TITLE OF BOOKLET

GEORGE AND RUSSELL

HOLD

CONVERSATIONS

ON

CANADIAN ECONOMIC SYSTEM

 TABLE OF CONTENTS

1. SETTING UP A BUSINESS
2. WORKER A COMMODITY IN OUR
ECONOMY
3. DETERMINATION OF THE VALUE OF
LABOUR AND THE RATE OF PAY
4. EMPLOYERS AND THEIR UNIQUE
DISCOVERY
5. INHERENT DILEMMA OF THE ECONOMY
6. FIXING THE INNATE CANADIAN ECONOMIC
PROBLEM

WRITTEN BY MICHAEL UHRYN JUNE 15/16

 PREFACE

In this booklet, two characters, Russell and

George, engage in interesting conversations on
how the Canadian economic system functions.
Russell works as a pump jockey at a service
station while George, a machinist by trade, is
currently unemployed because of the slump in
the oil industry.
Previously when employed, George worked
in an oil related industrial shop receiving a
decent wage as a skilled worker while Russell
receives a minimum wage just enough to get
by.
On a Sunday morning, George and Russell
met at Tim Hortons coffee shop and it wasnt
long before they began discussing aspects of
the Canadian economy. In the course of their
conversation, they tried to come to grips on
how their pay - cheque and wage rate was
determined. Russell was somewhat
startled when he was referred to as a
commodity in his work place. Both of
them were focused on attempting to
understand what role an employer plays
in economy and in worker employer
relationships. The greatest challenge
in their conversation occurred when they
attempted to unravel the root cause of the
contradiction within the economic system. In
attempting to fix the Canadian economic
problem, Russell and George were deeply pre-
occupied in effort to determine if there were
any forces outside of parliament influencing
governmental decision-making.Both were
involved in interesting and inspiring
conversations when reforms in United States
Canada were being examined.
It is the intention of this booklet to cast
some badly needed light on dynamics of the
Canadian economy. Hopefully, George and
Russell, during their extensive conversations,
have been able to provide some answers, in
laymans terms on critical aspects of the
economy. Some of the views expressed by the
two characters may be controversial; however,
in the world of ideas nothing is sacred
everything is open for questioning. Their
conversations were directed at a cross-
section of the Canadian population high
school students, workers, aboriginals,
women, seniors and ordinary folk. Should a few
novel ideas be retained by those
who receive and read this booklet, the effort
for publishing it will be well rewarded.
Chapter 1. SETTING UP A BUSINESS

George: Did you have a good day at work,

Russell?
Russell: Yeah! Just another typical day.
George: You dont seem to be too happy about
your work.
Russell: Yes, the same bloody thing day in and
day out.
George: Are you pissed off with the conditions
under which you work or is it the pay- cheque?
Russell: To be honest, Im ticked off with both,
the conditions I work under and the pay
cheque; but my main concern is the pay
envelope.
George: If youre dissatisfied with your pay
cheque, Russell, why dont you set up a
business?
Russell: Thats easier said than done. Even a
disgruntled worker like me knows that it takes
money to establish a business, and nowadays it
takes a piss pot full of money to set up a
successful business.
George: You hit the nail right on the head,
Russell, setting up a business nowadays is
extremely difficult. That is precisely why so few
workers take the gamble of starting a business.
Starting a business venture like in the good old
days are long gone.
Russell: What do you mean by the good old
days?
George: In the good old days, in the horse and
buggy days, conditions were very favourable,
Russell, for starting a business venture, and
there were many opportunities.
Russell: What were these opportunities that
you are referring to?
George: In the good old days, Russell, one had
a choice of business to set up; for example, a
blacksmith shop, shoe repair shop, furniture
store, flour mill or even a clothing outlet. All
these business ventures required minimal
capital to get started.
Russell: Cant we make a stab at starting a
business?
George: Open your eyes, Russell, and look
around you. Everywhere we see corporations,
whether it be in the consumer, service,
transportation, or oil industry its all big
business. Would you be able to compete with
the huge corporate concerns Im referring to?
Russell: But with financial assistance from the
federal or provincial government could we not
set up some type of business?
George: You can try, Russell, but youre
unrealistic if you think either level of
government will provide you with financial
assistance. You can try; it will be a good
learning experience.
Russell: But why are governments reluctant to
provide start- up capital to people like me?
George: The typical response of the
government is that one should approach banks
for assistance; banks, not governments, are in
the money lending business.
Russell: Hey! Maybe thats what I should do.
George: I dont want to discourage you,
Russell, but believe me, banks are very sticky in
providing loans for a small business.
Russell: Why is that?
George: Explanation for that is failure for small
business start-ups is fairly high so banks do a
careful background check on prospective loan
applications for starting a small business.
Russell: Hmmm. Seems like my future
regarding setting up a small business is very
bleak.
George: I wouldnt say that, Russell, there is a
small window of opportunity for you but it
requires some careful thinking on your part.
Russell: What do you mean, George?
George: Starting a small business is risky and
rather difficult. I would advise you to save up
some money and approach a couple of friends
who may have saved some cash. What the
three of you need to do than is set up a small
company.
Russell: Sounds like a good idea. Once the
company is established, what do we do next?
George: The company should do a survey of
possible ventures that could be established and
choose one most likely to succeed.
Russell: Its a darn good idea.
George: Common sense suggests the three of
you, your newly formed company, will do a
feasibility study on the business venture you
have chosen.
Russell: Why does one need a feasibility study?
George: One of the first questions banks will
throw at you, Russell, is: Can we have a look at
the feasibility study of your business venture?
Russell: Thats not a problem. We have access
to a business advisor who will help us work on a
feasibility study.
George: Good. The bank will look at the
feasibility study of your business venture to
determine its success probability. A positive
response from the bank means you have
overcome the main hurdle.
Chapter 2. WORKER COMMODITY IN OUR
ECONOMY

