc. and Impath Networks Canada Corporation, and Transat AT.

Jean Pierre Desrosiers: on the boards of KPGM, Aéroports de Montréal and D-BOX Technologies Inc.

Rita Lc de Santis: a partner at Davies, Ward, Phillips & Vineberg, former member of The Italian Chamber of Commerce in Canada, Board of Trade of Metropolitan Montréal, Business Development Bank of Canada and Hydro-Québec.

James Cherry: President and CEO of Aéroports de Montréal, former executive with Bombardier, Oerlikon Aerospace Inc., CAE Inc. and ALSTOM Canada Inc.

Baljit Singh Chadha: Director of the Canada-India Business Council, Pesident and founder of Balcorp Ltd.

Charles Cavell: former President and CEO of Quebecor World Inc., former Chairman of the Board of Sun Media Corp, a director of Adaltis Inc., Novelis Inc.

Tim Brodhead: former President and CEO of the J.W. McConnell Family Foundation, former Executive Director of the Canadian Council for International Co-operation (CCIC), past chair of Philanthropic Foundations Canada.

Joelle Berdugo Adler: founder of ONEXEONE, and CEO of Diesel Canada.

Jonathan Wener: President and CEO of Canderal (a major real estate investment company), a trustee of the Fraser Institute, member of the board of the Laurentian bank of Canada, Silanis Technologies, and former president of the Urban Development Institute of Canada.

Annie Tobias: former official at Deloitte & Touche

Michael Novak: Executive Vice President of SNC-Lavalin Group, a global engineering and defense contractor.

Marie-José Nadeau: Executive Vice President of Hydro-Québec, Executive Vice President of Corporate Affairs and General Secretary at Cascades Fine Papers Group Inc, and is a director of Metro.

Andrew T. Molson: Chairman of the Board of Molson Coors Brewing Company, is a partner and chairman of RES PUBLICA Consulting Group, a Montreal-based holding and management company, is Chairman of the Board of Trade of Metropolitan Montreal and a director of The Montreal Canadiens, DundeeWealth Inc., Groupe Deschênes Inc. and Montréal International, and is president of the Molson Foundation.

Tony Meti: President of G.D.N.P. Consulting Services, Inc., a former Senior Vice President at National Bank Financial Group, a director of ADF Group, Saputo Inc.

Jacques Lyrette: Executive at Innovative Materials Technologies, former CEO of ADGA Inc., an engineering consulting company.

Arvind K. Joshi: CEO at St. Mary’s Hospital Center, member of the advisory board of the John Molson School of Business at Concordia University.

Suzanne Gouin: President and Chief Executive Officer, TV5 Québec Canada, former director of Hydro-Québec.

McGill University:

H. Arnold Steinberg: Chancellor of McGill University, formerly worked for Dominion Securities (now RBC – Royal Bank of Canada – Dominion Securities), has been a member of the boards of Bell Canada, Teleglobe, Provigo, National Bank of Canada.

Heather Munroe-Blum: Principal and Vice Chancellor of McGill, is on the board of the Internationalization Committee, and the Membership Committee of the Association of American Universities, a member of the Science, Technology and Innovation Council (STIC) of Canada, the U.S. National Research Council’s Committee on Research Universities, the Canada Foundation for Innovation, the Trilateral Commission, and is co-chair of the Private Sector Advisory Committee of the Ontario-Quebec Trade and Co-operation Agreement, on the boards of the Trudeau Foundation, Canada Pension Plan Investment Board (CPPIB), Conférence de Montréal, and the Royal Bank of Canada. She has served on the boards of the Conference Board of Canada, Montreal Chamber of Commerce, Four Seasons Hotel, and Hydro One.

Stuart Cobbett: Managing Partner and Chief Operating Officer of Stikeman Elliott LLP, and is a Director of Citibank Canada.

Lili de Grandpré: founder of an organization strategy consulting firm, CenCEO Consulting, formerly with the Mercer Consulting Group and Bank of Montreal.

Michael Boychuk: President and CEO of Bimcor Inc., and is a member of the advisory board of Centennial Ventures, a U.S. private equity firm, former Senior Vice President and Treasurer of BCE Inc. and Bell Canada.

Gerald Butts: President and CEO of WWF-Canada.

Daniel Gagnier: former Chief of Staff to Quebec Premier Jean Charest, former VP at Alcan, former Chairman of the Canadian Manufacturers and Exporters, current chairman of the International Institute for Sustainable Development, and a board member of the Asia-Pacific Foundation.

Banking on Power

In Canada, there are five major banks which dominate the national banking sector (and together wield enormous influence over Canada’s monetary system through the Bank of Canada). These banks are the Canadian Imperial Bank of Commerce (CIBC), the Bank of Montreal (BMO), Toronto-Dominion Bank (TD), the Bank of Nova Scotia (Scotiabank), and the Royal Bank of Canada (RBC). To understand how these banks wield influence over Canada as a whole, it would be useful to examine the boards of directors of the banks, drawing the overlap of leadership between the ‘Big Five’ and Canada’s major corporations, think tanks, foundations, media and educational institutions. For the purpose of this report, I will simply take a look at the board of directors of the biggest bank: Royal Bank of Canada (RBC), and show how it overlaps with the other institutions which dominate our society.

W. Geoffrey Beattie: on the board of directors of General Electric (GE), President of the Woodbridge Company, a privately held investment holding company (the majority shareholder of Thomson Reuters, a major media conglomerate of which he is Deputy Chairman), and he is also a board member of Maple Leaf Foods Inc. and Chairman of CTV Globemedia, a major Canadian media conglomerate.

Richard L. George: President and CEO of Suncor Energy, on the board of the Canadian Pacific Railway, former Chairman and current board member of the Canadian Council of Chief Executives (CCCE), was a member of the North American Competitiveness Council (NACC), which was formed in 2006 to advise North American governments on the process of ‘North American integration’.

