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Danny Cavanagh: Has COVID turned capitalism on its head?

KJIPUKTUK (Halifax) – It makes someone like me wonder what Covid has done to the free-market theory touted by capitalists as good for all of us. For years, we heard “Don’t worry, be happy, and all of us will be better off if the private sector takes over our society”. What happened to those authoritative voices of fiscal austerity? Are they now lined up at the government money trough? 

With COVID hitting us with its second wave, I would suggest we are in more of a socialist driven economic situation in which the private sector is looking for government intervention to pay the bills. A capitalist economic system is driven by private ownership of a business. In contrast, a socialist financial system has more government intervention built on a premise to make society fairer and move us towards a classless society.

Don’t get me wrong, I understand that many businesses need help, and many deserve support, but we need to be realistic – not every business will be saved. It is not fair that businesses expect taxpayers to save them when those same businesses fought tax increases, higher wages, and anything that would benefit workers. They stood with shareholders in a capitalist society as the one percent got richer while the rest suffered.

COVID-19 hit us in March and the so-called free market that depended on spending nose-dived. They quickly realized that there is no free market if people don’t have a paycheque. We now understand that investing in people will be essential, and government investment in a business in times of need must ensure that cash reaches the workers. Our society depends on people spending.

But if people can’t get help to pay their bills and buy food, we will be in big trouble. The worst-case scenario is that without intervention and support for unemployed workers, they will need the province to look after them and their families.

Ensuring that people in hard times have an income will keep the economy going. When workers don’t have cash, they don’t spend; when they don’t spend, businesses don’t have customers, no customers means no sales, well, you get my point. We need new jobs, green jobs, jobs where we make things in our province and country with our wealth of natural resources.

Government intervention also can’t be free as we bail out some of the more extensive transportation services. We cannot be cut off from the rest of the country. For example, Atlantic airports need help, lots of support, but when taxpayers become the primary funder, it’s time also to be the principal owner. Taxpayers need to benefit in the good times if a capitalist society expects to have the government keep them operational in bad times.  Taxpayers need to become shareholders, and we need to ensure that dividends to shareholders are limited, and the CEOs have a more realistic pay cheque.

The last thing I will touch on is that many large corporations take advantage of tax loopholes. Taxpayers lose when corporations don’t pay their fair share. While those loopholes are legal, the time has come for the government to enact a law to ensure tax fairness so we all pay our fair share of taxes.

It’s not right that someone making $30,000 or $40,000 pays more tax than many larger corporations. Those same corporations demand government handouts, but do all they can to avoid paying a fair share of taxes. That type of thinking needs to end and tax-loopholes need to end.

With some 350,000 workers in Canada without a job, it’s time to ensure people have a decent income, and that we do more to buy and build local products here at home. Let’s hope those corporations who happily took our tax-dollars during COVID don’t return to their old roots. Socialism isn’t that bad after all.

Danny Cavanagh is president of the Nova Scotia Federation of Labour

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