George: Were going to part with our business

venture and turn our attention to your work-
place and labour issues. Tell me, Russell,
regarding your work, do you get your pay-
cheque every two weeks or is it weekly?
Russell: Yeah, every two weeks and on time
like clock-work.
George: Tell me and be honest about it, are
you satisfied that your pay-cheque was fairly
arrived at?
Russell: Of course. My employer tells me my
pay-cheque is dead on for what I do not a
penny less and not a penny more.
George: Here comes a shocker, Russell, did
your employer or anyone else ever refer to you
and mention that you are simply a commodity;
that you are bought and sold on the labour
market like any other thing of exchange value.
Russell: Nope. Nobody has ever mentioned
that Im what did you say a commodity? I
prefer to be called simply a working dude.
George: Dont get upset, Russell, by the use of
the term. The term commodity is
appropriately used in economics to explain
what your work or labour is worth. As a
machinist Im also bought and sold on the
labour market.
Russell: What are you getting at with your term
commodity?
George: What I want you to grasp is the size of
your pay cheque has nothing to do
with how much you produce or how much work
you do. On the contrary, it depends on the
actual value of your labour.
Russell: Hold your horses, George, slow down
a bit. Im lost and cant understand what you
mean by value of labour; and Im still disturbed
by being referred to as a thing a commodity.
Can you elaborate a bit?
George: Ill try my best, Russell. Its important
to understand that under the present economic
system - capitalism - a commodity is an
accurate term for describing human labour by
workers; and labour is a commodity which
has exchange value and is sold on the market
like any other thing. The real economic world
tells us that you and I are commodities and we
sell our labour power to the employer.
Russell: Wow! Thats unbelievable. You mean
to say that Im like a loaf of bread or bananas in
a Safeway store.
George: Exactly, Russell; You are catching on.
The labour power you provide, as well as my
labour power, are bought and sold consistently
on the labour market like any other
commodity.
Russell: Carry on George, Im still confused but
Ill get there.
George: Ok, Russell, in a sense when you and I
are hired for work we sell our capacity to work,
our labour power, which literally means we sell
ourselves.
Russell: So why is it important to know that
you and I are commodities?
George: Observation and common sense tells
us that by examining our role as commodities,
the fact that we are bought and sold on the
market, will enable us to understand how our
pay cheque is arrived at.
Russell: Im rather eager to find out.
George: Before we take a look at how wages
are determined, its necessary to point out that
a strong tendency exists in the economy to
push wages towards the subsistence level.
Russell: Why is that?
George: As capital accumulates and new
inventions take place, as new technology Is
applied to production in factories, untold
numbers of workers are displaced and join the
ever growing pool of unemployed.
Russell: Stop right here, George, Im having
difficulty understanding why wages would tend
to be depressed.
George: Saying it simply and clearly; capital
and new technology outstrips and exceeds the
demand for labour. Laid off workers, and the
growing pool of unemployed workers, means
supply is greater than demand which provides
employers with the leverage advantage to keep
wages as low as possible.
Russell: So you and I have to live with the
reality you described in our economic system.
George: You couldnt have guessed it better.
But we will converse later to see if there is any
hope for you and me and Canadian workers.
Chapter 3. DETERMINATION OF WAGES AND
RATE OF PAY
George: We should be clear by now, Russell,
that you and I sell our labour power, our
capacity to work, to the employer.
Russell: I agree with you, George.
George: The critical question that arises is: how
does the employer determine your rate of pay?
Does the employer simply pick your rate of pay
out of a hat?
Russell: Believe me, George, I have no idea and
would be afraid to ask the crummy boss that
question. But you must have some idea how
the wage rate is set.
George: Are you paying attention, Russell?
Russell: Im paying attention and Im all ears.
George: Regarding your wage rate, your
employer will say if you ask him, that he pays
you fairly for what your work is worth, no more
and no less.
Russell: Yes George, on several occasions, my
employer did say that he pays me fairly and
what Im worth. Do you think, George, that my
boss is stringing me a line of baloney regarding
my pay cheque?
George: I think you know better, Russell, to
answer an employer back.
Russell: I wouldnt dare; my boss is quite hot-
headed.
George: For the moment, Russell, let us accept
that your employer is paying you a full and fair
wage, no more and no less. But I have to ask
you a question, Russell?
Russell: Go to it but please, make the question
simple and clear.
George: Here it is, Russell, the question is as
clear as the ring of a bell: what is the value of
your work?
Russell: Im becoming impatient again. Why
are you asking me about the value of my
labour?
George: Because the employer calculates your
pay cheque based on the value of your
labour.
Russell: Shucks. Im ashamed that I have no
idea what the value of my work is. But you are
a machinist and an activist; you mentioned that
you attended educational conferences
organized by your local trade union branch.
Could you tell me what is the value of my
work?
George: The general consensus among
progressive trade unionists is that your 40
hours of labour are determined by your
employer in the same way as the value of
anything else like any other commodity thats
bought and sold on the market.
Russell: Im having trouble accepting the trade
union position. Are they saying that Im a
commodity and my 40 hours of labour the
value of that labour is determined in the
same way as are other commodities in the
market?
George: Exactly, Russell. The value of your
work, your labour of 40 hours, will be
determined by what it costs to produce your 40
hours of labour.
Russell: My heart is starting to beat faster.
What do you mean by what it costs to produce
my 40 hours of labour?
George: Stop and think for a moment, Russell.
What I mean by what I just said is that it costs
to keep you in fit condition to do the 40 hours
of work at your work-place. The size of your
pay cheque does not depend on how much
you produce.
Russell: Im getting the drift of what youre
saying; its starting to sink in slowly.
George: Thats very encouraging, Russell. Ill try
to reinforce what Im saying in down-to- earth
plain language. The fact is that your employer
needs to pay you enough so that you are able
to do your job and produce another man or
woman capable of doing your job in the next
generation.
Russell: Wow! Thats a mouth-full and I think
Im getting the message.
George: Good, Russell. To throw more light on
the matter, look at the situation from the point
of view of the employer. Why should the
employer pay more?
Russell: Im simply joking; the employer should
pay more if he is any kind of humanitarian.
George: Im glad you are only joking about
employers and capitalists and the
humanitarian outlook. The reality is, Russell,
that there is a definite and strong tendency
inherent in our economic system to drive
wages consistently down towards a subsistence
level.
Russell: What exactly do you mean by
subsistence level?
George: I mean the employer or capitalist tries
to keep wages as low as possible so that he can
extract as much of the surplus you produce in
order to maximize his profit.
Russell: So are you saying that the employer or
capitalist is primarily motivated by profit?
George: Thats what Im saying. For roughly a
thousand years of feudal Europe, money
lending and making profit was considered usury
and sin, but with the emergence of the market
economy and growth of capitalism in the
modern period of history, money - lending and
making a profit has become legal, virtuous and
acceptable.
Russell: It would appear that the profit motive
is rather questionable?
George: I agree with you, Russell, the profit
motive generates concentration of wealth at
the top but creates a serious problem at the
bottom of the economy. Workers end up with
insufficient purchasing power to buy
commodities produced by employers. At the
same time the government, employers and
media remain silent on the value of labour
produced by workers.
Russell: But why cant something be done
internally to solve the problem? Cant we just
print more money and dole it out to workers so
they can buy commodities they need?
George: I wish it was simple as you suggest but
employers would veto any such action on the
part of banks or government. The issue is more
complicated by being an inherent dilemma in
economy.
Russell: But surely something can be done by
the government in the short term.
George: Yes, when goods and commodities pile
up and the economy plummets into a slump,
the government looks for a way out of crisis.
Russell: What does government usually do
when faced with such circumstances?
George: Rather than focusing on the real
problem, the government looks outside of the
country, desperately searching for markets in
effort to dispose of its surpluses.
Russell: So government does attempt to solve
the economic problem.
George: Yes, the government does engage in
keeping the economic engine moving; however,
the inherent economic problem causing
slumps, unemployment, and worker strikes
continues to persist.
Russell: Holy Smokes, George, so whats the
answer?
George: Real answer is for workers like you
and me to get involved and attempt to
determine what constitutes the inherent
problem in economy.
Chapter 4. EMPLOYERS AND THEIR UNIQUE
DISCOVERY