Paule Gautier: the first woman president of the Canadian Bar Association, on the boards of Metro Inc., TransCanada Corporation, and Transcanada Pipelines, an associate member of the American Bar Association, and is on the board of CARE, a supposed “humanitarian” organization, and she was a former director of the Institut Québecois des Hautes Études Internationales at Laval University.

Timothy J. Hearn: former CEO of Imperial Oil Limited, former chairman of the C.D. Howe Institute (a major pro-business think tank) where he remains as a board member, former member of the Canadian Council of Chief Executives (CCCE), is co-chair of a fundraising campaign for the University of Alberta and is chair of the fundraising campaign for Tyndale University, and is on the Advisory Board of the Public Policy School at the University of Calgary, a director of Viterra Inc., and is Chair of the board of directors of the Calgary Homeless Foundation.

Alice D. Laberge: former CEO of Fincentric, a current Commissioner of the Financial Institutions Commission, on the board of the Minerva Foundation, and a member of the Financial Executives Institute, and a former director of BC Hydro and Power Authority, and is on the board of directors of the University of British Columbia (UBC).

Jacques Lamarre: former President and CEO of SNC-Lavalin, a major global engineering, construction, and military contractor; is on the board of Suncor Energy, the founding member and former Chair of the Commonwealth Business Council, former Chairman of the board of directors of the Conference Board of Canada, a leader at the World Economic Forum, a former director of Canadian Pacific Railway, a member of the C.D. Howe Institute’s British North American Committee.

Brandt C. Louie: Chairman and CEO of H.Y. Louie Co. Limited, a food retail distribution company, Chairman of London Drugs Limited, Vice Chairman of IGA Canada Ltd., former Chancellor of Simon Fraser University (SFU), Governor of the Vancouver Board of Trade, Governor of the British Columbia Business Council, a member of the Canadian Council of Chief Executives (CCCE), and is a member of the Dean’s Council of the John F. Kennedy School of Government at Harvard University, and is a current director of the Gairdner Foundation. He is also a board member of the World Economic Forum, Grosvenor (a property company), and the Fraser Institute, a major right-wing pro-business think tank.

Michael H. McCain: President and CEO of Maple Leaf Foods Inc., Chairman of the Canada Bread Company, board member at the American Meat Institute, the Richard Ivey School of Business Advisory Board, a member of the Canadian Council of Chief Executives (CCCE), and a former director of Bombardier Inc.

Heather Munroe-Blum: the Principal and Vice Chancellor of McGill University, board member of the Canadian Pension Plan Investment Board, a member of the Trilateral Commission, has attended meetings of the Bilderberg Group, is co-chair of the Private Sector Advisory Committee of the Ontario-Quebec Trade and Co-operation Agreement, on the board of the Trudeau Foundation, and is on the board of the Conférence de Montréal (the International Economic Forum of the Americas), which is chaired by Paul Desmarais Jr.; and she has also been on the boards of the Conference Board of Canada, Montreal Chamber of Commerce, Four Seasons Hotel, and Hydro One.

Gordon Nixon: President and CEO of the Royal Bank of Canada, a director and past Chairman of the Canadian Council of Chief Executives (CCCE), on the board of directors of the International Monetary Conference, and has been on the boards of Daimler/Chrysler, Catalyst, EnCana Corporation, and Queen’s University School of Business; is a director of the Institute of International Finance and has attended Bilderberg Group meetings.

David P. O’Brien: Chairman of the Board of the Royal Bank of Canada, Chairman of EnCana Corporation, a director of Enerplus Corporation, Molson Coors Brewing Company, and TransCanada Corporation; he is also the Chancellor of Concordia University, and is on the board of the C.D. Howe Institute. He was the former Chairman and CEO of Canadian Pacific Limited.

J. Pedro Reinhard: a director of the Colgate-Palmolive Company, a director of Sigma-Aldrich Corporation, a chemical company; former Executive Vice President and Dow Chemical Company, is a former board member of the Coca-Cola Company, and is President of Reinhard & Associates, a financial advisory practice.

Edward Sonshine: was President, CEO and a director of RioCan Real Estate Investment Trust, Chairman and a director of Chesswood Income Fund, and is Vice Chairman and a director of Mount Sinai Hospital.

Kathleen P. Taylor: President of Four Seasons Hotels and Resorts, is a director of The Hospital for Sick Children Foundation, a cabinet member of the United Way of Greater Toronto and a member of the Industry Real Estate Financing Advisory Council of the American Hotel and Motel Association and the International Advisory Council of the Schulich School of Business of York University.

Bridget A. van Kralingen: Senior Vice President of IBM, and was Managing Partner of Deloitte Consulting, and is a member of the board of advisors at Catalyst Inc.

Victor L. Young: a director of Imperial Oil Ltd., former Chairman and CEO of Fishery Products International Limited, and is a current board member of McCain Foods, former Chairman and CEO of Newfoundland and Labrador Hydro, and was a director at BCE Inc. (Bell Canada).

Our Parasitic Elite

Canada’s elite, like all elites, are parasitic to the social good and wellbeing of the people. They own the banks and financial institutions, own our central bank which sets the interest rates, gives loans and collect on debt, pushing people deeper into servitude and slavery; poverty as punishment. They control our media, which shapes our views and ‘opinions,’ they sit on the boards of our universities, putting future generations into debt before they have a chance at life, and control the ‘knowledge economy’ for which they have defined the purpose of education. They influence and control our governments and political leaders, sit on the boards of the think tanks that write policy and promote political agendas, they run the foundations and claim themselves to be benevolent philanthropists, when philanthropy is at best, moral masturbation for the wealthy, a way to feel good about their vast disparity of wealth, and at its more organized levels, is simply a means through which to engage in social engineering and social control: to give a little in order to continue taking so much. The profit off of the foreign wars our country wages and supports, blood plunderers of the Congo, Afghanistan, and Libya. The Canadian elite rule the country as a proxy for the American Empire, acting as a resource suction-cup for the behemoth below us, providing the United States with most of its oil, water, electricity, and timber. These rapacious parasites claim they hold the answers to the crises they cause and profit from; a super-class which can only be understood as a sprawling, venomous, and vacuous social succubus.

