Economic Measures of the Financial Oligarchy and Its State to Preserve Its Power, Control and Private Wealth
- K.C. Adams -
The financial oligarchy has directed governments at
various levels to distribute money to businesses and individuals and to
borrow money from the private institutions of the rich. Every country
within the imperialist system of states has followed this directive
from the financial oligarchy. In Canada this dual policy has resulted
in upwards of $300 billion in state handouts in various ways to
businesses and individuals and a similar amount of government actual or
projected borrowing from global institutional holders of private
wealth. As of May 7, 2020 the federal and provincial and territorial
governments have committed over $820 billion. The Department of Finance
breaks this down into the following categories: Measures for Protecting
Health and Safety, Direct Support Measures, Liquidity Support to
businesses and individuals, and Business Credit Availability Program.
 The state
handouts to individuals are meant to sustain the
circulation and realization of goods and services at a minimum
level. The handouts to businesses are said to meet debt, rent or
other obligations, and to pay certain workers 75 per cent of their
wages in order to make businesses viable given the conditions and to keep a
number of other workers available when work resumes. The
government handouts to businesses are an extension or
generalization of the more normal practice of state pay-the-rich
schemes to specific cartels and big business.
State borrowing from the private global
institutions of the
financial oligarchy is to pay for the handouts to individuals and
businesses but also to provide a safe place to park massive
amounts of private money during the crisis and even gain some
interest profit. Institutional lending of private wealth to
various government agencies within the imperialist system of
states is a normal practice of the financial oligarchy, which
greatly expands during crises.
The financial oligarchy hopes these two broad
economic
measures will allow the imperialist state to weather the economic
crisis and prevent an uprising of the working class demanding a
new pro-social direction and aim for the economy and country
under its control. The financial oligarchy is using its vast
private wealth and the state it controls to defend its narrow
interests during the pandemic. The financial oligarchy owns and
controls the main financial, industrial and other cartels in the
country and their means of production and circulation. The
imperialist state, with its economic, political, police, judicial,
and social institutions, is the crucial and essential weapon for
the financial oligarchy to defend and preserve its private
wealth, power and control over the economy and people.
The Canadian state is one within the U.S.-led
imperialist
system of states. The financial oligarchy in Canada is an
international social class and exists as a faction of the global
financial oligarchy, with private business and personal interests
and connections throughout the imperialist system of states.
Members of the financial oligarchy engage in fierce competition
to expropriate maximum value from what workers produce.
The imperialist
economy operates in a vast socialized way with
production, financing and circulation of goods through
just-in-time supply chains worldwide. The pandemic has disrupted
operations of the imperialist economy and the production,
financing, circulation and realization of means of production and
consumption.
An immediate necessity for the financial oligarchy
during the
crisis is the realization of at least a minimum of
already-produced goods and payment for financial and other
services. With the interruption of circulation and realization of
means of production and articles of consumption, the availability
of cash for businesses to buy the capacity to work of the working
class, to service debt and pay for other obligations has emerged
as a serious problem. This has become extremely acute in certain
sectors, such as retail, tourism and the airline industry, and in
energy with the attendant oversupply of oil and the collapse of
prices. Bankruptcy looms as a real threat, especially for small
and medium-sized businesses.
When the pandemic began, it caused China to
shut down much of
its manufacturing of means of production and articles of
consumption. This immediately disrupted production and
consumption around the world, which require Chinese-made goods
and their realization.
As the pandemic spread globally so did the
severity of the
economic crisis, which falls on the backs of the people. Workers were laid off and the realization of means of production and
articles of consumption were curtailed. Businesses began to lose the
means to service their outstanding debts and rent and to buy the
capacity to work of their workers, resulting in further layoffs.
The big private financial institutions started to lose income
from the servicing of outstanding loans and, increasingly, lost
possibilities to invest their money, as private lending slowed or
became too risky.
 The circulation
and re-division of
already-produced value as
money within stock and commodity exchanges was disrupted as
traders began to sell their holdings. Since February 19, the
market value of shares on the U.S. stock exchanges alone has decreased by $11.5 trillion. Throughout the imperialist system of
states, value has come out of traded shares to be held as cash or
simply evaporated as prices fell.
All of it shows that to forestall the collapse of
the
imperialist economy and the possible loss of control of the
financial oligarchy over the political and economic affairs of
the countries within the imperialist system of states, the ruling
elite has unleashed the power of the state to manage the crisis
in a way that favours their private interests.
This week's TML Weekly
supplement
looks into the government's
borrowing, who it favours and the consequences.
This article was published in
Volume 50 Number 16 - May 9, 2020
Article Link:
Economic Measures of the Financial Oligarchy and Its State to Preserve Its Power, Control and Private Wealth - K.C. Adams
Website: www.cpcml.ca
Email: editor@cpcml.ca
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