George: Before we examine the inherent

contradiction in Canadian economy and how it
can be resolved, we will first take a little time to
observe the role played by employers in
economy.
Russell: So you are deferring the real problem
facing the Canadian economy to a later
conversation.
George: Yes, Russell, we will tackle the root
cause of the economic problem a bit later. And
now we will turn to the employers and their
part In economy.
Russell: It sounds interesting and intriguing.
George: You already know you are designated
as a commodity and you sell your labour power
to your employer who may be a small business
man or an owner of a huge business or
industry. Tell me, Russell, do you know the
relationship you have with your employer?
Russell: Yes, I think I do. I believe I exchange
my labour power for his pay - cheque.
George: Right on, Russell. You receive a pay -
cheque which is price paid for your labour
power. Having purchased your labour power,
the employer proceeds to use it.
Russell: Can you slow down a bit, George, cant
you see Im gasping for air.
George: Ok, Ill give you some space but I want
you to know a bomb shell is coming.
Russell: Thats all right, George, I will guard
myself.
George: I want your undivided attention,
Russell, its important to grasp that your labour
power in use is labour, and your labour is
source of value. And here is the kicker, Russell,
the mystery which you and workers in general,
are baffled by.
Russell: What mystery? Tell me, George, but in
language I can understand.
George: I will try but put your thinking cap on.
Employers have discovered that labour power
is a unique commodity which is virtually kept
under cover in Canadian society. Labour power
in use creates, not only use value, but creates a
value greater than it costs its self.
Russell: Time out, I need a breather.
George: If you are ready now we will continue
with the conversation.
Russell: Im composed and ready for offensive.
George: Stating it differently, Russell, your
labour power, not only sustains your existence,
but creates a surplus which is legally
appropriated by the employer or the capitalist.
Chapter 5. INHERENT DILEMMA IN CANADIAN
ECONOMY