With a massive student movement in Quebec nearing its fourth month of strikes against tuition increases, the media has set against them in a massive propaganda campaign, the legal system has set against them in declaring injunctions against picketing students, the provincial state has dismissed, derided, and engaged in fallacious negotiations designed only to win public sympathy for the government, while the police have been incredibly oppressive against the youth: employing pepper spray, tear gas, smoke bombs, concussion grenades, beatings with batons, mass arrests, shooting students in the face with rubber bullets, and a disturbing trend of driving police cars and trucks into crowds of students. These are images you expect from a military dictatorship like Egypt, but not from a supposed “democracy” like Canada. In the midst of this social upheaval and state repression, the propaganda campaign against the students has been so successful that the majority of public opinion stands with the government and against the youth. Through every institution, and with every means made available, the elite have set themselves against the student movement. It is time the students and Canada at large recognize our elite for what they are: parasites!

While this rhetoric is perhaps a little inflammatory, it remains apt. A parasite is much smaller than its host, and it benefits at the expense of the host, changing its behaviour and health. The word “parasite” comes from the Latin word parasitus which is itself derived from the Greek word, parasitos, meaning, “one who eats at the table of another.” The elite have been eating at our table for far too long. They have long over-stayed their welcome. It’s time to make it known that we have no patience or place for them at our table any longer. This will not be easy, this will not be simple; this will take a long time and a great deal of effort. But if we don’t start now, if we don’t begin to take and create a society of, by, and for the people (what was once referred to as ‘democracy’), then elite parasitism will continue to sap the strength, health, environment, wealth, and the very hope and lives of future generations. They will continue to spread like a social cancer until the host is dead.

The youth are always told that the future is ours, but that remains up to us to make it so. The past and the present belong to the parasites, so if we do not stand up and struggle now and forever, we have no future to inherit, no world in which to grow and no hope in which to gaze. We have only debt bondage, state violence, table scraps, impoverishment, punishment, and oppression. The youth in Quebec are trying to just begin to stand up, to say ‘No More!’ and demand for themselves and others a chance at a future. The success of the strike is secondary to the newly-discovered strength of the students. They have been dismissed and derided, insulted and oppressed, from the left and the right, from so-called Progressives and self-congratulating Libertarians. Because the students do not articulate the same philosophy as those of other critics, they are presented as naïve and ‘entitled.’ Those who insult and deride without empathy or understanding only expose their own naivety.

The fundamental and historical importance of the present situation in Québec is not the cost of tuition, it’s the mass mobilization of youth: it is an expression of a popular and growing dissatisfaction with the way things are and an articulation and drive to create something different, to chart a course for the way things can be. Those who fail to see and recognize that, fail to see the development of progress through history, not immediate, but evolving, not instant, but incremental and persistent. If nothing else, this generation can look back and say, “At least we tried. At least we started.”

What will you look back and say?

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.

Notes

[1]            Christa d’Souza, The art of being Louise MacBain, The Telegraph, 26 June 2004:

http://www.telegraph.co.uk/culture/3619575/The-art-of-being-Louise-MacBain.html

[2]            Konrad Yakabuski, Like Father, like sons?, The Globe and Mail, 26 March 2006:

http://www.theglobeandmail.com/report-on-business/rob-magazine/like-father-like-sons/article170466/singlepage/#articlecontent

[3]            Ibid.

[4]            Ibid.

[5]            Marianne White, “Author delivers high-voltage critique of Paul Desmarais Sr. — the man behind Power Corp,” Ottawa Citizen, 21 October 2008:

http://www2.canada.com/ottawacitizen/news/story.html?id=2e3cff7f-05a2-44fc-afc1-616c5c40f64f

[6]            Ian Austen, “The Name Is ‘Power’ and It Fits,” The New York Times, 26 January 2007:

http://www.nytimes.com/2007/01/26/business/26fund.html?_r=1

[7]            Lisa Kassenaar, “Desmarais family keeps a low profile,” Edmonton Journal, 1 August 2009:

http://www2.canada.com/edmontonjournal/news/business/story.html?id=b40b4563-fe56-4612-920d-a66e9e7da838

[8]            Lisa Kassenaar, “Buffett Loses to Desmarais as Power Exceeds Return,” Bloomberg, 30 July 2009:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aEl4wizkuSTQ

[9]            Christinne Muschi, “Great-West Lifeco helps boost profit at Power Financial,” Reuters, 14 March 2012:

http://www.theglobeandmail.com/globe-investor/great-west-lifeco-helps-boost-profit-at-power-financial/article2368991/print/

Kevin Dougherty, “Sabia-Desmarais meeting was “friendly”, not lobbying, Caisse de dépôt says,” Montreal Gazette, 7 February 2012:

http://www.montrealgazette.com/news/Sabia+Desmarais+meeting+friendly+lobbying+Caisse+d%C3%A9p%C3%B4t+says/6116318/story.html

[10]            William K. Carroll and Murray Shaw, “Consolidating a Neoliberal Policy Bloc in Canada, 1976 to 1996,” Canadian Public Policy (Vol. 27, No. 2, June 2001), pages 196-200.

[11]            William K. Carroll and Murray Shaw, “Consolidating a Neoliberal Policy Bloc in Canada, 1976 to 1996,” Canadian Public Policy (Vol. 27, No. 2, June 2001), pages 200-202.

[12]            C.D. Howe Institute, Members and Supporters: http://www.cdhowe.org/members-and-supporters

Student Strikes, Debt Domination, and Class War in Canada: Class War and the College Crisis, Part 4

Student Strikes, Debt Domination, and Class War in Canada: Class War and the College Crisis, Part 4

By: Andrew Gavin Marshall

Part 1: The “Crisis of Democracy” and the Attack on Education

Part 2: The Purpose of Education: Social Uplift or Social Control?

