Commentary

Handouts to the Rich - More Evidence of the Failure of Capitalism

As the economic crisis begins to establish itself in Manitoba, there are increasing demands from the capitalists that the taxpayers should bail them out. Motor Coach Industries is demanding at least $20 million from the Manitoba government under the threat of closing its Winnipeg bus manufacturing plant. New Flyer Industries, another bus manufacturer, is asking for an undisclosed amount to maintain its plant in Winnipeg. Numerous other capitalists are also reported to be lined up at the public trough.

It has been reported that even during the "boom" years of the 1990s, grants and tax exemptions to corporations from the Manitoba provincial government averaged over $500 million per year. Tax concessions from municipal governments and various direct subsidies from the federal government raise the total handout considerably higher. In addition there are hundreds of millions of dollars in income tax breaks to the rich and their corporations. This does not even begin to include the enormous sums of public money spent on infrastructure, such as highways, electricity and a steady supply of healthy and well-educated workers. By comparison, the Manitoba government spends less than $300 million per year on social assistance. So by far the largest recipients of social assistance in the province are the rich.

One of the most-repeated dogmas of neo-liberalism is that of the supposed superiority of "private enterprise" and the "free market" over public ownership and regulated markets. However, private enterprise in Manitoba required direct and indirect government subsidies of well over $1 billion per year during a period of economic prosperity just to remain "competitive". During a period of economic recession that figure is bound to soar even higher.

So, in reality, the much-vaunted superiority of capitalist "private enterprise" is an illusion. The only truly "private" aspect of modern capitalism is the appropriation of the profits, while all of the risk-taking is borne by the public. Such a system is neither efficient nor rational.