Russell: It will be quite a challenge for me,

George, in that I havent attended educational
functions like you did. But Ive had some
interesting discussions with friends of mine on
what were discussing.
George: Dont get all worked up, Russell, we
will take our time starting with basics.
Russell: Thats very encouraging. Im looking
forward with great expectations.
George: The starting point in order to unravel
the inherent contradiction in economy requires
careful examination of the institution of private
property.
Russell: Why start with private property?
George: The reason for that is private property
constitutes the foundation of economy; its
cornerstone on which whole economy is built.
Russell: Undoubtedly, Im going to face real
rocky road ahead.
George: Perhaps, but if you step on rocks
lightly you will get to understand our economic
dilemma involves two types of private
property.
Russell: I think youre stringing me a line of
beans, George, property is property.
George: Not at all, there is very important
distinction to be made between the two types
of property, and its crucial to know the
difference.
Russell: Ill go along; so whats the difference?
George: One type of private property involves
big business employers and capitalists
people who own means for producing wealth.
Such people own land, mines, factories, oil
companies and have connections with
insurance companies, banks, drug companies
and the like.
Russell: What is second type of private
property?
George: The second type of private property is
in the realm of consumer goods: owning food,
clothing, furniture, boats, automobiles, etc.
Russell: I see no difference; property is
property.
George: Hang on a bit, Russell, there is a
fundamental difference between the two types
of property.
Russell: Im listening carefully.
George: The first type of private property
owners of means of production generates
income while in the second type of private
property, owners of consumer goods, there is
no income.
Russell: One type of property gives an income
while the other doesnt, so whats the
significance of the distinction?
George: I will try to explain, Russell, the
importance of knowing the difference between
the two types of private property. Let us say,
Russell, that you have purchased $30,000
worth of shares in Ford Company. By doing so
you will receive income from those shares; on
the other hand, if you buy a Ford automobile
worth $30,000 nobody will give you income for
owning the car, in fact, by owning it you will
have an additional expense of upkeep.
Russell: Ok George, distinction between the
two types of property is crystal clear, but how is
it going to help us get at the root cause of our
economic problem?
George: You might have already grasped what
the inherent problem of economy might be
when you were wrestling with the two types of
property.
Russell: Yes, I think the answer is spinning in
my mind. Its the first type of private property
that is the root cause of our economic
dilemma.
George: Yes, Russell, look at issue this way.
Those who own and control the means of
production factories, mines, land, banks, etc.
hire hundreds and thousands of workers to
conduct their business. And you already know,
Russell, these corporate entities extract and
accumulate incredible wealth from the surplus
value produced by workers.
Russell: I think Ive got it. Corporate entities in
the process of economic development tend to
concentrate wealth at the top of the economic
pyramid.
George: That right, Russell, concentration of
wealth at the top inevitably leads to serious
decrease in purchasing power among workers
and families below. The result is that mass
production cannot be reconciled with human
consumption. This is what we mean when we
refer to the Canadian economy and its inherent
contradiction.
Russell: Now I see it, George, one cannot
concentrate money and wealth at the top, and
at same time provide necessary purchasing
power for workers and families below.
George: Yes Russell, you have discovered the
basic economic contradiction in Canadian
economic system.
Russell: Incredible! Now Im really worked up,
George. I find it hard to accept we as Canadian
workers do not have the necessary buying
power to purchase commodities produced by
corporations.
George: Hold on, Russell, slow down a bit, if
both of us show some patience, Im certain
your concern will be addressed.
Russell: Hmmm. I may have a partial answer to
the issue. What we need to do is levy fair but
substantive tax on corporate sector. By doing
so we can lower taxation of workers enabling
them to use savings to purchase abundant
commodities in market place.
George: You are heading in the right direction,
Russell, but it is doubtful whether governments
of the day would impose such tax on
corporations.
Russell: What are you saying, George? The
Prime Minister of Canada recently levied an
additional 2% tax on corporations.
George: Thats a drop in the bucket, it will only
have a ripple effect on buying power of
workers. We should look at how corporations
take advantage of tax loopholes to avoid paying
income tax. You may have heard how
corporations stash away huge sums of money
in safe havens outside Canada.
Russell: Unbelievable! Cant we do something
about it?
George: You have posed the right question,
Russell? During our conversations we have
identified, examined, analyzed and made a
positive determination what constitutes
fundamental problem in Canadian economic
system. Tax loopholes exercised by
corporations are an integral part of the main
problem weve been talking about. To solve the
basic economic problem, tax loop-holes and
related issues, we need to turn to the trade
unions and workers.
Russell: What are you getting at, George?
George: Change will not come about in our
society, and basic economic issues will not be
resolved unless trade unions and workers
embark on building a broad movement
consisting of students, young workers,
aboriginals, women, seniors and people of all
walks of life.
Russell: What makes you think these groups
can be brought together?
George: There is no magic formula for bringing
all these groups together; however, all these
groups share a common denominator: they are
primarily workers who depend on wages.
Organized activity by these groups can result in
a broad mass movement which could bring
about resolution of the inherent economic
problem and other issues in Canadian society.
Russell: Casual observation of Canadian society
would seem to indicate it will take some time
for such broad popular movement to emerge.
George: Yes, Russell, but dont underestimate
the potential and resolve of workers and the
energy of young people. Bernie Sanderss
campaign in United States mobilized millions of
Americans, young people in particular, and built
a large movement for change in America. So
Russell, it can be done.
Russell: I agree with you, George, Bernie
Sanders illustrates clearly what can be done in
an electoral campaign when important issues
arise in society. Unlike Hillary Clinton, Bernie
Sanders started virtually from scratch and over
a period of 10 months has energized and won
the support of millions of young Americans for
a democratic socialist movement.
George: Right on, Russell, over the last month
we have engaged in deep conversations on the
nature of Canadian economic problem
and economic issues associated with it. Now
the time has arrived to tackle the big question:
how can the economic contradiction be
resolved?
Russell: Im game, but dont you think we
should contact some professors from a
university to help us resolve the Canadian
economic dilemma?
George: I dont want to disappoint you, Russell,
but professors are unlikely to provide you with
real and truthful answers to the Canadian
economic problem.
Russell: Why are you so skeptical about
professors coming to our rescue?
George: The reason why I have little faith in
professors coming to assist us is too many tend
to be silent on important issues and with
justifiable reasons. Only a small number of
professors have the courage to identify with
the analysis of Canadian economic problem you
and I project.