Part 3: Of Prophets, Power, and the Purpose of Intellectuals

Part 5: Canada’s Economic Collapse and Social Crisis

Part 6: The Québec Student Strike: From ‘Maple Spring’ to Summer Rebellion?

There is a process under way in Canada, led by the corporate and financial elite, and directed against the general population, the poor, and the young, intending to provide for the rich and powerful, to punish the poor and steal from the rest, to plunge into poverty, to repress, control, and dominate: this process is called ‘Class War’ and it’s waged by the super-rich against the supposedly superfluous rest. It’s objective is simple: to preserve, protect, and expand the control and domination of the wealthy over the majority.

In Quebec, where the class warfare has taken on a specific assault on the students and youth, there are finally growing signs and actions that the youth are starting to fight back. The provincial government of Quebec – the French-speaking province of Canada – has decided to double the costs of tuition over the next few years. These moves have prompted hundreds of thousands of students across Quebec to go on strike in protest of the increased fees. Since Quebec currently has the lowest tuition costs in Canada for residents, a great deal of the media and commentary on the issue is related to lambasting Quebecers for their concept of “entitlements” and for “complaining” that they have to pay what others pay. The debate is focused around the ‘need’ for the government of Quebec to reduce its debt – balance its budget – framing increased tuition costs as a necessity to be accepted, and when resisted, to dismiss the protesters as unrealistic and petty.

So is it true that Quebec has the lowest tuition fees in Canada? Yes. However, Quebec residents also pay the highest income taxes in all of Canada.[1] One of the major claims by the Quebec government as to why tuition must be increased is the claim that Quebec’s universities are among the most “under-funded” in Canada, and therefore they need to increase their funding so as to increase their “competitiveness.” However, according to the Quebec government itself, total government spending on education (in 2008-2009) amounted to 1.94% of GDP, compared to 1.76% for Ontario, and 1.65% for Canada as a whole. At the same time, total university spending per student in Quebec was at $29,242, compared to $26,383 in Ontario, and $28,846 for Canada as a whole.[2] Thus, Québec’s universities are funded to a greater degree than the rest of Canada, so that argument does not hold weight.

Quebec’s universities are funded more than other Canadian universities, while Quebec residents pay more in taxes than the rest of Canada, so why the increase in tuition? As tuition fees for universities increase, government spending on education decreases. As the Canadian Federation of Students notes:

In the past fifteen years, tuition fees in Canada have grown to become the single largest expense for most university and college students. The dramatic tuition fee increases during this period were the direct result of cuts to public funding for post-secondary education by the federal government and, to a somewhat lesser extent, provincial governments. Public funding currently accounts for an average of approximately 57% of university and college operating funding, down from 84% just two decades ago. During the same period tuition fees have grown from 14% of operating funding to over 34%.[3]

This marks a move “away from a publicly funded model and towards a privatised user fee system,” which has caused “post-secondary education to become unaffordable for many low- and middle-income Canadians.” In the mid-1960s, nearly all of Canada’s university funding was provided by the federal and provincial governments, and tuition fees were either incredibly minimal or non-existent. This process began to change in the early 1980s, with the rise of neoliberalism in the global political economy, which saw moves toward cutting social spending by governments. As government funding decreased, tuition costs rose, and as a result, between the early 1980s and the early 1990s, tuition fees in Canada nearly doubled. In 1995, the Liberal federal government of Canada cut $7 billion in spending for the provinces, leading to “the largest tuition fee increases in Canadian history.” Quebec had, however, resisted the push toward making students pay more, which was taking place in all the other Canadian provinces. In the early 1990s, average undergraduate tuition fees in Canada were $1,464; today the average has more than tripled to $5,138.[4]

So why is this process taking place? Why must government spending on education (and other social programs) be reduced, while personal costs for all of these services be increased? The answer is not in “efficiency” or “balancing budgets,” but rather, in class warfare.

In April of 2007, TD Bank (one of Canada’s ‘big five’ banks which dominate the economy) released a “plan for prosperity” for the province of Quebec, which recommended, among other things, raising the cost of tuition: “by raising tuition fees but focusing on increased financial assistance for those in need, post secondary education (PSE) institutions will be better-positioned to prosper and provide world-class education and research.”[5] In one Canadian province, Nova Scotia, the government hired a former chief economist from the Bank of Montreal, Tim O’Neill, to assess higher education finances, and unsurprisingly, advocated higher tuition fees.[6] Banks, of course, have a major interest in promoting increased tuition costs, because they provide student loans and profit off of the interest on student debt, like some malevolent ever-growing succubus draining the life force and potential of future generations which are doomed to debt slavery. So naturally, our governments take the advice of the banks, because they know whom their real masters are.

It should be noted, as well, that this is not merely a problem in Quebec or Canada. Tens of thousands of students in the United Kingdom are planning a walk out in protest of increasing tuition fees, which “are pricing students out of education.”[7] The Occupy Movement in the United States is moving into universities, as campuses in California experienced demonstrations and protests against “state budget cuts to education and the resulting hikes in tuition.”[8] In Spain, more than 30,000 students took to the streets of Barcelona protesting the ‘austerity cuts’ to education, and were then of course met with state repression.[9] Perhaps most impressive is a mass student movement that has developed in Chile over the past year.

The College Crisis

What is the ‘college crisis’? It’s quite simple: our society is producing more educated, professionalized youths than ever before, who are then graduating into a jobless market, and what’s more, they are graduating with extensive debt. The professional education students receive, in combination with the heavy overbearing debt load and the immense dissatisfaction with the lack of opportunities for them, creates a large, mobile, educated, activated, and very pissed off group of people. This is what is referred to as a ‘poverty of expectations,’ whereby the inculcated expectations of a group or sector of society cannot be met by the society in which they live. In any society, in any period of history, this is a recipe for social unrest, resistance, rebellion, and, potentially, Revolution.

