Saving Capitalism From Itself

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The American economist  Richard Wolf maintains that capitalism contains the seeds of its own destruction. Unchecked, it produces greater and greater inequality, until it collapses upon itself. Tom Walkom agrees:

Experts may tie themselves up in knots over the precise trajectory of inequality, depending in part on what is measured and when.

But the general point is beyond dispute: On its own, the free market is providing increasingly less equal rewards.

That inequality, in turn, hampers the very forces that favour the free market.

Thus, those who wish to preserve capitalism should protect capitalism from itself. Those protections include public pensions, public healthcare, unemployment insurance and public employment.

After the Second World War, business and labour reached a grand bargain, which included these four safety valves. But things changed:

Jean Chrétien’s Liberal government began the job of dismantling the so-called welfare state. Stephen Harper’s Conservatives are finishing it.

But the factors that really killed the old bargain were globalization and the changing nature of work.

The old welfare state was built for a world where much of the workforce laboured in big factories.

Now, big factories are passé. The new normal is part-time work and alleged self-employment.

Rather than responding to changed circumstances, our politicians have been deer in the headlights. Walkom  has some suggestions about what they should do:

Build a national pharmacare program. This would continue the process, begun in the 1960s, of socializing the costs needed to keep workers healthy.

Reform the employment insurance system. The aim here should be to ensure that all who are involuntarily unemployed, including part-timers and the self-employed, have full access to EI.

Rebuild the entire collective bargaining system. Developed in the 1930s and ’40s, the current one was premised on a world of factory production. A new arrangement would have to take into account the dramatic new changes in work.

The Harper government has no such plans. But a new government -- if pushed -- might.