Russell: Dont you think, George, a major
reason why professors are reluctant to speak
out about the real economic problem is linked
to their job security?
George: You hit the nail right on the head. I
personally know of several professors who
confided in me and stated that tenure security
is the basic reason why many professors are
reluctant to speak publicly on the real nature of
the Canadian economic problem. Keep in mind,
Russell, professors tend to receive a fairly hefty
pay cheque which makes them think twice
before they engage publicly. However, during
critical and turbulent times professors could
become a cooperative ally in the struggle for
reforms and change.
Russell: It would appear that we will need to
rely on some gifted people in the trade union
movement to help us find a solution to the
Canadian economic dilemma.
George: I think you are right. There are people
among workers who are very bright and
capable of wrestling with economic problems.
Russell: I think our conversations should help
workers, students, aboriginals and ordinary folk
to understand what economic problems we are
facing in Canada.
Chapter 6. FIXING THE INNATE CANADIAN
ECONOMIC DILEMMA
George: Being away from conversations for
over a month, Russell, has given us ample
opportunity to relax and meditate. Hopefully,
you have taken advantage of that as I have. Are
you charged up and ready to join me in an
attempt to find a solution to the inherent
economic problem which we identified.
Russell: Im all cranked up and ready to go.
George: In previous conversations, Russell, we
made a determination what constitutes the
Canadian economic problem; however, we did
not come to grips regarding what the solution
might be to the Canadian economic dilemma.
Russell: Im prepared to take a gamble on the
solution to the problem. After conversations,
my guess would be to zero in on the first type
of private property owners of the means of
production big business tycoons.
George: Why are you focused on giant
employers, Russell?
Russell: Its common sense, big business is at
the heart of Canadian economic problem.
George: So what do you suggest we do?
Russell: My instinct tells me that we should
elect a majority of members of parliament so
that progressive legislation could be
implemented.
George: Your instinctual response to the
Canadian economic problem is right on track,
Russell; but what reforms or legislation are you
contemplating?
Russell: Simply off the top of my hat, George, I
can think of a number of needed reforms
in our society at the present time: proportional
representation in our electoral system; removal
of big money out of politics; implementation of
$15/ per hour minimum wage; closure of tax
loop-holes; substantial but fair increase in
corporate tax; and finally, restoration of
Canadas peace keeping role in foreign affairs.
George: Im amazed at the reforms you have
come up with. It seems to me that you have the
qualities of being a member of parliament.
Russell: There is no need to butter me up,
George, the reforms I suggested is common
knowledge to many Canadians, but thanks for
the compliment, I could stand a little boost.
George: Persuading the government to
implement reforms which you suggest would
be a positive step; however, a critical issue still
remains unsolved.
Russell: What critical question, George?
George: The crucial issue is that the owners of
the first type of property are firmly
entrenched in power. The reforms you have
suggested will not resolve the basic economic
contradiction in society.
Russell: So what is the answer, George? Youre
an economic and political guru.
George: Im by no means a guru you target me,
but I will try to offer a clear explanation on
what needs to be done. Research, logic and
common sense tells us that real political power
and actual decision making of crucial issues is
not necessarily made by elected government.
Russell: You lost me, George, Im drifting in
the clouds. You mean to say that an elected
government is not the real seat of political
power?
George: Yes, thats exactly what Im saying.
Russell: Let me get it in my head. Are you
suggesting there are forces behind the scenes
other than the elected government that
exercise real power and make decisions on
important issues?
George: You guessed it right, composite power
structures are intertwined with the government
and exercise real clandestine political power
and make decisions on critical issues.
Russell: Are we going to resurrect the first type
of private property once more in effort to
determine what we mean by power structures?
George: Yes we are, Russell, the first type of
private property (those who own the means of
production) is an integral part and most
important element of political power.
Russell: Are you suggesting there are other
elements connected with a composite power
structure?
George: Yes, there are five other elements:
military, banks, police, secret service and
media. These five elements and the one
referred to previously constitute the composite
power structure.
Russell: Holy Smokes! Im totally rattled. I
never knew these six elements were basis of
political power.
George: Yes, Russell, all these elements are
based on military chain of command.
Russell: My head is spinning, but I believe I
finally grasped the significance of power
structures. The economic dilemma we spent so
much time on intrinsically connected with the
first type of property (owners of the means of
production) and the continued existence of this
type of property is made possible by its integral
connection to power structure.
George: You scored again, Russell, and you are
dead on in your observation, but time has
arrived to bring to your attention the moral
dimension of the innate economic problem
facing our country.
Russell: Why are you introducing morality into
our conversation, George?
George: Recently, Justin Trudeau, Prime
Minister of Canada, agreed to honour a
contract previously signed by Steven Harper,
former Prime Minister, to sell $15 billion worth
of armaments to Saudi Arabian dictatorship.
Undoubtedly, such a huge sale of military
hardware is a lucrative bonanza for the
Canadian armaments industry.
Russell: Isnt that a good way of creating jobs
and disposing of surpluses?
George: You are missing a very important
point, Russell, purchased armaments are now
being used by Saudi dictatorship to suppress
and kill local civilians children, women,
seniors, young and old; and more so, arming
Saudi dictatorship will likely unleash serious
destabilization and prolong the disastrous war
in the Middle East.
Russell: I agree with you, George, many
Canadians are deeply disturbed by the
sale of armaments to Saudi dictatorship.
George: You have it right, Russell, great
responsibility has fallen on the shoulders of
Canadians requiring them to condemn the sale
of armaments to Saudi Arabia. It is crucial the
influence of the armaments industry, closely
tied to Canadian political power structure, be
curtailed to prevent Canada from being
dragged into a moral quagmire. Hopefully, the
political clout of the armaments industry will be
sufficiently diminished allowing Prime Minister
Trudeau to terminate the corrupt arms sales
agreement.
Russell: Gee, George, you really laid it on. You
have shaken me up to a point where I have
decided to assist people who are circulating a
petition asking Prime Minister Trudeau to
rescind Harpers contract of arms sales to Saudi
Arabia. I have many friends and Im quite
certain they would be glad to give a hand In the
petition drive.
George: Youre to be applauded for initiating
such action, Russell, we need more activists like
you. People like you have responded to Bernie
Sanders and his campaign In United States. The
issues Bernie Sanders is campaigning on in his
country are similar to reforms proposed by you
in our earlier conversations.
Russell: I think I know what you are after,
Bernie Sanderss campaign is calling for a
political revolution. I gather you want me to
examine and study Bernies campaign in that
his proposals are some - what similar to
reforms I suggested for Canada.
George: Yes, that is my intention.