Naturally, the elites of any society fear such a scenario, so they always come up with various methods of managing these increasingly problematic conditions. The solutions, invariably, are always aimed at finding methods and means for undermining the ability and effectiveness of the target group to mobilize and organize for their cause; in this case, students. Cutting education budgets and increasing tuition fees is a very effective means to create more ‘desirable’ conditions for elites. How so? Any form of ‘austerity’ is essentially an act of class war, waged by the upper class against the rest. Austerity means that budgets will be cut and costs will be increased, whether through taxation, direct prices for services and necessities, or more often, both. The stated purpose of ‘austerity measures’ is to reduce debt (spending) and increase profitability (or revenue), with the purported aim of eliminating the debt over time. This is, however, not the true purpose of austerity, and appropriately so, it is never the result. The result is actually to increase debt, and impose a regimen of what amounts to ‘social genocide’: increasing the burden, costs, taxes, and hardships upon the wider population. For the poor, it means despair; for the middle class, it means poverty; and for the rich, it means prosperity and power.

The current crisis stems from developments that took place in the 1960s which saw an increase in activism and engagement among the general population, and especially the youth. Universities were breeding grounds for activism and movements which sought to create social uplift. The elite response to this scenario, in the United States specifically but also across the Western world as a whole, was to declare a “Crisis of Democracy” in which too many people were making too many demands upon the system, in which all forms of authority were under attack, and the legitimacy of those authorities were called into question. Elites of both the left and right saw this acceleration of democratic participation and activism as an assault upon their conception of what “democracy” should be – namely, a state that serves their interests alone. From the right, the U.S. Chamber of Commerce – and from the liberal internationalists, the Trilateral Commission – launched a major national and global attack upon the surge of democratic activism in what the Trilateral Commission referred to as an “excess of democracy.” The result of this attack: neoliberalism and debt. The two documents that were most influential in this attack on democracy were the “Powell Memo” of 1971 sent to the U.S. Chamber of Commerce which outlined a detailed program for how big business could reorganize society for its own interests, and the Trilateral Commission’s 1975 report, “The Crisis of Democracy,” which outlined an elite ideology which saw the problem of society being in an “excess of democracy” and that what is required is to correct the balance in favour of elites and increase apathy and passivity among the population. The Chamber of Commerce represents all the major business interests in the United States, while the Trilateral Commission (founded in 1973 by banker David Rockefeller), represents roughly 350 elites in the areas of academia, finance, business, government, foreign policy, media and foundations from North America, Western Europe, and Japan.

The result of this was to decrease government funding for education, increase tuition and other costs, increase debt for students and the general population as a whole (through credit cards, mortgages, loans, etc.), and to merge higher education and big business: the corporatization and privatization of universities.

As part of this process, knowledge was transformed into ‘capital’ – into ‘knowledge capitalism’ or a ‘knowledge economy.’ Reports from the World Bank and the Organization for Economic Cooperation and Development (OECD) in the 1990s transformed these ideas into a “policy template.” This was to establish “a new coalition between education and industry,” in which “education if reconfigured as a massively undervalued form of knowledge capital that will determine the future of work, the organization of knowledge institutions and the shape of society in the years to come.”[10]

Knowledge was thus defined as an “economic resource” which would give growth to the economy. As such, in the neoliberal era, where all aspects of economic productivity and growth are privatized (purportedly to increase their efficiency and productive capacity as only the “free market” can do), education – or the “knowledge economy” – itself, was destined to be privatized.[11]

Solving the ‘College Crisis’

In February of 2011, it was reported that the average debt for a Canadian family had reached over $100,000, spending 150% of their earnings. Thus, for every $1,000 in after-tax income, the average Canadian family then owes $1,500. The debt figures include mortgages, student loans, credit card debts, and lines of credit. In 1990, the average Canadian family was able to put roughly $8,000 into savings, in 2012, that number was at $2,500. So while the public is constantly told that the ‘recession’ is over, this is simply not true for the general population, though it may appear to be true in the quarterly reports of Canada’s multinational corporations and banks. A 2011 report indicated that, “17,400 households were behind in their mortgage payments by three or more months in 2010, up by 50 per cent since the recession began. Credit card delinquencies and bankruptcy rates also remain higher than before the recession.”[12]

By February of 2012, this rate of income-to-debt had not only failed to improve, but even got slightly worse, hitting a new record.[13] The state for Canadian families is indeed getting worse. More than half of the jobs created since the “end” of the “recession” went to those aged 55 and older, leaving the youth struggling to find jobs, while older workers have to either stay working longer, return from retirement because they can’t survive off of their pensions, and thus, young people are living at home longer and staying in school longer. The slight increases in hourly earnings has not kept up with inflation, and thus amounts to a loss of earnings, and income inequality continues to grow between the super-rich and everyone else.[14]

Mark Carney, Governor of the Bank of Canada (Canada’s central bank), is also Chairman of the Financial Stability Board, run out of the Bank for International Settlements (BIS) in Basel, Switzerland – the central bank to the world’s central banks – and which operates under the auspices of the G20. Carney had previously served as Deputy Governor of the Bank of Canada, the Canadian Department of Finance, and spent thirteen years with Goldman Sachs prior to that.

The Bank of Canada, like all central banks, serves the dominant elite interests of the nation, but also of the international financial elite more broadly. The board of directors of the Bank of Canada includes William Black, former CEO of Maritime Life, who sits on the boards of Dalhousie University, the Shaw Group, Standard Life of Canada, and Nova Scotia Business, Inc.; Philip Deck, CEO of Extuple, Inc. (a technology finance corporation), former managing partner with merchant banking company HSD Partners, and is on the board of a major Canadian think tank, the C.D. Howe Institute; Bonnie DuPont, former Vice President at Enbridge Inc., former director of the Canadian Wheat Board, a current director of agribusiness firm Viterra Inc, UTS, on the board of governors of the University of Calgary, member of the Institute of Corporate Directors, and is past president of the Calgary Petroleum Club; Jock Finlayson, Vice President of the Business Council of British Columbia, former Vice President of the Canadian Council of Chief Executives (an interest group made up of Canada’s top 150 CEOs), and a member of the Canada West Foundation; Daniel Johnson, a director of Bombardier, IGM Financial, Mackenzie Financial Corporation, Investors Group, and former Minister of Industry and Commerce in the Province of Quebec; David Laidley, Chairman Emeritus of Deloitte & Touche LLP, on the boards of Nautilus Indemnity Limited, ProSep Inc., EMCOR Group, Aviva Canada Inc., the Cole Foundation, and on several boards at McGill University. The rest of the directors of the Bank of Canada are almost exclusively businessmen or former government officials (two women in total), and all of them are white; so, naturally, they truly represent the struggling Canadian family.

