Is Communism inevitable in Canada?
It may be if we don't stem the left wing tide of extreme socialism.
In his classic book “Can Capitalism Survive?” first published in 1947, Economist Joseph Schumpeter (himself an ardent capitalist) argues that capitalism is unlikely to survive and agrees with Karl Marx that Communism may be inevitable, but for different reasons. Marx saw Communism as the outcome of class warfare where the “oppressed proletariat” rose up against the “bourgeousie oppressors” to create an egalitarian society. Schumpeter saw the soft underbelly of Democracy as the tendency to elect representatives who saw their role as enacting a never ending litany of legislation to erode personal freedoms all in the name of improving society for everyone.
We see plenty of evidence that Schumpeter was right. Every time Parliament meets in Canada or Congress meets in the United States, new laws are enacted but few are ever repealed. Each new law chips away at personal freedoms, some by tiny degrees and others in meaningful chunks. Political parties form with opposing views of what is best for society - those on the right in support of personal freedom and opportunity of advance in a free and open market, and those on the left for government intervention and regulation to restrict freedoms for the “greater good”.
No one can ignore the prophecies contained in Eric Arthur Blair’s classic book “1984” written under the pen name George Orwell. The word “Orwellian” was coined to describe an intrusive state relying on computer technology to monitor and control its citizenry. Much of what Orwell foresaw is commonplace today.
Joseph Schumpeter was equally prescient. Famed author Peter Drucker commented on Schumpeter in a Forbes article in May 1983. Quoting from that article:
Schumpeter’s description of bureaucrats, intellectuals, professors, lawyers and journalists is an apt description of the members of the left wing governments of Joe Biden in America and Justin Trudeau in Canada. Under these regimes, wealth creation and allocation of resources to economic productivity is replaced by a “tax state” in which citizens are increasingly regulated by and dependent on the state and capital is directed to “social programs” at the expense of productive investments. Capital formation as a percentage of GDP has fallen in every Liberal government in Canada since 1965. In parallel, government tax revenue and government borrowing have grown.
The recent Trudeau cabinet illustrates the parastical nature of the bureaucracy underlaying Canada’s current government. The defining characteristic of those annointed is loyalty to both Trudeau and to Liberal ideology with knowledge and competence not even a close second. There are many well educated and accomplished members of the Trudeau cabinet including Rhodes scholars Jonathan Wilkinson and Crystia Freeland, but their histories are not replete with a record of innovation and contribution to a healthy Canadian economy. Less accomplished but equally loyal to Trudeau and his ideology is Steven Guilbeault whose pre-Parliament accomplishments are hard to find beyond a strident activism to curtail fossil fuels.
Freeland is an “activist” whose book “Plutocracy” evidences antipathy towards successful entrepeneurs who she sees as a dangerous emerging quasi-aristocracy that needs to be curtailed, comparing American billionaires to Russian oligarchs and vilifying both. Her mentality parallels that of left wing leaders like Alexandria Ocasio-Cortez described in my earlier article “Are successful people vile?” Freeland would quite readily sacrifice the well-being of Canadians to bring down those Canadians whose contribution to our country’s economic success is greatest. It is hard to believe we have elected someone so antagonistic to economic success to any role in Parliament, but here she is holding both Minister of Finance and Deputy Prime Minister portfolios and gleefully looking forward to seeing how much damage she can do to Canada.
Wilkinson is a graduate of McGill and Oxford with a less storied career than Freeland but has distinguished himself in politics as an ardent foe of “climate change”. His education appears devoid of any understanding of the laws of physics and his embrace of Anthropogenic Global Warming theory is closer to a religion than any reasoned conclusion based on evidence. His roles under Trudeau included Minister of Environment and Climate Change and now Minister of Natural Resources.
Guilbeault has enjoyed little academic success but has devoted his life to an evangelical commitment to fighting “climate change” as if mankind could alter nature, an absurd belief. He is now Minister of Environment, with a clear intent to suppress development of Canada’s vital resources based on his inane beliefs.
The foregoing three Ministers have in common a history lacking any contribution to the economic success of Canada. Now they are in a powerful position to deny such success to other Canadians preferring to enact legislation that stifles opportunity, increases dependency on governments, and runs up massive government debts. Their heavy hands on policy will subjugate Canadians to a future of economic decay. The hard data are hard to ignore.
Based on OECD data, in 2000 Canadian governments raised $390.2 billion in tax revenue and of that $186.5 from individuals, with taxes on profits at $143 billion and $61 billion from other sources. In 2019 total taxes rose to $770.8 billion and of that $378.6 from individuals, $281.8 billion from taxes on profits, and $101 billion from other sources.
Doubling of the tax revenues by government was nonetheless insufficient to pay government outlays, with borrowings rising every year. Total debt of all three levels of government in the year 2000 amounted to $798 billion. In 2019, that had risen to $2.4 trillion with most of that increase taking place under the Trudeau government first elected in 2015.
It is easy to become dizzy when considering the vast amounts of money collected, borrowed and spent by our governments. It is helpful to consider that spending $100 million a minute every minute for 40 years would be less than $2.4 trillion.
For the past two decades, Canadian governments have been able to spend freely without triggering inflation and central bankers crowed about inflation being below a 2% “target” and interest rates barely above zero. It seemed too good to be true.
Because it is. Rising debt is now triggering inflation. After several years of near zero inflation and a stated Bank of Canada “target” of 2% inflation, we see August 2021 inflation now at 4.4%, the highest it has been since 2003. American inflation, usually a harbinger of what is in store for Canada, seems almost out of control with that country’s Producer Price Index (PPI) recently reported as rising 8.6% higher year over year. Separately, the U.S. government reported Consumer Price Index (CPI) inflation of 6.2% year over year, the highest rate in over 30 years. In an earlier article, I set out reasons why stagflation is in the cards for Canada.
As Schumpeter predicted, rising inflation will increase citizens’ reliance on government supports requiring higher levels of taxation and borrowing in turn creating higher inflation. We have seen this kind of spiral before and it was reined in only through interest rates in the 20% range and wage and price controls. We are in the early stages of a simlar period of runaway inflation with prices of key items like cars and gasoline now at a 13-year high and home prices beyond the reach of most Canadians.
The table has been set for our Liberal government to take steps to further restrict freedoms, make Canadians even more dependent on government, and pillage our childrens’ futures with debt they can never hope to repay. Trudeau has assembled just the right team of left wing ideologues to ensure this happens. Canadians seem content to sit idly by and watch it take place.