Russell: But Im in the wilderness, George,

what does Bernie Sanders mean by political
revolution?

George: By political revolution, I think Bernie

Sanders means introduction of bold and
substantive changes in the American economy.

Russell: What bold and substantive changes?

George: Bernie Sanders is committed to

imposing a substantive tax on owners of the
first type of private property owners of the
means of production; but his intentions are also
to close tax loop holes to prevent corporate
interests of stashing away their capital in safe
havens outside the United States.

Russell: How is the implementation of these

two policies going to help American people?

George: Think about it, Russell, billions of

dollars are at stake; capital gained from these
two policy changes can help transform
America.

Russell: What do you mean by transforming

America?
George: Look at it this way, Russell, according
to Bernie Sanders, American hospitals, roads,
schools, bridges and infra-structure needs to be
upgraded to acceptable standards.

Russell: Ah Ha. I get it. Bernie Sanderss two

policies are also stated in my reforms for
Canadian society. Are his two policies the crux
of his political revolution?

George: Not entirely, Bernie Sanderss

campaign is also advocating free student tuition
for colleges and universities as well as a
universal health care system; and is also
stressing the importance of breaking up the
banks.

Russell: We already have a universal health

care system in Canada; however, we should
seriously examine how the major Canadian
banks function; and we ought to take a close
look whether we should provide free student
tuition to universities. Do you think, that we
ought to scrutinize the operation of the banks?
And should we provide free student tuition to
attend universities?

George: Of course, we should put the banks

under a microscope; banks are not sacred
institutions. And providing students with free
tuition is a positive step which all societies
should consider.
Russell: Am I to understand the reforms Bernie
Sanderss campaign is advocating constitutes
his concept of political revolution and
socialism?