In March of 2012, the Bank of Canada warned that household debt “remains the biggest domestic risk” to Canada’s economy. While part of the Bank’s role is to set interest rates, it has kept interest rates very low (at 1%) in order to encourage lending (and indeed, families have become more indebted as a result). Yet, the Bank says, interest rates will have to rise eventually. Economists at Canada’s major banks (CIBC, RBC, BMO, TD, and ScotiaBank) naturally support such an inevitability, as one BMO economist stated, “while rates are unlikely to increase in the near term, the next move is more likely to be up rather than down, and could well emerge sooner than we currently anticipate.” The chief economist at CIBC stated that, “markets will pick up on the slightly improved change in tone on the economy, and might move forward the implied date for the first rate hike.” This translates into: the economy is doing well for the big banks, therefore they will demand higher interest rates on debts, and plunge the Canadian population into poverty; the “invisible hand of the free market” in action.[15] Increased interest rates mean increased payments on debts, which means increased suffering for the indebted, who make up the general population.

As the Bank of Canada warns that interest rates will increase, perhaps as soon as this year, the Canadian people – heavily indebted – will suffer immensely and will likely fail to meet their interest payments. Since such a large majority of the debt and interest is in mortgages, this would potentially cause a major housing crisis, which is already at bubble proportions (especially in Vancouver, now the most expensive city to live in within North America), and will drag the middle class and the rest of the Canadian economy down with it. Even TD Bank has said the housing market is over-valued (i.e., artificially inflated), and warned of a coming “correction” (i.e., economic crisis).[16]

As the gap widens between the rich and everyone else in nearly every OECD (Organisation for Economic Cooperation and Development) country, Canada is no exception. The top 10% of Canadian earners make ten times as much as the bottom 10%. The top 1% in Canada saw their share of total income increase from 8.1% in 1980 to 13.3% in 2007, while the top 0.1% saw their share increase from 2% to 5.3%. Tax policies in Canada strengthen the wealth gap. In 1981, the tax rate for the top margin of earners was 43%, and in 2010, it was 29%. As the Secretary General of the OECD stated in December of 2011, “The social contract is starting to unravel in many countries… This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that greater inequality fosters greater social mobility.” Thus, “inequality will continue to rise.”[17]

In a 2008 OECD study, Canada was singled out as one of the countries with the worst rates of widening inequality, stating that, “In the last 10 years, the rich have been getting richer, leaving both middle and poorer income classes behind.” The top 3.8% of Canadian households controlled 66.6% of all financial wealth by 2009, with rates set to increase. As the Conservative government in Canada continues to implement corporate tax cuts, this disparity will increase, with the Harper government providing $60 billion in corporate tax breaks, while maintaining a $30 billion budget deficit (public debt). Despite all the tax cuts for corporations, the money that is not spent on taxes tends to go to shareholders and very little goes toward investments or job creation, meaning that the benefits do not “trickle down,” but rather, as to be expected, trickle up. For Prime Minister Harper’s tax policies and programs, “The higher the income, the bigger the tax break.” The senior economist at the International Trade Union Confederation stated that, “The growing gap between the rich and the rest of us has many causes, including higher remuneration for top earners, much higher profits as a share of the economy, less bargaining power for workers, and less progressive taxes… Conservative tax policies will clearly aggravate the problem.”[18]

The Conference Board of Canada released a study in the fall of 2011 which stated that, “income inequality has been rising more rapidly in Canada than in the U.S. since the mid-1990s,” and on a global scale, “Canada has had the fourth-largest increase in income inequality among its peers.” The President of the Conference Board explained, “Even though the U.S. currently has the largest rich-poor income gap among these countries, the gap in Canada has been rising at a faster rate.”[19]

Among the OECD countries, the one with the highest rates of inequality was none other than the Petri-dish experiment of neoliberalism, Chile, followed by Israel, Italy, Portugal, the U.K., and the United States. While the top 10% of Canadian earners had an average income of $103,500, the bottom 10% had an average annual income of $10,260.[20]

While Canada is often hailed as the most promising nation to come out of the economic-financial crisis of 2008, since its banks were largely left out of the housing derivative market (and thus, were protected), the facts on the ground represent a different reality. As the Economist reported in 2010, of the 31 OECD nations, Canada ranked as the 22nd worst country in terms of child poverty, with one in ten Canadians (roughly 3 million) being poor, 610,000 of them being children. In November of 2010, it was reported that roughly 900,000 Canadians were dependent upon food handouts, a 9% increase from the previous year, with roughly 300,000 homeless people. The majority of the poor are single mothers, immigrants, aboriginal and disabled Canadians. Through the 1980s and 1990s (with the implementation of neolibral policies), welfare payments to these groups were slashed, with British Columbia as the most enthusiastic supporter of exacerbating child poverty, which stood at 10.4% by 2010.[21]

The cost of poverty is quite extensive:

* By 2011, poverty was said to cost the government between $72-86 billion per year;

* In the city of Hamilton, Ontario, there is a 21 year-difference in life expectancy between those who live in high and low-income neighborhoods;

* In March of 2010, nearly 900,000 Canadians had to go to food banks for food, 38% of them being children, an increase of 28% since March of 2008, the “highest level of food bank use ever”;

* In 2010, there were between 150-300,000 “visible” homeless in Canada, with another 900,000 “hidden” homeless, and 1.5 million families in “core housing need” and 3.1 million families in unaffordable housing;

