In the News April 15

Economic Matters of Concern

Confronting Public-Private Partnerships (P3s)

Across the country large investments in P3s are proliferating. No significant development in any sector of the economy occurs without a P3 where investors are provided state-organized public funds and infrastructure. Global private interests who control financial and industrial cartels have infiltrated most public institutions including their political forms, official parties and civil society organizations with money and operatives to manipulate them to serve their narrow interests. They have created a narrative where P3s to pay the rich are the only road for development, viability of the economy and to guarantee the well-being and security of working people.

Under the current imperialist system where machinery and productivity are immense and where social product must be realized in money to be of any use, the return in money on the entirety of the invested funds is only a fraction of what the rich expect. Without state-organized public funds to reduce the investment “burden” of the rich and boost the rate of return on the portion private investors put into the project, the cartels will refuse to invest the social wealth they control. They want control of the project and means of production, control of the workforce, control over the selling price of the social product as much as possible, and crucially, control over the entire social value workers produce so they can expropriate for themselves the added-value when the commodity is sold.

A person cannot become a billionaire and sustain that wealth and power without control over all aspects of the economy and politics within a relation of competition and collusion with other billionaires and in contradiction with the people and the social and natural environment.

Ontario Green Investment

At this time in Ontario, billions of dollars of state-organized public funds are being made available to global investor cartels as P3s under the banner of expanding the green economy and creating jobs. Without receiving a guarantee in advance that an investment of a cartel will receive a significant return on the portion they invest, the rich will refuse and look elsewhere. The issue for them is that without the state providing a large part of the total necessary investment in all aspects of the project, including infrastructure, then the return or rate of profit for them is too low to meet their aim of maximum profit. If state-organized public money is not forthcoming, the people are told, no development or even sustaining of existing production will take place.

This tale is repeated ad nauseam even though before our eyes Ontario has everything modern development would possibly need: fresh water, infrastructure including electricity and transportation systems, a skilled workforce, advanced education and health systems, all the mineral resources necessary for battery, steel, vehicle and other production etc. Yet nothing proceeds unless state-organized public funds underwrite the investment to guarantee a maximum return for the particular rich private investors on the portion they put in, with the state receiving mostly indirect tax money from individual income and sales taxes collected from workers.

Steel, auto and battery manufacturing and mining development are sectors where announcements have already been made involving money and infrastructure from all levels of government going to prop up and guarantee a certain rate of return for global cartels.

Investments involving billions of dollars of public and private money combined under the control of private interests have become the norm. The expectation of the global private interests is maximum profit and control of the entire project, its direction and the produced and realized value. Control over the money from the realized social product is not even up for discussion. This includes what workers receive for the sale to the cartels of their capacity to work and their working conditions. In order for workers to have any say they must organize a determined resistance to confront not only the wealth and power of the global oligarchs but state-organized attacks.

Larger and larger portions of the budgets of every level of government are being directed into P3s and infrastructure to serve private global interests. GM, Honda, Algoma Steel, ArcelorMittal, Stellantis, LG Energy Solutions and various mining interests along with the federal, Ontario and municipal authorities have recently made announcements of large P3 developments.

Ironically, to accommodate these P3 investments governments must borrow from the very same global cartels they are paying to invest. Budget deficits have grown at every level of government. Ongoing spending commitments exist for the government bureaucracy: certain social programs, in particular during the pandemic and greater amounts of military spending. At the same time lower industrial prices are received for infrastructure such as electricity, roads, bridges and educated and healthy personnel, all of which must be covered by the state. Now there are even direct government payments to auto companies as discounts when they sell an electric or hybrid vehicle, as well as the provision of charging stations and building of new capacity for the required overall increase in electricity.

These government expenditures have resulted in more individual taxation, and to cover deficits, greater state borrowing from many of the same global private investment cartels that then receive the money back as P3s and cheap infrastructure on top of the interest profit from lending money to governments.

Dare to Build the New!

The situation poses a problem for the people but also opens a window on solutions. The problem is that the people have no control over the main sectors of the economy and public and political affairs. The solution appears as a relatively seamless takeover of P3s and all major investments by human-centred enterprises under the control of the people and accountable to them. These enterprises would be in a position to control the value workers produce and claim a portion of the added-value as enterprise profit. If global private interests wish to invest in the project then they would receive a percentage in the form of interest profit but would exercise no control over the direction of the project and how the value is distributed other than to receive their promised interest payment.

In a modern economy in a large bountiful country such as Canada, outside investments should not even be necessary as human-centred enterprise could borrow directly from a public banking authority with the prospect of paying it back with the social value workers produce in the new investment.

The issue for the people is to reject with contempt the extortion of the rich and their P3s and declare that through the people’s own efforts they will build the New. Standing in the way is the political control of the rich and the ideological crib clouding our minds that modern educated working people themselves are incapable of building the New through democratic renewal and humanizing the social and natural environment.

Workers’ Forum, posted April 15, 2022.