George: Thats exactly what Bernie Sanders is

saying and advocating. Implementation of
reforms put forth by the Sanders campaign
would clearly indicate that the United
States is moving in a socialist direction and that
is what Bernie Sanders means by political
revolution.
Russell: I think I finally understand the
connection between political revolution and
socialism; however, I am still in the dark on
American democracy. What is Bernie Sanderss
view on American democracy?
George: Bernie Sanders maintains that
American democracy is deeply flawed and
severely limited by virtue of the fact that the
electoral system is rigged.
Russell: Holy Moses! Thats totally new to me,
George. Can you elaborate regarding flawed
nature of American democracy?
George: It is flawed because many senators
and house of representative members, which
includes both democrats and republicans, tend
to be controlled by special interest groups,
donors and lobbyists. We have a similar
situation in Canada where special interest
groups, being connected with the power
structure, influence government decision-
making on critical issues. In short, Russell,
owners of the first type of private property
owners of the means of production - corporate
elite - in the United States as well as in Canada,
use their financial powers to influence critical
policies. But American democracy is further
down-graded by the rigged character of the
electoral system.
Russell: How is the electoral system rigged?
George: Bernie Sanders claims the American
electoral system needs considerable
revamping. Bernie Sanders would like to see big
money be taken out of the electoral system.
Would you not agree, Russell, that similar
action should be taken in Canada?
Russell: Indeed. Removal of big money from
Canadian elections would be a very positive
step.
George: American democracy has a further
problem in that they have institutionalized the
super- delegate system which undermines the
democratic process. These are governors,
mayors and other officials who become
delegates to the democratic convention. The
real purpose of the super delegates appears to
be to contain a grass roots populace movement
should it happen to emerge. Bernie Sanders has
aroused and energized millions of Americans, in
particular young people, on his proposals for
change. Thus far, most of the super-delegates
appear to have offered their allegiance to
Hillary Clinton who has close connections with
Wall Street and the corporate elite.
Russell: It would appear that corporate
interests engineered their way into the
American electoral system to thwart a grass
roots movement as demonstrated by Bernie
Sanderss campaign.
George: Yes, Russell, corporate interests will go
to no end to safeguard the ownership of their
accumulated wealth and their social class
position in society. However, the Bernie
Sanders Campaign is demonstrating that a
populace grass roots movement can be
mobilized to challenge the status quo and
effect fundamental changes.
Russell: Is it likely and probable that a similar
grass roots movement could evolve in Canadian
society?
George: Nobody has a crystal ball to foretell
whats in store for Canada. However, if
Canadians observe and study whats happening
south of the 49th parallel, there is a probability
Canadian society may move in a positive
direction.
Russell: I agree that we have much to learn
from Bernie Sanderss campaign. In previous
conversations I stated what reforms are
required in Canada. Effecting Canadian reforms
a tall order and a formidable challenge.
George: Reforms you previously stated are
aspired by countless Canadians. At this historic
juncture, let us hope that a capable,
committed, energetic, qualified and charismatic
Canadian appears on the political scene who
can arouse, excite, energize and mobilize
millions of Canadians to implement policies
which you have suggested, Russell.
Russell: Conversations weve had enabled me
to develop a clear perspective on what my role
should be in Canadian society. We need to
build a broad, grass roots movement to
implement reforms we talked about.
George: I agree with you whole heartedly. Your
perspective is my perspective. What you and I
need to do now is to roll up our sleeves and get
to work.
George: In our previous conversation, Russell,
you suggested a number of progressive reforms
for Canadian society; however, suggestion is
one thing, implementation of the reforms is
another. In your opinion, what is required in
effort to make the reforms a reality?
Russell: I imagine we need to elect a
progressive slate of federal House of Commons
members as I mentioned previously.
George: I think you have something in your
proposal but we need to pin it down a bit more.
Russell: What do you mean by pinning it down
a bit more?
George: We need to know what you mean by a
progressive slate; do you mean a group of
people consisting of democratic socialists?
Russell: Yes, I mean democratic socialists as
discussed by Bernie Sanders.
George: I admire your commitment to
democratic socialism; however, we need
to keep our feet on the ground. We have an
undetermined number of democratic socialists
in Canada, but they are too small a number to
have any political clout. Moreover, it is doubtful
whether Canadians currently running in an
election as socialists would make any
substantial gains.
Russell: So where do we go from here?
George: You are raising a very important issue,
Russell, the issue of strategy. The question is :
how do we build a grass roots movement which
endorses socialist principles and supports the
kind of policies for change that you are
advocating?
Russell: I dont have a clue, George, but I think
more people like you and me need to talk
about socialism and the policies I am
advocating.
George: You make a good point but looking at
the issue strategically, we need to determine
wherein exists the potential for democratic
socialism.
Russell: We should draw some lessons from
the Bernie Sanders campaign. His greatest
support came from young people.
George: You are raising an element of strategy
and are heading in the right direction. The
Canadian charismatic leader, who may emerge
on the Canadian scene, will likely appeal to
young people, workers and trade unions,
womens organizations, aboriginals, senior
groups, and common folk. Similarly, he will
likely appeal to socialist - minded new
democrats in Alberta legislature as well as left-
wing new democrats in parliament.
Russell: You are describing a grass roots,
populace movement that we briefly referred to
in our previous conversation.
George: You are right on, Russell. Whether a
charismatic democratic socialist leader is going
to appear on the Canadian political scene
remains to be seen. However, were confident
the reforms and strategy were advocating will
be adopted when conditions are ripe for
change.
Russell: The reforms and strategy for change
we are suggesting sounds nice in theory and
conversation but it seems to me that we left
out a crucial element that could thwart any
possibility of change.
George: You surprise me, Russell, what element
are you considering?
Russell: We talked about the element
previously a force that is the basis of political
