With all the columnists, pundits and political commentators pontificating on the SNC-Lavalin affair and former Governor-General Wilson-Raybould’s explosive testimony to the House of Commons Justice Committee, I wouldn’t dare venture to offer my own modest opinion on the imbroglio if I didn’t think I had something original to say.
To put it bluntly, I’m convinced that the eruption of this political scandal occurred because we live in a plutocracy rather than a democracy.
The Oxford dictionary defines plutocracy as “government by a wealthy elite.”
U.S. President Abraham Lincoln once defined democracy as “government of the people, by the people, and for the people.” But, since women and people of colour were denied voting rights at that time, he was careful not to say “government of, by, and for all the people.”
Indeed, more than eighty years were to pass before women and people of colour were grudgingly permitted to cast their ballots – a long delay that lasted in Canada as well as the U.S.
The freedom to vote, however, even when ostensibly extended to all the citizens of a country, does not automatically make that country a democracy. If the governments thus elected still give priority to policies and laws that favour the upper-class elite, while neglecting the needs of middle- and lower-class citizens, the latter’s right to vote is effectively nullified.
This is what happened when large corporations amassed so much political as well as economic power that they were able to subvert “democratically” elected governments. In effect, they transformed them into servile vassals of the owners, executives, investors, and major shareholders of the big corporations.
Such as SNC Lavalin.
Study exposes U.S. plutocracy
If you think I exaggerate, consider the findings of a prolonged study of the political system in the United States conducted a few years ago by researchers at Princeton and Northwestern universities.
They concluded that the U.S. can no longer be called a democracy. They described its current political form – even before Donald Trump became president – as “an oligarchy ruled by a small, powerful group of people with an entrenched commitment to serving their special interests.”
In short, a plutocracy.
Commenting on this study, consumer activist Ralph Nader noted that half the families of four or more in the U.S. “have incomes too low to lift them out of poverty. We have the highest child poverty rate in the developed world, and the lowest average wage. Electorally [as this study finds], the U.S. is a money-driven two-party tyranny – yet we’re still lecturing other countries on democracy!”
Chris Hedges, a former New York Times correspondent, claims that the conversion of democracy to plutocracy has given corporate oligarchs most of the wealth, power and privilege, “while the rest of us struggle as part of a vast underclass, increasingly impoverished and ruthlessly repressed. There is one set of laws and regulations for us, another set for a corporate power elite that functions as a global Mafia.”
That Canada has also become a plutocracy is clear. David Moscrop, political scientist at the University of British Columbia, referring to the U.S. study, pointed out that “oligarchic forces” have also undermined democracy in Canada. “Policy outcomes skewed to favour an elite are unlikely to benefit most Canadians.”
He pointed to the inherent unfairness of our first-past-the-post electoral system, which remains in effect after Prime Minister Trudeau cynically broke his promise to replace it with some form of democratic proportional representation.
“Only twice over the past two decades,” Moscrop pointed out, “has a winning party received more than a 40% minority of the vote. Giving these and other serious shortcomings, we can’t claim to be living in a democracy. A plutocracy would indeed be a more accurate description.”
Plutocracy spawns poverty, inequality
The inequitable society that has been created by the plutocrats’ dominant economic system – laissez-faire capitalism — has enriched and empowered an affluent minority in Canada, as it has in the U.S. and elsewhere. The plutocratic one percent wallow in luxury while millions of Canadian families are destitute and millions of underpaid workers scrabble precariously from paycheque to paycheque.
We live in a country in which — despite a recent decline in national poverty rates – more than 750,000 children still remain impoverished while just two of our richest businessmen – media magnate David Thomson and Holt Renfrew owner Galen Weston – hold a combined wealth of more than $33 billion. And the collective wealth of the next six richest Canadians amounts to another hefty $30 billion.
Is this not also the Oxford dictionary’s definition of a plutocracy?
Only in a plutocracy could this sort of inhumane disparity persist. Only in a plutocracy could the big corporations exercise such overwhelming political influence. Only in a plutocracy do governments meekly coddle, protect, and subsidize large corporations, and supinely bow to their wishes.
Banks bailed out after causing crash
The most striking example of this political subservience to the big business barons occurred during the crippling recession in 2007-08. That momentous economic crash was precipitated by the big unregulated American banks and other large financial firms. Their greed, reckless low-cost mortgages, short-selling, insider trading, money-laundering, and other infamous schemes inevitably triggered the worst financial collapse since the Great Depression.
“The operating principles of the big American banks were a cesspool of greed, corruption, and criminal intent,” investment specialist Mike Collins declared.
If the United States at the time had been a democracy, the blame and punishment for the meltdown would rightly have been imposed on the culprits – the owners and managers of the big banks and other financial institutions. But all but a few of them not only escaped prosecution and jail terms, but were saved from collapse by enormous government bailouts.
On the pretext that the big banks and investment firms on Wall Street were “too big to be allowed to fail,” President George W. Bush quickly signed a bill under the Troubled Asset Relief Program (TARP) that transferred $700 billion from the federal treasury to the vaults of the big banks.
