(The following article is from the July 1-31, 2009, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)
By Liz Rowley, Ontario leader of the Communist Party

By Kimball Cariou

The bailout/takeover of General Motors by the US and Canadian governments certainly marks a historic point in the trajectory of global imperialism. But contrary to the fears of some and the hopes of others, it does not signify a transition to a socialist North America.

     For decades, GM stood at the pinnacle of capitalism, with annual sales exceeding the gross domestic product of many countries. In 1954, Harlow Curtice, the company's president, famously said, "General Motors has no bad years, only good years and better years." Another GM President put it this way: "What's good for General Motors is good for the country, and vice-versa." How the mighty have fallen!

     On the other hand, the collapse of General Motors confirms the validity of Marxist theory, which stresses that capitalism is a system which features both expansion and contraction. The inter-imperialist struggle for supremacy and profits inevitably results in victory for some capitalists and defeats for others. Such gains and setbacks often lay the groundwork for new struggles and even wars to redivide the planet's resources and labour force for the purpose of exploitation.

     While key groups of capitalists are usually based primarily in one country, using their control of the capitalist state to gain advantages over rivals, there is also a tendency towards "internationalization" of capital. GM, for example, has always been a U.S.-based corporation, but it has huge investments abroad, and joint interests with other capitalists around the world. While GM slashes North American operations, it is expanding rapidly in countries such as Brazil, where the transnational is investing another $2.5 billion by 2012.

     Here at home, the news that the U.S. and Canadian governments are taking a majority ownership position in GM has led to much bleak humour. Finally, the world's biggest auto producer is publicly owned - making every taxpayer a capitalist!

     But none of us will receive dividends for our "shares," and the government "owners" do not even have voting rights on GM's board. This is not a case of true public ownership - we are still workers, not bosses.

     After decades of reaping enormous profits from the sweat of autoworkers, the owners and management of GM have driven this gigantic corporation into the ground. Despite recent losses, the big shareholders have done extremely well over the years.

     The same can't be said for GM employees. Much has been said about so-called "overpaid" GM workers, but every dollar of their wages and benefits is earned through mind-numbing, back-breaking labour, much of it on the assembly line. In fact, the rate of exploitation in auto plants has been among the highest in the world, measured by the ratio of company profits against the wages of autoworkers. Their gains were achieved by organizing unions and strikes against bitter repression by the bosses, the state, and the police. Now those gains are being wiped out, as wages, pensions and other benefits are squeezed out of their collective agreements.

     The spate of recent takeovers of banks and other corporations, geared to protect the interests of big capital, also reveals the weaknesses of capitalism.

     Communist Party of Britain leader Rob Griffiths wrote about this issue last fall, while the right-wing press was howling that the takeover of failing banks meant a return to so-called "Labour Party socialism."

     Griffiths noted that state ownership of industries, services or enterprises can take several forms. One is capitalist nationalization, where the state power acts to maintain capitalist society, by taking privately owned assets and facilities into public ownership. It does so not to change the economic and social basis of society, or to dispossess the capitalist class, but rather to maintain or develop a function which is important to the development of capitalist society. He gives the example of coal and railways which were nationalized by the British Labour government of 1945-51. Here in Canada we could point to the case of government-owned hydro industries which were essential for the development of capitalism. The attitude of the working class to such decisions depends on their particular features. Such takeovers can lay the basis for progressive governments to reduce the power of private capital, which is one reason why the Communist Party of Canada campaigns for public ownership of the energy industry, natural resources, and the big banks.

     But such nationalizations are also examples of state capitalism, measures which the ruling class considers necessary to expand its collective profiteering or to stabilize its own system. The GM "takeover" is in this category, especially since this move is being used to attack a powerful section of organized workers, with the aim of weakening the entire working class.

     "Democratic nationalization" is a different category. The Communist Party of Canada often calls for "public ownership under democratic control." This takes place when the working class and revolutionary movements are on the offensive. Left governments in Chile and Portugal in the 1970s carried out democratic nationalization of key industries, and a similar process is taking place in Venezuela and Bolivia today.

     As Griffiths says, "Once the significant organs of state power are under the control of the left, to be reorganized, abolished or replaced by new ones, measures of socialist nationalization can be carried through. These involve wholesale dispossession of the capitalist class with minimal if any compensation, the introduction of extensive industrial democracy, integration into macroeconomic planning and so on.... Democratic nationalization will only be achieved as part of the struggle of the working class and its allies for state power. The election of a left government of socialist, Labour and Communist MPs would likely mark the beginning of that process. The record of this current New Labour government shows how far we have to go. Economically, though, state capitalist measures continue to prepare the ground for fundamental change."

     Such fundamental change is as necessary in Canada as in Britain or the United States. The current global economic crisis is an opportunity to fight for such policies.