power in our society the Canadian composite
power structure.
George: You caught me off guard, Russell, you
are right on the money, ignoring the political
and economic clout of the Canadian composite
power structure would be gross negligence on
our part.
Russell: Ah Ha! You took me for a total novice. I
thought carefully about the first type of
property and its relationship to the power
structure that we discussed previously. The
question I have to ask you is hypothetical
because its based on future emergence of a
populace movement; the question is: can we
draw from modern historical experience how
similar power structures responded to grass
roots movements advocating fundamental
change? How is a Canadian power structure
likely to react to a grass roots movement
seeking basic reforms?
George: Holy catfish! Both of your questions
are loaded. Regarding your first question, and
perusing modern history, several modern
societies brought about basic reforms and
institutional changes by bullets rather than
ballots; for example, the English, French,
Russian, Chinese and Cuban Revolution. All
these societies brought about fundamental and
institutional changes through violence and civil
war. With respect to your second question
which is largely hypothetical, the desire and
hope of most Canadians is for peaceful,
parliamentary, and democratic change. How
the Canadian composite power structure reacts
to the populace movement advocating basic
reforms is anybodys guess.
Russell: So the future for reforms and change
looks rather remote and uncertain.
George: There is theoretical possibility which
could materialize into reality.
Russell: What is that possibility, George?
George: It depends how events unfold in
Canadian society. Should the grass roots
movement blossom into a mass movement
involving millions of Canadians,
fundamental change and reforms could be
effected.
Russell: What is the substance of your
strategy?
George: In effort to bring about real change
and resolution to the Canadian economic
dilemma, the populace movement will
necessarily be required to exercise democratic
control over the composite power structure.
Strategically, for the populace movement to
succeed in its struggles for change, it needs to
exercise substantive political clout over the first
type of private property owners of the big
means of production - which is the most
important element of the invisible composite
power structure.
Russell: Im overwhelmed by your description
of strategy; however, Im concerned about
the five other elements which are part of the
clandestine political power.
George: You have a keen mind, Russell. The
five additional elements of the political
structure play a vital role in supporting and
safeguarding the interest of business tycoons.
The higher echelons of the banks, military
(armaments industry), police, secret service
and corporate media are intertwined and are
closely connected with big business.
Russell: The role power structures play in
Canadian society is becoming increasingly clear
to me; however, Im having considerable
difficulty in understanding the two terms you
have introduced composite and invisible -
which are connected with power structure.
George: Its wise of you, Russell, to have asked
for clarification of the terms. Use of the two
terms is very appropriate in that they describe
the power structure more precisely.
Russell: What do you mean by more precisely?
George: One term at the time, Russell. The
term - composite simply means that the power
structure consists of a number of component
parts like the six elements we have stated; on
the other hand, the term - invisible - depicts the
power structure as being an unidentifiable,
illusive and ghost-like object, lacking a formal
structure. Such a composite and invisible power
structure becomes activated only when
fundamental economic and political interests of
big business are being threatened.
Russell: Ok, Im comfortable with the use of
the two terms; however, can you give me
several examples, George, where the ghost-like
and invisible power structure was activated
because its economic interests were being
threatened.
George: You already know of one example,
Russell. Do you recall when the sale of arms to
Saudi Arabia took place, orchestrated by Steven
Harper and honoured by Prime Minister Justin
Trudeau? The contractual agreement involved a
sale of 15 billion dollars of armaments, a
lucrative monetary windfall for the armaments
Industry. When the issue of sale arose in
parliament, the composite power structure
was activated to make certain sale was a
reality. Another example; Brian Mulroney
administration, under intense pressure from
composite and invisible power structure,
enacted the notorious North American Free
Trade Agreement in 1992. And currently, Prime
Minister Justin Trudeau is examining option of
whether to join Trans - Pacific Partnership
(TPP), a trade agreement involving twelve
countries. You can bet your bottom dollar,
Russell, composite, invisible and ghost-like
power structure has been activated to promote
ratification of agreement.
Russell: Are you saying, George, neither of
these agreements serve the interest of
Canadians?
George: Thats what Im saying. There is ample
evidence to demonstrate these agreements
serve primarily interests of multi - national
corporations and not ordinary people. Joseph
Stiglitz, world economist, says TPP is worst
trade deal ever negotiated. TPP will reduce
workers rights, cause lower wages, loss of jobs
as well as environmental and health
degradation.
Russell: Are there other aspects of TPP we
should be concerned about?
George: Yes, there is; Stiglitz points out a
rather disturbing aspect of the agreement.
There is a provision which allows multi
national corporations to sue governments
should their economic interest surface as a
critical issue.
Russell: Implementation of TPP will have an
adverse economic impact on Canadians but the
provision allowing corporations to sue
governments is outrageous and unacceptable.
Do you think, George, TPP will be approved by
Canada and other member states?
George: We have to wait and see how the
political process unfolds. However, Professor
Stiglitz recommends Canadian government
should use its influence to renegotiate the
agreement so that interests of Canadian
citizens are advanced and not the interests of
large multi-national corporations.
Russell: In essence, George, its quite evident
that corporate power structures are key players
in determining basic provisions of TPP.
George: Youve grasped the nature of the
process, Russell. In the real world that is
precisely how decisions are made on crucial
issues. But keep your fingers crossed, there is a
possibility that the influence of the composite
and invisible power structure could be
minimized allowing Prime Minister Justin
Trudeau either to reject or renegotiate the
agreement.
Russell: I am hopeful and am keeping my
fingers crossed. Debate on the issue of TPP will
be a good litmus test for Canadian
parliamentarians. Will the majority in House of
Commons stand up for ordinary Canadians or
will they support multi national corporations?