* In 2010, 59% of Canadians (over 20 million Canadians) lived from paycheck to paycheck, “saying they would be in financial difficulty if their paycheque was delayed by a week”;

* In 2009, the average annual income of Canada’s best paid CEOs was $6.6 million, “155 times higher than the average worker’s income ($42,988);

* A third of all income growth in Canada over the past two decades has gone to the richest one percent of Canadians.”[22]

Canada’s Youth: A “Bankrupted Generation”

By January of 2009, Canadian students had a debt to the federal government of over $13 billion, with student loan debt increasing by $1.2 million every day. The Canadian Federation of Students said the obvious answer to this growing crisis was to make education “affordable.” Studies show the effects of student debt, reducing “the ability of new graduates to start families, work in public service careers, invest in other assets, volunteer, or even just take a lower paying job in their own field to get a foot in the door.” On top of the $13 billion owed to the Federal Government, Canadian students owed an additional $5 billion to provincial governments, and the figures do not include debt owed to banks, credit card companies or parents.[23] In short, Canada’s student youth are a “lost generation.”

In September of 2010, the Canadian Council on Learning published a report which indicated that, “students who graduate from college and university with high debt loads are putting off buying a house, having children or investing for the future.” The average debt load of a Canadian university graduate in 2009 was $26,680, and the average debt for college graduates was $13,600. These figures, it should be noted, do not take into account mortgages, credit card debt, lines of credit, or car loans.[24] This represented a doubling in the amount of student debt from 1990, and in 2005, the number of Canadian students needing loans to pay for their education had increased to 57%.[25]

In October of 2011, it was reported that Canadian student debt (to the Federal Government) will surpass $15 billion by 2013, which is the current ceiling set by the government in student loans. Thus, if it reaches the ceiling, the government will no longer (in theory) be able to provide student loans. The solution, according to the Canadian Federation of Students, does not mean eliminating the debt ceiling, which will only make the problem worse, but rather, in reducing the costs of education itself. As the national chairperson of the CFS stated, “The reality is that the job market is grim and students are facing their first interviews with a mortgage-sized debt.” Thus, once they begin work, they do not contribute to the economic growth of the country, but rather merely have to focus on paying interest and repaying debts. The cost of university education in Canada is estimated to be at $60,000, and some studies suggest that this will rise to $140,000 for those born in 2011. The average yearly undergraduate tuition fees were a 4.3% increase from the previous year, reaching $5,366.[26]

In 2011, almost two million Canadians had a student debt totaling $20 billion, and as the chairman of the Canadian Federation of Students stated, “We have an entire generation of people who now more than ever have to complete some form of post-secondary education just to get a job interview, with more than 70% of all new jobs requiring some degree or diploma. We are on the verge of bankrupting a generation before they even enter the workplace.” As job losses continue, and especially as the youth job market continues to decline, the number of full-time students tends to increase, and the availability of part-time work for students continues to decline. A post-secondary education no longer increases a “return on investment” through a lifetime, as it was once assumed. The overall student debt is not the most pressing immediate problem, but rather the “crippling interest rate attached to these government loans” which plunge youth into a deep crisis. So while interest rates are very low (in other lending, as set by the Bank of Canada at 1%), the government is charging 8% interest on student loans. Margaret Johnson, president of Solutions Credit Counselling Service Inc. in Vancouver stated that, “When the loan goes into default, the interest starts to compound. And then you have an absolute nightmare. The average debt I’m seeing is anywhere between $30,000 and $60,000. The payments are so high on some of these loans that the young person cannot live and make a payment. Instead of lowering the interest rate — or eliminating it, which I think is the best solution — the government extended the repayment term to 14 years. The fact that so many loans are in arrears proves this isn’t the answer.”[27]

Some things are worth repeating: the average debt for every Canadian household is over $100,000 and the average debt for a university graduate in Canada is over $26,000; nearly one million Canadians depend upon food banks for their food, poverty and inequality are increasing, homelessness is increasing; the rich are getting richer and everyone else is getting poor or poorer, and there is a horrible job market with few jobs available, let alone available to youth. So the “solution” – we are told – to the supposed “problem” of “competitiveness” in our universities… is to increase the burden, the cost, and the debt of students, families, and the general population; to increase tuition and student debt, to increase interest rates on all debts, and to plunge the population into abject poverty. It seems then, that Canadians, and the Western world in general (as these policies are being pushed throughout the G8 nations on the whole) are about to get a hard lesson in what our countries of the industrialized and supposedly “democratic” north have been doing to the rest of the world (Africa, Asia, Latin America) for decades and, indeed, centuries. What has been done abroad is now coming home to roost.

The conditions, restrictions, programs and policies that our nations have imposed upon Africa, Asia, and Latin America for the past four decades have plunged those countries into poverty, allowed for the unhindered control and extraction of their resources for our corporations, put their nations into the debt of our banks, exploited their populations for cheap labour, and propped up ruthless dictators to repress the people if they ever get wise and want to change their society. While our nations of course continue in their raping and pillaging of the world, now they have also turned their attention – and absolute disregard for humanity – to their domestic populations. The same banks, international institutions, nations, organizations and even individuals who promoted the policies which led to the impoverishment and punishment of much of the world’s population are now telling us that these same policies are the “solutions” to our current crises, just as they told the populations of Africa, Asia, and Latin America. If we listen to these same people, submit to the same policies, and accept the same ideologies which have caused so much destruction and devastation around the world, and expect different results at home, we deserve what we get. Naturally, then, we must stop accepting and consenting to the hegemony and power of our elites and their institutions and ideologies. This means that we have to actively create alternatives, not simply protest against their programs, or demand reforms, rearranging deck chairs on the Titanic. The boat is sinking, it doesn’t matter how it looks on the way down. It’s time for a new system altogether. One cannot demand from others to create a new system, but must actively create it themselves.