This vast sum, however, was simply to buy the banks’ toxic mortgage-backed securities that were in danger of defaulting. To completely bail them out from the staggering debts they incurred from their corruption, insider-trading, money-laundering, and other nefarious practices, the U.S. federal government shelled out many additional trillions of dollars.
The Special Inspector-General for TARP estimated that this total bailout peaked at a colossal $16.8 trillion. John Carney, then senior editor of CNBC.com, put the total amount even higher, at $29 trillion.
So the big bankers and investors were stupendously rewarded rather than punished for their financial atrocities, while their victims – the more than eight million American workers deprived of their jobs and homes during the crash – were left to suffer the appalling consequences.
Canada also subsidizes big business
Only in a plutocracy could such a monstrous injustice be inflicted and rationalized. And the same plutocratic perversity prevails in Canada, if not quite to the same drastic extent.
For example, although our federal government boasted that Canadian banks didn’t need any bailouts during the 2007-08 economic crisis, a CCPA study found that they actually received a combined $114 billion in cash and loan support from the Canadian and U.S governments.
Our federal government also bailed out General Motors and Chrysler with $13.7 billion in public money. Although it was all claimed to be in the form of loans, the auto companies failed to repay nearly $4 billion of that amount, so the Trudeau government last year gave up and wrote it all off as a free gift.
Such huge bestowals of public funds on the big corporations is standard practice in a plutocracy. A recent study by the University of Calgary’s School of Public Policy found that the federal government and the four largest provinces spend $29 billion every year subsidizing big business firms.
Of that huge largesse, $14 billion comes from the federal government and $14.6 billion from the provinces of Ontario, Quebec, Alberta, and British Columbia. The most extravagant and harmful subsidy, by far, is the $3.3 billion a year that our federal and provincial governments lavish on the large oil and gas companies. This is a gargantuan annual gift to the worst polluters of the environment. In effect, it helps them keep increasing the toxic carbon emissions that cause global warming.
Among other prominent corporate recipients of massive government gravy, in addition to SNC-Lavalin, is aerospace company Bombardier, which is also based in Quebec. It also has a history of malfeasance and currently faces bid-rigging and corruption charges in the courts of Sweden and Brazil. A few years ago, when suffering serious financial setbacks, Bombardier was bailed out by a $3.7 billion government subsidy. It was allegedly intended to enable the company to avoid layoffs, but, shortly afterward, the company still sacked thousands of employees while company executives raised their own salaries.
Financial Post columnist Andrew Coyne’s acerbic reaction was to quip that “Bombardier is not in the transportation industry; it’s in the government subsidies industry.”
Commenting on this and other huge government handouts of public cash to the corporations, the Huffington Post’s Mike Milne made this cynical observation:
“In the land of government plenty – that vast landscape populated with the tax dollars of Canadians – there is no shortage of politicians willing to hand out and defend subsidies to big business, and no dearth of corporations willing to take the cash.”
Companies subsidized, social programs cut
While Ottawa and the provinces continue to maintain and even increase the amounts of their tax revenue they expend in business subsidies, they have proportionately reduced their spending on social services.
The OECD’s latest report on the social expenditures of its 34 member countries ranked Canada 24th for the relatively low 17.2% of GDP it spent on social services. Most of the 23 countries that surpassed Canada had social spending rates of 23% of GDP or more. Some, including Denmark, Sweden, Norway, Finland, France, Belgium, Italy and Ireland, had rates higher than 28%.
The decision of Canadian governments to convert so much of the tax revenue they derive from workers into mammoth handouts to corporations could only be maintained in a plutocracy. This depletion of tax revenue through profligate business bounties gives political leaders the contrived excuse that they simply can’t afford to improve the social services they had deliberately stripped of adequate funding.
Inexcusable and sustained pressure
Now let’s apply these stark realities to the intense and long-sustained political pressure exerted on Wilson-Raybould by Justin Trudeau and his staff to intervene in the trial of SNC-Lavalin – specifically, to save the Montreal-based firm from a conviction for its many bribery, corruption, and kickback crimes.
The company had every reason to expect such a “get-out-of-jail-free” rescue from a political party whose election campaigns it had so generously funded, and with whom it had developed such a long and cosy relationship. And the Liberals had every reason to expect they could provide the company with that deliverance, which in a plutocracy is almost taken for granted.
For a plutocracy to function as intended, however, all of a government’s cabinet members have to be “team players.” They have to share the same perverted priorities — and the same willingness, if necessary, to put expedience ahead of principle in the service of corporate overlords.
However, when Trudeau appointed Jody Wilson-Raybould Governor-General, he rashly placed a non-conformist and incorruptible wolf in his flock of compliant cabinet sheep. She was never going to put the interests of a criminally depraved corporation ahead of the public interest.
Her valiant adherence to that moral and ethical principle triggered the colossal political uproar that followed. It also inadvertently exposed the existence of plutocracy as the real type of government that prevails in Canada.
That fundamental aspect of the SNC-Lavalin affair would not have been so widely publicized without Wilson-Raybould’s revelations, but it has still been studiously ignored by the mass media pundits. As usual.