In the next part of this series, “Class War and the College Crisis,” I will be discussing the coming economic crisis for Canada, which has thus far been hailed as the “safest” nation emerging from the 2008 “recession,” a myth that will soon be broken. As Canada, and much of the rest of the world, begin their rapid descent into an economic depression, the above-mentioned statistics regarding debt, poverty, and inequality will get worse. As the social and economic crisis deepens, our governments will continue to show in whose interests they truly rule: with batons, tear gas, beatings, mass arrests, detention camps, and the growth and development of a police state surveillance society, our governments will reveal that they rule for bankers, corporations, and oligarchs. The democratic façade will wash away. It is within these circumstances that Canadians, and the wider world in general, must seek to create a true democratic system. First, however, we must recognize and understand the system in which we live for what it is: a State-Capitalist society ruled by a power-mad oligarchy. The next part of this series will be taking a look at what this power-mad oligarchy is doing and will be doing to Canada’s economy and society in the coming years. Here’s a hint: it doesn’t benefit YOU!

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.

Notes

[1]            CRA, What are the income tax rates in Canada for 2012? Canada Revenue Agency:

http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

[2]            Finances Québec, “A Fair and Balanced University Funding Plan: To Give Québec the Means to Fulfill its Ambitions,” The Government of Québec, 2011-2012 Budget, page 7.

[3]            CFS, Tuition Fees, The Canadian Federation of Students:

http://cfs.bc.ca/index.php/section/49

[4]            Ibid.

[5]            Press Release, “TD Economics outlines plan for prosperity in Quebec report,” Newswire, 10 April 2007:

http://www.newswire.ca/fr/story/178423/td-economics-outlines-plan-for-prosperity-in-quebec-report

[6]            CNW, “Déjà Vu: O’Neill Report Recycles Dated, Discredited Tuition Fee Myths,” Newswire, 17 September 2010:

http://www.newswire.ca/en/story/673917/deja-vu-o-neill-report-recycles-dated-discredited-tuition-fee-myths

[7]            Alison Kershaw, “Thousands of students to stage walkout protest,” The Independent, 12 March 2012:

http://www.independent.co.uk/news/education/education-news/thousands-of-students-to-stage-walkout-protest-7562129.html

[8]            Carla Rivera and Larry Gordon, “Occupy protests bring small yet intense crowds to state campuses,” Los Angeles Times, 1 March 2012:

http://articles.latimes.com/2012/mar/01/local/la-me-student-protests-20120302

[9]            Giles Tremlett, “Fighting breaks out in Barcelona as students protest over education cuts,” The Guardian, 29 February 2012:

http://www.guardian.co.uk/world/2012/feb/29/fighting-barcelona-students-protest-education-cuts?newsfeed=true

[10]            Mark Olssen and Michael A. Peters, “Neoliberalism, Higher Education and the Knowledge Economy: From the Free Market to Knowledge Capitalism,” Journal of Education Policy (Vol. 20, No. 3, May 2005), page 331.

[11]            Ibid, pages 338-339.

[12]            CTV News Staff, “Average Canadian family debt hits $100,000,” CTV News, 17 February 2011:

http://www.ctv.ca/CTVNews/Canada/20110217/family-debt-110217/

[13]            Why are Canadian families falling further into debt?, The Globe and Mail, 14 February 2012:

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/why-are-canadian-families-falling-further-into-debt/article2337540/

[14]            Tavia Grant, “Financial security ‘elusive’ for many Canadian families,” The Globe and Mail, 22 March 2012: http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/financial-security-elusive-for-many-canadian-families/article2377592/

[15]            Gordon Isfeld, “Bank of Canada says household debt ‘biggest risk’ to economy,” The Leader Post, 9 March 2012:

http://www.leaderpost.com/business/Bank+Canada+says+household+debt+biggest+risk+economy/6274564/story.html

[16]            John Morrissy, “Household debt a mounting concern as rates appear set to rise,” The Montreal Gazette, 23 March 2012:

http://www.montrealgazette.com/business/Household+debt+mounting+concern+rates+appear+rise/6347875/story.html

[17]            CBC, Wealth gap widens to 30-year high, CBC News, 5 December 2011:

http://www.cbc.ca/news/canada/story/2011/12/05/oecd-rich-poor-gap.html

[18]            Les Whittington, “Tax policies may aggravate gap between rich and poor,” Toronto Star, 27 May 2011:

http://www.thestar.com/news/canada/article/998648–tax-policies-may-aggravate-gap-between-rich-and-poor

[19]            Tavia Grant, “Income inequality rising quickly in Canada,” The Globe and Mail, 13 September 2011:

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/income-inequality-rising-quickly-in-canada/article2163938/

[20]            CTV News Staff, “OECD report finds income inequality rising in Canada,” CTV News:

http://www.ctv.ca/CTVNews/TopStories/20111205/organization-economic-cooperation-development-oecd-inequality-report-canada-111205/#ixzz1pycGLl6e

[21]            Poverty in Canada: Mean Streets, The Economist, 25 November 2010:

http://www.economist.com/node/17581844

[22]            CTV News Staff, “Canada Student Loan debt tops $13B, figures show,” CTV News, 21 January 2009:

http://www.ctv.ca/CTVNews/Canada/20090121/student_loans_090121/

[23]            CTV News Staff, “Canada Student Loan debt tops $13B, figures show,” CTV News, 21 January 2009:

http://www.ctv.ca/CTVNews/Canada/20090121/student_loans_090121/

[24]            CBC, “Student debt limits post-grad options,” CBC News, 22 September 2010:

http://www.cbc.ca/news/story/2010/09/22/con-student-debt.html

[25]            QMI Agency, “Student debt doubled over 20 years: Study,” Toronto Sun, 22 September 2010:

http://www.torontosun.com/news/canada/2010/09/22/15435176.html

[26]            Sharon Singleton, “Action needed on student debt: CFS,” Toronto Sun, 17 October 2011:

http://www.torontosun.com/2011/10/17/action-needed-on-student-debt-cfs

[27]            Mary Teresa Bitti, Student debt bankrupting a generation, The Financial Post, 4 June 2011:

http://www.financialpost.com/news/Student+debt+bankrupting+generation/4874861/story.html